OF AMENDED AND RESTATED
LIABILITY COMPANY OPERATING AGREEMENT
1 GENERAL PROVISIONS
Office and Registered Agent
2 MANAGEMENT; MEMBERS AND SHARES
and Duties of the Board of Managers
and Representations of Shares
and Transfer of Shares
or Replacement of the Managers
of the Managers
3 CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNT; DISTRIBUTIONS; ALLOCATIONS
4 LIABILITY; INDEMNIFICATION
of a Member
5 ACCOUNTING; FINANCIAL AND TAX MATTERS
6 DISSOLUTION; WINDING UP; TERMINATION
Up and Termination
Reserved and Pending Claims
7 MEMBER MEETINGS
of Meetings of Members
of Notice; Approval of Meeting
of a Meeting; Member Lists
Without a Meeting
and Other Rights
of Certain Provisions
Capital Contributions, Shares|
LIABILITY COMPANY OPERATING AGREEMENT
Amended and Restated Limited Liability Company Operating Agreement (this “Agreement”) of Masterworks 002, LLC, a Delaware
limited liability company (the “Company”), is dated as of May [___], 2019, and is entered into by Masterworks
Galley, LLC as its sole initial Member (the “Initial Member”).
R E C I T A L S:
The Company has heretofore been formed as a limited liability company under the Delaware Act (as defined below) pursuant to a
Certificate of Formation filed with the Secretary of State of the State of Delaware on March 28, 2018.
The Initial Member has entered into that certain Limited Liability Company Operating Agreement, dated as of May 30, 2018 (the
Original Agreement”) and now desires to amend and restate the Original Agreement in its entirety as set forth herein;
The Company and the Initial Member acknowledge the status of the Company initially, prior to the admission of one or more additional
Persons (defined hereinafter) as Members, as a disregarded entity for U.S. federal income tax purposes whose U.S. federal income
taxable attributes, if any, would be deemed attributed solely to the Initial Member as its sole member; provided, however, owing
to the contemplation of the imminent admission of one or more Persons as additional Members, upon such occurrence, the Company
would be deemed to have become classified as a partnership for U.S. federal income tax purposes by default. Accordingly, this
Agreement has been intentionally structured contemplating that eventuality, through its implementation of certain applicable concepts
of U.S. federal partnership tax law, and prescription of certain processes and procedures incidental to such tax classification,
that would become applicable only upon admission of such one or more Persons as additional Members.
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Original Agreement is hereby amended and restated in its entirety
to provide as set forth herein, and the Initial Member hereby agrees as follows:
1 GENERAL PROVISIONS
Definitions. For the purpose of this Agreement, the following terms shall have the following meanings:
Services Agreement” has the meaning set forth in Section 2.1(b).
has the meaning set forth in 2.1
means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person. For the purposes of this definition, the term “controls,”
“is controlled by” or “under common control with” means, with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership
of voting securities, by contract or otherwise. No Member shall be deemed to be an “Affiliate” of the Company solely
by reason of being a Member of the Company.
has the meaning set forth in the preamble.
means the Bipartisan Budget Act of 2015 as amended by the Protecting American from Tax Hikes Act of 2015, Pub. L. No.114-113,
div. Q (the “PATH Act”), Section 411, whose operational provisions are contained in Internal Revenue Code Sections
6221 through 6241.
Owner” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship
or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or
(ii) investment power, which includes the power to dispose, or to direct the disposition of, such security. The terms “Beneficially
Own” and “Beneficial Ownership” shall have correlative meanings. Notwithstanding the forgoing, any determination
as to whether a Person is a “Beneficial Owner” shall be determined in accordance with Section 13d-3(a) of the Securities
Exchange Act, as amended. If such Person would be deemed a Beneficial Owner pursuant to Section 13, such Person shall be deemed
a Beneficial Owner for purposes of this Agreement and, conversely, if such Person would not be deemed a Beneficial Owner pursuant
to Section 13, such Person shall not be deemed a Beneficial Owner for purposes of this Agreement.
has the meaning set forth in 2.1.
Contribution” means, with respect to each Member, the amount of cash or the Fair Value of any property contributed or deemed
to be contributed by such Member, if any, to the capital of the Company from time to time pursuant to Section 3.1.
has the meaning set forth in Section 2.9.
means a certificate (i) in global form in accordance with the rules and regulations of the Depositary or (ii) in such other form
as may be adopted by the Board, issued by the Company evidencing ownership of one or more Shares.
in Tax Classification” has the meaning set forth in Section 5.2(h).
A Member” means a Member holding one or more Class A Ordinary Shares.
A Share Value” shall have the meaning ascribed to it in Section 2.4(c)(iii).
A Ordinary Shares” shall have the meaning ascribed to it in Section 2.4(a).
B Member” means a Member holding one or more Class B Ordinary Shares.
B Ordinary Shares” has the meaning set forth in Section 2.4(a).
B Ordinary Shares” shall have the meaning ascribed to it in Section 2.4(a).
means the Internal Revenue Code of 1986, as amended from time to time.
means the United States Securities and Exchange Commission.
has the meaning set forth in the preamble.
Percentage” shall have the meaning ascribed to it in Section 2.4(c)(i).
Act” means the Chapter 18 of Subtitle II of Title 6 of the Delaware Code, referred to as the Delaware Limited Liability
Company Act, as amended from time to time, and any successor thereto.
means, with respect to any Shares issued in global form, The Depository Trust Company and its successors and permitted assigns.
means the General Corporation Law of the State of Delaware, 8 Del. C. Section 101, et seq., as amended, supplemented or restated
from time to time, and any successor to such statute.
Event” has the meaning set forth in Section 6.1.
Act” means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor
to such statute, and the rules and regulations promulgated thereunder.
Value” means, with respect to securities or any other assets, other than cash, the fair market value determined by the Board.
Year” means each fiscal year of the Company (or portion thereof), which shall end on December 31; provided, however, that,
upon Termination of the Company, “Fiscal Year” means the period from the January 1 immediately preceding such Termination
to the date of such Termination.
Member” has the meaning set forth in the introductory paragraph.
“Involuntary Transfer” shall mean any Transfer of Shares, or proposed Transfer of Shares, (i) in the case of a Member
who is a natural person, upon such Member’s death or the entry by a court of competent jurisdiction adjudicating such Member
incompetent to manage such Member’s person or such Member’s property; (ii) in the case of a Member that is a trust,
the termination of the trust, (iii) in the case of a Member that is a partnership, the dissolution and commencement of winding
up of the partnership; (iv) in the case of a Member that is an estate, the distribution by the fiduciary of the estate’s
interest in the Company; and (v) in the case of a Member that is a corporation, the filing of a certificate of dissolution, or
its equivalent, for the corporation or the revocation of its charter.
has the meaning set forth in Section 4.2(b).
Trustee” has the meaning set forth in Section 6.2(a).
Shares” has the meaning set forth in Section 2.8(c).
has the meaning set forth in 2.1.
“Member” has the meaning set forth in the preamble and includes any Person later admitted to the Company as a Member.
Securities Exchange” means an exchange registered with the Commission under Section 6(a) of the Exchange Act or any successor
means the offering by the Company of Class A Ordinary Shares for sale to the public pursuant to Regulation A under the Securities
Act of 1933, as amended (the “Act”) or, in any replacement offering of Class A Ordinary Shares, as determined by the
Board in the event such Offering shall not proceed for any reason.
has the meaning set forth in Section 2.2.
Profits” has the meaning set forth in Section 3.3(d).
has the meaning set forth in Section 1.6(a).
means an individual, a corporation, a company, a voluntary association, a partnership, a joint venture, a limited liability company,
a trust, an estate, an unincorporated organization, a governmental authority or other entity.
Interests” has the meaning set forth in Section 2.4(b).
Person” means: (i) the=members of the Board ; (ii) the Administrator and its Affiliates; (iii) any Member;
(iv) any Officer; or (v) any Person who serves at the request of the Board on behalf of the Company as an officer,
director, partner, member, stockholder or employee of any other Person.
Date” means the date established by the Company for determining (a) the identity of the Record Holders entitled to notice
of, or to vote at, any meeting of Members or entitled to exercise rights in respect of any lawful action of Members or (b) the
identity of Record Holders entitled to receive any report or distribution or to participate in any offer.
Holder” or “holder” means the Person in whose name such Shares are registered on the books of the Company or
the Transfer Agent, as applicable, as of the opening of business on a particular Business Day.
party” has the meaning set forth in Section 2.8(f).
Year” has the meaning ascribed to said phrase under BBA Section 6225(d)(1).
of the Painting” means the transfer of title and ownership of the Painting to an un-Affiliated third-party and receipt by
the Company of value therefor as determined by the Board.
has the meaning set forth in Section 2.4.
Member” means a Person who is admitted as a Member of the Company pursuant to Section 2.7 as a result of a Transfer of Shares
to such Person.
means the date of the cancellation of the Certificate of Formation of the Company following the end of the Winding Up Period by
the filing of a Certificate of Cancellation of the Company with the Secretary of State of the State of Delaware.
Agent” means, with respect to any class of Shares, such bank, trust company or other Person (including the Company or one
of its Affiliates) as shall be appointed from time to time by the Company to act as registrar and transfer agent for such class
of Shares; provided that if no Transfer Agent is specifically designated for such class of Shares, the Administrator shall
act in such capacity.
means, with respect to a Share and the associated membership interest in the Company, a transaction by which the Record Holder
of a Share assigns such Share to another Person who is or becomes a Member, and includes a sale, assignment, gift, exchange or
any other disposition by law or otherwise, including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or
Regulations” means the regulations of the U.S. Treasury Department issued pursuant to the Code.
Increase” shall have the meaning ascribed to it in Section 2.4(c)(i).
Member” means a Member holding one or more Voting Shares.
Shares” means the Class A Ordinary Shares, excluding any Shares beneficially owned by the Administrator or any of
Up Period” means the period from the Dissolution Event to the Termination of the Company.
Name. The name of the Company is “Masterworks 002, LLC.” All business of the Company shall be conducted under
such name. The Members may elect to change the name of the Company at any time.
Principal Office. The principal office of the Company shall be at a location as determined by the Board either within
or outside of the United States. The Company shall keep its books and records at its principal office.
Registered Office and Registered Agent. The street address of the registered office of the Company in the State of Delaware
shall be as selected by the Board. The Board may elect to change the registered office and the registered agent
of the Company at any time.
Term. The Company was formed on March 28, 2018 and
shall continue its regular business activities until the Company is dissolved.
Purpose and Powers.
The Company is organized for the purposes of undertaking such activities as determined by the Board and, subject to the
terms and conditions herein and of the Delaware Act, the Members, which are permitted by applicable law and engaging in activities
incidental or ancillary thereto. Notwithstanding the forgoing, the Company has been organized to form a subsidiary which will
acquire the artwork as identified on Schedule 1 (the “Painting”) and undertake certain actions with respect thereto.
The Company shall possess and may exercise all the powers and privileges granted by the Delaware Act or by any other law or by
this Agreement, together with any powers incidental thereto, which are necessary or convenient to the conduct, promotion or attainment
of the business, purposes or activities of the Company.
Power of Attorney.
Each Member hereby constitutes and appoints each of the Chief Executive Officer, the Chief Financial Officer and the Secretary
of the Company and, if a Liquidating Trustee shall have been selected pursuant to Section 6.2(a), the Liquidating Trustee (and
any successor to the Liquidating Trustee by merger, transfer, assignment, election or otherwise) and each of their authorized
officers and attorneys-in-fact, as the case may be, with full power of substitution, as his true and lawful agent and attorney-in-fact,
with full power and authority in his name, place and xxxxx, to:
execute, swear to, acknowledge, deliver, file and record in the appropriate public offices:
all certificates, documents and other instruments (including this Agreement and the Certificate of Formation and all amendments
or restatements hereof or thereof) that the Chief Executive Officer, Chief Financial Officer or Secretary of the Company, or the
Liquidating Trustee, determines to be necessary or appropriate to form, qualify or continue the existence or qualification of
the Company as a limited liability company in the State of Delaware and in all other jurisdictions in which the Company may conduct
business or own property;
all certificates, documents and other instruments that the Chief Executive Officer, the Chief Financial Officer or Secretary of
the Company, or the Liquidating Trustee, determines to be necessary or appropriate to reflect, in accordance with its terms, any
amendment, change, modification or restatement of this Agreement;
all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the Board
or the Liquidating Trustee determines to be necessary or appropriate to reflect the dissolution, liquidation and termination
of the Company pursuant to the terms of this Agreement;
all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Member
pursuant to, or other events described in, ARTICLE 2 or ARTICLE 3; and
all certificates, documents and other instruments (including agreements and a certificate of merger) relating to a merger, consolidation
or conversion of the Company; and
execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and
other instruments that the Board or the Liquidating Trustee determines to be necessary or appropriate to (i) make, evidence,
give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Members hereunder
or is consistent with the terms of this Agreement or (ii) effectuate the terms or intent of this Agreement; provided, that when
required by any provision of this Agreement that establishes a percentage of the Members or of the Members of any class or series
required to take any action, the Chief Executive Officer, Chief Financial Officer or Secretary of the Company, or the Liquidating
Trustee, may exercise the power of attorney made in this Section 1.7(a)(ii) only after the necessary vote, consent, approval,
agreement or other action of the Members or of the Members of such class or series, as applicable.
Nothing contained in this Section 1.7 shall be construed as authorizing the Chief Executive Officer, Chief Financial Officer or
Secretary of the Company, or the Liquidating Trustee, to amend, change or modify this Agreement except in accordance with Section
8.2 or as may be otherwise expressly provided for in this Agreement.
The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive
and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Member and the Transfer of all or any portion of such Member’s Shares and shall extend
to such Member’s heirs, successors, assigns and personal representatives. Each such Member hereby agrees to be bound by
any representation made by the Chief Executive Officer, Chief Financial Officer or Secretary of the Company, or the Liquidating
Trustee, acting in good faith pursuant to such power of attorney; and each such Member, to the maximum extent permitted by law,
hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the Chief Executive Officer,
Chief Financial Officer or Secretary of the Company, or the Liquidating Trustee, taken in good faith under such power of attorney
in accordance with Section 1.7. Each Member shall execute and deliver to the Chief Executive Officer, Chief Financial Officer
or Secretary of the Company, or the Liquidating Trustee, within 15 days after receipt of the request therefor, such further designation,
powers of attorney and other instruments as any of such Officers or the Liquidating Trustee determines to be necessary or appropriate
to effectuate this Agreement and the purposes of the Company.
2 MANAGEMENT; MEMBERS AND SHARES
Rights and Duties of the Board of Managers.
(a) The Company is a manager-managed
limited liability company. Accordingly, management of the affairs of the Company shall be vested in a Board of Managers (the “Board”).
The Persons constituting the Board (each, a “Manager”) will be (i) the “managers” of the Company for all
purposes under the Act and (ii) the Board for all purposes under this Agreement. The Board will have the power to act only by
a majority of the Managers in accordance with the provisions and in the manner specified herein. A person does not need to be
a Member to serve on the Board. The Board will consist of three members and shall initially consist of, Xxxxx Xxxxxxx ,
Xxxx Xxxxxxxxx and the Independent Manager, who shall serve until they resign or are replaced by a majority of the Board of Managers,
and new members of the Board shall be appointed by a majority of the Board of Managers. Provided, however, the Members holding
66 2/3% of the Voting Shares can vote to remove and replace a Manager for “Cause” in accordance with Section 2.9.
The size of the Board may be increased or decreased from time to time by action of the Board.
The Company shall have one Independent Manager serving as one of the members of the Board. To the fullest extent permitted by
law, the Independent Manager shall consider only the interests of the Company in acting or otherwise voting on the matters set
forth in this Article 2. The Independent Manager shall act where other Managers are excluded from voting on certain matters involving
a direct or indirect conflict of interest between any Manager on the one hand and public investors on the other hand. All right,
power and authority of the Independent Manager shall be limited to the extent necessary to exercise those rights and perform those
duties specifically set forth herein and the Independent Manager shall have no authority to bind the Company.
Except as otherwise expressly provided in this Agreement or as required by the Delaware Act, the Board shall have complete and
exclusive discretion in the management and control of the affairs and business of the Company, and shall possess all powers necessary,
convenient or appropriate to carrying out the purposes and business of the Company, including doing all things and taking all
actions necessary to carry out the terms and provisions of this Agreement. Except as otherwise expressly provided in this Agreement,
the Board shall have, and shall have full authority in its discretion to exercise, on behalf of and in the name of the Company,
all rights and powers of a “manager” of a limited liability company under the Delaware Act necessary or convenient
to carry out the purposes of the Company Except as otherwise expressly provided in this Agreement, the Board or Persons designated
by the Board, including officers and agents (including the Administrator) appointed by the Board, will be the only Persons authorized
to execute documents which will be binding on the Company. To the fullest extent permitted by Delaware law, but subject to any
specific provisions hereof granting rights to one (1) or more Members (e.g., the right of Masterworks Gallery, LLC to designate
Board members), the Board will have the power to perform any acts, statutory or otherwise, with respect to the Company (including
with respect to any Subsidiary of the Company) or this Agreement, which would otherwise be possessed by the Members under Delaware
law, and the Members will have no power whatsoever with respect to the management of the business and affairs of the Company (including
with respect to any Subsidiary of the Company) except as expressly provided herein.
The Company shall enter into an administrative services agreement with Masterworks Administrative Services, LLC (the “Administrator”)
in form and substance as reasonably determined by the Initial Member (the “Administrative Services Agreement”). The
Board has authorized the Administrator to administer all day to day operations of the Company. Any amendment to the Administrative
Services Agreement that would be adverse or detrimental to the interests of members of the Company must be approved by holders
of a majority of voting shares. Any termination of the Administrative Services Agreement will require the prior written consent
of Masterworks Gallery, LLC.
Subject to the terms and conditions herein, all decisions regarding the management and operations of the Company shall be made
by the Board, provided, however, that the Administrator shall have all power and authority to take any and all actions necessary
to effectuate the intent and purpose of the Administrative Services Agreement and the Board may designate any Officers of the
Company to have control or authority with respect to one or more decisions or areas of operation, and may include such limitations
or restrictions on such power as they may deem reasonable.
At any time, the Board may appoint and replace individuals as officers or agents of the Company (“Officers”)
with such titles as the Board may elect to act on behalf of the Company with such power and authority as the Board
may delegate to such persons. Any number of offices may be held by the same person. Officers shall hold their offices for such
terms as shall be determined from time to time by the Board. Unless otherwise determined and set forth by the Board
and subject to the policies and procedures of the Company applicable to Officers and employees, each Officer shall have the
powers, rights and obligations as are customarily held and exercised by other persons in similar positions in limited liability
companies organized under the Delaware Act, subject to Section 2.1(c). The Officers shall hold office until their successors are
chosen and qualified. Any Officer may be removed at any time, with or without cause, by the Board. The Officers may also
be officers or employees of other Persons. The Officers, to the extent of their powers set forth in this Agreement or otherwise
vested in them by action of the Board not inconsistent with this Agreement, are agents of the Company for the purpose of
the Company’s business and the actions of the Officers taken in accordance with such powers shall bind the Company. Except
to the extent otherwise provided herein, each Officer shall have a fiduciary duty of loyalty and care as set forth in the Delaware
Act. No Officer shall at any time serve as trustee in bankruptcy for any Affiliate of the Company.
(b) Notwithstanding the
foregoing, it shall be deemed not to be a breach of any duty (including any fiduciary duty) or any other obligation of any type
whatsoever of any Manager or any officer or employee or any Affiliates of such Manager, officer or employee (other than
any express obligation contained in any agreement to which such Person and the Company or any of its subsidiaries are parties)
to engage in outside business interests and activities in preference to or to the exclusion of the Company or in direct competition
with the Company; provided such Person does not engage in such business or activity as a result of or using confidential information
provided by or on behalf of the Company to such Person; provided, further, that a Person shall not be deemed to be in direct competition
with the Company solely because of such Person’s ownership, directly or indirectly, solely for investment purposes, of securities
of any publicly traded entity if such Person does not, together with such Person’s Affiliates, collectively own 5% or more
of any class or securities of such publicly traded entity, and such Person is not a director or officer (and does not hold an
equivalent position) in such publicly traded entity. Neither the Board, not any officer or employee shall have no obligation
hereunder or as a result of any duty expressed or implied by law to present business opportunities to the Company that may become
available to Affiliates of such Person. None of any Member or any other Person shall have any rights by virtue of the Board’s
or any officer’s or employee’s or any Affiliates of the Board, officer or employee duties as the Board
or any Manager, officer or employee or this Agreement in any business ventures of the Administrator or any Manager or any
officer or employee or any Affiliates of the Administrator or any such Manager, officer or employee.
(c) Xxxxx Xxxx is hereby
designated as the Chief Executive Officer , Xxxx Xxxxxxxxx is designated the General Counsel and Secretary and Xxxxx
Xxxxxxx is designated as the Chief Financial Officer of the Company, each to serve in such capacity until his earlier death,
resignation or removal from office.
A Person shall be admitted as a Member and shall become bound by, and shall be deemed to have agreed to be bound by, the terms
of this Agreement if such Person purchases or otherwise lawfully acquires any Share, and such Person shall become the Record Holder
of such Share, in accordance with the provisions of this Agreement. A Member may be a Class A Member and or a Class B Member,
and, in such case, shall have the rights and obligation accorded to the Class A Ordinary Shares with respect to such Class A Ordinary
Shares and the rights and obligations accorded to the Class B Ordinary Shares with respect to such Class B Ordinary Shares. A
Person may become a Record Holder without the consent or approval of any of the Members and without physical execution
of this Agreement. A Person may not become a Member without acquiring a Share.
The name and mailing address of each Member or such Member’s representative shall be listed on the books and records of
the Company maintained for such purpose by the Company or the Transfer Agent.
Except as otherwise provided in the Delaware Act, 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 the Members shall not be obligated
personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company.
Except to the extent expressly provided in this Agreement: (i) no Member shall be entitled to the withdrawal or return of any
Capital Contribution, except to the extent, if any, that distributions made pursuant to this Agreement or upon dissolution of
the Company may be considered as such by law and then only to the extent provided for in this Agreement; (ii) no Member shall
have priority over any other Member either as to the return of Capital Contributions or as to profits, losses or distributions;
(iii) no interest shall be paid by the Company on Capital Contributions; and (iv) no Member, in its capacity as such, shall participate
in the operation or management of the Company’s business, transact any business in the Company’s name or have the
power to sign documents for or otherwise bind the Company by reason of being a Member.
Any Member shall be entitled to and may have business interests and engage in business activities in addition to those relating
to the Company, including business interests and activities in direct competition with the Company. Neither the Company nor any
of the other Members shall have any rights by virtue of this Agreement in any such business interests or activities of any Member.
Shares; Membership Interests.
The total of the membership interests in the Company shall be divided into (i) Class A Ordinary Shares having the rights and preferences
as set forth herein (the “Class A Ordinary Shares”) and (ii) Class B Ordinary Shares having the rights and preferences
as set forth herein (the “Class B Ordinary Shares” and, together with the Class A Ordinary Shares, the “Shares”
and each a “Share”) all of which shall have the same rights, powers and duties, except as otherwise set forth in this
Agreement. The number of Class A Ordinary Shares shall be limited to 343,175 plus (i) the number of Class A Ordinary Shares
which may be issued pursuant to the Administrative Services Agreement, plus (ii) the number of Class A Ordinary Shares which may
be issued upon conversion of the Class B Ordinary Shares, The number of Class B Ordinary Shares shall be limited to up to
85,794 . The Shares of the Members shall be as set forth on Exhibit A attached hereto, which may be updated as set forth
herein. The Board may issue or sell Shares for consideration as the Board may deem adequate or necessary, but only with the consent
of holders of a majority of Voting Shares. For the avoidance of doubt, in the event that all of the Class A Ordinary Shares are
not sold pursuant to the Offering, the Board shall, upon the closing of the Offering, issue a number of Class A Ordinary Shares
to the Initial Member equal to the aggregate number of Class A Shares that remain unsold in the Offering upon the sale of the
Painting by the Initial Member to the Company via the Merger, as partial consideration therefore. The name and mailing address
of each Member or such Member’s representative shall be listed on the books and records of the Company maintained for such
purpose by the Company or the Transfer Agent.
Prior to the date hereof and as set forth in the Original Agreement, the Initial Member has been issued 100% of the membership
interests in the Company in return for a capital contribution of $100 (the “Prior Interests”). Upon execution of this
Agreement, the Prior Interests shall be automatically converted into up to 85,794 Class B Ordinary Shares. As of
the date of such conversion, the Class B Ordinary Shares shall constitute all of the membership interests of the Company.
The Class B Members may elect to convert their Class B Ordinary Shares into Class A Ordinary Shares, in whole or in part, at any
time prior to the consummation of the Sale of the Painting, subject to the terms and conditions herein, for no additional consideration
pursuant and to the following conversion formula: The number of Class A Ordinary Shares issuable per Class B Ordinary Share upon
conversion shall equal (A) the Value Increase, multiplied by (B) the Conversion Percentage, multiplied by (C) 20%, divided by
(D) the Class A Ordinary Share Value. For purposes herein:
“Value Increase” means, (A) the total number of Shares outstanding at such time, multiplied by (B) the positive remainder,
if any, resulting from (i) the Class A Ordinary Share Value, minus (ii) $20.00.
“Conversion Percentage” means, (A) the number of Class B Ordinary Shares being converted, divided by (B) the total
number of Class B Ordinary Shares issued and outstanding (i.e. up to 85,794) .
“Class A Ordinary Share Value” means, as of the close of business on the day preceding the conversion date, the volume
weighted average trading price of the Class A Ordinary Shares on all trading platforms or trading systems on which the Class A
Ordinary Shares are being traded over the forty-five (45) trading days then ended, provided, that if the total aggregate trading
volume over such 45-trading-day period is less than 5% of the public float, such period shall be extended to the ninety (90) trading
days then ended, provided, further, if the total aggregate trading volume over such 90-trading-day period is less than 5% of the
public float, the holder of the Class B Ordinary Shares shall be entitled to request that the Board obtain an appraisal
of the value of the Class A Ordinary Shares from one or more independent nationally-recognized third party appraisal companies
and such appraisal shall constitute the Class A Ordinary Share Value.
Certificates and Representations of Shares.
Shares may be recorded in book entry form or may be evidenced by certificates or electronic or crypto tokens or coins, or in any
other form, as determined by the Board as may be permitted by the Delaware Act. Notwithstanding anything to the contrary
herein, unless the Board r shall determine otherwise in respect of one or more classes of Shares or as may be required
by the Depository with respect to any specific class of Shares, Shares shall not be evidenced by physical Certificates. No Member
shall have the right to require the Company to issue physical Certificates representing Shares for any reason, except as may be
required by applicable law. If the Board authorizes the issuance of Shares to any Person in the form of physical Certificates,
the Company shall issue one or more Certificates in the name of such Person evidencing the number of such Shares being so issued.
Certificates shall be executed on behalf of the Company by any the Board. If and to the extent a Transfer Agent has been
appointed with respect to any class or series of Shares, no Certificate representing such class or series of Shares shall be valid
for any purpose until it has been countersigned by the Transfer Agent; provided, however, that if the Board elects to issue Shares
in global form, the Certificates representing Shares shall be valid upon receipt of a certificate from the Transfer Agent certifying
that the Shares have been duly registered in accordance with the directions of the Company. Any or all of the signatures required
on the Certificate may be by facsimile. If any officer or Transfer Agent who shall have signed or whose facsimile signature shall
have been placed upon any such Certificate shall have ceased to be such officer or Transfer Agent before such Certificate is issued
by the Company, such Certificate may nevertheless be issued by the Company with the same effect as if such Person were such officer
or Transfer Agent at the date of issue. Certificates for any class or series of Shares shall be consecutively numbered and shall
be entered on the books and records of the Company as they are issued and shall exhibit the holder’s name and number and
type of Shares.
If any mutilated Certificate is surrendered to the Company or the Transfer Agent, the appropriate officers on behalf of the Company
shall execute, and the Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same
number and class or series of Shares as the Certificate so surrendered. The appropriate officers on behalf of the Company shall
execute, and the Transfer Agent shall countersign and deliver, a new Certificate in place of any Certificate previously issued
if the Record Holder of the Certificate: (i) makes proof by affidavit, in form and substance satisfactory to the Company, that
a previously issued Certificate has been lost, destroyed or stolen; (ii) requests the issuance of a new Certificate before the
Company has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse
claim; (iii) if requested by the Company, delivers to the Company a bond, in form and substance satisfactory to the Company, with
surety or sureties and with fixed or open penalty as the Company may direct to indemnify the Company and the Transfer Agent against
any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and (iv) satisfies any other
reasonable requirements imposed by the Company. If a Member fails to notify the Company within a reasonable time after he has
notice of the loss, destruction or theft of a Certificate, and a Transfer of the Shares represented by the Certificate is registered
before the Company or the Transfer Agent receives such notification, the Member shall be precluded from making any claim against
the Company or the Transfer Agent for such Transfer or for a new Certificate. As a condition to the issuance of any new Certificate
under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected
Record Holders. The Company shall be entitled to recognize the Record Holder as the owner of a Share and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in such Share on the part of any other Person, regardless
of whether the Company shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule,
regulation, guideline or requirement of any National Securities Exchange on which such Shares are listed for trading. Without
limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any
of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or
holding Shares, as between the Company on the one hand, and such other Persons on the other, such representative Person shall
be the Record Holder of such Shares.
Registration and Transfer of Shares.
Any Transfer of any Shares shall only be completed subject to the compliance by the Member and the proposed transferee with all
applicable laws; and furthermore may only be completed in accordance with the provisions of this Agreement.
Other than (i) any Transfer of Shares which is an Involuntary Transfer or (ii) any Transfer that occurs on an alternative
trading system that has been approved by the Company in writing, and Transfer of Shares shall be subject to the prior
written approval of the Company, which the Company may give or withhold in its sole discretion.
The Company shall keep or cause to be kept on behalf of the Company a register (which may be in electronic form) that will provide
for the registration and Transfer of Shares. The Company may appoint a Transfer Agent to act as registrar and transfer
agent for the purpose of registering any class of Shares and Transfers of such class of Shares as herein provided. For Shares
represented by Certificates, upon surrender of a Certificate for registration of Transfer of any Shares evidenced by a Certificate,
the appropriate Officers of the Company shall execute and deliver, and in the case of Shares for which a Transfer Agent has been
appointed, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the Record Holder’s instructions, one or more new Certificates evidencing the same aggregate number
and type of Shares as were evidenced by the Certificate so surrendered, provided that a transferor shall provide the address and
facsimile number for each such transferee as set forth on Exhibit A at any time.
The Company shall not recognize any Transfer of Shares evidenced by Certificates until the Certificates evidencing such Shares
are surrendered for registration of Transfer. No charge shall be imposed by the Company for such Transfer; provided, that as a
condition to the issuance of Shares, whether or not such Shares are evidenced by Certificates, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.
By acceptance of the Transfer of any Share, each transferee of a Share (including any nominee holder or an agent or representative
acquiring such Shares for the account of another Person) (i) shall be admitted to the Company as a Substitute Member with respect
to the Shares so Transferred to such transferee when any such Transfer or admission is reflected in the books and records of the
Company or the Transfer Agent, as applicable, (ii) shall be deemed to agree to be bound by the terms of this Agreement, (iii)
shall become the Record Holder of the Shares so transferred, (iv) grants powers of attorney to the Officers of the Company and
any Liquidating Trustee, as specified herein, and (v) makes the consents and waivers contained in this Agreement. The Transfer
of any Shares and the admission of any new Member shall not constitute an amendment to this Agreement.
Nothing contained in this Agreement shall preclude electronic book-entry only Transfer of Shares or the settlement of any transactions
involving Shares entered into through electronic systems maintained by the Administrator on behalf of the Company, facilities
of the Depository or any National Securities Exchange on which such Shares are listed for trading.
Prior to the one-year anniversary of the closing of the Offering, the Initial Member and its Affiliates shall not be permitted
to Transfer any Shares that are Beneficially Owned by
them except to a Masterworks Affiliate or as required by law or in any bankruptcy or similar proceeding, provided, however,
notwithstanding the definition of the term “Transfer,” the Initial Member and its Affiliates shall be permitted, during
such one-year period, to pledge any or all of such Shares to unaffiliated third-party lenders and, for the avoidance of doubt,
such lenders shall not be subject to the provisions of this Section 2.7(g) if they obtain Beneficial Ownership of such Shares
in connection with a default by the Initial Member and its Affiliates pursuant to the transactions in which such third-party lenders
obtained such Shares.
Any Transfer or attempted Transfer of any Share(s) in contravention of this Agreement shall be absolutely null and void ab
initio and of no force or effect, on or against the Company, any Member, any creditor of the Company or any claimant against
the Company and may be enjoined, and shall not be recorded on the books and records of the Company. No distributions of cash or
property of the Company shall be made to any transferee of any Share(s) which is/are Transferred in violation hereof, nor shall
any such Transfer be registered on the books of the Company. The Transfer or attempted Transfer of any Share(s) in violation hereof
shall not affect the Beneficial Ownership of such Share(s), and, notwithstanding such Transfer or attempted Transfer, the Member
making such prohibited Transfer or attempted Transfer shall retain the right to vote, if any, and the right to receive liquidation
proceeds and any other distributions with respect to the Shares.
Each Voting Share shall be entitled to and shall constitute one (1) vote. Except as otherwise set forth in this Agreement, the
Voting Shares shall vote together as a single class on all matters submitted for approval of Members. Upon the issuance of the
Class B Ordinary Shares in exchange for the Prior Interests, the Class B Ordinary Shares shall constitute Voting Shares and have
the right to vote on any matter on which the Members are entitled to vote on hereunder or on which the Members are required to
vote pursuant to the Delaware Act and shall be entitled to and shall constitute one (1) vote. Upon any issuance of any Class A
Ordinary Shares, the Class B Ordinary Shares shall no longer constitute Voting Shares and shall have no further voting rights
except as specifically set forth herein, unless such right to vote is specifically required and mandated by the Delaware Act or
as set forth herein.
In determining any action or other matter to be undertaken by or on behalf of the Company, each Member shall be entitled to cast
a number of votes equal to the number of Voting Shares that such Member holds, with the power to vote, at the time of such vote
unless otherwise set forth in this Agreement. Unless otherwise set forth in this Agreement, or otherwise required by the Delaware
Act, the taking of any action by the Company which required a vote of the Members as set forth above shall be authorized by the
affirmative vote of a majority of the Voting Shares, subject to any approval of the Board as required herein.
Notwithstanding the forgoing, any Class A ordinary shares issued to any Affiliate of the Administrator pursuant
to the Administrative Services Agreement, as set forth in Section 2.4 or otherwise held by any Affiliate of the Administrator
(the “Masterworks Shares”), shall not, while such Shares are Beneficially Owned by any Affiliate of the
Administrator, be entitled to vote on any matter on which the Class A Members are entitled or required to vote hereunder
or pursuant to the Delaware Act, and shall not be considered in determining the existence of a quorum or in the total number of
votes available or required hereunder or pursuant to the Delaware Act. Once the Masterworks Shares, if any, are Transferred
to any Person who is not an Affiliate of the Administrator, the Masterworks Shares shall thereafter have all voting
rights that any other Voting Shares held by any Class A Member have hereunder or pursuant to the Delaware Act. In the event that
the Delaware Act or any other law requires, at any time, that the Masterworks Shares vote on any matter notwithstanding
the provisions herein, the Masterworks Shares shall be required to be, and shall be, voted in the same proportion as the
Voting Shares that are not Masterworks Shares are voted by the Class A Members. Any Masterworks Shares shall bear
a customary “restricted” legend, which may be a virtual legend, evidencing the restricted nature thereof.
In addition to the other matters on which the Members holding Voting Shares have the right to vote as set forth herein, the approval
of Members holding a majority of the Voting Shares shall be required for the Company to undertake any of the following actions,
except as otherwise set forth herein:
acquiring any additional material assets, other than those incidental to the direct or indirect ownership, maintenance and promotion
of the Painting or the eventual Sale of the Painting and other than the ownership of any equity or membership interests of any
subsidiary of the Company which owns or holds the Painting;
conducting any business activities, except for activities relating to its investment in Art Holdco and the ownership,
maintenance and promotion of the Painting or the eventual Sale of the Painting; and
(i ii )
incurring any material loans or material borrowing arrangements to be entered into by the Company as a debtor other than those
incidental to the direct or indirect investment in Art Holdco and the ownership, maintenance and promotion of the Painting
or the eventual Sale of the Painting;
( i v)
amending, waiving or failing to comply with any material provision of this Agreement or the Administrative Services Agreement,
including amending this Agreement to increase the number of Shares that may be issued hereunder; and
amending the Administrative Services Agreement .
(e) If the
Board of Managers determines in its sole discretion that an active trading market for the Class A ordinary shares does not exist
on the seven-year anniversary of the closing of the Offering, the Company will, in its discretion, either: (i) offer shareholders
the opportunity to sell their Class A ordinary shares in a best-efforts underwritten secondary offering qualified with the SEC
pursuant to Regulation A or similar rules in effect at such time or (ii) cause Art Holdco to use commercially reasonable efforts
to sell the Painting as soon as reasonably practicable, but not later than the ten-year anniversary of the Closing of the Offering.
Pricing the secondary offering would be determined by the Board of Managers. The obligation to execute a qualified
secondary offering or sale of the Painting can only be waived by the holders of a majority of the Voting Members.
( f )
In any vote of the Voting Members pursuant to Section 2.8(d) or Section 2.8(f), any Shares that are Beneficially Owned by the
Initial Member or any Affiliate of the Initial Member, shall not be entitled to vote of any such matter and shall not be considered
in determining the total number of votes available or required hereunder or pursuant to the Delaware Act, provided, however, that,
in the event that the Delaware Act or any other law requires that such Shares that are Beneficially Owned by the Initial Member
or any Affiliate of the Initial Member vote on any matter notwithstanding this Section 2.8(g), such Shares shall be required to
be, and shall be, voted in the same proportion as the Voting Shares that are Beneficially Owned by Members holding Voting Shares
other than the Initial Member or any Affiliate of the Initial Member.
Removal or Replacement of a Manager. Any Manager, as selected by the Initial Member, may only be removed or replaced
(i) without “Cause” at any time by a majority of the Board of Managers or (ii) for “Cause” and only
upon the approval of Voting Members holdings at least two-thirds of the Voting Shares. For purposes herein, “Cause”
the commission by the applicable Manager of fraud, gross negligence or willful misconduct;
the conviction of the applicable Manager of a felony;
a violation by the applicable Manager of any applicable law that has a material adverse effect on the business of the Company;
the bankruptcy or insolvency of the applicable Manager.
Withdrawal of Administrator. Prior to the five-year anniversary of the closing of the Offerings, the Administrator may
only withdraw from its role as Administrator and its obligations under the Administrative Services Agreement in connection with
a withdrawal by the Initial Member and its Affiliates from the business of operating an online investment platform that allows
investors to acquire ownership of an interest in special purpose companies that invest in distinct artworks. At any time following
five-year anniversary of the closing of the Offerings, the Administrator may withdraw for any reason upon notice to the Initial
Member, provided that such withdrawal shall be effective only following a Sale of the Painting.
3 CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNT;
Capital Contributions. Persons seeking to become a Member shall be required to purchase or acquire Shares and make capital
contributions in such forms and in such amounts and at such times as the Board may require, if any, in its sole discretion
(any, a “Capital Contribution”) whereupon a capital account for a new Member will be established, and, if applicable,
accreted, in the amount of such Member’s Capital Contribution or based upon the fair market value of property contributed,
and the new Member shall be issued a number of Class Shares as determined by the Board, and the Board shall update
Exhibit A attached hereto accordingly. The provisions of this Section 3.1 are solely intended for the benefit of the Members and,
to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company (and
no such creditor shall be a third-party beneficiary of this Agreement). The Members shall have no duty or obligation to any creditor
of the Company to make any contribution to the Company.
There shall be established for each Member on the books of the Company a Capital Account in accordance with Section 704 of the
Code and the Treasury Regulations promulgated thereunder.
At the close of each Fiscal Year, and at certain other periods, as in the case of a withdrawal, there shall be determined for
each Member, such Member’s closing Capital Account for such period which shall be determined by adjusting such Member’s
opening Capital Account for such period, as the case may be, as follows: (i) by increasing such Member’s Capital Account
by (A) such Member’s allocable share of each item of the Company’s income and gain for such period (allocated in accordance
with Section 3.2(d)), and (B) the Capital Contributions, if any, made by such Member during such period and (ii) by decreasing
such Member’s Capital Account by (A) the amount of cash or the Fair Value of any property distributed in kind to such Member
by the Company during such period and (B) such Member’s allocable share of each item of the Company’s loss and deduction
for such period (allocated in accordance with Section 3.2(d)). Each Member’s Capital Account shall be further adjusted with
respect to any special allocations or adjustments pursuant to this Agreement.
In the event the Company is terminated during any period in accordance with ARTICLE 6, the closing Capital Accounts of the Members
for such Fiscal Year then completed will be determined as of the date of termination of the Company in the manner provided in
this Section 3.2.
For each Fiscal Period, as of the end of such Fiscal Period, each item of income, deduction, gain or loss of the Company (determined
in accordance with U.S. tax principles as applied to the maintenance of capital accounts) shall be allocated among the Capital
Accounts of the Members in such manner that as closely as possible gives economic effect to the provisions of Section 3.3 and
If all or a portion of a Member’s Shares 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 Shares so transferred.
The Company, in the sole discretion of the Board, in the event there are Available Funds, may make distributions thereof
(“Distributions”) to Members as set forth herein. “Available Funds” means the Company’s gross cash
receipts from operations, less the sum of: (1) payments of principal, interest, charges and fees pertaining to any of the Company’s
indebtedness; (2) costs and expenses incurred in the conduct of the Company’s business; and (3) amounts reserved to meet
the reasonable needs of the Company’s business. Notwithstanding anything herein to the contrary, no Member may receive a
Distribution to the extent that, after giving effect to the Distribution, all liabilities of the Company (other than to a Member
on account of its Shares and liabilities for which the recourse of creditors is limited to specific property of the Company) exceed
the fair market value of the assets of the Company (except that property that is subject to a liability for which the recourse
of the creditors is limited to such property shall be included in the assets of the Company only to the extent the Fair Market
Value of such property exceeds that liability). In the event of a Distribution to a Member that would be deemed violative of applicable
law, the applicable Member may be required to return such Distribution to the Company. Each Distribution in respect of any Shares
shall be paid by the Company, directly or through the Transfer Agent or through any other Person or agent, only to the Record
Holder of such Shares as of the Record Date set for such Distribution. Such payment shall constitute full payment and satisfaction
of the Company’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in
such payment by reason of an assignment or otherwise.
Other than distributions pursuant to a Dissolution Event as set forth in ARTICLE 6, if the Administrator declares and determines
to make any Distribution of cash or other assets to the Members, all such Distributions shall be made to the Members as follows:
100% to the Class A Members, pro rata in proportion to the number of Class A Ordinary Shares held by each such Member until the
aggregate Distributions (including all prior Distributions, if any) paid per Class A Ordinary Share equals $20.00; and
In the event any funds remain available for distribution after payments referenced in clause (A), (1) 80% of such remaining amount
to the Class A Members, pro rata in proportion to the number of Class A Ordinary Shares held by each such Member and (2) shall
be adjusted in direct proportion to the percentage of the total Class B Ordinary Shares previously converted into Class A Ordinary
By way of examples and not limitation, (i) in the event of a Distribution pursuant to Section 3.3(b)(C) prior to the conversion
of any Class B Ordinary Shares, such Distribution shall be apportioned 20% to the Class B Ordinary Shares and 80% to the Class
A Ordinary Shares, pro rata, and (ii) in the event of a Distribution pursuant to Section 3.3(b)(C) following the conversion in
whole or in part of Class B Ordinary Shares, such Distribution to be apportioned to the Class B Ordinary Shares shall
be proportionately reduced.
Except as otherwise provided herein or as required by law, no Member shall be required to restore or repay to the Company any
funds properly distributed to it pursuant to this Section 3.2.
Tax Allocations. Each item of income, gain, loss or deduction recognized by the Company shall be allocated among the Members
for U.S. federal, state and local income tax purposes in the same manner that each such item is allocated to the Member’s
Capital Accounts pursuant to Section 3.2(d) or as otherwise provided herein, provided that the Board may adjust such allocations
as long as such adjusted allocations have substantial economic effect or are in accordance with the interests of the Members in
the Company, in each case within the meaning of the Code and the Treasury Regulations. Tax credits and tax credit recapture shall
be allocated in accordance with the Members’ interests in the Company as provided in Treasury Regulations section 1.704-1(b)(4)(ii).
Items of Company taxable income, gain, loss and deduction with respect to any property (other than cash) contributed to the capital
of the Company or revalued shall, solely for tax purposes, be allocated among the Members, as determined by the Board in
accordance with Section 704(c) of the Code, so as to take account of any variation between the adjusted basis of such property
to the Company for U.S. federal income tax purposes and its fair market value at the time of contribution or revaluation, as the
case may be. All of the Members agree that the Board is authorized to select the method or convention, or to treat an item
as an extraordinary item, in relation to any variation of any Member’s interest in the Company described in section 1.706-4
of the Treasury Regulations in determining the Members’ distributive shares of Company items. All matters concerning allocations
for U.S. federal, state and local and non-U.S. income tax purposes, including accounting procedures, not expressly provided for
by the terms of this Agreement shall be determined by the Board in its sole discretion. Each Class B Share is intended
to be treated as a profits interest for U.S. federal income tax purposes, and all of the Members agree to report consistently
with, and to take any action requested by the Board to ensure, such treatment.
4 LIABILITY; INDEMNIFICATION
Liability of a Member. The liability of each Member shall be limited as provided in the Delaware Act and as set forth in
this Agreement. No Member shall be obligated to restore by way of Capital Contribution or otherwise any deficits in its Capital
Account (if such deficits occur).
Exculpation and Indemnification.
No Protected Person shall be liable to the Company or any Manager or any other Member for any action taken or omitted to
be taken by it or by other Person with respect to the Company, including any negligent act or failure to act, except in the case
of a liability resulting from such Protected Person’s own actual fraud, gross negligence, willful misconduct, bad faith,
breach of fiduciary duty, reckless disregard of duty or any intentional and material breach of this Agreement or conduct that
is subject of a criminal proceeding (where such Protected Person has reasonable cause to believe that such conduct was unlawful).
With the prior consent of the Board, any Protected Person may consult with legal counsel and accountants with respect to
Company affairs (including interpretations of this Agreement) and shall be fully protected and justified in any action or inaction
which is taken or omitted in good faith, in reliance upon and in accordance with the opinion or advice of such counsel or accountants.
In determining whether a Protected Person acted with the requisite degree of care, such Protected Person shall be entitled to
rely on written or oral reports, opinions, certificates and other statements of the directors, officers, employees, consultants,
attorneys, accountants and professional advisors of the Company selected with reasonable care; provided that no such Protected
Person may rely upon such statements if it believed that such statements were materially false.
To the fullest extent permitted by law, the Company shall indemnify, hold harmless, protect and defend each Protected Person against
any losses, claims, damages or liabilities, including reasonable legal fees, costs and expenses incurred in investigating or defending
against any such losses, claims, damages or liabilities or in enforcing a Protected Person’s right to indemnification under
this Agreement, and any amounts expended in respect of settlements of any claims approved by the Board (collectively, “Liabilities”),
to which any Protected Person may become subject:
by reason of any act or omission or alleged act or omission (even if negligent) arising out of or in connection with the activities
of the Company;
by reason of the fact that it is or was acting in connection with the activities of the Company in any capacity or that it is
or was serving at the request of the Company as a partner, shareholder, member, director, officer, employee, or agent of any Person;
such Liability results from such Protected Person’s own actual fraud, gross negligence, willful misconduct, bad faith, breach
of fiduciary duty, reckless disregard of duty or intentional and material breach of this Agreement or conduct that is subject
of a criminal proceeding (where such Protected Person has reasonable cause to believe that such conduct was unlawful).
The Administrator may, on behalf of the Company, reimburse (and/or advance to the extent reasonably required) each Protected
Person for reasonable legal or other costs and expenses (as incurred) of such Protected Person in connection with investigating,
preparing to defend or defending any claim, lawsuit or other proceeding relating to any Liabilities for which the Protected Person
may be indemnified pursuant to this Section 4.2 and for all costs and expenses, including fees, expenses and disbursements of
attorneys, reasonably incurred by such Protected Person in enforcing the indemnification provisions of this Section 4.2; provided,
that such Protected Person executes a written undertaking to repay the Company for such reimbursed or advanced costs and expenses
if it is finally judicially determined that such Protected Person is not entitled to the indemnification provided by this Section
4.2. Upon any liquidation of the Company, such reimbursements or advancement of expenses shall be reimbursed by the Company to
the Administrator prior to any other distributions hereunder.
The provisions of this Section 4.2 shall continue to afford protection to each Protected Person regardless of whether such Protected
Person remains in the position or capacity pursuant to which such Protected Person became entitled to indemnification under this
Section 4.2 and regardless of any subsequent amendment to this Agreement; provided, that, no such amendment shall reduce or restrict
the extent to which these indemnification provisions apply to actions taken or omissions made prior to the date of such amendment.
Any indemnification under this Section 4.2 or otherwise shall be paid out of and to the extent of the Company’s assets only.
5 ACCOUNTING; FINANCIAL AND TAX MATTERS
Accounting Basis. The Company shall use such method of accounting as may be determined by the Board that is consistent
with United States generally accepted accounting principles or such other accounting methods and conventions as the Board
may from time to time determine to be used in the preparation of the Company’s tax returns.
The Board (or such other Person as designated by the Board) is hereby designated the partnership representative
of the Company for purposes of Section 6223 of the Code (“Partnership Representative”) and any similar provision under
any state or local or non-U.S. tax laws, and is responsible for acting as the liaison between the Company and the Internal Revenue
Service (“Service”). The Partnership Representative shall have the exclusive authority and discretion to determine
all matters and shall be authorized to take any actions necessary with respect to preparing and filing any U.S. federal, state
or local or non-U.S. tax returns of the Company, to make any elections required or permitted to be made by the Company under any
provisions of the Code or any other applicable laws and has the sole authority under the Code to deal with the Internal Revenue
Service regarding any audit of or assessment against the Company to the exclusion of all Members. At any time during an audit
by the Internal Revenue Service of the Company, the Board shall have the authority to remove, with or without cause, the
Partnership Representative and appoint a replacement Partnership Representative.
Each of the Members consents to and agrees to become bound by all actions of the Partnership Representative, including any contest,
settlement or other action or position which the Partnership Representative may deem proper under the circumstances. The Members
specifically acknowledge, without limiting the general applicability of this Section 5.2, that the Partnership Representative
will not be liable, responsible or accountable in damages or otherwise to the Company or any Member with respect to any action
taken by it in its capacity as a Partnership Representative, except for bad faith, fraud, gross negligence, willful misconduct
or breach of fiduciary duty. All reasonable out-of-pocket expenses incurred by the Partnership Representative in such capacity
will be considered expenses of the Company for which the Partnership Representative will be entitled to full reimbursement.
In connection with any BBA audit of the Company, the Partnership Representative shall resolve each issue in the audit only in
accordance with the affirmative accession of the Board to the advice of the Partnership Representative made, either independently
or in consultation with the Company’s tax preparer, after appropriately articulating to it the issues involved and the dynamics
of the impact upon the Company and the Members respective to any such proposed posture.
If, in connection with a BBA audit, the IRS assesses a tax against the Company, the Partnership Representative, acting under BBA
Section 6225(c), may require all of the Members, or Persons who were previously Members as to an applicable Reviewed Year but
not as of an applicable Adjustment Year, and the Persons signing this Agreement as a condition to becoming a Member hereby agree
in such case, to file amended tax returns for the Reviewed Year and to pay their share of such assessed tax for such applicable
period, in proportion to the share of partnership income or loss ascribed to each for such year, or, as necessary, upon such substantially
similar allocation basis as the former basis of allocation may under then existing circumstances be required to be modified to
address in a case in which the obligated Person would not as of such an applicable Adjustment Year then be a Member. This provision
shall survive each Person’s cessation as a Member of the Company or any amendment or termination of this Agreement for so
long as a return of a Reviewed Year of the Company as to which any Person was a Member would be open to audit, and each Person
signing this Agreement as a Member hereby agrees to indemnify the Company and the other Members from and against any amounts of
assessed taxes as they would be otherwise obligated to pay in accordance with this Section 5.2, in a case in which such Person
would not do so, as well as against all reasonable attorneys’ fees and costs that would be incurred by the Company or such
other one or more Members in the event undertakings, including legal proceedings, to enforce such obligation hereunder against
such Person were commenced.
The Members acknowledge that the Board reserves the right to supplement or amend any applicable provisions of this Agreement,
including as to this Section 5.2, to address such additional processes or procedures as may be indicated as such unresolved issues
are prospectively addressed as to reasonably facilitate the Company’s compliance with the BBA.
The Members shall provide the Company with such information, which may be necessary or desirable in connection with preparing
and filing tax elections or otherwise in connection with the compliance with applicable tax laws, including providing information
in connection with Section 743 of the Code and elections permitted thereunder. The Board shall cause to be prepared and
filed all tax returns of the Company that are required for U.S. federal, state or local or non-U.S. tax purposes and shall make
all determinations as to tax elections by the Company. The Company shall use reasonable efforts to furnish to all Members tax
information as is reasonably required for U.S. federal, state and local income tax reporting purposes as soon as practicable following
the end of the fiscal year. Each Member shall be required to report for all tax purposes consistently with such information provided
by the Company.
Notwithstanding anything otherwise to the contrary herein, the Board is authorized to take any action that may be
required to cause the Company to comply with any withholding or other similar requirements established pursuant to the Code
or any other provision of U.S. federal, state or local or non-U.S. tax law or otherwise. To the extent the Company is
required to or elects to withhold and pay over or otherwise pay any withholding or other taxes payable, or required to be
deducted, by the Company or any of its Affiliates pursuant to the Code or any provision of U.S. federal, state or local or
non-U.S. tax law or otherwise, attributable to a Member (including taxes attributable to income or gain allocable to such
Member) or resulting from such Member’s participation in the Company, the Board may treat the amount withheld as
a distribution of cash pursuant to Section 3.4 to the extent such Member would have received a cash distribution but for such
withholding or other taxes. To the extent that such payment exceeds the cash distribution that such Member would have
received but for such withholding or other taxes, the Board shall notify such Member as to the amount of such excess
and such Member shall make a prompt payment to the Company of such amount by wire transfer, which payment shall not
constitute a Capital Contribution of such Member.
Notwithstanding anything otherwise to the contrary herein, the Board may at any time elect to have the Company make an
election to be taxed as a “C” corporation pursuant to the Code (the “Change in Tax Classification”), without
any approval or vote of the Members required, and to make such filings, including without limitation, a Form 8832 with the Service,
and to undertake such actions as required to effect such change in tax classification. At the time and following any Change of
Tax Classification, the Board shall have the right, without any approval or vote of the Members being required, to amend
this Agreement as reasonably required to effect the Change in Tax Classification and to provide for the operations of the Company
following such event.
6 DISSOLUTION; WINDING UP; TERMINATION
Dissolution. The Company shall commence its winding up upon the first to occur of the following (the “Dissolution
upon the determination of the Voting Members with the approval of the Board, at any time;
the insolvency or bankruptcy of the Company;
the sale of all or substantially all of the Company’s assets, which for the avoidance of doubt includes a sale of 100% of
the equity interests of any subsidiary of the Company which owns the Painting or the Sale of the Painting by the Company or such
the entry of a decree of judicial dissolution under Section 18-802 of the Delaware Act.
Dissolution Event shall be effective on the day on which such event occurs and immediately thereafter the Company shall commence
the Winding Up Period during which its affairs shall be wound up in accordance with Section 6.2 and Section 6.3.
Winding Up and Termination.
Upon the occurrence of a Dissolution Event, the property and business of the Company shall be wound up by the Board or,
in the event of the unavailability of the Board, by a Person designated as a liquidating trustee by the Board (the
Board or such liquidating trustee, the “Liquidating Trustee”). Subject to the requirements of applicable law
and the further provisions of this Section 6.2, the Liquidating Trustee shall have discretion in determining whether to sell or
otherwise dispose of Company assets or to distribute the same in kind and the timing and manner of such disposition or distribution.
While the Company continues to hold assets, the Liquidating Trustee may in its discretion expend funds, acquire additional assets
and borrow funds. The Liquidating Trustee may also authorize the payment of fees and expenses reasonably required in connection
with the winding up of the Company and any fees and expenses payable pursuant to any agreement to which the Company is party.
Within a reasonable period of time following the occurrence of a Dissolution Event, after allocating all items of income, gain,
loss or deduction pursuant to Section 3.5, the Company’s assets (except for assets reserved pursuant to Section 6.3) shall
be applied and distributed in the following manner and order of priority:
the claims of all creditors of the Company (including Members except to the extent not permitted by law) shall be paid and discharged
other than liabilities for which reasonable provision for payment has been made; and
to the Members in the same manner as Distributions under Section 3.2(e).
anything to the contrary in this Agreement, liquidating distributions shall be made no later than the last to occur of (x) 90
days after the date of disposition (including pursuant to Section 6.3 of the last remaining asset of the Company and (y) the end
of the Company’s taxable year in which the disposition referred to in clause (x) shall occur.
The Liquidating Trustee shall allocate securities for distribution in kind to the Members. Notwithstanding any other provision
of this Agreement, the amount by which the Fair Value of any property to be distributed in kind to the Members (including property
distributed in liquidation and property distributed pursuant to Section 3.2(e)) exceeds or is less than the adjusted basis of
such property shall, to the extent not otherwise recognized by the Company, be taken into account in computing income, gains and
losses of the Company for purposes of crediting or charging the Capital Account of, and distributing proceeds to, the Members,
pursuant to this Agreement.
When the Liquidating Trustee has completed the winding up described in this Section 6.2, the Liquidating Trustee shall cause the
Termination of the Company.
Assets Reserved and Pending Claims.
If, upon the occurrence of a Dissolution Event, there are any assets that, in the judgment of the Liquidating Trustee, cannot
be sold or distributed in kind without sacrificing a significant portion of the value thereof or where such sale or distribution
is otherwise impractical at the time of the Dissolution Event, such assets may be retained by the Company if the Liquidating Trustee
determines that the retention of such assets is in the best interests of the Members. Upon the sale of such assets or a determination
by the Liquidating Trustee that circumstances no longer require their retention, such assets (at their Fair Value) or the proceeds
of their sale shall be taken into account in computing Capital Account on winding up and amounts distributable pursuant to Section
6.2(b), and distributed in accordance with such value.
If there are any claims or potential claims (including potential Company expenses in connection therewith) against the Company
(either directly or indirectly, including potential claims for which the Company might have an indemnification obligation) for
which the possible loss cannot, in the judgment of the Liquidating Trustee, be definitively ascertained, then such claims shall
initially be taken into account in computing The Capital Account upon winding up and distributions pursuant to Section 6.2(b)
at an amount estimated by the Liquidating Trustee to be sufficient to cover any potential loss or liability on account of such
claims (including such potential Company expenses), and the Company shall retain funds (or assets) determined by the Liquidating
Trustee in its discretion as a reserve against such potential losses and liabilities, including expenses associated therewith,
and for any other Company purpose. The Liquidating Trustee may in its discretion obtain insurance or create escrow accounts or
make other similar arrangements with respect to such losses and liabilities. Upon final settlement of such claims (including such
potential Company expenses) or a determination by the Liquidating Trustee that the probable loss therefrom can be definitively
ascertained, such claims (including such potential Company expenses) shall be taken into account in the amount at which they were
settled or in the amount of the probable loss therefrom in computing the Capital Account on winding up and amounts distributable
pursuant to Section 6.2(b)), and any excess funds retained shall be distributed as such funds would be distributed under Section
7 MEMBER MEETINGS
There shall be no meetings of the Members unless called by the Board or as otherwise specifically required by the Delaware
Act. No Members or group of Members, acting in its or their capacity as Members, shall have the right to call a meeting of the
All acts of Members to be taken hereunder shall be taken in the manner provided in this Agreement. If authorized by the Board,
and subject to such guidelines and procedures as the Board may adopt, if a meeting of the Members is called Members and
proxyholders not physically present at a meeting of Members may by means of remote communication participate in such meeting and
be deemed present in person and vote at such meeting.
A majority of the Shares present at such meeting, either in person or by proxy, and entitled to vote thereat, shall constitute
a quorum for the purpose of such meeting. The Delaware Court of Chancery may issue such orders as may be appropriate, including
orders designating the time and place of such meeting, the record date for determination of Members entitled to vote, and the
form of notice of such meeting.
No Members or group of Members, acting in its or their capacity as Members, shall have the right to call a meeting of the Members.
Notice of Meetings of Members.
Notice, stating the place, day and hour of any meeting of the Members, as determined by the Board, and the purpose or purposes
for which the meeting is called, as determined by the Board, shall be delivered by the Company not less than 5 calendar
days nor more than 60 calendar days before the date of the meeting, in a manner and otherwise in accordance with the terms herein
to each Record Holder who is entitled to vote at such meeting. Such further notice shall be given as may be required by Delaware
or applicable federal law or any exchange on which any Shares are then listed. Only such business shall be conducted at a meeting
of Members as shall have been brought before the meeting pursuant to the Company’s notice of meeting. Any previously scheduled
meeting of the Members may be postponed, and any meeting of the Members may be canceled, by resolution of the Board upon
public notice given prior to the date previously scheduled for such meeting of the Members.
The Board shall designate the place of meeting for any meeting of the Members. If no designation is made, the place of
meeting shall be the principal office of the Company.
Record Date. For purposes of determining the Members entitled to notice of or to vote at a meeting of the Members, the
Board may set a Record Date, which shall not be less than 5 nor more than 60 days before the date of the meeting (unless
such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the
Shares are listed for trading, in which case the rule, regulation, guideline or requirement of such exchange shall govern). If
no Record Date is fixed by the Board, the Record Date for determining Members entitled to notice of or to vote at a meeting
of Members shall be at the close of business on the day next preceding the day on which notice is given. A determination of Members
of record entitled to notice of or to vote at a meeting of Members shall apply to any adjournment or postponement of the meeting;
provided, however, that the Board may fix a new Record Date for the adjourned or postponed meeting.
Adjournment. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting and
a new Record Date need not be fixed, if the time and place thereof are announced at the meeting at which the adjournment is taken,
unless such adjournment shall be for more than 30 days. At the adjourned meeting, the Company may transact any business which
might have been transacted at the original meeting. If the adjournment is for more than 30 days or if a new Record Date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given in accordance with this ARTICLE 7.
Waiver of Notice; Approval of Meeting. Whenever notice to the Members is required to be given under this Agreement, a written
waiver, signed by the Person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a Person at any such meeting of the Members shall constitute a waiver of notice of such meeting, except
when the Person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Members need be specified in any written waiver of notice unless so required by resolution
of the Board. All waivers and approvals shall be filed with the Company records or made part of the minutes of the meeting.
Quorum; Required Vote. At any meeting of the Members, the holders of a majority of the Voting Shares entitled to vote represented
in person or by proxy shall constitute a quorum unless any such action by the Members requires approval by holders of a greater
percentage of Voting Shares entitled to vote, in which case the quorum shall be such greater percentage. The submission of matters
to Members for approval shall occur only at a meeting of the Members duly called and held in accordance with this Agreement at
which a quorum is present; provided, however, that the Members present at a duly called or held meeting at which a quorum is present
may continue to transact business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum,
if any action taken (other than adjournment) is approved by the required percentage of Shares entitled to vote specified in this
Agreement. Any meeting of Members may be adjourned from time to time by the chairman of the meeting to another place or time,
without regard to the presence of a quorum.
Conduct of a Meeting; Member Lists.
The Board shall have full power and authority concerning the manner of conducting any meeting of the Members, including
the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the requirements of this ARTICLE
7, the conduct of voting, the validity and effect of any proxies and the determination of any controversies, votes or challenges
arising in connection with or during the meeting or voting. The Board shall designate a Person to serve as chairman of
any meeting and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept with the records
of the Company maintained by the Board. The Board may make such other regulations consistent with applicable law
and this Agreement as it may deem advisable concerning the conduct of any meeting of the Members, including regulations in regard
to the appointment of proxies, the appointment and duties of inspectors of votes, the submission and examination of proxies and
other evidence of the right to vote.
A complete list of Members entitled to vote at any meeting of Members, arranged in alphabetical order and showing the address
of each such Member and the number of Shares registered in the name of such Member, shall be open to the examination of any Member,
for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days before the meeting, at
the principal place of business of the Company. The Member list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Member who is present.
Action Without a Meeting. On any matter that is to be voted on, consented to or approved by Members, the Members may take
such action 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 approved by the Members having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all Members entitled to vote thereon were present and voted.
Voting and Other Rights.
Only those Record Holders of Voting Shares on the Record Date set pursuant to Section 7.3 shall be entitled to notice of, and
to vote at, a meeting of Members or to act with respect to matters as to which the holders of the Voting Shares have the right
to vote or to act. All references in this Agreement to votes of, or other acts that may be taken by, the Voting Shares shall be
deemed to be references to the votes or acts of the Record Holders of such Voting Shares on such Record Date.
With respect to Voting Shares that are held for a Person’s account by another Person (such as a broker, dealer, bank, trust
company or clearing corporation, or an agent of any of the foregoing), in whose name such Voting Shares are registered, such other
Person shall, in exercising the voting rights in respect of such Voting Shares on any matter, and unless the arrangement between
such Persons provides otherwise, vote such Voting Shares in favor of, and at the direction of, the Person who is the Beneficial
Owner, and the Company shall be entitled to assume it is so acting without further inquiry.
No Members shall have any cumulative voting rights.
Proxies and Voting.
On any matter that is to be voted on by Members, the Members may vote in person or by proxy, and such vote may be made, or proxy
may be granted in writing, by means of electronic transmission or as otherwise permitted by applicable law. Any such proxy shall
be delivered in accordance with the procedure established for the relevant
For purposes of this Agreement, the term “electronic transmission” means any form of communication not directly involving
the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and
that may be directly reproduced in paper form by such a recipient through an automated process. Any copy, facsimile telecommunication
or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in
lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be
used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire
original writing or transmission.
The Board may, and to the extent required by law, shall, in advance of any meeting of Members, appoint one or more inspectors
to act at the meeting and make a written report thereof. The Board may designate one or more alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at a meeting of Members, the chairman of the meeting
may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability. Every vote taken by ballots shall be counted by a duly appointed
inspector or inspectors.
With respect to the use of proxies at any meeting of Members, the Company shall be governed by paragraphs (b), (c), (d) and (e)
of Section 212 of the DGCL and other applicable provisions of the DGCL, as though the Company were a Delaware corporation and
as though the Members were shareholders of a Delaware corporation.
In the event that the Company becomes subject to Regulation 14A under the Exchange Act, pursuant to and subject to the provisions
of Rule 14a-16 under the Exchange Act, the Company may, but is not required to, utilize a Notice of Internet Availability of Proxy
Materials, as described in such rule, in conjunction with proxy material posted to an Internet site, in order to furnish any proxy
or related material to Members pursuant to Regulation 14A under the Exchange Act.
Addresses and Notices. Any notice, demand, request, report or proxy materials required or permitted to be given or made
to a Member under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by
first class United States mail or by other means of written communication (including electronic communication) to the Member at
the address described below. Any notice, payment or report to be given or made to a Member hereunder shall be deemed conclusively
to have been given or made, and the obligation to give such notice or report or to make such payment shall be deemed conclusively
to have been fully satisfied, upon sending of such notice, payment or report to the Record Holder of such Shares at his address
as shown on the records of the Transfer Agent or delivered electronically as otherwise shown on the records of the Company (including
on Exhibit A attached hereto), regardless of any claim of any Person who may have an interest in such Shares by reason of any
assignment or otherwise. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions
of this Section 8.1 executed by the Company, the Board or the Transfer Agent or the mailing organization shall be prima
facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report addressed to a Record
Holder at the address of such Record Holder appearing on the books and records of the Transfer Agent or the Company is returned
by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it or is returned
or there is a delivery failure through any electronic communication, such notice, payment or report and any subsequent notices,
payments and reports shall be deemed to have been duly given or made without further mailing (until such time as such Record Holder
or another Person notifies the Transfer Agent or the Company of a change in his address or electronic address, as applicable)
if they are available for the Member at the principal office of the Company for a period of one year from the date of the giving
or making of such notice, payment or report to the other Members. Any notice to the Company shall be deemed given if received
by the Secretary at the principal office of the Company designated pursuant to the terms and conditions herein. The Board
and the Officers may rely and shall be protected in relying on any notice or other document from a Member or other Person if believed
by it to be genuine.
Amendments; Waiver. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be amended
or waived only by an instrument in writing executed by the Board and Class A Members holding a majority of the Voting Shares,
provided, however, any amendment which disproportionately affects the Class A Members, must be approved by the Class A Members
holding a majority of the Class A Ordinary Shares voting as a separate class. Notwithstanding the foregoing, the Board
may amend this Agreement and the schedules and exhibits hereto, without the approval of the Members (i) to evidence the joinder
to this Agreement of a new Member of the Company; (ii) in connection with the Transfer of Shares; (iii) in connection with any
issuance of Shares to the Administrator or to any existing members, whether as a result of issuances to the Administrator
pursuant to the Administrative Services Agreement, upon conversion of the Series B Ordinary Shares pursuant
to Section 2.4(c), or otherwise, (iv) as otherwise required to reflect Capital Contributions, distributions and similar actions
hereunder; (v) to reflect the naming of new officers members of the board of managers or replacement of officers or managers
of the Company; (vi) pursuant to Section 5.2(h) and as may be required to cause the Company to be treated as an association or
as a publicly traded partnership taxable as a corporation for U.S. federal (and applicable state and local) income tax purposes,
and (vii) any change the Board deems necessary or appropriate to enable trading of membership interests. Notwithstanding the
forgoing the Board is authorized to make such amendments to this Agreement as required in order to comply with any applicable
law, including, without limitation, any securities law or tax law, whether currently in place or promulgated in the future.
Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted
assigns of the Members.
No Waiver. No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Survival of Certain Provisions. The covenants and agreements set forth in Section 4.1, Section 4.2 and Section 5.2 shall
survive the Termination of the Company.
Corporate Treatment. The Board shall use its reasonable best efforts to take such actions as are necessary or appropriate
to preserve the status of the Company as a partnership for U.S. federal (and applicable state and local) income tax purposes.
If, however, the Board determines, in its sole discretion, for any reason (including the proposal, formally or informally,
of legislation that could affect the Company’s status as a partnership for U.S. federal and/or applicable state and local
income tax purposes) that it is not in the best interests of the Company to be characterized as a partnership, the Board
may take whatever steps, if any, are needed to cause the Company to be or confirm that the Company will be treated as an association
or as a publicly traded partnership taxable as a corporation for U.S. federal (and applicable state and local) income tax purposes.
Notwithstanding anything in this Agreement to the contrary, in the event U.S. federal (and/or applicable state and local) income
tax laws, rules or regulations are enacted, amended, modified or applied after the date hereof in such a manner as to require
or necessitate that the Company no longer be treated as a partnership for U.S. federal (and/or applicable state and local) income
tax purposes, then the first sentence of this Section 8.6 shall no longer apply.
8.7 Section 7704(e) Relief.
In the event that the Board determines the Company should seek relief pursuant to Section 7704(e) of the Code to preserve
the status of the Company as a partnership for U.S. federal (and applicable state) income tax purposes, the Company and each Member
shall agree to adjustments required by the tax authorities, and the Company shall pay such amounts as required by the tax authorities,
to preserve the status of the Company as a partnership.
Electronic Information. Each Member hereby agrees that all current and future notices, confirmations and other communications
may be made by the Company via email, sent to the email address of record of the Member provided to the Company as changed or
updated from time to time, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication
is sufficient for all matters regarding the relationship between the Company and the Members except as otherwise required by law.
If any such electronically sent communication fails to be received for any reason, including but not limited to such communications
being diverted to the recipients spam filters by the recipients email service provider, or due to a recipient’s change of
address, or due to technology issues by the recipients service provider, the parties agree that the burden of such failure to
receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other
means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes,
including legal and regulatory, be deemed to have been delivered and received. Except as required by law, no physical, paper documents
will be sent to Members, and a Member desires physical documents then such Member agrees to be satisfied by directly and personally
printing, at such Member’s own expense, the electronically sent communication(s) and maintaining such physical records in
any manner or form that a Member desires.
Severability. In case any provision in this Agreement shall be deemed to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired hereby.
Interpretation The headings in this Agreement are inserted for convenience of reference only and shall not affect the interpretation
of this Agreement. As used herein, masculine pronouns shall include the feminine and neuter, neuter pronouns shall include the
masculine and the feminine, and the singular shall be deemed to include the plural. The use of the word “including”
herein shall not be considered to limit the provision that it modifies but instead shall mean “including, without limitation.”
No Third-Party Rights. Except as expressly provided in this Agreement, this Agreement is intended solely for the benefit
of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any Person other than
the parties hereto.
Entire Agreement. This Agreement constitutes the entire agreement of the Company, the Initial Member and any Person who
becomes a Member hereafter with respect to the matters described herein and supersedes any prior agreement or understanding among
them with respect to such subject matter.
Rule of Construction. The general rule of construction for interpreting a contract, which provides that the provisions
of a contract should be construed against the party preparing the contract, is waived by the parties hereto. Each party acknowledges
that such party was represented by separate legal counsel in this matter who participated in the preparation of this Agreement
or such party had the opportunity to retain counsel to participate in the preparation of this Agreement but elected not to do
Authority. Whenever in this Agreement or elsewhere it is provided that consent is required of, or a demand shall be made
by, or an act or thing shall be done by or at the direction of, the Company, or whenever any words of like import are used, all
such consents, demands, acts and things are to be made, given or done by the consent of the Board or Person acting under
the authority of the Board, unless a contrary intention is expressly indicated.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware,
without regard to the conflict of laws principles thereof.
Facsimile Signatures. The use of facsimile signatures affixed in the name and on behalf of the transfer agent and registrar
of the Company on certificates representing Shares is expressly permitted by this Agreement.
Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all
of which together shall constitute one instrument.
appear on following page]
WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first written above.
members now and hereafter admitted as Members of the Company, pursuant to powers of attorney now and hereafter executed in
favor of, and granted and delivered to the Company or without execution hereof or thereof by purchasing or otherwise lawfully
acquiring any Share, pursuant to Section 1.7.|
Capital Contributions, Shares
Xxxx, XX 00000
of Counterpart Signature Page
undersigned hereby accepts, and becomes a party to, the Amended and Restated Limited Liability Company Agreement (the “Agreement”)
of Masterworks 002, LLC, a Delaware limited liability company (the “Company”), in connection with the acquisition
of Shares (as defined in the Agreement) of the Company, and by its signature below signifies its agreement to be bound by the
terms and conditions of the Agreement.
refers to that certain painting by Xxxxxx Xxxxx, titled Coupe de Vent, 1881, Oil on canvas.