Limited Liability Company Agreement
chebeague.net, LLC

This Limited Liability Company Agreement (the "Agreement") made and entered into this sixth day of April, 2012 (the "Execution Date"),

AMONGST

-------------------------; Chebeague Island, ME 04017,
----------------------------------------------; Chebeague Island, ME 04017,
-------------------------------------------; Chebeague Island, ME 04017,
-----------------------------; Chebeague Island, ME 04017,
-------------------------------; Chebeague Island, ME 04017,
-----------------------------------; Cincinnati, OH 45208,
------------------------------------; Brookline, MA  02146,
----------------------------------; Chebeague Island, ME 04017,
-------------------------------; Chebeague Island, ME 04017,
--------------------------------; Chebeague Island, ME 04017,
------------------------------------; Cambridge, MA 02138,
-----------------------------------; Yarmouth, ME  04096,
-----------------------------------------; Harrison, NY  10528, and
------------------------------; Chebeague Island, ME 04017

(individually the "Member" and collectively the "Members").

BACKGROUND

A. The Members wish to associate themselves as members of a limited liability company, which succeeds chebeague.net, Inc. a Maine corporation established July 12, 2006, Charter Number 20070059 D with Employer Identification Number 20-5169528.

B. The terms and conditions of this Agreement will govern the members within the limited liability company.

IN CONSIDERATION OF and as a condition of the Members entering into this Agreement and other valuable consideration, the receipt and sufficiency of which is acknowledged, the parties to this Agreement agree as follows:

Formation

1. By this Agreement the Members form a Limited Liability Company (the "Company") in accordance with the laws of the State of Maine. The rights and obligations of the Members will be as stated in the Maine Limited Liability Company Act (the "Act") except as otherwise provided here.

Name

2. The name of the Company will be chebeague.net, LLC.

Purpose

3. The purpose of this company is to provide broadband Internet services to Chebeague Island, Maine.

Term

4. The Company will continue until terminated as provided in this Agreement or may dissolve under conditions provided in the Act.

Place of Business

5. The Principal Office of the Company will be located at 13 South Road or such other place as the Members may from time to time designate.

Capital Contributions

6. The following is a list of all Members and their Initial Capital Contributions to the Company.  These Capital Contributions to the Company reflect their respective ownership in chebeague.net, Inc. and are transferred dollar for dollar:

Distribution of Profits/Losses

7. Subject to the other provisions of this Agreement, the Net Profits or Losses of the Company, for both accounting and tax purposes, will accrue to and be borne by the Members in proportions equal to the value of their contribution.
   
   Distributions will be made according to the following schedule: Distributions are to be made annually after tax returns have been completed and returned and will be in such manner as the Managers determine to be in the Company’s best interest.
8. Tax Allocations will be borne by the Members in proportions equal to the value of their contribution.
9. No Member will have priority over any other Member for the distribution of Net Profits or Losses and will be in accordance with Internal Revenue Code Sec. 704(c) and the Regulations thereunder.

Voting

11. Each Member will have a single equal vote on any matter.

Nature of Interest

12. A Member's interest in the Company will be considered personal property, and will at no time be considered real property.
13. A Member's ownership interest in the Company will be represented by a certificate issued by the Company.

Withdrawal of Contribution

14. No Member will withdraw any portion of their Capital Contribution without the unanimous consent of the other Members.

Liability for Contribution

15. A Member's obligation to make their required Capital Contribution can only be compromised or released with the consent of all remaining Members or as described elsewhere in this Agreement. If a Member does not make the Capital Contribution when it is due, he is obligated at the option of the remaining Members to contribute cash equal to the agreed value of the Capital Contribution. This option is in addition to and not in lieu of any others rights, including the right to specific performance that the Company may have against the Member.

Additional Contributions

16. Capital Contributions may be amended from time to time, according to the requirements of the Company provided that the Members' interests are not affected, except with the unanimous consent of the Members. No Member will be required to make Additional Contributions. Whenever additional capital is determined to be required and an individual Member is unwilling or unable to meet the additional contribution requirement within a reasonable period, as required by business obligations, the remaining Members may contribute in proportion to their existing Capital Contributions to resolve the amount in default. In such case the allocation of Net Profits or Losses of the Company among all the Members may be adjusted to reflect the aggregate change in Capital Contributions by the Members.
17. Any advance of money to the Company by any Member in excess of the amounts provided for in this Agreement or subsequently agreed to, will be deemed a debt due from the Company rather than an increase in the Capital Contribution of the Member. This liability will be repaid with interest at such rates and times to be determined by a majority of the Members. This liability will not entitle the lending Member to any increased share of the Company's profits nor to a greater voting power. Resolution of such debts may have preference or priority over any other payments to Members as may be determined by a majority of the Members.

Capital Accounts

18. An individual capital account will be maintained for each Member and their initial Capital Contribution will be credited to this account. Any Additional Contributions made by any Member will be credited to that Member's individual Capital Account.

The Company shall maintain the Members’ Capital Accounts in accordance with Section 704(b) of the Internal Revenue Code and the Treasury Regulations promulgated thereunder.At the termination of the Company, after the Company has satisfied or provided for the satisfaction of all the Company’s debts and other obligations,the Company’s assets will be distributed in cash to the Member as follows:

First, in discharge of their respective Capital Accounts; and

Then, in proportion to the amount of a Member’s capital contribution.

If the Company lacks sufficient assets to make the distributions described in this Article the Company will make distributions in proportion to the amount in the respective Capital Accounts of the Members and each Member agrees to look solely to the assets of the Company for the return of its capital contribution.

No Member has a right to any distribution in any form other than money unless the Member receiving the in kind distribution consents or all Members receive undivided interest in the same property or all Members receive, in proportion to their rights to distribution, interests in substantially equivalent property.All distributions are subject to set off by the Company either in the case of a Member, for any past due obligations of the Member to make a contribution to the Company or in the case of an assignee of financial rights, for any past due obligation owed to the Company by the Member who originally owned the financial rights and no Member shall have priority over any other Member as to the return of such Member’s capital contribution, distributions or allocations.

Notwithstanding anything to the contrary herein, it is the intention of the Company that it be classified as a partnership for Federal Income Tax purposes and that it conform to the requirements of the Internal Revenue Code with respect to the validity of the allocations ofitems, income, gain, loss and tax credits.In the event of a change in the Internal Revenue Code or Treasury Regulations, the Members hereby agree to consult with tax counsel to determine whether an amendmentto this Agreement is required and if it is, to adopt such amendment.

Interest on Capital

19. No borrowing charge or loan interest will be due or payable to any Member on their agreed Capital Contribution inclusive of any agreed Additional Contributions.

Drawing Accounts

20. An individual drawing account will be maintained for each Member. Each Member will be entitled to draw against their share of the profits in such amounts and at such time as will be agreed by the Members. Losses will also be credited to the individual drawing accounts and each Member will be required to maintain a positive balance in their Drawing Account at all times. Failure to maintain a positive balance may be deemed an Involuntary Withdrawal of the offending Member and may be treated accordingly by the remaining Members.

Compensation of Members for Services Rendered

21. Members will be compensated by the Company for services rendered to or on behalf of the Company.

Management

22. Management of the Company is vested in the following managers (individually the "Manager" and collectively the "Managers") until such time as they are removed by the Members or withdraw from the position:

23. Management compensation will be as follows:

24. The duties, responsibilities of the Managers will include the following: All matters pertaining to the operation of the Company.
25. The limitations on the powers and authority of the Managers will include the following: Managers are limited to actions that do not affect the perpetuation of the Company, involve dissolution of the Company, or disposition of major Company assets.
26. At any time when there is more than one Manager, each Manager is authorized to act independently without prior consultation with or approval by the other Managers unless his or her authority is specifically limited by this LLC Agreement or a vote of the Members or unless another Manager objects to him or her so acting, in which case his or her right to act shall be suspended and the action which he or she proposes to take shall be submitted as soon as practicable to a vote of all of the Members.  An affirmative vote of a majority in number of all Members shall be required to approve such action.
27. The Members may remove one or more Managers under the following conditions: By unanimous vote of the remaining Members with or without cause.
28. A Manager may voluntarily withdraw as Manager under the following conditions: With thirty (30) days notice.
29. A Manager may be added to the Company, under the following conditions: Majority vote of the Members.
30. A Manager will be reimbursed for expenses directly related to the operation of the Company.
31. All the Members will be consulted and the advice and opinions of the Members will be obtained as much as is practicable. However, a Manager will have management and control of the day-to-day business of the Company for the purposes stated in this Agreement. All matters outside the day-to-day business of the Company will be decided by the Members as outlined elsewhere in this Agreement.
32. In addition to day-to-day management tasks and any other duties and responsibilities already identified in this Agreement, the Manager's duties will include keeping, or causing to be kept, full and accurate business records for the Company according to accepted accounting practices and overseeing the preparation of any reports considered reasonably necessary to keep the Members informed of the business performance of the Company.
33. A Manager will not be liable to the Members for any action or failure to act resulting in loss or harm to the Company except in the case of gross negligence or willful misconduct.
34. Subject to the Duty of Loyalty section of this Agreement, a Manager may engage in activities with other business entities where they are or may become a member or manager. A transaction between the Company and another company in which the Manager has a financial interest will not be void for this reason alone. The transaction will be valid only where it has been fully disclosed to the Members of the Company and they agree to the transaction.
35. Each Manager will devote such time and attention to the business of the Company as required to carry out their duties and responsibilities for the conduct of the Company's business.

Authority to Bind Company

36. Only the following individuals have authority to bind the Company in contract: Managers.

Duty of Loyalty

37. No Member or Manager will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Company or that would be in direct conflict of interest to the Company. Any potential conflicts of interest will be deemed an Involuntary Withdrawal of the offending Member or Manager and may be treated accordingly by the remaining Members. A withdrawing Member or Manager will not carry on a similar business to the business of the Company within any established or contemplated market regions of the Company for a period of at least 2 years after the date of withdrawal.

Duty to Devote Time

38.  Each Manager will devote such time and attention to the business of the Company as the majority of the Members will from time to time reasonably determine necessary for the conduct of the Company business.

Member Meetings

39. Member meetings will be held at the Principal Office of the Company, or any other location that the Members may from time to time designate: As agreed to by Members..
40. Any impending Member meeting will require three (3) days notice be given to all Members.
41. A meeting may be called by any Member providing that appropriate notice has been provided to the other Members.
42. There must be at least 51.00% of the Members present at a meeting for any decisions to be binding. If the minimum number of Members are not present at the meeting, actions may still be taken by the present Members if prior written consent of the absent Members has been obtained.  A Member may assign his voting proxy to another Member.

Admission of New Members

43. A new Member may only be admitted to the Company with a majority vote of the existing Members.
44. The new Member agrees to be bound by all the covenants, terms, and conditions of this Agreement, inclusive of all current and future amendments. Further, a new Member will execute such documents as are needed to effect the admission of the new Member. Any new Member will receive such business interest in the Company as determined by a unanimous decision of the other Members.

Dissociation of a Member

45. Voluntary Withdrawal: No Member may voluntarily withdraw from the Company for a period of 30 days from the execution date of this Agreement. After the expiration of this period, any Member (the "Dissociated Member") will have the right to voluntarily withdraw from the Company at the end of any fiscal year. Written notice of intention to withdraw must be served upon the remaining Members at least 30 days prior to the fiscal year end. The withdrawal of such Member will have no effect upon the continuance of the Company business. If the remaining Members elect to purchase the interest of the withdrawing Member, the Members will serve written notice of such election upon the withdrawing Member within thirty (30) days after receipt of the withdrawing Member's notice of intention to withdraw, including the purchase price and method and schedule of payment for the withdrawing Member's interest. The purchase amount of any buyout of a Member's interest will be determined as outlined in the Valuation of Interest section of this Agreement. It remains incumbent on the withdrawing Member to exercise this right in good faith and to minimize any present or future harm done to the remaining Members as a result of the withdrawal.
46. Involuntary Withdrawal: Events leading to the involuntary withdrawal of a Member (the "Dissociated Member") from the Company will include but not be limited to: death of a Member; Member mental incapacity; Member disability preventing reasonable participation in the Company; Member incompetence; breach of fiduciary duties by a Member; criminal conviction of a Member; Operation of Law against a Member or a legal judgment against a Member that can reasonably be expected to bring the business or societal reputation of the Company into disrepute. Expulsion of a Member can also occur on application by the Company or another Member, where it has been judicially determined that the Member: has engaged in wrongful conduct that adversely and materially affected the Company's business; has willfully or persistently committed a material breach of the Limited Liability Company Agreement or of a duty owed to the Company or to the other Members; or has engaged in conduct relating to the Company's business that makes it not reasonably practicable to carry on the business with the Member. The withdrawal of such Member will have no effect upon the continuance of the Company business. If the remaining Members elect to purchase the interest of the withdrawing Member, the remaining Members will serve written notice of such election, including the purchase price and method and schedule of payment for the withdrawing Member's interest, upon the withdrawing Member, their executor, administrator, trustee, committee or analogous fiduciary within a reasonable period after acquiring knowledge of the change in circumstance to the affected Member. The purchase amount of any buyout of a Member's interest will be determined as outlined in the Valuation of Interest section of this Agreement.
47. On any purchase and sale made pursuant to this section, a Dissociated Member will only have liability for Company obligations that were incurred during their time as a Member. Immediately upon purchase of a withdrawing Member's interest, the Company will prepare, file, serve, and publish all notices required by law to protect the withdrawing Member from liability for future Company obligations. Where the remaining Members have purchased the interest of a dissociated Member, the purchase amount will be paid in full, but without interest, within 90 days of the date of withdrawal. The Company will retain exclusive rights to use of the trade name and firm name and all related brand and model names of the Company and to all intellectual property and trade secrets and equipment and other property of the Company.
48. The remaining Members retain the right to seek damages from a dissociated Member where the dissociation resulted from a malicious or criminal act by the dissociated Member or where the dissociated Member had breached their fiduciary duty to the Company or was in breach of this Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to the Company or to the reputation of the Company.

Buyout Agreement

49. In the event of a Member's interest in the Company becoming for sale, due to any reason, the remaining Members of the Company have a right of first purchase on the interest. The value of the interest in the Company will be determined as outlined in the Valuation of Interest section of this Agreement.

Assignment of Interest

50. Where a Member's financial interest in the Company is assigned to another party, that Member forfeits any duties and rights arising from their status as a Member and those duties and rights will not be passed to the acquiring party. Obligations to contribute are not negated by this forfeiture.

Valuation of Interest

51. In the absence of a written agreement setting a value, the value of the Company will be based on the fair market value appraisal of all Company assets (less liabilities) determined in accordance with generally accepted accounting procedures. This appraisal will be conducted by an independent accounting firm agreed to by all Members. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Members. A withdrawing Member's interest will be in proportion to their profit and loss share in the Company, less any outstanding liabilities a Member may have to the Company. The intent of this section is to ensure the survival of the Company despite the withdrawal of any individual Member.
52. No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Company books immediately prior to valuation.

Dissolution

53. The Company may be dissolved by a unanimous vote of the Members. The Company will also be dissolved on the occurrence of events specified in the Act.
54. Upon Dissolution of the Company and liquidation of Company property, and after payment of all selling costs and expenses, the liquidator will distribute the Company assets to the following groups according to the following order of priority:
    1. in satisfaction of liabilities to creditors except Company obligations to current Members;
    2. in satisfaction of Company obligations to current Members to pay debts; and
    3. to the Members in proportion to their profit and loss share in the Company.
55. The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess of Company assets after liabilities or any insufficiency in Company assets in resolving liabilities under this section will be resolved by the Members in proportion to the profit and loss share of each Member as set out in this Agreement.

Records

56. The Company will at all times maintain accurate records of the following:

1. Information regarding the status of the business and the financial condition of the Company.
2. A copy of the Company federal, state, and local income taxes for each year (promptly after becoming available).
3. Name and last known business, residential, or mailing address of each Member and Manager, as well as the date that person became a Member or Manager.
4. A copy of this Agreement and any articles or certificate of formation, as well as all amendments, together with any executed copies of any written powers of attorney pursuant to which this Agreement, articles or certificate, and any amendments have been executed.
5. The cash, property, and services contributed to the Company by each Member, along with a description and value, and any contributions that have been agreed to be made in the future.
57. Each Member has the right to demand, within a reasonable period of time, a copy of any of the above documents for any purpose reasonably related to their interest as a Member of the Company, at their expense.
58. Each Manager has the right to examine the above documents for any purpose reasonably related to their position as Manager of the Company.

Books of Account

59. Accurate and complete books of account of the transactions of the Company will be kept and at all reasonable times be available and open to inspection and examination by any Member.  The Books of Account will be kept on the cash basis method of accounting.

Banking and Company Funds

60. The funds of the Company will be placed in such investments and banking accounts as will be designated by the Managers. All withdrawals from these accounts will be made by the duly authorized agent or agents of the Managers as agreed by unanimous consent of the Managers. Company funds will be held in the name of the Company and will not be commingled with those of any other person or entity.

Audit

61. Any of the Members will have the right to request an audit of the Company books, subject to a majority vote of the Members. The cost of the audit will be borne by the Company. The audit will be performed by an accounting firm acceptable to all the Members. Not more than one (1) audit will be required by any or all of the Members for any fiscal year.

Fiscal Year End

62. The fiscal year end of the Company is the 1st day of January.

Tax Treatment

63. This Company is intended to be treated as a corporation, for the purposes of Federal and State Income Tax.  The Company's predecessor, chebeague.net, Inc. elected to be taxed as an S-Corporation, as will chebeague.net, LLC

Annual Report

64. As soon as practicable after the close of each fiscal year, the Company will furnish to each Member an annual report showing a full and complete account of the condition of the Company including all information as will be necessary for the preparation of each Member's income or other tax returns. This report will consist of at least:

1. A copy of the Company's year-end Profit and Loss Statement
2. A copy of the Company's year-end Balance Sheet

A copy of the Company's federal income tax returns for that fiscal year will be available on request.

Goodwill

65. The goodwill of the Company will be assessed at an amount to be determined by appraisal using generally accepted accounting procedures.

Governing Law

66. This Agreement shall be governed by the laws of the state of Maine and The Members submit to the jurisdiction of the courts of the State of Maine for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement.

Mediation and Arbitration

67. In the event a dispute arises out of or in connection with this Agreement, the parties will attempt to resolve the dispute through friendly consultation. If the dispute is not resolved within a reasonable period then any or all outstanding issues may be submitted to mediation in accordance with any statutory rules of mediation. If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration in accordance with the laws of the State of Maine. The arbitrator's award will be final, and judgment may be entered upon it by any court having jurisdiction within the State of Maine.

Force Majeure

68. A Member will be free of liability to the Company where the Member is prevented from executing their obligations under this Agreement in whole or in part due to force majeure, such as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event where the Member has communicated the circumstance of the event to any and all other Members and where the Member has taken any and all appropriate action to satisfy his duties and obligations to the Company and to mitigate the effects of the event.

Forbidden Acts

69. No Member may do any act in contravention of this Agreement.
70. No Member may permit, intentionally or unintentionally, the assignment of express, implied or apparent authority to a third party that is not a Member of the Company.
71. No Member may do any act that would make it impossible to carry on the ordinary business of the Company.
72. No Member will have the right or authority to bind or obligate the Company to any extent with regard to any matter outside the intended purpose of the Company.  A Member who takes any unauthorized action purportedly on behalf of the Company shall indemnify and hold the Company harmless from any costs or damages incurred by the Company as a result thereof.
73. No Member may confess a judgment against the Company.
74. Any violation of the above forbidden acts will be deemed an Involuntary Withdrawal of the offending Member and may be treated accordingly by the remaining Members.

Indemnification

75. All Members will be indemnified and held harmless by the Company from and against any and all claims of any nature, whatsoever, arising out of a Member's participation in Company affairs. A Member will not be entitled to indemnification under this section for liability arising out of gross negligence or willful misconduct of the Member or the breach by the Member of any provisions of this Agreement.

Liability

76. A Member or any employee will not be liable to the Company or to any other Member for any mistake or error in judgment or for any act or omission believed in good faith to be within the scope of authority conferred or implied by this Agreement or the Company. The Member or employee will be liable only for any and all acts and omissions involving intentional wrongdoing.

Liability Insurance

77. The Company may acquire insurance on behalf of any Member, employee, agent or other person engaged in the business interest of the Company against any liability asserted against them or incurred by them while acting in good faith on behalf of the Company.

Life Insurance

78. The Company will have the right to acquire life insurance on the lives of any or all of the Members, whenever it is deemed necessary by the Company. Each Member will cooperate fully with the Company in obtaining any such policies of life insurance.

Amendment of Limited Liability Company Agreement

79. Majority vote of the Members.
80. Amendment of this section or the Voting section will require the unanimous written consent of all Members.

Title to Company Property

81. Title to all Company property will remain in the name of the Company. No Member or group of Members will have any ownership interest in Company property in whole or in part.

Miscellaneous

82. Time is of the essence in this Agreement.
83. This Agreement may be executed in counterparts.
84. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in a neutral gender include the masculine gender and the feminine gender and vice versa.
85. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
86. This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations that may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements have no force or effect in respect to this Agreement. Only the written terms of this Agreement will bind the parties.
87. This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Member's successors, assigns, executors, administrators, beneficiaries, and representatives.
88. Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
89. All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law.

Definitions

90. For the purpose of this Agreement, the following terms are defined as follows:

1. “Execution Date” means the date that the Certificate of Formation (MLLC-6) and Statement of Conversion (MLLC-CONV) and associated fees were submitted to the Secretary of State of the State of Maine.
2. "Additional Contribution" means Capital Contributions, other than Initial Contributions, made by Members to the Company.
3. "Capital Contribution" means the total amount of cash, property, or services contributed to the Company by any one Member.
4. "Initial Contribution" means Capital Contributions made by any Member to acquire an interest in the Company.
5. "Net Profits or Losses" means the net profits or losses of the Company as determined by generally accepted accounting principles.
6. "Operation of Law" means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited to, an assignment for the benefit of creditors, a divorce, or a bankruptcy.
7. "Principal Office" means the office whether inside or outside the State of Maine where the executive or management of the Company maintain their primary office.

IN WITNESS WHEREOF the parties have duly affixed their signatures as follows:

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