SEASONS CREEK DEVELOPMENT, LLC

 

 

 

FIRST AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

Dated as of October 19, 2016

 

THE SHARES REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY OTHER APPLICABLE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD, ASSIGNED,
PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION
UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER
RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

 

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TABLE OF CONTENTS

 

      Page         ARTICLE I DEFINITIONS   4         ARTICLE II ORGANIZATIONAL
MATTERS   13 2.1 Formation of LLC   13 2.2 Limited Liability Company Agreement  
13 2.3 Name   13 2.4 Purpose   13 2.5 Principal Office; Registered Office   13
2.6 Term   14 2.7 No State-Law Partnership   14         ARTICLE III CAPITAL
CONTRIBUTIONS   14 3.1 Shareholders   14 3.2 Vesting Shares   15 3.3 Capital
Accounts   15 3.4 Negative Capital Accounts   16 3.5 No Withdrawal   16 3.6
Loans From Shareholders   16 3.7 Distributions In-Kind   16 3.8 Transfer of
Shares   16 3.9 Repurchase of Shares   16 3.10 Conversion to Corporation   17  
      ARTICLE IV DISTRIBUTIONS AND ALLOCATIONS   17 4.1 Distributions   17 4.2
Allocations   18 4.3 Special Allocations   19 4.4 Tax Allocations   20 4.5
Offsetting Allocations   20 4.6 Forfeiture of Unvested Shares   20 4.7
Indemnification and Reimbursement for Payments on Behalf of a Shareholder   20

 

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ARTICLE V MANAGEMENT   21 5.1 Authority of the Managing Member   21 5.2
Delegation of Authority   23 5.3 Purchase of Shares   23 5.4 Limitation of
Liability   23         ARTICLE VI RIGHTS AND OBLIGATIONS OF SHAREHOLDERS   24
6.1 Limitation of Liability   24 6.2 Lack of Authority   25 6.3 No Right of
Partition   25 6.4 Indemnification   25 6.5 Members Right to Act   26 6.6
Investment Opportunities and Conflicts of Interest   26 6.7 Confidentiality   26
        ARTICLE VII BOOKS, RECORDS, ACCOUNTING AND REPORTS   27 7.1 Records and
Accounting   27 7.2 Fiscal Year   27 7.3 Reports   27 7.4 Transmission of
Communications   28         ARTICLE VIII TAX MATTERS   28 8.1 Preparation of Tax
Returns   28 8.2 Tax Elections   28 8.3 Tax Controversies   28         ARTICLE
IX TRANSFER OF SHARES   28 9.1 Transfers by Members   28 9.2 Exit Rights   29
9.3 First Refusal Rights   29 9.4 Tag Along Rights   30 9.5 Approved Sale; Drag
Along Obligations; Public Offering   30 9.6 Void Transfers   31 9.7 Effect of
Assignment   31 9.8 Additional Restrictions on Transfer   31 9.9 Prospective
Transferees   32 9.10 Legend   32 9.11 Transfer Fees and Expenses   32        
ARTICLE X ADMISSION OF MEMBERS   33 10.1 Substituted Members   33 10.2
Additional Members   33         ARTICLE XI WITHDRAWAL AND RESIGNATION OF
SHAREHOLDERS   33 11.1 Withdrawal and Resignation of Member   33

 

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ARTICLE XII DISSOLUTION AND LIQUIDATION   33 12.1 Dissolution   33 12.2
Liquidation and Termination   33 12.3 Cancellation of Certificate   35 12.4
Reasonable Time for Winding Up   35 12.5 Return of Capital   35 12.6
Hart-Scott-Rodino Act   35         ARTICLE XIII GENERAL PROVISIONS   35 13.1
Information Rights   35 13.2 Power of Attorney   35 13.3 Amendments   36 13.4
Title to LLC Assets   36 13.5 Remedies   36 13.6 Successors and Assigns   36
13.7 Severability   37 13.8 Counterparts   37 13.9 Descriptive Headings;
Interpretation   37 13.10 Applicable Law   37 13.11 Addresses and Notices   37
13.12 Creditors   37 13.13 Waiver   38 13.14 Further Action   38 13.15 Offset  
38 13.16 Entire Agreement   38 13.17 Opt-in to Article 8 of the Uniform
Commercial Code   38 13.18 Delivery by Facsimile   38 13.19 Arbitration   38
13.20 Survival   38 13.21 Expenses   39 13.22 Acknowledgements   39

 

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FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

 

OF SEASONS CREEK DEVELOPMENT, LLC

 

This FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
“Agreement”), dated as of 19-th day of October 2016 (the “Effective Date”) is
adopted, executed and agreed to, for good and valuable consideration, by and
among the Members.

 

ARTICLE I

 

DEFINITIONS

 

Capitalized terms used but not otherwise defined herein shall have the following
meanings:

 

“Actual Per Share Purchase Price” has the meaning set forth in Section 3.1(b).

 

“Additional Member” means a Person admitted to the LLC as a Member pursuant to
Section 10.2.

 

“Adjusted Capital Account Deficit” means with respect to any Capital Account as
of the end of any Taxable Year, the amount by which the balance in such Capital
Account is less than zero. For this purpose, such Person’s Capital Account
balance shall be

 

  (i) reduced for any items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6), and         (ii) increased for any amount
such Person is obligated to contribute to the LLC or is treated as being
obligated to contribute to the LLC pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(c) (relating to partner liabilities to a partnership) or
1.704-2(g)(1) and 1.704-2(i) (relating to minimum gain).

 

“Affiliate” of any particular Person means (i) any other Person controlling,
controlled by or under common control with such particular Person, where
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities, by contract or otherwise, and (ii) if such Person is a partnership,
any partner thereof.

 

“Agreement” means this Agreement, as amended, modified and waived from time to
time in accordance with the terms hereof.

 

“Approved Sale” has the meaning set forth in Section 9.5(a).

 

“Assignee” means a Person to whom Shares have been Transferred in accordance
with the terms of this Agreement and the other agreements contemplated hereby,
but who has not become a Member pursuant to Article X.

 

“Authorization Date” has the meaning set forth in Section 9.3(a).

 

“Base Rate” means, on any date, a variable rate per annum equal to the rate of
interest most recently published by The Wall Street Journal as the “prime rate”
at large U.S. money center banks.

 

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“Book Value” means, with respect to any LLC property, the LLC’s adjusted basis
for federal income tax purposes, adjusted from time to time to reflect the
adjustments required or permitted by Treasury Regulation Section
1.704-1(b)(2)(iv)(d)-(g).

 

“Business” means, at any particular time, the manufacture, design, assembly and
sale of capital equipment and related services for the solar power industry or
any other business conducted by GT Equipment Technologies or any Subsidiaries of
the LLC or GT Equipment Technologies.

 

“Capital Account” means the capital account maintained for a Member pursuant to
Section 3.3.

 

“Capital Contributions” means any cash, cash equivalents, promissory obligations
or the Fair Market Value of other property which a Shareholder contributes or is
deemed to have contributed to the LLC with respect to any Share pursuant to
Section 3.1 or thereafter.

 

“Cause” means, with respect to any Member (including the Managing Member), one
or more of the following: (i) the commission of a felony or other crime
involving moral turpitude or the commission of any other act or omission
involving dishonesty, disloyalty or fraud with respect to any other Member, the
Company, or the Managing Member, or any of their respective Subsidiaries or any
of their customers or suppliers, (ii) reporting to work or performing duties
under the influence of alcohol or illegal drugs, the use of illegal drugs
(whether or not at the workplace) or other repeated conduct causing any other
Member, the Company, or the Managing Member or any of their Subsidiaries a
public disgrace or disrepute or an economic harm, (iii) substantial and repeated
failure to perform duties as reasonably directed, (iv) any act or omission
aiding or abetting a competitor, supplier or customer of any other Member, the
Company, the Managing Member or any of their Subsidiaries to the material
disadvantage or detriment of the Company, any other Member, or the Managing
Member, or/and their Subsidiaries, (v) breach of fiduciary duty, gross
negligence or willful misconduct with respect to the Company, any other Member,
or the Managing Member, or/any of their Subsidiaries or (vi) any other material
breach of any agreement to which such Member is a party. Notwithstanding the
foregoing, in the case of any Employee that is party to a written employment
agreement with Helpful Alliance or any of its Subsidiaries, which employment
agreement contains a definition for the term “Cause,” the definition of “Cause”
with respect to such Employee for purposes of this Agreement shall be as set
forth in such employment agreement.

 

“Certificate” means the LLC’s Certificate of Formation as filed with the
Secretary of Commonwealth of Virginia.

 

“Certificated Shares” has the meaning set forth in Section 9.10.

 

“Class A Preferred Share” means a Share having the rights and obligations with
respect to Limited Liability Membership Interests of Class A specified in this
Agreement.

 

“Class A Shareholder” means a holder of one or more Class A Preferred Shares.

 

“Class A Yield” means, with respect to each Class A Preferred Share, the amount
accruing on such Class A Share on annual basis at the non-compounding rate of
14.0% of Unreturned Capital of such Class A Share per annum, such rate starting
to accrue on the date such Class A Preferred Share is issued to the Class A
Shareholder thereof and continually accruing until the Unreturned Capital of
such Class A Share is repaid in full.

 

“Class A Profit Share” means the amount equal to 30.0% of the Net Cash Available
to Distribution to all Members.

 

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“Class B Preferred Share” means a Share having the rights and obligations with
respect to for Limited Liability Membership Interests of Class B specified in
this Agreement.

 

“Class B Shareholder” means a holder of one or more Class B Preferred Shares.

 

“Class B Yield ” means, with respect to each Class B Share, the amount accruing
on such Class B Share on an annual basis at the non- compounding rate of 14.0%
of Unreturned Capital of such Class A Share per annum, such rate starting to
accrue on the date such Class B Share is issued to the Class B Shareholder
thereof and continually accruing until the Unreturned Capital of such Class B
Share is repaid in full.

 

“Class B Profit Share” means the amount equal to 30.0% of the Net Cash Available
to Distribution.

 

“Class C Preferred Share” means a Share having the rights and obligations with
respect to Limited Liability Membership Interests of Class C specified in this
Agreement.

 

“Class C Shareholder” means a holder of one or more Class C Preferred Shares.

 

“Class C Yield ” means, with respect to each Class C Share, the amount accruing
on such Class C Share on annual basis at the non-compounding rate of 12.0% of
Unreturned Capital of such Class A Share per annum, such rate starting to accrue
on the date such Class C Share is issued to the Class C Shareholder thereof and
continually accruing until the Unreturned Capital of such Class C Share is
repaid in full.

 

“Class C Profit Share” means the amount equal to 35.0% of the Net Cash Available
to Distribution.

 

“Common Share” means a Share having the rights and obligations specified with
respect to Common Limited Liability Membership Interests specified in this
Agreement.

 

“Common Shareholder” means a holder of Common Shares.

 

“Common Profit Share” means the amount equal to 5.0% of the Net Cash Available
to Distribution to all Members.

 

“Code” means the United States Internal Revenue Code of 1986, as amended. Such
term shall, at the Managing Member’s sole discretion, be deemed to include any
future amendments to the Code and any corresponding provisions of succeeding
Code provisions (whether or not such amendments and corresponding provisions are
mandatory or discretionary; provided, however, that if they are discretionary,
the term “Code” shall not include them if including them would have a material
adverse effect on any Shareholder).

 

“Competitor” means any Person engaged or proposing to engage in the same
Business conducted, whether directly or indirectly through one or more
affiliates, as the LLC.

 

“Confidential Information” has the meaning set forth in Section 6.7.

 

“Virginia Act” means the Virginia Limited Liability Company Act, as it may be
amended from time to time, and any successor to the Virginia Act.

 

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“Distribution” means each distribution made by the LLC to a Shareholder, whether
in cash, property or securities of the LLC and whether by liquidating
distribution, redemption, repurchase or otherwise; provided that none of the
following shall be a Distribution: (a) any redemption or repurchase by the LLC
of any securities of the LLC, (b) any recapitalization or exchange of securities
of the LLC, and any subdivision (by Share split or otherwise) or any combination
(by reverse Share split or otherwise) of any outstanding Shares, or (c) any
reasonable fees, other remuneration or expense reimbursement paid to any
Shareholder in such Shareholder’s capacity as an employee, officer, consultant
or other provider of services to the LLC (including payments pursuant to Section
13.21).

 

“Equity Securities” shall have the meaning set forth in Section 3.1(c).

 

“Event of Withdrawal” means the death, retirement, resignation, expulsion,
bankruptcy or dissolution of a Member or the occurrence of any other event that
terminates the continued membership of a Member in the LLC.

 

“Exchange Agreement” means an agreement which may be executed in connection with
the exchange of the Shares into debt or equity securities of Helpful Alliance
(defined in this section below).

 

“Fair Market Value” of any asset in question shall mean the fair market value of
such asset as determined in the reasonable discretion of the Managing Member,
provided that the Fair Market Value of any publicly-traded security as of any
date, shall be the average closing prices of such security’s sales on the
primary domestic securities exchange on which such security may at the time be
listed for the previous 20 business days of such date on which such exchange was
open.

 

“Fiscal Period” means any interim accounting period within a Taxable Year
established by the Managing Member and which is permitted or required by Code
Section 706.

 

“Fiscal Quarter” means each calendar quarter ending March 31, June 30, September
30 and December 31, or such other quarterly accounting period as may be
established by the Managing Member.

 

“Fiscal Year” means the LLC’s annual accounting period established pursuant to
Section 7.2.

 

“Forfeiture Allocations” has the meaning set forth in Section 4.3(f).

 

“Governmental Entity” means the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.

 

“Helpful Alliance” means Helpful Alliance Company, a Florida Corporation,
inclusive of any of its Affiliates and Subsidiaries.

 

“Helpful Alliance Employee” has the meaning set forth in Section 3.2(b).

 

“HSR Act” has the meaning set forth in Section 12.6.

 

“Indebtedness” means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business), and
(iv) any commitment by which a Person assures a creditor against loss
(including, without limitation, contingent reimbursement obligations with
respect to letters of credit).

 

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“Indemnified Person” has the meaning set forth in Section 6.4(a).

 

“IRR” means, as of any measurement date, the non-compounding interest rate
which, when used as the discount rate to calculate the net present value as of
December 31 of each fiscal year of the LLC of (i) the aggregate amounts which
have previously been distributed in cash to the Shareholders pursuant to Section
4.1 and (ii) the aggregate Capital Contributions made with respect to the Class
A Shares, causes such net present value to equal zero. For purposes of the net
present value calculation, (A) Distributions shall be positive numbers, (B)
Capital Contributions shall be negative numbers, and (C) Distributions and
Capital Contributions shall be deemed to have been received or made on the
actual date of such receipt or payment.

 

“Liquidation Assets” has the meaning set forth in Section 12.2(b).

 

“Liquidation FMV” has the meaning set forth in Section 12.2(b).

 

“Liquidation Statement” has the meaning set forth in Section 12.2(b).

 

“LLC” means Seasons Creek Development, LLC, a Virginia limited liability
company.

 

“Losses” means items of LLC loss and deduction determined according to Section
3.3.

 

“Majority Vote” means an affirmative vote representing at least 2/3 of the
voting power attributed to the voting Shares then issued and outstanding.

 

“Managing Member” means Helpful Alliance, and any successors thereto.

 

“Member” means each Person listed on the Schedule of Shareholders, as amended,
attached hereto as Exhibit A and any Person admitted to the LLC as a Substituted
Member or Additional Member; but only for so long as such Person is shown on the
LLC’s books and records as the owner of at least one non-voting Share.

 

“Minimum Gain” means the partnership minimum gain determined pursuant to
Treasury Regulation Section 1.704-2(d).

 

“New Share” has the meaning set forth in Section 4.1(c)(ii).

 

“Net Cash Available For Distribution” means the gross cash proceeds from Company
operations, including sales of homes and other property in the ordinary course
of business, less capitalized costs as such term is defined in the Uniform
Capitalization (UNICAP) rules of Section 263A of the Internal Revenue Code, less
the cash used to pay or establish reserves for expenses, debt and interest
payments, capital improvements, replacements, and contingencies, and operating
expenses, including the construction management fees, as set forth in Section
4.1(b) hereof.

 

“Non-Power Equity” means any securities issued directly or indirectly with
respect to the foregoing securities by way of a unit split, unit dividend, or
other division of securities, or in connection with a combination of securities,
recapitalization, merger, consolidation, or other reorganization. As to any
particular securities constituting Non-Power Equity, such securities shall cease
to be Non-Power Equity when they have been (a) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them, (b) distributed to the public through a broker, dealer or market
maker pursuant to Rule 144 under the Securities Act (or any similar provision
then in force), or (c) repurchased by the LLC or any Subsidiary.

 

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“Note” means any Promissory Note issued by thru Company having an Interest Rate
(as defined therein) and a Maturity Date (as defined therein) and the date of
demand of payment by the Lender therein, exchangeable, at the option of the
Lender, for Class A Shares at any time after the Maturity Date if the Repayment
Amount (as defined therein) has not been paid.

 

“Offer Notice” has the meaning set forth in Section 9.3(a).

 

“Offered Shares” has the meaning set forth in Section 9.3(a).

 

“Other Business” has the meaning set forth in Section 6.6.

 

“Other Members” has the meaning set forth in Section 9.4(a).

 

“Outstanding Value” has the meaning set forth in Section 4.1(c)(ii).

 

“Permitted Transferee” means (i) with respect to any Member who is a natural
person, such Member’s spouse and descendants (whether natural or adopted) and
any trust that is and at all times remains solely for the benefit of the Member
and/or the Member’s spouse and/or descendants, and (ii) with respect to any
Member which is an entity, any of such Member’s Affiliates.

 

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, association or other entity or a Governmental
Entity.

 

“Pro Rata Share” means with respect to each Share, the proportional amount such
Share would receive if an amount equal to the Total Equity Value were
distributed to all Shares in accordance with Section 4.1(b), and with respect to
each Shareholder, the aggregate Pro Rata Share with respect to Shares owned by
such Shareholder, in each case as determined in good faith by the Managing
Member.

 

“Profits” means items of LLC income and gain determined according to Section
3.3.

 

“Proportional Share” has the meaning set forth in Section 3.1(d)(i).

 

“Public Offering” means any sale, in a public offering registered under the
Securities Act, of the LLC’s (or any successor’s) equity securities.

 

“Regulatory Allocations” has the meaning set forth in Section 4.3(e).

 

“Repurchase Notice” has the meaning set forth in Section 3.9.

 

“Restricted Shares” means all Shares other than Shares which have (i) been
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (ii) become eligible for sale pursuant to
Rule 144(k) or (iii) been otherwise Transferred and new certificates for them
not bearing the Securities Act legend set forth in Section 9.10 have been
delivered by the LLC.

 

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“Sale of the LLC” means a sale of the outstanding Shares or assets of the LLC by
the holder(s) thereof to any Person (other than the LLC, any Subsidiary of the
LLC, or Helpful Alliance) pursuant to which such party or parties acquire (i) a
majority of the outstanding vested Shares of the LLC (whether by merger,
consolidation, sale or Transfer of Shares or otherwise) or (ii) all or
substantially all of the LLC’s assets determined on a consolidated basis.

 

“Sale Notice” has the meaning set forth in Section 9.4(a).

 

“Securities Act” means the Securities Act of 1933, as amended, and applicable
rules and regulations thereunder, and any successor to such statute, rules or
regulations. Any reference herein to a specific section, rule or regulation of
the Securities Act shall be deemed to include any corresponding provisions of
future law.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended,
and applicable rules and regulations thereunder, and any successor to such
statute, rules or regulations. Any reference herein to a specific section, rule
or regulation of the Securities Exchange Act shall be deemed to include any
corresponding provisions of future law.

 

“Share” means a Share of a Member or an Assignee in the LLC representing a
fractional part of interests in Profits, Losses and Distributions of the LLC
held by all Members and Assignees and shall include Class A Shares, Class B
Shares, Class C Shares, and Common Shares; provided that any class or group of
Shares issued shall have the relative rights, powers and duties set forth in
this Agreement.

 

“Shareholder” means any Member owning one or more Shares as reflected on the
Schedule of Shareholders, as amended, attached hereto as Exhibit A.

 

“Statement of Disagreement” has the meaning set forth in Section 12.2(c).

 

“Subscription Agreement” means, with respect to any Person, the subscription
agreement executed in order to purchase the Shares.

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity (other than a corporation), a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association or other
business entity gains or losses or shall be or control any managing director or
general partner of such limited liability company, partnership, association or
other business entity. For purposes hereof, references to a “Subsidiary” of any
Person shall be given effect only at such times that such Person has one or more
Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a
Subsidiary of the LLC.

 

“Substituted Member” means a Person that is admitted as a Member to the LLC
pursuant to Section 10.1.

 

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“Tax” or “Taxes” means any federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, utility, customs,
duties, real property, personal property, capital stock, social security,
unemployment, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, including any interest, penalties or
additions to tax or additional amounts in respect of the foregoing, in all cases
whether or not disputed.

 

“Tax Distribution” has the meaning set forth in Section 4.1(a).

 

“Tax Exempt Partner” means any equity holder of a Shareholder (or, with respect
to any equity holder of a Shareholder that is taxed as a partnership for federal
income tax purposes (a “flow-through entity”), any equity holder of such
flow-through entity) which is exempt from income taxation under Section 501(a)
of the Code.

 

“Tax Matters Partner” has the meaning set forth in Section 6231 of the Code. The
Managing Member shall be the initial Tax Matters Partner.

 

“Taxable Year” means the LLC’s accounting period for federal income tax purposes
determined pursuant to Section 8.2.

 

“Total Equity Value” means the aggregate proceeds which would be received by the
Shareholders if: (i) the assets of the LLC as a going concern were sold at their
Fair Market Value; (ii) the LLC satisfied and paid in full all of its
obligations and liabilities (including all Taxes, costs and expenses incurred in
connection with such transaction, as well as any indebtedness of the LLC and any
reserves established by the Managing Member for contingent liabilities); and
(iii) such net sale proceeds were then distributed in accordance with Section
4.1(b), all as determined in good faith by the Managing Member, except that Fair
Market Value shall be determined in accordance with the definition thereof in
this Agreement.

 

“Transfer” means any sale, transfer, assignment, pledge, mortgage, exchange,
hypothecation, grant of a security interest or other direct or indirect
disposition or encumbrance of an interest whether with or without consideration,
whether voluntarily or involuntarily or by operation of law) or the acts
thereof. The terms “Transferee,” “Transferred,” and other forms of the word
“Transfer” shall have correlative meanings.

 

“Transferring Shareholder” has the meaning set forth in Section 9.3(a).

 

“Treasury Regulations” means the income tax regulations promulgated under the
Code and effective as of the date hereof. Such term shall, at the Managing
Member’s sole discretion, be deemed to include any future amendments to such
regulations and any corresponding provisions of succeeding regulations (whether
or not such amendments and corresponding provisions are mandatory or
discretionary; provided, however, that if they are discretionary, the term
“Treasury Regulations” shall not include them if including them would have a
material adverse effect on any Shareholder).

 

“Unpaid Class A Yield” of any Class A Share means, as of any date, an amount
equal to the excess, if any, of (a) the aggregate Class A Yield accrued on such
Class A Preferred Share for all periods prior to such date over (b) the
aggregate amount of prior Distributions made by the LLC pursuant to Section
4.1(b)(ii), (including prior Distributions made pursuant to Section 4.1(a) which
are treated as advances of Distributions made under Section 4.1(b)(ii)).

 

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“Unpaid Class B Yield” of any Class B Preferred Share means, as of any date, an
amount equal to the excess, if any, of (a) the aggregate Class B Yield accrued
on such Class B Share for all periods prior to such date over (b) the aggregate
amount of prior Distributions made by the LLC pursuant to Section 4.1(b)(ii),
(including prior Distributions made pursuant to Section 4.1(a) which are treated
as advances of Distributions made under Section 4.1(b)(ii)).

 

“Unpaid Class C Yield” of any Class C Preferred Share means, as of any date, an
amount equal to the excess, if any, of (a) the aggregate Class C Yield accrued
on such Class C Share for all periods prior to such date over (b) the aggregate
amount of prior Distributions made by the LLC pursuant to Section 4.1(b)(ii),
(including prior Distributions made pursuant to Section 4.1(a) which are treated
as advances of Distributions made under Section 4.1(b)(ii)).

 

“Unreturned Capital” means, with respect to any Share, an amount equal to the
excess, if any, of (a) the aggregate amount of Capital Contributions made in
exchange for or on account of such Share, over (b) the aggregate amount of prior
Distributions made by the LLC that constitute a return of the Capital
Contributions pursuant to Section 4.1(b)(i) (including prior Distributions made
pursuant to Section 4.1(a) which are treated as advances of Distributions made
under Section 4.1(b)(i)); provided that the Unreturned Capital for any given
Share shall never be less than zero.

 

ARTICLE II

 

ORGANIZATIONAL MATTERS

 

2.1 Formation of LLC. The LLC was formed on November 30, 2015 pursuant to the
provisions of the Virginia Act.

 

2.2 Limited Liability Company Agreement. The Members hereby execute this
Agreement for the purpose of establishing the affairs of the LLC and the conduct
of its business in accordance with the provisions of the Virginia Act. The
Members hereby agree that during the term of the LLC set forth in Section 2.6
the rights and obligations of the Shareholders with respect to the LLC will be
determined in accordance with the terms and conditions of this Agreement and
(except where the Virginia Act provides that such rights and obligations shall
apply “unless otherwise provided in a limited liability company agreement” or
words of similar effect and such rights and obligations are set forth in this
Agreement).

 

2.3 Name. The name of the LLC shall be “Seasons Creek Development, LLC.” The
Managing Member in its sole discretion may change the name of the LLC at any
time and from time to time. Notification of any such change shall be given to
all Shareholders. The LLC’s business may be conducted under its name and/or any
other name or names deemed advisable by the Managing Member.

 

2.4 Purpose. The purpose and business of the LLC shall be (i) to purchase and
hold the land described in Exhibit C hereto (the “Land”), (ii) to cause Land
development work to result in subdivision of the Land into plurality of
individual building lots; (iii) to cause construction of real estate properties
using the individual building lots on the Land; (iv) to perform such other
obligations and duties as are imposed upon the LLC under this Agreement and the
other agreements contemplated hereby, and (v) to engage in any other lawful act
or activity for which limited liability companies may be organized under the
Virginia Act.

 

2.5 Principal Office; Registered Office. The principal office of the LLC shall
be located at the office of its Registered Agent, or at such other place as the
Managing Member may designate at its sole discretion from time to time, and all
business and activities of the LLC shall be deemed to have occurred at the Land
location. The LLC may maintain offices at such other place or places as the
Managing Member deems advisable. Notification of any such change shall be given
to all Shareholders. The address of the registered office of the LLC in the
Commonwealth of Virginia shall be at the address if its registered agent for
service of process on the LLC in the Commonwealth of Virginia at such registered
office shall be the law practice of Matthew Stewart, Esq.

 

 Page 13 of 42

  

 

2.6 Term. The term of the LLC commenced upon the filing of the Certificate in
accordance with the Virginia Act and shall continue in existence until
termination and dissolution thereof in accordance with the provisions of Article
XII.

 

2.7 No State-Law Partnership. The Shareholders intend that the LLC not be a
partnership (including, without limitation, a limited partnership) or joint
venture, and that no Shareholder be a partner or joint venture of any other
Shareholder by virtue of this Agreement, for any purposes other than as set
forth in the last sentence of this Section 2.7, and neither this Agreement nor
any other document entered into by the LLC or any Shareholder relating to the
subject matter hereof shall be construed to suggest otherwise. The Shareholders
intend that the LLC shall be treated as a partnership for federal and, if
applicable, state or local income tax purposes, and that each Shareholder and
the LLC shall file all tax returns and shall otherwise take all tax and
financial reporting positions in a manner consistent with such treatment.

 

ARTICLE III

 
CAPITAL CONTRIBUTIONS

 

3.1 Shareholders.

 

(a) Authorized Shares. The authorized Shares which the LLC has authority to
issue the Limited Liability Company Membership Interests consisting of such
number of Class A Shares, Class B Shares, Class C Shares and Common Shares (the
“Equity Securities”) as shall be determined by the unanimous vote of the
Members. The Managing Member shall have the discretion to authorize the issuance
by the LLC of any Equity Securities (as defined in Section 3.1(c) below). All
Shares issued hereunder shall not be Certificated Shares unless otherwise
determined by the Managing Member. The ownership by a Member of Class A Shares,
Class B Shares, Class C Shares and/or Common Shares shall entitle such Member to
allocations of Profits and Losses and other items and Distributions of cash and
other property as set forth in Article IV hereof.

 

(b) Capital Contributions. Each Shareholder shall make Capital Contributions
pursuant to the Subscription Agreement or shall make, has made or has been
deemed to have made Capital Contributions to the LLC and shall receive Shares,
as set forth on the Exhibit A (as such Schedule may be amended to reflect
adjustments to such Capital Contributions and number of Shares corresponding to
any additional issuances of Shares after the Closing (as defined in the
Subscription Agreement). By signing this Agreement, each Shareholder
acknowledges that additional Class A Shares, Class B Shares, Class C Shares and
Common Shares may be issued pursuant to this Agreement. Upon any such issuances,
the Exhibit A shall be amended accordingly. No subsequent Capital Contributions
shall be required from any Member.

 

(c) Issuance of Additional Shares and Interests. Subject to compliance with
Section 3.1(d), and except as otherwise expressly provided in this Agreement,
the Managing Member shall have the power and authority to cause the LLC to issue
(i) additional Shares or other interests in the LLC (including to create and
issue other classes or series having different rights), (ii) obligations,
evidences of indebtedness or other securities or interests convertible or
exchangeable into Shares or other interests in the LLC and (iii) warrants,
options or other rights to purchase or otherwise acquire Shares or other
interests in the LLC (collectively, “Equity Securities”); provided that at any
time following the date hereof, the LLC shall not issue Shares to any Person
unless such Person shall have executed a counterpart to this Agreement. In such
event, (A) the rights of Shareholders in respect of Shares or interests of any
class or series shall be diluted on a pro rata basis based on holdings of such
Shares or other interests of such class or series, and (B) the Managing Member
shall have the power and authority to amend the Schedule of Shareholders on
Exhibit A solely to reflect such additional issuances and dilution and to make
any such other amendments as it deems necessary or desirable to reflect such
additional issuances consistent with the foregoing (including, without
limitation, power and authority to amend this Agreement to increase the
authorized number of Shares of any class or create a new class of Shares and to
add the terms of such new class including economic and governance rights which
may be different from the Class A Shares, Class B Shares, Class C Shares or
Common Shares or any other outstanding securities).

 

 Page 14 of 42

  

 

3.2 Vesting of Shares. The Class A Shares, Class-B Shares, Class C Shares, and
Common Shares shall vest only when the subscription for such Shares is duly
received and accepted by the LLC as indicated on the Subscription Agreement.
Upon an execution of the Subscription Agreement, the Shares thereunder shall be
considered reserved by the LLC in the name of the subscriber, but unvested until
the Subscriber remits the payment for such subscription in full.

 

3.3 Capital Accounts.

 

(a) The LLC shall maintain a separate Capital Account for each Shareholder
according to the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). In
accordance with such Treasury Regulation, the Capital Account of each Member
shall equal, as of the date hereof, the amount set forth on the Schedule of
Shareholders attached hereto as Exhibit A and shall be (a) increased by any
additional Capital Contributions made by such Member and such Member’s share of
items of income and gain allocated to such Member pursuant to Article IV and (b)
decreased by such Member’s share of items of loss, deduction and expense
allocated to such Member pursuant to Article IV and any Distributions to such
Holder of cash or the Fair Market Value of any other property distributed to
such Member. The LLC may, in the sole discretion of the Managing Member, upon
the occurrence of the events specified in Treasury Regulation Section
1.704-1(b)(2)(iv)(f), increase or decrease the Capital Accounts in accordance
with the rules of such regulation and Treasury Regulation Section
1.704-1(b)(2)(iv)(g) to reflect a revaluation of LLC property.

 

(b) For purposes of computing the amount of any item of LLC income, gain, loss
or deduction to be allocated pursuant to Article IV and to be reflected in the
Capital Accounts, the determination, recognition and classification of any such
item shall be the same as its determination, recognition and classification for
federal income tax purposes (including any method of depreciation, cost recovery
or amortization used for this purpose); provided that:

 

(i) The computation of all items of income, gain, loss and deduction shall
include those items described in Code Section 705(a)(1)(B) or Code Section
705(a)(2)(B) and Treasury Regulation Section 1.704-1(b)(2)(iv)(i), without
regard to the fact that such items are not includable in gross income or are not
deductible for federal income tax purposes.

 

(ii) If the Book Value of any LLC property is adjusted pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(e) or (f), the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such
property.

 

(iii) Items of income, gain, loss or deduction attributable to the disposition
of LLC property having a Book Value that differs from its adjusted basis for tax
purposes shall be computed by reference to the Book Value of such property.

 

(iv) Items of depreciation, amortization and other cost recovery deductions with
respect to LLC property having a Book Value that differs from its adjusted basis
for tax purposes shall be computed by reference to the property’s Book Value in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g).

 

 Page 15 of 42

  

 

(v) To the extent an adjustment to the adjusted tax basis of any LLC asset
pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis).

 

3.4 Negative Capital Accounts. No Shareholder shall be required to pay to any
other Shareholder or the LLC any deficit or negative balance which may exist
from time to time in such Shareholder’s Capital Account (including upon and
after dissolution of the LLC).

 

3.5 No Withdrawal. No Person shall be entitled to withdraw any part of such
Person’s Capital Contributions or Capital Account or to receive any Distribution
from the LLC, except as expressly provided herein.

 

3.6 Loans From the Members. Loans by a Member to the LLC shall not be considered
Capital Contributions. If any Member shall loan funds to the LLC in excess of
the amounts required hereunder to be contributed by such Member to the capital
of the LLC, the making of such loans shall not result in any increase in the
amount of the Capital Account of such Shareholder. The amount of any such loans
shall be a debt of the LLC to such Member and shall be payable or collectible in
accordance with the terms and conditions upon which such loans are made;
provided, that such terms and conditions are no more favorable to such lending
Member than those which would be agreed to in an orderly transaction with a
willing, unaffiliated lender in an arm’s-length transaction.

 

3.7 Distributions In-Kind. To the extent that the LLC distributes property
in-kind to the Members, the LLC shall be treated as making a distribution equal
to the Fair Market Value of such property for purposes of Section 4.1 and such
property shall be treated as if it were sold for an amount equal to its Fair
Market Value (or such other amount as is required to be used by the Code or
applicable Treasury Regulation) and any resulting gain or loss shall be
allocated to the Members’ Capital Accounts in accordance with Sections 4.2
through 4.4.

 

3.8 Transfer of Shares. In the event of a Transfer of a Share pursuant to
Article IX, the Transferee shall succeed to the Transferor’s Capital Account
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(l).

 

3.9 Repurchase of Shares. The LLC may elect to repurchase all or any portion of
the vested Shares pursuant to Section 3.2 by delivering written notice (the
“Repurchase Notice”) to the holder thereof within 60 calendar days prior to
repurchase date. The Repurchase Notice shall set forth the number of Shares to
be acquired from the Shareholder, the amount to be paid for such Shares, and the
time and place for the closing of the transaction. The closing of the repurchase
shall take place on the date designated by the LLC in the Repurchase Notice. The
LLC shall pay for the Shares to be repurchased by delivery of an official bank
check or a wire transfer of funds. The LLC shall be entitled to receive
customary representations and warranties from the holder regarding such sale of
Shares (including representations and warranties regarding good title to such
Shares, free and clear of any liens or encumbrances) and to require the holder’s
signature be duly notarized.

 

 Page 16 of 42

  

 

3.10 Conversion to Corporation.

 

(a) The Managing Member may, based upon an approval by Majority Vote of the
Members, either (i) cause the LLC to contribute all or substantially all of its
assets to a corporation in a transaction qualified under Section 351(a) of the
Code, and thereupon liquidate and dissolve the LLC, (ii) elect to have all
Shareholders contribute their Shares to a corporation, in a transaction
qualifying under Section 351(a) of the Code, as long as the value of the shares
of the corporation received by all Shareholders has a value equal to the value
of the Shares transferred, or (iii) otherwise cause the LLC to convert into a
corporation, by way of merger, consolidation or otherwise, so long as such
conversion does not result in any material liability (including any material
liability for Taxes) of any of the Shareholders without their consent and
provided that the value of the shares of the corporation received by each
Shareholder has a value equal to the value of the Shares transferred. Subject to
the foregoing and to Section 3.10(b), the conversion of the LLC or its business
into a corporation shall be accomplished pursuant to such terms and in such
manner as the Managing Member shall deem appropriate, in its sole discretion;
provided, however, that the Managing Member shall use all reasonable efforts to
structure the conversion so as to minimize the adverse impact, if any, to the
Shareholders.

 

(b) The Managing Member and the other Shareholders shall use all reasonable
efforts (including executing a stockholders’ agreement) to ensure that the
shares of the corporation issued to each Shareholder in connection with any of
the transactions referred to in Section 3.10(a) shall have substantively the
same rights and be subject to the same restrictions as the Shares of each class
held by such Shareholder, including with respect to distributions and transfer
restrictions.

 

ARTICLE IV

 

DISTRIBUTIONS AND ALLOCATIONS

 

4.1 Distributions.

 

(a) Tax Distributions. To the extent funds of the LLC are available for
distribution by the LLC (as determined by the Managing Member in its sole
discretion), the Managing Member shall cause the LLC to distribute to the
Shareholders with respect to each Fiscal Quarter of the LLC an amount of cash (a
“Tax Distribution”) which in the good faith judgment of the Managing Member
equals (i) the amount of net taxable income (adjusted to take account of any net
taxable losses of the LLC allocable to the Shareholders in prior periods) of the
LLC allocable to the Shareholders in respect of such Fiscal Quarter, multiplied
by (ii) the sum of the highest marginal federal, state and local income tax
rates applicable to an individual living in Chesterfield, Virginia for the
relevant type of taxable income, with such Tax Distribution to be made to the
Shareholders in the same proportions that taxable income was allocated to the
Shareholders during such Fiscal Quarter. Tax Distributions shall be considered
advance Distributions to Shareholders under Section 4.1(b).

 

(b) Other Distributions. Except as otherwise set forth in Section 4.1(a), the
Managing Member may in its sole discretion (but shall not be obligated to) make
Distributions at any time or from time to time, but shall make distributions in
respect of Class A Shares, Class B Shares, Class C Shares and/or Common Shares
in the following order of priority:

 

  (i) first, to the holders of outstanding Class A Preferred Shares (ratably
among such holders based upon the aggregate Unreturned Capital with respect to
all Class A Preferred Shares held by each such holder immediately prior to such
Distribution), until the aggregate Unreturned Capital with respect to the Class
A Preferred Shares has been reduced to zero;         (ii) second, to the holders
of outstanding Class A Preferred Shares (ratably among such holders based upon
the aggregate Unreturned Capital with respect to all Class A Preferred Shares
held by each such holder immediately prior to such Distribution) until the
aggregate Unpaid Class A Return resulted in an IRR equal to 14.0% and has been
reduced to zero;

 

 Page 17 of 42

  

 

  (iii) third, to the holders of outstanding Class B Shares (ratably among such
holders based upon the aggregate Unreturned Capital with respect to all Class B
Shares held by each such holder immediately prior to such Distribution), until
the aggregate Unreturned Capital with respect to the Class B Shares has been
reduced to zero;         (iv) fourth, to the holders of outstanding Class B
Shares (ratably among such holders based upon the aggregate Unreturned Capital
with respect to all Class B Shares held by each such holder immediately prior to
such Distribution) until the aggregate Unpaid Class B Return resulted in an IRR
equal to 14.0% and has been reduced to zero;         (v) fifth, to the holders
of outstanding Class C Shares (ratably among such holders based upon the
aggregate Unreturned Capital with respect to all Class C Shares held by each
such holder immediately prior to such Distribution), until the aggregate
Unreturned Capital with respect to the Class C Shares has been reduced to zero;
        (vi) sixth, to the holders of outstanding Class C Shares (ratably among
such holders based upon the aggregate Unreturned Capital with respect to all
Class C Shares held by each such holder immediately prior to such Distribution)
until the aggregate Unpaid Class C Return resulted in an IRR equal to 12.0% and
has been reduced to zero;         (vii) seventh, to the holders of outstanding
Common Shares (ratably among such holders based upon the aggregate Unreturned
Capital with respect to all Common Shares held by each such holder immediately
prior to such Distribution) until the aggregate Unreturned Capital with respect
to the Common Shares has been reduced to zero;         (viii) eights, to Helpful
Alliance in the amount equal to Twelve ($12.00) per square foot of the aggregate
area of real estate properties built, excluding garage areas, driveways, common
areas, and similar area         (ix) ninth, to the holders of outstanding Class
A Shares, Class B Shares, Class C Shares, and Common Shares (ratably among such
holders based upon the aggregate number of the Shares held by each such holder
immediately prior to Distribution) in respect to their Class A Profit Share,
Class B Profit Share, Class C Profit Share, and Common Profit Share percentile
of the Profit as determined by the Subscription Agreement. The intent of this
Section 4.1(b)(ix) is to ensure that any Class A Profit Share, Class B Profit
Shares, Class C Profit Shares, and/or Common Profit Shares issued after the date
of this Agreement qualify as “profits interests” under Revenue Procedure 93-27,
I.R.B. 1993-24 (June 9, 1993) and Revenue Procedure 2001-43, I.R.B. 2001-34
(August 2, 2001).

 

4.2 Allocations. Except as otherwise provided in Section 4.3 and Section 4.5,
Profits and Losses for any Fiscal Year shall be allocated among the Shareholders
in such a manner that, as of the end of such Fiscal Year, the sum of (i) the
Capital Account of each Shareholder, (ii) such Shareholder’s share of Minimum
Gain (as determined according to Treasury Regulation Section 1.704-2(g)) and
(iii) such Shareholder’s partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)) shall be equal to the respective net
amounts, positive or negative, which would be distributed to them or for which
they would be liable to the LLC under the Virginia Act or otherwise, determined
as if all unvested Shares were to vest and the LLC were to (i) liquidate the
assets of the LLC for an amount equal to their Book Value and (ii) distribute
the proceeds of liquidation pursuant to Section 12.2.

 

 Page 18 of 42

  

 

4.3 Special Allocations.

 

(a) Losses attributable to partner nonrecourse debt (as defined in Treasury
Regulation Section 1.704-2(b)(4)) shall be allocated in the manner required by
Treasury Regulation Section 1.704-2(i). If there is a net decrease during a
Taxable Year in partner nonrecourse debt minimum gain (as defined in Treasury
Regulation Section 1.704-2(i)(3)), Profits for such Taxable Year (and, if
necessary, for subsequent Taxable Years) shall be allocated to the Shareholders
in the amounts and of such character as determined according to Treasury
Regulation Section 1.704-2(i)(4). This Section 4.3(a) is intended to be a
“partner nonrecourse debt minimum gain chargeback” provision that complies with
the requirements of Treasury Regulation Section 1.704-2(i)(4) and shall be
interpreted in a manner consistent therewith.

 

(b) Nonrecourse deductions (as determined according to Treasury Regulation
Section 1.704-2(b)(1)) for any Taxable Year shall be allocated to each
Shareholder ratably among such Shareholders based upon the number of outstanding
Class A Shares held by each such Shareholder immediately prior to such
allocation. Except as otherwise provided in Section 4.3(a), if there is a net
decrease in the Minimum Gain during any Taxable Year, each Shareholder shall be
allocated Profits for such Taxable Year (and, if necessary, for subsequent
Taxable Years) in the amounts and of such character as determined according to
Treasury Regulation Section 1.704-2(f). This Section 4.3(b) is intended to be a
Minimum Gain chargeback provision that complies with the requirements of
Treasury Regulation Section 1.704-2(f), and shall be interpreted in a manner
consistent therewith.

 

(c) If any Shareholder that unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5) and (6) has an Adjusted Capital Account Deficit as of the end of any Taxable
Year, computed after the application of Sections 4.3(a)and 4.3(b) but before the
application of any other provision of this Article IV, then Profits for such
Taxable Year shall be allocated to such Shareholder in proportion to, and to the
extent of, such Adjusted Capital Account Deficit. This Section 4.3(c) is
intended to be a qualified income offset provision as described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner
consistent therewith.

 

(d) Profits and Losses described in Section 3.3(b)(v) shall be allocated in a
manner consistent with the manner that the adjustments to the Capital Accounts
are required to be made pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(k) and (m).

 

(e) The allocations set forth in Section 4.3(a)-(d) (the “Regulatory
Allocations”) are intended to comply with certain requirements of Sections
1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory Allocations
may not be consistent with the manner in which the Shareholders intend to
allocate Profit and Loss of the LLC or make LLC distributions. Accordingly,
notwithstanding the other provisions of this Article IV, but subject to the
Regulatory Allocations, income, gain, deduction, and loss shall be reallocated
among the Shareholders so as to eliminate the effect of the Regulatory
Allocations and thereby cause the respective Capital Accounts of the
Shareholders to be in the amounts (or as close thereto as possible) they would
have been if Profit and Loss (and such other items of income, gain, deduction
and loss) had been allocated without reference to the Regulatory Allocations. In
general, the Shareholders anticipate that this will be accomplished by specially
allocating other Profit and Loss (and such other items of income, gain,
deduction and loss) among the Shareholders so that the net amount of the
Regulatory Allocations and such special allocations to each such Shareholder is
zero. In addition, if in any Fiscal Year or Fiscal Period there is a decrease in
partnership Minimum Gain, or in partner nonrecourse debt Minimum Gain, and
application of the Minimum Gain chargeback requirements set forth in Section
4.3(a) or Section 4.3(b) would cause a distortion in the economic arrangement
among the Shareholders, the Shareholders may, if they do not expect that the LLC
will have sufficient other income to correct such distortion, request the
Internal Revenue Service to waive either or both of such Minimum Gain chargeback
requirements. If such request is granted, this Agreement shall be applied in
such instance as if it did not contain such Minimum Gain chargeback requirement.

 

 Page 19 of 42

  

 

(f) The Members acknowledge that allocations like those described in Proposed
Treasury Regulation Section 1.704-1(b)(4)(xii)(c) (“Forfeiture Allocations”)
result from the allocations of Profits and Losses provided for in this
Agreement. For the avoidance of doubt, the LLC is entitled to make Forfeiture
Allocations and, once required by applicable final or temporary guidance,
allocations of Profits and Losses will be made in accordance with Proposed
Treasury Regulation Section 1.704-1(b)(4)(xii)(c) or any successor provision or
guidance.

 

4.4 Tax Allocations.

 

(a) The income, gains, losses, deductions and credits of the LLC will be
allocated, for federal, state and local income tax purposes, among the
Shareholders in accordance with the allocation of such income, gains, losses,
deductions and credits among the Shareholders for computing their Capital
Accounts; except that if any such allocation is not permitted by the Code or
other applicable law, the LLC’s subsequent income, gains, losses, deductions and
credits will be allocated among the Shareholders so as to reflect as nearly as
possible the allocation set forth herein in computing their Capital Accounts.

 

(b) Items of LLC taxable income, gain, loss and deduction with respect to any
property contributed to the capital of the LLC shall be allocated among the
Shareholders in accordance with Code Section 704(c) so as to take account of any
variation between the adjusted basis of such property to the LLC for federal
income tax purposes and its Book Value using any permitted method selected by
the Tax Matters Partner.

 

(c) If the Book Value of any LLC asset is adjusted pursuant to the requirements
of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f) subsequent
allocations of items of taxable income, gain, loss and deduction with respect to
such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Book Value in the same manner
as under Code Section 704(c) using any permitted method selected by Tax Matters
Partner.

 

(d) Allocations of tax credits, tax credit recapture, and any items related
thereto shall be allocated to the Shareholders according to their interests in
such items as determined by the Managing Member taking into account the
principles of Treasury Regulation Section 1.704-1(b)(4)(ii).

 

(e) Allocations pursuant to this Section 4.4 are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Shareholder’s Capital Account or share of Profits, Losses,
Distributions or other LLC items pursuant to any provision of this Agreement.

 

4.5 Offsetting Allocations. If, and to the extent that, any Member is deemed to
recognize any item of income, gain, deduction or loss as a result of any
transaction between such Member and the LLC pursuant to Sections 83, 482, or
7872 of the Code or any similar provision now or hereafter in effect, the
Managing Member shall use its reasonable best efforts to allocate any
corresponding Profit or Loss of the LLC to the Member who recognizes such item
in order to reflect the Members’ economic interest in the LLC.

 

4.6 Forfeiture of Unvested Shares. In the event that a Person’s unvested Shares
are forfeited, the Capital Account balance attributable to such unvested Shares
shall be nulled and void, and the subscriber for the Shares shall not have any
rights to any Distributions, unless such Person is the Member.

 

4.7 Indemnification and Reimbursement for Payments on Behalf of a Shareholder.
Except as otherwise provided in Section 5.4 and 6.1., if the LLC is required by
law to make any payment to a Governmental Entity that is specifically
attributable to a Shareholder or a Shareholder’s status as such (including,
without limitation, federal withholding taxes, state personal property taxes,
and state unincorporated business taxes), then such Shareholder shall indemnify
and contribute to the LLC in full for the entire amount paid (including
interest, penalties and related expenses). The Managing Member may offset
Distributions to which a Person is otherwise entitled under this Agreement
against such Shareholder’s obligation to indemnify the LLC under this Section
4.7. A Shareholder’s obligation to indemnify and make contributions to the LLC
under this Section 4.7 shall survive the termination, dissolution, liquidation
and winding up of the LLC, and for purposes of this Section 4.7, the LLC shall
be treated as continuing in existence. The LLC may pursue and enforce all rights
and remedies it may have against each Shareholder under this Section 4.7,
including instituting a lawsuit to collect such indemnification and contribution
with interest calculated at a rate equal to the Base Rate plus three percentage
points per annum (but not in excess of the highest rate per annum permitted by
law).

 

 Page 20 of 42

  

 

ARTICLE V

 

MANAGEMENT

 

5.1 Authority of the Managing Member. The business and affairs of the LLC shall
be managed, operated and controlled by or under the direction of the Managing
Member, which shall be elected by the unanimous vote of the Members, and may be
removed and/or replaced for failure to perform the duties and responsibilities
of the Managing Member (including but not limited to failure to execute
appropriate and prompt actions in the course of business or purpose of the LLC
and/or any contractual obligations of the LLC), for the Cause, or for any other
legitimate reason in the interest of the LLC, by the unanimous vote of all
Members, or, in case when the Managing Member is the holder of the Majority
Vote, by the unanimous vote of the remaining Members excluding such Managing
Member.

 

(a) Except for situations in which the approval of the Members is expressly
required as specifically stated in this Section 5.1(a) below, (i the Managing
Member shall conduct, direct and exercise daily operating control over all
activities of the LLC (including but not limited to decisions relating to
subsequent Capital Contributions, issuances of Equity Securities and the sale
of, and the exercise of other rights with respect to, the real estate properties
owned by the LLC), (ii) all management powers and authority over the business
and affairs of the LLC shall be exclusively vested in the Managing Member, (iii)
the Managing Member, upon obtaining the Majority Vote of the Members, shall have
the authority to cause the LLC to consent to any sale of the LLC’s assets, and
(iv) the Managing Member, upon obtaining the Majority Vote of the Members, shall
have the sole power and authority to bind or take any action on behalf of the
LLC, or to exercise any rights and powers (including, without limitation, the
rights and powers to take certain actions, give or withhold certain consents or
approvals, or make certain determinations, opinions, judgments, or other
decisions) granted to the LLC under this Agreement or any other agreement,
instrument, or other document to which the LLC is a party. Notwithstanding the
foregoing, the Managing Member shall not approve, without prior written
unanimous approval of the Members, any of the following:

 

  (1) Dissolution or winding up of the LLC;         (2) Any merger or
consolidation of the LLC;         (3) Any sale, exchange, mortgage, pledge,
encumbrance, lease or other disposition or transfer of all or substantially all
of the assets of the LLC;         (4) Declaration of any payment by the LLC
beyond the payments approved by the Members;         (5) Any amendment to this
Agreement;         (6) Any amendment, restatement or revocation of the Articles
of Organization of the LLC, except (a) as provided to effectuate a change in the
principal place of business of the LLC, (b) to change the name of the LLC, or
(c) as required by applicable law;

 

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  (7) Any material change in the business purpose of the LLC;         (8) Any
transfer of limited membership interest to any Person;         (9) The
incurrence of any indebtedness for borrowed money by the LLC;         (10) Any
purchase, lease or other acquisition, in any single transaction or in a series
of related transactions, of property or services or capital equipment
inconsistent with an approved business plan;         (11) Any capital
expenditures or series of related capital expenditures, that exceed the amount
provided therefor in the most recently approved operating budget of the LLC
attached hereto as Exhibit B (after taking into account any general spending
overrun provisions contained in the approved business plan) or any commitment by
the LLC to make expenditures in any project in an amount greater than the amount
set forth in the approved operating budget of the home building project carried
out by the LLC;         (12) The acquisition of any business or entry into any
partnership by the LLC;         (13) The voluntary commencement or the failure
to contest in a timely and appropriate manner any involuntary proceeding or the
filing of any petition seeking relief under bankruptcy, insolvency, receivership
or similar laws;         (14) The application for or consent to the appointment
of a receiver, trustee, custodian, conservator or similar official for the LLC,
or for a substantial part of their property or assets;         (15) The filing
of an answer admitting the material allegations of a petition filed against the
LLC in any proceeding described above;         (16)

The consent to any order for relief issued with respect to any proceeding
described herein;

        (17) The making of a general assignment for the benefit of creditors, or
        (18) The admission in writing of the LLC’s inability, or the failure of
the LLC to pay its debts as they become due or the taking of any action for the
purpose of effecting any of the foregoing.         (19) Creation of any direct
or indirect Subsidiary of the LLC; and         (20) Any other act that would
make it impossible for the LLC to continue to operate its business.

 

No other Member, except as the Managing Member, shall have the power and
authority to bind the LLC in any way, to do any act that would be (or that could
be construed as such) binding on the LLC, or to make any expenditures on behalf
of the LLC, unless such specific power and authority has been expressly
authorized in writing to and not revoked by the Managing Member.

 

 Page 22 of 42

  

 

(b) Without limiting the generality of the foregoing, (i) the Managing Member
and the LLC (and any delegate thereof) shall exercise all rights and powers of
the LLC (whether such rights and powers are expressly and specifically granted
to the LLC under the terms of an agreement to which the LLC is a party, and (ii)
the Managing Member shall have exclusive authority on behalf of the LLC to
prepare all tax returns, make or not make any tax elections or other decisions
related to taxes, control the handling of any tax proceeding, and otherwise
interact with any taxing authority with respect to LLC matters.

 

5.2 Delegation of Authority. The Managing Member may, from time to time,
delegate to one or more Persons (including any Member of the LLC) such authority
and duties as the Managing Member may deem necessary or advisable. Any
delegation pursuant to this Section 5.2 may be revoked at any time by the
Managing Member in its sole discretion. The daily business of the Company and
implementation of the Company’s policies and executive control of the Company’s
major decisions shall be managed by one or more Managers (including the Managing
Member), who shall be appointed by the Managing Member at its sole discretion.
The Manager shall have the right and power to run the day-to-day and other
affairs of the Company and to act as agent for and on behalf of the Company,
with power to legally bind the Company. The Manager may be removed from office
solely by the Managing Member, and new Manager may be elected or appointed by
the Managing Member without vote or approval by the Members.

 

5.3 Purchase of Shares. The Managing Member may cause the LLC to purchase or
otherwise acquire Shares, or may purchase or otherwise acquire the Shares on
behalf of the LLC; provided that this provision shall not in and of itself
obligate any Shareholder to sell any Shares to the LLC. So long as any such
Shares are owned by or on behalf of the LLC such Shares will not be considered
outstanding for any purpose.

 

5.4 Limitation of Liability.

 

(a) Except as otherwise provided herein or in any agreement entered into by such
Person and the LLC, and to the maximum extent permitted by the Virginia Act, no
present or former Managing Member or any of such Managing Member’s Affiliates,
employees, agents or representatives shall be liable to the LLC or to any other
Member for any act or omission performed or omitted by such Person in good faith
in its capacity as a Managing Member of the LLC or otherwise; provided that,
except as otherwise provided herein, such limitation of liability shall not
apply to the extent the act or omission was attributable to such Person’s gross
negligence, willful misconduct or knowing violation of law or this Agreement or
any other agreement with the LLC. The Managing Member may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its Affiliates, agents or
representatives, and the Managing Member shall not be responsible for any
misconduct or negligence on the part of any such Person appointed by the
Managing Member (so long as such Person was selected in good faith and with
reasonable care). The Managing Member shall be entitled to rely upon the advice
of legal counsel, independent public accountants and other experts, including
financial advisors, and any act of or failure to act by the Managing Member in
good faith reliance on such advice shall in no event subject the Managing Member
or any of its Affiliates, employees, agents or representatives to liability to
the LLC or any Member.

 

(b) Whenever in this Agreement or any other agreement contemplated herein, the
Managing Member is permitted or required to take any action or to make a
decision in its “sole discretion” or “discretion,” with “complete discretion” or
under a grant of similar authority or latitude, the Managing Member shall be
entitled to consider such interests and factors as it desires (including its
interests as a Shareholder), provided that, the Managing Member shall act in
good faith.

 

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(c) Whenever in this Agreement a Managing Member is permitted or required to
take any action or to make a decision in its “good faith” or under another
express standard, the Managing Member shall act under such express standard and,
to the extent permitted by applicable law, shall not be subject to any other or
different standards imposed by this Agreement or any other agreement
contemplated herein, and, notwithstanding anything contained herein to the
contrary, so long as the Managing Member acts in good faith, the resolution,
action or terms so made, taken or provided by the Managing Member shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or impose liability upon the Managing Member or any of its Affiliates,
employees, agents or representatives.

 

(d) To the maximum extent permitted by applicable law, each Member hereby waives
any claim or cause of action against the Managing Member or any of its
Affiliates, employees, agents and representatives for any breach of any
fiduciary duty to the LLC, its Members or any Subsidiary of the LLC by such
Person, including as may result from a conflict of interest between the LLC or
such Subsidiary and such Person; provided that, except as otherwise provided
herein, such waiver shall not apply to the extent the act or omission was
attributable to such Person’s gross negligence, willful misconduct or knowing
violation of law or this Agreement or any other Agreement with the LLC, nor
shall such waiver eliminate the implied contractual covenant of good faith and
fair dealing. Each Member acknowledges and agrees that in the event of any such
waived conflict of interest, each such Person may, in the absence of bad faith,
act in the best interest of the Managing Member or its Affiliates, employees,
agents or representatives. With respect to any such waived conflict of interest,
the Managing Member shall not be obligated to recommend or take any action as a
managing member that prefers the interests of the LLC or any Subsidiary or the
other Members or Shareholders over the interests of the Managing Member or its
Affiliates, employees, agents or representatives and the LLC.

 

(e) Except as otherwise required by law or the provisions of this Agreement, the
LLC shall indemnify its present and former Managing Members against any losses,
liabilities, damages or expenses (including amounts paid for attorneys’ fees,
judgments and settlements in connection with any threatened, pending or
completed action, suit or proceeding) to which any of such Persons may directly
or indirectly become subject for action taken or omitted to be taken on behalf
of the LLC or in connection with any involvement with the LLC or any Subsidiary
(including serving as a manager, officer, director, consultant or employee of
such Subsidiary), but not to the extent attributable to such Indemnified
Person’s or its Affiliates’ gross negligence, willful misconduct or knowing
violation of law or for any present or future breaches of any representations,
warranties or covenants by such Indemnified Person or its Affiliates, employees,
agents or representatives contained herein or in any other agreement with the
LLC or to such Person’s failure to act in good faith. The rights of the Managing
Member pursuant to this Section 5.4(e) shall be in addition to, and not in lieu
of, the rights of Members generally pursuant to Section 6.4.

 

ARTICLE VI

 

RIGHTS AND OBLIGATIONS OF THE MEMBERS

 

6.1 Limitation of Liability. Except as otherwise provided by the Virginia Act,
the debts, obligations and liabilities of the LLC, whether arising in contract,
tort or otherwise, shall be and remain solely the debts, obligations and
liabilities of the LLC, and no Shareholder and no Member (including the Managing
Member) shall be obligated personally for any such debt, obligation or liability
of the LLC solely by reason of being a Shareholder or acting as a Member or
Managing Member of the LLC, other than such Shareholder’s obligation to make
Capital Contributions to the LLC pursuant to the terms and conditions hereof.
Except as otherwise provided in this Agreement, a Shareholder’s liability (in
its capacity as such) for LLC liabilities and losses shall be such Shareholder’s
share of the LLC’s assets; provided that a Shareholder shall be required to
return to the LLC any Distribution made to it in clear and manifest accounting
or similar error. The immediately preceding sentence shall constitute a
compromise to which all Shareholders have consented within the meaning of the
Virginia Act. Notwithstanding anything contained herein to the contrary, the
failure of the LLC to observe any formalities or requirements relating to the
exercise of its powers or management of its business and affairs under this
Agreement or the Virginia Act shall not be grounds for imposing personal
liability on any of the Shareholders or Members (including the Managing Member)
for liabilities of the LLC.

 

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6.2 Lack of Authority. No Shareholder or Member (other than the Managing Member)
in its capacity as such has the authority or power to act for or on behalf of
the LLC in any manner, to do any act that would be (or could be construed as)
binding on the LLC or to make any expenditures on behalf of the LLC, and the
Shareholders and Members hereby consent to the exercise by the Managing Member
of the powers conferred on it by law and this Agreement.

 

6.3 No Right of Partition. No Shareholder or Member shall have the right to seek
or obtain partition by court decree or operation of law of any LLC property, or
the right to own or use particular or individual assets of the LLC.

 

6.4 Indemnification.

 

(a) Subject to Section 4.7, the LLC hereby agrees to indemnify and hold harmless
any Person (each an “Indemnified Person”) to the fullest extent permitted under
the Virginia Act, as the same now exists or may hereafter be amended,
substituted or replaced (but, in the case of any such amendment, substitution or
replacement only to the extent that such amendment, substitution or replacement
permits the LLC to provide broader indemnification rights than the LLC is
providing immediately prior to such amendment), against all expenses,
liabilities and losses (including attorney fees, judgments, fines, excise taxes
or penalties) reasonably incurred or suffered by such Person (or one or more of
such Person’s Affiliates) by reason of the fact that such Person is or was a
Shareholder or Member or a partner, member, employee, officer, director, agent
or other representative of the Managing member or is or was serving as a
Managing Member, officer, director, principal, member, employee, agent or
representative of the LLC or is or was serving at the request of the LLC as a
Managing Member, officer, director, principal, member, employee, agent or
representative of another corporation, partnership, joint venture, limited
liability company, trust or other enterprise; provided that (unless the Managing
Member otherwise consents) no Indemnified Person shall be indemnified for any
expenses, liabilities and losses suffered to the extent attributable to such
Indemnified Person’s or its Affiliates’ gross negligence, willful misconduct or
knowing violation of law or for any present or future breaches of any
representations, warranties or covenants by such Indemnified Person or its
Affiliates, employees, agents or representatives contained herein or in any
other agreement with the LLC. Expenses, including attorneys’ fees and expenses,
incurred by any such Indemnified Person in defending a proceeding shall be paid
by the LLC in advance of the final disposition of such proceeding, including any
appeal therefrom, upon receipt of an undertaking by or on behalf of such
Indemnified Person to repay such amount if it shall ultimately be determined
that such Indemnified Person is not entitled to be indemnified by the LLC.

 

(b) The right to indemnification and the advancement of expenses conferred in
this Section 6.4 shall not be exclusive of any other right which any Person may
have or hereafter acquire under any statute, agreement, law, vote of Managing
Member or otherwise.

 

(c) The LLC may maintain insurance, at sole discretion of the Managing Member
and at the LLC’s expense, to protect any Indemnified Person against any expense,
liability or loss relating to the LLC or its business whether or not the LLC
would have the power to indemnify such Indemnified Person against such expense,
liability or loss under the provisions of this Section 6.4.

 

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(d) Notwithstanding anything contained herein to the contrary (including in this
Section 6.4), any indemnity by the LLC relating to the matters covered in this
Section 6.4 shall be provided out of and to the extent of LLC assets only and
neither the Managing Member nor any other Shareholder (unless such Shareholder
otherwise agrees in writing or is found in a final decision by a court of
competent jurisdiction to have personal liability on account thereof) shall have
personal liability on account thereof or shall be required to make additional
Capital Contributions to help satisfy such indemnity of the LLC (except as
expressly provided herein).

 

(e) If this Section 6.4 or any portion hereof shall be invalidated on any ground
by any court of competent jurisdiction, then the LLC shall nevertheless
indemnify and hold harmless each Indemnified Person pursuant to this Section 6.4
to the fullest extent permitted by any applicable portion of this Section 6.4
that shall not have been invalidated and to the fullest extent permitted by
applicable law.

 

6.5 Members Right to Act. For situations for which the approval of the Members
(rather than the approval of the Managing Member, which shall not be
unreasonably withheld) is required by this Agreement or by applicable law, the
Members shall act through meetings and written consents as described in this
Section 6.5, and each holder of Shares shall be entitled to vote based on such
Shareholder’s Proportional Share indicated in Exhibit A, as amended. The actions
by the Members permitted hereunder may be taken at a meeting called by the
Managing Member or Members holding at least 2/3 of all Shares then issued and
outstanding on at least 10 business days’ prior written notice to all other
Members, which notice shall state the purpose or purposes for which such meeting
is being called. The actions taken by the Members entitled to vote or consent at
any meeting (as opposed to by written consent), however called and noticed,
shall be as valid as though taken at a meeting duly held after regular call and
notice if (but not until), either before, at or after the meeting, the Members
entitled to vote or consent as to whom it was improperly held signs a written
waiver of notice or a consent to the holding of such meeting or an approval of
the minutes thereof. The actions by the Members entitled to vote or consent may
be taken by vote of the Members entitled to vote or consent at a meeting or by
written consent (without a meeting and without a vote) so long as such consent
is signed by the Members having not less than the minimum number of Shares 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. Prompt notice of the
action so taken without a meeting shall be given to those Members entitled to
vote or consent who have not consented in writing. Any action taken pursuant to
such written consent of the Members shall have the same force and effect as if
taken by the Members at a meeting thereof.

 

6.6 Investment Opportunities and Conflicts of Interest. Helpful Alliance, as
Member of the LLC, shall present to each Member all investment or business
opportunities of which Helpful Alliance becomes aware and which may be, within
the scope and investment objectives, related to the Business of the LLC. The
Members shall the right to accept or reject such investment or business
opportunities at a Member’s sole discretion, after which a conflict of interest
shall be considered void regardless of its existence, and Helpful Alliance shall
have the right and sole discretion to proceed with such business opportunity or
investment.

 

6.7 Confidentiality. Each Shareholder recognizes and acknowledges that it has
and may in the future receive certain confidential and proprietary information
and trade secrets of the LLC and the Managing Member, including but not limited
to confidential information regarding identifiable, specific and discrete
business opportunities being pursued by the LLC or Helpful Alliance and its
Affiliates (“Confidential Information”). Each Member agrees that it will not,
and shall cause each of its directors, officers, shareholders, partners,
employees, agents and members not to, during or after the term of this
Agreement, whether directly or indirectly through an Affiliate or otherwise,
take commercial or proprietary advantage of or profit from any Confidential
Information or disclose Confidential Information to any Person for any reason or
purpose whatsoever, except (i) to authorized directors, officers,
representatives, agents and employees of the LLC, Helpful Alliance or the
Subsidiaries and as otherwise may be proper in the course of performing such
Member’s obligations, or enforcing such Member’s rights, under this Agreement
and the agreements expressly contemplated hereby; (ii) as part of such Member’s
normal reporting, rating or review procedure (including normal credit rating or
pricing process), or in connection with such Member’s or such Member’s
Affiliates’ normal fund raising, marketing, informational or reporting
activities, or to such Shareholder’s (or any of its Affiliates’) Affiliates,
auditors, attorneys or other agents; (iii) to any bona fide prospective
purchaser of the equity or assets of such Member or its Affiliates or the Shares
held by such Member, or prospective merger partner of such Member or its
Affiliates, provided that such prospective purchaser or merger partner agrees to
be bound by the provisions of this Section 6.7; or (iv) as is required to be
disclosed by order of a court of competent jurisdiction, administrative body or
governmental body, or by subpoena, summons or legal process, or by law, rule or
regulation, provided that, to the extent permitted by law, the Member required
to make such disclosure shall provide to the Managing Member prompt notice of
such disclosure. For purposes of this Section 6.7, “Confidential Information”
shall not include any information of which (x) such Person learns from a source
other than the LLC, Helpful Alliance or their Subsidiaries who is not bound by a
confidentiality obligation, or (y) is disclosed in a prospectus or other
documents for dissemination to the public. Nothing in this Section 6.7 shall in
any way limit or otherwise modify the Confidentiality and Non-Competition
Agreements or any other agreement entered into by any holder of Shares with the
LLC, Helpful Alliance or their Affiliates.

 

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ARTICLE VII

 

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

7.1 Records and Accounting. The LLC shall keep, or cause to be kept, appropriate
books and records with respect to the LLC’s business, including all books and
records necessary to provide any information, lists and copies of documents
required to be provided pursuant to Section 7.3or pursuant to applicable laws.
All matters concerning (i) the determination of the relative amount of
allocations and distributions among the Members pursuant to Articles III and IV
and (ii) accounting procedures and determinations, and other determinations not
specifically and expressly provided for by the terms of this Agreement, shall be
determined by the Managing Member, whose determination shall be final and
conclusive as to all of the Members absent manifest clerical error.

 

7.2 Fiscal Year. The fiscal year (the “Fiscal Year”) of the LLC shall constitute
the 12-month period ending on December 31 of each calendar year, or such other
annual accounting period as may be established by the Managing Member.

 

7.3 Reports.

 

(a) The LLC shall use reasonable efforts to deliver or cause to be delivered to
each Member, within 120 days after the end of each Fiscal Year, an annual report
containing a statement of changes in the Shareholder’s equity and the
Shareholder’s Capital Account balance for such Fiscal Year.

 

(b) The LLC shall, upon the written request of a Members, deliver or cause to be
delivered to such Member with reasonable promptness, such other information and
financial data concerning the LLC and its Subsidiaries but only to the extent
the delivery of such information and data is required by the Virginia Act or is
reasonably necessary for any of such entities to consummate a Transfer of
Shares; provided further that furnishing such information shall not be
financially burdensome on the LLC or the Managing Member, or any Subsidiary of
the LLC or its board of directors, or unreasonably time consuming for the
employees of the Managing Member, the LLC or its Subsidiaries. If the Managing
Member believes that preparation and delivery of such information is financially
burdensome, the LLC shall provide the requesting Member with an estimate of
costs and expenses the Managing Member reasonably believes the Company would
encounter in connection of preparation and delivery of such information, and the
requesting Member, at his/her/its sole discretion may continue with his/her/its
request or withdraw his/her/its request. If the requesting Member elects to
continue with his/her/its request, the requesting shareholder shall provide the
amount of costs and expenses estimated by the LLC by depositing such amount in
full on escrow, and the payment of fees associated with escrow agent services
shall be the sole responsibility of the requesting Member.

 

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(c) The LLC shall use reasonable best efforts to deliver or cause to be
delivered, within 75 days after the end of each Fiscal Year, to each Person who
was a Shareholder at any time during such Fiscal Year all information with
respect to such Person’s Shares which are necessary for the preparation of such
Person’s United States federal and state income tax returns.

 

7.4 Transmission of Communications. Each Person that owns or controls Shares on
behalf of, or for the benefit of, another Person or Persons shall be responsible
for conveying any report, notice or other communication received from the
Managing Member to such other Person or Persons.

 

ARTICLE VIII

TAX MATTERS

 

8.1 Preparation of Tax Returns. The LLC shall arrange for the preparation and
timely filing of all returns required to be filed by the LLC. Each Member shall
timely furnish to the Managing Member all pertinent information in its
possession relating to LLC operations that is necessary to enable the LLC’s
income tax returns to be prepared and filed.

 

8.2 Tax Elections. The Taxable Year shall be determined by the Managing Member
in accordance with applicable laws. The Managing Member shall, in its sole
discretion, determine whether to make or revoke any available election pursuant
to the Code. Each Shareholder will upon request supply any information necessary
to give proper effect to such election.

 

8.3 Tax Controversies. The Managing Member is hereby designated the Tax Matters
Partner and is authorized and required to represent the LLC (at the LLC’s
expense) in connection with all examinations of the LLC’s affairs by tax
authorities, including resulting administrative and judicial proceedings, and to
expend LLC funds for professional services and reasonably incurred in connection
therewith. Each Member agrees to cooperate with the LLC and to do or refrain
from doing any or all things reasonably requested by the LLC with respect to the
conduct of such proceedings.

 

ARTICLE IX

TRANSFER OF SHARES

 

9.1 Transfers by Members.

 

(a) No Member shall Transfer any interest, fractional or otherwise, in any
Shares other than (i) pursuant to and in compliance with this Article IX or (ii)
with the prior written consent of the Managing Member, which consent shall not
be unreasonably withheld. For the three-year period commencing from December 31,
2015, except: (i) pursuant to Section 9.2, 9.4 or 9.5, (ii) in the case of
Permitted Transfer, or (iii) in a Transfer to a Permitted Transferee, no Member
shall Transfer, or offer or cause to Transfer, any legal or beneficial interest
in any Shares without the prior written consent of the Managing Member, which
consent shall not be unreasonably withheld.

 

 Page 28 of 42

  

 

(b) Except in connection with an Approved Sale, each Transferee of the Shares or
other interest(s) in the LLC shall, as a condition precedent to such Transfer,
execute a counterpart to this Agreement pursuant to which such Transferee shall
agree to be bound by the provisions of this Agreement.

 

9.2 Exit Rights. At any time after the date hereof:

 

(a) the Managing Member may cause an Approved Sale pursuant to the terms and
conditions described in Section 9.5, which sale shall be negotiated and executed
by the Managing Member and, for the avoidance of doubt, shall require the
unanimous vote of all other Members; and

 

(b) each Member shall have the right to sell all or any portion of its Shares
(including all rights and obligations associated with such Shares) at any time
to any Person subject only to Sections 9.1(b) and 9.4.

 

9.3 First Refusal Rights.

 

(a) Subject to compliance with all other provisions of this Agreement, prior to
any Transfer of Shares (except in an Approved Sale or a Transfer to a Permitted
Transferee), the Member desiring to make such Transfer (the “Transferring
Shareholder”) shall deliver a written notice (the “Offer Notice”) to the
Managing Member, disclosing in reasonable detail the identity of the prospective
Transferee, the Shares to be Transferred (the “Offered Shares”), and the terms
and conditions of the proposed Transfer. The Transferring Shareholder shall not
consummate such proposed Transfer until the ROFR Termination Date (as defined in
Section 9.3(c) below), unless the parties to the Transfer have been finally
determined pursuant to this Section 9.3 prior to the ROFR Termination Date or
such Transfer of Shares is to a Permitted Transferee.

 

(b) The LLC may elect to purchase any or all of the Offered Shares on the terms
and conditions set forth in the Offer Notice, by delivering written notice of
such election, specifying the quantity of such Shares that the LLC proposes to
acquire, to the Transferring Shareholder and the Managing Member within Twenty
(20) days after its receipt of the Offer Notice. If the LLC elects to purchase
less than all of the Offered Shares, the Managing Member may elect to purchase
any or all of the Offered Shares not proposed within such 20-business-day period
and on the same terms and conditions set forth in the Offer Notice, by
delivering written notice of such election to the LLC and the Transferring
Shareholder.

 

(c) The purchase of the Offered Shares from the Transferring Shareholder by the
LLC and/or the Managing Member shall be consummated as soon as practicable after
the delivery of the election notice(s) to the Transferring Shareholder, but in
any event before the ROFR Termination Date. If the LLC and the Managing Member
have not elected to purchase all of the Offered Shares within 45 days, or have
not consummated such purchase within 60 days, after delivery of the Offer Notice
(the earlier such date, the “ROFR Termination Date”), the Transferring
Shareholder shall be entitled to transfer the Offered Shares to the Transferee
identified in the Offer Notice on terms and conditions no more favorable to such
Transferee than those specified in the Offer Notice; provided that any Shares
not transferred within 60 days following the ROFR Termination Date shall be
subject to the provisions of this Section 9.3 upon subsequent Transfer.
Transfer; and provided further that notwithstanding anything to the contrary in
this Agreement, no Shareholder may Transfer any Shares to a Competitor of the
LLC pursuant to this Section 9.3.

 

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9.4 Tag Along Rights. At least 15 days prior to any Transfer of Shares (other
than to a Permitted Transferee and other than Transfers not to exceed three
percent in the aggregate of the Shares issued to the Transferring Shareholder
pursuant to this Agreement), the Transferring Shareholder shall deliver a
written notice (the “Sale Notice”) to the LLC and to the other Members holding
the same class of Shares as proposed to be Transferred by such holder (the
“Other Members”), specifying in reasonable detail the Shares to be Transferred
and the terms and conditions of the Transfer. The Other Members may elect to
participate in the contemplated Transfer with respect to the same class of
Shares proposed to be Transferred by such holder of Power Fund Equity by
delivering written notice to the Transferring Shareholder within 15 days after
delivery of the Sale Notice, and failure to deliver any such notice shall be
deemed a waiver of rights under this Section 9.4 with respect to such Transfer.
The aggregate consideration to be received by each Shareholder in such Transfer
shall be based upon the Pro Rata Share represented by the Shares requested to be
included by each Shareholder relative to the Pro Rata Share of all Shares
participating in such Transfer held by the Shareholders participating in such
Transfer. If no Other Member has elected to participate in the contemplated
Transfer (through notice to such effect or expiration of the 15-day period after
delivery of the Sale Notice), then the Transferring Shareholder may, during the
90-day period immediately following the date of the delivery of the Sale Notice,
Transfer the Shares specified in the Sale Notice at a price and on terms no more
favorable to the Transferee(s) thereof than specified in the Sale Notice. Any
Shares identified in the Sale Notice but not Transferred within such 90-day
period shall be subject to the provisions of this Section 9.4 upon subsequent
Transfer.

 

9.5 Approved Sale; Drag Along Obligations; Public Offering.

 

(a) If the Members by a majority of votes approve a Sale of the LLC (an
“Approved Sale”), each Member shall vote for, consent to and raise no objections
against such Approved Sale. If the Approved Sale is structured as a (x) merger
or consolidation, each Member holding Shares shall waive any dissenters rights,
appraisal rights or similar rights in connection with such merger or
consolidation or (y) sale of Shares, each holder of Shares shall agree to sell
all of his, her or its Shares and rights to acquire Shares on the terms and
conditions approved by the Managing Member. Each Member holding Shares shall
take all necessary or desirable actions in connection with the consummation of
the Approved Sale as requested by the Managing Member.

 

(b) The obligations of the Members holding Shares with respect to the Approved
Sale are subject to the satisfaction of the following conditions: (i) the
consideration payable upon consummation of such Approved Sale to all
Shareholders shall be allocated among the Shareholders as if distributed
pursuant to Section 4.1(b); and (ii) upon the consummation of the Approved Sale,
all of the Shareholders of a particular class of Shares shall receive the same
amount of consideration per Share of such class (with any non-cash consideration
valued in good faith by the Managing Member), as reduced by the aggregate
principal amount plus all accrued and unpaid interest on any indebtedness of any
holder to the LLC.

 

(c) Notwithstanding anything to the contrary, in connection with an Approved
Sale, (i) no Shareholder will be required to make affirmative representations or
warranties except as to such Shareholder’s due power and authority,
non-contravention and ownership of Shares, free and clear of all liens, and (ii)
the Shareholders may be severally obligated to join on a pro rata basis (based
on the amount by which each holder’s share of the aggregate proceeds paid with
respect to its Shares would have been reduced had the aggregate proceeds
available for distribution to such Shareholders been reduced by the amount of
such indemnity) in any indemnification obligation agreed to by the Managing
Member in connection with such Approved Sale, except that each Member may be
fully liable for obligations that relate specifically to such Shareholder, such
as indemnification with respect to representations and warranties given by such
Shareholder regarding such Shareholder’s title to and ownership of Shares;
provided that no holder shall be obligated in connection with such Approved Sale
to agree to indemnify or hold harmless the Transferees with respect to an amount
in excess of the cash proceeds to which such holder is entitled in such Approved
Sale, or to make indemnity payments in excess of the net cash proceeds paid to
such holder in connection with such Approved Sale; provided further, that any
escrow of proceeds of any such transaction shall be withheld on a pro rata basis
among all Shareholders (based on the amount by which each such holder’s share of
the aggregate proceeds otherwise payable with respect to its Shares would have
been reduced had the aggregate proceeds available for distribution to such
Shareholders been reduced by the amount placed in escrow). Each Shareholder
shall enter into any indemnification or contribution agreement requested by the
Managing Member to ensure compliance with this Section 9.5(c) and the provisions
of this Section 9.5(c) shall be deemed complied with if the requirement for
several liability is addressed through such agreement, even if the purchase and
sale agreement or merger agreement related to the Approved Sale provides for
joint and several liability.

 

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(d) Except as otherwise provided in Section 9.5(d), each Member Transferring
Shares pursuant to this Section 9.5 shall pay its Pro Rata Share of the expenses
incurred by the Members in connection with such Transfer (including by reducing
the portion of the consideration to which such Shareholder would be entitled in
such Approved Sale).

 

(e) In addition, if the Managing Member approves a Public Offering or
transaction pursuant to Section 3.10, each Shareholder shall, and shall cause
its affiliates and representatives to, vote for, consent to (to the extent it
has any voting or consenting rights) and raise no objections against any such
transaction, and the LLC, the Managing Member and each Shareholder shall take
all reasonable actions in connection with the consummation of any such
transaction as requested by the Managing Member.

 

9.6 Void Transfers. Any Transfer by any Member of any Shares or other interest
in the LLC in contravention of this Agreement in any respect (including, without
limitation, the failure of the Transferee to execute a counterpart in accordance
with Section 9.1(b)) or which would cause the LLC to not be treated as a
partnership for U.S. federal income tax purposes shall be void and ineffectual
and shall not bind or be recognized by the LLC or any other party. No purported
assignee shall have any right to any profits, losses or distributions of the
LLC.

 

9.7 Effect of Assignment.

 

(a) Any Member who shall assign any Shares or other interest in the LLC shall
cease to be a Member of the LLC with respect to such Shares or other interest
and shall no longer have any rights or privileges of a Member with respect to
such Shares or other interest.

 

(b) Any Person who acquires in any manner whatsoever any Shares or other
interest in the LLC, irrespective of whether such Person has accepted and
adopted in writing the terms and provisions of this Agreement, shall be deemed
by the acceptance of the benefits of the acquisition thereof to have agreed to
be subject to and bound by all of the terms and conditions of this Agreement
that any predecessor in such Shares or other interest in the LLC of such Person
was subject to or by which such predecessor was bound.

 

9.8 Additional Restrictions on Transfer.

 

(a) Prior to any Transfer of Restricted Shares, the Member proposing to Transfer
such Restricted Shares will deliver written notice to the LLC describing in
reasonable detail the Transfer or proposed Transfer. In addition, if the Member
holding such Restricted Shares delivers to the LLC an opinion of counsel (who
may be counsel for the LLC), satisfactory in form and substance to the Managing
Member and counsel for the LLC (which opinion may be waived, in whole or in
part, at the discretion of the Managing Member) that no subsequent Transfer of
such Restricted Shares will require registration under the Securities Act, the
LLC will promptly upon such contemplated Transfer deliver new certificates or
instruments, as the case may be, for such Restricted Shares which do not bear
the restrictive legend relating to the Securities Act as set forth below. If the
LLC is not required to deliver new certificates or instruments, as the case may
be, for such Restricted Shares not bearing such legend, the Member holding such
Restricted Shares will not Transfer the same until the prospective Transferee
has confirmed to the LLC in writing its agreement to be bound by the conditions
contained in this Section 9.8.

 

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(b) Notwithstanding any other provisions of this Article IX, no Transfer of
Shares or any other interest in the LLC may be made unless in the opinion of
counsel for the LLC, satisfactory in form and substance to the Managing Member
and counsel for the LLC (which opinion may be waived, in whole or in part, at
the discretion of the Managing Member), such Transfer would not violate any
federal securities laws or any state or provincial securities or “blue sky” laws
(including any investor suitability standards) applicable to the LLC or the
interest to be Transferred, or cause the LLC to be required to register its
securities under the U.S. Securities Act of 1933, as amended, or register as an
“Investment Company” under the U.S. Investment Company Act of 1940, as amended.
Such opinion of counsel shall be delivered in writing to the LLC prior to the
date of the Transfer.

 

(c) In order to permit the LLC to qualify for the benefit of a “safe harbor”
under Code Section 7704, notwithstanding anything to the contrary in this
Agreement, no Transfer of any Share or economic interest shall be permitted or
recognized by the LLC or the Managing Member (within the meaning of Treasury
Regulation Section 1.7704-1(d)) if and to the extent that such Transfer would
cause the LLC to have more than 100 partners (within the meaning of Treasury
Regulation Section 1.7704-1(h), including the look-through rule in Treasury
Regulation Section 1.7704-1(h)(3)).

 

9.9 Prospective Transferees. Subject to the terms of this Agreement, the LLC
agrees to cooperate, as may reasonably be requested, by providing information
and access to information to any prospective Permitted Transferee in connection
with a proposed Transfer, subject to receipt of a confidentiality agreement in
form and substance satisfactory to the Managing Member.

 

9.10 Legend. In the event that certificates representing the Shares are issued
(“Certificated Shares”), such certificates will bear the following legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
__________, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS (“STATE ACTS”) AND MAY
NOT BE SOLD, ASSIGNED, PLEDGED OR TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR STATE ACTS OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN A LIMITED
LIABILITY COMPANY AGREEMENT, DATED AS OF DECEMBER 30, 2005, AS AMENDED AND
MODIFIED FROM TIME TO TIME, GOVERNING THE ISSUER (THE “COMPANY”) AND BY AND
AMONG CERTAIN INVESTORS. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.”

 

9.11 Transfer Fees and Expenses. Except as provided in Sections 9.3, 9.4 and
9.5, the Transferor and Transferee of any Shares or other interest in the LLC
shall be jointly and severally obligated to reimburse the LLC for all reasonable
expenses (including attorneys’ fees and expenses) of any Transfer or proposed
Transfer, whether or not consummated.

 

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ARTICLE X

 

ADMISSION OF MEMBERS

 

10.1 Substituted Members. In connection with the Transfer of Shares of a
Shareholder permitted under the terms of this Agreement, the Transferee shall
become a Substituted Member on the later of (i) the effective date of such
Transfer, and (ii) the date on which the Managing Member approves such
Transferee as a Substituted Member, and such admission shall be shown on the
books and records of the LLC.

 

10.2 Additional Members. A Person may be admitted to the LLC as an Additional
Member only as contemplated under Section 3.1 and only upon furnishing to the
Managing Member (a) a letter of acceptance, in form satisfactory to the Managing
Member, of all the terms and conditions of this Agreement, including the power
of attorney granted in Section 13.2, and (b) such other documents or instruments
as may be necessary or appropriate to effect such Person’s admission as a
Member. Such admission shall become effective on the date on which the Managing
Member determines in its sole discretion that such conditions have been
satisfied and when any such admission is shown on the books and records of the
LLC.

 

ARTICLE XI

 

WITHDRAWAL AND RESIGNATION OF SHAREHOLDERS

 

11.1 Withdrawal and Resignation of Member. No Member shall have the power or
right to withdraw or otherwise resign from the LLC prior to the dissolution and
winding up of the LLC pursuant to Article XII without the prior written consent
of the Managing Member (which consent may be withheld by the Managing Member in
its sole discretion), except as otherwise expressly permitted by this Agreement
or any of the other agreements contemplated hereby. Upon a Transfer of all of a
Member’s Shares in a Transfer permitted by this Agreement, subject to the
provisions of Section 9.7, such Member shall cease to be a Member.
Notwithstanding that payment on account of a withdrawal may be made after the
effective time of such withdrawal, any completely withdrawing Member will not be
considered a Member for any purpose after the effective time of such complete
withdrawal, and, in the case of a partial withdrawal, such Shareholder’s Capital
Account (and corresponding voting and other rights) shall be reduced for all
other purposes hereunder upon the effective time of such partial withdrawal.

 

ARTICLE XII

 

DISSOLUTION AND LIQUIDATION

 

12.1 Dissolution. The LLC shall not be dissolved by the admission of Additional
Members or Substituted Members. The LLC shall dissolve, and its affairs shall be
wound up upon the first to occur of the following:

 

(a) at any time by the Managing Member; or

 

(b) the entry of a decree of judicial dissolution of the LLC under the Virginia
Act or an administrative dissolution under the Virginia Act.

 

Except as otherwise set forth in this Article XII, the LLC is intended to have
perpetual existence. An Event of Withdrawal shall not cause a dissolution of the
LLC and the LLC shall continue in existence subject to the terms and conditions
of this Agreement.

 

12.2 Liquidation and Termination. On the dissolution of the LLC, the Managing
Member shall act as liquidator or may appoint one or more representatives,
Members or other Persons as liquidator(s). The liquidators shall proceed
diligently to wind up the affairs of the LLC and make final distributions as
provided herein and in the Virginia Act. The costs of liquidation shall be borne
as an LLC expense. Until final distribution, the liquidators shall continue to
operate the LLC properties with all of the power and authority of the Managing
Member. The steps to be accomplished by the liquidators are as follows:

 

(a) the liquidators shall pay, satisfy or discharge from LLC funds all of the
debts, liabilities and obligations of the LLC (including, without limitation,
all expenses incurred in liquidation) or otherwise make adequate provision for
payment and discharge thereof (including, without limitation, the establishment
of a cash fund for contingent liabilities in such amount and for such term as
the liquidators may reasonably determine);

 

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(b) as promptly as practicable after dissolution, the liquidators shall (i)
determine the Fair Market Value (the “Liquidation FMV”) of the LLC’s remaining
assets (the “Liquidation Assets”) in accordance with the definition thereof in
this Agreement, (ii) determine the amounts to be distributed to each Shareholder
in accordance with Section 4.1(b), and (iii) deliver to each Shareholder a
statement (the “Liquidation Statement”) setting forth the Liquidation FMV and
the amounts and recipients of such Distributions;

 

(c) if the Members do not deliver written notice to the liquidators disagreeing
with the calculations in the Liquidation Statement (a “Statement of
Disagreement”) within Fifteen (15) business days after the date of delivery of
the Liquidation Statement, absent manifest error, the Liquidation Statement
shall be final and binding on all Shareholders. In the event such holders give a
Statement of Disagreement within such 15-day period, the holders of a majority
of the voting Shares and the liquidators will attempt in good faith to agree on
the Liquidation FMV, and any such agreement shall be final and binding on all
Shareholders. If such Persons are unable to reach such agreement within Twenty
(20) business days after the date of the Statement of Disagreement, the holders
of a majority of the voting Shares and the liquidators shall each, within 10
days thereafter, select an investment banker or other appraiser with experience
in analyzing and making determinations concerning matters in the Business and in
valuing entities similar to the LLC (including calculating distribution
mechanisms like that set forth in Section 4.1(b) above), and the two investment
bankers/appraisers so selected shall together select a third such investment
banker/appraiser similarly qualified. The three investment bankers/appraisers so
selected shall each determine the Liquidation FMV in accordance with the
definition thereof in this Agreement, shall determine the amount and allocation
of Distributions in accordance with Section 4.1 (b), and shall, within 30 days
after their retention, provide the written results of such determination to the
Members and the liquidators. For purposes hereof, the Liquidation FMV and the
amounts to be distributed with respect to each class of Shares shall each be
equal to the average of the two appraisals closest to each other with respect
thereto, and such amounts shall be final and binding on all Shareholders. The
costs of such appraisal shall be borne by the LLC; and

 

(d) as soon as the Liquidation FMV and the proper amounts of Distributions have
been determined in accordance with Section 12.2(c) above, the liquidators shall
promptly distribute the LLC’s Liquidation Assets to the holders of Shares in
accordance with Section 4.1(b) above. Any non-cash Liquidation Assets will first
be written up or down to their Fair Market Value, thus creating Profit or Loss
(if any), which shall be allocated in accordance with Sections 4.2 and 4.3. In
making such distributions, the liquidators shall allocate each type of
Liquidation Assets (i.e., cash or cash equivalents, etc.) among the Shareholders
ratably based upon the aggregate amounts to be distributed with respect to the
Shares held by each such holder. To the extent that equity securities of any
Subsidiary of the LLC are distributed to any Shareholders in connection with the
liquidation, such Shareholders hereby agree to enter into a securityholders
agreement with such Subsidiary and each other Shareholder which contains
restrictions on the Transfer of such equity security and other provisions
(including with respect to the governance and control of such Subsidiary) in
form and substance similar to the provisions and restrictions set forth herein
(including, without limitation, in Article IX and Article V). The distribution
of cash and/or property to a Shareholder in accordance with the provisions of
this Section 12.2 constitutes a complete return to the Shareholder of its
Capital Contributions and a complete distribution to the Shareholder of its
interest in the LLC and all the LLC’s property and constitutes a compromise to
which all Shareholders have consented within the meaning of the Virginia Act. To
the extent that a Shareholder returns funds to the LLC, it has no claim against
any other Shareholder for those funds.

 

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12.3 Cancellation of Certificate. On completion of the distribution of LLC
assets as provided herein, the LLC is terminated (and the LLC shall not be
terminated prior to such time) and the Managing Member (or such other Person or
Persons as the Virginia Act may require or permit) shall file a certificate
attesting to the liquidation of the LLC with the Secretary of State of Virginia,
and any other filings made pursuant to this Agreement that are or should be
canceled and take such other actions as may be necessary to terminate the LLC.
The LLC shall be deemed to continue in existence for all purposes of this
Agreement until it is terminated pursuant to this Section 12.3.

 

12.4 Reasonable Time for Winding Up. A reasonable time shall be allowed for the
orderly winding up of the business and affairs of the LLC and the liquidation of
its assets pursuant to Section 12.2 in order to minimize any losses otherwise
attendant upon such winding up.

 

12.5 Return of Capital. Only the LLC, bit mot the liquidators, shall be liable
for the return of Capital Contributions or any portion thereof to the
Shareholders (it being understood that any such return shall be made solely from
LLC assets). For the avoidance of doubt, any Member or liquidator shall not be
personally liable for the return of Capital Contributions or any portion thereof
to the Shareholders.

 

12.6 Hart-Scott-Rodino. In the event the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “HSR Act”) is applicable to any
Shareholder, the dissolution of the LLC shall not be consummated until such time
as the applicable waiting period (and extensions thereof) under the HSR Act have
expired or otherwise been terminated with respect to each such Shareholder.

 

ARTICLE XIII

 

GENERAL PROVISIONS

 

13.1 Information Rights. The LLC shall provide the Alliance, for so long as
Alliance continues to own at least one Share acquired prior to the Effective
Date of this Agreement, as set forth on the Schedule of Shareholders, with the
following: (A) as soon as available and in any event within Ten (10) calendar
days after the end of each of the first three quarters of each Fiscal Year,
consolidated balance sheets of the LLC and its Subsidiaries, if any, as of the
end of such period, and consolidated statements of income and cash flows
statements of the LLC and its , if any, for the period then ended prepared in
conformity with generally accepted accounting principles in the United Stated
(“GAAP”) applied on a consistent basis, except as otherwise noted therein, and
subject to the absence of footnotes and year-end adjustments; and (B) as soon as
available and in any event within Thirty (30) calendar days after the end of
each Fiscal Year, a consolidated balance sheet of the LLC and its Subsidiaries,
if any, as of the end of such year, and consolidated statements of income and
cash flows of the LLC and its Subsidiaries, if any, for the year then ended
prepared in conformity with GAAP applied on a consistent basis, except as
otherwise noted therein, together with an auditor’s report thereon.

 

13.2 Power of Attorney.

 

(a) Each Shareholder hereby constitutes and appoints the Managing Member and the
liquidators, with full power of substitution, as his true and lawful agent and
attorney-in-fact, with full power and authority in his or its name, place and
stead, to execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) this Agreement, all certificates and other
instruments and all amendments thereof in accordance with the terms hereof which
the Managing Member deems appropriate or necessary to form, qualify, or continue
the qualification of, the LLC as a limited liability company in the State of
Virginia and in all other jurisdictions in which the LLC may conduct business or
own property; (B) all instruments which the Managing Member deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this
Agreement in accordance with its terms; (C) all conveyances and other
instruments or documents which the Managing Member and/or the liquidators deems
appropriate or necessary to reflect the dissolution and liquidation of the LLC
pursuant to the terms of this Agreement, including a certificate of
cancellation; and (D) all instruments relating to the admission, withdrawal or
substitution of any Shareholder pursuant to Article X or XI.

 

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(b) The foregoing power of attorney is irrevocable and coupled with an interest,
and shall survive the death, disability, incapacity, dissolution, bankruptcy,
insolvency or termination of any Shareholder and the Transfer of all or any
portion of his or its Shares and shall extend to such Shareholder’s heirs,
successors, assigns and personal representatives.

 

13.3 Amendments. Subject to the right of the Managing Member to amend this
Agreement as expressly provided herein, this Agreement may be amended, modified,
or waived with the written consent of a majority of the Power Fund Equity;
provided that if any such amendment, modification, or waiver would adversely
affect in any material respect the rights, preferences or privileges of any
Shares as compared with the effect of such amendment, modification or waiver on
the rights, preferences or privileges of the Power Fund Equity, such amendment,
modification, or waiver shall also require the written consent of the holders of
a majority of the Shares so adversely affected. In connection with any
amendment, modification or waiver, or other approval hereunder, the Managing
Member will have no obligation to provide any information to any Person unless
the consent of such Person is required to be obtained in order to effectuate
such amendment, modification or waiver; provided that any Person shall, at the
request of the LLC or the Company, as the case may be, promptly (and in any
event, within three (3) business days) execute and deliver to the LLC or the
Company, any amendment, modification or waiver that has been approved in
accordance with this Agreement; and provided further that the Managing Member
shall be required to inform the holders of Class A Shares of the substance and
occurrence of such amendment. The Managing Member may, without the consent of
any other Member or Shareholder, amend the Schedule of Shareholders to reflect
the admission of any other Member or Shareholder, the creation of issuance of
any other Shares or interests in the LLC or the making of any Capital
Contributions.

 

13.4 Title to LLC Assets. LLC assets shall be deemed to be owned by the LLC as
an entity, and no Shareholder, individually or collectively, shall have any
ownership interest in such LLC assets or any portion thereof. Legal title to any
or all LLC assets may be held in the name of the LLC, the Managing Member or one
or more nominees, as the Managing Member may determine. The Managing Member
hereby declares and warrants that any LLC assets for which legal title is held
in its name or the name of any nominee shall be held in trust by the Managing
Member or such nominee for the use and benefit of the LLC in accordance with the
provisions of this Agreement. All LLC assets shall be recorded as the property
of the LLC on its books and records, irrespective of the name in which legal
title to such LLC assets is held.

 

13.5 Remedies. Each Shareholder shall have all rights and remedies set forth in
this Agreement and all rights and remedies which such Person has been granted at
any time under any other agreement or contract and all of the rights which such
Person has under any law. Any Person having any rights under any provision of
this Agreement or any other agreements contemplated hereby shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.

 

13.6 Successors and Assigns. All covenants and agreements contained in this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors, legal representatives
and permitted assigns, whether so expressed or not.

 

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13.7 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

13.8 Counterparts. This Agreement may be executed simultaneously in two or more
separate counterparts, anyone of which need not contain the signatures of more
than one party, but each of which will be an original and all of which together
shall constitute one and the same agreement binding on all the parties hereto.

 

13.9 Descriptive Headings; Interpretation. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. Whenever required by the context, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa. The use of the words “including” or “include” in this
Agreement shall be by way of example rather than by limitation. Reference to any
agreement, document or instrument means such agreement, document or instrument
as amended or otherwise modified from time to time in accordance with the terms
thereof, and if applicable hereof. Wherever required by the context, references
to a Fiscal Year shall refer to a portion thereof. The use of the words “or,”
“either” and “any” shall not be exclusive. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Wherever a conflict
exists between this Agreement and any other agreement, this Agreement shall
control but solely to the extent of such conflict.

 

13.10 Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Virginia, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Virginia or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Virginia. Subject to Section 13.19,
any dispute relating hereto shall be heard in the state or federal courts of
Virginia, and the parties agree to jurisdiction and venue therein.

 

13.11 Addresses and Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given or made when (a) delivered
personally to the recipient, (b) telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service (charges prepaid)
that same day) if telecopied before 5:00 p.m. Los Angeles, California time on a
business day, and otherwise on the next business day, or (c) one business day
after being sent to the recipient by reputable overnight courier service
(charges prepaid). Such notices, demands and other communications shall be sent
to the address for such recipient set forth in the LLC’s books and records
(which shall initially be the addresses set forth on the Schedule of
Shareholders), or to such other address or to the attention of such other person
as the recipient party has specified by prior written notice to the sending
party. Any notice to the Managing Member or the LLC shall be deemed given if
received by the Managing Member at the principal office of the LLC designated
pursuant to Section 2.5.

 

13.12 Creditors. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the LLC or any of its Affiliates,
and no creditor who makes a loan to the LLC or any of its Affiliates may have or
acquire (except pursuant to the terms of a separate agreement executed by the
LLC in favor of such creditor) at any time as a result of making the loan any
direct or indirect interest in LLC Profits, Losses, Distributions, capital or
property other than as a secured creditor.

 

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13.13 Waiver. No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute a waiver of
any such breach or any other covenant, duty, agreement or condition.

 

13.14 Further Action. The parties agree to execute and deliver all documents,
provide all information and take or refrain from taking such actions as may be
necessary or appropriate to achieve the purposes of this Agreement.

 

13.15 Offset. Whenever the LLC is to pay any sum to any Shareholder or any
Affiliate or related person thereof, any amounts that such Shareholder or such
Affiliate or related person owes to the LLC under any promissory note issued to
the LLC as partial payment for any Shares of the LLC may be deducted from that
sum before payment.

 

13.16 Entire Agreement. This Agreement and the Registration Rights Agreement,
those documents expressly referred to herein and other documents dated as of
even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.

 

13.17 Opt-in to Article 8 of the Uniform Commercial Code. The Shareholders
hereby agree that the Shares shall be securities governed by applicable laws of
the Commonwealth of Virginia (and the Uniform Commercial Code of any other
applicable jurisdiction).

 

13.18 Delivery by Facsimile. This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute original forms thereof and deliver them to all
other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

 

13.19 Arbitration. Except as set forth in Section 13.5, any controversy or claim
arising out of or relating to this Agreement shall be settled exclusively by
final and binding arbitration in accordance with the rules of the American
Arbitration Association and shall take place in Richmond, Virginia. Judgment
upon the arbitration award may be entered in any court having jurisdiction
thereof. In the event that a judgment is made pursuant to this Section 13.19,
all reasonable out of pocket costs and reasonable legal costs incurred by the
prevailing party shall be paid by the non-prevailing party. In the event that a
non-arbitrated settlement is reached, each party shall pay their own respective
costs and fees incurred thereby.

 

13.20 Survival. Section 6.7 shall survive and continue in full force in
accordance with its terms notwithstanding any termination of this Agreement or
the dissolution of the LLC.

 

 Page 38 of 42

  

 

13.21 Expenses. The LLC shall pay (or cause its Subsidiaries to pay) and hold
the Managing Member harmless against liability for the payment of the reasonable
out-of-pocket expenses of such Persons (including the reasonable fees and
expenses of legal counsel or other advisors) in the performance of its duties as
Managing Member and in connection with (i) start-up and organizational costs in
connection with the formation of the LLC and the commencement of their
respective businesses and operations, (ii) the preparation, negotiation and
execution of this Agreement, any debt financing documents and each other
agreement executed in connection herewith, and the evaluation and consummation
of the transactions contemplated hereby and thereby, (iii) any amendments or
waivers (whether or not the same become effective) under or in respect of this
Agreement or such other agreements, (iv) the enforcement of the rights granted
under this Agreement (v) any filing with any governmental agency with respect to
such Person’s investment in the LLC or in any other filing with any governmental
agency with respect to the LLC that mentions such Person, and (vi) any fees and
expenses of any lenders to the LLC and its Subsidiaries.

 

13.22 Acknowledgements. Upon execution and delivery of a counterpart to this
Agreement or a joinder to this Agreement, each Member and Additional Member
shall be deemed to acknowledge to Power Fund as follows: (a) the determination
of such Member or Additional Member to purchase Shares pursuant to this
Agreement and any other agreement referenced herein has been made by such Member
or Additional Member independent of any other Member and independent of any
statements or opinions as to the advisability of such purchase or as to the
properties, business, prospects or condition (financial or otherwise) of the LLC
which may have been made or given by the Managing Member or by any agent or
employee of the Managing Member, (b) the Managing Member has not acted as an
agent of such Member or Additional Member in connection with making its
investment hereunder and that the Managing Member shall not be acting as an
agent of such Member or Additional Member in connection with monitoring its
investment hereunder, (c) Alliance has retained law office of Philip Magri, Esq.
in connection with the transactions contemplated hereby and expects to retain
law offices of Feingold, Morgan and Sanchez as legal counsel in connection with
the management and operation of the LLC and Alliance, (d) Philip Magri, Esq. and
Feingold, Morgan and Sanchez are not counsel to any other Members and are not
representing and will not represent any other Member or Additional Member in
connection with the transaction contemplated hereby or any dispute which may
arise between the LLC, on the one hand, and any other Member or Additional
Member, on the other hand, (e) such Member or Additional Member will, if it
desires legal advice with respect to any of the transactions contemplated
hereby, retain its own independent counsel.

 

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

 

MEMBER 1: HELPFUL ALLIANCE COMPANY       By: /s/ MAXIM TEMNIKOV   Name: Maxim
Temnikov   Its: Chief Executive Officer       MEMBER 2: MR. OLEG MIRMANOV      
By: /s/ OLEG MIRMANOV   Name: Oleg Mirmanov   Its: Individually

 

 Page 39 of 42

  

 

EXHIBIT A

 

SCHEDULE OF SHAREHOLDERS

 

(as of __________________________, 2016)

 

Shareholder  Class-A
Preferred
LLC
Interests  % of
Ownership
from
Class-A
Preferred
LLC
Interests   Class-B
Preferred
LLC
Interests  % of
Ownership
from
Class-B
Preferred
LLC
Interests   Class-C
Preferred
LLC
Interests   Common
LLC
Interests  % of
Ownership
from
Common
LLC
Interests   Total % of
Ownership                                 Helpful Alliance Company  20 Units 
 66%  —        —   1 Unit   1%   67%                                     Oleg
Mirmanov  —       10 Units   33%   —   —        33%                           
         TOTAL:  20 Units       10 Units        —   1 Unit        100%

 

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

 

MEMBER 1: HELPFUL ALLIANCE COMPANY       By: /s/ MAXIM TEMNIKOV   Name: Maxim
Temnikov   Its: Chief Executive Officer       MEMBER 2: MR. OLEG MIRMANOV      
By: /s/ OLEG MIRMANOV   Name: Oleg Mirmanov   Its: Individually

 

 Page 40 of 42

  

 

EXHIBIT B. APPROVED CONSTRUCTION BUDGET

 

The Members of the Company hereby approve the construction and operating budget
within the limits defined in the table below:

 

LAND DEVELOPMENT  Development Aggregate   Per Lot   Per Sellable  Capitalized
Costs  Amount   % Total   Average   Sq. foot  01  Land purchase costs (1) 
$210,000    1.4%  $3,000   $1.44  02  Project origination costs   40,000  
 0.3%   571    0.27  03  Engineering costs (2)   160,000    1.1%   2,286  
 1.10  04  Contractors costs, off-site   430,000    2.9%   6,143    2.95  05 
Contractors costs, on-site   2,400,000    16.1%   34,286    16.47  06  County
fees   16,560    0.1%   237    0.11  07  Letter of credit costs and fees 
 25,000    0.2%   357    0.17  08  Homeowners association costs   50,000  
 0.3%   714    0.34  09  Contingency @5.0% of cap. Costs   166,578    1.1% 
 2,380    1.14     Total:  $3,498,138    23.5%  $49,973   $24.01 

 

HOMEBUILDING  Development Aggregate   Per Unit      Capitalized Costs  Amount  
% Total   Average   Per Sq.Ft.  10  New construction fees to County 
$1,015,000    6.8%  $14,500   $6.97  11  Construction costs (3)   8,743,320  
 58.8%   124,905    60.00  12  Engineering costs   350,000    2.4%   5,000  
 2.40  13  Architectural costs   116,667    0.8%   1,667    0.80  14 
Contingency @5.0% of cap. Costs   511,249    3.4%   7,304    3.51     Subtotal: 
$10,736,236    72.2%  $153,375   $73.68 

 

  Development Aggregate   Per Unit      OPERATING EXPENSES  Amount   % Total  
Average   Per Sq.Ft.  15  Construction management fees (4)  $-    -   $-   $- 
16  Securities offering expenses   25,000    0.2%   357    0.17  17  Investor
relations, including reporting   200,000    1.3%   2,857    1.37  18  Project
LLC maintenance (5)   180,000    1.2%   2,571    1.24  19  Marketing and sale of
homes   203,000    1.4%   2,900    1.39  20  Contingency @5.0%   30,400    0.2% 
 434    0.21     Total expenses:  $638,400    4.3%  $9,120   $4.38  AGGREGATE
COSTS AND EXPENSES  $14,872,774    100.0%  $212,468   $102.06 

 

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

 

MEMBER 1: HELPFUL ALLIANCE COMPANY       By: /s/ MAXIM TEMNIKOV   Name: Maxim
Temnikov   Its: Chief Executive Officer     Exhibit B. Continuation of signature
page       MEMBER 2: MR. OLEG MIRMANOV       By: /s/ OLEG MIRMANOV   Name: Oleg
Mirmanov   Its: Individually

 

 Page 41 of 42

  

 

EXHIBIT C. LEGAL DEFINITION OF LAND

 

PARCEL I

 

16800 BRANDERS BRIDGE ROAD
TAX PARCEL NO. 792631870100000

 

ALL THAT CERTAIN PIECE, OR PARCEL OF LAND, LYING AND BEING IN BERMUDA DISTRICT,
CHESTERFIELD COUNTY, VIRGINIA, DESIGNATED AS PARCEL “A” CONTAINING 27.0 ACRES AS
SHOWN ON PLAT ENTITLED “COMPILED PLAT SHOWING 2 PARCELS OF LAND LYING WEST OF
BRANDERS BRIDGE ROAD, BERMUDA DISTRICT CHESTERFIELD COUNTY, VIRGINIA” MADE BY
BALZER AND ASSOCIATES, INC. DATED JANUARY 4, 2006, A COPY OF WHICH PLAT IS
RECORDED IN PLAT BOOK 161, PAGE 96, AND REFERENCE TO WHICH PLAT IS HEREBY MADE
FOR MORE PARTICULAR DESCRIPTION.

 

LESS AND EXCEPT 0.845 acres conveyed to Commonwealth of Virginia in Deed Book
8420 Page 70, Highway Plat Book 23 Pages 201-202.

 

BEING the same real property conveyed to First Community Bank by Substitute
Trustee’s Deed from Kepley Broscious & Biggs, PLC, substitute trustee, dated as
of September 25, 2013, and recorded in the Clerk’s Office of the Circuit Court
of Chesterfield County, Virginia, on October 10, 2013, in Deed Book 10355, page
356.

 

PARCEL II

 

16812 BRANDERS BRIDGE ROAD
TAX PARCEL NO. 792631627700000

 

ALL THAT CERTAIN PIECE, OR PARCEL OF LAND, LYING AND BEING IN BERMUDA DISTRICT,
CHESTERFIELD COUNTY, VIRGINIA, DESIGNATED AS PARCEL “A” CONTAINING 2.6 ACRES AS
SHOWN ON PLAT ENTITLED “COMPILED PLAT SHOWING 2 PARCELS OF LAND LYING WEST OF
BRANDERS BRIDGE ROAD, BERMUDA DISTRICT CHESTERFIELD COUNTY, VIRGINIA” MADE BY
BALZER AND ASSOCIATES, INC. DATED JANUARY 4, 2006, A COPY OF WHICH PLAT IS
RECORDED IN THE CLERK’S OFFICE, CIRCUIT COURT, CHESTERFIELD COUNTY, VIRGINIA IN
PLAT BOOK 161, PAGE 96, AND TO WHICH REFERENCE IS HEREBY MADE FOR MORE
PARTICULAR DESCRIPTION OF THE PROPERTY HEREBY CONVEYED.

 

BEING the same real property conveyed to First Community Bank by General
Warranty Deed from Shively, L.L.C., a terminated Virginia limited liability
company, by and through Randolph K. Shively, its Manager and trustee in
liquidation pursuant to Virginia Code § 13.1-1050.2©, dated as of October 21,
2013, and recorded in the Clerk’s Office of the Circuit Court of the County of
Chesterfield, Virginia, on November 1, 2013, in Deed Book 10377, page 751.

 

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

 

MEMBER 1: HELPFUL ALLIANCE COMPANY       By: /s/ MAXIM TEMNIKOV   Name: Maxim
Temnikov   Its: Chief Executive Officer     Exhibit B. Continuation of signature
page       MEMBER 2: MR. OLEG MIRMANOV       By: /s/ OLEG MIRMANOV   Name: Oleg
Mirmanov   Its: Individually

 

 Page 42 of 42