Exhibit 10.2

AMENDED AND RESTATED OPERATING AGREEMENT OF

CBC SETTLEMENT FUNDING, LLC

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

        Page   ARTICLE I       DEFINITIONS     1    ARTICLE II  
    ORGANIZATION     1        2.01    Formation.     1        2.02    Name.    
1        2.03    Registered Agent; Registered Office.     2   
    2.04    Principal Office; Other Offices.     2        2.05    Purposes.    
2        2.06    Term.     2        2.07    No State Law Partnership.     2   
    2.08    Liability to Third Parties.     2    ARTICLE III       MEMBERSHIP;
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; REVALUATIONS     2   
    3.01    Units.     2        3.02    Members and Capital Contributions.     3
       3.03    Additional Members; Additional Capital Contributions.     3   
    3.04    Preemptive Rights.     4        3.05    Return of Capital
Contributions; Special Rules.     6        3.06    Capital Accounts.     6   
    3.07    Gross Asset Value.     7    ARTICLE IV       ALLOCATION OF PROFITS
AND LOSSES     8        4.01    Profits and Losses.     8    ARTICLE V  
    DISTRIBUTIONS     8        5.01    Time of Distributions.     8   
    5.02    Distributions.     8        5.03    Tax Distribution Amount.     9
       5.04    Withholding.     9    ARTICLE VI       MANAGEMENT     9   
    6.01    Management.     9        6.02    Meetings of the Board.     10   
    6.03    Action by Written Consent.     11        6.04    Officers.     12   
    6.05    Actions Requiring Approval by the Board or the Members.     13   
    6.06    Duties; Liability of Parties.     18        6.07    Indemnification
of Managers.     19    ARTICLE VII       RESTRICTIVE COVENANTS     19   
    7.01    Other Ventures.     19        7.02    Confidentiality.     20   

 

i

--------------------------------------------------------------------------------

    7.03    Covenant Against Competition     21        7.04    Covenant Against
Solicitation of Customers     21        7.05    Covenant Against Solicitation of
Employees and Others     21        7.06    Assignment of Inventions     22   
    7.07    Severability     22        7.08    Reasonableness; Injunction     22
   ARTICLE VIII   RESTRICTIONS ON TRANSFERS; PUT AND CALL RIGHTS     22   
    8.01    Restrictions on Transfers.     22        8.02    Permitted
Transfers.     23        8.03    Conditions to Transfer.     23   
    8.04    Rights of Unadmitted Transferee.     23        8.05    Admission of
Transferee as Member.     24        8.06    Effect of Disposition.     24   
    8.07    Skyrm and Goodman’s Put Right.     24        8.08    Company’s Call
Right.     25        8.09    Drag-Along.     25        8.10    Tag-Along.     26
       8.11    Right of First Refusal.     28        8.12    Conversion of
Units.     28        8.13    Prohibited Transfers.     28    ARTICLE IX  
WITHDRAWAL     28        9.01    Restrictions on Withdrawal.     28   
    9.02    Withdrawal Payment; Reserves.     29        9.03    Withdrawing
Member’s Rights.     29    ARTICLE X   DISSOLUTION, LIQUIDATION, AND TERMINATION
    29        10.01    Dissolution.     29        10.02    Liquidation.     30
   ARTICLE XI   ALLOCATION RULES     30        11.01    Special Allocations.    
30        11.02    Code Section 704(c).     31        11.03    Other Allocation
Rules.     31    ARTICLE XII   ANNUAL BUDGET; BOOKS AND RECORDS, ACCOUNTING, AND
TAX ELECTIONS     32        12.01    Annual Budget.     32   
    12.02    Maintenance of Records.     32        12.03    Reports to Members.
    32        12.04    Tax Elections; Determinations Not Provided for in
Agreement.     33        12.05    Tax Matters Partner.     33    ARTICLE XIII  
GENERAL PROVISIONS     33        13.01    Notices.     33   
    13.02    Interpretation.     34   

 

ii

--------------------------------------------------------------------------------

    13.03    Governing Law; Jurisdiction; Venue.     34        13.04    Binding
Agreement.     34        13.05    Severability.     35        13.06    Entire
Agreement.     35        13.07    Further Action.     35   
    13.08    Amendment or Modification.     35        13.09    Counterparts;
Electronic Delivery.     35        13.10    Representation.     36    EXHIBIT A
  MEMBERS AND CAPITAL CONTRIBUTIONS     A-1          EXHIBIT B   DEFINITIONS    
B-1          EXHIBIT C   OPTION AGREEMENT     C-1         

 

iii

--------------------------------------------------------------------------------

AMENDED AND RESTATED OPERATING AGREEMENT OF

CBC SETTLEMENT FUNDING, LLC

This Amended and Restated Operating Agreement (this “Agreement”) of CBC
Settlement Funding, LLC (the “Company”), a limited liability company organized
pursuant to the Delaware Limited Liability Company Act (the “Act”), is entered
into by and among the persons listed on Exhibit A hereto and made effective as
of December 31, 2013 (the “Effective Date”).

Background. CBC Holding Company, LLC (the “Original Member”) currently is the
sole member of the Company pursuant to the Operating Agreement of CBC Settlement
Funding, LLC dated as of December, 2012 (the “Existing Operating Agreement”).
Pursuant to the Membership Interest Purchase Agreement dated as of December 31,
2013 (the “Purchase Agreement”) among the Company, the Original Member, Asta,
CBC Holding Company, LLC (the “Holding Company”), and certain other parties, CBC
Acquisition LLC (“CBC Acquisition”) has acquired all of the membership interest
in the Company from the Holding Company. This Agreement is entered into pursuant
to Section 1.03 of the Purchase Agreement to reflect that purchase and the
admission of two additional members.

This Agreement amends and restates the Existing Operating Agreement in its
entirety as follows:

1.

DEFINITIONS

Certain defined terms used in this Agreement are set forth in Exhibit B.

2.

ORGANIZATION

A. Formation.

The Company has been organized as a Delaware limited liability company by the
filing of a Certificate of Formation on December 20, 2012 pursuant to the Act.

B. Name.

The name of the Company is “CBC Settlement Funding, LLC” and all Company
business shall be conducted under that name or such other names as comply with
applicable law that the Members may select from time to time.

--------------------------------------------------------------------------------

C. Registered Agent; Registered Office.

The registered agent of the Company shall be Monarch Entity Services, LLC and
the registered office of the Company in the State of Delaware shall be located
at 500 Delaware Avenue, 11th Floor, Wilmington, Delaware 19801 or such other
office (which need not be a place of business of the Company) as the Board may
designate from time to time in the manner provided by law.

D. Principal Office; Other Offices.

The principal office of the Company shall be at such place as the Board may
designate from time to time, which need not be in the State of Delaware. The
initial principal office of the Company shall be at One West First Avenue, Suite
310, Conshohocken, Pennsylvania 19428. The Company may change its principal
office or have such other offices as the Members may designate from time to time
to the extent required by Section 6.05(b)(xxiii).

E. Purposes.

The purposes of the Company are to engage in any activity in which limited
liability companies may engage under the Act.

F. Term.

The Company commenced its existence on December 20, 2012 and shall have
perpetual existence, unless sooner terminated in accordance with the provisions
of this Agreement.

G. No State Law Partnership.

The Members intend that the Company shall not be a partnership or joint venture,
and that no Member shall be a partner or joint venturer of any other Member in
connection with this Agreement, for any purpose other than federal, state, and
local tax purposes, and the provisions of this Agreement shall not be construed
otherwise.

H. Liability to Third Parties.

No Member shall be liable for the debts, obligations, or liabilities of the
Company, except to the extent required under the Act with respect to amounts
distributed to the Member at a time when the Company was insolvent or was
rendered insolvent by virtue of the distribution.

3.

MEMBERSHIP; CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; REVALUATIONS

A. Units.

1. Membership Interests in the Company are represented by units (“Units”), with
each Unit representing a fractional part of the Membership Interests of all
Members (or permitted assignees, as the case may be) equal to the quotient of
one divided by the total number of Units outstanding at any time, except as
otherwise provided herein. Units may be expressed in whole or in fractions.

 

2

--------------------------------------------------------------------------------

2. Each of the Units and the corresponding Membership Interests of each Member
in the Company has the same rights, responsibilities, privileges, and
obligations as all other Units in the Company, except (i) as otherwise expressly
provided in this Agreement; and (ii) certain Units may be subject to additional
rights, restrictions, terms, and conditions, including without limitation,
certain forfeiture provisions and/or anti-dilution protections, as expressly
permitted in this Agreement and specified in the particular agreement or other
document which memorializes the grant or issuance of, or which governs the grant
or issuance of, such Units; provided, however, that in the event of any
inconsistency between the terms of this Agreement and the terms of any such
other agreement or other document, the terms of this Agreement shall control.

3. For the avoidance of doubt, voting by Members shall be based on the Profit
Percentages outstanding at the time such vote is taken or approval or consent
provided.

B. Members and Capital Contributions.

The Members of the Company are listed on Exhibit A hereto, each of which has
executed this Agreement as of the Effective Date and is hereby admitted to the
Company as a Member. The Members have been credited with the Units and Initial
Capital Account Balances specified in Exhibit A. The Board shall cause Exhibit A
to be updated as necessary to reflect any change in the ownership of Units.
Updates to Exhibit A pursuant to the preceding sentence shall not be deemed an
amendment to this Agreement.

C. Additional Members; Additional Capital Contributions.

1. No Person shall be admitted to the Company as an additional Member without
the consent of Members holding at least a majority of the Membership Interests
of the Company.

2. No Member shall be obligated to make any additional Capital Contributions to
the Company. However, if a Member shall make contributions to the Company in
addition to the Capital Contributions set forth on Exhibit A attached hereto
opposite such Member’s name, such contributions shall, absent a different
understanding between the Member and the Company, be considered a short-term
loan from the Member to the Company, which loan shall bear interest (compounded
on a daily basis based on a 365 day year) at the Prime Rate plus two hundred
(200) basis points, per annum, and shall have such other commercially reasonable
arm’s length terms as are mutually agreed upon by the Company and the Member.
Such additional contributions (other than an additional Capital Contribution
that is pro rata, among all existing Members) shall only be made with the
consent of Members holding at least a majority of the Membership Interests of
the Company.

 

3

--------------------------------------------------------------------------------

D. Preemptive Rights.

1. Each Member shall have preemptive rights with respect to the issuance of new
Membership Interests or rights to acquire Membership Interests(the “Offered
Interests”) to the extent provided by this Section 3.04, the effect of which
will be that each Member shall have the right to purchase a portion of such
Offered Interests equal to such Member’s Profit Percentage. Solely with respect
to Skyrm and Goodman, the Offered Interests shall include any issuances of
Membership Interests (or the reservation of any Membership Interests) pursuant
to any equity incentive plans for employees to the extent Skyrm or Goodman, as
applicable, are not participants therein.

2. In the event the Board shall determine to issue Offered Interests, the
Company shall give each then-existing Member notice (a “Preemptive Notice”) of
such issuance describing in reasonable detail the proposed terms and conditions
of such issuance, including the amount of the Offered Interests to be issued,
the terms and conditions thereof and the purchase price therefor. Each
then-existing Member shall have twenty (20) days from the date such notice is
given to elect to purchase a portion of the Offered Interests equal to such
Member’s Profit Percentage, at the same price, on the same terms and conditions
and at the same time as the Offered Interests are sold to the other Members by
giving notice to such effect to the Company (such notice, an “Election” and such
Member making an Election, an “Electing Member”). Member’s failure to make an
Election as provided in the preceding sentence shall be deemed to be an
irrevocable waiver by such Member of its rights under this Section 3.04 in
respect of such Offered Interests. Any Election made in accordance with this
Section 3.04 shall be deemed to be an irrevocable commitment by the Electing
Member to purchase the Offered Interests subject to such Election on the terms
and conditions set forth in the Preemptive Notice.

3. Following the expiration of the twenty (20) day notice period referred to in
Section 3.04(b), the Company shall sell to each Electing Member the Membership
Interests subject to such Electing Member’s Election, and may sell to the
prospective purchaser(s) identified in the Preemptive Notice any Offered
Interests which the Members did not elect to purchase. The closing of such sale
shall be within sixty (60) days after the expiration of the twenty (20) day
notice period specified above, on a date determined by the Board, and the
consideration paid for and the other terms and conditions upon which such
Offered Interests are sold shall not be any more favorable to prospective
purchaser(s) than those specified in the Preemptive Notice.

4. Notwithstanding anything in this Section 3.04 to the contrary:

 

  a) The rights of the Members under this Section 3.04 shall not apply to the
issuance of Offered Interests (“Exempt Issuances”): (A) in connection with any
Membership Interest split, dividend, recapitalization or distribution by the
Company, pursuant to which all Members are treated in accordance with this
Agreement; (B) in or after an initial public offering of the Company’s
securities; (C) as part or all of the consideration for the acquisition by the
Company of the business, at least a majority of the equity interests or all or
substantially all of the assets of any other Person who is not an Affiliate of
the Company; and (D) as part of a loan provided to the Company by any Person who
is not an Affiliate of the Company; and

 

4

--------------------------------------------------------------------------------

  b) in addition to the exceptions set forth in clause (i) above, but subject to
Section 3.04(d)(iii) below, the Company may issue and sell Offered Interests to
any Person without first complying with this Section 3.04; provided, however,
that the following conditions are met: (A) the Board has determined in good
faith that (1) the Company needs a cash investment, (2) no alternative financing
is readily available under reasonable timing and on reasonable terms for the
Company and (3) the delay caused by compliance with this Section 3.04 in
connection with such investment would be reasonably likely to cause harm to the
Company or its Subsidiaries; and (B) the Company gives prompt prior notice to
all the Members of such investment, which notice describes in reasonable detail
the Offered Interests being issued.

 

  c) In the event that the Company issues Offered Interests pursuant to
Section 3.04(d)(ii) hereof (an “Emergency Funding Offering”), the Company shall
promptly following the closing of the Emergency Funding Offering offer to each
Member the opportunity to purchase up to the number of new Units that would
allow such Member to preserve the Profit Percentage such Member held immediately
prior to the consummation of the Emergency Funding Offering (the “Post-Offering
Interests”). Each Member electing to exercise such Member’s rights pursuant to
this Section 3.04(d)(iii) shall have twenty (20) days from the date the Company
delivers notice of the offering of Post-Offering Interests (the “Post-Offer
Notice”) to elect to purchase such Member’s Post-Offering Interests, at the
price and on the terms set forth in the Post-Offer Notice, by giving notice to
such effect to the Company. A Member’s failure to notify the Company as provided
in the preceding sentence shall be deemed to be an irrevocable waiver by such
Member of its rights under this Section 3.04(d)(iii) in respect of such
Post-Offering Interests. Any election by a Member made in accordance with this
Section 3.04(d)(iii) shall be deemed to be an irrevocable commitment by such
Member to purchase the Post-Offering Interests indicated in such Member’s notice
on the terms set forth in the Post-Offer Notice. The closing of any sale of
Post-Offering Interests pursuant to this Section 3.04(d)(iii) shall be held
within forty-five (45) days after the Company’s delivery of the Post-Offer
Notice, on a date determined by the Company.

 

5

--------------------------------------------------------------------------------

E. Return of Capital Contributions; Special Rules.

Except as otherwise expressly provided herein, no Member shall be entitled to
the return of any part of his, her, or its Capital Contribution or to be paid
interest in respect of either his, her, or its Capital Account balance or its
Capital Contribution; no Member shall have any personal liability for the return
of the Capital Contribution of any other Member; and no Member shall have any
priority over any other Member with respect to the return of any Capital
Contribution.

F. Capital Accounts.

A Capital Account shall be established and maintained for each Member in
accordance with the following provisions:

1. To each Member’s Capital Account, there shall be credited such Member’s
Capital Contributions, such Member’s distributive share of Profits, and any
items in the nature of income or gain that are specially allocated pursuant to
this Agreement, and the amount of any liabilities of the Company that are
assumed by such Member, or that are secured by any assets of the Company
distributed to such Member.

2. To each Member’s Capital Account, there shall be debited the amount of cash
and the Gross Asset Value of any Company assets distributed to such Member
pursuant to any provision of this Agreement, such Member’s distributive share of
Losses, and any items in the nature of expenses or losses that are specially
allocated pursuant to this Agreement, and the amount of any liabilities of such
Member assumed by the Company or that are secured by any property contributed by
such Member to the Company.

3. If ownership of any Membership Interest in the Company is assigned in
accordance with the terms of this Agreement, the assignee shall succeed to the
Capital Account of the assignor to the extent it relates to the assigned
Membership Interest.

4. In determining the amount of any liability for purposes of Subsections
3.06(a) and 3.06(b) above, there shall be taken into account Code section 752(c)
and any other applicable provisions of the Code and Regulations.

5. To each Member’s Capital Account, there shall be debited or credited, as the
case may be, such adjustments as are necessary to reflect a revaluation of
Company assets to reflect the Gross Asset Value of all Company assets, as
required by Regulations section 1.704-1(b)(2)(iv)(f) and Section 3.07 hereof.

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Code section 704
and Regulations section 1.704-1(b) and shall be interpreted and applied in a
manner consistent with such Regulations. The Company shall make any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Members and the amount of Company capital reflected on the
Company’s balance sheet as computed for book purposes in accordance with
Regulations section 1.704-1(b)(2)(iv)(q).

 

6

--------------------------------------------------------------------------------

G. Gross Asset Value.

The Gross Asset Value of any asset of the Company shall be equal to the asset’s
adjusted basis for federal income tax purposes, except as follows:

1. The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the gross fair market value of such asset, as reasonably
determined by the contributing Member and the Company.

2. The Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross fair market values in connection with (and to be effective
immediately prior to) the following events: (i) the acquisition of an additional
Membership Interest in the Company by any new or existing Member in exchange for
more than a de minimis Capital Contribution; (ii) the distribution by the
Company to a Member of more than a de minimis amount of property (including
cash) as consideration for an interest in the Company; (iii) the grant of an
interest in the Company (other than a de minimis interest) as consideration for
the provision of services to or for the benefit of the Company by an existing
Member acting in the capacity of a Member or by a new Member acting in the
capacity of a Member or in anticipation of being a Member; (iv) the Liquidation
of the Company; or (v) any other time, in the discretion of the Board, for which
an adjustment would be necessary or appropriate to reflect the relative economic
interests of the Members in the Company; provided, however, that an adjustment
pursuant to clauses (i), (ii), or (iii) above shall be made only if such
adjustment is necessary or appropriate to reflect the relative economic
interests of the Members in the Company.

3. The Gross Asset Value of any Company asset distributed to any Member shall be
the gross fair market value of such asset on the date of distribution.

4. The Gross Asset Values of Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted bases of such assets pursuant to Code
section 734(b) or Code section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulations section 1.704-1(b)(2)(iv)(m) and Section 11.01 hereof; provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
Subsection to the extent they were adjusted pursuant to Subsections 3.07(b) or
3.07(c) above in connection with a transaction that otherwise would result in an
adjustment pursuant to this Subsection.

5. If the Gross Asset Value of an asset has been determined or adjusted pursuant
to this Section 3.07, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Profits and Losses.

 

7

--------------------------------------------------------------------------------

4.

ALLOCATION OF PROFITS AND LOSSES

A. Profits and Losses.

After giving effect to the special allocations set forth in Section 11.01 and
subject to the other provisions of ARTICLE XI, Profits or Losses for any
Accounting Period shall be allocated among the Members in such a manner that, as
of the end of such Accounting Period, with respect to each Member, the sum of
(i) the Capital Account of such Member, (ii) such Member’s share of Company
Minimum Gain, and (iii) such Member’s Member Nonrecourse Debt Minimum Gain
shall, as nearly as possible, be equal to the net amount, positive or negative,
that would be distributed to such Member or for which such Member would be
liable to the Company under this Agreement, determined as if the Company were
to, on the last day of the Accounting Period, (1) sell all of the assets of the
Company for an amount equal to their respective Gross Asset Values, (2) satisfy
all debts in accordance with their terms (limited, with respect to each
Nonrecourse Liability, to the Gross Asset Value of the assets securing such
liability), and (3) distribute the remaining proceeds of such sale in
Liquidation pursuant to Section 5.02, all of the foregoing computed after all
actual distributions or Capital Contributions have been made for such Accounting
Period.

5.

DISTRIBUTIONS

A. Time of Distributions.

Distributions of Available Cash shall be made from the Company to the Members at
the times recommended by the Board and approved by the Members holding at least
a majority of the Membership Interests of the Company; provided, however, that
for any calendar year, unless the Members determine otherwise, the Company shall
distribute in cash no less than the Tax Distribution Amount.

B. Distributions.

The Company may make distributions of Available Cash in such amounts as may be
determined by the Members holding at least a majority of the Membership
Interests of the Company, in accordance with the following order or priority:

1. first, to CBC Acquisition until the aggregate amount of distributions
received by CBC Acquisition pursuant to this Section 5.02(a) equals
(i) $2,337,189.00 less (ii) the aggregate dollar amount of (A) all cash flows
derived from the portfolio assets owned by the Company as of September 30, 2013
to the extent such cash flow has been applied from October 1, 2013 through the
Effective Date to the reduction of the Company’s indebtedness for borrowed money
reduced by (B) all accrued interest and costs and fees incurred by the Company
for such indebtedness from October 1, 2013 through the Effective Date (the
“Original Assets Proceeds”); and

 

8

--------------------------------------------------------------------------------

2. second, after payment of the Original Assets Proceeds to CBC Acquisition, all
Available Cash is to be distributed to the Members in proportion to their Profit
Percentages at the time at which the distribution is made.

C. Tax Distribution Amount.

For purposes of this Agreement, the “Tax Distribution Amount” for any calendar
year shall be an amount equal to (a) the aggregate income of the Company
(including items that are separately stated under Code section 702) taxed to the
Members for federal income tax purposes for such calendar year multiplied by
(b) (i) the highest marginal federal individual or corporate income tax rate, as
applicable, in effect for that calendar year (taking into account any surtax and
any reduced rate on long-term capital gains (to the extent that the Company’s
income will be so taxed) plus (ii) either (x) the highest marginal State of
Pennsylvania individual income tax rate in effect for that calendar year with
regard to Members who are individuals or (y) the highest marginal State of New
Jersey corporate income tax rate in effect for that calendar year with regard to
Members who are corporate entities. The Company shall endeavor to make such
minimum distributions at such times during the calendar year and during the
seventy-five (75) days following the end of the calendar year as shall enable
the Members to use such distributions to satisfy their estimated and final
income tax liabilities for the calendar year. Any distributions to a Member
pursuant to this Section 5.03 shall be treated as an advance on the
distributions to be made to such Member pursuant to Section 5.02, and shall
reduce such distributions accordingly.

D. Withholding.

Each Member hereby authorizes the Company to withhold and to pay over any taxes
payable by the Company as a result of such Member’s participation in the
Company. If and to the extent that the Company shall be required to withhold any
such taxes, such Member shall be deemed for all purposes of this Agreement to
have received a distribution from the Company equal to the amount withheld. To
the extent that the aggregate amount withheld on behalf of a Member for any
period exceeds the distribution to which such Member is entitled for such
period, the amount of such excess shall be considered a demand loan from the
Company to such Member with interest at five percent (5%) per annum accruing
from the date of payment by the Company until discharged by such Member by
repayment. The Members may, in their sole and absolute discretion, satisfy any
such obligation of a Member out of future distributions to such Member.

6.

MANAGEMENT

A. Management.

1. Subject only to the express provisions of this Agreement or requirements of
the Act, management and control of the Company shall be vested exclusively in
the Board, and the business and affairs of the Company shall be managed under
the direction of the Board. Unless the Act expressly requires the approval of
one or more Members or unless this Agreement expressly requires the approval,
consent or other action by a requisite percentage of Members (or class of
Members) for any action, the Board may take or cause the Company to take any
action without the approval of any Member. The Board shall retain always the
authority to make management decisions notwithstanding any delegation of duties
by the Board to officers, employees or agents. In managing the business and
affairs of the Company and in exercising its powers, the Board shall act through
meetings and written consents pursuant to this ARTICLE VI. Except as
specifically authorized by the Board or as expressly provided in this Agreement,
no Person or Manager, in his capacity as such, shall have the authority to bind
the Company. Similarly, no Member in his capacity as such shall have the
authority or capacity to bind the Company or conduct its business, but shall
have only such voting and other management and participation rights as are
specifically set forth herein.

 

9

--------------------------------------------------------------------------------

2. Except as otherwise expressly required in this Agreement or in the Act,
whenever any action, including any approval, consent, determination, resolution,
or decision, is to be taken or given by the Board or the Company under this
Agreement or under the Act, it shall be authorized by a majority of the
Managers, unless otherwise agreed by all of the Managers. Such an authorization
may be evidenced by a vote taken at a meeting of the Board or by a written
consent pursuant to this Agreement. If, at any time, there is no Manager of the
Company, the Members shall select one or more Persons to serve as the Manager by
a Majority Vote.

3. A Person shall cease to serve as a Manager upon his death, bankruptcy, or a
ruling by a court of competent jurisdiction that he is incompetent. Subject to
Section 6.01(d), an individual also may be removed as a Manager at any time upon
a Majority Vote. A Manager may withdraw voluntarily from such position at any
time upon thirty (30) days’ advance notice to the Members.

4. The duly elected members of the Board are referred to as the “Managers.” The
Board shall consist of five (5) individuals. The initial Managers shall be
Skyrm, Goodman, Gary Stern, Ricky Stern and Seth Berman. Members of the Board
will be elected by a Majority Vote; provided, each of Skyrm and Goodman shall
have the right to nominate one Manager so long as each of them owns the
Requisite Percentage, in which case, the Members shall elect each of Skyrm and
Goodman, as applicable, or their nominees, as Managers. The majority of the
Managers shall elect a Chairman of the Board. The initial Chairman shall be Gary
Stern.

B. Meetings of the Board.

1. The Board will hold regular meetings four (4) times a year on dates
designated by the Chairman of the Board and special meetings, as called by any
Manager. Meetings of the Board will be held upon no less than fifteen (15) days’
notice by certified mail or by e-mail sent with a “Read Receipt” request or five
(5) business days’ notice delivered personally. The notice shall specify the
purpose of any regular or special meeting of the Board, stating the agenda for
such meeting, and include any supporting materials necessary or required for
purposes of making any decision listed on the agenda. Notice of a meeting need
not be given to any Manager who signs a waiver of notice or a consent to holding
the meeting or an approval of the minutes of the meeting, whether before or
after the meeting, or who attends the meeting without protesting, prior thereto
or at its commencement, the lack of notice to such Manager. All such waivers,
consents and approvals will be filed with the Company records or made a part of
the minutes of the meeting.

 

10

--------------------------------------------------------------------------------

2. A majority of the Managers present, whether or not a quorum is present, or
the Chairman of the Board may adjourn any meeting to another time and place. If
the meeting is adjourned for more than twenty-four (24) hours, notice of any
adjournment to another time or place shall be given prior to the time of the
meeting to the Managers who were not present at the time of the adjournment.

3. Meetings of the Board may be held at any location designated by the Chairman
or at any place as agreed to by a majority of the Managers. Managers may attend
a meeting through use of conference telephone or similar communications
equipment, so long as all Managers participating can hear and be heard by one
another, and participation in a meeting pursuant to this Section 6.02 shall
constitute presence in person at such meeting, except when a person participates
in the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting was not lawfully called or convened.

4. The quorum necessary to constitute a meeting of the Board shall be at least
two (2) Managers if there are three (3) Managers on the Board, at least three
(3) Managers if there are four (4) or five (5) Managers on the Board; provided,
that if within thirty (30) minutes of the time fixed for a Board meeting, a
quorum is not present because of insufficient representation by the Managers,
the Board meeting shall stand adjourned until the same time and place on the
tenth (10th) business day following the date originally fixed for such a
meeting.

5. A written resolution signed by the number of Managers required to approve
such action at a meeting whereby all Managers are present (provided, that, the
action to be taken by written consent was provided to all Managers prior to the
taking of such action by written consent) shall be as effective as a resolution
passed at a meeting of the Board duly convened and held and may consist of
several documents in the same form each signed by one or more of the Managers
and a document sent by telex or facsimile (confirmed by letter) shall suffice
for such purpose. Written consents will be filed with the minutes of the Board.
Action by written consent has the same force and effect as a vote by the same
Managers in a meeting.

6. At each Meeting of the Board, each of the Managers present shall have one
(1) vote.

C. Action by Written Consent.

Any action permitted or required by the Act or this Agreement to be taken by the
Members or the Managers may be taken without a meeting if a consent in writing,
setting forth the action taken, is signed by (a) all of the Members or all of
the Managers, as the case may be; or (b) by Members holding the minimum Profit
Percentage necessary to authorize such action. If action is taken by written
consent pursuant to clause (b) of the preceding sentence, the Company shall
notify promptly all non-consenting Members of such action.

 

11

--------------------------------------------------------------------------------

D. Officers.

1. The Board may, but shall not be required to, designate one or more officers
or other agents who shall have such duties and shall perform such functions as
set forth in Section 6.04(b) and as may be delegated to them by the Board from
time to time, and who shall serve at the sole discretion of the Board, subject
to any employment agreement between the Company and such officer. Any officers
or other agents who are appointed by the Board may be removed, at any time and
from time to time, by the Board, with or without cause, subject to any
employment agreement between the Company and such officer. Until further action
by the Board and subject to any employment agreement between the Company and
such officer, the following officers are hereby appointed: Skyrm as Chief
Executive Officer and Goodman as President.

2. Subject to the provisions of this Agreement, the Board may appoint a chief
executive officer (the “CEO”), a president (the “President”), one or more
executive vice presidents and vice president, a treasurer, a secretary and any
other officers it deems necessary, whose duties and authority shall be as
follows, except as otherwise provided in this Agreement:

 

  a) Duties and Authority of Chief Executive Officer. Subject to this Agreement
and any employment agreement between the Company and such officer, the chief
executive officer shall have general charge of, supervision over and
responsibility for the business and affairs of the Company. Unless otherwise
directed by the Board, all other officers shall be subject to the authority and
supervision of the chief executive officer. The chief executive officer may
enter into and execute in the name of the Company contracts or other instruments
in the regular course of business or contracts or other instruments not in the
regular course of business which are authorized, either generally or
specifically, by this Agreement, by the Board or by any employment agreement
between the Company and the CEO.

 

  b) Duties and Authority of President. The President shall be the chief
operating officer and chief marketing officer of the Company. Subject to this
Agreement, the authority and direction of the chief executive officer (if such
office is occupied by an individual other than the individual occupying the
office of president) and subject to any employment agreement between the Company
and such officer, the President shall have the authority and the duty to
supervise the business and activities of the Company, to instruct and direct its
other officers, agents and employees, and to perform such other duties as the
Board or the chief executive officer shall direct. The President may enter into
and execute in the name of the Company contracts or other instruments in the
regular course of business or contracts or other instruments not in the regular
course of business which are authorized, either generally or specifically, by
this Agreement, by the Board or by any employment agreement between the Company
and the President. In the absence of the chief executive officer, or in the
event of the chief executive officer’s death, inability, or refusal to act,
(unless the Board determines otherwise) the President shall perform the duties
vested with the authority of the chief executive officer.

 

12

--------------------------------------------------------------------------------

  c) Duties and Authority of Executive Vice Presidents and Vice Presidents. Each
executive vice president and vice president shall perform the duties and have
the authority as from time to time may be delegated to him or her by the Board,
the chief executive officer or the President (or, in the case of a vice
president, by an executive vice president). In the absence of the President, or
in the event of the president’s death, inability, or refusal to act, (unless the
Board determines otherwise) the executive vice president designated as successor
for these purposes by the Board or, if there is none, the most senior executive
vice president, shall perform the duties vested with the authority of the
President.

 

  d) Duties and Authority of Treasurer. Subject generally to the authority and
direction of the CEO and the President, the treasurer shall have custody of the
funds and securities of the Company and shall keep or cause to be kept regular
books of account for the Company. The treasurer shall perform such other duties
and possess such other powers as are incident to the office of treasurer or as
shall be assigned to him or her by the Board, the chief executive officer or the
President.

 

  e) Duties and Authority of Secretary. The secretary shall keep or cause to be
kept the minutes of all meetings and written consents of the Board. The
secretary shall perform such other duties and possess such other powers as are
incident to the office of secretary or as shall be assigned to him or her by the
Board, the chief executive officer or the President.

E. Actions Requiring Approval by the Board; Actions Requiring Approval by the
Members.

1. Notwithstanding Section 6.04, the approval by the Board shall be required to
authorize each of the following actions of the Company:

 

  a) Admission of any Person to the Company as an additional Member, subject to
further approval to the extent required by Section 6.05(b)(i);

 

  b) The creation or adoption of an equity incentive plan for employees of the
Company or the cancellation, renewal, amendment or other modification, or
extension by the Company of any existing equity incentive plan;

 

13

--------------------------------------------------------------------------------

  c) The commencement, settlement, or compromise by the Company of any material
litigation;

 

  d) The entry by the Company into any employment contract, membership services
agreement, or other arrangement with any Member, or the adoption by the Company
of any material amendment or other material modification to any such contract,
agreement, or arrangement; provided, however, that any such contract, agreement
or arrangement on less than arm’s length terms and conditions are subject to
further approval to the extent required by Section 6.05(b)(v);

 

  e) Other than in connection with structured settlements or annuity cash flows
pursuant to clause (vi) of this Section 6.05(a), the entry by the Company into
contracts or the adoption by the Company of any material amendment or other
material modification to such a contract or the waiver by the Company of a right
under a contract, (A) outside the ordinary course of business, or (B) which
concerns or contemplates an expenditure or commitment by the Company exceeding
Fifty Thousand Dollars ($50,000) or (C) having a term longer than two (2) years
(unless terminable without cost on thirty (30) or fewer days’ notice);

 

  f) The purchase by the Company of individual, or groups of related, structured
settlements or annuity cash flows (A) exceeding Two Hundred Fifty Thousand
Dollars ($250,000) or (B) having an internal discount rate of less than seven
percent (7%) or (C) that materially vary from the Company’s underwriting
standards;

 

  g) The sale of any structured settlement or annuity cash flows in excess of
Two Hundred Fifty Thousand Dollars ($250,000) or an aggregate of One Million
Five Hundred Thousand Dollars ($1,500,000) in any rolling six (6) month period;

 

  h) The individual expenditure by the Company (or any series of expenditures
for a common or related purpose) either not included in the Annual Budget or
exceeding Twenty Five Thousand Dollars ($25,000);

 

  i) The allocation of Profits and Losses to the Members in accordance with
Section 11.03;

 

  j) The establishment by the Company of any employee benefit plan or the
adoption by the Company of any material amendment or other material modification
thereto;

 

14

--------------------------------------------------------------------------------

  k) The appointment, removal, or change by the Company of the Company’s
accountants or attorneys, other than attorneys obtaining court approval of the
Company’s acquisitions of structured settlements or annuity cash flows in the
ordinary course of business;

 

  l) The establishment of salaries and approval of salary increases, to the
extent not specifically included in the Annual Budget;

 

  m) The entry by the Company into any contract or other transaction between the
Company, on the one hand, and any Member or any Affiliate or Family Member of
such Member, on the other, including without limitation, the making of any loan
or advance by the Company, including any such loans or advance to any employee
or third-party, including a Member or the Family Member of a Member, or the
adoption by the Company of any amendment or other modification or the waiver by
the Company of any material rights under any such agreement or transaction;
provided, however, that any such contract or transaction on less than arm’s
length terms and conditions are subject to approval to the extent required by
Section 6.05(b)(vii);

 

  n) The entry by the Company into any guaranty, indemnity or surety contract or
any contract of a similar nature in favor or for the benefit of any employee,
third-party, including a Member or the Family Member of a Member, other than an
indemnity covenant in a contract entered into in the ordinary course of
business; or the adoption by the Company of any amendment or other modification
thereto or the waiver by the Company of any material rights under such a
contract, other than in the ordinary course of business;

 

  o) The entry by the Company into any contract that by its terms would
materially restrict, geographically or otherwise, the Company’s ability to
conduct business;

 

  p) The purchase or discontinuance by the Company of liability insurance (other
than in connection with the purchase of structured settlements or annuity cash
flows in the ordinary course of business);

 

  q) The purchase, license, or sale by the Company of any real property; the
rental by the Company of any real property; the entry by the Company into any
other type of real property lease or license; or the cancellation, renewal,
material amendment or other material modification, or extension by the Company
of any existing real property lease or license;

 

15

--------------------------------------------------------------------------------

  r) The incurrence by the Company of any indebtedness, or the entering into or
amending of any agreement involving the incurrence by the Company of any
indebtedness, or the purchase, redemption, early retirement, or other
acquisition by the Company of any such indebtedness, except (A) trade credit or
equipment financing done in the ordinary course of business, so long as such
trade credit or equipment financing does not at any time exceed Fifty Thousand
Dollars ($50,000) in the aggregate in any Fiscal Year except if specifically set
forth in the Approved Budget, (B) indebtedness associated with the payment of
insurance premiums, or (C) indebtedness related to the acquisition of structured
settlements or annuity cash flows;

 

  s) The appointment or removal by the Company, with or without cause, of any
officer;

 

  t) The revision by the Company of any accounting policy or procedure employed
or to be employed by the Company, which could reasonably be expected to have a
negative effect on the Company or any Member, including any change of the
Company’s Fiscal Year;

 

  u) The adoption by the Company of any change in the location of the principal
executive offices; provided, that for three (3) years from the Effective Date,
so long as they remain employed by the Company and continue to own the Requisite
Percentage, Skyrm and Goodman shall have the right, in their sole and absolute
discretion, to approve any move of the Company’s principal office outside of the
Philadelphia metropolitan area;

 

  v) The entry by the Company into any transaction with a current employee of
the Company or any Affiliate or Family Member of a current employee, other than
an at-will employment arrangement in the ordinary course of business with an
employee who is not an Affiliate or a Family Member;

 

  w) The grant by the Company of any lien on any of its assets other than with
respect to equipment financing done in the ordinary course of business (and only
to the extent that such lien is on the equipment so financed) or in connection
with any indebtedness of the Company permitted to be incurred pursuant to
Section 6.04(c) by the President or CEO;

 

  x) The establishment by the Company of any relationship with a banking or
other financial institution or any change to such a relationship, or the grant
or revocation by the Company of signatory powers with respect to such a
relationship;

 

16

--------------------------------------------------------------------------------

  y) The making by the Company of any political contributions or charitable
contributions (A) in excess of One Thousand Dollars ($1,000) individually or
(B) in related transactions and in excess of Ten Thousand Dollars ($10,000) in
the aggregate for all transactions for any rolling twelve (12) month period;

 

  z) Approving the Annual Budget;

 

  aa) Spending more than fifteen percent (15%) in excess of the average monthly
operating expenses provided in the Annual Budget for any rolling three (3) month
period;

 

  bb) Exceeding any Annual Budget item by fifteen percent (15%) or exceeding the
overall Annual Budget by more than ten percent (10%);

 

  cc) Establishing, or making any material changes to, its underwriting
policies;

 

  dd) Engaging in any joint venture, partnership, or royalty, franchise,
distribution or licensing agreement or arrangement;

 

  ee) Making an equity investment in any other business venture; or

 

  ff) Entering into, assuming or becoming bound by any contract to do any of the
foregoing.

2. Notwithstanding Sections 6.01, 6.04 and 6.05(a), the approval of all of the
Members shall be required to authorize each of the following actions of the
Company until the second (2nd) anniversary of the Effective Date, after which
time each of the following actions shall require approval of Members holding at
least a majority of the Membership Interests of the Company:

 

  (i) Admission of any Person to the Company as an additional Member, other than
an Affiliate of Asta, provided that Skyrm and Goodman hold the Requisite
Percentage;

 

  (ii) The merger or consolidation of the Company with any other Person;

 

  (iii) The sale, license or other transfer by the Company of all or
substantially all, or a material portion, of its assets or the Transfer by any
Member of fifty percent (50%) or more of the Membership Interests in the Company
in one or more series of related transactions other than to an Affiliate of such
Member;

 

  (iv) The reorganization, dissolution, Liquidation, or other winding up of the
Company;

 

17

--------------------------------------------------------------------------------

  (v) The institution by the Company of any proceedings to adjudicate it
bankrupt; the consent by the Company to the filing of any bankruptcy proceedings
against it; the filing by the Company of any petition or answer or consent
seeking its reorganization under the U.S. Bankruptcy Code or any other similar
applicable federal or state law, or the consent by the Company to the filing of
any such petition against it; the consent by the Company to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency over
the Company or its property; the assignment by the Company for the benefit of
its creditors; or the admission by the Company of its inability to pay its debts
generally as they become due;

 

  (vi) The entry by the Company into any employment contract, membership
services agreement, or other arrangement with any Member, or the adoption by the
Company of any material amendment or other material modification to any such
contract, agreement, or arrangement, if any such contract, agreement or
arrangement is on less than arm’s length terms and conditions;

 

  (vii) The entry by the Company into any contract or other transaction between
the Company, on the one hand, and any Member or any Affiliate or Family Member
of such Member, on the other, or the adoption by the Company of any amendment or
other modification or the waiver by the Company of any material rights under any
such agreement, if any such contract or transaction is on less than arm’s length
terms and conditions;

 

  (viii) Engaging in any business other than the Business; or

 

  (ix) Entering into, assuming or becoming bound by any contract to do any of
the foregoing.

F. Duties; Liability of Parties.

No Member, Manager or officer, or any Representative of a Member, Manager or
officer shall be liable to the Company or to any other Member for (a) the
performance of, or the omission to perform, any act or duty on behalf of the
Company if, in good faith, such Person determined that such conduct was in the
best interests of the Company, and such conduct did not constitute fraud, gross
negligence, or reckless or intentional misconduct; (b) the termination of the
Company and this Agreement pursuant to the terms hereof; or (c) the performance
of, or the omission to perform, any act on behalf of the Company in good-faith
reliance on the advice of legal counsel, accountants, or other professional
advisors to the Company; provided, however, that upon actual knowledge thereof,
William Skyrm and James Goodman shall promptly report to the Board, or the
Chairman, any default or breach by the Company of any agreement that is material
to the Company including, without limitation, the Purchase Agreement.

 

18

--------------------------------------------------------------------------------

G. Indemnification of Managers.

The Company, its receiver, or its trustee shall indemnify, defend, and hold each
Manager and officer and their respective heirs, personal representatives, and
successors (collectively, the “Indemnified Parties”) harmless from and against
any expense, loss, damage, or liability incurred or connected with any claim,
suit, demand, loss, judgment, liability, cost, or expense (including reasonable
attorneys’ fees) arising from or related to the Company or any act or omission
of the Indemnified Parties on behalf of the Company (exclusive of acts taken as
an independent contractor for the Company) and amounts paid in settlement of any
of the foregoing; provided, that the same were not the result of fraud, gross
negligence, or reckless or intentional misconduct on the part of the Indemnified
Party against whom a claim is asserted. The Company may advance to any
Indemnified Party the costs of defending any claim, suit, or action against such
Indemnified Party if the Indemnified Party undertakes to repay the funds
advanced, with interest, should it later be determined that the Indemnified
Party is not entitled to indemnification under this Section 6.07.

7.

RESTRICTIVE COVENANTS

A. Other Ventures.

1. For so long as each of Skyrm and Goodman is a Member of the Company, the
Company shall be the exclusive vehicle of Asta, directly or indirectly, and
Skyrm and Goodman for the conduct of the Business.

2. Except as otherwise limited herein and subject to this ARTICLE VII, each
Member of the Company at any time and from time to time may engage in and
possess interests in other business ventures of any and every type and
description, independently or with others with no obligation to offer to the
Company or to any other Member the right to participate therein.

3. Subject to the other express provisions of this Agreement, the Company may
transact business with any Member or a party related to any Member in accordance
with this Agreement.

 

19

--------------------------------------------------------------------------------

B. Confidentiality.

1. Each Member may develop or acquire, through the Member’s work or from the
officers, members, employees, agents, or consultants of the Company (for
purposes of this Section 7.02, the term “Company” shall include any Affiliates
of the Company after the Effective Date, unless otherwise noted herein),
knowledge of Confidential Information relating to the Company or its prospects,
Business or Confidential Information relating to the Company’s customers. As
used herein, “Confidential Information” means the terms of this Agreement and
all oral and written non-public, confidential, or proprietary information
concerning the Company that the Company or any officers, employees,
Representatives, advisors, contractors, or agents of the Company provide to the
Members at any time, together with analyses, compilations, studies, notes, or
other documents that contain or otherwise reflect such Confidential Information.
With respect to any information that the Members may receive from the Company,
or may develop or of which the Members may acquire knowledge directly as a
result of their relationship with the Company, Confidential Information
specifically includes, but is not limited to, the following: (i) all
organizational documents of the Company; (ii) any contract between the Company
and any of its Members, Affiliates, customers, clients, employees, vendors,
independent contractors, or other parties; (iii) trade secrets; (iv) know-how;
(v) the identity of and any information concerning any of the Company’s
Affiliates, customers, potential customers, or referral sources; (vi) marketing
and sales information; (vii) information received from others that the Company
is obligated to treat as confidential or proprietary; (viii) business plans; and
(ix) any other technical, operating, financial, and other business information
that has commercial value, in each case relating to the Company or the business,
potential business(es), operations, or finances of the Company. Notwithstanding
the foregoing, no Member shall have any obligation to maintain the
confidentiality of information that: (1) is in the public domain at the time it
was disclosed; (2) enters the public domain other than by breach of this
Agreement; (3) is already known to the receiving party at the time of its
disclosure to it by the disclosing party; (4) is developed by the receiving
party independently of any disclosure by the disclosing party hereunder; or
(5) relates to the Excluded Businesses.

2. A Member shall not provide to any third-party, nor divulge, distribute, or
disseminate, nor use for his, her, or its own benefit, any Confidential
Information, except (i) as required to be used by such Member, in his capacity
as a Manager or officer of the Company in performing his, her, or its duties for
the Company, (ii) as expressly permitted in writing by the Members, or (iii) as
required to be disclosed by law, regulation, court order, or other legal process
after notice to the other Members or the Board. Upon receipt of the notice
specified in (iii) above, the Company may seek an appropriate protective order
or other appropriate remedy. Each Member agrees to cooperate, at the Company’s
cost, with the Company to obtain such a protective order or other remedy. If
such order or other remedy is not obtained, or the Company waives compliance
with the provisions of this Section 7.02(b) in connection with such law,
regulation, court order, or other legal process, then the Member shall disclose
only that portion of the Confidential Information that the Member, on the advice
of legal counsel, is legally required to so disclose and shall exercise
reasonable efforts to obtain reliable assurance that confidential treatment
shall be accorded such Confidential Information so disclosed. All memoranda,
notes, lists, records, and other documents (and all copies thereof) constituting
Confidential Information hereunder or hereafter made or compiled by the Member
or made available to the Member shall be the property of the Company, shall be
kept confidential in accordance with the provisions of this Section 7.02(b), and
shall be delivered to the Company promptly upon the dissolution or Liquidation
of the Company or at any earlier or later time upon the request of the other
Members.

3. The Members acknowledge that they and their respective directors, members,
managers, officers, Representatives and Affiliates during the course of this
Agreement may be deemed to be in possession of material, non-public information
under United States securities laws and other applicable securities laws, and
that such Persons purchasing or trading in Asta’s common stock while in
possession of such information could be subject to civil and criminal penalties
under United States securities laws and other applicable securities laws.

 

20

--------------------------------------------------------------------------------

C. Covenant Against Competition. Each Member acknowledges and understands that
the Members collectively have expended substantial effort and made substantial
financial contributions to the development of the business and goodwill of the
Company and the Member’s relationship with the Company will afford the Member
the opportunity to benefit from such goodwill and have extensive access to the
Confidential Information of the Company. Each Member therefore covenants and
agrees that, subject to dissolution of the Company and except as otherwise
expressly provided herein, while such Member remains a Member of the Company and
for a period thereafter, if any, equal to (a) any comparable restrictive period
remaining in such Member’s employment agreement with the Company or any
Affiliate thereof or (b) two (2) years after a Member ceases to be associated
with the Company as a Member, whichever ends earlier (such period, the
“Restricted Period”), the Member will not, anywhere in the United States of
America or in any other country in which the Company then conducts or proposes
to conduct business, other than on behalf of the Company or its Affiliates,
engage in any business or other commercial activity that competes with the
Business, whether the Member does so directly or indirectly, and whether as an
owner, stockholder, member, Manager, manager, partner, joint venturer, officer,
Manager, consultant, advisor, independent contractor, agent, or employee. For
the avoidance of doubt, the parties expressly agree and acknowledge that nothing
in this Section 7.03 shall in any way be deemed to limit each Member’s right or
ability to own, directly or indirectly, (i) any interest in the stock of Asta or
(ii) mutual funds or other investment vehicles operated by money managers for
multiple investors.

D. Covenant Against Solicitation of Customers. Except as otherwise expressly
provided herein, each Member covenants and agrees that, for a period of
twenty-four (24) months after a Member ceases to be associated with the Company
as a Member (the “Non-Solicit Period”), the Member will not, directly or
indirectly, either on the Member’s own behalf or on behalf of any other
individual or commercial enterprise, contact, communicate, solicit, or transact
any business with or assist any third-party in contacting, communicating,
soliciting, or transacting any business with (i) any current customer or client,
including, without limitation, any referral source (each, a “Referral Source”)
of the Company; (ii) any prospective customer, client, or Referral Source of the
Company who or that was being solicited at the beginning of the Non-Solicit
Period; or (iii) any individual or entity who or that was within the most recent
twelve (12) month period a customer, client or Referral Source of the Company,
for the purpose of inducing such customer, client, potential customer or
Referral Source to be connected to or to benefit from any business or other
commercial activity that competes with the Business or to terminate its or their
business relationship with the Company, excluding general solicitations or
general announcements on social media platforms.

E. Covenant Against Solicitation of Employees and Others. Except as otherwise
expressly provided herein, each Member covenants and agrees that while such
Member remains a Member of the Company and for the Non-Solicit Period, the
Member will not, directly or indirectly, (i) solicit, induce, or assist any
third-party in soliciting or inducing, any individual or entity who or that is
then (or was at any time within the preceding twelve (12) months) an employee,
consultant, independent contractor, or agent of the Company to leave the
employment of the Company or to cease performing services for the Company;
(ii) hire, engage, or assist any third-party in hiring or engaging, any
individual or entity that is or was (at any time within the preceding twelve
(12) months) an employee, consultant, independent contractor, or agent of the
Company; or (iii) solicit, induce, or assist any third-party in soliciting or
inducing, any other Person to terminate its relationship with the Company or
otherwise interfere with such relationship, except (A) general solicitations of
employment by such Member or his or its Affiliates (including general
solicitations through employee search firms or similar agents) not specifically
directed towards employees of the Company and (B) solicitations of former
employees of the Company or any of their respective Affiliates.

 

21

--------------------------------------------------------------------------------

F. Assignment of Inventions. On or prior to the date hereof, each Member shall
enter into an assignment of invention agreement or similar agreement with the
Company, in a form reasonable satisfactory to the Company.

G. Severability. The Members acknowledge and agree that the restrictions
contained in this ARTICLE VII are reasonable and are being relied upon by the
Members and the Company. If a court of competent jurisdiction determines that
any covenant under this ARTICLE VII is unenforceable, it shall be modified to
the extent necessary to permit it to be enforceable.

H. Reasonableness; Injunction. Each Member acknowledges and agrees that (a) the
Member has had an opportunity to seek advice of counsel in connection with this
Agreement; (b) the restrictive covenants set forth in this ARTICLE VII
(collectively, the “Restrictive Covenants”) are reasonable in scope and in all
other respects; (c) any violation of the Restrictive Covenants will result in
irreparable injury to the Company; (d) money damages would be an inadequate
remedy at law for the Company in the event of a breach of any of the Restrictive
Covenants by the Member; and (e) specific performance in the form of injunctive
relief would be an adequate remedy for the Company. If any Member breaches or
threatens to breach a Restrictive Covenant, the Company shall be entitled, in
addition to all other remedies, to seek an injunction restraining any such
breach, without any bond or other security being required and without the
necessity of showing actual damages. Notwithstanding anything herein to the
contrary, the Restricted Period or the Non-Solicit Period, as applicable, shall,
automatically without further action, deed or notice, be extended by a number of
days equal to the number of days in which a Member is in breach of his, her, or
its obligations under this 6.07.

8.

RESTRICTIONS ON TRANSFERS; PUT AND CALL RIGHTS

A. Restrictions on Transfers.

Except as otherwise permitted by this Agreement, no Member may Transfer all or
any portion of his, her, or its Membership Interest in the Company, except as
authorized by (a) all Members if such Transfer is to occur on or prior to the
second (2nd) anniversary of the date of this Agreement or (b) a Majority Vote of
the Members if such Transfer is to occur after the second (2nd) anniversary of
the date of this Agreement, in either case, other than the Member proposing such
Transfer, prior to such Transfer, which authorization may be granted or withheld
in the absolute and unreviewable discretion of the Members.

 

22

--------------------------------------------------------------------------------

B. Permitted Transfers.

A Member shall be free at any time to Transfer all or any portion of his, her,
or its Membership Interest to (a) a Person who already is a Member at the time
of Transfer; (b) any one or more of an existing Member’s equity holders, on
dissolution of the Member entity or otherwise; (c) any one or more of an
existing, non-individual Member’s equity holders or Affiliates and (d) in the
case of a Member that is a natural Person, to any one or more trusts so long as
such Member is and remains the trustee of such trust and the primary
beneficiaries of such trust are the Member or the Member’s Family Members. A
trust or estate that has received a Membership Interest from a Member may not
Transfer the Membership Interest to a beneficiary of the trust or estate.

C. Conditions to Transfer.

Notwithstanding any other provision of Sections 8.01, 8.02 or 8.09, no Transfer
shall be permitted, except in the case of a Transfer on death or involuntarily
by operation of law, unless the following additional conditions precedent are
satisfied (or waived by the Board or a Majority Vote of the Members, other than
the Member proposing such Transfer):

1. The transferor and transferee shall execute and deliver to the Company such
documents and instruments of conveyance as may be necessary or appropriate in
the opinion of counsel to the Company to effect such Transfer and to confirm the
agreement of the transferee to be bound by the provisions of this Agreement
(including this ARTICLE VIII); and

2. The transferor, if required by the Board, shall provide an opinion of counsel
satisfactory to the Company to the effect that such Transfer will not violate
any applicable securities laws regulating the Transfer of securities or any of
the provisions of any agreement to which the Company is a party.

D. Rights of Unadmitted Transferee.

A transferee of a Membership Interest who is not admitted as a Member pursuant
to Section 8.05 shall be entitled to allocations and distributions attributable
to the Membership Interest Transferred to the same extent as if the transferee
were a Member, but shall have no right to participate in the management of the
Company, or to vote or give a consent on any matter calling for the approval or
consent of the Members (and any requisite percentage or majority shall be
computed as if the Transferred Membership Interest did not exist), shall have no
right to any information or accounting of the affairs of the Company, shall not
be entitled to inspect the books or records of the Company, and shall not have
any of the other rights of a Member under the Act or this Agreement.

 

23

--------------------------------------------------------------------------------

E. Admission of Transferee as Member.

Subject to the other provisions of this ARTICLE VIII, a transferee of a
Membership Interest may be admitted to the Company as a Member only upon
satisfaction of all of the following conditions:

1. The Members (other than the Member proposing such Transfer) shall consent to
such admission, by a Majority Vote of the Members, prior to such Transfer which
consent may be granted or withheld in the absolute and unreviewable discretion
of the Members;

2. The Membership Interest with respect to which the transferee is admitted was
acquired by means of a Transfer permitted under Sections 8.01, 8.02 or 8.09;

3. The transferee becomes a party to this Agreement as a Member and executes
such documents and instruments as the Company reasonably may request as
necessary or appropriate to confirm such transferee as a Member in the Company
and such transferee’s agreement to be bound by the terms and conditions hereof;
and

4. The transferee furnishes copies of all instruments effecting the Transfer,
opinions of counsel, and such other certificates, instruments, and documents as
the Company may require.

F. Effect of Disposition.

Following any Transfer (whether or not permitted) of a Member’s entire
Membership Interest, the Member shall have no further rights as a Member of the
Company. In addition, following any Transfer (whether or not permitted) of a
portion of a Member’s Membership Interest, the Member shall have no further
rights as a Member of the Company with respect to that portion Transferred.

G. Skyrm and Goodman’s Put Right.

So long as (a) Skyrm or Goodman continues to own the Requisite Percentage and
(b) the Company is not insolvent, each of Skyrm and Goodman, as applicable,
shall have the right to require the Company to purchase all but not less than
all of his Membership Interests should he be terminated under his Employment
Agreement, other than “for cause” (the “Put Right”). Each of Skyrm and Goodman,
as applicable, shall give notice (the “Put Notice”) to the Company of his
intention to exercise the Put Right within twenty (20) days of the effective
date of any such termination. If Skyrm or Goodman elects to exercise the Put
Right, each of Skyrm and Goodman, as applicable, shall sell all but not less
than all of his Membership Interests, free and clear of all encumbrances, at the
purchase price for his Membership Interests determined by an External Valuation,
no later than thirty (30) days after the date of the Put Notice. The closing
shall take place within ninety (90) days after the date of notice and payment
shall be made as follows either (a) if there is Available Cash as determined in
good faith by the Board, in which case, up to twenty-five percent (25%) of such
Available Cash will be paid in a lump sum with the balance paid in eight
(8) equal quarterly installments of principal, or (b) if there is no Available
Cash, as determined in good faith by the Board, in which case, in twelve
(12) equal quarterly installments of principal, the first of which shall be paid
on the date of closing, together with interest on the unpaid principal balance
at a rate equal to the Prime Rate. Interest shall accrue from the date of
closing.

 

24

--------------------------------------------------------------------------------

H. Company’s Call Right.

Should either Skyrm or Goodman be terminated for any reason and the Company is
not insolvent, the Company shall have the right to require Skyrm or Goodman, as
applicable, to sell all but not less than all of his Membership Interests (the
“Call Right”) to the Company. The Company shall give notice (the “Call Notice”)
to Skyrm or Goodman, as applicable, of its intention to exercise the Call Right
within twenty (20) days of the effective date of any such termination. If the
Company elects to exercise the Call Right, Skyrm or Goodman, as applicable,
shall sell all but not less than all of his Membership Interests and the Company
shall purchase all but not less than all of Skyrm’s or Goodman’s, as applicable,
Membership Interests, free and clear of all encumbrances, at the purchase price
for his Membership Interests determined by an External Valuation no later than
thirty (30) days after the date of the Call Notice. If Skyrm or Goodman are
terminated “For Cause,” then the External Valuation used to determine the value
of the Membership Interest shall be required to incorporate the Discount
Factors, but in no event shall such discounts be in excess of twenty percent
(20%). The closing shall take place within ninety (90) days after the date of
notice with payment made in twelve (12) equal quarterly installments of
principal, the first of which shall be paid on the date of closing, together
with interest on the unpaid principal balance at a rate equal to the Prime Rate
as reported in The Wall Street Journal as of the date of closing. Interest shall
accrue from the date of closing. Notwithstanding the other provisions of this
Section 8.08, should the Company terminate Skyrm or Goodman “For Cause” then the
closing shall take place within ninety (90) days after the date of notice with
payment made in twenty (20) equal quarterly installments of principal, the first
of which shall be paid on the date of closing and no interest shall be owed on
the principal.

I. Drag-Along.

If at any time CBC Acquisition proposes to Transfer, directly or indirectly,
fifty percent (50%) or more of its Membership Interests in the Company to a
prospective purchaser in one or more series of related transactions other than
to an Affiliate of Asta, and such Transfer is approved to the extent required
under Section 6.05(b)(iii), CBC Acquisition shall, at least ten (10) business
days prior to the closing of the Transfer, have the right to give notice to all
of the other Members (specifying the identity of the prospective purchaser, the
proposed purchase price, the scheduled date of the closing, and all other
relevant material information), and in such event, each of the other Members
shall also sell to the proposed purchaser, simultaneously with the sale by CBC
Acquisition and on the same terms and conditions as CBC Acquisition, all of
their respective Membership Interests in the Company. Upon request of CBC
Acquisition or the prospective purchaser, each of the other Members shall
execute and deliver a definitive purchase and sale agreement, in substantially
the same form and substance as the definitive agreement executed and delivered
by CBC Acquisition; provided, however, (a) any indemnification obligation of any
Member in connection with the sale shall be several and not joint and shall be
limited to the gross proceeds received by that Member in the sale and (b) such
Member shall only be obligated to make such representations and warranties in
connection with the sale as to itself (as opposed to the business and condition
of the Company) as are customary for such transactions. If any such Member shall
fail to execute and deliver such definitive agreement, CBC Acquisition shall
have a power of attorney (which may be relied upon by the purchaser(s) in any
such sale) and for that purpose the Member, without any further action or deed,
shall be deemed to have appointed CBC Acquisition as the Member’s agent and
attorney-in-fact, with full power of substitution, for the purpose of executing
and delivering the definitive agreement in the name and on behalf of the Member
and performing all such action as may be necessary or appropriate to consummate
the sale of the Member’s interest pursuant to that agreement.

 

25

--------------------------------------------------------------------------------

J. Tag-Along.

1. If at any time after the date of this Agreement CBC Acquisition proposes to
Transfer, directly or indirectly, any of its Membership Interests in the Company
to a prospective purchaser in one or more series of related transactions other
than to an Affiliate of Asta, and CBC Acquisition cannot or has not elected to
exercise its drag-along rights pursuant to Section 8.09, each of Skyrm and
Goodman (each, a “Tag-along Member”), so long as he continues to own the
Requisite Percentage, shall be permitted to participate in such sale (a
“Tag-along Sale”) on the terms and conditions set forth in this Section 8.10.

2. Prior to the consummation of the sale described in Section 8.10(a), CBC
Acquisition shall deliver to the Company and each Tag-along Member a notice (a
“Sale Notice”) of the proposed sale subject to this Section 8.10(b) no more than
ten (10) business days after the execution and delivery by all the parties
thereto of the definitive agreement entered into with respect to the Tag-along
Sale and, in any event, no later than twenty (20) business days prior to the
closing date of the Tag-along Sale. The Tag-along Notice shall make reference to
the Tag-along Members’ rights hereunder and shall describe in reasonable detail:
(i) the number of Units to be sold by CBC Acquisition; (ii) the name of the
prospective purchaser; (iii) the per Unit purchase price and the other material
terms and conditions of the sale, including a description of any non-cash
consideration in sufficient detail to permit the valuation thereof; (iv) the
proposed date, time and location of the closing of the sale; and (v) a copy of
any form of agreement proposed to be executed in connection therewith.

3. Each Tag-along Member shall exercise its right to participate in a sale of
Units by CBC Acquisition subject to this Section 8.10 by delivering to CBC
Acquisition a notice (a “Tag-along Notice”) stating its election to do so and
specifying the number of Units to be sold by it no later than five (5) business
days after receipt of the Sale Notice (the “Tag-along Period”). The offer of
each Tag-along Member set forth in a Tag-along Notice shall be irrevocable, and,
to the extent such offer is accepted, such Tag-along Member shall be bound and
obligated to sell in the proposed sale on the terms and conditions set forth in
this Section 8.10. Each Tag-along Member shall have the right to sell in a sale
subject to this Section 8.10 the number of Units equal to the product obtained
by multiplying (x) the number of Units held by the Tag-along Member by (y) a
fraction (A) the numerator of which is equal to the number of Units CBC
Acquisition proposes to sell or transfer to the prospective purchaser and
(B) denominator of which is equal to the number of Units then owned by CBC
Acquisition and all of its permitted Transferees.

4. CBC Acquisition shall use its reasonable efforts to include in the proposed
sale to the prospective purchaser all of the Units that the Tag-along Members
have requested to have included pursuant to the applicable Tag-along Notices, it
being understood that the prospective purchaser shall not be required to
purchase Units in excess of the number set forth in the Sale Notice. In the
event the prospective purchaser elects to purchase less than all of the Units
sought to be sold by the Tag-along Members, the number of Units to be sold to
the prospective purchaser by the Selling Member and each Tag-along Member shall
be reduced so that each such Member is entitled to sell a pro-rata portion of
the number of Units the prospective purchaser elects to purchase (which in no
event may be less than the number of Units set forth in the Sale Notice), based
on the percentage of Units each such Member wishes to sell of the total number
of Units to be sold.

 

26

--------------------------------------------------------------------------------

5. Any Tag-along Member who does not deliver a Tag-along Notice in compliance
with Section 8.10(c) above shall be deemed to have waived all of such Tag-along
Member’s rights to participate in such sale, and CBC Acquisition shall (subject
to the rights of any participating Tag-along Member) thereafter be free to sell
to the prospective purchaser its Units at a per Unit price that is no greater
than the per Unit price set forth in the Sale Notice and on other same terms and
conditions which are not materially more favorable to CBC Acquisition than those
set forth in the Sale Notice, without any further obligation to the
non-accepting Tag-along Members.

6. Each Member participating in a sale pursuant to this Section 8.10 shall
receive the same consideration per Unit after deduction of such Member’s
proportionate share of the related expenses in accordance with paragraph
(h) below.

7. Each Tag-along Member shall make or provide the same representations,
warranties, covenants, indemnities and agreements as CBC Acquisition makes or
provides in connection with the Tag-along Sale (except that in the case of
representations, warranties, covenants, indemnities and agreements pertaining
specifically to CBC Acquisition, the Tag-along Member shall make the comparable
representations, warranties, covenants, indemnities and agreements pertaining
specifically to itself); provided, that all representations, warranties,
covenants and indemnities shall be made by CBC Acquisition and each other
Tag-along Member severally and not jointly and any indemnification obligation in
respect of breaches of representations and warranties that do not relate to such
Tag-along Member shall be in an amount not to exceed the aggregate proceeds
received by such Tag-along Member in connection with any sale consummated
pursuant to this Section 8.10.

8. The fees and expenses of CBC Acquisition incurred in connection with a sale
under this Section 8.10 and for the benefit of all Members (it being understood
that costs incurred by or on behalf of CBC Acquisition for its sole benefit will
not be considered to be for the benefit of all Members), to the extent not paid
or reimbursed by the Company or the prospective purchaser, shall be shared by
all the Members on a pro rata basis, based on the consideration received by each
Member; provided, that no Member shall be obligated to make any out-of-pocket
expenditure prior to the consummation of the transaction consummated pursuant to
this Section 8.10.

9. Each Member shall take all actions as may be reasonably necessary to
consummate the Tag-along Sale, including, without limitation, entering into
agreements and delivering certificates and instruments, in each case, consistent
with the agreements being entered into and the certificates being delivered by
CBC Acquisition.

 

27

--------------------------------------------------------------------------------

K. Right of First Refusal.

For two (2) years from the Effective Date, notwithstanding the provisions of
this ARTICLE VIII other than Section 8.01, a Member may Transfer all or any
portion of such Member’s Membership Interest in the Company to any Person
pursuant to a bona fide offer from a third party to purchase such Membership
Interest as provided herein. Upon receipt of an acceptable offer, the Member
(the “Transferring Member”) shall give the Company, the Managers, and the other
Members notice of the terms and conditions of the offer and of such Member’s
intention to Transfer such Membership Interest in accordance with the offer. The
Members shall then have the right to acquire all, but not less than all, of the
Membership Interest upon the same terms and conditions as set forth in the
offer. The Members shall have the right to acquire the Membership Interest upon
the same terms and conditions as set forth in the offer by giving notice to the
Transferring Member within sixty (60) days of delivery of notice of the
third-party offer from the Transferring Member. If more than one other Member
shall accept the offer, then such Members shall purchase the Transferring
Member’s Membership Interest pro rata based on the percentage of Units each
applicable Member owns of the total number of Units to be purchased. If no other
Member shall accept the offer within the sixty (60)-day period, or if the
Members together have not subscribed for the entire interest, then the
Transferring Member shall be free to Transfer such Membership Interest in
accordance with the terms of the offer. If the Transferring Member shall fail to
complete the Transfer in accordance with the offer within one hundred eighty
days (180) days following the expiration of the sixty (60)-day period described
herein, then any future Transfer by such Transferring Member shall require a
re-offering to the other Members as provided for above.

L. Conversion of Units.

Skyrm and Goodman shall each be a party to the Option Agreement attached hereto
as Exhibit C.

M. Prohibited Transfers.

Any purported Transfer that is not permitted under Sections 8.01, 8.02 or 8.09,
shall be null and void and of no effect whatsoever. In the case of a Transfer or
attempted Transfer that is not such a permitted Transfer, the parties engaging
or attempting to engage in such Transfer shall indemnify and hold harmless the
Company and the other Members from all cost, liability, and damage that any of
such indemnified persons may incur (including incremental tax liability and
attorneys’ fees and expenses) as a result of such Transfer or attempted Transfer
and efforts to enforce the indemnity granted hereby.

9.

WITHDRAWAL

A. Restrictions on Withdrawal.

Except as otherwise expressly permitted in this Agreement, without the consent
of Members holding at least a majority of the Membership Interests, a Member
does not have the right to withdraw from the Company as a Member or terminate
his, her, or its Membership Interest.

 

28

--------------------------------------------------------------------------------

B. Withdrawal Payment; Reserves.

Upon a permitted withdrawal, the withdrawing Member shall be entitled to receive
his, her or its Capital Account balance in the Company as of the withdrawal date
(as determined after giving effect to the revaluation of Company assets pursuant
to Section 3.07), payable in cash and subject to the limitations and other
provisions of this Section 9.02. The payment to a withdrawing Member shall be
made in twenty (20) equal quarterly installments of principal, the first of
which shall be paid within ninety (90) days after the date of withdrawal,
together with interest on the unpaid principal balance at a rate equal to the
mid-term applicable federal rate under Code section 1274 (for quarterly
compounding periods) as of the date of withdrawal. If installment payment is
elected, interest shall accrue from the date of withdrawal and shall be paid
together with each quarterly installment of principal, and the Company at any
time may prepay, in whole or in part, the amount owing, which prepayment shall
be applied first to accrued but unpaid interest and then to principal
installments in their inverse order of maturity. The amount payable to a
withdrawing Member under this Section 9.02 may, as the Board shall determine, be
subject to reserves for subsequent adjustments in the computation of the
withdrawal amount and reserves for contingencies, including contingent
liabilities relating to pending or anticipated litigation or to Internal Revenue
Service examinations, and to a reasonable charge to cover the cost of selling or
liquidating assets in order to effect payment to the withdrawing Member. Any
amount withheld as a reserve shall reduce the amount payable under this
Section 9.02 and shall be invested at interest by the Company in a segregated
account (which may be commingled with similar accounts). The unused portion of
any reserve shall be distributed with interest thereon after the Board shall
have determined that the need therefor shall have ceased.

C. Withdrawing Member’s Rights.

Following the date of a withdrawal, the withdrawing Member shall have no further
rights as a Member of the Company and, in the event that any money is still owed
to the withdrawing Member after the date of withdrawal, the withdrawing Member
shall have only the rights of an unsecured creditor of the Company.

10.

DISSOLUTION, LIQUIDATION, AND TERMINATION

A. Dissolution.

The Company shall be dissolved automatically and its affairs shall be wound up
on the first to occur of the following:

1. at any time upon the written consent of the sole remaining Member;

2. at any time upon the approval of the Board following a vote in accordance
with this Agreement; or

 

29

--------------------------------------------------------------------------------

3. ninety (90) days after the date on which the Company no longer has at least
one (1) Member, unless a new Member is admitted to the Company during such
ninety (90) day period.

B. Liquidation.

1. Upon a dissolution of the Company requiring the winding-up of its affairs,
the Managers (or, in their absence, the Members) shall wind-up its affairs. The
assets of the Company shall be sold within a reasonable period of time to the
extent necessary to pay or to provide for the payment of all debts and
liabilities of the Company, and may be sold to the extent deemed practicable and
prudent by the Managers.

2. The net assets of the Company remaining after satisfaction of all such debts
and liabilities and the creation of any reserves under Subsection 10.02(d) shall
be distributed to the Members in accordance with Section 5.02.

3. Distributions to Members pursuant to this ARTICLE X shall be made by the end
of the taxable year of the Liquidation, or, if later, ninety (90) days after the
date of such Liquidation in accordance with Regulations section
1.704-1(b)(2)(ii)(g).

4. The Members may withhold from a distribution under this Section 10.02 such
reserves as are required by applicable law and such other reserves for
subsequent computation adjustments and for contingencies, including contingent
liabilities relating to pending or anticipated litigation or to IRS
examinations. Any amount withheld as a reserve shall reduce the amount payable
under this Section 10.02 and shall be held in a segregated interest-bearing
account (which may be commingled with similar accounts). The unused portion of
any reserve shall be distributed with interest thereon pursuant to this
Section 10.02 after the Members shall have determined that the need therefor
shall have ceased.

5. If a Member has a deficit balance in his, her, or its Capital Account after
giving effect to all contributions, distributions, and allocations for all
taxable years, including the year in which the Liquidation occurs or the year in
which a Member ceases to have any Membership Interests, the Member shall have no
obligation to make any contribution to the capital of the Company with respect
to such deficit, and such deficit shall not be considered a debt owed by such
Member to the Company or to any other Person, for any purpose whatsoever.

11.

ALLOCATION RULES

A. Special Allocations.

Notwithstanding the provisions of ARTICLE IV or any other provision of this
Agreement, the Board shall have the discretion to modify the allocations of
Profits and Losses, and all items of income, gain, loss, deduction, and credit,
in such manner as the Members shall determine based on advice of tax counsel to
be necessary to comply with Code section 704 and the Regulations promulgated
thereunder.

 

30

--------------------------------------------------------------------------------

B. Code Section 704(c).

The Members shall make such allocations for tax purposes, and any modifications
to this Agreement, as may be required to comply with Code section 704(c) and the
Regulations thereunder.

C. Other Allocation Rules.

Except as otherwise provided in this Agreement, items of taxable income, gain,
loss, deduction, and credit shall be allocated among the Members for income tax
purposes in the same manner as the corresponding items are allocated for “book
purposes” under ARTICLE IV and this ARTICLE XI. Taxable income or loss for any
Accounting Period that is not allocated pursuant to the preceding sentence and
that is not otherwise allocated pursuant to ARTICLE IV or this ARTICLE XI shall
be allocated among the Members for tax purposes in the same proportion that
Profit or Loss has been allocated for that Accounting Period under Section 4.01.
Notwithstanding the other provisions of ARTICLE IV or this ARTICLE XI, the Board
is authorized to make any adjustment in the allocation of Profits or Losses
provided for in such Articles if the Board considers, in good faith, based on
advice of tax counsel, that the adjustment is necessary and equitable to address
issues not specifically dealt with in such Articles, to correct errors in
allocations caused by errors in unaudited financial information, or to correct
inequities that may arise under this Agreement.

 

31

--------------------------------------------------------------------------------

12.

ANNUAL BUDGET; BOOKS AND RECORDS, ACCOUNTING, AND TAX ELECTIONS

A. Annual Budget.

For each Fiscal Year, the Board shall cause its officers and agents to prepare
an annual budget that sets forth specific categories and parameters for Company
expenditures (the “Annual Budget”), which shall be, in form and substance,
subject to revision by, and the approval of, the Board; provided, however, that,
unless otherwise agreed by Members holding at least a majority of the Membership
Interests of the Company, for any Fiscal Year after Fiscal Year 2016, the Annual
Budget shall have a level of detail consistent with standard financial reporting
and sets forth specific categories and parameters for Company expenditures and
revenues. A draft of the Annual Budget for Fiscal Year 2014 shall be prepared
within twenty (20) days of the Effective Date and considered by the Board within
thirty (30) days of the Effective Date. A draft of the Annual Budget for each
subsequent Fiscal Year shall be prepared no later than September 1st of each
Fiscal Year and considered by the Board no later than September 15th of each
Fiscal Year. Notwithstanding the foregoing, with respect to the Annual Budget
for Fiscal Year 2014 and Fiscal Year 2015, the budgeted expenditures and
revenues shall be consistent with the projections included in the “CBC
Settlement Funding Business Overview” delivered to Asta. If the Board does not
approve an Annual Budget within fifteen (15) days of the applicable
consideration date set forth above, then the Annual Budget for the subsequent
Fiscal Year shall be the immediately preceding year’s Annual Budget.

B. Maintenance of Records.

The Company shall maintain true and correct books and records, in which shall be
entered all transactions of the Company, and shall maintain all other records
necessary, convenient, or incidental to recording the Company’s business and
affairs, which shall be sufficient to record the allocation of Profits and
Losses and distributions as provided for herein. All decisions as to accounting
principles, accounting methods, and other accounting matters shall be made by
the Board. The Company shall keep a current list of all Members and their
Capital Contributions, adjusted for any withdrawals, which shall be available
for inspection by all Members. Each Member or his, her, or its authorized
Representative may examine any of the books and records of the Company during
normal business hours upon reasonable notice for a proper purpose reasonably
related to the Member’s interest in the Company.

C. Reports to Members.

As soon as practicable after the end of each fiscal quarter, but in no event
later than forty-five (45) days from the end of such fiscal quarter, and each
Fiscal Year, but in no event later than ninety (90) days from the end of such
Fiscal Year, the Company shall cause to be prepared and sent to each Member a
balance sheet and a statement of income for the Company that may, but need not,
be audited by a certified public accountant. In addition, as soon as practicable
after the end of each Fiscal Year, the Company shall cause to be prepared and
sent to each Member a report setting forth in sufficient detail all such
information and data with respect to the Company for such Fiscal Year as shall
enable each Member to prepare his, her, or its income tax returns. Any financial
statements, reports, and tax returns required pursuant to this Section 12.03
shall be prepared at the expense of the Company.

 

32

--------------------------------------------------------------------------------

D. Tax Elections; Determinations Not Provided for in Agreement.

The Board shall be empowered to make or revoke any elections now or hereafter
required or permitted to be made by the Code or any state or local tax law, and
to decide in a fair and equitable manner any accounting procedures and other
matters arising with respect to the Company or under this Agreement that are not
expressly provided for in this Agreement. Notwithstanding the foregoing, absent
the unanimous consent of all Members to the contrary, the Company and all
Members shall take any steps that may be necessary to elect partnership status
for purposes of the Code and any applicable state or local tax law.

E. Tax Matters Partner.

CBC Acquisition is hereby designated the “Tax Matters Partner” of the Company
for purposes of the Code.

13.

GENERAL PROVISIONS

A. Notices.

Except as expressly provided in this Agreement, all notices, consents, waivers,
requests, or other instruments or communications given pursuant to this
Agreement shall be in writing, shall be signed by the party giving the same, and
shall be delivered personally by hand; sent by certified United States mail,
return receipt requested, postage prepaid; or sent by a recognized overnight
delivery service. Such notices, instruments, or communications shall be
addressed, in the case of the Company or the Board, to the Company at its
principal place of business and, in the case of any of the Members, to the
address set forth in the Company’s books and records; except that any Member
may, by notice to the Company and each other Member, specify any other address
for the receipt of such notices, instruments, or communications. Except as
expressly provided in this Agreement, any notice, instrument, or other
communication shall be deemed properly given when sent in the manner prescribed
in this Section 13.01. In computing the period of time for the giving of any
notice, the day on which the notice is given shall be excluded and the day on
which the matter noticed is to occur shall be included. If notice is given by
personal delivery, then it shall be deemed given on the date personally
delivered to such Person. If notice is given by mail, it shall be deemed given
when deposited in the mail addressed to the Person to whom it is directed at the
last address of the Person as it appears on the records of the Company, with
prepaid postage thereon. If notice is given by nationally recognized overnight
courier delivery service, then it shall be deemed given on the date delivered to
such nationally recognized overnight courier delivery service. If notice is
given in any other manner authorized herein or by law, it shall be deemed given
when actually delivered, unless otherwise specified herein or by law. The
substance of any such notice shall be deemed to have been fully acknowledged in
the event of refusal of acceptance by the party to whom the notice is addressed.

 

33

--------------------------------------------------------------------------------

B. Interpretation.

1. Article, Section, and Subsection headings are not to be considered part of
this Agreement, are included solely for convenience of reference and are not
intended to be full or accurate descriptions of the contents thereof.

2. Use of the terms “herein,” “hereunder,” “hereof,” and like terms shall be
deemed to refer to this entire Agreement and not merely to the particular
provision in which the term is contained, unless the context clearly indicates
otherwise.

3. Use of the word “including” or a like term shall be construed to mean
“including, but not limited to.”

4. Exhibits and schedules to this Agreement are an integral part of this
Agreement.

5. Words importing a particular gender shall include every other gender, and
words importing the singular shall include the plural and vice-versa, unless the
context clearly indicates otherwise.

6. Any reference to a provision of the Code, Regulations, or the Act shall be
construed to be a reference to any successor provision thereof.

C. Governing Law; Jurisdiction; Venue.

This Agreement and all matters arising herefrom or with respect hereto,
including, without limitation, tort claims (the “Covered Matters”) shall be
governed by, and construed in accordance with, the internal laws of the State of
Delaware, without reference to the choice or conflict of law principles thereof.
Each of the parties hereto irrevocably submits to the co-exclusive jurisdiction
of the federal and state courts located in the State of Delaware for the purpose
of any suit, action, proceeding or judgment relating to or arising out of the
Covered Matters. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any such court in
any such suit, action or proceeding and to the laying of venue in such court.
Each party hereto irrevocably waives any objection to the laying of venue of any
such suit, action, or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action, or proceeding brought in any such court
has been brought in an inconvenient forum.

D. Binding Agreement.

This Agreement shall be binding upon and inure to the benefit of the Members and
their respective heirs, executors, administrators, personal representatives, and
successors.

 

34

--------------------------------------------------------------------------------

E. Severability.

Each item and provision of this Agreement is intended to be severable. If any
term or provision of this Agreement is determined by a court of competent
jurisdiction to be unenforceable for any reason whatsoever, that term or
provision shall be modified only to the extent necessary to be enforced, such
term or provision shall be enforced to the maximum extent permitted by law, and
the validity of the remainder of this Agreement shall not be adversely affected
thereby.

F. Entire Agreement.

This Agreement (including the exhibits hereto) supersedes any and all other
understandings and agreements, either oral or in writing, between the Members
with respect to the Membership Interests and constitutes the sole agreement
between the Members with respect to the Membership Interests.

G. Further Action.

Each Member shall execute and deliver all papers, documents, and instruments and
perform all acts that are necessary or appropriate to implement the terms of
this Agreement and the intent of the Members.

H. Amendment or Modification.

This Agreement (including the exhibits hereto) may be amended or modified from
time to time only by the consent of all Members.

I. Counterparts; Electronic Delivery.

This Agreement may be executed in original or by facsimile in several
counterparts and, as so executed, shall constitute one agreement, binding on all
of the parties hereto, notwithstanding that all of the parties are not signatory
to the original or to the same counterpart. Signatures on this Agreement may be
communicated by facsimile transmission or in portable document format (.pdf) by
electronic mail and shall be binding upon the parties so transmitting their
signatures. Counterparts with original signatures shall be provided to the other
parties following the applicable facsimile or electronic mail transmission;
provided, however, that the failure to provide the original counterpart shall
have no effect on the validity or the binding nature of this Agreement.

 

35

--------------------------------------------------------------------------------

J. Representation.

This Agreement was prepared by Lowenstein Sandler LLP in its capacity as legal
counsel to the Company. In connection with its preparation of this Agreement,
each of the Members acknowledge that Lowenstein Sandler LLP has advised each
Member that (a) such Member’s individual interests may be different than the
interests of the Company; and (b) it would be in each such Member’s best
interest to retain independent counsel for the purpose of advising such Member
how this Agreement affects such Member’s personal interests.

IN WITNESS WHEREOF, the Members have executed and adopted this Agreement as of
the Effective Date.

 

 /s/ William J. Skyrm

William J. Skyrm

 

 /s/ James Goodman

James Goodman

 

CBC ACQUISITION LLC By:  

 /s/ Gary Stern

Name:   Gary Stern Title:   Manager

[Signature Page to the Amended and Restated Operating Agreement]

--------------------------------------------------------------------------------

EXHIBIT A

MEMBERS, CAPITAL CONTRIBUTIONS,

PROFIT PERCENTAGES AND UNITS

 

Member   

Initial Capital

Account Balance

   Profit Percentages   Units

James Goodman

   $0.00    10%   10

William J. Skyrm, Esq.

   $0.00    10%   10

CBC Acquisition

   $5,650,000.00    80%   80

 

A-1

--------------------------------------------------------------------------------

Exhibit B

DEFINITIONS

For purposes of this Agreement, the following terms shall have the following
meanings:

“Accounting Period” means the following fiscal periods: the initial Accounting
Period shall commence on the day on which a Certificate of Formation is filed
with the State of Delaware. Each subsequent Accounting Period shall commence
immediately after the close of the next preceding Accounting Period. Each
Accounting Period shall close at the close of business on the first to occur of
(a) the last day of a Fiscal Year of the Company; (b) the day immediately
preceding the effective date of the acceptance of a Capital Contribution from a
new or existing Member, other than a Capital Contribution that is pro rata among
all existing Members; (c) the day immediately preceding the grant of an interest
in the Company (other than a de minimis interest) as consideration for the
provision of services to or for the benefit of the Company by an existing Member
acting in the capacity of a Member or by a new Member acting in the capacity of
a Member or in anticipation of being a Member; (d) the effective date of the
partial or complete withdrawal of a Member; or (e) the date of the Company’s
Liquidation.

“Act” means the Limited Liability Company Act of the State of Delaware and any
successor statute, as amended from time to time.

“Affiliate” means, with respect to any Person, any other Person controlling,
controlled by, or under common control with such Person; in such context,
“control” means the possession, directly or indirectly, of the power to direct
the management or policies of another, whether through the ownership of voting
securities, by contract, or otherwise.

“Agreement” means this Amended and Restated Limited Liability Company Operating
Agreement, as it may be amended or restated from time to time.

“Asta” means Asta Funding, Inc., a Delaware corporation.

“Available Cash” means all cash proceeds received by the Company (or released
from reserves) during any period, whether pursuant to operations or capital
transactions or otherwise, as reduced by (a) all costs and expenses incurred
during such period, including expenses incurred in any sale or disposition
transaction, (b) the discharge during such period of any indebtedness or
liabilities of the Company for which such proceeds are to be used and (c) the
setting aside during such period of such reserves as the Board may deem
reasonably necessary for the discharge of known or existing liabilities or
obligations of the Company.

“Board” means the Board of Managers of the Company elected pursuant to this
Agreement.

“Business” means the acquiring, brokering, securitizing, or servicing of direct
to consumer structured settlements and annuity cash flows.

“Call Notice” has the meaning ascribed to that term in Section 8.08.

 

B-1

--------------------------------------------------------------------------------

“Call Right” has the meaning ascribed to that term in Section 8.08.

“Capital Account” means, with respect to any Member, the Member’s Capital
Contribution, increased or decreased as provided in this Agreement.

“Capital Contribution” means, with respect to any Member, the amount of money
and the initial Gross Asset Value of any property other than cash contributed to
the Company by that Member.

“CBC Acquisition” means CBC Acquisition LLC, a Delaware limited liability
company.

“CEO” has the meaning ascribed to that term in Section 6.04(b).

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” has the meaning ascribed to that term in the preamble of the
Agreement.

“Company Minimum Gain” has the meaning given to “Partnership Minimum Gain” in
Regulations sections 1.704 2(b)(2) and 1.704-2(d).

“Confidential Information” has the meaning ascribed to that term in
Section 7.02(a).

“Covered Matters” has the meaning ascribed to that term in Section 13.03.

“Depreciation” has the meaning ascribed to that term in the definition of
“Profit and Losses.”

“Discount Factors” means, for purposes of an External Valuation, any discounts
deemed appropriate by the evaluator with respect to minority holdings, lack of
transferability, lack of marketability, private company, or otherwise.

“Effective Date” has the meaning ascribed to that term in the preamble of the
Agreement.

“Electing Member” has the meaning ascribed to that term in Section 3.04(b).

“Election” has the meaning ascribed to that term in Section 3.04(b).

“Emergency Funding Offering” has the meaning ascribed to that term in
Section 3.04(d)(iii).

“Employment Agreement” means the employment agreement of either Skyrm or Goodman
with CBC Management Services Group, LLC, dated as of December 31, 2013, as it
may be amended or restated from time to time.

“Exempt Issuances” has the meaning ascribed to the term in Section 3.04(d)(i).

“Existing Operating Agreement” has the meaning ascribed to that term in the
preamble of the Agreement.

--------------------------------------------------------------------------------

“External Valuation” means a determination of the fair value of the Company as
of the close of the month prior to the month in which the event triggering a
buy-out right occurs, determined by an unrelated third party with at least
fifteen (15) years’ experience and expertise in private company valuations and
an “ABV” (Accredited in Business Valuation), “ASA” (Accredited Senior
Appraiser), “CVA” (Certified Valuation Analyst), “AVA” (Accredited Valuation
Analyst) or “CBA” (Certified Business Appraiser) credential, jointly selected by
Representatives selected by each party (one by the purchaser and one by the
seller), which Representatives also must have at least fifteen (15) years’
experience and expertise in private company valuations and an ABV, ASA, CVA, AVA
or CBA credential. The Representatives will provide the evaluator with
information and materials they deem relevant to value the Company; the valuation
issued by the jointly-selected evaluator will be final and binding on all
parties. To the extent necessary or appropriate, the Company’s accountants shall
determine the value of the respective Membership Interests once the evaluator
has made its determination of the Company value. Except as otherwise expressly
provided in this Agreement, the expense of the External Valuation will be borne
by the Company; provided, however, that any External Valuation conducted in
connection with the “For Cause” termination of Skyrm or Goodman shall be borne
by the terminated party and paid in full at Closing, setoff against the amount
owed by the Company.

“Family Member” means a Member’s spouse, ancestors, issue (including adopted
children and their issue) and trusts or custodianships for the primary benefit
of the Member himself or such spouse, ancestors, or issue (including adopted
children and their issue).

“Fiscal Year” means the calendar year; but, upon the organization of the
Company, “Fiscal Year” means the period from the first day of the term of the
Company to the next following December 31 and, upon dissolution of the Company,
shall mean the period from the end of the last preceding Fiscal Year to the date
of such dissolution.

“Goodman” means James Goodman.

“Gross Asset Value” has the meaning ascribed to that term in Section 3.07.

“Holding Company” has the meaning ascribed to that term in the preamble of the
Agreement.

“Indemnified Parties” has the meaning ascribed to that term in Section 6.07.

“Liquidation” has the meaning as set forth in Regulations section
1.704-1(b)(2)(ii)(g).

“Majority Vote” means the approval, given at a meeting of Members or by written
consent in accordance with Section 6.02, of Members holding at least a majority
of the Membership Interests outstanding at the time such approval is given.

“Member” means each Person executing this Agreement as a Member or hereafter
admitted to the Company as a Member as provided in this Agreement, but does not
include any Person who has ceased to be a Member of the Company. For purposes of
interpreting this Agreement, references to the term “Member” in ARTICLE IV,
ARTICLE V, and ARTICLE XI shall be deemed to refer to a transferee of an
interest in the Company who is not admitted as a Member under Section 8.05
unless such interpretation is inconsistent with the provisions of Section 8.04.

--------------------------------------------------------------------------------

“Member Nonrecourse Debt” has the meaning given to “partner nonrecourse debt” in
Regulations section 1.704 2(b)(4).

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

“Membership Interest” means the entire interest of a Member in the Company,
including, without limitation, rights to distributions (liquidating or
otherwise), allocations, information, and the right to participate in the
management of the business and affairs of the Company, including the right to
vote on, consent to, or otherwise participate in any decision or action of or by
the Members granted by this Agreement or the Act.

“Nonrecourse Liability” has the meaning set forth in Regulations sections
1.704-2(b)(3) and 1.752-1(a)(2).

“Non-Solicit Period” has the meaning ascribed to that term in Section 7.04.

“Offered Interests” has the meaning ascribed to that term in Section 3.04(a).

“Original Assets Proceeds” has the meaning ascribed to that term in
Section 5.02(a).

“Original Member” has the meaning ascribed to that term in the preamble of the
Agreement.

“Person” means an individual, corporation, association, partnership, joint
venture, limited liability company, estate, trust, or any other legal entity.

“Post-Offer Notice” has the meaning ascribed to that term in
Section 3.04(d)(iii).

“Post-Offering Interests” has the meaning ascribed to that term in
Section 3.04(d)(iii).

“Preemptive Notice” has the meaning ascribed to that term in Section 3.04(b).

“President” has the meaning ascribed to that term in Section 6.04(b).

“Prime Rate” means the interest rate announced from time to time in The Wall
Street Journal, Eastern edition, as the prime rate, and in the event such rate
is no longer quoted in The Wall Street Journal, Eastern edition, then in such
other nationally circulated financial publication as is selected by the Board.

--------------------------------------------------------------------------------

“Profit Percentage” means, with respect to a Member, the percentage obtained by
dividing (i) the number of Units held by that Member by (ii) the total number
Units held by all Members.

“Profits and Losses” means, for each Accounting Period, an amount equal to the
Company’s taxable income or loss for such Accounting Period, determined in
accordance with Code section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

1. Income that is exempt from federal income tax and not otherwise taken into
account in computing Profits and Losses shall be added to such taxable income or
loss.

2. Any expenditures of the Company described in Code section 705(a)(2)(B), or
that are treated as Code section 705(a)(2)(B) expenditures pursuant to
Regulations section 1.704 1(b)(2)(iv)(i) and not otherwise taken into account in
computing Profits and Losses pursuant to this Section, shall be subtracted from
such taxable income or loss.

3. If the Gross Asset Value of any asset is adjusted pursuant to Section 3.07(b)
or 3.07(c), the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such asset for purposes of computing Profits and
Losses.

4. Gain or loss resulting from any disposition of assets with respect to which
gain or loss is recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the assets disposed of (as adjusted under
this Agreement), notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value.

5. In lieu of the depreciation, amortization, and other cost-recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such Accounting Period as defined
hereinafter. For such purposes “Depreciation” means, for each Accounting Period,
an amount equal to the depreciation, amortization, or other cost-recovery
deduction allowable with respect to an asset for such Accounting Period, except
that if the Gross Asset Value of an asset differs from its adjusted basis for
federal income tax purposes at the beginning of such Accounting Period,
Depreciation shall be any amount that bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization, or other
cost-recovery deduction for such Accounting Period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization, or other cost-recovery deduction for such Accounting
Period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the Company.

6. To the extent an adjustment to the adjusted tax basis of any asset pursuant
to Code section 734(b) or Code section 743(b) is required pursuant to
Regulations section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of a Member’s interest in the Company, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Profits and Losses.

--------------------------------------------------------------------------------

7. Notwithstanding any other provision of this definition, any items that are
specially allocated pursuant to Section 11.01 shall not be taken into account in
computing Profits and Losses. The amounts of the items of Company income, gain,
loss, or deduction available to be so specially allocated shall be determined by
applying rules analogous to those set forth in this definition.

8. The Company’s distributive share of any Profits and Losses (as defined
herein) from any partnership (including any limited liability company or other
entity treated as a partnership for tax purposes) in which it holds an interest,
adjusted to avoid taking into account any items otherwise reflected in the
Company’s Profits and Losses, shall be included in the Company’s Profits and
Losses.

“Purchase Agreement” has the meaning ascribed to that term in the preamble of
the Agreement.

“Put Notice” has the meaning ascribed to that term in Section 8.07.

“Put Right” has the meaning ascribed to that term in Section 8.07.

“Referral Source” has the meaning ascribed to that term in Section 7.04.

“Regulations” means the Treasury Regulations promulgated under the Code, as such
Regulations may be amended from time to time.

“Representative” of a Person means that Person’s Managers, officers, partners,
members, managers, employees, and agents.

“Requisite Percentage” means (a) with respect to Skyrm and Goodman, together, at
least twenty percentage (20%) of the Membership Interests or (b) with respect to
each of Skyrm and Goodman, individually, at least ten percentage (10%) of the
Membership Interests, representing, in each case, the Profit Percentages as of
the Effective Date; provided, however, that in the event (i) either Skyrm or
Goodman, or both, elect not to purchase any Offered Interests pursuant to
Section 3.04(a) in connection with delivery of any Preemptive Notices, (ii) the
Company undertakes Exempt Issuances pursuant to Section 3.04(d), or (iii) either
Skyrm or Goodman, or both, elect not to purchase any Post-Offering Interests
pursuant to Section 3.04(d)(iv) in connection with an Emergency Funding
Offering, then, in each case, the Requisite Percentage for Skyrm and Goodman
shall be reduced to the Profit Percentages held by Skyrm and Goodman, together
and individually, immediately resulting from each occurrence described in
subsections (i)-(iii) above, but in no event shall the Requisite Percentage
(A) for Skyrm and Goodman, collectively, be less than ten percentage (10%), or
(B) for each of Skyrm and Goodman, individually, be less than five percentage
(5%).

“Restricted Period” has the meaning ascribed to that term in Section 7.03.

--------------------------------------------------------------------------------

“Restrictive Covenants” has the meaning ascribed to that term in Section 7.08.

“Sale Notice” has the meaning ascribed to that term in Section 8.10(b).

“Skyrm” means William J. Skyrm.

“Tag-along Member” has the meaning ascribed to that term in Section 8.10(a).

“Tag-along Notice” has the meaning ascribed to that term in Section 8.10(c).

“Tag-along Period” has the meaning ascribed to that term in Section 8.10(c).

“Tag-along Sale” has the meaning ascribed to that term in Section 8.10(a).

“Tax Distribution Amount” has the meaning ascribed to that term in Section 5.03.

“Transfer” means, as a noun, any voluntary or involuntary transfer, sale,
pledge, hypothecation, gift, or other disposition and, as a verb, voluntarily or
involuntarily to transfer, sell, pledge, hypothecate, give, or otherwise dispose
of.

“Transferring Member” has the meaning ascribed to that term in Section 8.11.

“Units” has the meaning ascribed to that term in Section 3.0