Document:

EX-10.58

 Exhibit 10.58 

LIMITED LIABILITY COMPANY AGREEMENT 

OF 
 MOMENTUM GENERAL
PARTNERS, LLC, 
 a Virginia limited liability company 

BY AND BETWEEN 
 SCG
DEVELOPMENT PARTNERS, LLC, 
 a Delaware limited liability company 

AND 
 COMSTOCK REDLAND
ROAD III, L.C., 
 a Virginia limited liability company 

OCTOBER 24, 2016 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I GENERAL PROVISIONS
	  	 	2	 
	 Section 1.1
	 	 Organization.
	  	 	2	 
	 Section 1.2
	 	 Business of the Company.
	  	 	2	 
	 Section 1.3
	 	 Good Faith Efforts.
	  	 	3	 
	 Section 1.4
	 	 Principal Place of Business.
	  	 	3	 
	 Section 1.5
	 	 Qualification in Other Jurisdictions.
	  	 	3	 
	 Section 1.6
	 	 Term.
	  	 	3	 
		
	 ARTICLE II DEFINITIONS
	  	 	3	 
	 Section 2.1
	 	 Definitions.
	  	 	3	 
		
	 ARTICLE III CAPITAL CONTRIBUTIONS AND LOANS
	  	 	9	 
	 Section 3.1
	 	 Initial and Mandatory Contributions of Members.
	  	 	9	 
	 Section 3.2
	 	 Additional Contributions of Capital.
	  	 	9	 
	 Section 3.3
	 	 Form of Contributions.
	  	 	10	 
	 Section 3.4
	 	 No Right to Interest or Return of Capital.
	  	 	10	 
	 Section 3.5
	 	 No Third Party Rights.
	  	 	10	 
	 Section 3.6
	 	 Limitations.
	  	 	10	 
	 Section 3.7
	 	 Project Financing.
	  	 	10	 
	 Section 3.8
	 	 Member Loans.
	  	 	10	 
	 Section 3.9
	 	 Third Party Loans.
	  	 	11	 
	 Section 3.10
	 	 Third Party Rights.
	  	 	11	 
	 Section 3.11
	 	 Return of Capital Contributions.
	  	 	11	 
	 Section 3.12
	 	 Further Assurances.
	  	 	11	 
	 Section 3.13
	 	 Amendment.
	  	 	11	 
		
	 ARTICLE IV CAPITAL ACCOUNTS, ALLOCATIONS OF INCOME AND LOSS
	  	 	11	 
	 Section 4.1
	 	 Capital Accounts.
	  	 	11	 
	 Section 4.2
	 	 Allocation of Net Profits.
	  	 	12	 
	 Section 4.3
	 	 Allocations of Net Losses.
	  	 	12	 
	 Section 4.4
	 	 If Insufficient Net Profits or Net Losses.
	  	 	12	 
	 Section 4.5
	 	 Loss Limitation.
	  	 	12	 
	 Section 4.6
	 	 Minimum Gain Chargebacks and Nonrecourse Deductions.
	  	 	12	 
	 Section 4.7
	 	 Qualified Income Offset.
	  	 	12	 
	 Section 4.8
	 	 Tax Allocation - Code Section 704(c).
	  	 	13	 
	 Section 4.9
	 	 Code Section 704(b).
	  	 	13	 
	 Section 4.10
	 	 No Deficit Restoration to Members.
	  	 	13	 
	 Section 4.11
	 	 Timing of Allocations.
	  	 	13	 
		
	 ARTICLE V DISTRIBUTIONS
	  	 	13	 
	 Section 5.1
	 	 Distributions.
	  	 	13	 
	 Section 5.2
	 	 Timing of Distributions.
	  	 	13	 
		
	 ARTICLE VI POWERS AND DUTIES
	  	 	14	 
	 Section 6.1
	 	 Appointment and General Responsibilities of the Managing Member.
	  	 	14	 
	 Section 6.2
	 	 Appointment and General Responsibilities of the Operating Member.
	  	 	14	 
	 Section 6.3
	 	 Development Budget and Business Plans.
	  	 	14	 
	 Section 6.4
	 	 Approval Rights of Members.
	  	 	17	 
	 Section 6.5
	 	 Other Business Activities of the Members.
	  	 	17	 
	 Section 6.6
	 	 Limitation of Liability.
	  	 	18	 
	 Section 6.7
	 	 Duty; Devotion of Time.
	  	 	18	 

							
	 ARTICLE VII LIABILITIES OF MEMBERS
	  	 	18	 
	 Section 7.1
	 	 General.
	  	 	18	 
		
	 ARTICLE VIII TRANSFER OF COMPANY INTEREST
	  	 	18	 
	 Section 8.1
	 	 Transfer by the Members.
	  	 	18	 
	 Section 8.2
	 	 Members.
	  	 	19	 
	 Section 8.3
	 	 Buy/Sell.
	  	 	19	 
		
	 ARTICLE IX OBLIGATIONS FOR REPORTING RECORDS AND ACCOUNTING MATTERS
	  	 	20	 
	 Section 9.1
	 	 Fiscal Year.
	  	 	20	 
	 Section 9.2
	 	 Bank Accounts.
	  	 	20	 
	 Section 9.3
	 	 Maintenance of Records.
	  	 	21	 
	 Section 9.4
	 	 Certain Records.
	  	 	21	 
	 Section 9.5
	 	 Required Reports.
	  	 	21	 
	 Section 9.6
	 	 Other Disclosures.
	  	 	21	 
	 Section 9.7
	 	 Managing Member as Tax Matters Partner.
	  	 	21	 
	 Section 9.8
	 	 Taxation as a Partnership.
	  	 	22	 
	 Section 9.9
	 	 Quarterly Meetings.
	  	 	22	 
		
	 ARTICLE X DISSOLUTION
	  	 	22	 
	 Section 10.1
	 	 Dissolution.
	  	 	22	 
		
	 ARTICLE XI EVENTS OF DEFAULT
	  	 	22	 
	 Section 11.1
	 	 Events of Default.
	  	 	22	 
	 Section 11.2
	 	 Remedies.
	  	 	23	 
	 Section 11.3
	 	 Special Remedies on Default by the Managing Member.
	  	 	24	 
		
	 ARTICLE XII ARBITRATION
	  	 	24	 
	 Section 12.1
	 	 General.
	  	 	24	 
		
	 ARTICLE XIII MISCELLANEOUS
	  	 	24	 
	 Section 13.1
	 	 Notices.
	  	 	24	 
	 Section 13.2
	 	 Amendments.
	  	 	25	 
	 Section 13.3
	 	 Interpretation.
	  	 	25	 
	 Section 13.4
	 	 Counterparts.
	  	 	25	 
	 Section 13.5
	 	 No Partition.
	  	 	25	 
	 Section 13.6
	 	 Attorneys’ Fees.
	  	 	26	 
	 Section 13.7
	 	 Severability.
	  	 	26	 
	 Section 13.8
	 	 Binding on Successors.
	  	 	26	 
	 Section 13.9
	 	 Confidentiality.
	  	 	26	 
	 Section 13.10
	 	 Additional Representations, Warranties, Covenants and Agreements of Each Member.
	  	 	26	 
	 Section 13.11
	 	 Brokerage.
	  	 	26	 
	 Section 13.12
	 	 Exhibits and Schedules.
	  	 	26	 
	 Section 13.13
	 	 Scope of Representations.
	  	 	26	 
		
	 ARTICLE XIV OPERATING MEMBER
BUY-OUT
	  	 	27	 
	 Section 14.1
	 		  	 	27	 
	 Section 14.2
	 		  	 	27	 

  
 ii 

			
	 Exhibit
	  	 Description

		
	A	  	Name, Address and Proportionate Share of Members
		
	B	  	Legal Description of Property
		
	C	  	Form of Capital Call Notice
		
	D	  	Form of Note
		
	E	  	Development Budget
		
	F	  	Major Actions
		
	G	  	Budget/Reports
		
	H	  	Reimbursement, Assignment and Assumption Agreement
		
	I	  	Development Services Agreement

  

			
	 Schedule
	  	 Description

		
	12.10	  	Representations and Warranties of Members

 LIMITED LIABILITY COMPANY AGREEMENT OF 

MOMENTUM GENERAL PARTNERS, LLC, 

A VIRGINIA LIMITED LIABILITY COMPANY 

This Limited Liability Company Agreement of MOMENTUM GENERAL PARTNERS, LLC, a Virginia limited liability company (this
“Agreement”), is made as of the 24TH day of October, 2016, by and between COMSTOCK REDLAND ROAD III, L.C., a Virginia limited liability company (the
“Operating Member” or “COMSTOCK”), with a principal place of business at the address set forth in Exhibit A, and SCG DEVELOPMENT PARTNERS, LLC, a Delaware limited liability company
(the “Managing Member” or “SCG”), with a principal place of business at the address set forth in Exhibit A. The Managing Member and the Operating Member, together with any such
additional parties as and when admitted to the Company (as defined below) as members shall be individually a “Member” and collectively, the “Members.” 

RECITALS 
  

	 	A.	MOMENTUM GENERAL PARTNERS, LLC, a Virginia limited liability company (the “Company”), is a to-be-formed limited
liability company under the Virginia Limited Liability Company Act (as amended from time to time, the “Act”); and 

  

	 	B.	The Members desire to enter into an agreement to develop the Property (as defined below) in accordance with the terms of this Agreement. 

 

	 	C.	The Members have performed and will continue to perform services in connection with the development of the Project (as defined below). 

 

	 	D.	The Members intend for this Agreement to govern their relationship, and to set forth the respective roles and obligations of the parties with respect to the development activities, to establish a scope of work to be
performed by the Company, and to establish an initial schedule for the performance to the scope of work. 

  

	 	E.	The Members now desire to set out fully their respective rights, obligations and duties regarding the Company and its assets and liabilities. 

AGREEMENT 
 NOW,
THEREFORE, in consideration of the mutual covenants expressed herein, the parties hereby agree as follows: 
 ARTICLE I 

GENERAL PROVISIONS 

Section 1.1 Organization. The Company will be formed by the filing of its Certificate of Formation with the
Commonwealth of Virginia State Corporation Commission (“SSC”) pursuant to the Act. The Certificate of Formation, as same may be amended from time to time, is referred to herein as the “LLC
Certificate.” The LLC Certificate states that the registered agent and registered office of the Company in Virginia are Stephen Wilson at 8245 Boone Blvd., Suite 640, Vienna, VA 22182. 

Section 1.2 Business of the Company. 

1.2.1 The business of the Company shall be to (a) act as developer to an Owner (as defined below) which Owner will:
(i) acquire that certain real property consisting of approximately 41,030 square feet of land located at 16011 Redland Road in Derwood, MD, designated as Parcel D on the Residences at Shady Grove Record Plat # 24599, and more particularly
described on Exhibit B (the “Property”), (ii) develop and construct upon the Property an approximately 110 unit apartment community, to be known as the Momentum at Shady Grove Metro, together with any and all related on-site and off-site improvements appurtenant thereto (collectively, the “Improvements”), (iii) own, operate, manage, maintain, market, lease, hold for
long-term investment, finance, mortgage, encumber, refinance, sell, exchange, dispose of and otherwise realize the economic benefit from the Project, and (iv) conduct such other activities with respect to the Project as are necessary and/or
appropriate to carry out the foregoing purposes and to do all things incidental to or in furtherance of such purposes, and (b) engage in any other lawful activity permitted by the Act. 

  
 A-2 

 1.2.2 The Members intend that the majority of the units of the Project will be
operated and maintained as qualified low-income units under Section 42 of the Code for a period not less than the Compliance Period (as defined below) and any Extended Use Period (as defined below). 

Section 1.3 Good Faith Efforts. The Managing Member and the Operating Member shall cooperate with one another in
good faith to successfully consummate the Project in accordance with Good Industry Practices. Such cooperation shall include reasonable efforts to respond to one another as expeditiously as possible with regard to requests for information or
approvals required hereby. With regard to materials or documents requiring the approval of one or more parties, if such materials or documents are not approved as initially submitted, then the parties shall engage in such communication as is
necessary under the circumstances to resolve the issues resulting in such disapproval. A spirit of good faith and a mutual desire for the success of the Project, subject to applicable financial constraints and regulatory limitations, shall govern
the parties’ relationship under this Agreement. 
 Section 1.4 Principal Place of Business. The principal
office and place of business of the Company shall initially be 8245 Boone Blvd, Suite 640, Vienna, Virginia 22182. 

Section 1.5 Qualification in Other Jurisdictions. The Operating Member shall cause the Company to be qualified or
registered under applicable laws of the States of Maryland, and every other jurisdiction in which the Company transacts business and is required to register, and the Operating Member shall be authorized to execute, deliver and file any certificates
and documents necessary to effect such qualification or registration. 
 Section 1.6 Term. The term of the
Company commenced as of the date of the filing of the LLC Certificate with SDAT and shall continue until dissolved in accordance with the provisions of this Agreement. The term of this Agreement may be extended upon the mutual agreement of the
Members. Any provisions of this Agreement that are expressly identified to survive a termination of this Agreement shall survive such termination. 

ARTICLE II 
 DEFINITIONS

 Section 2.1 Definitions. For all purposes of this Agreement, including, without limitation, each of the
Exhibits and Schedules attached hereto, the following terms shall have the meanings indicated or referred to below, inclusive of their singular and plural forms except where the context requires otherwise. 

“Act” is defined in Recital A. 

“Adjusted Capital Account” is defined in Section 4.5. 

“Agreement” is defined in the introductory statement. 

“Annual Business Plan” is defined in Section 6.3.2. 

“Bankruptcy” means, with reference to any Member: 

(i) the entry of an order of relief (or similar court order) against such Member which authorizes a case brought under Chapter
7, 11 or 13 of Title 11 of the United States Code (or successors to such Chapters and Title) to proceed; 
 (ii) the
commencement of a federal, state or foreign bankruptcy, insolvency, reorganization, arrangement or liquidation proceeding by such Member; 

(iii) the commencement of a federal, state or foreign bankruptcy, insolvency, reorganization, arrangement or liquidation
proceedings against such Member if such proceeding is not dismissed within one hundred twenty (120) days after the commencement thereof; 

(iv) the entry of a court decree or court order which remains unstayed and in effect for a period of one hundred twenty
(120) consecutive days: 
 adjudging such Member insolvent under any federal, state or foreign law relating to
bankruptcy, insolvency, reorganization, arrangement, liquidation, receivership or the like; 

  
 A-3 

 approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of, or in respect of, such Member or of all, or of a substantial part, of such Member’s properties under any federal, state or foreign law relating to insolvency, reorganization, arrangement, liquidation, receivership
or the like; 
 appointing a receiver, liquidator, assignee, trustee, conservator, or sequester (or other similar official)
of such Member, or of all, or of a substantial part, of such Member’s properties; or 
 ordering the winding up,
dissolution or liquidation of the affairs of such Member; 
 (v) the consent by such Member to the institution against it of
any proceeding of the type described in subsection (a), (b), (c) and (d); 
 (vi) the consent by such Member to the
appointment of a receiver, liquidator, assignee, trustee, conservator or sequester (or other similar official) of such Member, or of all, or of a substantial part, of its properties; 

(vii) the making by such Member of an assignment for the benefit of creditors; or 

(viii) the admission in writing by such Member of its inability to pay its debts generally as they come due. 

“Business Day” means any day excluding a Saturday, Sunday, any other day during which there is no
scheduled trading on the New York Stock Exchange and all other days on which the state government offices of the Commonwealth of Virginia are not open for business. 

“Buy Price” is defined in Section 8.3.2(b). 

“Buy/Sell Deposit” is defined in Section 8.3.3. 

“Buy/Sell Election Date” is defined in Section 8.3.2(b). 

“Buy/Sell Offering Notice” is defined in Section 8.3.1. 

“Capital Account” is defined in Section 4.1. 

“Capital Contribution” means the total value of cash and net fair market value of property contributed
and agreed to be contributed to the Company by the Member, as shown on Exhibit A, as the same may be amended from time to time. Additional Capital Contributions may be made by a Member pursuant to ARTICLE III. 

“Capital Call Notice” means a written notice, substantially in the form attached as
Exhibit C, requesting each Member to fund or make Additional Capital Contributions pursuant to Section 3.2. 

“Closing” means the closing of the Construction Loan. 

“Closing Date” is defined in Section 8.3.4. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated
thereunder. 
 “Company” is defined in Recital A. 

“Company Minimum Gain” is defined in Section 4.6.1. 

“Completion” means, as to the Project, the date when: 

(i) the construction of the Project is completed substantially in accordance with the Project plans and in accordance with all
applicable local, state and federal laws, codes, rules, regulations and ordinances, as evidenced by (x) the issuance by the applicable governmental agency of a final certificate of occupancy (or its equivalent) permitting the occupancy of the
Project without material condition or qualification; and (y) the issuance of a certificate of substantial completion on A.I.A. Form G-704 by the Architect for the Project with no material condition or
qualification; and 
 (ii) all claims for work performed or materials provided for the construction and development of the
Project have been paid in full, as evidenced by lien releases and lien waivers from all Persons providing such work or materials; provided, however, that such lien releases and lien waivers with respect to any Person shall not be required with
respect to any claims made by such Person which are being contested in good faith by the Company after providing a bond or other security against liens therefor approved by the title insurance company insuring the Company or the Construction Lender.

  
 A-4 

 “Compliance Period” means, with respect to the Project, the
entire period during which the “compliance period” in Section 42(i)(1) of the Code shall be applicable to any building. 

“Consent” means the prior written consent or approval of a Person or the act of granting such consent, as the context
may require, to do the act or thing for which the consent is solicited. Except as otherwise expressly indicated, Consent shall not be unreasonably withheld, delayed or conditioned in light of the facts and circumstances. 

“Construction Lender” means the lender or lenders providing the Construction Loan. 

“Construction Loan” is defined in Section 3.7.1. 

“Construction Loan Agreement” means the loan agreement and other loan documents evidencing
and governing the Construction Loan. 
 “Deferred Development Fee” is that fee payable
to the Managing Member or its affiliate at or before stabilization of the Project. 
 “Development
Budget” is defined in Section 6.3.1. 
 “Development Services
Agreement” is defined in Section 6.3.6. 
 “Distributions” is defined
in Section 5.1. 
 “Economic Benefits” means all paid development fees,
including any deferred development fees, Distributions to the Members after the payment of all operating expenses, proceeds from sale of Company property, and any other financial benefits from the Interest of a Member. 

“Entity” means any general partnership, limited partnership, corporation, limited liability company, limited liability
partnership, joint venture, trust, business trust, cooperative or association or other comparable business entity. 

“Event of Default” is defined in Section 11.1. 

“Extended Use Period” means, with respect to the Project, the entire period during which
the “compliance period” in Section 42(h)(6) of the Code shall be applicable to any building. 
 “Extraordinary
Cash Flow” means all (a) net proceeds realized from the sale, exchange, condemnation, eminent domain taking or other disposition of a capital asset of the Company, (b) net proceeds from the dissolution,
liquidation or termination of the Company (or a Member’s interest therein), and (c) all net proceeds from any borrowings or refinancings by the Company. 

“Final Development Budget” means the Development Budget for the Project approved by the
Construction Lender and used in connection with the funding of the Construction Loan. 
 “Fiscal Year”
means (as applicable) (i) the period commencing on the effective date of this Agreement and ending on December 31, 2016, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31, or
(iii) any portion of the period described in clause (ii) for which the Company is required to allocate Net Profits, Net Losses, and other items of Company income, gain, loss or deduction pursuant to ARTICLE IV hereof. 

“GAP Contributions” is defined in Section 3.7.3. 

“General Partner” shall mean a Related Party of the Company that serves as the general partner or
managing member of the Owner. 

  
 A-5 

 “Good Industry Practices” means those
practices, methods, standards and procedures as are commonly used by similar Persons engaged in providing low-income housing tax credit investment opportunities in investments similar in size and type to the
Project, which in the exercise of reasonable judgment and in the light of the facts known at the time the decision was made, are considered good, safe and prudent practice in connection with the investment in
low-income housing credit facilities, with commensurate standards of, performance, dependability, efficiency and economy. Good Industry Practices are not intended to be limited to the optimum practice, method,
or act, to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts employed by such persons and having due regard for current editions of laws, codes and regulations. 

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for
federal income tax purposes; provided, however, that (i) the initial Gross Asset Value of any asset contributed to the Company shall be adjusted to equal its gross fair market value (determined by the Members) at the time of its contribution
and (ii) the Gross Asset Values of all assets held by the Company shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account) upon an election by the Company to revalue its property in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f). The Gross Asset Value of any asset whose Gross Asset Value was adjusted pursuant to the preceding sentence thereafter shall be adjusted in
accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(g). 

“Improvements” is defined in Section 1.2. 

“Initiating Member” is defined in Section 8.3.1. 

“Insurance Program” is defined in Section 6.3. 

“Interest” means in respect to any Member, all of such Member’s right, title and interest in and to the Net
Profits, Net Losses, Operating Cash, Extraordinary Cash Flow, Distributions and capital of, and any and all management rights pertaining to, the Company, and any and all other interests therein in accordance with the provisions of this Agreement and
the Act. 
 “Legal Successor” means the legal representative, heir, successor or assign of any Person
who is legally incompetent or has died or dissolved. 
 “LLC Certificate” is defined in
Section 1.1. 
 “Loan” or “Loans” means any loan or loans obtained
by the Company from any Third Party, including, without limitation, the Construction Loan, the Permanent Loan, and any Loan that may refinance the Permanent Loan. 

“Major Action” is defined in Section 6.4.1. 

“Managing Member” means SCG Development Partners, LLC, a Delaware limited liability company, or any
permitted successor or assign. 
 “Member” or “Members” is defined in the introductory
statement. 
 “Member Loan” is defined in Section 3.8. 

“Modified Capital Account” means, for each Member, such Member’s Capital Account
balance increased by such Member’s share of Company Minimum Gain and of “partner non-recourse debt minimum gain” (as determined pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), respectively). 

“Net Profits” and “Net Losses” mean the taxable income or loss, as
the case may be, for a period as determined in accordance with Code Section 703(a) computed with the following adjustments: 

items of gain, loss, and deduction shall be computed based upon the Gross Asset Values of the Company’s assets (in
accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(g) and 1.704-3(d) rather than upon the assets’ adjusted bases for federal income tax purposes); 

any tax-exempt income received by the Company shall be included as an item of gross
income; 
 the amount of any adjustments to the book values of any assets of the Company pursuant to Code Section 743
shall not be taken into account except to the extent required by Treasury Regulation Section 1.704-1(b)(2)(iv)(m); 

  
 A-6 

 any adjustment to the adjusted tax basis of any Company asset pursuant to Code
Section 734 as a result of a distribution other than in liquidation of a Member’s Interest in the Company or pursuant to Treasury Regulation Section 1.734-2(b)(1) shall be treated as an item of gain
or loss from the disposition of the asset; 
 any expenditure of the Company described in Code Section 705(a)(2)(B)
(including any expenditures treated as being described in Section 705(a)(2)(B) pursuant to Treasury Regulations under Code Section 704(b)) shall be treated as a deductible expense; 

the amount of gross income and “non-recourse
deductions” (as defined in Section 4.6 hereof) specifically allocated to any Members pursuant to Section 4.6 and Section 4.7 shall not be included in
the computation; 
 the amount of any increase (or decrease) in the Gross Asset Value of an asset pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(f) shall be treated as an item of revenue (or expense); 

the amount of any unrealized gain (or loss) attributable to an asset distributed in kind to a Member shall be treated as an
item of revenue (or expense); and 
 to the extent an adjustment to the Gross Asset Value of any asset of the Company
pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury 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 Gross Asset Value of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset. 

“Operating Member Buy-out” means the option
described in Article XIV. 
 “Owner” means a limited partnership or limited liability company to be formed to be the
owner of the Project. 
 “Partnership Agreement” means the limited partnership agreement or operating
agreement of the Owner to be executed by and among a Related Party of the Company, as General Partner, and one or more other parties in connection with the formation of the Owner. 

“Permanent Loan” is defined in Section 3.7.1. 

“Person” means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors
and assigns of such Person where the context so permits. 
 “Property” is defined in
Section 1.2.1. 
 “Project” means the Property and the Improvements, which Property and
Improvements shall be developed in a manner to be eligible for Tax Credits. 
 “Project Stabilization”
means the date that the Project achieves ninety-three percent (93%) occupancy with tenants paying rent for one hundred twenty (120) days. 

“Proportionate Share” means, unless and until there has been a transfer of an interest in the Company or
an admission of a new Member: (i) with respect to the Managing Member, seventy-five percent (75%) and (ii) with respect to the Operating Member, twenty-five percent (25%). 

“Proposed Value” is defined in Section 8.3.1. 

“Purchaser” is defined in Section 8.3.3. 

“Related Party” means, when used with reference to a specified Person: (i) any Person that,
directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the specified Person; (ii) any Person that is an officer of, partner in, or trustee of, or serves in a similar capacity
with respect to the specified Person or of which the specified Person is an officer, partner, or trustee, or with respect to which the specified Person serves in a similar capacity; (iii) any Person that, directly or indirectly, is the
beneficial owner of, or controls, 10% or more of any class of equity securities of, or otherwise has a substantial beneficial interest (10% or more) in, the specified Person, or of which the specified Person is directly or indirectly the
owner of 10% or more of any class of equity securities, or in which the specified Person has a substantial beneficial interest (10% or more); and (iv) any relative or spouse of the specified Person. 

  
 A-7 

 “Reserves” means cash set aside for capital improvements or replacements
or FF&E in amounts required by any lender holding a mortgage on the Project or as otherwise approved by the Members. 

“Responding Member” is defined in Section 8.3.1. 

“Sale Price” is defined in Section 8.3.2(a). 

“Seller” is defined in Section 8.3.3. 

“Target Balance” means, for each Member at any point in time, either (i) a positive amount equal to
the net amount, if any, the Member would be entitled to receive from the Company, or (ii) a negative amount equal to the net amount the Member would be required to pay or contribute to the Company, assuming, in each case, that (A) the
Company sold all of its assets for an aggregate purchase price equal to their aggregate Gross Asset Value (assuming for this purpose only that the Gross Asset Value of any asset that secures a liability that is treated as “non-recourse” for purposes of Treasury Regulation Section 1.1001-2 is no less than the amount of such liability that is allocated to such asset in accordance
with Treasury Regulation Section 1.704-2(d)(2)); (B) all liabilities of the Company were paid in accordance with their terms from the amounts specified in clause (A) of this sentence; (C) any Member
that was obligated to contribute any amount to the Company pursuant to this Agreement or otherwise (including the amount a Member would be obligated to pay to any third party pursuant to the terms of any liability or pursuant to any guaranty,
indemnity or similar ancillary agreement or arrangement entered into in connection with any liability of the Company) contributed such amount to the Company; (D) all liabilities of the Company that were not completely repaid pursuant to clause
(B) of this sentence were paid in accordance with their terms from the amounts specified in clause (C) of this sentence; and (E) the balance, if any, of any amounts held by the Company was distributed in accordance herein. 

“Tax Credits” means low-income housing tax credits under
Section 42 of the Code. 
 “Tax Return” means any return, filing, report, declaration,
questionnaire or other document required to be filed for any period with any taxing authority (whether domestic or foreign) in connection with any taxes (whether or not payment is required to be made with respect to such document). 

“Terminating Event” means any of the following: 

For a natural person: death; any disabling mental or physical condition which prevents such person from carrying on
business activities and which continues for uninterrupted period of more than six (6) months; entry of an order adjudicating such person incompetent by a court of competent jurisdiction; appointment of a conservator; or execution of a
certificate diagnosing such person’s incompetency by each of such person’s physician and two additional independent consulting physicians, each licensed to practice medicine in the state of such person’s residence. 

For an Entity other than a natural person: filing of a certificate of dissolution or its equivalent for any corporation;
dissolution of a partnership or limited liability company; termination of a trust; distribution of a trust estate’s entire Interest in the Company; or the dissolution, termination or Bankruptcy of any other entity that is a Member, whether
voluntary or involuntary; provided that a tax termination of an Entity shall not alone be a Terminating Event. 
 For any
Member: withdrawal, resignation or Transfer in contravention of this Agreement; the Bankruptcy of any Member. 

“Term Sheet” means that certain term sheet regarding the development of the Project dated June 24,
2016 between SCG Development Partners, LLC and COMSTOCK Redland Road II, L.C. 
 “Third Party” means
any Person who is not a Member or a Related Party to any Member. 
 “Transfer” is defined in
Section 8.1.1. 
 “Treasury Regulations” means the Income Tax Regulations
and Procedure and Administration Regulations promulgated under the Code, as amended from time to time. 

  
 A-8 

 “Upfront Development Fee” means the
development fee payable to the Company, Members or Related Parties, which is currently estimated to be $2,500,000, as provided herein. The Upfront Development Fee shall be shared in accordance with the Operating Member and Managing Member’s
Proportionate Share, payable from capital sources (i.e. all mortgage loan financing, tax credit equity, and/or subordinate financing) as follows: 
  

																	
	 Milestone
	  	Estimated Upfront
Development Fee	 	  	% of Upfront
Development Fee	 	 	Operating
Member	 	  	Managing
Member	 
	 Closing (est. May 2017)
	  	$	625,000	 	  	 	25	% 	 	$	156,250	 	  	$	468,750	 
	 50% Construction Completion (est. Feb 2018)
	  	$	625,000	 	  	 	25	% 	 	$	156,250	 	  	$	468,750	 
	 Substantial Completion (est. Nov 2018)
	  	$	875,000	 	  	 	35	% 	 	$	218,750	 	  	$	656,250	 
	 Project Stabilization (est. Aug 2019)
	  	$	375,000	 	  	 	15	% 	 	$	93,750	 	  	$	281,250	 

 “Unreturned Capital Contribution” means, with respect to
each Member, as of any applicable determination date, the aggregate amount of cash Capital Contributions made by the Member pursuant to ARTICLE III and the aggregate net fair market value (determined by the Members) of any non-cash Capital Contributions made by the Member to the Company pursuant to ARTICLE III, decreased by the amount of money distributed by the Company to such Member pursuant to
Section 5.1 as of such date, and the fair market value (determined by the Members) of any property distributed to such Member by the Company (net of liabilities secured by such distributed property that such Member is
considered to assume or take subject to under Code Section 752) pursuant to Section 5.1 as of such date. 

ARTICLE III 
 CAPITAL
CONTRIBUTIONS AND LOANS 
 Section 3.1 Initial and Mandatory Contributions of Members. Each Member hereby agrees to make a
Capital Contribution of up to the amount set forth opposite such Member’s name on its respective signature page under the caption “Initial Cash Capital Contribution.” The Initial
Cash Capital Contribution will be used by the Company for the development activities described in Section 6.3. The Members acknowledge that the Operating Member has fully funded its Initial Cash Capital Contribution which
has been expended in connection with predevelopment activities, including, without limitation, obtaining zoning approvals for the Project, permits, design, engineering and site planning for the Project and preparation of construction documents for
the Project (e.g., architectural & engineering reimbursement) of $1,000,000, and such expenses are third party expenditures and are supported with reasonable documentation and receipts. The Managing Member shall make installments of its
Initial Cash Capital Contribution at such times and in such amounts, up to the amount of its Initial Cash Capital Contribution, as may be necessary to pay predevelopment costs incurred by the Company (on its own behalf or on behalf of Owner) after
the date of this Agreement in accordance with the approved Development Budget. In no event shall the Managing Member be required to make an Initial Cash Capital Contribution in excess of $1,000,000. Each installment of the Managing Member’s
Initial Cash Contribution shall accrue simple interest at 6% per annum from the date made, which aggregate contribution and accrued interest will be repaid at Closing; provided that Operating Member’s Initial Cash Capital Contribution is fully
repaid at Closing as provided below. 
 At Closing, the Company and Owner will enter into a Reimbursement, Assignment and Assumption Agreement in the form
attached hereto as Exhibit H, providing for the Managing Member’s reimbursement of the aggregate predevelopment expenditures made in connection with the Project and paid from Capital Contributions to extent not paid at Closing. 

Section 3.2 Additional Contributions of Capital. Subject in all events to the requirement of
Section 6.4, after the Initial Cash Capital Contributions are made, if the Managing Member and Operating Member, in good faith, reasonably determine that the Project requires additional capital, the Managing Member shall
deliver notice thereof to the Members (the “Capital Call Notice”) in the form of Exhibit C, setting forth the amount and purpose of the additional funds required (the
“Additional Capital Contribution”). If the Additional Capital Contribution is approved by the Members as a Major Event, within five (5) Business Days of such Capital Call Notice, each Member
shall then contribute its Proportionate Share of the Capital Contribution requested in the Capital Call Notice. The Members shall not be required to make any Additional Capital Contributions to the Company other than as set forth in this Article
III. 

  
 A-9 

 Section 3.3 Form of Contributions. Except as specifically provided
for herein, all Capital Contributions (including any Additional Capital Contributions) shall be paid in immediately available funds. 

Section 3.4 No Right to Interest or Return of Capital. Except as specifically provided for herein, no Member shall
be entitled to any return of, or interest on, its Capital Contributions (including any Additional Capital Contributions) to the Company. 

Section 3.5 No Third Party Rights. Any obligations or rights of the Company or the Members to make or require any
Capital Contribution under this Article III shall not result in the grant of any rights or confer any benefits upon any Person who is not a Member. 

Section 3.6 Limitations. Except as set forth in Article III hereof, no Member shall be entitled or required
to make any Capital Contribution to the Company including, without limitation, to restore any negative balance in such Member’s Capital Account. Except as expressly provided herein, no Member shall have any liability for the repayment of the
Capital Contribution of any other Member, and each Member shall look only to the assets of the Company for return of its Capital Contributions. 

Section 3.7 Project Financing. 

3.7.1 In order to finance the construction of the Project, the Managing Member shall use good-faith efforts to assist the
Owner in obtaining a non-recourse third party fixed rate construction loan (the “Construction Loan”) secured by the Project in an amount described in the Development
Budget. The Managing Member shall use good faith efforts to assist the Owner in obtaining a non-recourse third party fixed rate permanent loan to refinance the Construction Loan (the
“Permanent Loan”) in an amount to be determined by the Owner and approved by the Members and on such terms and conditions as the Owner and Members may mutually agree. 

3.7.2 The Managing Member will be responsible for arranging any required bridge financing which may be required by the Owner.
Such financing will be on a non-recourse basis, and the costs of such financing will be borne by the Owner. 

3.7.3 Except as provided in Section 3.1, the Members agree that, to the extent necessary to keep the
approved Development Budget in balance, they will defer return of their Initial Cash Capital Contributions following Closing (the “Gap Contributions”). At Closing, each Member’s outstanding GAP Contribution
will be converted to a Member Loan in accordance with Section 3.8, and each Member’s Capital Account will be reduced by the amount of its respective unreturned Initial Cash Capital Contribution so converted. 

3.7.4 All guaranties required in order for each Owner to obtain its Construction Loan or as required under its Partnership
Agreement or as otherwise required for the Project and approved by the Members will be provided by the Members or their respective Related Parties and the liability under such guaranties shall be joint and several, however pursuant to a separate
contribution agreement to be executed by the members and the guarantor affiliate, shall be borne and shared by and between the Members or their respective designated affiliates on the basis of seventy percent (75%) to the Managing Member and twenty
five percent (25%) to the Operating Member. Such guaranties may include, without limitation, a development deficit guaranty, an operating deficit guaranty, a completion guaranty, an environmental indemnification agreement, a recourse carve-out guaranty and other such guaranties as are commonly required in accordance with Good Industry Practice (the “Guaranty Obligations”). No Member shall be obligated to
fund a Guaranty Obligation if such Guaranty Obligation was triggered as a result of the gross negligence or willful misconduct of the other Member. The failure to fund Guaranty Obligations (after any applicable notice and cure period) will
constitute an Event of Default under Section 11.1. 
 Section 3.8 Member Loans. In
addition to the loan(s) made under Section 3.7.3, a Member may make a loan to the Company upon commercially reasonable terms, only upon approval of such terms as provided in Section 6.4 herein (a
“Member Loan”). A Member Loan shall not be considered a Capital Contribution. Any Member Loan shall accrue interest at the rate of eight percent (8%) per annum. Member Loans (including Gap Contributions) will be
repaid pro rata, based on the balances of the Member Loans, ahead of any Distribution (as described in Sections Section 5.1 and Section 5.1(a) below). 

  
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 Section 3.9 Third Party Loans. In addition to the Loan(s) described
in Section 3.7 and Section 3.8, in the event that the Company requires additional funds to carry out its purposes, to conduct its business, or to meet its obligations, or to make any expenditure
authorized by this Agreement, if an additional Loan is approved as provided in Section 6.4, the Managing Member will be responsible for arranging such additional Loan. Company may borrow funds from such Third Party
lender(s), and on such terms and conditions as may be acceptable to the Members. 
 Section 3.10 Third Party
Rights. The right of the Company or any Member to require any Capital Contributions of any nature under the terms of this Agreement will not be construed to confer any right or benefit upon any person that is not a Member, including, without
limitation, any creditor of the Company. No creditor of the Company or other person not a Member in this Company will be entitled to require any Member to solicit or demand any Capital Contributions from any other Member. 

Section 3.11 Return of Capital Contributions. Each Member will look solely to the assets of the Company for the
return of its Capital Contributions, and if the Company assets remaining after the payment or discharge of the debts and liabilities of the Company are insufficient to return the investment of each Member, no Member will have recourse against any
other Member except under Section 11.2. No Member will have any right to demand or receive property other than immediately available funds upon dissolution, liquidation, and termination of the Company or to demand the
return of its Capital Contributions prior to dissolution, liquidation, and termination of the Company except as expressly provided herein, including under Section 3.1. Any property distributed in kind in liquidation will be
valued and treated as though the property was sold and cash proceeds distributed. 
 Section 3.12 Further
Assurances. As of the date of this Agreement, the Project is in the construction documentation and permitting stage. As of the date hereof, the General Partner shall be responsible for raising tax credit equity capital for the Project and apply
for 4% low income housing tax credits from the appropriate governmental authorities. The Owner will be required to negotiate various financing documents with the Construction Lender in connection with a Construction Loan for the Project. The Members
agree to assist the General Partner with negotiating the terms and provisions of the Partnership Agreement and to assist the Owner in negotiating the Construction Loan Agreement so that the terms thereof shall conform as nearly as possible to the
intentions of the Members reflected in the Term Sheet. 
 Section 3.13 Amendment. To the extent any amendment to
this Agreement is necessary in connection with the Construction Loan Agreement or the Partnership Agreement, the Members agree to make such reasonable modifications to this Agreement as are necessary provided such changes are consistent with the
intentions of the Members as reflected in the Term Sheet. 
 ARTICLE IV 

CAPITAL ACCOUNTS, ALLOCATIONS OF INCOME AND LOSS 

Section 4.1 Capital Accounts. A separate capital account (each a “Capital
Account”) shall be maintained for each Member in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv). To the extent consistent with such Treasury Regulations, the
adjustments to such accounts shall include the following: 
 4.1.1 There shall be credited to each Member’s Capital
Account the amount of any cash contributed by such Member to the capital of the Company, the fair market value (determined by the Members) of any property contributed by such Member to the capital of Company (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to under Section 752 of the Code) and such Member’s share of the Net Profits of the Company and of any items in the nature of income or gain separately allocated
to the Members; and there shall be charged against each Member’s Capital Account the amount of all cash distributions to such Member, the fair market value (determined by the Members) of any property distributed to such Member by the Company
(net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code) and such Member’s share of the Net Losses of the Company and of any items in the nature of
losses or deductions separately allocated to the Members. 

  
 A-11 

 4.1.2 In the event any interest in the Company is transferred in accordance with
the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest. 

Section 4.2 Allocation of Net Profits. Except as provided in Section 4.6 and
Section 4.7 below (which shall be applied first), Net Profits of the Company for any relevant period shall be allocated to the Members to cause, to the extent possible, their respective Modified Capital Account balances to
equal their respective Target Balances. 
 Section 4.3 Allocations of Net Losses. Except as provided in
Section 3.3(a), Section 4.6 and Section 4.7 below (which shall be applied first), Net Losses of the Company for any relevant period shall be allocated the Members to cause, to the extent
possible, their respective Modified Capital Account balances to equal their respective Target Balances. 
 Section 4.4
If Insufficient Net Profits or Net Losses. If the amount of Net Profits allocable to the Members pursuant to Section 4.2 or the amount of Net Losses allocable to them pursuant to Section 4.3
is insufficient to allow the Modified Capital Account balance of each Member to equal such Member’s Target Balance, such Net Profits or Net Losses shall be allocated among the Members in such a manner as to decrease the differences between the
Members’ respective Modified Capital Account balances and their respective Target Balances in proportion to such differences. 

Section 4.5 Loss Limitation. Net Losses allocated pursuant to Section 4.3 shall not
exceed the maximum amount of Net Losses that can be allocated without causing or increasing a deficit balance in a Member’s Adjusted Capital Account. A Member’s “Adjusted Capital Account”
balance shall mean such Member’s Capital Account balance increased by such Member’s obligation to restore a deficit balance in its Capital Account, including any deemed obligation pursuant to the penultimate sentences of Treasury
Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5), and decreased by the amounts described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6). 
 Section 4.6 Minimum Gain Chargebacks
and Nonrecourse Deductions. 
 4.6.1 Notwithstanding any other provisions of this Agreement, in the event there is a net
decrease in Company Minimum Gain during a Fiscal Year, the Members shall be allocated items of income and gain (computed with the adjustments set forth in the definition of “Net Profits” and
“Net Losses”) in accordance with Treasury Regulations Section 1.704-2(f). For purposes of this Agreement, the term “Company Minimum
Gain” shall mean “partnership minimum gain” as set forth in Treasury Regulations Section 1.704-2(b)(2), and any Member’s share of
Company Minimum Gain shall be determined in accordance with Treasury Regulations Section 1.704-2(g)(1). This Section 4.6.1 is intended to comply with the minimum gain charge back
requirement of Treasury Regulations Section 1.704-2(f) and shall be interpreted and applied in a manner consistent therewith. 

4.6.2 Notwithstanding any other provision of this Agreement other than subsection (c) of this
Section 4.6, “non-recourse deductions” (within the meaning of Treasury Regulations Section 1.704-2(b)(1))
shall be allocated to the Members, pari passu, in proportion to their Proportionate Shares. 
 4.6.3
Notwithstanding any other provisions of this Agreement, to the extent required by Treasury Regulations Section 1.704-(i), any items of income, gain, loss or deduction of the Company (computed with the
adjustments as set forth in the definition of “Net Profits” and “Net Losses”) that are attributable to a nonrecourse debt of the Company that constitutes
“partner non-recourse debt” as defined in Treasury Regulations Section 1.704-2(b)(4) (including chargebacks of
partner non-recourse debt minimum gain) shall be allocated in accordance with the provisions of Treasury Regulations Section 1.704-2(i). This
Section 4.6.3 is intended to satisfy the requirements of Treasury Regulations Section 1.704-2(i) (including the partner non-recourse debt
minimum gain chargeback requirements) and shall be interpreted and applied in a manner consistent therewith. 

Section 4.7 Qualified Income Offset. Any Member who unexpectedly receives an adjustment, allocation or distribution
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes a deficit balance in its Adjusted Capital Account, shall be allocated items of income and gain (computed with the
adjustments set forth in the definition of “Net Profits” and “Net Losses”) in an amount and a manner sufficient to eliminate, to the extent required by the Treasury
Regulations, such deficit balance as quickly as possible. This Section 4.7 is intended to comply with the alternate test for economic effect set forth in Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in a manner consistent therewith. 

  
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 Section 4.8 Tax Allocation - Code Section 704(c). Except as otherwise
provided herein or as required by Code Section 704, for tax purposes, all items of income, gain, loss, deduction or credit shall be allocated to the Members in the same manner as are Net Profits and Net Losses; provided, however, that if the
Gross Asset Value of any property of the Company differs from its adjusted basis for tax purposes, then items of income, gain, loss, deduction or credit related to such property for tax purposes shall be allocated among the Members so as to take
account of the variation between the adjusted basis of the property for tax purposes and its Gross Asset Value in the manner provided for under Code Section 704(c). 

Section 4.9 Code Section 704(b). The allocation provisions contained in this Article IV are intended to comply with
Code Section 704(b) and the Treasury Regulations promulgated thereunder, and shall be interpreted and applied in a manner consistent therewith, and the Members agree that any provision of this ARTICLE IV that is reasonably subject to
different interpretations shall be interpreted in a manner that comports with the foregoing intention. The Members further agree to make such amendments or changes to this Agreement as are reasonably requested by the Managing Member in good faith
and consistent with the understanding of the parties, to effectuate such intent. 
 Section 4.10 No Deficit
Restoration to Members. Notwithstanding anything to the contrary in this Agreement, no Member shall be required to contribute capital to the Company to restore a deficit balance in its Capital Account upon liquidation or otherwise. 

Section 4.11 Timing of Allocations. Allocations of Net Profits, Net Losses and similar items provided for in this
ARTICLE IV shall generally be made as of the end of the Fiscal Year of the Company; provided, however, that if the Gross Asset Values of the assets of the Company are adjusted in accordance with clause (ii) of the
definition of “Gross Asset Value,” the date of such adjustment shall be considered to be the end of a Fiscal Year for purposes of computing and allocating such Net Profits, Net Losses and other
items of income, gain, loss and deduction. 
 ARTICLE V 

DISTRIBUTIONS 

Section 5.1 Distributions. The Managing Member shall distribute Cash Flow available (or property available to be
distributed in-kind by the Company) to the Members (“Distributions”) in accordance with this Section 5.1. “Cash Flow” means, with respect to
the Company for a period of time, all funds of the Company which, in the reasonable discretion of the Members, are available for distribution to Members after provision has been made for payment of all operating expenses and of all outstanding and
unpaid current obligations of the Company as of such time, including any Member Loan and for such reserves as the Members deem appropriate or necessary based on reasonable and customary industry practices. No Distribution shall be declared and paid
if payment of such Distribution would cause the Company to violate any limitation on distributions provided in the Act, or any other mortgage, deed of trust, or regulatory agreement encumbering the Property. 

(a) First, to Operating Member and Managing Member for reimbursement of their Initial Cash Capital Contributions; 

(b) Second, to the Operating Member and Managing Member in the amount of any Upfront Development Fee; 

(c) Third, to any Member to repay any Member Loan; 

(d) Finally, to the Members in their Proportionate Share. 

Section 5.2 Timing of Distributions. Distributions of Cash Flow from operations of the Company shall be made
monthly no later than fifteen (15) days after the end of each month of operations. Distributions of the net proceeds from a capital transaction related to the Project or the Owner shall be distributed within fifteen (15) days after the
consummation of the capital transaction giving rise to such proceeds. Distributions also may be made, in the discretion of the Managing Member, at any other time or times during any Fiscal Year and such Distributions shall be subject to year-end adjustment. 

  
 A-13 

 ARTICLE VI 

POWERS AND DUTIES 

Section 6.1 Appointment and General Responsibilities of the Managing Member. The Company will be member-managed.
The Members hereby unanimously appoint SCG to serve as the Managing Member until its resignation or replacement as set forth herein. The Managing Member may resign in accordance with Section 8.2.2. Upon the resignation of
the Managing Member as set forth above, Operating Member may elect to appoint a new Managing Member. 
 Section 6.2
Appointment and General Responsibilities of the Operating Member. The Members hereby unanimously appoint COMSTOCK to serve as the Operating Member until its resignation or replacement as set forth herein. The Operating Member may resign in
accordance with Section 8.2.2. Upon the resignation of the Operating Member as set forth above, Managing Member may elect to appoint a new Operating Member. 

Section 6.3 Development Budget and Business Plans. 

6.3.1 Development Budget. Attached hereto as Exhibit E is a development and construction budget (the
“Development Budget”) for the Project setting forth the estimated cost of developing and constructing the Project. The Development Budget is hereby approved by the Members. 

6.3.2 Annual Business Plans. An annual business plan (the “Annual Business
Plan”) for the Company and Owner shall be mutually developed and approved by the Members. Each Annual Business Plan shall include, as appropriate, the following: 

(a) a brief narrative description of any material activity planned to be undertaken; 

(b) capital budgets for the Project; 

(c) a projected annual income statement (accrual basis) on a
month-by-month basis for the Project; 
 (d)
a projection as to the timing and amount of Distributions; 
 (e) a leasing plan for the Project; 

(f) a schedule of total projected operating cash flow for the Project and projected uses of monies in any Reserves on a month-by-month basis, including a schedule of projected negative cash flow for the Project, if any; 

(g) a description of any planned Loans for the Company or the Owner; and 

(h) a description of any planned construction, capital, FF&E or other personal property expenditures for the Owner,
including projected dates for commencement and completion of the foregoing. 
 6.3.3 Implementation of Annual Business
Plan. The Managing Member shall, subject to the availability of Company revenues and other cash flow and the provisions of Section 6.4 below, use reasonably commercial efforts to implement the then applicable Annual
Business Plan and shall have the authority to manage the Company’s business in accordance therewith. 
 6.3.4
Financing and Tax Credit Applications. The Members shall work jointly on budgeting, financial modeling and applications for financing including the application for low income housing tax credits. 

6.3.5 Authority of the Managing Member. Subject to Section 6.4, the powers of the Managing
Member shall include, but are not limited to, the following: 
 (a) To oversee the Operating Member’s monitoring and
direction of such persons, firms, or companies selected for the construction of the Project. 

  
 A-14 

 (b) Conduct all negotiations with funding sources in connection with the
construction of the Project, and secure financing of the Project. 
 (c) Supervise all communications to, and relations
with, all state and local governmental authorities with respect to the financing, rehabilitation and construction of the Project. 

(d) Supervise the activities necessary to actually commence construction of the Project. 

(e) Advise the Company with respect to the availability, terms and conditions of construction financing. 

(f) Approve the plans and specifications and the Operating Member’s recommendations concerning alternative solutions in
the event that details of the Project’s design adversely affect construction feasibility, schedules or costs. 
 (g)
Supervise the progress of construction of the Project. 
 (h) Oversee construction of the Project to ensure it will be
completed in substantially accordance with the plans and specifications, in such a manner as to enable the Owner to materially comply with any construction completion timeframes or requirements imposed by any of the funding sources. 

(i) Supervise the property manager. 

(j) Assist the Owner in obtaining Low Income Housing Tax Credits for the Project. 

(k) Engage in such other activities as the Managing Member may deem reasonably necessary or desirable for the rehabilitation
and construction of the Project, so long as such activities are not inconsistent with any specific material provision of this Agreement. 

6.3.6 Subject to the terms and conditions of this Agreement, the Operating Member shall have the power and duty to: 

(a) Monitor and direct such persons, firms, or companies selected for the construction of the Project, including oversight of
the activities under the Development Services Agreement, the form of which is attached as Exhibit I hereto and incorporated herein. 

(b) Monitor and direct the performance of architects, engineers, legal counsel, accountants, financial advisers and other
professionals. 
 (c) Advise the Company with respect to governmental matters pertaining to the construction of the Project,
including all necessary permits and approvals therefor. 
 (d) Review the plans and specifications and recommend alternative
solutions in the event that details of the Project’s design adversely affect construction feasibility, schedules or costs. 

(e) Monitor actual costs of construction, identify variances between actual and budgeted costs, and advise the Company with
respect to such variances. 
 (f) Monitor the progress of construction of the Project, and submit periodic progress reports
to the Company as and when reasonably requested by the Company, but no more frequently than once per calendar month. 

  
 A-15 

 (g) Establish and implement appropriate administrative and financial controls
for the design, rehabilitation and construction of the Project, including, but not limited to: 
 (i) coordination and
administration of the Project’s architect, the general contractor and other contractors, professionals and consultants employed in connection with the design or construction of the Project; 

(ii) administration of any construction contracts on behalf of the Owner; 

(iii) participation in conferences and the rendering of such advice and assistance as will aid in developing economical,
efficient and desirable design and construction procedures; 
 (iv) rendition of advice and recommendations concerning the
selection of subcontractors and suppliers; 
 (v) review requests for payment under any architectural agreement, general
contractor’s agreement or any loan agreements with any lending institution providing funds for the benefit of the Owner for the design or construction of any improvements; 

(vi) submission of any suggestions or requests for changes which could in any reasonable manner improve the design, efficiency
or cost of the Project. 
 (h) apply for and maintain in full force and effect any and all building permits required for the
lawful construction of the Project; 
 (i) furnish such consultation and advice relating to the Project as may be reasonably
requested from time to time by the Owner. 
 (j) Inspect the progress of construction of the Project, including verification
of the materials and labor being furnished so as to be fully competent to approve or disapprove requests for payment made by the Project’s architect and the general contractor, or by any other parties with respect to the design or construction
of the Project. 
 (k) Procure such permits and approvals, and cause construction of the Project to progress and to be
completed substantially in accordance with the plans and specifications, in such a manner as to enable the Owner to materially comply with any construction completion timeframes or requirements imposed by any of the funding sources. 

(l) assist the Company in communicating with and interfacing with local municipal officials, neighborhood groups and local
organizations with respect to the development, rehabilitation and construction of the Project, and respond to issues and matters raised by such persons or parties which may arise during the course of rehabilitating and constructing the Project. 

(m) To operate the Company in accordance with the Annual Business Plans. 

(n) To invest and reinvest cash of the Company in one or more interest bearing demand deposit accounts or other interest
bearing accounts, which accounts are solely the property of the Company, with any state or national bank, provided that the deposits maintained in such accounts are fully insured by the Federal Deposit Insurance Corporation, or invested in United
States government securities, or other investments and securities issued or fully guaranteed by the United States or its agencies, provided, however, that the Company funds shall not be deposited in commingled accounts; 

(o) To maintain a program of insurance coverage for the Company which shall be with insurance companies and coverages and
amounts and otherwise in form and substance as are standard in the industry (the “Insurance Program”). 

  
 A-16 

 (p) To pay out of the funds of the Company the taxes, premiums for liability
insurance, casualty insurance (at replacement cost) and other expenses of the Company. 
 (q) At the direction of the
Managing Member, to make distributions, in accordance with ARTICLE V, of cash assets and liquidation proceeds and proceeds from the sale, exchange or disposition of any and all property acquired. 

(r) To make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the powers herein granted. 
 Section 6.4 Approval
Rights of Members. 
 6.4.1 Prior to the Managing Member taking any action listed in Exhibit F (each, a
“Major Action”), the Managing Member shall provide Notice to the Operating Member of such proposed Major Action, an analysis of the proposed Major Action and the reason for such Major Action. The Operating
Member shall have ten (10) Business Days from its receipt of the Notice to review the information provided and either provide Notice of its Consent or non-Consent to such Major Action. If the Operating
Member does not Consent to such Major Action, the Operating Member shall provide to the Managing Member a summary of the reason for its rejection and such additional information supporting such reason as the Managing Member may reasonably request.
The Members shall then engage in good faith negotiations to come a joint consensus as to such action. 
 6.4.2 If, after the
review period described above, the Operating Member has not delivered to the Managing Member the Notice of its Consent or non-Consent described above, the Managing Member may cause the Company to take the
Major Action. 
 6.4.3 Notwithstanding Section 6.4.1, the Operating Member may request that the
Managing Member cause the Company to take a Major Action. The Operating Member shall provide Notice to the Managing Member of such proposed Major Action, an analysis of the proposed Major Action and the reason for such Major Action. The Managing
Member shall have ten (10) Business Days from its receipt of the Notice to review the information provided and either provide Notice of its Consent or non-Consent to such Major Action. If the Managing
Member does not Consent to such Major Action, the Managing Member shall provide to the Operating Member a summary of the reason for its rejection of such action and such additional information supporting such reason as the Operating Member may
reasonably request. The Members shall then engage in good faith negotiations to come a joint consensus as to such action. 

6.4.4 If, pursuant to Section 6.4.1, the Operating Member does not give its Consent with respect to
a Major Action, or pursuant to Section 6.4.3, the Managing Member does not give its Consent with respect to a Major Action (each, a “Notice of
Non-Consent to a Major Action”), and the Members cannot reach agreement on a Major Action after engaging in good faith negotiations
for ten (10) or more Business Days (which ten (10) Business Day period shall begin upon receipt of a Member of a Notice of Non-Consent to a Major Action), then the parties must engage in arbitration
as more fully set forth in Section 12.1. Only after arbitration may either Member send a Buy/Sell Offer Notice pursuant to Section 8.3. 

Section 6.5 Other Business Activities of the Members. 

6.5.1 General Provisions. Notwithstanding anything else to the contrary, neither the Members nor any Related Parties of
the Members shall be obligated to present any investment opportunity to the Company or other Members, even if the opportunity is of a character consistent with the Company’s other activities and interests. The Members and the Members’
Related Parties may engage in or possess any interest, directly or indirectly, in any other business venture of any nature or description independently or with others, including, but not limited to, the ownership, financing, leasing, operation,
management, syndication, brokerage, or development of real property competitive with the Project. Membership in the Company and the assumption by either Member of any duties hereunder shall be without prejudice to such Member’s rights (or the
rights of its affiliates) to have such other interests and activities and to receive and enjoy profits or compensation therefrom, and neither the Company nor the other Member(s) shall have any right by virtue of this Agreement in and to such
ventures or the income or profits derived therefrom. 

  
 A-17 

 Section 6.6 Limitation of Liability. 

6.6.1 Exculpatory Provisions. None of the Managing Member, the Operating Member, any Related Party of any of the
foregoing or any of their respective agents, officers, partners, members, employees, representatives, directors or shareholders shall be liable, responsible or accountable in damages or otherwise to the Company or any Member for (i) any act
performed in good faith within the scope of the authority conferred by this Agreement, (ii) any good faith failure or refusal to perform any acts except those required by the terms of this Agreement; provided (i) and (ii) are determined to
be in the best interests of the Company and provided, however, that each Member shall nevertheless be liable in all events for its own fraud, gross negligence or willful misconduct and its breach of this Agreement. 

6.6.2 Indemnification. To the fullest extent permitted by law, the Company shall indemnify, defend and save harmless
each Member and each of their respective Related Parties, agents, officers, partners, members, employees, representatives, directors and shareholders from any loss, cost, damage, fee (including without limitation, legal and expert witness fees and
costs) or expense incurred by reason of (i) such party’s status as a Member or the Related Party thereof or such party’s status as agent, officer, partner, member, employee, representative, director or shareholder of such Member,
(ii) any act performed in good faith within the scope of the authority conferred by this Agreement, (iii) any failure or refusal to perform any acts except those required by the terms of this Agreement; provided (i), (ii) and
(iii) are determined to be in the best interests of the Company and provided that no indemnification shall be given with respect to acts or omissions that constitute fraud, gross negligence or willful misconduct. 

Section 6.7 Duty; Devotion of Time. The Managing Member shall exercise its powers and discharge its duties in good
faith with a view to the interests of the Company and its Members with that degree of diligence, care and skill that ordinarily prudent persons would exercise under similar circumstances in like positions. The Managing Member shall devote so much of
its time to the business of the Company as the requirements of such business may dictate from time to time. 
 ARTICLE VII 

LIABILITIES OF MEMBERS 

Section 7.1 General. No Member shall be liable for any debts, liabilities, contracts or other obligations of the
Company nor shall any Member be required to lend funds to the Company. Except as otherwise specifically required by ARTICLE III or by applicable law, no Member shall be required to make any Capital Contributions to the Company. 

ARTICLE VIII 
 TRANSFER
OF COMPANY INTEREST 
 Section 8.1 Transfer by the Members. 

8.1.1 General Restrictions. No Member shall sell, pledge, hypothecate, assign, transfer, mortgage, charge or otherwise
encumber, or contract to do or permit any of the foregoing, directly or indirectly, and whether voluntarily or by operation by law (collectively referred to as a “Transfer”) any part or all of its Interest in the Company
except as provided in this ARTICLE VIII. Any attempt to affect any of the foregoing prohibited actions shall be void ab initio and, in addition to other rights and remedies at law and in equity, the other Member or
Members shall be entitled to injunctive relief enjoining the prohibited action. The Members expressly acknowledge that damages at law would be an inadequate remedy for a breach or threatened breach of the provisions concerning transfer set forth in
this Agreement. The giving of consent or approval by the Member required under this ARTICLE VIII in any one or more instances shall not limit or waive the need for such consent or approval in any other or subsequent instances.
Notwithstanding anything in this ARTICLE VIII or this Agreement to the contrary, no Member shall have the right to effect any Transfer of its Interest in the Company if the Transfer would constitute a breach or default under any
material agreement by which the Company is bound (including, without limitation, any document executed in connection with a Loan) or would, in the opinion of counsel to the Company, constitute a violation of any state or federal securities laws or
other applicable law. No Transfer by any Member of an Interest in the Company may be made to any Person if: (i) such Transfer would cause the Company to no longer be excluded from the definition of “Investment
Company” under the Investment Company Act of 1940; or (ii) such Transfer would cause the Company to be considered for purposes of Section 1.7704-1(h)(1)(ii) of the Regulations to have
more than 100 members at any time during any taxable year. 

  
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 8.1.2 Transfers. The restrictions set forth in this ARTICLE
VIII (including, without limitation, Section 8.1.3) shall not be construed to limit or restrict in any way (i) transfers otherwise permitted under this ARTICLE VIII; transfers of interests by or in
a Member, or the direct or indirect constituent partners or members of a Member, without the consent of any other Member, including, without limitation, the right of a Member to transfer its Interest directly or indirectly to the holders of direct
or indirect ownership interests in the Member or Related Party thereof. Notwithstanding anything to the contrary contained herein, no Transfer shall be made which causes a default or event of default under any Loan to which the Company is a party.
Any expenses of a permitted Transfer and any transfer or similar taxes which are triggered by a permitted Transfer shall be borne by the Member whose Interest in the Company is the subject of the Transfer, except in the case of a Buy/Sell pursuant
to Section 8.3 hereof, in which case such expenses shall be borne by the Member purchasing the Interest of the other Member and such transfer and similar taxes shall be divided equally among the Members. 

8.1.3 Permitted Transfers. Without any requirement for obtaining approval, but subject to the restrictions contained in
the final two sentences of Section 8.1.1 and the provisions of Section 8.2, each Member shall have the right to Transfer directly or indirectly all or a portion of its Interest in the Company to an
Entity that is owned or controlled by, is under common ownership and control with, or owns and controls the original Member. 

8.1.4 Conditions to Substitutions. An assignee or transferee of a Member shall not have any other rights of a Member
other than its right to Distributions, unless and until the assignee is admitted as a substituted Member. Thereafter, subject to the last sentence of this Section, such assignee shall have all rights of a Member hereunder. An assignee or transferee
shall become a substituted Member when and if the assignee or transferee (a) pays all Company expenses incurred in connection with its substitution; (b) submits a duly executed instrument of assignment, in a form reasonably satisfactory to
the non-assigning Member, specifying the Interest assigned to it and setting forth the assigning Member’s intention that the assignee succeed to such portion of the assigning Member’s Interest;
(c) executes a copy of this Agreement or an amendment to this Agreement; and (d) is approved by any Member whose consent is required for such transfer pursuant to the terms hereof. The admission of a substituted Member shall be effective
as of the close of the day on which all of the conditions specified in this Section 8.1.4 have been satisfied. 

Section 8.2 Members. 

8.2.1 Terminating Event. Upon the occurrence of a Terminating Event with respect to a Member, the Legal Successor of
the Member shall continue to possess the Member’s interest in Company Distributions, but shall possess no rights of approval or decision otherwise attendant to such Member’s Interest. 

8.2.2 Withdrawal by Members. Subject to the Act, no Member may resign, withdraw or withdraw capital from the Company,
except pursuant to a right expressly set forth in this Agreement. In furtherance of the foregoing, to the extent permitted by applicable law, each Member hereby waives any and all rights such Member may have to resign, withdraw and/or retire from
the Company pursuant to Section 18-603 of the Act and hereby waives any and all rights such Member may have to receive the fair value of such Member’s Interest in the Company upon such resignation,
withdrawal and/or retirement pursuant to Section 18-604 of the Act. No Member shall be entitled to exercise its rights under this Section 8.2.2 prior to undergoing arbitration
pursuant to Section 12.1. 
 Section 8.3 Buy/Sell. 

8.3.1 Buy/Sell Offering Notice. The operation of this Section 8.3 may be triggered upon
Notice (the “Buy/Sell Offering Notice”): 
 (a) by either Member if,
after arbitration pursuant to Section 12.1, either Member desires to trigger this provision; or 

(b) by the Enforcing Member (as defined below) given at any time after the occurrence of an Event of Default by the Defaulting
Member (as defined below) provided, however, that there is no Event of Default with respect to the Enforcing Member initiating such notice. 

The Member duly exercising such right shall be the “Initiating Member” and the other Member shall be the
“Responding Member” for the purposes of this Section 8.3. The Buy/Sell Offering Notice shall set forth the assumed value of the Interests on the proposed purchase date based on the
remaining Economic Benefits to be received by the Members under this Agreement (the “Proposed Value”). No Buy/Sell Offering Notice or Responsive Notice under Section 8.3.2 may be
rescinded once given, without the Consent of the other Member. 

  
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 8.3.2 Responsive Notice. Within forty five (45) days following the
date of the Buy/Sell Offering Notice, the Responding Member shall deliver to the Initiating Member a responsive notice, without qualification or condition, electing either: 

(a) To sell to the Initiating Member the entirety of the Responding Member’s Interest in the Company at a price (the
“Sale Price”) equal to the amount of cash that would be distributed to the Responding Member under ARTICLE V (including the repayment of Member Loans or any other loans made by such Member to the
Company) if the Company was sold in the amount of the Proposed Value; or 
 (b) To purchase from the Initiating Member the
entirety of the Initiating Member’s Interest in the Company at a price (the “Buy Price”) equal to the amount of cash that would be distributed to the Initiating Member under ARTICLE V
(including the repayment of Member Loans or any other loans made by such Member to the Company) if the Company was sold in the amount of the Proposed Value. 

In calculating the amount that would be distributed to the applicable Member under either (a) or (b) above, the Initiating Member shall take into account
in determining the Proposed Value that a sum will be required to be set aside for reasonable liquidation costs and reasonable reserves, and all Company indebtedness and other liabilities shall be deemed to be retired from the assets of the Company
as of the Closing Date. The Sale Price or Buy Price shall not take into account any loan assumption costs, prepayment premiums, breakage costs or similar items unless the same will be incurred as a result of the consummation of the purchase and sale
of any Interest of either Member pursuant to a Buy/Sell Offering Notice. The failure of the Responding Member to give such a responsive notice (without qualification or condition) within the required time period shall be deemed notice of an
election, binding on all Members, to sell its Interest to the Initiating Member. The date as of which the Responding Member shall have given notice of its election (or be deemed to have made an election) shall be the “Buy/Sell
Election Date.” 
 8.3.3 Buy/Sell Deposit. If a Member is bound to purchase pursuant
to the election referenced in Section 8.3.2 (the “Purchaser,” and the other Member shall be the “Seller”), such Member shall be required to make an earnest money deposit, in
immediately available funds, within five (5) Business Days after the Buy/Sell Election Date in an amount equal to two percent (2%) of the Buy Price or Sale Price, as applicable, for the Seller’s interest in the Company as determined in
accordance with the provisions of Section 8.3.2 hereof (the “Buy/Sell Deposit”). The Buy/Sell Deposit to serve as a good faith deposit for the purposes of the closing of the purchase in
accordance with Section 8.3.4 below shall be delivered to a national title insurance company reasonably acceptable to the Members as escrow agent. The Buy/Sell Deposit shall be non-refundable to
the Purchaser (except in the event that the closing of the purchase shall fail to occur due to a default of the Seller in performing its closing obligations pursuant to Section 8.3.4) and upon closing, the Buy/Sell Deposit
will be credited against the purchase price and delivered to Seller. 
 8.3.4 Closing Process. Purchaser shall fix a
closing date (the “Closing Date”) which shall be not later than sixty (60) days following the date of receipt by the Initiating Member of the responsive notice within the period set forth in
Section 8.3.2, by notifying the Seller in writing of the Closing Date not less than fifteen (15) days prior thereto. The closing shall take place on the Closing Date at the principal office of the Purchaser. The
purchase price for the Seller’s Interest shall be paid in immediately available funds and the Seller shall convey good and marketable title to its Interest to Purchaser or its designee free and clear of all liens and encumbrances. Each Member
shall cooperate and take all actions and execute all documents reasonably necessary or appropriate to reflect the purchase of the Seller’s Interest by the Purchaser. 

ARTICLE IX 
 OBLIGATIONS
FOR REPORTING 
 RECORDS AND ACCOUNTING MATTERS 

Section 9.1 Fiscal Year. Except as provided by the Code, the fiscal year and the taxable year of the Company shall
be the calendar year. 
 Section 9.2 Bank Accounts. The Managing Member shall deposit all cash balances derived
by the Company from any source in accounts in the name of the Company. In no event shall any Company funds be commingled with any accounts of any other party. Any investment of Company funds shall be made in the name of the Company and shall be
consistent with investment guidelines stated in an Annual Business Plan. 

  
 A-20 

 Section 9.3 Maintenance of Records. 

9.3.1 The Managing Member shall maintain a uniform system of accounts with respect to the Company. All such records shall be
maintained at the principal office of the Company. 
 9.3.2 The Managing Member shall maintain files related to the Project
in a good and orderly fashion, all such files being the sole property of the Company. 
 Section 9.4 Certain
Records. The Managing Member shall keep at the principal office of the Company a current list of the full name and last known business or residence address of each Member, a copy of the LLC Certificate and all certificates of amendment to any of
them, together with executed copies of any powers of attorney pursuant to which any of the certificates or any amendments have been executed, copies of the Company’s (to the extent applicable) federal, state and local income tax or information
returns and reports, if any, for the duration of the Company, copies of this Agreement and any amendments thereto, copies of any and all financial statements of the Company for the duration of the Company, and the books and records of the Company as
they relate to the internal affairs of the Company for the duration of the Company. Each Member has the right, upon reasonable request, to inspect and copy during normal business hours any of the Company’s books, records agreements and other
documents. 
 Section 9.5 Required Reports. The Managing Member shall promptly deliver to each Member, at the
Company’s expense, a copy of this Agreement as in effect from time to time, and any amendments thereto and, upon request, shall so deliver any additional documents required by the Act. The Managing Member shall furnish or arrange to be
furnished to each Member the following reports prepared for the Company to the extent applicable: 
 9.5.1 Tax
Returns. The Managing Member shall prepare or cause to be prepared and file all Tax Returns required of the Company not later than ninety (90) days after the end of each taxable year. The Managing Member shall determine any decisions
regarding or affecting the reporting or characterization for tax purposes of items of income, gain, loss or deduction of the Company, including, but not limited to, whether to make any available election pursuant to the Code and the regulations.

 9.5.2 Other Reports and Notices. 

(a) The Managing Member shall prepare (or cause to be prepared) and deliver to each Member the budgets, reports and other
items described in Exhibit G attached thereto and incorporated herein by this reference on or before the respective dates set forth therein. 

(b) The Managing Member shall: 

(i) Promptly notify the Operating Member of any legal action involving the Company where the amount in controversy exceeds One
Hundred Thousand Dollars ($100,000); and 
 (ii) Notify the Members within five (5) days after receiving notice of
(A) any default under any Loan or breach of or default under any other material agreement to which the Company or the Owner is a party that continues beyond any applicable notice and cure period(s), (B) nonpayment of property taxes with respect
to the Project, or (C) any matter that could result in a substantial and material loss (i.e., greater than One Hundred Thousand Dollars ($100,000)) to the Company. 

Section 9.6 Other Disclosures. The Managing Member shall provide any and all material information relating to the
Owner and the Project and other periodic reports as the Members may reasonably request from time to time. 
 Section 9.7
Managing Member as Tax Matters Partner. The Managing Member is designated the tax matters partner of the Company as provided in Section 6231(a)(7) of the Code and corresponding provisions of applicable state law. This designation is effective
only for the purpose of activities performed pursuant to the Code, corresponding provisions of applicable state law, the applicable laws of any non-U.S. jurisdiction (and political subdivisions thereof), and
under this Agreement. The Managing Member shall inform the Members of any material decisions or actions taken by the Managing Member as the tax matters partner. 

  
 A-21 

 Section 9.8 Taxation as a Partnership. It is the intent of the
Company and its Members that the Company be treated as a partnership for income tax purposes, and the terms of this Agreement shall be construed so as to accomplish that goal, and the Members will use best efforts to cause the Company to be so
treated. 
 Section 9.9 Quarterly Meetings. An officer or one or more other representatives of the Managing
Member shall meet at least once per calendar quarter with representatives from the Operating Member to discuss the status of the development and operations of the Project. Such meetings shall occur on dates and times reasonably satisfactory to the
Members and may be conducted in person or by teleconference. 
 ARTICLE X 

DISSOLUTION 

Section 10.1 Dissolution. 

10.1.1 Events of Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of
the following: (i) the expiration of the term of the Company unless such term has been extended by the unanimous election of the Members, (ii) at the election of the Members, (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act, or (iv) the sale, transfer or other disposition by the Company of all or substantially all of its assets and the collection by the Company of any and all cash flow derived
therefrom. 
 10.1.2 Bankruptcy of a Member. Subject to the provisions of Section 11.1
below, the Bankruptcy of a Member or other Terminating Event will not cause the Member to cease to be a member of the Company and, upon the occurrence of such an event, the business of the Company shall continue without dissolution. 

10.1.3 Liquidation and Winding Up. In the event of dissolution, the Company shall be wound up and its assets
liquidated. In connection with the dissolution and winding up of the Company, the Managing Member or such other Person designated by the Members shall proceed with the sale, exchange or liquidation of all of the assets of the Company, and shall
conduct only such other activities as are necessary to wind up the Company’s affairs, and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 5.1 hereof. 

ARTICLE XI 
 EVENTS OF
DEFAULT 
 Section 11.1 Events of Default. There will be an “Event of
Default” under this Agreement if any one or more of the following events or circumstances shall transpire or exist and shall not be cured within any applicable period of notice and grace specified below: 

11.1.1 Breach of Obligations. If either Member is in breach in any material respect of (i) any obligation under
this Agreement and such breach is not corrected within thirty (30) Business Days after written notice thereof from the other Member; unless such breach is of a nature that it is not capable of cure in such period, in which event the breaching
party shall promptly commence such cure within such thirty (30) Business Day period and thereafter diligently pursue such cure to completion within such reasonable time, not to exceed an additional one hundred eighty (180) days, as may be
necessary to complete such cure, or (ii) any representation or warranty made by such Member in this Agreement, including, without limitation, on Schedule 12.10 attached hereto. 

11.1.2 Fraud, Gross Negligence or Willful Misconduct. If either Member shall commit an act involving fraud or willful
misconduct in connection with any of its obligations hereunder or an act involving gross negligence, which with respect to any act of gross negligence is not corrected within fifteen (15) days after written notice thereof from the other Member.

 11.1.3 Transfers. Any Transfer by either Member in violation of the provisions of Article VIII. 

11.1.4 Bankruptcy of a Member. The Bankruptcy of a Member. 

  
 A-22 

 11.1.5 Breach of Fiduciary Duty. Any breach of fiduciary duty of the
Managing Member. 
 11.1.6 Failure to Satisfy Guaranty Obligations. Failure of the Managing Member to fund any
Guaranty Obligation when due. 
 Section 11.2 Remedies. Upon an Event of Default, the non-defaulting Member (the “Enforcing Member”) may: 

11.2.1 Enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement
contained herein or for the enforcement of any other appropriate legal or equitable remedy and recover damages caused by any breach by the defaulting Member (the “Defaulting Member”) of the provisions of this
Agreement, including court costs, reasonable attorneys’ fees and other expenses incurred in the enforcement of the obligations of the Defaulting Member hereunder; 

11.2.2 Exercise any and all rights and remedies which the Enforcing Member may have under applicable law; 

11.2.3 In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such
rights, the Enforcing Member may either (i) allocate any funds that would otherwise become available in the Distributions during the next one (1) year period following the Event of Default to repay the Enforcing Member for the amount of
such payment default, and any penalties or interest provided herein, and/or (ii) either with respect to the entire amount of the payment in default or the remaining amount of the payment default after application of the funds in provision
(i), permanently reduce the Proportionate Share of the Defaulting Member which shall be equal to: 
 (a) a fraction
(expressed as a percentage, but not to exceed 100%), the numerator of which shall equal the sum of (w) the aggregate amount of all default amounts contributed by the Enforcing Member to cover the Defaulting Member’s unperformed obligations
(the “Default Amounts”) since the inception of the Company (including the present one) times 1.5, plus (x) the amount of Capital Contributions and Member Loans made by the Enforcing Member under this
Agreement, and the denominator of which shall equal the aggregate sum of (y) all Default Amounts, plus (z) the amount of all other Capital Contributions and Member Loans made by the Members under this Agreement; and 

(b) the Proportionate Share of the Defaulting Member shall be adjusted to equal one hundred percent (100%) minus the adjusted
Proportionate Share of the Enforcing Member as determined under Section 11.2.3(a); provided, however, notwithstanding anything to the contrary contained herein, if a Member’s Proportionate Share is reduced to zero as a result of the
operation of this subsection (b), such Member shall not cease to be a Member merely as a result of the operation of this subsection and such Member shall continue to be entitled to receive Distributions in accordance with
Section 5.1 hereof, subject to the recalculation of Proportionate Shares caused by this subsection (b) and shall have all other rights as a Member under this Agreement subject to all the other provisions of this
Agreement. 
 11.2.4 Allocate distributable cash or Extraordinary Cash Flow, or any other funds that would otherwise become
available to the Defaulting Member in the Distributions, following the Event of Default to repay the Company or Enforcing Member, as applicable, for the amount of actual monetary costs reasonably incurred by the Company or Enforcing Member as a
direct result of the Event of Default; 
 11.2.5 Set off and to apply any fees, including without limitation development fee
and deferred development fee, payable in connection with the Project to the Defaulting Member or its Related Party to repay the Company or Enforcing Member, as applicable, for the amount of actual monetary costs reasonably incurred by the Company or
Enforcing Member as a direct result of the Event of Default; and/or 
 11.2.6 The Enforcing Member may automatically trigger
a cross default with the contractual agreements between the Owner and Related Party of the Defaulting Member. 
 In the event the Enforcing
Member exercises and satisfies any Event of Default pursuant to the Remedies in Sections 11.2.3 to 11.2.5 listed above, the Defaulting Member shall no longer be deemed to be in default hereunder. Until such remedy has fully satisfied the
Event of Default, the Defaulting Member shall have no consent rights hereunder, including, without limitation, for any Major Actions. 

  
 A-23 

 Section 11.3 Special Remedies on Default by the Managing Member. In
the event the Managing Member commits an act described in Section 11.1.2 that has a material adverse effect on the Company and is not cured within fifteen (15) days after written notice thereof from the Operating
Member or an act described in Section 11.1.3, the Operating Member may, in its sole discretion remove the Managing Member from having any role in the management or operation of the Company (including, without limitation,
its role as managing member of the Company) and designate itself or its designee as the managing member of the Company in which event it will have full and complete authority to manage and operate the Company subject to the provisions of hereof. If
the Operating Member exercises such right, the Managing Member shall automatically, without need for the execution and delivery of any instrument other than notice by the Operating Member to the Managing Member that it has exercised such right,
cease to have any role in the management or operation of the Company. 
 ARTICLE XII 

ARBITRATION 

Section 12.1 General. In the event any dispute arises between any Members to this Agreement with respect to this Agreement or the
Company, then upon written request of one Member served on the other Member, the matter shall be submitted promptly for arbitration with JAMS or the McCammon Group in accordance with their rules then pertaining unless the parties mutually agree
otherwise. The Members shall cooperate in good faith to agree upon an arbitrator or arbitrators and shall proceed in accordance with any rules or requests of the arbitrator(s). If the Members are unable to agree on an arbitrator within seven
(7) days after being provided with bios of the arbitrators, then the arbitrator shall be chosen by the selected arbitration tribunal. The arbitration shall be held in the Commonwealth of Virginia, unless the parties otherwise agree. The cost of
such arbitration shall be split equally among the Members. If a Member does not agree to go to arbitration, as the case may be, then that party shall be liable for the other party’s reasonable legal fees in any subsequent litigation regarding
that same matter in which the party who refused to go to arbitration loses in that subsequent litigation. The award rendered by the arbitrator shall be final and binding, and judgment may be entered upon the award in accordance with applicable law
in any United States court of competent jurisdiction. 
 Because of the unique relationship of the Members and the unique value of the
Members’ interests in the Company, this provision for arbitration shall not prevent any party from applying for and obtaining injunctive relief from a competent court in the United States of America where, in the absence thereof, the rights of
such party cannot be adequately protected by mediation or an arbitrator’s award. 
 The parties agree and acknowledge that, in addition
to any other remedies specifically set forth herein, in the event of a breach of any provision of this Agreement by a Member, the Company and the Enforcing Member shall be entitled to receive from the Defaulting Member any and all damages suffered
by them as a result of such breach, together with all expenses incurred in connection with the enforcement of this Agreement and the collection of such damages, including reasonable attorneys’ fees and all costs and expenses in enforcing this
Agreement. The obligations of the Members hereunder shall survive the withdrawal of any Member and the dissolution or termination of the Company. 

ARTICLE XIII 

MISCELLANEOUS 

Section 13.1 Notices. 

13.1.1 Any and all notices, demands, consents, approvals, offers, elections and other communications required or permitted
under this Agreement (collectively, “notices”) shall be deemed adequately given if in writing and the same shall be delivered either in hand or by mail or Federal Express or similar expedited commercial carrier, addressed to
the recipient of the notice, postpaid and registered or certified with return receipt requested (if by mail), or with all freight charges prepaid (if by Federal Express or similar carrier). 

13.1.2 All notices required or permitted to be sent hereunder shall be deemed to have been given for all purposes of this
Agreement upon the date of acknowledged receipt and in all other cases, upon the date of receipt or refusal, except that whenever under this Agreement a notice is either received on a day that is not a Business Day or is required to be delivered on
or before a specific day that is not a Business Day, the day of receipt or required delivery shall automatically be extended to the next Business Day. 

  
 A-24 

 13.1.3 All such notices shall be addressed: 

 

			
	If to the Operating Member, to:	  	 COMSTOCK REDLAND ROAD III, L.C.
 1886 Metro
Center Drive, 4th Floor
 Reston, Virginia 20190

Attention: Christopher Clemente, CEO

		
	with a copy to:	  	 COMSTOCK REDLAND ROAD III, L.C.
 1886 Metro
Center Drive, 4th Floor
 Reston, Virginia 20190

Attention: Jubal Thompson

		
	If to the Managing Member, to:	  	 SCG Development Partners, LLC
 8245 Boone Blvd,
Suite 640
 Vienna, VA 22182
 Attention: Stephen P.
Wilson

		
	with a copy to:	  	 Klein Hornig LLP
 1325 G St NW, Suite 770

Washington, DC 20005
 Attention: Erik Hoffman

 13.1.4 By notice given as herein provided, the parties hereto and their respective successors
and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses effective upon receipt by the other parties of such notice and each shall have the right to specify as its
address any other address within the United States of America or to add one or two more parties to whom a copy of a notice must be given. 

Section 13.2 Amendments. Except as otherwise provided herein, this Agreement may be amended only with the written
approval of all Members. 
 Section 13.3 Interpretation. This Agreement shall be governed by and construed in
accordance with the laws of the [State of Maryland], without regard to the principles of conflicts of law. Venue shall be proper in the [Circuit Court of Montgomery County, Maryland, or the U.S. District Court for Montgomery County]. To the extent
not prohibited by applicable law that cannot be waived, each party hereby waives its right to trial by jury in connection with any dispute between any of the parties to this Agreement arising out of this Agreement or the rights or obligations of the
parties hereunder. The table of contents and titles of the Articles and Sections in this Agreement are for convenience only and shall not be considered in construing this Agreement. Pronouns used herein shall be construed to refer to the masculine,
feminine, neuter, singular and plural as the identity of the individual or entity referred to may require. This Agreement, together with the documents and agreements being executed on the date hereof, constitutes the entire agreement among the
Members and supersedes any prior written or oral agreements with respect to the subject matter of this Agreement except as otherwise set forth herein. No provision of this Agreement (including, without limitation, any obligation of any Member to
make Capital Contributions) shall be interpreted as bestowing any rights whatsoever upon any third party. A cross-reference to another section shall be deemed to be to such section of this Agreement, unless explicitly stated otherwise. 

Section 13.4 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed
an original. PDF, TIFF, facsimile, or other electronic images of signatures will be deemed originals for all purposes. 

Section 13.5 No Partition. No Member, nor any Legal Successor of a Member, shall have the right to partition the
Company or the Project or any part thereof or interest therein, or to file a complaint or institute any proceeding at law or in equity to partition the Company or the Project or any part thereof or interest therein. Each Member, for such Member and
such Member’s Legal Successor, hereby waives any such rights. The Members intend that, during the term of this Agreement, the rights of the Members and their successors in interest, as among themselves, shall be governed solely by the terms of
this Agreement and by the Act. 

  
 A-25 

 Section 13.6 Attorneys’ Fees. If any Member seeks
to enforce such Member’s rights under this Agreement by legal proceedings or otherwise the non-prevailing party shall be responsible for all reasonable costs and expenses in connection therewith,
including without limitation, reasonable attorneys’ fees and expert witness fees. In this Section 13.6, non-prevailing party shall not be meant to refer to a Member who initiates
or accepts a settlement offer with regards to such legal proceeding. 
 Section 13.7 Severability. If any
provision of this Agreement is determined to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the parties. In any event, all other provisions shall be deemed valid and enforceable to the
greatest possible extent. 
 Section 13.8 Binding on Successors. Subject to the provisions of ARTICLE
VIII, the rights and obligations of the Members under this Agreement shall inure to the benefit of and bind their respective heirs, successors and assigns. 

Section 13.9 Confidentiality. Both parties hereto agree to maintain the confidentiality of the financial terms and
conditions of this Agreement and to maintain the confidentiality of (a) any financial information provided by one party to the other, and (b) all information contained in any plans, specifications, manuals, forms, contracts, books,
records, computer discs and similar materials containing information, invoices and other documents received or maintained by the Company pursuant to this Agreement, other than information that is available from public sources. Either party may,
however, disclose any of such information to its agents, directors, officers, employees, advisors, attorneys, affiliates or representatives who require such information for the purpose of performing or assisting in the performance of its obligations
or services hereunder, and to investors or lenders or proposed investors or lenders, provided that in all such cases such parties shall be informed of the confidential nature of such information. Either party hereto may also disclose any such
information (x) to the extent required by law, regulation (including SEC regulations) or court order provided that such party shall have first, to the extent reasonably practicable, advised the other of the requirement to disclose such
information and shall have afforded the other an opportunity to dispute such requirement and seek relief therefrom by legal process, (y) in connection with any suit, action, arbitration or other proceedings between the parties hereto or their
respective Related Parties, or (z) to the extent required in connection with the preparation or filing of any Tax Returns or other filings required by any applicable law. 

Any press releases or other public announcements concerning the Company or the arrangement between the Members shall be mutually approved by both the
Operating Member and the Managing Member in their reasonable discretion. 
 Section 13.10 Additional Representations,
Warranties, Covenants and Agreements of Each Member. As an inducement to each Member to enter into this Agreement, in addition to the representations, warranties, covenants and agreements contained in this Agreement, the parties make the
additional representations, warranties, covenants and agreements contained in Schedule 12.10 attached hereto and made a part hereof. 

Section 13.11 Brokerage. The parties hereto represent and warrant to each other that they have not dealt with any
brokers, consultants or other third parties in the negotiation of this Agreement and the transactions contemplated herein. Each Member shall indemnify, defend and hold the other harmless from and against any liability, claim, damage, cost or expense
(including, without limitation, reasonable attorneys’ and expert witness fees) arising out of or in connection with any breach by such Member of its representations and warranties under this Section 13.11. 

Section 13.12 Exhibits and Schedules. Each of the Exhibits and Schedules attached hereto is incorporated
herein by this reference and expressly made a part of this Agreement for all purposes. 
 Section 13.13 Scope of
Representations. EACH OF THE MEMBERS HEREBY ACKNOWLEDGES AND AGREES THAT, IN CONNECTION WITH THE DRAFTING, PREPARATION AND NEGOTIATION OF THIS AGREEMENT, THE FORMATION OF THE COMPANY AND ANY OTHER MATTERS RELATED THERETO, (I) KLEIN HORNIG
LLP HAS ONLY REPRESENTED THE INTERESTS OF THE MANAGING MEMBER AND NOT THE INTERESTS OF THE OPERATING MEMBER OR THE COMPANY. THE ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS WHO PERFORM SERVICES FOR ANY OF THE PARTIES HERETO MAY ALSO PERFORM SERVICES FOR
THE COMPANY. TO THE EXTENT THE FOREGOING REPRESENTATION CONSTITUTES A CONFLICT OF INTEREST, EACH OF THE MEMBERS HEREBY EXPRESSLY WAIVES ANY SUCH CONFLICT OF INTEREST. THE MEMBERS FURTHER ACKNOWLEDGE THAT THE ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS
WHO PERFORM SERVICES FOR THE COMPANY OR ANY MEMBER SHALL NOT BE DEEMED BY VIRTUE OF SUCH REPRESENTATION TO HAVE ALSO REPRESENTED ANY OTHER MEMBER IN CONNECTION WITH ANY SUCH MATTERS. 

  
 A-26 

 ARTICLE XIV 

OPERATING MEMBER BUY-OUT 

Section 14.1 Managing Member will have the option to purchase all of the Interest of the Operating Member for $1.00 upon
the occurrence of the following events: 
 14.1.1 the closing/conversion of the Project’s permanent financing, 

14.1.2 the release of the Operating Member from all obligations under this Agreement, 

14.1.3 the release of the Operating Member and its Related Party from all Guaranty Obligations (including by any assumption
thereof by the Managing Member or its affiliates), and 
 14.1.4 satisfaction by the Company of the obligations owed to the
Operating Member under this Agreement, subject to Section 14.2 below. 
 The option may be exercised by the Managing Member by providing
written notice thereof to the Operating Member, which notice will include the proposed closing date of the transfer of such Interest. 

Section 14.2 If Managing Member exercises the option to purchase all of the Interest of the Operating Member as provided
herein at the time that Montgomery County, Maryland or Department of Housing and Urban Development issues its final endorsement to the Property, Managing Member may exercise the option, but shall provide a Promissory Note for any remaining
distributions or amounts owed to Operating Member under this Agreement. 
 [This space is intentionally left blank] 

  
 A-27 

 IN WITNESS WHEREOF, each of the Members has executed this Agreement as of the date first written
above. 
  

			
	OPERATING MEMBER:
	
	COMSTOCK REDLAND ROAD III, L.C.
		
	By:	 	COMSTOCK HOLDING COMPANIES, INC., Manager
		
	By:	 	  

		 	Christopher Clemente, Chief Executive Officer

 [SIGNATURES CONTINUED] 

  
 A-28 

 
			
	MANAGING MEMBER:
	
	SCG Development Partners, LLC
	a Delaware limited liability company
	its managing member
		
	By:	 	SCG Development Manager, LLC
	a Delaware limited liability company
	its managing member
		
	By:	 	SCG Capital Corp.
	 a Delaware corporation
 its sole
member

		
	By:	 	  

	Name:	 	Stephen P. Wilson
	Title:	 	President – Virginia Office

  
 A-29 

 EXHIBIT A 

NAME, ADDRESS AND PROPORTIONATE SHARE OF MEMBERS 
  

											
	 Members
	  	 Address
	  	Proportionate Share	 	 	Initial Cash Capital
Contribution	 
	 SCG Development Partners, LLC
	  	 8245 Boone Blvd
 Suite 640

Vienna, VA 22182
	  	 	75	% 	 	$	1,000,000	 
	 Comstock Redland Road III, L.C.
	  	 1886 Metro Center Drive
 4th Floor
 Reston, Virginia 20190
	  	 	25	% 	 	$	1,000,000	 

  
 A-30 

 EXHIBIT B 

LEGAL DESCRIPTION OF PROPERTY 

  
 B-1 

 EXHIBIT C 

FORM OF CAPITAL CALL NOTICE 

$                     

 

	Re:	Funding of Capital to MOMENTUM GENERAL PARTNERS LLC  

 Gentlemen: 

Reference is hereby made to the Limited Liability Company Agreement of MOMENTUM GENERAL PARTNERS LLC, dated as of
            , 2016 (the “Operating Agreement”). Capitalized terms not otherwise defined shall have the meaning ascribed to them in the Operating Agreement. 

Pursuant to 0 of the Operating Agreement, you are advised, as the
                     Member of the Company, that the
                     Member has determined that Capital is required to
                     in the aggregate amount of $            . 

Each Member is hereby requested to contribute, in the form of cash or cash equivalents, funds in the amount of its Proportionate Share (as set
forth below) of such required Capital within [insert appropriate time period which shall not be less than as set forth in Article III] of
the date of this notice. 
  

									
	 	  	Contributions	 	  	Proportionate Share	 
	 Managing Member
	  	$	    	 	  	 	75	% 
	 Operating Member
	  	$	    	 	  	 	25	% 
	 TOTAL
	  				  	 	100	% 

  

			
	[MEMBER]
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 C-1 

 EXHIBIT D 

FORM OF NOTE 
 NOTE

 $                     

            , 20     

FOR VALUE RECEIVED, MOMENTUM APARTMENTS, LLC, a Maryland limited liability company (the “Company”) promises to pay the order of COMSTOCK REDLAND
ROAD III, L.C., a Virginia limited liability company (the “Developer”), the principal sum of                      AND
    /100 DOLLARS ($            ), on or before
                         (the “Maturity Date”) in accordance with that certain Development Services Agreement by and
between the Company and the Developer, dated                      (the “Development Agreement”). 

This Development Fee Note evidences the obligation of the Company to pay the Developer its prorata share of the outstanding portion of the Upfront Development
Fee (the “Remaining Upfront Development Fee”) pursuant to the Development Agreement. The Remaining Upfront Development Fee is payable out of the Company’s Net Capital Proceeds received up to and including the date of Project
Stabilization, as such terms are defined in the Amended and Restated Operating Agreement of the Company dated as of October 24, 2016. 
 The
outstanding principal balance of this Development Fee Note shall unconditionally be due and payable within six (6) months of receipt of the Final Endorsement of the Project by Maryland DCHD, but no later than December 31, 2019. 

Demand for payment shall be presumed to have been issued and the entire unpaid principal sum of this Development Fee Note, together with accrued interest
thereon, if any, shall become immediately due in the event of the occurrence of any one or more of the following: default in the payment of any installment due hereunder continuing for a period in excess of ten (10) days after written notice
from the Developer to the Company; the filing by the Company of a voluntary petition in bankruptcy; or the failure by the Company within thirty (30) days thereof to lift any filing against the Company of any involuntary petition, execution, or
attachment; or the adjudication of the Company as bankrupt; or any assignment by the Company of all or substantially all of its assets for the benefit of its creditors; or the invalidity or illegality of any portion of this Note by reason of any act
or omission by the Company. 
 This Development Fee Note shall not be assigned, hypothecated, pledged, sold, or otherwise transferred without the prior
written consent of the Company, and any such other transfer without the Company’s consent shall be null and void. 

  
 D-1 

 Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Development
Agreement. 
 This Development Fee Note shall be governed by and construed in accordance with the internal laws of the State of Maryland. 

IN WITNESS WHEREOF, the Company has executed this Development Fee Note as of the date written above. 

 

									
	 MOMENTUM APARTMENTS, LLC, a Maryland limited liability company

		
	By:	 	Momentum General Partners, LLC a Maryland limited liability company, its managing member
		
	By:	 	SCG Development Partners, LLC, a Delaware limited liability company, its managing member
				
		 	By:	 		 	SCG Development Manager, LLC, a Delaware limited liability company, its managing member
					
		 		 		 	By:	 	SCG Capital Corp., a Delaware corporation, its sole member
					
		 		 		 	By:	 	  

		 		 		 	Name:	 	Stephen P. Wilson
		 		 		 	Title:	 	President – Virginia Office

  
 D-2 

 EXHIBIT E 

DEVELOPMENT BUDGET 

  
 E-1 

 EXHIBIT F 

MAJOR ACTIONS 
 1. Cause
the Company to expend the greater of Twenty-Five Thousand Dollars ($25,000) or five percent (5%) or more in excess of the amount budgeted for any expenditure for the Company or the Project in the Development Budget or Annual Business Plan. 

2. Any changes to the aggregate amount of the Development Budget or any other changes or decisions which will materially increase the
aggregate cost of developing the Project. 
 3. Confess a judgment against the Company or initiate, or take any action for foreclosure,
bankruptcy or any other insolvency proceedings. For the purposes hereof, a plea of nolo contendere by the Managing Member shall be the equivalent of a guilty plea. 

4. Take any action in contravention of the Annual Business Plan. 

5. Institute any legal action involving a claim in excess of Twenty-Five Thousand Dollars ($25,000); settle any legal action that involves an
uninsured expense in excess of Twenty-Five Thousand Dollars ($25,000) or confirm a judgment against the Company in excess of Twenty-Five Thousand Dollars ($25,000). 

6. Cause the Company to borrow money, refinance, extend, compromise or otherwise deal with any Loans (including securing such Loans) of the
Company. 
 7. Approve any Development Budget and Annual Business Plan (and any modifications or deviations thereof). Except as otherwise
provided in this Agreement, the entry into by the Company of any contract with, or the making of any payment to, any Member, or any Related Party of a Member, or with respect to any such contract, making any amendment, modification or rescission
thereof; or consenting to the assignment of any rights or delegation of any duties by any party thereto. 
 8. Cause a merger, conversion,
reorganization or similar transaction with respect to the Company. 
 9. Approve the terms of any Member Loan, except as otherwise provided
in this Agreement. 
 10. Except as permitted in accordance with the terms of the Agreement, admit or remove any party as a Member or the
Managing Member of the Company. 
 11. Dissolve, liquidate or otherwise terminate the Company. 

12. Amend this Agreement or knowingly take or permit any action to occur that would materially adversely affect or otherwise alter the
structure of the Company. 
 13. Require an Additional Capital Contribution under 3.2. 

14. Any decisions related to or affecting or increasing the Guaranty Obligations or obligation to reimburse the Managing Member for payment
thereof. 
 15. Selection and approval of general contractors, owner’s representatives, property managers, engineers and the architects
for the Project. 
 16. Amend the Operating Agreement of Owner or admit a new member to the Owner. 

17. Amend the Development Services Agreement between the Company and Momentum Apartments, LLC. 

  
 F-1 

 EXHIBIT G 

BUDGET/REPORTS 

  
 G-1 

 SCHEDULE 12.10 
  

	1.	Representations and Warranties of the Managing Member. 

 1.1 Authority; Good
Standing. The Managing Member is a limited liability company duly organized and validly existing under the laws of the State of Delaware, with full power and authority and legal right to be a member of the Company and to carry on its business in
the manner and in the locations in which such business has been and is now being conducted by it, to execute and deliver this Agreement and to perform its obligations hereunder. 

1.2 Consent of Third Parties. No consent of any third party is required as a condition to the entering into of this Agreement by the
Managing Member other than such consent as has been previously obtained. 
 1.3 Authority; Enforceability. The execution and delivery
of this Agreement has been duly authorized by the Managing Member and this Agreement constitutes the valid and binding obligation and agreement of the Managing Member, enforceable in accordance with its terms (subject to the effect of bankruptcy,
insolvency or creditor’s rights generally, and to limitations imposed by general principles of equity). 
 1.4 Absence of
Conflicts. Neither the execution and delivery of this Agreement, nor compliance with the terms and provisions hereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result
in the creation of any lien, charge or encumbrance upon the property or assets of the Managing Member pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness, agreement or other instrument to which the
Managing Member or any Related Party may be party or by which it or they or any of its or their properties or assets may be bound, or violate any provision of law, or any applicable order, writ, injunction, judgment or decree of any court, or any
order or other public regulation of any governmental commission, bureau or administrative agency. 
 1.5 No Judgments. There are no
judgments presently outstanding and unsatisfied against SCG or any of its assets and neither SCG nor any of its assets is involved in any litigation at law or in equity, or in any proceeding before any court, or by or before any governmental or
administrative agency, which judgment, litigation or proceeding could reasonably be anticipated to have a material adverse effect on SCG, the Company, the Property or the Project, and no such material judgment, litigation or proceeding is, to the
best of the Managing Member’s knowledge, threatened against SCG or any of its assets, and to the best of the Managing Member’s knowledge, no investigation looking toward such a proceeding has begun or is contemplated. 

1.6 Litigation. To the actual knowledge of the Managing Member, there is no material action, suit or proceeding pending or threatened
against or affecting the Property, or arising out of the ownership, management or operation of the Property, this Agreement or the transactions contemplated hereby. 
  

	2.	Representations and Warranties of the Operating Member. 

 2.1 Authority; Good
Standing. COMSTOCK is a limited liability company duly organized and validly existing under the laws of the Commonwealth of Virginia with full power and authority and legal right to be a Member of the Company and to carry on its business in the
manner and in the locations in which such business has been and is now being conducted by it, to execute and deliver this Agreement and to perform its obligations hereunder. 

2.2 Consent of Third Parties. No consent of any third party is required as a condition to the entering into of this Agreement other
than such consent as has been previously obtained. 
 2.3 Authority; Enforceability. The execution and delivery of this Agreement has
been duly authorized by COMSTOCK and this Agreement constitutes the valid and binding obligation and agreement of COMSTOCK, enforceable in accordance with its terms (subject to the effect of bankruptcy, insolvency or creditor’s rights
generally, and to limitations imposed by general principles of equity). 
 2.4 Absence of Conflicts. To our knowledge, neither the
execution and delivery of this Agreement, nor compliance with the terms and provisions hereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon the property or assets of COMSTOCK pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness, agreement or other instrument to which COMSTOCK or any Related Party may be party or
by which it or they or any of its or their properties or assets may be bound, or violate any provision of law, or any applicable order, writ, injunction, judgment or decree of any court, or any order or other public regulation of any governmental
commission, bureau or administrative agency. 

  
 F-1 

 2.5 No Judgments. To our knowledge, there are no judgments presently outstanding and
unsatisfied against the COMSTOCK or any of its assets and neither COMSTOCK nor any of its assets is involved in any litigation at law or in equity, or in any proceeding before any court, or by or before any governmental or administrative agency,
which judgment, litigation or proceeding could reasonably be anticipated to have a material adverse effect on COMSTOCK, the Company or the Property and no material judgment, litigation or proceeding over $50,000, except as otherwise provided in
Exhibit [    ] hereto and attached herein, is, to the best of COMSTOCK’s knowledge, threatened against COMSTOCK or any of its assets, and to the best of the COMSTOCK’s knowledge, no investigation looking toward such a
proceeding has begun or is contemplated. 
  

	3.	Indemnification Obligations. 

 3.1 Indemnification by the Managing Member. The
Managing Member shall indemnify, defend, and hold harmless COMSTOCK and its members, managers, authorized signatories, officers, directors, employees, Related Parties, successors and assigns from and against, and pay or reimburse each of them for
and with respect to, any and all out of pocket costs, obligations, liabilities, demands, claims, settlement payments, awards, judgments, fines, penalties, damages and other reasonable out of pocket expenses, including court costs and reasonable
attorneys’ and expert witness fees, arising out of a third-party claim (collectively, “Loss”) relating to, arising out of or resulting from any breach by the Managing Member of any of its fiduciary duty, representations,
warranties, covenants or agreements in this Agreement. 
 3.2 Indemnification by COMSTOCK. COMSTOCK shall indemnify, defend and hold
harmless the Managing Member and its members, managers, authorized signatories, officers, directors, employees, agents, representatives, Related Parties, successors and assigns from and against, and pay or reimburse each of them for and with respect
to any Loss relating to, arising out of or resulting from any breach by COMSTOCK of any of its representations, warranties, covenants or agreements in this Agreement. 

3.3 Administration of Indemnification. For purposes of administering the indemnification provisions set forth in Sections
Section 3.1 and 0, the following procedure shall apply: 
 (a) Whenever a claim shall arise for
indemnification under this Article, the party entitled to indemnification (the “Indemnified Party”) shall reasonably promptly give written notice to the party from whom indemnification is sought (the
“Indemnifying Party”) setting forth in reasonable detail, to the extent then available, the facts concerning, the nature of such claim and the basis upon which the Indemnified Party believes that it is entitled
to indemnification hereunder. 
 (b) In the event of any claim for indemnification resulting from or in connection with any claim by a third
party, the Indemnifying Party shall be entitled, at its sole expense, either (i) to participate in defending against such claim or (ii) to assume the entire defense with counsel which is selected by it and which is reasonably satisfactory
to the Indemnified Party provided that (A) the Indemnifying Party agrees in writing that it does not and will not contest its responsibility for indemnifying the Indemnified Party in respect of such claim or proceeding, and (B) no
settlement shall be made and no judgment consented to without the prior written consent of the Indemnified Party which shall not be unreasonably withheld. If, however, (i) the claim, action, suit or proceeding would, if successful, result in
the imposition of damages for which the Indemnifying Party would not be solely responsible, or (ii) representation of both parties by the same counsel would otherwise be inappropriate due to actual or potential differing interests between them,
then the Indemnifying Party shall not be entitled to assume the entire defense and each party shall be entitled to retain counsel who shall cooperate with one another in defending against such claim. In the case of Clause (i) of the preceding
sentence, the Indemnifying Party shall be obligated to bear only that portion of the expense of the Indemnified Party’s counsel that is in proportion to the damages indemnifiable by the Indemnifying Party compared to the total amount of the
third-party claim against the Indemnified Party. 
 (c) If the Indemnifying Party does not choose to defend against a claim by a third
party, the Indemnified Party may defend in such manner as it deems appropriate or settle the claim (after giving notice thereof to the Indemnifying Party) on such terms as the Indemnified Party may deem appropriate, and the Indemnified Party shall
be entitled to periodic reimbursement of defense expenses incurred and prompt indemnification from the Indemnifying Party in accordance with this Article. 

  
 F-2 

 Failure or delay by an Indemnified Party to give a reasonably prompt notice of any claim shall not release, waive
or otherwise affect an Indemnifying Party’s obligations with respect to the claim, except to the extent that the Indemnifying Party can demonstrate actual loss or prejudice as a result of such failure or delay. 

3.4 Limitation on Damages. Notwithstanding anything to the contrary contained this Agreement, including, without limitation, this
Schedule 12.10, neither party to this Agreement shall be liable for lost profits, or consequential, special or punitive damages. 

  
 F-3ex10-7.htm

Exhibit 10.7

 

Executive Officer SEVERANCE AGREEMENT

 

This Executive Officer Severance Agreement (as modified, amended or restated from time to time in the manner provided herein, this "Agreement") is dated and effective as of August 23, 2016 (the "Effective Date"), and is by and between Scott Popaditch, an individual (the "Employee"), and SPAR Group, Inc., a Delaware corporation (the "Company" or "SGRP"). The Employee and Company may be referred to individually as a "Party" and collectively as the "Parties".

 

In consideration of past, present and future employment by the Company, the mutual covenants below and other good and valuable consideration (the receipt and adequacy of which are hereby acknowledged by each Party), the Employee and Company, intending to be legally bound, hereby agree as follows:

 

Section 1.     Introduction and At Will Employment. (a) Introduction. The Employee and the Company have entered into this Agreement in order to provide for the terms of the Employee's initial and continued "at will" employment with the Company in accordance with the Offer Letter (as defined below) and to provide for severance payments from the Company to the Employee under certain circumstances if the Employee leaves for Good Reason or is terminated other than in a Termination For Cause during the Protected Period (as all such terms are hereinafter defined). The effectiveness of this Agreement is conditioned on the Employee's execution and delivery to the Company of the other Related Documents (as defined below) and the commencement of his services on or before September 6, 2016 (as more fully provided in the Offer Letter).

 

(b)     Positions. With the approval of the SGRP Board and applicable SGRP Committee(s), the Company hereby appoints Employee to be the Chief Executive Officer and President of the Company as well as a Director, Officer and Executive of the Company (as such terms are defined in the Company's By-Laws), the Employee's start date will be on or before September 6, 2016 (as more fully provided in the Offer Letter), and the Employee will continue (while employed by the Company) to hold such positions for the Protected Period, subject to the pleasure of the Company, the SGRP Board and applicable SGRP Committee(s). The Employee also will be a director or officer of various of the Company's subsidiaries (as and to the extent designated and changed by the Company or the SGRP Board from time to time in its discretion).

 

(c)     At Will Employment. Notwithstanding the potential severance payments and other benefits under this Agreement, the Employee acknowledges and agrees that: (i) this Agreement is not intended, and shall not be deemed or construed, to in any way (A) create or evidence any employment agreement, contract, term or period of any kind or nature or (B) contradict, limit or modify the "at will" nature of the Employee's employment; and (ii) except as otherwise expressly provided in any other written agreement of the Company with the Employee and approved by the SGRP Board , the Employee's employment is "at will" and may be modified from time to time and terminated at any time by the Company in its discretion, for any reason or no reason whatsoever, and without any notice or benefit of any kind (other than any benefit expressly provided under the circumstances by this Agreement). 

 

Section 2.     Certain Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings respectively assigned to them in the By-Laws or SGRP Ethics Code, as applicable. As used in this Agreement, the following capitalized terms and non-capitalized words and phrases shall have the meanings respectively assigned to them:

 

(a)     "§162(m) Covered Officer" shall mean any "covered employee" under (and as defined in) IRC §162(m) for any taxable year (or portion thereof) of the Company if, and only if, the Employee's maximum "remuneration" (as defined in IRC§162(m)(4)(E)) could exceed $1,000,000 if the maximum amount payable under the Company's bonus proposal to the Employee for the year of the Employee's Separation from Service were included in such remuneration (as if all targets were satisfied).

 

(b)     "Authorized Representative" shall mean, for the Company or any SPAR Affiliate for whom the Employee works, any of (i) the Board, (ii) the Chairman, (iii) any other executive officer of the Company or applicable SPAR Affiliate who directly or indirectly supervises or is responsible for the Employee or (iv) any other Representative of the Company or applicable SPAR Affiliate who directly or indirectly supervises or is responsible for the Employee and is authorized to do so by the Board, the Chairman or any such executive officer, in each case other than the Employee.

 

(c)     "Beneficial Owner" shall mean any person who beneficially owns (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act), securities issued by the referenced corporation or other entity, whether directly or indirectly, and whether individually, jointly with any other person(s) or otherwise.

 

(d)     "Board" shall mean the Board of Directors of the Company or the applicable SPAR Affiliate.

 

(e)     "Chairman" shall mean the Chairman of the Company or applicable SPAR Affiliate.

 

 

-1-

 

 

(f)     "CICSA" shall mean the Change in Control Severance Agreement between the Employee and the Company dated as of August 23, 2016, as the same may be supplemented, modified, amended, restated or replaced from time to time in the manner provided therein with the approval of the SGRP Board.

 

(g)     "Company's By-Laws" shall mean the By-Laws of the Company, as the same may have been and hereafter may be adopted, supplemented, modified, amended or restated from time to time in the manner provided therein.

 

(h)     "Confidentiality Agreement" shall mean the Confidentiality, Non-Solicitation and Non-Competition Agreement between the Employee and the Company dated as of August 23, 2016, as the same may be supplemented, modified, amended, restated or replaced from time to time in the manner provided therein.

 

(i)     "Employee's Annual Salary" shall mean the Employee's annual salary rate in effect immediately prior to the Service Termination or, if greater, at the highest annual salary rate in effect at any time during the one-year period preceding the Service Termination, in each case without regard for any bonus, benefit or allowance.

 

(j)     "Employee's Daily Salary" shall mean the daily equivalent (i.e., 1/365th or 1/366th, as applicable) of the Employee's Annual Salary.

 

(k)     "Employment Period" shall mean the period commencing with the beginning of the Employee's most recent Protected Period and ending on the date of the Employee's Separation from Service.

 

(l)     "Good Reason" shall mean the occurrence of any of the following events during the Protected Period if not at the Employee's direction or with the Employee's consent in his or her discretion:

 

	
(i)
	
the failure to elect or appoint, or re-elect or re-appoint, the Employee for any period within the Protected Period to, or removal or attempted removal of the Employee from, his position or positions with the Company or applicable SGRP Company (except in connection with the proper termination of the Employee's employment by the Company by reason of death, disability or Termination For Cause);

 

	
(ii)
	
the assignment to the Employee of any duties materially inconsistent with the status of the Employee's office and/or position with the Company;

 

	
(iii)
	
any material adverse change in the Employee's title with the Company or applicable SGRP Company or in the nature or scope of the Employee's authorities, powers, functions or duties respecting the Company or applicable SGRP Company;

 

	
(iv)
	
the willful delay by the Company or applicable SGRP Company for more than ten (10) business days in the payment to the Employee, when due, of any part of his or her compensation; 

 

	
(v)
	
a material reduction in the Employee's salary or benefits (other than an incentive or discretionary bonus); 

 

	
(vi)
	
a failure by the Company to obtain the assumption of, and agreement to perform, this Agreement by any successor to the Company; or

 

	
(vii)
	
a change in the location at which substantially all of the Employee's duties with the Company or applicable SGRP Company are to be performed in any geographic location materially different from the location in which the Employee is then performing substantially all of his or her duties (excluding those duties performed at home or on the road); 

 

provided, however, that Good Reason shall not be considered present unless both (A) the Employee provides written notice to the Company of the existence of a Good Reason condition described above within a period not to exceed ninety (90) days of the initial existence of the Good Reason condition and (B) the Company does not remedy the condition within thirty (30) days after receipt of such notice (but if remedied the condition shall be considered not to have occurred and not to be a basis for a Severance Termination due to Good Reason). A failure to renew or replace this Agreement shall not be, and shall not be deemed or construed to be, "Good Reason". It is intended that "Good Reason" be construed, interpreted and administered as "good reason" (as defined in applicable regulation or other guidance) for purposes of IRC §409A.

 

(m)     "IRC" shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, all as in effect at the applicable time.

 

(n)     "Majority of Voting Securities" shall mean securities of the referenced person representing more than fifty percent (50%) of the combined voting power of the referenced person's then outstanding securities having the right to vote generally in the election of directors, managers or the equivalent.

 

(o)     "Offer Letter" shall mean the letter offering at will employment to the Employee by the Company dated as of August 23, 2016, as the same may be extended, supplemented, modified, amended, restated or replaced from time to time in the mutual discretion of the Parties, with the approval of the SGRP Board, in a written document signed by both Parties.

 

 

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(p)     "Protected Period" shall mean the period commencing on the Effective Date and ending at 11:59 pm (NYC time) on September 6, 2018. The Protected Period may be renewed for additional twelve month periods from time to time by the written agreement of both Parties in their discretion and the approval of the SGRP Compensation Committee in its discretion, which written agreements shall specify the commencement, duration and end date for each such renewal. 

 

(q)     "Related Document" shall mean the Offer Letter, the CICSA, the Confidentiality Agreement, and this Agreement.

 

(r)     "Representative" shall mean any subsidiary or other affiliate of the referenced person or any shareholder, partner, equity holder, member, director, officer, manager, employee, consultant, agent, attorney, accountant, financial advisor or other representative of the referenced person or of any of its subsidiaries or other affiliates, in each case other than the Employee. 

 

(s)     "Securities Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any corresponding or succeeding provisions of any applicable law (including those of any state or foreign jurisdiction), and the rules and regulations promulgated thereunder, in each case as the same may have been and hereafter may be adopted, supplemented, modified, amended, restated or replaced from time to time.

 

(t)     "Separation from Service" shall mean the Employee's "separation from service" in accordance with (and as defined in) IRC §409A(a)(2)(A)(i) with respect to the Employee's employment with the Company or applicable SPAR Affiliate. The Employee shall be presumed to have suffered such a "separation from service" even if the Employee continues to provide bona fide services after such termination or separation to the Company or any SPAR Affiliate, as an independent contractor or otherwise, so long as those services in the aggregate continue at a level that is less than 50% of the average level of those bona fide services performed during the immediately preceding 36-month period (or the entire Employment Period if less than 36 months).

 

(u)     "Severance Payment Date" shall mean the first to occur of (i) the tenth business day following the Company's receipt of the Release it required under Section 3(a) duly executed by the Employee and such Release is not later revoked by the Employee, provided that such day shall not be sooner than the first business day of the second calendar year if the required return period for such Release overlaps two calendar years, (ii) if the Company gives the Employee notice that it will not require a Release, the tenth business day following the giving of such notice, (iii) if the Company does not send a Release within the thirty day period required under Section 3(a), the tenth business day following the expiration of that period, or (iv) the day (or if not a business day, the immediately preceding business day) that is 2 1⁄2 months after the date of the Severance Termination. 

 

(v)     "SGRP" shall mean SPAR Group, Inc., a Delaware corporation and the Company under this Agreement.

 

(w)     "SGRP Board" shall mean the Board of Directors of SGRP.

 

(x)     "SGRP By-Laws" shall mean the By-Laws of SGRP, including (without limitation) the charters of the SGRP Audit Committee, SGRP Compensation Committee and the SGRP Governance Committee, as the same may have been and hereafter may be adopted, supplemented, modified, amended or restated from time to time in the manner provided therein.

 

(y)     "SGRP Committee" shall mean the SGRP Board's Audit Committee, the SGRP Board's Compensation Committee, the SGRP Board's Governance Committee or any other committee of the SGRP Board established from time to time, as applicable.

 

(z)     "SGRP Company" shall mean SGRP or any direct or indirect subsidiary of SGRP (including the Company). The subsidiaries of SGRP at the referenced date are listed in Exhibit 21.1 to SGRP's most recent Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (a copy of which can be viewed at the Company's website (www.SMFinc.com) under the tab/sub-tab of Investor Relations/SEC Filings).

 

(aa)     "SGRP Ethics Code" shall mean, collectively, the SPAR Group Code of Ethical Conduct for its Directors, Executives, Officers, Employees, Consultants and other Representatives Amended and Restated as of August 13, 2015, and SGRP's Statement of Policy Regarding Personal Securities Transactions in SGRP Stock and Non-Public Information, as amended and restated on May 1, 2004, and as further amended through March 10, 2011, as each may have been and hereafter may be unilaterally adopted, interpreted, supplemented, modified, amended, restated, replaced, suspended or cancelled in whole or in part at any time and from time to time by the SGRP Board or applicable SGRP Committee in its or their discretion, as the case may be, all without any notice to or approval from the Employee

 

(bb)     "SGRP Policies" shall mean any and all of the SGRP's internal accounting, financial and reporting principles, controls and procedures, employment policies and procedures, and corporate codes and policies (including the SGRP Ethics Code) in effect at the applicable time(s), as each may have been and hereafter may be unilaterally adopted, interpreted, supplemented, modified, amended, restated, replaced, suspended or cancelled in whole or in part at any time and from time to time by the SGRP Board or applicable SGRP Committee or by the applicable authorized Executive(s) of SGRP (as defined in its By-Laws) in its or their discretion, as the case may be, all without any notice to or approval from the Employee.

 

 

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(cc)     "SGRP Securities" shall mean any securities issued by SGRP, whether acquired directly from SGRP, in the marketplace or otherwise.

 

(dd)     "SPAR Affiliate" shall mean and currently includes (without limitation) each of the SGRP Companies, the Company's other affiliates (including, without limitation, SPAR Administrative Services Inc., SPAR Business Services, Inc., and SPAR InfoTech, Inc.), and each other entity under the control of or common control with any of the foregoing entities, in each case whether now existing or hereafter acquired, organized or existing.

 

(ee)     "SPAR Group" shall mean the Company (i.e., SGRP), all of the other SGRP Companies and all of the other SPAR Affiliates.

 

(ff)     "Tax Adviser" with respect to a referenced determination or calculation shall mean (i) if the required determination or calculation is not a prohibited non-audit service or inconsistent with its independence, the independent public accountants that act as the principal auditors of the Company's financial statements, unless such accountants are unable or unwilling to so act, and (ii) in all other cases, a tax or benefits adviser selected by such accountants on behalf of the Employee and Company, who shall be selected taking into account both experience and reasonableness of cost.

 

(gg)     "Termination For Cause" shall mean any termination of the Employee for any of the following reasons: (i) the Employee's willful, negligent or repeated breach in any material respect of, or the Employee's willful, negligent or repeated nonperformance, misperformance or dereliction in any material respect of any of his or her duties and responsibilities under, (A) any Related Document or other employment agreement or confidentiality agreement with the Company or any Spar Affiliate, (B) the directives of the Board or any Authorized Representative, (C) the SGRP Ethics Code or other SGRP Policies, or (D) the Company's policies and procedures governing his or her employment, in each case other than in connection with any absence or diminished capacity due to illness, disability or incapacity excused by (1) the policies and procedures of the Company, (2) the terms of his or her employment or (3) the action of the Board or any Authorized Representative; (ii) the gross or repeated disparagement by the Employee of the business or affairs of the Company, any SPAR Affiliate or any of their Representatives that in the reasonable judgment of the Company or applicable SPAR Affiliate has adversely affected or would be reasonably likely to adversely affect the operations or reputation of any such person; (iii) any resume, application, report or other information furnished to the Company or any SPAR Affiliate by or on behalf of the Employee shall be in any material respect untrue, incomplete or otherwise misleading when made or deemed made; (iv) the Employee is indicted for, charged with, admits or confesses to, pleads guilty or no contest to, adversely settles respecting or is convicted of (A) any willful dishonesty or fraud (whether or not related to the Company or any SPAR Affiliate), (B) any material breach of any applicable securities or other law, (C) any assault or other violent crime, (D) any theft, embezzlement or willful destruction by the Employee of any asset or property of the Company, any SPAR Affiliate or any of their respective Representatives, customers or vendors, (E) any other misdemeanor involving moral turpitude, or (F) any other felony; (vi) alcohol or drug abuse by the Employee; or (v) any other event or circumstance that constitutes cause for termination of an employee under applicable law and is not described in another clause of this subsection.

 

Section 3.     At Will Employment and Severance Termination. (a) Introduction. Notwithstanding the potential severance and other benefits under this Agreement, the Employee acknowledges and agrees that the Employee's employment is "at will" and may be modified from time to time and terminated at any time (whether during a Protected Period or otherwise) by the Company in its discretion, for any reason or no reason, and without notice or benefit of any kind, other than any benefit expressly provided under the circumstances pursuant to this Agreement. However, without in any way contradicting, limiting or modifying the "at will" nature of the Employee's employment, if the Employee's employment with the Company or other applicable SGRP Company is terminated within the Protected Period (i) by such employer for any reason other than the Employee's death or permanent disability or a Termination For Cause (as reasonably determined by SGRP's Compensation Committee), or (ii) by the Employee for Good Reason, and, in the case of any payment or benefit provided hereunder or portion thereof that is deferred compensation subject to IRC §409A (or would be treated as such deferred compensation if the Employee were an Executive or Officer of SGRP), if either such termination also constitutes a Separation from Service (each of which will be referred to as a "Severance Termination"), the provisions of this Section shall apply and the benefits provided by this Section shall be in lieu of any and all other severance or similar termination benefits that might otherwise apply (which other benefits are hereby waived by the Employee in the event such Severance Termination benefits apply).

 

(b)     Release and Non-Compete Agreement Required for Severance Benefits. As a condition precedent to the payment of any benefits under this Agreement in the event of a Severance Termination, the Company may in its discretion elect to require execution and delivery by the Employee of (i) a release substantially in the same form as Exhibit A hereto (a "Release"), (ii) a Confidentiality, Non-Solicitation and Non-Competition Agreement (with, among other things, a five year period of confidentiality, a three year period of non-solicitation and a one-year non-compete following termination) substantially in the same form as Exhibit B hereto (a "Non-Compete Agreement"), and confirmatory resignation letters for each applicable SGRP Company substantially in the same form as Exhibit C hereto (each a "Resignation"), by sending to the Employee a Release and a Non-Compete Agreement signed by the Company (and any applicable SPAR Affiliate) within the thirty(30) day period following the date of such Severance Termination (whether or not delivery is accepted by the Employee). If the Employee has not signed the Release, Non-Compete Agreement and Resignations and sent them back to the Company by the last day of the thirty (30) day period following their by the Employee (or if such last day not a business day, the next succeeding business day), then notwithstanding anything else in this Agreement to the contrary, the Company (and any applicable SPAR Affiliate) shall not be required to make, and the Employee shall not be entitled to receive, any severance payments or other benefits under this Agreement.

 

 

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(c)     Lump Sum Severance Payment; CICSA Credit. If a Severance Termination has occurred, then, subject to subsection (b) of this Section, the Company shall promptly (but not later than the Severance Payment Date) pay (or cause the applicable SPAR Affiliate to promptly pay) to the Employee severance pay in a lump sum equal to the sum of the following amounts (collectively, the "Severance Payment"): the product of the Employee's Daily Salary times 183 days.

 

(ii) The Employee acknowledges and agrees that the Severance Payment is in lieu of all other salary, bonuses, severance or other compensation that may have been payable to the Employee after or respecting the Severance Termination date (other than under the CICSA), and that the Severance Payment shall be credited against and reduce the amount of any payment due under the CICSA under the circumstances (e.g., no double dipping). The Company acknowledges and agrees that the Severance Payment is in addition to (and not in limitation of) any and all unpaid salary and other compensation earned by and owed to the Employee for any period ending on or before the date of the Severance Termination (including any period ending on that date due to such termination).

 

(d)     Vacation Days. If a Severance Termination has occurred, then, subject to subsection (b) of this Section, the Company shall promptly (but not later than the Severance Payment Date) pay (or cause the applicable SPAR Affiliate to promptly pay) to the Employee an amount equal to his or her accrued and unused vacation days (if any), computed at the Employee's Annual Salary, which the Company shall pay promptly and in accordance with the applicable policy of the Company (or if changed pending or following the applicable Service Termination, in accordance with the immediately preceding applicable policy of the Company). The Employee acknowledges that personal days and sick days are not vacation days for this or any other purpose.

 

(e)     Insurance. In addition, during the two-year period following the effective date of any Severance Termination, the Employee and his dependents shall continue to receive the insurance benefits received during the preceding year as well as any additional insurance benefits as may be provided to executive officers or their dependents during such period in accordance with the Company's policies and practices. The Employee's required co-payments shall not exceed those payable by the other executive officers of the SPAR Group so long as the Employee has timely complied with subsection (a) of this Section. Any applicable COBRA time periods and rights shall run concurrently with the provision of such insurance.

 

(f)     Stock Compensation Awards. If a Severance Termination has occurred, then, subject to subsection (a) of this Section, each stock compensation award granted to the Employee that has not, by its express terms, vested shall be deemed to have vested on the date of any Severance Termination, and shall thereafter be exercisable for the maximum period of time allowed for exercise thereof under the terms of such option, which period shall be determined as if the Severance Termination were a permitted retirement (irrespective of age or subsequent employment) of the Employee for the purpose of interpreting the provisions of any of the Company's stock compensation plans or awards to the Employee; provided, however, that if payment or settlement of any such stock compensation award at such time would result in a prohibited acceleration or deferral under IRC §409A, then such award shall be paid or settled at the time the award would otherwise have been paid or settled under the applicable plan or arrangement relating to such award absent such prohibited acceleration or deferral.

 

(g)     401k. If a Severance Termination has occurred, then, subject to subsection (a) of this Section, on October 15 of the year following the Severance Termination the Company shall pay to the Employee an amount equal to the 401k matching contribution for the year of his Severance Termination in accordance with the Company's 401(k) Plan as if the Employee had been employed for more than 1000 hours during the plan year and employed on the last day of the plan year.

 

(h)     Illness not affecting Good Reason. The Employee's right to terminate his employment for Good Reason shall not be affected by his illness or incapacity, whether physical or mental, unless the Company shall at the time be entitled to terminate his or her employment by reason thereof.

 

 

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(i)     Parachute Payments. Notwithstanding any other provision of this Section, if it is determined that part or all of the compensation or benefits to be paid to the Employee under this Agreement in connection with the Employee's Severance Termination, or under any other plan, arrangement or agreement, constitutes a "parachute payment" under IRC §280G(b)(2), then the amount constituting a parachute payment that would otherwise be payable to or for the benefit of the Employee shall be reduced (if required under such applicable law), but only to the extent necessary, so that such amount would not constitute a parachute payment. In the event a reduction is required, cash payments shall be reduced first, and then compensation and benefits not payable in cash shall be reduced, in each case in reverse order beginning with payments or benefits that are to be paid the farthest in time from the date of the reduction and in each case after giving effect to any payments and benefits that may have been received prior to termination. Any determination that a payment constitutes a parachute payment shall be made as promptly as practicable following the Employee's termination of employment (but not later than the date payment is required under subsection (b) of this Section) by the Tax Adviser (at the expense of the Company), whose determination shall be final and binding in all cases. Unless the Employee is given notice that a payment (or payments) will constitute a parachute payment prior to the earlier of (1) receipt of such payments or (2) the tenth (10th) business day following his or her Severance Termination, no payment (or payments) shall be deemed to constitute a parachute payment. If the determination made pursuant to this subsection would result in a reduction, the Tax Adviser also shall determine which and how much of any particular entitlement shall be so reduced (to the extent required under such applicable law), in each case after giving effect to any payments and benefits that may have been received prior to such termination, and shall advise the Employee and Company in writing within ten (10) business days of the determination of the reduction in payments. 

 

(j)     Company's Obligations. The Company shall (or shall cause the applicable SPAR Affiliate to) pay to, or distribute to or for the benefit of, the Employee such amounts as are then due to the Employee under this Agreement and shall timely pay to, or distribute to or for the benefit of, the Employee in the future such amounts as become due to the Employee under this Agreement.

 

(k)     Extension of Benefits. Except as otherwise specified in this Section, any extension of benefits following a Severance Termination shall be deemed to be in addition to, and not in lieu of, any period for benefits continuation provided for by applicable law at the Company's, the Employee's or his dependents' expense, as applicable.

 

(l)     Temporary Suspension of Section's Benefits. Notwithstanding any other provision of this Section, to the extent permitted under IRC §409A, in the event that the Employee's Termination For Cause is solely based on the Employee having been indicted for or charged with any one or more of the deeds described in clause (iv) of the definition of Termination For Cause and there is a bona fide dispute as to whether any such deed(s) occurred, the payments and benefits of this Section(other than those under subsections (d), (e) and (k) of this Section respecting vacation pay, insurance and the like) shall be temporarily withheld until the bona fide dispute is considered settled, which settlement shall be deemed to occur at such time as either:

 

	
(i)
	
the first to occur of (A) the final determination by an appropriate authority (including an arbitrator) that the Employee is not guilty or is acquitted of such deed(s), (B) the Company's written acknowledgement that the Employee is not guilty or acquitted of such deed(s) or the substantive equivalent or any settlement with the Employee to any such effect, or (C) the passage of twelve months following such termination without the good faith prosecution (criminal or civil) of the Employee for or arbitration of such deed(s) (the first of which occurs being the "Resolution Date"), in any which case the termination shall be deemed a Severance Termination and, subject to subsection (a) of this Section, the Employee shall be entitled at such time, with (where applicable) payment or commencement, as applicable, to be made within ten business days after the Resolution Date but in no event later then the end of the calendar year containing the Resolution Date, to all the benefits of this Section as of the Severance Date , plus (y) interest at the prime rate per annum on the unpaid amounts outstanding from time to time from the Severance Date through the Resolution Date (the "Resolution Period"), plus (z) an extension of the Employee's benefit periods under subsections (d) and (i) of this Section and stock compensation award exercise period(s) under subsection (e) of this Section equal to the length of the Resolution Period; provided, however, that the extension of the extension of the Employee's stock compensation award exercise period(s) under subsection (e) of this Section shall not extend the exercise period beyond the original term of each stock option (determined without regard to early termination due to cessation of employment); or 

 

	
(ii)
	
the Employee admits or confesses to, pleads guilty or no contest to, adversely settles respecting or is convicted of such deed(s), in any which case the Employee shall not be entitled to any of the benefits of this Section, any salary or bonus pending such resolution, any of the benefits of subsection (c) hereof or any further payments or benefits hereunder other than benefits continuation provided for by applicable law.

 

(m)     Employee's Estate. In the event the Employee shall die after a Severance Termination (including, without limitation, during the Resolution Period), this Agreement and the benefits of this Section shall inure to the benefits of the estate, heirs and legal representatives of the deceased Employee in accordance with his or her will or applicable law, as the case may be.

 

(n)     IRC §409A Override; Voluntary Early Payment. Notwithstanding anything to the contrary in this Agreement, (A) the Company and the SPAR Affiliates do not warrant or guaranty compliance with IRC §409A, (B) the Company and the SPAR Affiliates shall not be liable for any taxes should the Employee be assessed or otherwise become liable for any additional income tax, excise tax, penalty or interest as a result of any payment or provision of any benefit in violation of IRC §409A, (C) it is intended that any payment or benefit provided pursuant to or in connection with this Agreement that is considered to be deferred compensation subject to IRC §409A (and not exempt) shall be provided and paid in a manner, and at such time and in such form, as complies with the requirements of IRC §409A to avoid any unfavorable tax consequences, and (D) without limiting the generality of the foregoing, the following specific rules shall apply in connection therewith: 

 

 

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(i)
	
any bonus payments due hereunder that would be penalized under IRC §409A if paid later pursuant to the terms hereof shall instead be paid to the Employee by no later than 2 1/2 months after the end of the calendar year in which the Employee's rights to such bonus payments first vested for purposes of IRC §409A; 

 

	
(ii)
	
if any bonus payments are accelerated hereunder to an earlier payment time that would result in a prohibited acceleration under IRC §409A, then such amount shall instead be paid at the time the amount would otherwise have been paid absent such prohibited acceleration; 

 

	
(iii)
	
subject to any applicable prohibition on acceleration of payment under IRC §409A, the Company may, at any time and in its sole discretion, make a lump-sum payment of or all amounts, or any or all remaining amounts, due to the Employee under this Agreement;

 

	
(iv)
	
all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits for purposes of and to the fullest extent allowed by IRC §409A;

 

	
(v)
	
the payments or provision of benefits that are considered to be deferred compensation subject to IRC §409A (e.g., not exempt) in connection with the Employee's Separation from Service shall be delayed, to the extent applicable, until six months after the separation from service, or, if earlier, the Employee's death, if the Employee is a "specified employee" under IRC §409A (the "409A Deferral Period"); payments that are otherwise due to be made in installments or periodically during the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends; payments that are due to be made in installments or periodically after the 409A Deferral Period shall be made as scheduled; any benefits that are required to be deferred under IRC §409A during the 409A Deferral Period may be provided during such period at the Employee's expense, with the Employee having a right to reimbursement from the Company once the 409A Deferral Period ends; and payments and benefits that are due to be made or provided in installments or periodically after the 409A Deferral Period shall be made or provided as scheduled; 

 

	
(vi)
	
if this Agreement provides for reimbursements that constitute deferred compensation for purposes of IRC §409A, in no event shall the reimbursements be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred; and

 

	
(vii)
	
if, after application of the foregoing rules and the other provisions of this Agreement (as and to the extent applicable) the Employee would still be reasonably likely to be assessed or otherwise become liable for any additional income tax, excise tax, penalty or interest as a result of any payment or provision of any benefit in violation of IRC §409A under any provision of this Agreement, then effective as of the effective date of this Agreement, (A) if such provision could be amended to eliminate such violation, such provision shall be deemed to have been amended as to the extent necessary to eliminate such violation, and (B) if such provision could not be amended to eliminate such violation, such provision shall be deemed to have been deleted.

 

Section 4.     Waivers of Notice, Etc. Each Party hereby absolutely, unconditionally, irrevocably and expressly waives forever each and all of the following: (a) delivery or acceptance and notice of any delivery or acceptance of this Agreement; (b) notice of any action taken or omitted in reliance hereon; (c) notice of any nonpayment or other event that constitutes, or with the giving of notice or the passage of time (or both) would constitute, any nonpayment, nonperformance, misrepresentation or other breach or default under this Agreement; (d) notice of any material and adverse effect, whether individually or in the aggregate, upon the assets, business, cash flow, expenses, income, liabilities, operations, properties, prospects, reputation or condition (financial or otherwise) of a Party, its Representative or any other person,; and (e) any other proof, notice or demand of any kind whatsoever with respect to any or all of a Party's obligations or promptness in making any claim or demand under this Agreement.

 

Section 5.     Mutual Consent to Governing Law. To the greatest extent permitted by applicable law, this Agreement shall be governed by and construed in accordance with the applicable federal law of the United States of America, and to the extent not preempted by such federal law, by the applicable law of the State of New York, in each case other than those conflict of law rules that would defer to the substantive laws of another jurisdiction. The preceding consents to governing law have been made by the Parties in reliance on applicable law, including (without limitation) Section 5-1401 of the General Obligations Law of the State of New York, as amended, as and to the extent applicable. 

 

 

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Section 6.     Mutual Consent to Arbitration and New York Jurisdiction, Etc. (a) Any unresolved dispute or controversy under this Agreement other than any Arbitration Exclusion shall be settled exclusively by arbitration conducted by the American Arbitration Association ("AAA") in accordance with the AAA's Commercial Arbitration Rules then in effect ("AAA Rules") and held in Westchester County, New York. However, no Party shall be required to arbitrate any Arbitration Exclusion, and any Party may pursue any Arbitration Exclusion through any action, suit, proceeding or other effort independent and irrespective of any pending or possible arbitration. "Arbitration Exclusion" shall mean any injunctive or similar equitable relief, any defense or other indemnification by the other Party, the scope or applicability of this arbitration provision, any enforcement of any arbitration or court award or judgment in any jurisdiction or any appeal of any lower court or arbitration decision sought by a Party, and at the option of such seeking Party, any damages or other applicable legal or equitable relief reasonably related to any of the forgoing exclusions. Any Party may object to any proposed arbitrator that (in its reasonable judgment) is not a disinterested unrelated third party or does not have at least a basic knowledge of merchandising businesses, accounting practices and generally accepted accounting principles. The arbitrator(s) shall determine each claim or severable part thereof in accordance with the provisions of this Agreement, shall use supportable quantifiable calculations in determining amounts, shall not add to, detract from, or modify any provision of this Agreement, and shall not "split the difference" or use other similar allocation methods. Discovery will be strictly limited to documents of the Parties specifically applicable to the claims, excluding, however, those documents protected by attorney/client, accountant or other professional or work product privilege (which have not been waived). 

 

(b)     The Parties each hereby consents and agrees that any state or federal court sitting in White Plains, New York, each shall have non-exclusive personal jurisdiction and proper venue with respect to any unresolved dispute or controversy between the Parties under or related to this Agreement respecting any Arbitration Exclusion or other matter under this Agreement that is not subject to arbitration hereunder; provided, however, that such consent shall not deprive any Party of the right to appeal the decision of any such court to a proper appellate court located elsewhere or to voluntarily commence or join any action, suit or proceeding in any other jurisdiction having proper jurisdiction and venue. 

 

(c)     The preceding consents to the jurisdiction and venue of such arbitrations and courts have been made by the Parties in reliance (at least in part) on Section 5-1402 of the General Obligations Law of the State of New York, as amended (as and to the extent applicable), other applicable law, and the rules of the AAA. No Party will raise, and each Party hereby absolutely, unconditionally, irrevocably and expressly waives forever, any objection or defense to any such jurisdiction as an inconvenient forum, or to any deference to or delay for any arbitration respecting any counterclaim or other matter relating to any Arbitration Exclusion. Except as otherwise provided in this Agreement: (i) in any arbitration, each Party shall pay its own expenses in such matter, including the fees and disbursements of its own attorneys, and half of the fees and expenses of the AAA and the arbitrator(s) costs, as applicable in each case irrespective of outcome; and (ii) in any action, suit or proceeding (other than arbitration), the predominately losing Party shall pay the costs and expenses of the predominately winning Party, including the fees and disbursements of the Parties' respective attorneys and all court costs. 

 

Section 7.     Notice. Any notice, request, demand, service of process or other communication permitted or required to be given to a Party under this Agreement shall be in writing and shall be sent to the applicable Party at the address set forth on the signature page below (or at such other address as shall be designated by notice to the other Party and Persons receiving copies), effective upon actual receipt (or refusal to accept delivery) by the addressee on any business day during normal business hours or the first business day following receipt after the close of normal business hours or on any non-business day, by FedEx (or other equivalent national or international overnight courier) or United States Express Mail, certified, registered, priority or express United States mail, return receipt requested, telecopy, or messenger, by hand or any other means of actual delivery. The Employee also may use and rely on the accuracy of the address of the SGRP designated as its executive office in its most recent filing under the Securities Exchange Act as the Company's address for notices hereunder. The Parties acknowledge and agree that such actual receipt will be presumed with, among other things, evidence of the signature by a Representative of, or adult in the same household as, the receiving Party on a return receipt, courier manifest or other courier's acknowledgment of delivery or receipt.

 

Section 8.     Interpretation, Headings, Etc. In this Agreement: (a) the meaning of each capitalized term or other word or phrase defined in singular form also shall apply to the plural form of such term, word or phrase, and vice versa; each singular pronoun shall be deemed to include the plural variation thereof, and vice versa; and each gender specific pronoun shall be deemed to include the neuter, masculine and feminine, in each case as the context may permit or required; (b) any bold text, italics, underlining or other emphasis, any table of contents, or any caption, section or other heading is for reference purposes only and shall not affect the meaning or interpretation of this Agreement; (c) the word "event" shall include (without limitation) any event, occurrence, circumstance, condition or state of facts; (d) this Agreement includes each schedule and exhibit hereto, all of which are hereby incorporated by reference into this Agreement, and the words "hereof", "herein" and "hereunder" and words of similar import shall refer to this Agreement (including all schedules and exhibits hereto) and the applicable statement(s) of work as a whole and not to any particular provision of any such document; (e) the words "include", "includes" and "including" (whether or not qualified by the phrase "without limitation" or the like) shall not in any way limit the generality of the provision preceding such word, preclude any other applicable item encompassed by the provision preceding such word, or be deemed or construed to do so; (f) unless the context clearly requires otherwise, the word "or" shall have both the inclusive and alternative meaning represented by the phrase "and/or"; (g) each reference to any financial or reporting control or governing document or policy of SPAR shall include those of its ultimate parent, SPAR Group, Inc., or any Nasdaq or SEC rule or other applicable law, whether generically or specifically, shall mean the same as then in effect; and (h) each provision of this Agreement shall be interpreted fairly as to each Party irrespective of the primary drafter of such provision. 

 

 

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Section 9.     Survival of Agreements, Etc. Each of the representations and warranties (as of the date(s) made or deemed made), covenants, waivers, releases and other agreements and obligations of each Party contained in this Agreement: (a) shall be absolute, irrevocable and unconditional, irrespective of (among other things) (i) the validity, legality, binding effect or enforceability of any of the other terms and provisions of this Agreement or any other agreement (if any) between the Parties, or (ii) any other act, circumstance or other event described in this Section; (b) shall survive and remain and continue in full force and effect in accordance with their respective terms and provisions following and without regard to (i) the execution and delivery of this Agreement and each other agreement (if any) between the Parties and the performance of any obligation of such Party hereunder or thereunder, (ii) any waiver, modification, amendment or restatement of any other term or provision of this Agreement or any other agreement (if any) between the Parties (except as and to the extent expressly modified by the terms and provisions of any such waiver, modification, amendment or restatement), (iii) any full, partial or non-exercise of any of the rights, powers, privileges, remedies and interests of a Party or any SPAR Affiliate under this Agreement, any other agreement (if any) between the Parties or applicable law against such other Party or any other person or with respect to any obligation of such Party, which exercise or enforcement may be delayed, discontinued or otherwise not pursued or exhausted for any or no reason whatsoever, or which may be waived, omitted or otherwise not exercised or enforced (whether intentionally or otherwise), (iv) any extension, stay, moratorium or statute of limitations or similar time constraint under any applicable law, (v) any pledge, assignment, sale, conveyance or other transfer by the Company (in whole or in part) to any other person of this Agreement or any other agreement (if any) between the Parties or any one or more of the rights, powers, privileges, remedies or interests of the Company therein, (vi) any act or omission on the part of the Company, any SPAR Affiliate, any of their respective Representatives or any other person, (vii) any termination or other departure of the Employee from his or her employment, whether for cause or otherwise, or any dispute involving any aspect of such employment; or (viii) any other act, event, or circumstance that otherwise might constitute a legal or equitable counterclaim, defense or discharge of a contracting party, co-obligor, guarantor, pledgor or surety; in each case without notice to or further assent from the Employee or any other person (except for such notices or consents as may be expressly required to be given to such Party under this Agreement or any other agreement (if any) between the Parties); (c) shall not be subject to any defense, counterclaim, setoff, right of recoupment, abatement, reduction or other claim or determination that the Employee may have against the Company, any SPAR Affiliate, any of their respective Representatives or any other person; (d) shall not be diminished or qualified by the death, disability, dissolution, reorganization, insolvency, bankruptcy, custodianship or receivership of Party or any other person, or the inability of any of them to pay its debts or perform or otherwise satisfy its obligations as they become due for any reason whatsoever; and (e) with respect to any provision expressly limited to a period of time, shall remain and continue in full force and effect (i) through the specific time period(s) and (ii) thereafter with respect to events or circumstances occurring prior to the end of such time period(s).

 

Section 10.     Mutual Successors and Assigns, Assignment; Intended Beneficiaries. All representations, warranties, covenants and other agreements made by or on behalf of each Party in this Agreement shall be binding upon the heirs, successors, assigns and legal representatives of such Party and shall inure to the benefit of the heirs, successors, assigns, and legal representatives of each other Party; provided, however, that nothing herein shall be deemed to authorize or permit the Employee to assign any rights or obligations under this Agreement to any other person, and the Employee agrees to not make any such assignment. The representations, agreements and other terms and provisions of this Agreement are for the exclusive benefit of the Parties hereto and the SPAR Affiliates, and, except as otherwise expressly provided herein, no other person shall have any right or claim against any Party by reason of any of those provisions or be entitled to enforce any of those provisions against any Party. The provisions of this Agreement are expressly intended to benefit each of the members of the SPAR Group, who may enforce any such provisions directly, irrespective of whether the Company participates in such enforcement. However, no SPAR Affiliate shall have, or shall be deemed or construed to have, any obligation or liability to the Employee under this Agreement or otherwise.

 

Section 11.     Mutual Severability. In the event that any provision of this Agreement shall be determined to be superseded, invalid, illegal or otherwise unenforceable (in whole or in part) pursuant to applicable law by a court or other governmental authority, the Parties agree that: (a) any such authority shall have the power, and is hereby requested by the Parties, to reduce or limit the scope or duration of such provision to the maximum permissible under applicable law or to delete such provision or portions thereof to the extent it deems necessary to render the balance of such Agreement enforceable; (b) such reduction, limitation or deletion shall not impair or otherwise affect the validity, legality or enforceability of the remaining provisions of this Agreement, which shall be enforced as if the unenforceable provision or portion thereof were so reduced, limited or deleted, in each case unless such reduction, limitation or deletion of the unenforceable provision or portion thereof would impair the practical realization of the principal rights and benefits of either Party hereunder; and (c) such determination and such reduction, limitation and/or deletion shall not be binding on or applied by any court or other governmental authority not otherwise bound to follow such conclusions pursuant to applicable law.

 

 

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Section 12.     Mutual Waivers and Cumulative Rights. Any waiver or consent respecting this Agreement shall be effective only if in writing and signed by the required Parties and then only in the specific instance and for the specific purpose for which given. No waiver or consent shall be deemed (regardless of frequency given) to be a further or continuing waiver or consent. No voluntary notice to or demand on any Party in any case shall entitle such Party to any other or further notice or demand. Except as expressly provided otherwise in this Agreement, (a) no failure or delay by any Party in exercising any right, power, privilege, remedy, interest or entitlement hereunder shall deemed or construed to be a waiver thereof, (b) no single or partial exercise thereof shall preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right, power, privilege, interest or entitlement, and (c) the rights, powers, privileges, remedies, interests and entitlements under this Agreement shall be cumulative, are not alternatives, and are not exclusive of any other right, power, privilege, remedy, interest or entitlement provided by this Agreement or applicable law.

 

Section 13.     Mutual Waiver of Jury Trial; All Waivers Intentional, Etc. In any action, suit or proceeding in any jurisdiction brought by any Party hereto against any other Party, each Party hereby absolutely, unconditionally, irrevocably and expressly waives forever trial by jury. This waiver of jury trial and each other express waiver, release, relinquishment or similar surrender of rights (however expressed) made by a Party in this Agreement has been absolutely, unconditionally, irrevocably, knowingly and intentionally made by such Party.

 

Section 14.     Mutual Counterparts and Amendments. This Agreement or any supplement, modification or amendment to or restatement of this Agreement may have been executed in two or more counterpart copies of the entire document or of signature pages to the document, each of which may have been executed by one or more of the signatories hereto or thereto and delivered by mail, courier, telecopy or other electronic or physical means, but all of which, when taken together, shall constitute a single agreement binding upon all of its signatories. This Agreement (i) may not be supplemented, modified, amended, restated, waived, extended, discharged, released or terminated orally, (ii) may only be supplemented, modified, amended or restated in a writing signed by all of the Parties hereto specifically referencing this Agreement by date, title, parties and provision(s) being amended, and (iii) may only be waived, extended, discharged, released or terminated in a writing signed by each Party against whom enforcement thereof may be sought.

 

Section 15.     Entire Agreement. Each Party acknowledges and agrees that, in entering into this Agreement and the other Related Documents, it has not directly or indirectly received or acted or relied upon any representation, warranty, promise, assurance or other agreement, understanding or information (whether written, electronic, oral, express, implied or otherwise) from or on behalf of the other Party, any of its subsidiaries or other Affiliates, or any of their respective Representatives, respecting any of the matters contained in this Agreement or any other Related Document except for those expressly set forth in this Agreement and the other Related Documents. This Agreement (including all exhibits and schedules) and the other Related Documents contain the entire agreement and understanding of the Parties and supersede and completely replace all prior and other representations, warranties, promises, assurances and other agreements, understandings and information (including, without limitation, all letters of intent, term sheets, existing agreements, offers, requests, responses and proposals and any other severance or termination arrangement or policy of the Company), whether written, electronic, oral, express, implied or otherwise, from a Party or between them with respect to the matters contained in this Agreement and the other Related Documents, as applicable.

 

In Witness Whereof, the Parties hereto have executed and delivered this Agreement (including all schedules and exhibits hereto) through their duly authorized signatories on the dates indicated below and intend to be legally bound by this Agreement as of the Effective Date.

 

 

	
CORPORATION:
	  	
EMPLOYEE: 

	
SPAR Group, Inc.
	  	
Scott Popaditch

	  	  	  
	
By: 
	 	  	  
	
[ ▲ Executive's Signature ▲]
	  	
[ ▲ Employee's Signature ▲ ]

	
Executive's Name:
	  	  
	
Executive's Title:
	  	
Scott Popaditch

	  	  	
[Employee's Name ▲ Please Type or Print]

	 	 	 
	
Date Signed: August 23, 2016
	  	
Date Signed: August 23, 2016

	  	  	  
	
Company's Current Address:
	  	
Employee's Current Address:

	
SPAR Group, Inc. 
	  	
→ Scott Popaditch

	
333 Westchester Avenue, South Building, Suite 204,
	  	
→625 Bentley Lane

	
White Plains, New York 10604
	  	
→ Maitland, FL 32751

	  	  	  

 

 

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