McGowin Park MEMORANDUM OFFERING - Stirling Properties · 2018. 11. 13. · certificate of formation limited liability company agreement mcgowin park investors, llc articles of organization

stirlingproperties.com

CO N F I D E N T I A LI N V E S TM E N T

O F F E R I N GM E M O R A N D U M

McGowinPark

MOBILE, ALABAMA

www.stirlingproperties.com

Stirling Properties, LLC

109 Northpark Boulevard Suite 300

Covington, LA 70433

[office] 985-898-2022 [fax] 985-898-2077

StirlingProperties.comstirlingproperties.com

GRIFFIN LENNOXInvestment Advisor and [email protected]

BEEZIE LANDRYVice President of Investment [email protected]

McGowinParkMOBILE, ALABAMA

mailto:[email protected]

mailto:[email protected]

www.stirlingproperties.com

INVESTMENT OFFERING

STIRLING PROPERTIES, LLCMCGOWIN PARK | MOBILE, ALABAMA 3

D I S C L A I M E R

THIS CONFIDENTIAL INVESTMENT OFFERING MEMORANDUM (THE “MEMORANDUM”) RELATES TO AN OFFERING OF MEMBERSHIP INTERESTS IN THE COMPANY (THE “INTERESTS”).

AN INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY, ITS BUSINESS, PROPERTIES AND LIABILITIES, AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE MEMBERSHIP INTERESTS OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FUTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.INTERESTS IN THE COMPANY ARE SUITABLE ONLY FOR SOPHISTICATED INVESTORS FOR WHOM AN INVESTMENT IN THE COMPANY DOES NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAM AND WHO FULLY UNDERSTAND AND ARE WILLING TO ASSUME THE RISKS INVOLVED IN THE COMPANY’S BUSINESS. THE COMPANY’S BUSINESS INVOLVES A SUBSTANTIAL DEGREE OF RISK. THERE CAN BE NO ASSURANCE THAT THE COMPANY’S BUSINESS WILL PROVE SUCCESSFUL, AND RESULTS MAY VARY SUBSTANTIALLY OVER TIME.

THE SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE COMPANY’S OPERATING AGREEMENT, THE SECURITIES ACT OF 1933 AS AMENDED (THE “SECURITIES ACT”), AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR EXEMPTION FROM REGISTRATION THEREUNDER. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.EXCEPT AS EXPRESSLY PROVIDED HEREIN, NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS MEMORANDUM AND THE ANNEXES HERETO, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS MEMORANDUM AND THE ANNEXES HERETO, NOR ANY SALE MADE HEREUNDER, SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE MATTERS DISCUSSED HEREIN SINCE THE DATE HEREOF. IN THE EVENT OF ANY MATERIAL CHANGE PRIOR TO THE CLOSING OF ANY SALE MADE HEREUNDER, THIS MEMORANDUM AND THE ANNEXES HERETO WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.

THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR THE INFORMATION OF THE PERSON TO WHOM IT HAS BEEN DELIVERED BY OR ON BEHALF OF THE FUND AND MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, EACH INVESTOR (AND EACH EMPLOYEE, REPRESENTATIVE OR OTHER AGENT OF SUCH INVESTOR) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX STRUCTURE OF THE FUND AND ANY TRANSACTIONS DESCRIBED HEREIN, AND ALL MATERIALS OF ANY KIND (INCLUDING TAX ANALYSES) THAT ARE PROVIDED TO THE INVESTOR RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE. EACH PERSON ACCEPTING THIS CONFIDENTIAL MEMORANDUM HEREBY AGREES TO RETURN IT TO THE COMPANY PROMPTLY UPON REQUEST.

EACH PROSPECTIVE INVESTOR IS INVITED TO MEET WITH COMPANY REPRESENTATIVES TO DISCUSS WITH, TO ASK QUESTIONS OF AND TO RECEIVE ANSWERS FROM THOSE REPRESENTATIVES CONCERNING THE TERMS AND CONDITIONS OF THIS OFFERING OF INTERESTS AND TO OBTAIN ANY ADDITIONAL INFORMATION, TO THE EXTENT THE REPRESENTATIVES POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE, NECESSARY TO VERIFY THE INFORMATION CONTAINED HEREIN.

I.R.S. CIRCULAR 230 NOTICE - THE FOLLOWING NOTICE IS BASED ON U.S. TREASURY REGULATIONS GOVERNING PRACTICE BEFORE THE U.S. INTERNAL REVENUE SERVICE: (1) ANY U.S. FEDERAL TAX INFORMATION CONTAINED HEREIN IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING U.S. FEDERAL TAX PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER; (2) ANY SUCH INFORMATION IS NOT LEGAL OR TAX ADVICE TO A TAXPAYER; AND (3) EACH TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

Prospective Members should carefully read this Memorandum. However, the contents of this Memorandum should not be considered to be legal or tax advice, and each prospective Member should consult with its own counsel and advisers as to all matters concerning an investment in an interest. There will be no public offering of the interests in the Company. No offer to sell (or solicitation of an offer to buy) is being made in any jurisdiction in which such offer or solicitation would be unlawful.

This Memorandum is accurate as of its date, and no representation or warranty is made as to its continued accuracy after such date. No person has been authorized in connection with this offering to give any information or make any representations other than as contained in this Confidential Memorandum.

EXECUTIVE SUMMARY PROPERTY OVERVIEW REGIONAL MAP AERIALS SITE PLAN EXTERIOR PHOTOS OFFERING OVERVIEW

ACQUISITION ANALYSIS SUMMARY PROJECTED CASH FLOW ANALYSIS RENT ROLL LEASE EXPIRATION SCHEDULE ANCHOR TENANT SUMMARIES

MARKET OVERVIEW/HIGHLIGHTS

APPENDIX LIST MCGOWIN PARK SHOPPING CENTER, LLC CERTIFICATE OF FORMATION LIMITED LIABILITY COMPANY AGREEMENT MCGOWIN PARK INVESTORS, LLC ARTICLES OF ORGANIZATION OPERATING AGREEMENTS ACCREDITED INVESTOR QUESTIONNAIRE SUBSCRIPTION AGREEMENT

I NVE S TM E N T O F F E R I N G

INVESTMENT OFFERING


Stirling Properties LLC (Stirling) is pleased to announce our next investment opportunity: McGowin Park Shopping Center• 374,858 square foot open-air shopping center• Located in Mobile, Alabama on Interstate 65 and U.S. Highway 90, McGowin Park sits in a highly visible and high traffic area of Mobile, a market that continues to experience strong economic growth.• Built in 2015/2016• Shadow anchors Hollywood Theaters and Costco Wholesale with the next nearest Costco being over 100 miles away. • 99% leased with only one vacancy of 2,400 square feet.• National and regional retailers including Dick’s Sporting Goods, Field & Stream, Hobby Lobby, Best Buy, HomeGoods and Old Navy.• Tenants occupying 90% of the square footage of the center have lease term that expire in 2025 or later.

Regional Economic Highlights• The Port of Mobile is the 9th largest port in the United States which has a massive economic impact on the city and surrounding areas.• AirBus - $600 million new facility - 600 jobs or more. • Amazon - 362,000 square foot facility - $30 million - nearly 1,000 jobs. • Walmart - 2.5 million square foot distribution center - $135 million - over 750 jobs.• The ship building industry is another one of Mobile’s primary economic drivers. It is supported by 38 companies that employ 5,600 employees.As Mobile continues to attract global recognition in the industrial and retail sectors, more jobs and more economic growth are predicted for this market.

PR O PE R T Y OV E RV I E W

INVESTMENT OFFERING


9 |

177 Miles 233 Miles

16

5 Mile

s

128 Miles

McGowin Park

75

75

2020

59

55

55

85

85

10

20

20

49

59

65

185

Gulf of Mexico

Florida

Georgia

Alabama

Mississippi

Louisiana

85,5

20 A

ADT

87,780 AADT

R E G I O N A L M A P

INVESTMENT OFFERING


(87,870 AADT)

GOVERNMENT BLVD / U.S. HWY 90 (47,497 AADT)

(88,143 AADT)

McGowin Park

MOBILEDOWNTOWN

AIRPORT

A E R I A L

INVESTMENT OFFERING


(87,870 AADT)

GO

VERNMENT BLVD / U.S. HW

Y 90

(47,497 AADT)

A E R I A L

GASOLINE

CORP SKX DROP SHADOW BLUE LOGO COLOR SYSTEM

FILE NAME CORP_SKX_DROP-SHADOW_BLU-logo.eps

SKECHERS corporate identityCATEGORY /DESCRIPTION

PANTONE 296CC = 100M = 46Y = 0K = 70

INVESTMENT OFFERING

STIRLING PROPERTIES, LLCMCGOWIN PARK | MOBILE, ALABAMA 9 11EXECUTIVE SUMMARY

Outparcel 8+/-2.57 acres

(NAP)

(83,520 AADT)

Gove

rnm

en

t Blvd

. | U.S. H

wy. 9

0 (2

8,4

20 A

AD

T)


(NAP)

B-2

B-3

D1-D

6

K

C100

DA

(NAP) REST.

C106

J H G F ED C B A100-A112

B100-

B108

E100


(NAP)

(NAP) REST.

Satchel Paige Drive

CURRENT TENANT TO BE LEASED

PYLON SIGNNOT OWNED

TENANT ROSTER

Suite Tenant SF

A-100 Verizon Wireless 1,800

A-102 Sleep Center Mattress 3,934

A-104 H&R Block 1,229

A-106 L.A. Bikini 1,600

A-108 Luxury Nails Spa 2,000

A-110 Carter's 3,969

A-112 Osh Kosh B'Gosh 2,831

B Petco 12,500

B-2 Field & Stream 50,000

B-3 Dick's Sporting Goods 40,000

B-100 Starbucks 2,110

B-102 T-Mobile 2,850

B-104 AT&T 2,040

B-105 Firehouse Subs 1,783

B-106 Great Clips 1,229

B-108 Mattress Firm 4,000

C Sketchers 7,500

C-100 Panda Palace Buffet 6,490

C-106 Newk's 4,500

D Old Navy 13,000

D-1 ABC Liquor 5,341

D-4 Total Nutrition 1,600

D-5 Sport Clips 1,200

D-6 Dickey's BBQ Pit 2,797

E Ross Dress for Less 24,934

E-100 Five Guys Burgers & Fries 2,500

E-102 Xfinity 4,005

E-106 To Be Leased 2,400

F HomeGoods 24,000

G Hobby Lobby 55,000

H Ashley HomeStore 30,000

J Dollar Tree 10,000

K Best Buy 45,721

TOTAL 374,858

E102E106

SITE PLAN

(NAP)Rest.B

S I T E PL A N

INVESTMENT OFFERING


E X T E R I O R PH OTO S

INVESTMENT OFFERING


McGowin Park Shopping Center, LLC (“Purchaser”) was formed as a Delaware limited liability company on September 14, 2018. Purchaser is a wholly-owned subsidiary of McGowin Park Investors, LLC (the “Company”), a Louisiana limited liability company organized on September 19, 2018. The certificate of formation and limited liability company agreement of Purchaser are attached to this Offering Memorandum as Appendices 1 and 2. The articles of organization and operating agreement of the Company are attached to this Offering Memorandum as Appendices 3 and 4.

Purchaser will acquire 100% fee simple interest in McGowin Park Shopping Center (the “Shopping Center”). The Company, as the sole member of Purchaser, will likewise acquire an indirect 100% fee simple interest in McGowin Park Shopping Center.

Pursuant to this Offering Memorandum, the Company is offering membership interests as follows:

O F F E R I N G OV E RV I E W

Issuer: McGowin Park Investors, LLC, a Louisiana limited liability company.

Security: Class A Units

Issue Price: $250,000 per unit

Intended Offering Size: $31,000,000 - We are assuming the sale and issuance of 124 Class A Units

Use of Proceeds: Pay a portion of the Shopping Center purchase price, related closing expenses and fund an initial escrow account. See page 14

Management: Managed by a board of managers composed of four individuals. Initial managers are Martin A. Mayer, G. Townsend Underhill IV, Grady K. Brame and Donna F. Taylor.

Voting: All Members (Class A and Class B) will vote as a single class. Each Memeber will have that number of votes equal to the Units held by that Mem-ber.

Distributions: The Company will make distributions from cash distributed to it from Purchaser.

From operating revenues:

First, to Class A Members until each has received an amount equal to 7.5% per annum on unreturned investment amount;Second, to Class B Members in the aggregate (to be distributed pro rata based on their Class B Unit holdings) an amount equal to one-ninth (1/9) of the total amount distributed to Class A Members; andFinally, 90% to Class A Members in the aggregate (to be distributed pro rata based on their Class A Unit holdings) and 10% to Class B Members in the aggregate in the aggregate (to be distributed pro rata based on their Class B Unit holdings).

From refinancing/liquidation events:

First, to Class A Members until each has received an amount equal to 7.5% per annum on unreturned investment amount;Second, to Class A Members until each has recovered their investment amount;Third, to Class B Members in the aggregate (to be distributed pro rata based on their Class B Unit holdings) an amount equal to one-ninth (1/9) of the total amount distributed to Class A Members; andFinally, 90% to Class A Members in the aggregate (to be distributed pro rata based on their Class A Unit holdings) and 10% to Class B Members in the aggregate in the aggregate (to be distributed pro rata based on their Class B Unit holdings).

Transfer Restrictions: The Class A Units are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted by the Securities Act of 1933, as amended, and applicable state securities laws, as well as in compliance with the restrctions set forth in the Company’s operating agreement, including a right of first refusal. (See Appendix)

INVESTMENT OFFERING


O F F E R I N G OV E RV I E W

The Company is offering the Class A Units to a limited number of investors, primarily “accredited investors” (as that term is defined in Rule 501 under Regulation D of the Securities Act of 1933, as amended). See the Accredited Investor Questionnaire at Appendix 5. The sale and issuance of the Class A Units will be made pursuant to a Subscription Agreement to be entered into by the Company and each investor in the form of Appendix 6. Persons interested in subscribing for Class A Units should complete and return to the Company the Accredited Investor Questionnaire and Subscription Agreement, and such other documents as the Company may request. Once a subscription has been submitted, the investor may not rescind its subscription without the Company’s approval, which may be withheld in its sole and absolute discretion. The Company reserves the right to reject a subscription in its sole and absolute discretion.

The foregoing overview is not intended to be exhaustive, and does not contain all of the information that you should consider before investing in the Class A Units. For a more complete understanding, you should read this entire Offering Memorandum, including all Appendices attached hereto. You are also encouraged to ask questions of the representatives of the Company and request any additional information that you may deem useful in helping you make a decision to invest.

INVESTMENT OFFERING


Year ROE Total Return*1 8.09% 10.17%2 8.07% 10.24%3 8.56% 10.82%4 8.70% 11.06%5 8.74% 11.21%6 8.78% 11.36%7 8.89% 11.59%8 9.22% 9.30%9 9.33% 10.75%10 9.46% 10.97%

Average 8.78% 10.75%* including debt reduction

RETURNS

ACQUISIT IONANALYSIS

The total acquisition costs are projected to be $73.7 million including the purchase price of $71 million, $750,000 in upfront reserves for CapEx, Leasing Commissions, and Tenant Improvement Allowances, and approximately $1.9 million in acquisition and loan costs. The transaction will require approximately $31,000,000 in investor equity.

The property has existing debt with New York Life that we will be assuming. The New York Life debt has a current balance of $42,764,700 payable interest only at an interest rate of 4.05% with a maturity date of May 10, 2024. We have been in discussions with New York Life about revising the terms of the debt to extend the maturity date and begin to amortize debt once we acquire the property. The revised terms will include a fixed rate of 4.30% fixed for 7 years based on a 30 year amortization. The projected cash flow analysis included is based on the revised debt terms.

The acquisition also includes a revenue stream from the bonds issued by the City and County of Mobile for the formation of an Improvement District for the purpose of providing funds necessary for the acquisition, construction, maintenance and operation of the public infrastructure for the development with the McGowin Park project. The bonds provide recurring cash flow through November 1, 2044.

**FINANCIAL MATTERSThe following financial information contains projections that are based on our reasonable judgment, but are subject to a number of risks and uncertainties, many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct.

S U M M ARY

INVESTMENT OFFERING


Year 1As-Is Projection

Gross Potential Rent 5,084,298 5,147,659 NNN Reimbursements 1,859,117 2,041,769 Other Income 537,800 538,133 Less Vacancy and Collection - (230,190) Total Income 7,481,215 7,497,371 Total Operating Expenses (1,880,643) (2,124,307) Net Operating Income 5,600,572 5,373,064 Annual Debt Service (2,539,563) Reserves, Commissions & Tenant Allowances (56,229) Cash Flow Available for Distribution 2,777,272$

Net Operating Income 5,373,064$ Cap Rate 7.57%Purchase Price 71,000,000$ 189.41

500,000 1.33 Up Front TI/LC Funding 250,000 0.67 Working Capital 106,000 0.28 Acquisition Fee 1.50% 1,065,000 2.84 Loan Assumption Fee 0.50% 213,800 0.57

50,000 0.13 Deed Transfer Tax 28,500 0.08 Appraiser 7,500 0.02 Environmental 4,000 0.01 Building Condition 13,000 0.03

15,000 0.04 55,000 0.15

Insurance (13 months) 352,000 0.94 Total Purchase Price/Costs 73,659,800 196.50 Existing Debt to be Assumed 60% (42,764,700) REQUIRED CASH EQUITY 30,895,100$

PROJECTED ACQUISITION COSTS

Legal

CapX

SurveyProperty Tax Escrow (1 month)

S U M M ARY

INVESTMENT OFFERING


2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

INCOMEGross Potential Rent 5,147,659 5,182,176 5,413,728 5,454,475 5,458,849 5,459,815 5,488,489 5,766,215 5,807,346 5,820,398

ReimbursementsOperating Expenses 1,700,908 1,741,272 1,778,234 1,815,786 1,854,245 1,891,589 1,933,106 1,971,006 2,018,174 2,061,536 District Assessment Tax 340,861 341,963 343,680 344,051 343,160 343,475 343,039 342,349 343,680 343,652

Total Reimbursements 2,041,769 2,083,235 2,121,914 2,159,837 2,197,405 2,235,064 2,276,145 2,313,355 2,361,854 2,405,188

Other IncomeBond Income/Collections 603,633 603,833 606,917 607,583 605,983 607,267 606,133 606,067 606,917 606,867 District Admin Expenses (70,000) (70,000) (70,000) (70,000) (70,000) (70,000) (70,000) (70,000) (70,000) (70,000) Billboard Income 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500

Total Other Income 538,133 538,333 541,417 542,083 540,483 541,767 540,633 540,567 541,417 541,367

Less Vacancy and Collection (230,190) (290,807) (365,429) (370,060) (371,233) (372,105) (374,824) (387,535) (391,717) (394,244) TOTAL INCOME 7,497,371 7,512,937 7,711,630 7,786,335 7,825,504 7,864,541 7,930,443 8,232,602 8,318,900 8,372,709

OPERATING EXPENSESCAM 1.45$ 541,872 550,000 558,250 566,624 575,123 583,750 592,506 601,394 610,415 619,571 INS 0.87$ 325,000 329,875 334,823 339,845 344,943 350,117 355,369 360,700 366,110 371,602 RET 1.76$ 660,678 670,588 680,647 690,857 701,220 711,738 722,414 733,250 744,249 755,413 Management Fee 3% 224,921 225,388 231,349 233,590 234,765 235,936 237,913 246,978 249,567 251,181 District Assessment Tax 371,836 371,959 373,858 374,269 373,283 374,074 373,376 373,335 373,858 373,828 TOTAL OPERATING EXPENSES (2,124,307) (2,147,810) (2,178,927) (2,205,185) (2,229,334) (2,255,615) (2,281,578) (2,315,657) (2,344,199) (2,371,595)

NET OPERATING INCOME 5,373,064 5,365,127 5,532,703 5,581,150 5,596,170 5,608,926 5,648,865 5,916,945 5,974,701 6,001,114 CAPX (T.I./L.C. & structural)

Capital Reserve 0.15$ (56,229) (56,229) (56,229) (56,229) (56,229) (56,229) (56,229) (56,229) (56,229) (56,229) Tenant Improvements (30,000) (70,845) (39,815) - - (16,500) (162,134) (186,380) (10,000) - Leasing Commission (19,877) (42,825) (50,724) - - (12,045) (170,009) (381,187) (8,773) - Funded from Cash Reserve 49,877 113,670 90,539 - - 28,545 332,143 135,226 - -

432,341 NET CASH FLOW BEFORE DEBT SERVICE 5,316,835 5,308,898 5,476,474 5,524,921 5,539,941 5,552,697 5,592,636 5,860,716 5,899,699 5,944,885 ANNUAL DEBT SERVICE (2,539,563) (2,539,563) (2,539,563) (2,539,563) (2,539,563) (2,539,563) (2,539,563) (2,696,967) (2,696,967) (2,696,967) CASH FLOW AVAILABLE FOR DISTRIBUTION 2,777,272 2,769,335 2,936,911 2,985,358 3,000,378 3,013,134 3,053,073 3,163,749 3,202,732 3,247,918

CASH RESERVE BALANCE 750,000 700,123 586,453 495,914 495,914 495,914 467,369 135,226 - - -

DISTRIBUTIONSSponsor 10% 277,727$ 276,933$ 293,691$ 298,536$ 300,038$ 301,313$ 305,307$ 316,375$ 320,273$ 324,792$ Cash Investors 90% 2,499,545$ 2,492,401$ 2,643,220$ 2,686,822$ 2,700,340$ 2,711,820$ 2,747,766$ 2,847,374$ 2,882,459$ 2,923,126$ Return on Equity 8.09% 8.07% 8.56% 8.70% 8.74% 8.78% 8.89% 9.22% 9.33% 9.46%

Total Return (Equity + Debt Reduction) 10.17% 10.24% 10.82% 11.06% 11.21% 11.36% 11.59% 9.30% 10.75% 10.97%Debt Service Coverage Ratio 2.09 2.09 2.16 2.18 2.18 2.19 2.20 2.17 2.19 2.20 End of Year Loan Balance 42,050,043$ 41,304,043$ 40,525,325$ 39,712,454$ 38,863,933$ 37,978,198$ 37,053,616$ 37,025,625$ 36,536,901$ 36,018,033$

Excees Loan Proceeds

PR OJ E C T E D C A S H F LOW A N A LYS I S

INVESTMENT OFFERING


As of September 1, 2018 START END RENTRENT ESCALATIONS

OPTION RENT (DENOTED IN BLUE)

SUITE TENANT SQ. FT. DATE DATE PER SF ANNUAL DATE PER SF OPTIONS

A-100 Verizon Wireless 1,800 Sep-15 Aug-20 $29.75 $53,550 Sep-20Sep-25

$32.85$36.27 Two, 5-Year

A-102 Sleep Center Mattress 3,934 Mar-16 Feb-21 $24.00 $94,416 Mar-21 $26.40 One, 5-Year

A-104 H&R Block 1,229 Jan-16 Apr-20 $29.00 $35,641 May-20 $33.35 One, 5-Year

A-106 LA Bikini 1,600 Sep-15 Sep-20 $27.00 $43,200 Oct-20 Oct-25

$29.70 $32.67 Two, 5-Year

A-108 Luxury Nails 2,000 May-16 Jan-27 $29.00 $58,000 Feb-22 Feb-27

$31.90$35.09 One, 5-Year

A-110 Carter's 3,969 Oct-15 Jan-26 $20.00 $79,380

Oct-20Feb-26Feb-31Feb-36

$22.00$24.20$26.62$29.28

Three, 5-Year

A-112 Osh Kosh B'Gosh 2,831 Oct-15 Jan-26 $20.00 $56,620


$22.00$24.20$26.62$29.28

Three, 5-Year

B Petco 12,500 Nov-15 Jan-26 $15.85 $198,125


$16.85$17.85$18.85$19.85

Three, 5-Year

B-100 Starbucks 2,110 Oct-15 Feb-26 $42.86 $90,435

Mar-21Mar-26Mar-31Mar-36Mar-41

$47.15$51.87$57.05$62.76$69.03

Four, 5-Year

B-102 T-Mobile 2,850 Feb-16 Jan-26 $35.00 $99,750 Feb-21Feb-26Feb-31

$38.50$42.35$46.58

Two, 5-Year

B-104 AT&T 2,040 Dec-15 Nov-20 $31.00 $63,240 Dec-20 Dec-25

$34.10$37.50 Two, 5-Year

B-105 Firehouse Subs 1,783 Jun-16 Jun-26 $30.00 $53,490 Jul-21Jul-26Jul-31

$31.80$34.98$38.48

Two, 5-Year

R E N T R O L L

INVESTMENT OFFERING





B-106 Great Clips 1,229 May-16 Apr-21 $28.00 $34,412 May-21 $28.60 One, 5-Year

B-108 Mattress Firm 4,000 Dec-15 Nov-25 $36.00 $144,000 Dec-20Dec-25Dec-30

$39.60$43.56$47.92

Two, 5-Year

B-2 Field & Stream 50,000 Aug-15 Jan-26 $13.50 $675,000

Feb-21Feb-26Feb-31Feb-36Feb-41

$14.00$14.50$15.00$15.50$16.00

Four, 5-Year

B-3 Dick's Sporting Goods 40,000 Aug-15 Jan-26 $11.50 $460,000

Feb-21Feb-26Feb-31Feb-36Feb-41

$12.00$12.50$13.00$13.50$14.00

Four, 5-Year

C Sketchers 7,500 Nov-15 Nov-20 $19.00 $142,500 Dec-20Dec-25

$20.90$22.99 Two, 5-Year

C-100 Panda Palace 6,490 Sep-16 Aug-26 $26.00 $168,740 Sep-21Sep-26Sep-31

$28.60$31.46$34.60

Two, 5-Year

C-106 Newk's 4,500 Dec-15 Nov-25 $32.00 $144,000

Dec-20 Dec-25Dec-30Dec-35

$35.20$38.72$42.59$46.85

Three, 5-Year

D Old Navy 13,000 Apr-16 Mar-21 $16.00 $208,000 Apr-21Apr-26

$17.50$19.00 Two, 5-Year

D-1 ABC Liquor 5,341 May-16 Apr-26 $33.68 $179,885 Mar-19Mar-20

$33.95Varies None

D-4 Total Nutrition 1,600 Mar-16 Feb-21 $28.67 $45,872 Mar-21Mar-26

$31.54$34.69 Two, 5-Year

D-5 Sport Clips 1,200 Jul-15 Jan-21 $26.00 $31,200 Feb-21Feb-26Feb-31

$28.60$31.46$34.60

Three, 5-Year

D-6 Dickey's BBQ 2,797 Aug-15 Jul-25 $28.00 $78,316 Sep-20Aug-25Aug-30

$30.80$33.90$37.30

Two, 5-Year

R E N T R O L L

INVESTMENT OFFERING





E Ross Dress for Less 24,934 Feb-17 Jan-26 $5.95 $148,357

Feb-26Feb-31Feb-36Feb-41

$7.95$9.95$10.95$12.95

Four, 5-Year

E-100 Five Guys 2,500 Dec-15 Nov-25 $28.00 $70,000 Dec-20Dec-25Dec-30

$30.80$33.90$37.30

Two, 5-Year

E-102 Xfinity*See Footnotes 4,000 Aug-18 Jul-25 $35.00 $140,000 Aug-25

Aug-30$38.50$42.35 Two, 5-Year

E-106 To Be Leased 2,400 Sep-19 Sep-24 $0.00 $0.00 Sep-19Sep-20

$28.843% Annual Increases None

F HomeGoods 24,000 Aug-15 Sep-25 $10.50 $252,000

Aug-20Oct-25Oct-30Oct-35Oct-40

$10.75$11.25$11.75$12.25$12.75

Four, 5-Year

G Hobby Lobby 55,000 Sep-15 Aug-30 $7.15 $393,250

Sep-20Sep-25Sep-30Sep-35Sep-40

$7.65$8.15$8.65$9.15$9.65

Four, 5-Year

H Ashley HomeStore 30,000 Aug-15 Jan-26 $10.00 $300,000 Feb-21Feb-26Feb-31

$10.50$11.00$11.50

Two, 5-Year

J Dollar Tree 10,000 Sep-15 Sep-25 $12.00 $120,000 Oct-20Oct-25Oct-30

$12.50$13.00$13.50

Two, 5-Year

K Best Buy 45,721 Feb-17 Mar-26 $9.25 $422,919

Apr-26Apr-31Apr-36Apr-41

$9.75$10.25$10.75$11.25

Four, 5-Year

Center Total 374,858 $5,084,298Anchors 305,155 81% $3,177,652 62%Shops 67,303 18% $1,906,646 38%

Total Occupied 372,458 99%FOOTNOTES TO RENT ROLL:1. Xfinity: Tenant and Landlord have executed a Lease. For the purpose of this Analysis, it was assumed that Tenant is open and paying rent as of day one (1) of the Analysis and that the Buyer will credited for any "Gap Rent".

R E N T R O L L

INVESTMENT OFFERING


14%

0%

0%

1%

61%

14%

0%

0%

0%

6%

4%

0% 10% 20% 30% 40% 50% 60% 70%

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

GLA Expiration

Lease Expiration L E A S E E X P I R AT I O N S C H E D U L E

% of Square Footage Expiring

INVESTMENT OFFERING


ASHLEY HOMESTORE Founded in 1945 and headquartered in Arcadia, Wisconsin, Ashley Furniture Industries is the world’s largest home furniture manufacturer and parent company to Ashley Furniture HomeStore. The privately owned company reported $4.6 billion in revenue in 2016 and employs over 23,000. (Forbes) With more than 600 locations in 28 countries, Ashley HomeStore is the No. 1 furniture retailer in the U.S. and one of the world’s best-selling furniture store brands. www.ashleyfurniturehomestore.com

BEST BUY (S&P: BBB) Best Buy (NYSE: BBY) is a consumer electronics retailer headquartered in Richfield, Minnesota which operates loca-tions acrossthe world including the US, Mexico and Canada. Founded in 1966, the Company has 1,509 stores globally, 1,293 of which are located in the US, and over 125,000 employees. Best Buy reported $42.2 billion in revenue for the 2018 fiscal year with earnings per share growth of 25.9%. www.bestbuy.com

DICK’S SPORTING GOODS Dick’s Sporting Goods (NYSE: DKS) is a sporting goods retailer founded in 1948 and currently headquartered in Pitts-burgh, Pennsylvania. With an estimated 11% market share of the U.S. sporting goods industry, Dick’s Sporting Goods is the largest full-line sporting goods retailer in the U.S. Additionally, specialty retailer concepts Field & Stream, and Golf Galaxy also operating under the Dick’s umbrella. As of May 5, 2018, the company operated 724 stores inover 48 states. Net sales for the fiscal year ending Feb-2018 saw a year-over-year increase of 8.4% to $8.6 billion. www.dickssportinggoods.com

FIELD & STREAM Field & Stream is a hunting, fishing, and outdoor retailer owned by Dick’s Sporting Goods which currently has 34 stores across the U.S. Dick’s Sporting Goods reported a record high $8.6 billion in revenue for the 2017 fiscal year. www.fieldandstreamshop.com

HOBBY LOBBY Headquartered in Oklahoma City, Oklahoma, Hobby Lobby is a home décor and arts and crafts merchandise retailer of-fering more than 65,000 arts, crafts, hobbies, home décor, Holiday, and seasonal products. Founded in 1972, the Com-pany currently operates more than 800 stores in 47 states across the country with an average footprint of 55,000 square feet. The Company is regularly included in Forbes’ annual list of America’s largest private companies with $4.3 billion in sales for the 2016 fiscal year and carries no long-term debt. www.hobbylobby.com

A N C H O R T E N A N T S U M M AR I E S

INVESTMENT OFFERING


HOMEGOODS (S&P: A+) Founded in 1992, HomeGoods is a home furnishing retailer owned by The TJX Companies (NYSE: TJX) with approxi-mately 579 stores in 45 states and Puerto Rico. For the 2017 fiscal year, the Company increased net sales from $3.9 bil-lion to more than $4.4 billion. Headquartered in Framingham, Massachusetts, the TJX Companies is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. www.homegoods.com

OLD NAVY Founded in 1994, Old Navy is a clothing and accessories retailer owned by American multinational corporation Gap Inc. (NYSE: GPS). Fiscal year 2017 net sales for Gap Inc. were $15.9 billion with Old Navy reporting a fifth consecutive year of net sales growth. The Gap Inc. offers apparel, accessories, and personal care products for men, women, children, and babies under The Gap, Old Navy, Banana Republic, Athleta, and Intermix brands through company operated stores, franchise stores, e-commerce sites, and catalogs. As of February 3, 2018, the Company operated 3,165 locations and 429 franchised stores worldwide, 1,080 of which operate under the Old Navy banner.www.oldnavy.com

PETCO Petco is a pet merchandise and animal retailer founded in 1965, based out of San Diego, California. It was purchased in 2015 by CVC Capital Partners and Canada Pension Plan Investment Board (CPPIB) for $4.6 billion. The Company oper-ates over 1,500 stores in all 50 United States, Puerto Rico, and Mexico and employs more than 25,000 associates across the country. The Company is included in Forbes’ annual list of America’s largest private companies with $4.1 billion in revenue for the 2016 fiscal year. www.petco.com

ROSS DRESS FOR LESS (S&P: A-) Ross Stores, Inc. (NASDAQ: ROST) is a chain of American off-price department stores headquartered in Dublin, Cali-fornia. The Company is the largest off-price apparel and home fashion chain in the United States and offers customers everything from clothes and luggage to backyard furniture and grilling equipment. As of the end of fiscal year 2017, the Company operates 1,409 Ross stores in 37 states, the District of Columbia, and Guam. The Company reported $14.1 bil-lion in revenue for the 2017 fiscal.www.rossstores.com

DOLLAR TREE Dollar Tree, Inc., incorporated in 2008, is an operator of discount variety stores. As of January 28, 2017, the Company operated 14,334 stores in 48 states and the District of Columbia, and five Canadian provinces. The Company’s seg-ments include Dollar Tree and Family Dollar. The Dollar Tree segment is the operator of discount variety stores offering merchandise at a fixed price. The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of merchandise in neighborhood stores. The Company’s stores operate under the names of Dollar Tree, Family Dollar and Dollar Tree Canada. www.dollartree.com

A N C H O R T E N A N T S U M M AR I E S

INVESTMENT OFFERING


MARKETOVERVIEW

M AR K E T OV E RV I E W

Founded in 1702, Mobile is one of the oldest cities in the U.S. Its rich history is matched with a fast-growing, modern community focused on the future.

With a population of 626,583, the Mobile Bay region is Alabama’s second-largest metro area. Mobile County, the second-largest county in the state, has 413,955 residents. The population for the city of Mobile is 190,265.

Situated in south Alabama at the junction of I-10 & I-65, Mobile has an extensive transportation and logistics infrastructure that links businesses with the nation and the world. With access to 2 airports; more than 15,000 miles of inland waterways; 5 Class-1 railroads and the Port of Mobile (the 9th largest port by volume in the U.S.), Mobile keeps business on the move.

Over the last decade, Mobile’s economic development efforts garnered $8.1 billion in capital investment and 14,341 jobs for new and existing area companies.

Mobile has the most diverse economy in Alabama. Its current industry clusters include aviation/aerospace, chemical, healthcare, information technology, maritime, logistics/distribution, oil and gas, and steel.

Home to Airbus, FedEx, Amazon, Walmart, Austal USA, & Continental Motors Group, among numerous other major corporations.

Mobile, Alabama, and its surrounding region are experiencing unprecedented growth due to a low cost of doing business, diverse commerce base, intermodal transportation options, and quality lifestyle. Businesses and corporations are flocking to the area, bringing with them an increased workforce and a plethora of new economic opportunities.

INVESTMENT OFFERING



Airbus built a $600+ million final assembly line in Mobile, responsible for the construction of the A320 & A321 aircrafts. This marked the company’s first manufacturing facility in the U.S., and it created 400 new jobs. Airbus also announced an agreement to form a partnership to build Bombardier’s C Series passenger jets, resulting in the addition of a second $300 million aircraft assembly line, creating a proposed 400-500 more direct jobs in the area. The facility will also create 1,900 direct jobs, 1,000 indirect jobs, and 3,000 induced jobs during construction.

Amazon made its first investment in Alabama, with the construction of a new $30 million sortation center in Mobile. More than a million packages a month have the Mob5 label, indicating it came through Mobile. About 100-300 highly-anticipated were created with the opening of the facility.

Walmart recently opened a direct-import distribution center in Mobile, creating more than 550 new, direct jobs. The 2.5M SF facility will stock Walmart’s other distribution centers along the central Gulf Coast and represents a $135 million investment.

Continental Motors broke ground on a 260,000 SF state-of-the-art manufacturing facility and corporate office in Mobile, investing about $75 million in the building and updated equipment. The news was part of Continental’s re-commitment to Mobile as its corporate global headquarters. It employs 400 people in the area.

SSAB steel mill is moving its U.S. division’s head office to Mobile, bringing 95 high-paying positions and a capital investment valued at $3 million. The company is planning a $287 million plant expansion. Over the last decade SSAB has made significant investment in its Mobile facility and added more than 100 high-paying jobs

Alabama State Port Authority completed a $47.5M Phase III expansion that added two super-Post Panamax and two Post-Panamax ship-to-shore cranes. The Port is responsible for 134,608 direct and indirect jobs, $486.9M in direct and indirect tax impact, and a total economic value of $22.4B.

INVESTMENT OFFERING



Mobile’s growing business community counts on a strong, talented and dedicated workforce. Abundant education programs ensure local residents have the skills area employers need, including AIDT, one of the most recognized state-led workforce training programs in the country.

The Mobile Bay Area has several prominent four-year colleges, community colleges, and vocational schools, including Spring Hill College, University of Mobile, Bishop State Community College, and Enterprise-Ozark Community College. The University of South Alabama is the region’s largest four-year institution with 16,000 students, 5,500 employees and an economic impact of $3 billion.

Alabama GDP is expected to grow 2.2% in 2018, an increase from the 1.3% seen in 2017. Employment growth is expected to rise 1% in 2018 similar to the 1% growth seen in 2017. With stronger statewide economic growth this year, tax receipts are expected to increase 4.5%. (Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama)

Sales are expected to continue growing in the coming quarter with an index of 66.1 after a 1.3-point increase from Q2 2018, making it the highest of all the industry indexes. (Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama)

#1 Best Business Climate

#2 Workforce Training Leaders

#3 FTZ Activity (Exports)

#4 Economic Growth Potential

Business Facilities Magazine

Alabama Rankings:

Median Household Income:City of Mobile: $38,759Mobile County: $44,263Mobile Bay Area: $47,814

INVESTMENT OFFERING

STIRLING PROPERTIES, LLCMCGOWIN PARK | MOBILE, ALABAMA STIRLING PROPERTIES, LLC

A PPE N D I X L I S T

MCGOWIN PARK SHOPPING CENTER, LLC

CERTIFICATE OF FORMATION

DelawareThe First State

Page 1

7056697 8100 Authentication: 203430320SR# 20186665065 Date: 09-17-18You may verify this certificate online at corp.delaware.gov/authver.shtml

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF

DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT

COPY OF THE CERTIFICATE OF FORMATION OF “MCGOWIN PARK SHOPPING

CENTER, LLC”, FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF

SEPTEMBER, A.D. 2018, AT 3:26 O`CLOCK P.M.

INVESTMENT OFFERING



LIMITED LIABILITY COMPANY AGREEMENT

LIMITED LIABILITY COMPANY AGREEMENT OF


This Limited Liability Company Agreement (this “Agreement”) of McGowin Park Shopping Center, LLC, a Delaware limited liability company (the “Company”), dated effective as of September [●], 2018 (the “Effective Date”), is entered into by the Company and McGowin Park Investors, LLC, a Louisiana limited liability company, as the sole member of the Company (the “Member”).

RECITALS

A. The Company was formed pursuant to its Certificate of Formation, dated and filed with the Delaware Secretary of State on September 14, 2018 (the “Certificate of Formation”).

B. The Company and Member desire to enter this Agreement to govern the affairs of the Company.

C. By executing this Agreement, the Member hereby becomes the sole member of this Company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et. seq.), as amended (the “Act”).

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

AGREEMENT

1. Name. The name of the limited liability company is “McGowin Park Shopping Center, LLC”.

2. Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any and all activities necessary or incident to the foregoing.

3. Registered Office. The address of the registered office of the Company in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

4. Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

5. Member and Membership Interests. Membership interests in the Company shall be represented by a single class of units (“Units”). Exhibit A attached hereto sets forth the

Member of the Company, together with its initial Capital Contribution, number of Units owned and percentage interest in the Company as of the date thereof.

6. Capital Contributions. The amount of money, services, and property contributed to the Company by a Member in respect of the issuance of Units to such Member shall constitute a “Capital Contribution”. The Member shall not be required to make any additional Capital Contributions to the Company beyond the amount disclosed in Exhibit A.

7. Management. In accordance with Section 18-402 of the Act, management of the Company shall be vested in a single manager appointed by the Member. The initial Manager shall be McGowin Park Investors, LLC (the “Manager”). The Manager shall have full power and authority to act for and bind the Company in all matters and may delegate its powers to any other person.

8. Distributions. Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Manager.

9. Dissolution. The Company shall continue in existence until it is terminated pursuant to this Section 9. The Company shall dissolve and its affairs shall be wound up upon the first to occur of the following: (a) the written consent of the Member, or (b) the entry of a decree of judicial dissolution under Section 18-802 of the Act. In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

10. Tax Matters. The Member and Manager desire that the Company shall be disregarded as a separate entity from the Member solely for federal income tax purposes, and it is the intent of the Member and Manager that this Agreement be interpreted and applied accordingly.

11. Admission of Additional Members. One or more persons may be admitted to the Company as additional members with the written consent of the Member.

12. Liability of Members and Manager. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member and the Manager shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member or a Manager of the Company.

13. Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to create any third-party beneficiaries.

14. Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this Agreement.

15. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

16. Counterparts. This Agreement may be executed in counterparts. Each counterpart shall be an original. All the counterparts together shall constitute but one and the same instrument, binding upon all members, notwithstanding that all the members may not have executed the same counterpart.

(Signature Page Follows)

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby as of the Effective Date, have duly executed this Limited Liability Company Agreement as of the first date written above.

COMPANY:

MCGOWIN PARK SHOPPING CENTER, LLC By: McGowin Park Investors, LLC, sole member and manager By:________________________________ G. Townsend Underhill IV, Authorized Representative

MEMBER: MCGOWIN PARK INVESTORS, LLC By:________________________________ G. Townsend Underhill IV, Authorized Representative

EXHIBIT A MEMBERS AS OF SEPTEMBER 14, 2018

Name and Address Initial Capital Contribution Units Percentage

Interest

McGowin Park Investors, LLC

$100 100 100.0%

INVESTMENT OFFERING


MCGOWIN PARK INVESTORS, LLC

ARTICLES OF ORGANIZATION

INVESTMENT OFFERING



OPERATING AGREEMENT

_______________________________________________________________________

OPERATING AGREEMENT

OF


A LOUISIANA LIMITED LIABILITY COMPANY

OCTOBER [__], 2018

THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THIS AGREEMENT AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

_______________________________________________________________________

1366725v.3

TABLE OF CONTENTS

Page

ARTICLE I DEFINED TERMS .......................................................................................................... 1

ARTICLE II ORGANIZATION ......................................................................................................... 1 Section 2.1 Organization .................................................................................................... 1 Section 2.2 Name; Registered Office; Registered Agent; Other Offices ........................ 1 Section 2.3 Company Purpose ........................................................................................... 2 Section 2.4 Relationship of the Parties .............................................................................. 2 Section 2.5 Title to Company Assets ................................................................................. 2 Section 2.6 Liability to Third Parties; Limited Liability of Members ............................. 2 Section 2.7 Member Action................................................................................................ 3

ARTICLE III MEMBERS; CAPITAL CONTRIBUTIONS; CERTIFICATES .............................. 4 Section 3.1 Members .......................................................................................................... 4 Section 3.2 Certain Representations and Covenants of Members ................................... 4 Section 3.3 Units; Capital Contributions ........................................................................... 4 Section 3.4 Additional Capital Contributions ................................................................... 5 Section 3.5 No Interest on Capital Accounts .................................................................... 5 Section 3.6 Return of Capital Contributions ..................................................................... 5 Section 3.7 Loans ................................................................................................................ 6 Section 3.8 Expulsion; Voluntary Withdrawal ................................................................. 6 Section 3.9 Book-Entry System; No Certificates.............................................................. 6 Section 3.10 Register, Registration of Transfer and Exchange of Units ........................... 6

ARTICLE IV ALLOCATIONS; CAPITAL ACCOUNTS ............................................................... 7 Section 4.1 Allocations of Profits and Losses ................................................................... 7 Section 4.2 General Rules Relating to Allocations ........................................................... 8 Section 4.3 Capital Accounts ............................................................................................. 8

ARTICLE V DISTRIBUTIONS ......................................................................................................... 9 Section 5.1 Operating Distributions................................................................................... 9 Section 5.2 Distributions Upon a Refinancing or Liquidation Event .............................. 9 Section 5.3 No Distributions in Kind............................................................................... 10 Section 5.4 No Deficit Capital Account .......................................................................... 10

ARTICLE VI MANAGEMENT; RIGHTS, POWERS AND DUTIES ......................................... 10 Section 6.1 Management .................................................................................................. 10 Section 6.2 Board of Managers ........................................................................................ 10 Section 6.3 Actions Requiring Member and Board Approval ....................................... 12 Section 6.4 Transactions Between the Company and the Members .............................. 12

ARTICLE VII INDEMNIFICATION AND LIABILITY ............................................................... 13 Section 7.1 Performance of Duties; Exculpation ............................................................ 13 Section 7.2 Right to Indemnification from the Company .............................................. 13

Section 7.3 Advance Payment .......................................................................................... 14 Section 7.4 Indemnification of Employees ..................................................................... 14 Section 7.5 Nonexclusivity of Rights .............................................................................. 14 Section 7.6 Insurance ........................................................................................................ 14 Section 7.7 Savings Clause .............................................................................................. 14

ARTICLE VIII TRANSFER OF UNITS .......................................................................................... 15 Section 8.1 Restrictions on Transfer of Units ................................................................. 15 Section 8.2 Right of First Refusal .................................................................................... 15 Section 8.3 Registration of Transfer and Exchange........................................................ 16 Section 8.4 Cessation of Membership. ............................................................................ 17

ARTICLE IX DISSOLUTION, LIQUIDATION AND WINDING UP ........................................ 17 Section 9.1 Term ............................................................................................................... 17 Section 9.2 Events of Dissolution .................................................................................... 17 Section 9.3 Procedure for Winding Up and Dissolution ................................................ 17

ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS .......................... 19 Section 10.1 Bank Accounts .............................................................................................. 19 Section 10.2 Reports; Accounting; Internal Controls ....................................................... 19 Section 10.3 Contents and Location of Required Records; Access to Accounts ............ 19 Section 10.4 Tax Returns.................................................................................................... 20 Section 10.5 Tax Elections ................................................................................................. 20 Section 10.6 Partnership Status .......................................................................................... 20

ARTICLE XI RESERVED ................................................................................................................ 21

ARTICLE XII MISCELLANEOUS ................................................................................................. 21 Section 12.1 Confidentiality ............................................................................................... 21 Section 12.2 Notifications .................................................................................................. 21 Section 12.3 Complete Agreement .................................................................................... 21 Section 12.4 Third Party Rights ......................................................................................... 22 Section 12.5 Modification and Waiver .............................................................................. 22 Section 12.6 Outside Businesses ........................................................................................ 22 Section 12.7 Applicable Law ............................................................................................. 22 Section 12.8 Table of Contents; Section Titles ................................................................. 22 Section 12.9 Binding Provisions ........................................................................................ 22 Section 12.10 Terms ............................................................................................................. 22 Section 12.11 Separability of Provisions ............................................................................. 23 Section 12.12 Counterparts................................................................................................... 23 Section 12.13 Costs and Attorneys’ Fees ............................................................................ 23

Exhibit A Defined Terms Exhibit B List of Members Exhibit C Tax Allocation Principles

1

OPERATING AGREEMENT OF


THIS OPERATING AGREEMENT (this “Agreement”) of McGowin Park Investors, LLC, a Louisiana limited liability company (the “Company”), is made and entered into as of October [__], 2018 (the “Effective Date”), by and among the Members.

RECITALS:

A. The Company has been formed as a limited liability company pursuant to its Articles of Organization, dated and filed with the Louisiana Secretary of State on September 19, 2018 (the “Articles of Organization”).

B. The Members desire to enter into this Agreement to govern the conduct of the affairs of the Company and the rights and obligations of the Members.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I DEFINED TERMS

Terms with their initial letters capitalized used but not otherwise defined herein have the meanings given to them in Exhibit A and in Part C of Exhibit C attached hereto, unless otherwise expressly provided herein.

ARTICLE II ORGANIZATION

Section 2.1 Organization. The Company was organized as a limited liability company pursuant to the Act on September 19, 2018, by the filing of its Articles of Organization and Initial Report with the Secretary of State of Louisiana and shall be operated pursuant the provisions of this Agreement. The rights and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be under the Act in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

Section 2.2 Name; Registered Office; Registered Agent; Other Offices.

(a) The name of the Company shall be McGowin Park Investors, LLC. The Company may do business under that name and under any other name or names the Members may designate from time to time. The Board of Managers shall file, or shall cause to be filed for public record, any fictitious name certificates and similar documents, and any amendments thereto, that the Members designate or approve.

2

(b) The registered office of the Company in the State of Louisiana shall be the initial registered office named in the Articles of Organization or such other office (which need not be a place of business of the Company) as the Board of Managers may designate from time to time.

(c) The registered agent of the Company in the State of Louisiana shall be the initial registered agent named in the Articles of Organization or such other Person or Persons as the Members may designate from time to time.

(d) The principal office of the Company shall be at 109 Northpark Boulevard, Suite 300, Covington, Louisiana 70433, or at such other place as the Board of Managers may designate from time to time either within or without the State of Louisiana, and the Company shall maintain records there for inspection as required by the Act. The Company may have such other offices as the Board of Managers may designate from time to time either within or without the State of Louisiana.

Section 2.3 Company Purpose. The Company has been formed for the purpose of, and the nature of the business to be conducted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any activities necessary, convenient or incidental thereto.

Section 2.4 Relationship of the Parties. The Members understand and agree that the arrangement and undertakings evidenced by this Agreement result in a partnership for purposes of federal income taxation and certain state income tax laws that incorporate or follow federal income tax principles. For every other purpose of this Agreement, the Members agree that their legal relationship to each other and to any third parties under other applicable state, federal or foreign law is that of members of a limited liability company and not of partners.

Section 2.5 Title to Company Assets. Title to the assets of the Company, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Member, individually or collectively, shall have any ownership interest in such Company assets or any portion thereof. Title to any or all of the Company assets may be held in the name of the Company or one or more nominees, as the Members may determine. All Company assets shall be recorded as the property of the Company in its books and records, irrespective of the name in which record title to such Company assets is held.

Section 2.6 Liability to Third Parties; Limited Liability of Members. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in tort, contract or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member or “manager” (as such term is defined under the Act) of the Company shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member or acting as a manager of the Company. No Member shall have any duty to the Company or any other Member except as expressly set forth in the Act, this Agreement and in other written agreements between or among them.

3

Section 2.7 Member Action.

(a) No Member shall, as such, have any management power over the business and affairs of the Company or actual or apparent authority to enter into contracts on behalf of, or to otherwise bind, the Company. Any Member who takes any action or binds the Company in violation of this Section 2.7(a) shall be solely responsible for any loss and expense incurred by the Company as a result of the unauthorized action and shall indemnify and hold the Company harmless with respect to such loss or expense.

(b) Except as expressly required by the Act or by this Agreement, no vote, consent or authorization of the Members shall be required for the taking of any action on behalf of or with respect to the Company. Where required by the Act or by this Agreement, any action requiring the approval of the Members shall be deemed taken upon the affirmative vote or written consent of the Members holding at least a majority of the outstanding Units, voting as a single class, unless a greater number is required by the express provisions of the Act or this Agreement. Any matter on which the Members are authorized to take action under the Act or this Agreement may be taken by the Members, in lieu of a meeting, by written consent to such action executed by Members holding not less than the number of Units that would be required to vote to approve the matter; provided, that any Member entitled to vote on the matters addressed by such consent who does not execute such written consent shall be promptly provided with notice of the action taken and a copy of such written consent. For purposes of any vote, consent or approval under the Act or this Agreement, each Member shall have a number of votes equal to the number of Units then held by such Member. Unless otherwise provided in this Agreement, all Units shall vote together as a single class.

(c) There shall be no requirement that the Company hold annual or other meetings of Members. Meetings of the Members may be called by Members holding at least one third (⅓) of the outstanding Units or the Board of Managers, and shall be held at such place as shall be designated from time to time by the Board of Managers. Written notice (which shall state the purpose or purposes for which the meeting is called) of any meeting of the Members, stating the place, date and hour of the meeting, shall be mailed or given by or at the direction of the Board of Managers to each Member at least three (3) days prior to the meeting.

(d) At all meetings of the Members, the presence in person or by proxy of Members holding a majority of the outstanding Units shall constitute a quorum at such meeting. All Members present in person or by proxy at such meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum. If a quorum is present, the affirmative vote of Members present in person or by proxy holding a majority of the outstanding Units then present at such meeting shall be the act of the Members unless otherwise provided by the Act or this Agreement.

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ARTICLE III MEMBERS; CAPITAL CONTRIBUTIONS; CERTIFICATES

Section 3.1 Members.

(a) A Person shall only be admitted as a Member if such Person acquires one or more Units from a Member in accordance with the provisions of this Agreement or is issued one or more Units as authorized by the Board of Managers in accordance with this Agreement, and executes this Agreement and agrees to be bound by the provisions hereof.

(b) Exhibit B hereto sets forth the name of each Member, together with such Member’s Initial Capital Contribution and the number of Units owned as of the date specified thereon. The Board of Managers shall cause Exhibit B to be amended or supplemented from time to time to reflect the receipt by the Company of notice of the contribution of additional capital by a Member, the distribution of capital to a Member, the admission of a new Member, or the occurrence of any other event requiring that Exhibit B be amended or supplemented.

Section 3.2 Certain Representations and Covenants of Members.

(a) Each Member understands and acknowledges that the Units (i) have not been registered under the Securities Act of 1933 or registered or qualified under any applicable state securities laws in reliance upon specific exemptions therefrom, and (ii) may not be Transferred or sold except in accordance with the terms of this Agreement and pursuant to a transaction registered or exempt from registration under the Securities Act of 1933, and registered or qualified or exempt from registration or qualification under any applicable state securities laws.

(b) Without prior written notice to the Company, no Member shall take a position on such Member’s federal income tax return, in any claim for refund or in any administrative or legal proceedings that is inconsistent with this Agreement or with any information return filed by the Company.

(c) Each Member shall cooperate in providing such information, in signing such documents and in taking any other action as may reasonably be requested by the Company in connection with obtaining any federal, state or local license or permit needed to operate its business or the business of any entity in which the Company invests.

Section 3.3 Units; Capital Contributions.

(a) Membership interests in the Company shall be represented by two classes of Units: Class A Units and Class B Units. The Company has authority to issue an unlimited number of Units; provided, however, that at all times the proportion of total Class A Units outstanding to the total number of Units outstanding shall be eighty percent (80%). The Board of Managers may issue from time to time additional Units at such prices and on such terms as the Board of Managers may determine.

(b) The amount of money and the fair market value of any property (determined as of the date of contribution by the Board of Managers and contributing Member,

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using such reasonable method of valuation as they may adopt) contributed to the Company by a Member in respect of the issuance of Units to such Member shall constitute a “Capital Contribution.” No Member shall be deemed to own Units until it has paid its related Capital Contribution in full.

Section 3.4 Additional Capital Contributions.

(a) Except as otherwise provided in this Section 3.4, no Member shall be required to make additional Capital Contributions once the Company has received in full the Member’s Capital Contribution associated with a related issuance of Units to such Member.

(b) In the event the Board determines that additional Capital Contributions are necessary, the Board may issue a capital call to the Class A Members (a “Capital Call”) pursuant to this Section 3.4. In the event of a Capital Call pursuant to this Section 3.4, the Class A Members shall make additional Capital Contributions in cash to the Company, on a pro rata basis in accordance with their respective Class A Units at the time of the Capital Call.

(c) Each Capital Call pursuant to this Section 3.4 shall be made pursuant to a notice from the Company (a “Capital Call Notice”) to each Class A Member. Each Capital Call Notice pursuant to this Section 3.4 shall specify (i) the amount of the additional Capital Contribution required by each Class A Member; and (ii) the date funds are required to be received by the Company, which shall not be a date less than fifteen (15) days after the Capital Call Notice. Upon receipt of a Class A Member’s required additional Capital Contribution pursuant to this Section 3.4, the Company shall issue such Class A Member additional Class A Units at a price per Class A Unit equal to [$__________] (the “Original Issue Price”). The Company shall have the right to withdraw a Capital Call Notice at any time prior to funding of the additional Capital Contributions thereunder.

(d) If a Class A Member fails to fund its required additional Capital Contribution (the amount of such required additional Capital Contribution, the “Shortfall Amount”) within five (5) days after the date specified in the Capital Call Notice (a “Defaulting Member”), the Board of Managers shall permit the other Class A Members to fund the Shortfall Amount, as allocated among such other Class A Members in the sole and absolute discretion of the Board of Managers. Each Class A Member that funds any portion of the Shortfall Amount shall be issued additional Class A Units in exchange for their additional Capital Contributions with respect to the Shortfall Amount at a price per Class A Unit equal to the Original Issue Price.

Section 3.5 No Interest on Capital Accounts. No Member shall be entitled to receive or be credited with any interest on the balance of such Member’s Capital Account at any time.

Section 3.6 Return of Capital Contributions. Except as otherwise provided in this Agreement, no Member shall have priority over any other Member for the return of Capital Contributions or for the income, losses, gains of or distributions from the Company, and no Member shall be entitled to withdraw such Member’s Capital Contribution or to demand any distribution from the Company.

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Section 3.7 Loans. Subject to the terms herein and subject to the approval of the Board of Managers, any Member may, at any time, make or cause a loan to be made to the Company in any amount and on such terms on which the Board of Managers and such Member may mutually agree in writing.

Section 3.8 Expulsion; Voluntary Withdrawal.

(a) A Member may not be expelled or removed as a Member of the Company.

(b) No Member shall have the right or power to voluntarily withdraw or disassociate from the Company, other than by means of a Transfer of all of its Units permitted by Article VIII.

Section 3.9 Book-Entry System; No Certificates. The Company shall maintain a book-entry system for Unit ownership, and Units will be uncertificated unless the Board of Managers determines that certificates evidencing such Units (“Certificates”) are necessary or advisable. Such uncertificated Units shall be credited to a book entry account maintained by the Company (or its designee) on behalf of the appropriate Member. If the Board of Managers determines that Certificates are necessary or advisable, Certificates evidencing Units shall be in such form, not inconsistent with the Act or applicable law and this Agreement.

Section 3.10 Register, Registration of Transfer and Exchange of Units.

(a) The Company shall keep or cause to be kept on behalf of the Company a register that will provide for the registration and Transfer of Units. The Company shall not recognize Transfers of Units unless the same are effected in the manner described in this Agreement, and any such Transfer will be void and ineffective and shall not operate to Transfer any interest in or title to any Units to the purported transferee.

(b) By Transfer of Units in accordance with this Section 3.10 and Article VIII, the transferor shall be deemed to have given the transferee the right to be admitted to the Company as a Member, and each transferee of Units (including any nominee holder or an agent acquiring such Unit for the account of another Person) shall become a Member with respect to the Unit so transferred to such Person when any such Transfer and admission is reflected in the books and records of the Company.

(c) The Company shall be entitled to recognize the record holder as the owner of Units and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Units on the part of any other Person, whether or not the Company shall have actual or other notice thereof, except as otherwise provided by applicable law. Units may be Transferred only in accordance with the express provisions of this Agreement, including without limitation Article VIII hereof. The Transfer of any Units and the admission of any new Member shall not constitute an amendment to this Agreement.

(d) Each dividend or other distribution in respect of the Units shall be paid by the Company, directly or through any other Person or agent, only to the record holders thereof as of the record date set forth the dividend or other distribution. Such payment shall constitute full payment and satisfaction of the Company’s liability in respect of such payment, regardless of

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any claim of any Person who may have an interest in such payment by reason of assignment or otherwise.

ARTICLE IV ALLOCATIONS; CAPITAL ACCOUNTS

Section 4.1 Allocations of Profits and Losses. Subject to Sections 4.2 and 4.3 and the principles set forth in Exhibit C hereto (the “Tax Allocation Principles”), Profits, Losses, and tax credits for each Fiscal Year, or portion thereof, shall be allocated among the Members in the following order and priority.

(a) Profits shall be allocated among the Members in the following order and priority:

(i) First to the extent that the amount of Losses allocated to the Members under Section 4.1(b)(iv) exceeds the amount of Profits allocated to the Members under this Section 4.1(a)(i), to the Members pro rata according to amount of such Losses allocated to the Members;

(ii) Next, for the Fiscal year ending in the year of the Placed in Service Date and for any Fiscal Year ending after the Placed in Service Date, to the Class A Members until such Members have been allocated a cumulative amount of Profits under this Section 4.1(a)(ii) equal to a seven and a half percent (7.5%) per annum (simple interest) return on their Unrecovered Capital Contributions determined on a daily basis from the Placed in Service Date through the date of the allocation;

(iii) Reserved.

(iv) Next, to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members) until the Class B Members have been allocated an aggregate amount of Profits under this Section 4.1(a)(iv) equal to one-ninth (1/9th) of the total amount of Profits allocated to the Class A Members under Sections 4.1(a)(ii);

(v) Next, ninety percent (90%) to the Class A Members (in proportion to the number of Class A Units owned by the Class A Members) and ten percent (10%) to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members).

(b) Losses shall be allocated among the Members in the following order and priority:

(i) First, to the extent that the amount of Profits allocated under Section 4.1(a)(v) exceeds the amount of Losses previously allocated under this Section 4.1(b)(i), then ninety percent (90%) to the Class A Members (in proportion to the number of Class A Units owned by the Class A Members) and ten percent (10%) to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members);

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(ii) Next, to the extent that the amount of Profits allocated under Section 4.1(a)(ii) exceeds the amount of Losses previously allocated under this Section 4.1(b)(ii), then to the Class A Members (in proportion to the number of Class A Units owned by the Class A Members);

(iii) Next, to the extent that the amount of Profits allocated under Section 4.1(a)(iv) exceeds the amount of Losses previously allocated under this Section 4.1(b)(iii), then to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members); and

(iv) Next, ninety percent (90%) to the Class A Members (in proportion to the number of Class A Units owned by the Class A Members) and ten percent (10%) to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members).

(c) The total number of Units is 10,000 (see Exhibit B); 9,000 Class A Units have been allocated to A Members and 1,000 Class B Units have been allocated to B Members.

Section 4.2 General Rules Relating to Allocations.

(a) Subject to Sections 706(c) and 706(d) of the Code, any allocation of Profit or Loss shall be made to those Persons shown on the records of the Company to have been Members as of the last day of the Fiscal Year of the Company for which the allocation is to be made, based upon the number of days that each Member held its Units during the Fiscal Year.

(b) The Board of Managers is authorized, upon advice of the Company’s tax counsel, to amend any provision of this Article IV to comply with the Code and the Regulations.

Section 4.3 Capital Accounts. A separate Capital Account shall be maintained for each Member in accordance with the following provisions:

(a) Each Member's Capital Account will be increased by (1) the amount of money contributed by such Member to the Company; (2) the fair market value of property contributed by such Member to the Company (net of liabilities that the Company is considered to assume or take the property subject to); (3) such Member’s allocable share of Profit; (4) any items in the nature of income and gain that are specially allocated to the Members pursuant to Article IV or the Tax Allocation Principles; and (5) allocations to such Member of income and gain exempt from federal income tax.

(b) Each Member's Capital Account will be decreased by (1) the amount of money distributed by the Company to such Member; (2) the fair market value of property distributed to such Member by the Company (net of liabilities that such Member is considered to assume or take property subject to); (3) such Member’s allocable share of Loss; (4) allocations to such Member of expenditures described in Code Section 705(a)(2)(B); and (5) any items in the nature of deduction and loss that are specifically allocated to the Member pursuant to Article IV or the Tax Allocation Principles.

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In the event any Unit 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 Unit. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 704(b) of the Code and Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with the Code and such Regulations.

ARTICLE V DISTRIBUTIONS

Section 5.1 Operating Distributions. The Board of Managers may from time to time determine in its sole discretion that the Company (i) has funds on hand available for distribution to Members (after payment of all then-due obligations of the Company and the establishment of reasonable reserves for the Company’s liabilities, obligations, working capital and other anticipated needs), and (ii) is not restricted by contract or applicable law from making a distribution to the Members (funds from time to time, on a cumulative basis, satisfying the criteria set forth above are referred to as “Cumulative Available Funds”). In such cases, the Board of Managers shall distribute some or all of the Cumulative Available Funds to the Members in the following order and priority:

(a) First, to the Class A Members until the Class A Members have received an amount pursuant to this Section 5.1(a) equal to seven and a half percent (7.5%) per annum (simple interest) return on their Unrecovered Capital Contributions determined on a daily basis from the Placed in Service Date until the date of the distribution;

(b) Next, to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members) until the Class B Members have been distributed an aggregate amount equal to one-ninth (1/9th) of the total amount distributed to the Class A Members pursuant to Section 5.1(a); and

(c) Any remaining Cumulative Available Funds of each fiscal year shall be distributed ninety percent (90%) to the Class A Members (in proportion to the number of Class A Units owned by the Class A Members) and ten percent (10%) to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members).

Section 5.2 Distributions Upon a Refinancing or Liquidation Event. Upon the occurrence of a Refinancing or Liquidation Event, the Board of Managers, to the extent that the Company has Cumulative Available Funds, shall distribute the Cumulative Available Funds to the Members in the following order and priority:

(a) First, to the Class A Members until the Class A Members have received under Sections 5.1(a) and 5.2(a) an amount equal to seven and a half percent (7.5%) per annum (simple interest) return on their Unrecovered Capital Contributions determined on a daily basis from the Placed in Service Date until the date of the distribution;

(b) Next, to the Class A Members until the Class A Members have received an amount equal to their Unrecovered Capital Contributions;

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(c) Next, to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members) until the Class B Members have been distributed an aggregate amount equal to one-ninth (1/9th) of the total amount distributed to the Class A Members pursuant to Sections 5.1(a), 5.2(a) and 5.2(b); and

(d) Any remaining Cumulative Available Funds of each fiscal year shall be distributed ninety percent (90%) to the Class A Members (in proportion to the number of Class A Units owned by the Class A Members) and ten percent (10%) to the Class B Members (in proportion to the number of Class B Units owned by the Class B Members).

Section 5.3 No Distributions in Kind. Unless otherwise approved by the Board of Managers, no Member shall be entitled to demand and receive property (other than cash) in return of its capital contributions to the Company, the balance in its Capital Account or its Units.

Section 5.4 No Deficit Capital Account. Notwithstanding Sections 5.1, 5.2, and 5.3, no cash or property shall be distributed to any Member if the effect thereof would be to create a deficit in the Member’s Capital Account balance or increase the deficit in the Capital Account of such Member below the sum of (a) the amount (if any) which such Member is required to contribute to the Company and (b) said Member’s share of the gain which the Company would recognize upon the sale of its property above the amount equal to the balance of the nonrecourse debt encumbering it, and such cash or property shall be retained by the Company and shall be distributed to the Member at the earliest time or times possible when such distributions will not cause such a deficit or increase such a deficit in the Member’s Capital Account balance.

ARTICLE VI MANAGEMENT; RIGHTS, POWERS AND DUTIES

Section 6.1 Management. Subject to such matters which are expressly reserved hereunder to the Members for decision, all management powers over the business and affairs of the Company shall be exclusively vested in a Board of Managers (the “Board of Managers”) and, subject to the direction of the Board of Managers. The members of the Board of Managers (the “Managers”) shall constitute “managers” of the Company within the meaning of the Act. No Manager need be a Member. Thus, except as otherwise specifically provided in this Agreement, the business and affairs of the Company shall be managed under the direction of the Board of Managers. The Board of Managers may delegate any such business and affairs on the Company’s behalf, including all the day-to-day activities of the Company, pursuant to a third party Management Agreement. In addition to the powers that now or hereafter can be granted to managers under the Act and to all other powers granted under any other provision of this Agreement, the Board of Managers shall have full power and authority to do all things on such terms as they, in their sole discretion, may deem necessary or appropriate to conduct, or cause to be conducted, the business and affairs of the Company.

Section 6.2 Board of Managers.

(a) The Board of Managers shall consist of a minimum of four (4) Managers. Initially, the Managers are Martin A. Mayer, Grady K. Brame, G. Townsend Underhill IV and Donna F. Taylor.

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(b) Subject to Section 6.4, any action requiring the approval of the Board of Managers shall be deemed taken upon the unanimous consent of the Managers. Any matter on which the Board of Managers is authorized to take action under the Act or this Agreement may be taken by the Board of Managers, in lieu of a meeting, by unanimous written consent.

(c) Managers shall serve until their earlier death, resignation or removal in accordance with this Agreement. A Manager may be removed by a vote of the Members holding at least two-thirds (⅔) of all Units or by two-thirds (⅔) vote of existing Managers. Any vacancies of the Board of Managers may be filled by a vote of the Members holding at least two-thirds (⅔) of all Units. Prompt written notice of any such removal and the appointment of a successor shall be given to the Board of Managers and the Members.

(d) Managers shall serve without compensation from the Company, unless otherwise agreed to by Members holding at least two-thirds (⅔) of the outstanding Units. Managers shall be entitled to reimbursement for out-of-pocket expenses reasonably incurred in connection with their service to the Company.

(e) The Board of Managers shall hold no less than one regular meeting to be known as the annual meeting of the Board of Managers. Other special meetings shall be held at such time as determined by the Board of Managers. Special meetings of the Board of Managers may be called by any Manager. All meetings of the Board of Managers shall be held at such place as shall be designated in the notice of meeting or in a duly executed waiver of notice thereof.

(f) Whenever the Board of Managers is required or authorized to take any action at a meeting, a written notice of such meeting, stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called, shall be delivered by the Board of Managers no fewer than two (2) days prior to the date set for such meeting, either by hand, overnight delivery service, or e-mail, to each Manager. If given by overnight delivery service, notice shall be deemed given the first day following posting on which deliveries are made by mail or overnight delivery service, as the case may be. Written waiver by a Manager of notice of a meeting of the Board of Managers, signed by him, whether before or after the time stated thereon, shall be equivalent to the giving of such notice.

(g) Upon an adjournment of a meeting of the Board of Managers, it shall not be necessary to give any notice of the adjourned meeting; provided, that the time and place to which the meeting is adjourned shall be announced at the meeting at which the adjournment is taken, and any business which might have been transacted on the original date of the meeting may be transacted at the adjourned meeting. If, however, after the adjournment, a new record date for the adjourned meeting is fixed, a notice of the adjourned meeting shall be given as provided in Section 6.2(f) to the Board of Managers on the new record date entitled to vote at such meeting.

(h) Managers may participate in a meeting of the Board of Managers by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

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Section 6.3 Actions Requiring Member and Board Approval. Notwithstanding anything contained herein to the contrary, the Company shall not, without first obtaining the affirmative vote or written consent of the Board of Managers and the Members holding at least two-thirds (⅔) of the outstanding Units, engage in or take any of the following actions:

(a) sell all or substantially all of the assets of the Company;

(b) dissolve or terminate the Company;

(c) merge, consolidate or reorganize the Company into another entity;

(d) engage in any business activities other than the Business;

(e) do any act which would make it impossible to carry on the Business, except as otherwise provided in this Agreement;

(f) knowingly perform any act that would subject any Member to liability for the obligations of the Company in any jurisdiction;

(g) file a voluntary petition or otherwise initiate proceedings (x) to have the Company adjudicated insolvent or, (y) seeking an order for relief of the Company as debtor under the United States Bankruptcy Code (11 U.S.C. §§ 101 et seq.); file any petition seeking any composition, reorganization, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy laws or any other present or future applicable federal, state or other statute or law relative to bankruptcy, insolvency, or other relief for debtors with respect to the Company; or seek the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of the Company or of all or any substantial part of the Company’s property, or make any general assignment for the benefit of creditors of the Company, or admit in writing the inability of the Company to pay its debts generally as they become due, or declare or effect a moratorium on the Company’s debt or take any action in furtherance of any proscribed action;

(h) amend the Articles of Organization or this Agreement;

(i) cause the Company to enter into any partnership or joint venture with a third party, or cause the Property of the Company to be subject to such an agreement; and

(j) compensate or change the compensation of a Manager.

Section 6.4 Transactions Between the Company and the Members. Notwithstanding that it may constitute a conflict of interest, the Members or their Affiliates may engage in any transaction or other business arrangement (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service or the establishment of any salary, other compensation or other terms of employment) with the Company so long as such transaction or other arrangement is approved by the Board of Managers and the Members in accordance with Section 6.3 and the terms of such transaction or arrangement are at least as favorable to the Company as could have been attained or entered into in a comparable arm’s length transaction with a third party that is not an Affiliate.

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ARTICLE VII INDEMNIFICATION AND LIABILITY

Section 7.1 Performance of Duties; Exculpation.

(a) No Manager of the Company shall be liable, responsible, or accountable, in damages or otherwise, to any Member or to the Company for any act performed by such Person within the scope of the authority conferred on such Person by or pursuant to this Agreement except for (i) liability for acts or omissions that are taken or omitted to be taken not in good faith or that involve intentional misconduct or an intentional violation of applicable law, or (ii) liability with respect to any transaction from which such Person derived a financial benefit to which such Person was not entitled. By resolution of the Board of Managers, the Company may, but shall not be obligated to, exculpate any employee or authorized agent of the Company to the same degree that Managers are exculpated under this Section 7.1(a).

(b) In performing their duties, each Manager of the Company shall be entitled to rely in good faith on the provisions of this Agreement and on information, opinions, reports or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, profits or losses of the Company or any facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid) of the following other Persons or groups: (i) other management-level employees of the Company; (ii) any attorney, independent accountant, appraiser or other expert or professional employed or engaged by or on behalf of the Company or the Board of Managers; or (iii) any other Person who has been selected by or on behalf of the Company or the Board of Managers, in each case as to matters which such relying Person reasonably believes to be within such other Person’s competence.

Section 7.2 Right to Indemnification from the Company. Subject to the limitations and conditions contained in this Article VII, each Manager who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or arbitrative (hereinafter a “Proceeding”), or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that such Person, or a Person of which such Person is the legal representative, is or was a Manager shall be indemnified by the Company to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment) against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements and reasonable expenses (including, without limitation, reasonable attorneys’ fees) actually incurred by such Person in connection with such Proceeding, appeal, inquiry or investigation (each, an “Expense”), and indemnification under this Article VII shall continue as to a Person who has ceased to serve in the capacity which initially entitled such Person to indemnity hereunder. The rights granted pursuant to this Article VII shall be deemed contract rights, and no amendment, modification or repeal of this Article VII shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings, appeals, inquiries or investigations arising prior to any amendment, modification or repeal. Notwithstanding anything contained herein to the contrary, no Person shall be entitled to

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indemnification pursuant to this Article VIII if it is finally determined by a court of competent jurisdiction (after exhaustion of all appeals) that the Proceeding is directly or substantially related to the gross negligence or willful misconduct of such Person. The Company will be provided the opportunity to approve the attorney(s) whose fees it will be asked to pay in advance of such attorney(s) being engaged in each case the Company is to provide indemnity payments and to pay such approved attorney(s) directly, if the members of the Board of Managers (who are not seeking indemnification) elect to do so, or if the entire Board of Managers is seeking indemnification, then the Members may approve the attorney(s) in advance of such attorney(s) being engaged and elect to pay them directly.

Section 7.3 Advance Payment. The right to indemnification conferred in this Article VII shall include the right to be paid or reimbursed by the Company the reasonable expenses incurred by a Manager of the type entitled to be indemnified under Section 7.2 who was, is or is threatened to be, made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the Manager’s ultimate entitlement to indemnification or ability to repay advances; provided, however, that the payment of such expenses incurred by a Manager in advance of the final disposition of a Proceeding shall be made only upon delivery to the Company of a written affirmation by such Manager of his good faith belief that he is entitled to indemnification hereunder and a written undertaking, by or on behalf of such Manager, to repay all amounts so advanced if it shall ultimately be determined that such indemnified Manager is not entitled to be indemnified by the Company under this Article VII or otherwise.

Section 7.4 Indemnification of Employees. The Company, in the discretion of the Board of Managers, may indemnify and advance expenses to an authorized agent or employee of the Company to the same extent and subject to the same conditions under which it may indemnify and advance expenses under Sections 7.2 and Section 7.3.

Section 7.5 Nonexclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article VII shall not be exclusive of any other right that a Manager or other Person indemnified pursuant to this Article VII may have or hereafter acquire under any law (common or statutory) or provision of this Agreement.

Section 7.6 Insurance. The Company shall purchase and maintain insurance at its expense, to the extent commercially available at reasonable cost as reasonably determined by the Board of Managers, to protect itself and any Manager or agent of the Company who is or was serving at the request of the Board of Managers as a manager, director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of a limited liability company, corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Article VII.

Section 7.7 Savings Clause. If this Article VII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Person indemnified pursuant to this Article VII as to costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any such Proceeding, appeal, inquiry or investigation

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to the full extent permitted by any applicable portion of this Article VII that shall not have been invalidated and to the fullest extent permitted by applicable law.

ARTICLE VIII TRANSFER OF UNITS

Section 8.1 Restrictions on Transfer of Units.

(a) No Member shall Transfer, or enter into any agreement to Transfer, any Units held by such Member, unless (i) such Transfer constitutes a Permitted Transfer or complies in all respects with the terms and conditions of this Article VIII and in all respects with all applicable federal and state securities laws and regulations, (ii) such transferee affirmatively agrees in writing delivered to the Company prior to the effectiveness of such Transfer to be bound by the terms of this Agreement as a Member, and (iii) all amounts owed and due to the Company by such transferor Member have been paid in full prior to the effectiveness of such Transfer; provided, that any such Transfer shall not act to relieve the transferring Member of any liability or obligation owed to the Company, either directly or indirectly, as of the date of such Transfer. The Company will not recognize any purported Transfer that does not comply with this Section 8.1, and any such Transfer will be void and ineffective and shall not operate to Transfer any interest in or title to any Units to the purported transferee. In addition to the foregoing requirements, any such transferee shall not be admitted to the Company as a Member without the prior written consent of the Board of Managers, which may be withheld or conditioned in their sole and absolute discretion. The prohibitions set forth in this Section 8.1 shall include, but shall not be limited to, any agreement to limit, restrict or grant any voting rights with respect to any Units.

(b) Class B Members shall not be permitted to Transfer all or any portion of their Class B Units to any Person other than: (i) a Permitted Transferee of such Class B Member, and (ii) another Class B Member. The terms and conditions of any transfer of Class B Units by a Class B Member (except for a Permitted Transfer, which is permitted without prior approval) shall require the prior written consent of the Board, which consent may be withheld or denied for any reason or no reason.

Section 8.2 Right of First Refusal.

(a) If a Member (“Selling Member”) proposes to Transfer any Units (“Offered Units”) to another Person (other than through a Permitted Transfer), such Selling Member shall first provide written notice (“Option Notice”) of such offer to the Company specifying in reasonable detail the identity of the prospective transferee(s), the number of Units to be Transferred and the terms and conditions of the proposed Transfer, including the purchase price for such Offered Units (“Offering Price”). The Board of Managers shall forward the Option Notice to the other Members (“Non-Selling Members”) within five (5) days after its receipt of the Option Notice.

(b) During the 30-day period following the Non-Selling Members’ receipt of the Option Notice (“Non-Selling Members’ Option Period”), the Non-Selling Members will have the right of first refusal to purchase their Pro Rata Portion or any portion thereof of the Offered

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Units from the Selling Member at the Offering Price and subject to the same material terms and conditions as described in the Option Notice. The Non-Selling Members may exercise such right of first refusal and, thereby, purchase all (or a portion) of their Pro Rata Portion of the Offered Units by (i) notifying the Selling Member in writing before the expiration of the Non-Selling Members’ Option Period as to the number of Offered Units it desires to purchase and (ii) closing the purchase and sale of the Offered Units not less sixty (60) days from the date of the Option Notice. If any Non-Selling Member fails to purchase all of its Pro Rata Portion of the Offered Units (“Remaining Offered Units”) within the Non-Selling Members’ Option Period, the Board of Managers may allocate the Remaining Offered Units among the remaining Non-Selling Members who wish to purchase some or all of the Remaining Offered Units in the sole and absolute discretion of the Board of Managers at the price and terms of payment designated in the Option Notice (the Non-Selling Members electing to purchase the Offered Units, the “Purchasing Members”). The Purchasing Members shall each be entitled to purchase the Remaining Offered Units in the allocation provided by the Board of Managers. If any Purchasing Member elects to purchase less than all of its allocated portion of the Remaining Offered Units, then the Board of Managers may allocate the Remaining Offered Units among the remaining Non-Selling Members who wish to purchase some or all of the Remaining Offered Units in the sole and absolute discretion of the Board of Managers at the price and terms of payment designated in the Option Notice.

(c) If the Non-Selling Members do not exercise the options granted to them in subsection (b) with respect to all of the Offered Units, then the Non-Selling Members may not purchase any of the Offered Units and the Selling Member may Transfer all (but not less than all) of the Offered Units to the transferee identified in the Option Notice on the same terms and conditions as described in the Option Notice; provided, that such Transfer shall be consummated (i) within ninety (90) days after the date of the Option Notice and (ii) in accordance with all of the terms of this Agreement. If the Offered Units are not Transferred to such transferee within such 90 day period, the Selling Member will not Transfer any of the Offered Units without complying again in full with the provisions of this Section 8.2. Notwithstanding the foregoing, a Selling Member may not Transfer any Offered Units pursuant to this Section 8.2(c) if Non-Selling Members holding in the aggregate at least two thirds of the Units held by all of the Non-Selling Members object to such Transfer in writing prior to the expiration of the Non-Selling Members’ Option Period.

Section 8.3 Registration of Transfer and Exchange.

(a) The Company shall not recognize any Transfer of Units unless such Transfer is effected in accordance with the provisions of this Section 8.3 and complies with this Article VIII. Upon surrender for registration of Transfer of any Certificate, provided such Transfer complies with this Article VIII, a Manager shall execute and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates evidencing the same aggregate number of Units as was evidenced by the Certificate so surrendered.

(b) In addition to the other requirements of this Agreement with respect to Transfer of Units, if the Board determines that the Units shall be represented by Certificates pursuant to Section 3.9, the Company shall not recognize any Transfer of Units until the

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Certificates evidencing such Units are surrendered for registration of Transfer. No charge shall be imposed by the Company for such Transfer, provided, that as a condition to the issuance of any new Certificate under this Section 8.3, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.

(c) No transferee shall be deemed a Member unless the Transfer to such transferee complies with this Article VIII and such Transfer has been reflected on the books and records of the Company in accordance with this Section 8.3 and Section 3.10. Upon the registration of the Transfer of any Units, the transferee of such Units shall be deemed to have been admitted as a Member and to have agreed to become a party to and bound by the terms of this Agreement.

Section 8.4 Cessation of Membership. If a Member Transfers all of its Units pursuant to this Article VIII, and the transferee(s) of such Units is admitted as a Member(s) pursuant to Section 8.1, immediately following such admission, the transferor Member shall cease to be a Member of the Company. Upon such cessation of the transferor Member’s membership in the Company, the transferor Member shall not be entitled to any distributions pursuant to Article V from and after the date of such cessation. In addition, the Company and the remaining Members shall use their commercially reasonable efforts to have the former Member released from any personal guaranties provided by such former Member with respect to the Company’s indebtedness. A Transfer that does not comply with Section 8.1 is null and void and shall have no effect.

ARTICLE IX DISSOLUTION, LIQUIDATION AND WINDING UP

Section 9.1 Term. The term of the Company began on the date of the filing of the Articles of Organization with the Secretary of State of Louisiana, and the Company shall continue in existence perpetually, unless its existence is sooner terminated pursuant to this Article IX.

Section 9.2 Events of Dissolution. The Company shall be dissolved upon the happening of any of the following events (each, a “Dissolution Event”):

(a) the approval of the Members and the Board in accordance with Section 6.3;

(b) the sale of all or substantially all of the assets of the Company; or

(c) the entry of a decree of judicial dissolution under the Act.

Section 9.3 Procedure for Winding Up and Dissolution. On the occurrence of a Dissolution Event, the Board of Managers may select one or more Persons to act as liquidator(s) or may itself act as liquidators. The liquidator(s) shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Act. The costs of winding up shall be borne as a Company expense, including reasonable compensation to the liquidator(s). Until final distribution, the liquidator(s) shall continue to operate the Company

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properties with all of the power and authority of the Board of Managers. The steps to be accomplished by the liquidator(s) are as follows:

(a) As promptly as possible after dissolution and again after final winding up, the liquidator(s) shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities, and operations through the last calendar day of the month in which the dissolution occurs or the final winding up is completed, as applicable;

(b) The liquidator(s) shall pay, satisfy or discharge from Company funds all of the debts, liabilities and obligations of the Company (including all expenses incurred in winding up); provided, however, that the liquidator may establish one or more cash escrow funds (in such amounts and for such terms as the liquidator may reasonably determine) for the payment of contingent liabilities; and

(c) All remaining assets of the Company shall be distributed to the Members as follows:

(i) the liquidator(s) shall use commercially reasonable efforts to sell all or substantially all Company property to a Person or Persons who are not Affiliated with any Member through an auction process to be conducted by a nationally recognized investment banking firm selected by the liquidator(s) and reasonably acceptable to the Members, and any resulting gain or loss from each sale shall be computed and allocated to the Capital Accounts of Members in accordance with the provisions of Article IV and the Tax Allocation Principles;

(ii) with respect to all Company property that has not been sold, the fair market value of that property shall be determined and the Capital Accounts of Members shall be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously would be allocated among the Members if there were a taxable disposition of that property for the fair market value of that property on the date of distribution; and

(iii) Company property will be distributed to the Members, in accordance with their respective positive Capital Accounts balances, after the same have been adjusted to reflect all allocations required to be made under the provisions of this Article IX and Article IV of this Agreement.

(d) All distributions in kind to the Members shall be made subject to the liability of each distributee for costs, expenses, and liabilities theretofore incurred or for which the Company has committed prior to the date of termination and those costs, expenses, and liabilities shall be allocated in accordance with such Member’s Pro Rata Portion. The distribution of cash and/or property to a Member in accordance with the provisions of this Section 9.2 constitutes a complete return to the Member of its Capital Contributions and a complete distribution to the Member of all the Company’s property. To the extent that a Member returns funds to the Company, it shall have no claim against any other Member for those funds.

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(e) On completion of the distribution of Company assets as provided herein, the liquidator(s) shall file a certificate of dissolution with the Secretary of State of Louisiana and take such other actions as may be necessary to terminate the existence of the Company under the Act and other applicable law.

ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS

Section 10.1 Bank Accounts. All funds of the Company shall be deposited in a bank account or accounts maintained in the Company’s name. The Board of Managers shall determine the institution or institutions at which the accounts will be opened and maintained, the types of accounts, and the Persons who will have authority with respect to the accounts and the funds therein.

Section 10.2 Reports; Accounting; Internal Controls.

(a) The Company shall deliver to each Member:

(i) as soon as available, but not later than thirty (30) days after the end of each fiscal quarter (including the fiscal quarters ending on the last day of the Company’s Fiscal Year), an internally-prepared balance sheet of the Company, as at the end of such fiscal quarter and the related statements of operations and cash flows for such quarter setting forth in each case, to the extent applicable, in comparative form the figures for the corresponding periods of the previous fiscal year all in reasonable detail, which shall fairly present the financial condition and results of operations of the Company; and

(ii) as soon as available and in any event within ninety (90) days after the end of each Fiscal Year, an internally-prepared balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, partners’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year which shall fairly present the financial condition and results of operations of the Company.

(b) The Company shall maintain a system of financial accounting for the financial condition and results of operations of the Company, which shall contain a single instance of production accounting, revenue accounting, land administration and general ledger, all in accordance with accounting policies and procedures adopted and reviewed by the Board of Managers from time to time, but in any event on an accrual method basis.

Section 10.3 Contents and Location of Required Records; Access to Accounts. The Company will maintain at its principal place of business the records the Company is required to maintain by the Act. Subject to Section 12.2, the Company shall afford to each of the Members and their respective counsel, accountants and other representatives, upon reasonable notice and during business hours access to all properties of the Company, books, records and other documents of the Company and shall furnish to each of the Members such information concerning the Company and copies of such documents as each Member may reasonably request. Upon thirty (30) days advance notice, each Member shall be entitled, at its own

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expense, to have a firm of independent certified public accountants designated by it review all properties, books, records and other documents of the Company.

Section 10.4 Tax Returns.

(a) The Company shall prepare income tax returns on the cash method of accounting, or such other method of accounting as approved by the Board of Managers, and on a calendar year basis.

(b) The Members designate Paul Mastio to act on behalf of the Company as the “partnership representative” within the meaning of Code Section 6223(a). Any person who is designated as the partnership representative is referred to herein as the “Partnership Representative”. In the event of an audit by the IRS, the Partnership Representative shall make, on a timely basis, the election provided by Code Section 6226(a) to treat a “partnership adjustment” as an adjustment to be taken into account by each Member in accordance with Code Section 6226(b), provided that the Partnership Representative shall, if requested in writing by the Manager, not make such election. If the election under Code Section 6226(a) is made, the Company shall furnish to each Member for the year under audit a statement reflecting the Member’s share of the adjusted items as determined in the notice of final partnership adjustment, and each such Member shall take such adjustment into account as required under Section 6226(b) of the Internal Revenue Code and shall be liable for any related interest, penalty, addition to tax, or additional amount.

(c) The Board of Managers shall arrange for the preparation and timely filing for each Fiscal Year or other period of all federal, state and local tax or information returns required to be filed by or on behalf of the Company. As soon as practicable after the end of each Fiscal Year, the Board of Managers shall cause to be furnished to each Member all information required by such Member for its federal and state income tax reporting purposes with respect to the Company, including without limitation a copy of Schedule K-1 to the federal tax return of the Company on Form 1065 (or any similar successor schedule or return) showing the taxable income and loss of the Company for such Fiscal Year just ended and the allocation thereof to each Member. The Members shall each take reporting positions on their respective foreign, federal, state and local income tax returns consistent with the positions determined for the Company.

Section 10.5 Tax Elections. The Board of Managers shall have the authority to make all Company elections permitted under the Code, including, without limitation, elections of methods of depreciation and elections under Code Section 754. The decision to make or not make an election shall be at the Board of Managers’ sole and absolute discretion.

Section 10.6 Partnership Status. The Members intend that the Company be classified as a partnership for federal, state and local income tax purposes and shall take all reasonable actions as may be required to qualify for and receive such classification. The Board of Managers shall use its best efforts to avoid taking any action that would cause the Company to be classified as other than a partnership for federal income tax purposes. All provisions of this Agreement and the Articles of Organization are to be construed so as to preserve the Company’s tax status as a partnership.

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ARTICLE XI RESERVED

ARTICLE XII MISCELLANEOUS

Section 12.1 Confidentiality. During the term of this Agreement and for a period of two years after the earlier of the final dissolution of the Company or the cessation of such Member’s membership in the Company (such period, the “Restricted Period”), each Member agrees to keep strictly confidential and not disclose, use, divulge, publish or otherwise reveal, directly or through another Person, (i) any confidential or proprietary information regarding the Company, its subsidiaries or any other Member, (ii) the terms of this Agreement or the other agreements contemplated hereby, and (iii) all Company-related information obtained from an inspection of the Company’s books and records pursuant to Section 10.2 or otherwise, or included in the reports and statements provided pursuant to Section 10.3 (collectively, “Confidential Information”), except as may be necessary for the Member to perform its duties and obligations under the terms of this Agreement, in connection with filings with governmental agencies or courts or as otherwise required under applicable law, the applicable rules or regulations of any securities exchange or quotation system or in judicial proceedings involving the interpretation or enforcement of this Agreement, unless the other Members give prior written consent to the disclosure. To the extent that Confidential Information is revealed, each party shall use its best efforts to have the Persons receiving such information retain it in confidence. Upon termination of this Agreement or upon the cessation of a Member’s membership in the Company, such Member shall return to the other Members all Confidential Information of such other Members that such Member may then possess or have under its control. Each Member also agrees, during the Restricted Period, that it shall not use any Confidential Information for any competitive or other purposes detrimental to the Company.

Section 12.2 Notifications. Any notice, demand, consent, election, offer, approval, request or other communication (collectively, a “notice”) required or permitted under this Agreement must be in writing and shall be deemed given and effective upon delivery, if delivered by nationally recognized overnight delivery service, certified US mail, return receipt requested or similar receipted delivery, or by electronic or facsimile transmission if addressed to and delivered to the address of the party set forth in the books of the Company or such other address as the party, by written notice to the other parties, may designate from time to time. The transmission confirmation receipt from the sender’s electronic mail read receipt shall be conclusive evidence of successful delivery.

Section 12.3 Complete Agreement. This Agreement and the Articles of Organization constitute the complete and exclusive statement of the agreement among the Members with respect to the subject matter hereof and supersede all prior written and oral agreements, statements, and any prior or contemporaneous representation, statement, condition or warranty with respect thereto. In the event of a direct conflict between the provisions of this Agreement and the mandatory provisions of the Act or the provisions of the Articles of Organization, such provisions of the Act or the Articles of Organization, as the case may be, will be controlling.

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Section 12.4 Third Party Rights. Except as provided in Article VII, nothing in this Agreement, either express or implied, is intended or shall be construed to confer upon or give to any Person other than the Company, the Members and their Affiliates any legal or equitable right, remedy or claim under or in respect of this Agreement.

Section 12.5 Modification and Waiver. Except as otherwise provided in this Agreement, this Agreement shall not be amended or modified at any time unless approved by the Members and Board of Managers in accordance with Section 6.3, by an instrument in writing duly executed by the Board of Managers. The failure by any party to insist upon strict performance of any provision of this Agreement or to enforce any of its rights hereunder shall not be deemed to be a waiver of, or estoppel against, assertion of the right to require such performance, unless such waiver is an express written waiver that has been signed by the waiving party.

Section 12.6 Outside Businesses. Except as otherwise provided in this Agreement, any Member or Affiliate thereof may engage in, or possess an interest in other business ventures of any nature or description, independently, or with others, similar or dissimilar to the business of the Company, and the Company and the Members shall have no rights by virtue of this Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company, shall not be deemed wrongful or improper. Except as otherwise provided in this Agreement, no Member or Affiliate thereof shall be obligated to present any investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and any Member or Affiliate thereof shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such investment opportunity.

Section 12.7 Applicable Law. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal law of the State of Louisiana without the application of conflicts of law principals.

Section 12.8 Table of Contents; Section Titles. The table of contents of this Agreement and the headings used herein are inserted as a matter of convenience only and do not define, limit or describe the scope of this Agreement or the intent of the provisions hereof.

Section 12.9 Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal and legal representatives, successors and permitted assigns.

Section 12.10 Terms. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the Person may in the context require. Any agreement, instrument, statute or provision of this Agreement defined or referred to in this Agreement means such agreement or instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and includes (in the case of agreements or instruments) references to all attachments thereto and instruments

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incorporated therein. References to a Person are also to its permitted successors and assigns. Whenever required by the context, as used in this Agreement the singular number shall include the plural, the plural shall include the singular, and all words herein in any gender shall be deemed to include the masculine, feminine and neuter genders.

Section 12.11 Separability of Provisions. Each provision of this Agreement shall be considered separable; and if, for any reason, any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid.

Section 12.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, constitute one and the same instrument. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. Executed copies of the signature pages of this Agreement sent by facsimile or transmitted electronically in Portable Document Format (“PDF”) shall be treated as originals, fully binding and with full legal force and effect, and the Parties waive any rights they may have to object to such treatment. Any party delivering an executed counterpart of this Agreement by facsimile or PDF also may deliver a manually executed counterpart of this Agreement, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

Section 12.13 Costs and Attorneys’ Fees. In any action between the parties to this Agreement arising out of or connected with this Agreement, the prevailing party in such action shall be awarded, in addition to any damages, injunctions or other relief, his costs and expenses, including reasonable attorneys’ fees.

[Signatures appear on the following page.]

IN WITNESS WHEREOF, the parties have executed, or caused this Operating Agreement to be executed as of the date set forth above.

IF MEMBER IS AN ENTITY: By: Name: Title: IF MEMBER IS AN INDIVIDUAL: Name:

A-1

EXHIBIT A

DEFINED TERMS

For purposes of the Operating Agreement of McGowin Park Investors, LLC, a Louisiana limited liability company, to which this Exhibit A is attached, the following terms when used therein with their initial letters capitalized shall have the following meanings, unless the context requires otherwise.

“Act” means the Louisiana Limited Liability Company Law, as amended.

“Affiliate” means, when used with reference to a specific Person, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the specified Person.

“Agreement” means this Limited Liability Company Agreement, as originally executed and as amended from time to time, and the terms “hereof,” “hereto,” “hereby” and “hereunder,” when used with reference to this Agreement, refer to this Agreement as a whole, unless the context otherwise requires.

“Articles of Organization” has the meaning assigned to it in Section 2.1.

“Board of Managers” has the meaning assigned to it in Section 6.1.

“Business” means the business of the acquisition, development, repair, management, leasing, holding, and, if appropriate, sale of the Property, either directly or indirectly, and such other activities that are incidental thereto or are approved by the Board of Managers.

“Capital Account” means, with respect to any Member, the Capital Account maintained in accordance with Section 4.3 of this Agreement.

“Capital Call” has the meaning assigned to it in Section 3.4(a).

“Capital Call Notice” has the meaning assigned to it in Section 3.4(b).

“Capital Contribution” has the meaning assigned to it in Section 3.3(b).

“Certificates” has the meaning assigned to it in Section 3.9.

“Class A Members” means Members holding Class A Units.

“Class A Units” means those Units specifically designated as Class A Units.

“Class B Members” means Members holding Class B Units.

“Class B Units” means those Units specifically designated as Class B Units.

“Code” means the Internal Revenue Code of 1986, as amended, or any corresponding provision of any succeeding law.

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“Company” means McGowin Park Investors, LLC, a Louisiana limited liability company.

“Confidential Information” has the meaning assigned to it in Section 12.1.

“Cumulative Available Funds” has the meaning assigned to it in Section 5.1.

“Defaulting Member” has the meaning assigned to it in Section 3.4(d).

“Dissolution Event” has the meaning assigned to it in Section 9.1.

“Expense” has the meaning assigned to it in Section 7.2.

“Fiscal Year” means the calendar year ending December 31, or such other twelve calendar month period as may be designated from time to time by the Board of Managers subject to the requirements and limitations of the Code.

“Initial Capital Contribution” means, with respect to each initial Member, an amount equal to the purchase price of the Units acquired by each initial Member, as determined by the Board of Managers.

“Liquidation Event” shall mean:

(a) consummation of the acquisition by any individual, entity or group of at least a majority of the outstanding Units in one transaction or a series of related transactions from one or more of the Members;

(b) consummation of a merger, consolidation or statutory share exchange of the Company into or with any other entity or entities if immediately thereafter the Company’s Members immediately preceding the consummation do not control a majority of the outstanding voting securities or equity interests of the surviving or new entity or its parent; or

(c) consummation of the sale of all or substantially all of the Company’s assets when a subsequent liquidating distribution or liquidation is contemplated.

“Management Agreement” means the contractual relationship between McGowin Park Investors, LLC and a third party property management company. This initial management agreement shall be with Stirling Properties, LLC. (The definition shall also be understood to be part of an overall “Management, Development, & Leasing Agreement”, or any variation thereof).

“Manager” has the meaning assigned to it in Section 6.1.

“Member” means each Person signing this Agreement and any Person who subsequently is admitted as a member of the Company in accordance with this Agreement.

“Notice” has the meaning assigned to it in Section 12.2.

“Non-Selling Members” has the meaning assigned to it in Section 8.2(a).

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“Non-Selling Members Option Period” has the meaning assigned to it in Section 8.2(b).

“Offered Units” has the meaning assigned to it in Section 8.2(a).

“Offering Price” has the meaning assigned to it in Section 8.2(a).

“Option Notice” has the meaning assigned to it in Section 8.2(a).

“Original Issue Price” has the meaning assigned to it in Section 3.4(c).

“Permitted Transfer” means the Transfer of all or any portion of a Member’s Units to one or more Affiliates or, if such Member is an individual, to his spouse, lineal descendant or antecedent, brother or sister, adopted child or adopted grandchild or a trust for the benefit of, or an entity controlled by, one or more individuals.

“Person” means and includes any individual, corporation, partnership, association, limited liability company, trust, estate, or other entity.

“Placed in Service Date” means the date that the facility located at the Property becomes open for business to the public.

“Pro Rata Portion” means, with respect to a Member, the percentage of the Units held by such Member with respect to all of the Units (excluding the Units held by the Selling Member).

“Proceeding” has the meaning assigned to it in Section 7.2.

“Property” means the real property, and the improvements thereon, located at Interstate 65 and U.S. Highway 90 in Mobile, Alabama.

“Profit” and “Loss” mean, for each Fiscal Year of the Company (or other period for which Profit or Loss must be computed) the Company’s taxable income or loss determined in accordance with Code Section 703(a), with the following adjustments:

(a) all items of income, gain, loss, deduction, or credit required to be stated separately pursuant to Code Section 703(a)(1) shall be included in computing taxable income or loss;

(b) any tax-exempt income of the Company, not otherwise taken into account in computing Profit or Loss, shall be included in computing taxable income or loss;

(c) any expenditures of the Company described in Code Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit or Loss, shall be subtracted from taxable income or loss;

(d) gain or loss resulting from any taxable disposition of Company property shall be computed by reference to the adjusted book value of the property disposed of, notwithstanding the fact that the adjusted book value differs from the adjusted basis of the property for federal income tax purposes;

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(e) in lieu of the depreciation, amortization, or cost recovery deductions allowable in computing taxable income or loss, there shall be taken into account the depreciation computed based upon the adjusted book value of the asset; and

(f) any item specially allocated under Exhibit C hereto shall not be taken into account in computing Profit and Loss.

“Purchasing Members” has the meaning assigned to it in Section 8.2(b).

“Refinancing” means a refinancing of a material property or asset of the Company.

“Regulations” means the income tax regulations, including any temporary regulations, from time to time promulgated under the Code.

“Remaining Offered Units” has the meaning assigned to it in Section 8.2(b).

“Selling Member” has the meaning assigned to it in Section 8.2(a).

“Tax Allocation Principles” has the meaning assigned to it in Section 4.1.

“Transfer” means, when used as a noun, any direct or indirect sale, gift, hypothecation, pledge, granting of a security interest, assignment, attachment, or other Transfer; and, when used as a verb, means, to sell, give, hypothecate, pledge, grant a security interest, assign, or otherwise Transfer, in either case whether voluntary or involuntary. The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.

“Units” means the units of membership interest in the Company issued in accordance with Article III.

“Unrecovered Capital Contribution” with respect to each Class A Member, means such Class A Member’s total Capital Contribution to the Company, decreased by the total amount of distributions received by such Class A Member under Section 5.1(c) and 5.2(b).

B-1

EXHIBIT B

LIST OF MEMBERS AS OF OCTOBER [__], 2018

Class A Members Initial Capital Contribution Class A Units

Class A Percentage

Interest

Total Percentage

Interest

B-2

Total Class A Members [$_______] [_______] 100.00% 80.00%

Class B Members Initial Capital Contribution Class B Units

Class B Percentage

Interest

Total Percentage

Interest $ - [______] $ - [______] $ - [______] $ - [______] $ - [______] $ - [______] $ - [______] Total Class B Members $ - [______] 100.00% 20.0000%

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EXHIBIT C

TAX ALLOCATION PRINCIPLES

For purposes of interpreting and implementing Article IV of the Operating Agreement of McGowin Park Investors, LLC (the “Agreement”), the following rules shall apply and shall be treated as part of the terms of the Agreement:

B. Special Allocation Provisions.

1. The following special allocations shall be made in the following order notwithstanding any provision of the Agreement to the contrary:

(a) Subject to the exceptions set forth in Section 1.704-2(f)(2)-(5) of the Regulations, if there is a net decrease in Company Minimum Gain during any Company Fiscal Year, each Member shall be specially allocated items of Company profits and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain determined in accordance with Section 1.704-2(g)(2) of the Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(f) of the Regulations. This subparagraph 1(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. To the extent permitted by such Section of the Regulations and for purposes of this subparagraph 1(a) only, each Member’s Adjusted Capital Account Balance shall be determined prior to any other allocations pursuant to Sections 4.1 and 4.2 of the Agreement with respect to such Fiscal Year and without regard to any net decrease in Member Minimum Gain during such Fiscal Year.

(b) Subject to the exceptions set forth in Section 1.704-2(i)(4) of the Regulations, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Fiscal Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(3) of the Regulations, shall be specially allocated items of Company Profits and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of the Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(i)(4) of the Regulations. This subparagraph 1(b) is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith. Solely for purposes of this subparagraph 1(b), each Member’s Adjusted Capital Account Balance shall be determined prior to any other allocations pursuant to Sections 4.1 and 4.2 of the Agreement with respect to such Fiscal Year, other than allocations pursuant to subparagraph 1(a) hereof.

(c) In the event any Members unexpectedly receive any adjustments, allocations or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), 1.704 1(b)(2)(ii)(d)(5) or 1.704 1(b)(2)(ii)(d)(6), items of Company Profits and gain shall be specially

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allocated to such Members in an amount and manner sufficient to eliminate the deficits in their Adjusted Capital Account Balances created by such adjustments, allocations or distributions as quickly as possible.

(d) In the event any Member has a deficit Capital Account at the end of any Fiscal Year which is in excess of the sum of the amount such Member is obligated to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such Member shall be specially allocated items of Company Profits and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this subparagraph 1(d) shall be made only if and to the extent such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in the Agreement have been made as if subparagraph 1(c) and this subparagraph 1(d) were not in the Agreement.

(e) Nonrecourse Liabilities and Nonrecourse Deductions for any Fiscal Year or other period shall be specially allocated to the Members in accordance with the percentages set forth in Section 4.1 of the Agreement. Allocations attributable to Exculpatory Liabilities shall be treated in the same manner as allocations attributable to Nonrecourse Liabilities.

(f) Any Member Nonrecourse Deduction for any Fiscal Year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Section 1.704-2(i) of the Regulations.

2. No Losses shall be allocated to any Member to the extent that such allocation would result in a deficit in such Member’s Adjusted Capital Account Balance while any other Member continues to have a positive Adjusted Capital Account Balance; in such event Losses shall first be allocated to any Members with positive Adjusted Capital Account Balances, and in proportion to such balances, to the extent necessary to reduce their positive Adjusted Capital Balances to zero.

3. Any special allocations of items pursuant to paragraph 1 and paragraph 2 of this Part A shall be taken into account in computing subsequent allocations so that the net amount of any items so allocated and the Profits, Losses and all other items allocated to each such Member pursuant to Sections 4.1 and 4.2 of the Agreement shall, to the extent possible, be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of Section 4.1 or 4.2, as applicable, of the Agreement if such special allocations had not occurred.

4. For purposes of determining the amount of Profits or Losses to be allocated pursuant to Sections 4.1 and 4.2 of the Agreement, any basis adjustments permitted pursuant to Section 743 of the Code shall be disregarded.

5. Notwithstanding any provision of the Agreement to the contrary, in the event the Company is entitled to a deduction for interest imputed under any provision of the Code on any loan or advance from a Member (whether such interest is currently deducted, capitalized or amortized), such deduction shall be allocated solely to such Member.

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6. Notwithstanding any provision of the Agreement to the contrary, to the extent any payments in the nature of fees made to a Member are finally determined by the IRS to be distributions to a Member for federal income tax purposes, there will be a gross income allocation to such Member in the amount of such distribution.

7. Notwithstanding any other provision of the Agreement, to the extent required by law, Profits, gains, Losses and deductions attributable to property contributed to the Company by a Member shall be, solely for tax purposes, allocated among the Members so as to take into account any variation between the basis of the property and the fair market value of the property at the time of contribution in accordance with the requirements of Section 704(c) of the Code and the applicable Regulations thereunder as more fully described in Part B hereof. Such allocations are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses or other items or distributions pursuant to the Agreement.

C. Capital Account Adjustments and 704(c) Tax Allocations.

1. For purposes of computing the amount of any item of Profits, gains, Losses or deductions to be reflected in the Members’ Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes; provided, however, that:

(a) Any deductions for depreciation, cost recovery or amortization (other than depletion under Section 611 of the Code) attributable to a Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Company was equal to the Agreed Value of such property. Upon an adjustment to the Carrying Value of any Company property (other than property subject to depletion under Section 611 of the Code), any future deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined as if the adjusted basis of such property was equal to the Carrying Value of such property immediately following such adjustment.

(b) Any Profits, gains or Losses attributable to the taxable disposition of any property (including any property subject to depletion under Section 611 of the Code) shall be determined by the Company as if the adjusted basis of such property as of such date of disposition was equal in amount to the Company’s Carrying Value with respect to such property as of such a date.

(c) If the Company’s adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to Section 48(q)(1) of the Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year such property is placed in service and shall be allocated among the Members pursuant to Section 4.1 of the Agreement. Any restoration of such basis pursuant to Section 48(q)(2) of the Code shall be allocated in the same manner to the Members to whom such deemed deduction was allocated.

(d) The computation of all items of Profits, gains, Losses and deduction shall be made by the Company and, as to those items described in Sections

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705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalizable for federal income tax purposes.

2. A transferee of any Units will succeed to the Capital Account relating to the Units so transferred; provided, however, that if the Transfer causes a termination of the Company under Section 708(b)(1)(B) of the Code, the Company properties shall be deemed to have been distributed to a new company (the “New Company”) in exchange for interests in the New Company, and the Company shall distribute interests in the New Company to the Members in accordance with the Regulations. The Capital Accounts of such reconstituted Company shall be maintained in accordance with the principles set forth herein.

3. Upon an issuance of additional Units for cash or Contributed Property, the Capital Accounts of all Members (and the Carrying Values of all Company properties) shall, immediately prior to such issuance, be adjusted (consistent with the provisions hereof) upward or downward to reflect any unrealized gain or unrealized loss attributable to each Company property (as if such unrealized gain or unrealized loss had been recognized upon an actual sale of such property at the fair market value thereof, immediately prior to such issuance, and had been allocated to the Members, at such time, pursuant to Section 4.2 of the Agreement). In determining such unrealized gain or unrealized loss attributable to the properties, the fair market value of Company properties shall be determined by the Board of Managers using such reasonable methods of valuation as they may adopt.

4. Immediately prior to the distribution of any Company property in liquidation of the Company, the Capital Accounts of all Members (and the Carrying Values of all Company properties) shall be adjusted (consistent with the provisions hereof and Section 704 of the Code) upward or downward to reflect any unrealized gain or unrealized loss attributable to each Company property (as if such unrealized gain or unrealized loss had been recognized upon an actual sale of each such property, immediately prior to such distribution, and had been allocated to the Members, at such time, pursuant to Section 4.1 of the Agreement). In determining such unrealized gain or unrealized loss attributable to the properties, the fair market value of Company properties shall be determined by the Board of Managers using such reasonable methods of valuation as they may adopt.

5. In accordance with Section 704(c) and the Regulations thereunder, Profits, gains, Losses and deductions with respect to any Contributed Property shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Agreed Value.

6. In the event the Carrying Value of any Company asset is adjusted as described in paragraph 3 or 4 of this Part B, subsequent allocations of Profits, gains, Losses and deductions with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Carrying Value in the same manner as under Section 704(c) of the Code and the Regulations thereunder.

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7. In making Section 704(c) allocations, any elections or other decisions relating to such allocations shall be made by the Board of Managers in any manner that reasonably reflects the purpose and intention of the Agreement.

D. Definitions. Unless otherwise defined in Exhibit A to this Agreement, the following terms shall have the meanings indicated for the purposes of this Exhibit C, unless the context clearly indicates otherwise:

“Adjusted Capital Account Balance” means the balance in the Capital Account of a Member as of the end of the relevant Fiscal Year, after giving effect to the following: (a) credit to such Capital Account any amounts the Member is obligated to restore, pursuant to the terms of the Agreement or otherwise, or is deemed obligated to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, and (b) debit to such capital account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

“Agreed Value” means the fair market value of Contributed Property as agreed to by the contributing Member and the Company, using such reasonable method of valuation as they may adopt.

“Carrying Value” means (a) with respect to Contributed Property, the Agreed Value of such property reduced (but not below zero) by all amortization, depreciation and cost recovery deductions charged to the Members’ Capital Accounts with respect to such property, as well as any other charges for sales, retirements and other dispositions of assets included in a Contributed Property, as of the time of determination, and (b) with respect to any other property, the adjusted basis of such property for federal income tax purposes as of the time of determination. The Carrying Value of any property shall be adjusted in accordance with the principles set forth herein.

“Company Minimum Gain” shall have the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

“Contributed Property” means each Member’s interest in property or other consideration (excluding services and cash) contributed to the Company by such Member.

“Exculpatory Liability” means a liability of the Company that is not secured by any specific property and that is recourse to the Company as an entity, but is nonrecourse to any Member.

“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i) of the Regulations.

“Member Nonrecourse Debt” shall have the meaning set forth in Section 1.704-2(b)(4) of the Regulations.

“Member Nonrecourse Deductions” shall have the meaning set forth in Section 1.704 2(i)(2) of the Regulations.

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“Nonrecourse Deductions” shall have the meaning set forth in Section 1.704-2(b)(1) of the Regulations.

“Nonrecourse Liability” shall have the meaning set forth in Section 1.704-2(b)(3) of the Regulations.

“Regulations” means the income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

INVESTMENT OFFERING


ACCREDITED INVESTOR QUESTIONAIRE

APPENDIX A ACCREDITED INVESTOR QUESTIONNAIRE

THE COMPANY WILL KEEP ALL INFORMATION CONTAINED IN THIS ACCREDITED INVESTOR QUESTIONNAIRE STRICTLY CONFIDENTIAL.

In connection with the proposed offering of Class A Units representing membership

interests in McGowin Park Investors, LLC (the “Company”), the undersigned subscriber (the “Subscriber”) does hereby warrant, represent, and certify that he, she or it qualifies as an “accredited investor” under Rule 501 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), because at least one of the following statements apply, as indicated by the Subscriber’s initialing of the applicable statement(s). Subscriber agrees to furnish any additional information that the Company considers necessary in order to verify the answers set forth below.

Subscriber is a bank as defined under section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity.

Subscriber is a broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Subscriber is an insurance company as defined in section 2(a)(13) of the Exchange Act.

Subscriber is an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

Subscriber is a business development company as defined in section 2(a)(48) of the Investment Company Act.

Subscriber is a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958.

Subscriber is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees with total assets in excess of $5 million.

Subscriber is any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and either (1) this investment decision is made by a bank, savings and loan association, insurance company, or registered investment adviser which is a plan fiduciary as defined by ERISA, or (2) the plan has total assets in excess of $5 million, or (3) the investment decision is made solely by persons who are accredited investors, if the plan is a self-directed one.

Subscriber is a private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940, as amended.

Subscriber is an organization described in section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, which was not formed for the specific purpose of making this investment and which has total assets in excess of $5 million.

Subscriber is a manager or executive officer of the Company, provided he or she performs policy-making functions for the Company.

Subscriber is a natural person who, at the time of this purchase, has an individual net worth or joint spousal net worth in excessive of $1 million (net worth calculation excludes the value of Subscriber’s primary residence).

Subscriber is a natural person who had, for each of the most recent two years, individual income in excess of $200,000 or joint spousal income in excess of $300,000, and reasonably expects to reach the same income level in the current year.

Subscriber is a trust with total assets in excess of $5 million, not formed for the specific purpose of making this investment, and whose purchase is directed by a “sophisticated person” as described in Rule 506(b)(2)(ii) of Regulation D of the Securities Act.

Subscriber is an entity in which all of the equity owners are accredited investors under one of the foregoing categories.

Subscriber is an individual retirement account in which the participant is an

accredited investor under one of the foregoing categories. If Subscriber does not meet any of the criteria for an “accredited investor,” as listed above, such undersigned Subscriber does hereby warrant, represent, and certify, as indicated by the Subscriber’s initials below, that it does not qualify as an “accredited investor” under Rule 501 of Regulation D as of the Securities Act:

Subscriber does not qualify as an “accredited investor” under Rule 501 of Regulation D.

Entity or Individual Retirement Account Information

If Subscriber is an entity or individual retirement account, the information requested below should be provided in regard to the entity that is investing.

(1) Name of Entity:

(2) Indicate Type of Entity:

General Partnership Corporation

Limited Partnership Trust

Limited Liability Company IRA

Other (please specify):

(3) Mailing Address of Entity:

(4) State Whose Laws Govern Entity:

(5) Date of Formation:

(6) Number of Partners, Members, Shareholders or Beneficiaries:

(7) Taxpayer I.D. Number:

Print Name of Individual or Entity

By: Print Name of Representative Signature of Individual or Representative

Dated: , 2018

Capacity of Representative (e.g., Manager, President, Trustee, etc.)

INVESTMENT OFFERING


SUBSCRIPTION AGREEMENT


SUBSCRIPTION AGREEMENT

McGowin Park Investors, LLC 109 Northpark Boulevard, Suite 300 Covington, Louisiana 70433

Dear [●]:

The undersigned investor (the “Investor”) is executing and delivering this Subscription Agreement (the “Agreement”) in connection with the Investor’s subscription for Class A Units of membership interest (the “Units”) in McGowin Park Investors, LLC, a Louisiana limited liability company (the “Company”). Terms not defined herein shall have the meanings assigned to them in the Operating Agreement of the Company, dated as of [●] [●], 2018, as it may be amended from time to time (the “Operating Agreement”). The Investor hereby agrees as follows:

1. Subscription.

(a) Units Subscribed For. Subject to the terms and conditions of this Agreement and the Operating Agreement, the Investor hereby subscribes for [●] Units for the price of $[●] (the “Purchase Price”). The Investor agrees to contribute the Purchase Price to the capital of the Company.

(b) Deposit. The Investor agrees to pay ten percent (10%) of the Purchase Price upon the execution and delivery of this Agreement to the Company by either wire transfer of immediately available funds to an account designated by the Company or certified check (the “Deposit”). The Deposit shall be held in escrow until the Closing.

(c) Acceptance of Subscription and Issuance of Units. It is understood and agreed that the Company shall have the sole right, at its complete discretion, to accept or reject this subscription, in whole or in part, for any reason and that the same shall be deemed to be accepted by the Company only when it is signed by a duly authorized officer of the Company and delivered to the undersigned. Subscriptions need not be accepted in the order received, and the Units may be allocated among subscribers by the Company in its sole discretion. Notification of acceptance may be by telephone, facsimile, email or other electronic means.

(d) Final Payment. The Investor agrees to pay the remaining ninety percent (90%) of the Purchase Price (the “Final Payment”) by either wire transfer of immediately available funds to an account designated by the Company or certified check within five (5) days of notification by the Company to Investor that the Final Payment is due. Notification to Investor may be by telephone, facsimile, email or other electronic means.

(e) Closing. The closing of the purchase and sale of the Units (the “Closing”) shall take place at the time and place specified by the Company in its Final Payment notification pursuant to Section 1(d). This Agreement is not a guarantee by the Company that the Closing will occur, and in the event that the Company chooses for whatever reason, at its sole discretion, that the Closing will not occur, then the Deposit shall be returned to Investor within ten (10) days of the notification to Investor that the Closing will not occur. Notification of acceptance may be by telephone, facsimile, email or other

1367268v.1

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electronic means.

2. Representations and Warranties. The Investor hereby represents and warrants that:

(a) Investment Risk. The Investor is aware that the investment in the Units is a speculative investment and involves a high degree of risk. The Investor understands the financial risks involved, which could result in a substantial or complete loss of the Investor’s investment and other financial loss. The Investor understands that the Company cannot guarantee that it will succeed or that it will generate returns to investors. The Investor is able to bear the economic risk of this investment, can afford to hold the Units for an indefinite period of time and can afford a complete loss of the investment. The Investor has adequate means for providing for the Investor’s current needs and contingencies and has no need for liquidity with respect to the Investor’s investment in the Units. The amount of the Investor’s investment and the Investor’s undertaking of future obligations with respect to the Units is within the Investor’s risk capital means and is not so great in relation to the Investor’s total financial resources as would jeopardize the Investor’s future financial condition or needs.

(b) Information. In making the decision to purchase the Units, the Investor has relied on the Investor’s own independent investigation and/or on the advice given to the Investor by the Investor’s own counsel, accountant or other advisers. The Investor is not relying on the Company or the Company’s counsel for an evaluation of the tax, legal or other consequences of an investment in the Units. The Investor further represents that the Investor and the Investor’s advisers have had the opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Units and have obtained or been given access to any additional information the Investor deems necessary to evaluate this investment and to verify the accuracy of the information contained in the Operating Agreement or otherwise furnished to the Investor and the Investor’s advisers. The Investor has not used any broker or finder in respect of the Investor’s purchase of the Units.

(c) Appropriate Risks. The Investor has evaluated the risks of investing in the Company in light of the foregoing and is satisfied that the investment is appropriate for the Investor.

(d) Experience. The Investor has, either alone or with the Investor’s representatives, such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of investing in the Units and of protecting the Investor’s own interest in connection with this transaction.

(e) Manner of Offering. Investor is subscribing for the Units as a result of personal contact and a prior business relationship between Investor on the one hand and the Company’s principals on the other, and not as a result of any advertising, article, publication, radio or television broadcast, general seminar, letter, circular, or any other general solicitation.

(f) Investment Intent. The Investor is acquiring the Units solely for the Investor’s own account and not for the account of any other person, for investment only, and not with a view to resale, assignment or distribution of the Units or with any present intention of selling or otherwise disposing of all or any part of the Units. The Investor has no arrangement or understanding with any other persons regarding the distribution of the Units. The Investor understands that any transfer of the Units or any arrangement for an economic interest in the Units to be held or owned by anyone other than the Investor except as provided for in this Agreement will constitute a violation of this representation, and shall be null and void. The Investor agrees that the Investor must bear the economic risk of the Investor’s investment in the Units for an

3

indefinite period of time because, among other reasons, the Units have not been registered under the Securities Act of 1933, as amended (the “Act”), or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of in the absence of evidence satisfactory to the Company of compliance with applicable laws, including an opinion of counsel satisfactory to the Company that, among other things, the Units have been registered under the Act and all applicable state securities laws or that such registrations are not required. The Investor acknowledges that there is no public market for the Units, that none is expected to develop and therefore the Investor’s ability to dispose of the Units will be severely limited. Further, the Investor acknowledges that the Operating Agreement contains restrictions on the transfer of the Units that limit the Investor’s ability to transfer or dispose of the Units. The Investor understands that the Company, its Manager, officers and any other appropriate parties may rely upon the Investor’s representations and warranties contained herein in determining whether the offering of Units is exempt from registration under the Act and applicable state securities laws.

(g) Projections. The Investor has not placed undue reliance on any projections or forward-looking information the Company may have provided the Investor in making the Investor’s investment decision, acknowledging that such information is merely Company management’s and representative’s estimate of possible performance and that there are no guarantees or assurances that the Company will so perform. The Investor understands that these estimates speak only as of the date made and involve known and unknown risks and other factors, that could cause actual results to be materially different from any future results expressed or implied by them.

(h) Accredited Investor. The Investor is an “accredited investor” as that term is defined in Rule 501 pursuant to the Act, and as more specifically indicated in the Accredited Investor Questionnaire completed by Investor and simultaneously or previously delivered to the Company, and incorporated herewith.

(i) Restricted Securities. The Investor understands that the Units are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired in a transaction not involving a public offering and that under such laws and applicable regulations the Units may be resold without registration under the Act only in certain limited circumstances and that otherwise the Units must be held indefinitely.

(j) Disposition. Without in any way limiting the representations set forth above concerning the transferability of the Units or otherwise, the Investor agrees not to make, in any event, any disposition of all or any portion of the Units unless and until: (x) there is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement and any applicable requirements of state securities laws; or (y) the Company has been furnished with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such Units under the Act or the consent of or permission from appropriate authorities under any applicable state securities law or a written waiver by the Company of such requirement.

3. Indemnification. In light of the Company’s reliance on the Investor’s representations and warranties in establishing an exemption from registration under federal and state securities laws and Investor’s covenant contained in this Section 3, the Investor agrees to indemnify, defend and hold harmless the Company, its Board of Managers and each of the Company’s officers, employees, affiliates, anyone acting on behalf of the Company or the Board of Managers and any person who controls any of them (each an “Indemnified Party”), from and against all damages, losses, claims, demands, liabilities,

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costs and expenses (including without limitation any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever, whether or not resulting in any liability to such Indemnified Party), including without limitation reasonable attorneys’ fees and expenses, which an Indemnified Party may incur arising out of or based upon (i) any false or allegedly false representation or warranty by the Investor made in this Agreement or (ii) any breach by the Investor of, or the Investor’s failure to fulfill any of the covenants, terms and conditions of, this Agreement.

4. Benefit. This Agreement, if, and only if, accepted by the Company acting through its duly authorized representative, shall be binding upon the Investor’s executors, administrators, heirs, legal representatives, legatees, successors and assigns and shall inure to the benefit of the Company, its successors and assigns.

5. Complete Agreement. This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.

6. Governing Law. This Agreement shall be deemed to be a contract made under and shall be construed in accordance with the internal laws of the State of Louisiana without regard to conflicts of law principles.

7. Notices. All notices and other communications required or permitted under this Agreement shall be in writing or email, and shall be deemed to have been given if delivered personally, or mailed, postage prepaid, by first class mail, to the parties at the addresses set forth in this Agreement or such other address as a party may specify to the other by notice as provided in this Section.

8. Assignment. The Investor may not assign or transfer this Agreement, via operation of law or otherwise, without the advance written consent of the Company.

9. Amendment. This Agreement may be amended or modified only by an instrument signed by Investor and the Company. A waiver of any provision of this Agreement must be in writing, designated as such, and signed by the party against whom enforcement of that waiver is sought. The waiver by a party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent or other breach thereof.

10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution and delivery of this Agreement may be made by delivery of either an actual or facsimile/photocopy.

(Signature Page Follows)

[Signature Page to Subscription Agreement]

IN WITNESS WHEREOF, the Investor has executed this Subscription Agreement on the date indicated below.

SUBSCRIBER: IF INVESTOR IS AN ENTITY:

By: Name: Title:

IF INVESTOR IS AN INDIVIDUAL:

Name: Dated: Address:

____________________________________ ____________________________________ ____________________________________ ____________________________________ Social Security Number/Federal Tax ID Number: ____________________________________

Accepted by McGowin Park Investors, LLC, this _______ day of __________, 2018, with respect to [●] Units for the price of $[●].

MCGOWIN PARK INVESTORS, LLC By: Name: [ ] Title: Manager

Stirling Properties, LLC

109 Northpark Boulevard Suite 300

Covington, LA 70433

[office] 985-898-2022 [fax] 985-898-2077

StirlingProperties.comstirlingproperties.com

The foregoing is solely for information purposes and is subject to change without notice.

Stirling Properties makes no representations or warranties regarding the properties or information herein including but not limited to any and all images pertaining to these properties. It is the obligation of each purchaser/lessee to investigate the condition and attributes of the properties and to verify the accuracy of the foregoing information to the extent such purchaser/lessee deems necessary. Also subject to errors, omissions, changes in terms and conditions, prior sale, lease or withdrawal, without notice. 9/18

GRIFFIN LENNOXInvestment Advisor and [email protected]

BEEZIE LANDRYVice President of Investment [email protected]

Documents

McGowin Park MEMORANDUM OFFERING - Stirling Properties · 2018. 11. 13. · certificate of formation limited liability company agreement mcgowin park investors, llc articles of organization