THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (“SEC”) DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THIS INVESTMENT INVOLVES A DEGREE OF RISK THAT MAY NOT BE SUITABLE FOR ALL PERSONS. ONLY THOSE INVESTORS WHO CAN BEAR THE LOSS OF A SIGNIFICANT PORTION OF THEIR INVESTMENT SHOULD PARTICIPATE IN THE INVESTMENT. (SEE “RISK FACTORS” BELOW.)

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE SALE THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

THE SECURITIES OFFERED HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY STATE REGULATORY AUTHORITY NOR HAS ANY STATE REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

Preliminary Offering Circular

For

Benchmark Real Estate Investment Fund, LLC

A Delaware Limited Liability Company

doing business as

BENCHMARK REAL ESTATE FUND

March 15, 2024

Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than ten (10%) percent of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, Investors are encouraged to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, Investors are encouraged to refer to www.investor.gov.

Benchmark Real Estate Investment Fund, LLC d/b/a Benchmark Real Estate Fund (“Benchmark Real Estate Fund”, the “Issuer”, or the “Company”) is a Delaware limited liability company (“LLC”) registered as a foreign limited liability company with the State of Michigan. The Company is offering (the “Offering”) by means of this offering circular (the “Offering Circular”), Company equity in the form of Class A membership interests (the “Membership Interests”, “Membership Units” or in the singular an “Interest” or “Unit”) on a Best Efforts and ongoing basis to Investors who meet the Investor suitability standards as set forth herein. (See “Investor Suitability Standards” below). The Company will offer Membership Interests through its own website www.benchmarkmi.com (“Platform”) and through JumpStart Securities, LLC, (the “Dealer Manager” or “Jumpstart”) as a FINRA registered broker-dealer for its services in this transaction. For performing broker-dealer functions in connection with this Offering, the Dealer Manager and any other broker-dealers will receive up to five percent (5.00%) Brokerage Commission; and when the Company signed the Dealer Manager Agreement, the Dealer Manager received a $25,000.00 fee for consulting and advisory services. In addition to selling commissions of up to five percent (5.00%) of the sale price of Membership Units, the Fund, the Manager or its affiliates may pay or reimburse the Dealer Manager or other broker-dealers, or will otherwise bear, certain underwriters’ expenses, in an aggregate amount of up to 86/100 (0.86%) of the sale price of Membership Units as additional selling compensation. The maximum fees for Dealer Manager and other broker-dealer services are five and 86/100 percent (5.86%). See “Plan of Distribution” for more details. (See the “Terms of Offering” below.) Persons who purchase Membership Interests will be members of the Company (“Members” or in the singular a “Member”) and will hereinafter be referred to as “Investors” or in the singular an “Investor.” The Company intends to use the proceeds of this Offering (“Proceeds”) to commence operations of the Company.

The minimum investment amount per Investor is Two Hundred Fifty Dollars ($250.00) for the Offering (the “Minimum Investment Amount”). Although the Company does not intend to list the Membership Interests for trading on any exchange or other trading market, the Company has adopted a redemption plan designed to provide Investors with limited liquidity for their investment in the Company. (See “Description of the Securities” below.)

Sales of the Class A Units pursuant to this Regulation A Tier 2 Offering will commence immediately upon qualification by the Securities and Exchange Commission (the “Effective Date”) and will terminate on the earliest of: (a) the date the Company, in its sole discretion, elects to terminate, (b) the date upon which all Units have been sold, or (c) exactly 12 months after the Effective Date (the “Offering Period”).

Jumpstart will act as the placement agent for this Offering. Proceeds from this Offering will be held in escrow until the Minimum Offering Amount is met. The escrow account “(Escrow Account”) is administered by Enterprise Bank & Trust, a Missouri chartered trust company with banking powers (“EBT”) as escrow agent. (See “Plan of Distribution” below.)

Prior to this Offering, there has been no public market for Membership Interests, and none is expected to develop. The Offering price is arbitrary and does not bear any relationship to the value of the assets of the Company. The Company does not currently have plans to list any Membership Interests on any securities market. Investing in the Company through the purchase of Membership Interests involves risk, some of which are set forth below. See the section titled “Risk Factors” to read about the factors an Investor should consider prior to purchasing Membership Interests.

Investors who purchase Membership Interests will become Members of the Company subject to the terms of the Operating Agreement of Benchmark Real Estate Investment Fund, LLC (See Exhibit 3, the “Operating Agreement”) once the Company deposits the Investor’s investment into the Company’s escrow account (if the Minimum Offering Amount has not yet been met at the time of investment) or in the Company’s main operating account (if the Minimum Offering Amount has been met at the time of investment).

If the Company’s gross Proceeds received do not meet the Minimum Offering Amount, the funds will be returned to Investors. When the gross Proceeds received exceeds the Minimum Offering Amount, the funds will be released from the escrow account (administered by the Escrow Agent) and deposited into the Company’s operating account.

The Manager and Affiliates will receive compensation and income from the Company and is subject to certain conflicts of interest. (See “Risk Factors”, “Compensation of the Manager” and “Conflicts of Interest” below.) Investing in the Membership Interests is speculative and involves substantial risks, including risk of complete loss. Prospective Investors should purchase these securities only if they can afford a complete loss of their investment. (See “Risk Factors” below starting on Page 11.) There are material income tax risks associated with investing in the Company that prospective Investors should consider. (See “Income Tax Considerations” below.)

As of the date of this Offering Circular, the Fund has engaged KoreTransfer USA LLC (“KoreTransfer”) as transfer agent for this Offering.

RULE 251(D)(3)(I)(F) DISCLOSURE. RULE 251(D)(3)(I)((F) PERMITS REGULATION A OFFERINGS TO CONDUCT ONGOING CONTINUOUS OFFERINGS OF SECURITIES FOR MORE THAN THIRTY (30) DAYS AFTER THE QUALIFICATION DATE IF: (1) THE OFFERING WILL COMMENCE WITHIN TWO (2) DAYS AFTER THE QUALIFICATION DATE; (2) THE OFFERING WILL BE MADE ON A CONTINUOUS AND ONGOING BASIS FOR A PERIOD THAT MAY BE IN EXCESS OF THIRTY (30) DAYS OF THE INITIAL QUALIFICATION DATE; (3) THE OFFERING WILL BE IN AN AMOUNT THAT, AT THE TIME THE OFFERING CIRCULAR IS QUALIFIED, IS REASONABLY EXPECTED TO BE OFFERED AND SOLD WITHIN ONE (1) YEARS FROM THE INITIAL QUALIFICATION DATE; AND (4) THE SECURITIES MAY BE OFFERED AND SOLD ONLY IF NOT MORE THAN THREE (3) YEARS HAVE ELAPSED SINCE THE INITIAL QUALIFICATION DATE OF THE OFFERING, UNLESS A NEW OFFERING CIRCULAR IS SUBMITTED AND FILED BY THE COMPANY PURSUANT TO RULE 251(D) (3)(I)((F) WITH THE SEC COVERING THE REMAINING SECURITIES OFFERED UNDER THE PREVIOUS OFFERING; THEN THE SECURITIES MAY CONTINUE TO BE OFFERED AND SOLD UNTIL THE EARLIER OF THE QUALIFICATION DATE OF THE NEW OFFERING CIRCULAR OR THE ONE HUNDRED EIGHTY (180) CALENDAR DAYS AFTER THE THIRD ANNIVERSARY OF THE INITIAL QUALIFICATION DATE OF THE PRIOR OFFERING CIRCULAR. THE COMPANY INTENDS TO OFFER THE SHARES DESCRIBED HEREIN ON A CONTINUOUS AND ONGOING BASIS PURSUANT TO RULE 251(D)(3)(I)(F). THE COMPANY INTENDS TO COMMENCE THE OFFERING IMMEDIATELY AND NO LATER THAN TWO (2) DAYS FROM THE INITIAL QUALIFICATION DATE. THE COMPANY REASONABLY EXPECTS TO OFFER AND SELL THE SECURITIES STATED IN THIS OFFERING CIRCULAR WITHIN ONE (1) YEAR FROM THE INITIAL QUALIFICATION DATE.

The Company will commence sales of the Membership Interests immediately upon qualification of the Offering by the SEC. The Company approximates sales will commence within Q1– 2024.

*The Offering price to Investors was arbitrarily determined by the Manager.

** The Company is not using an underwriter for the sale of Membership Interests. We have retained Jumpstart Securities, LLC (the “Dealer Manager”) as a FINRA registered broker-dealer for its services in this transaction. The Dealer Manager and any other broker-dealers will receive up to five percent (5.00%) Brokerage Commission. In addition to selling commissions, the Fund, the Manager or its affiliates may reimburse the Dealer Manager or other broker-dealers, or will otherwise bear, certain underwriters’ expenses, in an aggregate amount of up to 86/100 (0.86%) of the sale price of Membership Units as additional selling compensation. The maximum fees for Dealer Manager and other broker-dealer services is five and 86/100 percent (5.86%). See “Plan of Distribution” for more details. See “Plan of Distribution” below.

*** The Company will compensate Benchmark Capital Management, LLC (“BCM”) with a $100,000.00 Organizational Fee for the time and effort involved in organizing the Company. The Company will reimburse its Affiliate West Michigan Private Capital Fund I, LLC doing business as Benchmark Capital Finance (“WMPCF”) for the initial expenses associated with this Offering, including legal, marketing, and accounting expenses, equaling approximately $388,212.00 upon the successful raising of the Minimum Offering Amount. See “Compensation of the Manager” below.

TABLE OF CONTENTS

SUMMARY OF THE OFFERING

The following information is only a brief summary of, and is qualified in its entirety by, the detailed information appearing elsewhere in this Offering. This Offering Circular, together with the exhibits attached including, but not limited to, the Operating Agreement, a copy of which is attached hereto as Exhibit 3 should be carefully read in its entirety before any investment decision is made. If there is a conflict between the terms contained in this Offering Circular and the Operating Agreement, the Operating Agreement shall prevail, and control and no Investor should rely on any reference herein to the Operating Agreement without consulting the actual underlying document.

The Company was organized under the laws of Delaware on November 10, 2015 (see Exhibit 2 “Certificate of Formation”). The Company has not had any revenue and has not commenced operations as of the date of this Offering Circular. The Company expects to begin operations promptly after the Proceeds from the sale of Membership Interests pursuant to this Offering are released from escrow by the Escrow Agent.

The Company intends to be a funding source or Originator for Notes Originated, brokered, and Serviced primarily by the Company and its Affiliates, Benchmark Capital Management II, LLC, the manager of the Company (the “Manager” or “BCM II”), Benchmark Capital Management, LLC (“BCM”) and WMPCF. BCM II, BCM, and WMPCF, may be collectively referred to as “Affiliates” of the Company because they are entities associated with the principals of the Company, Mr. Matthew J. Fox and Mr. Todd A. Harding (the “Principals”). The Manager is an entity managed by BCM whose Manager is Mr. Matthew J. Fox. With respect to the anticipated business of the Company, the Company intends: (i) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on owner-occupied 1-4 family residential Collateral located in the State of Michigan primarily in West Michigan as Originated and/or brokered by Affiliates or third party Mortgage loan Originators; (ii) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on non-owner-occupied 1-4 family residential and commercial Collateral located in the State of Michigan, primarily in West Michigan as Originated or brokered by BCM or third party Mortgage loan Originators; (iii) to acquire, develop, renovate, hold, and/or sell owner and non-owner-occupied Property located in the State of Michigan, primarily in West Michigan; (iv) to purchase, renovate, develop, and rent Property located in the State of Michigan, primarily in West Michigan; (v) to fund, purchase, sell, and otherwise acquire Notes for new construction on 1-4 family residential owner and non-owner residential Collateral; (vi) to fund, purchase, sell, develop, renovate, and/or broker other investments secured by owner-occupied, non-owner-occupied, and commercial Property located in the State of Michigan, primarily in West Michigan; and (vii) and any act reasonably related thereto.

Though the Company may operate throughout the State of Michigan, the Manager and its Affiliates will direct most of the Company’s efforts to the West Michigan region with respect to the aforementioned intended business activities (see “Description of the Business” below).

FORWARD LOOKING STATEMENTS

Investors should not rely on forward-looking statements because they are inherently uncertain. Investors should not rely on forward-looking statements in this Offering Circular. This Offering Circular contains forward-looking statements that involve risks and uncertainties. The use of words such as “anticipated,” “projected”, “forecasted”, “estimated”, “prospective”, “believes”, “expects,” “plans”, “future”, “intends”, “should”, “can”, “could”, “might”, “potential”, “continue”, “may”, “will”, and similar expressions identify these forward-looking statements. Investors should not place undue reliance on these forward-looking statements, which may apply only as of the date of this Offering Circular, and the Company undertakes no obligation to publicly update or revise any ‎forward-looking information, ‎other than as required by applicable law.

STATE LAW EXEMPTION AND PURCHASE RESTRICTIONS

The Membership Interests are being offered and sold only to “Qualified Purchasers” (as defined in Regulation A under the Act). As a Tier II Offering pursuant to Regulation A under the Act, this Offering is exempt from state law “blue sky” review, subject to meeting certain state filing requirements and complying with certain anti-fraud provisions, to the extent that the Membership Interests offered hereby are offered and sold only to “Qualified Purchasers” or at a time when the Membership Interests are listed on a national securities exchange, if at all.

“Qualified purchasers” include: (i) “Accredited Investors” under Rule 501(a) of Regulation D; and (ii) all other non-Accredited Investors so long as their investment in the Membership Interests does not represent more than ten percent (10.00%) of the greater of the Investor’s, alone or together with a spouse or spousal equivalent, annual income or net worth (excluding the value of the Investor’s primary residence and any loans secured by the residence (up to the value of the residence)), or ten percent (10.00% ) of the greater of annual revenue, alone or together with a spouse or spousal equivalent, or net assets at fiscal year-end (for non-natural persons).

The Membership Interests are offered hereby and sold to Investors that are within both categories (i.e., Accredited Investors and non-Accredited Investors whose investment in the Membership Interests does not represent more than ten percent (10.00%) of the applicable amount). Accordingly, the Company reserves the right to reject any Investor’s subscription in whole or in part for any reason, including if the Company determines in its sole and absolute discretion that such Investor is not a “Qualified Purchaser” for purposes of Regulation A.

For purposes of determining whether a potential Investor is a “Qualified Purchaser” (who is not an Accredited Investor), annual income and net worth should be calculated as provided in the “Accredited Investor” definition under Rule 501 of Regulation D.

GLOSSARY

Defines all capitalized terms in the Offering Circular which are not defined within the text of the Offering Circular nor within the Company’s Operating Agreement.

RISK FACTORS

The Company will attempt (in its sole and absolute discretion) to comply with requests for the redemption of the Membership Interests if the financial position of the Company can accommodate it. (See “Description of the Securities” below). Any investment in the Membership Interests involves a significant degree of risk and is suitable only for Investors who have no need for liquidity in their investments. When analyzing this Offering, prospective Investors should carefully consider each of the following risks.

INVESTMENT RISKS

The Offering Price and Minimum Investment Amount have been arbitrarily determined by the Company and do not reflect the value of the assets that have been or will be acquired by the Company.

The Offering amount and Minimum Investment Amount have been arbitrarily determined by the Company and do not bear any relationship to the assets that have been or are to be acquired by the Company or any other established criteria or indicia for valuing a business. The Company may, at its sole and absolute discretion, accept or require a lesser or greater Minimum Investment Amount. In addition, the assets that are to be acquired by the Company could have a higher or lower value than the Offering price, which may result in the valuation of the Company being lower or higher than the Offering price.

Investment in the Membership Interests is speculative, and each Investor assumes the risk of losing his, her, or its entire investment.

Investment in these Membership Interests is speculative, and by investing, each Investor assumes the risk of losing the entire investment. The Company has no operations as of the date of this Offering Circular and will be solely dependent upon the efforts of the Manager and its Affiliates to develop and manage the Note and Property portfolio, all of which are subject to the risks described herein. Accordingly, only Investors who are able to bear the loss of their entire investment and who otherwise meet the Investor Suitability standards should consider purchasing these Membership Interests. (See “Investor Suitability Standards” in the summary section above.)

The Company’s ability to commence operations is dependent on its ability to raise funds.

The Company has been utilizing and may continue to utilize funds from its Affiliates, which have agreed to advance these funds to allow the Company to facilitate its formation including paying for Offering costs, filing fees, and professional fees related to the preparation of this Regulation A Offering. These funds will be reimbursed to the Affiliates upon the Company breaking escrow and beginning operations. In order to execute the plan of operations, the Company will require varying amounts of capital based on the Notes it intends to purchase or Originate and/or Properties the Company intends to acquire. The Company’s ability to commence operations is largely dependent on its ability to raise funds through this Offering. Investors should be aware that there is no assurance that the Company will obtain capital investments necessary to commence operations and become profitable. In addition, receipt of capital investments of less than the Maximum Offering Amount may reduce the ability of the Company to spread investment risks through diversification of its Note and Property portfolios.

Conflicts of interest may arise when the Company purchases or Originates Notes brokered by the Manager, Affiliates of the Company, or third parties.

There are important areas in which the interests of the Company may conflict with its Manager, Principals, and/or Affiliates. To see the potential conflicts of interests that may arise please refer to “Conflicts of Interest” section below. The Company may purchase or Originate Notes Originated by the Company, its Affiliates, or third parties and may receive compensation as a result. This represents a conflict of interest between the Manager and the Company since the Principals who manage or own Affiliates of the Manager and manage the Manager also directly manages the Company. Specifically, the Company may conduct business primarily with the Manager or its Affiliates by purchasing or Direct Funding Notes Originated by the Manager or its Affiliates. These will be Affiliate transactions and therefore, the terms of the Notes may not be the same as if it were agreed upon via a third-party transaction. Notwithstanding the foregoing, the Company will only invest in those Notes and Properties that are in the best interests of the Company and said Notes or Property purchases will have terms that are commercially reasonable. It is expected that transactions may occur between the Company and its Manager, Principals, and/or Affiliates, and outside or independent review of these transactions may not be performed.

In addition, conflicts of interest may pose a risk to Investors due to the fact that the Company and the Manager and each of its Principals, and/or Affiliates may be involved in other investments or business similar to the Offering and as a result, may not always act in a manner that is advantageous to the Company and to the Offering if presented with similar investment or business opportunities.

There is no federal registration of this Offering and there may be limited governmental review.

This Offering has not been registered with the SEC or with any state regulators. Although certain states require notice filing pursuant to pertinent state securities laws, the Offering is largely subject to limited governmental review.

There is limited transferability of Membership Interests and no public market for Membership Interests.

Although the Company may attempt to redeem Membership Interests (when possible, in the Company’s sole and absolute discretion), there is no public market for Membership Interests, and none is expected to develop in the future. Even if a potential buyer could be found, the transferability of these Membership Interests may be limited. Any sale or transfer of these Membership Interests also requires the prior written consent of the Company. Investors must be capable of bearing the economic risks of this investment with the understanding that these Membership Interests may not be liquidated by resale or redemption and should expect to hold their Membership Interests as a long-term investment.

There is no guarantee of reaching Maximum Offering Amount.

There is no assurance that the Company will obtain capital investments equal to the amount required to close the Offering. In addition, receipt of capital investments of less than the Maximum Offering Amount may reduce the ability of the Company to spread investment risks through diversification of its Note and Property portfolios.

Investors are not independently represented by the Company’s attorneys and should seek their own independent counsel.

The Investors of the Company have not been represented by independent counsel with respect to this Offering. Attorneys assisting in the formation of the Company and the preparation of this Offering Circular have represented only the Company and its Principals and Affiliates. (See “Conflicts of Interest” below.)

No assurance can be provided that the Maximum Offering Amount will be adequate working capital and/or will absolve the need for additional financing.

In the opinion of the Company, if the maximum number of Membership Interests being offered are sold, the Company will likely have sufficient working capital to achieve its planned operations. However, there can be no assurance that even if the maximum number of Membership Interests are sold that the Company would not be required to seek alternative or additional sources of financing. The Company is not restricted in the application of the funds as provided within this Offering Circular under the caption “Use of Proceeds”.

Terms of the Membership Interests may not be favorable to prospective Investors.

The Company has set the terms of the Membership Interests in a manner which may be favorable to the Company and has not made an attempt to consider the favorability or suitability of such terms for any prospective Investors.

The Company may employ leverage, resulting in the Membership Interests being subordinate to any debt incurred by the Company.

Any indebtedness incurred by the Company (e.g. through a credit line, borrowing from a financer, etc.) may expose the Investors to substantially greater risk. Any debt incurred by the Company will be senior to the Investors’ investment and will have priority of payment. If there are not sufficient cash flows generated from the operations of the Company and the Company has to pay debtholders, it may affect the Company’s ability to make distributions to Investors. In addition, leverage may involve restrictive covenants, interest obligations and other risks that are customary to organizations that employ leverage in financing their investments.

The Company will invest in assets that have not been identified and potential Investors will be unable to evaluate the Company’s Note and Property portfolios prior to making their investment.

None of the specific assets in which the Company will invest are identified as of the date of this Offering Circular. Therefore, any potential Investor is unable to evaluate the Note or Property portfolios to determine whether to invest in the Company. However, the general business goals of the Company are to purchase or Originate Notes and Property purchases as further described herein (see “Description of the Business” below).

The Company has the right to change and mix its investment profile, there is no guarantee that the investment profile will not change substantially over time.

The Company reserves the right, in its sole and absolute discretion, to modify, change, or revise its typical investment profile and the mix of Notes and Property that it invests or otherwise participates in, and accordingly, Investors have no guarantee, and should not assume that the investment mix and profile of the Company will not change substantially over time.

The Loan Loss Reserve may be insufficient to cover Loan losses, which may ultimately cause the Company to be unable to distribute income to Investors.

The purpose of a Loan Loss Reserve is to help insulate the Investors from loss. Although a Loan Loss Reserve will help reduce the impact of a default of a Note temporarily, ultimate repayment of the Note or resale of the asset(s) collateralizing the Note will be jeopardized if the Note in default is not eventually repaid. In addition, a Loan Loss Reserve may vary and will be based on reserve overages and the weighted risk levels of the Note portfolio. This may cause reserve amounts to be reduced, eliminated, or increased accordingly in the sole and absolute discretion of the Company. Investors should understand that a Loan Loss Reserve does not guarantee the Company will not incur a loss if a Note or Notes results in default, which may ultimately cause the Company to sustain a loss and be unable to distribute income to the Investors.

BUSINESS RISKS

There is reliance on the Principals to make all decisions with respect to the management of the Company, therefore, Investors will have very limited choice in the management decisions.

The Manager of the Company will make virtually all decisions with respect to the management of the Company including, without limitation, the determination as to which Notes to purchase or Originate and the terms thereof, which Property to purchase, sell, hold for rent or appreciation, renovate, or develop. Investors will have very limited voice in the management decisions of the Company and can exercise only a limited (if any) amount of control over the Company. The Company gives no assurance that the Company will operate at a profit or positive cash flow. The Company is dependent to a substantial degree on the continued services of the Principals. In the event of the death, incapacity or other termination of the Principals, the business and operations of the Company may be adversely affected. Furthermore, all investments related to specific Notes or Property will be undertaken by the Company without the Investors having any ability to directly affect such transactions.

Competition with other Lenders may affect the Company’s profitability.

Because of the nature of the Company's business, the Company's profitability will depend to a large degree on the future availability of capital. In particular, the Company will compete with private Lenders, institutional (banks, credit unions, Mortgage Brokers, etc.) Lenders and others engaged in the Mortgage lending business, many of whom may have greater financial resources and/or experience than the Company.

The Principals are not required to devote full-time to the business of the Company.

The Company’s management and the Principals are not required to devote their respective individual capacities full-time to the Company's affairs, but only such time as the affairs of the Company may reasonably require.

No restriction preventing the Company or its Affiliates from competing with one another by investing or sponsoring investments similar to those of the Company.

Although the Company, Manager, its Affiliates, and Principals currently have no intention to do so, there is no restriction preventing them from competing with one another by investing in Notes or Property or sponsoring the formation of other investment groups similar to the Company. The Principals may make decisions that may at times favor Affiliates rather than the Company. Unless otherwise mandatorily required to the contrary by applicable law, the Company, Manager, its Affiliates, and Principals are exonerated from any liability for investment opportunities given to other parties.

Delays in the participation in the investment yield by Investors may occur.

There may be a delay between the time subscription funds are accepted from Investors and the time when such funds are deposited into the Company’s main operating bank account and begin to participate in the investment yield offered herein. Such delays may result from the Company having to verify an Investor’s suitability and admissibility as a Member, delays while the Company raises the Minimum Offering Amount, and/or delays in depositing an Investor’s contribution into the Company’s main operating bank account. In addition to the aforementioned delays, delays may occur as a result of lack of availability of Notes to Purchase or Originate and Property available for purchase by the Company immediately upon an Investor making a Capital Contribution to the Company. After the Minimum Offering Amount has been raised, any delays between the time Capital Contributions are accepted and the time when such funds are deposited into the Company’s main operating bank account shall be a reasonable timeframe. No interest shall be payable on or with respect to the Capital Contributions or Capital Accounts of the Investors.

Management and investment practices of the Company may not be regulated by federal or state authorities.

The Manager, Affiliates, and the process of purchasing or Direct Funding Notes particularly for owner-occupied Notes and the buying and selling of Properties for the Company may be regulated by more than one department of the State of Michigan and Federal Government, especially owner-occupied Notes. The Company may not be supervised or regulated by federal or state regulatory authority, with respect to its Properties, however some Affiliates are supervised and regulated under Michigan law. In addition, the Company’s lending activities are generally regulated by both federal and state authorities and supervised by state authorities. The Company’s investments in Properties will be subject to state and local regulation. The Company will not be required to obtain a consumer lending license since it will not make any consumer purpose loans. However, WMPCF currently is a licensed Lender, Broker, Servicer with the State of Michigan. WMPCF intends to maintain a valid Lender, Broker, Servicer license with the State of Michigan in order to Originate, underwrite, and/or Service Notes secured by Collateral that is owner-occupied. The Company and its Affiliates, aside from WMPCF, will not be required to maintain a valid consumer lending license because they do not Originate, underwrite, fund, or Service owner-occupied Notes. Notwithstanding the foregoing, if required by state or federal authorities, the Company and/or any of its Affiliates will obtain all licenses prior to Originating, underwriting, servicing, investing in or funding an owner-occupied Note.

While the Company will use its Best Efforts to comply with all laws, including federal, state, and local laws and regulations, there is a possibility of governmental action to enforce any alleged violations of lending laws which may result in legal fees and damage awards that would adversely affect the Company and its ability to distribute income to Investors.

Investment in the Company involves certain tax and ERISA risks of which Investors should be aware.

An investment in the Company involves certain tax risks of general application to all Investors and certain other risks specifically applicable to Keogh accounts, Individual Retirement Accounts and other tax-exempt Investors. (See “Income Tax Considerations” and “ERISA Considerations” below).

Note defaults and foreclosures may occur which could potentially adversely affect the profitability of the Company and its ability to distribute income to Investors.

The Company as a private Lender will invest in Notes and accept the risks (some of which are detailed in this Offering) that traditional lending sources typically face, including but not limited to Mortgagors who may default on those Notes. The Company may purchase or Originate Notes wherein the Mortgagors may not qualify for financing from more traditional lending sources. Notes generally require a monthly payment from the Mortgagor. Mortgagors may be unable to make such payments. Among the factors that could affect a Mortgagors ability to refinance a Note with a traditional lending source include but may not be limited to fluctuations in interest rates, unavailability of Mortgage funds, and a decrease in the value of the Collateral securing the Note.

The Company looks to the value of the underlying Collateral securing the Note and the Mortgagor’s ability to repay the Note to determine whether to purchase or Originate the Note. In addition, the Mortgagors must also be able to demonstrate their ability to meet their other financial obligations.

To determine the fair market value of the Collateral securing the Note, the Company will primarily rely on a licensed independent third-party real estate appraisal, and the Company’s own opinion of value of the Collateral. Appraisals are a judgment of an individual appraiser’s interpretation of a Collateral’s value. If the Company does not use a third-party appraiser, the Company’s Principals may determine the Collateral’s value based on their experience in the real estate industry. Due to the differences in individual opinions, values may vary from one appraiser to another. Furthermore, the appraisal is merely the value of the Collateral at the time the Note is Originated. Market fluctuations and other conditions could cause the value of the Collateral to decline over time.

If the Mortgagor defaults on the Note, the Company may take a deed in lieu of foreclosure or be forced to purchase the Collateral at a foreclosure sale. If the Company cannot quickly sell the Collateral, or the Collateral does not produce reasonable income, the Company may not realize its intended return on its investment.

Due to certain provisions of state law that may be applicable to all Notes, if the sale of a Collateral after a foreclosure proves insufficient to repay amounts owing to the Company, it is unlikely that the Company will be able to recover any deficiency from the Mortgagor.

The recovery of funds advanced by the Company in investing in Notes and protecting its security interest may also be delayed or impaired by the operation of the federal bankruptcy laws or by irregularities in the manner in which the Note was granted. Any Mortgagor has the ability to delay a foreclosure sale for a period of several months by filing a petition in bankruptcy court which automatically stays any actions to enforce the terms of the Note. Such delays and the costs associated therewith may reduce the profitability of the Company.

The possible repeal of state usury limits could affect the Company’s profitability and cash flow.

Any Notes that are purchased or Originated by or through a Mortgage lending license are generally subject to applicable state’s usury limitation(s). The Company will not be able to purchase or Originate Notes in excess of the usury limit, potentially reducing its return on investment or forcing it to limit its lending activities or otherwise burdening its profitability and cash flow. The Company has no intention of raising interest rates for the Notes close to the relevant usury rates, and no Notes are anticipated to ever be in significant risk of violating the state usury limit.

Certain Properties may be at risk as a result of certain losses being uninsured, underinsured or not insurable.

The Company will require all its Mortgagors to maintain comprehensive homeowners’ insurance coverage of the type and amount equal or greater than the Note’s principal balance, with the Company named as first Mortgagee on the policy. There are, however, certain types of losses, generally of a catastrophic nature, such as earthquakes, governmental prohibitions, epidemics, war, and floods, which may be uninsurable or not economically insurable from which the Collateral may be at risk. In addition, because of coverage limits and deductibles, insurance coverage in the event of a substantial loss may not be sufficient to pay the full current market value or current replacement cost of the underlying investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it unfeasible to use insurance proceeds to replace a Collateral after it has been damaged or destroyed. Under such circumstances, the insurance proceeds received by the Company might not be adequate to restore its economic position with respect to its Collateral. Additionally, the Company does not intend to require Mortgage insurance on Notes, which would protect the Company from losses due to defaults by Mortgagors.

Fluctuations in interest rates may affect the profitability of the Company and Investors may not be able to liquidate their investment to take advantage of higher available returns.

Mortgage interest rates may be subject to substantial fluctuations and the purchase of Membership Interests are a relatively illiquid investment. If prevailing interest rates rise above the average returns being earned by the Company’s portfolio, Investors may wish to liquidate their investment to take advantage of higher available returns but may be unable to do so due to restrictions on transfer and withdrawal.

The Company, as a Lender, may be exposed to the risks of litigation by a Mortgagor, or other counterparty as a result of a Note.

The Company will act in good faith and use reasonable judgment in deciding to purchase or Originate Notes. However, as a Mortgagee or Lender the Company is exposed to the risk of litigation by a Mortgagor or other counterparty for any warranted or unwarranted allegations regarding the terms of the Note or the actions or representations of the Company in Originating, funding, or foreclosing on said Notes. It is impossible to foresee the allegations that a party may bring against the Company, but the Company will use its best efforts to avoid litigation if, in its sole and absolute discretion, it is in the best interests of the Company. If the Company is required to incur legal fees and costs to respond to any lawsuit, the costs and fees may have an adverse impact on the Company’s cash flow and profitability.

Participation with other parties in a transaction may result in lack of control as to when and how to enforce a Note default.

While the Company does not expect to participate in transactions with other parties, there is a possibility that it may do so. When participating in transactions with other parties the Company may not have control over the determination of when and how to (in the case of Notes) enforce a default action, depending on the terms of any participation agreement with other assignees. Other assignees may have varied amounts of input into such decision-making process, including (without limitation) the ultimate decision-making power on if and when to enforce a default action; or (in the case of Collateral asset activated such as development) conduct development, acquisition, rehabilitation, disposition, or sale activities. There is no certainty as to whom would be a lead Lender or lead Investor (as applicable) in a situation where the Company participates in ownership of a Note with another entity.

There are risks of government actions against the Company for alleged violations of lending laws (and other laws) which may result in high legal fees and damage awards.

While the Company will use its best efforts to comply with all laws, including federal, state, and local laws and regulations, there is a possibility of governmental action to enforce any alleged violations of (without limitation) Mortgage lending laws which may result in legal fees and damage awards that would adversely affect the Company or its Affiliates.

Risks of leveraging the Company’s Property portfolio include assigning a portion of or the entire Company’s Property portfolio as security for obtaining additional capital.

The Company may borrow funds from third-party sources (including, but not limited to, Lenders and Investors) to fund investments in Notes and Properties. These additional sources of funds may be secured by Notes and/or Property or other assets held by the Company. In order to obtain such additional funds, the Company may assign part or its entire Property portfolio to the Lender or Investor. Such borrowings may bear interest at a variable rate, whereas the Company may be Originating or purchasing fixed-rate Notes. Therefore, if prevailing interest rates rise, the cost of these funds could exceed the income earned from the borrowed funds, thus reducing the Company’s profitability or causing losses.

Risks of Property ownership that could affect the marketability and profitability of the Properties.

There is no assurance that the Company’s owned Properties will be profitable. Because Property, like many other types of long-term investments, historically has experienced significant fluctuations and cycles in value, specific market conditions may result in occasional or permanent reductions in the value of a Property. The marketability and value of Property will depend upon many factors beyond the control of the Company, including (without limitation):

There are a number of risks involved in investing in development, redevelopment, and undeveloped Properties.

The Company anticipates that it will invest in existing Property that may require varying degrees of renovation, development, or redevelopment. In addition, some Properties may be under construction or under contract to be renovated, developed, or redeveloped. Property that involves renovation, development or redevelopment may be subject to the general real estate risks described above and may also be subject to additional risks, such as unanticipated delays or excess costs due to factors beyond the control of the Company. These factors may include (without limitation):

Delays in completing any development, redevelopment, or renovation project will cause corresponding delays in the receipt of operating income and, consequently, the distribution of any cash flow by the Company with respect to such Property.

Commercial Properties invested in by the Company that may not comply with the Americans with Disabilities Act and other changes in governmental rules and regulations could have adverse consequences to the Company’s profitability.

Under the Americans with Disabilities Act of 1990 (the "ADA"), all public Properties are required to meet certain federal requirements related to access and use by disabled persons. Properties acquired by the Company or in which it makes a Property investment may not be in compliance with the ADA. If a Property is not in compliance with the ADA, then the Company may be required to make modifications to such Property to bring it into compliance, or face the possibility of imposition, or an award of damages to private litigants. In addition, changes in governmental rules and regulations or enforcement policies affecting the use or operation of the Properties, including changes to building, fire and life-safety codes, may occur which could have adverse consequences for the Company.

Unforeseen Changes

While the Company has enumerated certain material risk factors herein, it is impossible to know all risks which may arise in the future. In particular, Investors may be negatively affected by changes in any of the following: (i) laws, rules, and regulations; (ii) regional, national, and/or global economic factors and/or real estate trends; (iii) the capacity, circumstances, and relationships of partners of Affiliates, the Company or the Manager; (iv) general changes in financial or capital markets, including (without limitations) changes in interest rates, investment demand, valuations, or prevailing equity or bond market conditions; or (v) the presence, availability, or discontinuation of real estate and/or housing incentives.

The Company may encounter changes in its operating environment and the Company may have fewer resources than its competitors to continue to adjust to these changes. The operating environment of the Company may incur rapid changes, with frequent introductions of laws, regulations, competitors, market approaches, and economic impacts. Future success of the Company may depend, in part, upon the ability of the Company to address the needs of its Mortgagors and Investors. The Company may not be able to effectively react to all of the changes in its operating environment or be successful in adapting its products, services, and approach.

DILUTION

JosephArden Enterprises, LLC, an Affiliate owned by the Principals, owns the Class B Membership Units, representing 100% of all Class B Membership Units, which constitutes a 15% ownership interest of the Company. JosephArden Enterprises, LLC was granted these Class B Membership Units in 2024 for $1,000.00. Class B Membership Units are not offered through this Offering.

PLAN OF DISTRIBUTION

The Offering will be made through general solicitation, direct solicitation, and marketing efforts whereby Investors will be directed to the Portal (www.benchmarkmi.com) to invest.

The Company has retained Jumpstart Securities, LLC (the “Dealer Manager” or “JumpStart”) as a FINRA registered broker-dealer for its services in this transaction. Other broker-dealers, who are also FINRA registered broker-dealers (the “Soliciting Dealers”), if any, may also provide services and are part of the disclosures made in this Offering Circular. These provisions apply to all FINRA members participating in this Offering, including, but not limited to, Jumpstart Securities, LLC.

JumpStart has agreed to act as placement agent to assist in connection with this Offering. JumpStart is not purchasing any securities offered by this Offering Circular, nor is it required to arrange the purchase or sale of any specific number or dollar amount of Membership Interests. However, JumpStart has agreed to use their Best Efforts to arrange for the sale of the Membership Interests offered through this Offering Circular. In addition, JumpStart may engage other brokers to sell the Membership Interests on the Company’s behalf. JumpStart will receive compensation for sales of the Membership interests.

As of the date of this Offering Circular, unless otherwise permitted by applicable law, the Company does not intend to accept subscriptions from Investors in this Offering who reside in certain states, unless the Company’s FINRA-member Dealer Manager or Soliciting Dealer(s) are approved consummate and process sales to Investors in such states. The Company reserves the right to temporarily suspend and/or modify this Offering and Offering Circular in the future, during the Offering Period, in order to take such actions necessary to enable the Company to accept subscriptions in this Offering from Investors residing in such states identified above.

Dealer Manager, as part of its services agrees to provide consultation/advisory services, marketing, data analytics, background checks, subscription agreement review, investment limit review, registered agency, and back-office activities, as well as introduce the offering to Investors and manage any operational and compliance functions needed to process those Investor’s subscriptions for the Offering. Dealer Manager may also handle additional services pertaining to management of other Soliciting Dealers, including but not limited to finding and managing coordinated activities, providing marketing review services, and accounting and commission payment processing.

Dealer Manager has also agreed to perform the following services in exchange for the compensation discussed below:

For the DM Services described above, Dealer Manager has received receive a one-time consultation fee of $25,000.00, and a Soliciting Dealer Manager commission/fee of 35/100 percent (0.35%) from total gross sales of investments in this Offering. In addition to these fees, Dealer Manager may also receive expense reimbursements up to $2,500.00.

The aggregate Dealer Manager fees for the DM Services above will not exceed 41/100 (0.41%) of the aggregate amount of gross proceeds from its services activity.

Selling Group and Soliciting Dealers

Any sale of Units will generate selling commissions of up to five percent (5.00%) of the sale price of the Securities for which it directly sells. The Company, the Manager, or its Affiliates will pay or reimburse the Dealer Manager or Soliciting Dealers, for reimbursable expenses, in an aggregate amount of up to 45/100 percent (0.45%) of the sale price of the Units. This payment is to be used as expense reimbursement for due diligence and marketing preparation costs.

Until subscriptions for a total of $1,000,000.00 are received and accepted, all Proceeds will be deposited in an escrow account. Upon receipt and acceptance of subscriptions to a minimum of $1,000,000.00, the Proceeds will be released to the Company.

The Principals, employees, and Manager of the Company are primarily engaged in the Company’s business of purchasing or Originating Notes, purchasing, renovating, selling, renting, holding for appreciation or developing Property, and none of them are, or have ever been, brokers nor dealers of securities, with the exception that Mr. Harding held Series 7 and 66 licenses from 2001 through 2009. The Principals, employees, and Manager will not be compensated in connection with the sale of Membership Interests through this Offering. The Company believes that the Principals, and employees are associated persons of the Company not deemed to be brokers under Exchange Act Rule 3a4-1 because: (1) no Principal or employee, is subject to a statutory disqualification, as that term is defined in section 3(a)(39) of Exchange Act at the time of their participation; (2) no Principal or employee will be compensated in connection with his participation by the payment of commissions or by other renumeration based either directly or indirectly on transactions in connection with the sale of Membership Interests through this Offering; (3) no Principal, or employee, is an associated person of a broker or dealer; (4) the Principals and employees, primarily perform substantial duties for the Company other than the sale or promotion of the Membership Interests; (5) no Principal or employee, has acted as a broker or dealer within the preceding twelve months of the date of this Offering Circular; (6) no Principal or employee, will participate in selling this Offering after more than twelve months from the Effective Date of the Offering.

The Company will also publicly market the Offering using general solicitation through methods that include emails to potential Investors, the internet, social media, and any other means of widespread communication.

The Offering Circular will be furnished to prospective Investors via download 24 hours per day, seven (7) days per week on the Company’s website at www.benchmarkmi.com and via the EDGAR filing system.

The following table shows the total discounts and commissions payable to Dealer Manager which is inclusive of the five and 45/100 (5.45%) commissions and reimbursements for other broker-dealers for sales activity in connection with this Offering by the Company: 

USE OF PROCEEDS

The Company intends to raise Offering Proceeds to engage in the following activities: (i) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on owner-occupied 1-4 family residential Collateral located in the State of Michigan, primarily in West Michigan as Originated and/or brokered by Affiliates or third party Mortgage loan Originators; (ii) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on non-owner-occupied 1-4 family residential and commercial Collateral located in the State of Michigan, primarily in West Michigan as Originated or brokered by BCM or third party Mortgage loan Originators; (iii) to acquire, develop, renovate, hold, and/or sell owner and non-owner-occupied Property located in the State of Michigan, primarily in West Michigan; (iv) to purchase, renovate, develop, and rent Property located in the State of Michigan, primarily in West Michigan; (v) to fund, purchase, sell, and otherwise acquire Notes for new construction on 1-4 family residential owner and non-owner residential Collateral; (vi) to fund, purchase, sell, develop, renovate, and/or broker other investments secured by owner and non-owner-occupied, and commercial Property located in the State of Michigan, primarily in West Michigan; and (vii) and any activities reasonably related to the foregoing.

(See “Lending Standards and Policies” and “General Standards for Purchasing Properties” below).

The net Proceeds from this Offering will not be used to compensate or otherwise make payments to Principals, the Manager, Affiliates, or Members of the Company, unless and to the extent as otherwise stated below. All Offering Proceeds raised by the Company and the Manager will be sourced from business conducted per the Operational Plan set forth below.

The foregoing represents the Company’s best estimate of the allocation of the Proceeds of this Offering based on planned use of funds for the Company’s operations and current investment objectives. The Company will not raise funds from other sources in order to achieve its investment objectives, except the possible use of leverage from traditional lending sources or trusted financiers. Notwithstanding the foregoing the Company may borrow funds from traditional funding sources and trusted financiers to fund its investments, who are not identified at this moment as the Company does not have any agreements in place with any lending source.

A substantial portion of the Proceeds from the Offering have not been allocated for a particular purpose or purposes other than as is described above. The Company anticipates approximately 93.94% of the Offering Proceeds will be used for the intended uses as described above, with the exception of approximately $388,212.00 of pre-Offering expenses to be reimbursed to an Affiliate. The Company currently has $388,212.00 of debt owed to Affiliate WMPCF. Upon raising of the Minimum Offering Amount and the release of funds from escrow, this debt will be paid to WMPCF.

This Offering is being made on a “Best Efforts” basis. If the Maximum Offering Amount is not reached the intended Use of Proceeds will not change. The Manager will still direct the Company to use the Net Deployable Proceeds (as stated above) in the following manners: (i) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on owner-occupied 1-4 family residential Collateral located in the State of Michigan primarily in West Michigan as Originated and/or brokered by Affiliates or third party Mortgage loan Originators; (ii) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on non-owner-occupied 1-4 family residential and commercial Collateral located in the State of Michigan, primarily in West Michigan as Originated or brokered by BCM or third party Mortgage loan Originators; (iii) to acquire, develop, renovate, hold, and/or sell owner and non-owner-occupied Property located in the State of Michigan, primarily in West Michigan; (iv) to purchase, renovate, develop, and rent Property located in the State of Michigan, primarily in West Michigan; (v) to fund, purchase, sell, and otherwise acquire Notes for new construction on 1-4 family residential owner and non-owner residential Collateral; (vi) to fund, purchase, sell, develop, renovate, and/or broker other investments secured by owner, non-owner-occupied and commercial Property located in the State of Michigan, primarily in West Michigan; and (vii) and any activities reasonably related to the foregoing. In the case where the Maximum Offering Amount is not reached, the Proceeds will not be able to purchase as many assets, however the uses will remain the same as if the Maximum Offering Amount is reached. No proportions for use of the Net Deployable Proceeds for items (i)-(vii) (above) have been determined as of the date of this Offering Circular.

The Company hereby reserves the right to change the anticipated or intended Use of Proceeds of this Offering as described in this Section and as described elsewhere within this Offering Circular.

DESCRIPTION OF THE BUSINESS

Company Business

The Company intends to operate as a real estate company and private Lender specializing in 1-4 family residential Properties for both real estate activities and lending activities. The Company intends to utilize wholly controlled Affiliates and non-affiliated third-party entities including but not limited to (i) licensed Mortgage Brokers, Lenders, and Servicers to Originate, Service, and/or Broker Notes which the Company will fund, hold, and/or sell; (ii) licensed real estate Brokers to assist the Company in purchasing, selling, developing, renovating, redeveloping, and managing the Properties in its portfolio.

The Company intends to operate only in the State of Michigan, focusing most of its revenue-generating operations in West Michigan due to the experience and relationships of the Manager and Principals in the region. The Manager may designate Affiliates and non-affiliated third parties, who have established customers and clients, to market, broker, Originate, and Service the Notes, in an effort to assist the Manager in deploying the Company’s capital throughout West Michigan.

BCM II (Fund Manager) Business

BMC II will act as the Manager of the Company. BCM II is a manager-managed limited liability company. BCM II is managed by BCM which is also a manager-managed limited liability company. Mr. Matthew J Fox is the Manager of BCM. The aforementioned Principals of BCM have extensive experience in the real estate and financing industries (See section titled “Principals” below). BCM II was formed in 2021 by the Principals of BCM. BCM and its Principals have been operating under different iterations and entities since 1986.

After the Proceeds of this Offering are raised, the Manager intends to implement its operational strategy to utilize Company’s assets for the following activities: (i) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on owner-occupied 1-4 family residential Collateral located in the State of Michigan primarily in West Michigan as Originated and/or brokered by Affiliates or third party Mortgage loan Originators; (ii) to fund, refinance, purchase, sell, and/or otherwise acquire Notes on non-owner-occupied 1-4 family residential and commercial Collateral located in the State of Michigan, primarily in West Michigan as Originated or brokered by BCM or third party Mortgage loan Originators; (iii) to acquire, develop, renovate, hold, and/or sell owner and non-owner-occupied Property located in the State of Michigan, primarily in West Michigan; (iv) to purchase, renovate, develop, and rent Property located in the State of Michigan, primarily in West Michigan; (v) to fund, purchase, sell, and otherwise acquire Notes for new construction on 1-4 family residential owner and non-owner residential Collateral; (vi) to fund, purchase, sell, develop, renovate, and/or broker other investments secured by owner, non-owner-occupied and commercial Property located in the State of Michigan, primarily in West Michigan; and (vii) and any activities reasonably related to the foregoing. All services provided by the Manager on behalf of or for the Company will be fee based and will conform to market rates for the same or similar services. (See the “Compensation of the Manager” section below.) (See “WMPCF Business” below).

History of Benchmark Capital Management II and its Predecessors since 1986

BCM II was formed in 2021 as a manager-managed limited liability company by the Principals of BCM. BCM is a licensed real estate Broker in the State of Michigan and has been operating under different iterations and entities since 1986 originally under the name Benchmark Investment Brokers, Inc. The 1980’s brought about a period of high Mortgage interest rates that eliminated the ability of many residential home buyers from being able to afford to purchase a new primary residence through traditional Mortgage financing. In Michigan this led to the advent of single-family owner-occupied Properties being sold via seller-held financing as an option to selling their Properties that they otherwise would not be able to sell. However, in many cases these sellers did not wish to hold these positions and wished to sell or cash out of them. BCM’s primary focus of business from 1986 through the late 1990’s was to Broker the sale of these seller financing interests to individual private investors or institutional investors such as insurance companies, banks, and other institutional investors. It was during this period specifically 1988 that Matthew J. Fox joined BCM. As Mortgage interest rates fell from the 1980’s through the 1990’s fewer primary residences were sold with seller financing.

With its established relationships with private investors, BCM transitioned from the brokering of seller-held financing to investing funds in direct lending to Mortgagors who could not qualify for Mortgages from traditional lending sources. These Mortgagors included the self-employed, Mortgagors with credit scores that did not meet Fannie Mae of Freddie Mac qualifications, landlords, property renovators, and Mortgagors purchasing Properties that did not qualify for traditional types of loans.

As Michigan Mortgage licensing laws were changing in the early 2000’s, the Principals of BCM, decided to change its investment model from being an individual investor, as the Mortgagee directly lending to a Mortgagor, to a single licensed entity whereby its current investors could invest without being individually licensed. The Principals, who now included Todd A. Harding who joined BCM in 2009, formed WMPCF with BCM as its manager and began its operations in April 2009. WMPCF is licensed in the State of Michigan as a Mortgage Broker, Lender, Servicer under Act No. 173, Public Acts of 1987, as amended, the Brokers, Lenders, and Servicers Licensing Act. BCM has and continues to manage WMPCF and invests its funds for direct lending or funding of Notes, purchase and management of 1-4 family rental Property, Property renovation and sale, and any other real estate investment activities BCM deems an appropriate investment for WMPCF.

WMPCF Business

WMPCF commenced operations on April 1, 2009. WMPCF is a member-owned Michigan limited liability company and nonreporting company under the Securities and Exchange Act of 1934, as amended. The units of WMPCF are not registered under any state or federal securities laws. Instead, they are offered pursuant to exemptions from the registration found at Section 4(2) of the Securities Act of 1933, as amended (Securities Act), Rule 506 of Regulation D, and federal pre-emption of state registration found at Section 18 of the Securities Act. WMPCF is a licensed Lender, Broker, and Servicer pursuant to Act No. 173, Public Acts of 1987, as amended, the Brokers, Lenders, and Servicers Licensing Act (License Number: FL-0016833, NMLS ID 248549, Effective 07/31/2009). This license permits WMPCF to act as a broker, Lender, and Servicer for 1-4 family owner-occupied residential Notes. The Company intends to utilize WMPCF to act as the Broker and Originator of owner-occupied Notes funded by the Company. WMPCF also will act as Servicer for non-owner-occupied Notes funded by the Company.

WMPCF is a manager-managed limited liability company managed by BCM. WMPCF has engaged in the (i) funding, refinancing, purchasing, sale, Origination, marketing, sale, and acquisition of Notes on 1-4 family owner and non-owner-occupied residential and commercial Collateral located in the State of Michigan, primarily West Michigan; and, (ii) the acquisition, development, renovation, renting, and selling Property located in the State of Michigan, primarily West Michigan.

Since its founding, WMPCF has steadily increased its earnings using its own capital to operate and fund its business activities. From 2021 through 2023, WMPCF had the statistics as contained in the following table:

The Company’s Principal Products and Services

The Company anticipates the following revenue streams:

All revenue generated from the various revenue streams will be kept within the Company, less applicable fees to the Manager, any joint venturers, and to Affiliates and other operating expenses. (See “Compensation of the Manager” below.)

Purchasing of the Notes from Affiliates

The Company intends to purchase Notes as Originated by its wholly-controlled Affiliates and nonaffiliated third parties. These Affiliates and nonaffiliated third parties will Originate Notes with Mortgagors. The Company will provide funds to purchase the Notes. When the Company purchases a Note Originated and closed by an Affiliate or nonaffiliated third-party Originator, the Notes will be assigned to the Company. The Company will become the Mortgagee on the Notes and all revenues from these Notes will be received by the Company (less a servicing fee paid to the Servicer).

Customer Profiles of Mortgagors

The Company intends to utilize its business relationship with its Affiliates, with respect to the Company’s investments in purchasing or Originating owner-occupied Notes, direct Origination on non-owner-occupied Collateral, all activities involved with the sale and purchase of Property that requires licensed real estate brokers and the management and leasing of income Property. The Company intends to utilize its Affiliates to help fulfill the investment objectives of the Company. The Affiliates have and continue to review and adjust the profile of their Mortgagors and Collateral profiles used as Collateral and/or used for income-producing Properties. The Company’s profile of Mortgagors includes, but is not limited, to Mortgagors, that for reasons determined by traditional banks/Mortgage companies/credit unions, do not qualify for Notes funded through, including but not limited to, the following loan types: conventional, FHA, VA, MHSDA, or Rural Development. The Company’s underwriting criteria focuses on Mortgagors who the Company deems to have an ability to repay the Notes. Some common events or circumstances that may disqualify a Mortgagor from obtaining the aforementioned traditional financing include, but are not limited to: (1) being able to prove self-employment income, (2) a recent health issue that may have interrupted continuous employment, (3) a Mortgagor’s employer going out of business causing interruption in employment, (4) divorce, death of a spouse or significant other, (5) bankruptcy caused by unforeseen circumstances, or (6) Collateral types that are not acceptable to other Lenders, including but not limited to those that are purchased for renovation and resale, rental Property, or certain types of vacant land.

By targeting this “niche” market of Mortgagors and Collateral, the Company intends to position itself as a key provider of capital in the private lending market in West Michigan.

The Company intends to primarily utilize its Affiliates to facilitate its lending and financing operations. Therefore, the Company anticipates the majority of direct sources of the Notes it will Originate or purchase will be from BCM and WMPCF. These Affiliates will use the Company’s specific underwriting profiles for potential Mortgagors. Generally, these Mortgagors will be unable to qualify for financing from traditional conventional sources including but not limited to FHA, VA, conventional, or other Fannie Mae or Freddie Mac products. However, in the opinion of the Company these Mortgagors have demonstrated an ability to repay the Note. (see “Lending Profiles” below). The Company will accept Notes issued to both individuals and entities. Any Notes purchased or Originated by the Company that was issued to an entity will require a personal guarantee from its officers, members, partners, managers, or other controlling parties. With respect to Notes issued to entities, the entity must be in good standing with the State of Michigan and/or the state of incorporation.

Lending Profiles

The Company intends, primarily, to fund or invest in Notes for two Collateral types, owner-occupied 1-4 family residential and non-owner-occupied 1-4 family residential. The Company considers the Collateral to be “owner-occupied” if any owner of the borrowing entity intends to reside in the Collateral. The non-owner 1-4 family residential Collateral will typically be either rental Property or Property to be renovated and sold.

The Company will consider lending on or purchasing Collateral types other than 1-4 family residential as opportunities present themselves. Any other Collateral types that are not categorized as 1-4 family residential will not be the primary objectives of the Company and are not expected to constitute a significant part of the Company’s overall portfolio.

Notes for Owner-Occupied Collateral – West Michigan Private Capital Fund I, LLC

Notes for owner-occupied Collateral that the Company intends to purchase will be brokered, Originated, and Serviced by WMPCF or other appropriately licensed third party entities. WMPCF holds a license from the State of Michigan (License Number: FL-0016833, NMLS ID 248549, Effective 07/31/2009) permitting WMPCF to act as a Broker, Lender, and Servicer for Notes on owner-occupied 1-4 residential Collateral. The Company intends to contract with WMPCF to Service any Notes it has in its portfolio and will pay market rate fees for Servicing these Notes (See “Compensation of the Manager” below). The Company does reserve the right to have other licensed third-party Service entities Service some or all of its owner-occupied 1-4 family residential Notes. The Company does not intend to pay WMPCF or any other licensed Mortgage broker or Lender a brokerage or Origination fee for brokering Notes. Origination or brokerage fees are generally paid by the Mortgagor.

The Company’s investment objectives requires that any Collateral for owner-occupied Notes the Company purchases will approximately follow the loan-to-value ratio(s) in accordance with the table below. The Company’s underwriting guidelines requires the Collateral be appraised by a third-party licensed appraiser. The Company, as a Private Lender, intends to purchase Notes with interest rates higher than those set by traditional Lenders, however these rates will conform to the rules and regulations set forth by the Consumer Financial Protection Bureau (“CFPB”) to qualify as a Section 35 loan and Qualified Mortgage. The Company does not intend for the Notes it purchases to contain any of the following terms or conditions: (1) balloon payments, (2) negative amortization, (3) prepayment penalties, or (4) other terms that would disqualify the Note from being a Qualified Mortgage pursuant to the CFPB. The Manager intends the owner-occupied Notes purchased by the Company to be thirty (30) year conventional Mortgages, but retains the right to offer variable terms for owner-occupied Notes.

Notes for Non-Owner-Occupied Collateral– Benchmark Capital Management

The Company intends to purchase or Originate Notes for non-owner-occupied Collateral for its own portfolio that are Originated and/or brokered by its Affiliates or other licensed third-party brokers. State licensure for non-owner-occupied Notes is not required by the State of Michigan, enabling the Company’s non-licensed Affiliates to act as the Originator and/or Broker for these types of Notes. The Company intends to have WMPCF Service these Notes, even though this will not preclude or limit the Company from using other third-party Servicers in the future. (See “Compensation of the Manager” below). The Company does not intend to pay any of its Affiliates or any other licensed Mortgage Broker or Lender a Brokerage or Origination fee for brokering Notes. Origination or brokerage fees are generally paid by the Mortgagor.

The Company’s investment objectives for Collateral for non-owner-occupied Notes the Company purchases or Originates will approximately follow loan-to-value ratio(s) in accordance with the table below.

Any other Notes the Company intends to purchase or Originate whose Collateral is not classified as 1-4 family residential, may have Collateral classified as commercial, vacant land to be developed, or other Collateral the Company deems in its opinion to have potential for an outsized return. The Company as a Private Lender intends to charge interest rates on these Notes as determined on a case-by-case basis. The Company may include balloon payments or prepayment penalties within the terms of the Notes for the non-owner-occupied Collateral. The term of the Notes may vary and may include interest-only payments or may amortize the Note, typically with a 30-year amortization.

Loan-to-Value Guidelines

The Company intends to purchase or Originate Notes with loan-to-value (“LTV”) ratios as set forth in the table below. Though not the only assessment of risk, the LTV ratio is one of the most important factors considered by the Company when deciding whether or not to approve an application by a perspective Mortgagor. The LTV ratio is calculated by dividing the amount borrowed by the value of the Collateral designated as the collateral for the Note. To determine the value of the Collateral, the Company will use appraised values from licensed third-party appraisers. In addition, BCM, acting under the direction of the Company as a licensed real estate broker, intends to conduct its own determination of value based on its vast experience and compare its data with the licensed appraiser. Based on the findings of the licensed appraiser and that of BCM, the Company may accept the licensed appraiser’s value of the Collateral, choose to use the value as determined by BCM or except a combined value the Company determines is the most accurate pursuant to its underwriting guidelines. Determination of the source of the LTV will be at the sole discretion of the Company.

Notwithstanding the foregoing, the Company may exceed the below-stated LTV ratios if the Company determines in its sole business judgment that Originating or purchasing a Note with an LTV in excess of the amounts listed below is warranted by the circumstances of that particular application, such as being able to secure multiple pieces of Collateral, called “cross-collateralization”, personal guaranties, prior loan history with the Mortgagor, market conditions, or other compensating factors that would support the Company in making its decision in the best interest of the Company. The Company, in determining the value of any Collateral that a Mortgagor intends to develop, redevelop, or renovate as part of its guidelines requires an appraisal with both a current “as is” value along with an “after repaired value”. The Company disburses funds to the Mortgagor in these types of transactions as evidence in its or the underwriters, most generally BCM, sole professional judgment warrants as the development, redevelopment, or renovation progresses to maintain the LTV Ratio’s outlined in the table below.

No Unsecured or Personal Loans

The Company will exclusively engage in the purchase or Originating of Notes used in conjunction with the purchase, refinance, renovation, development, or redevelopment of Collateral. The Company will not engage in unsecured or personal loans.

Minimum and Maximum Loan Amount

The Company will not purchase or Originate Notes lower than $10,000.00 pursuant to Mich. Comp Laws 445.1602(4) (1993) and to WMPCF’s Notices to Inquirers and Loan Applicants. The Company does not intend in the normal course of business to purchase or Originate Notes in amounts greater than $500,000.00. The Company in its sole discretion may purchase or Originate Notes in amounts greater than $500,000.00 if it determines that it is in the best interest of the Company.

Title Insurance

All the Notes Originated or purchased by the Company will be required to have a Mortgage or Lender’s title insurance policy insuring the Company for the full Note amount. These title policies are paid for by the Mortgagors. Every title insurance policy will be required to name the Company as the insured. Each title policy will have a coverage amount of the original principal amount borrowed by the Mortgagor. Any derivations from this may be approved at the sole discretion of the Company based on the facts and circumstances of any given transaction.

Private Mortgage Insurance (PMI)

The Company does not intend to purchase or maintain any private Mortgage insurance (PMI) policies as of the date of this Offering Circular.

Homeowners Insurance

The Company will mandate that all its Mortgagors must maintain a homeowners insurance policy in an amount at least equal to the principal balance of the Note. The Company is to be named as Mortgagee on all such policies.

The Company intends to maintain dwelling and liability insurance policies for all Property owned by the Company. The minimum limits of such policies will be equal to at least the purchase price of each Property or an amount determined by the insurance underwriter if greater than the purchase price.

Foreclosure Procedures

Statutory guidelines for foreclosures in Michigan are to be followed by the Company until the underlying Collateral is liquidated and/or the account is brought current. Any costs of this process are to be posted to the Mortgagor’s account for reimbursement to the Company. If a Note is foreclosed upon and the Collateral reverts back to the Company, the Company will be responsible for paying the costs and fees associated with the foreclosure process, maintenance and repair of the Collateral, Service of senior liens and resale expenses.

Property Profiles for the Company

It is the intention of the Company to use Proceeds from this Offering to acquire non-owner-occupied Property. The Company may rent, renovate, develop, redevelop these Properties as it deems in the best interest of the Company. The Principals of the Company intend to utilize longstanding relationships they have cultivated over the years with real estate brokers, agents, and other real estate professionals within West Michigan to accomplish this investment objective.

The Company will focus its acquisition, rental, renovation, development, redevelopment, and disposition activities on the following Property types:

Single Family Residential Properties Profile

The Company intends to primarily focus its Property acquisition, disposition, development, redevelopment, renovation, and rental activities on single family residential Properties located in West Michigan. The Company will acquire these Properties through traditional acquisition efforts.

The Company’s decision to acquire one or more Properties for acquisition, disposition, development, redevelopment, renovation, and rental activities will be based on but not limited to, the asset’s current and projected capitalization rates, anticipated costs such as repairs, income tax considerations, and projected risk and overall returns to the Company.

2-4 Family Residential Properties

The Company intends to seize upon opportunities with regards to 2-4 family residential Properties in its Property acquisition, disposition, development, redevelopment, renovation, and rental activities; however, such activities with respect to 2-4 family Properties will not be the Company’s primary focus. Activities of this sort (regarding 2-4 family Properties) will be targeted in West Michigan. The Company reserves the right to pursue and acquire or invest in larger multi-family Properties in its sole discretion.

As with single family Properties the Company’s decision as to whether to acquire a 2-4 or multi-family Property to be held for rental income will be based on but not limited to its current and future projected cap rates, repairs, and income tax considerations along with its projected value at the time of sale. Any Properties acquired for renovation and sell projects will be risk assessed by the Company as to its probability of generating an outsized gain rather than if the funds invested in the Property were to be invested in a Note or other transaction.

Commercial Properties

The Company intends to act upon opportunities with regards to commercial Property in its acquisition, disposition, development, redevelopment, renovation, and rental activities; however, such activities with respect to commercial Property will not be the Company’s primary focus. The Company only intends on conducting such activities with respect to commercial Property if the Company in its sole discretion discerns that the balance between the downside risk and upside gain of a commercial project grants the Company the ability to obtain an outsized gain. The Principals of the Company in addition to their own experience may also rely on commercial real estate brokers, accountants, commercial real estate attorneys, and other experts in the commercial real estate industry for help in determining whether or not to proceed with any Note against or purchase of any commercial Property for the Company’s portfolio.

Special Purpose Entities

The Company may establish Special Purpose Entities (if singular “SPE”, if plural “SPEs”) for the sole purpose of acquiring, purchasing, disposing of, transferring, developing, redeveloping, renovating, and/or renting one or more Properties. Every SPE is intended to be a wholly-owned or wholly-controlled subsidiary; however, the Company may create or have an interest in a SPE that is neither wholly-controlled nor wholly-owned by the Company (in the case of joint ventures with Affiliates or third parties). The Company has the sole and absolute discretion as to whether it will utilize an SPE structure for any transaction. Furthermore, the Company has sole and absolute discretion as to the structuring, including fee schedules, compensation, and governance, of any SPE, including those partially owned by third parties.

Market for Company Products and Services

The Company will seek to purchase or Originate Notes Originated through Affiliates and third-party Mortgage Brokers/Originators/Lenders in the West Michigan private lending market. The Principals of the Company have established long-term relationships with real estate professionals, property managers, real estate developers, and contractors and other financing Servicers/sources to become one of the leading private Lenders for 1-4 family residential Collateral in West Michigan. Because of the niche lending market the Company intends to operate within, the long-term relationships cultivated by the Principals of the Company will be instrumental in establishing and gaining market share.

The Notes the Company will purchase or Originate are varied, flexible and designed to help the needs of the unique Mortgagors the Company intends to lend to. This allows the Company to design Note products and underwriting requirements that are not as rigid as traditional lending sources.

Notes for 1-4 family owner-occupied residential Collateral will only be purchased or Originated if they meet the regulatory qualification of a Qualified Mortgage according to the Mortgage Act. This means the interest rates of the Notes may be higher than conventional lending sources. These Notes will be amortized at fixed terms of thirty (30) years in length. Notes with amortization terms other than thirty (30) years may be considered on a case-by-case basis.

The Company intends to provide borrowing opportunities to real estate investors, contractors, property managers, and real estate developers who may not be able to or do not desire to use conventional lending resources. The Notes for non-owner-occupied Collateral may contain higher interest rates and can be structured with flexible terms to meet the needs of these Mortgagors.

The Company also intends to be opportunistic and use Company funds to purchase Properties that may need to be renovated, redeveloped, or developed with an option to either resell the Property or include it in the Company’s Property portfolio.

The Company is particularly well-positioned in the State of Michigan to act as a major capital source for Notes brokered, Originated, and Serviced by both Affiliates and third-party Brokers. The Company’s Affiliates have multiple years’ experience with respect to seeking out and closing Notes with Mortgagors that fit within the Customer Profile (see “Customer Profile” below). Even though the Company will seek to purchase or Originate Notes throughout the State of Michigan, the Company’s Affiliates have existing market penetration in West Michigan specifically in and around the city of Grand Rapids. The Company intends to focus initial operations in the following counties:

West Michigan Market Population Information*

* All data was sourced by the United States Census Bureau. All data contained in this table can be found on census.gov.

DESCRIPTION OF PROPERTY

The Company does not own any business personal property of any material significance, nor does it own any Property. BCM leases office space in Grand Rapids, MI, which the Company will in turn sublease on a pro rata basis. The Company intends to begin building its Note and Property portfolio using the Proceeds as soon as the funds are released from escrow.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company has not commenced operations. All financial activity since date of inception has been the accumulation of legal and other formation costs totaling $388,212.00 through the year ended December 31, 2023. This is stated as an “intercompany payable” on the Audited Financial Statements for the period Ended 12/31/23. This amount is payable to WMPCF, who paid the legal and formations costs on behalf of the Company. It is not anticipated additional legal and other formation costs will be material.

The Company intends to reimburse all formation costs, including legal, marketing, and accounting expenses incurred, to affiliate WMPCF upon the release of the Proceeds from escrow.

Plan of Operations

After the Company raises the Proceeds from this Offering, the Company intends on deploying those Proceeds in the manner as specified in the “Use of Proceeds” and “Description of the Business” sections. The Principals will endeavor to direct the Company to begin operations as soon as the Proceeds can be deployed in the marketplace. 

EXECUTIVE PRINCIPALS AND SIGNIFICANT EMPLOYEES

The Manager of the Company is Benchmark Capital Management II LLC, a Michigan Limited Liability Company. The Manager will direct the affairs of the Company. The Manager of the Manager is BCM. The Principals of BCM and the Company are as described below:

Principals of the Manager

*Refers to the Manager and predecessors of the Manager.

Business Experience of Management

Mr. Matthew J. Fox

Matthew J. Fox is the Co-Founder, Chief Executive Officer, and Manager of BCM which is the Manager of BCM II, the Manager. As CEO he, along with Mr. Harding is responsible for creating a structured, sustainable, and repeatable infrastructure and strategy for Note Origination and portfolio management.

Benchmark Capital Management LLC: CEO and Manager 1988 - Present

In 1984 Mr. Fox obtained his real estate license in the state of Michigan and began his real estate career. In 1985 Mr. Fox became county manager of the Title Office, Inc., a title insurance company. On July 1, 1988 Mr. Fox joined Benchmark Investment Brokers, Inc. (BIB) (the predecessor BCM) where he assisted in BIB’s seller financing brokerage business. Mr. Fox became a partner in 1994 where he took over running the company’s brokerage business. By the late 1990’s Mr. Fox shifted BIB’s focus to commercial lending and Mortgage servicing on 1-4 family non-owner-occupied property and real estate development. Mr. Fox co-founded, is the CEO, and president of BCM, where he directs the development and implementation of industry partnerships to manage BCM’s real estate acquisition and disposition, asset development, portfolio lending, company development, and serves as Manager of the Company. In 2009 BCM became the Manager of the WMPCF which began operations the same year. During this time, to facilitate the licensing needs of the business Mr. Fox obtained his real estate Brokers license and Mortgage Loan Originator license.

Land Equity Management, Inc.: President, 2005 – Present

Mr. Fox cofounded Land Equity Management, Inc., (LEMI) where today he is president and sole stockholder. LEMI specializes in the creation and development of site condominium projects.

West Michigan Private Capital Fund, I LLC: CEO, 2009 – Present

Mr. Fox serves as CEO and Manager of BCM the Manager and founder of the Company. Along with Mr. Harding, Mr. Fox directs the Company’s business including Mortgage Lending, Brokering, and Servicing, Property development and redevelopment, and property management. Mr. Fox graduated from Ferris State College (Ferris State University) in 1983 with a bachelor’s degree in Arts and Sciences with a Major in Criminal Justice Security.

Mr. Todd A. Harding

Todd A. Harding is the Chief Financial Officer of BCM the Manager of BCM II. As CFO he, along with Mr. Fox is responsible for creating a structured, sustainable, and repeatable infrastructure and strategy for Note Origination and portfolio management.

Mr. Harding has an extensive background in finance, real estate, business, and entrepreneurship. From 1983 to 1985, Mr. Harding was a public accountant with the CPA firm of Ernest & Whinney. In 1985, Mr. Harding transitioned to Main Street Savings Bank, FSB, (Formerly Hastings Savings & Loan), as Chief Financial Officer, a position he held until 1990, when Mr. Harding was named President and Chief Executive Officer. Mr. Harding left the Bank at the end of 1999 and engaged in private consulting for the next year. From 2001 through 2009, Mr. Harding was a financial planner & broker for AXA Equitable, obtaining multiple licenses and certifications, including Series 7 and Series 66.

Benchmark Capital Management, LLC: CFO and Member, 2009 – Present

Mr. Harding serves as CFO and Member of BCM, where he develops industry partnerships to manage risk; investor acquisition and relations, financial and regulatory reporting/review.

West Michigan Private Capital Fund I, LLC: CFO, 2009 – Present

Mr. Harding serves as CFO of the Company. Along with Mr. Fox, Mr. Harding directs the Company’s business including Mortgage Lending, Brokering, and Servicing, Property development and redevelopment, and property management. Mr. Harding graduated from Ferris State College (Ferris State University) in 1983 with a Bachelor of Science in Business (Accounting).

No Bankruptcy, Investigations, or Criminal Proceedings

The Principals, Manager, nor any of the Affiliates have been part of any bankruptcy proceedings, proceedings whereby there was a material evaluation of the integrity or ability of the Principals, investigations regarding moral turpitude, or criminal proceedings or convictions (excluding traffic violations).

COMPENSATION OF MANAGER

Principals

The Principals will not be compensated directly by the Company. All Compensation for management of the Company will be paid directly to the Manager, and in some cases to Affiliates in accordance with the tables below.

The following is a summary of the fees payable to the Manager and Affiliates pursuant to the Operating Agreement. For complete explanation of fees See Exhibit 3 “Operating Agreement”.

Compensation for the Manager and Affiliates-Fee and Reimbursement Schedule

The Manager and Affiliates shall be reimbursed by the Company for all expenses, fees, or costs incurred on behalf of the Company, including, without limitation, organizational expenses, legal fees, filing fees, accounting fees, out of pocket costs of reporting to any governmental agencies, insurance premiums, travel, costs of evaluating investments and other costs and expenses for the formation of the Company.

The Company shall pay to the Manager a monthly asset management fee equal to one percent (1.00%) of the then Gross Assets Under Management (the “Asset Management Fee”). For purposes of calculating the Asset Management Fee, Gross Assets Under Management shall be measured as of the last Business Day of each month, and the Asset Management Fee for that month shall be paid on the first Business Day of the subsequent month. After the second (2^nd) Fiscal Year after the Effective Date, the Manager may increase the Asset Management Fee up to ..25% per Fiscal Year, up to a maximum Asset Management Fee of two percent (2.00%) of the then Gross Assets Under Management.

In the event the Manager or an Affiliate of the Manager shall provide general contractor and/or construction management services for any Managed Real Estate (“Managed Real Estate”), then the Company shall pay to the Manager or its Affiliate a fee (“Construction Fee”) equal to the greater of eight percent (8.00%) of the budgeted construction and improvements costs for each such construction project or market rate. The Manager shall provide the Company with a written budget for each such project with reasonable and customary itemization of costs. The Construction Fee shall be paid within thirty (30) days of the completion of the applicable construction project.

In the event the Manager or an Affiliate shall provide property management services for any real estate owned or managed by the Company, then the Company shall pay to the Manager or its Affiliate a monthly fee (“Property Management Fee”) equal to six percent (6.00%) of the monthly gross rent payable under the terms of the applicable lease for such Managed Real Estate, provided, however, that the Manager or its Affiliate may be paid a greater amount if the same is reasonable and not in excess of the customary real estate property management fee which would be paid to an independent third party in connection with the management of such real estate. The Property Management Fee shall be payable in the ordinary course consistent with industry standards within the geographic community in which the Managed Real Estate is located.

As compensation for the time and effort involved in organization of the Company, the Company shall pay BCM a one-time organization fee in the amount of One Hundred Thousand Dollars ($100,000.00) (the “Organizational Fee”). BCM shall be paid the Organization Fee upon raising the Minimum Offering Amount and the funds being released from escrow.

The Company shall pay to an Affiliate of the Company, a monthly loan servicing fee (“Loan Servicing Fee”) up to one percent (1.00%) per annum (i.e., one-twelfth of one percent per calendar month) of the then outstanding principal balance payable under the Notes held by the Company and Serviced by the Affiliate pursuant to its registration as a Mortgage Broker, Lender and Servicer with the State of Michigan under the Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act. The Loan Servicing Fee shall be payable to the Affiliate in the ordinary course consistent with industry standards. The Affiliate may impose a reasonable surcharge to the Loan Servicing Fee for Notes in a state of default that require significant additional attention.

The Company shall pay to BCM a reasonable monthly amount for its utilization of BCM’s office, personnel and equipment, at the discretion of the Company.

The Affiliates or Principals may receive reasonable commissions upon the Company’s purchase or sale of Property.

WMPCF shall be reimbursed by the Company for all expenses, fees, or costs incurred on behalf of the Company, including, without limitation, organizational expenses, legal fees, filing fees, accounting fees, out of pocket costs of reporting to any governmental agencies, insurance premiums, travel, costs of evaluating investments and other costs and expenses for the formation of the Company. this reimbursement should be distinguished from the Organization Fee of $100,000. The $388,212.00 payable to WMPCF is currently an inter-company loan between the Company and WMPCF, and represents amounts already paid on behalf of the Company. The Organization Fee is an earned fee owed to the BCM upon the Company’s the funds being released from escrow.

West Michigan Private Capital Fee Schedule

The Company will engage WMPCF to Service all Notes funded by the Company, including those Notes Originated by Affiliates or third-party Originators. The Company shall pay to WMPCF, a monthly loan servicing fee ("Loan Servicing Fee") up to one percent (1.00%) per annum (i.e., one-twelfth of one percent per calendar month) of the then outstanding principal balance payable under Financing Receivables held by the Company and Serviced by WMPCF. Fees are due to WMPCF monthly, however the Company may choose, in its sole discretion, to pay the servicing fees periodically or allow said fees to accrue.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

*JosephArden Enterprises, LLC is owned and controlled by Matthew J. Fox and Todd A. Harding.

DESCRIPTION OF THE MEMBERSHIP INTERESTS

There are two classes of Membership Interests currently outstanding with the Company, Class A Membership Interests (“Class A Interests” or “Class A Units”) and Class B Membership Interests (“Class B Interests” or “Class B Units”). Only Class A Interests are being offered through this Offering. Class B Units are exclusively held by JosephArden Enterprises, LLC, an Affiliate of the Manager, owned in whole by Matthew J. Fox and Todd A. Harding. (See “Security Ownership of Management and Certain Securityholders” above).

A total of five hundred thousand (500,000) Class A Membership Interests are offered through this Offering. The Minimum Investment Amount is Two Hundred Fifty Dollars ($250.00), or 2.5 Class A Interests. Each Interest is priced at $100 per Unit. By purchasing Class A Interests through this Offering, an Investor will become a Member of the Company and will be granted rights as stated below.

Please note that the following is a summary of the rights granted to an Investor and is not exhaustive. For a complete description of all rights associated with Company Membership, please see Exhibit 3 “Operating Agreement”.

The business and affairs of the Company shall be managed, operated, and controlled by or under the exclusive direction of the Manager. The Manager shall have full and complete power, authority and discretion for, on behalf of and in the name of the Company to take such actions as the Manager may deem necessary or advisable to carry out any and all of the objectives and purposes of the Company, without the consent, approval, or knowledge of the Investors. All decisions of the Company are made by the Manager.

For purposes of this Section, all defined terms (as indicated by capital letters) shall have the same meaning as set forth in the Operating Agreement (Exhibit 3).

Distribution rights

Distributions of Distributable Cash, if any, shall be distributed quarterly, within forty-five (45) days after the end of each calendar quarter. All distributions of Distributable Cash, if any, shall be distributed as follows: (i) eighty-five percent (85.00%) to the Class A Interests issued and outstanding, pro rata, and the balance to the Class B Interests, pro rata.

No Member has any right to demand and receive any distribution from the Company in any form other than money in the form of US Currency. No Investor may be compelled to accept from the Company a distribution of any asset in kind.

Voting rights

Each Investor shall be entitled to one vote per Unit (or such percentage vote equal to the applicable fraction of one Unit) on all matters to be voted upon by the Investors. For example, if an Investor owns 54 Units and there are 1,000 Units then outstanding, that Member would be entitled to a vote equal to 5.40% of all Investors.

The affirmative vote of a majority of the Class B Percentage Interests shall be required to: adopt clerical or ministerial amendments to the Operating Agreement; approve a sale of substantially all of the assets of the Company; approve indemnification of any Manager, Member or officer of the Company as authorized by the Operating Agreement; or appoint a Liquidating Trustee in accordance with the Operating Agreement.

The affirmative vote of Investors holding more than fifty percent (50.00%) of the Percentage Interests of the Class A Interests (if any outstanding) and Class B Interests, represented and voting at a duly held meeting at which a quorum of each class is present (which Investors voting affirmatively shall constitute at least a majority of the required quorum) shall be required to authorize or approve a fundamental change in the business of the Company, modify the number of Class A Interests after issuance, alter the Percentage Interest of the Class A Interests after issuance or alter the capital contribution required for each Class A Interest once any Class A Interests have been issued, approve any loan to any Manager or any guarantee of a Manager's obligations.

Liquidation Rights

Upon dissolution and termination, proceeds from the liquidation of the assets of the Company and collection of the receivables of the Company, together with the assets distributed in kind, to the extent sufficient therefore, shall be applied and distributed in the following descending order of priority:

1)       to the payment and discharge of all of the Company's debts and liabilities and the expenses of the Company including liquidation expenses;

2)       to the creation of any reserves which the Manager and Liquidating Trustee deems necessary for any contingent or unforeseen liabilities or obligations of the Company;

3)       to the payment and discharge of all of the Company's debts and liabilities owing to Investors, but if the amount available for payment is insufficient, then pro rata in proportion to the amount of the Company debts and liabilities owing to each Investor;

4)       to all the Investors in the proportion of their respective positive Capital Accounts, as those accounts are determined after all adjustments to such accounts for the taxable year of the Company during which the liquidation occurs as are required by this Agreement and Income Tax Regulations § 1.704-I(b), such adjustments to be made within the time specified in such Income Tax Regulations; and,

5)       to the Investors in proportion to their Percentage Interests.

Preemptive rights

No Investor shall have any preemptive rights in connection with the issuance of additional Units by the Company.

Redemption and Withdrawal Provisions

Withdrawal.

No Investor may have the right to voluntarily or involuntarily withdraw, resign or otherwise disassociate or receive a return of its Capital Contribution from the Company for a period of five (5) years from the Unit Issue Date.

Discretionary Withdrawal Requests. 

Prior to the expiration of the Five-Year Term, an Investor may request to Withdraw from the Company and to have said Investor's Units which have not been issued and outstanding for longer than the Five-Year Term, redeemed by the Company by submitting a written withdrawal request ("Withdrawal Request") to the Manager. The Manager shall have sole discretion in whether to approve or disapprove the Withdrawal Request.

Redemption

After the Five-Year Term, an Investor may request that the Company redeem a maximum of Fifteen Hundred (1,500) Units from said Investor per fiscal year. In the event an Investor desires redemption and qualifies for the same, said Investor shall submit a written request to Withdraw and for the Company to redeem said Investor’s Units up to maximum of Fifteen Hundred (1,500) Units per Fiscal Year.

Redemptions and Discretionary Withdrawals are subject to certain penalties and procedures. See the Operating Agreement for more details (Exhibit 3).

Mandatory Redemptions.

If as a result of a Member Withdrawal, redemption or otherwise or issuance of additional Units, the Company violates or will violate the ERISA Investor Restriction, the Company has the right, exercisable in its sole discretion, to cause the Company to redeem outstanding Units that are then held by ERISA Investors, on a pro rata basis, as is or may be necessary to ensure that the Company does not violate the ERISA Investor Restriction. In the event the Company determines to exercise its rights, the Company shall give each ERISA Investor immediate written notice of said determination, and in such Writing shall advise each ERISA Investor of the number of Units to be redeemed from said Investor, the effective date of such redemption and the Redemption Price to be paid to such Investor. Upon the effective date of such redemption, the Company shall tender to each ERISA Investor the Redemption Price applicable to said Investor as directed by said Investor. No Surrender Fee or Processing Fee shall be assessed on a redemption occurring pursuant to this Section.

Liability to Further Calls or to Assessment by the Issuer

No Investor shall be obligated to contribute additional capital to the Company. No Class A Investor shall be permitted or authorized to make any additional capital contribution without the prior approval of the Manager.

Transfer of Interests; Admission of Investors

Interests may be transferred, sold, conveyed, or assigned by Investors after nine (9) months from the date of purchase, provided that any such transfer, sale or assignment is in compliance with all applicable federal and state laws and regulations. The Company may require an opinion of legal counsel satisfactory to the Company in connection with any transfer, sale, or assignment.

No Person shall be admitted as an Investor of the Company by assignment or sale of an Investor ’s Interest to a person not already an Investor unless the Company shall have voted to approve the admission of such Person as a new Investor.

No person shall be admitted to the Company as a new Investor contributing new capital without the approval of the Company and in compliance with Section 8.2.1 of the Operating Agreement. The new Investor shall pay in his or its Capital Contribution in accordance with Subsection 8.1.2 of the Operating Agreement, the Company shall establish a Capital Account which shall be credited with the Capital Contribution of the new Investor, and Exhibits “1” and “2” of the Operating Agreement shall be adjusted to reflect the new Percentage Interests and Capital Accounts of the Investors.

Liabilities of the Members under the Operating Agreement and State Law

The Company is organized under the laws of the State of Delaware. The Operating Agreement choice of law clause and all rights and obligations arising therefrom will be governed by Delaware law.

Delaware law provides:

See 6 DE Code 18-303 Liability to Third Parties

As stated, no Member will be deemed liable to third parties except by the Operating Agreement. The Operating Agreement has a provision addressing this exact issue. The Operating Agreement Section 7.4 places a limitation of liability for Members stating, “…no Member will be obligated personally for any debt, obligation or liability of the Company or other Members, whether arising in contract, tort or otherwise, solely by reason of being a Member. A Member or Assignee who receives a distribution or the return, in whole or in part, of its Capital Contribution is liable to the Company only to the extent provided herein or by the Act.”

TAX TREATMENT

The following is a summary of certain relevant federal income tax considerations resulting from an investment in Benchmark Real Estate Fund but does not purport to cover all of the potential tax considerations applicable to any specific Investor. Prospective Investors are urged to consult with and rely upon their own tax advisors for advice on these and other tax matters with specific reference to their own tax situation and potential changes in applicable law discussion is a general summary of certain federal income tax consequences of acquiring, holding and disposing of partnership interests in the Company and is directed to individual Investors who are United States citizens or residents and who will hold their interests in the Company as “capital assets” (generally, Property held for investment). It is included for general information only and is not intended as a comprehensive analysis of all potential tax considerations inherent in making an investment in the Company. The tax consequences of an investment in the Company are complex and will vary depending upon each Investor’s individual circumstances, and this discussion does not purport to address federal income tax consequences applicable to all categories of Investors, some of whom may be subject to special or other treatment under the tax laws (including, without limitation, insurance companies, qualified pension plans, tax-exempt organizations, financial institutions or broker-dealers, traders in securities that elect to mark to market, Members owning capital stock as part of a “straddle,” “hedge” or “conversion transaction,” domestic corporations, “S” corporations, REITs or regulated investment companies, trusts and estates, persons who are not citizens or residents of the United States, persons who hold their interests in the Company through a company or other entity that is a pass-through entity for U.S. federal income tax purposes or persons for whom an interest in the Company is not a capital asset or who provide directly or indirectly services to the Company). Further, this discussion does not address all of the foreign, state, local or other tax laws that may be applicable to the Company or its partners.

Prospective Investors also should be aware that uncertainty exists concerning various tax aspects of an investment in the Company. This summary is based upon the IRS Code, the Treasury Regulations (the “Treasury Regulations”) promulgated thereunder (including temporary and proposed Treasury Regulations), the legislative history of the IRS Code, current administrative interpretations and practices of the Internal Revenue Service (“IRS”), and judicial decisions, all as in effect on the date of this offering circular and all of which are under continuing review by Congress, the courts and the IRS and subject to change or differing interpretations. Any such changes may be applied with retroactive effect. Counsel to the Company has not opined on the federal, state, or local income tax matters discussed herein, and no rulings have been requested or received from the IRS or any state or local taxing authority concerning any matters discussed herein. Consequently, no assurance is provided that the tax consequences described herein will continue to be applicable or what the positions taken by the Company in respect of tax matters will not be challenged, disallowed or adjusted by the IRS or any state or local taxing authority. 

Prospective Investors are urged to consult with and rely upon their own tax advisors for advice on these and other tax matters with specific reference to their own tax situation and potential changes in applicable law.

FOREIGN INVESTORS: NON-U.S. INVESTORS ARE SUBJECT TO UNIQUE AND COMPLEX TAX CONSIDERATIONS. THE COMPANY AND THE MANAGER MAKE NO DECLARATIONS AND OFFER NO ADVICE REGARDING THE TAX IMPLICATIONS TO SUCH FOREIGN INVESTORS, AND SUCH INVESTORS ARE URGED TO SEEK INDEPENDENT ADVICE FROM ITS OWN TAX COUNSEL OR ADVISORS BEFORE MAKING ANY INVESTMENT.  

Tax Classification of the Company as a Partnership General.

The federal income tax consequences to the Investors of their investment in the Company will depend upon the classification of the Company as a “Partnership” for federal income tax purposes, rather than as an association taxable as a corporation. For federal income tax purposes, a partnership is not an entity subject to tax, but rather a conduit through which all items of partnership income, gain, loss, deduction and credit are passed through to its partners. Thus, income and deductions resulting from Company operations are allocated to the Investors in the Company and are taken into account by such Investors on their individual federal income tax returns. In addition, a distribution of money or marketable securities from the Company to a partner generally is not taxable to the partner unless the amount of the distribution exceeds the partner’s tax basis in his interest in the Company. In general, an unincorporated entity formed under the laws of a state in the United States with at least two members, such as the Company, will be treated as a partnership for federal income tax purposes provided that (i) it is not a “publicly traded partnership” under Section 7704 of the IRS Code and (ii) does not affirmatively elect to be classified as an association taxable as a corporation under the so-called “check the box” regulations relating to entity classification. The Company is not currently a “publicly traded partnership” within the meaning of Section 7704 of the IRS Code for the reasons discussed below. In addition, the Manager does not intend to affirmatively elect classification of the Company as an association taxable as a corporation. Accordingly, the Manager expects that the Company will be classified as a partnership for federal income tax purposes.

Publicly Traded Partnership Rules.

Under Section 7704 of the IRS Code, a partnership that meets the definition of a “publicly traded partnership” may be treated as a corporation depending on the nature of its income. If the Company were so treated as a corporation for federal income tax purposes, the Company would be a separate taxable entity subject to corporate income tax, and distributions from the Company to a partners would be taxable to the partners in the same manner as a distribution from a corporation to a shareholder (i.e., as dividend income to the extent of the current and accumulated earnings and profits of the Company, as a nontaxable reduction of basis to the extent of the partner’s adjusted tax basis in his interests in the Company, and thereafter as gain from the sale or exchange of the Investor’s interests in the Company). The effect of classification of the Company as a corporation would be to reduce substantially the after-tax economic return on an investment in the Company. A partnership will be deemed a publicly traded partnership if (a) interests in such partnership are traded on an established securities market, or (b) interests in such partnership are readily tradeable on a secondary market or the substantial equivalent thereof. As discussed in this offering circular, interests in the Company (i) will not be traded on an established securities market; and (ii) will be subject to transfer restrictions set forth in the Operating Agreement. Specifically, the Operating Agreement generally prohibits any transfer of a partnership interest without the prior consent of the Manager except in connection with an Exempt Transfer. The Manager will consider prior to consenting to any transfer of an interest in the Company if such transfer would or could reasonably be expected to jeopardize the status of the Company as a partnership for federal income tax purposes.

The remaining discussion assumes that the Company will be treated as a Partnership and not as an association taxable as a corporation for federal income tax purposes.

Allocation of Partnership Income, Gains, Losses, Deductions and Credits

Profits and Losses are allocated to the partners under the Operating Agreement. In general, Profits or Losses during any fiscal year will be allocated as of the end of such fiscal year to each Member in accordance with their ownership interests. Certain allocations may be effected to comply with the “qualified income offset” provisions of applicable Treasury Regulations relating to partnership allocations (as referenced below).

Under Section 704(b) of the IRS Code, a Company’s allocations will generally be respected for federal income tax purposes if they have “substantial economic effect” or are otherwise in accordance with the “member’s interests in the partnership.” The Company will maintain a capital account for each Member in accordance with federal income tax accounting principles as set forth in the Treasury Regulations under Section 704(b), and the Operating Agreement does contain a qualified income offset provision. The Operating Agreement requires liquidating distributions to be made in accordance with the economic intent of the transaction and the allocations of Company income, gain, loss and deduction under the Operating Agreement are designed to be allocated to the members with the economic benefit of such allocations and are in a manner generally in accord with the principles of Treasury Regulations issued under Section 704(b) of the IRS Code relating to the partner’s interest in the partnership. As a result, although the Operating Agreement may not follow in all respects applicable guidelines set forth in the Treasury Regulations issued under Section 704(b), the Manager anticipates that the Company’s allocations would generally be respected as being in accordance with the Member’s interests in the Company. However, if the IRS were to determine that the Company’s allocations did not have substantial economic effect or were not otherwise in accordance with the Member’s interests in the Company, then the taxable income, gain, loss and deduction of the Company might be reallocated in a manner different from that specified in the Operating Agreement and such reallocation could have an adverse tax and financial effect on Members. 

Limitations on Deduction of Losses.

The ability of an Investor to deduct the Investor’s share of the Company’s losses or deductions during any particular year is subject to numerous limitations, including the basis limitation, the at-risk limitation, the passive actively loss limitation and the limitation on the deduction of investment interest. Each prospective Investor should consult with its own tax advisor regarding the application of these rules to it in respect of an investment in the Company.

Basis Limitation. Subject to other loss limitation rules, an Investor is allowed to deduct its allocable share of the Company’s losses (if any) only to the extent of such Investor’s adjusted tax basis in its interests in the Company at the end of the Company’s taxable year in which the losses occur.

At-Risk Limitation. In the case of an Investor that is an individual, trust, or certain type of corporation, the ability to utilize tax losses allocated to such Member under the Operating Agreement may be limited under the “at-risk” provisions of the IRS Code. For this purpose, an Investor who acquires a Company interest pursuant to the Offering generally will have an initial at-risk amount with respect to the Company’s activities equal to the amount of cash contributed to the Company in exchange for its interest in the Company. This initial at-risk amount will be increased by the Investor’s allocable share of the Company’s income and gains and decreased by their share of the Company’s losses and deductions and the amount of cash distributions made to the Investor. Liabilities of the Company, whether recourse or nonrecourse, generally will not increase an Investor’s amount at-risk with respect to the Company. Any losses or deductions that may not be deducted by reason of the at-risk limitation may be carried forward and deducted in later taxable years to the extent that the Investor’s at-risk amount is increased in such later years (subject to application of the other loss limitations). Generally, the at-risk limitation is to be applied on an activity-by-activity basis. If the amount for which an Investor is considered to be at-risk with respect to the activities of the Company is reduced below zero (e.g., by distributions), the Investor will be required to recognize gross income to the extent that their at-risk amount is reduced below zero.

Passive Loss Limitation. To the extent that the Company is engaged in trade or business activities, such activities will be treated as “passive activities” in respect of any Investor to whom Section 469 of IRS Code applies (individuals, estates, trusts, personal service corporations and, with modifications, certain closely-held C corporations), and, subject to the discussion below regarding portfolio income, the income and losses in respect of those activities will be “passive activity income” and “passive activity losses.” Under Section 469 of the IRS Code, a taxpayer’s losses and income from all passive activities for a year are aggregated. Losses from one passive activity may be offset against income from other passive activities. However, if a taxpayer has a net loss from all passive activities, such taxpayer generally may not use such net loss to offset other types of income, such as wage and other earned income or portfolio income (e.g., interest, dividends and certain other investment type income). Investor income and capital gains from certain types of investments are treated as portfolio income under the passive activity rules and are not considered to be income from a passive activity. Unused passive activity losses may be carried forward and offset against passive activity income in subsequent years. In addition, any unused loss from a particular passive activity may be deducted against other income in any year if the taxpayer’s entire interest in the activity is disposed of in a fully taxable transaction.

Non-Business Interest Limitation. Generally, a non-corporate taxpayer may deduct “investment interest” only to the extent of such taxpayer’s “net investment income.” Investment interests subject to such limitations may be carried forward to later years when the taxpayer has additional net investment income. Investment interest is interest paid on debt incurred or continued to acquire or carry Property held for investment. Net investment income generally includes gross income and gains from Property held for investment reduced by any expenses directly connected with the production of such income and gains. To the extent that interest is attributable to a passive activity, it is treated as a passive activity deduction and is subject to limitation under the passive activity rules and not under the investment interest limitation rules.

Limitation on Deductibility of Capital Losses. The excess of capital losses over capital gains may be offset against ordinary income of a non-corporate taxpayer, subject to an annual deduction limitation of $3,000. A non-corporate taxpayer may carry excess capital losses forward indefinitely.

Taxation of Undistributed Company Income (Individual Investors)

Under the laws pertaining to federal income taxation of limited liability companies that are treated as partnerships, no federal income tax is paid by the Company as an entity. Each individual Member reports on his federal income return his distributive share of Company income, gains, losses, deductions, and credits, whether or not any actual distribution is made to such member during a taxable year. Each individual Investor may deduct his distributive share of Company losses, if any, to the extent of the tax basis of his Units at the end of the Company year in which the losses occurred. The characterization of an item of profit or loss will usually be the same for the member as it was for the Company. Since individual Investors will be required to include Company income in their personal income without regard to whether there are distributions of Company income, such Investors will become liable for federal and state income taxes on Company income even though they have received no cash distributions from the Company with which to pay such taxes.

Tax Returns

Annually, the Company will provide the Investors sufficient information from the Company’s informational tax return for such persons to prepare their individual federal, state, and local tax returns. The Company’s informational tax returns will be prepared by a tax professional selected by the Company.

ERISA CONSIDERATIONS

In Some Cases, if the Investors Fails to Meet the Fiduciary and Other Standards Under the Employee Retirement Income Security Act of 1974, as Amended (“ERISA”), the Code or Common Law as a Result of an Investment in the Fund’s Interests, the Investor Could be Subject to Liability for Losses as Well as Civil Penalties:

There are special considerations that apply to investing in the Fund’s Interests on behalf of pension, profit sharing or 401(k) plans, health or welfare plans, individual retirement accounts or Keogh plans. If the Investor is investing the assets of any of the entities identified in the prior sentence in the Fund’s Units, the Investor should satisfy themselves that:

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA, the Code, or other applicable statutory or common law may result in the imposition of civil penalties and can subject the fiduciary to liability for any resulting losses as well as equitable remedies. In addition, if an investment in the Fund’s Units constitutes a prohibited transaction under the Code, the “disqualified person” that engaged in the transaction may be subject to the imposition of excise taxes with respect to the amount invested.

Audited Financial Statements

Benchmark Real Estate Fund

Years Ended December 31, 2023 and 2022

with Report of Independent Auditors

Benchmark Real Estate Fund

Audited Financial Statements

Years Ended December 31, 2023 and 2022

Contents

	ANDREWS HOOPER PAVLIK PLC
	2311 EAST BELTLINE AVENUE SE | SUITE 200 | GRAND RAPIDS, MI 49546

Report of Independent Auditors

Benchmark Capital Management II, LLC, Fund Manager Benchmark Real Estate Fund

Grand Rapids, Michigan

Opinion

We have audited the accompanying financial statements of Benchmark Real Estate Fund, which comprise the balance sheets as of December 31, 2023 and 2022, and the related statements of operations, members’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Benchmark Real Estate Fund as of December 31, 2023 and 2022, and the results of its operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Benchmark Real Estate Fund and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Benchmark Real Estate Fund’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

P: 616.942.6440 | WWW.AHP.CPA | F: 616.942.6095

Andrews Hooper Pavlik PLC is a member of Allinial Global, an association of legally independent firms.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Grand Rapids, Michigan

February 1, 2024

Benchmark Real Estate Fund

Balance Sheets

See accompanying notes.

Benchmark Real Estate Fund

Statements of Operations

See accompanying notes.

Benchmark Real Estate Fund

Statements of Members’ Deficit

Years Ended December 31, 2023 and 2022

See accompanying notes.

Benchmark Real Estate Fund

Statements of Cash Flows

See accompanying notes.

Benchmark Real Estate Fund

Notes to Financial Statements

December 31, 2023

Nature of Operations

Benchmark Real Estate Fund (Fund) is a manager-managed Delaware limited liability company operating primarily in the State of Michigan. The Fund was formed to be a funding source or direct lender for real estate mortgage loans originated, brokered, and serviced by itself and its affiliates, Benchmark Capital Management II, LLC and West Michigan Private Capital Fund I, LLC dba Benchmark Capital Finance (collectively referred to as “Affiliates”). The Fund intends to fund, refinance, purchase, sell, and/or otherwise acquire loans secured by first mortgages, primarily on 1-4 family owner-occupied and non-owner-occupied residential real estate. In addition, the Fund intends to acquire, develop, construct, rehabilitate, hold, rent, and/or sell 1-4 family residential real estate. The Fund may incur indebtedness, borrow or lend monies from or to one or more sources, including Affiliates, and engage in any other lawful act or activity for which a limited liability organized under the Delaware Limited Liability Company Act may engage in. Benchmark Capital Management II, LLC (Fund Manager), is the Fund Manager under an Operating Agreement with the Members of the Fund.

The Fund organized on November 10, 2015 and has not commenced operations. The Fund anticipates raising a maximum of $50 million, consisting of A-Units and B-Units under an Offering Circular pursuant to an exemption from registration under Regulation A of the Securities Act of 1933, as amended. The Fund intends to engage in deploying its capital for approximately five years then commence an orderly termination of operations and final distributions.

Basis of Presentation

The financial statements of the Fund have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Fund Manager to make estimates and assumptions based on available information. The Fund Manager believes the estimates utilized in preparing the Fund’s financial statements are reasonable and prudent; however, actual results could differ from these estimates and such differences could be material to the Fund’s financial statements.

Benchmark Real Estate Fund

Notes to Financial Statements

December 31, 2023

Operations

The Fund conducts its business in an office shared with the Fund Manager and other affiliated organizations.

Income Taxes

The Fund is treated as a partnership for federal income tax purposes. Consequently, federal income taxes are not payable or provided for by the Fund. Members are taxed individually on their pro rata ownership share of the Fund’s earnings on a pass-through basis. The Fund’s net income or loss is allocated among the members in accordance with the Fund’s operating agreement.

Subsequent Events

The financial statements and related disclosures include evaluation of subsequent events for recognition and disclosure up through and including February 1, 2024, which is the date the financial statements were available to be issued.

It is anticipated that the Operating Agreement will provide detailed provisions regarding the allocation of net income and losses received by members over the life of the Fund. Generally, items of income and expense are allocated among members in proportion to the applicable membership interest.

The Fund Manager and the Fund have an Operating Agreement that discusses how the operations of the Fund will share services between Benchmark Real Estate Fund and Benchmark Capital Finance. The only transactions through December 31, 2023 relate to expenses incurred in the formation of the Fund.

The Fund has incurred aggregate legal and other formation costs of $388,212 as of December 31, 2023 and $355,783 as of December 31, 2022. The Fund will reimburse all formation costs incurred to West Michigan Private Capital Fund I, LLC dba Benchmark Capital Finance, an Affiliate.

Benchmark Real Estate Fund

Notes to Financial Statements

December 31, 2023

During 2023 and 2022, no capital contributions have been made. The Fund expects to raise a maximum of $50 million in member contributions.

The Fund Manager (and/or its Affiliates) has incurred and will continue to incur organizational and offering expenses which are reimbursable from the Fund, at less than 1% of total gross proceeds from the offerings.

Exhibit Index

Exhibit 2A: Certificate of Formation

Exhibit 3: Operating Agreement

Exhibit 4: Subscription Agreement

Exhibit 8: Tri-Party Escrow Agreement

Exhibit 11: Written Expert Consent Letter of Accountant

Exhibit 12: Opinion Re Legality of the Securities

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, Georgia on July 24, 2023.

Issuer Company Legal Name and Address:

Benchmark Real Estate Investment Fund, LLC

3919 Remembrance Rd NW, Ste B

Grand Rapids, MI 49534 

BY:

 s/Matthew Fox

Matthew Fox

Manager of the Manager, Benchmark Capital Management II, LLC

Date: March 15, 2024

Location: Grand Rapids, MI

 s/Todd Harding

Todd Harding

Manager of the Manager, Benchmark Capital Management II, LLC

Date: March 15, 2024

Location: Grand Rapids, MI

This Offering Statement has been signed by the following Manager of the Company in the capacity and on the date indicated:

Benchmark Capital Management II, LLC

By its Manager (serving in the capacity of Principal Financial Officer, Principal Accounting Officer and Principal Executive Officer of the Issuer)

 s/Matthew Fox

Matthew Fox

Manager of the Manager, Benchmark Capital Management II, LLC

Date: March 15, 2024

Location: Grand Rapids, MI

 s/Todd Harding

Todd Harding

Manager of the Manager, Benchmark Capital Management II, LLC

Date: March 15, 2024

Location: Grand Rapids, MI

Exhibit 1A-2B

OPERATING AGREEMENT

OF

BENCHMARK REAL ESTATE INVESTMENT FUND, LLC

a Delaware limited liability company,

doing business as

BENCHMARK REAL ESTATE FUND

THE INTERESTS REPRESENTED HEREBY (THE “INTERESTS”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF LEGAL COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

THE INTERESTS ARE BEING OFFERED AND SOLD PURSUANT TO REGULATION A OF THE SECURITIES ACT AND PURSUANT TO RULES THEREUNDER.

THERE IS NO OBLIGATION ON THE ISSUER TO REGISTER THE INTERESTS UNDER THE SECURITIES ACT. A PURCHASER OF ANY INTEREST MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

ARTICLE 11 OF THE OPERATING AGREEMENT PROVIDES FOR FURTHER RESTRICTIONS ON TRANSFER OF THE INTERESTS.

THIS OPERATING AGREEMENT is made and entered into effective as of December 31, 2021, by and among BENCHMARK REAL ESTATE INVESTMENT FUND, LLC, a Delaware limited liability company doing business as BENCHMARK REAL ESTATE FUND, Benchmark Capital Management II, LLC, a Michigan limited liability company as Manager and JosephArden Enterprises, LLC, a Michigan limited liability company as Class B Member and the several persons whose names and addresses are set forth in Exhibit “1” attached hereto and incorporated herein by reference, and whose signatures appear herein or by a separate joinder instrument, and any other Person who shall hereafter execute this Agreement as a Member of the Company.

W I T N E S S E T H

WHEREAS certain persons, wishing to become Members of a limited liability company called BENCHMARK REAL ESTATE INVESTMENT FUND, LLC (hereafter “BENCHMARK REAL ESTATE FUND” (the “Company”)) under and pursuant to the Delaware Limited Liability Company Act caused Articles of Organization to be executed and filed with the Delaware Secretary of State on November 10, 2015; and

WHEREAS the parties agree that their respective rights, powers, duties and obligations as Members of the Company, and the management, operations, and activities of the Company, shall be governed by this Operating Agreement (“Agreement”) of BENCHMARK REAL ESTATE FUND, and

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed that the foregoing recitals shall be, and are, incorporated into this Agreement as if repeated in their entirety below, and it is further agreed as follows:

In consideration of the mutual terms, covenants, and conditions contained herein, the parties hereby agree as follows:

ARTICLE 1

definitions

1.1.1 Certain Definitions Capitalized terms used in this Agreement without other definition shall, unless expressly stated otherwise, have the meanings specified in this Article 1.

1.1.2 “Act” means the provisions of the Delaware Code, Title 6, Chapter 18 (the Delaware Revised Uniform Limited Liability Company Act) (the “Act”), as from time to time in effect in the State of Delaware, or any corresponding provision or provisions of any succeeding or successor law of such State. The Act shall govern the rights and obligations of, and the relationships among, the Members except as modified by the provisions of this Agreement provided, however, that in the event that any amendment to the Act, or any succeeding or successor law, is applicable to the Company only if the Company has elected to be governed by the Act as so amended or by such succeeding or successor law, as the case may be, the term “Act” shall refer to the Act as so amended or to such succeeding or successor law only after the appropriate election by the Company, if made, has become effective.

1.1.3 “Affiliate” of a Member or Manager means any Person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Member or Manager, as applicable. The term “control,” as used in the immediately preceding sentence, means with respect to a corporation, limited liability company, limited life company or limited duration company (collectively, “limited liability company”), the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the controlled corporation or limited liability company and, with respect to any individual, partnership, trust, estate, association or other entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity.

1.1.4 “Agreement” means this Operating Agreement of BENCHMARK REAL ESTATE INVESTMENT FUND, LLC, doing business as BENCHMARK REAL ESTATE FUND as originally executed and as amended, modified, or supplemented from time to time. Words such as “herein,” “hereinafter,” “hereof,” “hereto,” “hereby,” and “hereunder,” when used with reference to this Agreement, refer to this Agreement as a whole, unless the context otherwise requires.

1.1.5 "Assignee" means any transferee of a Member's Interest who has not been admitted as a Member of the Company in accordance with Article 11.

1.1.6 “Bankruptcy” means, with respect to a Member: (i) such Member makes an assignment for the benefit of creditors; (ii) such Member files a voluntary petition for bankruptcy; (iii) such Member is adjudged as bankrupt or insolvent, or has entered against him or it an order for relief, in any bankruptcy or insolvency proceeding; (iv) such Member files a petition or answer seeking for himself or itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (v) such Member files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him or it in any proceeding of a nature described in this Subsection 1.1.6; (vi) such Member seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Member of all or any substantial part of his or its assets; or (vii) one hundred twenty (120) days after the commencement of any proceeding against the Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if within ninety (90) days after the appointment without the Member's consent or acquiescence of a trustee, receiver or liquidator of the Member of all or any substantial part of his or its properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated.

1.1.7 "Capital Account" means an account established and maintained (in accordance with, and intended to comply with, Income Tax Regulations Section 1.704-1(b)) for each Member pursuant to Section 8.5 hereof.

1.1.8 "Capital Contributions" means the contributions made by the Members to the Company pursuant to Section 8.1, Section 8.2, or Section 8.3 hereof and, in the case of all the Members, the aggregate of all such Capital Contributions.

1.1.9 "Certificate of Formation" means the Articles of Organization of this Company filed with the Delaware Secretary of State, Division of Corporations on November 10, 2015.

1.1.10 "Class A Interests and Members” Class A Members are persons accepted into the Company as owners of Class A Interests and are identified as such in Exhibit “1”. There shall be Five Hundred Thousand (500,000) Class A Interests each representing an original Capital Contribution of One Hundred and 00/100 Dollars ($100.00) for an aggregate of Fifty Million and 00/100 Dollars ($50,000,000.00). Capital Contributions shall be payable in accordance with the written Subscription Agreement between the Company and the Class A Members. The aggregate equity of the Class A Interests is eighty-five percent (85%) of the Company, which shall not be reduced under any circumstances without the consent of the Class A Members.

1.1.11 "Class B Interest” means an Interest that is held by a Class B Member and is identified as such in Exhibits “1” and “2”. There shall be One Thousand (1,000) Class B Interests, each representing a Capital Contribution of One and 00/100 Dollars ($1.00) for a total of One Thousand and 00/100 Dollars ($1,000.00). The Class B Interests are entitled to a fifteen percent (15%) Interest of the Company.

1.1.12 "Code" means the United States Internal Revenue Code of 1986, as amended, or any corresponding provision or provisions of any succeeding law and, to the extent applicable, the Income Tax Regulations.

1.1.13 "Company" means BENCHMARK REAL ESTATE INVESTMENT FUND, LLC, a Delaware limited liability company, doing business as BENCHMARK REAL ESTATE FUND.

1.1.14 “Distributable Cash" means, for each Fiscal Quarter, the GAAP (Generally Accepted Accounting Principles) Profits from Company operations less (only to the extent not yet included in the adjustments made to determine the GAAP Profits for such Fiscal Quarter) the following to the extent paid, accrued or set aside by the Company: (a) all principal payments on indebtedness of the Company and all other sums paid by the Company to lenders; (b) all capital expenditures of the Company's business, including but not limited to, any real estate purchase commitments and commitments for any Financing Receivable; (c) such Reserves as the Manager deems reasonably necessary for the proper operation of the Company's business; (d) Cash Available for Redemption; and (e) fees payable to the Manager under Article 5.

1.1.15 "Income Tax Regulations" means, unless the context clearly indicates otherwise, the regulations in force as final or temporary that have been issued by the U.S. Department of the Treasury pursuant to its authority under the Code, and any successor regulations.

1.1.16 "Manager" means Benchmark Capital Management II, LLC who is elected as a Manager of the Company pursuant to Section 5.5 or Section 5.6 of this Agreement.

1.1.17 "Member" means any Person who (i) is one of the original Members of the Company which are parties to this Agreement and listed as such in Exhibit “1”, or (ii) has been admitted to the Company as a Member in accordance with the Act and this Agreement, and (iii) has not ceased to be a Member for any reason.

1.1.18 “Net Capital Event Proceeds” means, with respect to any fiscal period, the amount of net proceeds from receipt of funds derived from the sale of an asset held for more than one year. Net Capital Event Proceeds shall not include any profits that are tax deferred as a result of exchanges under IRC Section 1031 or investments in Opportunity Zones that have the effect of deferring taxes.

1.1.19 "Percentage Interest" means the allocable interest of each Member in the income, gain, loss, deduction, or credit of the Company, as set forth in Exhibit “2”, attached hereto and incorporated herein by reference, as amended from time to time. Percentage Interest includes the entire ownership interest of a Member in the Company at any particular time, including, without limitation, the right of such Member to participate in the Company's income or losses, Distributable Cash and any and all rights and benefits to which a Member may be entitled pursuant to this Agreement and under the Act, together with the obligations of such Member to comply with all the terms and provisions of this Agreement and the Act.

1.1.20 "Person" means a natural person or any partnership (whether general or limited and whether domestic or foreign), limited liability company, foreign limited liability company, limited life company, limited duration company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity or any other entity.

1.1.21 “Real Estate Asset” means either unimproved land, land having in place improvements or “Financing Receivables” consisting of Promissory Notes secured by real property.

1.1.22 "Reserves" means the reasonable reserves established and maintained from time to time by the Manager, in amounts reasonably considered adequate and sufficient from time to time by the Manager to pay taxes, fees, insurances or other costs and expenses, and including reserves for loan impairment, reserves for real estate value impairment or any other reserves incident to the Company's business.

1.1.23 "Secretary of State" means the Secretary of State of the State of Delaware.

Section 1.2 Forms of Pronouns; Number; Construction. Unless the context otherwise requires, as used in this Agreement, the singular number includes the plural and the plural number may include the singular. The use of any gender shall be applicable to all genders. Unless otherwise specified, references to Articles, Sections or Subsections are to the Articles, Sections, and Subsections in this Agreement. Unless the context otherwise requires, the term "including" shall mean "including, without limitation."

ARTICLE 2

the company

Section 2.1 Name. The name of the Company shall be Benchmark Real Estate Investment Fund, LLC, doing business as Benchmark Real Estate Fund.

Section 2.2 Purpose of the Company. The Company is organized for the following objects and purposes: The purpose of the Company is to engage in any lawful act or activity for which a limited liability company may be organized under the Act, which shall include, but not be limited to, engaging in mortgage brokering, lending, and servicing, buying, selling, assigning and/or transferring Financing Receivables, and taking all necessary and appropriate actions to collect and enforce against the same, acquiring, retaining, managing, improving, selling, assigning and/or transferring real estate and interests therein, incurring indebtedness, borrowing or lending monies from or to one or more sources, including Affiliates, and engaging in any other lawful act or activity for which a limited liability company may be organized under the Act.

The Company intends to engage in deploying its capital for approximately five (5) years then commence an orderly termination of operations and final distributions.

Section 2.3 Term. The Company shall continue in existence in perpetuity from the date of filing of its Certificate of Formation with the Delaware Secretary of State, unless earlier dissolved pursuant to the Act or Section 13.1 of this Agreement. The Company intends to commence an orderly liquidation of its assets in approximately five (5) years from its first acquisition of assets.

ARTICLE 3

OFFICES

Section 3.1 Registered Office. The registered office of the Company in Delaware required by the Act shall be as set forth in the Company's Certificate of Formation until such time as the registered office is changed in accordance with the Act.

Section 3.2 Principal Executive Office. The principal executive office for the transaction of the business of the Company shall be fixed by the Manager within or without the State of Michigan.

Section 3.3 Other Offices. The Manager may at any time establish other business offices within or without the State of Michigan.

ARTICLE 4

MEMBERS; LIMITED LIABILITY OF MEMBERS; CLASSES; INTERESTS OF MEMBERS; CERTIFICATES; VOTING RIGHTS; MEETINGS OF MEMBERS

Section 4.1 Members. Each of the parties to this Agreement, and each Person admitted as a Member of the Company pursuant to the Act and Section 11.2 of this Agreement, shall be Members of the Company until they cease to be Members in accordance with the provisions of the Act, the Certificate of Formation, or this Agreement. Upon the admission of any new Member, Exhibits “1” and “2”, attached hereto, shall be amended accordingly.

Section 4.2 Limited Liability. Except as expressly set forth in this Agreement or required by law, no Member shall be personally liable for any debt, obligation, or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company.

Section 4.3 Nature of Membership Interest; Agreement Is Binding upon Successors. The Interests of Members in the Company constitute their personal estate. No Member has any interest in any specific asset or property of the Company. In the event of the death or legal disability of any Member, the executor, trustee, administrator, guardian, conservator, or other legal representative of such Member shall be bound by the provisions of this Agreement, including without limitation Section 11.1, Section 11.2 and Section 11.3. If a Member who is not a natural person is dissolved or terminated, the successor of such Member shall be bound by the provisions of this Agreement, including without limitation Section 11.1, Section 11.2 and Section 11.3.

Section 4.4 Certificates Evidencing Interests. The Company does not intend to issue certificates to the Members for their interests in the Company. The Company reserves the right to issue to every Member of the Company a certificate signed by the Manager of the Company specifying the Interest of such Member. If a certificate for registered interests is worn out or lost, it may be renewed on production of the worn-out certificate or on satisfactory proof of its loss together with such indemnity as may be required by a resolution of the Manager.

Section 4.5 Classes of Members. The Company shall have two (2) classes of Members: Class A Members and Class B Members. Each such class of Members shall have the rights, powers, duties, obligations, preferences, and privileges set forth in this Agreement. The names of the Members, respectively, shall be set forth in Exhibit “1”, attached hereto and incorporated herein by reference, as amended from time to time. A Class B Member may also be a Class A Member.

Section 4.6 Class A Members. Are entitled to eighty-five percent (85%) of profits as set forth in Section 1.1.10 and shall be entitled to a return of their positive Capital Account balances upon a dissolution and liquidation of the Company in accordance with Article 13.

Section 4.7 Voting Rights.

4.7.1 Except as may otherwise be provided in this Agreement, the Act, or the Certificate of Formation, each of the Members hereby waives his or its right to vote on any matters other than as set forth in this Section 4.7.

4.7.2 In accordance with Section 19.2, the affirmative vote of a majority of the Class B Percentage Interests shall be required to:

(A)       adopt clerical or ministerial amendments to this Agreement;

(B)       approve a sale of substantially all the assets of the Company as authorized by Article 13 of this agreement;

(C)       approve indemnification of any Manager, Member, or officer of the Company as authorized by Article 14 of this Agreement; and

(D)       appoint a Liquidating Trustee in accordance with Subsection 13.2.1.

4.7.3 The following actions require a majority vote of the Class B members and a majority of the Class A Members voting as a single class:

(A)       authorize or approve a fundamental change in the business of the Company;

(B)       modify the number of Class A Interests after issuance, alter the Percentage Interest of the Class A Interests after issuance or alter the capital contribution required for each Class A Interest once any Class A Interests have been issued; and

(C) to approve any Loans to a Manager or any guarantee of a Manager's personal obligations, in accordance with Article 17.

4.7.4 Unless a Record Date for voting purposes has been fixed as provided in Section 4.13 of this Agreement, only Persons whose names are listed as Members on Exhibit 1 of this Agreement of the Company at the close of business on the business day immediately preceding the day on which notice of the meeting is given or, if such notice is waived, at the close of business on the business day immediately preceding the day on which the meeting of Members is held shall be entitled to receive notice of and to vote at such meeting, and such day shall be the Record Date for such meeting. Any Member entitled to vote on any matter may cast part of the votes in favor of the proposal and refrain from exercising the remaining votes or vote against the proposal (other than for election or removal of a Manager), but if the Member fails to specify the Interests such Member is voting affirmatively, it will be conclusively presumed that the Member's approving vote is with respect to all votes such Member is entitled to cast. Such vote may be a voice vote or by ballot; provided, however, that all votes for election or removal of a Manager must be by ballot upon demand made by a Class B or Class A Member at any meeting at which such election or removal is to be considered and before the voting begins.

4.7.5 Without limiting the preceding provisions of this Article 4.7, no Person shall be entitled to exercise any voting rights as a Member until such Person (i) shall have been admitted as a Member pursuant to Article 11.2, and (ii) shall have paid the Capital Contribution of such Person in accordance with Article 8.1.

Section 4.8 Place of Meetings. All meetings of the Members shall be held at any place within or without the State of Michigan that may be designated by the Manager. In the absence of such designation, Members' meetings shall be held at the principal executive office of the Company. Meetings may be held virtually, by telephonic, internet or other similar means.

Section 4.9 Meetings of Members. Meetings of the Members for the purpose of taking any action permitted to be taken by the Members may be called by any Manager, or by any Member. Upon request in writing that a meeting of Members be called for any proper purpose, the Manager forthwith shall cause notice to be given to the Members entitled to vote that a meeting will be held at a time requested by the Person or Persons calling the meeting, not less than ten (10) days nor more than sixty (60) days after receipt of the request. Except in special cases where other express provision is made by statute, written notice of such meetings shall be given to each Member entitled to vote not less than ten (10) days nor more than sixty (60) days before the meeting. Such notices shall state:

4.9.1 The place, date, and hour of the meeting;

4.9.2 Those matters which the Manager, at the time of the mailing of the notice, intend to present for action by the Members; and

4.9.3 The names of the Manager intended at the time of the notice to be presented for election by the Class B Members.

Section 4.10 Quorum. The presence at any meeting in person or by proxy of Members holding not less than a majority of the Percentage Interests of the class or classes entitled to vote at such meeting shall constitute a quorum for the transaction of business. This section shall not be interpreted to alter the votes required by this Agreement.

Section 4.11 Waiver of Notice. The actions of any meeting of Members, however called and noticed, and wherever held, shall be as valid as if taken at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting, or an approval of the minutes thereof. The waiver of notice, consent, or approval need not specify either the business to be transacted or the purpose of any regular or special meeting of the Members, except that if action is taken or proposed to be taken for approval of any of those matters specified in Subsection 4.7.2, Subsection 4.7.3, and Subsection 4.7.4, inclusive, of this Agreement, the waiver of notice, consent, or approval shall state the general nature of such proposal. All such waivers, consents or approvals shall be filed with the Company's records and made a part of the minutes of the meeting. Attendance of a Member at a meeting shall also constitute a waiver of notice of and presence at such meeting, except when the Member objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be included in the notice but not so included, if such objection is expressly made at the meeting.

Section 4.12 Action by Members Without a Meeting. Any other action which, under any provision of the Act or the Certificate of Formation or this Agreement that may be taken at a meeting of the Members, may be taken without a meeting, and without notice except as hereinafter set forth. If a consent in writing, setting forth the action so taken, is signed by Members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Members entitled to vote thereon were present and voted. All such consents shall be filed with the secretary of the Company and shall be maintained in the Company's records. Unless the consents of all Members entitled to vote have been solicited in writing, then (i) notice of any proposed Member approval without a meeting by less than unanimous written consent shall be given to those Members entitled to vote who have not consented in writing at least five (5) days before the consummation of the action authorized by such approval, and (ii) prompt notice shall be given of the taking of any other action approved by Members without a meeting by less than unanimous written consent to those Members entitled to vote who have not consented in writing.

Any Member giving a written consent, or the Member's proxyholders, or a personal representative of the Member or their respective proxyholders, may revoke the consent by a writing received by the secretary prior to the time that written consents of the number of votes required to authorize the proposed action have been filed with the secretary, but may not do so thereafter. Such revocation is effective upon its receipt by the secretary or, if there shall be no person then holding such office, upon its receipt by any other officer or Manager of the Company.

Section 4.13 Record Date. The Manager or, if there be no Manager then in office, the Members may fix a time in the future as a Record Date (the “Record Date”) for the determination of the Members entitled to notice of and to vote at any meeting of Members or entitled to give consent to action by the Company in writing without a meeting, to receive any report, to receive any dividend or distribution, or any allotment of rights, or to exercise rights with respect to any change, conversion or exchange of interests. The Record Date so fixed shall be not more than sixty (60) days nor less than ten (10) days prior to the date of any meeting, nor more than sixty (60) days prior to any other event for the purposes of which it is fixed. When a Record Date is so fixed, only Members of record at the close of business on that date are entitled to notice of and to vote at any such meeting, to give consent without a meeting, to receive any report, to receive a dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any interests on the books of the Company after the Record Date, except as otherwise provided by statute or in the Certificate of Formation or this Agreement.

If the Manager or the Members, as the case may be, do not so fix a Record Date, then (i) the Record Date for determining Members entitled to notice of or to vote at a meeting of Members shall be at the close of business on the business day immediately preceding the day on which notice is given or, if notice is waived, at the close of business on the business day immediately preceding the day on which the meeting is held, and (ii) the Record Date for determining Members entitled to give consent to Company action in writing without a meeting shall be the day on which the first written consent is given.

Section 4.14 Resignation and Withdrawal of Members. No Member may resign or withdraw as a Member prior to the dissolution and winding up of the Company or without the consent of the Manager.

Section 4.15 Members May Participate in Other Activities. Each Member of the Company, either individually or with others, shall have the right to participate in other business ventures of every kind, whether or not such other business ventures compete with the Company. No Member, acting in the capacity of a Member, shall be obligated to offer to the Company or to the other Members any opportunity to participate in any such other business venture. Neither the Company nor the other Members shall have any right to any income or profit derived from any such other business venture of a Member or Affiliate. A Class B Member or Manager may engage in incidental use of the Company’s computers, communication systems, or internet facilities for other business activities so long as such usage has no material impact upon the Company’s facilities and equipment.

Section 4.16 Members Are Not Agents. Pursuant to Article 5.1 of this Agreement, the management of the Company is vested in the Manager. The Members shall have no power to participate in the management of the Company except as expressly authorized by the Act, this Agreement, or the Certificate of Formation. No Member, acting solely in the capacity of a Member, is an agent of the Company nor does any Member, unless expressly and duly authorized in writing to do so by the Manager, have any power or authority to bind or act on behalf of the Company in any way, to pledge its credit, to execute any instrument on its behalf or to render it liable for any purpose. Any attempt to do so is null and void.

Section 4.17 Transactions of Members with the Company. Subject to any limitations set forth in this Agreement and with the prior approval of the Manager, a Member may lend money to and transact other business with the Company, such as providing services for compensation. Subject to other applicable law, such Member has the same rights and obligations with respect thereto as a Person who is not a Member.

Section 4.18 Loans by Members to the Company. Without limiting Section 4.15, no Member shall be obligated to lend money to the Company. No Member may lend money to the Company without the prior approval of the Manager. Any loan by a Member to the Company with the required approval of the Manager shall be separately entered on the books of the Company as a loan to the Company and not as a Capital Contribution, shall bear interest at such commercially reasonable rate as may be agreed upon by the lending Member and the Manager, and shall be evidenced by a promissory note containing commercially reasonable terms duly executed by the Manager.

Section 4.19 General Prohibition on Withdrawal. No Member may have the right to voluntarily or involuntarily withdraw, resign or otherwise disassociate (a "Withdrawal" or to "Withdraw") or receive a return of its Capital Contribution from the Company for a period of five (5) years from the Unit Issue Date (the "Five Year Term") applicable to said Member except on the prior written consent of the Manager and as provided in Section 4.20, Section 4.21, Section 4.22 or Section 4.23 hereto. Any Withdrawal for which no consent has been given, or which is not permitted under said aforementioned Sections, shall be null and void and of no effect whatsoever.

Section 4.20 Permitted Withdrawal and Redemption Requests. After the Five-Year Term, a Member may request that the Company redeem a maximum of one hundred fifty (150) Units from said Member per Fiscal Year. In the event a Member desires redemption under this Section 4.20 and qualifies for the same, said Member ("Redeeming Member") shall submit a written request ("Redemption Request") to Withdraw and for the Company to redeem said Member's Units up to maximum of one hundred fifty (150) Units per Fiscal Year. (The Redemption Request shall be in a form provided by the Manager from time to time.) The Redemption Request shall specify the number of Units ("Request Units") to be redeemed, provided, however, that for the avoidance of doubt, a Member may only request the redemption of Units that have been issued and outstanding for longer than the Five-Year Term. The Redemption Request shall be effective in the Fiscal Quarter after said Request is actually received by the Company; redemptions will be closed at the end of a Fiscal Quarter, and Members must have delivered a completed Redemption Request to the Manager no later than the last day of the prior Fiscal Quarter in order to be eligible to participate in a redemption in the current Fiscal Quarter. Notwithstanding anything else contained herein to the contrary, the Company's ability to meet Redemption Requests is wholly contingent upon the sufficiency and availability of Cash Available for Redemption, and the process by which the Company will meet the Redemption Requests is provided for in Section 4.21 and below. The Manager shall at its sole discretion establish a redemption price (the “Redemption Price”), which may be at a discount to the then current liquidation value. 

Section 4.21 Redemption Requests; Sufficient Cash Available for Redemption. To the extent there is sufficient and available Cash Available for Redemption, as determined by the Manager in its sole discretion, to meet all Redemption Requests timely delivered by Redeeming Members in the prior Fiscal Quarter, the Company shall redeem the Request Units from all Redeeming Members for the Redemption Price per Unit.

Section 4.22 Redemption Requests; Insufficient Cash Available for Redemption. To the extent there is insufficient and unavailable Cash Available for Redemption, as determined by the Manager in its sole discretion, to meet all Redemption Requests timely delivered by Redeeming Members in the prior Fiscal Quarter, then the Redeeming Members, vis-a-vis each other, shall be redeemed on a pro-rata basis to the extent of Cash Available for Redemption. Request Units for which completed Redemption Requests are received and which are not fully redeemed at the end of the subsequent Fiscal Quarter (due to insufficiency and unavailability of Cash Available for Redemption) shall have priority for redemption in the next succeeding Fiscal Quarter over those Request Units for which completed Redemption Requests are received in such next succeeding Fiscal Quarters. Priority for redemption shall be established quarter by quarter, pursuant to a "first in, first out" system on a quarterly basis. Thus, completed Redemption Requests received in the same Fiscal Quarter shall have priority over completed Redemption Requests received in subsequent Fiscal Quarters, with completed Redemption Requests received in the same Fiscal Quarter shall have pro-rata priority vis-à-vis each other.

Section 4.23 Redemption Requests Terms. Closing on the redemption of Request Units may occur electronically no later than the last Business Day of the subsequent Fiscal Quarter, and the Company shall tender cash or other readily available funds to the Redemption Members in payment of the Redemption Price for the Request Units. Upon receipt by each Redeeming Member of the Redemption Price due said Member for said Member's Request Units, said Redeeming Member shall promptly execute and deliver any documents of transfer requested by the Company to evidence such redemption. The Company may assess a reasonable processing fee ("Processing Fee") per Redemption Request. The Company may, in its discretion, assess this Processing Fee against the Redemption Price for the Request Units. Notwithstanding Section 10.1, or anything else herein, to the contrary, the Redeeming Member is not eligible to receive distributions (made pursuant to Section 10.1 or otherwise) on Request Units in the Fiscal Quarter in which said Member has been redeemed for said Request Units.

Section 4.24 Discretionary Withdrawal Requests. Prior to the expiration of the Five-Year Term, a Member may request to Withdraw from the Company and to have said Member's Units which have not been issued and outstanding for longer than the Five Year Term, redeemed by the Company by submitting a written withdrawal request ("Withdrawal Request") to the Manager, in the form to be provided by the Manager from time to time. The Manager shall, in its sole discretion, approve or disapprove the Withdrawal Request. In the event the Manager approves such Withdrawal Request, the Manager shall notify the requesting Member of the same in Writing, which Writing shall set forth the total Units to be redeemed and the total purchase price ("Withdrawal Purchase Price"), which shall be the Redemption Price for said Units less the Processing Fee and less the "Surrender Fee" (as that term is defined below), to be paid by the Company to the Member for its Units, and shall specify the closing date of such redemption. The Company shall assess a surrender fee ("Surrender Fee") against the Redemption Price per Unit as follows: a Surrender Fee of ten percent (10.0%) per Unit shall be assessed for Withdrawal Requests submitted after the one-year anniversary of the Unit Issue Date for said Units and before the five-year anniversary of the Unit Issue Date for said Units.

4.24.1 Upon receipt by the withdrawing Member of the Withdrawal Purchase Price due said Member for said Member's Units, said Member shall promptly execute and deliver any documents of transfer requested by the Company to evidence such redemption.

4.24.2 Notwithstanding Article 10.1, or anything else herein to the contrary, the withdrawing Member is not eligible to receive distributions (made pursuant to Section 10.1 or otherwise) on Units in the Fiscal Quarter in which said Member has been redeemed for said Units as provided for in this Section 4.24. Notwithstanding Article 8.5, or anything else herein, to the contrary, the withdrawing Member is not eligible to receive distributions (made pursuant to Article 10.1 or otherwise) on said redeemed Units in the Fiscal Quarter in which said Member has been redeemed for said Units as provided for in this Section 4.24.

4.24.3 The Manager may, in its sole discretion, waive the Surrender Fee with regard to a Withdrawal Request to which the Manager has consented, including, but not limited to, Withdrawal Requests submitted by an Affiliate of the Manager.

Section 4.25 Mandatory Redemptions. If as a result of a Member Withdrawal, redemption or otherwise or issuance of additional Units, the Company violates or will violate the ERISA Investor Restriction, the Manager has the right, exercisable in its sole discretion, to cause the Company to redeem outstanding Units that are then held by ERISA Investors, on a pro rata basis, as is or may be necessary to ensure that the Company does not violate the ERISA Investor Restriction. In the event the Manager determines to exercise its rights under this Section 4.25, the Manager shall give each ERISA Investor immediate written notice of said determination, and in such Writing shall advise each ERISA Investor of the number of Units to be redeemed from said Investor, the effective date of such redemption and the Redemption Price to be paid to such Investor. Upon the effective date of such redemption, the Manager shall cause the Company to tender to each ERISA Investor the Redemption Price applicable to said Investor as directed by said Investor. No Surrender Fee or Processing Fee shall be assessed on a redemption occurring pursuant to this Section.

Section 4.26 Company Option to Redeem. If a Member's Units are Transferred (the "Involuntary Transferred Units") to a Person not then a Member due to said Member's death or by any court or other judicial authority, including, but not limited to, Transfers ordered in a Bankruptcy proceeding, divorce, or as a result of garnishment, attachment or execution, the Company has the option, exercisable in its sole and exclusive discretion, to redeem all, but not less than all, of the Involuntary Transferred Units for the price and upon the terms set forth in this Section 4.26. Within thirty (30) Business Days after the date on which the Company receives written notice of the applicable event, the Company shall provide written notice of its exercise of its option to redeem to the Member, the court, and the proposed assignee and/or the successor of the Member ("Successor") as applicable (the "Option Notice").  

The redemption price for the Involuntary Transferred Units shall be an amount equal to their Redemption Price less the Processing Fee and less all any and all loss, liability, damages, loss and expenses incurred by the Company as a result of or related to the Transfer. In the event the Company has an offset right under this Section 4.26 and exercises the same, then the Company shall notify in Writing the Member, the court and/or Successor, as applicable, of the amount of offset, with reasonable detail and documentation regarding the same, and shall provide the amount of the redemption price as reduced by any offset.

4.26.1 The closing of the redemption of the Involuntary Transferred Units pursuant to this Section 4.26.1 may occur electronically or at the principal place of business of the Company and shall take place within a reasonable amount of time after the Option Notice.

4.26.2 Notwithstanding anything else contained herein to the contrary, the Successor and/or the applicable Member shall merely be an assignee from and after the date of the applicable event causing the Transfer, and such Successor and/or the applicable Member shall thereinafter have no right to vote or exercise rights of a Member hereunder.

4.26.3 In the event that any Successor and/or the applicable Member ("Defaulting Person") shall be required to sell its Involuntary Transfer Units pursuant to this Section 4.26.3, and in the further event that Defaulting Person is unable to, or for any reason does not, deliver such Involuntary Transfer Units and necessary documentation to the Company and the Manager in accordance with the applicable provisions of this Agreement, then the Company may deposit the applicable redemption price for such Involuntary Transfer Units, by certified check with the Company's primary bank, as agent or trustee, or in escrow, for such Defaulting Person, to be held by the bank until withdrawn by such Defaulting Person. Upon the deposit of the redemption price as provided for herein and upon notice in Writing to the Defaulting Person, the Involuntary Transfer Units of such Defaulting Person to be redeemed pursuant to Section 4.26 of this Agreement shall at such time be deemed to have been redeemed by and conveyed to the Company, and such Defaulting Person shall have no further rights thereto, and the Company shall record the redemption in its books and records.

Section 4.27 For Cause Redemption. The Manager has the right to redeem (i.e., purchase) the interest of any Member in the Company, but only for “Cause” or “Good Reason.” The term “Cause” means: (i) A breach by the Member of any of the terms, conditions or obligations of the Member contained in this Operating Agreement, including, without limitation, transferring or obtaining (voluntarily, by operation of law or otherwise) an Interest in the Company without the Manager’s written consent; (ii) Fraud, dishonesty or willful and serious misconduct by the Member with respect to the business or affairs of the Company; (iii) Any misrepresentation by a Member in any subscription for Interests in the Company (including any representation made in the Operating Agreement); (iv) Ongoing and persistent interference with the orderly conduct of the Company’s affairs.

4.27.1       The term “Good Reason” means: (i) Fraud, dishonesty or serious misconduct by the Member, other than with respect to the business or affairs of the Company, which involves an act of moral turpitude or could adversely affect the business, affairs or reputation of the Company; (ii) The Member’s continued ownership of an Interest, in the sole discretion of the Manager, that could interfere with the ownership or operation of any material Company asset or activity, including, without limitation, rendering the Company ineligible for any license, permit, registration, status, concession or benefit; (iii) The Member (1) becoming subject to any of the “bad actor” disqualifications within the meaning of Rule 506(d) under the Securities Act, (2) being prohibited from owning an interest in or otherwise affiliated with the Company pursuant to any applicable law, rule, regulation, order or judgment, or (3) the Member otherwise becoming a disreputable person; except that, the foregoing (1) through (3) shall be considered “Cause” if the acts or circumstances giving rise to any of them fall within the definition of “Cause” described above. The redemption of a Member for Cause will not be considered a remedy for breach and will not limit or in any way diminish any right or remedy the Company may have on account of an act constituting Cause. The Interests of all transferees, successors or assignees of a Member (including a permitted transferee) will also be subject to redemption if any transferee, successor or assignee has engaged in any of the acts described in the foregoing definitions of Cause and Good Reason, or if the assigning or another predecessor Member of the permitted transferee (whether or not a Member) engaged in any of such acts.

4.27.2       The redemption price of a Member’s interest in the Company will be determined with reference to the fair market value of the Company’s assets, which will be reasonably determined by the Manager. In the case of a redemption for Cause, (i) the redemption price will not exceed fifty percent (50%) of the Member’s unreturned capital and (ii) the redemption price will be reduced by all of the Company’s reasonable costs and expenses associated with the redemption, including without limitation attorney’s and other professional fees, filing fees and transfer taxes. In the case of a redemption for Good Reason, the redemption price shall be the fair market value, reduced by all of the Company’s reasonable cost and expenses associated with the redemption, including without limitation attorney’s and other professional fees, filing fees and transfer taxes. In the case of a redemption for Cause, the Redemption Price shall be paid in the form of an unsecured promissory note, without interest, payable to the redeemed Member over a three-year term.

ARTICLE 5

MANAGEMENT OF THE COMPANY

Section 5.1 Manager. Subject to the provisions of the Act and any limitations in the Certificate of Formation and this Agreement as to action required to be authorized or approved by the Members, the business and affairs of the Company shall be managed and all its powers shall be exercised by or under the direction of the Manager.

5.1.1 Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the Manager shall have the following powers:

(A)       to conduct, manage and control the business and affairs of the Company and to make such rules and regulations therefor not inconsistent with law or with the Certificate of Formation or with this Agreement, as the Manager shall deem to be in the best interests of the Company;

(B)       to appoint and remove at pleasure the officers, agents, and employees of the Company, prescribe their duties and fix their compensation;

(C)       to borrow money and incur indebtedness for the purposes of the Company and to cause to be executed and delivered therefor, in the Company's name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor;

(D)       to designate an advisory board and/or other committees, to serve at the pleasure of the Manager, and to prescribe the manner in which proceedings of such committees shall be conducted;

(E)       to acquire real and personal property, arrange financing and enter into contracts; and

(F)       to make all other arrangements and do all things which are necessary or convenient to the conduct, promotion, or attainment of the business, purposes, or activities of the Company.

Section 5.2 Agency Authority of Manager. The Manager is authorized to sign checks, contracts, and obligations on behalf of the Company.

Section 5.3 Limited Liability. Except as expressly set forth in this Agreement or required by law, no Manager shall be personally liable for any debt, obligation, or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Manager of the Company. This section shall not be construed to insulate a Manager from liability in the event its actions are intentional, willful, or fraudulent.

Section 5.4 Standards of Conduct; Modification of Duties. Notwithstanding any other provision of this Agreement or other applicable provision of law whenever in this Agreement or any other agreement contemplated hereby or otherwise, the Manager, in its capacity as the Manager of the Company, is permitted to or required to make a decision, the Manager shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no fiduciary duty or obligation other than the duties of good faith and fair dealing to give any consideration to any interest of or factors affecting the Company or the Members, and shall not be subject to any other or different standards imposed by this Agreement, any other agreement contemplated hereby, under the Michigan Act or under any other law, rule or regulation. Whenever in this Agreement or any other agreement contemplated hereby or otherwise the Manager is permitted to or required to make a decision in "good faith" then for purposes of this Agreement, the Manager, or any of their Affiliates that cause them to make any such decision, shall be conclusively presumed to be acting in good faith if such Person or Persons subjectively believe(s) that the decision made or not made is in the best interests of the Company.

5.4.1 Whenever the Manager makes a determination or takes or declines to take any other action, or any of their Affiliates causes them to do so, in their individual capacities as opposed to their capacities as the Manager of the Company, whether under this Agreement or any other agreement contemplated hereby or otherwise, then the Manager, or such Affiliates causing it to do so, are entitled, to the fullest extent permitted by law, to make such determination or to take or decline to take such other action free of any duty (including any fiduciary duty) or obligation (other than the duties of good faith and fair dealing to the Company) to any Member or any other Person bound by this Agreement, and the Manager, or such Affiliates causing them to do so, shall not, to the fullest extent permitted by law, be required to act pursuant to any other standard imposed by this Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity.

5.4.2 Except as expressly set forth in this Agreement, to the fullest extent permitted by law, the Manager shall not have any duties or liabilities other than the duties of good faith and fair dealing to the Company, any Member or any other Person bound by this Agreement or any creditor of the Company, and the provisions of this Agreement, to the extent that they restrict or otherwise modify or eliminate the duties and liabilities, including fiduciary duties, of the Manager otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Manager.

5.4.3 The Members expressly acknowledge that the Manager is under no obligation to consider the separate interests of the Members (including, without limitation, the tax consequences to Members) in deciding whether to cause the Company to take (or decline to take) any actions, and that the Manager shall not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by Members in connection with such decisions.

5.4.4 The Manager may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties hereto.

5.4.5 The Manager may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by them, and any act taken or omitted to be taken in reliance upon the advice or opinion of such Persons as to matters that the Manager reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion.

5.4.6 The Manager shall have the right, in respect of any of their powers or obligations hereunder, to act through any of their duly authorized officers or any duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the Manager in the power of attorney, have full power and authority to do and perform each and every act and duty that is permitted or required to be done by the Manager hereunder.

Section 5.5 Number and Qualifications of Manager. There shall be one (1) authorized Manager, however, subject to the provisions of the Act and any limitations in the Certificate of Formation, the authorized number of managers may be changed from time to time upon the affirmative vote of Class B Members holding not less than a majority of each of the Class B votes. The initial Manager is Benchmark Capital Management II, LLC. The Manager may, but need not, be a Member of the Company.

Section 5.6 Election and Removal of the Manager.

5.6.1 The Manager shall be elected by the vote of Members holding not less than a majority of the Class B Interests at any meeting of the Members, or by written consent of Members holding not less than a majority of the Class B Interests pursuant to Section 5.5 of this Agreement. Except as otherwise provided by the Act or the Certificate of Formation, each Manager, including a Manager elected to fill a vacancy, shall hold office until his or her death, Bankruptcy, mental incompetence, resignation, or removal.

5.6.2 Any Manager may be removed, with or without cause, by the votes of Members holding not less than a majority of the Class B Interests represented and voting at a duly held meeting of the Members at which a quorum is present (which Members voting affirmatively also constitute at least a majority of the required quorum), or by written consent of a majority of the Class B Interests pursuant to Section 4.10 of this Agreement.

5.6.3 Any Manager may be removed for Cause upon the vote of a majority of the Percentage Interests of the Class A Members. For purposes of removal of a Manager, “for Cause” shall mean any of the following:

(A)       Breach or default by a Manager of any material term or obligation under this Operating Agreement that is not waived in writing by a majority of each of the Class A and Class B Members or cured within ten (10) days of notice of the alleged breach or default;

(B)       The willful and continued failure of a Manager to substantially perform that party’s customary duties (other than due to such party’s death or incapacity due to physical or mental illness), the reckless disregard of the performance of such party’s duties, or the willful engaging by the Manager in gross misconduct, which is materially injurious to the Company, monetarily or otherwise;

(C)       The inability of a Manager (if an individual) to perform his duties hereunder by reason of illness, or physical or mental incapacity of any kind, for a period of more than sixty (60) days. If disputed by the Manager, the Manager shall submit to a medical examination by a qualified medical doctor selected by the Company to determine the Manager’s ability to perform his duties;

(D)       A felony conviction or conviction of any felony offense involving moral turpitude, whether as a result of a guilty plea, a plea of nolo contendere, a verdict of guilty; or

(E)       Making materially false, misleading, or inaccurate statements in connection with the rendering of services as a Manager that results in material financial damage to the Company.

5.6.4 The proposed removal of any Manager other than based upon Section 5.6.3 D shall first be subject to written notice setting forth the alleged basis for the removal. Upon receipt of written notice, the recipient Manager shall have up to thirty (30) days to cure the alleged basis for removal. Any dispute regarding whether the alleged basis has been cured shall be subject to the dispute resolution provisions of Section 19.8. For purposes of Section 5.6, “material” means having a dollar value in excess of Seventy-Five Thousand and 00/100 Dollars ($75,000.00).

Section 5.7 Manager. The name and address of the Manager, to hold office from and after the date of this Agreement until one or more successors are elected and qualified, is as set forth in Exhibit “3” attached hereto and incorporated herein by reference. Such Manager is appointed by the Class B Members signing this Operating Agreement.

Section 5.8 Manager May Engage in Other Activities. The Manager of the Company, either individually or with others, shall have the right to participate in other business ventures of every kind, whether or not such other business ventures compete with the Company. No Manager, acting in the capacity of a Manager, shall be obligated to offer to the Company, the Members, or to any other Manager any opportunity to participate in any such other business venture. Neither the Company nor any Member shall have any right to any income or profit derived from any such other business venture of a Manager.

Section 5.9 Transactions of Manager with the Company. The Manager may lend money to and transact other business with the Company. Subject to other applicable law, such Manager has the same rights and obligations with respect thereto as a Person who is not a Member or Manager.

Section 5.10 Compensation of Manager. As more particularly set forth in subsection 5.10.1 below, the Manager shall be entitled to receive compensation for an asset management fee.

5.10.1 Asset Management Fee. The Company shall pay to the Manager a monthly asset management fee equal to one percent (1.0%) of the then Gross Assets Under Management (the "Asset Management Fee"). For purposes of calculating the Management Fee, Gross Assets Under Management shall be measured as of the last Business Day of each month, and the Management Fee for that month shall be paid on the first Business Day of the subsequent month. After the second Fiscal Year after the Effective Date, the Manager may increase the Asset Management Fee up to one quarter of one percent (.25%) per Fiscal Year, up to a maximum Asset Management Fee of two percent (2%) of the then Gross Assets Under Management.

Section 5.11 Compensation to Affiliate. As more particularly set forth in subsection 5.11.1 through subsection 5.11.6 below, the Manager may use Affiliates to perform the following services and the Affiliates shall be entitled to receive compensation and reimbursements as follows.

5.11.1 Cost Sharing. The Company shall pay to Benchmark Capital Management, LLC a reasonable monthly amount for its utilization of the Benchmark Capital Management, LLC’s office, personnel and equipment, at the discretion of the Manager.

5.11.2 Commissions. The Manager, its affiliates or principals may receive reasonable commissions upon the Company’s purchase or sale of real property.

5.11.3 Organizational Fee. As compensation for the time and effort involved in organizing the Company, the Company shall pay to Benchmark Capital Management, LLC an organization fee in the amount of One Hundred Thousand Dollars ($100,000.00) (the "Organization Fee"). Benchmark Capital Management, LLC shall be paid the Organization Fee upon the Company accepting subscriptions for a total of Ten Thousand (10,000) Units.

5.11.4 Loan Servicing Fee. The Company shall pay to an Affiliate of the Manager, a monthly loan servicing fee ("Loan Servicing Fee") up to one percent (1.0%) per annum (i.e., one-twelfth of one percent per calendar month) of the then outstanding principal balance payable under Financing Receivables held by the Company and serviced by the Affiliate pursuant to its registration as a Mortgage Broker, Lender and Servicer with the State of Michigan under the Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act. The Loan Servicing Fee shall be payable to the Affiliate in the ordinary course consistent with industry standards. The Affiliate may impose a reasonable surcharge to the Loan Servicing Fee for loans in a state of default that require significant additional attention.

5.11.5       Property Management Fee. An affiliate of the Manager, may provide property management services for any real estate owned or managed by the Company ("Managed Real Estate"), in which event the Company shall pay the affiliate a monthly fee ("Property Management Fee") equal to the greater of six percent (6%) of the monthly gross rental payable under the terms of the applicable leases for such Managed Real Estate or market rate, provided, however, that the affiliate may be paid a greater amount if the same is reasonable and not in excess of the customary real estate property management fee which would be paid to an independent third party in connection with the management of such real estate. The Property Management Fee shall be payable in the ordinary course consistent with industry standards within the geographic community in which the Managed Real Estate is located.

5.11.6       Construction Management Fee. In the event the Manager or an affiliate of the Manager shall provide general contractor and/or construction management services for any Managed Real Estate, then the Company shall pay to the Manager or its affiliate a fee ("Construction Fee") equal to the greater of eight percent (8%) of the budgeted construction and improvements costs for each such construction project or market rate. The Manager shall provide the Company with a written budget for each such project with reasonable and customary itemization of costs. The Construction Fee shall be paid within thirty (30) days of the completion of the applicable construction project.

5.11.7       Reimbursements. The West Michigan Private Capital Fund I, LLC shall be reimbursed by the Company for all expenses, fees, or costs incurred on behalf of the Company, including, without limitation, organizational expenses, legal fees, filing fees, accounting fees, out of pocket costs of reporting to any governmental agencies, insurance premiums, travel, costs of evaluating investments and other costs and expenses for the formation of the Company.

Section 5.12 Insufficient Funds. In the Event there are insufficient Company Funds to pay the Manager any Management Fee then due, the Manager in its sole discretion may cause such Management Fee to be accrued and paid at such time(s) as the Company has sufficient funds or upon the liquidation of the Company. Any unpaid Management Fee shall be an accrued liability of the Company.

Section 5.13 Placement Fee. The Manager may, in its sole discretion, pay up to eight percent (8.0%) of Gross Proceeds to Financial Advisors (the “Placement Fee”). For purposes of this Section, a Financial Advisor is a licensed attorney in connection with his/her representation of an investing client, a licensed Investment Advisor under the Investment Advisor Act of 1940, as amended, or a licensed securities broker or agent holding licenses from FINRA and the Securities and Exchange Commission.

Section 5.14 Representative. For taxable years beginning after December 31, 2021 (or any earlier year, if the Manager, so elects), the Manager shall designate a Company representative (in such capacity, the “Company Representative”) to act under Section 6223 of the Code as amended by the Bipartisan Budget Act of 2015 (or any successor thereto) (the “2015 Act”) and in any similar capacity under state, local or non-U.S. law, as applicable. The Company Representative may be removed and replaced by the Manager at any time in its sole discretion. Notwithstanding anything else to the contrary in this Agreement, the Company Representative shall apply the provisions of subchapter C of Chapter 63 of the Code, as amended by the 2015 Act (or any successor rules thereto), or similar provisions of state, local or non-U.S. tax law, with respect to any audit, imputed underpayment, other adjustment, or any such decision or action by the Internal Revenue Service (or other tax authority) with respect to the Company or the Members for such taxable years, in the manner determined by the Company Representative with the approval of the Manager.

5.14.1       The Members shall have no claim against the Company or Company Representative for any form of damages or liability as a result of actions taken or remedies pursued by or on behalf of the Company in order to comply with the rules under subchapter C of Chapter 63 of the Code, as amended by the 2015 Act (or any successor rules thereto) or similar provisions of state, local or non-U.S. law.

5.14.2       The Company Representative shall keep the Members informed of any inquiries, audits, other proceedings, or tax deficiencies assessed or proposed to be assessed (of which the Company Representative is actually aware) by any taxing authority against the Company or the Members.

5.14.3       So long as the Company satisfies the provisions of Sections 6221(b)(1)(B) through (D) of the Code, the Company Representative, with the approval of the Manager, may cause the Company to make the election set forth in Section 6221(b)(1) of the Code so that the provisions of Subchapter C of Chapter 63 of the Code shall not apply to the Company. If such election is made the Company Representative shall provide the proper notice to each Member in accordance with Section 6221(b)(1)(E).

5.14.4       Provided the election described in Section 5.14.3 above is not in effect, in the case of any adjustment by the IRS in the amount of any item of income, gain, loss, deduction, or credit of the Company or any Member’s distributive share thereof (“IRS Adjustment”), the Company Representative shall respond to such IRS Adjustment in accordance with either Section 5.14.5 or Section 5.14.6.

5.14.5       In accordance with section 6225 of the Code as enacted under the 2015 Act, the Company Representative may cause the Company to pay an imputed underpayment as calculated under section 6225(b) of the Code with respect to the IRS Adjustment, including interest and penalties (“Imputed Tax Underpayment”) in the Adjustment Year. The Company Representative shall use commercially reasonable efforts to pursue available procedures to reduce any Imputed Tax Underpayment on account of any Member’s tax status. Each Member agrees to amend its U.S. federal income tax return(s) to include (or reduce) its allocable share of the Company’s income (or losses) resulting from an IRS Adjustment and pay any tax due with such return as required under Section 6225(c)(2) of the Code, even if an Imputed Tax Underpayment liability of the Company or IRS Adjustment occurs after the Member’s withdrawal from the Company. The Company Representative may elect at his/its sole discretion to follow and implement the Centralized Partnership Audit Regulations and thereby address any tax issues at the Company level.

5.14.6       Alternatively, the Company Representative may elect under section 6226 of the Code as implemented under the 2015 Act to cause the Company to issue adjusted Internal Revenue Service Schedules “K-1” (or such other form as applicable) reflecting a Member’s shares of any IRS Adjustment for the Adjustment Year.

5.14.7        Each Member does hereby agree to indemnify and hold harmless the Company, Manager, and Company Representative from and against any liability with respect to the Member’s proportionate share of any Imputed Tax Underpayment or other IRS Adjustment resulting in liability of the Company, regardless of whether such Member is a Member in the Company in an Adjustment Year, with such proportionate share as reasonably determined by the Manager, including the Manager’s reasonable discretion to consider each Member’s interest in the Company in the Reviewed Year and a Member’s timely provision of information necessary to reduce the amount of Imputed Tax Underpayment set forth in section 6225(c) of the Code. This obligation shall survive a Member’s ceasing to be a Member of the Company and/or the termination, dissolution, liquidation and winding up of the Company.

5.14.8 Each Member does hereby agree to indemnify and hold harmless the Company, the Manager and Company Representative from and against any liability with respect to the Member’s proportionate share of any item of income, gain, loss, deduction, or credit of the Company or any Member’s distributive share thereof reported on an adjusted Internal Revenue Service Schedule K-1 received by the Company with respect to any entity in which the Company holds an ownership interest and which results in liability of the Company, regardless of whether such Member is a Member in the Company in an Adjustment Year, with such proportionate share as reasonably determined by the Manager, including the Manager’ reasonable discretion to consider each Member’s interest in the Company in the Reviewed Year and a Member’s timely provision of information necessary to reduce the amount of Imputed Tax Underpayment set forth in section 6225(c) of the Code. This obligation shall survive a Member’s ceasing to be a Member of the Company and/or the termination, dissolution, liquidation and winding up of the Company.

5.14.9       “Adjustment Year” means: (1) in the case of an adjustment pursuant to the decision of a court, the Company’s taxable year in which the decision becomes final; (2) in the case of an administrative adjustment request, the Company’s taxable year in which the administrative adjustment is made; or (3) in any other case, the Company’s taxable year in which the notice of final Company adjustment is mailed.

ARTICLE 6

MEETINGS OF MANAGER

Section 6.1 Place of Meetings. Meetings of the Manager shall be held at any place within or without the State of Michigan that has been designated from time to time by the Manager.

Section 6.2 Action by Manager Without a Meeting. Any action required or permitted to be taken by the Manager may be taken without a meeting by the Manager.

ARTICLE 7

OFFICERS

Section 7.1 General. Subject to the provisions of the Act and the Certificate of Formation, the Manager may determine from time to time to appoint one or more individuals as officers of the Company. Every officer must be at least 18 years of age. An officer need not be a Member or Manager of the Company, and any number of offices may be held by the same person. The Manager shall determine the nature and extent of the duties to be performed by any officer, which shall be reduced to writing. Officers may include a President, a Secretary, a Treasurer, one or more Vice-presidents and such other officers as may be designated from time to time by the Manager.

Section 7.2 Appointment and Removal. The officers shall be appointed by the Manager. Each officer, including an officer elected to fill a vacancy, shall hold office at the pleasure of the Manager until his or her successor is elected, except as otherwise provided by the Act. Any officer may be removed, with or without cause by the Manager.

ARTICLE 8

CAPITAL CONTRIBUTIONS

Section 8.1 Initial Capital Contributions.

8.1.1 Each Member shall make or has made the Capital Contribution to the Company in cash as set forth in Exhibit “1”. The Manager shall have the discretion as to the date at which the subscriptions for classes of Interests shall be closed.

8.1.2 Upon the date of admission of a new Member in accordance with Section 11.2, each new Member shall make a Capital Contribution to the Company in such amount and in such form as the Manager shall accept.

8.1.3 Upon receipt of each such Capital Contribution the Company shall credit each Member's Capital Account with the amount of such Member's Capital Contribution as shown in Exhibit “1”, as amended from time to time.

Section 8.2 Additional Capital Contributions.

8.2.1 No Class A Member shall be obligated to contribute additional capital to the Company. No Class A Member shall be permitted or authorized to make any additional Capital Contributions without the prior approval of the Manager. Additional Capital Contributions may be necessary to accomplish the purposes and objectives of the Company. Additional Capital Contributions may be made by the Class A Members when determined necessary, from time to time, in the amounts and representing such Percentage Interest and within the time determined by the approval of the Manager. Such additional Capital Contributions shall be payable in proportion to each Class A Member’s Percentage Interest. If the then current Class A Members are unable or unwilling to meet the demand for Additional Capital Contributions, the Class A Members acknowledge that new Members may be added at the time additional capital is required on terms no more favorable than was offered to the existing Class A Members. The Class A Members acknowledge that their Membership Interests may change (including being diluted) from time to time as a result of adding new Members to obtain Additional Capital Contributions. In the event that one or more Class A Members is unable or unwilling to contribute Additional Capital, then the Manager(s) may amend this Agreement to admit new Members on terms no more favorable than was offered to the existing Members. However, this Section is not for the benefit of any creditors of the Company. No creditor of the Company may obtain any right under this paragraph to make any claim that a Class A Member is obligated to contribute capital to the Company for the purpose of satisfying the Company’s creditors.

8.2.2 Such Class A Member or Members making Additional Capital Contributions shall receive a Capital Account credit for each such additional Capital Contribution at the time and in the amount that such contribution is made and the related Percentage Interests, and Exhibits “1” and “2” shall be adjusted accordingly as to the capital contributed and the related Percentage Interests for all Members.

Section 8.3 Withdrawal or Reduction of Capital Contributions.

8.3.1 Except as expressly provided in this Agreement, no Member shall have the right to withdraw from the Company all or any part of his or its Capital Contribution prior to the dissolution and winding up of the Company.

8.3.2 Without limiting the generality of Subsection 8.3.1, no Member shall receive any part of his or its Capital Contribution upon the dissolution of the Company until:

(A)       all liabilities of the Company, except liabilities to Members on account of their Capital Contributions, have been paid or there remains property of the Company sufficient to pay them; or

(B)       the Certificate of Formation or this Agreement is canceled or so amended as to permit the withdrawal or reduction of Capital Contributions by Members.

8.3.3 A Member, irrespective of the nature of his or its Capital Contribution, shall only have the right to demand and receive cash in return for his or its Capital Contribution.

Section 8.4 No Interest Payable on Capital Contributions. No interest shall be payable on or with respect to the Capital Contributions or Capital Accounts of Members.

Section 8.5 Capital Accounts.

8.5.1 A single Capital Account shall be maintained for each Member (regardless of the class of Interests owned by such Member and regardless of the time or manner in which such Interests were acquired) in accordance with the capital accounting rules of Section 704(b) of the Code, and the regulations thereunder (including without limitation Section 1.704-1(b)(2)(iv) of the Income Tax Regulations). In general, under such rules, a Member's Capital Account shall be:

(A)       increased by (i) the amount of money contributed by the Member to the Company (including the amount of any Company liabilities that are assumed by such Member other than in connection with distribution of Company property), (ii) the fair market value of property contributed by the Member to the Company (net of liabilities secured by such contributed property that under Section 752 of the Code the Company is considered to assume or take subject to), and (iii) allocations to the Member of Company income and gain (or item thereof), including income and gain exempt from tax; and

(B)       decreased by (i) the amount of money distributed to the Member by the Company (including the amount of such Member's individual liabilities that are assumed by the Company other than in connection with contribution of property to the Company), (ii) the fair market value of property distributed to the Member by the Company (net of liabilities secured by such distributed property that under Section 752 of the Code such Member is considered to assume or take subject to), (iii) allocations to the Member of expenditures of the Company not deductible in computing its taxable income and not properly chargeable to capital account, and (iv) allocations to the Member of Company loss and deduction (or item thereof).

8.5.2 Where Section 704(c) of the Code applies to Company property or where Company property is revalued pursuant to paragraph (b)(2)(iv)(t) of Section 1.704-1 of the Income Tax Regulations, each Member's Capital Account shall be adjusted in accordance with paragraph (b)(2)(iv)(g) of Section 1.704-1 of the Income Tax Regulations as to allocations to the Members of depreciation, depletion, amortization and gain or loss, as computed for book purposes with respect to such property.

8.5.3 When Company property is distributed in kind (whether in connection with liquidation and dissolution or otherwise), the Capital Accounts of the Members shall first be adjusted to reflect the manner in which the unrealized income, gain, loss and deduction inherent in such property (that has not been reflected in the Capital Account previously) would be allocated among the Members if there were a taxable disposition of such property for the fair market value of such property (taking into account Section 7701(g) of the Code) on the date of distribution.

8.5.4 The Members shall direct the Company's accountants to make all necessary adjustments in each Member's Capital Account as required by the capital accounting rules of Section 704(b) of the Code and the regulations thereunder.

ARTICLE 9

ALLOCATION OF PROFITS AND LOSSES; TAX AND ACCOUNTING MATTERS

Section 9.1 Allocations. Each Member's distributive share of income, gain, loss, deduction, or credit (or items thereof) of the Company as shown on the annual federal income tax return prepared by the Company's accountants or as finally determined by the United States Internal Revenue Service or the courts, and as modified by the capital accounting rules of Section 704(b) of the Code and the Income Tax Regulations thereunder, as implemented by Section 8.5 hereof, as applicable, shall be determined as follows:

9.1.1 Allocations. Except as otherwise provided in this Section 9.1:

(A)       items of income, gain, loss, deduction or credit (or items thereof) shall be allocated among the Members in proportion to their Percentage Interests as set forth in Exhibit “2”, if any, except that items of loss or deduction allocated to any Member pursuant to this Section 9.1 with respect to any taxable year shall not exceed the maximum amount of such items that can be so allocated without causing such Member to have a deficit balance in his or its Capital Account at the end of such year, computed in accordance with the rules of paragraph (b)(2)(ii)( d) of Section 1.704-1 of the Income Tax Regulations. Any such items of loss or deduction in excess of the limitation set forth in the preceding sentence shall be allocated as follows and in the following order of priority:

(1)       first, to those Members who would not be subject to such limitation, in proportion to their Percentage Interests; and

(2)       second, any remaining amount to the Members in the manner required by the Code and Income Tax Regulations.

Subject to the provisions of Subsection 9.1.2 through Subsection 9.1.11, inclusive, of this Agreement, the items specified in this Section 9.1 shall be allocated to the Members as necessary to eliminate any deficit Capital Account balances.

9.1.2 Allocations With Respect to Property. Solely for tax purposes, in determining each Member's allocable share of the taxable income or loss of the Company, depreciation, depletion, amortization and gain or loss with respect to any contributed property, or with respect to revalued property where the Company's property is revalued pursuant to paragraph (b)(2)(iv)(f) of Section 1.704-1 of the Income Tax Regulations, shall be allocated to the Members in the manner (as to revaluations, in the same manner as) provided in Section 704(c) of the Code. The allocation shall take into account, to the full extent required or permitted by the Code, the difference between the adjusted basis of the property to the Member contributing it (or, with respect to property which has been revalued, the adjusted basis of the property to the Company) and the fair market value of the property determined by the Members at the time of its contribution or revaluation, as the case may be.

9.1.3 Minimum Gain Chargeback. Notwithstanding anything to the contrary in this Section 9.1, if there is a net decrease in Company Minimum Gain or Company Nonrecourse Debt Minimum Gain (as such terms are defined in Sections 1.704-2(b) and 1.704-2(i)(2) of the Income Tax Regulations, but substituting the term "Company" for the term "Partnership" as the context requires) during a Company taxable year, then each Member shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in the manner provided in Section 1.704-2 of the Income Tax Regulations. This provision is intended to be a "minimum gain chargeback" within the meaning of Sections 1.704-2(f) and 1.704-2(i)(4) of the Income Tax Regulations and shall be interpreted and implemented as therein provided.

9.1.4 Qualified Income Offset. Subject to the provisions of Subsection 9.1.3, but otherwise notwithstanding anything to the contrary in this Section 9.1, if any Member's Capital Account has a deficit balance in excess of such Member's obligation to restore his or its Capital Account balance, computed in accordance with the rules of paragraph (b)(2)(ii)(d) of Section 1.704-1 of the Income Tax Regulations, then sufficient amounts of income and gain (consisting of a pro rata portion of each item of Company income, including gross income, and gain for such year) shall be allocated to such Member in an amount and manner sufficient to eliminate such deficit as quickly as possible. This provision is intended to be a "qualified income offset" within the meaning of Section 1.704-1(b)(2)(ii)(d) of the Income Tax Regulations and shall be interpreted and implemented as therein provided.

9.1.5 Depreciation Recapture. Subject to the provisions of Section 704(c) of the Code and Subsection 9.1.2, Subsection 9.1.3, and Subsection 9.1.4, inclusive, of this Agreement, gain recognized (or deemed recognized under the provisions hereof) upon the sale or other disposition of Company property, which is subject to depreciation recapture, shall be allocated to the Member who was entitled to deduct such depreciation.

9.1.6 Loans. If and to the extent any Member is deemed to recognize income as a result of any loans pursuant to the rules of Sections 1272, 1273, 1274, 7872 or 482 of the Code, or any similar provision now or hereafter in effect, any corresponding resulting deduction of the Company shall be allocated to the Member who is charged with the income. Subject to the provisions of Section 704(c) of the Code and Subsection 9.1.2, Subsection 9.1.3, and Subsection 9.1.4, inclusive, of this Agreement, if and to the extent the Company is deemed to recognize income as a result of any loans pursuant to the rules of Sections 1272, 1273, 1274, 7872 or 482 of the Code, or any similar provision now or hereafter in effect, such income shall be allocated to the Member who is entitled to any corresponding resulting deduction.

9.1.7 Tax Credits. Tax credits shall generally be allocated according to Section 1.704-1(b)(4)(ii) of the Income Tax Regulations or as otherwise provided by law. Investment tax credits with respect to any property shall be allocated to the Members pro rata in accordance with the manner in which Company profits are allocated to the Members under Subsection 9.1.1 hereof, as of the time such property is placed in service. Recapture of any investment tax credit required by Section 47 of the Code shall be allocated to the Members in the same proportion in which such investment tax credit was allocated.

9.1.8 Change of Pro Rata Interests. Except as provided in Subsection 9.1.6 and Subsection 9.1.7 hereof or as otherwise required by law, if the proportionate interests of the Members of the Company are changed during any taxable year, all items to be allocated to the Members for such entire taxable year shall be prorated on the basis of the portion of such taxable year which precedes each such change and the portion of such taxable year on and after each such change according to the number of days in each such portion, and the items so allocated for each such portion shall be allocated to the Members in the manner in which such items are allocated as provided in section 9.1.1 during each such portion of the taxable year in question.

9.1.9 Effect of Special Allocations on Subsequent Allocations. Any special allocation of income or gain pursuant to Subsection 9.1.3 or Subsection 9.1.4 hereof shall be taken into account in computing subsequent allocations of income and gain pursuant to this Section 9.1 so that the net amount of all such allocations to each Member 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 this Section 9.1 if such special allocations of income or gain under Subsection 9.1.3 or Subsection 9.1.4 hereof had not occurred.

9.1.10 Nonrecourse and Recourse Debt. Items of deduction and loss attributable to Member nonrecourse debt within the meaning of Section 1.7042(b)(4) of the Income Tax Regulations shall be allocated to the Members bearing the economic risk of loss with respect to such debt in accordance with Section 1704-2(i)(l) of the Income Tax Regulations. Items of deduction and loss attributable to recourse liabilities of the Company, within the meaning of Section 1.752-2 of the Income Tax Regulations, shall be allocated among the Members in accordance with the ratio in which the Members share the economic risk of loss for such liabilities.

9.1.11 State and Local Items. Items of income, gain, loss, deduction, credit and tax preference for state and local income tax purposes shall be allocated to and among the Members in a manner consistent with the allocation of such items for federal income tax purposes in accordance with the foregoing provisions of this Section 9.1.

Section 9.2 Accounting Matters. The Manager shall cause to maintain complete books and records accurately reflecting the accounts, business and transactions of the Company on a calendar-year basis and using such cash, accrual, or hybrid method of accounting as in the judgment of the Manager, as the case may be, is most appropriate; provided, however, that books and records with respect to the Company's Capital Accounts and allocations of income, gain, loss, deduction or credit (or item thereof) shall be kept under U.S. federal income tax accounting principles as applied to partnerships.

Section 9.3 Tax Status and Returns.

9.3.1 Any provision hereof to the contrary notwithstanding, solely for United States federal income tax purposes, each of the Members hereby recognizes that the Company may be subject to the provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, the filing of U.S. Partnership Returns of Income shall not be construed to extend the purposes of the Company or expand the obligations or liabilities of the Members.

9.3.2 The Manager shall prepare or cause to be prepared all tax returns and statements, if any, that must be filed on behalf of the Company with any taxing authority and shall make timely filing thereof. The Manager shall exercise commercially reasonable efforts, to prepare or cause to be prepared and delivered to each Member within ninety (90) days after the end of each calendar year a report setting forth in reasonable detail the information with respect to the Company during such calendar year reasonably required to enable each Member to prepare his or its federal, state, and local income tax returns in accordance with applicable law then prevailing. Nonetheless, neither the Manager nor the Company shall be liable to any Member for failing to complete and deliver such tax information within said ninety (90) days and each Member acknowledges that they may have to file for an extension of time to file their personal tax returns.

ARTICLE 10

DISTRIBUTIONS

Section 10.1 Distributions of Distributable Cash. Distributions of Distributable Cash, if any, shall be distributed quarterly, within forty-five (45) days after the end of each calendar quarter. All distributions of Distributable Cash, if any, shall be distributed as follows: (i) eighty-five percent (85%) to the Class A Interests issued and outstanding, pro rata, and the balance to the Class B Members, pro rata. Notwithstanding the foregoing, the Manager at its discretion may delay or defer any distributions.

Section 10.2 Form of Distributions.

10.2.1 No Member, regardless of the nature of the Member's Capital Contribution, has any right to demand and receive any distribution from the Company in any form other than money in the form of US currency. No Member may be compelled to accept from the Company a distribution of any asset in kind.

10.2.2 Without limiting the generality of Subsection 10.2.1, the Manager may, with the consent of the Member receiving the distribution and other Members holding not less than a majority of the Percentage Interests of all classes voting together as single class, distribute specific property or assets of the Company to one or more Members.

Section 10.3 Restriction on Distributions.

10.3.1 No distribution shall be made if, after giving effect to the distribution:

(A)       The Company would not be able to pay its debts as they become due in the usual course of business; or

(B)       The Company's total assets would be less than the sum of its total liabilities plus, unless this Agreement provides otherwise, the amount that would be needed, if the Company were to be dissolved at the time of the distribution, to satisfy the preferential rights of other Members, if any, upon dissolution that are superior to the rights of the Member receiving the distribution.

10.3.2 The Manager may base a determination that a distribution is not prohibited on any of the following:

(A)       financial statements prepared on the basis of GAAP accounting practices and principles;

(B)       A fair valuation; or

(C)       Any other method that is reasonable in the circumstances.

The effect of a distribution is to be measured as of the date the distribution is authorized if the payment is to occur within one hundred twenty (120) days after the date of authorization, or the date payment is made if it is to occur more than one hundred twenty (120) days after the date of authorization.

Section 10.4 Return of Distributions. Members and Assignees who receive distributions made in violation of the Act or this Agreement shall return such distributions to the Company. Except for those distributions made in violation of the Act or this Agreement, no Member or Assignee shall be obligated to return any distribution to the Company or pay the amount of any distribution for the account of the Company or to any creditor of the Company. The amount of any distribution returned to the Company by a Member or Assignee or paid by a Member or Assignee for the account of the Company or to a creditor of the Company shall be added to the account or accounts from which it was subtracted when it was distributed to the Member or Assignee.

Section 10.5 Withholding from Distributions. To the extent that the Company is required by law to withhold or to make tax or other payments on behalf of or with respect to any Member, the Company may withhold such amounts from any distribution and make such payments as so required. For purposes of this Agreement, any such payments or withholdings shall be treated as a distribution to the Member on behalf of whom the withholding or payment was made.

Section 10.6 754 Election. In the event of a distribution of property to a Member, the death of an individual Member or a transfer of any interest in the Company permitted under the Act or this Agreement, the Company may, in the discretion of the Manager upon the written request of the transferor or transferee, file a timely election under Section 754 of the Code and the Income Tax Regulations thereunder to adjust the basis of the Company's assets under Section 734(b) or 743(b) of the Code and a corresponding election under the applicable provisions of state and local law, and the person making such request shall pay all costs incurred by the Company in connection therewith, including reasonable attorneys' and accountants' fees.

ARTICLE 11

TRANSFER OF INTERESTS; ADMISSION OF MEMBERS

Section 11.1 Transfer of Interests. Interests may be transferred, sold, conveyed, or assigned by Members after nine (9) months from the date of purchase, provided that any such transfer, sale or assignment is in compliance with all applicable federal and state laws and regulations. The Company may require an opinion of legal counsel satisfactory to the Company in connection with any transfer, sale, or assignment.

Section 11.2 Admission of New Members.

11.2.1 No Person shall be admitted as a Member of the Company by assignment or sale of a Member’s Interest to a person not already a Member unless the Manager shall have voted to approve the admission of such Person as a new Member.

11.2.2 No person shall be admitted to the Company as a new Member contributing new capital without the approval of the Manager and in compliance with Section 8.2.1. The new Member shall pay in his or its Capital Contribution in accordance with Subsection 8.1.2, the Company shall establish a Capital Account which shall be credited with the Capital Contribution of the new Member, and Exhibits “1” and “2” shall be adjusted to reflect the new Percentage Interests and Capital Accounts of the Members.

ARTICLE 12

ACCOUNTING, RECORDS, REPORTING TO AND BY MEMBERS

Section 12.1 Books and Records. The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in accordance with the generally accepted accounting principles as established by the Financial Accounting Standards Board from time to time (GAAP). The books and records of the Company shall reflect all the Company's transactions and shall be appropriate and adequate for the Company's business. The Company shall maintain at its principal office all of the following:

12.1.1 A current list of the full name and last known business or residence address of each Member and Assignee set forth in alphabetical order, together with the Capital Contributions, Capital Accounts, and Percentage Interests of each Member or Assignee;

12.1.2 A current list of the full name and business or residence address of the Manager;

12.1.3 A copy of the Certificate of Formation and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which the Certificate of Formation or any amendments thereto have been executed;

12.1.4 Copies of the Company's U.S. federal, state and local income tax or information returns and reports, if any, and any tax returns or reports filed by or on behalf of the Company in any other jurisdiction, for the six (6) most recent taxable years;

12.1.5 A copy of this Agreement and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto have been executed;

12.1.6 Copies of the financial statements of the Company, if any, for the six (6) most recent fiscal years;

12.1.7 Copies of all Company contracts; and

12.1.8 The accounting records of the company, including, without limitation, checks, cancelled checks, bank statements, ledgers, invoices, and similar records.

Section 12.2 Delivery to Members and Inspection.

12.2.1 Upon the request of any Member for purposes reasonably related to the interest of that Person as a Member, the Manager shall promptly deliver to the requesting Member, at the expense of the Member, a copy of the information required to be maintained under Subsection 12.1.1, Subsection 12.1.2 and Subsection 12.1.4, and a copy of this Agreement.

12.2.2 Each Member and Manager has the right, upon reasonable request for purposes reasonably related to the interest of the Person as Member or Manager, to:

(A)       inspect and copy during normal business hours any of the Company records described in Subsection 12.1.1 through Subsection 12.1.8, inclusive, of this Agreement; and

(B)       obtain from the Manager, promptly after their becoming available, a copy of the Company's U.S. federal, state and local income tax or information returns and reports and any tax returns and reports filed in any other jurisdiction for each fiscal year of the Company.

12.2.3 The Manager shall be responsible for the preparation of financial reports of the Company and for the coordination of financial matters of the Company with the Company's accountants. Annual compiled financial statements shall be prepared that include a statement showing any item of income, gain, deduction, credit, or loss allocable for U.S. federal income tax purposes pursuant to the terms of this Agreement.

12.2.4 Any inspection or copying by a Member under this Section 12.2 may be made by that Person or that Person's agent or attorney.

Section 12.3 Filings. The Manager, at the Company’s expense, shall cause the income tax returns for the Company to be prepared and timely filed with the appropriate authorities. The Manager, at Company expense, shall also cause to be prepared and timely filed, with appropriate federal and state regulatory and administrative bodies, amendments to or restatements of the Certificate of Formation and all reports required to be filed by the Company with those entities under the Act or other then current applicable laws, rules, and regulations.

Section 12.4 Bank Accounts. The Manager shall maintain the funds of the Company in one or more separate bank accounts in the name of the Company and shall not permit the funds of the Company to be commingled in any fashion with the funds of any other Person. In the event the Company is unable to obtain bank accounts, the funds of the Company may be held as determined by the Manager.

Section 12.5 Accounting Decisions and Reliance on Others. All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Manager. The Manager may rely upon the advice of the Company’s accountants as to whether such decisions are in accordance with accounting methods followed for U.S. federal income tax purposes or for purposes of any other jurisdiction in which the Company does business or is required to file tax returns or reports under applicable law.

ARTICLE 13

DISSOLUTION AND LIQUIDATION

Section 13.1 Dissolution. Subject to the provisions of the Act or the Certificate of Formation, the Company shall be dissolved and its affairs wound up upon the first to occur of the following:

13.1.1 At the time specified in the Certificate of Formation, or upon the expiration of the term specified in Section 2.3 of this Agreement; or

13.1.2 The written consent of Members holding a majority of the Percentage Interests of all classes voting together as a single class; or

13.1.3 Upon the sale of substantially all of the assets of the Company.

Section 13.2 Liquidation.

13.2.1 Upon the occurrence of any of the events of dissolution as set forth in Section 13.1 of this Agreement, the Company shall cease to engage in any further business, except to the extent necessary to perform existing obligations, and shall wind up its affairs and liquidate its assets. The Manager or Liquidating Trustee appointed by the Manager, or if there be no Manager then in office by the Members (by a vote of Members holding not less than a majority of the Percentage Interests of all classes voting together as a single class), shall appoint a Liquidating Trustee (who may, but need not, be a Member) who shall have sole authority and control over the winding up and liquidation of the Company's business and affairs and shall diligently pursue the winding up and liquidation of the Company in accordance with the Act. As soon as practicable after his or her appointment, the Liquidating Trustee shall cause to be filed a statement of intent to dissolve as required by the Act.

13.2.2 During the course of liquidation, the Members shall continue to share profits and losses as provided in Section 10.1 of this Agreement, but the Manager shall have sole discretion with respect to cash distributions to the Members until the Distribution Date (as defined in Section 13.3).

Section 13.3 Liabilities. Liquidation shall continue until the Company's affairs are in such condition that there can be a final accounting, showing that all fixed or liquidated obligations and liabilities of the Company are satisfied or can be adequately provided for under this Agreement. The assumption or guarantee in good faith by one or more financially responsible Persons shall be deemed to be an adequate means of providing for such obligations and liabilities. When the Manager or Liquidating Trustee has determined that there can be a final accounting, the Manager or Liquidating Trustee shall establish a date (not to be later than the end of the taxable year of the liquidation, i.e., the time at which the Company ceases to be a going concern as provided in Section 1.704-1(b)(2)(ii)(g) of the Income Tax Regulations, or, if later, ninety (90) days after the date of such liquidation) for the distribution of the proceeds of liquidation of the Company (the "Distribution Date"). The net proceeds of liquidation of the Company shall be distributed to the Members as provided in Section 13.5 hereof not later than the Distribution Date.

Section 13.4 Dissolution and Termination. Upon dissolution and termination, the Manager or Liquidating Trustee, as the case may be, shall wind up the affairs of the Company, shall sell all the Company assets as promptly as consistent with obtaining, insofar as possible, the fair value thereof after paying all liabilities, including all costs of dissolution. The proceeds from the liquidation of the assets of the Company and collection of the receivables of the Company, together with the assets distributed in kind, to the extent sufficient therefore, shall be applied and distributed in the following descending order of priority:

13.4.1 to the payment and discharge of all of the Company's debts and liabilities and the expenses of the Company including liquidation expenses;

13.4.2 to the creation of any reserves which the Manager and Liquidating Trustee deems necessary for any contingent or unforeseen liabilities or obligations of the Company;

13.4.3 to the payment and discharge of all of the Company's debts and liabilities owing to Members, but if the amount available for payment is insufficient, then pro rata in proportion to the amount of the Company debts and liabilities owing to each Member;

13.4.4 to all the Members in the proportion of their respective positive Capital Accounts, as those accounts are determined after all adjustments to such accounts for the taxable year of the Company during which the liquidation occurs as are required by this Agreement and Income Tax Regulations § 1.704-I(b), such adjustments to be made within the time specified in such Income Tax Regulations; and

13.4.5 to the Members in proportion to their Percentage Interests as set forth in Exhibit “2”.

Section 13.5 Certificate of Cancellation. Upon dissolution and liquidation of the Company, the Manager or Liquidating Trustee as the case may be, shall cause to be executed and filed with the Secretary of State of the State of Delaware, a certificate of cancellation in accordance with the Act.

ARTICLE 14

INDEMNIFICATION

Section 14.1 Indemnification: Proceeding Other than by Company. The Company may, but is not obligated to, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the Company, by reason of the fact that he or she is or was a Manager, Member, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Manager, Member, shareholder, director, officer, partner, trustee, employee or agent of any other Person, joint venture, trust or other enterprise, against expenses, including reasonable attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding if he or she acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company, and that, with respect to any criminal action or proceeding, he or she had reasonable cause to believe that his or her conduct was unlawful.

Section 14.2 Indemnification: Proceeding by Company. The Company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he or she is or was a Manager, Member, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Manager, Member, shareholder, director, officer, partner, trustee, employee or agent of any other Person, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him or her in connection with the defense or settlement of the action or suit if he or she acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the Company, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

Section 14.3 Mandatory Indemnification. To the extent that a Manager, Member, officer, employee, or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 14.1 and Section 14.2, or in defense of any claim, issue, or matter therein, he or she must be indemnified by the Company against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection with the defense.

Section 14.4 Authorization of Indemnification. Any indemnification under Sections 14.1 and Section 14.2, unless ordered by a court or advanced pursuant to Section 14.5, may be made by the Company only as authorized in the specific case upon a determination that indemnification of the Manager, Member, officer, employee, or agent is proper in the circumstances. The determination must be made by a majority of the Class B Members if the person seeking indemnity is not a Class B Member or by independent legal counsel selected by the Manager in a written opinion.

Section 14.5 Mandatory Advancement of Expenses. The expenses of the Manager, Members, and officers incurred in defending a civil or criminal action, suit or proceeding must be paid by the Company as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the Manager, Member or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Company. The provisions of this Section 14.5 do not affect any rights to advancement of expenses to which personnel of the Company other than the Manager, Members, or officers may be entitled under any contract or otherwise.

Section 14.6 Effect and Continuation. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to Section 14.1 through Section 14.5, inclusive:

14.6.1 Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the Certificate of Formation or any limited liability company agreement, vote of Members or disinterested Manager, if any, or otherwise, for either an action in his or her official capacity or an action in another capacity while holding his or her office, except that indemnification, unless ordered by a court pursuant to Section 14.2 or for the advancement of expenses made pursuant to Section 14.5, may not be made to or on behalf of any Member, Manager or officer if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, breach of fiduciary duty, fraud or a knowing violation of the law and was material to the cause of action.

14.6.2 Continues for a person who has ceased to be a Member, Manager, officer, employee, or agent and inures to the benefit of his or her heirs, executors and administrators.

Section 14.7 Notice of Indemnification and Advancement. Any indemnification of, or advancement of expenses to, a Manager, Member, officer, employee, or agent of the Company in accordance with this Article 14, if arising out of a proceeding by or on behalf of the Company, shall be reported promptly in writing to the Members.

Section 14.8 Repeal or Modification. Any repeal or modification of this Article 14 by the Members of the Company shall not adversely affect any right of a Manager, Member, officer, employee, or agent of the Company existing hereunder at the time of such repeal or modification.

ARTICLE 15

SEAL

Section 15.1 Seal. The Manager or, if no Manager shall have been elected, the Members may adopt a seal of the Company in such form as the Manager or the Members, as the case may be, shall decide.

ARTICLE 16

INVESTMENT REPRESENTATIONS

Each Member, by his or its execution of this Agreement, hereby represents and warrants:

Section 16.1 Experience. By reason of his or its business or financial experience, or by reason of the business or financial experience of his or its financial advisor who is unaffiliated with and who is not compensated, directly or indirectly, by the Company or any affiliate or selling agent of the Company, such Member is capable of evaluating the risks and merits of an investment in the Company and of protecting his or its own interests in connection with this investment.

Section 16.2 Investment Intent. Such Member is acquiring the Interest for investment purposes for his or its own account only and not with a view to or for sale in connection with any distribution of all or any part of the Interest.

Section 16.3 Economic Risk. Such Member is financially able to bear the economic risk of his or its investment in the Company, including the total loss thereof.

Section 16.4 No Obligation to Register. Such Member acknowledges and agrees that the Company and the Manager are under no obligation to register or qualify the Interests under the Securities Exchange Act of 1933, as amended or under any state securities law or under the laws of any other jurisdiction, or to assist such Member in complying with any exemption from registration and qualification.

Section 16.5 No Disposition in Violation of Law. Without limiting the representations set forth above, and without limiting Article 11 of this Agreement, such Member will not make any disposition of all or any part of the Interests which will result in the violation by such Member or by the Company of the Securities Act or any other applicable securities laws. Without limiting the foregoing, each Member agrees not to make any disposition of all or any part of the Interests unless and until:

16.5.1 there is then in effect a registration statement under the Securities 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

16.5.2 such Member has notified the Company of the proposed disposition and has furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Manager, such Member has furnished the Company with a written opinion of legal counsel, reasonably satisfactory to the Company, that such disposition will not require registration of any securities under the Securities Act or the consent of or a permit from appropriate authorities under any applicable state securities law or under the laws of any other jurisdiction.

Section 16.6 Financial Estimate and Projections. That he or it understands that all projections and financial or other materials which he/it may have been furnished are not based on historical operating results, because no reliable results exist, and are based only upon estimates and assumptions which are subject to future conditions and events which are unpredictable, and which may not be relied upon in making an investment decision.

ARTICLE 17

COMPANY LOANS AND GUARANTEES

Section 17.1 General. The provisions contained in this Article 17 set forth the terms and conditions by which the Company may make a loan or guarantee to or for the benefit of any Manager or officer of the Company.

Section 17.2 Members' Approval Required. The Company shall not make any loan of money or property to, or guarantee the obligation of, any Manager of the Company for any purpose not directly related to the business of the Company unless it is approved by a majority vote of by class of the Class A and Class B Members.

Section 17.3 Loans Generally Not to be Secured upon Interests in the Company. The Company shall not make any loan of money or property to, or guarantee the obligation of, any person upon the security of Interests in the Company, unless the loan or guarantee is (i) otherwise adequately secured, or (ii) approved by Members holding not less than fifty percent in interest of each class of Members.

Section 17.4 Advances for Expenses of Manager and Officers. Notwithstanding anything to the contrary contained in Section 17 hereof, the Company may advance money to any Manager or officer of the Company for any expenses reasonably anticipated to be incurred in the performance of the duties of such Manager or officer, provided that in the absence of such advance such Manager or officer would be entitled to be reimbursed for such expenses by this Company or any subsidiary of this Company.

ARTICLE 18

DEFAULTS AND REMEDIES

Section 18.1 Defaults. If a Member materially defaults in the performance of his or its obligations under this Agreement, and (a) such default is not cured within ten (10) days after written notice of such default is given by a Manager or any of the other Members to the defaulting Member for a default that can be cured by the payment of money, or (b) within thirty (30) days after written notice of such default is given by a Manager or any of the other Members to the defaulting Member for any other default, then the non-defaulting Members shall have the rights and remedies described in Section 18.2 hereunder in respect of the default.

Section 18.2 Remedies. If a Member fails to perform his or its obligations under this Agreement, the Company and such other Member shall have the right, in addition to all other rights and remedies provided herein, on behalf of himself or itself, the Company or the Members, to bring the matter to arbitration pursuant to Section 19.10. The award of the arbitrator in such a proceeding may include an order for specific performance by the defaulting Member of his or its obligations under this Agreement, an award for damages for payment of sums due to the Company or to a Member, and/or may result in the defaulting Member’s expulsion. Upon expulsion, a Member shall no longer have any ongoing rights, but shall be entitled to pro rata allocation and distribution of profits, if any, for the year of expulsion.

ARTICLE 19

MISCELLANEOUS

Section 19.1 Entire Agreement. This Agreement, and the Exhibits hereto, constitute the entire agreement among the Members with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, representations, and understandings of the parties. No party hereto shall be liable or bound to the other in any manner by any warranties, representations, or covenants with respect to the subject matter hereof except as specifically set forth herein.

Section 19.2 Amendments.

19.2.1 This Agreement may be amended only by the affirmative vote of seventy-five percent (75%) of the percentage Interests of each outstanding class of Members, except clerical or ministerial amendments that may be approved by the Class B Members. All amendments shall be in writing.

19.2.2 The Certificate of Formation may only be amended by the affirmative vote of all the Members. Any such amendment shall be in writing and shall be executed and filed in accordance with the Act.

Section 19.3 No Waiver. No consent or waiver, express or implied, by the Company or a Member to or of any breach or default by any Member in the performance by such Member of his or its obligations under this Agreement shall constitute a consent to or waiver of any similar breach or default by that or any other Member. Failure by the Company or a Member to complain of any act or omission to act by any Member, or to declare such Member in default, irrespective of how long such failure continues, shall not constitute a waiver by the Company or such Member of his or its rights under this Agreement.

Section 19.4 Representation of Shares of Companies or Interests in Other Entities. Any Manager or officers of this Company are authorized to vote, represent, and exercise on behalf of this Company all rights incident to any and all shares of any other company or companies, or any interests in any other Person, standing in the name of this Company. The authority herein granted to said Manager or officers to vote or represent on behalf of this Company any and all shares held by this Company in any other company or companies, or any interests in any other Person, may be exercised by such Manager in person or by any other person authorized so to do by proxy or power of attorney duly executed by said Manager or officers.

Section 19.5 Inconsistencies. In the event of any inconsistency in the actions taken by any Manager or by the president (or vice president) and secretary (or assistant secretary), the decision or action of a Manager shall prevail over any decision or action of an officer, and the decision or action of the president shall prevail over that of any other officer.

Section 19.6 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and permitted assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.

Section 19.7 Severability. If one or more provisions of this Agreement are held by a proper court to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary and permitted by law, shall be severed here from, and the balance of this Agreement shall be enforced in accordance with its terms.

Section 19.8 Governing Law. This Agreement shall be governed by and construed under the substantive laws of the State of Delaware, without regard to Delaware choice of law principles.

Section 19.9 Mandatory Mediation. The parties agree that any and all disputes, claims or controversies arising out of or relating to this Agreement shall be submitted to JAMS, or its successor, for mediation, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration pursuant to the clause set forth in Section 19.10 below. Either party may commence mediation by providing to JAMS and the other party a written request for mediation, setting forth the subject of the dispute and the relief requested. The parties will cooperate with JAMS and with one another in selecting a mediator from the JAMS panel of neutrals and in scheduling the mediation proceedings. The parties agree that they will participate in the mediation in good faith and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

19.9.1 Either party may initiate arbitration with respect to the matters submitted to mediation by filing a written demand for arbitration at any time following the initial mediation session or at any time following forty-five (45) days from the date of filing the written request for mediation, whichever occurs first (“Earliest Initiation Date”). The mediation may continue after the commencement of arbitration if the parties so desire.

19.9.2 At no time prior to the Earliest Initiation Date shall either side initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by JAMS Rules or by agreement of the parties. All applicable statutes of limitation and defenses based upon the passage of time shall be tolled until fifteen (15) days after the Earliest Initiation Date. The parties will take such action, if any, required to effectuate such tolling.

Section 19.10 Arbitration. Any party to this Agreement may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this Section 19.10 (this “Arbitration Provision”). The arbitration shall be conducted in Kent County, Michigan. As used in this Arbitration Provision, “Claim” shall include any past, present, or future claim, dispute, or controversy involving a Member (or persons claiming through or connected with a Member), on the one hand, and the Company or the Manager, on the other hand, relating to or arising out of this Agreement, any subscription agreement or related documents, any Units, and/or the activities or relationships that involve, lead to, or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of Subsection 19.10.11 below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include (without limitation) matters arising as initial claims, counterclaims, cross claims, third-party claims, or otherwise. However, this Arbitration Provision does not apply to claims under the U.S. federal securities laws, but does apply to the Company’s holdings (including the holdings of any subsidiary), the Units, the Company’s ongoing operations and the management of the Company’s investments, among other matters. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable. The party initiating arbitration shall do so with JAMS (jamsadr.com). The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply. In any arbitration arising out of or related to this Agreement, requests for documents:

19.10.1 Shall be limited to documents which are directly relevant to significant issues in the case or to the case’s outcome;

19.10.2 Shall be restricted in terms of time frame, subject matter and persons or entities to which the requests pertain; and

19.10.3 Shall not include broad phraseology such as “all documents directly or indirectly related to.” (See JAMS Discovery Protocols; JAMS Arbitration Rule 16.2).

19.10.4 There shall be production of electronic documents only from sources used in the ordinary course of business. Absent a showing of compelling need, no such documents are required to be produced from backup servers, tapes, or other media.

19.10.5 Absent a showing of compelling need, the production of electronic documents shall normally be made on the basis of generally available technology in a searchable format which is usable by the party receiving the e-documents and convenient and economical for the producing party. Absent a showing of compelling need, the parties need not produce metadata, with the exception of header fields for email correspondence.

19.10.6 The description of custodians from whom electronic documents may be collected shall be narrowly tailored to include only those individuals whose electronic documents may reasonably be expected to contain evidence that is material to the dispute.

19.10.7 Where the costs and burdens of e-discovery are disproportionate to the nature of the dispute or to the amount in controversy, or to the relevance of the materials requested, the arbitrator will either deny such requests or order disclosure on condition that the requesting party advance the reasonable cost of production to the other side, subject to the allocation of costs in the final award. (See JAMS Discovery Protocols; JAMS Arbitration Rule 16.2).

19.10.8 In any arbitration arising out of or related to this Agreement, there shall be no interrogatories or requests to admit.

19.10.9 If the Company elects arbitration, the Company shall pay the administrator’s filing costs and administrative fees (other than hearing fees). If a Member elects arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator’s rules. The Company shall pay the administrator’s hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator’s rules or applicable law requires otherwise, or a Member requests that the Company pay them and the Company agrees to do so. Each party shall bear the expense of its own attorney’s fees, except as otherwise provided by law. If a statute gives a Member the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.

19.10.10 Within thirty (30) days of a final award by the arbitrator, a party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, an opposing party may cross-appeal within thirty (30) days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrator’s rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act (the “FAA”), and may be entered as a judgment in any court of competent jurisdiction.

19.10.11 The Company agrees not to invoke the right to arbitrate an individual Claim that a Member may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NO ARBITRATION SHALL PROCEED ON A CLASS, REPRESENTATIVE, OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT.

19.10.12 Unless otherwise provided in this Agreement or consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two (2) or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not: (i) determine the rights, obligations, or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; or (ii) make an award for the benefit of, or against, anyone other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify or fail to enforce this Subsection 19.10.12, and any attempt to do so, whether by rule, policy, and arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this Subsection 19.10.12 shall be determined exclusively by a court and not by the administrator or any arbitrator.

19.10.13 This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.

19.10.14 This Arbitration Provision shall survive: (i) suspension, termination, revocation, closure or amendments to this Agreement and the relationship of the parties; (ii) the bankruptcy or insolvency of any party hereto or other party; and (iii) any transfer of any loan or Units or any amounts owed on such loans or notes, to any other party. If any portion of this Arbitration Provision other than Subsection 19.10.11 is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If arbitration is brought on a class, representative or collective basis, and the limitations on such proceedings in are finally adjudicated pursuant to the last sentence of Subsection 19.10.12 to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.

19.10.15 Each Member acknowledges, understands and agrees that: (a) arbitration is final and binding on the parties; (b) the parties are waiving their right to seek remedies in court, including the right to jury trial; (c) pre-arbitration discovery is generally more limited than and potentially different in form and scope from court proceedings; (d) the final award by the arbitrator is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek modification of a ruling by the arbitrators is strictly limited; and (e) the panel of arbitrators may include a minority of persons engaged in the securities industry.

9.10.16 BY AGREEING TO BE SUBJECT TO THE ARBITRATION PROVISION CONTAINED IN THIS AGREEMENT, MEMBERS WILL NOT BE DEEMED TO WAIVE THE COMPANY’S COMPLIANCE WITH THE FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

19.10.17 Waiver of Court & Jury Rights. THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT SOLELY BEFORE A JUDGE. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT, THE UNITS OR THE COMPANY, INCLUDING CLAIMS UNDER THE U.S. FEDERAL SECURITIES LAWS.

Section 19.11 Payment of Legal Fees and Costs. In the event that a Member: (a) initiates or asserts any suit, legal action, claim, counterclaim or proceeding regarding, relating to or arising under this Agreement, the Units or the Company, including claims under the U.S. federal securities laws; and (b) does not, in a judgment on the merits, substantially achieve, in substance and amount, the full remedy sought or the equivalent is reached in settlement, then the Member shall be obligated to reimburse the Company and any parties indemnified by the Company for any and all fees, costs and expenses of every kind and description (including, but not limited to, all reasonable attorneys’ fees, the costs of investigating a claim and other litigation expenses) that the Company and any parties indemnified by the Company may incur in connection with such Claim.

Section 19.12 Choice of Venue. Any suit, legal action or proceeding involving any dispute or matter regarding, relating to or arising under this Agreement shall be brought solely in the United States District Court for Kent County, Michigan. All parties hereby consent to the exercise of personal jurisdiction, and waive all objections based on improper venue and/or forum non conveniens, in connection with or in relation to any such suit, legal action or proceeding.

Section 19.13 Notices. Unless otherwise provided in this Agreement, any notice or other communication herein required or permitted to be given shall be in writing and shall be given by electronic communication, hand delivery, registered or certified mail, with proper postage prepaid, return receipt requested, or courier service regularly providing proof of delivery, addressed to the party hereto as provided as follows:

all communications intended for the Company shall be sent to and all communications intended for a Member shall be sent to the address of such Member set forth in Exhibit “1” to this Agreement.

For all purposes of this Agreement, a notice or communication will be deemed effective:

(A)       if delivered by hand or sent by courier, on the day it is delivered unless that day is not a day upon which commercial banks are open for business in the city specified (a "Local Business Day") in the address for notice provided by the recipient, or if delivered after the close of business on a Local Business Day, then on the next succeeding Local Business Day; or

(B)       if sent by registered or certified mail, on the tenth Local Business Day after the date of mailing.

Section 19.14 Titles and Subtitles. The titles of the sections and paragraphs of this Agreement are for convenience only and are not to be considered in construing this Agreement.

Section 19.15 Currency. Unless otherwise specified, all currency amounts in this Agreement refer to the lawful currency of the United States of America.

Section 19.16 Partition. Each Member irrevocably waives any right that it may have to maintain any action for partition with respect to any of the Company's property.

Section 19.17 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when there exist copies hereof which, when taken together, bear the authorized signatures of each of the parties hereto.

Section 19.18 Preparation of Agreement. This Operating Agreement has been prepared by David G. LeGrand, Esq. (the “Law Firm”), counsel for BENCHMARK REAL ESTATE INVESTMENT FUND, LLC in the course of its representation of it, and:

Section 19.19 NO RELIANCE. THE MEMBERS ACKNOWLEDGE THAT NEITHER THE MANAGER NOR ANY PERSON ACTING ON BEHALF OF THE MANAGER HAS MADE ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE UNITS OR ANY SECURITIES OF THE COMPANY, AND THE MEMBERS CONFIRM THAT THEY HAVE NOT BASED THEIR INVESTMENT DECISIONS ON, AND ARE NOT RELYING ON, ANY REPRESENTATIONS OR WARRANTIES FROM THE MANAGER. NO PERSON ACTING ON BEHALF OF THE MANAGER OR COMPANY IS REPRESENTING OR ACTING ON BEHALF OF ANY MEMBER WITH RESPECT TO ANY MATTER RELATED TO THE COMPANY.

IN WITNESS WHEREOF, BENCHMARK REAL ESTATE INVESTMENT FUND, LLC, through its Manager and the Members hereby execute this Operating Agreement effective as of December 31, 2021.

BENCHMARK REAL ESTATE INVESTMENT FUND, LLC

a Delaware limited liability company

By Benchmark Capital Management II, LLC, its Manager

By Benchmark Capital Management, LLC its Member

By ____________________________

Matthew Fox, Manager

Its Member

Class B Member: JosephArden Enterprises, LLC

By ______________________

Matthew Fox, Member

EXHIBIT “1”

Names, Addresses and Capital Contributions of Members

EXHIBIT “2”

Percentage Interests

EXHIBIT “3”

MANAGER

Exhibit 1A-4

BENCHMARK REAL ESTATE INVESTMENT FUND, LLC

a Delaware limited liability company

dba

Benchmark Real Estate Fund

500,000 Class A Units of Membership Interest

REGULATION A+ SUBSCRIPTION AGREEMENT

This Subscription Agreement (the “Subscription Agreement”) is made as of the date set forth below by and between the undersigned (the “Subscriber” or “You”) and the Company and is intended to set forth certain representations, covenants and agreements between Subscriber and the Company with respect to the offering (the “Offering”) for sale by the Company of the Class A Units as described in the Company’s Offering circular dated February 15, 2024 (the “Offering Circular”), a copy of which has been delivered to Subscriber. The Class A Units are also referred to herein as the “Securities”.

Investing in securities represented by the Class A Units (the “Class A Units”) of BENCHMARK REAL ESTATE INVESTMENT FUND, LLC, dba Benchmark Real Estate Fund, a Delaware limited liability company (the “Company”) involves significant risks. This investment is suitable only for persons who can afford to lose their entire investment and such investment could be illiquid for an indefinite period of time. No public market currently exists for the Class A Units and if a public market develops following this Offering, it may not continue.

The Class A Units have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities or blue sky laws and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and state securities or blue sky laws. Although an Offering Circular has been filed with the Securities and Exchange Commission (the “SEC”), that Offering statement does not include the same information that would be included in a registration statement under the Securities Act. The Class A Units have not been approved or disapproved by the SEC, any state securities commission or other regulatory authority, nor have any of the foregoing authorities passed upon the merits of this Offering or the adequacy or accuracy of the Offering Circular or any other materials or information made available to subscriber in connection with this Offering, through the online website platform at www.benchmarkmi.com (the “Portal”), or the SEC’s EDGAR website at https://sec.report.

No sale may be made to persons who are not “accredited investors” if the aggregate purchase price is more than 10% of the greater of such investors’ annual income or net worth. The Company is relying on the representations and warranties set forth by each subscriber in this Subscription Agreement and the other information provided by a Subscriber in connection with this Offering to determine compliance with this requirement.

Prospective investors may not treat the contents of this Regulation A+ Subscription Agreement, the Offering Circular or any of the other materials available (collectively, the “Offering Materials”) or any prior or subsequent communications from the Company or any of its affiliates, officer, employees or agents as investment, legal or tax advice. In making an investment decision, investors must rely on their own examination of the Company and the terms of this Offering, including the merits and the risks involved. Each prospective investor should consult the investor’s own counsel, accountant and other professional advisor as to investment, legal, tax and other related matters concerning the investor’s proposed investment.

The Company reserves the right in its sole discretion and for any reason whatsoever to modify, amend and/or withdraw all or a portion of the Offering and/or accept or reject in whole or in part any prospective investment in the Class A Units or to allot to any prospective investor less than the amount of Class A Units such investor desires to purchase.

Except as otherwise indicated, the Offering Materials speak as of their date. Neither the delivery nor the purchase of the Class A Units shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date.

ARTICLE I

SUBSCRIPTION

1.01  Subscription. Subject to the terms and conditions hereof, Subscriber hereby irrevocably subscribes for, and agrees to, purchase from the Company the number of Class A Units set forth on the Subscription Agreement Signature Page, and the Company agrees to sell such Class A Units to Subscriber at a purchase price of One Hundred Dollars ($100.00) per Class A Unit for the total amount set forth on the Subscription Agreement Signature Page (the “Purchase Price”), subject to the Company's right to sell to Subscriber such lesser number of Class A Units as the Company may, in its sole discretion, deem necessary or desirable.

1.02  Delivery of Subscription Amount; Acceptance of Subscription; Delivery of Securities. Subscriber understands and agrees that this Subscription is made subject to the following terms and conditions: 

(a)    Contemporaneously with the execution and delivery of this Subscription Agreement through the Platform, Subscriber shall pay the Purchase Price for the Class A Units in the form of ACH debit transfer, wire transfer, or credit card payment. Your subscription is irrevocable. The Company selected a transfer agent company to maintain all such funds for Subscriber’s benefit until the earliest to occur of: (i) the Closing, (ii) the rejection of such subscription or (iii) the termination of the Offering by the Company in its sole discretion. 

(b)   Payment of the Purchase Price shall be (i) made by Subscriber via the Portal, (ii) received through the Escrow Agent, and (iii) held in an escrow account operated by Enterprise Bank and Trust to hold funds (the “Escrow Agent”) until the minimum offering amount of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) is met (the “Initial Closing”). After the Initial Closing, the Subscriber’s payment may be accepted by the Company upon receipt (each a “Closing”).

(c)    This subscription shall be deemed to be accepted only when this Subscription Agreement has been signed by an authorized officer or agent of the Company, and the deposit of the payment of the Purchase Price for clearance will not be deemed an acceptance of this Subscription Agreement.

(d)   The Company shall have the right to reject this subscription, in whole or in part.

(e)    The payment of the Purchase Price (or, in the case of rejection of a portion of the Subscriber's subscription, the part of the payment relating to such rejected portion) will be returned promptly, without interest or deduction, if Subscriber's subscription is rejected in whole or in part or if the Offering is withdrawn or canceled.

(f)        Subscriber shall receive notice and evidence of the digital entry (or other manner of record) of the number of the Class A Units owned by Subscriber reflected on the books and records of the Company and verified by the transfer agent, which books and records shall bear a notation that the Class A Units were sold in reliance upon Regulation A+. 

1.03    Operating Agreement. You have received and read a copy of the Company’s Operating Agreement (the “Operating Agreement”) and agree that your execution of this Subscription Agreement constitutes your consent to the Operating Agreement, and that upon acceptance of this Subscription Agreement by the Company, you will become a shareholder of the Company as a holder of Class A Units. When this Subscription Agreement is countersigned by the Company, the Operating Agreement shall be binding upon acceptance of your subscription.

1.04    The Platform. The Offering is described in the Offering Circular, that is available through the online website platform at www.benchmarkmi.com, or the SEC’s EDGAR website at https://sec.report. Please read this Subscription Agreement, the Offering Circular, and the Operating Agreement. While they are subject to change, as described below, the Company advises you to print and retain a copy of these documents for your records.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of the date of each Closing Date: 

2.01  Requisite Power and Authority. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement. All action on Subscriber’s part required for the lawful execution and delivery of this Subscription Agreement has been or will be effectively taken prior to the Closing. Upon execution and delivery, this Subscription Agreement will be a valid and binding obligation of Subscriber, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) as limited by general principles of equity that restrict the availability of equitable remedies.

2.02  Investment Representations. Subscriber understands that the Securities have not been registered under the Securities Act. Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber’s representations contained in this Subscription Agreement. Subscriber is purchasing the Class A Units for Subscriber’s own account. Subscriber has received and reviewed this Subscription Agreement, the Offering Circular and the Operating Agreement. Subscriber and/or Subscriber’s advisors, who are not affiliated with and not compensated directly or indirectly by the Company or an affiliate thereof, have such knowledge and experience in business and financial matters as will enable them to utilize the information which they have received in connection with the Offering to evaluate the merits and risks of an investment, to make an informed investment decision, and to protect Subscriber’s own interest in connection with an investment in the Class A Units.

2.03  Illiquidity and Continued Economic Risk. Subscriber acknowledges and agrees that there is no ready public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber’s entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and understands all of the risk factors relating to the purchase of Securities.

2.04  Accredited Investor Status or Investment Limits. Subscriber represents that either:

(a)    Subscriber is an “Accredited Investor” within the meaning of Rule 501 of Regulation D under the Securities Act; or,

(b)   The Purchase Price set out below, on the signature page of this Subscription Agreement, together with any other amounts previously used to purchase Securities in this Offering, does not exceed ten percent (10%) of the greater of the Subscriber’s annual income or net worth. Subscriber represents that to the extent it has any questions with respect to its status as an Accredited Investor, or the application of the investment limits, it has sought professional advice. 

2.05  Additional Subscriber Information; Payment Information. Subscriber agrees to provide any additional documentation the Company may reasonably request, including documentation as may be required by the Company to form a reasonable basis that the Subscriber qualifies as an “accredited investor” as that term is defined in Rule 501 under Regulation D promulgated under the Act, or otherwise as a “qualified purchaser” as that term is defined in Regulation A promulgated under the Act, or as may be required by the securities administrators or regulators of any state, to confirm that the Subscriber meets any applicable minimum financial suitability standards and has satisfied any applicable maximum investment limits. Subscriber acknowledges that Subscriber’s responses to questions on the Platform (as defined in the Offering Circular) are true, complete and accurate in all respects. Payment information provided by Subscriber through the Platform is true, accurate and correct and such payment information shall be deemed to be a part of this Subscription Agreement as if, and to the same extent that, such information was set forth herein.

2.06  Company Information. Subscriber has read the Offering Circular filed with the SEC, including the section titled “Risk Factors.” Subscriber understands that the Company is subject to all the risks that apply to early-stage companies, whether or not those risks are explicitly set out in the Offering Circular. Subscriber acknowledges that no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition. 

2.07  Neither the Company nor the Platform is an Investment Adviser. Subscriber understands that neither the Company nor the Platform is registered under the Investment Company Act of 1940 or the Investment Advisers Act of 1940.

2.08  Valuation. Subscriber acknowledges that the price of the Securities was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. Subscriber further acknowledges that future offerings of Securities may be made at lower valuations, with the result that the Subscriber’s investment will bear a lower valuation.

2.09  Domicile. Subscriber maintains Subscriber’s domicile (and is not a transient or temporary resident) at the address shown on the signature page and provided on the Platform.

2.10  Power of Attorney. Any power of attorney of the Subscriber granted in favor of the Company contained in the Operating Agreement has been executed by the Subscriber in compliance with the laws of the state, province or jurisdiction in which such agreements were executed.

2.11  No Brokerage Fees. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Subscription Agreement or related documents based on any arrangement or agreement binding upon Subscriber. Subscriber will indemnify and hold the Company harmless against any liability, loss or expense (including, without limitation, reasonable attorneys' fees and out-of-pocket expenses) arising in connection with any such claim.

2.12  Foreign Investors. If Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Subscription Agreement, including (a) the legal requirements within its jurisdiction for the purchase of the Securities, (b) any foreign exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Subscriber’s jurisdiction. 

2.13  Terms and Conditions of the Platform.  Subscriber acknowledges that it has read, understands and agrees to the terms and conditions, privacy policy and disclaimers on the Platform.

2.14  Transfer Restrictions.  Subscriber acknowledges and agrees that the Class A Units are subject to restrictions on transfer as described in the Operating Agreement. The Class A Units shall bear a digital or physical restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates or instruments):

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO SIGNIFICANT RESTRICTIONS ON TRANSFER PURSUANT TO THE COMPANY’S OPERATING AGREEMENT AND THE SUBSCRIPTION AGREEMENT PURSUANT TO WHICH THESE SECURITIES WERE ORIGINALLY SOLD. ANY PURPORTED TRANSFER IN VIOLATION OF SUCH PROVISIONS SHALL BE VOID, AB INITIO.

ARTICLE III

SURVIVAL; INDEMNIFICATION

3.01  Survival; Indemnification. All representations, warranties and covenants contained in this Subscription Agreement and the indemnification contained herein shall survive (a) the acceptance of this Subscription Agreement by the Company, (b) changes in the transactions, documents and instruments described herein which are not material or which are to the benefit of Subscriber, and (c) the death or disability of Subscriber. Subscriber acknowledges the meaning and legal consequences of the representations, warranties and covenants in Article II hereof and that the Company has relied upon such representations, warranties and covenants in determining Subscriber’s qualification and suitability to purchase the Securities. Subscriber hereby agrees to indemnify, defend and hold harmless the Company, its officers, directors, employees, agents and controlling persons, from and against any and all losses, claims, damages, liabilities, expenses (including attorneys' fees and disbursements), judgments or amounts paid in settlement of actions arising out of or resulting from the untruth of any representation of Subscriber herein or the breach of any warranty or covenant herein by Subscriber. Notwithstanding the foregoing, however, no representation, warranty, covenant or acknowledgment made herein by Subscriber shall in any manner be deemed to constitute a waiver of any rights granted to it under the Securities Act or state securities laws. 

ARTICLE IV

MISCELLANEOUS PROVISIONS

4.01  Captions and Headings. The Article and Section headings throughout this Subscription Agreement are for convenience of reference only and shall in no way be deemed to define, limit or add to any provision of this Subscription Agreement. 

4.02  Notification of Changes. Subscriber agrees and covenants to notify the Company immediately upon the occurrence of any event prior to the consummation of this Offering that would cause any representation, warranty, covenant or other statement contained in this Subscription Agreement to be false or incorrect or of any change in any statement made herein occurring prior to the consummation of this Offering.

4.03  Assignability. This Subscription Agreement is not assignable by Subscriber, and may not be modified, waived or terminated except by an instrument in writing signed by the party against whom enforcement of such modification, waiver or termination is sought. 

4.04  Binding Effect. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns, and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by and be binding upon such heirs, executors, administrators, successors, legal representatives and assigns. 

4.05  Obligations Irrevocable. The obligations of Subscriber shall be irrevocable, except with the consent of the Company, until the consummation or termination of the Offering.

4.06  Entire Agreement; Amendment. This Subscription Agreement states the entire agreement and understanding of the parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written. No amendment of the Agreement shall be made without the express written consent of the parties. 

4.07  Severability. The invalidity or unenforceability of any particular provision of this Subscription Agreement shall not affect any other provision hereof, which shall be construed in all respects as if such invalid or unenforceable provision were omitted. 

4.08  Notices. All notices and communications to be given or otherwise made to the Subscriber shall be deemed to be sufficient if sent by electronic mail to such address as set forth for the Subscriber at the records of the Company (or that Subscriber submitted to us via the Platform). Subscriber shall send all notices or other communications required to be given hereunder to the Company via email at info@benchmarkmi.com, with a copy sent either certified mail or another traceable form of delivery to the Company at the following addresses:

Mail should be sent to:

BENCHMARK REAL ESTATE FUND 

c/o Benchmark Capital Management II, LLC

P.O. Box, 141396, Grand Rapids, MI 49514 

Or delivered to:

BENCHMARK REAL ESTATE FUND

3919 Remembrance Rd NW, Suite B

Grand Rapids, MI 49534 

Any such notice or communication shall be deemed to have been delivered and received on the first business day following that on which the electronic mail has been sent (assuming that there is no error in delivery). As used in this Section, “business day” shall mean any day other than a day on which banking institutions in the State of Michigan are legally closed for business.

4.09  Counterparts. This Subscription Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement. 

4.10  Digital Signatures. Digital (“electronic”) signatures, often referred to as an “e-signature”, enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures. The mechanics of this Subscription Agreement’s electronic signature include your signing this Agreement below by typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a securities hash within an SSL encrypted environment. This electronically signed Subscription Agreement will be available to both you and the Company, as well as any associated brokers, so they can store and access it at any time, and it will be stored and accessible on the Platform and hosting provider, including backups. You and the Company each hereby consent and agree that electronically signing this Subscription Agreement constitutes your signature, acceptance and agreement as if actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement shall be legally binding and such transaction shall be considered authorized by you. By signing electronically below, you agree your electronic signature is the legal equivalent of your manual signature on this Subscription Agreement and you consent to be legally bound by this Subscription Agreement’s terms and conditions. Alternatively, you may opt-out of this provision by printing a copy of this Agreement, signing it manually and returning it to the Company and, if your subscription is accepted, the Company will manually countersign it and return a countersigned copy to you via email.

4.11  Consent to Electronic Delivery of Tax Documents. Please read this disclosure about how the Company will provide certain documents that it is required by the Internal Revenue Service (the “IRS”) to send to you (the “Tax Documents”) in connection with your Class A Units. Tax Documents provide important information you need to complete your tax returns. Tax Documents include Form 1099 and/or Form K-1. Occasionally, the Company is required to send you CORRECTED Tax Documents. Additionally, the Company may include inserts with your Tax Documents. The Company is required to send Tax Documents to you in writing, which means in paper form. When you consent to electronic delivery of your Tax Documents, you will be consenting to delivery of Tax Documents, including corrected Tax Documents and inserts, electronically instead of in paper form. By executing this Subscription Agreement on the Platform, you are consenting in the affirmative that the Company may send Tax Documents to you electronically and acknowledging that you are able to access Tax Documents from the site. If you subsequently withdraw consent to receive Tax Documents electronically, a paper copy will be provided. Your consent to receive the Tax Documents electronically continues for every tax year until you withdraw your consent. You can withdraw your consent before the Tax Documents are furnished by mailing a letter including your name, mailing address, effective tax year, and indicating your intent to withdraw consent to the electronic delivery of Tax Documents to the Company at:

BENCHMARK REAL ESTATE FUND 

c/o Benchmark Capital Management II, LLC

P.O. Box, 141396, Grand Rapids, MI 49514

Or delivered to:

BENCHMARK REAL ESTATE FUND

3919 Remembrance Rd NW, Suite B

Grand Rapids, MI 49534

If a Subscriber withdraws consent to receive Tax Documents electronically, a paper copy will be provided. You as Subscriber must keep your e-mail address current with the Company and must promptly notify the Company of a change of your email address. If your mailing address, email address, telephone number or other contact information changes, you as Subscriber may also provide updated information by contacting the Company.

4.12  Electronic Delivery of Information. Subscriber and the Company each hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Operating Agreement and future communications in general between the parties, may be made by email, sent to the email address of record as set forth in this Subscription Agreement or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to (i) such communications being diverted to the recipients spam filters by the recipients email service provider, (ii) due to a recipient’s change of address, or (iii) due to technology issues by the recipients service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.

BALANCE OF PAGE INTENTIONALLY BLANK

BENCHMARK REAL ESTATE INVESTMENT FUND, LLC

DBA BENMARK REAL ESTATE FUND
SUBSCRIPTION AGREEMENT SIGNATURE PAGE

IN WITNESS WHEREOF, Subscriber or its duly authorized representative has executed and delivered this Subscription Agreement by signing or clicking “I Agree” and has delivered the Purchase Price as of the date set forth above.

BENCHMARK REAL ESTATE INVESTMENT FUND, LLC

DBA BENCHMARK REAL ESTATE FUND

SUBSCRIPTION AGREEMENT SIGNATURE PAGE (CONTINUED)

12

Exhibit 1A-8

TRI-PARTY ESCROW AGREEMENT

This ESCROW AGREEMENT (“Agreement”) is made and entered into as of , by and among , a Delaware limited liability company (the “Company”), Jumpstart Securities LLC, a Delaware limited liability company (the “Managing Broker-Dealer”) and ENTERPRISE BANK & TRUST, a Missouri chartered trust company with banking powers (in its capacity as escrow holder, the “Escrow Agent”).

RECITALS

This Agreement is being entered into in reference to the following facts:

(a)       The Company intends to sell a minimum of $ 1,000,000.00 (One million) (the “Minimum”) and a maximum of $50,000,000.00 (Fifty Million) (the “Maximum”) pursuant to an offering (the “Offering”) as described in the Subscription Agreement.

(b)       In connection with the Offering, the Company and Managing Broker-Dealer desire to establish an Escrow Account (as defined herein) on the terms and subject to the conditions set forth herein.

ARTICLE 1-ESCROW FUNDS

1.1       Appointment of Escrow Agent. The Company hereby appoints the Escrow Agent to act as escrow holder for the Escrow Funds (as defined below) under the terms of this Agreement. The Escrow Agent hereby accepts such appointment, subject to the terms, conditions, and limitations hereof.

1.2       Establishment of Escrow. Immediately following the Escrow Agent’s execution of this Agreement, the Escrow Agent will open a non-interest bearing bank checking account with Escrow Agent (the “Escrow Account”) for the purpose of receiving and holding Cash Deposits (as defined below) and the remaining portion of the Total Purchase Price payable by each Investor (as defined below) in connection with the Offering (the “Escrow Funds”).

(a)       Each Investor or Soliciting Broker Dealer (as such term is defined in the Offering circular) will be instructed by the Company to remit to the Company, a predetermined cash deposit (the “Cash Deposit”), as indicated on the applicable Subscription Agreement (as defined below), in the form of a check, draft, wire or ACH payable to the order of “Enterprise Bank & Trust, as Escrow Agent for “ ”. Following receipt by the Company of an Investor’s Cash Deposit, the Company will promptly: (i) send to the Escrow Agent the Investor’s name, address, executed IRS Form W-9 and total purchase price to be remitted for the Units to be purchased by the Investor (the “Total Purchase Price”), and (ii) remit to the Escrow Agent the Cash Deposit. Escrow Agent shall promptly deposit the Cash Deposit into the Escrow Account, which deposit shall occur within two (2) business days after the Escrow Agent’s receipt of the Cash Deposit.

(b)       On or prior to the consummation of the Offering, each Investor or Soliciting Broker Dealer may be further instructed by the Company to remit directly to the Escrow Agent an amount equal to the difference between such Investor’s Total Purchase Price and the amount of such Investor’s

Cash Deposit, in the form of a check, draft, wire or ACH payable to the order of “Enterprise Bank & Trust, as Escrow Agent” for the Company.

(c)       Escrow Agent shall have no obligation to accept Escrow Funds or documents from any party other than the Investors, the Soliciting Dealers or the Company. Any checks that are made payable to a party other than the Escrow Agent shall be returned to the party submitting the check, and if received by the Company shall not be remitted to the Escrow Agent. Proceeds in the form of wire or other electronic funds transfers are deemed deposited into the Escrow Account and considered “Collected Funds” when received by the Escrow Agent. Any Proceeds deposited in the form of a check, draft or similar instrument are deemed deposited when the collectability thereof has been confirmed; after such time, such Proceeds are considered “Collected Funds.” The Escrow Agent shall have no duty or responsibility to enforce the collection or demand payment of any funds deposited into the Escrow Account. Should any check be deemed uncollectible for any reason, the Escrow Agent will notify the Company of the amount of such return check, the name of the Investor and the reason for return and return the check to the Investor.

(d)       Escrow Agent will hold all Escrow Funds in escrow, free from any liens, claims or offsets, and such monies shall not become the property of the Company, the Investor or any Soliciting Dealer, nor shall such monies become subject to the debts thereof or the debts of the Escrow Agent, unless and until the conditions set forth in these instructions to disbursement of such monies have been fully satisfied.

(e)       The Escrow Funds shall be disbursed by the Escrow Agent from the Escrow Account by wire transfer or by a check payable to the appropriate payee(s) in accordance with the provisions of this Agreement.

(f)       Escrow Agent shall not be required to take any action under this Section 1.3 or any other section hereof until it has received proper written instruction from the Company. Such written instruction shall be signed by an Authorized Representative (as defined below) of the Company. Except as otherwise expressly contemplated herein, all parties hereby direct and instruct Escrow Agent to accept any payment or other instructions provided by the Company, and Escrow Agent shall have no duty or obligation to authenticate such payment or other instructions or the authorization thereof. The Escrow Agent shall not be required to release any funds that constitute Escrow Funds unless the funds represented thereby are Collected Funds.

1.4       Investments. All funds in the Escrow Account will be held by Escrow Agent in a non-interest bearing Checking Account at Escrow Agent. The Escrow Funds will not earn interest.

(a)       The Company may reject or cancel any Investor’s offer to purchase shares (the “Subscription”), in whole or in part. If all or any portion of the Total Purchase Price for such rejected or canceled Subscription has been delivered to the Escrow Agent, then the Company will inform Escrow Agent in writing of the rejection or cancellation, and instruct Escrow Agent in writing to refund some or all of the Escrow Funds. Such instruction must be signed by an Authorized Representative of the Company.

(b)       All Subscriptions are irrevocable, and except as otherwise provided in the Investor’s Subscription Agreement (the “Subscription Agreement”), no such Investor will have any right to

cancel or rescind its Subscription, except as required under the law of any jurisdiction in which the Offering is made. In the event of conflicting claims to any Escrow Funds, Escrow Agent may elect to interplead the monies in accordance with Section 3.6 of this Agreement.

ARTICLE 2-DISBURSEMENT PROCEDURES

2.1       Disbursement of Proceeds. Escrow Agent shall hold and disburse the Escrow Funds in accordance with the following procedures:

(a)       Subject to the provisions of Section 2.1(b) through Section 2.1(f), promptly after the Escrow Agent’s receipt of written instructions from both the Company and the Managing Broker Dealer in the form of Exhibit “A” attached hereto, the Escrow Agent shall disburse (by wire transfer or by a check payable to the appropriate payee(s)) the principal amount of all Escrow Funds then held by Escrow Agent, or such lesser amount as may be specified in such written instructions, in accordance with such written instructions. Escrow Funds shall be distributed within one (1) business day of the Escrow Agent’s receipt of such written instructions, which must be received by the Escrow Agent no later than 1:00 p.m. Central Standard time on a business day for the Escrow Agent to process such instructions that business day. From and after the Initial Closing Date not defined to and including the Final Closing Date (as hereinafter defined), the Escrow Agent shall promptly disburse to the Company the principal amount of any Escrow Funds as and when received by the Escrow Agent as Collected Funds, whether or not the applicable Subscription Agreement has been accepted by the Company or provided to the Escrow Agent.

(b)       Escrow Agent shall continue to accept deposits of additional Escrow Funds until a date (the “Final Closing Date”) which is the earlier of (i) the date on which the Escrow Agent receives written notification, signed by an Authorized Representative of the Company, that the Company has accepted Subscriptions for the Maximum Offering, or (ii) the date on which the Escrow Agent receives written notification, signed by an Authorized Representative of the Company, of the Company’s determination of a final closing date for receipt of Escrow Funds. Promptly from and after the Final Closing Date, the Escrow Agent shall return directly to the Investor, the principal amount of any Escrow Funds received by the Escrow Agent after the Final Closing Date and shall cease to accept any additional Escrow Funds.

(c)       If the Company and the Managing Broker-Dealer give written notice to the Escrow Agent of the termination of the Offering, in the form of Exhibit “B” attached hereto, then promptly after such notification, the Escrow Agent shall return, as a complete distribution, each Investor’s Escrow Funds, less any then-unpaid fees due to the Escrow Agent to such Investor by check to the address provided for each such Investor pursuant to Section 1.3(a); provided, however, that to the extent an Investor’s Escrow Funds were received by Escrow Agent from a qualified intermediary, such funds shall be returned to such qualified intermediary. In the event of the termination of the Offering pursuant to this Section 2.1(c), the Escrow Funds shall not under any circumstance be returned to the Soliciting Dealers or the Company. The Company represents, warrants, and agrees that the Escrow Funds returned to each Investor (or to such Investor’s qualified intermediary) are and shall be free and clear of any and all claims of the Company and its creditors.

(d)       If an Investor is entitled to terminate its Subscription, or the Company rejects such Subscription, for which the Escrow Agent has received Escrow Funds, the Escrow Agent shall, upon a written instruction signed by an Authorized Representative of each of the Company and Managing Broker Dealer, promptly return directly to such Investor that portion of the Escrow Funds associated

with of such Investor and specified in the written instruction. If the Escrow Agent has not yet collected funds but has submitted the Investor’s check for collection, the Escrow Agent shall promptly return the funds in the amount of the Investor’s check to such Investor after such funds have been collected. If the Escrow Agent has not yet submitted such Investor’s check for collection, the Escrow Agent shall promptly remit the Investor’s check directly to the Investor.

(e)       If the Company makes a determination that it is entitled to retain all or any portion of the Escrow Funds as liquidated damages pursuant to such Investor’s Subscription Agreement, the Company shall provide written notice signed by an Authorized Representative thereof to the Escrow Agent and the Escrow Agent shall promptly after receipt of such notice pay to the Company such portion of the Escrow Fund.

(f)       If an Investor elects to remit the Total Purchase Price for such Investor’s purchase of the Tokens in lieu of applying the Investor’s Cash Deposit to the Purchase Price, the Escrow Agent shall, upon the written request of the Company, promptly return directly to such Investor the Cash Deposit deposited in the Escrow Account on behalf of such Investor. If the Escrow Agent has not yet collected funds but has submitted the Investor’s check for the Cash Deposit for collection, the Escrow Agent shall promptly return the funds in the amount of the Investor’s check to such Investor after such funds have been collected. If the Escrow Agent has not yet submitted such Investor’s check for collection, the Escrow Agent shall promptly remit the Investor’s check directly to the Investor.

(g)       If any date that is a deadline under this Agreement for giving the Escrow Agent notice or instructions or for the Escrow Agent to take action is not a business day, then such date shall be the business day that immediately precedes such date. A “business day” is any day other than a Saturday, Sunday or any other day on which banking institutions located in the state of Missouri, are authorized or obligated by law or executive order to close.

ARTICLE 3- GENERAL ESCROW PROCEDURES

3.1       Accounts and Records. Escrow Agent shall keep accurate books and records of all transactions hereunder. The Company and Escrow Agent shall each have reasonable access to one another’s books and records concerning the Offering and the Escrow Account. Upon final disbursement of the Escrow Funds, the Escrow Agent shall deliver to the Company a complete accounting of all transactions relating to the Escrow Account.

3.2       Duties. Escrow Agent’s duties and obligations hereunder shall be determined solely by the express provisions of this Agreement. Escrow Agent’s duties and obligations are purely ministerial in nature, and nothing in this Agreement shall be construed to give rise to any fiduciary obligations of the Escrow Agent with respect to the Investors or to the other parties to this Agreement. Without limiting the generality of the foregoing, the Escrow Agent is not charged with any duties or responsibilities with respect to any documentation associated with the Offering and shall not otherwise be concerned with the terms thereof. For purposes of communications and directives, the Escrow Agent shall not accept any instructions from a Soliciting Broker Dealer participating in the Offering. The Escrow Agent shall not be required to notify or obtain the consent, approval, authorization, or order of court or governmental body to perform its obligations under this Agreement, except as expressly provided herein. The parties agree that Escrow Agent shall not be required to expend or risk any of its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder.

3.3       Liability Limited. Escrow Agent shall not be liable to anyone whatsoever by any reason of error of judgment or for any act done or step taken or omitted by them in good faith or for any mistake of fact or law or for anything which they may do or refrain from doing in connection herewith unless caused by or arising out of their own gross negligence or willful misconduct. In no event shall the Escrow Agent be liable for any indirect, special, consequential damages, or punitive damages. Escrow Agent shall have no responsibility to ensure anyone’s compliance with any securities laws in connection with the Offering, and Escrow Agent shall not be required to inquire as to the performance or observation of any obligation, term or condition under any other agreements or arrangements.

3.4       Fees. The Company shall pay the Escrow Agent the fees based on the fee schedule attached hereto as Exhibit “C”. In addition, the Company shall be obligated to reimburse the Escrow Agent for all fees, costs and expenses incurred or that become due in connection with this Agreement or the Escrow Account, including reasonable attorneys’ fees. Neither the modification, cancellation, termination or rescission of this Agreement nor the resignation or termination of the Escrow Agent shall affect the right of the Escrow Agent to retain the amount of any fee which has been paid, or to be reimbursed or paid any amount which has been incurred or becomes due, prior to the effective date of any such modification, cancellation, termination, resignation or rescission. Escrow Agent is hereby authorized by Company and Soliciting Broker Dealer to deduct any fees not timely paid, and any unpaid fees before final distribution of the Escrow Fund, from the Escrow Fund. To the extent the Escrow Agent has incurred any such expenses, or any such fee becomes due, prior to any closing, the Escrow Agent shall advise the Company and the Company shall direct all such amounts to be paid directly at any such closing.

3.5       Exculpation. Escrow Agent’s duties hereunder shall be strictly limited to the safekeeping of monies, instruments or other documents received by the Escrow Agent and any further responsibilities expressly provided in this Agreement. The Escrow Agent will not be liable for:

(a)       the genuineness, sufficiency, correctness as to form, manner or execution or validity of any instrument deposited in the Escrow, nor the identity, authority or rights of any person executing the same;

(b)       any misrepresentation or omission in any documentation associated with the Offering or any failure to keep or comply with any of the provisions of any agreement, contract, or other instrument referred to therein; or

(c)       the failure of any Soliciting Broker Dealer or Investor to transmit, or any delay in transmitting, any Investor’s Purchase Price to the Company or Escrow Agent.

3.6       Interpleader. If (i) conflicting demands are made or notice served upon the Escrow Agent with respect to the escrow or (ii) the Escrow Agent is otherwise uncertain as to its duties or rights hereunder, then the Escrow Agent shall have the absolute right at its election to do either or both of the following:

(a)       withhold and stop all further proceedings in, and performance of, this Agreement; or

(b)       file a suit in interpleader and obtain an order from the court requiring the parties to litigate their several claims and rights among themselves. In the event such interpleader suit is brought, the Escrow Agent shall be fully released from any obligation to perform any further duties imposed upon it hereunder, and the Company shall pay the Escrow Agent actual costs, expenses and reasonable

attorney’s fees expended or incurred by Escrow Agent, the amount thereof to be fixed and a judgment thereof to be rendered by the court in such suit.

3.7       Indemnification and Contribution. The Company and the Managing Broker Dealer (each, an “Indemnifying Party”) jointly and severally agree to defend, indemnify and hold Escrow Agent and its affiliates and their respective directors, officers, agents (“Indemnified Parties”) harmless from and against all costs, damages, judgments, attorneys’ fees, expenses, obligations and liabilities of any kind or nature (“Damages”) to the fullest extent permitted by law, from and against any Damages or liabilities related to or arising out of this Agreement which the Indemnified Parties may reasonably incur or sustain in connection with or arising out of the escrow or this Agreement and will reimburse the Indemnified Parties for all expenses (including attorneys’ fees) as they are incurred by the Indemnified Parties in connection with investigating, preparing or defending any such action or claim whether or not in connection with pending or threatened litigation in which the Indemnified Parties is or are a party; provided, however, the Indemnifying Party will not be responsible for Damages or expenses which are finally judicially determined to have resulted from an Indemnified Party’s gross negligence or willful misconduct. The provisions of this section shall survive the termination of this Agreement and any resignation of the Escrow Agent.

3.8       Compliance with Orders. If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects the Escrow Funds (including but not limited to orders of attachment or any other forms of levies or injunctions or stays relating to the transfer of the Escrow Funds), Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect.

(a)       Escrow Agent may resign as escrow holder hereunder upon fourteen (14) days prior written notice to the Company and shall thereupon be fully released from any obligation to perform any further duties imposed upon it hereunder. Company and Managing Broker Director shall promptly appoint a successor escrow agent. The Escrow Agent will transfer all files and records relating to the Escrow and Escrow Account to any successor escrow holder mutually agreed to in writing by Company and Managing Broker Director upon receipt of a copy of the executed escrow instructions designating such successor. If Company and Managing Broker Director have failed to appoint a successor escrow agent prior to the expiration of fourteen (14) calendar days following the delivery of such notice of resignation from Escrow Agent, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon Company and Managing Broker Director. Company and Managing Broker Director shall be jointly and severally liable for Escrow Agent’s costs and expenses including attorneys incurred in such proceeding.

(b)       In the case of a resignation of the Escrow Agent, the Escrow Agent shall have no responsibility for the appointment of a successor escrow agent hereunder. The successor escrow agent appointed by Company and Managing Broker Director shall execute, acknowledge and deliver to the

Escrow Agent and the other parties an instrument in writing accepting its appointment hereunder. Thereafter, the Escrow Agent shall deliver all of the then-remaining balance of the Escrow Funds, less any expenses then incurred by and unpaid to the Escrow Agent, to such successor escrow agent in accordance with the joint written direction of Company and Managing Broker Director and upon receipt of the Escrow Funds, the successor escrow agent shall be bound by all of the provisions of this Agreement.

3.10       Filings and Resolution. Concurrently or prior to the execution and delivery of this Agreement, the Company shall deliver to the Escrow Agent a copy of its certificate of formation or other charter documents.

3.11       Authorized Representatives. The Company hereby identifies to Escrow Agent the officers, employees or agents designated on Schedule I attached hereto as an authorized representative (each, an “Authorized Representative”) with respect to any notice, certificate, instrument, demand, request, direction, instruction, waiver, receipt, consent or other document or communication required or permitted to be furnished to Escrow Agent. Schedule I may be amended and updated by written notice to Escrow Agent. Escrow Agent shall be entitled to rely on such original or amended Schedule I with respect to any party until a new Schedule I is furnished by such party to Escrow Agent. The Managing Broker-Dealer hereby agrees that any of its officers, employees or agents shall have authority to sign any notice, certificate, instrument, demand, request, direction, instruction, waiver, receipt, consent or other document or communication required or permitted to be furnished to Escrow Agent.

3.12       Term. The term of this Agreement shall commence as of the date first above written and shall end on the date that all funds in the Escrow Account are disbursed pursuant to this Agreement and all reporting obligations specified herein have been satisfied.

3.13       Identification Number. The Company represents and warrants that (a) its Federal tax identification number (“TIN”) specified on the signature page of this Agreement underneath its signature is correct and is to be used for 1099 tax reporting purposes, and (b) it is not subject to backup withholding. The Company shall provide the Escrow Agent with the TIN and verification that the person or entity is not subject to backup withholding for any person or entity to whom interest is paid on any of the Proceeds, if applicable. Such verification may be evidenced by providing the Escrow Agent a Subscription Agreement containing appropriate language or a copy of a W-9.

3.14       Reliance. When Escrow Agent acts on any communication (including, but not limited to, communication with respect to the transfer of funds) sent by electronic transmission, Escrow Agent, absent gross negligence or willful misconduct, shall not be responsible or liable in the event such communication is not an authorized or authentic communication of the party involved or is not in the form the party involved sent or intended to send (whether due to fraud, distortion or otherwise). Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from Escrow Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Company and the Managing Broker-Dealer agree to assume all risks arising out of the use of such electronic transmission to submit instructions and directions to Escrow Agent, including without limitation the risk of Escrow Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.

3.15       Force Majeure. Escrow Agent shall not incur liability for not performing any act or not fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the

control of Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, pandemic or public health emergency, any act of God or war, terrorism or the unavailability of the Federal Reserve Bank or other wire or communication facility).

ARTICLE 4- GENERAL PROVISIONS

4.1       Notice. Any notice, request, demand or other communication provided for hereunder to be given shall be in writing and shall be delivered personally, by certified mail, return receipt requested, postage prepaid, or by transmission by a telecommunications device, and shall be effective (a) on the day when personally served, including delivery by overnight mail and courier service, (b) on the third business day after its deposit in the United States mail, and (c) on the business day of confirmed transmission by telecommunications device. The addresses of the parties hereto (until notice of a change thereof is served as provided in this Section 4.1) shall be as follows:

To the Escrow Agent:

Enterprise Bank & Trust

Attn: Specialized Deposit Services, Escrow 1281 N. Warson

St. Louis, Missouri 63132

specializeddepositservices@enterprisebank.com

with a copy to: Legal Department via email

legaltracking@enterprisebank.com

4.2       Amendments. Except as otherwise permitted herein, this Agreement may be modified only by a written amendment signed by the parties hereto, and no waiver of any provision hereof will be effective unless expressed in a writing signed by the parties hereto.

4.3       Wiring Instructions. In the event fund transfer instructions are given, such instructions must be communicated to Escrow Agent in writing delivered pursuant to Section 4.1. Escrow Agent shall seek confirmation of such instructions by telephone call-back to an Authorized Representative (in the case of the Company) or other authorized person, and Escrow Agent may rely upon the confirmations of anyone purporting to be the Authorized Representative or other authorized person so designated. Escrow Agent and the beneficiary’s bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Company to identify (i) the beneficiary, (ii)

the beneficiary’s bank, or (iii) an intermediary bank. Escrow Agent may apply any of the Escrow Funds for any payment order it executes using any such identifying number, even when its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an intermediary bank designated. The parties to this Agreement acknowledge that such security procedure is commercially reasonable.

4.4       Facsimile. The Escrow Agent may, but need not, honor and follow instructions, amendments or other orders (“orders”) which shall be provided by telephone facsimile transmission (“faxed”) to the Escrow Agent in connection with this Agreement and may act thereon without further inquiry and regardless of whom or by what means the actual or purported signature of the Company may have been affixed thereto if such signature in Escrow Agent’s sole judgment resembles the signature of the Company. The Company indemnifies and holds the Escrow Agent free and harmless from any and all liability, suits, claims or causes of action which may arise from loss or claim of loss resulting from any forged, improper, wrongful or unauthorized faxed order. The Company shall pay all actual attorney fees and costs reasonably incurred by the Escrow Agent (or allocable to its in-house counsel), in connection with said claim(s).

4.5       Assignment. Except as permitted in this Section 4.5, neither this Agreement nor any rights or obligations hereunder may be assigned by any party hereto without the express written consent of each of the other parties hereto. This Agreement shall inure to and be binding upon the parties hereto and their respective successors, heirs and permitted assigns. Any corporation into which Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which Escrow Agent will be a party, or any corporation succeeding to all or substantially all the business of Escrow Agent will be the successor of Escrow Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

4.6       USA PATRIOT Act. The Company shall provide to Escrow Agent such information as Escrow Agent may reasonably require to permit Escrow Agent to comply with its obligations under the federal USA PATRIOT Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001). Escrow Agent shall not make any payment of all or a portion of the Escrow Fund, to any person unless and until such person has provided to Escrow Agent such documents as Escrow Agent may require to permit Escrow Agent to comply with its obligations under such Act. Further, Company represents and warrants to Escrow Agent that it is not a hedge fund. If Company is a hedge fund that is not sponsored by a registered investment advisor, the Company agrees to enter into the form of Due Diligence Agreement provided by Escrow Agent.

4.7       Termination. This Agreement shall terminate when all the Escrow Funds have been disbursed or returned in accordance with the provisions of this Agreement.

4.8       Time of Essence. Time is of the essence of these and all additional or changed instructions.

4.9       Counterparts. This Agreement may be executed in counterparts, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original, and said counterparts together shall constitute one and the same instrument.

4.10       Governing Law and Jurisdiction. This Agreement shall be governed by, and shall be construed according to, the laws of the State of Missouri. The parties hereby irrevocably submit to the exclusive jurisdiction of the state courts of St. Louis County, Missouri or, if proper subject matter jurisdiction exists, the United States District Court for the Eastern District of Missouri, in any action or proceeding arising out of or relating to this Agreement. Each party hereto further irrevocably consents to the service of any complaint, summons, notice or other process relating to any such action or proceeding by delivery thereof to it by hand or by registered or certified mail, return receipt requested, in the manner provided for herein. Each party hereto hereby expressly and irrevocably waives any claim or defense in any such action or proceeding based on improper venue or forum non conveniens or any similar basis.

4.11       Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY EXPRESSLY, INTENTIONALLY, AND DELIBERATELY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE (EACH, A “CLAIM”). ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.11 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. In the event that the waiver of jury trial set forth in the previous sentence is not enforceable under the law applicable to this Agreement, the parties to this Agreement agree that any Claim, including any question of law or fact relating thereto, shall, at the written request of any party, be determined by judicial reference pursuant to Missouri law. The parties shall select a single neutral referee, who shall be a retired state or federal judge. In the event that the parties cannot agree upon a referee, the court shall appoint the referee. The referee shall report a statement of decision to the court. Nothing in this paragraph shall limit the right of any party at any time to exercise self- help remedies, foreclose against collateral or obtain provisional remedies. The parties shall bear the fees and expenses of the referee equally, unless the referee orders otherwise. The referee shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. The parties acknowledge that if a referee is selected to determine the Claims, then the Claims will not be decided by a jury.

4.12       Use of Name. The Company will not make any reference to Enterprise Bank & Trust in connection with the Offering except with respect to its role as Escrow Agent hereunder, and in no event will the Company state or imply the Escrow Agent has investigated or endorsed the Offering in any manner whatsoever.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have executed this Agreement pursuant to due authority as of the date set forth above.

EXHIBIT A

DISBURSEMENT NOTICE

DISBURSEMENT OF OFFERING PROCEEDS

To the Escrow Agent:

Enterprise Bank & Trust, Escrow

Attn: Specialized Deposit Services

1281 N. Warson

St. Louis, Missouri 63132

[Date]

Dear Escrow Agent:

1.       Reference is made to that certain Escrow Agreement dated as of (the “Escrow Agreement”) by and among , a Delaware limited liability company (the “Company”), Jumpstart Securities LLC, a Delaware limited liability company (the “Managing Broker-Dealer”) and ENTERPRISE BANK & TRUST (in its capacity as escrow holder, the “Escrow Agent”). All terms used but not defined herein shall have the respective meanings given such terms in the Escrow Agreement.

2. The Company hereby certifies that the Company has received and accepted subscriptions with a minimum of $ . You are hereby directed to disburse Escrow Funds in the amount of $ to the Company as follows:

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has executed this statement as of the date first hereinabove set forth.

EXHIBIT B

DISBURSEMENT NOTICE TERMINATION

(Date)

To the Escrow Agent:

Enterprise Bank & Trust

Attn: Specialized Deposit Services, Escrow 1281 N. Warson

St. Louis, Missouri 63132

[DATE]

Re:      Escrow Account No. IF-72424 Dear Escrow Agent:

1.       Reference is made to that certain Escrow Agreement dated as of (the “Escrow Agreement”) by and among , a Delaware limited liability company (the “Company”), Jumpstart Securities LLC, a Delaware limited liability company (the “Managing Broker- Dealer”) and ENTERPRISE BANK & TRUST (in its capacity as escrow holder, the “Escrow Agent”). All terms used but not defined herein shall have the respective meanings given such terms in the Escrow Agreement.

2.       The Company has terminated the Offering prior to the disbursement of offering proceeds pursuant to Section 2.1(d) of the Escrow Agreement.

3.       You are hereby directed to disburse the Escrow Funds to the subscribers in accordance with Section 2.1(c) of the Escrow Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has executed this statement as of the date first hereinabove set forth.

EXHIBIT C

ESCROW AGENT SCHEDULE OF FEES

NOTE: All other standard bank fees apply. Please see current fee schedule for a summary of all bank fees.

*Escrow fee is due upon account opening.

The Escrow Account Servicing Fee, if not paid at the time of final disbursement of the funds, may be debited by Escrow Agent from the balance remaining in the Escrow Account upon final disbursement of the funds.

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