                                 CODE OF VIRGINIA

MEMBERSHIP IN CORPORATION; LOANS FROM MEMBERS (§ 13.1-989)

A. Any financial institution is authorized to become a member of a corporation
by making application to the board of directors on such form and in such manner
as the board of directors may require and membership shall become effective upon
acceptance of such application by the board. Membership shall be for the
duration of the corporation, provided, however, that upon written notice given
to the corporation two years in advance, a member may withdraw from membership
at the expiration date of such notice and shall not thereafter be obligated to
make any loans to the corporation.

B. Each member shall make loans to the corporation as and when called upon by it
to do so. Such loans shall be made upon terms and conditions as shall be
approved from time to time by the board of directors, subject to the following
conditions:

   1. All loans shall be evidenced by transferable instruments of the corporation
   and shall bear interest at a rate of not less than one-half of one percent in
   excess of the rate of interest determined by the board of directors to be
   prevalent commercial banking prime or base rate on unsecured commercial loans
   as of the date of the loan.

   2. If expressly provided in such call, the loan may provide for a rate of
   interest which fluctuates with the prime or base rate from time to time and
   which would be subject during the life of the loan to adjustment as of each
   interest period commencing after the next interest payment date.

   3. All loan limits shall be established at the $1000 amount nearest to the
   amount computed in accordance with the provisions of this section.

   4. No loan pursuant to call under this section to a development corporation
   shall be made if immediately thereafter the total amount of the obligations of
   the corporation would exceed ten times the amount of its outstanding and
   unimpaired capital stock, its earned and unimpaired surplus established
   pursuant to &#xA7; 13.1-994 and any indebtedness expressly subordinated to
   loans made pursuant to call under this section.

   5. The total amount outstanding at any one time on loans to a development
   corporation made by any member shall not exceed the following limit, to be
   determined as of the time such member becomes a member, on the basis of
   figures contained in the most recent year-end statement furnished by such
   member to state or federal supervisory authorities, as the case may be: two
   percent of the capital and permanent surplus of banks and trust companies;
   one-half of one percent of the total outstanding loans made by a savings
   institution, or $250,000, whichever is less; one percent of the total
   outstanding loans made by an industrial loan company; one percent of the
   capital and unassigned surplus of stock insurance companies, except fire
   insurance companies; one percent of the unassigned surplus of mutual insurance
   companies, except fire insurance companies; one-tenth of one percent of the
   assets of fire insurance companies.

   6. All loan limits shall be recomputed as of January 1 of each even-numbered
   year, but no member&#8217;s loan limit shall be increased as the result of
   such recomputation without the consent of such member.

   7. Each call for loans made by the corporation shall be prorated among the
   members of the corporation in substantially the same proportion that the
   adjusted loan limit of each member bears to the aggregate of the adjusted loan
   limits of all members. The &#8220;adjusted loan limit&#8221; of a member shall
   be the amount of such member&#8217;s loan limit, reduced by the balance of
   outstanding loans made by such member to the corporation and the investment of
   such member in capital stock of the corporation at the time of such call.

   8. A member of a corporation created under this chapter shall not be a member
   of more than one such corporation.

HISTORY: Code 1950, § 13.1-147; 1960, c. 80; 1962, c. 159; 1972, c. 693; 1985,
c. 522; 1996, c. 77.