EXHIBIT 10.45

MASTER AGREEMENT FOR DEBT AND EQUITY

RESTRUCTURE OF CITY NATIONAL PLAZA

THIS MASTER AGREEMENT FOR DEBT AND EQUITY RESTRUCTURE OF CITY NATIONAL PLAZA
(this “Agreement”) is made and entered into as of February 19, 2010, by and
among the CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity
(“CalSTRS”), CNP INVESTOR, LLC, a Delaware limited liability company (“CNP
Investor”), THOMAS PROPERTIES GROUP, L.P., a Maryland limited partnership
(“TPG”), TPG/CalSTRS, LLC, a Delaware limited liability company (“TPG/CalSTRS”),
TPGA, LLC, a Delaware limited liability company (“TPGA”), TPG PLAZA INVESTMENTS,
LLC, a Delaware limited liability company (“TPG Plaza Investments”), 505 FLOWER
ASSOCIATES, LLC, a Delaware limited liability company (“Guarantor”), 515/555
FLOWER JUNIOR MEZZANINE ASSOCIATES, LLC, a Delaware limited liability company
(“Junior Mezzanine Borrower”), 515/555 FLOWER MEZZANINE ASSOCIATES, LLC, a
Delaware limited liability company (“Senior Mezzanine Borrower”), and 515/555
FLOWER ASSOCIATES, LLC, a Delaware limited liability company (“Mortgage
Borrower”). The capitalized terms used in this Agreement, including without
limitation any schedules, appendices and exhibits to this Agreement, and not
otherwise defined shall have the meanings given to such terms in Exhibit “A”.

RECITALS

A. TPG/CalSTRS owns indirectly through a series of wholly owned subsidiaries
(the “Title Holding Subsidiaries”) that certain office complex commonly known as
City National Plaza, located at 505 – 555 South Flower Street, Los Angeles,
California (the “Project”). TPG and CalSTRS are the sole members of TPG/CalSTRS.
The current ownership structure for the Project is shown on Exhibit “B” attached
hereto.

B. TPGA is a Title Holding Subsidiary directly and wholly owned by TPG/CalSTRS.

C. TPG Plaza Investments is a Title Holding Subsidiary directly and wholly owned
by TPGA.

D. In connection with a prior restructure of the ownership of TPG Plaza
Investments, TPG Plaza Investments entered into a financing arrangement with
certain of its prior members referred to herein as the Picerne/Kings Capital
Loan.

E. For purposes of financing the Project, additional Title Holding Subsidiaries
directly and indirectly wholly owned by TPG Plaza Investments obtained the loans
identified on Exhibit “C” attached hereto (the “Mezzanine Loans”), which are
currently held by the various holders of the Mezzanine Loans (the “Mezzanine
Lenders”). Guarantor guaranteed certain obligations of the borrowers under the
Mezzanine Loans pursuant to various guarantees (the “Loan Guaranties”).

 

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F. Also for purposes of financing the Project, another Title Holding Subsidiary
obtained that certain mortgage loan in the principal amount of Three Hundred
Fifty Five Million Three Hundred Thousand Dollars ($355,300,000) (the “Mortgage
Loan”).

G. TPG, for itself and on behalf of TPG/CalSTRS and the Title Holding
Subsidiaries, after considering the financial status of the Project and the
Mezzanine Loans as well as alternative sources of financing, has specifically
requested that CalSTRS acquire the Mezzanine Loans and thereafter retire the
Mezzanine Loans in exchange for an equity interest in TPG Plaza Investments (the
“New TPG Plaza Interest”) separate from CalSTRS’ equity interest held through
TPG/CalSTRS.

H. In connection with such request, CalSTRS has formed CNP Investor for the
purposes set forth herein. Pursuant to the CNP Investor LLC Agreement, CalSTRS
is the sole member of CNP Investor, and TPG is the non-member manager thereof
with such authority and responsibility as set forth therein.

I. Concurrently herewith, CNP Investor has entered into a loan purchase
agreement with each of the Mezzanine Lenders (the “Loan Purchase Agreements”),
pursuant to which CNP Investor has agreed to purchase each Mezzanine Loan from
the applicable Mezzanine Lender. CNP Investor will retire the Mezzanine Loans
following their acquisition and convert the Mezzanine Loans into the New TPG
Plaza Interest, all subject to and in accordance with the terms hereof.

J. If the acquisition of the Mezzanine Loans and the Conversion were to be
consummated as described above, then the ownership structure for the Project
would be as set forth on Exhibit “D” attached hereto.

K. Concurrently herewith, TPG and CalSTRS have entered into that certain Sixth
Amendment to Second Amended and Restated Operating Agreement of TPG/CalSTRS, LLC
in connection with the matters described in this Agreement.

L. The Parties now desire to set forth herein the terms and conditions pursuant
to which CNP Investor will acquire the Mezzanine Loans and the ownership of the
Mezzanine Loans, once acquired by CNP Investor, will be converted into the New
TPG Plaza Interest held by CNP Investor.

AGREEMENT

NOW THEREFORE, in consideration of the mutual promises, covenants and
representations hereinafter contained, and subject to the conditions hereinafter
set forth, the parties hereto fully incorporate the Recitals above herein and
agree as follows:

ARTICLE I.

PURCHASE OF MEZZANINE LOANS

1.1 Loan Purchase Agreements. CNP Investor, as described above, has entered into
the Loan Purchase Agreements with respect to the Mezzanine Loans. TPG shall use
commercially reasonable efforts to facilitate the consummation of the Loan
Purchase

 

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Agreements, including without limitation, by consulting and coordinating with
the Mezzanine Lenders and assisting with the satisfaction of conditions to
closing thereunder. Notwithstanding the foregoing, CNP shall have the right and
authority to make all decisions and take all actions under the Loan Purchase
Agreements in its sole and absolute discretion.

1.2 Rights of CNP Investor as Lender. Anything herein to the contrary
notwithstanding, during the period prior to the Conversion, while CNP Investor
is the holder of the Mezzanine Loans, Article VII shall apply, and CNP Investor
(and CalSTRS as the owner of CNP Investor) shall have all rights and remedies
available under the Mezzanine Loan Documents or otherwise, as more specifically
set forth in Article VII.

1.3 Mortgage Lender Notification and Consent. Following the acquisition of all
of the Mezzanine Loans in accordance with the Loan Purchase Agreements, CalSTRS,
CNP Investor and TPG shall cooperate in notifying Mortgage Lender that (i) CNP
Investor has acquired the Mezzanine Loans using purchase funds consisting of new
cash equity funds of CalSTRS which were not derived directly or indirectly from
the Project, and (ii) CNP Investor has waived and relinquished, for the benefit
of Mortgage Lender, certain rights of the Mezzanine Lenders under the
Intercreditor Agreement. Further, each of CalSTRS, CNP Investor and TPG shall
use commercially reasonable efforts to obtain from Mortgage Lender its written
(A) acknowledgment of the foregoing, (B) consent to the retirement of the
Mezzanine Loans, without any prepayment of the Mortgage Loan or other material
condition to such consent, and (C) acknowledgment that upon the retirement of
the Mezzanine Loans, the Intercreditor Agreement will be terminated as provided
therein (collectively, the “Mortgage Lender Consent”).

1.4 Effect of Closing under Loan Purchase Agreements. The Parties intend that
all closings under the Loan Purchase Agreements shall occur concurrently.
Notwithstanding the execution and entry into this Agreement by all Parties on
the date hereof, the performance by the Parties of their respective obligations
set forth in Articles II, III and V of this Agreement shall commence to apply
only upon the acquisition of the Mezzanine Loans by CNP Investor, if and when
such acquisition occurs. Unless and until CNP Investor acquires the Mezzanine
Loans, no Party shall have any obligations to any other Party arising under
Articles II, III and V of this Agreement.

1.5 No Distributions. Unless agreed by all the members of TPG/CalSTRS in
writing, no distributions shall be made by TPG Plaza Investments from the date
hereof until the Mezzanine Loan Acquisition Date.

ARTICLE II.

CONVERSION OF LOANS TO EQUITY

2.1 Agreement to Convert. Following the acquisition of the Mezzanine Loans by
CNP Investor and as further provided in Section 2.2, CNP Investor shall be
admitted as a member of TPG Plaza Investments in exchange for CNP Investor
entering into the Loan Termination Agreements with each of the Mezzanine
Borrowers to terminate all outstanding obligations under the Mezzanine Loans,
all in accordance with the terms and conditions set forth below, thereby
converting the Mezzanine Loans into an equity interest in TPG Plaza Investments
(the “Conversion”). CNP Investor shall convert all, and not less than all, of
the Mezzanine Loans acquired from the Mezzanine Lenders.

 

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2.2 Timing of Closing of the Conversion. The Conversion shall be scheduled to
occur on the date (the “Scheduled Conversion Date”) that is the earlier of
(i) five (5) days following receipt by CNP Investor and TPG of the Mortgage
Lender Consent, (ii) the maturity date of the Mezzanine Loans, or (iii) the date
that the Mortgage Loan has been fully repaid.

ARTICLE III.

CLOSING OF CONVERSION

3.1 Conversion Closing. Provided that upon the Scheduled Conversion Date (a) all
of the conditions to Conversion Closing set forth in this Agreement have been
satisfied or waived by the Party in whose favor the condition runs and (b) this
Agreement has not been terminated by any Party in accordance with the provisions
set forth herein, the transactions contemplated hereby shall be consummated (the
“Conversion Closing”), with the date that Conversion Closing actually occurs
being the “Conversion Date”.

3.2 CNP Investor’s Closing Deliveries. Upon the Conversion Closing, CNP Investor
shall deliver, or cause to be delivered, to TPG:

3.2.1 Two originals of that certain Second Amended and Restated Limited
Liability Company Agreement of TPG Plaza Investments, LLC in the form attached
hereto as Exhibit “E” (the “Amended TPG Plaza Investments LLC Agreement”), duly
executed by CNP Investor;

3.2.2 The original of the note for each Mezzanine Loan marked cancelled by CNP
Investor and two originals of the Loan Termination Agreement (Senior Mezzanine)
in the form attached hereto as Exhibit “G”, and two originals of the Loan
Termination Agreement (Junior Mezzanine) in the form attached hereto as Exhibit
“H” (collectively, the “Loan Termination Agreements”), duly executed by CNP
Investor; and

3.2.3 Such other documents and certificates as may be reasonably required by TPG
to consummate the Conversion.

3.3 TPG’s Closing Deliveries. Upon the Conversion Closing, TPG shall deliver, or
cause to be delivered, to CalSTRS:

3.3.1 Two originals of the Amended TPG Plaza Investments LLC Agreement, duly
executed by TPGA;

3.3.2 Two originals of each of the Loan Termination Agreements, duly executed by
Junior Mezzanine Borrower and Senior Mezzanine Borrower, as applicable; and

3.3.3 Such other documents and certificates as may be reasonably required by
CalSTRS to consummate the Conversion.

 

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3.4 Cash Reconciliation. It had been the intention of the Parties to implement
the Conversion concurrently with the Mezzanine Loan Acquisition Date. However,
the Parties recognize that the conditions set forth in Sections 5.1.1 and 5.2.1
will necessitate a delay in the Conversion beyond the Mezzanine Loan Acquisition
Date. The Parties desire that, to the maximum extent possible, the economic
effect of a Conversion concurrent with the acquisition of the Mezzanine Loans be
replicated notwithstanding such delay. Therefore, upon the Conversion Closing,
TPG shall certify in writing as to the financial information necessary to
perform the reconciliation, and the Parties shall in good faith reconcile the
differences between the economic results of the Conversion occurring on the
Conversion Date as compared to a hypothetical closing on the Mezzanine Loan
Acquisition Date. The Parties shall then calculate an amount of cash that shall
be paid by CNP Investor to TPGA, or by TPGA to CNP Investor, as applicable based
on the net debits and credits for the reconciliation, such that the Conversion
on the Conversion Date will result in the same economic effect as if the
Conversion had occurred on the Mezzanine Loan Acquisition Date. This
reconciliation shall include, without limitation, the following adjustments:

3.4.1 TPGA shall be credited, and CNP Investor shall be debited, with an amount
equal to TPGA’s Plaza Percentage multiplied by the total debt service payments
received by CNP Investor during the Reconciliation Period.

3.4.2 CNP Investor shall be credited, and TPGA shall be debited, with an amount
equal to CNP Investor’s Plaza Percentage multiplied by the total distributions
by TPG Plaza Investments to TPGA during the Reconciliation Period.

3.4.3 TPGA shall be credited, and CNP Investor shall be debited, with an amount
equal CNP Investor’s Plaza Percentage multiplied by the total capital
contributions made by TPGA to TPG Plaza Investments during the Reconciliation
Period.

3.5 TPG Plaza Investments as Title Holding Subsidiary. Upon the Conversion and
acquisition by CNP Investor of the New TPG Plaza Interest, TPG Plaza Investments
shall continue to be deemed a Title Holding Subsidiary of TPG/CalSTRS,
notwithstanding that it shall cease to be wholly owned indirectly by
TPG/CalSTRS, and the provisions relating to Title Holding Subsidiaries under
TPG/CalSTRS LLC Agreement shall continue to apply to TPG Plaza Investments, as
more particularly described in the Amended TPG Plaza Investments LLC Agreement.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of TPG. TPG hereby makes the following
representations and warranties to CalSTRS and CNP Investor as of the date
hereof, the Mezzanine Loan Acquisition Date and the Conversion Date as if such
representations and warranties were made on and as of that date:

4.1.1 Each of the TPG Parties has the power and authority to enter into and to
carry out the terms and provisions of this Agreement and the Conversion
Documents, as applicable to each of them.

 

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4.1.2 This Agreement constitutes, and the Conversion Documents when executed
will constitute, the legal, valid and binding agreement of each of the TPG
Parties, as applicable to each of them, enforceable in accordance with their
respective terms, except to the extent that enforcement may be affected by laws
relating to bankruptcy, reorganization, insolvency and creditors’ rights and by
the availability of injunctive relief, specific performance and other equitable
remedies.

4.1.3 The execution and delivery of this Agreement and all of the Conversion
Documents, the consummation of the transactions and the performance of the
obligations contemplated hereby and thereby by each of the TPG Parties, as
applicable, will not conflict with, or result in a violation of or default
under, any provision of any governing instrument applicable to any of the TPG
Parties, or any agreement or instrument to which any of the TPG Parties is a
party or by which it or any of its properties is bound, assuming that any
required consents of the lenders are obtained in connection with the acquisition
and Conversion of the Mezzanine Loans, or any permit, franchise, judgment,
decree, statute, law, rule or regulation applicable to any of the TPG Parties or
any of the properties of the TPG Parties.

4.1.4 TPGA is the owner of 100% of the membership interests in TPG Plaza
Investments free and clear of any lien, encumbrance or security interest, and,
until the consummation of the Conversion or earlier termination of this
Agreement, TPGA shall not transfer any membership interest in TPG Plaza
Investments.

4.1.5 To TPG’s actual current knowledge, the outstanding principal balance of
each of the Mezzanine Loans, the Mortgage Loan and the Picerne/Kings Capital
Loan as of February 14, 2010 is as set forth on Exhibit “I” hereto.

4.1.6 To TPG’s actual current knowledge, the balance of the Mortgage Lender
Reserve Accounts as of February 14, 2010 is as set forth in Exhibit “I” hereto.

4.1.7 To TPG’s actual current knowledge, the Net Operating Cash as of
February 14, 2010 is as set forth in Exhibit “I” hereto.

4.1.8 To TPG’s actual current knowledge, the aggregate accrued and unpaid
interest with respect to each of the Mezzanine Loans, the Mortgage Loan and the
Picerne/Kings Capital Loan as of February 14, 2010 is set forth on Exhibit “I”
attached hereto.

4.1.9 To TPG’s actual current knowledge, there are no material liabilities of
TPG Plaza Investments or its subsidiaries other than as shown on Exhibit “I”
attached hereto and other than any liabilities accounted for in the Net
Operating Cash.

4.1.10 To TPG’s actual current knowledge, there exists no Event of Default nor
any event or default which, but for the passage of time and/or the giving of
notice, would constitute an Event of Default with respect to any of the
Mezzanine Loans, the Mortgage Loan or the Picerne/Kings Capital Loan, excluding
any default that may be alleged arising from the proposed acquisition or
Conversion of the Mezzanine Loans by CNP Investor.

 

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4.1.11 TPG, for itself and on behalf of the other TPG Parties acknowledges that
CalSTRS is a unit of the California State and Consumer Services Agency
established pursuant to Title I, Division 1, Parts 13 and 14 of the California
Education Code, Sections 22000, et seq., as amended (the “Education Code”). As a
result, TPG, for itself and on behalf of the TPG Parties, acknowledges that
CalSTRS is prohibited from engaging in certain transactions with or for the
benefit of an “employer”, “employing agency”, “member”, “beneficiary” or
“participant” (as those terms are defined or used in the Education Code). In
addition, TPG, for itself and on behalf of the TPG Parties, acknowledges that
CalSTRS may be subject to certain restrictions and requirements under the
Internal Revenue Code, 26 U.S.C. Section 1 et seq. (the “Code”). Accordingly,
TPG represents and warrants to CalSTRS that (1) none of the TPG Parties is an
employer, employing agency, member, beneficiary or participant; (2) none of the
TPG Parties has made any contribution or contributions to CalSTRS; (3) neither
an employer, employing agency, member, beneficiary nor participant, nor any
person who has made any contribution to CalSTRS, nor any combination thereof, is
related to any of the TPG Parties by any relationship described in
Section 267(b) of the Code; (4) neither CalSTRS, David L Bonuccelli &
Associates, their affiliates, related entities, agents, officers, directors or
employees, nor any CalSTRS board member, employee or internal investment
contractor (collectively, “CalSTRS Affiliates”) has received or will receive,
directly or indirectly, any payment, consideration or other benefit from, nor
does any CalSTRS Affiliate have any agreement or arrangement with, any of the
TPG Parties or any person or entity affiliated with any of them, relating to the
transactions contemplated by this Agreement except as expressly set forth in
this Agreement; and (5) except for publicly traded shares of stock or other
publicly traded ownership interests, no CalSTRS Affiliate has any direct or
indirect ownership interest in TPG or any person or entity affiliated with TPG.

4.1.12 To TPG’s actual current knowledge, (1) none of the Mezzanine Lenders is
an employer, employing agency, member, beneficiary or participant; (2) none of
the Mezzanine Lenders has made any contribution or contributions to CNP Investor
or CalSTRS; (3) neither an employer, employing agency, member, beneficiary nor
participant, nor any person who has made any contribution to CalSTRS or CNP
Investor, nor any combination thereof, is related to any Mezzanine Lender by any
relationship described in Section 267(b) of the Code; (4) neither CalSTRS,
Thomas Properties Group, Inc., TPG/CalSTRS, Guarantor, the Title Holding
Subsidiaries, CNP Investor, their affiliates, related entities, agents,
officers, directors or employees, nor any CalSTRS board member, employee or
internal investment contractor (collectively “CalSTRS Loan Purchase Related
Parties”) has received or will receive, directly or indirectly, any payment,
consideration or other benefit from, nor does any CalSTRS Loan Purchase Related
Party have any agreement or arrangement with, any Mezzanine Lender or any person
or entity affiliated with a Mezzanine Lender, relating to the Mezzanine Loan
purchase transactions except as expressly set forth in this Agreement; and
(5) except for publicly traded shares of stock or other publicly traded
ownership interests, no CalSTRS Loan Purchase Related Party has any direct or
indirect ownership interest in any Mezzanine Lender or any person or entity
affiliated with any Mezzanine Lender.

With respect to the representations and warranties set forth in Sections 4.1.5
through 4.1.8, TPG shall execute and deliver to CalSTRS a separate certificate
setting forth the amounts applicable as of the date when such representations
and warranties are remade as of the Mezzanine Loan Acquisition Date and the
Conversion Date.

 

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4.2 Representations and Warranties of CalSTRS. CalSTRS hereby makes the
following representations and warranties to TPG as of the date hereof, the
Mezzanine Loan Acquisition Date and the Conversion Date as if such
representations and warranties were made on and as of that date:

4.2.1 Each of CalSTRS and CNP Investor has the power and authority to enter into
and to carry out the terms and provisions of this Agreement and the Conversion
Documents, as applicable to each of them.

4.2.2 This Agreement constitutes, and the Conversion Documents when executed
will constitute, the legal, valid and binding agreement of CalSTRS and CNP
Investor, as applicable to each of them, enforceable in accordance with its
terms, except to the extent that enforcement may be affected by laws relating to
bankruptcy, reorganization, insolvency and creditors’ rights and by the
availability of injunctive relief, specific performance and other equitable
remedies.

4.2.3 The execution and delivery of this Agreement and all of the Conversion
Documents, the consummation of the transactions and performance of the
obligations contemplated hereby and thereby by CalSTRS and CNP Investor, as
applicable, will not conflict with, or result in a violation of or default
under, any provision of any governing instrument applicable to CalSTRS or CNP
Investor, or any agreement or instrument to which CalSTRS or CNP Investor is a
party or by which it or any of its properties is bound, or any permit,
franchise, judgment, decree, statute, law, rule or regulation applicable to
CalSTRS or CNP Investor or any of the properties of CalSTRS or CNP Investor.

4.3 Survival of Representations and Warranties. This Article IV shall survive
the consummation of any of the transactions contemplated hereby and the
termination hereof, whether or not the transactions contemplated hereby are
consummated.

ARTICLE V.

CONDITIONS PRECEDENT.

5.1 Conditions Precedent to Conversion Obligations of CNP Investor. In addition
to the other terms and conditions set forth in this Agreement, the obligation of
CNP Investor to consummate the Conversion is subject to, and is expressly
conditioned on the satisfaction of, each of the following conditions, which are
for the sole and exclusive benefit of CalSTRS and CNP Investor; provided,
however, in the event any such condition has not been satisfied, CNP Investor
may either waive the same and proceed to the Conversion Closing, terminate this
Agreement in which case no Party shall have any ongoing obligations to any other
Party arising under this Agreement except as otherwise provided herein, or
exercise its rights under Article VI:

5.1.1 The Mortgage Lender Consent shall have been obtained, the maturity date of
the Mezzanine Loans shall have passed, or the Mortgage Loan shall have been
fully repaid.

5.1.2 TPG and the other TPG Parties shall have performed and complied with all
agreements, covenants and obligations required by this Agreement to be so
performed or complied with by TPG and the other TPG Parties.

 

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5.1.3 All representations and warranties made by TPG in this Agreement shall be
accurate in all material respects.

5.1.4 The Conversion shall not be prohibited by or conflict with any applicable
law, rule, regulation, stay, order or judgment binding on CNP Investor or
CalSTRS and issued by any court of competent jurisdiction in the United States
or by any regulatory authority (“Applicable Laws”).

5.1.5 No action, suit, or other proceeding relating to the transactions
contemplated hereby (collectively, “Proceedings”) shall have been instituted or
threatened by a third party before or by any court or regulatory authority.

5.2 Conditions Precedent to Conversion Obligations of TPG. In addition to the
other terms and conditions set forth in this Agreement, the obligation of TPG
and the other TPG Parties to consummate the Conversion is subject to, and is
expressly conditioned on the satisfaction of, each of the following conditions;
provided, however, in the event any such condition has not been satisfied, TPG
may either waive the same and proceed to the Conversion Closing, terminate this
Agreement, in which case no Party shall have any ongoing obligations to any
other Party arising under this Agreement except as otherwise provided herein, or
exercise its rights under Article VI:

5.2.1 The Mortgage Lender Consent shall have been obtained, the maturity date of
the Mezzanine Loans shall have passed, or the Mortgage Loan shall have been
fully repaid.

5.2.2 CalSTRS and CNP Investor shall have performed and complied with all
agreements, covenants and obligations required by this Agreement to be so
performed or complied with by CalSTRS and CNP Investor.

5.2.3 All representations and warranties made by CalSTRS in this Agreement shall
be accurate in all material respects.

5.2.4 The Conversion shall not be prohibited by or conflict with any Applicable
Laws binding on the TPG Parties.

5.2.5 No Proceedings shall have been instituted or threatened by a third party
before or by any court or Regulatory Authority.

ARTICLE VI.

TERMINATION/

EVENTS OF DEFAULT.

6.1 Termination. Each Party shall use its commercially reasonable efforts to
cause the satisfaction of all conditions to the consummation of this Agreement
that are in the control of such Party and to cooperate as reasonably necessary
in the satisfaction of all other conditions to the consummation of this
Agreement. This Agreement may be terminated on or before the Conversion Closing
as follows:

6.1.1 Upon the mutual written agreement of the Parties;

 

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6.1.2 In accordance with Section 1.4 above;

6.1.3 By the Party benefited by a closing condition if that closing condition
fails to occur within the time period provided therefor, or if no specified time
period, by the Scheduled Conversion Date;

6.1.4 By CalSTRS or CNP Investor, upon an Event of Default by any of the TPG
Parties as the Defaulting Party; or

6.1.5 By TPG, upon an Event of Default by either CalSTRS or CNP Investor as the
Defaulting Party.

6.2 Event of Default. Each of the following shall constitute an “Event of
Default” by the “Defaulting Party” (as defined below):

6.2.1 A breach by any of the parties of a material representation, warranty or
obligation contained in this Agreement, if such breach is not cured within ten
(10) calendar days after the date the other Party has provided written notice of
such breach to the Defaulting Party;

6.2.2 The rendering, by a court with appropriate jurisdiction, of a decree or
order (1) adjudging such Party or any of its Primary Affiliates bankrupt or
insolvent; or (2) approving as properly filed a petition seeking reorganization,
readjustment, arrangement, composition, or similar relief for such Party or any
of its Primary Affiliates under the federal bankruptcy Laws or any other similar
applicable Law or practice, and if such decree or order shall have continued
undischarged and unstayed for a period of sixty (60) days.

6.2.3 The rendering, by a court with appropriate jurisdiction, of a decree or
order (1) for the appointment of a receiver, a liquidator, or a trustee or
assignee in bankruptcy or insolvency of such Party or any of its Primary
Affiliates, or for the winding up and liquidation of such Party’s or any of its
Primary Affiliate’s affairs, provided that such decree or order shall have
remained in force undischarged and unstayed for a period of sixty (60) days; or
(2) for the sequestration or attachment of any property of such Party or any of
its Primary Affiliates without its return to the possession of such Party or its
release from such sequestration or attachment within sixty (60) days thereafter.

6.2.4 Such Party or any of its Primary Affiliates (1) institutes proceedings to
be adjudicated a voluntary bankrupt or an insolvent; (2) consents to the filing
of a bankruptcy proceeding against such Party or Primary Affiliate; (3) files a
petition or answer or consent seeking reorganization, readjustment, arrangement,
composition, or similar relief for such Party or Affiliate under the federal
bankruptcy Laws or any other similar applicable Law or practice; (4) consents to
the filing of any such petition, or to the appointment of a receiver, a
liquidator, or a trustee or assignee in bankruptcy or insolvency for such Party
or Primary Affiliate or a substantial part of such Party’s or Primary
Affiliate’s property; (5) makes an assignment for the benefit of such Party’s or
Primary Affiliate’s creditors; (6) is unable to or admits in writing such
Party’s or Primary Affiliate’s inability to pay such Party’s or Primary
Affiliate’s debts generally as they become due; or (7) takes any action in
furtherance of any of the aforesaid purposes.

 

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6.3 Defaulting Party. For the purposes of implementing the provisions contained
in this Agreement, the “Defaulting Party” shall be (i) in the case of an Event
of Default referenced in Section 6.2.1 , the Party whose action or inaction, or
whose Primary Affiliate’s action or inaction, caused or resulted in the breach;
and (ii) in the case of an Event of Default referenced in Section 6.2.2, 6.2.3
or 6.2.4, the Party who, or whose Primary Affiliate, is the subject of such
court decree or order, has instituted such proceedings or filed such petitions,
or is insolvent, etc. The “Non-Defaulting Party” is the Party that is not the
Defaulting Party.

6.4 Remedies. No Party shall be limited to the termination right granted by
virtue of Sections 6.1.3, 6.1.4 or 6.1.5, and such Party may elect any remedy
existing at law or in equity, including, without limitation, the following:

6.4.1 Proceeding to the Conversion Closing, despite the non-fulfillment of any
condition or breach or any representation or warranty hereunder;

6.4.2 With respect to an Event of Default by TPG, termination of this Agreement
by CalSTRS and the transactions contemplated hereby prior to the Conversion
Closing and proceeding to exercise any or all remedies available to such Party
under this Agreement at law or in equity;

6.4.3 With respect to an Event of Default by TPG that would prevent the
Conversion from occurring, including, without limitation, failure of TPG to
deliver the Conversion Documents described in Section 3.3 above, at any time
following the Mezzanine Loan Acquisition Date, at the election of CNP Investor
in its sole and absolute discretion, deem such Event of Default to constitute an
“Event of Default” under all of the Mezzanine Loans and CNP Investor may
exercise all rights and remedies with respect to such “Event of Default” under
the Mezzanine Loans; or

6.4.4 With respect to an Event of Default by CNP Investor or CalSTRS prior to
the Conversion Closing, termination of this Agreement by TPG and proceeding to
exercise any or all remedies available to TPG Parties under this Agreement at
law or in equity.

6.5 Survival of Remedies. Anything to the contrary notwithstanding, remedies
against a Defaulting Party shall survive the termination of this Agreement
indefinitely.

ARTICLE VII.

INDEPENDENCE OF RIGHTS

AS LENDER AND MEMBER.

7.1 Acknowledgments. TPG for itself and on behalf of the TPG Parties recognizes
and acknowledges the following:

7.1.1 CNP Investor has agreed, and CalSTRS, as the sole member of CNP Investor,
has agreed to cause CNP Investor, to acquire the Mezzanine Loans if CNP
Investor, in its capacity as the holder of the Mezzanine Loans, and CalSTRS as
its owner, are treated as, and are entitled to all of the rights and remedies
of, a third-party lender not in any way related to the TPG Parties. Were CNP
Investor, in its capacity as the Lender, or CalSTRS as the owner of the Lender,
to not be treated as, or entitled to all of the rights and remedies of, a third
party lender not in any way related to the TPG Parties, CNP Investor would not
have agreed to enter, and CalSTRS would not have agreed to cause CNP Investor to
enter, into the Loan Purchase Agreements to purchase the Mezzanine Loans.

 

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7.1.2 TPG and the other TPG Parties are agreeing to the provisions of this
Article VII to induce CNP Investor to acquire, and CalSTRS to cause CNP Investor
to acquire, the Mezzanine Loans. TPG and the other TPG Parties acknowledge that
CalSTRS and CNP Investor will be relying upon the provisions of this Article VII
in acquiring the Mezzanine Loans and that, but for this Article VII and the
other provisions set forth in this Agreement, CNP Investor would not acquire,
and CalSTRS would not cause CNP Investor to acquire, the Mezzanine Loans. The
TPG Parties will be benefited by CNP Investor acquiring the Mezzanine Loans and
by the Conversion and that such benefit constitutes actual and adequate
consideration for this Agreement.

7.1.3 Any provision of this Article VII referencing CNP Investor as Lender shall
extend, whether or not explicitly set forth, to CalSTRS as the owner of CNP
Investor. Similarly, any provision of this Article VII referencing CNP Investor
as a member of TPG Plaza Investments, LLC or a TPG Related Party shall extend,
whether or not explicitly set forth, to CalSTRS as an Affiliate of CNP Investor.

7.1.4 The admission of TPG or any of its Affiliates as members of CNP Investor
shall in no way affect any of the acknowledgments, agreements or waivers made by
any of the TPG Parties pursuant to this Article VII.

7.2 Acquisition of Mortgage Loan. It is the parties’ intention to refinance the
Mortgage Loan on or prior to the maturity date of the Mortgage Loan.
Notwithstanding the foregoing and without in any way limiting the provisions of
Section 7.1, TPG and the other TPG Parties agree that CalSTRS, CNP Investor and
their Affiliates shall be free to acquire the Mortgage Loan as if it were a
third party not in any way related to the TPG Parties, at par, at a discount or
on any terms, upon the maturity of the Mortgage Loan (whether scheduled or
accelerated). In the event of any acquisition of the Mortgage Loan by CalSTRS,
CNP Investor or any of their Affiliates, the provisions of this Article VII
shall apply equally to the Mortgage Loan, with CalSTRS, CNP Investor or such
Affiliate as the “CalSTRS Lender” and CalSTRS, CNP Investor or such Affiliate as
a “CalSTRS Member” of a TPG Related Party for purposes of this Article VII.
Notwithstanding the foregoing, the Parties hereto agree that CalSTRS, CNP
Investor or any applicable Affiliate will convert the Mortgage Loan into an
equity interest in the Project commensurate on a dollar-for-dollar basis with
the then-outstanding principal, interest and other payments due under the
Mortgage Loan in a manner similar to, and on substantially the same terms as,
the Conversion contemplated herein.

7.3 Exercise of Management Control with Respect to Mezzanine Loans. Anything
contained in the TPG/CalSTRS LLC Agreement to the contrary notwithstanding, TPG
and CalSTRS agree that the following shall apply with respect to the borrower’s
or guarantor’s interest in the Mezzanine Loans, but only during the period that
CNP Investor is the holder of the Mezzanine Loans:

7.3.1 TPG shall be designated to act on behalf of TPG/CalSTRS in connection with
all matters related to the Mezzanine Loans. Decisions of TPG/CalSTRS relating to
the Mezzanine Loans shall not require any approval of CalSTRS or its
representatives.

 

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7.3.2 The Representatives of CalSTRS to the Management Committee of TPG/CalSTRS
shall not be entitled to take any action or exercise any right or remedy on
behalf of TPG/CalSTRS related to the actions of Senior Mezzanine Borrower or
Junior Mezzanine Borrower under the Mezzanine Loans, including but not limited
to participating in any decisions or actions of TPG/CalSTRS with respect to the
Mezzanine Loans or participating in any Management Committee discussions or
decisions that relate to the Mezzanine Loans.

7.3.3 TPG acting alone shall have the right and authority, on behalf of the TPG
Parties, to (i) negotiate and agree to the terms and provisions of any
supplements, modifications or amendments to the Mezzanine Loan Documents;
(ii) exercise any rights or remedies, make any elections, give any notices and
take any actions authorized or required of any of the TPG Parties under the
Mezzanine Loan Documents; (iii) institute and settle legal proceedings and/or
take any other action necessary or appropriate to enforce the rights, exercise
the remedies and protect the interests of the TPG Parties under the Mezzanine
Loan Documents; and (iv) make any and all decisions and take any and all actions
on behalf of the TPG/CalSTRS in connection with the Mezzanine Loan.

Nothing in this Section 7.3 shall affect the rights of CNP Investor and CalSTRS
as Lender.

7.4 TPG Party Agreements. TPG, for itself and on behalf of the TPG Parties and
their Constituents, agrees that:

7.4.1 Any CalSTRS Lender’s relationship to any of the TPG Parties and their
Constituents as Lender is and shall be treated as entirely separate and
independent from any CalSTRS Member’s relationship to the TPG Parties and their
Constituents as a member in a TPG Related Party.

7.4.2 Any permission, approval, consent, authorization or other such
communication by a CalSTRS Lender in its capacity as Lender shall not be or be
deemed to be a permission, approval, consent, authorization or other such
communication by, or to in any way bind, a CalSTRS Member in its capacity as a
member in a TPG Related Party. Any permission, approval, consent, authorization
or other such communication by a CalSTRS Member in its capacity as a member in a
TPG Related Party, shall not be or be deemed to be a permission, approval,
consent, authorization or other such communication by, or to in any way bind,
the CalSTRS Lender in its capacity as Lender.

7.4.3 In its capacity as Lender, a CalSTRS Lender (i) shall be entitled to take
any action or exercise any right or remedy, or refrain from taking any action or
exercising any right or remedy, permitted hereunder or under any of the
Mezzanine Loan Documents, other applicable loan documents, or applicable Laws as
if the CalSTRS Lender were an independent third party with no relationship to
the TPG Parties or their Constituents other than the Mezzanine Loans or such
other applicable loans, and (ii) shall not be subject to, and the TPG Parties’
and their Constituents’ obligations to a CalSTRS Lender in its capacity as
Lender shall not be limited, excused by or subject to, any defenses, offsets,
counterclaims or other remedies of any nature which the TPG Parties or their
Constituents might have against a CalSTRS Member in its capacity as a member in
a TPG Related Party.

 

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7.4.4 In its capacity as a member in a TPG Related Party, a CalSTRS Member
(i) shall be entitled to take any action or exercise any right or remedy, or
refrain from taking any action or exercising any right or remedy, permitted
hereunder or under the applicable operating agreement of the TPG Related Party,
or applicable Laws as if the CalSTRS Lender were not the Lender, and (ii) shall
not be subject to, and the TPG Parties’ and their Constituents’ obligations to
the CalSTRS Member in its capacity as a member in a TPG Related Party shall not
be limited, excused by or subject to, any defenses, offsets, counterclaims or
other remedies of any nature which any of the TPG Parties or their Constituents
might have against the CalSTRS Lender in its capacity as Lender.

7.4.5 Each of the TPG Parties and each of their respective Constituents
unconditionally and irrevocably waives any right or power to withhold, delay or
otherwise limit in any way the performance of any of the duties, obligations and
liabilities of such TPG Party and its Constituents (i) to any CalSTRS Lender in
its capacity as Lender, notwithstanding any defenses, offsets, counterclaims or
other remedies of any nature which any of the TPG Parties or their Constituents
might have against the CalSTRS Member in its capacity as a member in a TPG
Related Party; and (ii) to a CalSTRS Member in its capacity as a member in a TPG
Related Party, notwithstanding any defenses, offsets, counterclaims or other
remedies of any nature which any TPG Party or its Constituents might have
against a CalSTRS Lender in its capacity as the Lender.

7.4.6 None of the rights, remedies, benefits or protections in favor of, and
none of the duties, obligations or liabilities of any of the TPG Parties or
their Constituents to, (i) a CalSTRS Lender in its capacity as the Lender shall
be diminished, impaired or affected in any way by virtue of a CalSTRS Member
being a member in a TPG Related Party; or (ii) a CalSTRS Member in its capacity
as a member in a TPG Related Party shall be diminished, impaired or affected in
any way by virtue of a CalSTRS Lender being the Lender.

7.4.7 Any duties, liabilities or obligations (including without limitation
fiduciary duties, liabilities or obligations) owed by a CalSTRS Member, in its
capacity as a member in a TPG Related Party, to any TPG Party or its
Constituents shall not extend or apply in any way to the separate and
independent relationship of any CalSTRS Lender to the TPG Parties and their
Constituents in its capacity as the Lender, and any duties, liabilities or
obligations (including without limitation fiduciary duties, liabilities or
obligations) owed by a CalSTRS Lender in its capacity as Lender, to any of the
TPG Parties or their Constituents shall not extend or apply in any way to the
separate and independent relationship to any of the TPG Parties and their
Constituents of any CalSTRS Member in its capacity as a member in a TPG Related
Party. Any such duties, liabilities or obligations (including without limitation
fiduciary duties, liabilities or obligations), to the extent they would so
extend or apply, are hereby knowingly and intentionally waived and released.

 

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7.4.8 No CalSTRS Member, in its capacity as a member in a TPG Related Party,
has, nor shall be deemed to have, any duties, liabilities or obligations
(including without limitation fiduciary duties, liabilities or obligations) to
any of the TPG Parties or their Constituents to the extent that any such duty,
liability or obligation (including without limitation fiduciary duties,
liabilities or obligations) shall be based on or derived from a CalSTRS Lender
being the Lender. No CalSTRS Lender, in its capacity as Lender, has, nor shall
be deemed to have, any duties, liabilities or obligations (including without
limitation fiduciary duties, liabilities or obligations) to any of the TPG
Parties or their Constituents to the extent that any such duty, liability or
obligation (including without limitation fiduciary duties, liabilities or
obligations) shall be based or derives from any CalSTRS Member being a member in
a TPG Related Party.

7.4.9 Neither the provisions of this Article VII nor anything contained herein
shall create, result in or be an admission or evidence of, or be deemed to
create, result in or be an admission or evidence of, any duty, obligation or
liability (including without limitation fiduciary duties, obligations or
liabilities) on the part of any CalSTRS Member, in its capacity as a member in a
TPG Related Party, or any CalSTRS Lender, in its capacity as Lender, that does
not or would not exist in the absence of this Article VII.

7.5 Release and Waiver. In connection with this Agreement, each of the TPG
Parties acknowledges and agrees on its own behalf, and on behalf of its
Constituents, that the TPG Parties and their respective Constituents have waived
and released certain rights, defenses and remedies that might otherwise have
been available to the TPG Parties or their Constituents. The releases, waivers
and other provisions of this Article VII shall be effective with respect to all
matters, past and present, known and unknown, suspected and unsuspected,
notwithstanding that factual matters now unknown or unknowable may have given or
may hereafter give rise to losses, damages, liabilities, costs and expenses
which are presently unknown, unanticipated and unsuspected. The waivers,
releases and other provisions of this Article VII, including without limitation
the following waiver of the provisions of California Civil Code Section 1542,
have been expressly bargained for, negotiated and agreed upon in light of the
foregoing. In furtherance of this intention, TPG, TPG Plaza Investments, each of
the TPG Parties, on behalf of themselves and their Constituents, hereby
expressly waive any and all rights and benefits conferred upon it or them by the
provisions of California Civil Code Section 1542, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

7.6 Certain Additional Representations and Warranties of TPG. TPG represents,
warrants and acknowledges as follows:

7.6.1 The TPG Parties and their Constituents are sophisticated and knowledgeable
business Persons and have read and understand the agreements, releases, waivers
and other provisions set forth in this Agreement.

 

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7.6.2 In negotiating this Agreement, the TPG Parties and their Constituents have
been represented by and consulted with competent legal counsel, accountants and
other consultants of their choosing experienced in the matters addressed in this
Agreement.

7.6.3 Such legal counsel, accountants and consultants have explained to the TPG
Parties and their Constituents, and the TPG Parties and their Constituents have
asked such questions and received such answers as the TPG Parties and their
Constituents have deemed necessary concerning, the agreements, releases, waivers
and other provisions set forth in this Agreement, and the TPG Parties and their
Constituents understand the specific and general rights, defenses and remedies
being waived and released.

7.7 Certain Additional Representations and Warranties of CalSTRS. CalSTRS
represents, warrants and acknowledges as follows:

7.7.1 CalSTRS, CNP Investor and their Constituents are sophisticated and
knowledgeable business Persons and have read and understand the agreements,
releases, waivers and other provisions set forth in this Agreement.

7.7.2 In negotiating this Agreement, CalSTRS, CNP Investor and their
Constituents have been represented by and consulted with competent legal
counsel, accountants and other consultants of their choosing experienced in the
matters addressed in this Agreement.

7.7.3 Such legal counsel, accountants and consultants have explained to CalSTRS,
CNP Investor and their Constituents, and CalSTRS, CNP Investor and their
Constituents have asked such questions and received such answers as CalSTRS, CNP
Investor and their Constituents have deemed necessary concerning, the
agreements, releases, waivers and other provisions set forth in this Agreement,
and CalSTRS, CNP Investor and their Constituents understand the specific and
general rights, defenses and remedies being waived and released.

7.8 Survival. This Article VII shall survive the consummation of any of the
transactions contemplated hereby and the termination hereof, whether or not the
transactions contemplated hereby are consummated.

 

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ARTICLE VIII.

MISCELLANEOUS.

8.1 Notices. Any notice or other communication required or permitted to be given
by a Party hereunder shall be in writing, and shall be deemed to have been given
by such Party to the other Party or Parties (a) on the date of personal
delivery, (b) on the same business day of any facsimile or electronic
transmission to a Party, or (c) three (3) business days after being placed in
the United States mail, as applicable, registered or certified, postage prepaid,
at its mailing or delivery address, facsimile number or e-mail address set forth
below, or at such other address as any Party may subsequently advise:

 

If to CalSTRS:   

California State Teachers’ Retirement System

100 Waterfront Place, 15th Floor

West Sacramento, California 95605-2807

Attention: Timothy D. Schreck, Esq.

Phone: (916) 414-1717

Fax: (916) 414-1723

and

Attention: Michael J. Thompson

Phone: (916) 414-7978

Fax: (916) 414-7984

 

With a copy to:

 

Cox, Castle & Nicholson LLP

2049 Century Park East, Suite 2800

Los Angeles, California 90067

Attention: John H. Kuhl, Esq.

Phone: (310) 284-2267

Fax: (310) 277-7889

If to TPG:   

Thomas Properties Group, Inc.

515 South Flower Street, Sixth Floor

Los Angeles, CA 90071

Attention: John R. Sischo

Phone: (213) 830-2265

Fax: (213) 633-4760

 

With a copy to:

 

Thomas Properties Group, Inc.

515 South Flower Street, Sixth Floor

Los Angeles, CA 90071

Attention: Paul S. Rutter

Executive Vice President

Phone: (213) 233-9753

Fax: (213) 633-4760

8.2 Notification. From the date hereof and until the Conversion Closing, each
Party shall promptly notify the other if (a) it receives notice or any
Proceeding in connection with the transactions contemplated hereby, (b) any fact
or circumstance makes any representation or warranty of such Party set forth
herein untrue or inaccurate as of the Conversion Date, the Acquisition Date or
the date hereof, or (c) there is a breach of or default under any covenant of
such Party set forth in this Agreement or the occurrence of any event that may
make the satisfaction of any of the conditions set forth in this Agreement
impossible or highly unlikely.

8.3 Entire Agreement. This Agreement, together with the exhibits hereto and the
other documents being executed concurrently herewith constitute the entire
agreement between the parties hereto pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations, and discussions,
whether oral or written.

 

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8.4 Severability. If any part of this Agreement is determined to be void,
invalid or unenforceable, such void, invalid, or unenforceable portion shall be
deemed to be separate and severable from the other portions of this Agreement,
and the other portions shall be given full force and effect, as though the void,
invalid or unenforceable portions or provisions were never a part of this
Agreement.

8.5 Amendment and Modification. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
Party to be bound.

8.6 Headings. Article, section, subsection, paragraph or clause headings are not
to be considered part of this Agreement and are included solely for convenience
and reference and shall not be held to define, construe, govern or limit the
meaning of any term or provision of this Agreement. References in this Agreement
to articles, sections, subsections, paragraphs or clauses, or any similar
reference, shall be reference to an article, section, subsection, paragraph or
clause of this Agreement unless otherwise stated or the context otherwise
requires.

8.7 Assignment; Successors. No Party hereto may assign its rights hereunder
without the prior written consent of the Parties. Subject to the foregoing, the
terms, provisions and obligations of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns. Notwithstanding anything that may be
construed to the contrary herein, each provision of this Agreement constitutes a
binding obligation on the parties from and after the date hereof,
notwithstanding that such provision may apply only upon satisfaction of certain
conditions or commence at a particular time.

8.8 Governing Law; Jurisdiction; Litigation. This Agreement has been prepared,
executed and delivered in, and shall be interpreted under, the internal laws of
the State of California, without giving effect to its conflict of law
provisions. Each of the parties hereto irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby in (a) the courts
of the State of California, Los Angeles County, or (b) the United States
District Court for the Central District of California, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. In the event of litigation arising
hereunder, the prevailing party shall be entitled to recover from the
non-prevailing party its reasonable attorneys’ fees and expenses incurred in
connection with such litigation at all levels, including before the filing of
suit.

8.9 Interpretation. This Agreement is to be deemed to have been prepared jointly
by the parties hereto, and if any inconsistency or ambiguity exists herein, it
shall not be interpreted against any Party but according to the application of
rules of the interpretation of contracts, if such an uncertainty or ambiguity
exists. Each Party has had the availability of legal counsel during the joint
preparation of this Agreement.

 

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8.10 Third Parties. Nothing in this Agreement, expressed or implied, is intended
to confer upon any person other than the parties hereto any rights or remedies
under or by reason of this Agreement.

8.11 Expenses. Each Party shall bear its own expenses incurred by it in
connection with the negotiation, execution and delivery of this Agreement and
the agreements contemplated by it, including without limitation, the fees and
expenses of each Party’s legal counsel, accountants and other advisors.

8.12 Attorneys’ Fees. In the event any Party incurs legal fees or other costs to
enforce any of the terms of this Agreement, to resolve any dispute with respect
to its provisions, or to obtain damages for breach thereof, whether by
prosecution or defense, the unsuccessful party to such action shall pay the
prevailing party’s reasonable expenses, including, without limitation,
reasonable attorneys’ fees and costs, incurred in such action. In addition to
the foregoing award of costs and fees, the prevailing party shall also be
entitled to recover its attorneys’ fees incurred in any post judgment
proceedings to collect or enforce any judgment.

8.13 Waiver of Rights. Failure to insist on compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such terms,
covenants, or conditions, nor shall any waiver or relinquishment of any right or
power hereunder at any one time or more times be deemed a waiver or
relinquishment of such rights or powers at any other time or times.

8.14 Further Assurances. Each Party hereto will, from time to time after the
execution of this Agreement, execute and deliver such instruments, documents and
assurances and take such further acts as the other Parties may reasonably
request to carry out the purpose and intent of this Agreement without undue
delay. Any Party who fails to comply with this Section 8.14 shall reimburse the
other Parties for any direct expenses, including attorneys’ fees and court costs
that, as a result of this failure, become reasonably necessary for carrying out
this Agreement.

8.15 Interpretation. In the interpretation of this Agreement, the singular may
be read as the plural, and vice versa, the neuter gender as the masculine or
feminine, and vice versa, and the future tense as the past or present, and vice
versa, all interchangeably as the context may require in order to fully
effectuate the intent of the parties and the transactions contemplated herein.
Syntax shall yield to the substance of the terms and provisions hereof.

8.16 Counterparts. This Agreement may be executed in counterparts, each one of
which so executed shall be deemed an original, and all of which shall together
constitute one and the same agreement.

8.17 Execution of Documents and Funding by CalSTRS. TPG understands that for
administrative reasons CalSTRS requires (a) up to three (3) business days to
sign any document after such document has been submitted to CalSTRS for
signature and an additional two (2) business days to deliver such document; and
(b) up to five (5) business days after all documents have been signed by all
parties and all other conditions to the Conversion Closing have been satisfied
to cause funds to be transferred, if applicable. All closing documents to be
executed by

 

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CalSTRS shall be agreed to and prepared in final execution form and received by
CalSTRS to allow for compliance with the foregoing schedule. In the event any of
the foregoing conditions are not complied with in accordance with the foregoing
schedule, the Scheduled Conversion Date shall be automatically extended by the
number of days necessary to allow CalSTRS the time periods set forth above for
the execution and delivery of documents and the transfer of funds.

8.18 CalSTRS Counsel.

8.18.1 The parties acknowledge and agree that Cox, Castle & Nicholson LLP
(“CalSTRS Counsel”) has represented and will represent only CalSTRS and CNP
Investor in connection with this Agreement, the acquisition and ownership of the
Mezzanine Loans by CNP Investor, the Conversion and the Conversion Documents
(the “CalSTRS Matters”). As part of the CalSTRS Matters, CalSTRS Counsel will
represent CalSTRS in its capacity as the owner of CNP Investor in connection
with the acquisition of the Mezzanine Loans and the enforcement of the Lender’s
rights and remedies under the Mezzanine Loan Documents, including without
limitation, if necessary, the appointment of a receiver and foreclosure. CalSTRS
Counsel does not and will not represent any of the TPG Parties or any of their
Constituents in connection with the CalSTRS Matters. Further, no
attorney/client, trust, confidential or other special relationship exists or
will exist between CalSTRS Counsel, on one hand, and the TPG Parties or any of
their Constituents, on the other hand, in connection with the CalSTRS Matters,
and CalSTRS Counsel shall have no duties to the TPG Parties or any of their
Constituents in connection with the CalSTRS Matters.

8.18.2 The parties further acknowledge and agree that one or more of the TPG
Parties may have in the past, and may in the future, engage CalSTRS Counsel for
advice or representation on matters not related to the CalSTRS Matters
including, without limitation, matters related to the ownership, operation and
financing of the Project with unrelated parties (the “Venture Matters”). CalSTRS
Counsel’s sole client in the Venture Matters will be the applicable TPG Party.
Each of the TPG Parties, on its own behalf and on behalf of its Constituents
consents to CalSTRS Counsel’s representation of any of the TPG Parties and
acknowledges and agrees that, in the Venture Matters, CalSTRS Counsel is not
representing any party other than the applicable TPG Party. Thus, no
lawyer-client, trust, confidential or other special relationship will exist
between CalSTRS Counsel and any such party other than the applicable TPG Party
in connection with the Venture Matters. Nothing in this Section 8.18 shall
prohibit CalSTRS Counsel from representing TPG/CalSTRS and the Title Holding
Subsidiaries with respect to the ownership and operation of the Project and,
with the sole exception of the Mezzanine Loans during the period when CNP
Investor owns the Mezzanine Loans, its financing.

8.18.3 CalSTRS and the TPG Parties, each on its own behalf and on behalf of its
Constituents, agree that CalSTRS Counsel may concurrently represent CalSTRS in
its capacity as the holder of the Mezzanine Loans in connection with the CalSTRS
Matters and TPG/CalSTRS in connection with Venture Matters. CalSTRS and the TPG
Parties, each on its own behalf and on behalf of its Constituents, waives and
releases any conflicts arising out of that concurrent representation.

 

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8.18.4 Further, the parties intend that CalSTRS Counsel shall remain free to
represent CalSTRS or its affiliates on any issue or matter, including any
dispute that is or may be adverse to the interests of the TPG Parties.
Therefore, each of the TPG Parties, on its own behalf and on behalf of its
Constituents, agrees that if a future dispute were to arise between CalSTRS, on
the one hand, and any one or more of the TPG Parties, on the other hand, CalSTRS
Counsel may represent CalSTRS in such dispute, whether or not related to the
Venture Matters. CalSTRS Counsel is also authorized to share with CalSTRS any
and all information related to the Venture Matters. Further, CalSTRS Counsel may
withdraw from representation of any TPG Party for any reason and may continue to
represent CalSTRS on any matter, including any matter that is adverse to a TPG
Party, even if it is related to the matter with respect to which CalSTRS Counsel
has withdrawn from representing a TPG Party.

8.18.5 Each of the TPG Parties, on its own behalf and on behalf of its
Constituents, waives and releases any conflicts arising out of CalSTRS Counsel’s
representation of any TPG Party in connection with Venture Matters. The TPG
Parties, each on its own behalf and on behalf of its Constituents, covenants and
agrees, that in no event may any of the TPG Parties any of their Constituents
seek to disqualify CalSTRS Counsel from any matter on the grounds of CalSTRS
Counsel’s representation of a TPG Party in connection with Venture Matters. By
way of example, in the event any dispute or controversy arises between
TPG/CalSTRS, on the one hand, and CalSTRS, on the other hand, then CalSTRS
Counsel may represent CalSTRS in any such dispute or controversy.

8.18.6 This Section 8.18 shall survive the consummation of the transactions
contemplated hereby or the termination hereof, whether or not any of the
transactions have been consummated.

[Signatures appear on the following pages.]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

CALSTRS:             CALIFORNIA STATE TEACHERS’ RETIREMENT

SYSTEM, a public entity

    By:  

/s/ Michelle Cunningham

    Name:  

Michelle Cunningham, CFA

    Title:  

Director of Fixed Income

TPG:           THOMAS PROPERTIES GROUP, L.P., a Maryland limited partnership    
By:  

THOMAS PROPERTIES GROUP, INC.

a Delaware corporation

Its General Partner

                  By:  

/s/ John R. Sischo

      Name:  

John R. Sischo

      Title:  

Executive Vice President

CNP INVESTOR:             CNP INVESTOR, LLC,

a Delaware limited liability company

    By:  

California State Teachers’ Retirement System, a

public entity, its sole member

      By:  

/s/ Michelle Cunningham

      Name:  

Michelle Cunningham, CFA

      Title:  

Director of Fixed Income

 

Signature Page to Master Agreement

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

TPG/CALSTRS:                 TPG/CalSTRS, LLC,

a Delaware limited liability company

    By:  

Thomas Properties Group, L.P.,

a Maryland limited partnership

its Manager

      By:    Thomas Properties Group, Inc.,

a Delaware corporation, General Partner

         By:   

/s/ John R. Sischo

         Name:   

John R. Sischo

         Title:   

Executive Vice President

TPGA:                 TPGA, LLC,

a Delaware limited liability company

    By:  

/s/ John R. Sischo

    Name:  

John R. Sischo

    Title:  

Executive Vice President

TPG PLAZA INVESTMENTS:                 TPG PLAZA INVESTMENTS, LLC,

a Delaware limited liability company

    By:  

/s/ John R. Sischo

    Name:  

John R. Sischo

    Title:  

Executive Vice President

JUNIOR MEZZANINE BORROWER:         515/555 FLOWER JUNIOR MEZZANINE

ASSOCIATES, LLC,

    a Delaware limited liability company     By:  

/s/ John R. Sischo

    Name:  

John R. Sischo

    Title:  

Vice President

 

Signature Page to Master Agreement

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SENIOR MEZZANINE BORROWER:           515/555 FLOWER MEZZANINE ASSOCIATES, LLC,  
  a Delaware limited liability company     By:  

/s/ John R. Sischo

    Name:  

John R. Sischo

    Title:  

Vice President

MORTGAGE BORROWER:           515/555 FLOWER ASSOCIATES, LLC,     a Delaware
limited liability company     By:  

/s/ John R. Sischo

    Name:  

John R. Sischo

    Title:  

Vice President

GUARANTOR:           505 FLOWER ASSOCIATES, LLC,     a Delaware limited
liability company     By:  

/s/ John R. Sischo

    Name:  

John R. Sischo

    Title:  

Vice President

 

Signature Page to Master Agreement

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

EXHIBIT “A”

DEFINITIONS

“Affiliate” means, with reference to a specified Person:

(a) a Person that, directly or indirectly, through one or more intermediaries,
has control of, is controlled by or is under common control with, the specified
Person;

(b) any Person that is an officer, director, controlling shareholder, general
partner, managing member or trustee of, or serves in a similar capacity with
respect to, the specified Person, or for which the specified Person is an
officer, director, controlling shareholder, general partner, managing member or
trustee, or serves in a similar capacity; or

(c) with respect to TPG, any Key Individual.

“Agreement” shall have the meaning ascribed thereto in the first paragraph of
this Agreement.

“Amended TPG Plaza Investments LLC Agreement” shall have the meaning ascribed
thereto in Section 3.2.1 above.

“Applicable Laws” shall have the meaning ascribed thereto in Section 5.1.4
above.

“CalSTRS” shall have the meaning ascribed thereto in the first paragraph of this
Agreement.

“CalSTRS Affiliates” shall have the meaning ascribed thereto in Section 4.1.8
above.

“CalSTRS Counsel” shall have the meaning ascribed thereto in Section 8.18.1
above.

“CalSTRS Lender” means, collectively, (i) CalSTRS or any of its Affiliates that
is a Lender and (ii) CalSTRS or any of its Affiliates that is a direct or
indirect owner of such Person described in clause (i) of this definition.
CalSTRS Lender shall include, without limitation, CalSTRS and CNP Investor but
only during such period, if any, that CNP Investor owns the Mezzanine Loans and
prior to the Conversion Date or at such other time as CalSTRS, CNP Investor or
any of their Affiliates is a Lender.

“CalSTRS Loan Purchase Related Parties” shall have the meaning ascribed thereto
in Section 4.1.9 above.

“CalSTRS Matters” shall have the meaning ascribed thereto in Section 8.18.1
above.

“CalSTRS Member” means, collectively, (i) CalSTRS or any of its Affiliates that
is a member or partner in a company or partnership and (ii) CalSTRS or any of
its Affiliates that is a direct or indirect owner of such member or partner
described in clause (i) of this definition. CalSTRS Member shall include,
without limitation, CalSTRS as a member of TPG/CalSTRS and CalSTRS as a member
of CNP Investor.

 

Exhibit A

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

“CNP Investor” shall have the meaning ascribed thereto in the first paragraph of
this Agreement.

“CNP Investor’s Plaza Percentage” means the percentage corresponding to the
Percentage Interest of CNP Investor in TPG Plaza pursuant to the Amended TPG
Plaza Investments LLC Agreement.

“CNP Investor LLC Agreement” shall mean that certain Limited Liability Company
Agreement of CNP Investor, LLC dated concurrently herewith, as amended from time
to time.

“Code” shall have the meaning ascribed thereto in Section 4.1.8 above.

“Constituent” means, with respect to any Person, such Person’s board members,
officers, directors, shareholders, partners, members, retirants, beneficiaries,
trustees, agents, employees, internal investment contractors, representatives,
Affiliates and, with respect to TPG, the Key Individuals.

“Conversion” shall have the meaning ascribed thereto in Section 2.1 above.

“Conversion Closing” shall have the meaning ascribed thereto in Section 3.1
above.

“Conversion Date” shall have the meaning ascribed thereto in Section 3.1 above.

“Conversion Documents” means all of the documents required to be delivered in
accordance with Sections 3.2 and 3.3 hereof.

“Defaulting Party” shall have the meaning ascribed thereto in Section 6.3 above.

“Education Code” shall have the meaning ascribed thereto in Section 4.1.8 above.

“Event of Default” shall have the meaning ascribed thereto in Section 6.2 above.

“Guarantor” shall have the meaning ascribed thereto in the first paragraph of
this Agreement.

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of November 14, 2006 relating to the Mezzanine Loans with respect to the
Project.

“Junior Mezzanine Borrower” shall have the meaning ascribed thereto in the first
paragraph of this Agreement.

“Key Individuals” means James A. Thomas and John R. Sischo (or any replacement
for any of them approved pursuant to the preceding definition), collectively;
the term “Key Individual” means any one (1) of the Key Individuals.

“Lender”, as used herein, shall mean (i) the holder of the Mezzanine Loans or
(ii) the holder of any other loan to any of the TPG Related Parties, including,
without limitation, the Mortgage Loan, or (iii) the direct and indirect owners
of any such holders.

“Loan Guaranties” shall have the meaning ascribed thereto in Recital E hereof.

 

Exhibit A

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

“Loan Purchase Agreements” shall have the meaning ascribed thereto in Recital I
hereof.

“Loan Termination Agreements” shall have the meaning ascribed thereto in
Section 3.2.2 hereof.

“Mezzanine Debt Amount” means, as of the Mezzanine Loan Acquisition Date, the
outstanding principal amount of the Mezzanine Loans plus all accrued but unpaid
interest thereon and any other amounts payable under the Mezzanine Loans.

“Mezzanine Lenders” shall have the meaning ascribed thereto in Recital E hereof.

“Mezzanine Loan Acquisition Date” means the date upon which CNP Investor
acquires the Mezzanine Loans pursuant to the Loan Purchase Agreements.

“Mezzanine Loan Documents” shall mean the loan documents evidencing and securing
the various Mezzanine Loans.

“Mezzanine Loans” shall have the meaning ascribed thereto in Recital E hereof.

“Mortgage Borrower” shall have the meaning ascribed thereto in the first
paragraph of this Agreement.

“Mortgage Debt Amount” means, as of the Mezzanine Loan Acquisition Date, the
outstanding principal amount of the Mortgage Loan plus all accrued but unpaid
interest thereon and any other amounts payable under the Mortgage Loan.

“Mortgage Lender” shall mean the holder of the Mortgage Loan.

“Mortgage Lender Consent” shall have the meaning ascribed thereto in Section 1.3
above.

“Mortgage Lender Reserve Accounts” means the net reserves held by the Mortgage
Lender on behalf of or for the benefit of the Mortgage Borrower.

“Mortgage Loan” shall have the meaning ascribed thereto in Recital F hereof.

“New TPG Plaza Interest” shall have the meaning ascribed thereto in Recital G
hereof.

“Net Operating Cash” means cash on hand of Mortgage Borrower, Junior Mezzanine
Borrower, Senior Mezzanine Borrower and TPG Plaza Investments, less payables of
such Persons, other than the Mortgage Debt Amount, Picerne/Kings Capital Debt
Amount, Junior Mezzanine Debt Amount and Senior Mezzanine Debt Amount, as of
February 14, 2010, on a cash accounting basis.

“Non-Defaulting Party” shall have the meaning ascribed thereto in Section 6.3
hereof.

“Parties” means the signatories to this Agreement, each of which is a “Party”.

“Percentage Interest” shall have the meaning ascribed thereto in the Amended TPG
Plaza Investments LLC Agreement.

 

Exhibit A

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

“Person” means and includes an individual, a corporation, a partnership, a
limited liability company, a joint venture, a trust, an unincorporated
organization and a government or any department or agency thereof, or any entity
similar to any of the foregoing.

“Picerne/Kings Capital Debt Amount” means, as of the Mezzanine Loan Acquisition
Date, the outstanding principal amount of the Picerne/Kings Capital Loan plus
all accrued but unpaid interest thereon and any other amounts payable under the
Picerne/Kings Capital Loan.

“Picerne/Kings Capital Loan” means that certain loan to TPG Plaza Investments by
Kenneth A. Picerne, as Trustee of the Kenneth A. Picerne Trust dated June 4,
1999 and Kings Capital Portfolio No. 9 LLC in the original principal amount of
Nineteen Million Seven Hundred Fifty Eight Thousand Dollars as evidenced by that
certain Non-Negotiable Promissory Note dated as of May 26, 2009.

“Primary Affiliates” means, as to any of TPG Parties, James A. Thomas and Thomas
Properties Group, Inc., a Delaware corporation.

“Proceedings” shall have the meaning ascribed thereto in Section 5.1.5 above.

“Project” shall have the meaning ascribed thereto in Recital A hereof.

“Reconciliation Period” means the period commencing on the Loan Acquisition Date
and terminating on the Conversion Date.

“Representative” shall have the meaning ascribed thereto in the TPG/CalSTRS LLC
Agreement.

“Scheduled Conversion Date” shall have the meaning ascribed thereto in
Section 2.2 above.

“Senior Mezzanine Borrower” shall have the meaning ascribed thereto in the first
paragraph of this Agreement.

“Title Holding Subsidiary” shall have the meaning ascribed thereto in Recital A
hereof as well as the meaning ascribed thereto in the TPG/CalSTRS LLC Agreement.
With respect to the Project, the Title Holding Subsidiaries of TPG/CalSTRS shall
include, without limitation, TPGA, TPG Plaza Investments, Junior Mezzanine
Borrower, Senior Mezzanine Borrower, Mortgage Borrower and Guarantor.

“TPG” shall have the meaning ascribed thereto in the first paragraph of this
Agreement.

“TPGA” shall have the meaning ascribed thereto in the first paragraph of this
Agreement.

“TPGA’s Plaza Percentage” means the percentage corresponding to the Percentage
Interest of TPGA in TPG Plaza Investments pursuant to the Amended TPG Plaza
Investments LLC Agreement.

“TPG/CalSTRS” shall have the meaning ascribed thereto in the first paragraph of
this Agreement.

 

Exhibit A

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

“TPG/CalSTRS LLC Agreement” means that certain Second Amended and Restated
Limited Liability Company Agreement dated as of October 13, 2004, by and between
CalSTRS and TPG, as amended by the following amendments and any further
amendments entered into from time to time: First Amendment to Second Amended and
Restated Operating Agreement of TPG/CalSTRS, LLC, dated as of June 8, 2006;
Second Amendment to Second Amended and Restated Operating Agreement of
TPG/CalSTRS, LLC, dated as of May 25, 2007; Third Amendment to Second Amended
and Restated Operating Agreement of TPG/CalSTRS, LLC, dated as of February 1,
2008; Fourth Amendment to Second Amended and Restated Operating Agreement of
TPG/CalSTRS, LLC, dated as of November 5, 2008; and Fifth Amendment to Second
Amended and Restated Operating Agreement of TPG/CalSTRS, LLC, dated as of
October 30, 2009, as amended from time to time.

“TPG Parties” means TPG, TPG/CalSTRS and the Title Holding Subsidiaries. With
respect to any provision herein requiring any of the TPG Parties to take or
refrain from any action, TPG shall be obligated, subject only to any required
authorizations by CalSTRS under the TPG/CalSTRS LLC Agreement or the CNP
Investor LLC Agreement, as applicable, to take or refrain from such action.

“TPG Plaza Investments” shall have the meaning ascribed thereto in the first
paragraph of this Agreement.

“TPG Related Party” means any TPG Party or any other Person in which both TPG
and CalSTRS have an ownership interest.

“Venture Matters” shall have the meaning ascribed thereto in Section 8.18.2
above.

 

Exhibit A

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

EXHIBIT “B”

CURRENT OWNERSHIP STRUCTURE

LOGO [g30330g14t92.jpg]

 

Exhibit B

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

EXHIBIT “C”

MEZZANINE LOANS

 

1. Participation A-1 ($19,641,161) in Replacement Promissory Note A
(Senior Mezzanine) dated October 27, 2006.

 

2. Participation A-2A ($24,122,389) in Replacement Promissory Note A
(Senior Mezzanine) dated October 27, 2006.

 

3. Participation A-2B ($24,122,389) in Replacement Promissory Note A
(Senior Mezzanine) dated October 27, 2006.

 

4. IO Participation (interest only) in Replacement Promissory Note A
(Senior Mezzanine) dated October 27, 2006.

 

5. Replacement Promissory Note B (Senior Mezzanine) ($23,569,393) dated
October 27, 2006.

 

6. Replacement Promissory Note C (Senior Mezzanine) ($23,569,393) dated
October 27, 2006.

 

7. Replacement Promissory Note D (Senior Mezzanine) ($23,569,393) dated
October 27, 2006.

 

8. Replacement Promissory Note E (Senior Mezzanine) ($22,292,717) dated
October 27, 2006.

 

9. Replacement Promissory Note (Junior Mezzanine) ($58,187,948) dated
October 27, 2006.

 

Exhibit C

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

EXHIBIT “D”

OWNERSHIP STRUCTURE

GIVING EFFECT TO LOAN ACQUISITION AND CONVERSION

LOGO [g30330g71p03.jpg]

 

Exhibit D

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

EXHIBIT “E”

FORM OF SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT OF

TPG PLAZA INVESTMENTS, LLC

[see attached]

 

Exhibit E

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

SECOND AMENDED AND RESTATED

OPERATING AGREEMENT

OF

TPG PLAZA INVESTMENTS, LLC

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

TABLE OF CONTENTS

 

                    Page   Article I. FORMATION    39     1.01      Formation   
39     1.02      Names and Addresses    39     1.03      Nature of Business   
39     1.04      Title Holding Subsidiaries    39     1.05      Term of Company
   40     1.06      Limited Liability    40     1.07      Broker’s Indemnity   
40   Article II. MANAGEMENT    40     2.01      Exclusive Management by Manager
   40     2.02      Manager    40     2.03      Reimbursement and Compensation
   41     2.04      Employees and Consultants    41     2.05      Insurance   
41     2.06      Liability and Indemnity    41   Article III. [RESERVED]    42  
Article IV. CAPITAL CONTRIBUTIONS    42     4.01      Initial Contributions of
the Members    42     4.02      Additional Contributions    42     4.03     
Remedies For Failure to Contribute Capital    43     4.04      Capital
Contributions in General    44   Article V. PROFITS AND LOSSES    44     5.01
     Incorporation of Exhibit C    44     5.02      Indemnity    44   Article
VI. DISTRIBUTIONS    44     6.01      Distribution of Available Cash and Capital
Proceeds    44     6.02      Reserves and Reinvestment    45   Article VII.
BOOKS, RECORDS AND ACCOUNTING    45     7.01      Company Books    45     7.02
     Reports    45     7.03      Company Tax Elections: Tax Controversies    45
    7.04      Accounting Method and Fiscal Year    45     7.05      Accountants
and Lawyers    45     7.06      Banking    45     7.07      Tax Returns    46  
  7.08      Confidentiality of Information    46   Article VIII. RESTRICTIONS ON
TRANSFER    47     8.01      Limitations on Transfer    47     8.02     
Admission of Substitute Members    47     8.03      Additional Restrictions on
Transfer    47     8.04      Regulatory Prohibition    48     8.05     
Election; Allocations Between Transferor and Transferee    48     8.06     
Partition    48

 

i

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     8.07      Waiver of Withdrawal and Purchase Rights    48 Article IX.
DISSOLUTION    49      9.01      Events Causing Dissolution of the Company    49
     9.02      Winding Up of the Company    49 Article X. DEFAULT    50     
10.01      Event of Default    50      10.02      Rights Arising From an Event
of Default    51 Article XI. INTENTIONALLY OMITTED    51
Article XII. CALSTRS MATTERS    51      12.01      Exculpation    51      12.02
     Role of CCN    52 Article XIII. MISCELLANEOUS    52      13.01      Notices
and Approvals    52      13.02      Statutes    54      13.03     
Cross-References    54      13.04      Cumulative Remedies    54      13.05     
Litigation Without Termination    54      13.06      Successors and Assigns   
54      13.07      Amendments    54      13.08      Governing Law    54     
13.09      Interpretation    54      13.10      No Obligation to Third Parties
   54      13.11      Further Assurances    55      13.12      Merger of Prior
Agreements    55      13.13      Enforcement    55      13.14      Time    55
     13.15      Severability    55      13.16      No Waiver    55      13.17
     Legal Representation    55      13.18      Appendices, Schedules and
Exhibits    56      13.19      Provisions Governing Actions for Indemnity    56
     13.20      Signer’s Warranty    56      13.21      No Offer or Binding
Contract    57

 

ii

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Exhibit List         Exhibit A    –      Definitions Exhibit B    –      Capital
Contributions and Percentage Interests Exhibit C    –      Tax and Accounting
Matters Exhibit D    –      Reports Exhibit E    –      Certain Management
Provisions

 

iii

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SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

TPG PLAZA INVESTMENTS, LLC

THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
“Agreement”) of TPG PLAZA INVESTMENTS, LLC, a Delaware limited liability company
(the “Company”) is entered into as of __[CONVERSION DATE DEFINED IN MASTER
AGREEMENT]            , 2010, by TPGA, LLC, a Delaware limited liability company
(“TPGA”), and CNP INVESTOR, LLC, a Delaware limited liability company (“CNP
Investor”). The capitalized terms used in this Agreement, including without
limitation any schedules, appendices and exhibits to this Agreement, and not
otherwise defined shall have the meanings given to such terms in Exhibit A.

RECITALS

A. The Certificate of Formation (the “Certificate”) for the Company was filed on
March 12, 2002 with the Delaware Secretary of State.

B. As of January 28, 2003, pursuant to that certain Amended and Restated
Operating Agreement of TPG Plaza Investments, LLC (the “Prior Agreement”), the
Members of the Company were TPGA, Kings Capital Portfolio No. 9, LLC, a Delaware
limited liability company (“Kings Capital Portfolio”), Kenneth A. Picerne as
Trustee of the Kenneth Picerne Trust dated June 4, 1999 (together with Kings
Capital Portfolio, the “KC Members”).

C. On May 26, 2009, the Company redeemed the entire interests of the KC Members
in the Company, and each of the KC Members ceased to be members of the Company
pursuant to that certain Membership Interests Retirement Agreement dated as of
May 26, 2009. In connection therewith, the KC Members made an unsecured loan in
the amount of $19,758,000 to the Company as evidenced by that certain
Non-Negotiable Promissory Note dated May 26, 2009 (the “Picerne/Kings Capital
Loan”). As a result of such redemption, TPGA became the sole Member of the
Company. Notwithstanding anything to the contrary herein, the KC Members retain
an interest in the Company for tax purposes only.

D. Concurrently herewith, in accordance with that certain Master Agreement for
Debt and Equity Restructure of City National Plaza dated as of February 19, 2010
(the “Master Agreement”), TPGA has agreed to admit CNP Investor, LLC, a Delaware
limited liability company (“CNP Investor”), as a Member of the Company as of the
date hereof, as more particularly described herein.

E. In connection with such admission of CNP Investor as a Member of the Company,
TPGA and CNP Investor desire to amend and restate the Prior Agreement in its
entirety, such amendment and restatement to be effective as of the date of this
Agreement.

NOW, THEREFORE, TPGA and CNP Investor, constituting the holders of all of the
Interests in the Company, desire to supersede, amend and restate in full the
Prior Agreement upon the terms and conditions set forth below.

 

38

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ARTICLE I.

FORMATION

1.01 Formation. The Company has been formed as a Delaware limited liability
company pursuant to the provisions of the Delaware Act. The Company shall be
operated in accordance with, and the Members shall be governed by, the terms and
conditions of this Agreement. If any term of this Agreement is inconsistent with
any term of the Delaware Act that is not mandatory, then this Agreement shall
control. In connection with the formation of the Company, a duly executed
Certificate of Formation for the Company was filed with the office of the
Delaware Secretary of State in accordance with the Delaware Act. The Manager
shall also cause to be executed, acknowledged and/or verified such other
documents and/or instruments as may be necessary and/or appropriate in order to
continue the Company’s existence in accordance with the provisions of the
Delaware Act and/or to register, qualify to do business and/or operate its
business as a foreign limited liability company in any other state in which such
is required for the Company to conduct business.

1.02 Names and Addresses. The name of the Company is “TPG Plaza Investments,
LLC”. The registered office of the Company in the State of Delaware shall be at
2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The name and
address of the registered agent for the Company in the State of Delaware shall
be Corporation Service Company. The principal office for the Company shall be
maintained at 515 South Flower Street, 6th Floor, Los Angeles, California 90071
or such other location at which TPGA maintains an office and thereafter at such
other place(s) as the Manager may designate from time to time. Copies of any
material notices or other matters received by the Company shall be promptly
delivered by the Manager to the Members.

1.03 Nature of Business. The sole purpose of the Company is to own directly or
indirectly that certain office complex commonly known as City National Plaza,
located at 505 – 555 Flower Street, Los Angeles, California (the “Project”), and
directly or through its subsidiaries (a) develop, renovate, redevelop,
reposition, construct, manage, finance, lease, operate and maintain the Project;
(b) hold the Project for investment purposes until its ultimate disposition; and
(c) conduct such other activities with respect to, and otherwise realize and
optimize the economic return from, the Project and any related assets
hereinafter acquired directly or indirectly as are appropriate to carrying out
the foregoing purposes.

1.04 Title Holding Subsidiaries. The interest of the Company in the Project may
be held through one or more separate, limited liability companies which is
wholly owned by, and whose only member and manager is, the Company. Such
entities, together with the Company are “Title Holding Subsidiaries”, as defined
in the TPG/CalSTRS LLC Agreement. Notwithstanding that the Company is a Title
Holding Subsidiary of TPG/CalSTRS, certain rights, duties and obligations of the
Members of the Company, including, without limitation, the contribution of
capital and the receipt of distributions and allocations, vary from those set
forth in the TPG/CalSTRS LLC Agreement, as more particularly provided herein.
However, the provisions of the TPG/CalSTRS LLC Agreement, including, without
limitation, provisions regarding decision-making approvals and duties with
respect to Title Holding Subsidiaries, shall govern with respect to TPG/CalSTRS
in its role as the sole member of the Manager of the Company and in its role
with respect to the other Title Holding Subsidiaries.

 

39

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1.05 Term of Company. The term of the Company commenced on the date the
Certificate of Formation for the Company was filed with the Delaware Secretary
of State and shall continue until December 31, 2032, unless otherwise dissolved
pursuant to Article IX. The existence of the Company as a separate legal entity
shall continue until the cancellation of the Company’s Certificate of Formation.

1.06 Limited Liability. Except as otherwise required hereunder or pursuant to
any non-waivable provision of the Delaware Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and the
Members and Manager shall not be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member or
Manager of the Company. Notwithstanding anything to the contrary in this
Agreement, no third party or any creditor of the Company, shall have any right
to require the Manager to make a capital call or to enforce any obligation of
the Members to contribute additional capital.

1.07 Broker’s Indemnity. Neither Member has had or will have any contact or
dealings regarding this Agreement or the formation of the Company through any
investment banker, broker or other person who can or could claim a right to any
compensation in connection with this transaction. In the event that any
investment banker, broker or other person claims any compensation in connection
with this Agreement or the formation of the Company, the Member through whom the
investment banker, broker or other person makes its claim shall indemnify,
defend and hold harmless the other Member, its Constituents and the Company from
and against any and all liability, loss (including without limitation Costs of
Litigation) which any of them may suffer or incur by reason of any such claim.
The provisions of this Section shall survive the dissolution or other
termination of the Company.

ARTICLE II.

MANAGEMENT

2.01 Exclusive Management by Manager. All aspects of the business and affairs of
the Company shall be managed exclusively by the Manager. Except for situations
in which the approval of the Members is expressly required by the Act, the
Certificate or this Agreement, the Manager shall have full, complete and
exclusive authority, power and discretion to manage and control the business,
property and affairs of the Company, to make all decisions regarding those
matters and to perform any and all other actions customary or incident to the
management of the Company’s business, property and affairs. The Manager shall
have the right to delegate any or all of its authority, rights and/or
obligations, whether arising hereunder, under the Act or otherwise, to any one
or more agents or other duly authorized representatives, provided that such
delegation shall not cause the Company to incur additional costs than would
otherwise be incurred. Anything to the contrary notwithstanding, as set forth in
Section 1.04, the actions of the Manager in exercising its authority and
carrying out its duties hereunder shall be governed by the provisions of the
TPG/CalSTRS LLC Agreement.

2.02 Manager.

(a) Appointment of Manager. TPGA is hereby designated as the “Manager” of the
Company.

 

40

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(b) Duty and Responsibility. The Manager shall have such duty, responsibility,
power and authority with respect to the business and affairs of the Company as
set forth in Section 2.01 of this Agreement. The Manager shall regularly report
to the Members as to the status and other business and affairs of the Company
and the Project.

(c) Authorized Actions and Expenditures. Without limiting the generality of
Section 2.01, the Manager shall have all necessary powers to manage and carry
out the purposes, business, property, and affairs of the Company, including,
without limitation, the power to exercise on behalf and in the name of the
Company all of the powers described in the Act. The Manager, acting alone, shall
have the authority to execute and deliver, on behalf of the Company, agreements,
instruments or other documents to which the Company will be a party or bound.

2.03 Reimbursement and Compensation. No Member, Manager or any Constituent
thereof, nor any officer appointed hereunder, shall receive any compensation
from the Company for services rendered to or in connection with the Company or
the Project or be reimbursed by the Company for general administrative or
overhead expenses.

2.04 Employees and Consultants.

(a) No Employees. The Company shall not have employees.

2.05 Insurance. The Manager shall, at no cost to the Company, cause the Company
to be named as an additional insured on all policies of insurance of TPG/CalSTRS
with respect to the Project required to be obtained pursuant to the TPG/CalSTRS
LLC Agreement.

2.06 Liability and Indemnity.

(a) Limitation on Liability. Except as expressly provided to the contrary in
this Agreement, none of the Members or the Constituents thereof shall be liable,
responsible, or accountable, in damages or otherwise, to the Company or any
Member for any good faith business judgment if such Member or Constituent
exercised Due Care and did not cause or engage in an Event of Default.

(b) Indemnity. The Company shall indemnify, defend and hold harmless each Member
and Constituent thereof to the greatest extent permitted by law against any and
all liabilities, losses, claims, costs, damages and expenses (including without
limitation Costs of Litigation) as a result of any claim or legal proceeding by
any Person (including by or through the Company and/or any Member) relating to
any good faith business judgment if such indemnitee acted with Due Care and did
not cause or engage in an Event of Default.

(c) Costs of Defense. From time to time, as requested by an indemnitee, Costs of
Litigation will, if reasonably approved by the Manager (taking into account,
among other things, the availability of security for any repayment obligation on
the part of the indemnitee and the likelihood that such repayment will be
necessary), be advanced by the Company prior to the final disposition of such
claims, actions or proceedings upon receipt by the Company of an undertaking by
or on behalf of such indemnitee, reasonably satisfactory to Manager, to repay
such amounts if it shall be determined that such indemnitee is not entitled to
be indemnified hereunder.

 

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(d) Funding of Indemnity. Any indemnification provided hereunder shall be
satisfied first out of assets of the Company as an expense of the Company. In
the event the assets of the Company are insufficient to satisfy the Company’s
indemnification obligations, each Member shall contribute a fraction of the
required amount equal to its Percentage Interest; provided that each Member’s
contribution obligation under this Section shall not exceed in the aggregate the
sum of all distributions received by such Member under Articles VI and IX. To
the extent a Member fails to contribute back to the Company its share of the
Latest Distributions as required by this Section, such shall constitute a
Material Breach by such Member and, without waiving or releasing any other right
or remedy on account of such Material Breach, the Non-Defaulting Member may, but
shall not be required to, advance the Defaulting Member’s share of such Latest
Distributions on the Defaulting Member’s behalf. Should the Non-Defaulting
Member so advance any funds on the Defaulting Member’s behalf at any time, the
amount so advanced shall be deemed a Shortfall Amount and the Non-Defaulting
Member shall have the rights and remedies with respect thereto set forth in
Section 4.03.

(e) Survival. The provisions of this Section shall survive the termination of
this Agreement, the dissolution of the Company and any cancellation of the
Company’s Certificate of Formation.

ARTICLE III.

[RESERVED]

ARTICLE IV.

CAPITAL CONTRIBUTIONS

4.01 Initial Contributions of the Members. Any contribution made to the capital
of the Company pursuant to this Section is referred to as an “Initial
Contribution”.

(a) Prior to the date hereof, TPGA has contributed to the capital of the Company
as reflected in the books and records of the Company.

(b) In accordance with the Master Agreement, as of the date hereof, CNP Investor
has agreed to convert debt owing by the wholly owned subsidiaries of the Company
into an equity interest in the Company upon the terms set forth herein, and CNP
Investor is hereby admitted as a Member of the Company.

(c) The Percentage Interests and total Capital Contributions attributable to
each Member as of the date hereof is set forth on Exhibit B attached hereto.

4.02 Additional Contributions. From time to time, the Manager may require the
Members to make Additional Contributions to the Company, as determined in
accordance with the provisions of the TPG/CalSTRS LLC Agreement. The Additional
Contributions will be provided by the Members in proportion to their respective
Percentage Interests. Any and all contributions made to the capital of the
Company pursuant to this Section shall be referred to as “Additional
Contributions” and shall be credited to the Book Capital Account of the
Contributing Member as and when such contribution is made.

 

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4.03 Remedies For Failure to Contribute Capital.

(a) Remedies. If any Member (the “Non-Contributing Member”) fails timely to make
all or any portion of any Additional Contribution or such other amount such
Member is required to contribute pursuant to any provision of this Agreement
(the “Shortfall Amount”) and such failure continues for ten (10) business days
following the Effective Date of notice thereof from the other Member, then such
other Member (the “Contributing Member”), in addition to any and all other
remedies available to the Contributing Member under this Agreement or otherwise
at law or in equity (including, without limitation, instituting a legal
proceeding to collect the Shortfall Amount), shall have the right, but not the
obligation, at any time thereafter (provided such Contributing Member has
contributed the corresponding Additional Capital required of it), in its sole
discretion, to implement any of the following remedies:

(i) Cause the Company to refund to the Contributing Member that portion of the
corresponding Additional Contribution actually made by the Contributing Member
that is in proportion to the Shortfall Amount (the “Refund Amount”). For
example, if, at a time the Members were obligated to contribute capital in the
ratio of 75% by the Contributing Member and 25% by the Non-Contributing Member,
the Non-Contributing Member failed to contribute capital resulting in a
Shortfall Amount of $25,000, the Contributing Member would be entitled to
withdraw from capital a Refund Amount equal to $75,000.

(ii) Fund the Shortfall Amount to the Company, not withdraw the Refund Amount,
and treat the Shortfall Amount so funded as an Additional Contribution to the
Company by the Contributing Member. In such event, the Percentage Interest of
the Non-Contributing Member shall be immediately reduced, and the Percentage
Interest of the Contributing Member shall be immediately increased, by the
number of percentage points (the “Adjustment Amount”) equal to the product of
(x) a fraction, the numerator of which is the Shortfall Amount and the
denominator of which is the total amount of capital previously contributed to
the Company by the Non-Contributing Member times (y) one hundred fifty percent
(150%). By way of example only, if the Non-Contributing Member fails to
contribute capital in a Shortfall Amount equal to $10,000 and its total
contributed capital at the time is $5,000,000, then the Non-Contributing
Member’s Percentage Interest would be decreased, and the Contributing Member’s
Percentage Interest would be increased, by 0.30 percentage points (calculated in
the following manner: (($10,000÷$5,000,000) x 1.5 = 0.30 percentage points).

(b) Remedies Not Exclusive. It is expressly agreed by the Members that the
rights and remedies of any Member on account of the failure of any other Member
to make Additional Contributions set forth in this Section are cumulative, and
not exclusive, of any other right or remedy, and that the funding of the
Shortfall Amount by the Contributing Member shall not be or be deemed to be a
cure or waiver of the breach or default of the Non-Contributing

 

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Member. The foregoing provisions of this Section to the contrary
notwithstanding, unless the Contributing Member shall have given written notice
to the Non-Contributing Member within sixty (60) days after the funding of a
Shortfall Amount of the Contributing Member’s intention to exercise any other
right or remedy in addition to the funding of such Shortfall Amount, the funding
of such Shortfall Amount shall then be deemed to be the sole and exclusive
remedy to be exercised by the Contributing Member as a result of the
Non-Contributing Member’s failure to make the Additional Contribution on account
of which such Shortfall Amount was funded.

4.04 Capital Contributions in General. Except as otherwise expressly provided in
this Agreement (a) no part of the contributions of any Member to the capital of
the Company may be withdrawn by such Member; (b) no Member shall be entitled to
receive interest on such Member’s contributions to the capital of the Company;
(c) no Member shall have the right to receive or obligation to accept property
other than cash in return for such Member’s contributions to the Company; (d) no
Member shall be required or be entitled to contribute additional capital, make
any loan or advance any credit to the Company; (e) except as expressly provided
in Article VI, no Member shall have the right to the return of all or any
portion of its capital before the dissolution and termination of the Company and
then only to the extent of the cash and other property, if any, distributable to
the Members upon Company liquidation; and (f) no Person who is not a party to
this Agreement may enforce or make any claim under any provision of this
Agreement for the contribution of capital, payment of any amount or otherwise.

ARTICLE V.

PROFITS AND LOSSES

5.01 Incorporation of Exhibit C. Each and all of the provisions of Exhibit C are
incorporated herein and shall constitute part of this Agreement. Exhibit C
provides for, among other matters, the maintenance of capital accounts, the
allocation of profits and losses, the maintenance of books and records, and, if
required, the tax withholding of distributions. The Company shall be operated as
a partnership solely for state and federal income tax purposes.

5.02 Indemnity. Neither Member makes any representation or warranty to the other
regarding the allocations of profits and losses of the Company, for tax purposes
or otherwise. In the event either Member is audited or the allocations of
profits or losses to such Member is challenged in any way, the Member being
audited or challenged shall indemnify, defend and hold harmless the other
Member, its Constituents and the Company from and against any and all liability,
loss (including without limitation Costs of Litigation) which any of them may
suffer or incur by reason of any such audit or challenge or any such allocation
of profits or losses to the Member being audited or challenged.

ARTICLE VI.

DISTRIBUTIONS

6.01 Distribution of Available Cash and Capital Proceeds. At all times prior to
the final liquidation of the Company and distribution of the remaining company
assets pursuant to Article IX, the Available Cash and Capital Proceeds shall be
determined and distributed to the Members in accordance with their Percentage
Interests on at least a quarterly basis within ten (10) days following the end
of each quarter (or at such other times (and more or less frequently) as the
Manager determines.

 

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6.02 Reserves and Reinvestment. The Manager, in its sole and absolute
discretion, shall have the authority to determine the amount of any reserve
established pursuant to the definitions of “Available Cash” or “Capital
Proceeds”, as well as whether all Available Cash and Capital Proceeds shall be
distributed on a current basis or shall be reinvested in the Project, or used to
pay or make any Company expenses or expenditures in connection with the
operation of the Company, the development, ownership or operation of the Project
or otherwise.

ARTICLE VII.

BOOKS, RECORDS AND ACCOUNTING

7.01 Company Books. The Manager shall maintain the books and records of the
Company in accordance with specifications of Section 7.01 of the TPG/CalSTRS LLC
Agreement. The Members (personally or through an authorized representative)
shall have the right at any time during normal business hours to inspect all
such books and records, to make copies thereof and to take extracts therefrom.

7.02 Reports. The Manager shall prepare and deliver to the Members the same
reports required under Section 7.02 of the TPG/CalSTRS LLC Agreement at no
expense to the Company. Further, the Manager shall cause to be prepared and
delivered to each Member at such times as are determined by the Manager (or
otherwise in accordance with the terms of this Agreement) the reports and other
items set forth in Exhibit D.

7.03 Company Tax Elections: Tax Controversies. The Manager shall determine which
elections to make for the Company provided for in the Code including, without
limitation, the elections provided for in Section 754 of the Code so long as
such elections do not result in any adverse tax consequences to CNP Investor or
its Constituents. Additionally, the Manager shall have the right to seek to
revoke any such election (including without limitation, any election under
Section 754 of the Code) so long as such revocation does not result in any
adverse tax consequences to CNP Investor or any of its Constituents.

7.04 Accounting Method and Fiscal Year. The accounting method and fiscal year of
the Company shall be consistent with those of TPG/CalSTRS.

7.05 Accountants and Lawyers.

(a) The Company’s accounting shall be handled by accountants selected by the
Manager, who shall provide the Members the same scope of audit reports for the
Company as are prepared for TPG/CalSTRS in accordance with the TPG/CalSTRS LLC
Agreement.

(b) The Company shall engage such lawyers and law firms to provide such services
and representation to the Company as the Manager may recommend.

7.06 Banking. All funds of the Company shall be deposited in such accounts and
at such banks or financial institutions as the Manager determines. Monies and
funds of the Company shall be used only for Company purposes. All funds of the
Company shall be

 

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deposited only in accounts of the Company in the Company name, shall not be
commingled with funds of the Manager, any Member, or any other Person, and shall
be withdrawn only upon such signature or signatures and in such amounts as may
be recommended in writing from time to time by the Manager. Manager shall have
the right to cause the bank accounts of the Company to be audited at Company
expense and to cause Company funds not deposited in the proper accounts to be
immediately transferred thereto, such rights to be exercised as determined in
accordance with the provisions of the TPG/CalSTRS LLC Agreement.

7.07 Tax Returns. Within ninety (90) days after the end of each fiscal year of
the Company, the Manager shall cause the Company’s accountants to complete the
Company’s federal, state and local tax returns. The costs of such preparation,
and the costs of any revisions or supplements to such tax returns required as a
result of any review thereof, shall be Company expenses. The Manager shall use
diligent efforts to have the Company’s accountants prepare and file final
federal, state and local tax returns for the Company and its Subsidiaries (to
the extent applicable) no later than the initial statutory filing date therefor.

7.08 Confidentiality of Information. Each party hereto agrees that the terms of
the transactions contemplated by this Agreement, the identities of the Members,
and all information made available by one party to the other or in any way
relating to the other party’s Interest in the Company, shall be maintained in
strict confidence and no disclosure of such information will be made, except to
such attorneys, accountants, fiduciaries, partners, members, investment
advisors, lenders and others as are reasonably required to evaluate and
consummate the transactions contemplated by this Agreement. Each party hereto
further agrees and covenants as follows:

(a) No party hereto shall disclose or authorize the disclosure of the terms of
this Agreement or any instruments, documents, or assignments delivered in
connection with this Agreement, or the identity of any other party to this
Agreement in any public statement, news release, or other announcement or
publication, including, specifically, no party shall disclose or authorize
disclosure of the following:

(i) Any information relating to the tax allocations including without limitation
the special allocation of depreciation.

(ii) All provisions relating to the distribution of Available Cash and Capital
Proceeds.

(b) Nothing contained herein shall prevent any party hereto from disclosing or
accessing any information otherwise deemed confidential under this Section
(i) in connection with that party’s enforcement of its rights hereunder;
(ii) pursuant to any legal requirement or the rules of any securities exchange,
any statutory reporting requirement or any accounting or auditing disclosure
requirement applicable to such party, including, without limitation, any public
reporting and/or filing requirements with the Securities and Exchange Commission
applicable to TPGI and/or TPGLP; (iii) in connection with performance by either
party of its obligations under this Agreement (including, but not limited to,
the delivery and recordation of instruments, notices or other documents required
hereunder); (iv) to existing or bona fide potential investors, participants or
assignees in or of the transactions contemplated by this Agreement or such
party’s rights under this Agreement; or (v) to such party’s lenders, consultants
or financial advisors.

 

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ARTICLE VIII.

RESTRICTIONS ON TRANSFER

8.01 Limitations on Transfer. Transfers by TPGA of its Membership Interest in
the Company shall be governed by the provisions of the TPG/CalSTRS LLC Agreement
relating to transfer of assets of TPG/CalSTRS. Transfers of CNP Investor’s
Interest in the Company shall be subject to the same terms and conditions as
Transfers of Interests held by CalSTRS in TPG/CalSTRS; provided, however, that,
anything herein or therein to the contrary notwithstanding, any Transfer of
membership interests in CNP Investor between CalSTRS and its Affiliates, on the
one hand, and TPGLP and its Affiliates, on the other hand, shall constitute a
Transfer permitted hereunder. Any transferee of an Interest transferred in
compliance with this Article VIII shall be deemed a “Permitted Transferee”
hereunder.

8.02 Admission of Substitute Members. If any Member Transfers such Member’s
Interest to a Permitted Transferee in accordance with Section 8.01, then such
Permitted Transferee shall be admitted into the Company as a substitute member
if, but only if (a) the transferor and Permitted Transferee execute and
acknowledge such other instruments as the non-transferring Member may deem
reasonably necessary to effectuate such admission; (b) the Permitted Transferee
in writing accepts, assumes and agrees to be bound by all of the transferor’s
duties, obligations and liabilities under and pursuant to this Agreement and all
of the terms and conditions of this Agreement, as the same may have been
amended; and (c) the transferor pays all reasonable expenses incurred by the
non-transferring Member in connection with such admission, including, without
limitation, legal fees and costs. If such Permitted Transferee is admitted into
the Company as a substitute member, the Manager shall cause the books and
records of the Company to be amended to reflect such admission. To the fullest
extent permitted by law, any Permitted Transferee of an Interest who does not
become a substitute member shall have no right to require any information or
account of the Company’s transactions, to inspect the Company books, or to vote
on any of the matters as to which a Member would be entitled to vote under this
Agreement, and such Permitted Transferee shall only be entitled, as an assignee,
to receive such distributions and allocations of income, gain, loss, deduction
or credit or similar items to which the transferor was entitled, to the extent
assigned. A Member that Transfers its Interest shall not cease to be a member of
the Company until the admission of the Permitted Transferee as a substituted
member of the Company and, until the admission of such Permitted Transferee as a
substitute member, such transferring Member shall continue to be entitled to
exercise, and shall continue to be bound by, all of the rights, duties and
obligations of such Member under this Agreement.

8.03 Additional Restrictions on Transfer. Notwithstanding any other provision
contained herein, any Transfer described in this Article shall be null and void
ab initio and of no force or effect if (i) such Transfer would cause a
termination of the Company for federal or state, if applicable, income tax
purposes; (ii) such Transfer would require the registration of such Interest
pursuant to, or otherwise directly or indirectly violate, any applicable federal
or state securities Laws; (iii) such Transfer would cause the Company to become
a “publicly traded partnership” as such term is defined in Section 469(k)(2) or
7704(b) of the Code; (iv) such

 

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Transfer would cause the Company to be regulated under the Investment Company
Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement
Income Security Act of 1974, each as amended; (v) such Transfer would result in
a violation of applicable Laws; (vi) such Transfer would, in the opinion of the
Company’s counsel, cause the Company to cease to be classified as a partnership
for state and federal income tax purposes; (vii) such Transfer would cause an
acceleration of any loan or debt instrument to which the Company is a party or
result in a breach or violation of any restriction contained in any agreement or
order to which the Company is a party or by which the Company is bound; or
(viii) the transferring Member fails to reimburse the Company and the other
Member for any costs incurred by the Company or the other Member in connection
with such Transfer. Until all of the conditions to an effective Transfer have
been satisfied, the Company, the Manager and the other Member may continue to
treat the purported transferor of any such interest as its absolute owner and
shall incur no liability for any allocation or distribution made in good faith
to the transferor.

8.04 Regulatory Prohibition. Notwithstanding any other provision contained
herein, no Member shall take or permit any action to be taken with respect to
itself (including, without limitation, any change in its shareholders, members
or partners, as applicable) that would cause the Company to be regulated under
the Investment Company Act of 1940, the Investment Advisors Act of 1940 or the
Employee Retirement Income Security Act of 1974, each as amended, and any such
action shall be null and void ab initio and of no force or effect.

8.05 Election; Allocations Between Transferor and Transferee. Upon the Transfer
of the Interest of any Member or the distribution of any property of the Company
to a Member, the Company may file, in the sole and absolute discretion of the
Manager, an election in accordance with applicable Income Tax Regulations, to
cause the basis of the Company property to be adjusted for federal income tax
purposes as provided by Sections 734 and 743 of the Code. Upon the Transfer of
the Interest of a Member as herein provided, the Profits and Losses attributable
to the Interest so transferred shall be allocated between the transferor and
Permitted Transferee as of the date set forth on the written assignment. In the
reasonable discretion of the Manager, such allocation may be based upon either
(a) the result of Company activities during the periods in which each was the
holder of the Interest transferred; or (b) each Member’s pro rata share of the
total Profits and Losses of the Company for the fiscal year in which the
Transfer occurred based upon the number of days during the applicable fiscal
year of the Company that the Interest so transferred was held by each of them.
Distributions shall be made to the holder of record of the Interest on the date
of distribution.

8.06 Partition. No Member shall have the right to partition any assets of the
Company, nor shall a Member make an application or proceeding for a partition of
any assets of the Company. Upon any breach of the provisions of this Section by
any Member, the other Member (in addition to all rights and remedies afforded by
law or equity) shall be entitled to a decree or order restraining or enjoining
such application, action or proceeding. The Members expressly agree that damages
at law would be an inadequate remedy for a breach or threatened breach of the
restrictions set forth in this Section.

8.07 Waiver of Withdrawal and Purchase Rights. Except in connection with any
Transfer which results in the Permitted Transferee becoming a substitute member
of the Company, no Member may voluntarily withdraw, resign or retire from the
Company. Each

 

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Member hereby waives any and all rights such Member may have to withdraw and/or
resign from the Company pursuant to Section 18-603 of the Delaware Act and
hereby waives any and all rights such Member may have to receive the fair value
of such Member’s Interest in the Company upon such withdrawal, resignation
and/or retirement pursuant to Section 18-604 of the Delaware Act. No admission
or withdrawal of a Member, whether in accordance with this Agreement or
otherwise, shall cause the dissolution of the Company. Any purported admission,
withdrawal or removal which is not in accordance with this Agreement shall be
null and void and, in addition to other rights and remedies at law and in
equity, the other Member(s) shall be entitled to injunctive relief enjoining the
prohibited action. The Members expressly agree that damages at law would be an
inadequate remedy for a breach or threatened breach of the restrictions set
forth in this Section.

ARTICLE IX.

DISSOLUTION

9.01 Events Causing Dissolution of the Company. The Company shall be dissolved
upon the first to occur of (a) the expiration of the term of the Company; or
(b) the affirmative election of the Manager to dissolve the Company. Neither a
Member’s bankruptcy, retirement, resignation, expulsion or other cessation to
serve, nor a technical termination of the Company under Section 708(b)(1)(B) of
the Code, shall cause a dissolution of the Company and, notwithstanding such
event, the Company’s business shall continue without interruption or break in
continuity (subject to Section 708(b)(1)(B) of the Code if applicable). Except
as may be permitted in accordance with this Section, no Member shall have the
right to, and each Member hereby agrees that it shall not, seek to dissolve or
cause the dissolution of the Company or seek to cause a partial or whole
distribution or sale of Company assets, whether by court action or otherwise, it
being agreed that any actual or attempted dissolution, distribution or sale not
in accordance with this Section would cause a substantial hardship to the
Company and the remaining Member. Any attempted dissolution or distribution not
in accordance with this Section shall be null and void ab initio and of no force
or effect and, in addition to the other rights and remedies at law and in
equity, the other Member shall be entitled to injunctive relief enjoining the
prohibited action. The Members expressly agree that damages at law would be an
inadequate remedy for a breach or threatened breach of this Section.

9.02 Winding Up of the Company. Upon the dissolution of the Company the Members
shall proceed to wind up the affairs of the Company. During such winding up
process, the Profits, Losses, Capital Proceeds and Available Cash shall continue
to be shared, allocated and distributed in accordance with this Agreement. The
assets shall be liquidated as promptly as consistent with obtaining a fair value
therefor. The proceeds from all asset sales, to the extent available, shall be
applied and distributed by the Company as soon as reasonably practical after
such liquidation, in the following order:

(a) First, to the Company’s creditors other than Members and the expenses of
liquidation, in the order of priority provided by law;

(b) Second, to set up any reserves in amounts that are reasonably determined by
the Manager to be necessary to provide for contingent, conditional, unmatured,
unliquidated or uncertain liabilities or obligations. If any of such liabilities
are being disputed or are

 

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reasonably expected by the Manager to be disputed, the Manager may increase the
reserve associated with any such disputed liability or obligation by the
reasonable Costs of Litigation expected to be incurred by the Company in
resolving the dispute. Such reserves shall be disbursed under the direction of
the Manager in payment of such liabilities or obligations. As such liabilities
or obligations have been paid or adequately provided for in the reasonable
judgment of the Manager, the balance of such reserves shall be distributed,
first pursuant to Section 9.02(c) and then Section 9.02(d) below;

(c) Third, to interest first and then principal on debts or obligations owing to
the Members to the extent incurred in compliance with this Agreement; and

(d) Thereafter, to the Members as provided in Article IV of Exhibit C.

ARTICLE X.

DEFAULT

10.01 Event of Default.

(a) Events of Default. Each of the following shall constitute an “Event of
Default” by the “Defaulting Member”:

(i) Any Material Breach by such Member.

(ii) The rendering, by a court with appropriate jurisdiction, of a decree or
order (1) adjudging such Member bankrupt or insolvent; or (2) approving as
properly filed a petition seeking reorganization, readjustment, arrangement,
composition, or similar relief for such Member under the federal bankruptcy Laws
or any other similar applicable Law or practice, and if such decree or order
shall have continued undischarged and unstayed for a period of sixty (60) days.

(iii) The rendering, by a court with appropriate jurisdiction, of a decree or
order (1) for the appointment of a receiver, a liquidator, or a trustee or
assignee in bankruptcy or insolvency of such Member, or for the winding up and
liquidation of such Member’s affairs, provided that such decree or order shall
have remained in force undischarged and unstayed for a period of sixty
(60) days; or (2) for the sequestration or attachment of any property of such
Member without its return to the possession of such Member or its release from
such sequestration or attachment within sixty (60) days thereafter.

(iv) Such Member (1) institutes proceedings to be adjudicated a voluntary
bankrupt or an insolvent; (2) consents to the filing of a bankruptcy proceeding
against such Member; (3) files a petition or answer or consent seeking
reorganization, readjustment, arrangement, composition, or similar relief for
such Member or Affiliate under the federal bankruptcy Laws or any other similar
applicable Law or practice; (4) consents to the filing of any such petition, or
to the appointment of a receiver, a liquidator, or a trustee or assignee in
bankruptcy or insolvency for such Member or a substantial part of such Member’s
property; (5) makes an assignment for the benefit of such Member’s creditors;
(6) is unable to or admits in writing such Member’s inability to pay such
Member’s debts generally as they become due; or (7) takes any action in
furtherance of any of the aforesaid purposes.

 

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(b) Defaulting Member. For the purposes of implementing the provisions contained
in this Agreement, the “Defaulting Member” shall be (i) in the case of an Event
of Default referenced in Section 10.01(a)(i), the Member whose action or
inaction caused or resulted in the Material Breach; and (ii) in the case of an
Event of Default referenced in Section 10.01(a)(ii), (iii) or (iv), the Member
who is the subject of such court decree or order, has instituted such
proceedings or filed such petitions, or is insolvent, etc. The “Non-Defaulting
Member” is the Member that is not the Defaulting Member.

10.02 Rights Arising From an Event of Default. Upon the occurrence of an Event
of Default, the Non-Defaulting Member shall have any and all rights and remedies
available at law or in equity, including without limitation the right to refuse
to make any further Additional Contributions.

ARTICLE XI.

INTENTIONALLY OMITTED

ARTICLE XII.

CALSTRS MATTERS

12.01 Exculpation.

(a) CalSTRS. The parties agree that no present or future Constituent of CalSTRS
or CNP Investor shall have any personal liability, directly or indirectly, and
recourse shall not be had against any such Constituent, under or in connection
with this Agreement or any other document or instrument heretofore or hereafter
executed in connection with this Agreement. TPGA hereby waives and releases any
and all such personal liability and recourse. In addition, TPGA agrees that all
persons dealing with CalSTRS or CNP Investor must look solely to (i) CalSTRS
Interest in CNP Investor for the enforcement of any claims against or liability
of CalSTRS, and (ii) CNP Investor’s Interest in the Company for the enforcement
of any claims against or liability of CNP Investor. The limitations of liability
provided in this Section are in addition to, and not in limitation of, any
limitation on liability applicable to CalSTRS and CNP Investor provided by Law
or in any other contract, agreement or instrument.

(b) TPGA. The parties agree that no present or future Constituent of TPGA shall
have any personal liability, directly or indirectly, and recourse shall not be
had against any such Constituent, under or in connection with this Agreement or
any other document or instrument heretofore or hereafter executed in connection
with this Agreement. CNP Investor hereby waives and releases any and all such
personal liability and recourse. The limitations of liability provided in this
Section are in addition to, and not in limitation of, any limitation on
liability applicable to TPGA provided by Law or in any other contract, agreement
or instrument.

 

51

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12.02 Role of CCN.

(a) The parties to this agreement acknowledge and agree that Cox, Castle &
Nicholson LLP (“CCN”) has represented and will represent only CNP Investor and
CalSTRS in connection with this Agreement. CCN will not and does not represent
any other person or entity concerning this Agreement.

(b) Specifically, no attorney/client relationship exists or will exist between
CCN, on one hand, and TPGA, TPGLP or any of TPGLP’s Affiliates, on the other
hand, concerning this Agreement, and CCN shall have no duties to TPGA or to
TPGLP or any of its Affiliates with respect to this Agreement. TPGA covenants
and agrees that in no event may TPGA or TPGLP or any of its Affiliates seek to
disqualify CCN from any matter on the ground that CCN undertook duties to TPGA
or to TPGLP or any of its Affiliates based upon CCN’s representation of CNP
Investor and CalSTRS with respect to this Agreement.

(c) The parties to this agreement further acknowledge and agree that the
Company, TPGA and the Title Holding Subsidiaries, or any of them, have engaged,
and/or may in the future engage, CCN for advice or representation on matters in
addition to this Agreement. The parties agree that in performing such services,
CCN will not be deemed to undertake any relationship with, or duty to, any
individual member of the Company or the Title Holding Subsidiaries and
specifically that neither TPGLP nor any of its Affiliates shall be CCN’s client.

(d) TPGA covenants and agrees for itself and each of its Constituents and their
respective Affiliates that in no event may TPGA or any of its Constituents or
their respective Affiliates seek to disqualify CCN from any matter based on work
CCN agrees to perform for CalSTRS, CNP Investor, the Company, or any of the
Title Holding Subsidiaries. By way of example and not of limitation, in the
event any dispute or controversy arises between TPGA, TPGLP or any of TPGLP’s
Affiliates, on the one hand, and CalSTRS, CNP Investor, the Company, the Title
Holding Subsidiaries or CalSTRS (or any of their Affiliates), on the other hand,
then CCN may represent CNP Investor, the Company, the Title Holding
Subsidiaries, CalSTRS, their Affiliate(s), or any of them, in any such dispute
or controversy.

ARTICLE XIII.

MISCELLANEOUS

13.01 Notices and Approvals. Any notice, approval, consent, payment, demand,
communication, authorization, delegation, recommendation, agreement, offer,
report, statement or disclosure required or permitted to be given or made under
this Agreement, whether or not expressly so stated, shall not be effective
unless and until given or made in writing and shall deemed to have been duly
given or made as of the following date (the “Effective Date”): (i) if delivered
personally by courier or otherwise, then as of the date delivered or if delivery
is refused, then as of the date presented; or (ii) if sent or mailed by
certified U.S. mail, return receipt requested, or by Federal Express, Express
Mail or other mail or courier service, then as of the date received. All such
communications shall be addressed as follows (which address(es) for a party may
be changed by that party from time to time by written notice to the other
parties). No such communications to a party shall be effective unless and until
deemed received at all address(es) for such party. E-mail addresses and
facsimile numbers, if included, are for convenience only. No notice, approval,
consent, demand or other communication delivered by e-mail or facsimile shall be
of any force or effect unless and until also delivered in a manner otherwise
authorized by this Section.

 

52

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If to the Company:      To its principal offices If to TPGA:     

TPGA, LLC

c/o Thomas Properties Group, L.P.

515 Flower Avenue, 6th Floor

Los Angeles, California 90071

Attention: Mr. James A. Thomas, Mr. John Sischo and

                          Paul S. Rutter, Esq.

Phone: (213) 613-1900

Fax: (213) 633-4760

    

With a copy to:

Cox, Castle & Nicholson LLP

2049 Century Park East, Suite 2800

Los Angeles, California 90067

Attention: John H. Kuhl, Esq.

Phone: (310) 284-2267

Fax: (310) 277-7889

If to CNP Investor:     

CNP Investor, LLC

c/o Thomas Properties Group, L.P.

515 Flower Avenue, 6th Floor

Los Angeles, California 90071

Attention: Mr. James A. Thomas, Mr. John Sischo and

                          Paul S. Rutter, Esq.

Phone: (213) 613-1900

Fax: (213) 633-4760

    

And to:

 

California State Teachers’ Retirement System

100 Waterfront Place

Sacramento, California 95605

Attention: Michael J. Thompson and Timothy D. Schreck

Phone: (415) 512-3501

Fax: (415) 512-3515

    

With a copy to:

Cox, Castle & Nicholson LLP

2049 Century Park East, Suite 2800

Los Angeles, California 90067

Attention: John H. Kuhl, Esq.

Phone: (310) 284-2267

Fax: (310) 277-7889

 

53

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13.02 Statutes. Any reference herein to any Law, or any section or provision
thereof, shall be deemed to include any future amendments thereto and any
similar provisions of Law that may hereafter replace or be substituted for such
provision, whether or not designated by the same title or number.

13.03 Cross-References. All cross-references in this Agreement, unless
specifically directed to another agreement or document, refer to provisions
within this Agreement.

13.04 Cumulative Remedies. No remedy conferred upon the Company or any Member in
this Agreement is intended to be exclusive of any other remedy herein or by law
provided or permitted, but rather each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity or by statute, including without limitation the right to petition
a court to have a receiver appointed to manage the Project.

13.05 Litigation Without Termination. Any Member shall be entitled to maintain,
on its own behalf or on behalf of the Company, any action or proceeding against
any other Member or the Company (including, without limitation, any action for
damages, specific performance or declaratory relief) for or by reason of breach
of such party of this Agreement, or any agreement entered into in connection
with this Agreement, notwithstanding the fact that any or all of the parties to
such proceeding may then be Members in the Company, and without dissolving the
Company.

13.06 Successors and Assigns. This Agreement shall not be assigned or otherwise
transferred (by operation of law or otherwise) by any Member except as is
otherwise permitted hereby. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors, heirs,
administrators and assigns.

13.07 Amendments. Except as otherwise provided herein, this Agreement may be
amended or modified only by a written instrument executed by both Members.

13.08 Governing Law. Except as otherwise expressly provided, this Agreement
shall be governed by and construed in accordance with the internal Laws of the
State of Delaware without reference to choice of law principles which might
indicate that the Law of some other jurisdiction should apply.

13.09 Interpretation. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation
hereof. Whenever the context hereof shall so require, the singular shall include
the plural, the male gender shall include the female gender and the neuter, and
vice versa. This Agreement shall not be construed against either Member but
shall be construed as a whole, in accordance with its fair meaning, and as if
prepared by both Members jointly.

13.10 No Obligation to Third Parties. The execution and delivery of this
Agreement shall not be deemed to confer any rights upon, nor obligate either of
the parties hereto to, any person or entity not a party to this Agreement.

 

54

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13.11 Further Assurances. Each of the parties shall execute such other and
further documents and do such further acts as may be reasonably required to
effectuate the intent of the parties and carry out the terms of this Agreement.

13.12 Merger of Prior Agreements. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings between the parties relating to the subject matter hereof,
including without limitation, any term sheet or letter of intent, which shall be
of no further force or effect upon execution of this Agreement by both Members.
Nothing herein shall affect the rights and obligations of the KC Members with
respect to the Company.

13.13 Enforcement. In the event a dispute arises concerning the performance,
meaning or interpretation of any provision of this Agreement or any document
executed in connection with this Agreement, the prevailing party in such dispute
shall be awarded any and all Costs of Litigation incurred by the prevailing
party in enforcing, defending or establishing its rights hereunder or
thereunder. In addition to the foregoing award of Costs of Litigation, the
prevailing party shall also be entitled to recover its Cost of Litigation
incurred in any post judgment proceedings to collect or enforce any judgment.
This provision is separate and several and shall survive the merger of this
Agreement or any such other document into any judgment on this Agreement or such
document.

13.14 Time. Time is of the essence of this Agreement. For purposes of this
Agreement “business day” shall mean any day other than a Saturday, Sunday,
California State or national holiday or other day on which commercial banks in
California are generally not open for business. Unless otherwise specified, in
computing any period of time described in this Agreement, the day of the act or
event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is not a business day, in which event the period shall run to and
include the next day which is a business day.

13.15 Severability. If any provision of this Agreement, or the application
thereof to any person, place, or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.

13.16 No Waiver. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege. No waiver shall be valid against any party hereto
unless made in writing and executed by the party against whom enforcement of
such waiver is sought and then only to the extent expressly specified therein.

13.17 Legal Representation. Each party has been represented by legal counsel in
connection with the negotiation of the transactions herein contemplated and the
drafting and negotiation of this Agreement. Each party and its counsel have had
an opportunity to review and

 

55

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suggest revisions to the language of this Agreement. Accordingly, no provision
of this Agreement shall be construed for or against or interpreted to the
benefit or disadvantage of any party by reason of any party having or being
deemed to have structured or drafted such provision.

13.18 Appendices, Schedules and Exhibits. All references in this Agreement to
exhibits and schedules shall, unless otherwise expressly provided, be deemed to
be references to the appendices, exhibits and schedules attached to this
Agreement. All such appendices, exhibits and schedules attached hereto are
incorporated into and made a part of this Agreement as though fully set forth
herein.

13.19 Provisions Governing Actions for Indemnity. The following provisions
govern actions for indemnity under this Agreement or any document or instrument
executed pursuant to this Agreement. The indemnitor shall be responsible for any
costs, expenses, judgments, damages, liability and losses incurred by the
indemnitee with respect to any and all indemnified claims, and the indemnitor,
at the indemnitor’s sole cost and expense, shall assume the defense of any and
all indemnified claims, with counsel reasonably acceptable to the indemnitee;
provided, however, that an indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnitor, if the
indemnitee reasonably believes that representation of such indemnitee by the
counsel retained by the indemnitor would be inappropriate due to actual or
potential conflicting interests between such indemnitee and any other party
represented in such proceeding by counsel retained by the indemnitor. Any delay
by the indemnitee in delivering written notice to the indemnitor after
indemnitee receives notice of an indemnified claim shall not relieve the
indemnitor of any liability to the indemnitee unless, and then only to the
extent that, such delay is actually prejudicial to the indemnitor’s ability to
defend such action, and the failure to deliver written notice to the indemnitor
will not relieve the indemnitor of any other liability that it may have to any
indemnitee. The settlement of a claim without the prior written consent of the
indemnitor shall not release the indemnitor from liability with respect to such
claim if the indemnitor has unreasonably withheld consent to such settlement or
has failed to provide or pay for a defense thereof as provided herein. All fees,
costs and expenses to be paid by indemnitor hereunder shall be made on a “paid
as incurred” basis within thirty (30) days of the indemnitor’s receipt of a
statement or invoice therefor. Should the indemnitor object to any such fees,
costs or expenses the indemnitor shall nevertheless pay such fees, costs and
expenses within said thirty (30) days which payment, if expressly stated in
writing at the time of such payment to be “under protest”, shall not prejudice
the indemnitor’s right to subsequently object to such fee, cost or expense paid
under protest.

13.20 Signer’s Warranty. Each individual executing this Agreement on behalf of
an entity hereby represents and warrants to the other party or parties to this
Agreement that (i) such individual has been duly and validly authorized to
execute and deliver this Agreement and any and all other documents contemplated
by this Agreement on behalf of such entity; and (ii) this Agreement and all
documents executed by such individual on behalf of such entity pursuant to this
Agreement are and will be duly authorized, executed and delivered by such entity
and are and will be legal, valid and binding obligations of such entity.

 

56

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13.21 No Offer or Binding Contract. The parties hereto agree that the submission
of an unexecuted copy or counterpart of this Agreement by one party to another
is not intended by either party to be, or be deemed to be a legally binding
contract or an offer to enter into a legally binding contract. The parties shall
be legally bound pursuant to the terms of this Agreement only if and when the
parties have been able to negotiate all of the terms and provisions of this
Agreement in a manner acceptable to each of the parties in their respective sole
discretion, and both Members have fully executed and delivered this Agreement.

[signatures begin on next page]

 

57

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IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Limited Liability Company Agreement of TPG Plaza Investments LLC
effective as of the day and year first above written.

 

“CNP Investor”          

CNP INVESTOR, LLC,

a Delaware limited liability company

    By:  

California State Teachers’ Retirement System,

a public entity, its sole member

      By:  

 

       

 

        (Print Name and Title)

 

“TPGA”    

TPGA, LLC,

a Delaware limited liability company

      By:  

TPG/CalSTRS, LLC,

a Delaware limited liability company,

its Managing Member

        By:  

Thomas Properties Group, L.P.,

a Maryland limited partnership,

its Managing Member

          By:   Thomas Properties Group, Inc., a Delaware corporation, General
Partner             By:  

 

             

 

              (Print Name and Title)

 

S-1

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

EXHIBIT A

DEFINITIONS

“Additional Contribution” is defined in Section 4.02.

“Adjusted Book Basis” is defined in Exhibit C.

“Adjusted Book Capital Account” is defined in Exhibit C.

“Adjustment Amount” is defined in Section 4.03(a)(ii).

“Affiliate” means, with reference to a specified Person (provided, however, that
in no event shall the Company be deemed an Affiliate of any Member nor shall
CalSTRS or CNP Investor be deemed an Affiliate of TPGI or any of its Affiliates,
including TPGLP):

(a) a Person that, directly or indirectly, through one or more intermediaries,
has control of, is controlled by or is under common control with, the specified
Person; or

(b) any Person that is an officer, director, controlling shareholder, general
partner, managing member or trustee of, or serves in a similar capacity with
respect to, the specified Person, or for which the specified Person is an
officer, director, controlling shareholder, general partner, managing member or
trustee, or serves in a similar capacity.

(c) with respect to TPGLP, any Constituent thereof and any Key Individual.

“Agreement” means this Second Amended and Restated Limited Liability Company
Agreement of TPG Plaza Investments, LLC, including all Exhibits, as it may be
amended.

“Amended CNP Investor LLC Agreement” means that certain Amended and Restated
Limited Liability Company Agreement of CNP Investor, LLC, to be effective upon
consummation of the option provided for under the Option Agreement (as defined
in the Master Agreement).

“Annual Plan” shall have the meaning ascribed thereto in the TPG/CalSTRS LLC
Agreement.

“Anticipated COD Income” is defined in Exhibit C.

“Available Cash” means the amount, if any, by which (a) the sum of (i) all cash
receipts of the Company prior to any applicable determination date (including
without limitation all cash receipts realized from operations of the Company,
but excluding however all Capital Proceeds), plus (ii) the amount of any
reduction in reserves; exceeds (b) the sum of (i) all cash disbursements of the
Company prior to such determination date (including without limitation all costs
and expenses of the Company and all distributions to the Members in their
capacities as such, but excluding any Capital Proceeds), plus (ii) the amount of
any increase in reserves (including, without limitation, any reserve for capital
expenditures and/or development of the Project) for anticipated cash
disbursements provided for in the then applicable Annual Plan or otherwise
determined by the Manager.

 

Exhibit A – 1

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

“Book Basis” is defined in Exhibit C.

“Book Capital Account” is defined in Exhibit C.

“Book Depreciation” is defined in Exhibit C.

“Book Gain or Loss” is defined in Exhibit C.

“CalSTRS” means California State Teachers’ Retirement System, a public entity,
and its permitted successors and assigns.

“Capital Proceeds” means the amount, if any, by which the sum of all cash
receipts of the Company realized prior to any applicable determination date from
capital contributions or the sale, financing and/or refinancing of the Company
or its assets exceeds the sum of (a) all cash disbursements of the Company made
prior to such determination date related to any such sale, financing or
refinancing transaction, plus (b) the amount of any increase in capital reserves
(including, without limitation, any reserve for capital expenditures and/or
development of the Project) for anticipated capital requirements provided for in
the then applicable Annual Plan or otherwise determined by the Manager.

“Cash Shortfall” is defined in Exhibit C.

“CNP Investor” means CNP Investor, LLC, a Delaware limited liability company.

“COD” is defined in Exhibit C.

“Code” is defined in Exhibit C.

“Company” means the limited liability company governed by this Agreement.

“Company Minimum Gain” is defined in Exhibit C.

“Constituent” means, with respect to any Person, such Person’s board members,
officers, directors, shareholders, partners, members, retirants, beneficiaries,
trustees, agents, employees, internal investment contractors, representatives,
Affiliates and, with respect to TPGA, the Key Individuals.

“Contributing Member” is defined in Section 4.03(a).

“control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”) as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

“Defaulting Member” is defined in Section 10.01(b).

“Delaware Act” means the Delaware Limited Liability Company Act (6 De1.C. §
18-101, et seq.), as hereafter amended from time to time.

 

Exhibit A – 2

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

“Due Care” shall mean to act in good faith, in the best interests of the
Company, within the scope of one’s authority, with the care, skill and diligence
(including diligent inquiry) under the circumstances then prevailing that a
prudent real estate professional experienced in such matters would use and
otherwise in accordance and compliance with the standards set forth in
California Education Code Sections 22250 through 22257.

“Economic Risk of Loss” is defined in Exhibit C.

“Education Code” means Title I, Division 1, Parts 13 and 14 of the California
Education Code, Sections 22000, et seq., as amended.

“Effective Date” is defined in Section 13.01.

“Event of Default” is defined in Section 10.01.

“Fiscal Year” is defined in Exhibit C.

“Income Tax Regulations” is defined in Exhibit C.

“Initial Book Capital Account” is defined in Exhibit C.

“Initial Contribution” is defined in Section 4.01.

“Interest” means in respect to any Member, all of such Member’s right, title and
interest in and to the management, information, allocations, distributions and
capital of the Company, and any and all other interests in the Company, in
accordance with the provisions of this Agreement and the Delaware Act.

“Key Individuals” means James A. Thomas and John R. Sischo (or any replacement
for any of them approved pursuant to the preceding definition), collectively;
the term “Key Individual” means any one (1) of the Key Individuals.

“Latest Distributions” means the aggregate of the latest in time distributions
made by the Company to the Members pursuant to Article VI or IX which have not
been previously called pursuant to Section 2.06(d) and which totals the
aggregate amount of distributions being recalled pursuant to Section 2.06(d).

“Laws” means all federal, state and local laws, moratoria, initiatives,
referenda, ordinances, rules, regulations, standards, orders, judicial
decisions, common law and other governmental, quasi-governmental and utility
company requirements (including those relating to labor and employment, the
environment, health and safety, or handicapped persons).

“Losses” is defined in Exhibit C.

“Manager” is defined in Section 2.02(a).

“Master Agreement” is defined in Recital D.

 

Exhibit A – 3

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

“Material Breach” means any breach or default by a Member (including without
limitation TPGA in its capacity as Manager) of any material covenant, duty,
obligation, representation or warranty under this Agreement and/or any exhibit
hereto; provided, however, that in any such instance, prior to such breach or
default being deemed a Material Breach, such Member (a) shall have received
written notice from the other Member of such breach or default; and (b) shall
have (i) failed to cure or remedy such breach or default within ten
(10) business days following the Effective Date of such notice, in the event of
a failure to contribute capital, or thirty (30) days following the Effective
Date of such notice in the event of any other breach or default; or (ii) if such
breach or default does not consist of the failure to contribute capital or
otherwise pay money and is not curable within such thirty (30) days, failed to
commence such cure within such thirty (30) days or failed to diligently and
continuously pursue such a cure or remedy thereafter and in any event failed to
fully cure or remedy such breach or default within ninety (90) days of the
Effective Date of such notice.

“Member Nonrecourse Debt” is defined in Exhibit C.

“Member Nonrecourse Debt Minimum Gain” is defined in Exhibit C.

“Member Nonrecourse Deductions” is defined in Exhibit C.

“Members” means CNP Investor and TPGA, collectively; “Member” means any one
(1) of the Members.

“Member Withholding Law” is defined in Exhibit C.

“Non-Defaulting Member” is defined in Section 10.01(b).

“Nonrecourse Deductions” is defined in Exhibit C.

“Nonrecourse Liability” is defined in Exhibit C.

“Permitted Transferee” is defined in Section 8.01.

“Person” means and includes an individual, a corporation, a partnership, a
limited liability company, a joint venture, a trust, an unincorporated
organization and a government or any department or agency thereof, or any entity
similar to any of the foregoing.

“Percentage Interest” means the percentage interest that a Member owns in the
profits, losses, capital and distributions of the Company. The current
Percentage Interest of each Member is set forth on Exhibit B. Upon the admission
of additional Members or other change in the Percentage Interests of the
Members, Exhibit B shall be updated to include the then effective Percentage
Interest of each Member of the Company.

“Prior Agreement” is defined in Recital B.

“Profits” is defined in Exhibit C.

“Project” is defined in Section 1.03.

 

Exhibit A – 4

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

“Recapture” is defined in Exhibit C.

“Refund Amount” is defined in Section 4.03(a)(i).

“Regulatory Allocations” is defined in Exhibit C.

“Required Member Withholding” is defined in Exhibit C.

“Section 704(c) Property” is defined in Exhibit C.

“Sixth Amendment” means that certain Sixth Amendment to Second Amended and
Restated Operating Agreement of TPG/CalSTRS, LLC dated as of February 19, 2010.

“Shortfall Amount” is defined in Section 4.03(a).

“Tax Depreciation” is defined in Exhibit C.

“Tax Gain or Loss” is defined in Exhibit C.

“Tax Matters Member” is defined in Exhibit C.

“Title Holding Subsidiary” shall have the meaning ascribed thereto in the
TPG/CalSTRS LLC Agreement.

“TPGA” means TPGA, LLC, a Delaware limited liability company and its permitted
successors and assigns.

“TPG/CalSTRS” means TPG/CalSTRS, LLC, a Delaware limited liability company.

“TPG/CalSTRS LLC Agreement” means that certain Second Amended and Restated
Limited Liability Company Agreement dated as of October 13, 2004, by and between
CalSTRS and TPGA, as amended by the following amendments and any further
amendments entered into from time to time: First Amendment to Second Amended and
Restated Operating Agreement of TPG/CalSTRS, LLC, dated as of June 8, 2006;
Second Amendment to Second Amended and Restated Operating Agreement of
TPG/CalSTRS, LLC, dated as of May 25, 2007; Third Amendment to Second Amended
and Restated Operating Agreement of TPG/CalSTRS, LLC, dated as of February 1,
2008; Fourth Amendment to Second Amended and Restated Operating Agreement of
TPG/CalSTRS, LLC, dated as of November 5, 2008; Fifth Amendment to Second
Amended and Restated Operating Agreement of TPG/CalSTRS, LLC, dated as of
October 30, 2009; and the Sixth Amendment.

“TPGI” means Thomas Properties Group, Inc., a Delaware corporation.

“TPGLP” means Thomas Properties Group, L.P., a Maryland limited partnership and
its permitted successors and assigns.

“Transfer” means any sale, exchange, assignment, disposition, pledge,
hypothecation, encumbrance, other grant of a security interest, conveyance in
trust, gift, transfer by bequest, devise or descent, or other transfer,
including transfer to a receiver, levying creditor, trustee or

 

Exhibit A – 5

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

receiver in bankruptcy or a general assignment for the benefit of creditors,
whether direct or indirect, for value or no value, or voluntary or involuntary
(including by operation of law or other legal or equitable proceedings). The
following shall also be deemed a “Transfer”: (a) any change in ownership of any
corporation, partnership, limited liability company or other entity that results
in ten percent (10%) or more of the direct or indirect ownership interests in a
Member having been Transferred since the time it became a Member or which
results in the effective control of a Member being vested in persons other than,
or in addition to, the persons who effectively controlled such Member at the
time it became a Member; and (b) any dissolution of any corporation,
partnership, limited liability company or other entity, or any acquisition,
merger or consolidation of any corporation, partnership, limited liability
company or other entity by or with another Person.

“Transfer Effective Date” is defined in Exhibit C.

 

Exhibit A – 6

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EXHIBIT B

CAPITAL CONTRIBUTIONS AND

PERCENTAGE INTERESTS OF THE MEMBERS

 

Members

   Capital Contributions    Percentage Interests  

CNP Investor

   $ 219,074,789    68.25 % 

TPGA

   $ 101,931,777    31.75 % 

 

Exhibit B – 1

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EXHIBIT C

TAX AND ACCOUNTING MATTERS

 

Exhibit C – 1

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

EXHIBIT C

TAX AND ACCOUNTING MATTERS

SECOND AMENDED AND RESTATED

OPERATING AGREEMENT

OF

TPG PLAZA INVESTMENTS, LLC

ARTICLE I

CAPITAL ACCOUNTS

Section 1.1 Maintenance of Capital Accounts; General Rules. A separate “Book
Capital Account” (as defined in Section 1.2 of this Exhibit) shall be maintained
for each Member in accordance with the provisions of this Article I.

Section 1.2 Book Capital Accounts. A capital account (the “Book Capital
Account”) for each Member shall be maintained at all times during the term of
the Company in accordance with this Section 1.2 and the capital accounting rules
set forth in Section 1.704-1(b)(2)(iv) of the Income Tax Regulations, as the
same may be amended from time to time (“Income Tax Regulations”). The Company
shall make all adjustments required by said Section 1.704-1(b)(2)(iv), including
the adjustments contained in Section 1.704-1(b)(2)(iv)(g) of the Income Tax
Regulations (relating to “Section 704(c) Property”, as defined in
Section 2.3B(1) of this Exhibit). In the event that at any time during the term
of the Company it shall be determined that the Book Capital Accounts shall not
have been maintained as required by this Section 1.2, then said accounts shall
be retroactively adjusted so that the same shall conform to this Section 1.2.

A. Initial Book Basis of Property of the Company. As used herein, “Book Basis”
of an item of property of the Company means the adjusted basis of such item as
reflected in the books of the Company, determined and maintained in accordance
with the capital accounting rules contained in Section 1.704-1(b)(2)(iv) of the
Income Tax Regulations.

B. Initial Book Capital Accounts. Prior to the transaction described in Recital
“D” of the Agreement and Section 4.01(b) of the Agreement, the Company has been
treated as a “partnership”, within the meaning of Section 301.7701-3 of the
Income Tax Regulations, comprised of TPGA and the KC Members. The “Initial Book
Capital Account” of TPGA and the KC Members as of the date of the Agreement
shall be equal to each such Member’s Book Capital Account as it existed
immediately following the transaction described in Recital “D” of the Agreement
and Section 4.01(b) of the Agreement and after the application of Section 2.9A
of this Appendix. The Initial Book Capital Account of CNP Investor shall be
equal to its total Capital Contribution under Section 4.01(c) of the Agreement,
which the Members agree is the fair market value of CNP Investor’s contribution.

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C. Optional Revaluations of Property of the Company. The Company will not make
the election to revalue property of the Company permitted under
Section 1.704-1(b)(2)(iv)(f) of the Income Tax Regulations except as determined
by the Manager.

D. Determination of Book Items. Consistent with the provisions of
Section 1.704-1(b)(2)(iv)(g)(3) of the Income Tax Regulations: (1) “Book
Depreciation” (which means the depreciation, depletion or amortization deduction
or allowance that shall be allowable to the Company with respect to an item of
property of the Company, determined in the manner hereinafter set forth) for
each item of property of the Company shall be the amount that bears the same
relationship to the “Adjusted Book Basis” (which means, with respect to an item
of property of the Company, the Book Basis of such item as the same may be
adjusted from time to time by Book Depreciation allowable with respect to such
item of property of the Company) of such item of property of the Company as the
Tax Depreciation (as defined in Section 2.3A of this Exhibit) with respect to
such item of property of the Company for such year bears to the “adjusted basis”
(within the meaning of Section 1011(a) of the Internal Revenue Code of 1986, as
amended [the “Code”]) of such item of property of the Company; and (2) “Book
Gain or Loss” shall be the gain or loss recognized by the Company from the sale
or other disposition of property of the Company (such gain or loss determined by
reference to the Adjusted Book Basis, and not the adjusted tax basis, of such
property to the Company). If an item of property of the Company shall have an
“adjusted basis” (as defined in the preceding sentence) equal to zero, Book
Depreciation shall be determined under a reasonable method, which method shall
be selected by the Manager.

E. Book Adjustments on Distributions. With respect to all distributions of
property of the Company to the Members, the Company shall comply with the
provisions contained in Section 1.704-1(b)(2)(iv)(e) of the Income Tax
Regulations (relating to adjustments to the Members’ Book Capital Accounts in
connection with such distributions) and all allocations and adjustments made in
connection therewith shall be in accordance with Article II of this Exhibit.

F. Purpose of Book Capital Accounts. Book Capital Accounts shall not govern
distributions by the Company to the Members, it being the understanding that
Book Capital Accounts shall be maintained solely to assist the Company in
allocating items of income, gain, loss, deduction and credit among the Members
for Federal and applicable state income tax purposes. The provisions of this
Exhibit are intended to effect an allocation of tax items of the Company that
are in accordance with the Members’ “interests in the partnership” (i.e., the
Company) within the meaning of Section 1.704-1(b)(3) of the Income Tax
Regulations by utilizing the principles of allocation contained in
Section 1.704-1(b)(2)(iv) of the Income Tax Regulations and Section 1.704-2 of
the Income Tax Regulations with respect to maintenance of capital accounts and
allocations, and shall be interpreted and applied accordingly. For purposes of
applying the provisions of this Exhibit, it shall be assumed that the Company
satisfies the requirements of Section 1.704-1(b)(2)(ii)(b)(2) and (3) of the
Income Tax Regulations, notwithstanding that the Company does not satisfy such
requirements.

 

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ARTICLE II

ALLOCATION OF INCOME, LOSSES AND DEDUCTIONS

FOR BOOK AND TAX PURPOSES

Section 2.1 Profits and Losses. The “Profits” or “Losses” of the Company (which
means the Company’s taxable income or loss, respectively, as calculated in
accordance with Section 703(a) of the Code [with, however, (i) all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code being included in such taxable income or loss,
(ii) any income and gain that is exempt from tax, and all expenditures described
in Section 705(a)(2)(B) of the Code (or treated as expenditures so described
pursuant to Section 1.704-1(b)(2)(iv)(i) of the Income Tax Regulations) being
included in such Profits or Losses, (iii) items of Book Depreciation (and not
Tax Depreciation [as defined in Section 2.3A of this Exhibit]) that are not
Nonrecourse Deductions (as defined in Section 2.4C of this Exhibit) being
included in calculating such Profits or Losses, and (iv) Book Gain or Loss (and
not Tax Gain or Loss [as defined in Section 2.3B of this Exhibit]) being
included in calculating such Profits or Losses], but excluding in such
calculation the amounts allocated under Sections 2.3, 2.4, 2.5, 2.7 and 2.8 of
this Exhibit) for each Fiscal Year of the Company, shall be allocated to the
Members in the following order and priority:

A. Profits. Subject to Section 2.7 of this Exhibit, if there shall be Profits
for such Fiscal Year, such Profits shall be allocated among the Members as
follows:

(1) first, to the Members to cause, to the extent possible, their respective
relative “Modified Book Capital Account” (as hereinafter defined) balances to be
proportional to their then respective Percentage Interests. For these purposes,
a Member’s “Modified Book Capital Account” shall be equal to such Member’s
Adjusted Capital Account: (i) increased by the sum of such Member’s share of
Company Minimum Gain and such Member’s share of Member Nonrecourse Debt Minimum
Gain; and (ii) decreased by the amounts remaining to be distributed to such
Member pursuant to Section 6.01 hereof; and

(2) the balance, if any, to the Members in accordance with their then respective
Percentage Interests.

B. Losses. Subject to Section 2.7 of this Exhibit, if there shall be Losses for
such Fiscal Year, such Losses shall be allocated among the Members as follows:

(1) first, to the Members to cause, to the extent possible, their respective
relative Modified Book Capital Account (as defined in Section 2.1A(1) of this
Exhibit) balances to be in proportion to their then respective Percentage
Interests; and

(2) the balance, if any, to the Members, in proportion to their then respective
Percentage Interests.

Section 2.2 Intentionally Omitted.

 

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Section 2.3 Tax Allocations.

A. Allocation of Tax Depreciation. Except to the extent required by
Section 704(c) of the Code or the regulations promulgated thereunder, “Tax
Depreciation” for each Fiscal Year of the Company (which means the depreciation,
depletion or amortization deduction or allowance that shall be allowable for
Federal income tax purposes to the Company with respect to an item of property
of the Company) shall be allocated to the Members in the same manner that Book
Depreciation shall have been allocated to the Members pursuant to Section 2.1 of
this Exhibit.

B. Tax Gain or Loss. The gain or loss for Federal income tax purposes from the
sale or other disposition of property of the Company (“Tax Gain or Loss”) for
each Fiscal Year of the Company shall be allocated to the Members as provided in
this Section 2.3. Tax gain or loss for purposes of this Section shall be
calculated (1) without including any income from interest on any deferred
portion of the sale price and (2) without including in the tax basis of the
property of the Company any remaining special basis adjustment to property of
the Company under Section 732(d) or 743 of the Code except to the extent that
such special basis adjustment is allocated to the common basis of property of
the Company under Section 1.734-2(b)(1) of the Income Tax Regulations. The
Members agree that the tax effects of any special basis adjustment that is not
included in the calculation of tax gain or loss in accordance with clause (2) of
the preceding sentence shall be separately reflected in calculating the tax gain
or loss of the Member or Members to whom such special basis adjustment relates.

(1) In General. In the case of “Section 704(c) Property” (as hereinafter
defined), Tax Gain or Loss (as the case may be) shall be allocated in accordance
with the requirements of Section 704(c) of the Code and the Income Tax
Regulations thereunder and such other provisions of the Code as govern the
treatment of Section 704(c) Property, as determined by the Manager. Any gain or
loss in excess of the amount allocated pursuant to the preceding sentence (or,
in the case of property which is not Section 704(c) Property, all Tax Gain or
Loss) shall be allocated among all the Members in the same ratio that the book
gain or loss with respect to such property is allocated in accordance with this
Article II; provided, however, in the event that there is no book gain or loss,
then any Tax Gain or Loss in excess of the amount allocated pursuant to the
preceding sentence shall be allocated among the Members in accordance with
Section 1.704-1(b)(3) of the Income Tax Regulations. As used herein, “Section
704(c) Property” means (i) each item of property of the Company which is
contributed to the Company and to which Section 704(c) of the Code or
Section 1.704-1(b)(2)(iv)(d) of the Income Tax Regulations applies, and
(ii) each item of property of the Company which, as contemplated by
Section 1.704-1(b)(4)(i) and other analogous provisions of the Income Tax
Regulations, is governed by the principles of Section 704(c) of the Code (or
principles analogous to the principles contained in Section 704(c) of the Code)
by virtue of (a) an increase or decrease in the Book Capital Accounts of the
Members to reflect a revaluation of property of the Company on the Company’s
books as provided by Section 1.704-1(b)(2)(iv)(f) of the Income Tax Regulations,

 

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(b) the fact that it constitutes a receivable, account payable, or other accrued
but unpaid item which, under principles analogous to those applying to an item
of property of the Company having an adjusted tax basis that differs from its
Book Basis, is treated as an item of property described in
Section 1.704-1(b)(2)(iv)(g)(2) of the Income Tax Regulations, or (c) any other
provision of the Code or the Income Tax Regulations (including
Section 1.704-1(b)(4)(i) of the Income Tax Regulations) as the same may from
time to time be construed, to the extent that, and for so long as, such item of
property of the Company continues to be governed by the principles of
Section 704(c) of the Code (or principles analogous to the principles contained
in Section 704(c) of the Code).

(2) Recapture Income. If, in the event of a gain on any sale, exchange or other
disposition of property of the Company, all or a portion of such gain is
characterized as ordinary income (“Recapture”) by virtue of the recapture rules
of Section 1250 of the Code, Section 1245 of the Code or otherwise, then the
Recapture shall be allocated between or among the Members in the same ratio that
Tax Depreciation allowable with respect to such property of the Company had been
allocated between or among them; provided, however, that under no circumstances
shall there be allocated to any Member Recapture in excess of the gain allocated
to such Member under subsection B of this Section above (and such excess shall
be allocated instead between or among the Members as to which this proviso does
not apply, in proportion to the gain allocated between or among them).

(3) Other Items Relating to Section 704(c) Property. Any item of income, gain,
loss or deduction relating to an item of Section 704(c) Property shall be
allocated in accordance with the requirements of Section 704(c) of the Code and
the Income Tax Regulations thereunder and such other provisions of the Code as
govern the treatment of Section 704(c) Property and the related book item shall
be allocated in a manner consistent with the Income Tax Regulations promulgated
under Section 704(b) of the Code, as determined by the Manager.

Section 2.4 Exceptions.

A. Limitations.

(1) General Limitation. Notwithstanding anything to the contrary contained in
this Article II, no allocation shall be made to a Member which would cause such
Member to have a deficit balance in its Adjusted Book Capital Account which
exceeds the sum of such Member’s share of Company Minimum Gain and such Member’s
share of Member Nonrecourse Debt Minimum Gain. If the limitation contained in
the preceding sentence would apply to cause an item of loss or deduction to be
unavailable for allocation to any Member, then such item of loss or deduction
shall be allocated to the Member(s) who will not be subject to this limitation
to the extent possible until such Member(s) become subject to this limitation.
Any remaining amount of loss or deduction shall be allocated to the Members in
proportion to their then respective Percentage Interests.

 

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(2) Member Nonrecourse Deductions. Notwithstanding anything to the contrary
contained in this Article II, any and all items of loss and deduction and any
and all expenditures described in Section 705(a)(2)(B) of the Code (or treated
as expenditures so described pursuant to Section 1.704-1(b)(2)(iv)(i) of the
Income Tax Regulations) (collectively, “Member Nonrecourse Deductions”) that are
(in accordance with the principles set forth in Section 1.704-2(i)(2) of the
Income Tax Regulations) attributable to Member Nonrecourse Debt shall be
allocated to the Member that bears the Economic Risk of Loss for such Member
Nonrecourse Debt. If more than one Member bears such Economic Risk of Loss, such
Member Nonrecourse Deductions shall be allocated between or among such Members
in accordance with the ratios in which they share such Economic Risk of Loss. If
more than one Member bears such Economic Risk of Loss for different portions of
a Member Nonrecourse Debt, each such portion shall be treated as a separate
Member Nonrecourse Debt.

B. Minimum Gain Chargebacks.

(1) Company Minimum Gain. Except to the extent provided in
Section 1.704-2(f)(2), (3), (4) and (5) of the Income Tax Regulations, if there
is, for any Fiscal Year of the Company, a net decrease in Company Minimum Gain,
there shall be allocated to each Member, before any other allocation pursuant to
this Article II is made under Section 704(b) of the Code of Company items for
such Fiscal Year, items of income and gain for such year (and, if necessary, for
subsequent years) equal to such Member’s share of the net decrease in Company
Minimum Gain. A Member’s share of the net decrease in Company Minimum Gain is
the amount of such total net decrease multiplied by the Member’s percentage
share of the Company’s minimum gain at the end of the immediately preceding
taxable year, determined in accordance with Section 1.704-2(g)(1) of the Income
Tax Regulations. Items of income and gain to be allocated pursuant to the
foregoing provisions of this Section 2.4B(1) shall consist first of gains
recognized from the disposition of items of property of the Company subject to
one or more Nonrecourse Liabilities of the Company, and then of a pro rata
portion of the other items of Company income and gain for that year.

(2) Member Nonrecourse Debt Minimum Gain. Except to the extent provided in
Section 1.704-2(i)(4) of the Income Tax Regulations, if there is, for any Fiscal
Year of the Company, a net decrease in Member Nonrecourse Debt Minimum Gain,
there shall be allocated to each Member that has a share of Member Nonrecourse
Debt Minimum Gain at the beginning of such Fiscal Year before any other
allocation pursuant to this Article II (other than an allocation required
pursuant to Section 2.4B(1) of this Exhibit) is made under Section 704(b) of the
Code of Company items for such Fiscal Year, items of income and gain for such
year (and, if necessary, for subsequent years) equal to such Member’s share of
the net decrease in the Member Nonrecourse Debt

 

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Minimum Gain. The determination of a Member’s share of the net decrease in
Member Nonrecourse Debt Minimum Gain shall be made in a manner consistent with
the principles contained in Section 1.704-2(g)(1) of the Income Tax Regulations.
The determination of which items of income and gain to be allocated pursuant to
the foregoing provisions of this Section 2.4B(2) shall be made in a manner that
is consistent with the principles contained in Section 1.704-2(f)(6) of the
Income Tax Regulations.

C. Certain Defined Terms. For purposes of this Exhibit: (i) “Company Minimum
Gain” shall have the meaning set forth in Section 1.704-2(b)(2) of the Income
Tax Regulations; (ii) “Member Nonrecourse Debt” shall have the meaning set forth
in Section 1.704-2(b)(4) of the Income Tax Regulations; (iii) “Member
Nonrecourse Debt Minimum Gain” shall have the meaning set forth in
Section 1.704-2(i)(2) of the Income Tax Regulations; (iv) “Nonrecourse
Liability” shall have the meaning set forth in Section 1.704-2(b)(3) of the
Income Tax Regulations; (v) “Adjusted Book Capital Account” means the Book
Capital Account of a Member reduced by any adjustments, allocations or
distributions described in Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the
Income Tax Regulations; (vi) “Economic Risk of Loss” shall have the meaning set
forth in Section 1.752-2(b) through (l) of the Income Tax Regulations;
(vii) “Nonrecourse Deductions” shall have the meaning set forth in
Section 1.704-2(b)(1) of the Income Tax Regulations; and (viii) notwithstanding
Section 7.04 of the Agreement, “Fiscal Year” shall mean the taxable year of the
Company within the meaning of Section 441 of the Code, and as such taxable year
is otherwise required by Section 706 of the Code.

Section 2.5 Qualified Income Offset. Notwithstanding anything to the contrary in
this Exhibit, in the event any Member unexpectedly receives any adjustments,
allocations or distributions described in Section 1.704-1(b)(2)(ii)(d)(4), (5),
or (6) of the Income Tax Regulations, there shall be specially allocated to such
Member such items of Company income and gain, at such times and in such amounts
as will eliminate as quickly as possible the deficit balance (if any) in its
Book Capital Account (in excess of the sum of such Member’s share of Member
Minimum Gain and such Member’s share of Member Nonrecourse Debt Minimum Gain)
created by such adjustments, allocations or distributions. To the extent
permitted by the Code and the Income Tax Regulations, any special allocations of
items of income or gain pursuant to this Section 2.5 shall be taken into account
in computing subsequent allocations of Profits or Losses pursuant to this
Article II, so that the net amount of any items so allocated and the subsequent
Profits or Losses allocated to the Members pursuant to this Article II shall, to
the extent possible, be equal to the net amounts that would have been allocated
to each such Member pursuant to the provisions of this Article II if such
unexpected adjustments, allocations or distributions had not occurred.

Section 2.6 Members’ Interests in Company Profits for Purposes of Section 752.
As permitted by Section 1.752-3(a)(3) of the Income Tax Regulations, the Members
hereby specify that solely for purposes of determining their respective shares
of excess Nonrecourse Liabilities of the Company, the Members’ respective shares
of Company profits shall be their then respective Percentage Interests.

 

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Section 2.7 Special Allocations. For each Fiscal Year of the Company, before any
allocations of Profits or Losses shall be made to the Members pursuant to
Section 2.1, the following special allocation shall first be made: Nonrecourse
Deductions shall be allocated among the Members in proportion to their then
respective Percentage Interests.

Section 2.8 Curative Allocations. The special allocations in Sections 2.4A(2),
2.4B, 2.5 and 2.7 of this Exhibit (the “Regulatory Allocations”) are intended to
comply with certain requirements of the Income Tax Regulations and shall be
interpreted consistently therewith. The Regulatory Allocations may effect
results which would be inconsistent with the allocations set forth in
Section 2.1 above. It is the intent of the Members that, to the extent possible,
all Regulatory Allocations shall be offset by other Regulatory Allocations or
special allocations of other items of income, gain, loss and deduction pursuant
to this Section 2.8. The Manager (based on the advice of the Company’s auditors
or tax counsel) shall make appropriate special curative allocations of items of
income, gain, loss and deduction so that, after such offsetting allocations
shall have been made, each Member’s Book Capital Account balance is, to the
extent possible, equal to the Book Capital Account balance such Member would
have had if the distortions resulting from any required Regulatory Allocations
had not occurred. In exercising discretion under this Section 2.8, the Manager
shall take into account future Regulatory Allocations under Sections 2.4B and
2.5 of this Exhibit that, although not yet made, are likely to offset other
allocations previously made under Sections 2.4A(2), 2.5 and 2.7 of this Exhibit.

Section 2.9 Special Provisions Related to COD Income.

A. Allocation of COD Income. Any income or gain (including, without limitation,
any cancellation of indebtedness (“COD”) income) recognized by the Company and
resulting from the contribution transaction described in the Recital “D” to the
Agreement and/or Section 4.01(b) of the Agreement shall be treated for income
tax purposes as resulting and being recognized immediately prior to the date of
such transaction and shall be allocated solely and entirely to the Members of
the Company as it was comprised immediately prior to that date. Without limiting
the generality of the foregoing, no such income or gain shall under any
circumstance be allocated to CNP Investor. In addition, under no circumstance
shall any COD income arising from the purchase of the Mezzanine Loans described
in Recital C of the Sixth Amendment to Second Amended and Restated Operating
Agreement of TPG/CalSTRS, LLC be allocated to CNP Investor.

B. Election Under Section 108(i) of the Code. The Members recognize and agree
that the transactions described in Recital C of the Sixth Amendment to Second
Amended and Restated Operating Agreement of TPG/CalSTRS, LLC (the “Sixth
Amendment”) will result in the recognition of COD income by the Company in
accordance with the provisions of Section 108(e)(4) of the Code (“Anticipated
COD Income”). The Members further agree that any Anticipated COD Income will be
handled in accordance with Section 4 of the Sixth Amendment.

 

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ARTICLE III

WITHHOLDING MATTERS

The Members shall comply with the requirements contained in the Code and
comparable tax laws of any state in which the Company is engaged in business
regarding tax withholding on income that is allocated to, or distributions made
to, Members who are non-U.S. persons and/or nonresidents of a particular state
or jurisdiction (the “Member Withholding Law”). The Manager is hereby authorized
and directed by each Member to withhold from the distributions or other amounts
payable to such Member under the Agreement such amount or amounts (“Required
Member Withholding”) as it reasonably determines is required by the Member
Withholding Law, and to remit the Required Member Withholding to the Internal
Revenue Service and/or such other applicable state taxing agency at such time or
times as may from time to time be required by the relevant taxing authority. If
the Manager determines at any time that the Required Member Withholding with
respect to a particular Member exceeds the amount of distributions or other
amounts payable to such Member at such time (a “Cash Shortfall”), the Member in
question shall immediately make a cash contribution to the Company equal to the
amount of such Cash Shortfall, which the Manager shall use to effectuate the
Required Member Withholding. The amount of the Cash Shortfall so contributed
shall not be treated as a capital contribution for purposes of the Agreement and
the associated remittance to the taxing authority shall not be treated as a
distribution for purposes of the Agreement. When remitting the Required Member
Withholding, the Manager shall inform the relevant taxing authority of the name
and tax identification number of the Member for whose account such Required
Member Withholding is being made.

ARTICLE IV

LIQUIDATING DISTRIBUTIONS; NO DEFICIT FUNDING OBLIGATION

Upon liquidation of the assets of the Company, the net proceeds of such
liquidation shall be applied as set forth in Section 6.01 of the Agreement.
Notwithstanding anything to the contrary contained in this Exhibit or in the
Agreement, no Member having a negative balance in its Book Capital Account shall
have any obligation to the Company or to any other Member to restore its Book
Capital Account to zero.

ARTICLE V

ORDER OF APPLICATION

For purposes of this Exhibit, the following provisions set forth in the
Agreement and this Exhibit shall be applied in the following order:

A. Sections 6.01 and 9.02 of the Agreement relating to distributions.

B. Section 2.4A(1) of this Exhibit relating to general limitations.

C. Section 2.4A(2) of this Exhibit relating to Member Nonrecourse Deductions.

D. Section 2.4B(1) of this Exhibit relating to chargebacks of Company Minimum
Gain.

 

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E. Section 2.4B(2) of this Exhibit relating to chargebacks of Member Nonrecourse
Debt Minimum Gain.

F. Section 2.5 of this Exhibit relating to Qualified Income Offset.

G. Section 2.7 of this Exhibit relating to Special Allocations.

H. Sections 2.1 and 2.8 of this Exhibit relating to, respectively, allocations
of Profits and Losses and Curative Allocations shall be applied at the same
time.

These provisions shall be applied as if all contributions, distributions and
allocations with respect to a given Fiscal Year were made at the end of the
Company’s Fiscal Year. Where any provision depends on the Book Capital Account
of any Member, such Book Capital Account shall be determined after the
application of all preceding provisions for the year.

ARTICLE VI

CLOSING OF COMPANY BOOKS IN CONNECTION WITH ADMISSION OF NEW

MEMBER OR TRANSFER OF MEMBER’S INTEREST

Upon the effective date (the “Transfer Effective Date”) of the admission of a
new Member into the Company or of a valid transfer of all or part of a Member’s
interest in the Company pursuant to the Agreement, the books of the Company
shall be closed in accordance with Section 706(d) of the Code, and consistent
therewith: (X) items of income, deduction, gain, loss and/or credit of the
Company that are recognized prior to the Transfer Effective Date shall be
allocated among those persons or entities who were Members in the Company prior
to the Transfer Effective Date; and (Y) items of income, deduction, gain, loss
and/or credit of the Company that are recognized after the Transfer Effective
Date shall be allocated among the persons or entities who were Members after the
Transfer Effective Date.

ARTICLE VII

TAX MATTERS MEMBER

TPGA shall initially be the “tax matters partner” of the Company as such term is
defined in Section 6231(a)(7) of Code (the “Tax Matters Member”) and it shall
serve as such with all powers granted to a tax matters partner under the Code as
may be limited by the Agreement and this Exhibit. Each Member shall give prompt
notice to each other Member of any and all notices it receives from the Internal
Revenue Service, or any relevant state or local taxing authority, concerning the
Company, including any notice of audit, any notice of action with respect to a
revenue agent’s report, any notice of a 30-day appeal letter and any notice of a
deficiency in tax concerning the Company’s Federal income tax return, or any
relevant state or local income tax return. The Tax Matters Member shall furnish
each Member with status reports regarding any negotiation between any taxing
authority (Federal, state or local) and the Company. The Tax Matters Member
shall not enter into any settlement with any taxing authority (Federal, state or
local), or extend the statute of limitations, on behalf of the Company or the
Members without the approval of the Majority of Members, except as may otherwise
be provided in the Agreement. This provision shall survive any termination of
the Agreement.

 

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EXHIBIT D

REPORTS

1.01 Company Interim Reports.

(a) Within thirty (30) days of the end of each calendar quarter, Manager shall
deliver to CNP Investor the following reports for the quarter then ended all in
form satisfactory to CNP Investor:

(i) A financial statement of the Company including a balance sheet, an income
and expense statement, a statement of cash flow, a statement of sources and
applications of funds and a statement of Member’s capital, all prepared
according to generally accepted accounting principles consistently applied.

(ii) A copy of the then current bank statement for each of the Company’s
accounts together with a reconciliation thereof to the Company’s books.

(b) Any other reports and information required pursuant to Section 7.05 of this
Agreement and Article VII of Exhibit C.

(c) Any other information with respect to the Company or the Project reasonably
requested by CNP Investor.

1.02 Company Fiscal Year End Reports. In the Manager’s discretion, the Manager
shall cause the Company’s accountants to prepare at the expense of the Company
draft audited financial statements of the Company, prepared in accordance with
generally accepted accounting principles, in sufficient detail to give a
reasonable picture of the status and operations of the Company and the Book
Capital Accounts of the Members. Such statements shall be submitted to, and
shall be subject to the review and approval of, TPGA and CNP Investor. CNP
Investor shall be entitled to submit such statements to CNP Investor’s own
consultants and/or accountants for review and approval. The costs of such review
by CNP Investor’s consultants and/or accountants, and the costs of any revisions
or supplements to such statements or additional reviews or audits made by the
Company’s accountants as required by CNP Investor’s consultants and/or
accountants, shall be Company expenses. The Manager shall use diligent efforts
to cause the Company’s accountants to comply with the requests and requirements
of CNP Investor’s consultants and/or accountants. If so requested, the Manager
shall use diligent efforts to cause the Company’s accountants to prepare the
final audited financial statements of the Company within ninety (90) days after
the end of each fiscal year of the Company. The audited financial statements
shall include a balance sheet, an income statement, statements of cash flow, a
statement of sources and applications of funds, statement of member’s capital
and such other statements and reports as CNP Investor may reasonably request, in
form satisfactory to CNP Investor and CNP Investor’s accountants.

1.04 Other Reports. The Manager shall also cause to be prepared and delivered in
a timely manner any and all reports, statements, books, records, and budgets
required to be prepared or delivered by or pursuant to any loan documents, any
other agreements to which the Company is a party or bound, any Law, or any
governmental or quasi-governmental body or agency. Copies of all such documents
shall be provided to all Members.

 

Exhibit D – 1

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1.05 Reporting Standards. All such reports and other items shall be prepared and
presented in accordance with modified generally accepted accounting principles
(GAAP) as defined in the National Council of Real Estate Investment Fiduciaries
(NCREIF) Market Value Accounting Policy Manual and other standards required by
CalSTRS of its real estate investment advisors.

 

Exhibit D – 2

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EXHIBIT E

CERTAIN MANAGEMENT PROVISIONS

1.01 No Meetings. No meetings of the Members shall be required.

1.10 Execution of Documents. All contracts, agreements and other documents or
instruments affecting or relating to the business and affairs of the Company may
be executed on the Company’s behalf by the Manager; provided however, that the
Manager may delegate in writing such authority to such authorized person(s) as
may be designated by the Manager.

1.11 Delegation and Officers. Nothing contained herein shall be construed as
prohibiting the Manager from delegating responsibility for any of the Manager’s
decisions to any Member, officer, or other representative or agent of the
Company. The Manager may, from time to time, designate officers of the Company,
may assign titles (including, without limitation, chief executive officer,
president, vice-president, secretary and/or treasurer) to any such officer, and
may, subject to the duties and authority conferred upon Manager pursuant to this
Agreement, delegate to such officers such authority and duties as the Manager
may deem advisable. Unless the Manager otherwise determines, if the title
assigned to an officer of the Company is one commonly used for officers of a
business corporation formed under the Delaware General Corporation Law, then the
assignment of such title shall constitute the delegation to such officer of the
authority and duties that are customarily associated with such office pursuant
to the Delaware General Corporation Law. Any number of titles may be held by the
same officer. Any officer to whom a delegation is made shall serve in the
capacity delegated unless and until such delegation is revoked by the Manager
for any reason or no reason whatsoever, with or without cause, or such officer
resigns.

 

Exhibit E – 1

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

EXHIBIT F

INTENTIONALLY OMITTED

[see attached]

 

Exhibit F

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

EXHIBIT G

FORM OF LOAN TERMINATION AGREEMENT

(SENIOR MEZZANINE)

[see attached]

 

Exhibit G

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

LOAN TERMINATION AGREEMENT

(Senior Mezzanine Loan)

THIS LOAN TERMINATION AGREEMENT (this “Termination Agreement”), dated as of
______________, 2010 (the “Termination Date”), is entered into by and between
515/555 FLOWER MEZZANINE ASSOCIATES, LLC, a Delaware limited liability company
(“Borrower”), and CNP INVESTOR, LLC, a Delaware limited liability company
(“Lender”), with respect to the following:

RECITALS

A. Borrower and Citigroup Capital Markets Realty Corp., a New York corporation
(as predecessor in interest to Lender) are parties to that certain Amended and
Restated Loan Agreement dated as of October 27, 2006 (as amended or modified
from time to time, the “Loan Agreement”). Initially capitalized words or terms
used but not defined in this Termination Agreement shall have the meanings
assigned to such words or terms in the Loan Agreement.

B. In connection with the transactions contemplated by that certain Master
Agreement for Debt and Equity Restructure of City National Plaza (the “Master
Agreement”) dated as of February     , 2010, Borrower and Lender have agreed to
terminate the Loan Documents on the terms, and subject to the conditions, set
forth herein.

C. This Termination Agreement is the Loan Termination Agreement (Senior
Mezzanine Loan) referenced in Section 3.2.3 of the Master Agreement.

AGREEMENT

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1. Termination of Loan Documents. As of the Termination Date, the Loan Documents
are terminated in their entirety, and shall be of no further force or effect. As
of the Termination Date, Lender releases, reconveys and otherwise terminates all
liens encumbering the Collateral in favor of Lender (collectively the “Liens”).
Lender agrees to execute such documentation as is reasonably requested by
Borrower to evidence the termination of the Loan Documents and such release,
reconveyance and/or termination of the Liens.

2. Waiver and Release. Borrower and Lender waive and release the other party
from any and all claims, actions and causes of action, whether known or unknown
and whether in law or in equity, that the waiving and releasing party may have
against the other party arising out of, or in connection with, the Loan, the
Loan Documents or the Collateral.

In furtherance of the foregoing, Borrower and Lender acknowledge, by initialling
in the spaces provided below, that they have read and understand, and are
waiving their rights under, Section 1542 of the California Civil Code, which
provides as follows:

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

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

                    Borrower Initials    Lender Initials   

3. Governing Law. This Termination Agreement, and the rights of the parties
hereto, shall be governed by, and construed under, the laws of the State of New
York.

4. Counterparts. This Termination Agreement may be executed in one or more
duplicate counterparts, each of which will be deemed an original but all of
which together shall constitute one and the same agreement.

5. Integration. This Termination Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes, in
all respects, all other communications between or among such parties, whether
oral or written.

(Remainder of page intentionally left blank,

signatures appear on following page)

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

IN WITNESS WHEREOF, this Loan Termination Agreement is executed as of the day
and year first above written.

 

BORROWER:    

515/555 FLOWER MEZZANINE ASSOCIATES, LLC,

a Delaware limited liability company

      By:           Name:         Title:  

 

LENDER:    

CNP INVESTOR, LLC,

a Delaware limited liability company

      By:           Name:         Title:  

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

EXHIBIT H

FORM OF LOAN TERMINATION AGREEMENT

(JUNIOR MEZZANINE)

[see attached]

 

Exhibit H

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

LOAN TERMINATION AGREEMENT

(Junior Mezzanine Loan)

THIS LOAN TERMINATION AGREEMENT (this “Termination Agreement”), dated as of
_________________, 2010 (the “Termination Date”), is entered into by and between
515/555 FLOWER JUNIOR MEZZANINE ASSOCIATES, LLC, a Delaware limited liability
company (“Borrower”), and CNP INVESTOR, LLC, a Delaware limited liability
company (“Lender”), with respect to the following:

RECITALS

A. Borrower and [Citigroup Capital Markets Realty Corp., a New York corporation
(as predecessor in interest to Lender) are parties to that certain Amended and
Restated Loan Agreement dated as of October 27, 2006] (as amended or modified
from time to time, the “Loan Agreement”). Initially capitalized words or terms
used but not defined in this Termination Agreement shall have the meanings
assigned to such words or terms in the Loan Agreement.

B. In connection with the transactions contemplated by that certain Master
Agreement for Debt and Equity Restructure of City National Plaza (the “Master
Agreement”) dated as of February     , 2010, Borrower and Lender have agreed to
terminate the Loan Documents on the terms, and subject to the conditions, set
forth herein.

C. This Termination Agreement is the Loan Termination Agreement (Junior
Mezzanine Loan) referenced in Section 3.2.3 of the Master Agreement.

AGREEMENT

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1. Termination of Loan Documents. As of the Termination Date, the Loan Documents
are terminated in their entirety, and shall be of no further force or effect. As
of the Termination Date, Lender releases, reconveys and otherwise terminates all
liens encumbering the [Collateral] in favor of Lender (collectively the
“Liens”). Lender agrees to execute such documentation as is reasonably requested
by Borrower to evidence the termination of the Loan Documents and such release,
reconveyance and/or termination of the Liens.

2. Waiver and Release. Borrower and Lender waive and release the other party
from any and all claims, actions and causes of action, whether known or unknown
and whether in law or in equity, that the waiving and releasing party may have
against the other party arising out of, or in connection with, the Loan, the
Loan Documents or the [Collateral].

In furtherance of the foregoing, Borrower and Lender acknowledge, by initialling
in the spaces provided below, that they have read and understand, and are
waiving their rights under, Section 1542 of the California Civil Code, which
provides as follows:

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

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

                    Borrower Initials    Lender Initials   

3. Governing Law. This Termination Agreement, and the rights of the parties
hereto, shall be governed by, and construed under, the laws of the State of New
York.

4. Counterparts. This Termination Agreement may be executed in one or more
duplicate counterparts, each of which will be deemed an original but all of
which together shall constitute one and the same agreement.

5. Integration. This Termination Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes, in
all respects, all other communications between or among such parties, whether
oral or written.

(Remainder of page intentionally left blank,

signatures appear on following page)

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

IN WITNESS WHEREOF, this Loan Termination Agreement is executed as of the day
and year first above written.

 

BORROWER:    

515/555 FLOWER JUNIOR MEZZANINE ASSOCIATES, LLC,

a Delaware limited liability company

      By:           Name:         Title:  

 

LENDER:    

CNP INVESTOR, LLC,

a Delaware limited liability company

      By:           Name:         Title:  

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

EXHIBIT I

INFORMATION RELATING TO LOANS

AND NET OPERATING CASH

 

LOAN

   OUTSTANDING
PRINCIPAL
BALANCE AS
OF 2/14/10    AGGREGATE
ACCRUED
AND UNPAID
INTEREST AS
OF 2/14/10

Mortgage Loan

   $ 348,925,218    $ 0

Participation A-1 in Replacement Promissory Note A (Senior Mezzanine) dated
October 27, 2006

   $ 19,641,161      NA

Participation A-2A in Replacement Promissory Note A (Senior Mezzanine) dated
October 27, 2006

   $ 24,122,389   

 

NA

Participation A-2B in Replacement Promissory Note A (Senior Mezzanine) dated
Oct. 27, 2006

   $ 24,122,389   

 

NA

IO Participation (interest only) in Replacement Promissory Note A (Senior
Mezzanine) dated October 27, 2006

     NA    $ 0

Replacement Promissory Note B (Senior Mezzanine) dated October 27, 2006

   $ 23,569,393    $ 0

Replacement Promissory Note C (Senior Mezzanine) dated October 27, 2006

   $ 23,569,393    $ 0

Replacement Promissory Note D (Senior Mezzanine) dated October 27, 2006

   $ 23,569,393    $ 0

Replacement Promissory Note E (Senior Mezzanine) dated October 27, 2006

   $ 22,292,717    $ 0

Replacement Promissory Note (Junior Mezzanine) dated October 27, 2006

   $ 58,187,948    $ 0

Picerne/Kings Capital Loan

   $ 19,758,000    $ 43,576

 

Balance of Mortgage Lender Reserve Accounts as of 2/14/10

   $ 46,250,062

Net Operating Cash as of 2/14/10

   $ 2,196,737.33

 

Exhibit I