Exhibit 10.1

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of

Macquarie CountryWide-Regency II, LLC,

a Delaware limited liability company

among

Global Retail Investors, LLC,

a Delaware limited liability company

Macquarie CountryWide (US) No. 2 LLC,

a Delaware limited liability company

and

Regency Centers, L.P.,

a Delaware limited partnership

DATED: As of July 31, 2009

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SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF MACQUARIE COUNTRYWIDE-REGENCY II, LLC,

A Delaware limited liability company

THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT is dated as
of July 31, 2009 (“Agreement”), by and among MACQUARIE COUNTRYWIDE (US) NO. 2
LLC, a Delaware limited liability company, as a Member (“MCW LLC”), REGENCY
CENTERS, L.P., a Delaware limited partnership (“Regency”), as a Member, and
GLOBAL RETAIL INVESTORS, LLC, a Delaware limited liability company, as a Member
(“GRI”, and together with Regency and MCW LLC, the “Members” and each
individually, a “Member”).

W I T N E S S E T H

WHEREAS, Macquarie Countrywide (US) NO. 2 Corporation, a Maryland corporation
and Regency entered into that certain Limited Liability Company Agreement, dated
February 14, 2005, of the Company;

WHEREAS, inter alia, MCW LLC, Regency, and Macquarie-Regency Management, LLC, a
Delaware limited liability company (“U.S. Manager”) entered into that certain
Amended and Restated Limited Liability Company Agreement of the Company, dated
June 1, 2005, as amended by that certain Amendment No. 1 to Limited Liability
Company Agreement of the Company executed January 13, 2006 (as amended, the
“Original Agreement”);

WHEREAS, pursuant to the Purchase Agreement (defined below), GRI has purchased
its Membership Interest from MCW LLC as of the date hereof;

WHEREAS, pursuant to that certain Assignment and Assumption Agreement between
U.S. Manager and Regency dated as of the date hereof, U.S. Manager has assigned
all of its right, title and interest in and to the Company to Regency;

WHEREAS, MCW LLC, Regency and GRI, as the sole Members of the Company upon the
consummation of the transactions described above, desire to enter into this
Agreement; and

WHEREAS, the parties hereto desire to amend, restate and supersede the Original
Agreement in its entirety.

NOW, THEREFORE, in consideration of the premises hereof, and the mutual
promises, obligations and agreements contained herein, the parties hereto,
intending to be legally bound, do hereby agree as follows:

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ARTICLE I

DEFINED TERMS

Section 1.1 General Definitions. The following terms used in this Agreement,
unless the context otherwise requires, shall have the meanings specified in this
Section 1.1:

“20% Purchase” means the transactions contemplated by the 20% Purchase
Agreement.

“20% Purchase Agreement” means that certain Purchase and Sale Agreement dated as
of the date hereof, among the Company, Regency, MCW LLC and GRI, whereby GRI,
subject to the terms, conditions and provisions thereof, has agreed to purchase
a twenty percent (20%) Membership Interest in the Company from MCW LLC
(provided, however, that the Membership Interest to be acquired under the 20%
Purchase Agreement shall be reduced by GRI’s Dilution Percentage Interest and
shall be subject to Regency’s right to purchase a five percent (5%) Membership
Interest from MCW LLC thereunder).

“Accountant” means PricewaterhouseCoopers LLP or such other firm of independent
certified public accountants as the Members subsequently select for the purpose
of preparing the tax returns and financial reports for the Company.

“Act” means the Delaware Limited Liability Company Act, codified in Delaware
Code Annotated, Title 6 Chapter 18, Sections 18-101, et seq., as the same may be
amended from time to time.

“Additional Capital Contributions” means contributions to the capital of the
Company that may be made from time to time by the Members in accordance with
Section 3.2 hereof.

“Adjusted Capital Account” means, with respect to any Member, the balance, if
any, in such Member’s Capital Account as of the end of the relevant Fiscal Year,
after giving effect to the following adjustments:

(a) Credit to such Capital Account any amounts that such Member is obligated to
restore or is deemed to be obligated to restore pursuant to the penultimate
sentences in Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) Debit to such Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

 

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“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in such Member’s Adjusted Capital Account as of the end
of the relevant Fiscal Year.

“Affiliate” means, when used with reference to a specified Person, (i) any
Person that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with the specified Person,
(ii) any Person in which the specified Person or any Person described in clause
(i) owns at least 20% of the outstanding stock or other equity interests, and
(iii) any Person in which the specified Person or any Person described in clause
(i) is a general partner or manager.

“Agreed Value” for any Project means the applicable value for such Project
listed in Schedule B of the Purchase Agreement.

“Agreement” means this Second Amended and Restated Limited Liability Company
Agreement, as amended in writing from time to time.

“Anchor Lease” means a lease for contiguous space of not less than 7,500 square
feet of gross leasable area.

“Appraisal Policy” means either (x) the appraisal policy attached as Schedule 2
or (y) any appraisal policy approved by Regency and GRI from time to time.

“Base Amounts” means, collectively, the GRI Base Amount and the MCW LLC Base
Amount.

“Budget” means a statement setting forth the estimated receipts and expenditures
(capital, operating and other) of the Company and of each Project for the period
covered by such statement, together with leasing and operating plans. The Budget
shall include information about the amounts and types of insurance coverage and
the amount of deductibles and premiums. The Budget shall be prepared
individually for each Project and for the Company’s portfolio of Projects on a
consolidated basis and shall consist of operating Budgets for each Project and a
Company Budget (not broken down by Project) that includes capital expenditures,
tenant improvements, leasing commissions, insurance (to the extent not
attributable to a Project) and fees to the Manager and its Affiliates (to the
extent not budgeted by Project).

“Business Day” means any day other than Saturday, Sunday and any other day on
which banks are allowed or required by law to close in Jacksonville, Florida or
Rockville, Maryland.

“Buying Member” has the meaning set forth in Section 7.6(a) hereof.

“Call” has the meaning set forth in Section 3.2(b) hereof.

“CalPERS” means the California Public Employees’ Retirement System, a unit of
the State and Consumer Services Agency of the State of California.

 

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“Capital Account” means, with respect to a Member, the account for such Member
maintained, increased or decreased as provided in Section 3.4.

“Capital Contributions” means, with respect to a Member, the total amount of
money and the value agreed by the Members at the time of contribution of any
property (other than money) contributed to the Company by such Member pursuant
to the terms of this Agreement (including the Deemed Closing Date Capital
Contributions), which amounts shall be set forth in a schedule to be agreed on
by the Members from time to time as Capital Contributions are made by the
Members.

“Capital Expenditures” means costs for repairs or improvements to a Project that
are undertaken by the Company and that should be capitalized under generally
accepted accounting principles in the United States.

“Capital Transaction” means the Sale of all or a part of a Project or casualty
damage to or condemnation of all or a part of a Project.

“Certificate” means the Company’s Certificate of Formation, as it may be amended
from time to time, filed in the Office of the Secretary of State of the State of
Delaware pursuant to the Act.

“Change of Control” of GRI means CalPERS ceases to own, directly or indirectly,
more than fifty percent (50%) of (a) the outstanding membership interests in GRI
or (b) the outstanding membership or other ownership interests in the transferee
of GRI’s Membership Interest following a Transfer of GRI’s Membership Interest
permitted by Section 9.1 hereof.

“Change of Control” of Regency means:

(a) (i) A majority of the board of directors of Regency’s general partner
consists of individuals who are not Continuing Directors, or (ii) Regency
Centers Corporation ceases to be the general partner of Regency, except as a
result of a Regency Affiliate Merger described in paragraph (b) below; and

(b) Any merger, consolidation, share exchange or similar transaction in which
Regency’s general partner is not the surviving entity unless the holders of
common equity of such entity own directly or indirectly, in substantially the
same proportions as their ownership of such common equity immediately prior to
such merger, consolidation or share exchange, more than 50% of the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors or trustees, as the case may be, of the
entity resulting from such merger, consolidation, share exchange or similar
transaction (a “Regency Affiliate Merger”).

“Claims” have the meaning set forth in Section 6.16(c) hereof.

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

 

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“Company” means Macquarie CountryWide-Regency II, LLC, a Delaware limited
liability company.

“Company Expenses” means allowable costs and expenses paid or incurred by the
Company in the conduct of the business of the Company and its subsidiaries that
are not directly attributable to a particular Project or Projects, including
without implied limitation, (i) expenses incidental to the transfer, servicing
and accounting for the Company’s cash, including charges of depositories and
custodians; (ii) expenses incurred in connection with any tax audit,
investigation or settlement of the Company; (iii) expenses of liquidating the
Company; (iv) taxes, fees and other governmental charges payable by the Company;
(v) routine administrative expenses of the Company; (vi) the cost of legal,
accounting and other professional expenses of the Company; and (vii) insurance
and the principal and interest under any debt of the Company (including, without
limitation, interest under any Company Loan) if such insurance, principal and
interest do not constitute an Operating Expense. Expenses attributable to a
specific Project shall be allocated to such Project as “Operating Expenses.”

“Company Loan” has the meaning set forth in Section 3.2(e).

“Company Minimum Gain” means the amount determined by computing with respect to
each Nonrecourse Liability of the Company the amount of income or gain, if any,
that would be realized by the Company if it disposed of the property securing
such Nonrecourse Liability in full satisfaction thereof and by then aggregating
the amount so computed, as provided in Treasury Regulations Section 1.704-2(d).

“Competing Project” means a retail project located within a three (3) mile
radius of any Project.

“Consent” means a prior written consent of a Person, which may be withheld for
any reason in the sole discretion of such Person unless expressly provided to
the contrary in this Agreement.

“Consent Project” has the meaning set forth in Section 7.5(j) hereof.

“Continuing Director” of a Person means an individual (i) who was a director or
trustee of the Person on the date hereof or (ii) who becomes a director or
trustee of the Person subsequent to the date hereof and whose election or
nomination for election is approved by a vote of at least a majority of the
directors or trustees then comprising the Continuing Directors of such Person.

“Contributing Member” has the meaning set forth in Section 3.3(a) hereof.

“Contribution Deficiency” has the meaning set forth in Section 3.3(a) hereof.

“Debt Financing Policy” means the requirement that any Manager shall endeavor to
secure Financing under which (x) multiple Projects are not subject to
“cross-collateralized” or “cross-defaulted” mortgage debt and (y) the following
are permitted, without lender consent or payment of any fee, so long as GRI,
Regency and/or MCW LLC

 

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or their respective Affiliates continue to directly or indirectly own the
applicable Project or Project Level Entity: (i) direct or indirect transfers of
each Project subject to the related loan and (ii) transfers of direct or
indirect interests in the Company or any Affiliate of the Company, including,
without limitation, any Project Level Entity.

“Deemed Closing Date Capital Contributions” shall mean Two Hundred Thirty-One
Million Three Hundred Thirty-Six Thousand One Hundred Eighty-One and 00/100
Dollars ($231,336,181), the aggregate amount of the Capital Contributions of all
Members that is set forth on Exhibit A as of the date of this Agreement.

“Default Date” has the meaning set forth in Section 3.3(a) hereof.

“Defaulting Member” has the meaning set forth in Section 7.2(a) hereof.

“Deficiency Contributions” means all funds that would otherwise be provided to
the Company as Additional Capital Contributions by the Members pursuant to
Section 3.2(b) or Section 3.2(c) hereof while MCW LLC is a Member, other than
any Additional Capital Contributions to be made by the Members for Required Loan
Paydown Funds pursuant to Section 3.2(c) hereof on account of which MCW LLC is
obligated to contribute the MCW LLC Required Loan Paydown Amount, unless MCW LLC
elects to contribute its Percentage Interest of any other Additional Capital
Contribution beyond the MCW LLC Required Loan Paydown Amount.

“Deleveraging Schedule” means the schedule for reducing existing Financing set
forth on the attached Schedule 3, which schedule may not be amended or modified
without the prior written consent of GRI and Regency.

“Depreciation” means for each Fiscal Year or other period, an amount equal to
the federal income tax depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year or other period,
except that if the Gross Asset Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such year or other period,
Depreciation shall be an amount which bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization, or other
cost recovery deduction for such year bears to such beginning adjusted tax
basis; provided, however, that if the federal income tax depreciation,
amortization, or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by all the Members.

“Dilution Percentage” has the meaning set forth in Section 3.3(c) hereof.

“EBITDA” means, for any period, the Regency REIT’s net income calculated in
accordance with US GAAP before non-controlling interests, depreciation expense,
amortization expense, interest expense, provisions for loss, and income taxes.
For avoidance of doubt, the calculation of EBITDA shall include the Regency
REIT’s (or, if applicable, its Affiliates’) pro rata share of EBITDA of any
unconsolidated joint venture in which the Regency REIT (or any of its
Affiliates) owns a direct or indirect membership interest calculated on the same
basis.

 

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“Emergency Expenditures” has the meaning set forth in Section 6.1(c) hereof.

“Event of Default” has the meaning set forth in Section 7.2(a) hereof.

“Excess MCW LLC Base Amount” has the meaning set forth on Schedule 1-B attached
hereto.

“Fair Market Value” means, as to any Project, the market value as defined by the
Appraisal Foundation in the Uniform Standards of Professional Appraisal Practice
determined by appraisal in accordance with the Appraisal Policy. Unless the
Members otherwise agree, or this Agreement provides otherwise, the determination
of the Fair Market Value of a Project as of a specified date shall be
conclusively established by reference to the final appraisal for such Project as
of that date obtained pursuant to Section 6.14. For avoidance of doubt, the
calculation of Fair Market Value shall not include any modification or
adjustment for Reserves and liabilities for money borrowed.

“Financing” means (i) any secured or unsecured financing or borrowing or
assumption of debt, including any refinancing of existing debt by the Company or
any Project Level Entity and (ii) any sale and leaseback transaction.

“Fiscal Quarter” means each of the calendar quarters comprising the Company’s
Fiscal Year.

“Fiscal Year” means the fiscal year of the Company commencing January 1 and
ending on December 31 of each calendar year.

“Fixed Charge Coverage Ratio” means the ratio of EBITDA to Fixed Charges.

“Fixed Charges” means, for any period, interest expense (including capitalized
interest) calculated in accordance with US GAAP, scheduled principal
amortization and payments to holders of preferred stock of the Regency REIT and
its Affiliates for such period. Fixed Charges exclude any non-cash charges for
the amortization of deferred loan costs or the charge off of preferred issuance
costs. For avoidance of doubt, the calculation of Gross Interest Expense shall
include the Regency REIT’s (or if applicable, its Affiliates’) pro rata share of
Gross Interest Expense for any joint venture in which the Regency REIT (or any
its Affiliates) owns a direct or indirect membership interest calculated on the
same basis.

“GRI” has the meaning set forth in the preamble hereof.

“GRI Base Amount” means, for any Fiscal Quarter, an amount as calculated in
accordance with Schedule 1-A attached hereto.

“GRI Base Amount Rate” has the meaning set forth on Schedule 1-A attached
hereto.

“GRI Option Period” has the meaning set forth in Section 12.1 hereof.

 

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“GRI to Regency Selection Ratio” means the ratio of GRI’s selection of Projects
to Regency’s selection of Projects in a distribution in kind pursuant to
Section 7.5 hereof. The GRI to Regency Selection Ratio shall be determined
pursuant to the table attached as Schedule 4 using the Ratio Determination
Amount (as determined on the date that the Member’s Liquidation Amounts are
calculated pursuant to Section 7.5 hereof).

“GRI’s Dilution Percentage Interest” means GRI’s total Percentage Interest
increase as the result of dilution of MCW LLC’s Membership Interest by GRI due
to MCW LLC’s failure to make an Additional Capital Contribution in response to
any Required Funds Call for Required Loan Paydown Funds (up to the MCW LLC
Required Loan Paydown Amount) pursuant to Article III hereof, but excluding any
other increase in GRI’s Percentage Interest.

“Gross Asset Value” means with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the agreed value of such asset, as determined by all the
Members, unless required to be determined in some other manner herein;

(b) The Gross Asset Values of all Company assets shall be adjusted to equal
their respective Fair Market Values (exclusive of liabilities), as of the
following times: (i) the acquisition of an additional limited liability company
interest in the Company by any new or existing Member in exchange for more than
a de minimis capital contribution; (ii) the distribution by the Company to a
Member of more than a de minimis amount of property as consideration for the
redemption of a limited liability company interest in the Company; (iii) in
connection with the issuance of an interest in the Company (other than a de
minimis interest) as consideration for the provision of services to or for the
benefit of the Company by an existing Member acting in a member capacity, or by
a new Member acting in a member capacity or in anticipation of being a member;
and (iv) the liquidation of the Company within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments
pursuant to clauses (i) and (ii) above shall be made only if all the Members
reasonably determine that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Members in the Company;

(c) The Gross Asset Value of any Company asset distributed to any Member shall
be adjusted to equal the Fair Market Value (exclusive of liabilities) of such
asset on the date of distribution as determined by all of the Members; and

(d) The Gross Asset Values of Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross
Asset Values shall not be adjusted pursuant to this paragraph (d) to the extent
all the Members determine that an adjustment pursuant to paragraph (b) above is
necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this paragraph (d).

 

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If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (a), (b), or (d) above, such Gross Asset Value shall thereafter be
adjusted by subtracting the Depreciation taken into account with respect to such
asset for purposes of computing Profits and Losses after the effective date of
such determination or adjustment.

“Half Year” means a period of six months ending June 30 or December 31.

“Hazardous Materials” means any “hazardous waste” as defined by the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as
amended from time to time, and regulations promulgated thereunder (“RCRA”);
(ii) any “hazardous substance” as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et
seq.), as amended from time to time, and regulations promulgated thereunder
(“CERCLA”) (including petroleum-based products as defined therein);
(iii) petroleum or petroleum derivatives, including crude oil or any fraction
thereof, all forms of natural gas, and petroleum products or by-products or
waste; (iv) asbestos in any quantity or form which would subject it to
regulation under any applicable Hazardous Materials Law; (v) polychlorinated
biphenyls; (vi) urea formaldehyde; (vii) lead and lead based paint or other lead
containing materials; (viii) any substance, the presence of which in or on any
Project is prohibited by any Hazardous Materials Law; (ix) any “extremely
hazardous substance” or “hazardous chemical” as those terms are defined in the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), as amended from time to time, and regulations promulgated thereunder
(“EPCRA”); (x) microbiological pollutants, including mildew, fungus, mold,
bacteria and/or other organic spore material, whether or not airborne,
colonizing, amplifying or otherwise; (xi) any “chemical substance” as that term
is defined in the Toxic Substance Control Act (15 U.S.C. Section 2601), as
amended from time to time, and regulations promulgated thereunder (“TSCA”);
(xii) radon gas; (xiii) pesticides and (xiv) any other substance that is now or
in the future included without the definitions of “hazardous substances,”
“hazardous materials,” “toxic substances,” “pollutant,” “contaminant” or
“hazardous waste” in any Hazardous Materials Law.

“Hazardous Materials Contamination” means, with respect to any Project, the
presence of Hazardous Materials in violation (or purported violation) of
applicable Hazardous Materials Laws, or otherwise in violation of the
recommendation of any environmental consultant or contrary to reasonable or
prudent business practices, at the buildings, improvements, facilities, soil,
groundwater air or other elements on or of such Project, or the presence of
Hazardous Materials at the buildings, facilities, soil, groundwater, air or
other elements on or of any other property as a result of Hazardous Materials at
any time emanating from the Project, other than in quantities customarily stored
and/or used by owners and tenants in the ordinary course of business and in
strict compliance with Hazardous Materials Laws.

“Hazardous Materials Laws” means all laws, statutes or regulations, including
without limitation, RCRA, CERCLA, EPCRA and TSCA, relating to (i) the handling,
storage, existence or otherwise regulating any Hazardous Materials, (ii) the
removal or remediation of Hazardous Materials, or (iii) pollution or protection
of the environment, as they exist and have been judicially and administratively
interpreted from time to time.

 

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“Hazardous Materials Laws” shall also include any guidance, rule, regulation,
statutory or common law that has developed or develops in the future that is
applicable to any Project regarding mold, fungus, microbiological pollutants,
mildew, bacteria and/or other organic spore material.

“Indemnitees” has the meaning set forth in Section 6.16(c) hereof.

“Insolvency Event” has the meaning set forth in Section 7.2(a)(vii) hereof.

“Investment Criteria” means the Investment Criteria for the acquisition of
Projects by the Company from time to time, as approved and amended from time to
time by agreement of all the Members.

“Investment Grade Rating” means either that (i) bonds issued by Regency or the
Regency REIT are rated Baa3 or higher by Moody’s Investor Service, Inc. or BBB-
or higher by Standard & Poor’s Ratings Group or BBB- or higher by Fitch, Inc. or
(ii) for any consecutive four (4) Fiscal Quarter period the Fixed Charge
Coverage Ratio is greater than or equal to 1.50 : 1.00.

“IRS” has the meaning set forth in Section 4.8(b) hereof.

“Liquidation Amount” has the meaning set forth in Section 7.5(a) hereof.

“Loan Conversion Calculation” means, in connection with the conversion of all
Company Loans to Additional Capital Contributions, the Percentage Interests of
the Members (including, without limitation, MCW LLC, if MCW LLC is a Member at
the time of such conversion) re-calculated as of the date of such conversion as
follows: the Percentage Interest of each Member shall be a percentage equal to
the fraction, (i) the numerator of which is the sum of such Member’s Deemed
Closing Date Capital Contributions plus the aggregate amount of any Additional
Capital Contributions made by such Member following the date hereof (if any)
plus the amount of any outstanding Company Loans to the extent funded (or deemed
funded pursuant to Section 3.2(e) as the result of a Member Loan to such Member
upon its failure to fund a Company Loan) by such Member (all of which will be
converted) minus distributions of Net Proceeds from Capital Transactions and Net
Proceeds from Financings to such Member following the date hereof (subject to
increase pursuant to the following sentence) and (ii) the denominator of which
is the sum of the Deemed Closing Date Capital Contributions of all of the
Members plus the aggregate amount of any Additional Capital Contributions of all
of the Members following the date hereof (if any) plus the aggregate amount of
all outstanding Company Loans (all of which will be converted) minus
distributions of Net Proceeds from Capital Transactions and Net Proceeds from
Financings to the Members following the date hereof. If a Member acquires any
portion of another Member’s Membership Interest following the date hereof
(whether by dilution, purchase or otherwise), then with respect to the acquiring
Member the amount calculated pursuant to the foregoing clause (i) shall be
increased by (x) the sum calculated pursuant to the foregoing clause (i) with
respect to the Member from whom the Membership Interest was acquired multiplied
by (y) the fraction, the numerator of which is the Percentage Interest

 

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acquired from the other Member and the denominator of which is such other
Member’s aggregate Percentage Interest immediately prior to such acquisition.

“Major Decision” has the meaning set forth in Section 6.2 hereof.

“Manager” means the manager of the Company. Regency shall be the initial
Manager.

“Manager Agreements” means (i) any property management and/or leasing agreement
between the Manager (or if applicable an Affiliate of the Manager) and the
Company or any Project Level Entity and (ii) any other agreement between (x) the
Company (or any Project Level Entity) and (y) the Manager or any Affiliate of
the Manager.

“Manager Expenses” has the meaning set forth in Section 6.9 hereof.

“Manager Removal” has the meaning set forth in Section 6.1(d) hereof.

“Manager Removal Event” means any of the following: (i) an Event of Default
under which the Manager is the Defaulting Member, (ii) the Manager’s Percentage
Interest falling below ten percent (10%), (iii) with respect to Regency, the
Regency REIT’s failure to maintain its Investment Grade Rating, (iv) a Change of
Control of Regency or GRI, as applicable, if either the applicable one or its
Affiliate is the Manager at the time of the occurrence, or (v) the indictment
of, or the filing of charges or other initiation of proceedings against, a
senior executive officer of the Manager or any Affiliate of the Manager for the
commission of (a) a felony or (b) a crime involving moral turpitude, dishonesty
or fraud, in each case with respect to the Company, any Project Level Entity,
any of the other Members or the operation of a Project (provided that a Manager
Removal Event shall not occur under this clause (v) if the Manager, or, if
applicable, the Affiliate of the Manager, suspends any such senior executive
officer pending a final judicial determination of guilt not subject to further
appeal and upon any such judicial determination, or at the Manager’s option,
before such judicial determination, terminates such senior executive officer and
reimburses the other Members, the Company and any Project Level Entity, as
applicable, for any damages caused or incurred by or as a result of the actions
of such senior executive officer).

“Market Rate” means, with respect to fees, comparable fees payable to
unaffiliated third parties for performing similar services with respect to
comparable properties in comparable locations.

“MCW” means Macquarie CountryWide Trust, an Australian listed registered managed
investment scheme (ARSN 093 143 965).

“MCW Interest Option” has the meaning set forth in Section 12.1 hereof.

“MCW LLC” has the meaning set forth in preamble hereof.

 

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“MCW LLC Base Amount” means, for any Fiscal Quarter, an amount as calculated in
accordance with Schedule 1-B attached hereto.

“MCW LLC Base Amount Rate” has the meaning set forth on Schedule 1-B attached
hereto.

“MCW LLC Required Loan Paydown Amount” means Fifty Million Dollars
($50,000,000). For avoidance of doubt, the aggregate amount of the MCW LLC
Required Loan Paydown Amount shall not be affected by any reduction of MCW LLC’s
Membership Interest by sale or dilution.

“MCW LLC Value” has the meaning set forth on Schedule 1-B attached hereto.

“MCW Marks” has the meaning set forth in Section 2.7 hereof.

“MCW Trigger Event” has the meaning set forth in Section 12.5 hereof.

“Member Loan” has the meaning set forth in Section 3.3(a) hereof.

“Member Nonrecourse Debt” means any Nonrecourse Liability for which a Member or
a related Person bears the economic risk of loss within the meaning of Treasury
Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (described in Section 705(a)(2)(B) of the Code) that, in accordance
with the principles of Treasury Regulations Section 1.704-2(i)(2), are
attributable to a Member Nonrecourse Debt.

“Members” means, collectively, Regency, MCW LLC and GRI. Reference to a “Member”
shall be to any one of the Members.

“Membership Interest” means the entire limited liability company interest of a
Member in the Company at any particular time, including the right of such Member
to any and all benefits to which a Member may be entitled as provided in this
Agreement (but not including any fees payable to a Member or any Affiliate of a
Member), together with the obligations of such Member to comply with all the
terms and provisions of this Agreement.

“Minimum Gain Attributable to Member Nonrecourse Debt” means that amount
determined in accordance with the principles of Treasury Regulations
Section 1.704-2(i)(3), (4) and (5).

“Net Asset Value” means, for a particular Project or Projects at a point in
time, the excess, if any, of the Fair Market Value of the Project(s) or in the
case of a newly acquired Project for which there has been no appraisal, the
actual aggregate acquisition costs of the Project(s) incurred on behalf of the
Company to date (or in the case of a Project contributed by a Member, the value
of the Project as agreed by all the Members), over the amount of any liabilities
secured by a mortgage or deed of trust encumbering the Project(s).

 

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“Net Operating Cash” means, for any period, the excess of (a) cash receipts of
every kind including, but not limited to, receipts from rental of space of every
kind; recoveries from tenants for common area maintenance, taxes and other
expenses; license, lease and concession fees and rentals (not including gross
receipts of licensees, lessees and concessionaires); proceeds, if any, from
business interruption or other loss of income insurance; any reductions in
Reserves agreed to by the Members; over (b) Operating Expenses, Capital
Expenditures to the extent not financed, Company Expenses and any additions to
Reserves agreed to by GRI and Regency for the same period. For avoidance of
doubt, the Base Amounts shall not be included in the amounts subtracted under
the foregoing clause (b). Net Operating Cash shall not be deemed to include
(i) payments received as deposits until such funds are actually applied as part
of the rentals, fees or charges due, (ii) Capital Contributions, (iii) Net
Proceeds from Capital Transactions and (iv) Net Proceeds from Financings.

“Net Proceeds from Capital Transactions” means all cash receipts received by the
Company or any Project Level Entity arising from Capital Transactions less
(a) the amount of cash paid or to be paid by the Company or any Project Level
Entity in connection with expenses associated with the closing of such Capital
Transactions; (b) the amount of cash required by any lender or other creditor to
be applied to the payment of debts and obligations of the Company or any Project
Level Entity as a result of such Capital Transactions; (c) the amount of any
cash reinvested in a Section 1031 Exchange; (d) the normal and reasonable costs
and expenses arising from such transactions including, without limitation,
escrow fees, title insurance fees, professional fees brokerage commissions and
other disposition costs and expenses; and (e) the amount of accrued and unpaid
interest under any Company Loans at such time, which shall be paid to the
lending Member(s) prior to any distribution of Net Proceeds from Capital
Transactions.

“Net Proceeds from Financings” means all cash receipts to the Company or any
Project Level Entity arising from a Financing, less (a) the amount of cash paid
or to be paid by the Company or any Project Level Entity for expenses in
connection with the closing of such Financing, including, without limitation,
all commitment fees, appraisal fees, title insurance premiums, survey costs,
broker’s commissions and attorneys’ fees, and for payment, to the extent
required by any lender or other creditor as a result of such Financing, of debts
and obligations of the Company or any Project Level Entity then due; (b) all
amounts paid to purchase or improve a Project or for any other purpose in order
to satisfy conditions to or established in connection with such Financing of or
by the provider of such Financing; and (c) the amount of accrued and unpaid
interest under any Company Loans at such time, which shall be paid to the
lending Member(s) prior to any distribution of Net Proceeds from Financings.

“New Project” means a Project that is not owned by the Company as of the
relevant time. A “New Project” shall be considered a “Project” after its
acquisition by the Company.

“Non-Conforming Lease” has the meaning set forth in Section 6.2(viii) hereof.

“Non-Contributing Member” has the meaning set forth in Section 3.3(a) hereof.

 

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“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(1).

“Nonrecourse Liability” means any liability of the Company treated as a
nonrecourse liability under Treasury Regulations Section 1.704-2(b)(3).

“Notification” means a written notice or any other written communication,
containing the information required or permitted by this Agreement to be
communicated to a Member, sent to the addresses set forth in Section 11.17 by
express courier, e-mail (if receipt is confirmed), telecopy (if receipt is
confirmed) or by hand delivery and shall be deemed given and effective upon
receipt by the addressee.

“Offer Notice” has the meaning set forth in Section 10.3(a) hereof.

“Operating Expenses” means the sum of the following cash expenditures of the
Company relating to the operation of the Projects provided that such items would
not be capitalized under generally accepted accounting principles in the United
States, consistently applied: (a) all authorized costs incurred in the
ownership, maintenance, repair, leasing, management and operation of the
Projects, including but not limited to the fees described in Section 6.5 hereof;
(b) all other expenses related to the operation of the Projects permitted under
this Agreement; and (c) regularly scheduled payments under any debt (including,
without limitation, interest payments under any Company Loan(s)) and principal
and interest under any Financing secured by a Project or allocated to a Project
in the Budget.

“Original Agreement” has the meaning set forth in the Recitals hereof.

“Percentage Interest” means 25% in the case of Regency, 30% in the case of MCW
LLC and 45% in the case of GRI; provided, however, that the Members’ Percentage
Interests shall be adjusted as provided for in Article III of this Agreement,
and as a result of the closings under the 20% Purchase Agreement and the MCW
Interest Option. If any Member’s Percentage Interest changes during any
specified period of time, then such Member’s Percentage Interest for such period
of time shall be calculated by (1) multiplying each different amount of such
Member’s Percentage Interest during such period of time by a fraction, the
numerator of which is the number of days in such period of time that such Member
held such Percentage Interest and the denominator of which is the total number
of days in such period of time and (2) adding all such amounts for such period
of time.

“Person” means any individual, partnership, limited liability company,
corporation, cooperative, trust, estate, government (or any branch or agency
thereof) or other entity.

“Profit” or “Loss” means for any taxable period, an amount equal to the
Company’s taxable income or loss for such taxable period determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:

 

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(a) Except as otherwise provided in Treasury Regulations
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under Section 754 of
the Code which may be made by the Company; provided, that the amounts of any
adjustments to the adjusted bases of the assets of the Company made pursuant to
Section 734 of the Code as a result of the distribution of property by the
Company to a Member (to the extent that such adjustments have not previously
been reflected in the Members’ Capital Accounts) shall be reflected in the
Capital Accounts of the Members in the manner and subject to the limitations
prescribed in Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

(b) Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Profit or Loss pursuant to this
definition shall be added to such Profit or Loss.

(c) The computation of all items of income, gain, loss and deduction shall be
made without regard to the fact that items described in Sections 705(a)(1)(B) or
705(a)(2)(B) of the Code are not includable in gross income or are neither
currently deductible nor capitalized for federal income tax purposes.

(d) Any income, gain or loss attributable to the taxable disposition of any
Company property shall be determined as if the adjusted basis of such property
as of such date of disposition were equal in amount to the Company’s Gross Asset
Value with respect to such property as of such date.

(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year.

(f) In the event the Gross Asset Value of any Company asset is adjusted pursuant
to clause (b) or (c) of the definition thereof, the amount of any such
adjustment shall be taken into account as gain or loss from the Sale of such
asset for purposes of computing Profit and Loss.

(g) Any items specially allocated under Section 4.2 and Section 4.3 hereof shall
not be taken into account.

“Project” means the Company’s direct or indirect leasehold or fee ownership
interest in a retail shopping center, including real property, together with all
improvements thereon and all real and personal property rights associated
therewith (including service agreements and other contract rights), either owned
by the Company, or proposed to be owned by the Company. The term “Project” does
not include any publicly traded debt or equity securities, such as a share in a
real estate investment trust. The Projects held by the Company as of the date of
this Agreement are listed on Exhibit B. The Company shall update its internal
records as it acquires or disposes of Projects, but no amendment shall be
required to Exhibit B.

 

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“Project Level Entity” means a 100% subsidiary of the Company or one or more
such 100% subsidiaries formed to hold direct or indirect ownership of one or
more Projects.

“Property Management Agreement” means the Property Management and Leasing
Agreement dated as of June 1, 2005 between the Company, each Project Level
Entity, and RRG, as amended in writing from time to time pursuant to the terms
of this Agreement.

“Purchase Agreement” means that certain Purchase and Sale Agreement dated
July 16, 2009, among the Company, U.S. Manager, Regency, MCW LLC and GRI whereby
GRI is purchasing its Membership Interest on or about the date hereof.

“Purchase Offer” has the meaning set forth in Section 10.3(a) hereof.

“Qualified Appraiser” means any of the appraisal firms listed on the attached
Schedule 5. GRI shall have the right, at any time and from time to time by
giving a Notification to Regency, to add independent appraisal firms or to
remove independent appraisal firms from the foregoing list of Qualified
Appraisers, subject to Regency’s and MCW LLC’s approval of each such addition or
removal, which approval shall not be unreasonably withheld by Regency and MCW
LLC as long as such list of Qualified Appraisers comprises at least three
(3) independent appraisal firms.

“Ratio Determination Amount” means GRI’s Percentage Interest divided by
Regency’s Percentage Interest.

“Regency” has the meaning set forth in the preamble hereof.

“Regency Option Period” has the meaning set forth in Section 12.1 hereof.

“Regency REIT” means Regency Centers Corporation, a Florida corporation.

“Regency’s Dilution Percentage Interest” means Regency’s total Percentage
Interest increase as the result of dilution of MCW LLC’s Membership Interest by
Regency due to MCW LLC’s failure to make an Additional Capital Contribution in
response to any Required Funds Call for Required Loan Paydown Funds (up to the
MCW LLC Required Loan Paydown Amount) pursuant to Article III hereof, but
excluding any other increase in Regency’s Percentage Interest.

“Regulatory Allocations” has the meaning set forth in Section 4.3 hereof.

“Required Funds” means the Required Loan Paydown Funds or funds required by the
Company or any of the Project Level Entities to pay amounts due and owing by the
Company or any of the Project Level Entities for (i) shortfalls in operating
costs of the Company, (ii) real estate taxes on any of the Projects,
(iii) insurance premiums for the Projects or any other assets of the Company or
any of the Project Level Entities, (iv) payments on any loans or financings to
the Company or any Project Level Entity (including, without limitation, any
Company Loans), (v) Emergency Expenditures, (vi)

 

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expenditures required for tenant improvements, leasing commissions and other
costs for the leasing of any Project, (vii) expenditures required to be made
under the Budget or (viii) Reserves.

“Required Funds Call” has the meaning set forth in Section 3.2(c) hereof.

“Required Loan Paydown Funds” shall mean the funds used to reduce existing
Financing as set forth in the Deleveraging Schedule.

“Required Property Sale” has the meaning set forth in Section 10.2 hereof.

“Reserves” means the amount of funds set aside for, or amounts allocated during
any period to, reasonable reserves for anticipated Company Expenses, Capital
Expenditures, contingent liabilities and working capital determined by GRI and
Regency, acting reasonably, to be necessary to meet the current or anticipated
future operating or capital needs of the Company or any Project.

“Restricted Projects” means the Projects listed on the attached Schedule 6.

“ROFO Period” has the meaning set forth in Section 7.6(a) hereof.

“ROFO Purchase and Sale Agreement” has the meaning set forth in Section 10.3(a)
hereof.

“RRG” means Regency Realty Group, Inc., a Florida corporation.

“Sale” means any sale, conveyance (other than a lease or ground lease),
exchange, or other transfer or alienation of all or a portion of a Project.

“Section 7.5 Closing Date” has the meaning set forth in Section 7.5(b) hereof.

“Section 7.5 Election” has the meaning set forth in Section 7.3 hereof.

“Section 7.5 Election Date” has the meaning set forth in Section 7.5(a) hereof.

“Section 12.5 Election” has the meaning set forth in Section 12.5 hereof.

“Section 1031 Exchange” means a transaction intended to qualify as tax-free
under Section 1031 of the Code.

“Selection Order” means the order in which Regency and GRI select Projects in a
distribution in kind pursuant to Section 7.5(b) hereof. The Selection Order
shall be determined pursuant to the table attached as Schedule 4 based on the
GRI to Regency Selection Ratio and whether GRI or Regency is selecting first
pursuant to Section 7.5(c) hereof.

“Selling Member” has the meaning set forth in Section 7.6(a) hereof.

“Special Allocations” has the meaning set forth in Section 4.2 hereof.

 

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“Special Excess Base Amount Distribution” has the meaning set forth on Schedule
1-B attached hereto.

“Tax Matters Member” has the meaning set forth in Section 4.8(a) hereof.

“Transfer” has the meaning set forth in Section 9.1 hereof.

“Treasury Regulations” means the income tax regulations, including temporary
regulations, promulgated under the Code, as such regulations are amended and
restated from time to time.

“United States” means the United States of America.

“U.S. Manager” has the meaning set forth in the preamble hereof.

“Voluntary Additional Capital Contribution” has the meaning set forth in
Section 3.3(c) hereof.

Section 1.2 Other Definitions. Capitalized terms not otherwise defined in
Section 1.1 shall have the meanings assigned to them in this Agreement.

ARTICLE II

FORMATION, NAME, PLACE OF BUSINESS, PURPOSE, AND TERM

Section 2.1 Formation. The Company has been formed pursuant to the Act as a
limited liability company. The Company shall be governed by and operated in
accordance with this Agreement and the rights, duties and liabilities of the
Members shall be as provided for in the Act if not otherwise expressly provided
for in this Agreement.

Section 2.2 Name and Offices. The name of the Company shall be Macquarie
CountryWide-Regency II, LLC and the business of the Company shall be conducted
solely under such name. The business address of the Company shall be One
Independent Drive, Suite 114, Jacksonville, Florida 32202, or at such other
place or places as Regency and GRI may from time to time designate. The address
of the registered office of the Company in the State of Delaware shall be
Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808 and the registered agent in charge thereof shall be Corporation
Service Company each of which may be changed by Regency and GRI.

Section 2.3 Other Acts/Filings. The Members after filing the Certificate shall
from time to time execute or cause to be executed all such certificates and
other documents, and do or cause to be done all such filings, recordings,
publishing and other acts, as are necessary to comply with the requirements of
law for the formation and operation of the Company in any jurisdiction in which
the Company does business.

Section 2.4 Purpose and Scope. The business and purposes of the Company are, in
whole or in part, (i) to own, manage, lease to tenants, finance and ultimately
dispose

 

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of the Projects, and (ii) to acquire, own, manage, lease to tenants, finance and
ultimately dispose of New Projects in the United States, each in accordance with
the Investment Criteria and this Agreement. The Company may do any and all
lawful things necessary or incidental to any of the foregoing to carry out and
further the business of the Company as contemplated by this Agreement. The
Company shall not engage in any business or activity not expressly authorized by
this Agreement.

Section 2.5 Term. The term of the Company commenced on the date of filing of the
Certificate in the office of the Secretary of State of the State of Delaware
pursuant to the Act and shall continue unless dissolved sooner pursuant to the
provisions of Article VII.

Section 2.6 Representations and Warranties of the Members.

(a) MCW LLC hereby represents and warrants to Regency and GRI that the following
are true and correct as of the date hereof:

(i) MCW LLC is a duly formed and validly existing limited liability company
under the laws of Delaware with full limited liability company power and
authority to enter into and perform its obligations under this Agreement;

(ii) This Agreement (A) has been duly authorized, executed and delivered by MCW
LLC, (B) assuming due authorization, execution and delivery by Regency and GRI,
shall be the legal, valid and binding obligation of MCW LLC and (C) does not
violate any provisions of MCW LLC’s organizational documents or any document or
agreement to which MCW LLC is a party or by which it is bound; and

(iii) MCW LLC has the power and authority to perform the obligations to be
performed by it hereunder and no consents, authorizations or approvals are
required for the performance of the obligations to be performed by MCW LLC under
this Agreement, except those as have been obtained.

(b) Regency hereby represents and warrants to MCW LLC and GRI that the following
are true and correct as of the date hereof:

(i) Regency is a limited partnership that has been duly formed and is validly
existing under the laws of the State of Delaware with full partnership power and
authority to enter into and perform its obligations under this Agreement; and is
duly qualified and in good standing to transact business in any jurisdiction
required in order to carry out its duties hereunder;

(ii) This Agreement (A) has been duly authorized, executed and delivered by
Regency, (B) assuming due authorization, execution and delivery by MCW LLC and
GRI, shall be the legal, valid and binding obligation of Regency, and (C) does
not violate any provisions of Regency’s organizational documents or any document
or agreement to which Regency is a party or by which it is bound; and

 

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(iii) Regency has the power and authority to perform the obligations to be
performed by it hereunder and no consents, authorizations or approvals are
required for the performance of the obligations to be performed by Regency under
this Agreement except those as have been obtained.

(c) GRI hereby represents and warrants to MCW LLC and Regency that the following
are true and correct as of the date of hereof:

(i) GRI is a limited liability company that has been duly formed and is validly
existing under the laws of the State of Delaware with full limited liability
company power and authority to enter into and perform its obligations under this
Agreement; and is duly qualified and in good standing to transact business in
any jurisdiction required in order to carry out its duties hereunder;

(ii) This Agreement (A) has been duly authorized, executed and delivered by GRI,
(B) assuming due authorization, execution and delivery by MCW LLC and Regency,
this Agreement shall be the legal, valid and binding obligation of GRI, and
(C) does not violate any provisions of GRI’s organizational documents or any
document or agreement to which GRI is a party or by which it is bound; and

(iii) GRI has the power and authority to perform the obligations to be performed
by it hereunder and no consents, authorizations or approvals are required for
the performance of the obligations to be performed by GRI under this Agreement
except those as have been obtained.

(d) Regency hereby represents and warrants to MCW LLC and GRI that the following
are true and correct as of the date of this Agreement:

(i) RRG is a corporation that has been duly formed and is validly existing under
the laws of the State of Florida with full corporate power and authority to
enter into and perform its obligations under the Property Management Agreement
and is duly qualified and in good standing to transact business in any
jurisdiction required in order to carry out its duties under the Property
Management Agreement;

(ii) The Property Management Agreement (A) has been duly authorized, executed
and delivered by RRG and is the legal, valid and binding obligation of Regency
and (B) does not violate any provisions of Regency’s organizational documents or
any document or agreement to which RRG is a party or by which it is bound; and

(iii) RRG has the power and authority to perform the obligations to be performed
by it under the Property Management Agreement and no consents, authorizations or
approvals are required for the performance of the obligations to be performed by
RRG under the Property Management Agreement except those as have been obtained.

 

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Section 2.7 Use of Macquarie CountryWide Name.

The Members agree that the name “Macquarie”, “Macquarie CountryWide” and “MCW”
and all derivations thereof are the sole property of MCW and that if for any
reason MCW LLC shall cease to be a Member of the Company, the Company, Regency,
GRI or any succeeding member (as appropriate) shall file, with the Delaware
Secretary of State, a Certificate of Amendment amending the name of the Company
in a manner that it shall no longer contain reference to “Macquarie”, “Macquarie
CountryWide”, “MCW” or any confusingly similar derivation thereof without the
consent of MCW or MCW LLC and shall take any and all other actions necessary to
effectuate such name change. Except as otherwise agreed to by MCW or MCW LLC,
after such time as MCW LLC shall cease to be a Member of the Company for any
reason, the Company shall not, and the Manager shall cause the Company not to,
engage in any business or other activity under, or hold itself out under the
name “Macquarie CountryWide-Regency II, LLC” or under any other name or
trademark containing the word “Macquarie”, “Macquarie CountryWide”, “MCW” or any
trademark or tradename of MCW or its Affiliates, or any variation or combination
of any of the foregoing, or any trademark or tradename confusingly similar to
any of the foregoing, or any Internet domain name that consists of or
incorporates any of the foregoing (collectively, the “MCW Marks”). Immediately
following the date upon which MCW LLC shall cease to be a Member of the Company
for any reason, the Company (i) shall destroy, or cause to be destroyed, all
signage, labels, marketing materials, letterhead, stationary, business cards,
and other supplies and materials in the possession of the Company or any Member
or Affiliate that contain any of the MCW Marks, (ii) cease to use all email
addresses and Internet domain names that contain any of the MCW Marks, and
(iii) remove and delete all web pages and similar materials owned or controlled
by any Member or Affiliate that contain any of the MCW Marks. The provisions of
this Section 2.7 shall also apply to any subsidiary of the Company and all
actions required by the Company under this Section 2.7 shall be required of such
subsidiaries. If for any reason MCW LLC shall cease to be a Member of the
Company, the Manager shall have sixty (60) days to comply with the provisions of
this Section 2.7. Notwithstanding the provisions of this Section 2.7, the
Company and the Members shall not have any obligations hereunder to the extent
that such actions would cause a violation of any restrictions or limitations set
forth in any Financing documents.

ARTICLE III

PERCENTAGE INTERESTS AND CAPITAL

Section 3.1 Percentage Interests. The initial Percentage Interests of the
Members shall be 30% for MCW LLC, 25% for Regency and 45% for GRI.

Section 3.2 Additional Capital Contributions.

(a) By Agreement. Without limitation of the processes set forth in
Section 3.2(b) and Section 3.2(c) below, Regency and GRI may contribute New
Projects and additional cash to the Company, and MCW LLC may contribute
additional cash to the Company, in each case with the written approval of all of
the Members. Upon such

 

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contributions by the Members, Exhibit A to this Agreement shall be amended to
reflect such contributions, and if necessary the Percentage Interests of each of
the Members shall be recalculated as of the date of such contribution (based
solely on the amount of the New Projects and additional cash contributed to the
Company by the Members) and set forth on such amended Exhibit A.

(b) Capital Calls. If at any time GRI and Regency agree, in good faith, that
additional funds are needed for any purpose, then the Manager shall make a
written call on the Members (“Call”) to make Additional Capital Contributions in
accordance with their respective Percentage Interests. Each Call shall specify:

(i) the aggregate amount of Additional Capital Contributions requested to be
made by the Members;

(ii) a general description of the intended application of the Additional Capital
Contributions being called;

(iii) the date on which Additional Capital Contributions are due (which date
shall be not less than ten (10) Business Days after receipt by each of the
Members of the Call from the Manager); and

(iv) the Additional Capital Contribution requested to be made by each of the
Members, which shall equal the aggregate amount required by the Company
multiplied by such Member’s Percentage Interest at such time.

Each Additional Capital Contribution shall be paid to the Company on or before
the due date in immediately available funds wired to an account of the Company
at a financial institution selected by the Manager. Except as specified in
Section 3.2(c) below with respect to Required Loan Paydown Funds, MCW LLC shall
not be required to (but may) make any Additional Capital Contributions in
connection with a Call, and any failure by MCW LLC to contribute funds in
accordance with a Call shall not result in MCW LLC being a Non-Contributing
Member for any reason under this Agreement.

(c) Required Funds Calls. If at any time the Manager determines, in good faith,
that Required Funds are necessary to be contributed to the Company, then the
Manager shall send Notification to the other Members making a written call for
Additional Capital Contributions for the Required Funds (“Required Funds Call”)
in accordance with their respective Percentage Interests. Each Required Funds
Call shall specify:

(i) the aggregate amount of Additional Capital Contributions for Required Funds
requested to be made by the Members;

(ii) a general description of the intended application of the Additional Capital
Contributions for Required Funds being called;

(iii) the date on which Additional Capital Contributions for Required Funds are
due (which date shall be not less than ten (10) Business Days after receipt by
each of the other Members of the Required Funds Call from the Manager); and

 

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(iv) the Additional Capital Contribution requested to be made by each of the
Members, which shall equal the aggregate amount of the Required Funds multiplied
by such Member’s Percentage Interest at such time.

Each Additional Capital Contribution for Required Funds shall be paid to the
Company on or before the due date in immediately available funds wired to an
account of the Company at a financial institution selected by the Manager.
Except for MCW LLC’s contribution of Required Loan Paydown Funds up to the MCW
LLC Required Loan Paydown Amount, MCW LLC shall not be required to (but may)
make any Additional Capital Contributions in connection with a Required Funds
Call, and any failure by MCW LLC to contribute funds in accordance with a
Required Funds Call (except in connection with MCW LLC’s contribution of
Required Loan Paydown Funds up to the MCW LLC Required Loan Paydown Amount)
shall not result in MCW LLC being a Non-Contributing Member for any reason under
this Agreement. If GRI or Regency determines, in good faith, that Required Funds
are necessary to be contributed to the Company, then either may send
Notification to the Manager with a reasonably detailed description thereof, and
if the Manager fails to issue a Required Funds Call in accordance with such
Notification within ten (10) Business Days following such Notification, then
Regency or GRI, as applicable, may issue the Required Funds Call on behalf of
the Manager.

(d) Required Loan Paydown Funds. Notwithstanding anything to the contrary or
otherwise set forth herein, the Members hereby acknowledge and agree that
Required Funds Calls for Required Loan Paydown Funds shall be made by the
Manager (at the request of GRI or Regency) in accordance with the Deleveraging
Schedule, and that either (i) Regency’s or GRI’s failure to contribute such
funds in accordance with any such Required Funds Call or (ii) MCW LLC’s failure
to contribute such funds in accordance with any such Required Funds Call up to
the MCW LLC Required Loan Paydown Amount (provided that MCW LLC may, but shall
not be obligated to, contribute funds in excess of the MCW LLC Required Loan
Paydown Amount), shall result in such Member being a Non-Contributing Member. If
the Manager fails to issue a Required Funds Call for Required Loan Paydown Funds
within ten (10) Business Days following Notification from Regency or GRI, as the
case may be, then Regency or GRI, as applicable, may issue the Required Funds
Call for Required Loan Paydown Funds on behalf of the Manager. Following a
Section 7.5 Election, Required Funds Calls for Required Loan Paydown Funds shall
only be made to repay Financing that has matured.

(e) Deficiency Contributions. Notwithstanding the provisions of this Section 3.2
and Section 3.3, any Deficiency Contributions shall be loaned to the Company by
GRI and Regency (any such loan, a “Company Loan”) at an interest rate equal to
twelve percent (12%) per annum compounded monthly. Any Company Loan shall have
no set maturity date and shall be unsecured and non-amortizing. Payments due
under any Company Loan shall be obligations of the Company with the same
standing and priority as Financing provided by a third party, and interest
payments thereunder shall be payable by the Company to any funding Member(s) in
arrears on the first Business Day of each month. Any Company Loan shall be
funded to the Company within (10) Business Days following the applicable Call or
Required Funds Call by GRI and Regency pro rata in the same proportion as each
of their respective Percentage Interests then bears to the total of

 

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their Percentage Interests, unless GRI and Regency agree to a different
proportion. If either GRI or Regency fails to so fund a Company Loan within such
ten (10) Business Day period, then the funding Member may only fund the other
Member’s share of such Company Loan as a Member Loan pursuant to Section 3.3(b)
and may not elect to make a Voluntary Additional Capital Contribution. With
respect to any such Member Loan, notwithstanding the provisions of
Section 3.3(b): (i) the principal amount of such Member Loan shall not
constitute a Capital Contribution by the non-funding Member but shall be deemed
to be the funding of the Company Loan by such non-funding Member and (ii) until
any such Member Loan is repaid in full, any payments under any Company Loan that
would otherwise be payable to such non-funding Member shall be paid to the
Member that funded such Member Loan as payments of accrued interest and
principal (first applied to interest and then to principal) on all such
outstanding Member Loans. All outstanding Company Loans shall be converted on a
dollar for dollar basis to Additional Capital Contributions of GRI and Regency
(as applicable) pursuant to the Loan Conversion Calculation immediately
following the date that MCW LLC is no longer a Member of the Company. All
outstanding Company Loans shall be so converted to Additional Capital
Contributions, whether or not MCW LLC is a Member of the Company, as soon as
practicable following a Section 7.5 Election or a Section 12.5 Election.
Following the consummation of such conversion of Company Loans, a Member that
provided a Member Loan in connection with another Member’s failure to fund a
Company Loan shall have the right to convert such Member Loan to a Voluntary
Additional Capital Contribution pursuant to Section 3.3 and the Membership
Interests of the funding Member and the non-funding Member will be adjusted
accordingly pursuant to Section 3.3(b) and Section 3.3(c). With respect to any
Company Loan that is funded ratably by both GRI and Regency pursuant to this
Section 3.2(e), if the Percentage Interests of GRI and Regency change following
the funding of such Company Loan, then immediately prior to the conversion of
such Company Loan to Additional Capital Contributions, Regency and GRI shall
sell interests in such Company Loan to each other such that their respective
ownership percentages of such Company Loan equals their respective Percentage
Interests in the Company at the time of such conversion. In connection with any
such purchase, the purchasing Member shall pay the other Member (A) the
principal amount of such Company Loan, plus (B) the amount of any accrued and
unpaid interest on such principal amount multiplied by (C) the percentage
interest in such Company Loan being purchased.

Section 3.3 Default by a Member.

(a) Default. Subject to Section 3.2(e) hereof regarding Deficiency
Contributions, if a Member is obligated to make an Additional Capital
Contribution pursuant to Section 3.2(b) hereof or Section 3.2(c) hereof and,
after any grace period provided in Section 7.2(a) hereof, such Member fails to
make such Additional Capital Contribution, then, in any such event, the unpaid
amount shall be called the “Contribution Deficiency”, such Member shall be
deemed a “Non-Contributing Member” and the date that such Member was required to
pay such amount pursuant to Section 3.2(b) or Section 3.2(c), as applicable,
shall be the “Default Date”. The Manager shall give a Notification to the
non-defaulting Member(s) as soon as practicable after the Default Date and the
non-defaulting Member(s) shall have the right, but not the obligation, either
(x) to advance to

 

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the Company an amount up to the amount of the Contribution Deficiency and treat
such advance as a deemed loan (a “Member Loan”) to the Non-Contributing Member
pursuant to Section 3.3(b) below (in which case the Contributing Member shall be
entitled, if it elects by Notification any time a Member Loan is outstanding, to
convert such Member Loan, in whole or in part, to a Voluntary Additional Capital
Contribution, provided that such conversion would not cause a violation of
Financing documents) or (y) to make a Voluntary Additional Capital Contribution
pursuant to Section 3.3(c) below if not restricted by the then-existing
Financing documents (any such Member making a Member Loan or a Voluntary
Additional Capital Contribution, a “Contributing Member”). If more than one
Member elects to be a Contributing Member (either by making a Member Loan or a
Voluntary Additional Capital Contribution), then each of the Contributing
Members shall advance the Contribution Deficiency to the Company pro rata in the
same proportion as its Percentage Interest bears to the total of the Percentage
Interests of all Contributing Members, unless all Contributing Members agree
between themselves to a different proportion.

(b) Member Loan. If the Contributing Member elects to make a Member Loan, then
the Member Loan shall bear interest compounded monthly at the annual rate equal
to the greater of (x) eighteen percent (18%) or (y) twelve percent (12%) plus
the “prime” or “base” rate of interest of commercial lending announced from time
to time by Bank of America (or a reasonably equivalent financial institution
selected by the Contributing Member). Notwithstanding the foregoing, in no event
shall the interest rate imposed pursuant to the foregoing sentence exceed the
maximum rate permitted by law at the time the Member Loan is made. A
Non-Contributing Member may pre-pay an outstanding Member Loan to it in full or
in part with all accrued interest at any time. To the extent that any Member
Loans are outstanding, all amounts otherwise distributable to the
Non-Contributing Member under Section 5.1 hereof shall instead be distributed
directly to the Contributing Member(s) as deemed distributions to the
Non-Contributing Member followed by deemed payments of accrued interest and
principal (first applied to interest and then to principal) on all outstanding
Member Loans by the Non-Contributing Member to the Contributing Member(s) until
all such Member Loans have been repaid in full. If a Member has multiple Member
Loans outstanding at any given time, the order of priority of such Member Loans
shall be based on the seniority in ages of such Member Loans (i.e., the Member
Loan that has been outstanding for the longest amount of time shall have the
highest priority and the Member Loan that has been outstanding for the least
amount of time shall have the lowest priority). If any Member shall make a
Member Loan, any such loan will not increase such Member’s Percentage Interest
and will not be added to the Capital Account of such Member, but will constitute
a Capital Contribution by the Non-Contributing Member funded by the Member Loan.
At any time after the Contributing Member elects to convert a Member Loan (with
accrued interest) to a Voluntary Additional Capital Contribution in accordance
with Section 3.2(e) or Section 3.3(a) above, the Non-Contributing Member shall
be treated as satisfying its obligations under the Member Loan (to the extent of
such Voluntary Additional Capital Contribution) by transferring a portion of its
Membership Interest to the Contributing Member in accordance with the provisions
of Section 3.3(c) below, the Voluntary Additional Capital Contribution shall be
credited to the Contributing Member’s Capital Account and the Contributing
Member’s and Non-Contributing Member’s Percentage Interests will be

 

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adjusted in accordance with the Dilution Percentage formula set forth in
Section 3.3(c). If a Member Loan is converted to a Voluntary Additional Capital
Contribution, such election shall not be made without the written consent of GRI
acknowledging that such conversion will not cause this Agreement to fail to
comply with the provisions of Section 514(c)(9)(E) of the Code. In order to
secure any Member Loan under this Section 3.3(b), the Non-Contributing Member
hereby grants to the Contributing Member a first priority security interest (or
subordinate to any prior Member Loans) pursuant to the Delaware Uniform
Commercial Code in the Non-Contributing Member’s Membership Interest and in all
additions thereto, substitutions therefor and distributions and proceeds
thereof. The Non-Contributing Member agrees to execute and deliver and hereby
authorizes the filing of financing and continuation statements covering said
property from time to time and in such form as the Contributing Member may
require to perfect and continue the perfection of the Contributing Member’s
security interest with respect to said property. The Non-Contributing Member
shall pay all costs of filing such statements and renewals and releases thereof
and shall pay all reasonable costs and expenses of any record searches for
financing statements the Contributing Member may reasonably require. Upon any
default by the Non-Contributing Member due to the failure of all or any part of
a distribution to be paid to the Contributing Member in accordance with this
Section 3.3(b), or any other default of the Member Loan which remains uncured
thirty (30) days following receipt of Notification of default from the
Contributing Member, the Contributing Member may, at its option (and without any
further notice to or demand on the Non-Contributing Member) do any one or more
of the following: (i) foreclose or otherwise enforce the Contributing Member’s
security interest in any manner permitted by law; (ii) sell or otherwise dispose
of the foregoing collateral at one or more public or private sales, whether or
not such collateral is present at the place of sale, for cash or credit, on such
terms and in such manner as the Contributing Member may reasonably determine;
and (iii) recover from the Non-Contributing Member all costs and expenses,
including without limitation, reasonable attorneys’ fees, incurred or paid by
the Contributing Member in connection with the foregoing. The Contributing
Member shall also have the rights and remedies of a secured party under the
Delaware Uniform Commercial Code as well as all other rights and remedies
available at law, in equity or hereunder, all of which rights and remedies shall
be cumulative and may be exercised successively or concurrently without
impairing the Contributing Member’s security interest in the foregoing
collateral. The Non-Contributing Member hereby agrees that thirty (30) days’
prior Notification to it at its address set forth herein of the time and place
of any public sale or of the time after which any private sale or other intended
disposition is to be made shall be deemed reasonable Notification thereof. The
Non-Contributing Member hereby represents and warrants that it is the owner of
the above-described collateral (i.e., a Membership Interest, together with
additions thereto, substitutions therefor and proceeds thereof). The
Non-Contributing Member further agrees, at its sole cost and expense, to do all
acts that may be necessary to maintain, preserve and protect such collateral; to
appear in and defend any action or proceeding which may affect its title to or
the Contributing Member’s interest in such collateral; and to keep all of the
Non-Contributing Member’s records concerning such collateral at the
Non-Contributing Member’s address for notices set forth below. Recourse to a
Non-Contributing Member in connection with a Member Loan shall be limited to
such Non-

 

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Contributing Member’s Membership Interest and any distributions or proceeds
applicable to such Membership Interest.

(c) Voluntary Additional Capital Contribution. Subject to any restrictions set
forth in any Financing documents, if the Contributing Member elects not to make
a Member Loan, the Contributing Member may, but shall not be obligated to, make
a voluntary Capital Contribution in an amount equal to the Additional Capital
Contribution (or, if there is more than one such Contributing Member, such
amount shall be the applicable Contributing Member’s pro rata share of such
Additional Capital Contribution as determined in accordance with the final
sentence of Section 3.3(a) above) which the Non-Contributing Member failed to
make as determined after a Call or a Required Funds Call, as applicable
(“Voluntary Additional Capital Contribution”). Upon the making of a Voluntary
Additional Capital Contribution, the Percentage Interests of the Members shall
be re-calculated as of the Default Date as follows: the Percentage Interest of
the Non-Contributing Member shall be equal to the amount determined by
subtracting the Dilution Percentage from such Member’s then Percentage Interest
and the Percentage Interest of the Contributing Member shall be equal to the
amount determined by adding the Dilution Percentage to such Member’s then
Percentage Interest (and if there is more than one Contributing Member making a
Voluntary Additional Capital Contribution, the resulting increase in their
Percentage Interests shall, in the aggregate, be equal to the Dilution
Percentage and shall be allocated between the two Contributing Members pro rata
in the same proportion as the Voluntary Additional Capital Contributions at
issue). The “Dilution Percentage” shall be a percentage equal to the fraction,
(i) the numerator of which is 135% multiplied by the amount of the Additional
Capital Contribution then due from the Non-Contributing Member and (ii) the
denominator of which is the sum of the Deemed Closing Date Capital Contributions
plus the aggregate amount of all Capital Contributions following the date hereof
(if any) plus the Additional Capital Contributions (including any Voluntary
Additional Capital Contributions) contributed in connection with the Call or
Required Funds Call at issue minus distributions of Net Proceeds from Capital
Transactions and Net Proceeds from Financings to the Members following the date
hereof. Notwithstanding anything in this Section 3.3 to the contrary, no Member
shall be permitted to make any Voluntary Additional Capital Contribution to the
extent that such contribution would dilute any Member in violation of any
then-existing Financing documents, and instead shall be required to make a
Member Loan pursuant to Section 3.3(b). Examples of dilution under this
Section 3.3(c) are set forth in Schedule 7. Notwithstanding the foregoing,
(x) GRI shall not make any Voluntary Additional Capital Contributions if MCW LLC
is the Non-Contributing Member if (A) GRI’s Percentage Interest is greater than
or equal to sixty percent (60%) and (B) either (i) the Regency Option Period has
not expired or (ii) Regency’s option to purchase a five percent (5%) Membership
Interest pursuant to the 20% Purchase Agreement has not expired and (y) Regency
shall not make any Voluntary Additional Capital Contributions if MCW LLC is the
Non-Contributing Member if (A) Regency’s Percentage Interest is greater than or
equal to forty percent (40%) and (B) the closing of the 20% Purchase with
respect to the Membership Interest to be acquired by GRI under the 20% Purchase
Agreement has not been consummated.

Section 3.4 Capital of the Company; Capital Accounts.

 

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(a) Capital Account. Each Member shall have a Capital Account. Each Member’s
Capital Account on the date of this Agreement is set forth on Exhibit A.

(b) Adjustments to Capital Account. Without limiting the generality of the
foregoing, the Capital Account of each Member shall be increased by (i) the
amount of any Additional Capital Contributions by the Member to the Company
(specifically including Voluntary Additional Capital Contributions, if
applicable), and (ii) allocations to the Member of Profit (or items thereof
pursuant to Article IV hereof), including all items of Company income and gain
(including income and gain exempt from tax) specially allocated to the Member
pursuant to Section 4.2 and Section 4.3 of this Agreement, and (iii) the amount
of any Company indebtedness assumed by such Member or which is secured by liens
on any property distributed to such Member, and the Capital Account of each
Member shall be reduced by (w) the Gross Asset Value of all property and the
amount of all cash distributed to such Member pursuant to this Agreement,
(x) allocations to the Members of Loss (or items thereof pursuant to Article IV
hereof), including all items of Company deduction and loss specially allocated
to such Member pursuant to Section 4.2 and Section 4.3 of this Agreement and
(y) the amount of any indebtedness of such Member assumed by the Company or
which is secured by any property contributed by such Member to the Company.

(c) Compliance With Treasury Regulations. The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Treasury Regulations Section 1.704-1(b), and shall be
interpreted and applied in a manner consistent with such Treasury Regulations.
If the Manager shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any debits or credits thereto (including, without
limitations, debits or credits relating to liabilities that are secured by liens
on contributed or distributed property or that are assumed by the Company or a
Member), are computed in order to comply with such Treasury Regulations, the
Manager, with the approval of the Members, may make such modification, provided
that it is not likely to have an adverse effect on the amounts distributed to
any Member pursuant to Article VII hereof upon the dissolution of the Company.
The Manager, with the approval of the Members also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Members and the amount of Company capital reflected on
the Company’s balance sheet, as computed for book purposes, in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(g), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Treasury Regulations Section 1.704-1(b).

(d) Members’ Rights and Obligations Regarding Capital Contributions. No interest
shall be paid by the Company on any Capital Contribution except as specifically
provided herein. A Member shall not be entitled to demand the return of, or to
withdraw, any part of its Capital Contributions or its Capital Account, or to
receive any distribution, except as provided in this Agreement. No Member shall
be liable for the return of the Capital Contributions of any other Member or the
payment of interest thereon, except as provided in this Agreement with respect
to Member Loans. No Member shall be

 

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obligated or permitted to make any contributions to the capital of the Company
other than the Capital Contributions provided for in this Article III.

ARTICLE IV

TAX ALLOCATIONS

Section 4.1 Allocation of Profit and Loss.

(a) Allocation of Profit and Loss. After giving effect to the Special
Allocations set forth in Section 4.2 and Section 4.3 hereof, Profit and Loss (or
items thereof) shall be allocated among the Members in a manner that will, as
nearly as possible, cause the Adjusted Capital Account balance of each Member
(as computed for purposes of Section 704(b) of the Code) at the end of such
Company taxable year (but without taking into account actual cash distributions
made during such year) to be equal to an amount equal to the hypothetical
distribution (if any) that such Member would receive if, on the last day of such
Company taxable year (or portion thereof), (w) all distributions under Article V
of the Agreement distributed during, or distributable for, such Company taxable
year (or portion thereof) were distributed in accordance with such Article of
the Agreement, (x) all remaining assets, including cash, were sold for cash
equal to their Gross Asset Value, taking into account any adjustments thereto
for such Company taxable year (or portion thereof), (y) all Company liabilities
were satisfied in cash according to their terms (limited, with respect to each
Nonrecourse Liability, to the Gross Asset Value of the assets securing such
liability) and (z) the net proceeds of such sale (after satisfaction of such
liabilities) were distributed in full pursuant to Section 7.4(b)(iii) hereof.

(b) Tax Credits. Except to the extent otherwise provided in Treasury Regulations
Section 1.704-1(b)(4)(ii), any tax credits or tax credit recapture for any
Fiscal Year shall be allocated among the Members in accordance with each
Member’s respective Percentage Interest as of the time such tax credit was
claimed.

Section 4.2 Special Allocations. Notwithstanding any provision of Section 4.1,
the following special allocations (the “Special Allocations”) shall be made for
each Fiscal Year in the following order of descending priority:

(a) Company Minimum Gain. Except as otherwise provided in Treasury Regulations
Section 1.704-2(f), if there is a net decrease in Company Minimum Gain during
any Fiscal Year, each Member shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in proportion to and to the extent of, an amount equal to the portion of
such Member’s share of the net decrease in Company Minimum Gain, determined in
accordance with Treasury Regulations Section 1.704-2(g). This Section 4.2(a) is
intended to comply with the chargeback of items of income and gain requirement
in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.

(b) Minimum Gain Attributable to Member Nonrecourse Debt. Except as otherwise
provided in Treasury Regulations Section 1.704-2(i)(4), if there is a net
decrease in Minimum Gain Attributable to Member Nonrecourse Debt during any
Fiscal

 

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Year, each Member with a share of Minimum Gain Attributable to Member
Nonrecourse Debt shall be specially allocated items of Company income and gain
for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in proportion
to, and to the extent of, an amount equal to the portion of such Member’s share
of the net decrease in the Minimum Gain Attributable to Member Nonrecourse Debt,
determined in accordance with Treasury Regulations Section 1.704-2(i)(4). This
Section 4.2(b) is intended to comply with the chargeback of items of income and
gain requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

(c) Qualified Income Offset. In the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate, to the extent required by the Treasury Regulations, any Adjusted
Capital Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 4.2(c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Section 4.2 have been tentatively made as
if this Section 4.2(c) were not in this Agreement.

(d) Gross Income Allocation. In the event a Member has an Adjusted Capital
Account Deficit at the end of any Company Fiscal Year, such Member shall be
specially allocated items of Company income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this
Section 4.2(d) shall be made only if and to the extent that Company would have
an Adjusted Capital Account Deficit after all other allocations provided for in
this Section 4.2 have been made as if Section 4.2(c) and this Section 4.2(d)
were not in this Agreement.

(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be
allocated among the Members in proportion to the Percentage Interests held by
them during such Fiscal Year in accordance with Treasury Regulations
Section 1.704-2(b)(1). If the Manager determines in its good faith discretion
that the Nonrecourse Deductions must be allocated in a different ratio to
satisfy the safe harbor requirements of the Treasury Regulations promulgated
under Section 704(b) of the Code, the Manager is authorized, with the approval
of GRI and Regency, to revise the prescribed ratio to the numerically closest
ratio that does satisfy such requirements.

(f) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any taxable
period shall be allocated 100% to the Member that bears the economic risk of
loss (as defined in Treasury Regulations Section 1.704-2(b) with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with Treasury Regulations Section 1.704-2(i)). If
more than one Member bears the economic risk of loss with respect to a Member
Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall
be allocated between or among such Members in accordance with the ratios in
which they share such economic risk of loss.

 

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(g) Code Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(2) or Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Member in complete liquidation of
its interest in the Company, the amount of such adjustment to Capital Accounts
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis) and such gain or
loss shall be specially allocated to the Members in accordance with their
respective Percentage Interests in the Company in the event that Treasury
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom
such distribution was made in the event that Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)(4) applies.

Section 4.3 Curative Allocations. The allocations set forth in Section 4.2(a)
through (g) above (the “Regulatory Allocations”) are intended to comply with
certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2(b).
Notwithstanding any other provisions of this Article IV (other than the
Regulatory Allocations hereof), the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss, and deduction among the
Members so that, to the extent possible, the net amount of such allocations of
other items and the Regulatory Allocations to each Member shall be equal to the
net amount that would have been allocated to such Member if the Regulatory
Allocations had not occurred. In determining the allocations under this
Section 4.3, consideration shall be given to future allocations under
Section 4.2(a) and Section 4.2(b) that, although not yet made or required, are
likely to offset allocations under Section 4.2(e) and Section 4.2(f).

Section 4.4 Other Allocation Rules.

(a) Profits, Losses and other items of income, gain, loss or deduction shall be
allocated to the Members pursuant to this Article IV as of the last day of each
Fiscal Year; provided that Profits, Losses and such other items shall also be
allocated at such times as the Gross Asset Values of any Company assets are
adjusted pursuant to subparagraph (b) of the definition of Gross Asset Value,
and provided further that Profits, Losses and such other items shall also be
allocated for any portion of such Fiscal Year for which the Company is required
to allocate Profits, Losses, and other items of income, gain, loss, or deduction
pursuant to Article IV.

(b) For purposes of determining Profits, Losses or any other items allocable to
any period, Profits, Losses and any such other items shall be determined on a
daily, monthly or other basis, as determined by the Manager using any
permissible method under Code Section 706 and the Treasury Regulations
thereunder.

Section 4.5 Tax Allocations: Code Section 704(c). In accordance with Code
Section 704(c) and the Treasury Regulations thereunder and Treasury Regulations
Section 1.704-1(b)(4)(i), income, gain, loss and deduction (as computed for tax
purposes) with respect to any property contributed to the capital of the Company
or otherwise revalued on

 

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the books of the Company shall, solely for tax purposes, be allocated among the
Members to take into account any variation between the adjusted basis of such
property to the Company for federal income tax purposes and its Fair Market
Value at the time of the contribution or revaluation. In addition, if any gain
(as computed for tax purposes) on the sale or other disposition of Company
property shall constitute recapture of depreciation under Sections 291, 1245 or
1250 of the Code or any similar provision, such gain shall (to the extent
possible) be divided among the Members in proportion to the depreciation
deductions previously claimed by them (or their predecessor in interest) giving
rise to such recapture.

Any elections or other decisions relating to such allocations shall be made by
the Members, jointly, in any manner that reasonably reflects the purpose and
intention of this Agreement.

Except as otherwise provided in this Agreement, for federal income tax purposes,
all items of Company income, gain, loss, deduction and any other allocations not
otherwise provided for shall be divided among the Members in the same manner as
its correlative item of “book” income, gain, loss, deduction or other item was
allocated pursuant to Section 4.1 and Section 4.2 of this Agreement or
otherwise.

Section 4.6 Allocations to Transferred Membership Interests. In the event of a
transfer of any Membership Interest, regardless of whether the transferee
becomes a Member, all items of income, gain, loss, deduction and credit for the
Fiscal Year in which the transfer occurs shall be allocated for federal income
tax purposes between the transferor and the transferee on the basis of the
ownership of the Membership Interest at the time the particular item is taken
into account by the Company for federal income tax purposes, except to the
extent otherwise required by Section 706(d) of the Code. Distributions made on
or after the effective date of transfer shall be made to the transferee,
regardless of when such distributions accrued on the books of the Company. The
effective date of the transfer shall be (a) in the case of a voluntary transfer,
the date of the transfer, or (b) in the case of an involuntary transfer, the
date of the operative event.

Section 4.7 Tax Elections. The Tax Matters Member (as hereinafter defined) may,
with the approval of GRI and Regency, which shall not be unreasonably withheld,
make such tax elections in any Fiscal Year, including any election under
Section 754 of the Code or an election out of installment sale treatment under
Section 453 of the Code. Notwithstanding the foregoing, if any Member requests
that the Tax Matters Member make an election under Section 754 of the Code, the
Tax Matters Member shall make this election promptly after receiving Notice of
the request from such Member.

Section 4.8 Designation of Tax Matters Member.

(a) The Manager shall act as the “tax matters partner” (the “Tax Matters
Member”) of the Company, as provided in Treasury Regulations pursuant to
Section 6231 of the Code and is authorized to qualify as such, and GRI (and
Regency, if Regency is not the Manager) shall be a “notice partner” within the
meaning of Code Section 6223. All

 

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Members hereby Consent to such designations and agree to execute, certify,
acknowledge, deliver, swear to, file and record at the appropriate public
offices such documents as may be deemed necessary or appropriate to evidence
such Consent.

(b) To the extent and in the manner provided by applicable Code sections and
regulations thereunder, the Tax Matters Member shall furnish the name, address,
profits, interest and taxpayer identification number of the Members to the
Internal Revenue Service (“IRS”).

(c) To the extent and in the manner provided by applicable Code sections and
regulations thereunder, the Tax Matters Member shall inform each Member of
administrative or judicial proceedings for the adjustment of Company items
required to be taken into account by a Member for income tax purposes (such
administrative proceedings being referred to as a “tax audit” and such judicial
proceedings being referred to as “judicial review”).

(d) The Tax Matters Member is authorized, but not required:

(i) to enter into any settlement with the IRS with respect to any tax audit or
judicial review, and in the settlement agreement the Tax Matters Member may
expressly state that such agreement shall bind all Members, except that such
settlement agreement shall not bind any Member (1) who (within the time
prescribed pursuant to the Code and Treasury Regulations) files a statement with
the IRS providing that the Tax Matters Member shall not have the authority to
enter into a settlement agreement on behalf of such Member or (2) who is a
“notice partner” (as defined in Section 6231 of the Code) or a member of a
“notice group” (as defined in Section 6223(b)(2) of the Code), and, to the
extent provided by law, the Manager shall cause each Member to be designated a
notice partner;

(ii) in the event that a notice of a final administrative adjustment at the
Company level of any item required to be taken into account by a Member for tax
purposes (a “final adjustment”) is mailed or otherwise given to the Tax Matters
Member, to seek judicial review of such final adjustment, including the filing
of a petition for readjustment with the Tax Court or the United States Claims
Court, or the filing of a complaint for refund with the District Court of the
United States for the district in which the Company’s principal place of
business is located;

(iii) to intervene in any action brought by any other Member for judicial review
of a final adjustment;

(iv) to file a request for an administrative adjustment with the IRS at any time
and, if any part of such request is not allowed by the IRS, to file an
appropriate pleading (petition, complaint or other document) for judicial review
with respect to such request;

(v) to enter into an agreement with the IRS to extend the period for assessing
any tax which is attributable to any item required to be taken into account by a
Member for tax purposes, or an item affected by such item; and

 

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(vi) to take any other action on behalf of the Members of the Company in
connection with any tax audit or judicial review to the extent permitted by
applicable law or regulations.

Subject to the following sentence, the taking of any action and the incurring of
any expense by the Tax Matters Member in connection with any such proceeding,
except to the extent required by law, is a matter in the reasonable discretion
of the Tax Matters Member (provided, however, that the Tax Matters Member shall
keep the Members informed as to the status of all such proceedings), and the
provisions relating to indemnification of the Manager set forth in
Section 6.16(c) of this Agreement shall be fully applicable to the Tax Matters
Member in its capacity as such. The Tax Matters Member shall provide the Members
the opportunity to review and comment on the taking of any action and the
incurring of any material expense in connection with any such proceeding.

(e) Reimbursement. The Tax Matters Member shall receive no compensation for its
services as such. All third-party costs and expenses incurred by the Tax Matters
Member in performing its duties as such (including legal and accounting fees)
shall be borne by the Company. Nothing herein shall be construed to restrict the
Company from engaging an accounting firm and a law firm to assist the Tax
Matters Member in discharging its duties hereunder, so long as the compensation
paid by the Company for such services is reasonable.

ARTICLE V

DISTRIBUTIONS

Section 5.1 Distributions.

(a) Distributions of Net Operating Cash. For each month (by no later than the
fourteenth (14th) day following the end of such month), the Company shall make
distributions of the Net Operating Cash for such month, as follows:

(i) First, to Regency an amount equal to the product of (i) Net Operating Cash
for such month multiplied by (ii) Regency’s Percentage Interest as of the end of
the month for which the distributions are being made.

(ii) Second, for any distribution that occurs during a month following the end
of a Fiscal Quarter, and for any period during which Regency or an Affiliate of
Regency is the Manager, to Regency for each Fiscal Quarter (by no later than the
fourteenth (14th) day following the end of such Fiscal Quarter), the Base
Amounts for such Fiscal Quarter, together with all previously accrued but unpaid
Base Amounts.

(iii) Third, to GRI an amount equal to the product of (i) Net Operating Cash for
such month multiplied by (ii) GRI’s Percentage Interest as of the end of the
month for which the distributions are being made. For any such distribution made
during a month in which the GRI Base Amount is distributed to Regency pursuant
to Section 5.1(a)(ii) above, the amount of the distribution to GRI described in
the foregoing sentence shall be reduced by the amount of the GRI Base Amount
distributed to Regency.

 

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(iv) Fourth, to MCW LLC an amount equal to the product of (i) Net Operating Cash
for such month multiplied by (ii) MCW LLC’s Percentage Interest as of the end of
the month for which the distributions are being made. For any such distribution
made during a month in which the MCW LLC Base Amount is distributed to Regency
pursuant to Section 5.1(a)(ii) above, the amount of the distribution to MCW LLC
described in the foregoing sentence shall be reduced by the amount of the MCW
LLC Base Amount distributed to Regency.

(b) Distributions of Net Proceeds from Capital Transactions and Net Proceeds
from Financings. Within thirty (30) days after the closing of a Capital
Transaction or Financing, the Company shall distribute the Net Proceeds from
Capital Transactions or Net Proceeds from Financings, as applicable, as follows
unless GRI and Regency elect as a Major Decision to maintain all or a portion of
such Net Proceeds from Capital Transactions or Net Proceeds from Financings, as
applicable, in the Company:

(i) First, to Regency, an amount equal to the sum of all previously accrued but
unpaid Base Amounts due to Regency.

(ii) Second, distributions of any remaining Net Proceeds from Capital
Transactions or Net Proceeds from Financings, as applicable, to the Members pro
rata in accordance with their respective Percentage Interests.

Section 5.2 Repayment of Member Loans. Notwithstanding the provisions of
Section 5.1 to the contrary, to the extent any Member Loans are outstanding at
the time that a distribution is made pursuant to the terms of Article V, then
all amounts otherwise distributable to a Non-Contributing Member under this
Article V shall be distributed directly to the Contributing Member and deemed to
constitute distributions to the Non-Contributing Member followed by deemed
payments of accrued interest and principal on all outstanding Member Loans by
the Non-Contributing Member to the Contributing Member until such time as all
Member Loans have been repaid in full. All amounts paid to a Contributing Member
in satisfaction of a Member Loan pursuant to the terms of this Section 5.2 shall
be deemed to have been distributed to the Non-Contributing Member for all
purposes of this Agreement (including, but not limited to, the determination of
the Non-Contributing Member’s Capital Account balance).

Section 5.3 Limitations on Distributions. The Company shall make no
distributions to the Members except (i) as provided in this Article V and
Article VII hereof, or (ii) as agreed to by all of the Members. A Member may not
receive a distribution from the Company to the extent that such distribution
would be prohibited by Section 18-607 of the Act.

Section 5.4 Distribution Notices. In connection with any distribution under this
Article V, the Manager shall distribute to the Members a summary of the
calculation(s) used to determine such distribution and copies of any work papers
generated and/or used in connection therewith.

 

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ARTICLE VI

MANAGEMENT AND OPERATIONS OF THE COMPANY

Section 6.1 Management Generally.

(a) Authority of the Manager With Respect to Daily Operations. Subject to this
Agreement, the overall management and control of the business and affairs of the
Company shall be vested in the Manager. Regency shall be the initial Manager.
Except for those matters expressly required under this Agreement to be approved
by all or any Member(s), (i) the Manager shall be the sole decision-maker on all
day-to-day operational issues, and (ii) all decisions with respect to the
day-to-day operations of the Company made by the Manager shall be binding on the
Company and each of the Members, including the following:

(i) subject to Section 6.2 and Section 6.3 hereof, taking all such actions as
are necessary or desirable to cause the Company to acquire, hold, manage and
sell Projects in accordance with the Investment Criteria and this Agreement,
including, without limitation, executing any deed, lease, easement, mortgage,
deed of trust, mortgage note, promissory note, bill of sale, contract,
certificate or other instrument in connection with the acquisition, holding,
financing, management, maintenance, operation, lease, mortgage or other
disposition of a Project, and any Person dealing with the Company shall be
entitled to rely on such execution, without any further investigation, as the
authority of the Manager to execute any such document on behalf of the Company;

(ii) subject to Section 6.2(iv) and Section 6.7 hereof, consummating Financings
in accordance with the Debt Financing Policy;

(iii) protecting and preserving the interests of the Company with respect to
each Project and other assets owned by the Company and complying with all
applicable laws and regulations and all agreements of the Company;

(iv) keeping all books of account and other records of the Company and each
Project;

(v) coordinating the services of all property managers, engineers, accountants
and other persons necessary or appropriate to carry out the business of the
Company;

(vi) maintaining all funds of the Company in one or more Company accounts in a
bank or banks and making payments for Company Expenses out of such account;

(vii) making distributions periodically to the Members in accordance with the
provisions of this Agreement;

(viii) obtaining and complying with all policies of insurance in place with
respect to the Company and the Projects;

 

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(ix) subject to Section 6.2, instituting, defending, prosecuting, settling or
otherwise taking any action on behalf of the Company with respect to any lawsuit
or other legal action;

(x) preparing and filing all necessary returns, reports and statements and
paying all taxes, assessments and other impositions relating to Projects or
operations of the Company; and

(xi) performing other normal business functions and otherwise operating and
managing the day-to-day business affairs of the Company in accordance with this
Agreement.

(b) Budgets. The Manager shall implement the Budget and shall be authorized,
without the need for further approval by the Members, to make the expenditures
and incur the obligations provided for in the Budget, except that if the total
expenditures and obligations for any Project exceed the total expenditures
provided for such Project in the Budget by the lesser of (x) Seventy Five
Thousand Dollars ($75,000) or (y) ten percent (10%), then any such expenditures
shall be subject to the consent of GRI and Regency, not to be unreasonably
withheld. Each year the Manager shall prepare and submit a new Budget to GRI and
Regency for approval, consistent with the internal procedures used by the
Manager for its own properties. Prior to the consummation of the 20% Purchase
but not thereafter, MCW LLC shall have the right to approve any Budget in which
budgeted net operating income varies by ten percent (10%) or more from the prior
year’s Budget. A copy of each Budget shall be provided to Regency and GRI for
their approval (and to MCW LLC for its information and for its approval if
applicable pursuant to the prior sentence) no later than November 1 of the
calendar year preceding the calendar year to which the Budget applies. If
Regency, GRI and, if applicable, MCW LLC fail to agree on a Budget for any year,
the Budget in effect for the preceding year shall remain in effect at the
Project and Company levels, except that (i) no Capital Expenditures shall be
made, (ii) invoices for taxes, insurance, utilities, snow removal and other
similar expenses necessary to operate the Projects shall be paid, and
(iii) appropriate adjustments in other items of income and expense shall be made
based on variances in occupancy, scheduled contract price increases and the
increase in the Consumer Price Index-All Urban Consumers, U.S. City Average,
since the beginning of the preceding year. Any matter requiring approval by a
Member under this Section 6.1(b) shall be deemed approved if a Member fails to
respond to a Notification regarding such matter within ten (10) Business Days
following receipt thereof; provided that in order for such deemed approval to be
effective the Notification must begin with the following in bold capitalized
letters: FAILURE TO RESPOND TO THIS NOTIFICATION WITHIN TEN (10) BUSINESS DAYS
SHALL RESULT IN A DEEMED APPROVAL UNDER SECTION 6.1(B) OF THAT CERTAIN SECOND
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF MACQUARIE
COUNTRYWIDE-REGENCY II, LLC. The text of any such Notification shall be modified
as appropriate if the name of the Company is changed.

(c) Emergency Repairs. The Manager may make expenditures on behalf of the
Company, or enter into contracts whose costs are not included in the Budget,

 

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for repairs to any Project which, in the Manager’s opinion, using reasonable
business judgment, are immediately required to be made for the preservation and
safety of the Project, to avoid the suspension of any essential service to or
for the Project, to avoid danger to life or property at the Project, or to
comply with law if the non-compliance therewith could subject the Manager, the
Company, any Project Level Entity or either of their Affiliates (or their
respective employees) to criminal or civil liability (“Emergency Expenditures”).
The Manager shall promptly, but in no event later than twenty-four (24) hours
from the time the Manager learns of such emergency, notify the Members of any
such emergency. Immediately thereafter, the Manager shall send GRI and Regency a
Notification setting forth the nature of the emergency and any action taken in
connection therewith.

(d) Removal of the Manager. If a Manager Removal Event occurs with respect to
the then current Manager, any Member with a Percentage Interest greater than ten
percent (10%) may elect by Notification to the Members following such Manager
Removal Event (any such election, a “Manager Removal”) to remove the Manager as
the manager of the Company. Following any such election with respect to the
removal of Regency as the initial Manager, GRI (or its Affiliate) shall be the
new Manager of the Company in substitution for the initial Manager and the
overall management and control of the business and affairs of the Company shall
be vested in GRI or its Affiliate in the capacity of Manager (and as a
consequence thereof, GRI or its Affiliate[s] shall be entitled to all fees and
reimbursements that were previously payable to Regency as the initial Manager
and its Affiliates prior to such Manager Removal, including, without limitation,
the amounts payable pursuant to Sections 6.5, 6.6 and 6.9 hereof). Upon any
Manager Removal with respect to GRI or any Manager succeeding GRI as Manager, a
replacement Manager shall be selected by the Member holding the majority
Percentage Interest between the remaining Members (other than the Member that
has been so removed as Manager). Upon any Manager Removal, (x) the Company,
and/or any Project Level Entities (as applicable) may terminate any of the
Manager Agreements and may enter into replacement agreements with the
replacement Manager (or its Affiliate[s]), (y) the Manager being removed or any
of its successors-in-interest shall promptly cause, upon demand of the
replacement Manager, the execution and delivery to the Company of all documents
that may reasonably appropriate, in the opinion of counsel for the replacement
Manager, to confirm such substitution (provided, however, that the parties agree
that such substitution shall be automatic following a Manager Removal and that
no documents other than the Notification described in the first sentence of this
Section 6.1(d) shall be necessary to effect any Manager Removal) and
(z) following a Manager Removal of Regency or any Affiliate of Regency as the
initial Manager, the Base Amounts shall no longer be payable under this
Agreement. Notwithstanding such Manager Removal, the Manager that has been
removed shall remain liable for all liabilities, duties and obligations of such
Manager as manager of the Company arising prior to the Manager Removal.

(e) Manager Duties. Except as otherwise expressly provided in this Agreement,
any Manager shall at all times act in good faith and in, or in a manner that is
not contrary to, the best interests of the other Members and the Company. In
managing the affairs of the Company and in dealings with the other Members,
except as otherwise expressly provided in this Agreement, the Manager shall owe
the same fiduciary duty to

 

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the other Members as a general partner owes to each other party in a general
partnership under Delaware law, including: (a) a duty of loyalty, which requires
the Manager to carry out its responsibilities with loyalty, honesty, good faith
and fairness towards the Company and the Members and (b) a duty of care, which
requires the Manager to discharge its duties with the diligence, care and skill
that a general partner would be required under Delaware limited partnership law
to exercise under similar circumstances, including, but not limited to, actions
with respect to the safekeeping and use of all funds, assets and records of the
Company. Unless expressly stated otherwise in this Agreement, the standard of
performance applicable to the Manager as set forth in this Section 6.1(e) shall
be applicable to any Manager in performing its obligations under each provision
of this Agreement. The provisions of this Section 6.1(e) shall not be applicable
with respect to any rights of a Manager as a Member under Section 7.5,
Section 7.6, Section 10.2, Section 10.3 and Section 12.5 below (for avoidance of
doubt, however, the provisions of this Section 6.1(e) shall apply to all such
Sections in connection with the duties and obligations of a Manager as the
Manager of the Company). Every Manager shall comply with CalPERS’ Responsible
Contractor Program, a copy of which is attached as Schedule 8.

Section 6.2 Major Decisions. Notwithstanding anything to the contrary contained
in this Agreement, no act shall be taken or sum expended or obligation incurred
by the Company or any Member, or anyone on their behalf, with respect to any of
the following matters, unless such matter has received the prior written
approval of GRI and Regency (each, a “Major Decision”):

(i) the acquisition of any New Project or any other real property;

(ii) the Sale of all or any part of a Project or any other real property or any
interest therein (provided that this clause (ii) shall not affect the rights of
any Member set forth in Article X below);

(iii) the adoption of or any modification to the Investment Criteria;

(iv) entering into any Financing, or increasing or extending any Financing;

(v) entering into any hedging;

(vi) except as permitted by Section 6.1(b) or Section 6.1(c), any expenditure
not provided for in the then current Budget;

(vii) entering into any Anchor Lease, any material amendment to or extension of
an Anchor Lease or permitting any tenant under any Anchor Lease to enter into an
assignment thereof or a sublease of all or any material portion of the premises
where landlord consent is required by the terms of the applicable Anchor Lease;

 

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(viii) entering into any lease other than an Anchor Lease that is less favorable
to the Company than the acceptable lease rates and other significant terms set
forth for the applicable tenant space in the then current approved Budget (a
“Non-Conforming Lease”) if any of the following are applicable: (A) the base
rent due under the Non-Conforming Lease is less than the amount established
therefor in the then current approved Budget by more than ten percent (10%),
(B) the tenant improvement allowance and/or tenant improvement costs to be
funded by the landlord under the Non-Conforming Lease are greater than the
amount established therefor in the then current approved Budget by more than ten
percent (10%) or (C) the Non-Conforming Lease, together with any other
non-Anchor Leases for the same Project entered into on behalf of the Company
during the same Fiscal Year, would result in a reduction in the annual base rent
generated by such Project (as set forth in the then current approved Budget) of
at least five percent (5%) in the aggregate;

(ix) any ground lease for all or any portion of a Project not identified in the
then current approved Budget (so identified by setting forth an agreed base
rent, term and other terms);

(x) the admission of a new Member to the Company, other than a transferee of
Membership Interests permitted by Section 9.1, or the appointment of a successor
or an additional manager of the Company;

(xi) terminating or dissolving the Company, except in accordance with Article
VII hereof, or merging, consolidating or converting the Company;

(xii) entering into any contract (or any amendment or waiver thereof) or
transaction with a Member or an Affiliate of a Member (and provided that any
such contracts or transactions that are not on an “arm’s-length” basis on
then-current market terms shall be subject to Section 6.3 below);

(xiii) confessing a judgment against the Company;

(xiv) entering into a joint venture or other co-ownership relationship with
respect to the ownership of a Project;

(xv) making any tax election on behalf of the Company;

(xvi) changing any accounting method adopted by the Company unless required by
generally accepted accounting principles in the United States;

(xvii) causing the Company to enter into any agreement, other than real property
leases or construction agreements, that is not cancelable without penalty on
thirty (30) days’ notice or less;

(xviii) forming, dissolving, merging, consolidating or converting a Project
Level Entity or any other direct or indirect subsidiaries of the Company;

 

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(xix) making any election pursuant to Treasury Regulation Section 301.7701-3 to
classify the Company for federal income tax purposes as anything other than a
partnership or to classify a Project Level Entity for federal income tax
purposes as anything other than a disregarded entity;

(xx) granting any lien, security interest, pledge, mortgage, deed of trust or
other encumbrance on any asset of the Company (other than easements or similar
rights that do not adversely affect the use or value of the Project);

(xxi) any zoning change adverse to or any subdivision of any Project;

(xxii) instituting, defending, prosecuting, settling or otherwise taking any
action on behalf of the Company with respect to any lawsuit or other legal
action (including, without limitation, any condemnation or taking) or the
settlement of any insurance claim where the amount at issue exceeds $100,000;

(xxiii) increasing the rates and fees schedules of any agreement between the
Company and a Member or an Affiliate of a Member, except as specifically
provided in the applicable agreement;

(xxiv) electing to maintain in the Company all or a portion of the Net Proceeds
from Capital Transactions in accordance with Section 5.1(b) hereof;

(xxv) performing any act in contravention of this Agreement;

(xxvi) except as otherwise provided herein, taking any action which would make
it impossible to carry on the ordinary business of the Company or substantially
change the nature or scope of the business of the Company;

(xxvii) filing for bankruptcy, appointing a receiver or trustee or making a
transfer for the benefit of creditors, or, except as provided in Section 7.2,
initiating any dissolution, liquidation or reorganization of either the Company
or any of the Project Level Entities (other than dissolution of a Project Level
Entity that has disposed of its assets in a transaction that has been approved
hereunder);

(xxviii) on behalf of any direct or indirect subsidiary of the Company
(including, without limitation, any of the Project Level Entities), making any
decision or election, or taking any action, that would require the approval of
GRI, Regency and if applicable, MCW LLC (pursuant to this Section 6.2 or
otherwise) if such decision, election or action were made or taken by the
Company itself; or

(xxix) major redevelopment capital expenditures in excess of Seven Million Five
Hundred Thousand Dollars ($7,500,000).

Section 6.3 MCW LLC’s Interest. Prior to the consummation of the 20% Purchase
but not thereafter, notwithstanding the provisions of Section 6.2 above the

 

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following Major Decisions shall require the unanimous approval of all three
Members: (i) [new Projects], (x) [new Members], (xi) [dissolution],
(xii) [contracts with Members or Affiliates except on “arm’s-length” basis],
(xiv) [joint ventures], (xv) [tax elections], (xvi) [accounting method],
(xviii) [formation, dissolution, merger, consolidation, conversion],
(xxvi) [contravention of Agreement], (xix) [tax elections re classification],
(xxvi) [change in nature or scope of business], (xxvii) [bankruptcy] and
(xxix) [major redevelopment capital expenditures]. MCW LLC shall have the right
to (x) participate in meetings and discussions concerning Major Decisions
(including, without limitation, any such meetings and discussions regarding
Financings) and the Debt Financing Policy and (y) participate in discussions
between lenders and the Manager regarding the “permitted” transfer provisions in
any Financing documents; provided that MCW LLC’s approval rights with respect to
Major Decisions shall be as expressly set forth in the prior sentence (and
further provided that MCW LLC’s lack of participation shall not prevent GRI and
Regency from making any Major Decisions, except with respect to the matters
listed in the first sentence of this Section 6.3).

Section 6.4 Member Representatives.

(a) Initial Representatives. Any one of Lisa Palmer or Michael Mas, acting
singly, shall serve as Regency’s initial representative, Steven Sewell shall
serve as MCW LLC’s initial representative and any one of James Blumenthal, James
Pounds or Jeffrey Distenfeld, acting singly, shall serve as GRI’s initial
representative. Each Member may designate a new Member representative upon
Notification to the other Members. The Member representatives shall meet
quarterly (either in person or by telephone) to review the Company’s operations
and more frequently as needed to address matters on an interim basis. Member
representative meetings may be called by any Member representative with at least
three Business Days’ prior Notification. Any Member representative may appoint
another individual to act for such representative at any Member representative
meeting by a proxy executed in writing and presented to the other Member
representative at or before such meeting. Member representatives shall not be
managers of the Company under the Act.

(b) Actions Binding on Members. Any written approval signed on behalf of a
Member by its respective Member representative as designated pursuant to
Section 6.4(a) shall be binding on such Member.

Section 6.5 Fees to the Manager and Its Affiliates. From time to time, the
Manager or its designee may be required to perform certain acquisition,
disposition or debt placement services for the Company. Any such services may be
performed by a designee of Manager that is an Affiliate of the Manager. The
Company shall pay the following fees to the Manager or its designee for
performing the services set forth below:

(a) Acquisition Fee. The Manager or its Affiliate shall receive an acquisition
fee for arranging the purchase of any New Project(s) by the Company from a third
party that is not an Affiliate of a Member as provided in this Section 6.5(a).
The acquisition fee for any New Project (or, if acquired in a single transaction
or a series of

 

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related transactions, multiple New Projects) shall be equal to the lesser of
(i) One Hundred Fifty Thousand Dollars ($150,000) or (ii) fifty (50) basis
points of the purchase price of such Project(s) (which shall include the
outstanding principal amount of and accrued and unpaid interest on debt assumed
at the time of acquisition by the Company, but which will not include expenses
and costs in connection with completing or financing the acquisition by the
Company). In exchange for such acquisition fee, the Manager shall be obligated
to perform all services necessary or desirable in connection with the
acquisition of a New Project or New Projects subject to all applicable terms and
provisions of this Agreement, including, without limitation, leading
negotiations with third parties, performing and coordinating due diligence,
engaging any third party consultants or service providers necessary in
connection with such transaction and coordinating the closing. Any such fee
shall be payable by the Company to the Manager or its Affiliate at the closing
of such acquisition transaction.

(b) Disposition Fee. The Manager or its Affiliate shall be entitled to receive a
disposition fee for arranging the Sale of any Project to a third party that is
not a Member or an Affiliate of a Member. The disposition fee shall be based on
Market Rates and shall not exceed fifty (50) basis points (0.50%) of the sale
price (including the principal amount of the debt assumed by the purchaser, but
excluding interest on such assumed debt, expenses and costs in connection with
completing the transaction) of such Project reduced by any amount paid to a
third party for providing any such disposition services. Any such fee shall be
payable by the Company to the Manager or its designee at the closing of such
disposition transaction by the Company.

(c) Capital Restructuring and Consulting Fees. The Manager or its Affiliate
shall be entitled to receive a fee for capital restructuring and consulting
services provided in connection with any new Financing (excluding Member Loans,
Company Loans, and the refinancing of any Financing in place less than twelve
[12] months) for the Company (but not the assumption of any such Financing or
any extension or other modification of such Financing). The capital
restructuring and consulting fee shall be equal to fifty (50) basis points
(0.50%) of the total amount of the original principal amount of such new
Financing. Such fee shall be payable by the Company to the Manager or its
Affiliate at the closing of such new Financing transaction by the Company. The
capital restructuring and consulting fee shall be reduced by any amount paid to
a third party for any debt placement services in connection with any such new
Financing.

(d) Construction Management Fee. The Company shall pay a construction management
fee to the Manager or an Affiliate of the Manager as provided in the current
Property Management Agreement or any replacement thereof.

(e) Property Management and Leasing Fees. The Company shall pay to the Manager
or an Affiliate of the Manager property management and leasing or leasing
oversight fees as provided in the Property Management Agreement or any
replacement thereof.

(f) Services Performed by GRI or Regency. If GRI or Regency (or an Affiliate of
either of them) is not the Manager and performs any of the services set forth in

 

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Sections 6.5(a), (b) or (c) above, and the Manager does not perform those
services, the applicable fees payable in connection with such services shall be
payable to GRI or Regency, as applicable, or their Affiliate, as provided above.

Section 6.6 Costs and Expenses.

(a) Dead Deal Costs and Expenses. In the event that an acquisition of a New
Project is approved by GRI, Regency and, if applicable, MCW LLC and the
acquisition fails to close, all third party costs and incurred due diligence
costs relating to such failed acquisition will be paid by the Company (and
shared proportionately by GRI and Regency in accordance with their respective
Percentage Interests), provided that such third party costs are for the payment
of services for the benefit of the Company. Otherwise, any such costs shall be
borne by the Member that incurred such costs.

(b) Other Third Party Costs and Expenses. At the time of the closing of any
transaction that generates a fee under Section 6.5(a), Section 6.5(b) or
Section 6.5(c) above, the Company shall reimburse the Manager (or, if applicable
pursuant to Section 6.5(f), GRI or Regency or their Affiliate, as appropriate)
for any costs related to the payment of services performed by a third party in
connection with any such transaction, including legal due diligence and Project
level compliance expenses.

Section 6.7 Hedging Activities. The Manager shall be responsible for carrying
out all hedging activities on behalf of the Company and shall provide prompt
Notification to the Members each time that it wishes to execute a hedge on
behalf of the Company, together with such information with respect to such
hedging activities as the Members may reasonably request; provided, however,
that hedging activities shall only be engaged in to the extent that they hedge
indebtedness incurred or to be incurred by the Company to acquire or carry real
estate assets. The Manager shall clearly and unambiguously identify each hedging
transaction (and related item hedged) as such for tax purposes in the Company’s
books and records (pursuant to Code Section 1221(a)(7) and the Treasury
Regulations thereunder) before the close of the day on which it was acquired,
originated, or entered into (or at such other time as the Internal Revenue
Service may by Treasury Regulations prescribe). The Manager hereby designates
for tax purposes all future interest rate swap and derivative transactions as
hedges of indebtedness incurred or to be incurred by the Company to acquire or
carry real estate assets.

Section 6.8 Matters Relating to Manager Agreements. Any action to be taken by
the Company as a party to a Manager Agreement, including but not limited to any
amendment to or a notice of a default or waiver under or termination of any
Manager Agreement, shall be decided by GRI, if Regency is the Manager, or by the
Member holding the majority Percentage Interest between the remaining Members,
if GRI is the Manager.

Section 6.9 Expenses. Nothing herein shall be construed to require the Manager
to advance its own funds to pay any Company costs or expenses except for any
costs and expenses incurred by the Manager by reason of any violation by the
Manager of the

 

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standard of care set forth in Section 6.16(b). To the extent not paid for by a
Project, the Company shall be responsible for and shall pay or shall reimburse
the Manager for (i) all out-of-pocket expenses that are incurred by it in the
conduct of the business of the Company and its subsidiaries in accordance with
the Budget or as permitted in excess of the Budget by Section 6.1(b), or are
expressly approved in writing by GRI and Regency, but excluding Manager
Expenses. “Manager Expenses” as used herein means:

(a) all compensation of officers, members, partners and employees of the Manager
and its Affiliates;

(b) all general office overhead and related expenses of the Manager, including
rent, utilities, telecommunications, office furniture, equipment, accounting,
legal, salaries and benefit expenses.

The Company shall not be responsible for payment of Manager Expenses. Manager
Expenses shall not be treated as expenses of the Company and the payment thereof
shall not be accounted for as contributions to or income of the Company and
shall in no way affect the Members’ Capital Contributions or the Capital Account
of any Member.

The expenses described above shall also include reimbursement to the Manager at
hourly rates set forth in the Budget or as otherwise approved by GRI and Regency
for the actual time reasonably incurred by only those professional employees of
the Manager or its Affiliates listed in the Budget or otherwise approved by GRI
and Regency in providing professional services in connection with the Company or
the Projects that the Manager would otherwise be authorized hereunder to obtain
from third party professionals, such as the services of in-house legal counsel
in handling tenant disputes.

Section 6.10 Compensation of Members and their Affiliates.

(a) Except as may be expressly provided in this Article VI or elsewhere in this
Agreement, or as may be approved by the Members, no Member nor any of their
Affiliates shall receive, or shall be entitled to receive, any compensation,
salaries, commissions (including, without limitation, for any Sale or Financing
of the Projects), fees, profits, reimbursements or distributions from the
Company.

(b) Each Member shall be responsible for all other costs and expenses incurred
by such Member in connection with this Agreement, including their own legal and
organizational costs, if any. Unless expressly authorized for reimbursement
under this Agreement, all other fees and expenses incurred by the Members in
connection with carrying out their obligations under this Agreement shall be
paid by the Members on their own account and shall not be reimbursed to the
Members or treated as Capital Contributions by them.

Section 6.11 Property Management. With the approval of GRI and Regency, Manager
may hire an independent contractor to manage a Project pursuant to a property
management agreement (the “Managing Agent”); provided, however, if the Managing

 

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Agent is paid a fee less than the fee agreed to be paid to the Manager (or its
Affiliate) for the same service, the cost savings will inure to the benefit of
the Company and not the Manager or such other Affiliate of the Manager. Nothing
herein is intended to preclude the Manager (or its Affiliate) from retaining a
portion of the duties it performs for such a Project, e.g., accounting, in
return for a portion of the fees that would otherwise be payable to the Managing
Agent if it performed the same services.

Section 6.12 Other Activities of Members. Subject to complying with its express
obligations set forth in this Agreement, each Member, in such Member’s
individual capacity or otherwise, shall be free to engage in, to conduct or to
participate in any business or activity whatsoever, including, without
limitation, the acquisition, development, management, rental, sale and
exploitation of real property, even if such business or activity competes with
or is enhanced by the business of the Company.

Section 6.13 Project Level Entity. If Regency and GRI determine that for legal,
tax or regulatory reasons it is in the best interests of the Company that the
Company acquire a Project through an alternative investment structure, the
Manager shall structure such acquisition through a Project Level Entity that is
directly or indirectly owned 100% by the Company and that will acquire such
Project in lieu of the Company. If the Manager structures such acquisition using
a Project Level Entity, each Member shall make Capital Contributions directly to
the Company which will in turn make Capital Contributions to the Project Level
Entity to the same extent, for the same purposes and on the same terms and
conditions as Members are required to make Capital Contributions to the Company.
For purposes of this Agreement, the formation documents of each Project Level
Entity and any agreements to which a Project Level Entity is a party, and any
action with respect to the Project, including but not limited to a Major
Decision, that would require the approval of GRI and Regency (and MCW LLC, if
applicable) if the Project were owned directly by the Company shall require such
approval even though such approval is not required by such formation documents
or other agreements. The forms of formation documents to be used by a Project
Level Entity shall not be materially amended without the approval of GRI and
Regency. The Project Level Entity to be used for each Project is set forth on
Exhibit B or in the contribution or purchase agreement for a Project acquired
after the date hereof.

Section 6.14 Property Appraisals.

(a) Periodic Appraisals. In accordance with the Appraisal Policy, the Fair
Market Value of all of the Projects owned by the Company shall be determined as
of December 31 of each calendar year by appraisals performed by Qualified
Appraisers. If a New Project is acquired by the Company during the second Half
Year of a calendar year, then the Fair Market Value of that Project shall be
determined by appraisal commencing as of December 31 of the ensuing calendar
year and, until it is required to be determined by appraisal, the Fair Market
Value of that Project shall equal the acquisition cost of that Project, unless
such Project is otherwise required to be appraised sooner by this Agreement. The
Manager shall, on behalf and at the expense of the Company, no later than
December 1 of each calendar year, engage a Qualified Appraiser to perform the

 

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annual appraisal to determine the Fair Market Value of the Projects. At least
fifteen (15) Business Days before any appraisal is completed, the Manager shall
deliver a draft of the appraisal to the Members for their review, comments and
questions. Thereafter, the Manager and the Qualified Appraiser shall respond to
all comments and questions concerning the draft made by any Member. When the
appraisal has been completed by the Qualified Appraiser, the Manager shall
deliver a copy of the completed appraisal to the Members. The Manager shall use
commercially reasonable efforts to cause all annual appraisals to be completed
by the Qualified Appraiser and delivered to the Members within sixty (60) days
following the end of each calendar year. The Company shall pay the cost of such
appraisals. In connection with the preparation of any appraisal by a Qualified
Appraiser pursuant to this Agreement, the Manager shall promptly furnish to the
Qualified Appraiser and the Members all documents and information concerning the
Projects reasonably requested by the Qualified Appraiser or the Members.

(b) Disputed Appraisals. If any Member disagrees with the determination of the
Fair Market Value in an appraisal of a Project undertaken by the Company, such
Member shall have the right, by giving a Notification to the other Members
within fifteen (15) days after the Members have received the completed appraisal
from the Manager, to appoint another Qualified Appraiser. If more than one
Member so disagrees and exercises such right to appoint another Qualified
Appraiser, then the disputing Member with the highest Percentage Interest alone
shall take responsibility for the required process and assume the rights, duties
and obligations of the disputing Member to the exclusion of the other disputing
Member(s). Such disputing Member shall exercise commercially reasonable efforts
to cause such Qualified Appraiser, within forty-five (45) days after the date of
its appointment, to perform its own appraisal of the Fair Market Value of the
Project and to select, together with the Company’s initial Qualified Appraiser,
a third Qualified Appraiser. If the first two Qualified Appraisers are not able
to agree on the appointment of a third Qualified Appraiser, the third Qualified
Appraiser shall be selected by GRI. The disputing Member shall exercise
commercially reasonable efforts to cause the third Qualified Appraiser to,
within thirty (30) days from the date of its appointment, select either one of
the Fair Market Values in the first two appraisals (and not any other Fair
Market Value) as the one that most closely approximates the Fair Market Value of
the Project in the opinion of the third Qualified Appraiser, and such Fair
Market Value selected by the third Qualified Appraiser shall be final and
binding on the Members. If the third Qualified Appraiser selects the Fair Market
Value of the initial Qualified Appraiser engaged by the Company, the disputing
Member shall pay the cost of the two additional appraisals. Otherwise, the
Company shall pay the cost of the two additional appraisals.

(c) Appraisal Policy. All appraisals required by this Section 6.14 or any other
provision of this Agreement shall be performed in accordance with the Appraisal
Policy.

Section 6.15 Scope of Authority. Except as otherwise expressly and specifically
provided in this Agreement, no Member, in its capacity as such or in any other
capacity, shall have any authority to bind or act for, or assume any obligations
or responsibility on

 

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behalf of, the Company or any other Member. Neither the Company nor any Member
shall by virtue of executing this Agreement be responsible or liable for any
indebtedness or obligation of, or claim against, any other Member.

Section 6.16 Liability of Members and Others; Indemnification.

(a) Except as provided in the Act, the Members shall not be liable for any
debts, liabilities, contracts or other obligations of the Company.

(b) No Member (or any partner, director, member, shareholder, officer or
employee of any Member, direct or indirect) shall be liable to the other Members
or to the Company for any act or omission performed or omitted by it in respect
of this Agreement or the Company unless such action or omission constitutes
gross negligence, fraud or willful misconduct or a breach of such Member’s
obligations under this Agreement or any other agreement with the Company.

(c) The Company shall defend, protect, indemnify and hold harmless each Member,
and their respective partners, officers, members, officers, directors,
shareholders, agents and employees (collectively, “Indemnitees”) harmless from
and against any third party claims, demands, losses, damages, liabilities or
costs and expenses, including, without limitation, reasonable attorneys’ fees
and court costs (collectively, “Claims”) suffered or incurred by any of them by
reason of their actions or omissions pursuant to this Agreement or by reason of
their being a Member of the Company, other than those suffered or incurred by
reason of such Indemnitee’s willful misconduct, fraud, gross negligence or
breach of such Member’s obligations under this Agreement or any other agreement
with the Company. If an Indemnitee shall be made, or is threatened to be made, a
party to any claim, action or proceeding arising out of conduct by such
Indemnitee on behalf of the Company, such Indemnitee shall immediately give the
other Member(s) Notification of such claim, action or proceeding, and the other
Member(s) shall have the right to join the resisting and defending of such
claim, action or proceeding. The Company shall, for all Claims indemnifiable by
the Company under this Section 6.16(c), pay all attorneys’ fees and other
expenses incurred by the indemnified party so long as such party provides to the
Company a reasonably satisfactory undertaking to reimburse the Company in the
event the Claim at issue turns out not to be a Claim indemnifiable by the
Company under this Section 6.16(c). Each Member shall cooperate, and shall cause
its Indemnitees to cooperate, in connection with the defense of any claim,
action or proceeding involving an Indemnitee which is indemnifiable under this
Section 6.16(c). Any indemnification pursuant to this Section 6.16(c) shall be
made only from the assets of the Company.

Section 6.17 REIT Status. The Manager shall at all times use commercially
reasonable efforts to conduct the business of the Company such that the nature
of its assets and gross revenues (as determined pursuant to Section 856(c)(2),
(3) and (4) of the Code) would permit the Company (determined as if the Company
were a “real estate investment trust” (a “REIT”)) to qualify as a REIT under
Section 856 of the Code and would permit the Company to avoid having any
transactions treated as prohibited transactions under Section 857(b)(6) of the
Code and incurring any tax on redetermined rents, redetermined

 

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deductions, and excess interest under Section 857(b)(7) of the Code (determined
as if the Company was a REIT). Notwithstanding anything to the contrary in this
Agreement, the Manager shall, to the fullest extent possible consistent with the
distribution provisions of Article V and Article VII, cause the Company to
distribute to MCW LLC by the end of the Fiscal Year no less than 100% of the
taxable income allocable to MCW LLC for such Fiscal Year so that MCW LLC may
satisfy the requirements of Section 857(a)(1) of the Code for its taxable year
(determined as if MCW LLC were a REIT).

Section 6.18 Unrelated Business Taxable Income. Except as otherwise provided by
this Agreement and except with respect to income described in Code
Section 514(a), the Manager shall cause the Company to use its good faith
efforts to attempt to minimize income to the Company that could be characterized
as unrelated business taxable income (“UBTI”) under Code Section 512. GRI shall
respond to reasonable requests by the Manager for guidance on minimizing or
avoiding UBTI in particular cases.

Section 6.19 Competing Projects. If the Manager (or any Affiliate thereof) has a
direct or indirect ownership interest in any Competing Project, then the Manager
shall give the Members Notification at least fifteen (15) Business Days prior to
the execution of any lease at any such Competing Project, which Notification
shall include the name and contact information of the tenant and any tenant’s
representative and a summary of the terms of such lease, provided that the
failure to deliver such Notification shall not constitute an Event of Default.

ARTICLE VII

WITHDRAWAL; DISSOLUTION AND TERMINATION

Section 7.1 Withdrawal. The Members shall not at any time withdraw, retire or
resign from the Company. Withdrawal, retirement or resignation by a Member in
contravention of this Section 7.1 shall subject such Member to liability for all
damages caused by such retirement, withdrawal or resignation.

Section 7.2 Events of Default by Members; Change of Control.

(a) The occurrence of any of the following events with respect to a Member
(“Defaulting Member”) shall constitute an event of default (“Event of Default”)
under this Agreement on the part of such Member:

(i) the making by such Member of a warranty or representation under this
Agreement that was false in any material respect when made, as a result of which
the Company and the other Members, or any of them, were (or was) or may be
materially and adversely affected, and if such Member fails to cure such breach
within thirty (30) days after receipt of Notification thereof from another
Member, or if the breach is not susceptible of cure within such thirty
(30) days, failure to institute prompt action and prosecute with diligence and
continuity the curing of the breach and failure to cure the breach within ninety
(90) days after receipt of such Notification;

 

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(ii) any failure by such Member (other than MCW LLC) to (A) make an Additional
Capital Contribution or fund any Company Loan as required by Article III or
(B) fund any amounts required in connection with any Consent Project as required
pursuant to Section 7.5(j) below, in either event within ten (10) days after
payment is due;

(iii) any failure by MCW LLC to (A) make any Additional Capital Contribution
with respect to any Required Loan Paydown Funds, which Additional Capital
Contribution is not in excess of the MCW LLC Required Loan Paydown Amount or
(B) fund any amounts required in connection with any Consent Project as required
pursuant to Section 7.5(j) below, in either event within ten (10) days after
payment is due;

(iv) any other material breach by such Member of the terms of this Agreement
applicable to such Member and failure to cure such breach within thirty
(30) days after receipt of Notification thereof from the other Member, or if the
breach is not susceptible of cure within such thirty (30) days, failure to
institute prompt action and prosecute with diligence and continuity the curing
of the breach and failure to cure the breach within ninety (90) days after
receipt of such Notification;

(v) with respect to Manager, any material breach by Manager or any Affiliate of
Manager under any Manager Agreement and failure to cure such breach within
thirty (30) days after receipt of Notification thereof from another Member, or
if the breach is not susceptible of cure within such thirty (30) days, failure
to institute prompt action and prosecute with diligence and continuity the
curing of the breach and failure to cure the breach within ninety (90) days
after receipt of such Notification, or if longer, within the applicable cure
period in such Manager Agreement;

(vi) any Transfer in violation of Article IX;

(vii) with respect to such Member, the filing in any court pursuant to any
statute of the United States or any state thereof of a petition in bankruptcy or
insolvency or for a reorganization, or for the appointment of a receiver or
trustee of all or a substantial portion of such Member’s property, or if such
Member makes an assignment for or petitions for or enters into an arrangement
for the benefit of creditors, or if any such a petition in bankruptcy or
insolvency is filed against such Member which is not discharged within sixty
(60) days thereafter (any of the foregoing, an “Insolvency Event”); or

(viii) the dissolution of such Member.

(b) Upon the occurrence of an Event of Default by a Defaulting Member, a
non-defaulting Member shall have the right (i) to exercise and enforce all
rights and remedies available under this Agreement (including, if applicable,
Section 3.3 hereof), at law or in equity and (ii) if the Defaulting Member is
GRI or Regency, at the election of the non-defaulting Member, to require that
the Company dissolve and distribute the Projects in kind to the Members in
accordance with the procedures described in Section 7.4 and Section 7.5 hereof.
Notwithstanding the foregoing, (x) if MCW LLC is a non-

 

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defaulting Member, then MCW LLC shall not, under any circumstances, be entitled
to exercise the remedy set forth in Section 7.2(b)(ii) and (y) if MCW LLC is the
Defaulting Member, then GRI and Regency shall not be entitled to exercise the
remedy set forth in Section 7.2(b)(ii).

(c) Within six (6) months following a Change of Control of Regency, GRI may send
Notification to Regency and MCW LLC of GRI’s election to require that the
Company dissolve and distribute the assets of the Company in kind to the Members
in accordance with the procedures described in Section 7.5. Regency shall
provide Notification to the Members of any Change in Control of Regency within
ten (10) Business Days following the occurrence thereof.

(d) Within six (6) months following a Change of Control of GRI, Regency may send
Notification to GRI and MCW LLC of Regency’s election to require that the
Company dissolve and distribute the assets of the Company in kind to the Members
in accordance with the procedures described in Section 7.5. GRI shall provide
Notification to the Members of any Change in Control of GRI within ten
(10) Business Days following the occurrence thereof.

(e) For so long as MCW LLC is a Member, immediately upon an Insolvency Event,
the Defaulting Member with respect to such Insolvency Event shall no longer have
any voting or approval rights under this Agreement, including, without
limitation, under Article III or Article VI hereof.

Section 7.3 Dissolution of the Company. The Company shall be dissolved upon the
first to occur of any of the following events (each a “Section 7.5 Election”):

(a) The written agreement of Regency and GRI to elect to dissolve the Company;

(b) Notification by GRI or Regency of an election to dissolve the Company
pursuant to Section 7.2(c) or Section 7.2(d), respectively;

(c) The election by Regency or GRI as a non-defaulting Member to dissolve the
Company pursuant to Section 7.2(b) (unless MCW LLC is the Defaulting Member);

(d) Upon the election of GRI or Regency, in either of their sole discretion, at
any time commencing on the date that is one (1) year following the date hereof;
or

(e) Notification by Regency of an election to dissolve the Company after a
change in the Code, or any regulations or published (non-private) IRS rulings
thereunder that would cause Regency’s general partner to cease to qualify as a
real estate investment trust under the Code if the only asset owned by such
general partner was Regency’s Membership Interest (provided, however, that
Regency may not so elect to

 

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dissolve the Company if the avoidance of the loss of qualification of real
estate investment trust status was within Regency’s control).

Immediately following any of the events described in clause (a), (b), (c),
(d) or (e) of this Section 7.3, the Members shall proceed to wind up the affairs
of the Company and liquidate the Company’s assets as provided in Section 7.4 and
Section 7.5. During the winding up of the affairs of the Company, the business
of the Company and the affairs of the Members as such, shall continue to be
governed by this Agreement.

Section 7.4 Liquidation.

(a) Upon the commencement of dissolution of the Company pursuant to Section 7.3,
the Manager shall wind up the business and affairs of the Company in an orderly
manner to the extent required to implement the distribution in kind and final
liquidation in accordance with Section 7.5. The management of the Company shall
continue to be governed by the provisions of Article VI while the Manager winds
up the Company.

(b) Pending any distributions pursuant to Section 7.5 and to the extent funds
are available therefor, the Manager shall take the following actions as soon as
practicable following the commencement of dissolution of the Company pursuant to
Section 7.3:

(i) Pay and discharge all of the Company’s debts and liabilities (but not
including any Financing encumbering a Project or Company Loans) to Persons
including Members (other than in respect of their Membership Interests) and the
expenses of liquidation;

(ii) Establish reasonable reserves (including any reserves that may be
necessary, as estimated by the Manager, in connection with any distribution in
kind pursuant to Section 7.5 below), subject to the reasonable approval of GRI,
Regency, and if the 20% Purchase has not been consummated, MCW LLC;

(iii) If not previously converted, convert any Company Loans to Additional
Capital Contributions pursuant to Section 3.2(e) hereof; and

(iv) Distribute the balance of any other cash to the Members in accordance with
the priorities set forth in Section 5.1(b) (and subject to Section 5.2 regarding
the repayment of Member Loans).

(c) Following the completion of the actions described in clause (b) above, the
Projects shall be distributed to the Members pursuant to the distribution in
kind process set forth in Section 7.5 below, unless all of the Members agree
otherwise in writing.

(d) Any distributions under this Article VII to Members upon liquidation
(whether in cash, cash equivalents, or in kind) shall be made by the end of the

 

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taxable year in which the liquidation of the Company occurs (or, if later,
within 90 days after the date of such liquidation).

(e) It is intended that the distributions set forth in this Section 7.4 comply
with the intention of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2) that
liquidating distributions be made in accordance with positive Capital Accounts.
However, if the distributions set forth in this Section 7.4 would not be the
same as distributions made in accordance with positive Capital Accounts, no
change in the amounts of distributions pursuant to this Section shall be made,
but rather, items of income, gain, loss, deduction and credit will be
reallocated among the Members so as to cause the balances in the Capital
Accounts to be in the amounts necessary so that, to the extent possible,
distributions set forth in this Section 7.4 shall be in accordance with positive
Capital Accounts.

Section 7.5 Distribution in Kind.

(a) General. Any Section 7.5 Election shall be made by Notification from the
electing Member to the other Members, and the date of the Section 7.5 Election
shall be the “Section 7.5 Election Date”. Distribution of any Projects in kind
to the Members shall be considered a distribution of an amount equal to the
Project’s Net Asset Value as of the Section 7.5 Closing Date for purposes of
Section 7.4 and Section 7.5. The amount distributable to each Member pursuant to
Section 7.5 shall be the amount that each Member would be entitled to receive on
the Section 7.5 Closing Date if the Projects were sold subject to the Financing
encumbering the Projects for Net Asset Value (based on the Fair Market Value of
the Project determined as of the Section 7.5 Election Date and the unpaid
balance of the principal sum of the loan secured by a mortgage or deed of trust
encumbering the Project determined as of the Section 7.5 Closing Date) in a
complete liquidation of the Projects pursuant to Section 7.4 and the net cash
proceeds were distributed to the Members pursuant to Section 5.1(b) hereof (and
subject to Section 5.2 regarding the repayment of Member Loans) on the
Section 7.5 Closing Date (the amount that would be so distributed to each Member
in connection therewith is such Member’s “Liquidation Amount”).

(b) Fair Market Value; Liquidation Amounts. In preparation for distributing the
Projects in kind to the Members on liquidation of the Company, the Fair Market
Value of the Projects as of the Section 7.5 Election Date shall be determined by
appraisals by a Qualified Appraiser (or Qualified Appraisers) in accordance with
Section 6.14. The Manager shall order such appraisals within ten (10) Business
Days after the Section 7.5 Election Date, and the Manager shall use commercially
reasonable efforts to cause such appraisals to be prepared as soon as
practicable thereafter. Within five (5) Business Days after all such appraisals
(and all requirements of Section 6.14) have been completed, the Members shall
mutually and reasonably agree on a date for the distribution of the Projects as
soon as practicable following such completion, which date shall be the first
Business Day of a calendar month (the “Section 7.5 Closing Date”). When the
Section 7.5 Closing Date has been established, the Manager shall exercise
commercially reasonable efforts to, within fifteen (15) Business Days
thereafter, prepare an initial estimate of the Liquidation Amount for each
Member and give a Notification to each Member setting forth in reasonable detail
the calculations of the estimates of the

 

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Liquidation Amounts. Unless GRI and Regency agree otherwise, the Manager shall,
at the expense of the Company, engage the Accountant to calculate and validate
the Liquidation Amounts.

(c) First Selection. Except as otherwise set forth in this Section 7.5(c),
(i) if the Section 7.5 Election was made by Regency and GRI pursuant to
Section 7.3(a), then as between Regency and GRI, the first to select which
Project shall be distributed to it shall be determined pursuant to Regency and
GRI’s written agreement regarding the Section 7.5 Election, (ii) if the
Section 7.5 Election was made pursuant to Section 7.3(b), then as between
Regency and GRI, the Member that made such Section 7.5 Election shall be the
first to select which Project shall be distributed to it and the other shall
follow, (iii) if the Section 7.5 Election was made pursuant to Section 7.3(c),
then as between Regency and GRI, the Member that is not the Defaulting Member
shall select the first Project for distribution to it and the Defaulting Member
shall follow, (iv) if the Section 7.5 Election was made pursuant to
Section 7.3(d), (x) if Regency’s Percentage Interest is greater than or equal to
forty percent (40%) as of the date the Members’ Liquidation Amounts are
determined pursuant to Section 7.5(a), then as between Regency and GRI, the
Member that did not elect to cause the dissolution shall select the first
Project for distribution to it and the other shall follow, or (y) if Regency’s
Percentage Interest is less than forty percent (40%) as of the date the Members’
Liquidation Amounts are determined pursuant to Section 7.5(a), then as between
Regency and GRI, the Member with the greater Percentage Interest shall select
the first Project for distribution to it and the other shall follow, and (v) if
the Section 7.5 Election was made by Regency pursuant to Section 7.3(e), then as
between Regency and GRI, GRI shall select the first Project for distribution to
it and Regency shall follow. If MCW LLC is part of the process, then MCW LLC
shall make the first selection, followed by GRI or Regency, as applicable,
pursuant to this Section 7.5(c).

(d) GRI to Regency Selection Ratio and Selection Order. Subject to the
provisions of this Section 7.5, GRI and Regency shall each select Projects in
accordance with the applicable GRI to Regency Selection Ratio and the Selection
Order pertaining thereto; provided, however, if MCW LLC is part of the process,
then MCW LLC shall select one (1) Project for each five (5) selected by GRI and
Regency collectively (and, with respect to any such process, GRI and Regency
shall alternate selections in accordance with the applicable GRI to Regency
Selection Ratio and the Selection Order pertaining thereto as between the two of
them with MCW LLC selecting one [1] Project for each five [5] Projects selected
by GRI and Regency collectively).

(e) Cross-Collateralized/Cross-Defaulted Financing. If a Member selects a
Project that is part of a pool of Projects subject to “cross-collateralized” or
“cross-defaulted” mortgage debt, then such Member shall automatically select all
Projects in such pool, and such Projects shall count towards such Member’s
selections for the current and subsequent rounds of selection until all Projects
in such pool have been counted. If, either (i) immediately following selection
of a Project in such a pool by another Member or (ii) pursuant to
Section 7.5(d), a Member is making consecutive selections in successive rounds
and intends to select one or more pools as part of those selections, such Member
must select the pool with the greatest number of Projects before selecting a
single Project or a pool with a lesser number of Projects during such
consecutive selections; provided,

 

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however, if a Member is making consecutive selections following the selection of
a pool by another Member, then such selecting Member may select single Projects
or multiple pools in any order if the total number of Projects selected does not
exceed the total number of Projects in the pool selected by the other Member.
Notwithstanding anything to the contrary or otherwise set forth in this
Section 7.5, (x) a Member may not select a pool of Projects subject to such
cross-collateralized or cross-defaulted mortgage debt if such selection would
cause such Member to exceed its Liquidation Amount by fifty percent (50%) or
more of the Net Asset Value of the Project in such pool with the lowest Net
Asset Value and (y) in no event may MCW LLC select any Project that is subject
to cross-collateralized or cross-defaulted mortgage debt during the first round
of selection.

(f) Completion of Selection. Examples of the selection process are set forth on
the attached Schedule 9. The Net Asset Value of each Project selected by a
Member shall be counted towards the distribution to such Member of its
Liquidation Amount. The selection process will be repeated until all Projects
have been selected, the Members agree to cease the selection process or, with
respect to any individual Member, until the aggregate Net Asset Value of all
Projects selected by that Member exceeds such Member’s Liquidation Amount. If a
Member, with its next selection, would exceed such Member’s Liquidation Amount,
and such excess amount represents less than fifty percent (50%) of the Net Asset
Value of the Project in question, then such Member will then make its last
selection, and that portion of the Net Asset Value of the selected Project that
exceeds such Member’s remaining Liquidation Amount shall be paid to the Company
by such Member in cash within thirty (30) days. If such excess amount represents
fifty percent (50%) or more of the Net Asset Value of the Project, such Member
may not make such selection.

(g) Capital Accounts. The Members’ respective Capital Accounts shall be charged
or credited, as the case may be, as if the Project had been sold for cash at
such Net Asset Value and the Profits or Losses recognized thereby had been
allocated to and among the Members in accordance with Section 4.2 as of the
Section 7.5 Closing Date.

(h) Distributions. Each Project shall be distributed subject to existing
Financing encumbering such Project. The closings for the distribution of
Projects shall be held on the Section 7.5 Closing Date after the completion of
the selection process. The Company or the applicable Project Level Entity, as
applicable, shall execute and deliver all documents that may be necessary or
appropriate and customary, in the reasonable opinion of counsel to the Member
receiving the distribution and as determined by a title company selected by the
receiving Member, to convey good, marketable and indefeasible fee simple title
to the applicable Project by special warranty deed (or the equivalent in the
applicable jurisdiction), free and clear of all liens and encumbrances (other
than (i) liens securing any Financing, (ii) liens for taxes not yet delinquent,
(iii) easements, documents evidencing existing Financing, rights-of-way,
covenants and restrictions which are customary and typical for properties
similar to the subject Project, (iv) those title matters affecting the Project
existing at the time the Project was acquired by the Company and disclosed on
the title insurance commitment issued to the Company at that time), and
(v) presently effective leases), together with all documents customarily
required in similar transactions or as reasonably required by the receiving
Member or the title company, including owner’s title

 

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policy and survey. When a Project is distributed to a Member the Property
Management Agreement shall be terminated with respect to such Project at no cost
or expense to the Company, any Project Level Entity or any Member. To the extent
required under the terms of the applicable Financing, the receiving Member shall
execute and deliver all documents reasonably required by the Company in
connection with the transfer of a Project subject to applicable Financing. All
items of income and expenses, charges, escrows, deposits and fees customarily
prorated and adjusted in similar transactions shall be so prorated and adjusted
as of the Section 7.5 Closing Date. In the event that accurate prorations and
adjustments cannot be made at such closing because current bills are not
obtainable, the Company and the receiving Member shall prorate on the best
available information, subject to adjustment upon receipt of the final bills. At
the election of the receiving Member, such Member may acquire all membership
interests in a Project Level Entity (or Project Level Entities) rather than
acquire fee simple title to a Project (or Projects). If a Member so elects, as
part of such membership interest acquisition, the Company, any applicable
Project Level Entities and any applicable Members shall execute, seal, swear to,
and deliver for and on its or their behalf, all documents that may be necessary
or appropriate, in the reasonable opinion of counsel to the receiving Member so
electing, to effect such transfer. The Company shall pay all closing costs
normally and customarily paid by a seller of a real property interest (or, if
applicable, a membership interest) in the area where the applicable Project is
located, and the receiving Member shall pay all closing costs normally and
customarily paid by a buyer of a real property interest (or, if applicable, a
membership interest); provided, however, that (x) the receiving Member and the
Company shall each pay the fees and expenses of its own legal counsel and (y) if
the process has been commenced following an Event of Default, then the
Defaulting Member shall pay all closing costs. If any Special Excess Base Amount
Distribution is payable to MCW LLC pursuant to Schedule 1-B in connection with
any distribution in kind under this Section 7.5, then such amount shall be paid
by the Company concurrently with such distribution in kind.

(i) Remaining Projects. Any remaining Projects shall immediately be marketed for
sale by the Company. The net proceeds from all such Sales shall be distributable
to the Members, as the remaining Members of the Company in the order set out in
Section 7.4(b). The Company shall undertake such further liquidation and
distributions pursuant to Section 7.4 so that total distributions equal the
amounts distributable to the Members pursuant to Section 7.4 and Section 7.5.
Unless GRI and Regency agree otherwise, the Company shall engage the Accountant
to calculate and validate the final amounts distributable to the Members.

(j) Consent Projects. Notwithstanding the provisions of Section 7.5(h) above, if
a Project selected by a Member is encumbered by Financing that does not permit
the distribution of the Project (or interests in the applicable Project Level
Entity) to such Member without the lender’s consent (any such Project, a
“Consent Project”), then any such Consent Project(s) and the liquidation and
distribution in kind process for them shall be subject to this Section 7.5(j).
If any Consent Projects are selected, the selecting Member, with the reasonable
cooperation of the Members and the Company, shall endeavor to obtain consent
from the lender to the distribution of each Consent Project (or the applicable
Project Level Entity) to the applicable Member(s). On the Section 7.5

 

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Closing Date, the Projects other than the Consent Projects shall be distributed
to the Members in accordance with the provisions of Section 7.5(h) and the Net
Asset Value of each Consent Project selected by a Member shall be counted
towards the distribution to such Member of its Liquidation Amount. Following
such initial distribution, the Company shall continue to own and operate the
Consent Projects subject to the provisions of this Agreement (including, without
limitation, this Section 7.5(j)) and the liquidation of the Company shall not be
completed until all Consent Projects have been distributed to the Members. If
any consent required for the distribution of a Consent Project is not obtained
within twelve (12) months following the Section 7.5 Closing Date, then the
Member that selected such Consent Project shall pay the applicable Financing in
full (including any applicable prepayment or defeasance costs) and the
applicable Consent Project shall be distributed to the applicable Member
concurrently therewith or immediately thereafter. For avoidance of doubt, if MCW
LLC selects a Consent Project, and the Financing encumbering such Consent
Project must be repaid following the expiration of the twelve (12) month period
described above, then MCW LLC shall so pay off such Financing notwithstanding
any limitations set forth in this Agreement with respect to the MCW LLC Required
Loan Paydown Amount. Notwithstanding anything to the contrary set forth in this
Agreement, during the period following the Section 7.5 Closing Date and prior to
the distribution of the Consent Projects to the selecting Member(s), the Company
shall account for the Consent Projects separately and maintain separate records
for the Consent Projects, the other Members shall have no obligation or
liability for Consent Projects selected by the other Member(s), and the Member
that selects a Consent Project: (i) shall have the right to make all decisions
regarding such Consent Project without the need for any consent or approval from
the other Members, (ii) shall be responsible for all costs and expenses incurred
in connection with such Consent Project accruing on or after the Section 7.5
Closing Date (including, without limitation, any liabilities, costs, penalties,
fees or charges under any Financing documents applicable to such Consent
Project) and (iii) shall be entitled to all benefits in connection with such
Consent Project (including, without limitation, all rents, profits and proceeds
thereof). Any Member that selects a Consent Project shall indemnify and hold
harmless the Company and the other Members from and against any costs or
expenses incurred in connection with such Consent Project.

Section 7.6 Right of First Offer.

(a) If any Member decides to offer a Project for sale to unrelated third parties
within one hundred twenty (120) days following the Section 7.5 Closing Date (or,
if applicable, the date a Consent Project is distributed to the selecting Member
pursuant to Section 7.5(j)), prior to soliciting any such offers such Member
(the “Selling Member”) shall give a Notification to the other Member(s) and give
such other Member(s) fifteen (15) days in which to make a written offer to
purchase the Project (the “Offer”) and the Selling Member shall not sell such
Project to any third party for a price equal to or less than the highest price
offered by the Member(s) (the highest offering Member, the “Buying Member”), for
such Project for 120 days after the date of the Offer (such 120 day period, the
“ROFO Period”) unless such Project is re-offered to the Buying Member pursuant
to this Section 7.6(a), but may sell such Project for more than such price at
any time after receipt of the Offer. If no Member delivers an Offer to the
Selling Member within such

 

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fifteen (15) day period, then each Member shall have waived its right of first
offer with respect to such Project and the Selling Member may sell such Project
to a third party at any price at any time without regard to this Section 7.6.
Following Selling Member’s receipt of the Offer, Selling Member may either
accept the Offer (if the Selling Member has not accepted the Offer in writing
within ten (10) days following the Selling Member’s receipt thereof, then the
Selling Member shall be deemed to have rejected the Offer) or, subject to the
requirements in this Section 7.6(a) sell the applicable Project to a third party
at terms as determined by the Selling Member in its sole discretion; provided,
however, during the ROFO Period if the sales price applicable to such third
party sale is equal to or less than the price set forth in the Offer, then the
Selling Member shall be obligated to re-offer the applicable Project to the
Buying Member at such equal or lower price. The Buying Member shall have ten
(10) days to accept such re-offer in writing. If the Buying Member fails to so
accept such re-offer during such ten (10) day period, then the Selling Member
may sell the subject Project at any price at any time.

(b) Unless otherwise set forth in the Offer (or, if applicable, a re-offer from
the Selling Member to the Buying Member), within five (5) Business Days after
the Selling Member’s acceptance of the Offer (or, if applicable following a
re-offer, the Buying Member’s acceptance of such re-offer), the Buying Member
shall deposit Earnest Money equal to five percent (5%) of the Offer price with
an independent and neutral party reasonably satisfactory to the Selling Member.
The Earnest Money shall be applied against the purchase price at the closing
referenced below, or shall be paid as liquidated damages in the event of default
by the Buying Member. If the Buying Member fails to deposit timely such Earnest
Money, then the Selling Member shall be free to sell the subject Project at any
price at any time without further reference to this Section 7.6.

(c) Unless otherwise set forth in the Offer (or, if applicable, a re-offer from
the Selling Member to the Buying Member), if the Selling Member accepts the
Offer (or, if applicable following a re-offer, if the Buying Member accepts a
re-offer from the Seller), the Buying Member shall pay (or cause its designee to
pay) to the Selling Member, at a closing to be held at the Selling Member’s
principal offices no later than sixty (60) days after the Selling Member’s
acceptance of the Offer (or, if applicable, the Buying Member’s acceptance of a
re-offer from the Selling Member), an amount equal to the price set forth in the
Offer. Simultaneously with the receipt of such payment, the Selling Member shall
execute and deliver all documents that may be necessary or appropriate and
customary, in the reasonable opinion of counsel to the Buying Member and as
determined by a title company selected by the Buying Member, to convey good,
marketable and indefeasible fee simple title to the Project, free and clear of
all liens and encumbrances (other than (i) liens securing any mortgage debt that
the Buying Member shall assume, (ii) liens for taxes not yet delinquent,
(iii) easements, rights-of-way, covenants and restrictions which are customary
and typical for properties similar to the subject Project, (iv) those title
matters affecting the Project existing at the time the Project was acquired by
the Selling Member and disclosed on the title insurance commitment issued to the
Selling Member at that time and (v) presently effective leases for such
Project), together with all documents customarily required in similar
transactions or as reasonably required by the Buying Member or the title
company, including owner’s title policy and survey. The Buying Member shall
execute and deliver all documents reasonably required by the Selling

 

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Member to evidence the Buying Member’s assumption of debt which the Buying
Member has agreed to assume. All items of income and expenses, charges, escrows,
deposits and fees customarily prorated and adjusted in similar transactions
shall be so prorated and adjusted. In the event that accurate prorations and
adjustments cannot be made at such closing because current bills are not
obtainable, the Selling Member and the Buying Member shall prorate on the best
available information, subject to adjustment upon receipt of the final bills. At
the election of the Buying Member, the Buying Member may acquire all membership
interests in a Project Level Entity (or Project Level Entities) rather than fee
simple title to a Project (or Projects). If the Buying Member so elects, as part
of such membership interest acquisition, the Company, any applicable Project
Level Entities and any applicable Members shall execute, seal, swear to, and
deliver for and on its or their behalf, all documents that may be necessary or
appropriate, in the reasonable opinion of counsel to the Buying Member so
electing, to effect such transfer. The Selling Member shall pay all closing
costs normally and customarily paid by a seller of a real property interest in
the area where the applicable Project is located, and the Buying Member shall
pay all closing costs normally and customarily paid by a buyer of a real
property interest; provided, however, that the Buying Member and the Selling
Member shall each pay the fees and expenses of its own legal counsel. In the
event of the Buying Member’s default of its obligation to purchase under this
Section 7.6(c), then the Selling Member shall be free to sell the subject
Project at any price at any time without further reference to this Section 7.6.

Section 7.7 Certificate of Cancellation. Upon the completion of the distribution
of Company assets as provided in this Article VII, the Company shall be
terminated and cancelled, and the Manager shall cause a Certificate of
Cancellation to be filed in the office of the Secretary of State of Delaware,
and shall take such other actions as may be necessary or appropriate to
terminate and wind up the Company.

ARTICLE VIII

BOOKS AND RECORDS, ACCOUNTING, REPORTS

Section 8.1 Books and Records. The Manager shall keep just and true books of
account with respect to the operations of the Company. The books and records
(including leases and other contracts) of the Company shall be maintained at the
principal office of the Company and such other locations as may be designated by
the Manager, and shall be available for examination and copying at all times by
the Members during ordinary business hours. The Members shall have the right to
inspect any Project at any time during ordinary business hours.

Section 8.2 Accounting Basis and Fiscal Year. The Company’s books and records
shall be closed and balanced at the end of each Fiscal Year. For financial
reporting purposes, the books and records of the Company shall be kept on the
accrual method of accounting and applied in a consistent manner in accordance
with generally accepted accounting principles in the United States. The accrual
method of accounting shall be used for both Company and tax accounting purposes.
The Fiscal Year of the Company shall be the 12-month period ending December 31.

 

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Section 8.3 Reports.

(a) The Manager shall have prepared and shall deliver to the Members within
three Business Days after the end of each month unaudited operating statements
for each of the Company’s Projects, and within 15 days after the end of each
month such additional information, including narrative information concerning
operations, as any Member may reasonably request.

(b) Within 45 days after the end of each Fiscal Quarter, the Manager shall have
prepared and shall deliver to the Members such quarterly reports as any Member
may reasonably request, which may include a balance sheet and operating
statements for each Project and for the Company, together with a written
analysis of operations of each of the Projects and a reasonably detailed
estimate of Net Operating Cash and a summary of all distributions during such
Fiscal Quarter, all of which shall be certified by the Manager, but which may be
unaudited. Such quarterly report shall be in a form acceptable to each of the
Members.

(c) The Manager shall prepare or cause to be prepared, at the expense of the
Company, all federal, state and local income tax returns required of the
Company. The Manager shall submit or cause the submission of such returns to GRI
and Regency in draft form for their review and approval which shall not be
unreasonably withheld, and after receiving such approval, shall file or cause
the filing of the tax returns and shall furnish or cause to be furnished to the
Members all necessary information concerning the Members’ distributive share of
the Company items shown on the Company’s tax returns to enable the Members to
prepare their federal, state and local income tax returns, with such information
for each Fiscal Year to be furnished to the Members by March 31 of the next
year. GRI and Regency shall provide all comments, and its approval and consent
to the filing of the returns subject to the implementation of their comments at
least five (5) days prior to the due date of the applicable return; otherwise,
the Members shall be deemed to have approved and consented to the filing of the
return submitted to GRI and Regency.

(d) Within 90 days after the end of each Fiscal Year, the Manager shall send to
the Members (i) the balance sheet of the Company and the Members’ Capital
Account balances as of the end of such year and statement of income (loss),
statement of Members’ equity and statement of cash flow of the Company for such
year, and (ii) a statement of Net Operating Cash and actual cash distributions
for such year, all of which, at either GRI’s or Regency’s request, shall be
audited by the Accountant at Company expense.

(e) The Manager shall provide to MCW LLC or any of its Affiliates promptly upon
MCW LLC’s request, any information as may be reasonably necessary to conform the
information provided pursuant to this Section 8.3 to the generally accepted
accounting principles prevalent in Australia.

(f) The Manager shall, within five (5) Business Days after the Manager receives
knowledge of the following matters, give (i) Notification to the Members of
(w) any default under any Financing or breach of or default under any other
material agreement

 

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of which the Company is a party, (x) nonpayment of property taxes with respect
to a Project, (y) any matter that will likely result in a loss greater than One
Hundred Thousand ($100,000) to the Company or (z) any Hazardous Materials
Contamination, and (ii) copies to the Members of any material notices given
under any Manager Agreement by (x) the Company or (y) the Manager or any
Affiliate of the Manager.

(g) Upon the written request of any Member, within forty-five (45) days after
the end of the third quarter of each calendar year, the Company shall provide to
the Members an estimate of the amount and nature of the Members’ respective
distributive shares of Company items of taxable income, gain, loss and deduction
realized or incurred by the Company during the first three quarters of such
calendar year, the amounts of ordinary income and capital gain and the amount of
earnings and profits (within the meaning of Section 312 of the Code)
attributable thereto. When providing this information, the Manager should also
inform the Members of any significant transactions that are contemplated to
occur during the fourth quarter of such Fiscal Year. The Company shall also
provide such information for the entire calendar year within twenty-five
(25) days after the close of such calendar year. In developing such information
and fulfilling its obligations hereunder, the Company shall retain its regular
nationally recognized accounting firm to review such information. In providing
such estimates, the Company shall also make available to the Members and their
respective tax advisors the supporting computations underlying such estimates.

(h) The Manager shall provide information to the Members on a quarterly basis
within twenty (20) days after the end of each quarter, or at such other times as
any Member may reasonably request, regarding the nature and amount of the
Company’s assets and gross income that is sufficient to permit such Member to
ascertain its compliance with the REIT income and asset tests and to comply with
the REIT recordkeeping requirements under the Code and the applicable
Regulations.

(i) During each Fiscal Year, the Manager agrees to give Notification to the
Members promptly after the Company first receives percentage rent under an
Anchor Lease or after the Manager has knowledge that the tenant under an Anchor
Lease has entered into a sublease or assignment for any space thereunder.

(j) Additionally, the Manager shall provide MCW LLC with information necessary
for MCW LLC and its Affiliates to comply with Australian securities laws upon a
reasonable request from MCW LLC.

Section 8.4 Independent Audit or Review.

(a) Upon the request of GRI or Regency, the Manager shall, at Company expense,
cause the Accountant to conduct an annual audit of the Company’s financial
statements in accordance with generally accepted accounting principles in the
United States, consistently applied. The Manager shall deliver a copy of any
such audit report and the accompanying financial statements and any other
documents prepared in connection therewith to the Members in accordance with
Section 8.3(d) hereof.

 

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(b) Any Member shall have the absolute right at any time to undertake an audit
review of the Company or its Projects, the fees payable hereunder to the Manager
(or its Affiliates) and the Manager’s (or its Affiliates’) compliance with the
provisions of this Agreement or any Manager Agreements (including, without
limitation, the Property Management Agreement or any replacement(s) thereof).
Such audit review may be undertaken directly by any Member or by third parties
engaged by any Member, including accountants, consultants and appraisers. The
Manager (or its Affiliate), as the case may be, shall cooperate fully with such
Member or any such third party in connection with such audit review. All
adjustments, payments and reimbursements to the fees payable hereunder to the
Manager or to the Manager (or its Affiliate) under the Property Management
Agreement (or any replacement(s) thereof) determined by such Member or its
representatives to be appropriate by such audit review shall be effected
promptly by the Manager; provided, however, that if the Manager (or its
Affiliate), as the case may be, disputes any of such adjustments, payments or
reimbursements, then the matters in dispute shall be submitted to a mutually
acceptable firm of nationally recognized independent certified public
accountants (other than the Accountant), who shall determine all such matters
and whose decision shall be binding. If the audit for any given annual period
discloses that aggregate adjustments, payments and reimbursements in favor of
the Company exceed either a percentage in excess of 3% of the total
distributions made to the Members in the year under audit or (with respect to
the Manager (or its Affiliates) fees only) in an adjustment in excess of 3% of
the fees payable to the Manager (or its Affiliates), as the case may be, the
cost of such audit shall be paid by the Manager (or its Affiliates), as the case
may be, out of its own funds. Otherwise, the cost of the audit shall be paid by
the Member who initiated the review from its own funds.

Section 8.5 Bank Accounts. The Manager shall be responsible for causing one or
more bank accounts of the Company to be maintained in an FDIC-insured bank (or
banks), which accounts shall be used for the payment of the expenditures
incurred in connection with the business of the Company. All deposits and funds
shall be swept daily to interest-bearing Company accounts approved by each of
the Members as part of the Company’s cash management system, subject to any
lock-box requirements imposed by lenders. All amounts in Company accounts shall
be and remain the property of the Company, and shall be received, held and
disbursed for the purposes specified in this Agreement.

ARTICLE IX

TRANSFER OF MEMBERSHIP INTERESTS

Section 9.1 General Restrictions. No Member may sell, assign, transfer, pledge
or otherwise encumber (for purposes of this Article IX, the foregoing may be
collectively referred to as a “Transfer”) any of its rights or interests in the
Company, including its Membership Interest and its interest in Company
allocations or distributions, except (i) to an Affiliate provided that the
Transferring Member shall remain liable for its obligations hereunder, (ii) in
connection with a merger, consolidation or other business combination in which
such Member is the surviving entity or (iii) in connection with a merger,
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partner or parent company and an unrelated third party in which the Member is
not the surviving entity (for example, a merger of Regency’s general partner
into an unrelated third party that also involves the merger of Regency into the
operating partnership of such unrelated third party). Notwithstanding anything
in this Article IX to the contrary, any direct or indirect Transfer of interests
in GRI and any direct or indirect Transfer of GRI’s Membership Interest in the
Company shall be permitted so long as CalPERS owns, directly or indirectly, more
than fifty percent (50%) of GRI or GRI’s Membership Interest in the Company, as
the case may be. Any attempted Transfer in violation of this Article IX shall be
void ab initio and shall constitute an Event of Default hereunder.

ARTICLE X

SALE OF PROJECTS

Section 10.1 Generally. Except as otherwise provided in this Agreement and in
Section 10.2, no Member shall have the independent right to market all or part
of any Project, retain brokers to market any Project, solicit offers from third
parties or accept any offer from a third party to purchase all or any part of a
Project. Each Member shall disclose the terms of any offers, solicited or
otherwise, to the other Members. Any brokerage commission and/or damages
incurred by the Company and/or another Member as a result a Member’s breach of
this Section 10.1 shall be paid solely by the breaching Member. If and only if
either (x) Regency does not purchase five percent (5%) of the Membership
Interests from MCW LLC (less Regency’s Dilution Percentage Interest, to the
extent not applied in connection with the MCW Interest Option) in connection
with the 20% Purchase prior to the expiration of the Regency Option Period (as
defined in the 20% Purchase Agreement) or (y) Regency does not purchase ten
percent (10%) of the Membership Interests from MCW LLC (less Regency’s Dilution
Percentage Interest, to the extent not applied in connection with the 20%
Purchase Agreement) pursuant to the MCW Interest Option prior to the expiration
of the Regency Option Period (as defined herein), then following the earlier to
occur of the foregoing (x) or (y), GRI shall have the right to cause Required
Property Sales in accordance with Sections 10.2 through 10.7 of this Agreement;
otherwise, the provisions of Sections 10.2 through 10.7 shall be inoperative.

Section 10.2 Required Property Sale. With respect to any Project or Projects,
subject to the provisions of Section 10.3 and Section 10.7 below, GRI, upon not
less than ten (10) Business Days’ prior Notification to Regency, acting on
behalf of the Company, may at any time in its sole discretion, (a) solicit
offers from unrelated arm’s length third parties and/or (b) accept an offer from
an unrelated arm’s length third party to purchase such Project(s), and/or
(c) offer such Project(s) for sale to an unrelated arm’s length third party, in
each case at such price and on such other terms as GRI shall consider
appropriate (the transaction contemplated by such a solicitation, acceptance or
offer being hereinafter referred to as a “Required Property Sale”), and
thereafter (d) consummate a Required Property Sale. GRI shall provide prompt and
regular advice to the other Members of the status and results of the proposed
sale. Each Member shall timely execute and deliver any and all documents and
take any other action necessary to consummate a Required Property Sale.

 

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Section 10.3 Right of First Offer.

(a) Prior to the first to occur of either (x) the solicitation of any unrelated
third party offers by GRI, (y) the acceptance of an unsolicited third party
offer by GRI or (z) the making of an offer as described in Section 10.2, GRI
shall give Regency and MCW LLC Notification (the “Offer Notice”) of its intent
to solicit unrelated third party offers or accept an unrelated arm’s length
third party offer together with a draft of a purchase and sale agreement
proposed for the transaction. Regency shall have thirty (30) days from the date
of its receipt of the Offer Notice (the “Offer Period”) to make an offer to
purchase the applicable Project (the “Purchase Offer”) by delivery of the terms
of such offer to GRI and MCW LLC. GRI shall not solicit or negotiate any
unrelated third party offers with respect to the applicable Project[s] with a
party other than Regency or its designee(s) during the Offer Period and the
first thirty [30] days of the negotiation of the ROFO Purchase and Sale
Agreement if the Purchase Offer is accepted by GRI. If GRI elects to accept the
Purchase Offer from Regency, GRI shall give a Notification to Regency and MCW
LLC following GRI’s receipt of the Purchase Offer and Regency and GRI shall meet
within ten (10) days thereafter to negotiate in good faith the terms of a
purchase and sale agreement based on the draft provided in the Offer Notice (the
“ROFO Purchase and Sale Agreement”). If GRI fails to provide such Notification
to Regency and MCW LLC within five (5) Business Days following GRI’s receipt of
the Purchase Offer, then GRI shall be deemed to have rejected the Purchase
Offer. GRI may also reject the Purchase Offer by Notification to Regency and MCW
LLC. If GRI elects to accept the Purchase Offer, and Regency and GRI agree upon
the terms of a ROFO Purchase and Sale Agreement within thirty (30) days of the
acceptance of the Purchase Offer, the sale of the applicable Project will be
consummated pursuant to the ROFO Purchase and Sale Agreement. If Regency fails
to deliver a Purchase Offer within thirty (30) days of the Offer Notice, if GRI
rejects (or is deemed to have rejected) a Purchase Offer pursuant to the
provisions hereof, or if Regency and GRI, despite using commercially reasonable
efforts, are unable to agree on the terms of a ROFO Purchase and Sale Agreement
within thirty (30) days of an accepted Purchase Offer, then, subject to the
rights of MCW LLC under Section 10.3(b) below, GRI may cause the Company to sell
the applicable Project upon such terms as determined by GRI in its sole
discretion. The Manager shall manage and coordinate such sales process on behalf
of the Company at GRI’s direction, and GRI shall have sole authority with
respect to all decisions in connection therewith (including, without limitation,
all terms of such sale and the selection of the broker(s); provided that the
selection of any broker shall be subject to Regency’s reasonable approval).
Notwithstanding the foregoing, if the sales price for such Project is less than
the price set forth in the Purchase Offer, GRI shall be obligated to re-offer
the applicable Project to Regency and MCW LLC at such lower price. Regency may
accept such re-offer at such lower price by Notification to GRI and MCW LLC
delivered within ten (10) Business Days of receipt of GRI’s re-offer
Notification. If GRI receives such Notification from Regency within such ten
(10) Business Day period, then Regency and GRI shall proceed to negotiate the
terms of a ROFO Purchase and Sale Agreement (and the period of time for Regency
and GRI to agree upon the terms of a ROFO Purchase and Sale Agreement shall be
ten (10) days from Regency’s acceptance of such re-offer). If Regency fails to
accept such re-offer within the ten (10) Business Day period described above, or
if Regency and GRI, despite using commercially reasonable efforts, are unable to
agree on the terms of a

 

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ROFO Purchase and Sale Agreement within ten (10) days of Regency’s acceptance of
such re-offer, then, subject to the rights of MCW LLC under Section 10.3(b)
below, GRI may cause the Company to sell the applicable Project upon such terms
as determined by GRI in its sole discretion (subject to a continuing obligation
to re-offer the applicable Project to Regency if the sales price for such
Project is less than the re-offered price that was accepted by Regency).

(b) If either (i) Regency does not deliver a Purchase Offer to GRI and MCW LLC
with respect to a Project during the applicable Offer Period or re-offer period
pursuant to Section 10.3(a) above, (ii) GRI rejects (or is deemed to have
rejected) a Purchase Offer pursuant to Section 10.3(a) above, or (iii) Regency
and GRI do not consummate the sale of the applicable Project pursuant to a ROFO
Purchase and Sale Agreement after GRI accepts a Purchase Offer, then in any such
event, MCW LLC may submit a Purchase Offer to GRI within one (1) Business Day
immediately following, as applicable, the expiration of such Offer Period or
re-offer period, Notification from GRI of rejection of a Purchase Offer or the
deemed rejection of a Purchase Offer pursuant to Section 10.3(a) above, or
Notification from GRI to MCW LLC of failure to consummate a sale pursuant to a
ROFO Purchase and Sale Agreement. If GRI elects to accept any such Purchase
Offer from MCW LLC, then MCW LLC shall have the same rights that Regency would
have had under Section 10.3(a) above with respect to the applicable Project if
GRI had accepted a Purchase Offer from Regency. If either (x) GRI does not
receive a Purchase Offer with respect to such Project from MCW LLC within one
(1) Business Day immediately following the expiration of the applicable Offer
Period or (y) GRI does not elect to accept such a Purchase Offer from MCW LLC,
then GRI may cause the Company to sell the applicable Project upon such terms as
determined by GRI in its sole discretion and, MCW LLC thereafter shall have no
right of first offer, right of first refusal or other preemptive right with
respect to such Project. If Regency delivers a Purchase Offer during the
applicable Offer Period for a Project and the sale is consummated pursuant to a
ROFO Purchase and Sale Agreement, then MCW shall have no further rights under
this Article X with respect to such Project.

Section 10.4 Restricted Projects. The process set forth in Section 10.3 shall be
modified as set forth in this Section 10.4 with respect to Restricted Projects.
An Offer Notice for any Restricted Project(s) shall provide that a Purchase
Offer for such Restricted Project(s) must be delivered by Regency to GRI within
eleven (11) months following Regency’s receipt of such Offer Notice (or such
earlier date determined by Regency); provided that if Regency submits a Purchase
Offer at any time, then the process for any such Restricted Project(s) shall be
governed by Section 10.3 and the provisions of this Section 10.4 shall not be
applicable with respect to such Restricted Project(s). Unless Regency provides a
Purchase Offer or other Notification to GRI to the contrary, the closing of the
sale of a Restricted Project cannot be consummated prior to the date that is
fifteen (15) months following Regency’s receipt of the Offer Notice for such
Restricted Project.

Section 10.5 Commissions to Members. Notwithstanding anything contained in this
Agreement to the contrary, no Member or any Affiliate of a Member shall be
entitled to a broker’s fee, commission or other compensation as the result of
any Required Property

 

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Sale pursuant to Section 10.2 above or a sale consummated in accordance with
Section 10.3 above.

Section 10.6 Specific Performance. GRI may, in addition to its other remedies,
enforce its rights under this Article X by a suit for specific performance.

Section 10.7 Limitations. Notwithstanding anything to the contrary set forth in
this Article X, (x) the aggregate purchase prices for all Projects sold pursuant
to this Article X may not exceed One Hundred Fifty Million Dollars
($150,000,000.00) during any twelve (12) month period and (y) a New Project may
not be sold pursuant to this Article X until after the date that is two
(2) years following the acquisition thereof by a Project Level Entity.

ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.1 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware applicable to agreements to be
performed solely within the State of Delaware.

Section 11.2 Attorneys’ Fees. Should any litigation be commenced between the
parties hereto or their representatives or should any party institute any
proceeding in a bankruptcy or similar court that has jurisdiction over any other
party hereto or any or all of such party’s or parties’ property or assets
concerning any provision of this Agreement or the rights and duties of any
person or entity in relation thereto, the prevailing party shall be entitled to
the payment of its own attorneys’ fees and court costs from the losing party.

Section 11.3 No Partition. No Member shall have the right to partition any of
the Company’s Projects or interests in any Project nor shall a Member make
application to any court or authority to commence or prosecute any action or
proceeding for a partition thereof, and upon any breach of the provisions of
this Section 11.3 by a Member, the other Members shall be entitled to a decree
or order restraining or enjoining such application, actions, or proceedings in
addition to all other rights and remedies afforded by law or equity.

Section 11.4 Binding Provisions. The covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, the successors and permitted
assigns of the respective parties hereto. No other Person shall have any rights
or remedies hereunder.

Section 11.5 Complete Agreement: Amendment. This Agreement, together with each
of the exhibits which are incorporated as if expressly set forth herein, the
Property Management Agreement, and any agreements entered into in connection
with the acquisition or divestiture of Projects, constitutes the entire
agreement between the parties

 

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and supersedes all agreements, representations, warranties, statements, promises
and understandings, whether oral or written, with respect to the subject matter
hereof, and neither party hereto shall be bound by nor charged with any oral or
written agreements, representations, warranties, statements, promises or
understandings not specifically set forth in this Agreement or the exhibits
hereto. This Agreement may not be amended, altered or modified except by a
writing signed by all the Members.

Section 11.6 Confidentiality and Nondisclosure. All confidential information
which shall have been furnished or disclosed by the Company or a Member to any
other Member pursuant to this Agreement or the negotiations leading to this
Agreement that has been furnished prior to the execution of this Agreement or is
hereafter furnished, and is identified in writing as confidential shall be held
in confidence and shall not be disclosed to any Person other than their
respective Affiliates, employees, directors, legal counsel, accountants or
financial advisers with a need to have access to such information, except as
reasonably necessary to comply with any disclosure obligations under any
foreign, federal or state securities laws or the rules of any securities
exchange on which the shares of a Member or one of its Affiliates are listed or
as otherwise required by law. The obligations of this Section do not apply to
information that (a) is or becomes part of the public domain, (b) is disclosed
by the disclosing party to third parties without restrictions on disclosure or
(c) is received by the receiving party from a third party without breach of a
nondisclosure obligation.

Section 11.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which together shall
constitute one agreement binding on all parties hereto, notwithstanding that all
the parties may not have signed the same counterpart.

Section 11.8 Fees and Commissions. Except as may be separately disclosed in
writing to the other Member, each Member hereby represents and warrants that, as
of the date of this Agreement there are no known claims for brokerage or other
commissions or finder’s or other similar fees in connection with the
transactions covered by the Original Agreement or this Agreement insofar as such
claims shall be based on actions, arrangements or agreements taken or made by or
on such Member’s behalf, and each Member hereby agrees to indemnify and hold
harmless the other Members from and against any liabilities, costs, damages and
expenses from any party making any such claims through such Member.

Section 11.9 Execution of Other Documents. Each party hereto agrees to do all
acts and things and to make, execute and deliver such written instruments, as
shall from time to time be reasonably required to carry out the terms and
provisions of this Agreement.

Section 11.10 Severability. Each provision of this Agreement shall be considered
separable and if for any reason any provision or provisions hereof are
determined to be illegal or invalid and contrary to any existing or future law,
such illegality or invalidity

 

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shall not impair the operation of, or affect, those portions of this Agreement
which are legal and valid.

Section 11.11 Survival of Indemnity Obligations. Except as expressly limited in
this Agreement, any and all indemnity obligations of any party hereto shall
survive any termination of the Company or a Member’s interest therein.

Section 11.12 Waiver. No consent or waiver, express or implied, by a Member to
or of any breach or default by any other Member in the performance by such other
Member of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such Member
of the same or any other obligations of such other Member hereunder. Failure on
the part of a Member to complain of any act or failure to act of any other
Member or to declare such other Member in default, irrespective of how long such
failure continues, shall not constitute a waiver by such Member of its rights
hereunder. The giving of consent by a Member in any one instance shall not limit
or waive the necessity to obtain such Member’s consent in any future instance. A
matter that is neither approved nor disapproved within the time period set forth
herein for such approval or disapproval to be given shall be deemed disapproved
by the non-responding party.

Section 11.13 Terminology. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; and the singular shall include the plural and vice versa. Titles of
Articles and Sections are for convenience only, and neither limit nor amplify
the provisions of this Agreement itself. The use herein of the word “including,”
when following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation,” or “but not limited to,” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter. If any
deadline falls on a day that is not a Business Day, the deadline shall be the
first Business Day thereafter.

Section 11.14 Equitable Remedies. Any Member hereto shall, in addition to all
other rights provided herein or as may be provided by law, and subject to the
limitations set forth herein, be entitled to all equitable remedies, including
those of specific performance and injunction, to enforce such Member’s rights
hereunder.

Section 11.15 Remedies Cumulative. Each right, power, and remedy provided for
herein or now or hereafter existing at law, in equity, by statute, or otherwise
shall be cumulative and concurrent and shall be in addition to every other
right, power, or remedy provided for herein or now or hereafter existing at law,
in equity, by statute, or otherwise, and the exercise or beginning of the
exercise or the forbearance of exercise by any party of any one or more of such
rights, powers, or remedies shall not preclude the simultaneous or later
exercise by such party of any or all of such other rights, powers, or remedies.

 

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Section 11.16 Press Relations. Except as required by law or the rules of any
securities exchange on which the shares of a Member or any of its Affiliates are
listed, no Member shall make any public announcements with respect to this
Agreement or the Company or its business without the Consent of the other
Members.

Section 11.17 Notices. Notification shall be sent as follows:

If to Regency:

Regency Centers, L.P.

One Independent Drive, Suite 114

Jacksonville, Florida 32202

Attention: Lisa Palmer and Michael Mas

E-mail: LPalmer@regencycenters.com and MMas@regencycenters.com

Facsimile: (904) 356-8214

If to MCW LLC:

Macquarie CountryWide (US) No. 2 LLC

c/o Macquarie CountryWide Management Limited

Level 11, No. 1 Martin Place

Sydney NSW 2000

Australia

Attention: Steven Sewell

E-mail: steven.sewell@macquarie.com

Facsimile: +61-2-8232-6510

If to GRI:

Global Retail Investors, LLC

c/o First Washington Realty, Inc.

4350 East-West Highway, Suite 400

Bethesda, Maryland 20814

Attention: William J. Wolfe

E-mail: bwolfe@firstwash.com

Facsimile: (301) 907-4911

with a copy to:

Global Retail Investors, LLC

c/o First Washington Realty, Inc.

4350 East-West Highway, Suite 400

Bethesda, Maryland 20814

Attention: Jeffrey S. Distenfeld

E-mail: jdistenfeld@firstwash.com

Facsimile: (301) 907-4911

 

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Section 11.18 Construction. This Agreement has been negotiated at arm’s length
and between persons sophisticated and knowledgeable in the matters dealt with in
this Agreement. In addition, each party has been represented by experienced and
knowledgeable legal counsel. Accordingly, any rule of law or legal decision that
would require interpretation of any ambiguities in this Agreement against either
party is not applicable and is waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the purpose of the parties.

Section 11.19 No Article 8 Opt-In. Each of the Members and the Manager, on
behalf of the Company, hereby agrees (i) not to cause the Company to take any
action to cause any Membership Interests to be or become a “security” within the
meaning of, or to be governed by, Article 8 (Investment Securities) of the
Uniform Commercial Code as in effect under the laws of any state having
jurisdiction and (ii) not to cause the Company to “opt in” or to take any other
action seeking to establish any Membership Interest as a “security” and not to
cause the Company to certificate any Membership Interest.

Section 11.20 Marketing of Certain Projects. Regency and GRI agree to use
commercially reasonable efforts to sell the Projects listed on the attached
Schedule 10 over the three (3) year period following the date hereof. The first
three (3) Projects listed on the attached Schedule 10 shall be marketed for sale
within sixty (60) to ninety (90) days of the date hereof, and the remaining
Projects listed on the attached Schedule 10 shall be marketed for sale after the
closing of the 20% Purchase over the balance of such three (3) year period. If
any of the Projects listed on the attached Schedule 10 have not been sold by the
end of such three (3) year period, then Regency and GRI agree to use
commercially reasonable efforts to sell those Projects thereafter.

ARTICLE XII

MCW INTEREST OPTION

Section 12.1 Generally. Regency shall have the option (the “MCW Interest
Option”) to purchase up to a 10% Membership Interest in the Company held by MCW
LLC, meaning: (x) the entirety of MCW LLC’s Membership Interest if and after the
20% Purchase has been completely consummated or (y) a 10% Membership Interest
(less Regency’s Dilution Percentage, to the extent not applied pursuant to the
20% Purchase Agreement), if and so long as the 20% Purchase has not been
completely consummated. The MCW Interest Option shall be in effect under this
Article XII from the date hereof through the date that is twenty one (21) months
thereafter, that is, starting on the date hereof, July 31, 2009, and ending on
April 30, 2011 (the “Regency Option Period”). Regency may exercise the MCW
Interest Option by giving a Notification of exercise to MCW LLC, and giving a
copy of that Notification to GRI, at least ten (10) Business Days before the end
of the Regency Option Period, which shall specify the portion of MCW LLC’s
Membership Interest to be purchased by Regency. So long as GRI has consummated
the 20% Purchase, GRI shall have the option to purchase any portion of MCW LLC’s
Membership Interest that is not so purchased by Regency from the expiration

 

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of the Regency Option Period through the date that is three (3) months
thereafter, that is, starting on May 1, 2011 and ending on July 31, 2011 (the
“GRI Option Period”). GRI may exercise such option by giving a Notification of
exercise of such option to MCW LLC, and giving a copy of that Notification to
Regency, at least ten (10) Business Days before the end of the GRI Option
Period, which shall specify the portion of MCW LLC’s Membership Interest to be
purchased by GRI.

Section 12.2 Price. The purchase price payable by Regency for any Membership
Interest purchased under this Article XII shall be as set forth in a separate
agreement between MCW LLC and Regency. The purchase price payable by GRI for any
Membership Interest purchased under this Article XII shall be computed in a
manner consistent with the 20% Purchase, adjusted to reflect the actual
Membership Interest being acquired. If a Manager Removal has occurred under
which Regency has been removed as the Manager, the purchase price so payable by
GRI shall increase by the amount of (x) the Percentage Interest being acquired
by GRI multiplied by (y) Twenty Million Dollars ($20,000,000).

Section 12.3 Closing. The closing of the purchase of the MCW Interest Option(s)
shall occur on a date designated by Regency or GRI, as the case may be, in the
Notification to MCW LLC, which date shall be at least ten (10) Business Days
following MCW LLC’s receipt of such Notification, but any such closing(s) shall
occur within the Regency Option Period or the GRI Option Period, as applicable.
MCW LLC’s transfer of any Membership Interest purchased under this Article XII
shall be made in accordance with a purchase and sale agreement in the form of
the 20% Purchase Agreement (subject to reasonable revision to reflect the terms
of this Article XII). Prior to the closing of any such transfer, the applicable
Members shall enter into such a purchase and sale agreement in such form
modified to reflect the actual Membership Interest being transferred and the
parties thereto shall consummate the transaction in accordance with its terms.
If any Special Excess Base Amount Distribution is payable to MCW LLC pursuant to
Schedule 1-B at any closing of the MCW Interest Option, then such amount shall
be paid by the Company concurrently with such closing. If GRI purchases any
Membership Interest from MCW LLC under this Article XII, then concurrently with
the closing of such purchase GRI shall pay to Regency an amount equal to the
Percentage Interest being acquired by GRI multiplied by the sum of (x) all
amounts paid by the Company with respect to redevelopment costs and expenses of
Brea Marketplace (as such term is defined in the Purchase Agreement) which
accrued during the period beginning June 1, 2009 and ending on the Calculation
Date (as such term is defined in the Purchase Agreement) under the Purchase
Agreement plus (y) the difference calculated pursuant to the Brea Reconciliation
Calculation (as such term is defined in the Purchase Agreement) under
Section 2.2(c)(i) of the Purchase Agreement.

Section 12.4 Deliveries. As part of the exercise of the MCW Interest Option by
Regency or GRI, all of the Members shall execute, seal, swear to, and deliver
for and on its or their behalf, all documents that may be necessary or
appropriate, in the reasonable opinion of counsel to MCW LLC and Regency or GRI,
as the case may be, to effect the acquisition of the applicable portion of MCW
LLC’s Membership Interest and transfer the

 

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applicable portion of MCW LLC’s Membership Interest free and clear of all liens
and encumbrances, including, but not limited to, an assignment of the applicable
portion of MCW LLC’s Membership Interest and, if applicable, a withdrawal by MCW
LLC as a Member of the Company, each in a form reasonably acceptable to Regency
and/or GRI, as the case may be. MCW LLC shall pay any transfer taxes or similar
charges payable in connection with the MCW Interest Option. If any amounts are
outstanding from MCW LLC under any Member Loan at any closing of the MCW
Interest Option, such amounts shall be repaid to the Member that made such
Member Loan to MCW LLC out of any proceeds that would otherwise be payable to
MCW LLC in connection with such closing.

Section 12.5 Distribution in Kind for Failure to Exercise MCW LLC Interest
Option. If either (x) following the expiration of the GRI Option Period any
portion of MCW LLC’s Membership Interest has not been acquired by Regency or GRI
or (y) GRI defaults in its obligation to consummate the 20% Purchase pursuant to
the 20% Purchase Agreement (either of the foregoing (x) or (y), a “MCW Trigger
Event”), then MCW LLC may elect, by Notification to the other Members given
within thirty (30) days following the expiration of the GRI Option Period, for
the Company and MCW LLC to engage in a distribution in kind procedure pursuant
to the terms and provisions set forth in Section 7.5 above, modified as follows:
(i) the date for determining the Fair Market Value of the Projects shall be the
date of the Section 12.5 Election, (ii) the process shall be between the
Company, on the one hand, and MCW LLC, on the other, rather than between the
Members, (iii) MCW LLC shall select first (but MCW LLC may not select a Project
that is subject to cross-collateralized or cross-defaulted Financing in a pool
with any other Project during the first round of selection) and the Company
shall follow (and the Company’s selections shall be reasonably determined by
Regency and GRI, provided that if Regency and GRI disagree, then with respect to
any such disputed selections, GRI and Regency shall alternate making such
disputed selections on behalf of the Company, with the Member with the larger
Percentage Interest making the first such selection), (iv) MCW LLC shall select
one (1) Project for each five (5) Projects selected by the Company, (v) the
process shall continue until MCW LLC, with its next selection, would exceed MCW
LLC’s Liquidation Amount (which, for avoidance of doubt, shall be based on MCW
LLC’s Membership Interest at such time), (vi) Projects selected by the Company
shall remain assets of the Company and Projects selected by MCW LLC shall be
distributed to MCW LLC in accordance with Section 7.5, (vii) Projects
distributed to MCW LLC shall be subject to a right of first offer in favor of
the Company in accordance with Section 7.6 and (viii) if MCW LLC selects any
Consent Projects, then such Consent Projects shall be subject to Section 7.5(j)
and MCW LLC shall remain a Member until either requisite consent is obtained
from the applicable lender(s) or any applicable Financing is paid off pursuant
to Section 7.5(j). If MCW LLC does not make such election within the thirty
(30) day period described above, then either GRI or Regency may elect, by
Notification to the other Members given within thirty (30) days following the
expiration of such initial thirty (30) day period, to commence the procedure
described in this Section 12.5. Any election by MCW LLC, Regency or GRI, as
applicable, to commence the distribution in kind process set forth in this
Section 12.5 shall be referred to as a “Section 12.5 Election”. If any Special
Excess Base Amount Distribution is payable to MCW LLC pursuant to

 

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Schedule 1-B in connection with any distribution in kind under this
Section 12.5, then such amount shall be paid by the Company concurrently with
such distribution in kind.

Section 12.6 Distribution in Kind Pursuant to Section 7.5. Notwithstanding the
provisions of Section 12.1, following a Section 7.5 Election, if Regency desires
to exercise the MCW Interest Option, then Regency must do so by giving
Notification of exercise to MCW LLC and GRI within ten (10) Business Days
following the Section 7.5 Election Date, which shall specify the portion of MCW
LLC’s Membership Interest to be purchased by Regency. If Regency does not elect
to purchase all of MCW LLC’s Membership Interest and if GRI desires to exercise
the MCW Interest Option, then GRI must do so by giving Notification of exercise
to MCW LLC and Regency within twenty (20) Business Days following the
Section 7.5 Election Date, which shall specify the portion of MCW LLC’s
Membership Interest to be purchased by GRI. Any closing(s) of the MCW Interest
Option by Regency or GRI shall occur as soon as practicable following Regency’s
and GRI’s respective election periods, but in no event less than five
(5) Business Days prior to the calculation of the Members’ Liquidation Amounts
pursuant to Section 7.5(b). Notwithstanding the provisions of Section 12.5, if a
MCW Trigger Event occurs following a Section 7.5 Election, then MCW LLC shall
participate in the distribution in kind process set forth in Section 7.5 with
GRI and Regency rather than the process set forth in Section 12.5.

[The remainder of this page is intentionally left blank; signature page
follows.]

 

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

 

REGENCY CENTERS, L.P., a Delaware limited partnership By:   Regency Centers
Corporation, a Florida corporation, its general partner   By:   /s/ Michael J.
Mas     Name: Michael J. Mas     Its: Vice President-Joint Ventures

 

MACQUARIE COUNTRYWIDE (US) NO. 2 LLC, a Delaware limited liability company By:  
Macquarie-Regency Management, LLC, a Delaware limited liability company, its
manager   By:   Regency Centers, L.P., a Delaware limited partnership, its
managing member     By:   Regency Centers Corporation, a Florida corporation,
its general partner       By:   /s/ Michael J. Mas         Name: Michael J. Mas
        Its: Vice President By:   Macquarie Countrywide (US) No. 2 Corporation,
a Maryland corporation, its sole member     By:   /s/ Paul Sorensen       Name:
Paul Sorensen       Its: President     By:   /s/ Mark Mullen       Name: Mark
Mullen       Its: Vice President

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GLOBAL RETAIL INVESTORS, LLC, a Delaware limited liability company By:   First
Washington Realty, Inc., its manager   By:   /s/ William J. Wolfe     Name:
William J. Wolfe     Its: President

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SCHEDULE 1-A

GRI Base Amount

First, for each Fiscal Quarter multiply the aggregate Fair Market Value of the
Projects by the Percentage Interest of GRI (such product shall be referred to as
the “GRI FMV”). If a Project is sold during any Fiscal Quarter then Fair Market
Value shall be reduced by the sales price and if a Project is acquired during
any Fiscal Quarter then Fair Market Value shall be increased by the purchase
price, in either event pro rated for the number of days such Project is owned by
the Company or its subsidiaries during such Fiscal Quarter. Notwithstanding the
foregoing, prior to the preparation of appraisals for the Projects determined as
of December 31, 2009 pursuant to Section 6.14(a) hereof, the aggregate Agreed
Value of the Projects shall be used for such calculation rather than the
aggregate Fair Market Value of the Projects.

Second, the “GRI Base Amount Rate” shall equal ten (10) basis points (0.1%) per
annum.

Third, the GRI Base Amount for each Fiscal Quarter is equal to the GRI FMV as
calculated above multiplied by the GRI Base Amount Rate multiplied by the
proportion that the number of days in the Fiscal Quarter bears to three hundred
sixty five (365) (pro-rated as applicable with respect to any partial Fiscal
Quarter).

The GRI Base Amount is payable in installments in arrears at the end of each
Fiscal Quarter in U.S. dollars.

If any portion of the GRI Base Amount for a quarter is not distributed when
payable, such unpaid but payable amount shall accumulate and shall be payable in
accordance with Section 5.1(a)(ii) whenever Net Operating Cash is available
therefor.

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

SCHEDULE 1-B

MCW LLC Base Amount

First, multiply the aggregate Agreed Value of the Projects held by the Company
at the end of the Half Year by the Percentage Interest actually held by MCW LLC
at the end of the Half Year (without any weighted adjustment for changes in MCW
LLC’s Percentage Interest during the Half Year as contemplated in the final
sentence of the definition of “Percentage Interest”) (such product shall be
referred to as the “MCW LLC Value”).

Second, the “MCW LLC Base Amount Rate” shall equal forty (40) basis points
(0.4%) per annum.

Third, the MCW LLC Base Amount for each Half Year is equal to the MCW LLC Value
at the end of the Half Year multiplied by the MCW LLC Base Amount Rate
multiplied by the proportion that the number of days in the Half Year bears to
365 (each such period pro-rated as applicable with respect to the Half Year
ending December 31, 2009).

The MCW LLC Base Amount is payable in installments at the end of each Fiscal
Quarter in U.S. dollars. Payments in respect of the Fiscal Quarters ending
March 31 and September 30 will be calculated as the MCW LLC Value at the end of
the previous Half Year (December 31 and June 30, respectively) multiplied by the
MCW LLC Base Amount Rate multiplied by the proportion that the number of days in
the Fiscal Quarter bears to 365 (each such period pro-rated as applicable with
respect to the Fiscal Quarter ending September 30, 2009) and will represent part
payment on account for the MCW LLC Base Amount for the Half Year in which the
end of that Fiscal Quarter ends.

In the event that payments in respect of the Fiscal Quarters ending March 31 and
September 30 exceed the MCW LLC Base Amount for the Half Year in which the end
of that Fiscal Quarter ends (such excess amount, the “Excess MCW LLC Base
Amount”), then provided that MCW LLC is a Member at the time the Company makes
distributions for the month following the end of such Half Year (i) there shall
be no distribution of MCW LLC Base Amount to Regency for the month following the
end of the Half Year under Section 5.1(a)(ii) and (ii) Regency’s distribution
under Section 5.1(a)(i) shall be reduced, and MCW LLC’s distribution under
Section 5.1(a)(iv) shall be increased, by an amount equal to the Excess MCW LLC
Base Amount for the month following the end of such Half Year.

It is agreed and acknowledged that there shall be no MCW LLC Base Amount payable
with respect to the Half Year in which either (a) MCW LLC Transfers the
remainder of its outstanding Membership Interests whether pursuant to this
Agreement or the 20% Purchase Agreement or (b) a distribution in kind occurs
pursuant to Section 7.5 or Section 12.5 of this Agreement that results in MCW
LLC no longer being a Member of the Company. If such Transfer or distribution in
kind occurs during the Fiscal Quarters ending either June 30 or December 31,
then it is agreed and acknowledged that any payments made in respect of the
immediately preceding Fiscal Quarter shall constitute Excess MCW

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

LLC Base Amount. Concurrently with such Transfer or distribution in kind,
(i) Regency shall return to the Company an amount equal to the Excess MCW LLC
Base Amount (without credit to the Capital Account of Regency) and (ii) the
Company, to the extent it has actually received the amounts due from Regency
pursuant to the foregoing clause (i), shall make a special distribution to MCW
LLC equal to the Excess MCW LLC Base Amount (the “Special Excess Base Amount
Distribution”).

If any portion of the MCW LLC Base Amount for a Half Year is not distributed
when payable, such unpaid but payable amount shall accumulate and shall be
payable in accordance with Section 5.1(a)(ii) whenever Net Operating Cash is
available therefor.

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

SCHEDULE 2

Appraisal Policy

All appraisals shall be prepared by a Qualified Appraiser, employing a
professional who is a member of the Appraisal Institute with the MAI
designation, in compliance with the Uniform Standards of Professional Appraisal
Practice of the Appraisal Foundation and the Code of Professional Ethics and
Standards of Professional Practice of the Appraisal Institute.

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

SCHEDULE 3

Deleveraging Schedule

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

SCHEDULE 4

GRI to Regency Selection Ratio and Selection Order

 

Ratio Determination Amount:    1.25 or less    Greater than 1.25 through 1.75   
Greater than 1.75 through 2.25    Greater than 2.25 through 2.75    2.75 or
greater GRI to Regency Selection Ratio:    1:1    3:2    2:1    5:2    3:1     
                    Selection Order:    If GRI selects First    If Regency
selects First    If GRI selects First    If Regency selects First    If GRI
selects First    If Regency selects First    If GRI selects First    If Regency
selects First    If GRI selects First    If Regency selects First   

GRI

Regency

  

Regency

GRI

  

GRI

Regency

GRI

Regency

GRI

  

Regency

GRI

Regency

GRI

GRI

  

GRI

Regency

GRI

  

Regency

GRI

GRI

  

GRI

Regency

GRI

GRI

Regency

GRI

GRI

  

Regency

GRI

GRI

Regency

GRI

GRI

GRI

  

GRI

Regency

GRI

GRI

  

Regency

GRI

GRI

GRI

  

GRI

Regency

  

Regency

GRI

  

GRI

Regency

GRI

Regency

GRI

  

Regency

GRI

Regency

GRI

GRI

  

GRI

Regency

GRI

  

Regency

GRI

GRI

  

GRI

Regency

GRI

GRI

Regency

GRI

GRI

  

Regency

GRI

GRI

Regency

GRI

GRI

GRI

  

GRI

Regency

GRI

GRI

  

Regency

GRI

GRI

GRI

   and so on    and so on    and so on    and so on    and so on    and so on   
and so on    and so on    and so on    and so on

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

SCHEDULE 5

Qualified Appraisers

 

  •  

CB Richard Ellis

 

  •  

Cushman & Wakefield

 

  •  

Duff and Phelps

 

  •  

Integra Realty Resources

 

  •  

PGP Valuation Inc.

 

  •  

Property Sciences Group Inc.

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

SCHEDULE 6

Restricted Projects

 

Project

  

Address

1.      Brea Marketplace

   835 East Birch Street, Brea, California

2.      Valley Centre

   9616 Reisterstown Road, Owings Mills, Maryland

3.      City Avenue Shopping Center

   7720 City Line Avenue, Philadelphia, Pennsylvania

4.      Weslayan Plaza East & West

   5586 Wesleyan Street, Houston, Texas

5.      Rockford Road Plaza

   4190 Vinewood Lane North, Plymouth, Minnesota

6.      First State Plaza

   1600 West Newport Pike, Stanton, Delaware

7.      The Oaks Shopping Center

   1555 Lee Street, Des Plaines, Illinois

8.      Village Commons

   711 Village Boulevard, West Palm Beach, Florida

9.      Watkins Park Plaza

   50 Watkins Park Drive, Mitchellville, Maryland

10.    Applewood Shopping Center

   4300 Youngfield Street, Wheat Ridge, Colorado

11.    Whitnall Square Shopping Center

   4698 South Whitnall Avenue, Milwaukee, Wisconsin

12.    Mayfair Shopping Center

   6499 Sackett Street, Philadelphia, Pennsylvania

13.    Stefko Boulevard Shopping Center

   1880 Stefko Boulevard, Bethlehem, Pennsylvania

14.    Colonial Square

   1151 Wayzata Boulevard, Wayzata, Minnesota

15.    Ashburn Farm Village Center

   43761 Parkhurst Plaza, Ashburn, Virginia

16.    Warwick Square Shopping Center

   2395 York Road, Warwick, Pennsylvania

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

SCHEDULE 7

Dilution Examples

[Omitted]

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

SCHEDULE 8

CalPERS Responsible Contractor Program

[Omitted]

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

SCHEDULE 9

Distribution In Kind Examples

1. If the GRI to Regency Selection Ratio is 3:2, GRI is selecting first, and
only GRI and Regency are Members, then the process will proceed as follows with
respect to single Projects for the first series of selections:

(i) GRI will select its first Project.

(ii) Regency will select its first Project

(iii) GRI will select its next Project.

(iv) Regency will select its next Project.

(v) GRI will select its next Project, and so on for the next and ensuing series.

2. If the GRI to Regency Selection Ratio is 3:2, GRI selects first as between
GRI and Regency, and GRI, Regency and MCW LLC are Members, then the process will
proceed as follows with respect to single Projects for the first two series of
selections:

(i) MCW LLC will select its first Project

(ii) GRI will select its first Project.

(iii) Regency will select its first Project.

(iv) GRI will select its next Project.

(v) Regency will select its next Project.

(vi) GRI will select its next Project.

(i) MCW LLC will select its next Project.

(ii) GRI will select its next Project.

(iii) Regency will select its next Project

(iv) GRI will select is next Project.

(v) Regency will select its next Project.

(vi) GRI will select its next Project, and so on for the next and ensuing
series.

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

3. If the GRI to Regency Selection Ratio is 2:1, GRI selects first, and only GRI
and Regency are Members, then the process will proceed as follows with respect
to single Projects for the first two series of selections:

(i) GRI will select its first Project.

(ii) Regency will select its first Project.

(iii) GRI will select its next Project.

(i) GRI will select its next Project

(ii) Regency will select its next Project.

(iii) GRI will select its next Project, and so on for the next and ensuing
series.

4. If the GRI to Regency Selection Ratio is 2:1, GRI selects first as between
GRI and Regency, and GRI, Regency and MCW LLC are Members, then the process will
proceed as follows with respect to single Projects for the first four series of
selections:

(i) MCW LLC will select its first Project.

(ii) GRI will select its first Project.

(iii) Regency will select its first Project.

(iv) GRI will select its next Project.

(i) GRI will select its next Project

(ii) Regency will select its next Project.

(iii) MCW LLC will select its next Project.

(iv) GRI will select its next Project.

(i) GRI will select its next Project.

(ii) Regency will select its next Project.

(iii) GRI will select its next Project.

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

(i) GRI will select its next Project

(ii) MCW LLC will select its next Project.

(iii) Regency will select its next Project.

(iv) GRI will select its next Project, and so on for the next and ensuing
series.

5. If the GRI to Regency Selection Ratio is 1:1, GRI selects first as between
GRI and Regency, and GRI, Regency and MCW LLC are Members, then the process will
proceed as follows for the first six series of selections:

(i) MCW LLC will select its first Project.

(ii) GRI will select its first Project, which for this example is a
cross-collateralized pool of six Projects.

(iii) Regency will select its first Project.

(i) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

(ii) Regency will select its next Project.

(i) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

(ii) MCW LLC will select its next Project.

(iii) Regency will select its next Project.

(i) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

(ii) Regency will select its next Project

(i) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

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

(ii) Regency will select its next Project.

(i) MCW LLC will select its next Project.

(ii) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

(iii) Regency will select its next Project, and so on for the next and ensuing
series.

6. If the GRI to Regency Selection Ratio is 2:1, GRI selects first as between
GRI and Regency, and GRI, Regency and MCW LLC are Members, then the process will
proceed as follows for the first four series of selections:

(i) MCW LLC will select its first Project.

(ii) GRI will select its first Project, which for this example is a
cross-collateralized pool of four Projects.

(iii) Regency will select its first Project.

(iv) GRI will not select since GRI selected a pool in (ii) above, and one of
those Projects will count as GRI’s selection.

(i) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

(ii) Regency will select its next Project.

(iii) MCW LLC will select its next Project.

(iv) GRI will not select since GRI selected a pool in (ii) in the first series
shown above, and one of those Projects will count as GRI’s selection.

(i) GRI will select its next Project.

(ii) Regency will select its next Project.

(iii) GRI will select its next Project.

(i) GRI will select its next Project.

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

(ii) MCW LLC will select its next Project.

(iii) Regency will select its next Project

(iv) GRI will select its next Project, and so on for the next and ensuing
series.

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

SCHEDULE 10

Marketing of Certain Projects

 

Property

  

Size

  

Location

Allen Street Shopping Center

   46,420 SF    Allentown, PA

Memorial Collection Shopping Center

   103,330 SF    Houston, TX

Stefko Boulevard Shopping Center

   133,824 SF    Bethlehem, PA

Property

  

Size

  

Location

Ashburn Farm Village Center

   88,897 SF    Ashburn, VA

Bowie Plaza

   104,037 SF    Bowie, MD

Goshen Plaza

   45,654 SF    Gaithersburg, MD

Hanover Village Shopping Center

   96,146 SF    Mechanicsville, VA

Main Street Center

   105,076 SF    Frisco, TX

Mayfair Shopping Center

   112,276 SF    Philadelphia, PA

McHenry Commons Shopping Center

   100,526 SF    McHenry, IL

Mitchellville Plaza

   156,125 SF    Mitchellville, MD

Racine Centre Shopping Center

   135,827 SF    Racine, WI

Rockford Road Plaza

   205,897 SF    Plymouth, MN

The Oaks Shopping Center

   135,005 SF    Des Plaines, IL

Willow Lake (East) Shopping Center

   149,923 SF    Indianapolis, IN

Whitnall Square

   133,301 SF    Milwaukee, WI

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

EXHIBIT A

Capital Contributions; Percentage Interests

 

Name and Address

   Capital
Account    Percentage
Interest  

Macquarie CountryWide (US) No. 2 LLC

c/o Macquarie CountryWide Management Limited

Level 11, No. 1 Martin Place

Sydney NSW 2000

Australia

   $ 69,400,854    30 % 

Regency Centers, L.P.

One Independent Drive, Suite 114

Jacksonville, Florida 32202

   $ 57,834,045    25 % 

Global Retail Investors, LLC

4350 East-West Highway, Suite 400

Bethesda, Maryland 20814

   $ 104,101,281    45 % 

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

EXHIBIT B

Projects

 

Property

 

Address

 

City

  State  

Project Level Entity

Auburn Village   2222 Grass Valley Hwy   Auburn   CA   FW CA-Auburn Village, LLC
Bayhill Shopping Center   851 Cherry Ave   San Bruno   CA   FW CA-Bay Hill
Shopping Center, LLC Brea Marketplace   835 East Birch Street   Brea   CA   FW
CA-Brea Market-place, LLC Five Points Shopping Center   3943 State Street  
Santa Barbara   CA   FW CA-Five Points Shopping Center, LLC Granada Village
Shopping Center   10823 Zelzah Ave   Granada Hills   CA   FW CA-Granada Village,
LLC Laguna Niguel Plaza   29941 Alicia Parkway   Laguna Niguel   CA   FW
CA-Laguna Niguel Plaza, LLC Mariposa Shopping Center   2760 Homestead Rd   Santa
Clara   CA   FW CA-Mariposa Gardens Shopping Center, LLC Navajo Shopping Center
  8650 Lake Murray Blvd   San Diego   CA   FW CA-Navajo Shopping Center, LLC
Pleasant Hill Shopping Center   560 Contra Costa Blvd   Pleasant Hill   CA   FW
CA-Pleasant Hill Shopping Center, LLC Point Loma Plaza   3645 Midway Drive   San
Diego   CA   FW CA-Point Loma Plaza, LLC Rancho San Diego Village   3681 Avocado
Blvd   La Mesa   CA   FW CA-Rancho San Diego Village, LLC Silverado Plaza   611
Trancas St   Napa   CA   FW CA-Silverado Plaza, LLC Snell & Branham Plaza   179
Branham Lane   San Jose   CA   FW CA-Snell & Branham Plaza, LLC Stanford Ranch
Village   2341 Sunset Blvd   Rocklin   CA   FW CA-Stanford Ranch Village, LLC
Twin Oaks Shopping Center   5727 Kanan Road   Agoura Hills   CA   FW CA-Twin
Oaks Shopping Center, LLC

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

Ygnacio Plaza   1881 Ygnacio Valley Road   Walnut Creek   CA   FW CA-Ygnacio
Plaza, LLC Applewood Shopping Center   3400 Youngfield Street   Wheat Ridge   CO
  U.S. Retail Partners, LLC Arapahoe Village   2798 Arapahoe Ave   Boulder   CO
  U.S. Retail Partners, LLC Cherrywood Square Shopping Center   7575 South
University Blvd   Littleton   CO   U.S. Retail Partners, LLC Ralston Square
Shopping Center   12350 West 64th Street   Arvada   CO   U.S. Retail Partners,
LLC Corbin’s Corner   1445 New Britain Avenue   West Hartford   CT   FW
CT-Corbins Corner Shopping Center, LLC Spring Valley Shopping Center  
4851 Massachusetts Avenue   Washington   DC   USRP I, LLC First State Plaza  
1600 West Newport Pike   Stanton   DE   USRP I, LLC Shoppes of Graylyn   1732
Marsh Road   Wilmington   DE   USRP I, LLC Village Commons   711 Village Blvd.  
West Palm Beach   FL   USRP I, LLC Brentwood Commons   1145 South York Rd  
Bensenville   IL   FW IL-Brentwood Commons, LLC Civic Center Plaza   7801 North
Waukegan Rd   Niles   IL   FW IL-Civic Center Plaza, LLC McHenry Commons
Shopping Center   2000 North Richmond Rd   McHenry   IL   FW IL-McHenry Commons
Shopping Center, LLC Riverside Square & River ’s Edge   3145 South Ashland Ave  
Chicago   IL   FW IL-Riverside/Rivers Edge, LLC Riverview Plaza   3330 North
Western Ave   Chicago   IL   FW IL-Riverview Plaza, LLC Stonebrook Plaza
Shopping Center   3243 West 115th Street   Merrionette Park   IL   FW
IL-Stonebrook Plaza, LLC The Oaks Shopping Center   1555 Lee Street   Des
Plaines   IL   FW IL-The Oaks Shopping Center, LLC Willow Lake Shopping Center  
2550 Lake Circle Lane   Indianapolis   IN   USRP Willow East, LLC Willow Lake
Shopping Center   2902 West 86th Street   Indianapolis   IN   USRP Willow West,
LLC

 

95

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

Bowie Plaza   6824 Laurel-Bowie Rd   Bowie   MD   Capital Place I Investment
Limited Partnership Cloppers Mill Village Shopping Center   18066 Mateny Rd  
Germantown   MD   Cloppers Mill Village Center, LLC Elkridge Corners Shopping
Center   7280 Montgomery Rd   Elkridge   MD   L&M Development Company Limited
Partnership Festival at Woodholme   1809 Reisterstown Road   Baltimore,   MD  
Woodholme Properties Limited Partnership Firstfield Shopping Center   505 Quince
Orchard RD   Gaithersburg   MD   USRP I, LLC Goshen Plaza   9140 Rothbury Drive
  Gaithersburg   MD   USRP I, LLC Mitchellville Plaza   12100 Central Ave  
Mitchellville   MD   Enterprise Associates Parkville Shopping Center   7709
Harford Rd   Baltimore   MD   Parkville Shopping Center, LLC Southside
Marketplace   857 East Fort Ave   Baltimore   MD   Southside Market-place
Limited Partnership Takoma Park Shopping Center   6875 New Hampshire Ave  
Takoma Park   MD   USRP I, LLC Valley Centre   9616 Reisterstown Road   Owings
Mills   MD   Greenspring Associates Limited Partnership Watkins Park Plaza   50
Watkins Park Drive   Mitchellville   MD   USRP I, LLC Woodmoor Shopping Center  
10141 Colesville Rd   Silver Springs   MD   US Retail Partners Limited
Partnership Colonial Square   1151 Wayzata Blvd   Wayzata   MN   U.S. Retail
Partners, LLC Rockford Road Plaza   4190 Vinewood Lane North   Plymouth   MN  
U.S. Retail Partners, LLC Shoppes of Kildaire   1394 Kildaire Farm Road   Cary  
NC   FW NC-Shoppes of Kildaire, LLC Plaza Square   625 Hamburg Turnpike   Wayne
  NJ   USRP I, LLC Westmont Shopping Center   400 Cuthbert Rd   Westmont   NJ  
FW NJ-Westmont Shopping Center, LLC Greenway Town Center  
12220 Southwest Scholls Ferry Rd   Tigard   OR   FW OR-Greenway Town Center, LLC

 

96

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

Allen Street Shopping Center   1401 Allen Street   Allentown   PA   Allenbeth
Associates Limited Partnership City Avenue Shopping Center   7720 City Line
Avenue   Philadelphia   PA   City Line Shopping Center Associates Mayfair
Shopping Center   6499 Sackett Street   Philadelphia   PA   USRP I, LLC Mercer
Square Shopping Center   73 Old Dublin Pike   Doylestown   PA   USRP I, LLC
Newtown Square Shopping Center   3590 West Chester Pike   Newtown Square   PA  
USRP I, LLC Stefko Boulevard Shopping Center   1880 Stefko Blvd   Bethlehem   PA
  Allenbeth Associates Limited Partnership Warwick Square Shopping Center   2395
York Road   Warwick   PA   USRP I, LLC Merchant’s Village   520 Folly Road  
Charleston   SC   MCW-RC SC-Merchant’s Village, LLC Main Street   307 FM 423  
Frisco   TX   USRP I, LLC Memorial Collection Shopping Center   14610 Memorial
Drive   Houston   TX   FW TX-Memorial Collection, L.P. Weslayan Plaza East &
West   5586 Weslayan St   Houston   TX   FW TX-Weslyan Plaza, L.P. Woodway
Collection   1407 South Voss Road   Houston   TX   FW TX-Woodway Collection,
L.P. 601 King Street   601 King Street   Alexandria   VA   FW VA-601 King
Street, LLC Ashburn Farm Village Center   43761 Parkhurst Plaza   Ashburn   VA  
FW VA-Ashburn Farm Village, LLC Centre Ridge Marketplace   6335 Multiplex Drive
  Centreville   VA   FW VA-Centre Ridge Marketplace, LLC Festival at Manchester
Lakes   7005 Manchester Blvd   Franconia   VA   USRP I, LLC Fox Mill Shopping
Center   2551 John Milton Drive   Reston   VA   FW VA-Fox Mill Shopping Center,
LLC Gayton Crossing   9782 Gayton Road   Richmond   VA   FW VA-Gayton Crossing
Shopping Center, LLC

 

97

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

Greenbriar Town Center    13043 Lee Jackson Memorial Hwy    Chantilly    VA   
USRP I, LLC Hanover Village Shopping Center    7047 Mechanicsville Turnpike   
Mechanicsville    VA    USRP I, LLC Kamp Washington Shopping Center    11054 Lee
Highway    Fairfax    VA    USRP I, LLC Kings Park Shopping Center    8970 Burke
Lake Road    Burke    VA    FW VA-Kings Park Shopping Center, LLC Saratoga
Shopping Center    8074 Rolling Road    Springfield    VA    FW VA-Saratoga
Shopping Center, LLC Town Center at Sterling Shopping Center    21800 Town
Center Plaza    Sterling    VA    US Retail Partners Limited Partnership Village
Shopping Center    7029 Three Chopt Road    Richmond    VA    FW VA-The Village
Shopping Center, LLC Willston Centre I    6164 Arlington Blvd    Falls Church   
VA    US Retail Partners Limited Partnership Willston Centre II    6118
Arlington Blvd    Falls Church    VA    US Retail Partners Limited Partnership
Aurora Marketplace    23632 Highway 99    Edmonds    WA    FW WA-Aurora
Marketplace, LLC Eastgate Plaza    15100 Southeast 38th Street    Bellevue    WA
   FW WA-Eastgate Plaza, LLC Overlake Fashion Plaza    2150 148 th Avenue
Northeast    Redmond    WA    FW WA-Overlake Fashion Plaza, LLC Racine Centre
Shopping Center    5201 Washington Ave    Racine    WI    FW WI-Racine Centre,
LLC Whitnall Square Shopping Center    4698 South Whitnall Ave    Milwaukee   
WI    FW WI-Whitnall Square, LLC

 

98

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

TABLE OF CONTENTS

 

          Page

ARTICLE I         DEFINED TERMS

   3

Section 1.1

   General Definitions    3

Section 1.2

   Other Definitions    19

ARTICLE II         FORMATION, NAME, PLACE OF BUSINESS, PURPOSE, AND TERM

   19

Section 2.1

   Formation    19

Section 2.2

   Name and Offices    19

Section 2.3

   Other Acts/Filings    19

Section 2.4

   Purpose and Scope    19

Section 2.5

   Term    20

Section 2.6

   Representations and Warranties of the Members    20

Section 2.7

   Use of Macquarie CountryWide Name    22

ARTICLE III         PERCENTAGE INTERESTS AND CAPITAL

   22

Section 3.1

   Percentage Interests    22

Section 3.2

   Additional Capital Contributions    22

Section 3.3

   Default by a Member    25

Section 3.4

   Capital of the Company; Capital Accounts    28

ARTICLE IV         TAX ALLOCATIONS

   30

Section 4.1

   Allocation of Profit and Loss    30

Section 4.2

   Special Allocations    30

Section 4.3

   Curative Allocations    32

Section 4.4

   Other Allocation Rules    32

Section 4.5

   Tax Allocations: Code Section 704(c)    32

Section 4.6

   Allocations to Transferred Membership Interests    33

Section 4.7

   Tax Elections    33

Section 4.8

   Designation of Tax Matters Member    33

ARTICLE V         DISTRIBUTIONS

   35

Section 5.1

   Distributions    35

Section 5.2

   Repayment of Member Loans    36

Section 5.3

   Limitations on Distributions    36

Section 5.4

   Distribution Notices    36

 

-i-

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

TABLE OF CONTENTS

(continued)

 

          Page

ARTICLE VI         MANAGEMENT AND OPERATIONS OF THE COMPANY

   37

Section 6.1

   Management Generally    37

Section 6.2

   Major Decisions    40

Section 6.3

   MCW LLC’s Interest    42

Section 6.4

   Member Representatives    43

Section 6.5

   Fees to the Manager and Its Affiliates    43

Section 6.6

   Costs and Expenses    45

Section 6.7

   Hedging Activities    45

Section 6.8

   Matters Relating to Manager Agreements    45

Section 6.9

   Expenses    45

Section 6.10

   Compensation of Members and their Affiliates    46

Section 6.11

   Property Management    46

Section 6.12

   Other Activities of Members    47

Section 6.13

   Project Level Entity    47

Section 6.14

   Property Appraisals    47

Section 6.15

   Scope of Authority    48

Section 6.16

   Liability of Members and Others; Indemnification    49

Section 6.17

   REIT Status    49

Section 6.18

   Unrelated Business Taxable Income    50

Section 6.19

   Competing Projects    50

ARTICLE VII         WITHDRAWAL; DISSOLUTION AND TERMINATION

   50

Section 7.1

   Withdrawal    50

Section 7.2

   Events of Default by Members; Change of Control    50

Section 7.3

   Dissolution of the Company    52

Section 7.4

   Liquidation    53

Section 7.5

   Distribution in Kind    54

Section 7.6

   Right of First Offer    58

Section 7.7

   Certificate of Cancellation    60

ARTICLE VIII         BOOKS AND RECORDS, ACCOUNTING, REPORTS

   60

Section 8.1

   Books and Records    60

Section 8.2

   Accounting Basis and Fiscal Year    60

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 8.3

   Reports    61

Section 8.4

   Independent Audit or Review    62

Section 8.5

   Bank Accounts    63

ARTICLE IX         TRANSFER OF MEMBERSHIP INTERESTS

   63

Section 9.1

   General Restrictions    63

ARTICLE X         SALE OF PROJECTS

   64

Section 10.1

   Generally    64

Section 10.2

   Required Property Sale    64

Section 10.3

   Right of First Offer    65

Section 10.4

   Restricted Projects    66

Section 10.5

   Commissions to Members    66

Section 10.6

   Specific Performance    67

Section 10.7

   Limitations    67

ARTICLE XI         MISCELLANEOUS PROVISIONS

   67

Section 11.1

   Applicable Law    67

Section 11.2

   Attorneys’ Fees    67

Section 11.3

   No Partition    67

Section 11.4

   Binding Provisions    67

Section 11.5

   Complete Agreement: Amendment    67

Section 11.6

   Confidentiality and Nondisclosure    68

Section 11.7

   Counterparts    68

Section 11.8

   Fees and Commissions    68

Section 11.9

   Execution of Other Documents    68

Section 11.10

   Severability    68

Section 11.11

   Survival of Indemnity Obligations    69

Section 11.12

   Waiver    69

Section 11.13

   Terminology    69

Section 11.14

   Equitable Remedies    69

Section 11.15

   Remedies Cumulative    69

Section 11.16

   Press Relations    70

Section 11.17

   Notices    70

 

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Section 11.18

   Construction    71

Section 11.19

   No Article 8 Opt-In    71

Section 11.20

   Marketing of Certain Projects    71

ARTICLE XII         MCW INTEREST OPTION

   71

Section 12.1

   Generally    71

Section 12.2

   Price    72

Section 12.3

   Closing    72

Section 12.4

   Deliveries    72

Section 12.5

   Distribution in Kind for Failure to Exercise MCW LLC Interest Option    73

Section 12.6

   Distribution in Kind Pursuant to Section 7.5    74

 

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