Exhibit 10.2

 

 

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

SGO RETAIL ACQUISITIONS VENTURE, LLC

 

Dated as of March 9, 2015

 

THE LIMITED LIABILITY COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY
COMPANY AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE DELAWARE SECURITIES ACT, OR OTHER SIMILAR FEDERAL OR STATE
STATUTES OR AGENCIES IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION AS PROVIDED
IN THOSE STATUTES. THE SALE, ASSIGNMENT, TRANSFER, EXCHANGE, MORTGAGE, PLEDGE OR
OTHER DISPOSITION OF ANY LIMITED LIABILITY COMPANY INTEREST IS RESTRICTED IN
ACCORDANCE WITH THE PROVISIONS OF THIS LIMITED LIABILITY COMPANY AGREEMENT, AND
THE EFFECTIVENESS OF ANY SUCH SALE OR OTHER DISPOSITION MAY BE CONDITIONED UPON,
AMONG OTHER THINGS, RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE OR OTHER DISPOSITION CAN BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE DELAWARE
SECURITIES ACT AND OTHER APPLICABLE FEDERAL OR STATE STATUTES. BY ACQUIRING THE
LIMITED LIABILITY COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY
COMPANY AGREEMENT, EACH MEMBER REPRESENTS THAT IT WILL NOT SELL OR OTHERWISE
DISPOSE OF ITS LIMITED LIABILITY COMPANY INTERESTS WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID STATUTES AND RULES AND REGULATIONS THEREUNDER AND
THE TERMS AND PROVISIONS OF THIS LIMITED LIABILITY COMPANY AGREEMENT.

 

 

 

  

Table of Contents

      Page         ARTICLE I   DEFINED TERMS 1         1.01   Defined Terms 1  
      1.02   Other Defined Terms 13         ARTICLE II   ORGANIZATION 13        
2.01   FORMATION 13         2.02   Name and Principal Place of Business 14      
  2.03   Term 14         2.04   Registered Agent and Registered Office 14      
  2.05   Purpose 14         2.06   Company Property 15         ARTICLE III  
MEMBERS 15         3.01   Members 15         3.02   Limitation On Liability 16  
      3.03   Waiver of Other Rights 16         3.04   No Certificated Interests
16         3.05   No State Law Partnership 16         ARTICLE IV   CAPITAL 16  
      4.01   Initial Capital Contributions 16         4.02   Additional Capital
Contributions 18         4.03   Capital Accounts 21         4.04   No Further
Capital Contributions 22         4.05   Loans 22         ARTICLE V   INTERESTS
IN THE COMPANY 23         5.01   Percentage Interest 23         5.02   Return of
Capital 23         5.03   Ownership 23         5.04   Waiver of Partition;
Nature of Interests in the Company 23         ARTICLE VI   ALLOCATIONS AND
DISTRIBUTIONS 24         6.01   Allocations 24

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Table of Contents

(continued)

 

      Page         6.02   Allocations and Compliance with Section 704(b) 24    
    6.03   Distributions and Payments 26         6.04   Special Payments and
Distributions 27         6.05   Distributions in Liquidation 28         6.06  
Tax Matters 29         6.07   Tax Matters Partner 29         6.08   Allocations
for Income Tax Purposes 29         ARTICLE VII   MANAGEMENT 30         7.01  
Management 30         7.02   GAP Consultant 35         7.03   Duties of managing
member 35         7.04   Services and Fees 40         7.05   Duties and
Conflicts 41         7.06   Company Expenses 45         ARTICLE VIII   BOOKS AND
RECORDS 45         8.01   Books and Records 45         8.02   Accounting and
Fiscal Year 46         8.03   Reports 46         8.04   The Company Accountant
48         8.05   Reserves 48         8.06   The Budget and Operating Plan 48  
      8.07   Accounts 49         ARTICLE IX   TRANSFER OF INTERESTS 49        
9.01   No Transfer 49         9.02   Permitted Transfers 49         9.03  
Transferees 50         9.04   Section 754 Election 50         9.05  
INTENTIONALLY OMITTED 51         9.06   GAP’s Right to Force Sale 51

 

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Table of Contents

(continued)

 

      Page         ARTICLE X   EXCULPATION AND INDEMNIFICATION 53         10.01
  Exculpation 53         10.02   Indemnification 54         ARTICLE XI  
DISSOLUTION AND TERMINATION 55         11.01   Dissolution 55         11.02  
Termination 56         11.03   Liquidating Member 57         11.04   Claims of
the Members 57         ARTICLE XII   DEFAULT BY MEMBER 57         12.01   Events
of Default 57         12.02   Effect of Event of Default 57         ARTICLE XIII
  REPRESENTATIONS, WARRANTIES AND COVENANTS 58         13.01   Representations
and Warranties of the Members 58         ARTICLE XIV   MISCELLANEOUS 65        
14.01   Further Assurances 65         14.02   Notices 65         14.03  
Governing Law 66         14.04   Attorney Fees 66         14.05   Captions 66  
      14.06   Pronouns 66         14.07   Successors and Assigns 66        
14.08   Extension Not a Waiver 66         14.09   Creditors Not Benefited 67    
    14.10   Recalculation of Interest 67         14.11   Severability 67        
14.12   Entire Agreement 67         14.13   Publicity 68         14.14  
Counterparts 68         14.15   Confidentiality 68

 

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Table of Contents

(continued)

 

      Page         14.16   Venue

69

        14.17   Waiver of Jury Trial 69         14.18   Attorney Representation
69         14.19   Cooperation 69

 

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LIMITED LIABILITY COMPANY AGREEMENT
OF
SGO RETAIL ACQUISITIONS VENTURE, LLC

 

This LIMITED LIABILITY COMPANY AGREEMENT (as may be amended, modified,
supplemented or restated from time to time, this “Agreement”) of SGO RETAIL
ACQUISITIONS VENTURE, LLC, a Delaware limited liability company, is made and
entered into as of March 9, 2015 (the “Effective Date”), by and between GROCERY
RETAIL GRAND AVENUE PARTNERS, LLC, a Delaware limited liability company (“GAP”),
GLB SGO, LLC, a Delaware limited liability company (“Operating Member”) and SRT
SGO, LLC a Delaware limited liability company (“SRT”).

 

WHEREAS, the Company (as hereinafter defined) was formed pursuant to a
Certificate of Formation dated as of January 28, 2015 and filed with the
Secretary of State of Delaware on January 28, 2015 (the “Certificate of
Formation”);

 

WHEREAS, pursuant to the terms of the Purchase Agreement (as hereinafter
defined), the Company has contracted to acquire the Initial Company Property.

 

WHEREAS, GAP, SRT and Operating Member desire to enter into this Agreement to,
among other things, allocate rights and obligations with respect to the
acquisition, management and ownership of the Initial Company Property.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

ARTICLE I
DEFINED TERMS

 

1.01        Defined Terms

 

As used in this Agreement, the following terms have the meanings set forth
below:

 

“Additional Capital Contributions” has the meaning set forth in Section 4.02(a).

 

“Adjusted Capital Account” means, with respect to any Member for any taxable
year or other period, the balance in such Member’s Capital Account as of the end
of such year or other period, 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 obligated to restore as described in the
penultimate sentence of Treasury Regulation Section 1.704-2(g)(1) and in
Treasury Regulation Section 1.704-2(i); and

 

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

 

 

 

  

“Adjusted Capital Account Deficit” means, with respect to any Member for any
taxable year or other period, the deficit balance, if any, in such Member’s
Adjusted Capital Account as of the end of such year or other period.

 

“Affiliated” or “Affiliate” means, with respect to any Person, (i) any Person
who directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person, (ii) any Person who
is an Immediate Family Member of such Person or (iii) any Person in which such
Person or one or more of the Immediate Family Members of such Person has a ten
percent (10%) or more direct or indirect beneficial interest (whether an
initial, residual or contingent interest) or as to which such Person, directly
or indirectly, serves as a managing member, general partner, trustee or in a
similar fiduciary or management capacity.

 

“Agreement” has the meaning set forth in the introductory paragraph hereof.

 

“Bankruptcy” means the occurrence of any of the following events with respect to
a particular Person: (a) the filing by such Person of an application for, or a
consent to, the appointment of a trustee for such Person’s assets; (b) the
filing by such Person of a voluntary petition in bankruptcy or the filing of a
pleading in any court of record admitting in writing its inability to pay its
debts as they come due; (c) the making by such Person of a general assignment
for the benefit of creditors; (d) the filing by such Person of an answer
admitting the material allegations of, or its consenting to or defaulting in
answering, a bankruptcy petition filed against it in any bankruptcy proceeding;
or (e) the entry of an order, judgment, or decree by any court of competent
jurisdiction adjudicating such Person a bankrupt or appointing a trustee of its
assets, and such order, judgment, or decree continues unstayed and in effect for
a period of one hundred twenty (120) days.

 

“Book Basis” means, with respect to any asset of the Company, the adjusted basis
of such asset for federal income tax purposes; provided, however, that (a) if
any asset is contributed to the Company, the initial Book Basis of such asset
shall equal its fair market value on the date of contribution, and (b) the Book
Basis of all Company Property shall be adjusted to equal their respective gross
fair market values, as determined by GAP, as of the following times: (i) the
acquisition of an additional Interest 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 an Interest; (iii) in connection with the liquidation of the
Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g);
and (iv) any other instance in which such adjustment is permitted under Treasury
Regulation Section 1.704-1(b)(2)(iv); provided, however, that adjustments
pursuant to clauses (i), (ii) and (iv) above shall be made only if GAP
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Members in the Company. The Book Basis of all
assets of the Company shall be adjusted thereafter by depreciation as provided
in Treasury Regulation Section 1.704-1(b)(2)(iv)(g) and any other adjustment to
the basis of such assets other than depreciation or amortization.

 

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“Budget” means the budget covering the Company’s anticipated operations (i)
approved by GAP in accordance with the terms of this Agreement and (ii) in
effect pursuant to Section 8.06.

 

“Business Day” means any day other than Saturday, Sunday, any day that is a
legal holiday in the State of California or New York, or any other day on which
banking institutions in California or New York are authorized to close. For the
avoidance of doubt, any reference to “day(s)” (and not “Business Days”) in this
Agreement shall mean calendar days.

 

“Capital Account” means the separate account maintained for each Member under
Section 4.03.

 

“Capital Contribution” means, with respect to any Member, all Initial Capital
Contributions and Additional Capital Contributions made by such Member to the
Company pursuant to this Agreement; provided, however, that any amount returned
by a Member pursuant to the proviso in Section 4.02(a), the proviso in Section
4.05 or Section 6.03 shall be treated as a contribution of capital to the
Company (but not as a Capital Contribution for purposes hereof) and shall be
treated as if such returned amount was not previously distributed to such
Member.

 

“Certificate of Formation” has the meaning set forth in the Recitals.

 

“Change in Control” means the occurrence of any transfer following which the Key
Person, together with the Immediate Family Members of the Key Person, ceases to
own at least fifty percent (50%) of the beneficial ownership interests of
Operating Member or have the ability to direct or cause the direction of the
management policies of Operating Member through ownership of voting securities
or beneficial interests, by contract or otherwise.

 

“Close Associate” is a person who is widely and publicly known to maintain an
unusually close relationship with a Senior Foreign Political Figure, and
includes a Person who is in a position to conduct substantial United States and
non-United States financial transactions on behalf of the Senior Foreign
Political Figure.

 

“Closing Date” means the day of the “Closing” under the Purchase Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended. All references
herein to sections of the Code shall include any corresponding provision or
provisions of succeeding law.

 

“Company” means the limited liability company formed and governed by the terms
of this Agreement.

 

“Company Accountant” has the meaning set forth in Section 8.04.

 

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“Company Management Services” means (a) the services performed by Managing
Member as provided for herein, pursuant to this Agreement, or Property Manager
as provided for in the Property Management Agreement, pursuant to the Property
Management Agreement, and all actions in the day-to-day management of the
Company provided under the Budget and Operating Plan and (b) all other services
reasonably requested from time to time by GAP, and reasonably agreed to by
Managing Member, consistent with other services customarily provided by managing
members or managers as part of their ordinary compensation in comparable
circumstances. Managing Member may retain the Property Manager, as defined
herein, or another person or entity approved by GAP, to perform the Company
Management Services for the Company; provided, however, that Managing Member
shall cause said Property Manager to perform Company Management Services and
shall remain responsible for performing Company Management Services if Property
Manager fails to do so.

 

“Company Minimum Gain” means “partnership minimum gain” as defined in Treasury
Regulation Section 1.704-2(d).

 

“Company Property” means any asset or other property (real, personal or mixed)
owned by or leased to the Company or any Property Company, which shall consist
of the Initial Company Property, and other property acquired by the Company or
any Property Company pursuant to the terms hereof.

 

“Competitive Area” has the meaning set forth in Section 7.05(c).

 

“Competitive Opportunity” has the meaning set forth in Section 7.05(c).

 

“Confidential Information” has the meaning set forth in Section 14.15(a).

 

“Contract and Due Diligence Costs” has the meaning set forth in Section 4.01(b).

 

“Contributing Member” has the meaning set forth in Section 4.02(c).

 

“Contribution Deadline” has the meaning set forth in Section 4.02(a).

 

“control” (including the terms “controlling”, “controlled by” and “under common
control with”) means the possession, direct or indirect, of the power (i) to
vote ten percent (10%) or more of the outstanding voting securities of such
person or entity; or (ii) to otherwise direct management policies of such person
or entity by contract or otherwise.

 

“Deadlock” means the failure of the Members to approve a Major Decision after
the Members have acted reasonably and in good faith to resolve any differences,
including being available to attend meetings in person or by telephone,
participate in conferences in person or by telephone, consult with third party
consultants and professionals, and otherwise take reasonable steps to resolve
any differences with respect to the proposed Major Decision.

 

“Delaware Act” means the Delaware Limited Liability Company Act, as amended from
time to time.

 

“Disposition Fee” means one percent (1%) of the aggregate Net Sales Proceeds
received by the Company from the sales of the Initial Company Property.

 

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“Effective Date” has the meaning set forth in the introductory paragraph hereof.

 

“Ensenada Square Property” means that certain commercial retail center located
at 301 S. Bowen Road, Arlington, TX comprising approximately 63,000 square feet
of commercial retail space.

 

“Equity Multiple” means an amount determined by dividing (i) the sum of all
distributions of Net Cash Flow received by GAP pursuant to Section 6.03,
excluding, however, Section 6.03(a), by (ii) GAP’s Gross Adjusted Capital
Contributions.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“Event of Default” has the meaning set forth in Section 12.01.

 

“Excess Amounts” has the meaning set forth in Section 4.02(c).

 

“Expenses” means, for any period, the total gross expenditures of the Company
and any Property Companies reasonably relating to the operations of the Company
and such Property Companies, ownership, entitlement, development, maintenance,
management, operations, sale, financing or refinancing of Company Property
during such period contemplated by the then applicable Budget or otherwise
approved (either prospectively or retroactively) by GAP, including (a) all cash
operating expenses (including, without limitation, real estate taxes and
assessments, personal property taxes, sales taxes, and all fees, commissions,
expenses and allowances paid or reimbursed to any Member or any of its
Affiliates to the extent permitted hereunder), (b) all deposits of Revenues to
the Company’s reserve accounts, (c) all debt service payments including debt
service on loans made to the Company by the Members or any of their Affiliates
(other than Shortfall Loans), (d) all expenditures which are treated as capital
expenditures (as distinguished from expense deductions included in (a)) under
GAAP, and (e) all expenditures related to any acquisition, sale, disposition,
financing, refinancing or securitization of any Company Property; provided,
however, that Expenses shall not include (i) any payment or expenditure to the
extent (A) the sources of funds used for such payment or expenditure are not
included in Revenues or (B) such payment or expenditure is paid out of any
Company reserves unless the withdrawal of the funds to make such payment or
expenditure was treated as Revenues, and (ii) any expenditure properly
attributable to the liquidation of the Company.

 

“for cause” means any of the following events: (a) any material breach of (i)
this Agreement by Operating Member, including the failure of Operating Member to
fund Required Capital Contributions, or the taking of a Major Decision without
having obtained the required prior approval of the Majority Members, or (ii) the
Property Management Agreement by Property Manager (if Affiliated with Operating
Member), or in either case, by any of their respective representatives or
Affiliates, (b) any action or omission on the part of Operating Member, Property
Manager (if Affiliated with Operating Member), any Key Person or any of their
respective representatives or Affiliates which amounts to gross negligence,
fraud, bad faith, willful misconduct or any misappropriation or intentional
misapplication of Company funds, (c) any Change in Control or Key Person Event,
(d) (i) criminal misconduct which has an adverse effect on the business or
affairs of the Company, as determined by GAP in good faith in its sole
discretion or (ii) commission of a felony by Operating Member, Property Manager
(if Affiliated with Operating Member), any Key Person or any of their respective
representatives or Affiliates, (e) any default by Operating Member under Section
7.05(c), (f) breach of the representation set forth in Section 13.01(b); or (g)
a Bankruptcy of Operating Member, Property Manager (if Affiliated with Operating
Member), or any Key Person or Key Entity. Each of the above events is referred
to herein as a “for cause” event.

 

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“for lack of performance” shall mean the Company’s failure to meet the
achievements described on Exhibit D attached hereto.

 

“Fundamental Decision” means (i) any amendment, modification or termination of
this Agreement, except for amendments or modifications which would not have a
disproportionate adverse effect on a Member who otherwise would not be permitted
to vote, or (ii) dissolving, terminating or winding up the Company if the
Company Property has not been sold in accordance with this Agreement.

 

“GAAP” means United States generally accepted accounting principles consistently
applied.

 

“GAP” has the meaning set forth in the introductory paragraph hereof.

 

“GAP Organizational Documents” has the meaning set forth in Section 13.01(d)(i).

 

“GAP Party” has the meaning set forth in Section 7.05(c).

 

“Governmental Authority” means any United States or non-United States federal,
national, supranational, state, provincial, local or similar government,
governmental, regulatory or administrative authority, branch, agency or
commission or any court, tribunal, or arbitral or judicial body (including any
grand jury).

 

“Gross Adjusted Capital Contributions” means, with respect to each Member, the
total amount of Capital Contributions (other than Shortfall Capital
Contributions) contributed by such Member to the Company pursuant to the terms
hereof, as adjusted pursuant to Section 4.02(c).

 

“Immediate Family Member” means the parents, siblings, spouse, children,
step-children and in-laws of a Person.

 

“Indemnitees” has the meaning set forth in Section 10.02(a).

 

“Initial Budget and Operating Plan” has the meaning set forth in
Section 8.06(a).

 

“Initial Capital Contribution” means, with respect to any Member, any capital
contribution made by such Member pursuant to Section 4.01.

 

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“Initial Company Property” means the “Property”, as defined in the Purchase
Agreement, being the real property identified on Schedule B hereto, and related
personal property to be acquired by the Company from Seller pursuant to the
Purchase Agreement.

 

“Interest” means, with respect to any Member at any time, the interest of such
Member in the Company at such time, including the right of such Member to any
and all of the benefits to which such Member may be entitled as provided in this
Agreement, together with the obligations of such Member to comply with all of
the terms and provisions of this Agreement.

 

“Internal Rate of Return” or “IRR” shall be calculated using the XIRR function
of Microsoft Excel utilizing the dates that all Capital Contributions are
contributed or deemed contributed to the Company in accordance with the terms of
this Agreement and the dates that all distributions are made or deemed to be
made in accordance with the terms of this Agreement.

 

“Investment Notice” has the meaning set forth in Section 7.05(c).

 

“Key Entity” means Operating Member.

 

“Key Person” means Andrew Batinovich.

 

“Key Person Event” means (i) the death or disability of the Key Person, (ii) the
failure of the Key Persons to control Operating Member and Property Manager; or
(iii) the occurrence of a Change in Control; provided, however, a “Key Person
Event” shall not be deemed to have occurred pursuant to clauses (i) or (ii)
above if the Key Person is replaced by a successor reasonably acceptable to GAP
within sixty (60) days of the referenced event.

 

“Lender” means individually and collectively, any lender under a Loan.

 

“Liquidating Member” means the Member designated as such by GAP; provided,
however, that any Member that is then in default hereunder or that causes the
dissolution of the Company under Section 11.01(c) shall not serve as the
Liquidating Member (in which event the Liquidating Member shall be the
non-defaulting Member).

 

“Loan” means any future mortgage loan encumbering some or all of the Initial
Company Property entered into by the Company or one or more of the Property
Companies and approved by GAP.

 

“Loan Documents” means the note(s), the mortgage and the other loan documents
executed and delivered by the Company, one or more of the Property Companies and
any applicable guarantor(s) and/or indemnitor(s) to the Lender in connection
with a Loan.

 

“Loss” means, for each taxable year or other period, an amount equal to the
Company’s items of tax deduction and loss for such year or other period,
determined in accordance with Section 703(a) of the Code (including all items of
loss or deduction required to be stated separately under Section 703(a)(1) of
the Code), with the following adjustments:

 

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(a)         Any expenditures of the Company described in Section 705(a)(2)(B) of
the Code or treated as Section 705(a)(2)(B) expenditures under Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
computing Loss, will be considered an item of Loss;

 

(b)         Loss resulting from any disposition of Company Property with respect
to which gain or loss is recognized for federal income tax purposes will be
computed by reference to the Book Basis of such property, notwithstanding that
the adjusted tax basis of such property may differ from its Book Basis;

 

(c)         In lieu of depreciation, amortization and other cost recovery
deductions taken into account in computing taxable income or loss, there will be
taken into account depreciation for the taxable year or other period as
determined in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g);

 

(d)         Any items of deduction and loss specially allocated pursuant to
Section 6.02 shall not be considered in determining Loss; and

 

(e)         Any decrease to Capital Accounts as a result of any adjustment to
the Book Basis of Company Property pursuant to Treasury Regulation
Section 1.704-1(b)(2) (iv)(f) or (g) shall constitute an item of Loss.

 

“Major Decision” has the meaning set forth in Section 7.01(b).

 

“Majority Members” means two (2) Members; provided, unless a Vote Loss Event has
occurred with respect to GAP, GAP must be one of the two (2) Members; provided,
further, the approval of any Member as to which a Vote Loss Event shall have
occurred shall not be required.

 

“Managing Member” means, initially, Operating Member.

 

“Member” means GAP, SRT and/or Operating Member, or any other Person who is
admitted as a member of the Company in accordance with this Agreement and
applicable law.

 

“Member Minimum Gain” means the Company’s “partner nonrecourse debt minimum
gain” as defined in Treasury Regulation Section 1.704-2(i)(2).

 

“Member Negotiation Expenses” has the meaning set forth in Section 4.01(b).

 

“Member Nonrecourse Deductions” means “partner nonrecourse deductions” as
defined in Treasury Regulation Section 1.704-2(i)(2).

 

“Membership Sale” has the meaning set forth in Section 9.06(a).

 

“Net Cash Flow” means, for any period, the excess of (a) Revenues for such
period over (b) Expenses for such period.

 

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“Net Loss” means, for any period, the excess of Losses over Profits, if
applicable, for such period.

 

“Net Profit” means, for any period, the excess of Profits over Losses, if
applicable, for such period.

 

“Net Sales Proceeds” means (i) the gross proceeds payable to the Company from
the sale(s) of the Initial Company Property, without reduction for the repayment
of the outstanding principal amount and accrued interest of any indebtedness
secured by the Initial Company Property, minus (without duplication) (ii) all
costs of sale chargeable to the Company, including, without limitation,
brokerage commissions, attorneys’ fees, transfer taxes, prorations, title and
escrow fees and charges, and loan prepayment, breakage and exit fees.

 

“Non-Contributing Member” has the meaning set forth in Section 4.02(c).

 

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

 

“Notices” has the meaning set forth in Section 14.02.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

 

“OFAC List” is any list of prohibited countries, individuals, organizations and
entities that is administered or maintained by OFAC, including: (i) Section
1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001) issued by the
President of the United States (Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), any related enabling legislation or any other similar executive
orders, (ii) the List of Specially Designated Nationals and Blocked Persons (the
“SDN List”) maintained by OFAC), and/or on any other similar list (“Other
Lists”) maintained by OFAC pursuant to any authorizing statute, executive order
or regulation, or (iii) a “Designated National” as defined in the Cuban Assets
Control Regulations, 31 C.F.R. Part 515.

 

“Operating Member” has the meaning set forth in the introductory paragraph
hereof.

 

“Operating Member Organizational Documents” has the meaning set forth in Section
13.01(b)(i).

 

“Operating Plan” means the strategic and comprehensive operating plan covering
the Company’s operation of Company Property, including, without limitation, any
anticipated entitlement and/or development work with respect to the Company
Property, which is approved by GAP and in effect from time to time pursuant to
Section 8.06.

 

“Partially Adjusted Capital Account” means, with respect to any Member for any
taxable year or other period of the Company, the Capital Account balance of such
Member at the beginning of such year or period, adjusted for all contributions
and distributions during such year or period and all special allocations
pursuant to Section 6.02 with respect to such year or period but before giving
effect to any allocations of Net Profit or Net Loss pursuant to Section 6.01.

 

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“Patriot Act” has the meaning set forth in Section 13.01(b)(viii).

 

“Percentage Interest” means with regard to each Member the percentage set forth
below opposite its name (in each case subject to adjustment as provided in this
Agreement):

 

Member     Percentage Interest   GAP     80 % SRT     19 % Operating Member    
1 %

 

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

 

“Profit” means, for each taxable year or other period, an amount equal to the
Company’s items of taxable income and gain for such year or other period,
determined in accordance with Section 703(a) of the Code (including all items of
income and gain required to be stated separately under Section 703(a)(1) of the
Code), with the following adjustments:

 

(a)         Any income of the Company that is exempt from federal income tax and
not otherwise taken into account in computing Profit will be added to Profit;

 

(b)         Gain resulting from any disposition of Company Property with respect
to which gain or loss is recognized for federal income tax purposes will be
computed by reference to the Book Basis of such property, notwithstanding that
the adjusted tax basis of such property may differ from its Book Basis;

 

(c)         Any items specially allocated pursuant to Section 6.02 shall not be
considered in determining Profit; and

 

(d)         Any increase to Capital Accounts as a result of any adjustment to
the Book Basis of Company Property pursuant to Treasury Regulation Section 
1.704-1(b)(2)(iv)(f) or (g) shall constitute an item of Profit.

 

“Property Company” and “Property Companies” have the meaning set forth in
Section 2.06.

 

“Property Management Agreement” means the Property Management Agreement in the
form attached hereto as Exhibit A, to be entered into by and between the Company
or a Property Company, as applicable, and Property Manager on the Closing Date.

 

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“Property Manager” means Glenborough LLC, a Delaware limited liability company,
which is Affiliated with Operating Member, or any other Person who is engaged as
a property manager for the Company Property and approved by GAP, whose services
will include those specified in the Property Management Agreement.

 

“Protection Decision” has the meaning set forth in Section 7.01(d).

 

“Purchase Agreement” means the Purchase and Sale Agreement, dated as of March
11, 2015, by and among TNP SRT Osceola Village, LLC, a Delaware limited
liability company, SRT Constitution Trail LLC, a Delaware limited liability
company, and TNP SRT Aurora Commons LLC, a Delaware limited liability company,
collectively, as seller, and the Company, as amended from time to time.

 

“Reasonable Period” means, with respect to any defaulting member, a period of
ten (10) Business Days after such defaulting Member receives written notice of
its default from a non-defaulting Member; provided, however, that if such breach
can be cured but cannot reasonably be cured within such 10-Business Day period,
the period shall continue, if such defaulting Member commences to cure the
breach within such 10-Business Day period, for so long as such defaulting Member
diligently prosecutes the cure to completion up to a maximum of the lesser of
(a) twenty (20) Business Days, or (b) the period of time allowed for such
performance under any material agreement affecting the Company Property,
including without limitation the mortgage, if any, encumbering Company Property.

 

“Regulatory Allocations” has the meaning set forth in Section 6.02(g).

 

“Reimbursement Agreement” means, the Reimbursement and Indemnity Agreement,
dated as of March 9, 2015, by and between GAP, Operating Member, SRT and
Strategic Realty Trust, Inc., a Maryland corporation, as amended from time to
time.

 

“Required Capital Contributions” means, the Initial Capital Contribution.

 

“Revenues” means, for any period, the total gross revenues received by the
Company during such period, including all receipts of the Company from (a) rent,
cost, expense and other recoveries and all additional rent paid to the Company
(including for parking facilities), (b) concessions to the Company which are in
the nature of revenues, (c) rent or business interruption insurance, and
casualty and liability insurance, if any, (d) funds made available to the extent
such funds are withdrawn from the Company’s reserve accounts and deposited into
the Company’s operating accounts, (e) proceeds from the sale or other
disposition of any Company Property, (f) proceeds from the financing,
refinancing or securitization of any Company Property, and (g) other revenues
and receipts realized by the Company, including without limitation excess cash
from Capital Contributions that were not used as contemplated for the purpose of
funding the Shortfall giving rise to the need for such Capital Contributions or
such other Shortfall as the Members may determine.

 

“ROFO Opportunity” has the meaning set forth in Section 7.05(c).

 

“Sale Property” has the meaning set forth in Section 9.06(a).

 

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“Seller” has the meaning set forth in the Purchase Agreement.

 

“Senior Foreign Political Figure” means a senior official of a major non-United
States political party or a senior executive of a government-owned corporation
not organized within the United States. In addition, a “Senior Foreign Political
Figure” includes any corporation, business or other entity that has been formed
by or for the benefit of a Senior Foreign Political Figure.

 

“Shortfall” has the meaning set forth in Section 4.02(a).

 

“Shortfall Advance” has the meaning set forth in Section 4.02(d).

 

“Shortfall Capital Contribution” has the meaning set forth in Section 4.02(d).

 

“Shortfall Contributing Member” has the meaning set forth in Section 4.02(d).

 

“Shortfall Election” shall mean, in the event of a Shortfall, an election by the
Contributing Member(s) pursuant to Section 4.02(d) to either treat the entire
Shortfall as (i) a Shortfall Loan or (ii) a Shortfall Capital Contribution.

 

“Shortfall Loan” shall mean the option, under a Shortfall Election, to treat
Shortfall Advances as a loan to the Company instead of a Shortfall Capital
Contribution.

 

“SPE” has the meaning set forth in Section 7.01(b)(xxi).

 

“SRO” means a self-regulatory organization.

 

“SRT Investment Notice” has the meaning set forth in Section 7.05(d).

 

“SRT Material Breach” means any of the representations and warranties of
“Seller” in the Purchase Agreement are found to have been intentionally false or
misleading when made.

 

“SRT Opportunity” has the meaning set forth in Section 7.05(d).

 

“Substituted Capital Contributions” has the meaning set forth in Section
4.02(c).

 

“Target Account” means, with respect to any Member as of the end of any taxable
year of the Company or other period, the excess of (a) an amount (which may be
positive or negative) equal to the hypothetical distribution (or contribution)
such Member would receive (or be deemed required to contribute) with respect to
its equity interest in the Company if all assets of the Company, including cash,
were sold for cash equal to their Book Basis (taking into account any
adjustments to Book Basis for such year or other period), all liabilities
(including Shortfall Loans) were then due and were satisfied according to their
terms (limited, with respect to each nonrecourse liability, to the Book Basis of
the assets securing such liability) and all remaining proceeds from such sale
were distributed pursuant to Section 6.03 or 6.04 (whichever is applicable at
the time of determination) over (b) the amount of Company Minimum Gain and
Member Minimum Gain that would be charged back to such Member as determined
pursuant to Treasury Regulation Section 1.704-2 immediately prior to such sale.

 

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“Transfer” has the meaning set forth in Section 9.01.

 

“Treasury Regulation” or “Regulation” means, with respect to any referenced
provision, such provision of the regulations of the United States Department of
the Treasury or any successor provision.

 

“UBTI” means “unrelated business taxable income” as defined in Code Sections 512
through 514 and the related Treasury Regulations.

 

“Value-Add Retail Joint Ventures” means joint venture retail real estate
investment opportunities where the internal rate of return over a five (5) year
holding period is reasonably projected to be in excess of thirteen percent
(13%).

 

“Vote Loss Event” means (a) with respect to Operating Member, (i) Operating
Member shall have been removed as Managing Member for cause (unless resulting
from a Change in Control or Key Person Event resulting from the death of the Key
Person), (ii) Operating Member shall have failed to return any distributions
pursuant to the provisos in Section 4.02(a) or Section 4.05 and GAP has returned
such distributions, (iii) Operating Member or its Affiliate shall have been
removed as Property Manager under the Property Management Agreement “for cause”,
(iv) the occurrence of a “for lack of performance” event or (v) the reduction of
Operating Member’s Percentage Interest to less than one half of one percent
(0.5%); (b) with respect to SRT, (i) the occurrence of any event described in
sub-clauses (i) through (iv) of clause (a) above with respect to Operating
Member at a time when Operating Member is the investment advisor of SRT, (ii)
SRT shall have failed to return any distributions pursuant to the provisos in
Section 4.02(a) or Section 4.05 and GAP has returned such distributions, (iii)
the reduction of SRT’s Percentage Interest to less than ten percent (10%) or
(iv) an SRT Material Breach shall have occurred; and (c) with respect to GAP,
the reduction of GAP’s Percentage Interest to less than ten percent (10%).

 

1.02        Other Defined Terms

 

As used in this Agreement, unless otherwise specified, (a) all references to
Sections, Articles or Exhibits are to Sections, Articles or Exhibits of this
Agreement, and (b) each accounting term has the meaning assigned to it in
accordance with GAAP.

 

ARTICLE II
ORGANIZATION

 

2.01        FORMATION

 

The Company has been formed as a limited liability company under the Delaware
Act by the filing of the Certificate of Formation. The Members hereby agree to
continue the Company as a limited liability company under the Delaware Act, upon
the terms and subject to the conditions set forth in this Agreement. GAP is
hereby authorized to file and record any amendments to the Certificate of
Formation and such other documents as may be reasonably required or appropriate
under the Delaware Act or the laws of any other jurisdiction in which the
Company may conduct business or own property.

 

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2.02        Name and Principal Place of Business

 

(a)         The name of the Company is set forth on the cover page to this
Agreement. Except as otherwise provided in Section 2.07, all business of the
Company shall be conducted under such name, and title to all Company Property
shall be held in such name.

 

(b)         The principal place of business and office of the Company shall be
located at c/o 400 South El Camino, 11th Floor, San Mateo, CA 94402-170,
Attention: General Counsel, or at such other place or places as Managing Member
may from time to time designate.

 

2.03        Term

 

The term of the Company commenced on the date of the filing of the Certificate
of Formation pursuant to the Delaware Act, and shall continue until the
liquidation and dissolution of the Company pursuant to Article XI.

 

2.04        Registered Agent and Registered Office

 

The name of the Company’s registered agent for service of process shall be
Corporation Service Company, and the address of the Company’s registered agent
and the address of the Company’s registered office in the State of Delaware
shall be Corporation Service Company, 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808. Such agent and such office may be changed from time
to time by Managing Member with written notice to all Members.

 

2.05        Purpose

 

(a)          The purpose of the Company shall be, either by itself or through
one or more Property Companies:

 

(i)          To perform its obligations and exercise its rights under the
Purchase Agreement and any other agreements or contracts contemplated by the
Purchase Agreement, and to carry out the terms of and engage in the transactions
contemplated by the Purchase Agreement;

 

(ii)         If applicable, to own, hold, sell, transfer, exchange, manage and
operate its direct or indirect interest in Property Companies;

 

(iii)       To acquire, own, entitle, develop, manage, operate, lease, improve,
finance, refinance, market, sell and otherwise deal with and dispose of the
Company Property; and

 

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(iv)        To conduct all activities reasonably necessary or desirable to
accomplish the foregoing purposes.

 

(b)         The Company is not authorized to, and shall not, engage in any
business other than as described in Section 2.05(a).

 

2.06       Company Property

 

In connection with the acquisition of the Initial Company Property on the
Closing Date, the Members may elect to cause the Company, and, if necessary, one
or more wholly owned subsidiaries of the Company, to form one or more Delaware
limited liability companies or limited partnerships to take title to the Initial
Company Property (each, a “Property Company” and collectively, “Property
Companies”). It is expressly understood that if the Company elects to utilize
one or more Property Companies, the Company shall conduct its business through
the Property Company(ies); provided that it is the intent of the Members that
the organizational documents relating to the formation of the Property Companies
shall be interpreted together with the provisions of this Agreement to have
substantially the same effect to the Members as would be the case if all the
interests therein were held or all such business were conducted by the Company
pursuant to the terms of this Agreement. Managing Member shall perform, with no
additional compensation, substantially identical services for each Property
Company as Managing Member performs for the Company, subject to the terms,
conditions, limitations and restrictions set forth in this Agreement. Managing
Member agrees to perform such duties, and in such circumstances and with regard
to such duties, Managing Member shall be subject to the same standards of
conduct and shall have the same rights and obligations with regard to such
duties performed or to be performed on behalf of any such Property Company as
are set forth in this Agreement with regard to substantially identical services
to be performed for or on behalf of the Company. The Members agree to make such
changes as any Lender(s) may require to this Agreement and to the organizational
documents of the Property Companies, including, without limitation, the addition
of a non-member manager and/or independent director to the structure of any of
the Property Companies and incorporation of special purpose entity provisions
into this Agreement and/or the organization documents of the Project Companies.

 

ARTICLE III
MEMBERS

 

3.01        Members

 

(a)         Effective as of the Effective Date, the Members of the Company shall
be GAP, SRT and Operating Member. Except as expressly permitted by this
Agreement, no other Person shall be admitted as a member of the Company and no
additional Interest shall be issued, without the consent of Majority Members.

 

(b)         Neither SRT nor GAP shall have any fiduciary duties toward any other
Member, the Company or any Property Company. The Managing Member, while serving
in such role, shall have a fiduciary duty towards the other Members, the Company
and any Property Company as described in Section 7.03 of this Agreement.

 

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3.02        Limitation On Liability

 

Except as otherwise expressly provided by the Delaware Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member.
Except as otherwise expressly provided in this Agreement (with respect to
liability among Members) or by the Delaware Act, the liability of each Member
shall be limited to such Member’s Interest.

 

3.03        Waiver of Other Rights

 

The Members have (i) no right under Section 18-604 of the Act to withdraw or
resign and receive the fair value of their Interests, (ii) no right to demand or
receive any distribution from the Company in any form other than cash and in
accordance with the provisions of this Agreement concerning distributions, and
(iii) no right under the first sentence of Section 18-606 of the Act.

 

3.04        No Certificated Interests

 

The Interests shall not be certificated unless otherwise approved by both
Operating Member and GAP. A Member’s Interest shall be personal property for all
purposes.

 

3.05        No State Law Partnership

 

The Company shall not be a partnership or joint venture under any state or
federal law, and no Member shall be a partner or joint venturer of any other
Member for any purposes, other than under the Code and other applicable tax
laws, and this Agreement may not be construed otherwise.

 

ARTICLE IV
CAPITAL

 

4.01        Initial Capital Contributions

 

(a)         Intentionally Omitted.

 

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(b)         Due Diligence Costs. Operating Member, SRT, GAP and their respective
Affiliates have heretofore incurred, and may hereafter incur, third party
out-of-pocket costs and expenses in connection with the negotiation of the
Purchase Agreement, including without limitation, their due diligence analyses
and other evaluations of the Initial Company Property and any engineering and
feasibility costs and expenses (collectively, the “Contract and Due Diligence
Costs”; such costs shall include, without limitation, costs (including, without
limitation, attorneys’ fees) incurred by GAP in reviewing and analyzing work
conducted by Operating Member or its agents but will exclude any costs incurred
by SRT or Operating Member in connection with the negotiation of the Purchase
Agreement). GAP, GAP Party, SRT and Operating Member have heretofore incurred
third party costs and expenses in connection with the negotiation and execution
of this Agreement, and the Property Management Agreement (collectively, the
“Member Negotiation Expenses”). For purposes of this Section 4.01(b), Operating
Member’s and SRT’s Member Negotiation Expenses shall be limited to the actual
third party costs and expenses incurred by Operating Member and SRT solely in
connection with the negotiation and execution of this Agreement, and the
Property Management Agreement (and shall exclude, without limitation, any other
costs and expenses that Operating Member or SRT may have incurred or may
hereafter incur in connection with any prior negotiations and/or transactions
with any Person other than GAP or GAP Party relating to the Initial Company
Property. Provided that the Company acquires the Initial Company Property
pursuant to the Purchase Agreement, (i) the Company shall pay or reimburse GAP
for (A) all Contract and Due Diligence Costs, (B) all Member Negotiation
Expenses incurred by GAP and GAP Party, and (ii) the Company shall pay or
reimburse Operating Member and SRT for all such Member Negotiation Expenses
incurred by Operating Member and SRT, in each case, to the extent such Member
seeking reimbursement has provided the Company and the other Members with
documentary evidence and such other evidence, reasonably satisfactory to the
Company, relating to such Member Negotiation Expenses, and so that each Member’s
share of all such costs, expenses and consideration shall be in proportion to
their respective Percentage Interests.

 

(c)         Failure to Close Purchase; Initial Capital Contributions. Whether
the Company shall proceed with the transaction pursuant to the Purchase
Agreement, including, but not limited to, whether it shall close the purchase of
the Initial Company Property shall be determined by GAP in its sole discretion,
and no Member or any Affiliate thereof shall have any claim against the Company
or any other Member or Affiliate of a Member or GAP by reason of such
determination. In the event GAP decides cause the Company to close the purchase
of the Initial Company Property pursuant to the Purchase Agreement, then two (2)
Business Days after any request by the Managing Member (as directed by GAP) (or
upon the closing of the acquisition of the Initial Company Property, if
earlier), GAP and Operating Member shall contribute in cash to the capital of
the Company their pro rata shares (based upon their actual Percentage Interests)
of the sum of (i) the amount reasonably determined by the Managing Member to be
necessary to close the acquisition of the Initial Company Property, including,
without limitation, the Company’s equity, closing costs, Contract and Due
Diligence Costs, and (ii) a reasonable amount of initial working capital of, and
reserves for, the Company, as determined by the Managing Member (all such
amounts shall be credited as provided in Section 4.01(b)). Operating Member’s
and GAP’s respective estimated required Initial Capital Contributions, which are
to be funded prior to the acquisition of the Initial Company Property, as well
as the sources and uses for the closing, are described on Schedule A attached
hereto. If, either before or after the acquisition of the Initial Company
Property, the Managing Member determines that the Initial Capital Contributions
described on Schedule A do not accurately reflect the matters specified in the
second sentence of this paragraph, then the Managing Member may readjust the
Initial Capital Contributions required of each Member. For avoidance of doubt,
SRT’s Percentage Interest is being acquired in exchange for the value of the
Initial Company Property that is in excess of the purchase price being paid for
the Initial Company Property by the Company. In no event will SRT be required to
make an Initial Capital Contribution in cash to the Company; provided, as
contemplated by the Purchase Agreement, the purchase price for the Initial
Company Property shall be reduced by an amount equal to (i) the sum of the
Contract and Due Diligence Costs and Member Negotiation Expenses for which the
Members are entitled to reimbursement under Section 4.01(b) multiplied by (ii)
SRT’s Percentage Interest.

 

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4.02        Additional Capital Contributions

 

(a)         If at any time or from time to time after all of the Initial Capital
Contributions have been contributed, GAP determines that additional funds (a
“Shortfall”) are required (i) for costs provided by the Initial Budget and
Operating Plan, or (ii) for costs necessary on an emergency basis to protect the
Company and any of its assets, including without limitation, the Initial Company
Property, or (iii) for costs and expenses not provided by the Initial Budget and
Operating Plan but approved in writing by GAP, then in connection with any such
Shortfall set forth in 4.02(a)(i), (ii), or (iii), GAP shall have the right to
require that the Members make further capital contributions (“Additional Capital
Contributions”) in the amount of such Shortfall. If directed by GAP, each Member
shall, within fifteen (15) Business Days thereafter (or such shorter period, if
any, in order to avoid a default under a Loan Document but not less than three
(3) Business Days) (the “Contribution Deadline”), contribute its pro rata share
of such Shortfall based on its Percentage Interest, provided however, that in
the event that distributions have been made pursuant to Section 6.03(c),
6.03(d), 6.03(e) or 6.03(f) at the time the Additional Capital Contributions are
to be made, the Shortfall shall be funded by the Members by returning
distributions previously made pursuant Section 6.03(c), 6.03(d), 6.03(e) or
6.03(f), respectively, in accordance with each Member’s then most recent
distribution percentage under Section 6.03(c), 6.03(d), 6.03(e) or 6.03(f),
respectively (but only to the extent of such distributions), and any
distributions returned shall be treated as not having been made for purposes of
making future distributions (other than taking into account the timing of such
distributions and their return for purposes of computing the applicable IRR
thresholds).

 

(b)         The Initial Capital Contributions required by Section 4.01 shall be
made by wire transfer of funds to an account in the name of the Company
designated by the Managing Member. All other Capital Contributions and the
return of any distributions pursuant to the proviso in Section 4.02(a) or the
proviso in Section 4.05 shall be made by wire transfer of funds to accounts in
the name of the Company designated by the Managing Member from time to time.

 

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(c)         If any Member (the “Non-Contributing Member”) fails to timely make
the Capital Contributions or the return of any distributions pursuant to the
proviso in Section 4.02(a) or the proviso in Section 4.05 (or any portions
thereof) required by Section 4.01 or 4.02(a) (other than in connection with the
withdrawal of a Member or following a decision not to proceed with the
acquisition of the Initial Company Property), then one or more of the other
Members that is not an Affiliate of the Non-Contributing Member (the
“Contributing Member”) may (but shall not be required to) make such capital
contribution (i.e., the Non-Contributing Member’s share, in addition to the
Contributing Member’s share; provided that if there is more than one
Contributing Member who wishes to so contribute the Non-Contributing Member’s
share, such Contributing Members, in the aggregate, must contribute the entire
amount of such share in proportion to their then-existing Percentage Interests),
and the Contributing Member may choose one, and only one, of the following
options: (X) to make a Shortfall Election, or, if no Shortfall Election is made,
(Y) elect to dilute the Percentage Interest of the Non-Contributing Member. In
the event the Contributing Member elects to dilute the Percentage Interest of
the Non-Contributing Member, the Percentage Interest of each of the Members
shall be adjusted to equal the percentage equivalent of the quotient determined
by dividing (1) the positive difference, if any, between (a) the sum of (i) 100%
of the aggregate Capital Contributions (excluding Substituted Capital
Contributions (as hereinafter defined)) then or theretofore made by such Member
to the Company, plus (ii) 200% of the Substituted Capital Contributions then or
theretofore made by such Member to the Company (the excess of 200% of such
Member’s Substituted Capital Contributions over such Member’s Substituted
Capital Contributions is referred to herein as the “Excess Amounts”), minus
(b) the Excess Amounts attributable to the Substituted Capital Contributions
then or theretofore made by the other Member to the Company, by (2) 100% of the
aggregate Capital Contributions (including without limitation Substituted
Capital Contributions) then or theretofore made by all of the Members to the
Company. As used herein, the term “Substituted Capital Contribution” shall mean
an Additional Capital Contribution made by the Contributing Member equal to the
amount that the Non-Contributing Member failed to timely contribute pursuant to
Section 4.02(a). An example of the operation of such calculation is set forth on
Exhibit C attached hereto. If a Contributing Member’s Percentage Interest is
increased pursuant to this Section 4.02(c), then (A) its Gross Adjusted Capital
Contributions, as previously adjusted, shall, in addition to being increased by
the amount of Capital Contributions (including without limitation ordinary
Capital Contributions and Substituted Capital Contributions) made by such
Member, also be increased by an amount equal to an additional 100% of the
Substituted Capital Contributions made by such Member (which increase for IRR
purposes shall be treated as a Capital Contribution on the date the related
Substituted Capital Contribution is made), and the Gross Adjusted Capital
Contributions of the other Member shall be adjusted so that the ratios of the
Members’ Gross Adjusted Capital Contributions immediately after such adjustment
are equal to their Percentage Interests immediately after such adjustment, and
(B) to the extent determined by the Managing Member, the Capital Account
balances of the Members shall be adjusted so that the Partially Adjusted Capital
Accounts immediately after such adjustment (after taking into account all items
of Profit and Loss and other items through the date of the adjustment as deemed
appropriate by the Managing Member) are equal as closely as possible to the
Target Accounts at such time, after giving effect to the adjustments to Target
Accounts resulting from changes to the Percentage Interests and Gross Adjusted
Capital Contributions required by this Section 4.02(c).

 

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(d)         In the event the Contributing Member does not elect to dilute the
Percentage Interest of the Non-Contributing Member pursuant to Section 4.02(c),
and instead makes the Shortfall Election pursuant to this Section 4.02(d), then
any Contributing Member which contributes its share of an Additional Capital
Contribution with respect to which there is a Non-Contributing Member shall be
referred to herein as a “Shortfall Contributing Member” and the amount advanced
to the Company pursuant to Section 4.01(a) and, if applicable, Section 4.01(c)
(consisting of the share advanced by the Contributing Member on its own behalf
and, if applicable, the share contributed by the Contributing Member that the
Non-Contributing Member failed to contribute) shall, upon making the Shortfall
Election, be referred to herein as the Shortfall Contributing Member’s
“Shortfall Advances.” The Shortfall Election shall be made by notice from the
Shortfall Contributing Members to the Non-Contributing Member within thirty (30)
days of the Contribution Deadline or the date on which the Shortfall
Contributing Members funded any amount that the Non-Contributing Member failed
to contribute (whichever is later), provided that no Shortfall Election shall be
effective unless all Members other than the Non-Contributing Member are
Shortfall Contributing Members with respect to the Shortfall Advances that are
the subject of such Shortfall Election and all Shortfall Contributing Members
make the Shortfall Election with respect to such Shortfall Advances. The
Shortfall Election shall specify whether the relevant Shortfall Advances shall
be treated as “Shortfall Capital Contributions” or as “Shortfall Loans”;
provided that if two or more Shortfall Contributing Members fail to agree on
such designation, the Member making the largest Shortfall Advance that is the
subject of such Shortfall Election shall have the right to designate the
treatment of all such Shortfall Advances as Shortfall Capital Contributions or
as Shortfall Loans. Shortfall Loans shall accrue interest at the rate of twenty
percent (20%) per annum, compounded monthly, until repaid in full, and all
amounts remaining due thereunder (after application of Section 6.03(a)) shall be
due and payable in full two (2) years from the date such loans are made (which
shall be the date of the respective Shortfall Advances) or, if sooner, upon an
event giving rise to the liquidation of the Company. Shortfall Capital
Contributions shall be treated as provided in Section 6.03(a). Shortfall Capital
Contributions shall be Additional Capital Contributions hereunder, but shall not
be Substituted Capital Contributions, and a Member’s Gross Adjusted Capital
Contributions shall in no event be increased by Shortfall Capital Contributions.
A Shortfall Loan shall not be treated as a Capital Contribution or a Substituted
Capital Contribution, and a Member’s Gross Adjusted Capital Contributions shall
in no event be increased by a Shortfall Loan.

 

(e)         Each Member hereby grants to the Company, as secured party, a
security interest in such Member’s Interest to secure its obligation to
contribute its Initial Capital Contributions to the Company under this Article
IV, and the Company shall have all rights available to a secured party under the
Delaware Uniform Commercial Code and the laws of the state of organization of
such Member. Each Member does hereby irrevocably constitute and appoint each of
the other Members, the Company and the agents, officers or employees thereof,
its true and lawful attorneys-in-fact, coupled with an interest, with full power
to prepare and execute any documents, instruments and agreements, and such
financing, continuation statements, and other instruments and documents as may
be appropriate to perfect, continue and enforce such security interest in favor
of the Company.

 

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(f)         Each Member acknowledges and agrees that the other Members would not
be entering into this Agreement were it not for (i) the Members agreeing to make
the Capital Contributions or Shortfall Loans provided for in Section 4.01 and
this Section 4.02 and (ii) the remedy provisions set forth above in this
Section 4.02. Each Member acknowledges and agrees that in the event any Member
fails to make its Capital Contributions pursuant to this Agreement, the other
Members will suffer substantial damages and the remedy provisions set forth
above are fair, just and equitable in all respects. In addition to the remedies
specified herein, the Company shall be entitled to exercise its rights and
remedies at law and equity against each Non-Contributing Member which fails to
make any Initial Capital Contribution (but only any Initial Capital
Contribution, and excluding circumstances where the Non-Contributing Member is
withdrawing as a member) required hereunder. Notwithstanding the foregoing, in
the event a Member fails to make any Additional Capital Contributions, any
Contributing Member’s remedies shall be limited to making the Shortfall Election
or electing to dilute the Percentage Interest of the Non-Contributing Member as
described in Section 4.02(c), and all other remedies at law or equity shall be
precluded.

 

4.03        Capital Accounts

 

A separate Capital Account will be maintained for each Member in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv). Consistent therewith, the Capital
Account of each Member will be determined and adjusted as follows:

 

(a)          Each Member’s Capital Account will be credited with:

 

(i)         Any contributions of cash made by such Member to the capital of the
Company plus the fair market value of any property contributed by such Member to
the capital of the Company (net of any liabilities to which such property is
subject or which are assumed by the Company);

 

(ii)        The Member’s distributive share of Net Profit and any items in the
nature of income or gain specially allocated to such Member pursuant to Section
6.02; and

 

(iii)        Any other increases required by Treasury Regulation
Section 1.704-1(b)(2)(iv).

 

(b)          Each Member’s Capital Account will be debited with:

 

(i)         Any distributions of cash made from the Company to such Member plus
the fair market value of any property distributed in kind to such Member (net of
any liabilities to which such property is subject or which are assumed by such
Member);

 

(ii)        The Member’s distributive share of Net Loss and any items in the
nature of expenses or losses specially allocated to such Member pursuant to
Section 6.02; and

 

(iii)        Any other decreases required by Treasury Regulation
Section 1.704-1(b)(2)(iv).

 

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(c)         The estimated initial Capital Account balance of each Member is set
forth in Schedule A, which balances have been determined in accordance with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(f). Upon any
adjustment to the Initial Capital Contributions, Schedule A shall be revised as
reasonably determined by GAP.

 

(d)         Capital Accounts shall also be subject to adjustment as and to the
extent provided in clause (B) of Section 4.02(c) (including the other provisions
in this Agreement that apply with reference to such clause).

 

The provisions of this Section 4.03 and any other provisions of this Agreement
relating to the maintenance of Capital Accounts have been included in this
Agreement to comply with Section 704(b) of the Code and the Treasury Regulations
promulgated thereunder and will be interpreted and applied in a manner
consistent with those provisions.

 

4.04       No Further Capital Contributions

 

Except as expressly provided in this Agreement or with the prior written consent
of the Members, and subject to the provisions of this Agreement, no Member shall
be required or entitled to contribute any other or further capital to the
Company, nor shall any Member be required or entitled to loan any funds to the
Company. No Member will have any obligation to restore any negative balance in
its Capital Account at any time including upon liquidation or dissolution of the
Company.

 

4.05        Loans

 

Following the Effective Date, the Managing Member shall use diligent efforts to
apply for and secure for the Company or, if applicable, a Property Company, one
or more Loans at commercially reasonable rates and on commercially reasonable
non-recourse terms (with, if required by a Lender, customary carve outs, which
shall be recourse only to Operating Member, SRT and/or their Affiliates who are
not natural persons) for traditional senior financing, which Loan(s) shall be
secured by the Initial Company Property. The Members agree to make such
reasonable changes to this Agreement as may be requested by any current or
future Lender; provided, however, that such changes shall not alter the economic
terms, or any fundamental rights of the Members, set forth herein. Operating
Member and its Affiliates who are not natural persons shall provide all recourse
for customary carve outs requested in non-recourse Loans to the extent required
by the Lender (the “Recourse Obligations”); provided that, (a) GAP and SRT shall
each reimburse Operating Member and its affiliated guarantors for GAP’s and
SRT’s pro rata shares (based on Percentage Interest, provided that, if
distributions have been made pursuant to Section 6.03(c), 6.03(d), 6.03(e) or
6.03(f) at the time any recourse liability arises under a guaranty, the Members’
liability for such recourse obligations, to the extent such guaranty obligations
are paid, payable or demand has been made upon such guarantor, shall be pro rata
in accordance with each Member’s then most recent distribution percentage under
Section 6.03(c), 6.03(d), 6.03(e) or 6.03(f) respectively (but only to the
extent of such distributions), and (b) each Member shall be solely responsible
for recourse liability under any guaranty to the extent arising out of an act
performed or omitted to be performed by such Member or an Affiliate of such
Member. Notwithstanding the foregoing, prior to Operating Member, or any
Operating Member affiliated guarantor, making any payment under a guaranty with
respect to which Operating Member intends to request reimbursement (in whole or
in part) from GAP in accordance with the foregoing, and as a condition to GAP’s
obligation to reimburse Operating Member or its affiliated guarantor in
accordance with the foregoing, Operating Member shall notify GAP of the claim
giving rise to liability under the applicable guaranty and shall refrain from
making any payment under such guaranty until GAP has approved of such payment;
provided, however, that GAP’s approval shall not be required if GAP is required
to reimburse Operating Member for such guaranty payment under the Reimbursement
Agreement.

 

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ARTICLE V
INTERESTS IN THE COMPANY

 

5.01        Percentage Interest

 

The Percentage Interests of the Members may be adjusted only as set forth in
this Agreement.

 

5.02        Return of Capital

 

No Member shall be liable for the return of the Capital Contributions (or any
portion thereof) of any other Member, it being expressly understood that any
such return shall be made solely from the assets of the Company. No Member shall
be entitled to withdraw or receive a return of any part of its Capital
Contributions or Capital Account, to receive interest on its Capital
Contributions or Capital Account or to receive any distributions from the
Company, except as expressly provided for in this Agreement or under applicable
law. No Member shall have any obligation to restore any negative balance in its
Capital Account.

 

5.03        Ownership

 

All Company Property shall be owned by the Company or, as provided in Section
2.06, by one or more Property Companies, subject to the terms and provisions of
this Agreement. Title to Company Property shall be held by the Company in the
Company’s name or, as provided in Section 2.06, by one or more Property
Companies in the name of such Property Companies.

 

5.04        Waiver of Partition; Nature of Interests in the Company

 

Except as otherwise expressly provided for in this Agreement, and without
limiting GAP’s unfettered right to sell all or any portion of the Company
Property as set forth herein, each of the Members hereby irrevocably waives any
right or power that such Member might have:

 

(a)         To cause the Company or any of its assets to be partitioned;

 

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(b)         To cause the appointment of a receiver for all or any portion of the
assets of the Company;

 

(c)         To compel any sale of all or any portion of the assets of the
Company pursuant to any applicable law; or

 

(d)         To file a complaint, or to institute any proceeding at law or in
equity, to cause the termination, dissolution or liquidation of the Company.

 

Each of the Members has been induced to enter into this Agreement in reliance
upon the waivers set forth in this Section 5.04, and without such waivers no
Member would have entered into this Agreement. No Member shall have any interest
in any specific Company Property. The interests of all Members in this Company
are personal property.

 

ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS

 

6.01        Allocations

 

For each taxable year or portion thereof, Net Profit and Net Loss shall be
allocated (after all allocations pursuant to Section 6.02 have been made) as
follows:

 

(a)         Net Loss shall be allocated among the Members so as to reduce,
proportionately, the differences between their respective Partially Adjusted
Capital Accounts (as decreased by such allocation) and Target Accounts for such
year; provided, however, that no portion of the Net Loss for any taxable year
shall be allocated to a Member whose Target Account is greater than or equal to
its Partially Adjusted Capital Account for such taxable year.

 

(b)         Net Profit shall be allocated among the Members so as to reduce,
proportionately, the differences between their respective Target Accounts and
Partially Adjusted Capital Accounts (as increased by such allocation) for such
year; provided, however, that no portion of the Net Profit for any taxable year
shall be allocated to a Member whose Target Account is less than or equal to his
Partially Adjusted Capital Account for such taxable year.

 

6.02        Allocations and Compliance with Section 704(b)

 

The following special allocations shall, except as otherwise provided, be made
in the following order:

 

(a)         If there is a net decrease in Company Minimum Gain or in any Member
Minimum Gain during any taxable year or other period, prior to any other
allocation pursuant hereto, such Member shall be specially allocated items of
income and gain for such year (and, if necessary, subsequent years) in an amount
and manner required by Treasury Regulation Sections 1.704-2(f) or 1.704-2(i)(4).
The items to be so allocated shall be determined in accordance with Treasury
Regulation Section 1.704-2.

 

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(b)         Nonrecourse Deductions for any taxable year or other period shall be
allocated (as nearly as possible) under Treasury Regulation Section 1.704-2 to
the Members, pro rata, in proportion to their respective Percentage Interests.

 

(c)         Any Member Nonrecourse Deductions for any taxable year or other
period shall be allocated to the Member that made or guaranteed or is otherwise
liable with respect to the loan to which such Member Nonrecourse Deductions are
attributable in accordance with principles under Treasury Regulation
Section 1.704-2(i).

 

(d)         Any Member who unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) which causes or increases an Adjusted Capital Account Deficit with
respect to such Member shall be allocated items of Profit sufficient to
eliminate such increase or negative balance caused thereby, as quickly as
possible, to the extent required by such Treasury Regulation.

 

(e)          No allocation of loss or deduction shall be made to any Member if,
as a result of such allocation, such Member would have an Adjusted Capital
Account Deficit. Any such disallowed allocation shall be made to the Members
entitled to receive such allocation under Treasury Regulation
Section 1.704-1(b)(2)(iv) in proportion to their respective Percentage
Interests. If losses or deductions are reallocated under this Section 6.02(e),
subsequent allocations of income and losses (and items thereof) shall be made so
that, to the extent possible, the net amount allocated under this
Section 6.02(e) equals the amount that would have been allocated to each Member
if no reallocation had occurred under this Section 6.02(e).

 

(f)          For purposes of Section 752 of the Code and the Treasury
Regulations thereunder, excess nonrecourse liabilities (within the meaning of
Treasury Regulations Section 1.752-3(a)(3)) shall be allocated to the Members
pro rata in proportion to their respective Percentage Interests.

 

(g)         The allocations contained in Sections 6.02(a), 6.02(c), 6.02(d) and
6.02(e) (the ”Regulatory Allocations”) are intended to comply with certain
requirements of Treasury Regulation Sections 1.704-1 and 1.704-2. The Regulatory
Allocations shall be taken into account in allocating Profits, Losses, Net
Profit and Net Loss and other items of income, gain, loss and deduction among
the Members so that to the extent possible, the aggregate of (i) the allocations
made to each Member under this Agreement other than the Regulatory Allocations
and (ii) the Regulatory Allocations made to each Member shall equal the net
amount that would have been allocated to each Member had the Regulatory
Allocations not occurred as necessary to effect the intent of Section 6.05. The
Managing Member shall take account of the fact that certain of the Regulatory
Allocations will occur at a period in the future for purposes of applying this
Section 6.02(g).

 

(h)         Interest on Shortfall Loans shall be treated as interest under the
Code. Items of Profit shall be allocated to Shortfall Contributing Members to
the extent of the accrued return on Shortfall Capital Contributions provided in
Section 6.03(a).

 

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6.03        Distributions and Payments

 

Except as provided in Sections 6.04 and 6.05, the Company shall, as soon as
reasonably practical (but no less often than quarterly, if appropriate), make
distributions (or, in the case of Shortfall Loans, payments) of Net Cash Flow to
the Members in the following manner and order of priority:

 

(a)         First, to Shortfall Contributing Members (i) for the repayment of
and in proportion to any amounts outstanding under Shortfall Loans (principal
and interest), and then (ii) pro rata (based upon the relative aggregate amounts
then distributable under this Section 6.03(a)(ii)) until each of the Shortfall
Contributing Members has received aggregate distributions of Net Cash Flow
pursuant to this Section 6.03(a)(ii) in an amount necessary to provide each such
Shortfall Contributing Member with a twenty percent (20%) IRR with respect to
all of its Shortfall Capital Contributions. The parties agree that distributions
under this Section 6.03(a) with respect to Shortfall Loans or Shortfall Capital
Contributions will be applied first to the interest on Shortfall Loans or to the
return on Shortfall Capital Contributions, respectively, to the extent accrued
as of the date of distribution, and then to the return of principal on such
Shortfall Loans or to the return of such Shortfall Capital Contributions,
respectively. The parties further agree that the interest on Shortfall Loans and
the return on Shortfall Capital Contributions represents a commercially
reasonable rate of return on such Shortfall Loans and Shortfall Capital
Contributions, respectively;

 

(b)         Second, to the Members, pro rata, in proportion to the amounts
required to be distributed pursuant to this Section 6.03(b), until such time as
each of the Members has received aggregated distributions pursuant to this
Section 6.03(b) in an amount equal to its Gross Adjusted Capital Contributions;

 

(c)         Third, to the Members, pro rata, in proportion to their respective
Percentage Interests until such time as GAP has received aggregate distributions
pursuant to Section 6.03(b) and this Section 6.03(c) in an amount necessary to
provide a twelve percent (12%) IRR to GAP with respect to its Gross Adjusted
Capital Contributions;

 

(d)         Fourth, (i) five percent (5%) to Operating Member, (ii) five percent
(5%) to SRT and (iii) the balance to Operating Member, SRT and GAP pro rata in
proportion to their respective Percentage Interests, until such time as GAP has
received aggregate distributions pursuant to Section 6.03(b), Section 6.03(c)
and this Section 6.03(d) in an amount necessary to provide to GAP the greater of
(x) a seventeen percent (17%) IRR with respect to its Gross Adjusted Capital
Contributions and (y) a 1.5x Equity Multiple;

 

(e)         Fifth, (i) five percent (5%) to Operating Member, (ii) twelve and
one-half percent (12.5%) to SRT and (iii) the balance to the Members, pro rata,
in proportion to their respective Percentage Interests, until such time as GAP
has received aggregate distributions pursuant to Section 6.03(b),
Section 6.03(c), Section 6.03(d) and this Section 6.03(e) in an amount necessary
to provide to GAP the greater of (x) a twenty-two percent (22%) IRR with respect
to its Gross Adjusted Capital Contributions and (y) a 1.75x Equity Multiple; and

 

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(f)         Sixth, (i) five percent (5%) to Operating Member, (ii) twenty
percent (20%) to SRT and (iii) the balance to the Members, pro rata, in
proportion to their respective Percentage Interests.

 

6.04        Special Payments and Distributions

 

(a)         (i) From and after the time (A) Operating Member shall have been
removed as Managing Member for cause, (B) Operating Member failed to return any
distributions pursuant to the provisos in Section 4.02(a) or Section 4.05 and
GAP has returned such distributions or (C) Operating Member or its Affiliate
shall have been removed as Property Manager under the Property Management
Agreement “for cause”, and (ii) provided that at such time (A) SRT has not
failed to return any distributions pursuant to the provisos in Section 4.02(a)
or Section 4.05 and (B) an SRT Material Breach has not occurred, Net Cash Flow
shall not be distributed as provided in Section 6.03 but rather pursuant to this
Section 6.04(a), and, except as provided in Section 6.05, the Company shall, as
soon as reasonably practical (but no less often than quarterly, if appropriate),
make payments or distributions, as applicable, of Net Cash Flow to the Members
in the following manner and order of priority:

 

(i)         First, as provided in Section 6.03(a);

 

(ii)        Second, to GAP and SRT pro rata, in proportion to their respective
losses, claims, damages or liabilities arising out of or in connection with the
applicable “for cause” event(s), until GAP and SRT have received distributions
under this Section 6.04(a)(ii) in amounts necessary to compensate GAP and SRT
for any losses, claims, damages or liabilities arising out of or in connection
with the applicable “for cause” event(s); and

 

(iii)       Thereafter, in accordance with Sections 6.03(b) through (f);
provided, that any amounts that would have been distributed to Operating Member
in excess of its pro rata share in proportion to its Percentage Interest shall
be distributed to the Members in proportion to their Percentage Interests.

 

(b)          (i) From and after the time (A) SRT has failed to return any
distributions pursuant to the provisos in Section 4.02(a) or Section 4.05 or (B)
an SRT Material Breach has occurred and provided (ii) (A) Operating Member has
not been removed as Managing Member for cause, (B) Operating Member has not
failed to return any distributions pursuant to the provisos in Section 4.02(a)
or Section 4.05 and (C) Operating Member or its Affiliate has not been removed
as Property Manager under the Property Management Agreement “for cause,” Net
Cash Flow shall not be distributed as provided in Section 6.03 but rather
pursuant to this Section 6.04(b), and, except as provided in Section 6.05, the
Company shall, as soon as reasonably practical (but no less often than
quarterly, if appropriate), make payments or distributions, as applicable, of
Net Cash Flow to the Members in the following manner and order of priority:

 

(i)         First, as provided in Section 6.03(a);

 

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(ii)        Second, to GAP until GAP has received distributions under this
Section 6.04(b)(ii) in an amount necessary to compensate GAP for any losses,
claims, damages or liabilities arising out of or in connection with any SRT
Material Breach; and

 

(iii)        Thereafter, in accordance with Sections 6.03(b) through (f);
provided, that any amounts that would have been distributed to SRT in excess of
its pro rata share in proportion to its Percentage Interest shall be distributed
to the Members in proportion to their Percentage Interests.

 

(c)         (i) From and after the time (A) Operating Member shall have been
removed as Managing Member for cause, (B) Operating Member failed to return any
distributions pursuant to the provisos in Section 4.02(a) or Section 4.05 and
GAP has returned such distributions or (C) Operating Member or its Affiliate
shall have been removed as Property Manager under the Property Management
Agreement “for cause”, and (ii) provided that at such time (A) SRT has failed to
return any distributions pursuant to the provisos in Section 4.02(a) or Section
4.05 or (B) an SRT Material Breach has occurred, Net Cash Flow shall not be
distributed as provided in Section 6.03 but rather pursuant to this
Section 6.04(c), and, except as provided in Section 6.05, the Company shall, as
soon as reasonably practical (but no less often than quarterly, if appropriate),
make payments or distributions, as applicable, of Net Cash Flow to the Members
in the following manner and order of priority:

 

(i)         First, as provided in Section 6.03(a);

 

(ii)        Second, to GAP until GAP has received distributions under this
Section 6.04(c)(ii) in an amount necessary to compensate GAP for any losses,
claims, damages or liabilities arising out of or in connection with the
applicable “for cause” event(s) or SRT Material Breach; and

 

(iii)        Thereafter, to the Members in proportion to their Percentage
Interests.

 

Upon this Section 6.04 becoming effective, Capital Accounts of the Members shall
be adjusted as, and to the extent, specified in clause (B) of Section 4.02(c).

 

6.05        Distributions in Liquidation

 

Upon the dissolution and winding-up of the Company, the proceeds of sale and
other assets of the Company distributable to the Members under
Section 11.02(c)(iii) shall be distributed, not later than the latest time
specified for such distributions pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(b)(2) to the Members in the manner specified in
Section 6.03 or Section 6.04 (whichever is applicable at the time of such
distribution). It is the intent that such distributions be in proportion to the
positive balances in the Members’ Capital Accounts immediately prior to such
distributions, and Net Profits, Net Loss and, if necessary, other items of
income, gain, loss or deduction for the year of such distribution (and, if prior
to the filing of the tax return for the Company and permitted by the Code, the
prior taxable year) shall be allocated among the Members so as to cause such
Capital Account balances to equal the amounts so distributable. With the
approval of GAP, a pro rata portion of the distributions that would otherwise be
made to the Members under the preceding sentence may be distributed to a trust
reasonably established, for a reasonable period of time, for the benefit of the
Members for the purposes of liquidating Company Property, collecting amounts
owed to the Company, and paying any contingent or unforeseen liabilities or
obligations of the Company arising out of or in connection with the Company. The
assets of any trust established under this Section 6.05 will be distributed to
the Members from time to time by the trustee of the trust upon approval of GAP
in the same proportions as the amount distributed to the trust by the Company
would otherwise have been distributed to the Members under this Agreement.

 

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6.06        Tax Matters

 

The Members intend for the Company to be treated as a partnership for federal
income tax purposes. The Managing Member shall make all applicable elections,
determinations and other decisions under the Code and applicable Treasury
Regulations, including, without limitation, the deductibility of a particular
item of expense and the positions to be taken on the Company’s tax return
following GAP’s approval of such elections, determinations and other decisions,
and any settlement or compromise of audit matters raised by the Internal Revenue
Service affecting the Members generally shall be subject to GAP’s prior written
consent. The Members shall each take reporting positions on their respective
federal, state and local income tax returns consistent with the positions for
the Company approved by GAP. Managing Member shall cause all federal, state and
local income and other tax returns to be timely filed by the Company and shall,
after receiving GAP’s approval of such returns, be authorized to execute such
returns (provided that Managing Member shall, for so long as it diligently
performs its obligations hereunder, not be responsible for the delays of any
other Member or reputable accountants or auditors retained by Managing Member or
at the request of GAP on behalf of the Company).

 

6.07        Tax Matters Partner

 

GAP shall be the tax matters partner within the meaning of Section 6231(a)(7) of
the Code and, subject to Section 6.06, shall exercise all rights, obligations
and duties of a tax matters partner under the Code; provided, however, that the
other Members shall be kept informed of, and given an opportunity to participate
in a non-binding manner in, all such matters which the tax matters partner deems
to be material; provided, however, that if a tax settlement would have a
disproportionate material adverse impact on one of the other Members, such
Member shall be given a reasonable period of time to approve the proposed
settlement, which approval shall not be unreasonably withheld, conditioned or
delayed.

 

6.08        Allocations for Income Tax Purposes

 

(a)         Except as provided in Section 6.08(b) or otherwise as required under
Section 704(b) of the Code and the related Treasury Regulations, each item of
income, gain, loss or deduction of the Company for federal income tax purposes
shall be allocated to the Members in the same manner that the corresponding item
of Net Profit, Net Loss or other item of income, gain, loss or deduction that
affect the Capital Accounts of the Members was allocated pursuant to Sections
6.01 and 6.02.

 

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(b)         In accordance with Section 704(c) of the Code and the applicable
Treasury Regulations thereunder, income, gain, loss, deduction and tax
depreciation with respect to any property contributed to the capital of the
Company, or with respect to any property which has a Book Basis different than
its adjusted tax basis, shall, solely for federal income tax purposes, be
allocated among the Members so as to take into account any variation between the
adjusted tax basis of such property to the Company and the Book Basis of such
property. Any elections, accounting conventions or other decisions relating to
such allocations shall be made by GAP in a manner that complies with Code
Sections 704(b) and 704(c) and the Treasury Regulations thereunder. For such
allocations, GAP may select any method permitted in the Treasury Regulations
under Code Section 704(c) with respect to such allocations, including the
“traditional method”, the “traditional method with curative allocations” and the
“remedial allocation method”.

 

All amounts required to be withheld pursuant to Section 1446 of the Code or any
other provision of federal, state, or local tax law shall be treated as amounts
actually distributed to the Members for all purposes under this Agreement. If
the Managing Member determines that the Company has insufficient liquid assets
to satisfy such withholding obligation, the Member as to which withholding
applies shall contribute cash to the Company in an amount sufficient to satisfy
such withholding obligation (which amounts shall not be treated as Capital
Contributions and the related payment of tax shall not be treated as a
distribution).

 

ARTICLE VII
MANAGEMENT

 

7.01        Management

 

(a)         Except to the extent provided elsewhere in this Agreement, the
Managing Member shall manage and conduct the operations and affairs of the
Company and make all decisions regarding the Company and its business and
assets. The Managing Member shall have all the rights and powers of a manager as
provided in the Delaware Act and as otherwise provided by law. In dealing with
the Managing Member acting on behalf of the Company, no person other than the
Property Manager shall be required to inquire into the authority of the Managing
Member to bind the Company. Persons dealing with the Company (other than the
Property Manager) are entitled to rely conclusively on the power and authority
of the Managing Member as set forth in this Agreement.

 

(b)         All decisions made with respect to the management and control of the
Company and approved pursuant to the terms of this Agreement shall be binding on
the Company and all Members. The Managing Member may elect officers of the
Company to implement the decisions (including without limitation executing
documents) of the Managing Member or the Members, as applicable, from time to
time. Without limiting the generality of the foregoing, except as otherwise
expressly provided in Section 7.01(c) or as provided for in any Budget or
Operating Plan, without the prior written consent of Majority Members in each
instance, the Managing Member shall not allow the Company take the following
actions (a “Major Decision”):

 

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(i)         The execution and delivery of any agreement or instrument to
purchase the Initial Company Property and the taking of any action required or
permitted to be taken thereunder (including, without limitation, all action
necessary to close the purchase of the Initial Company Property and an election
as to whether or not to purchase same) or any waiver under, amendment of or
assignment (in whole or in part) of any such agreement and the taking of any
action required or permitted to be taken thereunder or entering into any
agreements with any governmental agency, any neighboring or adjacent property
owner, any community organizations or any other third parties, or sending any
correspondence to or having any other material communications with, any
governmental agency which directly binds the Company or advocates a position on
behalf of the Company;

 

(ii)        Any financing, refinancing or securitization of any Company Property
(including, without limitation, a Loan) and the use of any proceeds thereof,
including, without limitation, interim and permanent financing, and any other
financing or refinancing of the operations of the Company and the execution and
delivery of any documents, agreements or instruments evidencing, securing or
relating to any such financing;

 

(iii)        Any material decision with respect to any environmental matters
affecting the Company Property;

 

(iv)       (A) Any sale, assignment, transfer or other disposition of Company
Property or any part thereof, including any delegated authority under the
Property Management Agreement or any activity which generates revenues; or
(B) any improvement, rehabilitation, alteration, repair, or completion of
construction of any Company Property (other than in the case of an emergency,
where such action is required prior to obtaining consent, and the aggregate cost
of such action is less than $25,000) that vary materially from the ranges and
guidelines in the Budget or Operating Plan (for purposes of this
Section 7.01(b)(iv), such a material variance shall be (I) an amount that is not
within the ranges established in the Operating Plan or is in excess of the
amount set forth in the Budget for such expenditure or line item by more than
$10,000 (in addition to individual expenditures and obligations, such test shall
be applied to aggregate expenditures and obligations made on a monthly basis as
well); provided, however, that any tenant improvement contemplated by any
approved lease or lease not requiring approval hereunder shall not be deemed a
violation of this Section 7.01(b)(iv) or (II) terms that materially conflict
with the other guidelines in the Operating Plan regarding such transactions); or
(C) taking any action relating thereto which burdens or encumbers Company
Property, and (D) any activity which generates revenues, or which is otherwise
on terms, that, vary materially from the ranges and guidelines in the Budget or
Operating Plan;

 

(v)        Any lease of any space within the Company Property, or any amendment
or modification thereto or any termination thereof, other than any lease,
amendment or modification thereto of less than 5,000 square feet of space within
the Company Property which is consistent with the Operating Plan. For purposes
of this Section 7.01(b)(v) only, Majority Members’ failure to approve any such
lease, amendment, modification or termination within three (3) Business Days of
receipt shall be deemed disapproval thereof;

 

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(vi)        The making of any recurring operating expenditure or incurring of
any recurring operating obligation by or on behalf of the Company that varies
materially from the Budget or entering into (or amending or modifying) of any
agreement which was not specifically included or provided in the Budget or under
the Operating Plan, or otherwise approved by the Majority Members (for purposes
of this Section 7.01(a)(vi), such a material variance shall be (A) expenditures
or obligations involving an amount that is in excess of the amount set forth on
a monthly basis or on an annual basis in the Budget for such expenditure on a
line item basis by more than $10,000 for such period, (B) expenditures or
obligations involving the incurrence of an expenditure or obligation for any
transaction or any series of related transactions when taken with all prior
expenditures or obligations during the particular quarter or fiscal year related
thereto exceeds the maximum expenditure amount provided in the Budget or the
Operating Plan for such particular transaction or series of transactions for
such period by $10,000, or (C) in the case of any material service, maintenance
or similar agreement proposed to be entered into, such agreement is not
terminable (without penalty) by the Company on thirty (30) calendar days or less
written notice to the other party; provided, however, that expenditures made or
obligations incurred or agreements entered into pursuant to, or which are
specifically included in or provided under, the Budget or Operating Plan or
otherwise previously approved by Majority Members shall not be Major Decisions
to the extent they do not vary (other than immaterial variances) from the Budget
and Operating Plan); provided, further, that expenditures made in connection
with snow removal costs at the Properties under approved agreements shall not be
a Major Decision;

 

(vii)       The establishment of reasonable reserves, determination of the
amount of available Net Cash Flow and making of distributions to Members
(subject to the requirements of Sections 6.03 and 6.04);

 

(viii)      The institution of any legal proceedings in the name of the Company,
settlement of any legal proceedings against the Company if the settlement amount
exceeds $50,000 in any single instance or $100,000 in the aggregate, and
confession of any judgment against the Company or any property of the Company
other than the institution of any eviction, suits for breach of tenant leases,
or similar proceedings provided for in the Operating Plan;

 

(ix)        (A) Pursuing any pre-development activities for any horizontal or
vertical construction to the extent that such pursuit would cause the Company to
incur expenditures in excess of those provided by the Budget or under the
Operating Plan, or (B) commencing any horizontal or vertical construction on any
Company Property;

 

(x)         The possession or pledge of any Company Property for other than
Company purposes (which shall require the consent of all Members);

 

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(xi)         Notwithstanding any other provisions of this Agreement, the
entering into any third party contract with an aggregate cost to the Company in
excess of $25,000 (“Contract Approval Threshold”).

 

(xii)        The entering into any contracts below the Contract Approval
Threshold to the extent that in connection with any such contracts (a) funds are
not explicitly provided for in the Budget and/or Operating Plan, as applicable,
or (b) the existence of which is not contemplated, in the Budget and/or
Operating Plan, as applicable;

 

(xiii)       Entering into, or amending, or modifying or terminating any
agreement with any manager, asset manager, leasing agent, listing agent,
contractor, or sales or placement agent or broker not expressly permitted
hereunder for the management, asset management, construction, leasing,
disposition, financing or refinancing of any Company Property;

 

(xiv)      Any other material matter pertaining to the Company’s business that
is designated to be a “Major Decision” hereunder;

 

(xv)       Any election or approval under the Purchase Agreement which the
Company may exercise under same;

 

(xvi)      make any loans that are not provided for in the Budget or Operating
Plan. For purposes of clarity, “loans” as used in this subparagraph (xvi) shall
not include tenant workouts that permit a tenant to repay amounts owed to
pursuant to a note;

 

(xvii)     amend this Agreement (provided that all Members hereby agree to make
such amendments as may be reasonably requested from time to time by any lender,
if any, to the Company, to the extent the same have been approved by GAP);

 

(xviii)    acquire any additional real property, or direct or indirect interest
in any additional real property, other than the Initial Company Property unless
provided by the Budget or Operating Plan;

 

(xix)       cause the Company to make any distribution of Company property in
kind to any Member;

 

(xx)        change the nature of the business conducted by the Company or its
purposes as described in Section 2.05;

 

(xxi)       (A) file any voluntary petition in bankruptcy on behalf of the
Company or any subsidiary of the Company (each, an “SPE”), (B) consent to or
file any involuntary petition in bankruptcy against the Company or any SPE, (C)
the making by the Company or any SPE of an assignment for the benefit of
creditors, or (D) consent to or initiate, or cause or permit any SPE to consent
to or initiate the appointment of a receiver of any Company Property or the
property of any SPE;

 

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(xxii)      cause the Company or any SPE to take any action (A) with the intent
to hinder, delay or interfere with the exercise by an administrative agent or
any Lender of any rights and remedies under the applicable Loan Documents, or
(B) to contest or in any way interfere, directly or indirectly, with any
foreclosure of any document securing a Loan or with any other enforcement of an
administrative agent’s or any Lender’s rights, powers or remedies under any Loan
Documents (whether by making any motion, seeking any extension, asserting any
defense, claim, counterclaim or right of offset, seeking any injunction or other
restraint, commencing any action, seeking to consolidate any such foreclosure or
other enforcement with any other action, or otherwise);

 

(xxiii)     sell, transfer or otherwise dispose of the Initial Company Property;

 

(xxiv)    enter into, amend or consummate any transaction or arrangement with
any Member or any Affiliate of any Member, all of which shall (with the
exception of the transactions described in Section 9.06 which shall not require
such approval) require the approval of the non-interested Member(s)
notwithstanding anything contained herein to the contrary;

 

(xxv)     Intentionally omitted;

 

(xxvi)    approve any Budget and Operating Plan, and any material amendments or
modifications thereto (which shall only be permitted in accordance with this
Agreement).

 

(c)         Subject to the terms of this Agreement, and the limitations imposed
by law, the Managing Member shall have all of the same powers as, but not the
duties of, a general partner of a general partnership under the laws of the
State of Delaware, including, without limitation, the full power and authority
to:

 

(i)         Acquire, hold, operate, sell, transfer, assign, convey, exchange,
lease, sublease, mortgage or otherwise dispose of or deal with all or any part
of Company Property;

 

(ii)        In furtherance of the Company’s purposes and business, borrow money
(including, without limitation, a Loan), whether on a secured or unsecured
basis, refinance, recast, modify, amend, extend, compromise or otherwise deal
with any such loan, and in connection therewith, issue evidences of indebtedness
and secure the same by mortgages, deeds of trust, security agreements or other
similar documents affecting the assets of the Company;

 

(iii)        Authorize other persons to execute and deliver such documents on
behalf of the Company as the Managing Member may deem necessary or desirable for
the Company’s business, including, without limitation, guarantees and
indemnities;

 

(iv)        Perform, or cause to be performed, all of the Company’s obligations
under any agreement to which the Company is a party;

 

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(v)        Enter into contracts on behalf of the Company and make expenditures
as are required to operate and manage the Company and the Company Properties;
and

 

(vi)       Do any act which is necessary or desirable to carry out any of the
purposes of the Company.

 

7.02       GAP Consultant

 

Notwithstanding anything to the contrary contained in this Agreement, GAP or its
Affiliate may engage an external third party consultant to advise it in
connection with this Agreement or the Company Property and any fees and expenses
incurred by GAP or its Affiliate in connection therewith shall be treated as an
expense of the Company and be promptly reimbursed to GAP upon request, provided,
however, that any fee paid to such consultant shall be subject to a cap of
$100,000 per year. Notwithstanding any provision to the contrary in this
Agreement, the decision to retain any such external consultant shall be the sole
decision of GAP and the same shall not constitute a Major Decision and Operating
Member shall have no right to approve or disapprove the Consultant or the
Consultant’s engagement agreement.

 

7.03        Duties of managing member

 

(a)         The Managing Member shall (i) conduct the business of the Company on
a day-to-day basis in accordance with the standard of care required of prudent
and experienced third parties performing similar functions, in accordance with
customary industry standards in accordance with the Budget and the Operating
Plan and such other guidelines as shall be adopted by the Company pursuant to
this Agreement, which duties may be discharged by delegating the same to
Property Manager pursuant to the Property Management Agreement, (ii) retain
Property Manager, or another person or entity approved by GAP, to perform the
Company Management Services for the Company, (iii) perform the duties assigned
to it hereunder, and (iv) carry out and implement all decisions and resolutions
of the Members. The initial Managing Member shall be Operating Member, which
shall remain Managing Member unless Operating Member is terminated or resigns as
Managing Member pursuant to the terms of this Agreement. Operating Member, as
the initial Managing Member, shall have no authority to retire or resign from
its position as the initial Managing Member; provided that Operating Member may
resign as Managing Member only if Property Manager is terminated, or if Property
Manager resigns from such position in accordance with the terms of the Property
Management Agreement. In the event that Operating Member or any other Person
should retire, resign or be removed as Managing Member, the Members shall be
under no obligation to appoint a replacement thereof. Subject to the limitations
set forth in this Agreement, the Managing Member, on behalf of the Company,
shall have the power and authority to enter into contracts and leases on behalf
of the Company in accordance with the current Budget and Operating Plan approved
in accordance with this Agreement, to make expenditures as are required to
implement such Budget and Operating Plan, but only to the extent that any such
expenditures and amounts required to be paid by the Company under such
contracts, leases and other instruments and documents have either been approved
in accordance with this Agreement do not require approval in accordance with
this Agreement. The Managing Member may rely on written instructions from a
representative appointed in writing by GAP from time to time that GAP has
approved certain actions and agreements. Subject to the Managing Member’s right
to charge certain matters to the Company as provided in Sections 8.01 and 8.03
and without limiting any compensation or reimbursements Managing Member may be
entitled to under the Property Management Agreement, the Managing Member shall
not be entitled to receive any fees or other compensation in respect of its
activities as Managing Member, and will not receive reimbursement for
compensation payable to any of its employees or other direct or indirect
overhead which may be attributable to the performance of its duties as Managing
Member.

 

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(b)         Notwithstanding anything to the contrary contained in
Section 7.01(b)(iii), if at the beginning of any calendar year the Budget and
Operating Plan or any item or portion thereof shall not have been approved by
Majority Members, then:

 

(i)         Any items or portions of the Budget and Operating Plan and amounts
of expenses provided therein which have been so approved shall become operative
immediately and the Managing Member shall be entitled to expend funds in
accordance with those operative portions;

 

(ii)        With respect to the Budget, the Managing Member shall be entitled
to, and shall, expend, in respect of noncapital, recurring expenses in any month
of the then-current calendar year, an amount equal to the budgeted amount for
the corresponding month of the immediately preceding calendar year, as set forth
on the immediately preceding calendar year Budget after giving effect to any
dispositions or other material changes to Company Property during the prior or
current year; provided, however, that if any contract approved by the Managing
Member or entered into pursuant to the provisions hereof or the Property
Management Agreement provides for an automatic increase in costs thereunder
after the beginning of the then current calendar year, then the Managing Member
shall be entitled to expend the amount of such increase; and

 

(iii)        The Managing Member shall be entitled to, and shall, expend funds
in respect of debt service on the Company’s financing (including the expense of
curing any defaults thereunder), utilities, real estate taxes and assessments,
or insurance premiums with respect to insurance for the Company Property,
regardless of whether the Budget has been approved or whether such expenditures
exceed the amounts provided for in the applicable Budget.

 

(c)         In addition to and without limiting any other duties set forth in
this Agreement, the Managing Member shall, subject to the availability of
adequate funds therefor in the Budget and from Revenues, Capital Contributions
or other sources, and provided that Managing Member may delegate such
obligations to Property Manager or any other third parties with whom the Company
may contract pursuant to the terms hereof:

 

(i)         Oversee, coordinate and process the operations, including without
limitation, the management on a day-to-day basis of any and all of the assets
which comprise Company Property, and prepare all communications with the Seller
and other relevant third parties;

 

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(ii)        Subject to the availability of funds therefor, take all proper and
necessary actions reasonably required to cause the Company and all third parties
at all times to perform and comply with the provisions (including, without
limitation, any provisions requiring the expenditure of funds by the Company) of
any loan commitment, agreement, mortgage, lease, or other contract, instrument
or agreement to which the Company is a party or which affects any Company
Property or the operation thereof;

 

(iii)        Subject to the availability of funds therefor, pay in a timely
manner all non-disputed operating expenses of the Company in accordance with the
terms of the Budget and the Operating Plan or as otherwise provided herein;

 

(iv)        To the extent available, and subject to the availability of the
funds therefor, obtain and maintain insurance coverage on Company Properties as
required by the Managing Member and pay all non-disputed taxes, assessments,
charges and fees payable in connection with the ownership, use and occupancy of
the Company Properties (provided that if the Managing Member requires that the
Company maintain insurance as part of GAP’s blanket policy, the Company’s
allocable share of deductibles and premiums under the liability insurance policy
shall be no greater than those under such policies previously maintained by
Property Manager);

 

(v)        Deliver to the other Members promptly upon the receipt or sending
thereof, copies of all material notices, reports and communications between the
Company and any tenant, the Seller, governmental agencies, neighboring property
owners, community groups and other relevant third parties, and material notices,
reports, and communications from any tenant, under any lease or any borrower
under any mortgage loan or any holder of a mortgage affecting all or any portion
of any Company Property, or any of such other parties, which relates to any
existing or pending default thereunder or to any financial or operational
information required by such Person;

 

(vi)        Deposit all receipts from operations of Company Property to a
separate account, or accounts, established and maintained by the Managing Member
in the name of the Company or the applicable Property Company, and not commingle
those receipts with any other funds or accounts of Managing Member;

 

(vii)       Manage and administer the process of selling and refinancing Company
Property;

 

(viii)      If the Managing Member subcontracts with third parties or any of its
Affiliates for the performance of any of the services to be performed by the
Managing Member, then the Managing Member shall supervise and oversee the
performance of the services performed by such third parties or Affiliates (in
the event of any such subcontract, references in this Agreement to actions taken
or to be taken by the Managing Member shall include actions taken or to be taken
by such subcontractors);

 

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(ix)        Execute and deliver agreements, certificates and similar documents
which are necessary to obtain loans, as well as manage any approved financing or
refinancing, on terms approved by the Managing Member and to acquire the Initial
Company Property pursuant to the Purchase Agreement;

 

(x)         Make periodic inspections of the Company Property and review all
maintenance, repairs and construction on the Company Property;

 

(xi)        Advise the Company on such action as may be required to comply with
any and all laws, ordinances, statutes and deed restrictions applicable to the
Company Property;

 

(xii)        Not knowingly permit the use of the Company Property for any
purpose which might impair any insurance on the Company Property or which might
render any insured loss thereunder uncollectible or which would be in violation
of any applicable law;

 

(xiii)       Promptly recommend from time to time the advisability of contesting
either the validity or the amount of personal and real property taxes, if
Managing Member deems such a contest appropriate

 

(xiv)      Fully cooperate with the Company and the Company’s representatives,
including leasing agents, tax consultants, brokers involved in the sale of all
or any portion of the Company Property, any potential purchaser of all or any
portion of the Company Property, appraisers, and counsel with the view that such
representatives shall be able to perform their duties efficiently and without
interference. Such parties shall be allowed to visit the Company Property and
inspect the same at such times as GAP may request;

 

(xv)       Advise the Company on such action as may be necessary to comply with
any and all laws, ordinances, statutes and deed restrictions applicable to the
Company Property;

 

(xvi)      Notify GAP of any of the following in any way relating to the Company
Property promptly following Managing Member’s receipt thereof: written notice of
any claim of violation of any legal requirement other than those which can be
corrected for less than $10,000 (or $150,000 if covered by insurance), and
without penalty or fine within thirty (30) days of notification thereof,
provided that notice is required for any claim that names any GAP Party; written
notice of any claim of liability; material written complaints from any
contractor, sub-contractor or other party involved in providing or assisting
with the operation, maintenance, and repair of the Company Property; written
notice of any default under any Loan Documents secured by the Company Property;
any summons or other legal process; any material damage to the Company Property;
any threatened (in writing by an applicable Governmental Authority or its agent)
condemnation or acquisition in lieu of condemnation of the Company Property or
any portion thereof; and any actual or alleged (in writing) personal injury or
property damage, and promptly notify GAP of any verbal notice Managing Member
receives related to any of the foregoing, but only if Managing Member, acting
reasonably and in good faith, deems the same to be material to the ownership or
operation of the Company Property. For purposes of this subsection (xvi),
“material” shall mean any claim for $10,000 or greater in any one instance, or
$50,000 in the aggregate;

 

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(xvii)     Promptly notify GAP of any material default or alleged (in writing)
material default by any party under any lease of all or any portion of the
Company Property of which Managing Member is aware, as well as any other
material information particular to the Company Property;

 

(xviii)    Advise the Company with respect to any presentations before public
agencies at both public and private meetings which relate to or affect the
Company Property, and in all dealings with the press, community leaders, owners
of adjacent property, and all other parties directly or indirectly involved with
the Company Property or with interests which may affect the success of the
Company Property;

 

(xix)       Comply at all times with this Agreement, including submitting to the
Members for their approval any decisions or matters which may be subject to
their approval under this Agreement; and

 

(xx)        Report to GAP with respect to Managing Member’s compliance with the
foregoing duties.

 

(d)         GAP shall have the absolute right, power and authority at any time
to terminate Operating Member’s appointment as Managing Member hereunder and to
appoint a successor Managing Member, and to remove Property Manager as the
manager under the Property Management Agreement and to terminate the Property
Management Agreement (and any other agreements or contracts between the Company
and Affiliates of Operating Member or Property Manager) and/or appoint a new
manager pursuant thereto “for cause”, or “for lack of performance”, or for an
Event of Default. GAP’s determination of whether a “for cause” event, a “for
lack of performance” event or an Event of Default by Operating Member shall have
occurred shall be conclusive and binding on the Members unless and until
Operating Member shall have obtained a final, non-appealable judgment of a court
of competent jurisdiction finding that no “for cause” event, “for lack of
performance” event or Event of Default by Operating Member has occurred. In the
event that Operating Member shall have been removed as Managing Member, or in
the event Property Manager is removed as the manager under the Property
Management Agreement, “for cause”, then under such circumstances and from that
time forward (i) Operating Member shall immediately cease to be Managing Member
(and Property Manager shall immediately cease to be the manager under the
Property Management Agreement), (ii) Operating Member shall cease to have any
right to any distributions under Section 6.03 and from that time forward
distributions to the Members shall be made under Section 6.04, (iii) Operating
Member shall forfeit its right to receive any fees under Section 7.04 and the
Property Management Agreement and (iv) Operating Member shall not have any right
to vote on Major Decisions other than as provided in Section 7.01(b). In the
event that Operating Member shall have been removed as Managing Member, or in
the event Property Manager is removed under the Property Management Agreement,
as a result of an Event of Default (which does not constitute “for cause”) by
Operating Member or Property Manager, or “for lack of performance”, then
Operating Member shall immediately cease to be Managing Member (and Property
Manager shall immediately cease to be the manager under the Property Management
Agreement), and Operating Member shall retain its right to receive distributions
hereunder pursuant to Section 6.03 (to the extent of its Interest), but (A)
Property Manager shall be terminated within ninety (90) days after such
termination and shall thereafter lose its right to receive payments under the
Property Management Agreement which would otherwise have accrued from and after
the expiration of said ninety (90) day period (provided that GAP, at its
election, may accelerate the termination of Property Manager to the date of the
termination of Operating Member as Managing Member for any reason other than for
cause, provided that Property Manager shall remain entitled to receive
management fees and reimbursements payable, if applicable, under the Property
Management Agreement through the termination date of said Property Manager), and
(B) Operating Member shall not have any right to vote on Major Decisions other
than Fundamental Decisions.

 

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(e)         Operating Member’s appointment as Managing Member shall
automatically terminate if Operating Member’s (or its permitted transferee’s)
Percentage Interest is less than one-half of one percent (0.5%).

 

7.04        Services and Fees

 

(a)         The Company and Property Manager shall enter into the Property
Management Agreement substantially concurrently with the execution of this
Agreement. The Property Management Agreement shall provide that after the
Company’s acquisition of the Initial Company Property, and while the Company
owns the Initial Company Property and Operating Member owns a Percentage
Interest of at least one half of one percent (0.5%), and provided that (i) no
Event of Default by Operating Member or any of its Affiliates then exists
hereunder or under the Property Management Agreement, and (ii) Operating Member
has not been removed as the Managing Member pursuant to this Agreement, the
Company shall pay Property Manager the Property Management Fee and the
Construction Management Fee (each as defined in the Property Management
Agreement) and leasing commissions pursuant to the terms and conditions of the
Property Management Agreement for so long as Property Manager is performing the
services required of it under the Property Management Agreement and under any
related agreements.

 

(b)         On the first day of each month of each year during the term of this
Agreement, the Company shall pay (to Operating Member (unless Operating Member
has forfeited its right to receive fees under this Section 7.04) an asset
management fee equal to (i) to the weighted average aggregate Investment Value
of the Initial Company Property owned by the Company during the immediately
preceding month multiplied by (ii) 0.02083% (an example of the foregoing is
attached as Schedule C). For purposes hereof, “Investment Value” means,
initially, with respect to each property included in the Initial Company
Property, the appraised value of such property as of the Closing Date; provided,
the Investment Value of each property shall be (i) reduced pro rata in
connection with sales of portions of such properties and (ii) excluded upon the
sale of such property.

 

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(c)         If and only if as of the date of calculation GAP has received
distributions hereunder in an amount necessary to provide GAP at least a twelve
percent (12%) IRR with respect to its Gross Adjusted Capital Contributions, then
promptly following the sale of the last Initial Company Property, the Company
shall pay Operating Member the Disposition Fee.

 

(d)         Except as set forth in this Section 7.04, any agreements with an
Affiliate of any Member must be approved by the non-Affiliated Members, and no
other fees or compensation will be paid by the Company to any Member or any of
its Affiliates. Neither Operating Member nor any of its Affiliates will be
entitled to any development, leasing or other fees associated with the
management, development and leasing of any of the Company Properties except as
set forth in the Property Management Agreement and will not be entitled to any
reimbursement for its employees or other direct or indirect overhead, except as
set forth in the Property Management Agreement or this Agreement, or as
otherwise provided by the Budget.

 

7.05        Duties and Conflicts

 

(a)         The Members and their respective officers, employees, the Managing
Member and Affiliates shall devote such time to the Company business as they
deem to be necessary or desirable in connection with their respective duties and
responsibilities hereunder. Except as provided hereunder or as otherwise agreed
to in writing by the Managing Member and all disinterested Members, no Member
nor any member, partner, shareholder, officer, director, employee, agent or
representative of any Member shall receive any salary or other remuneration for
its services rendered pursuant to this Agreement.

 

(b)         Each of the Members recognizes that each of the other Members and
its members, managers partners, shareholders, officers, directors, employees,
agents, representatives, the Managing Member and Affiliates, have or may have
other business interests, activities and investments, some of which may be in
conflict or competition with the business of the Company and that each of the
other Members and its members, managers, partners, shareholders, officers and
directors, employees, agents, representatives, the Managing Member and
Affiliates, are entitled to carry on such other business interests, activities
and investments. Except as set forth below, each of the Members may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, including, without limitation, owning, financing, acquiring,
leasing, promoting, developing, improving, operating, managing and servicing
real property and mortgage loans on its own behalf or on behalf of other
entities with which any of the Members is affiliated or otherwise, and each of
the Members may engage in any such activities, whether or not competitive with
the Company, without any obligation to offer any interest in such activities to
the Company or to the other Members. Neither the Company nor the other Members
shall have any right, by virtue of this Agreement, in or to such activities, or
the income or profits derived therefrom, and the pursuit of such activities,
even if competitive with the business of the Company, shall not be deemed
wrongful or improper.

 

-41-

 

  

(c)         Notwithstanding the foregoing, except as provided herein below,
during the term of this Agreement, (i) Operating Member shall not pursue an
opportunity or enter into a transaction (whether as lender, owner, shareholder,
partner, director, officer, employee, agent, consultant or other advisor), for
the financing, acquisition, ownership, entitlement, management, operation,
leasing, construction, or development, of any other property within a ten (10)
mile radius of any Initial Company Property (the “Competitive Area”) that has a
use comparable to the present projected or actual use of the Initial Company
Property or otherwise competes with the Initial Company Property in any way,
whether directly or indirectly, including without limitation through any of its
Affiliates or in any other manner (each, a “Competitive Opportunity”). The
Members acknowledge and agree that interests of SRT or its Affiliates with
respect to the Ensenada Square Property shall not be deemed a violation of this
Section 7.05(c). If Operating Member desires to pursue a Competitive Opportunity
or any Value-Add Retail Joint Venture, then GAP and its Affiliates (including,
without limitation, any affiliates of funds or accounts managed by GAP Capital
Management, L.P.) (each, a “GAP Party”), shall have a right of first offer with
respect to any such Competitive Opportunity or Value-Add Retail Joint Venture so
long as such proposed acquisition or development opportunity is a permitted
investment under any operating documents and/or fund documents that the
applicable GAP Party is subject to (each, a “ROFO Opportunity”). Operating
Member hereby represents and warrants that, as of the date hereof, neither it
nor any Affiliate is involved in any Competitive Opportunity or any ROFO
Opportunity which has not been disclosed in writing to GAP.

 

In the event Operating Member desires to pursue a ROFO Opportunity, Operating
Member shall give GAP notice of such ROFO Opportunity, which notice shall
include the proposed terms and conditions thereof and proposed investment return
thereon (in pro forma form) in sufficient detail to permit GAP to make an
informed decision as to its desire to proceed with said ROFO Opportunity on the
same terms as set out in the notice (together with such supporting information
as GAP may reasonably request, “Investment Notice”). GAP shall have thirty (30)
days from the date of such notice to determine whether it desires to proceed
with said ROFO Opportunity on the same terms as set out in the Investment
Notice. If GAP elects to proceed, it shall do so in a separate joint venture
upon terms and conditions similar to the terms and conditions of this Agreement
but subject to said revised economic terms as set forth in the Investment Notice
or otherwise acceptable to GAP and Operating Member. If GAP gives notice within
said thirty (30) day period that it does not desire to proceed with said
opportunity on the terms set forth in the Investment Notice or fails to respond
to such Investment Notice within the 30-day period, then Operating Member may
proceed with said opportunity either alone, with its Affiliates or otherwise
upon terms and conditions not materially more favorable to any alternate
provider of capital for such opportunity than the terms and conditions set forth
in the Investment Notice; provided, however, that in any event the opportunity
is modified to be upon terms materially more favorable to such alternate capital
provider than the terms and conditions set forth in the Investment Notice, then
the provisions of this paragraph shall again be applicable and an additional
Investment Notice shall be required to be delivered by Operating Member to GAP
pursuant to the terms hereof. For purposes of the preceding sentence, terms and
conditions shall be deemed materially more favorable to such alternate capital
provider if the proposed return on investment of GAP would increase by fifteen
percent (15%) or more over that which would be received under the terms set
forth in the Investment Notice. By way of example, if the pro forma included
with the Investment Notice indicated a projected return on investment of twenty
percent (20%) to GAP and GAP declined to proceed with the proposed investment,
Operating Member would be obligated to again offer the proposed investment to
GAP if the proposed terms and conditions were modified so that the projected
return on investment was equal to or greater than twenty-three percent (23%). If
Operating Member has complied with the conditions set forth above, Operating
Member shall have no further obligation to offer the proposed investment to GAP
once proposed terms have been accepted by such alternative capital provider as
evidenced by a term sheet signed by Operating Member of its Affiliates, on the
one hand, and such alternate capital provider, on the other hand.

 

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Notwithstanding the foregoing, GAP, for itself and each GAP Party, acknowledges
Operating Member’s obligation to provide investment opportunities to SRT and
agrees that the foregoing obligation of Operating Member to provide ROFO
Opportunities to GAP shall be subject and subordinate to Operating Member’s
existing obligations to SRT.

 

If GAP, or any GAP Party, elects to pursue a ROFO Opportunity, then any
agreement entered into between Operating Member and GAP, or the applicable GAP
Party, shall (i) be cross defaulted with this Agreement, such that a for cause
event resulting in the removal of Operating Member as Property Manager, Managing
Member or the like under this Agreement shall result in the same under the other
agreement and vice versa, and (ii) provide that Operating Member must contribute
not less than ten percent (10%) toward the total capitalization of the ROFO
Opportunity. Notwithstanding the foregoing, should SRT participate in a ROFO
Opportunity at a level not less than fifteen percent (15%), then Operating
Member shall be required to contribute not less than five percent (5%) to such
ROFO Opportunity.

 

The terms of this Section 7.05(c) shall expire, and Operating Member shall have
no further obligation to provide GAP or any GAP Party any ROFO Opportunity
following the earliest to occur of (i) the third anniversary of the Effective
Date, (ii) the first anniversary of the Effective Date if Operating Member and
GAP, or a GAP Party, have not entered into an agreement to pursue any ROFO
Opportunity or (iii) the date on which GAP (which for purposes hereof includes
each GAP Party) has rejected three (3) ROFO Opportunities which satisfy GAP’s
investment criteria.

 

(d)         SRT hereby represents and warrants that, except as disclosed to GAP
in writing, as of the date hereof, neither SRT nor any of its Affiliates has an
interest in any property within a ten (10) mile radius of any Initial Company
Property that has a use comparable to the present projected or actual use of the
Initial Company Property or otherwise competes with the Initial Company Property
in any way, whether directly or indirectly. The Members acknowledge and agree
that interests of SRT or its Affiliates with respect to the Ensenada Square
Property shall not be deemed a violation of this Section 7.05(d).

 

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If SRT desires to pursue (i) any joint venture involving any real estate assets
owned by SRT as of the date hereof or (ii) any Value-Add Retail Joint Ventures
(each, an “SRT Opportunity”), then GAP and the GAP Parties shall have a right of
first offer with respect to any such SRT Opportunity. In furtherance thereof,
SRT shall give GAP notice of such SRT Opportunity, which notice shall include
the proposed terms and conditions thereof and proposed investment return thereon
(in pro forma form) in sufficient detail to permit GAP to make an informed
decision as to its desire to proceed with said SRT Opportunity on the same terms
as set out in the notice (together with such supporting information as GAP may
reasonably request, “SRT Investment Notice”). GAP shall have thirty (30) days
from the date of such notice to determine whether it desires to proceed with
said SRT Opportunity on the same terms as set out in the SRT Investment Notice.
If GAP elects to proceed, it shall do so in a separate joint venture upon terms
and conditions similar to the terms and conditions of this Agreement but subject
to said revised economic terms as set forth in the Investment Notice or
otherwise acceptable to GAP and SRT. If GAP gives notice within said thirty (30)
day period that it does not desire to proceed with said opportunity on the terms
set forth in the SRT Investment Notice or fails to respond to such SRT
Investment Notice within the 30-day period, then SRT may proceed with said
opportunity either alone, with its Affiliates or otherwise upon terms and
conditions not materially more favorable to any alternate provider of capital
for such opportunity than the terms and conditions set forth in the SRT
Investment Notice; provided, however, that in any event the opportunity is
modified to be upon terms materially more favorable to such alternate capital
provider than the terms and conditions set forth in the SRT Investment Notice,
then the provisions of this paragraph shall again be applicable and an
additional SRT Investment Notice shall be required to be delivered by SRT to GAP
pursuant to the terms hereof. For purposes of the preceding sentence, terms and
conditions shall be deemed materially more favorable to such alternate capital
provider if the proposed return on investment of GAP increases by twenty percent
(20%) or more over that which would be received under the terms set forth in the
SRT Investment Notice. By way of example, if the pro forma included with the SRT
Investment Notice indicated a projected return on investment of twenty percent
(20%) to GAP and GAP declined to proceed with the proposed investment, SRT would
be obligated to again offer the proposed investment to GAP if the proposed terms
and conditions were modified so that the projected return on investment was
equal to or greater than twenty-four percent (24%). If SRT has complied with the
conditions set forth above, SRT shall have no further obligation to offer the
proposed investment to GAP once proposed terms have been accepted by such
alternative capital provider as evidenced by a term sheet signed by SRT of its
Affiliates, on the one hand, and such alternate capital provider, on the other
hand.

 

If GAP, or any GAP Party, elects to pursue an SRT Opportunity, then any
agreement entered into between SRT and GAP, or the applicable GAP Party, shall
(i) be cross defaulted with this Agreement as to rights to remove Managing
Member for its gross negligence, fraud, bad faith or willful misconduct, or any
other act that triggers recourse liability under any Loans and (ii) provide that
SRT must contribute not less than fifteen percent (15%) (in cash or real estate
or a combination thereof) toward the total capitalization of the SRT
Opportunity.

 

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The terms of this Section 7.05(c) shall expire, and SRT shall have no further
obligation to provide GAP or any GAP Party any SRT Opportunity following the
earliest to occur of (i) the third anniversary of the Effective Date, (ii) the
first anniversary of the Effective Date if SRT and GAP, or a GAP Party, have not
entered into an agreement to pursue any SRT Opportunity or (iii) the date on
which GAP (which for purposes hereof includes each GAP Party) has rejected three
(3) SRT Opportunities which satisfy GAP’s investment criteria.

 

7.06       Company Expenses

 

Except as otherwise provided in this Agreement or the Property Management
Agreement, except for the costs of preparing the reports specifically called for
by the terms hereof and the Budget and the Operating Plan, which shall be the
cost of Managing Member (provided that cost of materials and reasonable third
party costs shall be at the Company’s expense), except for costs which are to be
borne by Property Manager pursuant to the terms of the Property Management
Agreement, and except for any costs to be borne by any third party under any
agreement with the Company, the Company shall be responsible for paying, and
shall pay, all direct costs and expenses related to the business of the Company
and of acquiring, holding, owning, developing, servicing, collecting upon and
operating Company Property. Subject to the preceding sentence, all fees and
expenses payable under Section 7.04, costs and expenses relating to any
employees, staff or other personnel approved by the Managing Member to provide
day-to-day operations and financial reporting to oversee the operations of
Company Property, costs of financing, fees and disbursements of attorneys,
financial advisors, accountants, appraisers, brokers and engineers, travel
expenses, and all other fees, costs and expenses directly attributable to the
business and operations of the Company shall be borne by the Company. In the
event any such costs and expenses are or have been paid by any Member, such
Member shall be entitled to be reimbursed for such payment so long as such
payment is reasonably necessary for Company business or operations and has been
approved by the Managing Member or is expressly authorized in this Agreement or
the appropriate Budget or Operating Plan (including any permitted variance
hereunder). Notwithstanding the foregoing, and without affecting any contrary
terms (if any) in the Property Management Agreement, in no event shall the
Company have any obligation to pay or reimburse any Member for any general
overhead expense of such Member.

 

ARTICLE VIII
BOOKS AND RECORDS

 

8.01        Books and Records

 

Managing Member shall maintain, or cause to be maintained, at the expense of the
Company, in a manner customary and consistent with good accounting principles,
practices and procedures, a comprehensive system of office records, books and
accounts (which records, books and accounts shall be and remain the property of
the Company) in which shall be entered fully and accurately each and every
financial transaction with respect to the ownership and operation of Company
Property. Bills, receipts and vouchers shall be maintained on file by Managing
Member. Managing Member shall cause audits to be performed and audited
statements and income tax returns to be prepared as required by Section 8.03
(provided that Managing Member shall, for so long as it diligently performs its
obligations hereunder, not be responsible for the delays of any other
non-Affiliated Member or reputable accountants or auditors retained by Managing
Member or at the request of GAP on behalf of the Company). Such books and
records of account shall be prepared and maintained by Managing Member at the
principal place of business of Managing Member. Each Member or its duly
authorized representative shall have the right to inspect, examine and copy such
books and records of account at the Company’s office during reasonable business
hours. GAP shall have the right from time to time to audit the books and records
of the Company, at GAP’s expense.

 

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8.02        Accounting and Fiscal Year

 

The books of the Company shall be kept on the accrual basis in accordance with
GAAP and on a tax basis and the Company shall report its operations for tax
purposes on the accrual method. The fiscal year and tax year of the Company
shall end on December 31 of each year, unless a different tax year shall be
required by the Code.

 

8.03        Reports

 

(a)         The Managing Member will prepare, or cause to be prepared, at the
expense of the Company, and furnish to each Member (provided that the Managing
Member shall, for so long as it diligently performs its obligations hereunder,
not be responsible for the delays of any other non-Affiliated Member or
reputable accountants or auditors retained by the Managing Member or at the
request of GAP on behalf of the Company) (i) within twenty-one (21) calendar
days after the end of each fiscal quarter of the Company, unless such fiscal
quarter is the last fiscal quarter of any fiscal year of the Company, (A) an
unaudited balance sheet of the Company dated as of the end of such fiscal
quarter, (B) an unaudited related income statement of the Company for such
fiscal quarter, (C) an unaudited statement of each Member’s Capital Account for
such fiscal quarter, and (D) an unaudited statement of cash flows of the Company
for such fiscal quarter, (ii) within fifteen (15) calendar days after the end of
each calendar quarter (or calendar month, if available), a pertinent market
report on sales and leasing activity in the vicinity of each Company Property,
and a status report of the Company’s activities during such calendar quarter, or
month, as applicable, including descriptions of additions to, dispositions of
and leasing and occupancy of Company Properties and any material legal issues
such as material claims filed or threatened against the Company, the arising of
material claims by the Company against other parties and developments in any
then pending material legal actions affecting the Company during such fiscal
quarter, and (iii) within thirty (30) calendar days after the end of each month,
and a reconciliation of actual Expenses and Revenues during such period compared
with the Budget amounts for such items, and an explanation of the discrepancies,
all of which shall be certified by the Managing Member as being, to the best of
its knowledge, true and correct.

 

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(b)         The Managing Member will prepare, or cause to be prepared, on an
accrual basis in accordance with GAAP and on a tax basis, at the expense of the
Company, and furnish to each Member no later than January 15 after the end of
each fiscal year of the Company (i) an unaudited balance sheet of the Company
dated as of the end of such fiscal year, (ii) an unaudited related income
statement of the Company for such fiscal year, (iii) an unaudited statement of
each Member’s Capital Account for such fiscal year, (iv) an unaudited statement
of cash flows of the Company as of the end of the fiscal year, and (v) such
other supporting schedules, reports and backup information as are reasonably
requested by GAP, all of which shall be certified by the Managing Member as
being true and correct. In addition, if requested by GAP, the Managing Member
will prepare, at the expense of the Company, and furnish to each Member within
forty-five (45) calendar days after the end of each fiscal year of the Company,
the final audited amount of net income of the Company for such fiscal year and,
within sixty (60) calendar days after the end of such fiscal year, (i) an
audited balance sheet of the Company dated as of the end of such fiscal year,
(ii) an audited related income statement of the Company for such fiscal year,
(iii) an audited statement of cash flows for such fiscal year, and (iv) an
audited statement of each Member’s Capital Account for such fiscal year, all of
which shall be certified by the Managing Member as being, to the best of its
knowledge, true and correct and all of which shall be certified in the customary
manner by the Company Accountant (which firm shall provide such balance sheet,
income statement and statement of Capital Account in draft form to the Members
for review prior to finalization and certification thereof).

 

(c)         The Managing Member will furnish to each Member at the expense of
the Company, copies of all reports required to be furnished to any lender of the
Company.

 

(d)         The Managing Member will prepare, or cause to be prepared, at the
expense of the Company, and furnish to each Member not later than each March 15
a schedule of estimated taxable income of the Company for the year ending on the
following December 31, which schedule shall be updated from time to time as
needed to reflect material events. All schedules of book income shall be
prepared on a GAAP basis. Promptly after the end of each fiscal year, the
Managing Member will cause the Company Accountant to prepare and deliver to each
Member a report setting forth in sufficient detail all such additional
information and data with respect to business transactions effected by or
involving the Company during the fiscal year as will enable the Company and each
Member to timely prepare its federal, state and local income tax returns in
accordance with applicable laws, rules and regulations. The Managing Member will
use its best efforts to cause the Company Accountant to prepare all federal,
state and local tax returns required of the Company, submit those returns to the
Managing Member for its approval not later than February 1st of the year
following such fiscal year and will file the tax returns after they have been
approved by the Managing Member. If the Managing Member shall not have approved
any such tax return prior to the date required for the filing thereof (including
any extensions granted), Managing Member will timely obtain an extension of such
date to the extent such an extension is available.

 

(e)         The Managing Member shall prepare, or cause to be prepared, at
Company expense, such additional financial reports and other information as the
Managing Member may determine are appropriate.

 

(f)         All decisions as to accounting principles shall be made by the
pursuant to and in accordance with GAAP.

 

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8.04        The Company Accountant

 

The Company shall retain as the regular accountant and auditor for the Company
(the “Company Accountant”) any nationally-recognized accounting firm designated
by GAP. The Members acknowledge and consent to the engagement of Moss Adams LLP
as the initial Company Accountant for audit purposes and Deloitte LLP as the
initial tax advisor to the Company. The fees and expenses of the Company
Accountant shall be a Company expense.

 

8.05        Reserves

 

The Managing Member may, in its discretion and subject to such conditions as it
shall determine, establish reasonable reserves for the purposes and requirements
as it may deem appropriate, subject to the prior written approval of GAP.

 

8.06        The Budget and Operating Plan

 

(a)         The Managing Member shall, within thirty (30) days after the
acquisition of the Initial Company Property, prepare and submit to GAP for GAP’s
approval a budget and strategic operating plan (as approved, the “Initial Budget
and Operating Plan”) for the Company monthly through December 31, 2015 with
annual projections from January 1, 2016 through December 31, 2018, which sets
forth all anticipated revenue, operating expenses, and capital expenditures of
the Company, together with an exit valuation/strategy and projected capital
contributions/returns and IRR’s to each Member, all of which is based on the
strategic and comprehensive business plan designed to maximize the Company’s
returns on the Initial Company Property, and all of which shall be consistent
with preliminary projections previously provided to the Members by Managing
Member. Thereafter, the Budget and Operating Plan shall be prepared in proposed
form and submitted annually by Managing Member to the Members for approval at
least forty-five (45) calendar days prior to the end of each fiscal year with
respect to the following fiscal year, together with three (3) year forward
projections (provided if the Managing Member should fail to timely prepare and
submit in proposed form any such Budget and Operating Plan, GAP shall be
authorized to prepare such Budget and Operating Plan). In formulating the
comprehensive Budget and Operating Plan, to the extent reasonably feasible at
the time of preparation thereof, the Managing Member shall develop (for approval
by the Members) proposed strategies regarding (i) plans for development,
leasing, financing and sale of any real property and proposed reductions of
Expenses and other Company costs and expenses and increases in revenues,
(ii) preparation and release of all promotional and advertising material and
development related plans relating to, and a marketing plan for, the Company
Property or concerning the Company, (iii) terms for any proposed sale or
disposition of any Company Property, or acquisition of additional Company
Property, and (iv) selection of legal counsel, accountants, appraisers and other
consultants for the Company to efficiently implement the Budget and Operating
Plan (those professionals identified on Exhibit “B” attached hereto are hereby
approved, subject to GAP’s right to withdraw such approval for poor performance
by such professionals). The Managing Member will also consider and make
recommendations to the extent it deems the same appropriate regarding the
amendment, modification, alteration, change, cancellation, or prepayment of any
indebtedness evidenced by any mortgage loan presently or hereafter affecting any
Company Property, and procurement of title insurance and other insurance for the
Company, or decrease or vary the insurance carried by or on behalf of the
Company and any other matters affecting the Company’s business. The Managing
Member shall provide the Company with detailed analyses comparing actual
performance to the goals set forth on Exhibit D and the Budget and Operating
Plan, together with proposals for improving performance, no less frequently than
quarterly.

 

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8.07        Accounts

 

All funds of the Company shall be deposited in such checking accounts, savings
accounts, time deposits, or certificates of deposit in the Company’s name or
shall be invested in the Company’s name, in such manner as shall be reasonably
designated by GAP from time to time. Company funds shall not be commingled with
those of any other person or entity. Company funds shall be used only for the
business of the Company. The Members acknowledge and consent to the use of Wells
Fargo, N.A., as the initial depository institution for such accounts.

 

ARTICLE IX
TRANSFER OF INTERESTS

 

9.01        No Transfer

 

Except as expressly permitted or contemplated by this Agreement, no Member may
sell, assign, give, hypothecate, pledge, encumber or otherwise transfer
(“Transfer”) all or any portion of its Interest, whether directly or indirectly,
without the written consent of the other Members. Except as expressly permitted
or contemplated by this Agreement, Operating Member agrees not to permit any
Transfer of any equity interest in such Member, or in its managing member. Any
Transfer in contravention of this Article IX shall be null and void. No Member,
without the prior written consent of the other Members, shall resign from the
Company except as a result of such Member’s involuntary dissolution or final
adjudication as a bankrupt or in connection with a Transfer permitted by this
Article IX. The same restrictions set forth herein shall apply to a Transfer in
or of an interest in Operating Member’ managing member, and such a Transfer
shall have the same effect as a Transfer of an interest in Operating Member.

 

9.02        Permitted Transfers

 

(a)         GAP may from time to time and in its sole discretion without the
consent of any other Member or the Company, Transfer its Interest in whole or in
part to any Person. Any direct or indirect member of GAP may from time to time
and in its sole discretion without the consent of any Member of the Company,
transfer its direct or indirect interest in GAP in whole or in part to any
Person.

 

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(b)         Any permitted Transfer shall not relieve the transferor of any of
its obligations prior to such Transfer. The parties hereto agree to amend the
transfer provisions of Article IX if the Members reasonably determine that such
amendment is necessary for the Company to be treated as a partnership for
Federal and applicable state income tax purposes. Nothing contained in this
Article IX shall prohibit a Transfer indirectly of any interest in the Company
if a direct Transfer would otherwise be permitted under this Section 9.02.
Subject to Section 9.03, any transferee pursuant to this Section 9.02 shall
become a Member of the Company. The provisions of this Section 9.02 will not
apply to or be deemed to authorize or permit any collateral transfer of, or
grant of a security interest in, a Member’s interest in the Company, or in
Company Property (which transfer or grant shall be subject to the other
provisions of this Agreement).

 

9.03        Transferees

 

Notwithstanding anything to the contrary contained in this Agreement, no
transferee of all or any portion of any Interest shall be admitted as a Member
unless (a) such Interest is transferred in compliance with the applicable
provisions of this Agreement, (b) such transferee shall have furnished evidence
of satisfaction of the requirements of Section 9.02 reasonably satisfactory to
the remaining Members, and (c) such transferee shall have executed and delivered
to the Company such instruments as the remaining Members reasonably deem
necessary or desirable to effectuate the admission of such transferee as a
Member and to confirm the agreement of such transferee to be bound by all of the
terms and provisions of this Agreement with respect to such Interest. At the
request of the remaining Members, each such transferee shall also cause to be
delivered to the Company, at the transferee’s sole cost and expense, a favorable
opinion of legal counsel reasonably acceptable to the Company, to the effect
that (i) such transferee has the legal right, power and capacity to own the
Interest proposed to be transferred, (ii) if applicable, such Transfer does not
violate any provision of any loan commitment or any mortgage, deed of trust or
other security instrument encumbering all or any portion of Company Property,
and (iii) such Transfer does not violate any federal or state securities laws
and will not cause the Company to become subject to the Investment Company Act
of 1940, as amended. As promptly as practicable after the admission of any
Person as a Member, the books and records of the Company shall be changed to
reflect such admission. All reasonable costs and expenses incurred by the
Company in connection with any Transfer of any Interest and, if applicable, the
admission of any transferee as a Member shall be paid by such transferee.

 

9.04        Section 754 Election

 

In the event of a Transfer of all or part of the Interest of a Member, at the
request of the transferee or if in the best interests of the Company (as
determined by GAP), the Company shall elect pursuant to Section 754 of the Code
to adjust the basis of Company Property as provided by Sections 734 and 743 of
the Code, and any cost of such election or cost of administering or accounting
for such election shall be at the sole cost and expense of the requesting
transferee.

 

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9.05        INTENTIONALLY OMITTED

 

9.06        GAP’s Right to Force Sale

 

(a)         Notwithstanding anything to the contrary in this Agreement, at any
time and from time to time after two (2) years following the Effective Date,
GAP, acting alone, shall have the right and power to cause the Company or any
Property Company to sell all or substantially all of the assets of the Company
or such Property Company, or any interest therein, or make any other transfer of
the Company Property, including the Initial Company Property (the “Sale
Property”), to any third party other than an Affiliate of GAP for a price and on
terms determined by GAP, subject to this Section 9.06. GAP shall also have the
right, in its sole discretion, at any time and from time to time after two (2)
years following the Effective Date, to sell, directly or indirectly, to one or
more third parties other than an Affiliate of GAP, for a price and on terms
determined by GAP, subject to this Section 9.06, all or substantially all of
GAP’s Interest, and in connection therewith, require Operating Member and SRT to
sell all of their Interests pursuant to and in accordance with the terms and
conditions of such sale (the “Membership Sale”). For purposes of this Section
9.06, GAP’s right to “sell” shall include a right to grant an option or to
dispose of the fee interest or any other interest in the Sale Property, and
references below to a “binding agreement” shall be deemed references to any
agreement binding on the owner of the Sale Property by which GAP causes such
owner to grant any such option or to dispose of the Sale Property or, if
applicable, any agreement binding on GAP, SRT and Operating Member by which GAP,
SRT and Operating Member shall sell their respective Interests.

 

(b)         If GAP exercises its right under this Section 9.06, it shall (on
behalf of the Company or a Property Company) engage an experienced real estate
broker in the geographic area in which the Sale Property is located and with the
assistance of said broker, prepare marketing materials, market assets, cause the
owner of the Sale Property to enter into a binding agreement(s) in connection
with a sale or proposed sale and, in general, cause the owner of the Sale
Property to take any acts and make any commitments which are customary or
desirable in connection with the sale of property similar to that being sold by
the Company or a Property Company. If GAP elects the Membership Sale, (i)
Operating Member and SRT shall execute all documents, agreements and instruments
which GAP may reasonably request to consummate the conveyance of Operating
Member’s and SRT’s Interests, provided that, GAP shall execute substantially the
same documents, agreements and instruments with respect to GAP’s Interest, and
(ii) Operating Member and SRT shall each represent and warrant to the purchaser
of GAP’s, SRT’s and Operating Member’s Interests, in the binding agreement with
respect to the Membership Sale, and as of the date of the closing of such
Membership Sale, that (A) each Operating Member and SRT are the sole owners of
their respective Interests in the Company and holds the same free and clear of
any liens or other encumbrances, and (B) Operating Member and SRT each have all
requisite power and authority to transfer its Interest to such purchaser
pursuant to this Section 9.06. GAP agrees that it will select the winning offer
based upon whom GAP reasonably determines has submitted the best qualified offer
when the terms of the offer and the representation of the offeror are considered
as a whole in comparison to other offers made and other offerors. GAP shall
notify SRT and Operating Member in writing of the purchaser selected and shall
use commercially reasonable efforts to keep SRT and Operating Member informed
regarding the progress of the sale of the Sale Property or, if applicable, the
Membership Sale. Operating Member and SRT hereby represent and warrant to, and
agrees with and for the benefit of, GAP and the Company that GAP has all
requisite authority to complete and facilitate any sale of Operating Member’s
and SRT’s Interests in accordance with this Section 9.06, including transferring
Operating Member’s and SRT’s Interests and, if and to the extent Operating
Member or SRT fails to transfer Operating Member’s or SRT’s Interest (as
applicable) in accordance with this Section 9.06, Operating Member and SRT
hereby irrevocably appoint GAP as their true and lawful attorney-in-fact (which
appointment shall be deemed coupled with an interest) to individually execute
all documents, agreements and instruments which GAP may reasonably request, and
take any and all other action necessary or appropriate, to consummate the
conveyance of Operating Member’s and SRT’s Interests in accordance with this
Section 9.06. This Section 9.06 is self-operative and no additional
authorization or consent of Operating Member, SRT or any of their members,
managers, officers, directors or owners shall be required for the sale of
Operating Member’s and SRT’s Interests under this Section 9.06.

 

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(c)         In the event that GAP exercises its rights to sell the Company
Property under this Section 9.06, (i) prior to any such sale which constitutes a
sale in bulk of all of the Company’s assets, GAP shall notify SRT in writing of
the intended sale of Company Property pursuant to a written notice (the “Sale
Notice”) which sets forth GAP’s intended sales price for Company Property at the
time the Sale Notice is given (the “Proposed Price”) and other material proposed
terms (the “Proposed Terms”), of such sale (which shall be determined by GAP in
its sole discretion), and (ii) for the period commencing with the giving of the
Sale Notice and terminating thirty (30) days thereafter (the “ROFO Period”), SRT
shall have the opportunity to elect to purchase Company Property or the
Interests of GAP and Operating Member, at a price equal to or in excess of the
Proposed Price (or, in the case of a purchase of only the Interest of GAP and
Operating Member, a price equal to or in excess of the amount that GAP and
Operating Member would receive pursuant to the terms of this Agreement if
Company Property were sold for the Proposed Price and the Company was
liquidated), and on terms no less advantageous to the Company and GAP than the
Proposed Terms, by giving written notice of such election (the “Acceptance
Notice”) prior to expiration of the ROFO Period. If SRT fails to deliver the
Acceptance Notice within the ROFO Period, then GAP shall be free to compel the
Company to sell Company Property on terms determined by GAP in its sole
discretion, but only if such sale is consummated within 365 days after the
expiration of the ROFO Period (the “Sale Period”) at a price equal to or greater
than ninety-five percent (95%) of the Proposed Price. If such a sale is not
completed within 365 days at a price equal to or greater than ninety-five
percent (95%) of the Proposed Price, then GAP shall offer the Company Property
to SRT in accordance with this Section 9.06(c) prior to attempting to effect a
sale of the Company Property to a third party. Together with an Acceptance
Notice delivered by the Operating Member, and as a condition to the
effectiveness thereof, the Operating Member shall deposit in an escrow
established by parties a non-refundable cash deposit equal to 10% of the
Proposed Price (and to be applied to the purchase price at closing) and
consummate such sale within one hundred twenty (120) days after the date of the
delivery of the Acceptance Notice. If SRT delivers the Acceptance Notice but
defaults in the performance of its obligations to close the sale in accordance
with this Agreement and any other agreement of the parties relating to such
sale, SRT shall forfeit its deposit (which shall be paid to GAP) and shall have
no further rights under this Section 9.06(c), and GAP may elect to (i) cause the
Company to sell Company Property at any time after such default, and on any
terms, or (ii) enforce its rights by specific performance (and damages
incidental to a specific performance action which are allowed as part of such
action). Notwithstanding the foregoing provisions of this Section 9.06(c), none
of SRT’s rights under this Section 9.06(c) shall apply to any Transfer of any
Interest by or any direct or indirect member of or partner in GAP to any of
their respective Affiliates; provided, however, that if GAP sells its Interest
to a third party which is not an Affiliate of GAP, such sale shall be subject to
the provisions of this Section 9.06(c). If Operating Member has been removed as
Managing Member under this Agreement or Property Manager under the Property
Management Agreement, in any such case, “for cause,” then Operating Member shall
have no right of first offer on a sale of the Company Property or any other
rights under this Section 9.06(c). If a Vote Loss Event shall have occurred with
respect to SRT, then SRT shall have no rights under this Section 9.06(c).
Notwithstanding anything to the contrary herein, if the Members unanimously
agree to sell Company Property at any time, then the terms of this Section
9.06(c) shall not apply to such sale.

 

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ARTICLE X
EXCULPATION AND INDEMNIFICATION

 

10.01      Exculpation

 

No Member, Managing Member, general or limited partner of any Member,
shareholder or member or other holder of an equity interest of any Member or
manager, officer or director of any of the foregoing, shall be liable to the
Company, any Property Company or to any other Member for monetary damages for
any losses, claims, damages or liabilities arising from any act or omission
performed or omitted by it and arising out of or in connection with this
Agreement or the Company’s business or affairs; provided, however, that such act
or omission was taken in good faith, was reasonably believed to be in the best
interests of the Company and was within the scope of authority granted to such
Person, and in the case of a Member or related Person other than in its capacity
as Property Manager, was not attributable to such Member’s or Person’s fraud,
bad faith, willful misconduct or gross negligence. No general or limited partner
of any Member, shareholder, member or other holder of an equity interest in such
Member or manager, officer of director of any of the foregoing shall be
personally liable for the performance of any such Member’s obligations of this
Agreement, but the foregoing shall not relieve any partner or member of any
Member from its obligations to such Member.

 

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10.02      Indemnification

 

(a)         The Company shall, to the fullest extent permitted by applicable
law, indemnify, defend and hold harmless each Member, the Managing Member and
each general or limited partner of any Member or such Member’s Affiliate,
shareholder, member or other holder of any equity interest in such Member or its
Affiliate, or any manager, officer or director of any of the foregoing
(collectively, the “Indemnitees”), from and against any losses, claims, demands,
liabilities, costs, damages, expenses and causes of action to which such
Indemnitee may become subject in connection with any matter arising out of or
incidental to any act performed or omitted to be performed by any such
Indemnitee in connection with this Agreement or the Company’s business or
affairs; provided, however, that such act or omission was taken in good faith,
was reasonably believed by the applicable Indemnitee to be in the best interest
of the Company and within the scope of authority granted to such member or
applicable Indemnitee, and in the case of a Member or related Indemnitee (other
than in its capacity as Property Manager), was not attributable to such
Indemnitee’s fraud, bad faith, willful misconduct or gross negligence, or in the
case of Property Manager, was not attributable to Property Manager’s or related
Indemnitee’s fraud, bad faith, willful misconduct or gross negligence. Any
indemnity under this Section 10.02 shall be paid solely out of and to the extent
of Company Property and shall not be a personal obligation of any Member and in
no event will any Member be required, or permitted without the consent of all of
the Members, to contribute additional capital under Section 4.02 to enable the
Company to satisfy any obligation under this Section 10.02. All judgments
against the Company and the Members, or any one or more thereof, wherein such
Member (or Members) is entitled to indemnification, must first be satisfied from
Company Property before the Members shall be responsible therefor.

 

(b)         The Company and the other Members shall be indemnified and held
harmless by each Member from and against any and all claims, demands,
liabilities, costs, damages, expenses and causes of action of any nature
whatsoever arising out of or attributable to (i) any act performed by or on
behalf of any such Member (including, in the case of Operating Member, acts
performed as Managing Member or by Property Manager, if Property Manager is an
Affiliate of Operating Member), its managing member or, if Property Manager is
an Affiliate of such Member, Property Manager which is not performed in good
faith or is not reasonably believed by such Member, its managing member or, if
Property Manager is an Affiliate of such Member, Property Manager to be in the
best interest of the Company and within the scope of authority conferred upon
such Member or its managing member under this Agreement or, with respect to
Property Manager, the Property Management Agreement, (ii) the fraud, bad faith,
willful misconduct or gross negligence of such Member, its managing member or,
if Property Manager is an Affiliate of such Member, Property Manager, (iii) the
breach by the Company of any of its representations and warranties made under
any purchase, loan or other agreement entered into in connection with the
acquisition of Company Property, which breach was the result of information or
matters relating to such Member or, if Property Manager is an Affiliate of such
Member, Property Manager or (iv) any denial of an insurance claim by the Company
based on an intentional misstatement or intentional withholding of information
by any Member or, if Property Manager is an Affiliate of such Member, Property
Manager.

 

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(c)         The provisions of this Section 10.02 shall survive for a period of
four (4) years from the date of dissolution of the Company, provided that, if at
the end of such period there are any actions, proceedings or investigations then
pending, any Indemnitee may so notify the Company and the other Members at such
time (which notice shall include a brief description of each such action,
proceeding or investigation and the liabilities asserted therein) and the
provisions of this Section 10.02 shall survive with respect to each such action,
proceeding or investigation set forth in such notice (or any related action,
proceeding or investigation based upon the same or similar claim) until such
date that such action, proceeding or investigation is finally resolved.

 

(d)         Notwithstanding anything to the contrary contained in this
Agreement, the obligations of the Company or any Member under this Section 10.02
shall (i) be in addition to any liability which the Company or such Member may
otherwise have and (ii) inure to the benefit of such Indemnitee, its Affiliates
and their respective members, managers, directors, officers, employees, agents
and Affiliates and any successors, assigns, heirs and personal representatives
of such Persons.

 

ARTICLE XI
DISSOLUTION AND TERMINATION

 

11.01      Dissolution

 

The Company shall be dissolved and its business wound up upon the earliest to
occur of any of the following events, unless the majority-in-interest of the
remaining Members vote to continue the life of the Company upon the occurrence
of such an event:

 

(a)         Three (3) years after the sale, condemnation or other disposition of
all Company Property and the receipt of all consideration therefor;

 

(b)         December 31, 2064;

 

(c)         At any time on or after the second anniversary of the Effective
Date, the written determination of GAP to terminate the Company; provided, that
the foregoing shall not affect the parties’ rights under Section 7.05(c), and
any disposition by the Company in connection with a liquidation under this
paragraph (c) shall be subject to the ROFO Opportunity elections provided in
Section 7.05(c); or

 

(d)         The resignation, expulsion, bankruptcy or dissolution of any Member
(which shall not include the occurrence of such an event with respect to any
Member’s underlying members or partners which does not cause such an event to
occur with respect to the Member itself) or the occurrence of any other event
that terminates the continued membership of any Member in the Company, unless,
within ninety (90) days after such event, each of the remaining Members elects
in writing (i) to continue the business of the Company and (ii) if at such time
there exists only one remaining Member, effective as of the date of such event,
to admit at least one additional Member to the Company.

 

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Without limitation on, but subject to, the other provisions hereof, the
assignment of all or any part of a Member’s Interest permitted hereunder will
not result in the dissolution of the Company. Except as otherwise specifically
provided in this Agreement, each Member agrees that, without the consent of the
other Members, any Member may not withdraw from or cause a voluntary dissolution
of the Company. In the event any Member withdraws from or causes a voluntary
dissolution of the Company in contravention of this Agreement, such withdrawal
or the causing of a voluntary dissolution shall not affect such Member’s
liability for obligations of the Company.

 

11.02      Termination

 

In all cases of dissolution of the Company, the business of the Company shall be
wound up and the Company terminated as promptly as practicable thereafter, and
each of the following shall be accomplished:

 

(a)         The Liquidating Member shall cause to be prepared a statement
setting forth the assets and liabilities of the Company as of the date of
dissolution, a copy of which statement shall be furnished to all of the Members.

 

(b)         Company Property shall be liquidated by the Liquidating Member as
promptly as possible, but in an orderly and businesslike and commercially
reasonable manner and subject to the provisions of the Operating Plan then in
effect or a liquidating plan approved by GAP. The Liquidating Member may
distribute Company Property in kind only with the consent of all of the Members.

 

(c)         The proceeds of sale and all other assets of the Company shall be
applied and distributed as follows and in the following order of priority:

 

(i)         To the payment of (A) the debts and liabilities of the Company
(including any outstanding amounts due on any indebtedness encumbering Company
Property, or any part thereof and any Shortfall Loans) and (B) the expenses of
liquidation.

 

(ii)        To the setting up of any reserves which the Liquidating Member and
GAP shall determine to be reasonably necessary for contingent, unliquidated or
unforeseen liabilities or obligations of the Company or any Member arising out
of or in connection with the Company. Such reserves may, in the discretion of
the Liquidating Member, be paid over to a national bank or national title
company selected by it and authorized to conduct business as an escrow agent to
be held by such bank or title company as escrow agent for the purposes of
disbursing such reserves to satisfy the liabilities and obligations described
above, and at the expiration of such period as the Liquidating Member may
reasonably deem advisable, distributing any remaining balance as provided in
Section 11.02(c)(iii); provided, however, that, to the extent that it shall have
been necessary, by reason of applicable law or regulation, to create any
reserves prior to any and all distributions which would otherwise have been made
under Section 11.02(c)(i) and, by reason thereof, a distribution under
Section 11.02(c)(i) has not been made, then any balance remaining shall first be
distributed pursuant to Section 11.02(c)(i).

 

(iii)        The balance, if any, to the Members in accordance with
Section 6.05.

 

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11.03      Liquidating Member

 

The Liquidating Member is hereby irrevocably appointed as the true and lawful
attorney in the name, place and stead of each of the Members, such appointment
being coupled with an interest, to make, execute, sign, acknowledge and file
with respect to the Company all papers which shall be necessary or desirable to
effect the dissolution and termination of the Company in accordance with the
provisions of this Article XI. Notwithstanding the foregoing, each Member, upon
the request of the Liquidating Member or GAP, shall promptly execute,
acknowledge and deliver all such documents, certificates and other instruments
as the Liquidating Member or GAP shall reasonably request to effectuate the
proper dissolution and termination of the Company, including the winding up of
the business of the Company.

 

11.04      Claims of the Members

 

Members and former Members shall look solely to the Company’s assets for the
return of their Capital Contributions, and if the assets of the Company
remaining after payment of or due provision for all debts, liabilities and
obligations of the Company are insufficient to return such Capital
Contributions, the Members and former Members shall have no recourse against the
Company or any other Member.

 

ARTICLE XII
DEFAULT BY MEMBER

 

12.01      Events of Default

 

If a Member commits a material violation or breach of any of the provisions of
this Agreement, or if Property Manager commits a material violation or breach of
any of the provisions of the Property Management Agreement which is not cured
(including, without limitation, by the breaching Member reimbursing the Company
for the resulting material damage or loss) within a Reasonable Period, such
Member (Operating Member in the case of a violation or breach by Property
Manager) shall have committed an “Event of Default”. A failure to make any
Additional Capital Contribution shall not constitute an Event of Default.

 

12.02      Effect of Event of Default

 

Upon the occurrence of an Event of Default by any Member, Operating Member (if
the defaulting Member is GAP) or GAP (if the defaulting Member is Operating
Member or SRT) shall have the right, at any time within one year from the date
of such Event of Default and upon giving the defaulting Member ten (10) calendar
days written notice of such election (and provided such Event of Default is
continuing through the end of such ten (10) day period) to take any of the
following actions:

 

(a)         Dissolve the Company;

 

(b)         If Operating Member is the defaulting Member, terminate Operating
Member as Managing Member and as Property Manager under the Property Management
Agreement; and

 

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(c)         Pursue any other right or remedy available at law or in equity.

 

ARTICLE XIII
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

13.01       Representations and Warranties of the Members

 

(a)         Each Member represents and warrants to the other Member(s) as
follows:

 

(i)         It is duly organized, validly existing and in good standing under
the laws of its jurisdiction of formation with all requisite power and authority
to enter into this Agreement and to conduct the business of the Company.

 

(ii)        This Agreement constitutes the legal, valid and binding obligation
of the Member enforceable in accordance with its terms.

 

(iii)        No consents or approvals are required from any Governmental
Authority or other person or entity for the Member to enter into this Agreement.
All limited liability company, corporate or partnership action on the part of
the Member necessary for the authorization, execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly taken.

 

(iv)        The execution and delivery of this Agreement by the Member, and the
consummation of the transactions contemplated hereby, does not conflict with or
contravene the provisions of its organizational documents or any agreement or
instrument by which it or its properties are bound or any law, rule, regulation,
order or decree to which it or its properties are subject.

 

(v)        Other than a disposition fee required to be paid by SRT to
Glenborough, LLC, in connection with the sale by SRT of the Initial Company
Property to the Company, no Member has retained any broker, finder or other
commission or fee agent, and no such person has acted on its behalf in
connection with the acquisition of the Initial Company Property or the execution
and delivery of this Agreement.

 

(vi)        It understands that (A) an investment in the Company involves
substantial and a high degree of risk, (B) no federal or state agency has passed
on the offer and sale of the Interest in the Company to such Person, (C) it must
bear the economic risk of such Person’s investment in the Company for an
indefinite period of time, since such Person’s Interest in the Company has not
been registered for sale under the Securities Act of 1933 and, therefore, cannot
be sold or otherwise transferred unless subsequently registered under the
Securities Act of 1933 or an exemption from such registration is available, and
the Interest in the Company of such Person cannot be sold or otherwise
transferred unless registered under applicable state securities or blue sky laws
or an exemption from such registration is available, (D) there is no established
market for the Interest of such Person in the Company and no public market will
develop and (E) such Person’s principals have such knowledge and experience in
real estate and, other financial and business matters that they are capable of
evaluating the merits and risks of an investment in the Company.

 

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(b)         In addition to the representations and warranties set forth above,
Operating Member represents, warrants and covenants to GAP as follows:

 

(i)         Operating Member is a limited liability company currently existing
pursuant to that certain Certificate of Formation filed with the Secretary of
State of Delaware on January 28, 2015, and that certain limited liability
company operating agreement dated March 6, 2015 (collectively, the “Operating
Member Organizational Documents”), and a true and correct copy of the Operating
Member Organizational Documents have been provided to counsel for GAP.

 

(ii)        The Operating Member Organizational Documents have not been
terminated nor modified or amended and continue to be in full force and effect.

 

(iii)        No consent or authorization of any other persons or entities, other
than those whose consent has been secured, is required for Operating Member to
enter into this Agreement or to take any action or grant any consent or approval
under this Agreement.

 

(iv)       The offer and sale of interests in Operating Member has been
undertaken in full compliance with all applicable federal and state securities
laws and no interests in Operating Member have been offered or sold to any
person who was not at the time of such offer or sale an “accredited investor” as
defined in Section 2(15) of the Securities Act of 1933 and Rule 501 promulgated
thereunder and under the securities laws of various states.

 

(v)        The Key Persons own, directly or indirectly, 52% of the Operating
Member and have the power to direct the management and policies of Operating
Member.

 

(vi)        Operating Member hereby covenants and agrees not to amend or permit
the amendment of the management and control provisions of the Operating Member
Organizational Documents without the prior written consent of GAP.

 

(vii)      The issuance of all ownership interests in Operating Member was
accomplished in accordance with all laws, including, without limitation, all
securities laws.

 

(viii)     It is in compliance with all applicable anti-money laundering and
anti-terrorist laws, regulations, rules, executive orders and government
guidance, including the reporting, record keeping and compliance requirements of
the Bank Secrecy Act (“BSA”), as amended by The International Money Laundering
Abatement and Financial Anti-Terrorism Act of 2001, Title III of the USA PATRIOT
Act (the “Patriot Act”), and other authorizing statutes, executive orders and
regulations administered by OFAC applicable to Operating Member, and related
Securities and Exchange Commission, SRO or other agency rules and regulations
applicable to Operating Member, and has policies, procedures, internal controls
and systems that are reasonably designed to ensure such compliance.

 

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(ix)        Neither: (a) Operating Member, any Affiliate of Operating Member nor
any Person controlled by Operating Member; nor (b) to the best of knowledge of
Operating Member, after making due inquiry, any Person who owns a controlling
interest in or otherwise controls Operating Member; nor (c) to the best of
knowledge of Operating Member, if Operating Member is a privately held entity,
any Person otherwise having a direct or indirect beneficial interest (other than
with respect to an interest in a publicly traded entity) in Operating Member;
nor (d) any Person for whom Operating Member is acting as agent or nominee in
connection with this investment, is a country, territory, Person, organization,
or entity named on an OFAC List, nor is a prohibited country, territory, Person,
organization, or entity under any economic sanctions program administered or
maintained by OFAC.

 

(x)         Unless disclosed in writing to GAP on the date hereof, it is not a
Senior Foreign Political Figure, or an Immediate Family Member or a Close
Associate of a Senior Foreign Political Figure, that it is not controlled by a
Senior Foreign Political Figure, or an Immediate Family Member or a Close
Associate of a Senior Foreign Political Figure, and that, to the best of
Operating Member’s knowledge, after making due inquiry, none of the direct or
indirect owners of Operating Member (other than any owner(s) of any interest(s)
in a publicly traded entity) is a Senior Foreign Political Figure, or an
Immediate Family Member or a Close Associate of a Senior Foreign Political
Figure.

 

(xi)        Subject to any confidentiality obligations existing as of the date
of any request by GAP, Operating Member agrees that, upon receiving a request
from GAP, Operating Member shall provide information reasonably required by GAP
(a) that indicates that the representations, warranties and covenants of
Operating Member set forth in this Section 13.01(b) are true, and (b) to permit
GAP to comply with its obligations under all applicable anti-money laundering
and anti-terrorist laws, regulations and executive orders. Operating Member
consents to the disclosure to United States regulators and law enforcement
authorities by GAP and its Affiliates of such information about Operating Member
that GAP reasonably deems necessary or appropriate to comply with applicable
anti-money laundering and anti-terrorist laws, regulations, and executive
orders.

 

(xii)       Operating Member agrees that as a condition of any Transfer of any
of its direct or indirect interest in the Company, GAP has the right to require
full compliance with these representations, warranties and covenants, to the
satisfaction of GAP, with respect to any transferee and any Person who owns or
otherwise controls the transferee.

 

(xiii)      Operating Member shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless GAP and the Company, and
each general or limited partner of GAP or any Affiliate, shareholder, member or
other holder of any equity interest in GAP, or any manager, officer or director
of the foregoing (collectively, the “GAP and/or Company Indemnitees”), from and
against any losses, claims, demands, liabilities, costs, damages, expenses and
causes of action to which such GAP and/or Company Indemnitees may become subject
in connection with any breach of these representations, warranties and covenants
that causes a breach or violation or failed condition under any documents by
which the Company is bound (such as loan documents).

 

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(xiv)      Operating Member acknowledges and agrees that if, following its
investment in the Company, GAP reasonably believes that Operating Member has
breached its representations, warranties or covenants set forth herein, or that
action is otherwise required by law or regulation, GAP has the right or may be
obligated to freeze or block the investment, to prohibit additional investments,
to segregate the assets constituting the investment in accordance with
applicable OFAC laws and regulations, to decline any redemption or Transfer
requests, to redeem Operating Member’s investment, and/or to report such action
to government authorities. Operating Member further acknowledges that it will
have no claim against the Company and/or GAP or its Affiliates for any form of
damages as a result of any of the foregoing actions.

 

(xv)       Intentionally Omitted.

 

(xvi)     Operating Member is a “United States person” for United States federal
income tax purposes.

 

(xvii)     To the best of Operating Member’s knowledge, Operating Member has not
knowingly or intentionally withheld or knowingly or intentionally failed to
deliver to GAP any material written documents in its possession or control
relating to the Initial Company Property.

 

(xviii)    As of the Effective Date, Operating Member has not engaged in any
business other than, and has no obligations other than, its obligations under
this Agreement.

 

(xix)      To the best of Operating Member’s knowledge, Seller has not knowingly
or intentionally made any material misrepresentations in the representations and
warranties of Seller set forth in the Purchase Agreement.

 

For purposes of the representations, warranties and covenants set forth in this
Section 13.01(b), the term “knowledge” includes the actual knowledge of Andrew
Batinovich. Operating Member represents and warrants to GAP that Andrew
Batinovich is the person affiliated with Operating Member with the most
knowledge regarding the representations, warranties and covenants set forth in
this Section 13.01(a) and this Section 13.01(b).

 

(c)         In addition to the representations and warranties set forth above,
SRT represents, warrants and covenants to GAP as follows:

 

(i)         SRT is a Delaware limited liability company currently existing
pursuant to that certain Certificate of Formation filed with the Secretary of
State of Delaware on January 28, 2015, and that certain limited liability
company agreement dated March 6, 2015 (collectively, the “SRT Organizational
Documents”), and a true and correct copy of the SRT Organizational Documents
have been provided to counsel for GAP.

 

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(ii)        The SRT Organizational Documents have not been terminated nor
modified or amended and continue to be in full force and effect.

 

(iii)        No consent or authorization of any other persons or entities, other
than those whose consent has been secured, is required for SRT to enter into
this Agreement or to take any action or grant any consent or approval under this
Agreement.

 

(iv)        The offer and sale of interests in SRT has been undertaken in full
compliance with all applicable federal and state securities laws; except as may
be disclosed by the issues raised in the ongoing class action more particularly
described on Schedule E attached hereto.

 

(v)        It is in compliance with all applicable anti-money laundering and
anti-terrorist laws, regulations, rules, executive orders and government
guidance, including the reporting, record keeping and compliance requirements of
the Bank Secrecy Act (“BSA”), as amended by The International Money Laundering
Abatement and Financial Anti-Terrorism Act of 2001, Title III of the USA PATRIOT
Act (the “Patriot Act”), and other authorizing statutes, executive orders and
regulations administered by OFAC applicable to SRT, and related Securities and
Exchange Commission, SRO or other agency rules and regulations applicable to
SRT, and has policies, procedures, internal controls and systems that are
reasonably designed to ensure such compliance.

 

(vi)       Neither: (A) SRT, any Affiliate of SRT nor any Person controlled by
SRT; nor (B) to the best of knowledge of SRT, after making due inquiry, any
Person who owns a controlling interest in or otherwise controls SRT; nor (C) to
the best of knowledge of SRT, if SRT is a privately held entity, any Person
otherwise having a direct or indirect beneficial interest (other than with
respect to an interest in a publicly traded entity) in SRT; nor (D) any Person
for whom SRT is acting as agent or nominee in connection with this investment,
is a country, territory, Person, organization, or entity named on an OFAC List,
nor is a prohibited country, territory, Person, organization, or entity under
any economic sanctions program administered or maintained by OFAC.

 

(vii)      Unless disclosed in writing to GAP on the date hereof, it is not a
Senior Foreign Political Figure, or an Immediate Family Member or a Close
Associate of a Senior Foreign Political Figure, that it is not controlled by a
Senior Foreign Political Figure, or an Immediate Family Member or a Close
Associate of a Senior Foreign Political Figure, and that, to the best of SRT’s
knowledge, after making due inquiry, none of the direct or indirect owners of
SRT (other than any owner(s) of any interest(s) in a publicly traded entity) is
a Senior Foreign Political Figure, or an Immediate Family Member or a Close
Associate of a Senior Foreign Political Figure.

 

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(viii)      Subject to any confidentiality obligations existing as of the date
of any request by GAP, SRT agrees that, upon receiving a request from GAP, SRT
shall provide information reasonably required by GAP (A) that indicates that the
representations, warranties and covenants of SRT set forth in this Section
13.01(c) are true, and (B) to permit GAP to comply with its obligations under
all applicable anti-money laundering and anti-terrorist laws, regulations and
executive orders. SRT consents to the disclosure to United States regulators and
law enforcement authorities by GAP and its Affiliates of such information about
SRT that GAP reasonably deems necessary or appropriate to comply with applicable
anti-money laundering and anti-terrorist laws, regulations, and executive
orders.

 

(ix)        SRT agrees that as a condition of any Transfer of any of its direct
or indirect interest in the Company, GAP has the right to require full
compliance with these representations, warranties and covenants, to the
satisfaction of GAP, with respect to any transferee and any Person who owns or
otherwise controls the transferee.

 

(x)         SRT shall, to the fullest extent permitted by applicable law,
indemnify, defend and hold harmless GAP and the Company, and each general or
limited partner of GAP or any Affiliate, shareholder, member or other holder of
any equity interest in GAP, or any manager, officer or director of the foregoing
(collectively, the “GAP and/or Company Indemnitees”), from and against any
losses, claims, demands, liabilities, costs, damages, expenses and causes of
action to which such GAP and/or Company Indemnitees may become subject in
connection with any breach of these representations, warranties and covenants
that causes a breach or violation or failed condition under any documents by
which the Company is bound (such as loan documents).

 

(xi)        SRT acknowledges and agrees that if, following its investment in the
Company, GAP reasonably believes that SRT has breached its representations,
warranties or covenants set forth herein, or that action is otherwise required
by law or regulation, GAP has the right or may be obligated to freeze or block
the investment, to prohibit additional investments, to segregate the assets
constituting the investment in accordance with applicable OFAC laws and
regulations, to decline any redemption or Transfer requests, to redeem SRT’s
investment, and/or to report such action to government authorities. SRT further
acknowledges that it will have no claim against the Company and/or GAP or its
Affiliates for any form of damages as a result of any of the foregoing actions.

 

(xii)       Intentionally Omitted.

 

(xiii)      SRT is a “United States person” for United States federal income tax
purposes.

 

(xiv)     To the best of SRT’s knowledge, SRT has not knowingly or intentionally
withheld or knowingly or intentionally failed to deliver to GAP all material
written documents in its possession or control relating to the Initial Company
Property.

 

For purposes of the representations, warranties and covenants set forth in this
Section 13.01(c), the term “knowledge” includes the actual knowledge of Andrew
Batinovich. Operating Member represents and warrants to GAP that Andrew
Batinovich is the person affiliated with Operating Member with the most
knowledge regarding the representations, warranties and covenants set forth in
this Section 13.01(a) and this Section 13.01(b).

 

-63-

 

  

(d)         In addition to the representations and warranties set forth above,
GAP represents, warrants and covenants to Operating Member as follows:

 

(i)         GAP is a limited liability company currently existing pursuant to
that certain Certificate of Formation filed with the Secretary of State of
Delaware on September 11, 2014, and that certain limited liability company
agreement of GAP in effect as of the Effective Date (collectively, the “GAP
Organizational Documents”).

 

(ii)        The GAP Organizational Documents have not been terminated and
continue to be in full force and effect.

 

(iii)        No consent or authorization of any other persons or entities, other
than those whose consent has been secured, is required for GAP to enter into
this Agreement or to take any action or grant any consent or approval under this
Agreement.

 

(iv)        The offer and sale of interests in GAP has been undertaken in full
compliance with all applicable federal and state securities laws and no
interests in GAP have been offered or sold to any person who was not at the time
of such offer or sale an “accredited investor” as defined in Section 2(15) of
the Securities Act of 1933 and Rule 501 promulgated thereunder and under the
securities laws of various states.

 

(e)         (i)         Each Member acknowledges and agrees that, without SRT’s
consent, the Company shall not take, nor shall such Members cause the Company to
take, any actions that would (A) cause SRT or its Affiliates to be disqualified
as a REIT under the Code or (B) generate any income other than “rents from real
property” and “gains from the sale of real property which is not property
described in Section 1221(a)(i) of the Code.” Each Member shall be responsible
for any action taken by it in violation of the foregoing and in no event will
the Company be responsible for the actions of any Member.

 

(ii)         A Member may request confirmation from SRT, at any time and from
time to time, that a proposed action to be taken by a Member or the Company will
not violate the terms of subsection (i) above. If SRT either (A) confirms that
such action will not violate the terms of subsection (i) above or (B) fails to
respond to such request within ten (10) days, then the Member(s) and the Company
may pursue such action without any future liability under subsection (i) above
if such action is later determined to have violated the terms of subsection (i)
above.

 

(f)          Each Member agrees to indemnify and hold harmless the Company and
each other Member and their officers, directors, shareholders, partners,
members, employees, successors and assigns from and against any and all loss,
damage, liability or expense (including costs and attorneys’ fees) which they
may incur by reason of, or in connection with, any breach of the foregoing
representations and warranties by such Member and all such representations and
warranties shall survive the execution and delivery of this Agreement and the
termination and dissolution of Operating Member and/or the Company or any other
Member.

 

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ARTICLE XIV
MISCELLANEOUS

 

14.01     Further Assurances

 

Each Member agrees to execute, acknowledge, deliver, file, record and publish
such further instruments and documents, and do all such other acts and things as
may be required by law, or as may be required to carry out the intent and
purposes of this Agreement.

 

14.02     Notices

 

All notices, demands, consents, approvals, requests or other communications
which any of the parties to this Agreement may desire or be required to give
hereunder (collectively, “Notices”) shall be in writing and shall be given by
(a) personal delivery, (b) facsimile or electronic mail transmission, but only
to the extent delivery has been confirmed by all recipients by a return
facsimile or electronic mail transmission or (c) a reputable overnight courier
service, fees prepaid, addressed as follows:

 

 

If to GAP:

c/o Oaktree Real Estate Group

333 So. Grand Avenue, 28th Floor

Los Angeles, CA 90071

Attn: Cary Kleinman

Facsimile No.: 213/830-6392

    If to Operating Member, to:

c/o GLB SGO, LLC

400 South El Camino, 11th Floor

San Mateo, CA 94402-170

Attention: Andrew Batinovich

Facsimile No. 650/343-9690

    with a copy to:

 c/o GLB SGO, LLC

400 South El Camino, 11th Floor

San Mateo, CA 94402-170

Attention: General Counsel

Facsimile No. 650/343-9690

    If to SRT, to:

 c/o SRT SGO, LLC

400 South El Camino, 11th Floor

San Mateo, CA 94402-170

Attention: Andrew Batinovich

Facsimile No. 650/343-9690

 

-65-

 

  

with a copy to:

c/o SRT SGO, LLC

400 South El Camino, 11th Floor

San Mateo, CA 94402-170

Attention: General Counsel

Facsimile No. 650/343-9690

 

Any Member may designate another addressee (and/or change its address) for
Notices hereunder by a Notice given pursuant to this Section 14.02. A Notice
sent in compliance with the provisions of this Section 14.02 shall be deemed
given on the date of receipt.

 

14.03     Governing Law

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to agreements made and to be performed wholly
within that State.

 

14.04     Attorney Fees

 

If the Company or any Member obtains a judgment against any other Member by
reason of the breach of this Agreement or the failure to comply with the terms
hereof, reasonable attorneys’ fees and costs as fixed by the court shall be
included in such judgment.

 

14.05     Captions

 

All titles or captions contained in this Agreement are inserted only as a matter
of convenience and for reference and in no way define, limit, extend, or
describe the scope of this Agreement or the intent of any provision in this
Agreement.

 

14.06     Pronouns

 

All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, and neuter, singular and plural, as the identity of the
party or parties may require.

 

14.07     Successors and Assigns

 

This Agreement shall be binding upon the parties hereto and their respective
executors, administrators, legal representatives, heirs, successors and assigns,
and shall inure to the benefit of the parties hereto and, except as otherwise
provided herein, their respective executors, administrators, legal
representatives, heirs, successors and assigns.

 

14.08     Extension Not a Waiver

 

No delay or omission in the exercise of any power, remedy or right herein
provided or otherwise available to a Member or the Company shall impair or
affect the right of such Member or the Company thereafter to exercise the same.
Any extension of time or other indulgence granted to a member hereunder shall
not otherwise alter or affect any power, remedy or right of any other Member or
of the Company, or the obligations of the Member to whom such extension or
indulgence is granted.

 

-66-

 

  

14.09     Creditors Not Benefited

 

Nothing contained in this Agreement is intended or shall be deemed to benefit
any creditor of the Company or any Member, and no creditor of the Company shall
be entitled to require the Company or the Members to solicit or accept any
Additional Capital Contribution for the Company or to enforce any right which
the Company or any Member may have against any Member under this Agreement or
otherwise or under any guaranty.

 

14.10     Recalculation of Interest

 

If any applicable law is ever judicially interpreted so as to deem any
distribution, contribution, payment or other amount received by any Member or
the Company under this Agreement as interest and so as to render any such amount
in excess of the maximum rate or amount of interest permitted by applicable law,
then it is the express intent of the Members and the Company that all amounts in
excess of the highest lawful rate or amount theretofore collected be credited
against any other distributions, contributions, payments or other amounts to be
paid by the recipient of the excess amount or refunded to the appropriate
Person, and the provisions of this Agreement immediately be deemed reformed,
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the payment of the fullest amount
otherwise required hereunder. All sums paid or agreed to be paid that are
judicially determined to be interest shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the term
of such obligation so that the rate or amount of interest on account of such
obligation does not exceed the maximum rate or amount of interest permitted
under applicable law.

 

14.11     Severability

 

In case any one or more of the provisions contained in this Agreement or any
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and other application thereof shall not in any way be affected or
impaired thereby.

 

14.12     Entire Agreement

 

This Agreement contains the entire agreement between the parties relating to the
subject matter hereof and all prior agreements relative hereto which are not
contained herein are terminated. Amendments, variations, modifications or
changes herein may be made effective and binding upon the Members by, and only
by, the setting forth of same in a document duly executed by each Member, and
any alleged amendment, variation, modification or change herein which is not so
documented shall not be effective as to any Member.

 

-67-

 

  

14.13     Publicity

 

The parties agree that no Member shall issue any press release or otherwise
publicize or disclose the terms of this Agreement or the proposed terms of any
acquisition of the Initial Company Property, without the consent of each of the
other Members, except as such disclosure may be made in the course of normal
reporting practices by any Member to its members, shareholders or partners or as
otherwise required by law.

 

14.14     Counterparts

 

This Agreement may be executed in multiple counterparts, each of which shall be
an original but all of which together shall constitute but one and the same
agreement.

 

14.15     Confidentiality

 

(a)         Each Operating Member and SRT represents that it has not and agrees
that it will not and will direct its shareholders, partners, directors,
officers, agents, advisors and Affiliates not to, disclose to any Person the
terms of this Agreement, the identity of any person with whom the Company may be
holding discussions with respect to any investment, acquisition, disposition or
other transaction, or any other business, financial or other information
relating directly to the conduct of the business and affairs of the Company or
the relative or absolute rights or interests of any of the Members that is not
already publicly available or that has not been publicly disclosed by or
pursuant to authorization by GAP (collectively, the “Confidential Information”),
or confirm any statement made by third Persons regarding Confidential
Information; provided, however, that Operating Member and SRT (or either of
their Affiliates) may disclose such Confidential Information if required by law
(it being specifically understood and agreed that anything set forth in a
registration statement or any other document filed pursuant to law will be
deemed required by law), if necessary for it to perform any of its duties or
obligations hereunder or in any management agreement to which it is a party
covering any Company Property, and to its attorneys and advisors who agree to
maintain a similar confidence.

 

(b)         Subject to the provisions of Section 14.15(a), Operating Member and
SRT each agree not to disclose any Confidential Information to any Person (other
than a Person (including without limitation an attorney or advisor) agreeing to
maintain all Confidential Information in strict confidence or a judge,
magistrate or referee in any action, suit or proceeding relating to or arising
out of this Agreement or otherwise), and to keep confidential all documents
(including, without limitation, responses to discovery requests) containing any
Confidential Information. Each Operating Member and SRT hereby consents in
advance to any motion for any protective order brought by GAP represented as
being intended by GAP to implement the purposes of this Section 14.15, provided
that, if Operating Member or SRT receives a request to disclose any Confidential
Information under the terms of a valid and effective order issued by a court or
governmental agency and the order was not sought by or on behalf of or consented
to by Operating Member or SRT, as applicable, then Operating Member or SRT may
disclose the Confidential Information to the extent required if Operating Member
or SRT, as applicable, as promptly as practicable (i) notifies GAP of the
existence, terms and circumstances of the order, (ii) consults in good faith
with GAP on the advisability of taking legally available steps to resist or to
narrow the order, and (iii) if disclosure of the Confidential Information is
required, exercises its best efforts to obtain a protective order or other
reliable assurance that confidential treatment will be accorded to the portion
of the disclosed Confidential Information that GAP designates. The cost
(including, without limitation, attorneys’ fees and expenses) of obtaining a
protective order covering Confidential Information designated by GAP will be
borne by the Company.

 

-68-

 

  

(c)         The covenants contained in this Section 14.15 will survive the
Transfer of the Interest of any Member and the termination of the Company.

 

14.16      Venue

 

Each of the Members consents to the jurisdiction of any court in Wilmington,
Delaware for any action arising out of matters related to this Agreement. Each
of the Members waives the right to commence an action in connection with this
Agreement in any court outside of Wilmington, Delaware.

 

14.17      Waiver of Jury Trial

 

EACH OF THE MEMBERS HEREBY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF
MATTERS RELATED TO THIS AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.

 

14.18      Attorney Representation

 

Each Member hereby acknowledges and agrees that: (i) in the negotiation and
preparation of this Agreement and with respect to the matters contemplated
hereby GAP has been independently represented by the law firm of Jones Day
(“Jones Day”), Operating Member and SRT have been independently represented by
the law firm of Boutin Jones Inc. (“Boutin Jones”); (ii) Jones Day has
represented both GAP and its Affiliates in other related and unrelated matters;
(iii) each Member hereby waives any potential conflict of interest resulting
from Jones Day’s representation of GAP and GAP’s Affiliates with respect to this
Agreement and the Company with respect to other related and unrelated matters;
(iv) Operating Member and SRT agree and acknowledge that in the event of a
default on the part of Operating Member and/or SRT under this Agreement, Jones
Day shall be free to represent the Company, GAP and GAP’s Affiliates in the
enforcement of this Agreement; and (v) GAP agrees and acknowledges that in the
event of a default on the part of GAP under this Agreement, Boutin Jones shall
be free to represent Operating Member and/or SRT in the enforcement of this
Agreement.

 

14.19      Cooperation

 

In the event that GAP in good faith proposes a restructuring of the Company in
order to avoid the imposition of a corporate tax on any income of the Company or
to minimize the effects of any UBTI on GAP and/or its direct or indirect
partners, members or shareholders, Operating Member shall cooperate with and
consent to such restructuring, provided same does not materially adversely
affect Operating Member or SRT.

 

[SIGNATURES ON NEXT PAGE]

 

-69-

 

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the introductory paragraph hereof.

 

  Operating Member:       GLB SGO, LLC,   a Delaware limited liability company  
    By:     Name:  Andrew Batinovich   Title:  President and Chief Executive
Officer

 

Signatures Continue on Next Page

 

 

 

  

  SRT:       SRT SGO, LLC,   A Delaware limited liability company         By:
STRATEGIC REALTY OPERATING PARTNERSHIP, L.P.,     a Delaware limited
partnership,     its sole member             By: STRATEGIC REALTY TRUST, INC.,  
    a Maryland corporation,       its general partner               By:        
Name: Andrew Batinovich       Title:  President and Chief Executive Officer

 

Signatures Continue on Next Page

 

 

 

 

 

  GAP:       GROCERY RETAIL GRAND AVENUE PARTNERS, LLC,   a Delaware limited
liability company       By:     Name:     Its:  Authorized Signatory       By:  
  Name:     Its:  Authorized Signatory        

Signature Page – Limited Liability Company Agreement – SGO Retail Acquisitions
Venture, LLC

 

 

 

  

EXHIBIT A

 

PROPERTY MANAGEMENT AGREEMENT

 

[SEE ATTACHED]

 

 

 

  

EXHIBIT B

 

INTENTIONALLY OMITTED

 

 

 

  

EXHIBIT C

 

EXAMPLE OF OPERATION OF CALCULATION SET FORTH IN SECTION 4.02(c)

 

By way of example only, and without limitation, assume that on the Effective
Date, the Members made Capital Contributions aggregating $1,000,000, of which
$800,000 was made by GAP, with a Percentage Interest of 80.0%, $190,000 was made
by SRT with a Percentage Interest of 19%, and $10,000 was made by Operating
Member, with a Percentage Interest of 1.0%. Subsequent to the Effective Date,
the Managing Member calls for Additional Capital Contributions of $500,000 in
the aggregate (the “Additional Capital Call”), of which GAP is responsible for
$400,000, SRT is responsible for $95,000 and Operating Member is responsible for
$5,000. GAP and Operating Member each make their shares of the Additional
Capital Call, but SRT does not, and GAP and Operating Member each (based on
their relative Percentage Interests)* also make the $95,000 contribution on
behalf of SRT. Such $95,000 is a “Substituted Capital Contribution”, and after
the Additional Capital Call is funded, the Members’ Percentage Interests shall
have been adjusted as follows, in accordance with Section 4.02(c):

 

1.         GAP: The adjusted Percentage Interest of GAP, in the aggregate, is
calculated by dividing (1) the positive difference, if any, between (a) the sum
of (i) one hundred percent (100%) of the aggregate Capital Contributions
(excluding Substituted Capital Contributions) then or theretofore made by GAP to
the Company ($1,200,000), plus (ii) 200% of the Substituted Capital
Contributions then or theretofore made by GAP to the Company ($93,827.16), minus
(b) the Excess Amounts attributable to the Substituted Capital Contributions
then or theretofore made by SRT to the Company ($0), by (2) one hundred percent
(100%) of the aggregate Capital Contributions (including without limitation
Substituted Capital Contributions) then or theretofore made by all of the
Members to the Company ($1,500,000). This results in a Percentage Interest for
GAP of (i) the sum of $1,200,000 plus $187,654.32, divided by (ii) $1,500,000 =
92.51%.

 

2.         Operating Member: The adjusted Percentage Interest of Operating
Member, in the aggregate, is calculated by dividing (1) the positive difference,
if any, between (a) the sum of (i) one hundred percent (100%) of the aggregate
Capital Contributions (excluding Substituted Capital Contributions) then or
theretofore made by Operating Member to the Company ($15,000), plus (ii) 200% of
the Substituted Capital Contributions then or theretofore made by Operating
Member to the Company ($1,172.84), minus (b) the Excess Amounts attributable to
the Substituted Capital Contributions then or theretofore made by SRT to the
Company ($0), by (2) one hundred percent (100%) of the aggregate Capital
Contributions (including without limitation Substituted Capital Contributions)
then or theretofore made by all of the Members to the Company ($1,500,000). This
results in a Percentage Interest for Operating Member of (i) the sum of $15,000
plus $2,345.68, divided by (ii) $1,500,000 = 1.16%.

 

 

 

  

3.         SRT: SRT’s adjusted Percentage Interest is calculated by dividing
(1) the positive difference, if any, between (a) the sum of (i) one hundred
percent (100%) of the aggregate Capital Contributions (excluding Substituted
Capital Contributions) then or theretofore made by SRT to the Company
($190,000), plus (ii) 200% of the Substituted Capital Contributions then or
theretofore made by SRT to the Company ($0), minus (b) the Excess Amounts
attributable to the Substituted Capital Contributions then or theretofore made
by GAP and Operating Member to the Company ($93,827.16 and ($1,172.84,
respectively), by (2) one hundred percent (100%) of the aggregate Capital
Contributions (including without limitation Substituted Capital Contributions)
then or theretofore made by all of the Members to the Company ($1,500,000). This
results in a Percentage Interest for SRT of (i) the difference between $190,000
minus $95,000, divided by (ii) $1,500,000 = 6.33%.

 

*Relative Percentage Interests are calculated by dividing the Percentage
Interest of a Member by the aggregate Percentage Interest of all contributing
Members (i.e., 80/(80+1) = 98.77% and 1/(80+1) = 1.23%, respectively).

 

-2-

 

  

EXHIBIT D

 

PERFORMANCE GOALS

 

Investment must (i) achieve 90% of budgeted NOI based on projections at closing
and (ii) maintain leases covering in excess of 75% of the rentable square
footage of all properties comprising the Investment. Oaktree may assign
Operating Member’s Incentive Fee to a replacement third party upon a specified
termination event relating to “bad boy” acts of the Operating Member or
violation of the Performance Tests.

 

Budgeted Net Operating Income

 

   Yr 1  Yr 2  Yr 3  Yr 4  Yr 5 Aurora Commons - Office  $103,783   $122,995  
$135,802   $144,896   $148,587  Aurora Commons - Retail   554,960    635,590  
 646,705    636,246    642,877  Constitution Trail   1,999,228    2,189,356  
 2,357,942    2,510,337    2,537,873  Osceola Village   1,440,618    1,635,762  
 1,658,377    1,628,515    1,468,885  Total Budgeted NOI  $4,098,589  
$4,583,703   $4,798,826   $4,919,994   $4,798,222                             %
of Budgeted NOI   90%   90%   90%   90%   90% NOI Threshold  $3,688,730  
$4,125,333   $4,318,943   $4,427,995   $4,318,400 

 

 

 

  

SCHEDULE A

 

ESTIMATED REQUIRED INITIAL CAPITAL CONTRIBUTIONS

 

Operating Member:   $239,437.94       GAP:    $19,155,035.46       SRT:    
$4,549,320.92

 

 

 

  

SCHEDULE B

 

INITIAL COMPANY PROPERTY

 

PROPERTY DESCRIPTION OF AURORA COMMONS PROPERTY

 

The land referred to herein below is situated in the City of Aurora, County of
Portage, State of Ohio, described as follows:

 

TRACT I:

 

Parcel "A"

 

Situated in the City of Aurora, County of Portage, State of Ohio and known as
being part of Original Aurora Township, Lot No. 18 and is further bounded and
described as follows: Beginning at a 7/8" iron pin found at the intersection of
the center line of West Garfield Road (State Route 82) (60 feet wide) with the
center line of Bissell Road (50 feet wide). Thence South 89° 41’ 30" East, along
said center line of West Garfield Road, a distance of 808.88 feet to a P.K. nail
found at the Northeasterly corner of Parcel No. 4 of land conveyed to Aurora
Commons Phase Two, LLC by deed recorded in Document No. 200205196 of Portage
County Records and the principal place of beginning of the land herein
described;

 

Course 1 Thence South 89°-41’-30" East, continuing along said center line of
West Garfield Road, a distance of 483.87 feet;

 

Course 2 Thence South 00°-18’-30" West, passing through a 5/8" iron pin
(Neff-7065) set at 30.00 feet, the Southerly right of way line of said West
Garfield Road, a distance of 214.71 feet to a 5/8" iron pin (Neff-7065) set;

 

Course 3 Thence South 53°-36’-19" East, a distance of 85.93 feet to a 5/8" iron
pin (Neff-7065) set;

 

Course 4 Thence South 08°-09’-00" East, a distance of 157.55 feet to a 5/8" iron
pin (Neff-7065) set in the Northwesterly line of Parcel No. 2 of land so
conveyed to the aforesaid Aurora Commons Phase Two, LLC;

 

Course 5 Thence South 67°-18’-30" West, along said Northwesterly line of Parcel
No. 2, a distance of 28.74 feet to a magnetic nail found at a Northwesterly
corner thereof;

 

Course 6 Thence South 08°-09’-00" East, along a Westerly line of said Parcel No.
2 and along a Westerly line of a parcel of land conveyed to the City of Aurora
by deed recorded in Document No. 201108720 of Portage County Records, a distance
of 1109.28 feet to a Southwesterly corner thereof. Said corner marked by a 1/2"
iron pin found South 66°-58’-29" West, a distance of 0.52 feet;

 

Course 7 Thence North 82°-15’-00" East, along a Southerly line of land so
conveyed to the City of Aurora, a distance of 73.14 feet to a 1/2" iron pin
found at an interior corner thereof;

 

Course 8 Thence South 07°-59’-20" East, along a Westerly line of land so
conveyed to the City of Aurora, a distance of 249.75 feet to a P.K. nail found
at a Southwesterly corner thereof and the center line of West Pioneer Trail (60
feet wide);

 

Course 9 Thence South 82°-00’-42" West, along said center line of West Pioneer
Trail, a distance of 60.00 feet to a P.K. nail found at a Southeasterly corner
of a parcel of land conveyed to the City of Aurora by deed recorded in Document
No. 200121047 of Portage County Records;

 

Course 10 Thence North 07°-59’-20" West, along an Easterly line of land so
conveyed to the City of Aurora, as last aforesaid, a distance of 30.00 feet to a
P.K. nail found at an angle point therein and the Northerly right of way line of
said West Pioneer Trail;

 

Course 11 Thence North 26°-24’-10" West, continuing along said Easterly line of
land so conveyed to the City of Aurora, as last aforesaid, a distance of 232.11
feet to a 1/2" iron pin found at an angle point therein;

 

 

 

  

Course 12 Thence North 08°-09’-00" West, continuing along said Easterly line of
land so conveyed to the City of Aurora, as last aforesaid and along the Easterly
line of a parcel of land conveyed to the United States Postal Service by deed
recorded in Volume 1087, Page 664 of Portage County Records, a distance of
625.06 feet to a 1/2" iron pin found at the Northeasterly corner thereof;

 

Course 13 Thence North 61°-16’-00" West, along the Northeasterly line of land so
conveyed to the United States Postal Service, a distance of 218.47 feet to a
magnetic nail found at the Northwesterly corner thereof;

 

Course 14 Thence South 28°-44’-00" West, along the Northwesterly line of land so
conveyed to the United States Postal Service, a distance of 240.00 feet to a
magnetic nail found at the Southwesterly corner thereof;

 

Course 15 Thence South 61°-16’-00" East, along the Southwesterly line of land so
conveyed to the United States Postal Service, a distance of 54.74 feet to a 5/8"
iron pin (Neff-7065) set at an angle point in the Northeasterly line of Parcel
No. 2 of land conveyed to TNP SRT Aurora Commons, LLC by deed recorded in
Document No. 201205050 of Portage County Records;

 

Course 16 Thence South 56°-26’-46" West, along said Northeasterly line of Parcel
No. 2, a distance of 66.63 feet to a 5/8" iron pin (Neff-7065) set at an angle
point therein;

 

Course 17 Thence North 61°-09’-00" West, continuing along said Northeasterly
line of Parcel No. 2, a distance of 180.00 feet to a magnetic nail set at an
angle point therein;

 

Course 18 Thence North 73°-09’-00" West, continuing along said Northeasterly
line of Parcel No. 2, a distance of 270.98 feet to a 5/8" iron pin (Neff-7065)
set at the Northwesterly corner thereof and the Easterly line of a parcel of
land conveyed to Aurora Manor Limited Partnership by deed recorded in Document
No. 201114790 of Portage County Records;

 

Course 19 Thence North 02°-55’-20" West, along said Easterly line of land so
conveyed to Aurora Manor Limited Partnership and along the aforesaid Easterly
line of Parcel No. 4 of land so conveyed to Aurora Commons Phase Two, LLC, a
distance of 322.68 feet to a 5/8" iron pin (Dudley-6747) found at an angle point
therein;

 

Course 20 Thence North 17°-34’-18" East, along said Easterly line of Parcel No.
4, a distance of 633.33 feet to the principal place of beginning and containing
16.2705 Acres (708,744 Square Feet) of land according to a survey made by Thomas
J. Neff, Jr. Registered Surveyor No. 7065-Ohio in April 2012.

 

The subject premises being part of Parcel No. 1 of land conveyed to TNP SRT
Aurora Commons, LLC by deed recorded in Document No. 201205050 of Portage County
Records.

 

The basis of bearings for the premises surveyed is South 89°-41’-30" East, as
the center line of West Garfield Road (State Route 82) as evidenced by the deed
recorded in Document No. 201205050 of Portage County Records.

 

Parcel "B"

 

Situated in the City of Aurora, County of Portage, State of Ohio and known as
being part of Original Aurora Township, Lot No. 18 and is further bounded and
described as follows: Beginning at a 7/8" iron pin found at the intersection of
the center line of West Garfield Road (State Route 82) (60 feet wide) with the
center line of Bissell Road (50 feet wide). Thence South 89°-41’-30" East, along
said center line of West Garfield Road, a distance of 808.88 feet to a P.K. nail
found at the Northeasterly corner of Parcel No. 4 of land conveyed to Aurora
Commons Phase Two, LLC by deed recorded in Document No. 200205196 of Portage
County Records, the same being the Northwesterly corner of Parcel No. 1 of land
conveyed to TNP SRT Aurora Commons, LLC by deed recorded in Document No.
201205050 of Portage County Records. Thence South 89°-41’-30" East, continuing
along said centerline of West Garfield Road, a distance of 483.87 feet to the
principal place of beginning of the land herein described;

 

Course 1 Thence South 89°-41’-30" East, continuing along said center line of
West Garfield Road, a distance of 537.05 feet to a magnetic nail found at the
Northwesterly corner of a parcel of land conveyed to Kallstrom Taylor
Partnership, LLC by deed recorded in Document No. 2000025053 of Portage County
Records;

 

 

 

  

Course 2 Thence South 00°-18’-30" West, along the Westerly line of land so
conveyed to Kallstrom Taylor Partnership, LLC, a distance of 270.00 feet to a
1/2" iron pin found at the Northeasterly corner of Parcel No. 2 of land conveyed
to Aurora Commons Phase Two, LLC by deed recorded in Document No. 200205196 of
Portage County Records;

 

Course 3 Thence North 89°-41’-30" West, along the Northerly line of said Parcel
No. 2, a distance of 265.00 feet to a magnetic nail found at a Northwesterly
corner thereof;

 

Course 4 Thence South 00°-18’-30" West, along a Westerly line of said Parcel No.
2, a distance of 75.00 feet to a 1/2" iron pin found at an interior corner
thereof;

 

Course 5 Thence South 67°-18’-30" West, along the Northwesterly line of said
Parcel No. 2, a distance of 194.93 feet to a magnetic nail set;

 

Course 6 Thence North 08°-09’-00" West, a distance of 157.55 feet to a 5/8" iron
pin (Neff-7065) set;

 

Course 7 Thence North 53°-36’-19" West, a distance of 85.93 feet to a 5/8" iron
pin (Neff-7065) set;

 

Course 8 Thence North 00°-18’-30" East, passing through a 5/8" iron pin
(Neff-7065) set at 184.71 feet, the Southerly right of way line of aforesaid
West Garfield Road, a distance of 214.71 feet to the principal place of
beginning and containing 3.7858 acres (164,909 Square Feet) of land according to
a survey made by Thomas J. Neff, Jr. Registered Surveyor No. 7065-Ohio in April
of 2012.

 

The subject premises being part of Parcel No. 1 of land conveyed to TNP SRT
Aurora Commons, LLC by deed recorded in Document No. 201205050 of Portage County
Records.

 

The basis of bearings for the premises surveyed is South 89°-41’-30" East, as
the center line of West Garfield Road (State Route 82) as evidenced by the deed
recorded in Document No. 201205050 of Portage County Records.

 

Parcel "C"

 

Situated in the City of Aurora, County of Portage, State of Ohio and known as
being part of Original Aurora Township, Lot No. 18 and is further bounded and
described as follows: Beginning at a 7/8" iron pin found at the intersection of
the center line of West Garfield Road (State Route 82) (60 feet wide) with the
center line of Bissell Road (50 feet wide). Thence South 89°-41’-30" East, along
said center line of West Garfield Road, a distance of 808.88 feet to a P.K. nail
found at the Northwesterly corner of Parcel No. 1 of land conveyed to TNP SRT
Aurora Commons, LLC by deed recorded in Document No. 201205050 of Portage County
Records.

 

Thence South 17°-34’-18" West, along the Westerly line of said Parcel No. 1, a
distance of 633.33 feet to an angle point therein. Thence South 02°-55’-20"
East, continuing along said Westerly line of Parcel No. 1 and along the Easterly
line of a parcel of land conveyed to Aurora Manor Limited Partnership by deed
recorded in Document No. 201114790 of Portage County Records, a distance of
322.68 feet to a 5/8" iron pin (Neff-7065) set at the Southwesterly corner of
said Parcel No. 4 and the principal place of beginning of the land herein
described;

 

Course 1 Thence South 73°-09’-00" East, along the Southwesterly line of said
Parcel No. 1, a distance of 270.98 feet to a magnetic nail set at an angle point
therein;

 

Course 2 Thence South 61°-09’-00" East, continuing along said Southwesterly line
of Parcel No. 1, a distance of 180.00 feet to a 5/8" iron pin (Neff-7065) set at
an angle point therein;

 

Course 3 Thence North 56°-26’-46" East, continuing along said Southwesterly line
of Parcel No. 1, a distance of 66.63 feet to a 5/8" iron pin (Neff-7065) set at
a Southeasterly corner thereof and the Southwesterly line of a parcel of land
conveyed to the United States Postal Service by deed recorded in Volume 1087,
Page 664 of Portage County Records;

 

Course 4 Thence South 61°-16’-00" East, along said Southwesterly line of land so
conveyed to the United States Postal Service, a distance of 290.81 feet to a
5/8" iron pin (Neff-7065) set at an angle point in the Northerly line of a
parcel of land conveyed to the City of Aurora by deed recorded in Document No.
200121047 of Portage County Records;

 

 

 

  

Course 5 Thence South 82°-54’-59" West, along said Northerly line of land so
conveyed to the City of Aurora and along the Northerly line of a parcel of land
conveyed to the City of Aurora by deed recorded in Document No. 200121046 of
Portage County Records, a distance of 714.79 feet to a 1/2" iron pin found at
the Southeasterly corner of land so conveyed to the aforesaid Aurora Manor
Limited Partnership;

 

Course 6 Thence North 02°-55’-20" West, along the Easterly line of land so
conveyed to Aurora Manor Limited Partnership, a distance of 356.99 feet to the
principal place of beginning and containing 3.1379 Acres (136,687 Square Feet)
of land according to a survey made by Thomas J. Neff, Jr. Registered Surveyor
No. 7065-Ohio in April of 2012.

 

The subject premises being part of Parcel No. 2 of land conveyed to TNP SRT
Aurora Commons, LLC by deed recorded in Document No. 201205050 of Portage County
Records.

 

The basis of bearings for the premises surveyed is South 89°-41’-30" East, as
the center line of West Garfield Road (State Route 82) as evidenced by the deed
recorded in Document No. 201205050 of Portage County Records.

 

TRACT II:

 

Together with a non-exclusive Reciprocal Easement recorded November 22, 1989 as
Volume 1087, Page 166 of Portage County Records.

 

TRACT III:

 

Together with a non-exclusive Reciprocal Easement recorded March 23, 2012 as
Document No. 201205052 and First Amendment recorded April 6, 2012 as Document
No. 201205965, of Portage County Records.

 

APN:  03-018-00-00-032-012 and 03-018-00-00-033-000 and 03-018-00-00-033-001 

 

 

 

 

 

PROPERTY DESCRIPTION OF CONSTITUTION TRAIL PROPERTY

 

Real property in the City of Normal, County of McLean, State of Illinois,
described as follows:

 

TRACT NO. 1:

 

LOTS 1, 2, 3, 6 AND 8 AND OUTLOTS 5, 7, 12 AND 500, 502, AND 503 IN THE
CONSTITUTION TRAIL CENTRE SUBDIVISION, ACCORDING TO THE PLAT THEREOF RECORDED
AUGUST 7, 2007 AS DOCUMENT NUMBER 2007-21949, IN MCLEAN COUNTY, ILLINOIS;

 

EXCEPTING:

 

THE SECOND ADDITION TO CONSTITUTION TRAIL CENTRE A PLANNED UNIT DEVELOPMENT IN
THE TOWN OF NORMAL, ACCORDING TO THE PLAT THEREOF RECORDED JUNE 5, 2008 AS
DOCUMENT NUMBER 2008-15763, IN MCLEAN COUNTY, ILLINOIS;

 

EXCEPTING:

 

THE THIRD ADDITION TO CONSTITUTION TRAIL CENTRE A PLANNED UNIT DEVELOPMENT IN
THE TOWN OF NORMAL, ACCORDING TO THE PLAT THEREOF RECORDED JUNE 5, 2008 AS
DOCUMENT NUMBER 2008-15764, IN MCLEAN COUNTY, ILLINOIS.

 

EXCEPTING:

 

THE FIRST ADDITION TO CONSTITUTION TRAIL CENTRE A PLANNED UNIT DEVELOPMENT IN
THE TOWN OF NORMAL, ACCORDING TO THE PLAT THEREOF RECORDED FEBRUARY 20, 2009 AS
DOCUMENT NUMBER 2009-4743, IN MCLEAN COUNTY, ILLINOIS.

 

EXCEPTING:

 

THE FOURTH ADDITION TO CONSTITUTION TRAIL CENTRE A PLANNED UNIT DEVELOPMENT IN
THE TOWN OF NORMAL, ACCORDING TO THE PLAT THEREOF RECORDED JULY 1, 2009 AS
DOCUMENT NUMBER 2009-20923, IN MCLEAN COUNTY, ILLINOIS.

 

TRACT 1A:

 

EASEMENTS CONTAINED IN THAT CERTAIN RECORD DECLARATION OF EASEMENT AND
OPERATIONS AGREEMENT DATED AUGUST 31, 2007 AND RECORDED SEPTEMBER 11, 2007 AS
DOCUMENT NUMBER 2007-00025124, IN MCLEAN COUNTY, ILLINOIS.

 

TRACT NO. 2:

 

INTENTIONALLY DELETED.

 

 

 

  

TRACT NO. 3:

 

OUTLOT 509 IN THE THIRD ADDITION TO CONSTITUTION TRAIL CENTRE A PLANNED UNIT
DEVELOPMENT IN THE TOWN OF NORMAL, ACCORDING TO THE PLAT THEREOF RECORDED JUNE
5, 2008 AS DOCUMENT NUMBER 2008-15764, IN MCLEAN COUNTY, ILLINOIS.

  

TRACT NO. 4:

 

LOT 20 AND OUTLOTS 506 AND 507 IN THE FIRST ADDITION TO CONSTITUTION TRAIL
CENTRE A PLANNED UNIT DEVELOPMENT IN THE TOWN OF NORMAL, ACCORDING TO THE PLAT
THEREOF RECORDED FEBRUARY 20, 2009 AS DOCUMENT NUMBER 2009-4743, IN MCLEAN
COUNTY, ILLINOIS.

 

TRACT NO. 5:

 

LOT 9 AND OUTLOT 510 IN THE FOURTH ADDITION TO CONSTITUTION TRAIL CENTRE A
PLANNED UNIT DEVELOPMENT IN THE TOWN OF NORMAL, ACCORDING TO THE PLAT THEREOF
RECORDED JULY 1, 2009 AS DOCUMENT NUMBER 2009-20923, IN MCLEAN COUNTY, ILLINOIS.

 

APN's: 
14-16-454-001
14-16-454-002
14-16-454-004
14-16-380-001
14-16-379-004
14-16-380-002
14-16-379-005
14-16-379-001
14-16-454-003
14-16-326-003
14-16-326-002
14-16-405-002
14-16-404-004
14-16-404-003
14-16-404-005
14-16-404-006
14-16-379-008
14-16-379-009

 

 

 

  

PROPERTY DESCRIPTION OF OSCEOLA vILLAGE PROPERTY

 

Real property in the City of Kissimmee, County of Osceola, State of Florida,
described as follows:

 

PARCEL 1:

 

LOTS 1, 3, 4, 5, 6, 7, AND 8, INCLUSIVE, OSCEOLA VILLAGE, ACCORDING TO THE PLAT
THEREOF, AS RECORDED IN PLAT BOOK 21, PAGES 17 AND 18, INCLUSIVE, OF THE PUBLIC
RECORDS OF OSCEOLA COUNTY, FLORIDA.

 

PARCEL 2:

 

EASEMENT RIGHTS, AS CONTAINED IN THAT CERTAIN ACCESS AND EASEMENT AGREEMENT,
RECORDED IN OFFICIAL RECORDS BOOK 3300, PAGE 2533, OF THE PUBLIC RECORDS OF
OSCEOLA COUNTY, FLORIDA.

 

PARCEL 3:

 

EASEMENTS CONTAINED IN THAT CERTAIN DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS FOR OSCEOLA VILLAGE, RECORDED IN OFFICIAL RECORDS BOOK 4317, PAGE
250, OF THE PUBLIC RECORDS OF OSCEOLA COUNTY, FLORIDA.

 

APN:  R052529-188200010010 and R052529-188200010030 and R052529-188200010040 and
R052529-188200010050 and R052529-188200010060 and R052529-188200010070 and
R052529-188200010080 

 

 

 

  

SCHEDULE C

 

SAMPLE CALCULATION OF ASSET MANAGEMENT FEE

 

   Investment
Value Aurora Commons  $8,500,000  Constitution Trail  $23,100,000  Osceola
Village  $22,000,000     $53,600,000         Asset Fee (monthly)   0.020830%   
    Monthly Fee  $11,164.88 

 

 

 

  

SCHEDULE D

 

INTENTIONALLY OMITTED

 

 

 

  

SCHEDULE E

 

ONGOING CLASS ACTION AGAINST SRT

 

Case No. 13-CV-04921-JST currently pending before the United States District
Court for the Northern District of California [captioned as LEWIS BOOTH, as
Trustee for the Booth Trust dated 11-20-96, and STEPHEN DREWS, on behalf of
themselves and all others similarly situated, Plaintiffs, v. STRATEGIC REALTY
TRUST, INC. (f/k/a TNP STRATEGIC RETAIL TRUST, INC.), THOMPSON NATIONAL
PROPERTIES, LLC, TNP STRATEGIC ADVISOR, LLC, TNP SECURITIES, LLC, ANTHONY W.
THOMPSON, CHRISTOPHER S. CAMERON, JAMES R. WOLFORD, JACK R. MAURER, PHILLIP I.
LEVIN, ARTHUR M. FRIEDMAN, JEFFREY S. ROGERS, ROBERT N. RUTH, and PETER K.
KOMPANIEZ, Defendants].