EXHIBIT 10.2

 

 

FIRST AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

FOR

TNP SRT SECURED HOLDINGS, LLC

A DELAWARE LIMITED LIABILITY COMPANY

 

 

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER
APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT
REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS
FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH
HEREIN.

 

 

 

 

 

FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
FOR
TNP SRT SECURED HOLDINGS, LLC
A DELAWARE LIMITED LIABILITY COMPANY

 

This First Amended and Restated Limited Liability Company Agreement of TNP SRT
Secured Holdings, LLC, a Delaware limited liability company (the “Company”), is
made as of July 9, 2013, by and among TNP Strategic Retail Operating
Partnership, LP, a Delaware limited partnership (“OP”), as a Member, and SRT
SECURED HOLDINGS MANAGER, LLC, a Delaware limited liability company (“GLB”), as
a Member and Manager, and such other Persons that may be admitted from time to
time to the Company and as parties to this Agreement (each, a “Member”), with
reference to the following facts:

 

A. On October 22, 2010, a Certificate of Formation for the Company was filed
with the Delaware Secretary of State.

 

B. On October 22, 2010, OP, as the sole member of the Company, entered into a
limited liability company agreement for the Company (the “Original Agreement”).

 

C. The Members now desire to enter into this Agreement to replace the Original
Agreement with this Agreement and to provide terms to govern the Company.

 

NOW, THEREFORE, the parties by this Agreement set forth the limited liability
company agreement for the Company under the laws of the State of Delaware upon
the terms and subject to the conditions of this Agreement.

 

Article I. DEFINITIONS

 

When used in this Agreement, the following terms shall have the meanings set
forth below (all terms used in this Agreement that are not defined in this
Article I shall have the meanings set forth elsewhere in this Agreement):

 

1.1 Act means the Delaware Limited Liability Company Act, 6 Del. C. §18-101
through §18-1107, as the same may be amended from time to time, and the
provisions of succeeding law.

 

1.2 Additional Member means a Person admitted to the Company as an additional
Member pursuant to Section 4.1 and shown as a Member on the books and records of
the Company.

 

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

 

First Amended and Restated Limited Liability Company Agreement

TNP SRT Secured Holdings, LLC

 

 

 

1.4 Agreement means this First Amended and Restated Limited Liability Company
Agreement, as originally executed and as amended from time to time.

 

1.5 Business Day means any day other than a Saturday, Sunday or a holiday on
which national banking associations in San Mateo, California, are closed or are
authorized or required to close.

 

1.6 Capital Account means with respect to any Member the capital account which
the Company establishes and maintains for such Member pursuant to Section 3.4.

 

1.7 Capital Contribution means the total amount of cash and property contributed
to the Company by a Member.

 

1.8 Capital Proceeds means funds of the Company or a Subsidiary arising from a
Capital Transaction, net of the actual costs incurred by the Company or such
Subsidiary in consummating the Capital Transaction, and net of any indebtedness
of such Subsidiary or Property paid and satisfied with the proceeds of such
Capital Transaction.

 

1.9 Capital Transaction means the sale, financing, refinancing or similar
transaction of or involving any Property or any Subsidiary (including
condemnation awards, receipt of title insurance proceeds or casualty loss
insurance proceeds, other than business interruption or rental loss insurance
proceeds, to the extent such awards and proceeds are not applied to mortgage
indebtedness of the Company or a Subsidiary and not used to repair damage caused
by a casualty or taking or in alleviation of any title defect).

 

1.10 Certificate means the Certificate of Formation for the Company originally
filed with the Delaware Secretary of State and as amended from time to time.

 

1.11 Code means the Internal Revenue Code of 1986, as amended from time to time,
the provisions of succeeding law, and to the extent applicable, the Treasury
Regulations.

 

1.12 Company means TNP SRT Secured Holdings, LLC, a Delaware limited liability
company.

 

1.13 Craig Property means the property and assets owned by TNP SRT Craig
Promenade, LLC, a Delaware limited liability company and wholly owned Subsidiary
of the Company, or the Company’s equity interest therein.

 

1.14 Craig Sale Parameters means any sale by the Company or the applicable
Subsidiary of the Craig Property for a gross purchase price before costs of
sale, prorations and other closing costs/adjustments in excess of $9,934,000.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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1.15 DGCL means the Delaware General Corporation Law, as amended from time to
time, and the provisions of succeeding law.

 

1.16 Economic Interest means a Person’s right to share in the income, gains,
Profits and Losses, deductions, credits or similar items of, and to receive
distributions from, the Company, but not any other rights of a Member including,
without limitation, the right to vote or to participate in management of the
Company or, except as may be provided in the Act, any right to information
concerning the business and affairs of the Company.

 

1.17 Fiscal Year means the Company’s fiscal year, which shall commence on
January 1st and end on December 31st of each year, or such other year as shall
be required under the Code.

 

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

 

1.19 Internal Rate of Return means the discount rate at which all invested
capital has a zero net present value (“NPV”). The NPV of an investment shall be
the sum of (a) the total present value of the annual cash flows during ownership
plus (b) the present value of estimated or actual proceeds, as applicable, from
the sale less the amount of the equity investment. IRR is formulated as follows:

 

NPV = 0 = –C0 + CF1/(l +IRR)1 + CF2/(l +IRR)2 + … CFT /(l + IRR)T       + CT/(l
+ IRR)T

where,

 

C0 = initial capital investment at time 0

 

i = time variable indicating years from the initial year (i = 1) to the final
year (i = T)

 

CFi = cash flow in year i; value can be positive or negative

 

CT = actual or estimated, as applicable, sale proceeds in the final year (i = T)

 

IRR = annual internal rate of return

 

An example follows:

 

C0 = $1,000

 

i = 1, 2, 3 (3 years)

 

CF1 = $100

 

CF2 = $110

 

CF3 = $120

 

CT = $1,100

 

IRR = 13.83%.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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1.20 Invested Capital means with respect to each Member at any time, the
aggregate amount of all Capital Contributions previously made by such Member
less any amounts that have previously been distributed to such Member pursuant
to Section 6.6(c) of this Agreement.

 

1.21 Keybank means Keybank National Association.

 

1.22 Keybank Loan means that certain Revolving Credit Agreement dated December
17, 2010 by and between Keybank and the Company and related loan documents, in
each case, as amended from time to time.

 

1.23 Lender means any third party lender of funds to the Company, the agent for
any such lender, any Member or any Affiliate of the Company or any Member, and
such lender’s or agent’s successors and assigns with respect to the Loan.

 

1.24 Loan means any loan from the Lender to the Company, any Member or any
Affiliate of the Company or any Member.

 

1.25 Loan Documents means any and all documents evidencing or securing the Loan
or any assumptions thereof including, without limitation, any loan or credit
agreement, promissory note, pledge agreement, deed of trust, assignment of
leases and rents, indemnity agreement, certificate, escrow agreement, consent or
subordinate agreement or the functional equivalent of any of the aforementioned,
and any and all other documents evidencing or securing the Loan and any and all
documents related thereto.

 

1.26 Major Lease means any lease agreement for the lease of space in excess of
10,000 s.f. in any single instance to tenants in any of the Properties.

 

1.27 Manager means the manager elected by the Members pursuant to Section 5.3
hereof or any other Person that succeeds such Person as a manager of the
Company.

 

1.28 Member means each Person who is an initial signatory to this Agreement and
each Additional Member, if any.

 

1.29 Operating Cash means, with respect to any period for which such calculation
is being made, the positive difference of (a) Operating Revenues, minus (b) the
sum of the following (without duplication): (i) all Operating Expenses, (ii) all
interest, scheduled or required principal payments (including loan amortization
or satisfaction, if applicable) and other debt and escrow and reserve account
payments and deposits (including prepayment of any debt) made during such period
by the Company on account of or with respect to the Company’s or any
Subsidiary’s indebtedness for money borrowed, if any; (iii) all cash
expenditures made or to be made by the Company or any Subsidiary during such
period (including all operating and capital expenditures, fees, and any and all
capital contributions, loans or other advances of funds made or to be made by
the Company to any Subsidiary); and (iv) the amount of any Reserves (including
Reserves for working capital, operating deficits and capital) established or
increased during such period.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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1.30 Operating Expenses means, with respect to the Company or any Subsidiary, as
applicable, and for any period, the current obligations of the Company or such
Subsidiary for such period, determined in accordance with generally accepted
accounting principles applicable to commercial real estate and consistently
applied, for (a) operating expenses of the Properties, including fees paid
hereunder and organizational expenses of the Company or the Subsidiaries, (b)
capital expenditures, (c) increases in Reserves for working capital, operating
deficits and capital items, and (d) expenses incurred by the Company and
properly allocable to such Subsidiary, or if not properly allocable to a
particular Subsidiary or Subsidiaries, then such expenses will be allocated
among all Subsidiaries pro-rata according to the fair market value of the
Properties owned by such Subsidiaries; provided that Operating Expenses shall
not include any of the foregoing items paid from Reserves, Capital Proceeds or
Capital Contributions. Operating Expenses shall include the fees paid to the
Manager or its Affiliate for the management of the Properties but shall not
include any debt service (principal or interest) on loans to the Company or any
Subsidiary nor any non-cash expenses such as depreciation or amortization.

 

1.31 Operating Revenues means, with respect to the Company or any Subsidiary, as
applicable, and for any period, the gross revenues of the Company or such
Subsidiary arising from the ownership and operation of the Properties during
such period, including, without limitation, any rental income, interest income,
proceeds of any business interruption insurance and decreases in Reserves, but
specifically excluding (i) Capital Proceeds, (ii) Capital Contributions made by
the Members and (iii) loans, advances or contributions of capital made by the
Company to such Subsidiary.

 

1.32 Percentage Interest means, with respect to each Member, the Interest held
by a Member, expressed as a percentage of the total Interests held by all of the
Members in the Company. The Percentage Interests of the Members, which may be
adjusted from time to time in accordance with the terms of this Agreement, are
referred to in Article III below and set forth opposite such Member’s name on
Exhibit A attached hereto.

 

1.33 Person means an individual, partnership, limited partnership, limited
liability company, corporation, trust, estate, association or any other entity.

 

1.34 Permitted Sale means any sale by the Company or the applicable Subsidiary
of (i) the Craig Property, provided such sale satisfies the Craig Sale
Parameters or (ii) the Willow Property, provided such sale satisfied the Willow
Sale Parameters.

 

1.35 Profits and Losses means for each Fiscal Year or other period, the taxable
income or taxable loss of the Company for such period determined in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss or
deduction required to be separately stated pursuant to Code Section 703(a)(1)
shall be included in taxable income or loss), with the following adjustments:

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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(a) any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses shall be added to
such taxable income or loss;

 

(b) any expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits and Losses, shall be subtracted from such taxable income or
loss;

 

(c) any income, gain, loss, or deduction required to be allocated specially to
the Members under Sections 6.2 shall not be taken into account in computing
Profits or Losses;

 

(d) in lieu of any depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss, the Company shall
compute such deductions based on the book value of the Company property, in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3);

 

(e) gain or loss resulting from a taxable disposition of Company property shall
be computed by reference to the book value of the property disposed of (as
adjusted under Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3)),
notwithstanding that the adjusted tax basis of such property differs from its
book value; and

 

(f) if the book value of Company assets is adjusted to equal fair market value
as provided in Section 6.7, then the profits or losses shall include the amount
of any increase or decrease in such book values attributable to such adjustment.

 

1.36 Properties means any one or more real properties that are now or hereafter
owned from time to time, directly or indirectly, by the Company or a Subsidiary,
and any other real and personal property which are owned by the Company or a
Subsidiary at any time. The term “Property” shall refer to any of the Properties
in the singular.

 

1.37 REIT means TNP Strategic Retail Trust, Inc., a Maryland corporation.

 

1.38 Reserves means, at any time, the total amount of the reasonable reserves
established and maintained by the Company or its Subsidiaries, as applicable, as
determined by Manager, to be adequate and appropriate for current and future
operating and working capital and for capital expenditures and other costs and
expenses incident to the Company’s business.

 

1.39 Shortfall means, at any given time, the aggregate amount of (i) costs and
expenses that the Members specifically authorize in an operating budget to be
funded by Additional Capital Contributions, if any, plus (ii) the deficit or
contemplated deficit (stated as a positive amount) between (a) all Operating
Revenues and all payments from Reserves designated for such purposes and (b) the
sum of Operating Expenses, debt service, including required escrow payments on
all loans including loans to the Company or any Subsidiary, and other cash
requirements of the Company for the period as determined by Manager in its
reasonable discretion.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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1.40 Tax Matters Partner means the Person designated as set forth in
Section 5.13.

 

1.41 Treasury Regulations means the income tax regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

 

1.42 Willow Property means the property and assets owned by TNP SRT Willow Run,
LLC, a Delaware limited liability company and wholly owned Subsidiary of the
Company, or the Company’s equity interest therein.

 

1.43 Willow Sale Parameters means any sale by the Company or the applicable
Subsidiary of the Willow Property for a gross purchase price before costs of
sale, prorations and other closing costs/adjustments in excess of $10,589,000.

 

Article II. ORGANIZATIONAL MATTERS

 

2.1 Formation. The Members have formed a Delaware limited liability company
under the laws of the State of Delaware by filing the Certificate with the
Delaware Secretary of State and entering into this Agreement. The rights and
liabilities of the Members shall be determined pursuant to the Act and this
Agreement. To the extent that the rights or obligations of any Member are
different by reason of any provision of this Agreement than they would be in the
absence of such provision, this Agreement shall, to the extent permitted by the
Act, control.

 

2.2 Name. The name of the Company shall initially be TNP SRT SECURED HOLDINGS,
LLC. Promptly following the date hereof, OP and GLB shall use their best efforts
to cause an Amendment to the Company’s Certificate of Formation changing the
name of the Company to “SRT SECURED HOLDINGS LLC” to be filed with the Delaware
Secretary of State. Thereafter, the business of the Company may be conducted
under that name or, upon compliance with applicable laws, any other name that
the Manager deems appropriate or advisable.

 

2.3 Term. The term of this Agreement commenced on the date hereof and shall
continue until terminated as hereinafter provided.

 

2.4 Office and Agent. The Company shall continuously maintain an office and
registered agent in the State of Delaware. The principal office of the Company
shall be located at such place as the Manager may determine. The Company may
also have such offices, anywhere within and without the State of Delaware, as
the Manager may determine from time to time, or the business of the Company may
require. The registered agent shall be as stated in the Certificate or as
otherwise determined by the Manager.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
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2.5 Names and Addresses of the Members and the Manager. The names and addresses
of the Members are set forth on Exhibit A. The name and address of the Manager
are set forth on Exhibit B. A Member or Manager may change its address upon
notice thereof to the Company.

 

2.6 Purpose of the Company. The Company’s business and purposes shall consist
solely of:

 

(a) acquiring, owning, holding, pledging, encumbering, selling, disposing and
otherwise dealing with, publicly or privately and whether with unrelated third
parties or with affiliate entities, partnership, membership, economic, or other
ownership interests (collectively, “Ownership Interests”) in partnerships,
limited liability companies, or other entities which acquire, own, maintain,
manage, operate, improve, develop, finance, pledge, encumber, mortgage, sell,
lease, dispose and otherwise deal with real property;

 

(b) engaging in any other activities reasonably related or incidental to the
Ownership Interests; and

 

(c) engaging in any lawful act or activity and to exercise any powers permitted
to limited liability companies organized under the Act that are related or
incidental to and necessary, convenient or advisable for the accomplishment of
the above mentioned purposes.

 

2.7 Powers.

 

(a) Subject to Section 2.7(b), the Company shall have all powers of a limited
liability company formed under the Act and not prohibited by the Act or this
Agreement.

 

(b) Notwithstanding any provisions of this Agreement and any provision of law
that otherwise so empowers the Company, so long as any obligations evidenced or
secured by any of the Loan Documents remains outstanding and not discharged in
full, neither the Company nor any Member, the Manager or any other Person acting
on behalf of the Company shall have any authority to do any of the following
without Lender’s prior written consent:

 

(i) engage in any business or activity other than those set forth in this
Article II;

 

(ii) perform any act in contravention of or constituting an event of default
under the Loan Documents;

 

(iii) dissolve, wind-up or liquidate under Section 18-801 of the Act;

 

(iv) to the fullest extent permitted by law, take any action that might cause
the Company to become insolvent, or file a voluntary petition or otherwise
initiate proceedings to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Company, or file
a petition seeking or consenting to reorganization or relief of the Company as
debtor under any applicable federal or state law relating to bankruptcy,
insolvency, or other relief for debtors with respect to the Company; or seek or
consent to the appointment of any trustee, receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) of the Company
or of all or any substantial part of the properties and assets of the Company,
or make any general assignment for the benefit of creditors of the Company, or
admit in writing the inability of the Company to pay its debts generally as they
become due or declare or effect a moratorium on the Company debt or take any
action in furtherance of any such action;

 

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(v) enter into any transaction with an Affiliate unless such transaction is
concluded on an arm’s-length basis and on commercially reasonable terms;

 

(vi) amend, modify or alter this Agreement;

 

(vii) merge, combine or consolidate with any other entity; or

 

(viii) sell all or substantially all of its assets.

 

2.8 Title to Company Property. All property owned by the Company shall be deemed
to be owned by the Company as an entity, and no Member, individually, shall have
any ownership interest in any such property.

 

2.9 Failure to Observe Formalities. Notwithstanding any other provision of this
Agreement, so long as any obligation evidenced or secured by any of the Loan
Documents remains outstanding and not discharged in full, the Company shall (and
the Manager shall cause the Company at all times to):

 

(a) observe statutory formalities with respect to the administration of the
Company and in conduct of the Company’s activities;

 

(b) not own, directly or indirectly, any ownership interest (legal or equitable)
in any assets other than cash or any interest in the Ownership Interests
(described above) (collectively, the “Permitted Assets”);

 

(c) maintain books and records and bank accounts separate from those of any
other Person;

 

(d) maintain its assets in such a manner that it is not costly or difficult to
segregate, identify or ascertain such assets;

 

(e) hold regular meetings, as appropriate, to conduct the business of the
Company, and observe all customary organizational and operational formalities;

 

(f) hold itself out to creditors and the public as a legal entity separate and
distinct from any other Person;

 

(g) allocate and charge fairly and reasonably any common employee expenses or
overhead shared with Affiliates;

 

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(h) except for contributions and distributions permitted under the terms of this
Agreement, transact all business with Affiliates on an arm’s-length basis and
pursuant to enforceable agreements;

 

(i) conduct business in its own name, and use separate stationery, invoices and
checks;

 

(j) not commingle its assets or funds with those of any other Person;

 

(k) not incur indebtedness, secured or unsecured, or pledge, encumber, or assign
its assets other than in connection with a Loan;

 

(l) not assume, guarantee, or pay the debts or obligations of any other Person;

 

(m) pay its own liabilities and expenses out of its own funds;

 

(n) not hold out its credit as being available to satisfy the obligations of
others;

 

(o) not acquire obligations or securities of its beneficiaries or Affiliates;

 

(p) not make any loans or advances to any other Person;

 

(q) correct any known misunderstandings regarding its separate identity; and

 

(r) maintain adequate capital in light of its contemplated operations.

 

Notwithstanding the foregoing, a failure to observe any formalities or
requirements of this Agreement, the Certificate or the Act shall not be grounds
for imposing personal liability on the Members or the Manager for liabilities of
the Company.

 

2.10 No Partnership Intended for Nontax Purposes. The Members have formed the
Company under the Act, and expressly deny any intent hereby to form a
partnership under Delaware law, including a partnership under the Delaware
Revised Uniform Limited Partnership Act, or a corporation under the DGCL. Except
for purposes of federal, state and local taxes, the Members do not intend to be
partners to one another, or partners to any third party.

 

2.11 Liability of Members and Manager to Third Parties; Reliance by Third-Party
Creditors.

 

(a) Except as otherwise provided in the Act, no Member or Manager shall be
personally liable for any debt, obligation or liability of the Company, whether
arising in contract or otherwise, by reason of being a Member or acting as the
Manager of the Company.

 

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(b) This Agreement is entered into among the Company and the Members for the
exclusive benefit of the Company, its Members, and their successors and assigns.
This Agreement is expressly not intended for the benefit of any creditor of the
Company or any other Person. Except and only to the extent provided by
applicable statute, no such creditor or third party shall have any rights under
this Agreement or any agreement between the Company and any Member with respect
to any contributions or otherwise.

 

Article III. CAPITAL CONTRIBUTIONS

 

3.1 Initial Capital Contributions. In connection with the Original Agreement, OP
made an initial Capital Contribution to the Company of the cash and/or other
property set forth on Exhibit A of the Original Agreement. In connection with
this Agreement, GLB contributed cash to the Company in the amounts set forth on
Exhibit A hereto as such Member’s initial Capital Contribution. Each Member’s
relative Percentage Interest shall be as set forth on Exhibit A.

 

3.2 Additional Capital Contributions.

 

(a) No Member shall be permitted to make any additional Capital Contribution to
the Company without the consent of the Manager. Except as specifically set forth
in Section 3.2(b) of this Agreement, no Member shall be required to make an
additional Capital Contribution, and this sentence may not be amended without
the unanimous consent of all the Members.

 

(b) Each additional Capital Contribution made under this Section 3.2 is an
“Additional Capital Contribution.” When requested, the Members shall make
Additional Capital Contributions to the Company in proportion to their
respective Percentage Interests. When a Shortfall exists the Manager may elect
to call for Additional Capital Contributions to be made to satisfy all or a
portion of such Shortfall up to the Additional Capital Contribution Limit;
provided, the Manager may not call for Additional Capital Contributions for any
purpose other than Shortfalls without the written consent of all the Members.
For the purposes of this Section 3.2(b), “Additional Capital Contribution Limit”
means, at the time of determination, the aggregate amount of all distributions
previously received by the Members pursuant to Section 6.6 of this Agreement,
less and amounts paid to the Company as Additional Capital Contributions
pursuant to this Section 3.2(b).

 

(c) If the Manager so elects to call for Additional Capital Contributions, then
the Members shall make the Additional Capital Contributions within fifteen (15)
Business Days after the date on which such notice is given.

 

(d) An “Additional Capital Contribution Default” shall have occurred if any
Member fails to make any Additional Capital Contribution required to be made by
it under this Section 3.2 by the date due if such failure continues for three
(3) Business Days after written notice thereof is given by the Manager or any
Member to the Member that has failed to make such Additional Capital
Contribution.

 

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3.3 Failure To Make Project Capital Contributions Or Additional Capital
Contributions.

 

(a) A Member that fails to timely contribute all or any portion of its share of
any Additional Capital Contribution (“Delinquency”) shall be considered a
“Delinquent Member.” As its sole and exclusive remedies, the other Member (the
“Non-Delinquent Member”) shall, upon notice to a Delinquent Member, exercise one
of the following rights or remedies:

 

(i) Request a refund of its share of such requested Additional Capital
Contribution within ten (10) days after the default by the Delinquent Member, in
which case the Company shall immediately refund such amount to the
Non-Delinquent Member; or

 

(ii) Cause the Company to retain the Non-Delinquent Member’s share of such
requested Additional Capital Contribution and elect to pay to the Company part
or all of the Delinquency, in which case the Non-Delinquent Member may designate
the Delinquency paid by the Non-Delinquent Member as a loan (“Delinquency
Loan”).

 

(iii) In the event the Non-Delinquent Member elects to make a Delinquency Loan
to the Company, then effective from the date of the making of such loan the
Delinquency Loan shall earn interest at the rate of fifteen percent (15%) per
annum and any Delinquency Loan plus accrued interest shall be paid to the
Non-Delinquent Member out of amounts that would otherwise have been available
for distribution pursuant to Section 6.6.

 

(b) If a Capital Contribution Default occurs, then in addition to its specified
rights and remedies under Section 3.3 hereof, the Non-Delinquent Member may,
upon notice to the Delinquent Member, exercise the Buy Sell Option pursuant to
Section 7.3 hereof.

 

(c) During the pendency of any default by a Delinquent Member of this Agreement,
the Delinquent Member shall not be entitled to exercise any voting or approval
rights provided for in this Agreement.

 

(d) The express rights and remedies granted to the Non-Delinquent Member and the
Delinquent Member, as applicable, in this Section 3.3 and elsewhere in this
Agreement are exclusive of (and the Non-Delinquent Member and the Delinquent
Member shall not be entitled to exercise) any other rights and remedies granted
or available to the Non-Delinquent Member or the Delinquent Member, as
applicable, at law or in equity by reason of (i) the failure of a Delinquent
Member to contribute all or any portion of any required Additional Capital
Contribution or (ii) the occurrence or existence of a Capital Contribution
Default.

 

3.4 Capital Accounts. The Company shall establish and maintain an individual
Capital Account for each Member in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv). If a Member transfers all or a part of its Interest
in accordance with this Agreement, such Member’s Capital Account attributable to
the transferred Interest shall carry over to the new owner of such Interest
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(l).

 

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3.5 Schedules. The Manager shall be authorized, without the prior consent of the
Members, to update Exhibit A to this Agreement from time to time to reflect the
issuance of additional Interests to the Members, to reflect the issuance of new
Interests to Additional Members or changes in any Member’s address, or to
otherwise reflect changes in the number of Interests held by any Person, in each
case, as permitted by this Agreement. Similarly, the Manager shall be
authorized, without the prior consent of the Members, to update Exhibit B to
this Agreement from time to time to reflect any change to the Manager’s address.
No such changes shall be deemed to be amendments to this Agreement for purposes
of Section 12.12 hereof.

 

3.6 Rights Regarding Capital Contributions.

 

(a) No Member shall be entitled to interest on any Capital Contribution, and no
Member shall have the right to withdraw or to demand the return of all or any
part of its Capital Contribution, except as specifically provided in this
Agreement.

 

(b) Under circumstances requiring a return of any Capital Contribution, no
Member shall have the right to receive property, other than cash, except as may
be specifically provided herein.

 

(c) No Member shall have personal liability for the repayment of the Capital
Contribution of any Member or any obligation to make loans or advances to the
Company, including restoration of a deficit Capital Account as provided in
Section 3.6.

 

3.7 Deficit Capital Accounts. Notwithstanding anything to the contrary contained
in this Agreement, and notwithstanding any custom or rule of law to the
contrary, to the extent that any Member’s Capital Account has a deficit balance
upon dissolution of the Company, such deficit shall not be an asset of the
Company and such Member shall not be obligated to contribute such amount to the
Company to bring the balance of such Member’s Capital Account to zero.

 

Article IV. MEMBERS

 

4.1 Procedures for Admission. The admission of a Member shall require the
unanimous vote or consent of the Members. To effect the admission of a Member
(including any Additional Member) to the Company, the Manager shall require the
Person to be so admitted to the Company to execute and deliver a counterpart
signature page to this Agreement specifying the date of admission, such Person’s
name and address, such Person’s Capital Contribution (if any) and the Interest,
expressed as a Percentage Interest, acquired thereby. The Manager shall attach
such counterpart signature page as a signature page to this Agreement and shall
update Exhibit A hereto to reflect the admission of the Additional Member.
Additional Members may be admitted, and the terms of any such admission shall be
determined, in the sole discretion of the Manager. The admission of an
Additional Member (including the execution of a counterpart signature page to
this Agreement and the related update to Exhibit A hereto) shall not be deemed
an amendment to this Agreement and shall not require the consent of the Members.

 

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4.2 Limited Liability. Except as required by law, no Member shall be personally
liable for any debt, obligation or liability of the Company, whether that
liability or obligation arises in contract, tort or otherwise.

 

4.3 Withdrawals or Resignations. No Member shall have the right or power to
voluntarily withdraw or resign as a Member from the Company.

 

4.4 Competing Activities. The Members and their Affiliates may engage or invest
in, independently or with others, any business activity of any type or
description, including without limitation those that might be the same as or
similar to the Company’s business and that might be in direct or indirect
competition with the Company. Neither the Company nor any other Member shall
have any right in or to such other ventures or activities or to the income or
proceeds derived therefrom. The Members shall not be obligated to present any
investment opportunity or prospective economic advantage to the Company, even if
the opportunity is of the character that, if presented to the Company, could be
taken by the Company. The Members shall have the right to hold any investment
opportunity or prospective economic advantage for their own account or to
recommend such opportunity to Persons other than the Company. Each Member
acknowledges that the other Members and their Affiliates conduct other
businesses, including businesses that may compete with the Company and for the
Members’ time. Each Member hereby waives any and all rights and claims that they
may otherwise have against the other Members and their Affiliates as a result of
any of such activities.

 

4.5 Transactions with the Company. Subject to Section 5.4, with the prior
approval of the Manager, a Member may lend money to and transact other business
with the Company. Subject to applicable law, such Member has the same rights and
obligations with respect thereto as a Person who is not a Member.

 

4.6 Remuneration to Members. No Member, in such Person’s capacity as a Member,
is entitled to remuneration for acting in the Company business.

 

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

 

4.8 Voting Rights. Except as expressly provided in this Agreement or as required
by the Act, Members shall have no voting, approval or consent rights. All
Interests shall be voting. For purposes of determining the voting interest of a
Member, a Member’s voting power shall be based upon the Percentage Interest
held.

 

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4.9 Meetings of and Voting by Members.

 

(a) A meeting of the Members may be called at any time by the Manager or any
Member or Members holding at least one-third (⅓) of the Percentage Interests.
Meetings of the Members shall be held upon four (4) days’ notice by first-class
mail or 48 hours’ notice given personally or by telephone, telegraph, facsimile,
telex, e-mail or other similar means of communication. Any such notice shall be
addressed or delivered to each Member entitled to vote at such Member’s address
as it is shown upon the records of the Company. Notice by mail shall be deemed
to have been given at the time a written notice is deposited in the United
States mails, postage prepaid. Any other written notice shall be deemed to have
been given at the time it is personally delivered to the recipient or is
delivered to a common carrier for transmission, or actually transmitted by the
person giving the notice by electronic means, to the recipient. Oral notice
shall be deemed to have been given at the time it is communicated, in person or
by telephone or wireless, to the recipient or to a person at the office of the
recipient who the person giving the notice has reason to believe will promptly
communicate it to the receiver.

 

(b) Members may participate in a meeting through use of conference telephone,
electronic video screen communication or other communications equipment, so long
as all Members participating in such meeting can hear one another.

 

(c) Any action required or permitted to be taken by the Members may be taken
without a meeting, if a consent or consents in writing, setting forth the action
so taken, shall be signed by Members having not less than the Percentage
Interests that would be necessary to authorize or take such action at a meeting
at which all Members entitled to vote thereon were present and voted. Prompt
notice of the taking of any action without a meeting by less than unanimous
consent shall be given to all Members who have not consented in writing.

 

Article V. MANAGEMENT AND CONTROL OF THE COMPANY

 

5.1 Management of the Company by Manager. Subject to the provisions of
Section 5.4 of this Agreement relating to actions to be approved by a the
Members, the business, property and affairs of the Company shall be managed and
all powers of the Company shall be exercised by or under the direction of the
Manager.

 

5.2 Meetings of Manager. The Manager is not required to hold any meetings. Any
action required or permitted to be taken by the Manager may be taken without a
meeting.

 

5.3 Election of Manager.

 

(a) Number and Qualifications. The number of Managers of the Company shall be
fixed at one (1). The Manager shall serve until the earlier of (i) the election
of such Manager’s successor, (ii) the removal of such Manager in accordance with
this Agreement, (iii) such Manager’s resignation or (iv) such Manager’s death.
The Manager may, but need not be, a Member. The Manager may be an individual or
an entity. Upon execution of this Agreement, GLB shall be appointed as the
Manager of the Company.

 

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(b) Removal; Appointment. The Manager may be removed at any time (i) for Cause
(as defined below), or (ii) by the unanimous vote of all the Members at a
meeting called expressly for that purpose, or by the unanimous written consent
of all the Members which vote shall include that of the Manager, if a Member.
Any vacancy in the position of Manager shall be promptly filled by a unanimous
vote of all the Members. For the purposes of this Agreement, “Cause” means
conduct constituting fraud, deceit, gross negligence, reckless or intentional
misconduct, or a knowing violation of law by the Manager.

 

5.4 Powers of the Manager.

 

(a) Powers of the Manager. Without limiting the generality of Section 5.1, but
subject to Section 5.4(b) and to the express limitations set forth elsewhere in
this Agreement, the Manager shall have all necessary powers to manage and carry
out the purposes, business, property and affairs of the Company, including,
without limitation, the power to exercise on behalf and in the name of the
Company all of the powers described in the Act. Manager, on behalf of the
Company, shall implement, or cause to be implemented, the decisions of the
Members and shall conduct or cause to be conducted the ordinary and usual
business affairs of the Company as provided in this Agreement, in each case
using the same standard of care, devotion of time, diligence and prudence used
by Manager as it does in the conduct of business for its own account but Manager
shall be entitled to delegate its duties to a property manager. Subject to the
limitations set forth in this Agreement, the Manager shall have continuing
exclusive authority over the management of the Company and the conduct of the
Company’s affairs in accordance with this Agreement, including, without
limitation, monitoring the strategies and policies of the Company and its
Subsidiaries and determining distributions of income and capital. Without
limiting the foregoing (but subject to and limited by the provisions of this
Agreement), the Manager shall have full power and sole authority to conduct the
Company’s business, including, without limitation, to do each of the following
to the extent necessary for the conduct of the Company’s business:

 

(i) to supervise or arrange for the supervision of day-to-day operations of the
Company and its Subsidiaries;

 

(ii) to institute, prosecute, defend or settle any legal, arbitration or
administrative actions or proceedings on behalf of or against the Company or a
Subsidiary;

 

(iii) retain attorneys, consultants and other independent contractors to the
extent such professional services are required to carry on the business of the
Company and its Subsidiaries, provided that, unless such fees have been
contemplated in the Business Plan in any Fiscal Year the professional fees to
any one service provider shall not exceed $20,000 and to all service providers
shall not exceed $100,000;

 

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(iv) to enter into lease agreements other than Major Leases for the lease of
space to tenants in each of the Properties;

 

(v) to collect all rents and other payments due and owing to the Company and its
Subsidiaries;

 

(vi) to incur normal operating expenses of, and to pay the obligations of, the
Company and its Subsidiaries, and to enter into, perform and carry out contracts
and agreements on behalf of the Company or its Subsidiaries for the conduct of
the Company’s business;

 

(vii) to establish and maintain, in its sole discretion, Reserves for the
Company and each Subsidiary as required from time to time;

 

(viii) subject to Section 6.6, to declare and pay distributions for the Company
and each Subsidiary;

 

(ix) to perform, or cause to be performed, all of the Company’s and its
respective Subsidiaries’ obligations, and to exercise or cause to be exercised
all of Company’s and its Subsidiaries’ rights under any agreement (including,
without limitation, any financing documents, any limited liability company
agreement, partnership agreement, joint venture agreement, shareholder’s
agreement or other similar agreement) to which the Company, any Subsidiary or
any nominee of the Company or a Subsidiary is a party;

 

(x) to pay all taxes, assessments, rents and other impositions applicable to
Company and Subsidiary assets and undertake when appropriate any action or
proceeding seeking to reduce such taxes, assessments, rents or other imposition;

 

(xi) to obtain and maintain insurance coverage for the Properties and other
assets of the Company and its Subsidiaries, including any commercially
reasonable and customary insurance to protect the Manager against liability from
third parties, in such amounts and with such coverages as the Manager maintains
for its other assets and properties of similar types and in similar locations
(including, for example, hurricane insurance or earthquake insurance if
available at commercially reasonable rates); such insurance may be maintained as
part of a portfolio wide coverage or blanket policy that includes other
properties owned or managed by Manager or its Affiliates;

 

(xii) to open or maintain bank accounts for the deposit of Company and
Subsidiary funds, provided that withdrawals may be made only upon the Manager’s
signature or any other signature that all of the Members designate;

 

(xiii) to prepare and file tax returns on behalf of the Company and its
Subsidiaries in any federal, state, local or foreign tax jurisdiction which may
apply;

 

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(xiv) to do any and all acts which may be necessary or desirable for the proper
management and maintenance (excluding any capital expenditures) of the
Properties, including any matters provided for in a property management
agreement;

 

(xv) to execute and deliver such documents on behalf of the Company or a
Subsidiary as it reasonably deems necessary or desirable in connection with the
foregoing provisions;

 

(xvi) to call for Additional Capital Contributions as permitted by this
Agreement;

 

(xvii) subject to Section 5.4(b)(ix), to negotiate with Keybank for any
amendment to the material terms and conditions of any existing financing with
respect to interest rates, prepayment or other material provisions under any
existing financing with Keybank including, but not limited to, the Keybank Loan;

 

(xviii) subject to Section 5.4(b)(x) negotiate for any financing, refinancing or
loan transaction, or grant a security interest in all or any portion of the
Properties or amend the material terms and conditions of any existing financing
(other than the Keybank Loan) with respect to interest rates, prepayment or
other material provisions under any financing;

 

(xix) to cause the Company or any Subsidiary to effect a Permitted Sale;

 

(xx) to do, or to cause the Company or any Subsidiary to do, any and all acts
which may be necessary or desirable to implement any directives contained in any
Business Plan approved by the Members; or

 

(xxi) to do any act which is necessary or desirable to carry out any of the
foregoing.

 

Manager shall devote sufficient time and effort to the Company’s business and
operation as is necessary to perform its duties hereunder.

 

(b) Limitations on Powers of the Manager. Notwithstanding any other provisions
of this Agreement, the Manager shall not have any authority hereunder to cause
the Company to engage in the following transactions without first obtaining the
unanimous affirmative vote or written consent of the Members:

 

(i) Any amendment of the Certificate or this Agreement;

 

(ii) Any transactions between the Company and any Member;

 

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(iii) The sale, exchange or other disposition of all, or substantially all, of
the Company’s assets occurring as part of a single transaction or plan, or in
multiple transactions over a twelve (12) month period;

 

(iv) The merger or consolidation of the Company with another Person wherein the
holders of Interests do not hold at least a majority of the voting power of the
Person surviving such merger or consolidation;

 

(v) The call for Capital Contributions other than Additional Capital
Contributions as permitted by this Agreement;

 

(vi) The entry into, or amendment of in any material respect, any contract,
agreement or arrangement between the Company or a Subsidiary, on the one hand,
and on the other hand, Manager or an Affiliate of Manager (including, any
contract, agreement or arrangement providing for compensation to the Manager or
an Affiliate of the Manager), provided, however, that with respect to the entry
into any contract or agreement between the Company or a Subsidiary, on the one
hand, and Manager or an Affiliate of Manager, on the other hand, on the date of
this Agreement, the Members shall be deemed to have consented thereto;

 

(vii) Any act which would make it impossible to carry on the ordinary business
of the Company;

 

(viii) Effecting a liquidation, dissolution or winding up of the Company;

 

(ix) For so long as any existing financing arrangement with Keybank including,
but not limited to, the Keybank Loan remains outstanding and guaranteed by the
REIT, any amendment to the material terms and conditions of such financing
arrangement;

 

(x) The borrowing of any money or entry into any financing, refinancing or loan
transaction, or granting of a security interest in all or any portion of the
Properties or amendment of the material terms and conditions of any existing
financing with respect to interest rates, prepayment or other material
provisions under any financing if such financing, refinancing, transaction or
amendment would require a guarantee by the REIT or would otherwise be recourse
to the REIT in any manner;

 

(xi) to enter into any Major Leases for the lease of space to tenants in each of
the Properties;

 

(xii) Any sales of Properties (other than a Permitted Sale), subject to Section
5.5 below;

 

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(xiii) The purchase or acquisition, or entry into a contract or committing to
purchase or acquire, any property or asset unrelated to the Properties and
current operations of the Company or otherwise outside the ordinary course of
business;

 

(xiv) Subject to Section 5.7, the implementation of any Business Plan; or

 

(xv) Any other transaction described in this Agreement as requiring the vote,
consent or approval of the Members.

 

(c) Creation of Committees. The Manager may create committees to assist the
Manager and the Company’s officers, if any, in the governance of areas of
importance to the Company. Subject to the terms of this Agreement, such
committees shall have such powers and perform such duties as may be prescribed
by the resolutions creating such committees. Committee members need not be
Members.

 

5.5 Member’s Right Of First Offer. In the event that a proposed disposition of a
Property (a “Proposed Disposition”) is approved by one Member but not by the
unanimous vote or consent of all Members, the Manager shall notify the other
Member (a “Non-Consenting Member”) of such event in writing and provide such
Non-Consenting Member with a right of first opportunity to acquire any Property
that was the subject of the Proposed Disposition (a “ROFO Notice”). The
Non-Consenting Member may provide the Company with a cash offer to acquire the
Property in writing within thirty (30) days of receiving a ROFO Notice. If the
Non-Consenting Member does not provide a written offer within such time period,
the Manager shall be free to pursue the Proposed Disposition on behalf of the
Company, provided that the Property is broadly marketed to unrelated third
parties. All sales shall be managed and conducted by the Manager, including all
related rights, including, but not limited to, broker selection, pricing,
selection of a buyer, negotiation of transaction terms, and the like. If the
Non-Consenting Member does provide a written offer within such time period, the
Manager shall have ten (10) Business Days to accept the other Member’s offer on
behalf of the Company. If the Manager rejects the Non-Consenting Member’s offer,
the Property will be marketed for sale to unrelated third parties at a price
equal to or greater than 105% of the offering price made by the Non-Consenting
Member. In the event a third party offers less than 105% of the price of the
Non-Consenting Member’s offer and the Manager elects to dispose of the Property
(provided, however, the Manager has no obligation to dispose of the Property)
the Manager must re-offer the Property to the Non-Consenting Member at the third
party price. The Non-Consenting Member will have ten (10) Business Days to
determine whether it will acquire the Property at such re-offer price. If the
Non-Consenting Member declines to purchase the Property at the re-offer price,
the Manager may cause the Company to sell the Property to the third-party at
such price. In the event the Non-Consenting Member elects to purchase the
Property, it may, in its sole discretion, elect to acquire the Company’s
membership interest in the entity that owns the Property in lieu of the
Property.

 

5.6 Compensation and Management Fees.

 

(a) The Manager or its Affiliate shall be entitled to compensation pursuant to
one or more written property management agreements between or among the REIT or
an Affiliate of the REIT, the Company or any Subsidiary and the Manager.

 

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(b) In connection with a sale or other transfer of any assets of the Company,
the Company shall pay to the Manager or its affiliate a disposition fee of up to
50.0% of a competitive real estate commission, but not to exceed 1.0% of the
contract sales price (a “Disposition Fee”). Any Disposition Fee payable under
this Section may be paid in addition to real estate commissions paid to
non-Affiliates, provided that the total real estate commissions (including such
Disposition Fee) paid to all Persons by the Company for the sale of each
property shall not exceed the lesser of the competitive real estate commission
or an amount equal to 6.0% of the contract sales prices. The foregoing
notwithstanding, the Members hereby approve the payment of a Disposition Fee
payable to the Manager or affiliate of the Manager for the sales of the Willow
Property and the Craig Property in the amount of 50bps of the contract sales
price.

 

(c) The Manager shall receive an asset management fee as compensation for
services rendered in connection with the management of the Company’s assets (an
“Asset Management Fee”). The Asset Management Fee shall be equal to a monthly
fee of one twelfth (1/12th) of 0.6% of the higher of (i) aggregate cost on a
GAAP basis (before non-cash reserves and depreciation) of all investments the
Company owns, including any debt attributable to such Investments or (ii) the
fair market value of investments (before non-cash reserves and deprecation).
With the exception of any portion of the Asset Management Fee related to the
disposition of Investments, which shall be payable at the time of such
disposition and prorated based on the number of days such Investment was managed
by the Advisor before disposition, the Asset Management Fee shall be calculated
as of the last business day of each month during the term and of this Agreement
payable in arrears on the first business day of each month.

 

(d) As compensation for providing services in connection with (i) any financing
obtained, directly or indirectly, by the Company or any Subsidiary and used to
acquire or originate investments, (ii) any financing assumed, directly or
indirectly, by the Company in connection with the acquisition of investments, or
(iii) the refinancing of any financing obtained or assumed, directly or
indirectly, by the Company and or its Subsidiaries, the Company will pay the
Manager a financing coordination fee equal to 1.0% of the amount made available
and/or outstanding under such financing or refinancing (a “Financing
Coordination Fee”). The Manager may reallow some or all of the Financing
Coordination Fee to reimburse third parties with whom the Manager may
subcontract to procure such financing. The Manager shall submit an invoice to
the Company following the closing of any financing obtained or assumed by the
Company or the Operating Partnership, accompanied by a computation of the
Financing Coordination Fee. The Company shall pay the Financing Coordination Fee
promptly following receipt of the invoice.

 

(e) The Manager shall receive an acquisition fee payable by the Company as
compensation for services rendered in connection with the investigation,
selection and acquisition (by purchase, investment or exchange) of investments,
if any (an “Acquisition Fee”). The total Acquisition Fees payable to the Manager
or its Affiliates shall equal 1.0% of the cost of all investments, including
acquisition expenses and any debt attributed to such investments. With respect
to the acquisition of real estate assets through a joint venture, the
Acquisition Fee payable by the Company to the Manager shall equal 1.0% of the
Company’s allocable cost of such real estate assets, including acquisition
expenses and any debt attributed to such investments. The Manager shall submit
an invoice to the Company following the closing or closings of each investment,
accompanied by a computation of the Acquisition Fee. The Company shall pay the
Acquisition Fee promptly following receipt of the invoice.

 

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5.7 Business Plan.

 

(a) The Manager may propose to the Members for approval a strategic business
plan for the Company. Any such business plan that is in effect is called the
“Business Plan”.

 

(b) Following delivery of a proposed Business Plan, the Members shall approve or
disapprove the Business Plan no later than ten (10) business days after the date
on which Manager has met with, or attempted in good faith to meet with, an
Authorized Representative of each Member to discuss the proposed Business Plan.
To be effective, any notice which disapproves any proposed Business Plan must
contain specific objections thereto in reasonable detail. Unless otherwise
mutually agreed:

 

(c) If the Member disapproves or raises any objections to any items contained in
a proposed Business Plan or any amendments thereto, the undisputed portions of
the proposed Business Plan shall be deemed to be adopted and approved.

 

(d) Failure to agree or disagree in writing within ten (10) business days after
submission shall be deemed approval.

 

(e) The Manager shall have the right, from time to time, to submit a proposed
amendment to a Business Plan. Following delivery of any proposed amendment to a
Business Plan, the Members shall be required to approve or disapprove such
proposed amendment to such Business Plan no later than ten (10) business days
after the date on which the Manager has met with, or attempted in good faith to
meet with, the Member regarding the proposed amendment. To be effective, any
notice which disapproves proposed amendments to an Business Plan must contain
specific objections thereto in reasonable detail.

 

(f) The Manager shall not be deemed to have made any guarantee or warranty of
any fiscal estimations set forth in any Business Plan.

 

5.8 Performance of Duties; Liability of Manager; Fiduciary Standard. The Manager
shall not be liable to the Company or to any Member for any loss or damage
sustained by the Company or any Member, unless the loss or damage shall have
been the result of fraud, deceit, gross negligence, reckless or intentional
misconduct, or a knowing violation of law by the Manager. The Manager shall
perform the Manager’s managerial duties in good faith, in a manner the Manager
reasonably believes to be in the best interests of the Company and its Members,
and with such care as an ordinarily prudent person in a like position would use
under similar circumstances. The Members agree that the fiduciary duties of the
Manager to the Company and its Members shall be those of a director to a
corporation and its stockholders under the DGCL and not those of a partner to a
partnership and its partners. Any Manager who performs the duties of Manager in
compliance with this Section 5.8 shall not have any liability by reason of being
or having been a Manager of the Company.

 

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5.9 Devotion of Time. Except if the Manager is an employee of the Company, the
Manager is not obligated to devote all of the Manager’s time or business efforts
to the affairs of the Company. The Manager shall devote whatever time, effort,
and skill as the Manager deems appropriate for the operation of the Company.

 

5.10 Transactions between the Company and the Manager. Notwithstanding that it
may constitute a conflict of interest, the Manager may, and may cause the
Manager’s Affiliates to, engage in any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service, or the establishment of any salary, other compensation
or other terms of employment) with the Company so long as such transaction is
not expressly prohibited by this Agreement and the terms and conditions of such
transaction, on an overall basis, are fair and reasonable to the Company and are
at least as favorable to the Company as those that are generally available from
Persons capable of similarly performing them and in similar transactions between
parties operating at arm’s length.

 

5.11 Limited Liability. No entity or person who is a Manager or officer of the
Company shall be personally liable under any judgment of a court, or in any
other manner, for any debt, obligation or liability of the Company, whether that
liability or obligation arises in contract, tort or otherwise, solely by reason
of being a Manager or officer of the Company.

 

5.12 Officers. The Company shall have no officers.

 

5.13 Tax Matters Partner. Until the Manager designates otherwise, Manager shall
be the Tax Matters Partner of the Company as provided in the Treasury
Regulations pursuant to Code Section 6231(a)(7), and shall be indemnified and
reimbursed by the Company for all expenses, including legal and accounting fees,
claims, liabilities, losses and damages incurred in connection with serving in
that capacity. Notwithstanding the preceding sentence, the Tax Matters Partner
shall not be entitled to indemnification for such costs and expenses if such
party has not acted in good faith. The Tax Matters Partner shall represent the
Company (at the Company’s expense) in connection with all examinations of the
Company’s affairs by tax authorities, including any resulting judicial and
administrative proceedings, and shall expend the Company funds for professional
services and costs associated therewith.

 

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Article VI. ALLOCATIONS OF PROFITS AND LOSSES
AND DISTRIBUTIONS

 

6.1 Allocations of Profits and Losses. Except as otherwise provided in this
Article VI, Profits and Losses shall be allocated among the Members in
accordance with the following provisions:

 

(a) Except as otherwise provided in Section 6.2, for accounting, federal, state
and local (if any) income tax purposes, the Manager shall reasonably allocate
all Profits and Losses (and items thereof) of the Company to the Members so as
to, as nearly as possible, increase or decrease, as the case may be, each
Member’s Capital Account to the extent necessary such that each Member’s Capital
Account is equal to the amount that such Member would receive if the Company
were dissolved, its assets sold for their book value, its liabilities satisfied
in accordance with their terms and all remaining amounts were distributed to the
Members in accordance with Section 6.6 of this Agreement immediately after
making such allocation. The intent of the foregoing allocation is to comply with
Treasury Regulations Section 1.704-1(b) and ensure that the Members receive
allocations of Profits and Losses pursuant to this Section 6.1 in accordance
with their relative Interests, with the Interest of each Member determined by
reference to such Member’s relative rights to receive distributions from the
Company pursuant to Section 6.6 in respect of the Profits and Losses of the
Company.

 

(b) If the Capital Accounts of the Members are in such ratios or balances that
distributions in the manner set forth in Section 6.6 would not be in accordance
with the positive Capital Account balances of the Members, such failure shall
not affect or alter the distributions set forth in Section 6.6. Instead, the
Manager shall have the authority to make other allocations of Profits and
Losses, or items of income, gain, loss or deduction among the Members which
result in the Capital Accounts of each Member having a balance prior to such
distributions equal to the amount of distributions to be received by such Member
in accordance with the manner set forth in Section 6.6.

 

6.2 Special Allocations. Notwithstanding the allocations set forth in
Section 6.1, if a Member unexpectedly receives any adjustments, allocations or
distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6), or any other event creates a deficit balance in such Member’s
Capital Account in excess of such Member’s share of “partner minimum gain” (as
defined in Treasury Regulations Section 1.704-2(d)), items of Company income and
gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate such excess deficit balance as quickly as possible. Any
special allocations of items of income and gain pursuant to this Section 6.2
shall be taken into account in computing subsequent allocations of income and
gain pursuant to Section 6.1 so that the net amount of any item so allocated and
the income, gain and losses allocated to each Member pursuant to this
Section 6.2, to the extent possible, shall be equal to the net amount that would
have been allocated to each such Member pursuant to Section 6.1 if such
unexpected adjustments, allocations, or distributions had not occurred.

 

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6.3 Transfer of Interests During Taxable Year. In the case of the transfer of a
Member’s Interest or the admission of an additional Member or interest at any
time other than the end of a Fiscal Year, the distributive share of the various
items of income, gain, loss, deduction, credit or allowance in respect of the
Interest so transferred, issued or assigned, shall be allocated between the
transferor and the transferee (or, with respect to an additional Member, such
additional Member and all other Members) to take into account the varying
interests of the Members during the taxable year in accordance with Code
Section 706, using a convention permitted by law and selected by the Manager.

 

6.4 Tax Allocations. If any property is reflected in the Capital Accounts of the
Members and on the books of the Company at a book value that differs from the
adjusted tax basis of such property, then the tax items with respect to such
property shall (to the extent not governed by Code Section 704(c)), in
accordance with the requirements of Treasury Regulations
Section 1.704-1(b)(4)(i), be shared among the Members in a manner that takes
account of the variation between the adjusted tax basis of the applicable
property and its book value in the same manner as variations between the
adjusted tax basis and fair market value of property contributed to the Company
are taken into account in determining the share of tax items under Code
Section 704(c). The Company shall use the traditional method, as described in
Treasury Regulations Section 1.704-3(b), in a manner determined by the Manager.
Except as otherwise provided in this Agreement, all items of Company income,
gain, loss or deduction, and any other allocations not otherwise provided for
shall be divided among the Members in the same proportions as they share Profits
and Losses, as the case may be, for the year.

 

6.5 Section 754 Election. The Company shall be authorized to file an election
under Section 754 of the Code to adjust the basis of property of the Company in
the case of a transfer of an interest in the Company if such election under
Section 754 would, in the good faith judgment of the Tax Matters Partner, be
beneficial to the Company or any Member.

 

6.6 Distributions by the Company.

 

(a) Distributions in General. From time to time, but not less often than
quarterly, after having made provision for adequate Reserves, the Manager shall
distribute available Operating Cash to the Members in accordance with Section
6.6(b).

 

(b) Distributions of Operating Cash. Except as set forth in Section 6.6(c),
Operating Cash for any particular period shall be distributed to the Members in
proportion to their Percentage Interests. Quarterly distributions shall be made
on the last day of each calendar quarter unless such day is not a Business Day
in which event the distribution shall be made on the last Business Day of such
quarter. Annual distributions shall be made on December 31 of each year unless
such day is not a Business Day in which event the distribution will be made on
the last Business Day of the year.

 

(c) Distributions from Sale. In the event of the disposition or refinancing of
any of the Properties or destruction or condemnation of any of the Properties,
in whole or in part, the net proceeds thereof (other than insurance and
condemnation proceeds which will be used to rebuild such Property) available for
distribution shall be distributed within thirty (30) days of such event in the
following manner:

 

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(i) first, to GLB until it shall have received its previously unreturned
Invested Capital with respect to such Property;

 

(ii) second, to GLB until it has achieved an 7.0% Internal Rate of Return with
respect to such Member’s Invested Capital for such Property; and

 

(iii) next, to the Members other than GLB in proportion to their Percentage
Interests (excluding GLB) until each such Members shall have received their
previously unreturned Invested Capital with respect to such Property;

 

(iv) next, to all Members in proportion to their Percentage Interests.

 

(d) To the extent that the Company is required by law to withhold or to make tax
or other payments on behalf of or with respect to any Member, the Company shall
withhold such amounts from any distribution and make such payments as so
required. For purposes of this Agreement, any such payments or withholdings
shall be treated as a distribution to the Member on behalf of whom the
withholding or payment was made. All such distributions shall be made only to
the Persons who, according to the books and records of the Company, are the
holders of record of the Interests in respect of which such distributions are
made on the actual date of distribution. Neither the Company nor the Manager
shall incur any liability for making distributions in accordance with this
Section 6.6.

 

6.7 Book-Up of Company Assets. The book value of all Company assets may, in the
Manager’s sole discretion, be adjusted to equal their respective gross fair
market values, as determined in good faith by the Manager, as of the following
times: (i) the acquisition of an additional interest in the Company by any new
or existing Member in exchange for more than a de minimis capital contribution;
(ii) the distribution by the Company to a Member of more than a de minimis
amount of money or Company property as consideration for an interest in the
Company; and (iii) the liquidation of the Company within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(g), including the termination of the
Company for federal income tax purposes pursuant to Section 708(b)(1)(B) of the
Code. The book-up shall be made in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(f).

 

Article VII. TRANSFER AND ASSIGNMENT OF INTERESTS

 

7.1 Transfer and Assignment of Interests. Except as expressly provided in this
Agreement, a Member shall not transfer any part of the Member’s Interest,
whether now owned or later acquired, unless the Manager and the non-transferring
Members approve the transferee’s admission to the Company as a Member upon such
transfer. Except as provided in this Agreement, no Member may encumber or permit
or suffer any encumbrance of all or any part of the Member’s Interest unless
such encumbrance has been approved in writing by the Manager. With respect to
both a proposed transfer and any encumbrance, such approval may be granted or
withheld in the Manager’s sole discretion. Any transfer or encumbrance of an
Interest without such approval shall be void. Notwithstanding any other
provision of this Agreement to the contrary, a Member who is a natural person
may transfer all or any portion of his or her Interest to any revocable trust
created for the benefit of the Member, or any combination between or among the
Member, the Member’s spouse, and the Member’s immediate family; provided that
the Member retains a beneficial interest in the trust and all of the voting
Interest included in such Interest and, provided further, the Manager is
provided with prior written notice of such transfer. A transfer of a Member’s
beneficial interest in such trust, or failure to retain such voting Interest,
shall be deemed a transfer of an Interest.

 

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7.1A In connection with the KeyBank Loan to the Company, the OP has pledged all
of its membership interests in the Company to KeyBank National Association, as
Agent, ("Agent") pursuant to one or more pledge agreements (the "Pledge
Agreements"). Except for the Pledge Agreements, no Member may sell, transfer,
assign, pledge (other than the Pledge Agreements) or in any other manner
whatsoever alienate such Member's interest in the Company without the prior
written consent of Agent so long as the KeyBank Loan is outstanding. All parties
acquiring an interest in or to any Member's membership interests in the Company
are hereby put on notice of the existence of the Pledge Agreements and shall be
subject to the terms hereof (which include, without limitation, restrictions on
the transferability of membership interests in the Company). The Company, all of
the Members, and Manager hereby (i) consent to the Pledge Agreements, (ii)
acknowledge that the pledge of the membership interests in the Company shall be
a pledge not only of profits and losses of the Company but also a pledge of all
rights and obligations of the OP, (iii) consent to the transfer of membership
interests that may occur in connection with the enforcement of the Pledge
Agreements and agree that upon a foreclosure, sale or other transfer of the
membership interests of the Company pursuant to the Pledge Agreements, the
holder of such membership interests (whether Agent or any purchaser from Agent)
shall, upon the execution of a counterpart to this Agreement or a bill of sale
or an assignment of membership interests, automatically be admitted as a Member
of the Company with all of the rights and obligations of the Members hereunder.
Notwithstanding anything to the contrary in this Agreement, (i) membership
interests in the Company shall be uncertificated (that is, not evidenced by any
certificate) and the Members and the Company shall not take any action to opt
into Article 8 of the Uniform Commercial Code as in effect in the State of
Delaware or to have any membership interests be a "security" as defined in
Article 8 of the Uniform Commercial Code as in effect in the State of Delaware,
and (ii) additional membership interests shall not be issued without the prior
written consent of Agent. This paragraph may not be amended or modified without
Agent's written consent until after the KeyBank Loan is paid and discharged in
full.

 

7.2 Further Restrictions on Transfer of Interests. In addition to other
restrictions found in this Agreement, no Member shall transfer, assign, convey,
sell, encumber or in any way alienate all or any part of its Interest:
(A) without compliance with all federal and state securities laws, (B) if the
Interest to be transferred, when added to the total of all other Interests
transferred in the preceding twelve (12) consecutive months prior thereto, would
cause the tax termination of the Company under Code Section 708(b)(1)(B), or
(C) if such transfer would cause the number of holders of the Company’s
securities to exceed 100 or such other number as may be permitted for purposes
of determining that the Company is exempt from the Securities Exchange Act of
1934, as amended, or the Investment Company Act of 1940, as amended, or for
purposes of determining whether the Company is a “publicly traded partnership”
within the meaning of Section 7704 of the Code.

 

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7.3 Buy Sell Option.

 

(a) Buy Sell Option. For so long as OP remains a Member of the Company, OP shall
have the right, at any time, to initiate the provisions of this Section 7.3 (the
“Buy Sell Option”). Should OP desire to exercise the Buy Sell Option, OP shall
do so by giving notice (the “Initiating Notice”) to GLB setting forth a
statement of intent to invoke its rights under this Section 7.3. The purchase
price of the Interest shall be based upon an estimate of the respective amounts
that would be received by the Members pursuant to Section 6.6 (subject to
adjustment on the Buy Sell Closing Date for outstanding cash balances, accounts
payable and accounts receivable less than 30 days past due) assuming that all of
the Properties and assets of the Company were sold for the Net Asset Valuation
Amount (as defined below), the Company had paid all Company and Subsidiary
liabilities (including all mortgage loans and any and all prepayment premiums on
such mortgage loans assuming such mortgage loans were required to be prepaid in
full on the Buy Sell Closing Date) and any and all applicable transfer taxes,
document stamps, or similar fees that would be incurred if the Company and its
Subsidiaries, if any, sold all of the Properties and distributed the net
proceeds to the Members pursuant to Section 6.6 hereof (the “B/S Distribution
Amount”). For the purposes of this Agreement, “Net Asset Valuation Amount” means
the net asset value of the Company using third party appraisals for all of the
Properties of the Company free and clear of all liabilities (other than
then-existing mortgage loans), assuming that no Capital Contributions are made
or Capital Proceeds distributed between the date of the Initiating Notice and
the Buy Sell Closing Date. After receipt of an Initiating Notice, GLB shall,
within thirty (30) days thereafter, elect to exercise its option to sell or
purchase by giving written notice of its election (the “Electing Notice”) to OP:

 

(i) to purchase the Interest of OP for the B/S Distribution Amount allocable to
OP on the Buy Sell Closing Date, or

 

(ii) to sell to OP GLB’s Interest for the B/S Distribution Amount allocable to
GLB on the Buy Sell Closing Date.

 

If GLB does not deliver such Electing Notice within said period, then GLB shall
be deemed to have elected to sell GLB’s Interest to OP. Notwithstanding the
foregoing, in the event of an election by GLB to purchase the Interest of OP,
such purchase and transfer of such Interest shall be subject to the prior
written consent of the Agent. Within three (3) Business Days after an election
has been made under this Section 7.3(a) (whether deemed or otherwise) the
acquiring Member shall deposit with an escrow agent selected by the acquiring
Member but not Affiliated with the acquiring Member and reasonably acceptable to
the selling Member, an earnest money deposit in an amount equal to one percent
(1%) of the applicable B/S Distribution Amount, which deposit will be applied to
the purchase price at closing. The acquiring Member may assign its right to
acquire the Interest to another party designated by the acquiring Member only
contemporaneously with the closing under Section 7.3(b), and so long as the
acquiring Member remains liable for such purchase.

 

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(b) Closing. The closing of an acquisition pursuant to Section 7.3 shall be held
at the principal place of business of the Company on a mutually acceptable date
(the “Buy Sell Closing Date”) not later than ninety (90) days after the
Initiating Notice. At the closing of the disposition and acquisition of such
interests the following shall occur:

 

(i) the selling Member’s entire Interest shall be assigned to the acquiring
Member or its designee, free and clear of all liens and security interests, and
the Company, any applicable subsidiaries and the selling Member shall execute
and deliver to the acquiring Member or its designee all documents which may be
reasonably required to give effect to the transfer of such Interest;

 

(ii) if any non-acquiring Member holds (i.e., is owed) any loans from the
Company or a Subsidiary as of the Buy Sell Closing Date, then such loans shall
be paid out of the Capital Proceeds from such sale (or assigned, if applicable)
as an expense;

 

(iii) the Company shall pay for any and all transfer or similar taxes, recording
fees, title insurance premiums or fees and other closing costs in connection
with such transfer except in the case where there is a Buy Sell Default in which
event the defaulting Member shall pay such costs; and

 

(iv) the acquiring Member shall pay the selling Member the selling Member’s B/S
Distribution Amount, as the purchase price for the selling Member’s entire
Interest, in cash or other immediately available funds.

 

(c) Buy-Sell Default.

 

(i) If the acquiring Member (for such purposes the “Defaulted Acquirer”) should
default in its obligation to buy in accordance with Section 7.3(b), the other
Member (for such purposes, the “Replacement Acquirer”) shall exercise one of the
following alternative remedies within thirty (30) days after the Defaulted
Acquirer’s default as the Replacement Acquirer’s sole and exclusive remedy for
such default:

 

(1) The Replacement Acquirer may elect to purchase the Defaulted Acquirer’s
Interest on the terms set forth above in Sections 7.3(a) and Section 7.3(b)
hereof (including payment of the 1% earnest money deposit), such closing to
occur not later than 270 days after the Initiating Notice on a date selected by
the Replacement Acquirer upon not less than fifteen (15) Business Days’ notice
to the Defaulted Acquirer, except that the purchase price shall be ninety
percent (90%) of the Defaulted Acquirer’s B/S Distribution Amount under Section
7.3(a) hereof; or

 

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(2) The Replacement Acquirer may receive the earnest money deposit as full
liquidated damages for such default of the Defaulted Acquirer, the Members
hereby acknowledging and agreeing that it is impossible to more precisely
estimate the damages to be suffered by the Replacement Acquirer upon the
Defaulted Acquirer’s default and the Members acknowledge and agree that the
earnest money deposit which may be received by the Replacement Acquirer is
intended not as a penalty, but as full liquidated damages for such default of
the Defaulted Acquirer. In the event the Defaulted Acquirer failed to make its
earnest money deposit as required in Section 7.3(a) hereof and the Replacement
Acquirer has elected its remedy under this Section 7.3(c), then the Replacement
Acquirer shall have the right to recover an award or judgment against the
Defaulted Acquirer in the amount of such required earnest money deposit,
together with its reasonable attorneys’ fees and costs incurred in obtaining
such award or judgment.

 

(ii) If the non-acquiring Member should default in its obligation to transfer
its Interest in accordance with Section 7.3(b), the acquiring Member shall
exercise one of the following alternative remedies within thirty (30) days after
the non-acquiring Member’s default as the acquiring Member’s sole and exclusive
remedy for such default:

 

(1) The acquiring Member shall be entitled to demand and receive a return of its
earnest money deposit previously deposited with an escrow agent, in which event
after return of such deposit, the non-acquiring Member’s default hereunder shall
be deemed waived; or

 

(2) The acquiring Member shall be entitled to seek specific performance of the
non-acquiring Member’s obligations under Section 7.3(b), the Members’ expressly
agreeing that the remedy at law for breach of the obligations of the
non-acquiring Member set forth in this Section 7.3(c) is inadequate in view of
(A) the complexities and uncertainties in measuring the actual damage to be
sustained by the acquiring Member on account of the default of the selling
Member; and (B) the uniqueness of the Company business and the Members’
relationships.

 

(d) Payment of Debts. If, at the Buy Sell Closing Date, the non-acquiring Member
has any outstanding debts to the Company or the acquiring Member, all proceeds
of the purchase price for such exercise will be paid to the Company or the
acquiring Member (pro rata in accordance with the amounts owed by the
non-acquiring Member to each) for and on behalf of the non-acquiring Member
until all such debts will have been paid and discharged in full.

 

(e) Release of Capital Contribution Obligations. At the time of closing pursuant
to Section 7.3(b), each non-acquiring Member will be released from any further
obligation to make Capital Contributions to the Company.

 

(f) Offset. At the time of closing pursuant to Section 7.3(b), the acquiring
Member will be entitled to deduct from the amounts otherwise payable to the
Company any and all amounts owed to the acquiring Member, including damages owed
by the non-acquiring Member by reason of any Event of Default, to the extent
agreed by the parties or to the extent such damages have been reduced to an
arbitration award or a final nonappealable judgment, as applicable.

 

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(g) Minimum Purchase Price. Notwithstanding anything to the contrary contained
in this Agreement, in no event will the purchase price paid for an Interest
pursuant to Section 7.3(a), 7.3(b) or 7.3(c) be less than Ten Dollars ($10.00).

 

(h) Operations In Pre-Closing Period. From the date of the Initiating Notice
until the date the closing occurs under Sections 7.3(b) or 7.3(c), as
applicable, or, if earlier, the date on which the Members agree not to proceed
with such closing, the Company and the applicable Subsidiaries will continue to
be operated in the ordinary course, as if the closing were not going to occur,
the Members and the Manager will continue to have all power and authority
granted in this Agreement (including the power to make distributions), and the
Members and the Manager will exercise their power and authority in good faith
and without regard to the fact that such closing may occur; provided, however,
that, any Capital Contributions made by the non-acquiring Member to the Company
during such period shall be added to and increase the B/S Distribution Amount
otherwise payable to the non-acquiring Member (without double-counting for the
adjustments specified in the definition of B/S Distribution Amount), and neither
the Company nor any subsidiary shall enter into any contracts or agreements, or
otherwise agree, to sell or otherwise dispose of any Properties; except that (1)
the Company and each subsidiary shall be authorized to consummate any
transactions which were the subject of binding contractual obligations entered
into prior to the commencement of such period, and (2) in the event that during
such period the selling Member fails to make a Capital Contribution for the
acquisition of another Property that has been approved in advance by the
Members, then the acquiring Member may, in addition to and without waiver of any
and all other rights and remedies it may have under this Agreement, advance such
Capital Contributions to the Company.

 

Article VIII. ACCOUNTING, RECORDS, REPORTING BY MEMBERS

 

8.1 Books and Records. The books and records of the Company shall be kept, and
the financial position and the results of its operations recorded, in accordance
with generally accepted accounting principles and the accounting methods
followed for federal income tax purposes. The books and records of the Company
shall reflect all the Company transactions and shall be appropriate and adequate
for the Company’s business. The Company shall maintain at its principal office
all of the following:

 

(a) A current list of the full name and last known business or residence address
of each Member, together with the Capital Contributions, Capital Account and
Percentage Interest held by each Member;

 

(b) A current list of the full name and address of the Manager;

 

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

 

(d) Copies of the Company’s federal, state and local income tax or information
returns and reports, if any, for the six (6) most recent taxable years;

 

(e) A copy of this Agreement and any and all amendments hereto together with
executed copies of any powers of attorney pursuant to which this Agreement or
any amendments hereto have been executed;

 

(f) Copies of the financial statements of the Company, if any, for the six (6)
most recent Fiscal Years; and

 

(g) The Company’s books and records as they relate to the internal affairs of
the Company for at least the current and past four (4) Fiscal Years.

 

8.2 Reports. The Company shall cause to be filed, in accordance with the Act,
all reports and documents required to be filed with any governmental agency. The
Company shall cause to be prepared at least annually information concerning the
Company’s operations necessary for the completion of the Members’ federal and
state income tax returns. The Company shall send or cause to be sent to each
Member, within sixty (60) days after the end of each taxable year, such
information concerning the Company as is necessary to complete the Members’
federal and state income tax or information returns. The Company shall provide
each Member with a copy of the Company’s federal, state, and local income tax or
information returns for the year.

 

8.3 Bank Accounts. The Manager shall maintain the funds of the Company in one or
more separate bank accounts in the name of the Company, and shall not permit the
funds of the Company to be commingled in any fashion with the funds of any other
Person.

 

Article IX. ARTICLE IX. DISSOLUTION AND WINDING UP

 

9.1 Dissolution. The Company shall be dissolved, its assets shall be disposed
of, and its affairs wound up on the first to occur of the following:

 

(a) The happening of any event of dissolution specified in the Certificate;

 

(b) The entry of a decree of judicial dissolution;

 

(c) The unanimous vote or consent of the Members; or

 

(d) The sale of all or substantially all of the assets of the Company.

 

9.2 Certificate of Dissolution. As soon as practicable following the occurrence
of any of the events specified in Section 9.1, the Manager shall execute a
Certificate of Dissolution in such form as shall be prescribed by the Delaware
Secretary of State and file the Certificate of Dissolution as required by the
Act. Dissolution of the Company shall be effective on the date which the event
occurs giving rise to the dissolution, but the Company shall not terminate until
the Certificate of Dissolution shall have been cancelled and the assets of the
Company shall have been distributed as provided herein.

 

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9.3 Winding Up. Upon the dissolution of the Company, the Company’s assets shall
be disposed of and its affairs wound up. The Company shall give written notice
of the commencement of the dissolution to all of its known creditors.

 

9.4 Order of Payment Upon Dissolution. The assets and proceeds on liquidation
shall be applied in the following order:

 

(a) To creditors, including Members who are creditors, to the extent permitted
by law and in accordance with their relative rights of priority, if any; and

 

(b) All remaining assets and proceeds shall be distributed pro rata to the
Members in accordance with their positive Capital Account balances, after taking
into account the allocation of Profits and Losses for the Company’s Fiscal Year
during which the liquidation occurs.

 

9.5 Limitations on Payments Made in Dissolution. Except as otherwise
specifically provided in this Agreement, each Member shall only be entitled to
look to the assets of the Company for the return of its positive Capital Account
balance and shall have no recourse for its Capital Contribution and/or share of
income or gain of the Company (upon dissolution or otherwise) against the
Manager or any other Member.

 

9.6 Distributions in Kind. The Manager may make dissolution distributions to the
Members in cash or distribute Company assets in kind, and the distribution of
any such assets in kind shall be made on the basis of the fair market value of
such asset as of the date of distribution, as determined by the Manager in good
faith. The Capital Accounts of the Members shall be adjusted accordingly to
preserve the economic interests of the Members as the result of any distribution
in kind.

 

9.7 Certificate of Cancellation. The Manager or Members who filed the
Certificate of Dissolution shall cause to be filed in the office of, and on a
form prescribed by, the Delaware Secretary of State, a Certificate of
Cancellation of the Certificate upon the completion of the winding up of the
affairs of the Company.

 

Article X. EXCULPATION, INDEMNIFICATION AND INSURANCE

 

10.1 Exculpation. No Manager, Member nor any officer of the Company, shall, to
the fullest extent permitted by law, be liable to the Company or any other
person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Manager, Member or officer of the Company, in good
faith on behalf of the Company and in a manner reasonably believed to be within
the scope of the authority conferred on such person by this Agreement, except
that each Manager, Member or officer of the Company shall be liable for any such
loss, damage or claim incurred by reason of such person’s gross negligence or
willful misconduct.

 

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TNP SRT SECURED HOLDINGS, LLC
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10.2 Indemnification. The Company shall defend and indemnify any Member or
Manager and may indemnify any other Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that it, he or she is or was a Member,
Manager, officer, employee or other agent of the Company or that, being or
having been such a Member, Manager, officer, employee or agent, it, he or she is
or was serving at the request of the Company as a manager, director, officer,
employee or other agent of another limited liability company, corporation,
partnership, joint venture, trust or other enterprise (all such persons being
referred to hereinafter as an “agent”), to the fullest extent permitted by
applicable law in effect on the date hereof and to such greater extent as
applicable law may hereafter from time to time permit. The Manager shall be
authorized, on behalf of the Company, to enter into indemnity agreements from
time to time with any Person entitled to be indemnified by the Company
hereunder, upon such terms and conditions as the Manager deems appropriate.

 

10.3 Insurance. The Company shall, to the extent commercially reasonable (as
determined by the Manager), purchase and maintain insurance on behalf of any
Person who is or was an agent of the Company against any liability asserted
against such Person and incurred by such Person in any such capacity, or arising
out of such Person’s status as an agent, whether or not the Company would have
the power to indemnify such Person against such liability under the provisions
of Section 10.2 or under applicable law.

 

Article XI. INVESTMENT REPRESENTATIONS

 

Each Member hereby represents and warrants to, and agrees with, the Manager, the
other Members, and the Company as follows:

 

11.1 Preexisting Relationship or Experience. By reason of his, her or its
business or financial experience, or by reason of the business or financial
experience of his, her or its financial advisor who is unaffiliated with and who
is not compensated, directly or indirectly, by the Company or any Affiliate or
selling agent of the Company, he, she or it is capable of evaluating the risks
and merits of an investment in the Interest and of protecting his, her or its
own interests in connection with this investment.

 

11.2 Investment Intent. He, she or it is acquiring the Interest for investment
purposes for his, her or its own account only and not with a view to or for sale
in connection with any distribution of all or any part of the Interest. No other
Person will have any direct or indirect beneficial interest in or right to the
Interest.

 

11.3 Accredited Investor. He, she or it is an “accredited investor” as defined
in Rule 501(c) promulgated by the Securities and Exchange Commission.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
TNP SRT SECURED HOLDINGS, LLC
34

 

 

11.4 Purpose of Entity. If an entity, it was not organized for the specific
purpose of acquiring the Interest.

 

11.5 Economic Risk. He, she or it is financially able to bear the economic risk
of an investment in the Interest, including the total loss thereof.

 

11.6 No Registration of Interests. He, she or it acknowledges that the Interest
has not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), or qualified under the securities laws of any state in
reliance, in part, on his, her or its representations, warranties and agreements
herein.

 

11.7 Investment in Restricted Security. He, she or it understands that the
Interest is a “restricted security” under the Securities Act in that the
Interest will be acquired from the Company in a transaction not involving a
public offering, and that the Interest may be resold without registration under
the Securities Act only in certain limited circumstances and that otherwise the
Interest must be held indefinitely.

 

11.8 No Obligations to Register. He, she or it acknowledges that the Company and
the Manager are under no obligation to register or qualify the Interest under
the Securities Act or under any state securities law, or to assist her, him or
it in complying with any exemption from registration or qualification.

 

11.9 No Disposition in Violation of Law. Without limiting the representations
set forth above, and without limiting Article VII of this Agreement, he, she or
it will not make any disposition of all or any part of the Interest which will
result in the violation by her, him or it or by the Company of the Securities
Act, the DGCL, the Act or any other applicable securities law. Without limiting
the foregoing, he, she or it agrees not to make any disposition of all or any
part of the Interest unless and until he, she or it has notified the Company of
the proposed disposition and, if requested by the Manager, has furnished the
Company with a detailed statement of the circumstances surrounding the proposed
disposition, and, if requested by the Manager, he, she or it has furnished the
Company with a written opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of any securities
under the Securities Act or the consent of or a permit from appropriate
authorities under any applicable state securities law.

 

11.10 Investment Risk. He, she or it acknowledges that the Interest is a
speculative investment which involves a substantial degree of risk of loss of an
entire investment in the Company, that he, she or it understands and takes full
cognizance of the risks related to the purchase of the Interest, and that the
Company is newly organized and has no financial or operating history.

 

11.11 Investment Experience. He, she or it is an experienced investor in
unregistered and restricted securities of limited liability companies.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
TNP SRT SECURED HOLDINGS, LLC
35

 

 

11.12 Restrictions on Transferability. He, she or it acknowledges that there are
substantial restrictions on the transferability of the Interest pursuant to this
Agreement, that there is no public market for the Interest and none is expected
to develop, and that, accordingly, it may not be possible to liquidate his, her
or its investment in the Company.

 

11.13 Information Reviewed. He, she or it has received and reviewed this
Agreement and all other information he, she or it considers necessary or
appropriate for deciding whether to purchase the Interest. He, she or it has not
relied on any oral statements or representations not otherwise set forth in
writing in making his, her or its investment decision.

 

11.14 Tax Consequences. He, she or it acknowledges that the tax consequences of
investing in the Company will depend on his, her or its particular
circumstances, and neither the Company, the Manager, the Members, nor the
partners, shareholders, members, managers, agents, officers, directors,
employees, Affiliates or consultants of any of them will be responsible or
liable for the tax consequences to him, her or it of an investment in the
Company. He, she or it will look solely to, and rely upon, his, her or its own
advisers with respect to the tax consequences of this investment.

 

11.15 No Assurance of Tax Benefits. He, she or it acknowledges that there can be
no assurance that the Code or the Treasury Regulations will not be amended or
interpreted in the future in such a manner so as to deprive the Company and the
Members of some or all of the tax benefits they might now receive nor that some
of the deductions claimed by the Company or the allocations of items of income,
gain, loss, deduction or credit among the Members may not be challenged by the
Internal Revenue Service.

 

11.16 Indemnity. He, she or it shall defend, indemnify and hold harmless the
Company, the Manager, each and every other Member, and any officers, directors,
shareholders, managers, members, employees, partners, agents, attorneys,
registered representatives and control persons of any such entity who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any misrepresentation or
misstatement of facts or omission to represent or state facts made by him, her
or it including, without limitation, the information in this Agreement, against
losses, liabilities and expenses of the company, the Manager, each and every
other Member, and any officers, directors, shareholders, managers, members,
employees, partners, attorneys, accountants, agents, registered representatives
and control persons of any such Person (including attorneys’ fees, judgments,
fines and amounts paid in settlement, payable as incurred) incurred by such
person in connection with such action, suit, proceeding or the like.

 

Article XII. MISCELLANEOUS

 

12.1 Complete Agreement. This Agreement and the Certificate constitute the
complete and exclusive statement of agreement among the Members and the Manager
with respect to the subject matter herein and therein and replace and supersede
all prior written and oral agreements or statements by and among the Members and
the Manager or any of them. No representation, statement, condition or warranty
not contained in this Agreement or the Certificate will be binding on the
Members or the Manager or have any force or effect whatsoever. To the extent
that any provision of the Certificate conflicts with any provision of this
Agreement, the Certificate shall control.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
TNP SRT SECURED HOLDINGS, LLC
36

 

 

12.2 Binding Effect. Subject to the provisions of this Agreement relating to
transferability, this Agreement will be binding upon and inure to the benefit of
the Members and their respective successors and assigns.

 

12.3 Parties in Interest. Except as expressly provided in the Act, nothing in
this Agreement shall confer any rights or remedies under or by reason of this
Agreement on any Persons other than the Members and the Manager and their
respective successors and permitted assigns nor shall anything in this Agreement
relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third person any right
of subrogation or action over or against any party to this Agreement.

 

12.4 Pronouns; Statutory References. All pronouns and all variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, singular or
plural, as the context in which they are used may require. Any reference to the
Code, the Treasury Regulations, the Act, the DGCL, the Securities Act or other
statutes or laws will include all amendments, modifications or replacements of
the specific sections and provisions concerned.

 

12.5 Headings. All headings herein are inserted only for convenience and ease of
reference and are not to be considered in the construction or interpretation of
any provision of this Agreement.

 

12.6 Interpretation. In the event any claim is made by any Member relating to
any conflict, omission or ambiguity in this Agreement, no presumption or burden
of proof or persuasion shall be implied by virtue of the fact that this
Agreement was prepared by or at the request of a particular Member or its
counsel.

 

12.7 References to this Agreement. Numbered or lettered articles, sections and
subsections herein contained refer to articles, sections and subsections of this
Agreement unless otherwise expressly stated.

 

12.8 Exhibits. All Exhibits attached to this Agreement are incorporated and
shall be treated as if set forth herein.

 

12.9 Severability. If any provision of this Agreement or the application of such
provision to any person or circumstance shall be held invalid, the remainder of
this Agreement or the application of such provision to persons or circumstances
other than those to which it is held invalid shall not be affected thereby.

 

12.10 Additional Documents and Acts. Each Member agrees to execute and deliver
such additional documents and instruments and to perform such additional acts as
may be necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions and conditions of this Agreement and the transactions
contemplated hereby.

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
TNP SRT SECURED HOLDINGS, LLC
37

 

 

12.11 Notices. Any notice to be given or to be served upon the Company or any
party hereto in connection with this Agreement must be in writing (which may
include facsimile) and will be deemed to have been given and received when
delivered to the address specified by the party to receive the notice. Such
notices will be given to a Member or the Manager at the address specified in
Exhibit A or Exhibit B hereto. Any party may, at any time by giving five (5)
business days’ prior written notice to the other parties, designate any other
address in substitution of the foregoing address to which such notice will be
given.

 

12.12 Amendments. All amendments to this Agreement must be in writing and
approved and executed by all of the Members. Sections 3.5 and 4.1 of this
Agreement specifies certain changes to this Agreement which shall not be deemed
to be amendments to this Agreement for purposes of this Section 12.12.

 

12.13 Reliance on Authority of Person Signing Agreement. Neither the Company nor
any Member will be required to determine the authority of the individual signing
this Agreement to make any commitment or undertaking on behalf of such entity or
to determine any fact or circumstance bearing upon the existence of the
authority of such individual.

 

12.14 No Interest in Company Property; Waiver of Action for Partition. No Member
has any interest in specific property of the Company. Without limiting the
foregoing, each Member irrevocably waives during the term of the Company any
right that he, she or it may have to maintain any action for partition with
respect to the property of the Company.

 

12.15 Multiple Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

12.16 Remedies Cumulative. The remedies under this Agreement are cumulative and
shall not exclude any other remedies to which any person may be lawfully
entitled.

 

[Remainder of this page intentionally left blank]

 

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
TNP SRT SECURED HOLDINGS, LLC
38

 

 

IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Limited Liability Company Agreement for TNP SRT Secured Holdings, LLC, a
Delaware limited liability company, as of the date first set forth above.

 

  MEMBERS:         TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, L.P.,
AS MEMBER OF TNP SRT SECURED HOLDINGS, LLC         By: TNP STRATEGIC RETAIL
TRUST, INC., AS GENERAL PARTNER OF TNP STRATEGIC RETAIL OPERATING PARTNERSHIP,
L.P.         By:   /s/ Jeffrey S. Rogers     Jeffrey S. Rogers               SRT
SECURED HOLDINGS MANAGER, LLC,   AS MEMBER OF TNP SRT SECURED HOLDINGS, LLC    
    By: /s/ Andrew Bainovich   Name: Andrew Bainovich   Title: CEO        
MANAGER:         SRT SECURED HOLDINGS MANAGER, LLC,   AS MANAGER OF TNP SRT
SECURED HOLDINGS, LLC         By: /s/ Andrew Bainovich   Name: Andrew Bainovich
  Title: CEO

 

FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
TNP SRT SECURED HOLDINGS, LLC
39

 

 

EXHIBIT A

 

CAPITAL CONTRIBUTION AND ADDRESSES OF MEMBERS
AS OF JULY __, 2013

Member’s Name and Address  Member’s
Capital
Contribution  Percentage Interest  TNP Strategic Retail Operating Partnership,
LP  As indicated on Exhibit A to the Original Agreement   88.0%          
Address:
4695 MacArthur Court, Suite 1100,
Newport Beach, CA 92660                   SRT SECURED HOLDINGS MANAGER, LLC 
Cash in the amount of
$1,929,088.00   12.0%           Address:
400 S. El Camino Real, Suite 1100
San Mateo, CA 94402                   TOTAL:      100.00%

 

 

 

First Amended and Restated Limited Liability Company Agreement

TNP SRT Secured Holdings, LLC

Exhibit A

 

 

 

EXHIBIT B

 

NAME AND ADDRESS OF MANAGER

AS OF JULY __, 2013

 

Manager Address SRT SECURED HOLDINGS MANAGER, LLC 400 S. El Camino Real, Suite
1100 San Mateo, CA  94402                

 

 

 

First Amended and Restated Limited Liability Company Agreement

TNP SRT Secured Holdings, LLC

Exhibit B

 

 

 

ARTICLE I. DEFINITIONS 1 ARTICLE II. ORGANIZATIONAL MATTERS 7 2.1 Formation 7
2.2 Name 7 2.3 Term 7 2.4 Office and Agent 7 2.5 Names and Addresses of the
Members and the Manager 8 2.6 Purpose of the Company 8 2.7 Powers 8 2.8 Title to
Company Property 9 2.9 Failure to Observe Formalities 9 2.10 No Partnership
Intended for Nontax Purposes 10 2.11 Liability of Members and Manager to Third
Parties; Reliance by Third-Party Creditors 10 ARTICLE III. CAPITAL CONTRIBUTIONS
11 3.1 Initial Capital Contributions 11 3.2 Additional Capital Contributions 11
3.3 Failure To Make Project Capital Contributions Or Additional Capital
Contributions 12 3.4 Capital Accounts 12 3.5 Schedules 13 3.6 Rights Regarding
Capital Contributions 13 3.7 Deficit Capital Accounts 13 ARTICLE IV. MEMBERS 13
4.1 Procedures for Admission 13 4.2 Limited Liability 14 4.3 Withdrawals or
Resignations 14 4.4 Competing Activities 14 4.5 Transactions with the Company 14
4.6 Remuneration to Members 14 4.7 Members are not Agents 14 4.8 Voting Rights
14 4.9 Meetings of and Voting by Members 15

 

40

 

 

ARTICLE V. MANAGEMENT AND CONTROL OF THE COMPANY 15 5.1 Management of the
Company by Manager 15 5.2 Meetings of Manager 15 5.3 Election of Manager 15 5.4
Powers of the Manager 16 5.5 Member’s Right Of First Offer 20 5.6 Compensation
And Management Fees 20 5.7 Business Plan 22 5.8 Performance of Duties; Liability
of Manager; Fiduciary Standard 22 5.9 Devotion of Time 23 5.10 Transactions
between the Company and the Manager 23 5.11 Limited Liability 23 5.12 Officers
23 5.13 Tax Matters Partner 23 ARTICLE VI. ALLOCATIONS OF PROFITS AND
LOSSES  AND DISTRIBUTIONS 24 6.1 Allocations of Profits and Losses: 24 6.2
Special Allocations 24 6.3 Transfer of Interests During Taxable Year 25 6.4 Tax
Allocations 25 6.5 Section 754 Election 25 6.6 Distributions by the Company 25
6.7 Book-Up of Company Assets 26 ARTICLE VII. TRANSFER AND ASSIGNMENT OF
INTERESTS 26 7.1 Transfer and Assignment of Interests 26 7.2 Further
Restrictions on Transfer of Interests 27 7.3 Buy Sell Option 28 ARTICLE VIII.
ACCOUNTING, RECORDS, REPORTING BY MEMBERS 31 8.1 Books and Records 31 8.2
Reports 32 8.3 Bank Accounts 32

 

41

 

 

ARTICLE IX. ARTICLE IX.  DISSOLUTION AND WINDING UP 32 9.1 Dissolution 32 9.2
Certificate of Dissolution 32 9.3 Winding Up 33 9.4 Order of Payment Upon
Dissolution 33 9.5 Limitations on Payments Made in Dissolution 33 9.6
Distributions in Kind 33 9.7 Certificate of Cancellation 33 ARTICLE X.
EXCULPATION, INDEMNIFICATION AND INSURANCE 33 10.1 Exculpation 33 10.2
Indemnification 34 10.3 Insurance 34 ARTICLE XI. INVESTMENT REPRESENTATIONS 34
11.1 Preexisting Relationship or Experience 34 11.2 Investment Intent 34 11.3
Accredited Investor 34 11.4 Purpose of Entity 35 11.5 Economic Risk 35 11.6 No
Registration of Interests 35 11.7 Investment in Restricted Security 35 11.8 No
Obligations to Register 35 11.9 No Disposition in Violation of Law 35 11.10
Investment Risk 35 11.11 Investment Experience 35 11.12 Restrictions on
Transferability 36 11.13 Information Reviewed 36 11.14 Tax Consequences 36 11.15
No Assurance of Tax Benefits 36 11.16 Indemnity 36 ARTICLE XII. MISCELLANEOUS 36
12.1 Complete Agreemen 36 12.2 Binding Effect 37

 

42

 

 

12.3 Parties in Interest 37 12.4 Pronouns; Statutory References 37 12.5 Headings
37 12.6 Interpretation 37 12.7 References to this Agreement 37 12.8 Exhibits 37
12.9 Severability 37 12.10 Additional Documents and Acts 37 12.11 Notices 38
12.12 Amendments 38 12.13 Reliance on Authority of Person Signing Agreement 38
12.14 No Interest in Company Property; Waiver of Action for Partition 38 12.15
Multiple Counterparts 38 12.16 Remedies Cumulative 38

 

43