Amended and Restated Operating Agreement of Evergreen at Coursey Place



 EXHIBIT 10.2 
 AMENDED AND RESTATED OPERATING AGREEMENT 
 OF 

EVERGREEN AT COURSEY PLACE, SOLE MEMBER, LLC 
 THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “FEDERAL ACT”), IN RELIANCE UPON ONE (1) OR MORE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL ACT. IN ADDITION, THE ISSUANCE OF THIS SECURITY HAS NOT BEEN QUALIFIED UNDER THE GEORGIA SECURITIES ACT OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY, THE “STATE
ACTS”), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF THE STATE ACTS. IT IS UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN TO, OR TO RECEIVE ANY CONSIDERATION
THEREFOR FROM, ANY PERSON OR ENTITY WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED SALE OR OTHER TRANSFER OF THIS SECURITY DOES NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND
THAT SUCH PROPOSED SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES LAWS. THE TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED UNDER THE TERMS OF THE OPERATING AGREEMENT GOVERNING THE COMPANY, A COPY OF WHICH
IS ON FILE WITH THE OPERATING MEMBER OF THE COMPANY. 







 AMENDED AND RESTATED OPERATING AGREEMENT 

OF 

EVERGREEN AT COURSEY PLACE, SOLE MEMBER, LLC 
 TABLE OF CONTENTS 
  

							
	 	  	 	  	Page	 
		
	 ARTICLE 1 FORMATION
	  	 	1	  
			
	 1.01
	  	 Formation
	  	 	1	  
	 1.02
	  	 Names and Addresses
	  	 	1	  
	 1.03
	  	 Nature of Business
	  	 	2	  
	 1.04
	  	 Term of the Company
	  	 	2	  
		
	 ARTICLE 2 MANAGEMENT OF THE COMPANY
	  	 	2	  
			
	 2.01
	  	 Management Committee
	  	 	2	  
	 2.02
	  	 Authority of the Management Committee
	  	 	5	  
	 2.03
	  	 Operating Member
	  	 	9	  
	 2.04
	  	 Annual Business Plan
	  	 	10	  
	 2.05
	  	 Operating Budget
	  	 	10	  
	 2.06
	  	 Removal of the Operating Member
	  	 	11	  
	 2.07
	  	 Liability and Indemnity
	  	 	13	  
	 2.08
	  	 Limited Liability
	  	 	14	  
	 2.09
	  	 Other Activities
	  	 	14	  
	 2.10
	  	 Brokers Indemnity
	  	 	14	  
	 2.11
	  	 Reimbursement; Compensation
	  	 	14	  
	 2.12
	  	 Property Management
	  	 	15	  
		
	 ARTICLE 3 MEMBERS’ CAPITAL CONTRIBUTIONS
	  	 	15	  
			
	 3.01
	  	 Initial Contributions of the Members
	  	 	15	  
	 3.02
	  	 Additional Contributions
	  	 	16	  
	 3.03
	  	 Remedy For Failure to Contribute Capital
	  	 	16	  
	 3.04
	  	 Debt Financing
	  	 	20	  
	 3.05
	  	 Loans from Members
	  	 	20	  
	 3.06
	  	 Capital Contributions in General
	  	 	20	  
		
	 ARTICLE 4 ALLOCATION OF PROFITS AND LOSSES
	  	 	21	  
			
	 4.01
	  	 Allocation of Net Profits and Net Losses
	  	 	21	  
	 4.02
	  	 Regulatory Allocations
	  	 	23	  
	 4.03
	  	 Special Allocation
	  	 	24	  
	 4.04
	  	 Other Allocation Rules
	  	 	24	  
		
	 ARTICLE 5 DISTRIBUTIONS
	  	 	25	  
			
	 5.01
	  	 Distribution of Ordinary Cash Flow
	  	 	25	  
	 5.02
	  	 Distribution of Extraordinary Cash Flow
	  	 	25	  









							
	 5.03
	  	 Limitations on Distributions
	  	 	26	  
	 5.04
	  	 In-Kind Distribution
	  	 	26	  
	 5.05
	  	 Right to Withhold
	  	 	26	  
		
	 ARTICLE 6 RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS
	  	 	26	  
			
	 6.01
	  	 Limitations on Transfer
	  	 	26	  
	 6.02
	  	 Permitted Transfers
	  	 	27	  
	 6.03
	  	 Admission of Substitute Members
	  	 	27	  
	 6.04
	  	 Additional Restrictions on Transfer
	  	 	28	  
	 6.05
	  	 Election; Allocations Between Transferor and Transferee
	  	 	28	  
	 6.06
	  	 Partition
	  	 	28	  
	 6.07
	  	 Waiver of Withdrawal
	  	 	29	  
		
	 ARTICLE 7 DEFAULT BUY-SELL AGREEMENT
	  	 	29	  
			
	 7.01
	  	 Default Buy-Sell Events
	  	 	29	  
	 7.02
	  	 Rights Arising From a Default Buy-Sell Event
	  	 	31	  
	 7.03
	  	 Determination of Purchase Price
	  	 	31	  
	 7.04
	  	 Member’s Option
	  	 	33	  
	 7.05
	  	 Closing of Purchase and Sale
	  	 	34	  
	 7.06
	  	 Payment of Purchase Price
	  	 	34	  
	 7.07
	  	 Release and Indemnity
	  	 	34	  
	 7.08
	  	 Repayment of Member Loans
	  	 	35	  
	 7.09
	  	 Voting Rights Following Default Buy-Sell Event
	  	 	35	  
	 7.10
	  	 Withdrawal of the Selling Member
	  	 	35	  
		
	 ARTICLE 8 DISSOLUTION AND WINDING UP OF THE COMPANY
	  	 	36	  
			
	 8.01
	  	 Events Causing Dissolution of the Company
	  	 	36	  
	 8.02
	  	 Winding Up of the Company
	  	 	36	  
	 8.03
	  	 No Negative Capital Account Restoration
	  	 	36	  
		
	 ARTICLE 9 BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS
	  	 	37	  
			
	 9.01
	  	 Company Books
	  	 	37	  
	 9.02
	  	 Delivery of Records; Inspection
	  	 	37	  
	 9.03
	  	 Reports and Tax Information
	  	 	38	  
	 9.04
	  	 Company Tax Elections; Tax Controversies
	  	 	39	  
	 9.05
	  	 Accounting and Fiscal Year
	  	 	39	  
	 9.06
	  	 Confidentiality of Information
	  	 	40	  
		
	 ARTICLE 10 MISCELLANEOUS
	  	 	40	  
			
	 10.01
	  	 Subscription Agreement
	  	 	40	  
	 10.02
	  	 Investment Interest; Nature of Investment
	  	 	40	  
	 10.03
	  	 Appointment of Attorney-in-Fact
	  	 	41	  
	 10.04
	  	 Waiver of Conflict of Interest
	  	 	41	  
	 10.05
	  	 Amendment
	  	 	42	  
	 10.06
	  	 No Assignments; Binding Effect
	  	 	42	  
	 10.07
	  	 Further Assurances
	  	 	42	  









							
	 10.08
	  	 Notices
	  	 	42	  
	 10.09
	  	 Waivers
	  	 	44	  
	 10.10
	  	 Preservation of Intent
	  	 	44	  
	 10.11
	  	 Entire Agreement
	  	 	44	  
	 10.12
	  	 Certain Rules of Construction
	  	 	44	  
	 10.13
	  	 Counterparts
	  	 	45	  
	 10.14
	  	 Governing Law
	  	 	45	  
	 10.15
	  	 Assurances
	  	 	45	  
	 10.16
	  	 Time is of the Essence
	  	 	45	  
	 10.17
	  	 Other Matters
	  	 	45	  
	 10.18
	  	 No Dissenters’ Rights
	  	 	45	  
	 10.19
	  	 Ownership of ERES
	  	 	45	  
		
	 ARTICLE 11 DEFINITIONS
	  	 	46	  
			
	 11.01
	  	 Additional Contribution
	  	 	46	  
	 11.02
	  	 Additional Member
	  	 	46	  
	 11.03
	  	 Adjusted Capital Account
	  	 	46	  
	 11.04
	  	 Affiliate
	  	 	46	  
	 11.05
	  	 Agreement
	  	 	47	  
	 11.06
	  	 Annual Business Plan
	  	 	47	  
	 11.07
	  	 Appraised Value
	  	 	47	  
	 11.08
	  	 Business Day
	  	 	47	  
	 11.09
	  	 Buyout Purchase Price
	  	 	47	  
	 11.10
	  	 Buy-Sell Notice
	  	 	47	  
	 11.11
	  	 Capital Account
	  	 	47	  
	 11.12
	  	 Capital Contribution
	  	 	48	  
	 11.13
	  	 Capital Event
	  	 	48	  
	 11.14
	  	 Cash Flow
	  	 	48	  
	 11.15
	  	 Cash Flow Bonus Forfeiture Event
	  	 	48	  
	 11.16
	  	 Class A Capital Contribution
	  	 	48	  
	 11.17
	  	 Class B Capital Contribution
	  	 	48	  
	 11.18
	  	 Class A Distribution Percentage
	  	 	49	  
	 11.19
	  	 Code
	  	 	49	  
	 11.20
	  	 Company
	  	 	49	  
	 11.21
	  	 Company Minimum Gain
	  	 	49	  
	 11.22
	  	 Contributing Member
	  	 	49	  
	 11.23
	  	 Contribution Date
	  	 	49	  
	 11.24
	  	 Contribution Notice
	  	 	49	  
	 11.25
	  	 Contribution Percentage
	  	 	50	  
	 11.26
	  	 Default Buy-Sell Event
	  	 	50	  
	 11.27
	  	 Default Notice
	  	 	50	  
	 11.28
	  	 Defaulting Member
	  	 	50	  
	 11.29
	  	 Default Purchase Price
	  	 	50	  
	 11.30
	  	 Delinquent Contribution
	  	 	50	  
	 11.31
	  	 Dilution Percentage
	  	 	50	  









							
	 11.32
	  	 Effective Date
	  	 	50	  
	 11.33
	  	 Emergency Situations
	  	 	50	  
	 11.34
	  	 ERES
	  	 	50	  
	 11.35
	  	 Extraordinary Cash Flow
	  	 	51	  
	 11.36
	  	 Fiscal Year
	  	 	51	  
	 11.37
	  	 Georgia Act
	  	 	51	  
	 11.38
	  	 Gross Asset Value
	  	 	51	  
	 11.39
	  	 Immediate Family
	  	 	52	  
	 11.40
	  	 Indemnified Party
	  	 	52	  
	 11.41
	  	 Interest
	  	 	53	  
	 11.42
	  	 IRR
	  	 	53	  
	 11.43
	  	 Liquidation
	  	 	53	  
	 11.44
	  	 Majority of Representatives
	  	 	53	  
	 11.45
	  	 Management Committee
	  	 	53	  
	 11.46
	  	 Material Breach
	  	 	53	  
	 11.47
	  	 Member Loan
	  	 	54	  
	 11.48
	  	 Member Minimum Gain
	  	 	54	  
	 11.49
	  	 Member Nonrecourse Debt
	  	 	54	  
	 11.50
	  	 Member Nonrecourse Deductions
	  	 	54	  
	 11.51
	  	 Member(s)
	  	 	54	  
	 11.52
	  	 Mortgage Loan
	  	 	54	  
	 11.53
	  	 Net Profits and Net Losses
	  	 	54	  
	 11.54
	  	 Non-Contributing Member
	  	 	55	  
	 11.55
	  	 Nonrecourse Deductions
	  	 	55	  
	 11.56
	  	 Operating Account
	  	 	55	  
	 11.57
	  	 Operating Budget
	  	 	56	  
	 11.58
	  	 Operating Member
	  	 	56	  
	 11.59
	  	 Ordinary Cash Flow
	  	 	56	  
	 11.60
	  	 Paladin
	  	 	56	  
	 11.61
	  	 Paladin REIT
	  	 	56	  
	 11.62
	  	 Percentage Interest
	  	 	56	  
	 11.63
	  	 Permitted Transferees
	  	 	57	  
	 11.64
	  	 Person
	  	 	57	  
	 11.65
	  	 Preferred Return
	  	 	57	  
	 11.66
	  	 Price Determination Notice
	  	 	57	  
	 11.67
	  	 Project
	  	 	57	  
	 11.68
	  	 Project Shortfall
	  	 	57	  
	 11.69
	  	 Property Management Agreement
	  	 	57	  
	 11.70
	  	 Property Manager
	  	 	58	  
	 11.71
	  	 Purchasing Member
	  	 	58	  
	 11.72
	  	 Qualified Appraiser
	  	 	58	  
	 11.73
	  	 Regulatory Allocations
	  	 	58	  
	 11.74
	  	 REIT
	  	 	58	  
	 11.75
	  	 Removal Event
	  	 	58	  
	 11.76
	  	 Removal Notice
	  	 	58	  









							
	 11.77
	  	 Securities Act
	  	 	58	  
	 11.78
	  	 Seller Loan
	  	 	58	  
	 11.79
	  	 Selling Member
	  	 	58	  
	 11.80
	  	 Tax Matters Partner
	  	 	59	  
	 11.81
	  	 Third-Party Purchase Price
	  	 	59	  
	 11.82
	  	 Transfer
	  	 	59	  
	 11.83
	  	 Treasury Regulation
	  	 	59	  
	 11.84
	  	 Unanimous Written Consent
	  	 	59	  
	 11.85
	  	 Unpaid Preferred Return
	  	 	59	  
	 11.86
	  	 Unpaid Yield Maintenance Amount
	  	 	59	  
	 11.87
	  	 Unrecovered Class A Contribution Account
	  	 	59	  
	 11.88
	  	 Unrecovered Class B Contribution Account
	  	 	60	  
	 11.89
	  	 Unrecovered Contribution Account
	  	 	60	  

 Exhibit List 

 

			
	Exhibit “A”	  	Initial Capital Contributions and Capital Account Balances
	Exhibit “B”	  	Property Description for Project
	Exhibit “C”	  	Annual Operating Budget for 2011
	Exhibit “D”	  	Information Regarding ERES
	Exhibit “E”	  	xIRR Calculation








 AMENDED AND RESTATED OPERATING AGREEMENT 

OF 

EVERGREEN AT COURSEY PLACE, SOLE MEMBER, LLC 
 THIS AMENDED AND RESTATED OPERATING AGREEMENT OF EVERGREEN AT COURSEY PLACE, SOLE MEMBER, LLC (the “Company”), is entered into effective as of July 28, 2011, by and between
PRIP COURSEY, LLC, a Delaware limited liability company (“Paladin”) and ERES COURSEY LLC, a Louisiana limited liability company (“ERES”). The capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned to such terms in Article 11. 
 ARTICLE 1 

FORMATION 
  

	 	1.01	Formation 

 The
Company was formed as a Georgia limited liability company pursuant to the provisions of the Georgia Act. The Company shall be operated in accordance with, and the Members shall be governed by, the terms and conditions of this Agreement. If any terms
of this Agreement are inconsistent with any terms of the Act that are not mandatory, then the terms of this Agreement shall control. In connection with the formation of the Company, a duly authorized representative of the Company has caused to be
filed with the office of the Georgia Secretary of State the duly executed Articles of Organization for the Company in accordance with the Georgia Act. A duly authorized representative also shall execute, acknowledge and verify such other documents
or instruments as may be necessary or appropriate in order to continue the existence of the Company in accordance with the provisions of the Georgia Act or to register, qualify to do business or operate its business as a foreign limited liability
company in any other state in which the Company conducts business. In connection with the formation of the Company, there was executed and delivered an Operating Agreement, dated June 1, 2008, which the parties hereto desire to amend and
restate in its entirety pursuant to this Agreement. From and after the date hereof, the Company shall be operated in accordance with, and the Members shall be governed by, the terms and conditions of this Agreement 

 

	 	1.02	Names and Addresses 


The name of the Company is Evergreen at Coursey Place, Sole Member, LLC. The registered office of the Company in the State of Georgia is
at c/o Smith, Gambrell & Russell, LLP, Suite 3100, Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309 and the name of the registered agent for the Company at such 







 
registered office is Malcom D. Young, Jr., Esq. For so long as ERES is the Operating Member, the principal office for the Company shall be maintained at 519 Harrison Avenue, Suite 512, Boston, MA
02118, or such other location at which ERES maintains an office and thereafter at such other place as the Management Committee may designate from time to time. Copies of any material notices or other matters received by the Company shall be promptly
delivered by the Operating Member to the Members. 
  

	 	1.03	Nature of Business 


The purpose for which the Company is to exist is (i) to acquire, own, manage, operate, maintain, finance, hold for investment, and
sell that certain real property more particularly described on Exhibit B attached hereto, together with existing improvements consisting of an approximately 352 unit apartment complex and related amenities and improvements located thereto
located at 13675 Coursey Boulevard, Baton Rouge, Louisiana (the “Project”); (ii) to conduct such other activities with respect to, and otherwise realize and optimize the operating cash flow distributions and economic internal
rates of return from, the Project and any and all other related assets the Company may hereinafter acquire as are appropriate to carrying out the foregoing purposes; and (iii) to do all things incidental to or in furtherance of the above
enumerated purposes. 
  

	 	1.04	Term of the Company 


The term of the Company commenced on the date the Articles of Organization were filed with the Georgia Secretary of State and shall
continue until December 31, 2051, unless otherwise dissolved pursuant to Article 8 or unless extended by the unanimous agreement of the Members. The existence of the Company as a separate legal entity shall continue until the
cancellation of the Certificate of Formation of the Company in accordance with the provisions of the Georgia Act. 
 ARTICLE 2

 MANAGEMENT OF THE COMPANY 
  

	 	2.01	Management Committee 

 (a) Management by Management Committee. Except as otherwise provided in this Agreement, all aspects of the business and affairs of the Company shall be managed, and all decisions affecting the
business and affairs of the Company (including, without limitation, investment and Project related decisions) shall be made, by the Members acting through a management committee (the “Management Committee”) composed of five
(5) representatives in accordance with the provisions contained below. The Members, exclusively through the Management Committee, shall have the right, power and authority to take any and all actions consistent with the purpose of the Company
that is permitted hereunder and under applicable law. No Member shall have any right, power or authority to act (as agent or otherwise) for, or to bind, the Company in any manner (other than as expressly provided herein) except through the
Management Committee. 

  
 -2-









 (b) Representatives. Paladin shall be entitled to select three
(3) representatives of the Management Committee, and ERES shall be entitled to select two (2) representatives of the Management Committee. Paladin hereby designates James R. Worms, William K. Dunbar, and Whitney A. Greaves as its initial
representatives on the Management Committee, and ERES hereby designates Douglas Reim and Charles Thompson as its initial representatives of the Management Committee. Paladin may appoint a replacement representative at any time and from time to time
for any one or more of the representatives it designated by giving written notice of such replacement to ERES, which replacement shall be effective upon the giving of such notice. Any change in the designation of ERES’ representatives shall be
subject to Paladin’s approval, which approval shall not be unreasonably withheld. The Members acting through the Management Committee shall have the authority to make all decisions affecting the business and affairs of the Company as fully and
completely as if the Members were themselves making such decisions. Each Member recognizes and agrees, however, that the representatives on the Management Committee are acting exclusively on behalf of the Member they represent, respectively, and
that such representatives shall not, therefore, have any personal liability by reason of serving as a representative of such Member. 
 (c) Decisions. Except as otherwise set forth in this Agreement, any actions required or permitted to be taken by the Management Committee shall be so taken only either (i) with the approval of
a Majority of Representatives at a meeting of the Management Committee or (ii) by Unanimous Written Consent without a meeting pursuant to Section 2.01(i). The Management Committee may, but shall not be required to, memorialize its
actions in the form of minutes, which minutes, when signed by at least one representative on the Management Committee appointed by each of Paladin and ERES, shall be conclusive evidence of such action and shall be incorporated into the books and
records of the Company. Notwithstanding anything contained herein to the contrary, each Member hereby agrees and covenants that it shall direct its representatives on the Management Committee to execute any minutes relating to actions that were
taken in accordance with this Section 2.01(c) regardless of whether such Member voted in favor of the action. 
 (d)
Meetings. Regular meetings of the Management Committee shall be held at the principal office of the Company (or at such other place(s) as are designated by the Management Committee) at such times as shall be designated from time to time by
the Management Committee. 
 (e) Special Meetings. Special meetings of the Management Committee may be called by or at
the request of any representative and shall be held at the principal office of the Company (or at such other place(s) as may be designated by the Management Committee). The representative calling any special meeting of the Management Committee may
designate any reasonable time for the holding of the special meeting. 
 (f) Telephonic Participation. Representatives of
the Management Committee may participate in any regularly scheduled or special meetings of the Management Committee telephonically or through other similar communications 

  
 -3-









 
equipment, as long as all of the representatives participating in the meeting can hear one another. Participation in a meeting pursuant to the preceding sentence shall constitute presence in
person at such meeting for all purposes of this Agreement. 
 (g) Notice and Attendance. Notice of any meeting of, or of
any action taken without a meeting pursuant to Section 2.01(i) by, the Management Committee shall be given as far in advance of the meeting as is reasonably practicable. Representatives, absent exigent circumstances, shall use their best
efforts to give any such notice at least forty-eight (48) hours prior to such meeting, unless otherwise agreed by the representatives, and to attend all meetings of the Management Committee. 

(h) Quorum. A quorum shall be required to conduct any business at any meeting of the Management Committee, and shall be deemed
present at any such meeting so long as at least one representative of each Member is in attendance (whether in person or otherwise); provided, however, that if written notice of any such meeting has been given at least five (5) days prior to
such meeting, then a quorum shall be deemed present at any such meeting so long as a Majority of Representatives of the Management Committee are present at such meeting. 
 (i) Actions Without Meetings. Any action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting with Unanimous Written Consent, which consent
shall set forth the actions to be so taken. Any such Unanimous Written Consent shall have the same effect as an act of a Majority of Representatives at a properly called and constituted meeting of the Management Committee. Copies of any such written
consent shall be delivered promptly to all representatives. 
 (j) Execution of Documents. Except as provided in
Section 2.03 below, all contracts, agreements and other documents or instruments affecting or relating to the business and affairs of the Company may be executed on the Company’s behalf only by the Members, or such other person(s) as may
be designated by the Management Committee and without execution by any other Member. 
 (k) Unauthorized Actions. None of
the Members or officers of the Company, without the prior consent of the Management Committee, shall take any action on behalf of or in the name of the Company, or enter into any commitment or obligation binding upon the Company, except for
(i) actions expressly authorized by this Agreement, (ii) actions by any Member (or officer) within the scope of such Member’s (or officer’s) authority expressly granted hereunder, and (iii) actions authorized by the
Management Committee in the manner set forth herein. Each Member hereby indemnifies, defends, protects and holds wholly harmless the other Members and each such other Member’s Affiliates, shareholders, officers, directors, constituent members,
Members, employees, agents, and representatives (including the representative(s) to the Management Committee appointed by such Member) from and against any and all losses, liability, damages, costs and expenses (including attorneys’ fees)
arising out of the breach of any of the foregoing provisions by such indemnifying Member, any representative of the Management Committee selected by such Member or such Member’s Affiliates,


  
 -4-









 
shareholders, officers, directors, constituent members, Members, employees, agents, or representatives. 
  

	 	2.02	Authority of the Management Committee 

 Without limiting the generality of Section 2.01, and except as otherwise provided by this Agreement, the consent of the Management Committee shall be required for the Company to undertake, and
the Management Committee shall have the right, power and authority to approve and cause the Company to undertake, all of the following actions (which actions shall be approved by a Majority of Representatives unless otherwise expressly provided
below): 
 (a) Issuance of Additional Interests. The issuance of any additional Interests in the Company
or the admission of any Additional Member into the Company; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or
Unanimous Written Consent; 
 (b) Sale or Other Transfer. Except as provided in accordance with the
provisions of Article 7, the sale, lease, exchange, transfer or other disposition of all or any portion of the Project or any other assets of the Company; provided, however, that until the second anniversary of the date hereof such a
decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; 

(c) Financing or Refinancing. Any and all financing or refinancing for the Company or the Project, the terms and
conditions thereof, or any modifications or amendments thereto; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or
Unanimous Written Consent; 
 (d) Material Company Transactions. The entry into by the Company and the
taking by the Company of any and all actions permitted or required by the Company in connection with any acquisition, disposition, merger, “roll-up” consolidation, reorganization, recapitalization, restructuring, joint venture,
partnership, limited liability company, or any other material business transaction involving the Company or its assets, including, without limitation, any and all actions required or permitted in connection with any initial public offering of
ownership interests in the Company (or in connection with the merger or the transfer of the assets of the Company to any corporation or other entity that is the successor to the Company that intends to conduct an initial public offering) or any
transfer of all or any portion of the assets of the Company to a public or private market vehicle that intends to qualify as a real estate investment trust (“REIT”) under Section 856 et. seq. of the Code or to a
partnership, limited liability company or other entity whose general partner, managing member or other 

  
 -5-









 
owner, intends to qualify as a REIT or to a comparable public or private REIT vehicle; provided, however, that such a decision shall require the approval of all of the representatives
present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; 

(e) Plans and Budgets. The approval of each Annual Business Plan and Operating Budget for the Company prepared by
the Operating Member, and any modifications or amendments thereof; 
 (f) Expenditures Outside of Plans or
Budgets. The making of any expenditure by the Company that is not specifically included or contemplated under any applicable Annual Business Plan and Operating Budget, other than as permitted within any parameters agreed to by the Management
Committee and specified in any such plan or budget (e.g., application of line item cost savings, contingency line amounts, budget variances, etc.); 
 (g) Additional Capital Contributions. The making of any Additional Contributions to the capital of the Company pursuant to Section 3.02 required to fund unit upgrades at the Project per
the applicable Operating Budget or to fund Emergency Situations; provided, however, the making of any other Additional Contributions to the capital of the Company pursuant to Section 3.02 shall require the approval of all of the
representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; 
 (h) Unrelated Businesses. The entry into by the Company of any business that is not related to the purpose of the Company set forth in Section 1.03; provided, however, that such
a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; 

(i) Liquidation of the Company. Except to the extent dissolution of the Company is permitted or required by this
Agreement or any nonwaivable provision of applicable law, the dissolution and winding up of the Company; 
 (j)
Contracts with Affiliates. Except as otherwise expressly permitted under this Agreement, the entry by the Company into any contract with, or the making of any payment to, any Member or any Affiliate of any Member and with respect to any such
contract, the making of any amendment, modification, waiver, termination, extension or rescission thereof; the declaration of any default thereunder or the exercise of any remedy thereunder; the institution, settlement or compromise of any claim
with respect thereto; the waiver of any rights of the Company against the other party(ies) thereto; or the consent to the assignment of any rights or the delegation of any duties by the other party(ies) thereto. The Members further acknowledge and
agree that, except as otherwise expressly permitted under this Agreement or as otherwise approved by the Management Committee, the fees paid in connection with any such contracts, payments, etc., made with or to any Member or any Affiliate thereof
shall in all events be 

  
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commensurate with fees negotiated at arm’s length and paid to independent third parties for providing similar services to projects similar in size, nature and location to the Project;

 (k) Cash Flow and Reserves. Subject to the provisions of Section 5.03, the
determination of any policies or procedures for making Cash Flow distributions by the Company including, without limitation, the establishment of any reserves with respect thereto; 

(l) Material Agreements. The execution by the Company of any material agreement in order to acquire, develop,
redevelop, renovate, operate, manage, maintain, market, lease, sell, transfer, convey, pledge or otherwise dispose of all or any portion of the Project or any other asset of the Company and any undertaking by the Company to implement the terms of
any such agreement, including the granting or withholding of approvals and consents thereunder, and any amendment or termination of any such material agreement (including, without limitation, the Property Management Agreement); 

(m) Consultants. The employment and engagement of any agents, brokers, appraisers, architects, contractors,
subcontractors, attorneys, accountants, bookkeepers, engineers, environmental consultants, real property and mortgage brokers and analysts, underwriters, escrow agents, depositories, agents for collection, banks, builders, building managers and
operators, marketing agents, property managers and any other service providers other than as permitted by the applicable Annual Business Plan or Operating Budget; 

(n) Legal Proceedings. The institution or defense of any legal proceedings (including arbitration) in the name of
the Company, the settlement of any such legal proceedings against the Company and the confession of any judgment against the Company, or any property thereof; 
 (o) Bankruptcy. Any of the following: (i) the filing of any voluntary petition in bankruptcy on behalf of the Company; (ii) the consenting to the filing of any involuntary petition and
bankruptcy against the Company; (iii) the filing on behalf of the Company of any petition seeking, or consenting to, the reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency; (iv) the
consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a substantial part of its property; (v) the making on behalf of the Company of any assignment for the benefit
of creditors; (vi) the admission in writing of the Company’s inability to pay its debts generally as they become due; or (vii) the taking of any action by the Company in furtherance of any such action; provided, however, that
such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; provided, further, however, that if ERES is removed as
Operating Member of the Company pursuant to Section 2.06 (and as a result no longer has a representative on the Management 

  
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Committee) and the then current mortgage lender for the Project fails or refuses to release any guaranty of ERES for which it would have liability upon the occurrence of one or more of the events
specified in clauses (i) - (vii) immediately above, then for so long as ERES remains a Member of the Company the approval of ERES shall continue to be required for the Company to take any such action specified in clauses (i) - (vii) immediately
above until such guaranty is released or such mortgage loan is paid in full; 
 (p) Insurance. The entry
into by the Company of any and all contracts of insurance for the Company that the Management Committee deems necessary or proper for the protection of the Company or the Project, either for the conservation of the Company’s assets or for any
purpose convenient or beneficial to the Company; 
 (q) Tax and Accounting Elections. Any and all tax or
accounting elections permitted or required to be made by the Company; 
 (r) Actions pertaining to Paladin
REIT Status. The undertaking of any action that deemed necessary, in the sole and but reasonable discretion of the Tax Matters Partner, to maintain the status of Paladin REIT as a REIT under the Code. 

(s) Transfers from Operating Account. The drawing of any single check on, or the making of any single transfer or
expenditure of funds from, the Operating Account in excess of $25,000, or drawing of any multiple number of checks on, or the making of any multiple number of transfers or expenditures of funds from, any Operating Account which collectively total
more than $25,000 to any one Person, unless (i) such single check or transfer, or multiple checks or transfers, are drawn or made, as the case may be, pursuant to the directive of the Management Committee as contained in the Operating Budget,
and the Operating Member has confirmed, for the benefit of the Company, that any such check or transfer is in proper order for payment or (ii) such single check or transfer, or multiple checks or transfers, are drawn or made, as the case may
be, for debt service payments related to existing financing for the Project which are hereby approved; and 
 (t)
Other Actions. Any and all other actions required or permitted to be taken by the Management Committee under this Agreement and any and all other actions relating to the business and affairs of the Company or necessary to carry out the
intentions and purposes of the Company. 
 The provisions of this Section 2.02 shall not be construed as exclusive
or so as to bar the Management Committee from delegating responsibility for any of the Management Committee’s management decisions to any Member, officer, or other representative or agent of the Company. The Members also acknowledge that
signatory authority for any of the foregoing items may be delegated by the Management Committee to any Member, officer, or other representative or agent of the Company. 

  
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	 	2.03	Operating Member 


(a) Designation of Operating Member. ERES is hereby designated as the “Operating Member” of the Company (the
“Operating Member”). ERES shall serve in such capacity unless and until ERES is removed by the Management Committee in accordance with the provisions of Section 2.06. Following any removal of ERES as the Operating
Member, the Person (who may be, but need not be, a Member of the Company) selected by the Management Committee in accordance with the provisions of Section 2.06 shall serve as the replacement Operating Member or manager of the Company.

 (b) Responsibilities of Operating Member. The Operating Member shall be responsible for implementing the decisions of
the Management Committee and for regularly reporting to the Management Committee as to the status of the business and affairs of the Company. The Operating Member also shall be responsible for (i) procuring any and all financing required for
the Project as approved by the Management Committee, (ii) supervising the management, leasing and operation of the Project in accordance with a Property Management Agreement approved by the Management Committee and entered into, by and between
the Company, as owner, and either the Property Manager or such other manager as may be designated by the Management Committee, as manager, (iii) undertaking such other matters as are determined by the Management Committee,
(iv) coordinating, supervising and otherwise overseeing any sale of the Project, (v) preparing and, as and when reasonably requested by the Management Committee, updating any applicable Annual Business Plan or Operating Budget for the
Company and the Project (provided, that, for the avoidance of any doubt, the foregoing provisions are not intended to permit the Operating Member to amend, modify or deviate from any of the foregoing documents, plans or budgets without the
prior consent of the Management Committee (except as otherwise expressly provided therein), (vi) advising the Management Committee on day-to-day matters affecting the business and affairs of the Company, (vii) diligently conducting the
day-to-day operations of the Company in accordance with the Annual Business Plan and Operating Budget, (viii) performing the duties assigned to such Member under this Agreement or by the Management Committee, and (ix) diligently
endeavoring to carry out all decisions and resolutions of the Management Committee. 
 (c) Authority of Operating Member.
The Operating Member shall at all times be subject to the direction and control of the Management Committee, and shall conform to the policies and procedures established and approved by the Management Committee in conformity with this Agreement, and
the scope of the Operating Member’s authority shall be limited solely to the matters set forth above in this Section 2.03. The Operating Member shall keep the Management Committee and the Members informed as to all matters of
concern to the Management Committee, the Company and the Members. The Operating Member shall not be authorized to bind the Company without the prior written approval of the Management Committee, except for matters delegated in writing to the
Operating Member by the Management Committee or any nonmaterial agreements, contracts or other documents or instruments affecting or relating to the day-to-day business and affairs of the Company provided that any such agreement, contract or
other 

  
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document is within the parameters established in the applicable Annual Business Plan or Operating Budget. 
 (d) Expenditures. The Operating Member shall have the authority to incur costs and expenditures and only the costs and expenditures set forth in an approved Operating Budget (subject to the ability
to apply line item cost savings; contingency line item amounts; budget variances, etc., if any, contained in such Operating Budget) without any further approval of the Management Committee (or the Members). 

(e) Paladin REIT Status. Paladin REIT is a REIT and owns (directly or indirectly) all of the interests in Paladin. The Operating
Member shall at all times conduct the business of the Company in a manner consistent with the approved Operating Budget, which Paladin shall approve only following its conclusion that the nature of the Company’s assets and gross revenues set
forth therein will permit Paladin REIT to maintain its status as a REIT under the Code and to avoid incurring any tax on prohibited transactions under Section 857(b)(6) of the Code and any tax on redetermined rents, redetermined deductions and
excess interest under Section 857(b)(7) of the Code, and to which Paladin may require reasonable modifications in order to reach or preserve such conclusion. 
 (f) Indemnification. The Operating Member shall indemnify and hold harmless the Company and the other Member(s), their Affiliates, subsidiaries, officers, directors, employees, partners, members,
shareholders, agents and representatives to the full extent permitted by law from and against any and all losses, claims, costs, damages and expenses (including attorneys’ fees) arising from or in connection with any act or failure to act of
the Operating Member which was not in good faith, within the scope of its authority, or in accordance with the directives of the Management Committee, and (ii) or constituted fraud, willful misconduct, gross negligence, or a Material Breach.

  

	 	2.04	Annual Business Plan 

 On or before October 31 of each Fiscal Year of the Company, commencing on October 31, 2011, the Operating Member shall submit a new annual business plan for the ensuing Fiscal Year for the
review and approval of the Management Committee (the initial and each new business plan, as approved, being the “Annual Business Plan”). Each Annual Business Plan shall include, without limitation: (i) a narrative description
of the proposed objectives and goals for the Company, which shall include for such Fiscal Year (without limitation), any proposed sale or refinancing of the Project; (ii) the status of the Project; (iii) a property management and leasing
plan for the Project for such Fiscal Year; and (iv) such other items as are requested by any representative of the Management Committee or as otherwise reasonably necessary to keep the Management Committee informed as to the business and
affairs of the Company and the Project. 
  

	 	2.05	Operating Budget 


Attached hereto as Exhibit C is the annual operating budget for the Company for the remainder of the 2011 Fiscal Year. On
October 31 of each Fiscal Year 

  
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of the Company commencing on October 31, 2011, the Operating Member shall submit a new annual operating budget for the Company for the ensuing Fiscal Year for the review and approval of the
Management Committee (the initial and each new annual operating budget, as approved, being the “Operating Budget”). Each Operating Budget shall set forth on a detailed itemized basis: (i) all receipts projected for the period
of such Operating Budget and all expenses, by category, for the Company (including, without limitation, all repairs and capital expenditures projected to be incurred during such period), (ii) the anticipated operating reserves and working
capital projected to be required for such period, (iii) a schedule setting forth the timing and amount of any Additional Contributions projected to be required by the Members for such Fiscal Year (or other period); and (iv) a five (5)-year
projection setting forth the estimated revenues, expenses and net operating income (or loss) expected to be incurred for the next five (5) years for the Company which shall be updated to compare the actual results to the projected results set
forth in the prior Operating Budget. The Operating Budget shall also include a detailed description of such other information, contracts, agreements and other matters reasonably necessary to inform the Management Committee of all matters relevant to
the ownership, operation, management, maintenance, leasing and sale of the Project (or any portion thereof) or as may be reasonably requested by any representative of the Management Committee. Except as otherwise expressly set forth herein, the
Operating Member shall only have the authority to incur the costs and expenditures set forth in an approved Operating Budget (subject to the ability to apply line item cost savings, contingency line item amounts, budget variances, etc., if any,
contained in such Operating Budget, as and if so permitted by the parameters of such Operating Budget), without any further approval of the Management Committee (or the Members). Except as otherwise provided within any Operating Budget, the
Operating Budget may not be increased without the prior approval of the Management Committee. 
  

	 	2.06	Removal of the Operating Member 

 (a) Upon Removal Event. Upon the occurrence of a Removal Event, the Management Committee shall have the right to remove ERES as the Operating Member of the Company by delivering written notice
(“Removal Notice”) thereof at any time following the occurrence of a Removal Event in accordance with the provisions of this Section 2.06. As used herein, the term “Removal Event” means the occurrence of
any of the Buy-Sell Events set forth in Section 7.01 with respect to which the Operating Member is the Defaulting Member (regardless of whether Paladin, as the Non-Defaulting Member, exercises any of its rights under Article 7 in
connection therewith). Any removal of ERES as the Operating Member shall be effective upon the Effective Date of the Removal Notice relating to any Removal Event (or such later time as may be provided in the Removal Notice). 

(b) Effect of Removal Upon Removal Event. If ERES is removed as the Operating Member of the Company pursuant to
Section 2.06(a), then (i) a Cash Flow Bonus Forfeiture Event shall exist for purposes of Sections 5.01(d) and 5.02(h), (ii) ERES shall retain the remaining portions of its Interest in the Company (unless Paladin
purchases such Interest as a result of the exercise of the Buy-Sell provisions set forth in Article 7), (iii) neither ERES nor its Affiliates shall be entitled to receive any further fees


  
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to which they would otherwise be entitled pursuant to Section 2.12; and (iv) the Management Committee may, in its sole and absolute discretion, designate any person or entity as
a replacement Operating Member or as a manager who shall fulfill the duties and obligations of the Operating Member, that may be (but need not be) a Member of the Company (including, without limitation, Paladin (or any Affiliate thereof). From and
after any such removal: (1) the replacement Operating Member (and not ERES or its Affiliates) shall be entitled to exercise all the rights, duties and obligations, and to receive any and all fees of the Operating Member under this Agreement,
(2) ERES shall have no further obligations under Sections 2.03, 2.04 or 2.05, and (3) ERES shall no longer have any right to appoint any representative to the Management Committee and any previously appointed representatives of ERES
shall be replaced by one (1) or more representatives to be appointed by the Management Committee. In the event there is a dispute as to whether a Removal Event occurred, then ERES shall cease to be the Operating Member and shall no longer have
any right to appoint any representative to the Management Committee, and, if it shall be later determined by a court of competent jurisdiction that a Removal Event did not occur, then ERES shall be deemed to have been terminated pursuant to
Section 2.06(c). 
 (c) Other Removal. For any reason, the Management Committee may elect (in its sole and
absolute discretion) at any time, without cause and for any or no reason, to remove ERES as the Operating Member and to designate any Person as a replacement Operating Member or as a manager who shall fulfill the duties and obligations of the
Operating Member, which election may be made by written notice to ERES not less than fifteen (15) days prior to the effective date of such removal, provided that, the Management Committee agrees to meet and confer with ERES during such
fifteen (15) day period, at the request of ERES, in connection with such removal. In such event, ERES (or its Affiliates, as applicable) shall: (i) have no further obligations under Sections 2.03, 2.04 or 2.05, and
(ii) otherwise retain its Interest in the Company, including its interests in the Net Income and Net Losses or similar items of, and to receive distributions from, the Company as provided in Articles 4 and 5 of this Agreement. If ERES is
removed as Operating Member pursuant to this Section 2.06(c), then (A) any such replacement Operating Member shall not receive any additional fees or “carried interest” or other profits interest in the Company unless such
interest is paid from Paladin’s Interest in the Company and (B) ERES may elect, by written notice to Paladin within thirty (30) days after the effective date of such removal, to require Paladin to purchase 100% of ERES’ Interests
in accordance with the procedures set forth in the last two sentences of Section 7.02, and in Section 7.03(a), (b) and (d) and Section 7.05, Section 7.06, Section 7.07,
Section 7.08 and Section 7.10 as if a ERES were a Defaulting Member as a result of one of the Buy-Sell Events referenced in Section 7.01(e)-(g) and ERES were the Selling Member and Paladin the Purchasing Member
under such provisions of this Agreement (but in such case the provisions of clause (iv) of Section 7.03(a) shall not apply). If ERES fails to make such election by written notice to Paladin at or before the end of such thirty
(30) day period, then ERES shall be deemed to have waived its rights under clause (B) immediately above. In addition, if ERES is removed as Operating Member pursuant to this Section 2.06(c), then Paladin shall use its
reasonable efforts to obtain written releases of ERES (and its Affiliates) from all guarantees of liabilities of the Company previously executed by ERES (and its 

  
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Affiliates). To the extent such releases cannot be obtained by Paladin, Paladin shall indemnify, defend, protect and hold ERES (and such Affiliates) wholly free and harmless from and against any
and all claims, liabilities, causes of action, liens, charges, and all other matters arising from such liabilities or guarantees, arising subsequent to the Effective Date of such removal. 

(d) Contracts. If ERES is removed as the Operating Member (whether pursuant to either Section 2.06(a) or
Section 2.06(c)), then Paladin (acting alone and outside of the Management Committee), on behalf of the Company, shall also have the right to terminate the right of ERES or its Affiliates to provide the services provided for in
Section 2.12 and to terminate any other agreement between the Company and ERES or any Affiliate of ERES (including, without limitation, the Property Management Agreement described in Section 2.12), without penalty. If ERES is
removed as the Operating Member pursuant to Section 2.06(c) and Paladin elects to terminate ERES’ (or its Affiliate’s) right to provide the services provided for in Section 2.12 or to terminate any contract between
the Company and ERES or an Affiliate of ERES, then the Company shall be obligated to engage a third party other than an Affiliate of Paladin to undertake the services previously provided by ERES or the Affiliate of ERES and which were terminated. If
ERES is removed as the Operating Member pursuant to Section 2.06(a) as a result of the occurrence of a Removal Event, then the Company may engage either an Affiliate of Paladin or a third party to complete the services that were being
provided under the terminated contract or other arrangement. 
  

	 	2.07	Liability and Indemnity 

 (a) Indemnification. Except as otherwise expressly provided in this Agreement, no Member, officer of the Company, representative on the Management Committee or other authorized representative of
the Company (each, an “Indemnified Party”) shall be liable or accountable in damages or otherwise to the Company or to the other Members for any error of judgment or any mistake of fact or law or for anything that such Indemnified
Party may do or refrain from doing hereafter, except in the case of fraud, willful misconduct or gross negligence in performing or failing to perform such Indemnified Party’s duties for the Company. To the maximum extent permitted by law, the
Company hereby indemnifies, defends, protects and agrees to hold each Indemnified Party wholly harmless from and against any and all loss, expense or damage suffered by such Indemnified Party by reason of anything which such Indemnified Party may do
or refrain from doing hereafter for and on behalf of the Company and in furtherance of its interest; provided, however, (i) no Indemnified Party shall be indemnified, defended, protected or held harmless from any loss, cost, expense or
damage which such Indemnified Party may suffer as a result of such Indemnified Party’s fraud, willful misconduct or gross negligence in performing or in failing to perform such Indemnified Party’s duties for the Company, and (ii) any
such indemnity shall be recoverable only from the assets of the Company. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Member (or representative thereof) otherwise existing at law or in equity,
are agreed by the Members to replace such duties and liabilities of such Member (or such representative). 

  
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 (b) No Third Party Beneficiaries. The provisions of this Section 2.07 are
for the benefit of the Indemnified Parties and shall not be deemed to create any rights for the benefit of any other Person. 

(c) Survival. The provisions of this Section 2.07 shall survive the termination of this Agreement. 

 

	 	2.08	Limited Liability 


Except as otherwise required hereunder or pursuant to any non-waivable provision of the Georgia Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Member of the Company. 
  

	 	2.09	Other Activities 


ERES, as the Operating Member, agrees to carry out the business and affairs of the Company in accordance with the terms and conditions of
this Agreement and shall devote all such time to the Company as is necessary for the efficient operation of the business and affairs of the Company. Except as otherwise provided in Section 2.11 of this Agreement or any Operating Budget,
or as otherwise approved by the Management Committee, the Operating Member shall not be paid any compensation by the Company for providing such services to the Company. No Member shall have any obligations (fiduciary or otherwise) with respect to
the Company or to the other Member insofar as making other investment opportunities available to the Company or to the other Members. Each Member may engage in whatever activity such Member may choose without having or incurring any obligation to
offer any interest in such activity to the Company or to the other Members. 
  

	 	2.10	Brokers Indemnity 


Each Member represents and warrants that it has not dealt with any broker or agent in connection with this Agreement or the relationship
contemplated hereby, and each Member hereby agrees to indemnify, defend, protect and hold the other Member and the Company wholly harmless from and against any and all liability, loss, cost, damage and expense (including without limitation,
attorneys’ fees and costs) which the other Member or the Company may suffer or incur by reason of any claim by any broker or agent for any compensation with respect to such indemnifying Member’s dealings in connection with this Agreement
or the transactions described herein. 
  

	 	2.11	Reimbursement; Compensation 


  
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 (a) Compensation. Except as otherwise expressly provided in this Agreement or as
provided in any applicable Operating Budget, no Member or any constituent partner, member, shareholder, officer, director, employee, agent, representative or Affiliate thereof shall receive any remuneration for services rendered to or in connection
with the Company or be reimbursed for general administrative and overhead expenses. 
 (b) Reimbursement of Expenses.
Notwithstanding the foregoing: (i) each Member shall be reimbursed from the initial contributions made by the Members pursuant to Section 3.01 for any and all costs (including legal fees) reasonably and actually incurred by such
Member in connection with the transactions contemplated herein (including the formation of the Company, and the negotiation and documentation of this Agreement), and (ii) each Member and its representatives shall be reimbursed for any
out-of-pocket travel and other costs and expenses reasonably and actually incurred in connection with the business and affairs of the Company, but such reimbursement shall not include any costs or charges for time expended by any Member’s
employees or other representatives or overhead costs of any Member. 
  

	 	2.12	Property Management 


Pegasus Residential, Inc. initially shall be the Property Manager of the Project and shall manage and operate the Project in accordance
with a Property Management Agreement between the Company and such Property Manager in the form approved by the Management Committee (the “Property Management Agreement”). The Property Management Agreement shall provide for
(i) an initial one year term with automatic one year renewals, (ii) termination by either the Company or the Property Manager for cause or upon a sale of the Project, and (iii) a management fee payable monthly, in arrears, to the
Property Manager with respect to the Project in an amount approved by the Management Committee. 
 ARTICLE 3 

MEMBERS’ CAPITAL CONTRIBUTIONS 
  

	 	3.01	Initial Contributions of the Members 

 (a) Initial Capital Contributions. Simultaneously with the execution of this Agreement, Paladin has contributed to the Company in cash its initial Capital Contribution as set forth on Exhibit
A hereto. ERES has contributed to the Company Class A Capital Contributions and Class B Capital Contributions as set forth on Exhibit A hereto. The initial Capital Contributions and current Capital Account balances of the Members are
identified on Exhibit A hereto. 
 (b) Credit to Capital Accounts. Any and all Capital Contributions made by
Paladin pursuant to this Section 3.01 and Sections 3.02 and 3.03 shall be credited to the Capital Account and Unrecovered Contribution Account of Paladin as of 

  
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the date any such Capital Contribution is made. The Class A Capital Contributions and any and all other Capital Contributions made by ERES pursuant to this Section 3.01 and
Sections 3.02 and 3.03 shall be credited to the Capital Account and Unrecovered Class A Contribution Account of ERES as of the date any such Capital Contribution is made. The Class B Capital Contributions of ERES shall be credited to the
Unrecovered Class B Contribution Account as of the date of this Agreement. 
  

	 	3.02	Additional Contributions 

 (a) Need for Contributions. Except as otherwise required by law or pursuant to this Section 3.02 or Section 3.03, no Member shall be required or permitted to make any
additional capital contributions to the Company. 
 (b) Required Additional Contributions. From time to time, the
Management Committee may require the Members to make Additional Contributions to the capital of the Company pursuant to this Section 3.02(b) in connection with the Project to fund Project Shortfalls by delivering written notice
(“Contribution Notice”) of such Additional Contribution to the Members, which Contribution Notice shall include a contribution date (“Contribution Date”) (which date shall not be less than fifteen (15) Business
Days following the Effective Date of such notice), upon which Contribution Date each Member shall be obligated to contribute to the capital of the Company its pro rata share of such Additional Contribution (measured by such Member’s
Contribution Percentage). 
  

	 	3.03	Remedy For Failure to Contribute Capital 

 (a) Failure to Contribute. If any Member (the “Non-Contributing Member”) fails timely to make all or any portion of any Additional Contribution such Member is required to
contribute pursuant to Section 3.02 (the “Delinquent Contribution”) and such failure continues for five (5) days following the Effective Date of notice thereof from the other Member, such other Member (the
“Contributing Member”), in addition to any and all other remedies available to the Contributing Member under this Agreement or otherwise at law or in equity (including, without limitation, instituting a legal proceeding to collect
the Delinquent Contribution), shall have the right, but not the obligation, to proceed in accordance with the terms and conditions set forth below in this Section 3.03 and, in addition, if ERES is the Non-Contributing Member, a Cash Flow
Bonus Forfeiture Event shall exist for purposes of Sections 5.01(d) and 5.02(h). 
 (b) Default Loan. The
Contributing Member may advance to the Company, in cash, within thirty (30) days following the Contribution Date, an amount equal to the Delinquent Contribution, and such advance by the Contributing Member shall be treated as a non-recourse
loan by the Contributing Member to the Non-Contributing Member (a “Member Loan”), bearing interest at a rate equal to the lesser of the then current prime rate as most recently reported by the Western Edition of the Wall Street
Journal, plus five percentage points, adjusted and compounded concurrently with any adjustments to such prime rate, or the maximum, nonusurious rate then permitted by applicable law for such loans. Each Member Loan shall be due and payable upon
the 

  
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earlier of six (6) months from the date such Member Loan is advanced or the dissolution of the Company. If Paladin is the Contributing Member, then both Members shall take all actions and
execute all documents (including a written promissory note evidencing the obligation of the Non-Contributing Member) necessary to ensure that the obligation meets the “straight debt safe harbor” described in Section 856(m) of the
Code. 
 As of the Effective Date of any advance of a Member Loan, the Non-Contributing Member shall be deemed to have
contributed an amount equal to the principal amount of such Member Loan to the capital of the Company, and the Capital Account and Unrecovered Contribution Account of Paladin (if Paladin is the Non-Contributing Member) or the Unrecovered
Class A Contribution Account of ERES (if ERES is the Non-Contributing Member), as applicable, shall be credited with a like amount. Notwithstanding the provisions of Articles 5 and 8, until any and all Member Loans are repaid in full,
the Non-Contributing Member shall draw no further distributions from the Company, and all cash or property otherwise distributable with respect to the Non-Contributing Member’s Interest (or fees payable to the Non-Contributing Member or any of
its Affiliates, excluding, however, any fees payable under Section 2.12) shall be distributed to the Contributing Member in repayment of the outstanding balance of the Member Loan, with such funds being applied first to reduce any and
all interest accrued on such Member Loan and then to reduce the principal amount thereof. Any amounts so applied shall be treated, for all purposes under this Agreement, as having actually been distributed to the Non-Contributing Member and applied
by the Non-Contributing Member to repay the outstanding Member Loan. 
 If, upon the maturity of a Member Loan (taking into
account any agreed upon extensions thereof), any principal thereof or accrued interest thereon remains outstanding, the Contributing Member shall elect one of the following options: (i) to renew such Member Loan (or portion thereof) pursuant to
the terms and provisions of this Section 3.03(b) for an additional term of six (6) months; (ii) to contribute all or any portion of such outstanding principal of and accrued, unpaid interest on such Member Loan (or portion
thereof) to the capital of the Company and dilute the Percentage Interest of the Non-Contributing Member in accordance with the provisions of Section 3.03(c); or (iii) elect to exercise the buy-sell provisions contained in
Article 7 in accordance with the provisions of Sections 3.03(c) and (d), in which event the Member Loan shall remain in effect until the closing of the buy-sell transaction contemplated under Article 7. The Contributing Member
may elect any of the options set forth in the immediately preceding sentence by giving written notice of such election to the Non-Contributing Member within thirty (30) days prior to such maturity date of the Member Loan. Failure of the
Contributing Member to timely give such written notice to the Non-Contributing Member shall be deemed to constitute an election to renew such Member Loan for an additional term of six (6) months on the terms set forth herein. 

(c) Dilution. The Contributing Member may contribute to the capital of the Company, in cash, within thirty (30) days
following the Contribution Date, an amount equal to the Delinquent Contribution, and the Capital Account and Unrecovered Contribution Account of the Contributing Member shall be credited with the amount so contributed. In the alternative, if the
Contributing Member elected to make a Member 

  
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Loan, then upon the maturity of a Member Loan that is not fully repaid on or before the maturity date thereof, the Contributing Member also may contribute to the capital of the Company, in
accordance with the provisions of Section 3.03(b) above, all or any portion of the outstanding principal of and accrued, unpaid interest on such Member Loan (or portion thereof) and (i) the amount of such outstanding principal and
interest so contributed shall be deemed repaid and satisfied, (ii) the amount of such outstanding principal and interest shall be deemed to have been distributed to the Non-Contributing Member, and debited from the Capital Account and
Unrecovered Contribution Account of the Non-Contributing Member, and (iii) the Capital Account and Unrecovered Contribution Account of the Paladin (if Paladin is the Contributing Member) or the Unrecovered Class A Contribution Account of
ERES (if ERES is the Contributing Member) shall be increased by the amount of such outstanding principal and interest so contributed. 
 Upon the contribution of any Delinquent Contribution (or the contribution of the principal and interest of any Member Loan by the Contributing Member pursuant to this Section 3.03(c)), the
Percentage Interest (but not the Contribution Percentage) of the Non-Contributing Member shall be decreased by the Dilution Percentage. The “Dilution Percentage” shall equal the amount expressed in percentage points (rounded to the
nearest one-hundredth of a percentage point) calculated based upon the following formula: 

  
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	 	  	Delinquent Contribution (or the outstanding balance of any
Member Loan (including interest)) contributed by the
Contributing Member
	Dilution Percentage = 200% x	  	  
  

		  	Aggregate amount of the balances standing in all of the Members’ respective Unrecovered Contribution Accounts (including the Additional Contribution contributed by the Contributing Member(s) and the
Delinquent Contribution or the outstanding balance of any Member Loan (including interest) contributed by the Contributing Member)

 The Percentage Interest, but not the Contribution Percentage, of the Contributing Member shall be
increased by the amount of the reduction in the Percentage Interest of the Non-Contributing Member. 
 The application of the
provisions of this Section 3.03(c) is illustrated by the following example: Assume that (i) the aggregate Unrecovered Contribution Accounts of the Members was equal to $4,000,000, (ii) an Additional Contribution of $200,000 was
required to be contributed by the Members to the capital of the Company, (iii) the Non-Contributing Member whose aggregate Percentage Interest is 48.27% failed to contribute its share of such contribution of $80,000 (i.e., 48.27% x $200,000),
and (iv) pursuant to this Section 3.03(c), the Contributing Member whose Percentage Interest is 51.73% made the Delinquent Contribution of $80,000 to the capital of the Company on behalf of such Non-Contributing Member pursuant to
this Section 3.03(c). 
 The Dilution Percentage applicable to the Non-Contributing Member would be equal to 3.81
percentage points as calculated in accordance with the following formula: 
  

							
		 		  	$     80,000	  	
		 	 3.81% = 200 %    x    
	  	$4,200,000	  	

 The Percentage Interest of the Non-Contributing Member therefore would be reduced by 3.81 percentage points from 48.27%
to 44.46%, and the Percentage Interest of the Contributing Member would be increased by a like amount of percentage points from 51.73% to 55.54%. 
 The Contribution Percentages of the Members would not be adjusted as a result of the foregoing dilution. 
 (d) Implementation of Buy-Sell. In addition to the options set forth in Sections 3.03(b) and 3.03(c) above, the Contributing Member may elect to implement the buy-sell provisions contained
in Article 7 for a Default Buy-Sell Event by delivery of written notice of such election to the Non-Contributing Member in accordance with the provisions thereof (and in which case the Non-Contributing Member shall be deemed to


  
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be the Defaulting Member and the Contributing Member shall be deemed to be the Non-Defaulting Member for purposes of Article 7); provided, however, that if the Contributing Member
so elects to implement the buy-sell provisions contained in Article 7 and the Contributing Member also exercises its rights under Section 3.03(c), then in computing the Dilution Percentage in Section 3.03(c) in connection
with the contribution of the Delinquent Contribution or any portion of the outstanding principal of and/or accrued, unpaid interest on any Member Loan that is the subject of the Default Buy-Sell Event, the 200% number used in the dilution formula in
Section 3.03(c) above shall be 100%. 
 (e) Application of Provisions. Any and all adjustments to the
Non-Contributing Member’s Percentage Interest shall be rounded to the nearest .01% and (except as provided otherwise in the first paragraph of Section 3.03(b)) the Contributing Member shall not succeed to all or any portion of the
Capital Account or Unrecovered Contribution Account of the Non-Contributing Member as the result of any such adjustment. In addition, notwithstanding any provision contained in this Article 3, the Non-Contributing Member’s Percentage
Interests shall in no event be reduced below .01% by operation of Section 3.03(d). As a result of any contribution to the capital of the Company pursuant to this Section 3.03, the Contributing Member shall have the right, but
not the obligation, to cause the Capital Accounts of the Members to be booked-up or booked-down in accordance with the provisions of Treasury Regulation Section l.704-l(b)(2)(iv)(f) to reflect the fair market value of the Company’s assets (as
reasonably determined by the Contributing Member) at the time of such contribution. 
  

	 	3.04	Debt Financing 


The Members acknowledge that the Management Committee may cause the Company to obtain debt financing from one or more third-party lenders
in order to fund all or any portion of any actual or projected financial requirements of the Company or in connection with other costs that may be incurred by the Company. Any such financing shall be obtained on the best available market rates and
terms, all as determined in the sole and absolute discretion of the Management Committee. In connection with obtaining any financing, it is expected that ERES and its Affiliates shall provide such repayment and “carve-out” guarantees that
are customarily requested, and on such terms and conditions as are customarily requested, by lenders with respect to similar projects of similar size, type and location. Paladin shall not be required to personally guarantee any financing obtained by
the Company. 
  

	 	3.05	Loans from Members 


The Management Committee may elect, in its discretion, to cause the Members to fund Project Shortfalls and other financial requirements of
the Company as loans to the Company in lieu of making Additional Contributions to the Company, on such terms and conditions as it shall determine from time to time. 
  

	 	3.06	Capital Contributions in General 


  
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 Except as otherwise expressly provided in this Agreement, (i) no part of the
contributions of any Member to the capital of the Company may be withdrawn by such Member, (ii) no Member shall be entitled to receive interest on such Member’s contributions to the capital of the Company, (iii) no Member shall have
the right to demand or receive property other than cash in return for such Member’s contributions to the Company, and (iv) no Member shall be required or be entitled to contribute additional capital to the Company other than as permitted
or required by this Article 3. 
 ARTICLE 4  

ALLOCATION OF PROFITS AND LOSSES 
  

	 	4.01	Allocation of Net Profits and Net Losses 

 (a) Net Profits. After application of Sections 4.02 and 4.03, Net Profits for each Fiscal Year shall be allocated among the Members in the following order and priority: 

(i) first, to the Members, in proportion to and to the extent of the amounts necessary to cause the cumulative allocations
of Net Profits to each Member under this Section 4.01(a)(i) for the current and all prior Fiscal Years to equal the cumulative allocations of Net Losses to such Member pursuant to Section 4.01(b)(iv) hereof; 

(ii) second, to the Members, in proportion to and to the extent of the amounts that would cause the balances of each of
the Members’ Capital Accounts (as of the last day of such Fiscal Year, but adjusted to reflect any Net Profits for such Fiscal Year allocated to such Member pursuant to Section 4.01(a)(i) and Section 4.02 and 4.03 hereof) to equal an
amount which, if distributed to such Members and added to all other actual distributions to the Members, would cause Paladin to receive a 15% IRR on all Capital Contributions made by Paladin and ERES to receive a 15% IRR on all Class A Capital
Contributions made by ERES; 
 (iii) third, to the Members, in proportion to and to the extent of the excess of
(A) the cumulative amounts distributed to each Member pursuant to Section 5.02(c) for the current and all prior Fiscal Years, over (B) the cumulative amounts allocated to each Member pursuant to this Section 4.01(a)(iii) for the
current and all prior Fiscal Years; 
 (iv) fourth, to ERES, until its Capital Account (as of the last day of
such Fiscal Year, but adjusted to reflect any Net Profits for such Fiscal Year allocated to ERES pursuant to Section 4.01(a)(i)-(iii) and Section 4.02 and 4.03 hereof) is equal to an amount which, if distributed to ERES and added to
all other actual distributions to ERES, would cause it to achieve a 15% IRR on all Class B Capital Contributions made by ERES; and 

  
 -21-









 (v) finally, subject to Section 4.03(b), 30% to Paladin, and 70%
to ERES. 
 For purposes of determining the amount of Net Profits to be allocated pursuant to Section 4.01(a)(ii) and (iii) for any
Fiscal Year, the Capital Account of each Member shall be increased by such Member’s share of “partnership minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(g)(1) of the Regulations, and
by such Member’s share of “partner nonrecourse debt minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(i)(5) of the Regulations. 

(b) Net Losses. After application of Sections 4.02 and 4.03, Net Losses for each Fiscal Year shall be allocated among the
Members in the following order and priority: 
 (i) first, to the Members in proportion to and to the extent of
the excess, if any, of (A) the cumulative Net Profits allocated to each Member pursuant to Section 4.01(a)(v) for all prior Fiscal Years, over (B) the cumulative distributions to such Member pursuant to
Section 5.02(e); 
 (ii) second, to ERES, in an amount equal to the excess, if any, of (A) the
cumulative Net Profits allocated to ERES pursuant to Section 4.01(a)(iv) for all prior Fiscal Years, over (B) the cumulative Net Losses allocated to ERES under this section 4.01(b)(ii) for all prior Fiscal Years; 

(iii) third, to the Members in proportion to and to the extent of their respective Capital Account balances; 

(iv) fourth, to the Members, in proportion to their Percentage Interests. 

For purposes of determining the amount of Net Losses to be allocated pursuant to Section 4.01(b)(ii) and (iii) for any Fiscal Year, the Capital
Account of each Member shall be increased by such Member’s share of “partnership minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(g)(1) of the Regulations, and by such Member’s
share of “partner nonrecourse debt minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(i)(5) of the Regulations. 
 (c) Net Loss Limitation. Notwithstanding anything in this Agreement to the contrary, no Member shall be allocated Net Losses under Section 4.01(b) to the extent such allocation would
cause or increase an Adjusted Capital Account deficit for such Member as of the last day of the Fiscal Year to which such allocation relates. Any amounts not allocated to a Member pursuant to the limitation set forth in the preceding sentence shall
be allocated to the other Members in proportion to and to the extent that such allocations would not cause them to have, or increase their, Adjusted Capital Account deficits. Any remaining Net Losses shall be allocated among the Members in
proportion to their then-current respective Percentage Interests. This provision is 

  
 -22-









 
intended to ensure that allocations of Net Losses have economic effect pursuant to Treas. Reg. §1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. 

 

	 	4.02	Regulatory Allocations 

 Prior to making any allocations pursuant to Sections 4.01 or 4.03 hereof, the following special allocations shall be made each Fiscal Year, to the extent required, in the following order:

 (a) Minimum Gain Chargebacks. Items of Company income and gain shall be allocated for any Fiscal Year
to the extent, and in an amount sufficient to satisfy the “minimum gain chargeback” requirements of Treasury Regulation Sections 1.704-2(f) and (i)(4). 

(b) Qualified Income Offset. Items of Company income and gain shall be allocated any Fiscal Year to the extent, and
in an amount sufficient to satisfy the “qualified income offset” requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(3). 
 (c) Member Nonrecourse Deductions. Member Nonrecourse Deductions shall be allocated to the Member who bears the economic risk of loss associated with such deductions, in accordance with Treasury
Regulations Section 1.704-2(i). 
 (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal
Year shall be allocated among the Members in accordance with their Percentage Interests. 
 (e)
Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) to be
taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and
such gain or loss shall be specially allocated to the Members in accordance with the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(m). 

(f) Curative Allocations. The allocations set forth in Section 4.01(c) and 4.02(a) through (e) (the
“Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulation Sections 1.704-1(b) and 1.704-2. The Regulatory Allocations may affect results which would be inconsistent with the manner in which
the Members intend to divide Company distributions. Accordingly, Paladin authorized to specially allocate items of income, gain, loss or deduction which otherwise would be included in the computation of Net Profits and Net Losses and other items
among the Members, to the extent that they exist, so that, to the extent possible, the cumulative net amount of allocations of 

  
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Company items under Sections 4.01, 4.02, and 4.03 hereof shall be equal to the net amount that would have been allocated to each Member if the Regulatory Allocations had not occurred.
Paladin will have discretion to accomplish this result in any reasonable manner that is consistent with Section 704 of the Code and the related Regulations. 
  

	 	4.03	Special Allocation 


(a) After giving effect to the allocations provided for in Section 4.02 hereof, items of gross income or gain shall be
specially allocated for each Fiscal Year to the Members in proportion to and to the extent of the excess of (A) the cumulative amounts distributed to each Member pursuant to Section 5.01 for the current and all prior Fiscal Years,
over (B) the cumulative amounts allocated to each Member pursuant to this Section 4.03(a) for all prior Fiscal Years; and 
 (b) Appropriate adjustments shall be made to the allocations provided for in Section 4.01 hereof if a Cash Flow Bonus Forfeiture Event has existed at any time during the life of the Company,
or if the Percentage Interests of the Members change pursuant to Section 3.03(c). 
  

	 	4.04	Other Allocation Rules 

 (a) Tax/Book Differences. In the event that any Company property has a book value which differs from the adjusted tax basis of such property, then allocations with respect to such property for
income tax purposes shall be made in a manner which takes into consideration differences between such book value and such adjusted tax basis in accordance with Section 704(c) of the Code, the Treasury Regulations promulgated thereunder and
Treasury Regulation Section 1.704-1(b)(2)(iv)(f)(4). Such allocations for income tax purposes shall be made using the traditional method or such other method as may be agreed to by the Members. Such tax allocations shall neither affect, nor in
any way be taken into account in computing, any Member’s Capital Account or share of Net Profits, Net Losses, other items, or distributions pursuant to any provision of this Agreement. 

(b) Variations in Interests During any Fiscal Year. For purposes of determining the Net Profits, Net Losses, or any other items
allocable to any period, Net Profits, Net Losses, and any such other items shall be determined on a daily, monthly, interim closing of the books or other basis, as determined by the Management Committee using any permissible method under
Section 706 of the Code and the regulations promulgated thereunder. 
 (c) Allocations of Items. Any allocation to a
Member of Net Profit or Net Loss shall be treated as an allocation to such Member of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Profit or Net Loss. Unless otherwise specified herein to
the contrary, any allocation to a Member of items of Company income, gain, loss, deduction or credit (or item thereof) shall be 

  
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treated as an allocation of a pro rata portion of each item of Company income, gain, loss, deduction or credit (or item thereof). 

ARTICLE 5  
 DISTRIBUTIONS 
  

	 	5.01	Distribution of Ordinary Cash Flow 

 Subject to the provisions of Sections 5.03, 7.04 and 8.02, Ordinary Cash Flow realized by the Company shall be distributed to the Members as soon as practicable following the Company’s receipt
thereof in the following order of priority: 
 (a) First, to Paladin until Paladin’s Unpaid Preferred Return
has been reduced to zero; 
 (b) Second, to ERES until ERES’ Unpaid Preferred Return has been reduced to
zero; and 
 (c) Thereafter, to the Members in accordance with their respective Percentage Interests. 

 

	 	5.02	Distribution of Extraordinary Cash Flow 

 Subject to the provisions of Sections 5.03, 7.04 and 8.02, Extraordinary Cash Flow realized by the Company shall be distributed to the Members as soon as practicable following the Company’s
receipt thereof in the following order of priority: 
 (a) First, to the Members pro rata in accordance with
their respective Class A Distribution Percentages until Paladin’s Unrecovered Contribution Account has been reduced to zero and ERES’ Unrecovered Class A Contribution Account has been reduced to zero; 

(b) Second, to the Members pro rata in accordance with their respective Class A Distribution Percentages, until
(i) Paladin has received aggregate distributions pursuant to Section 5.01 and this Section 5.02 which would produce a 15% IRR to Paladin on all Capital Contributions made by Paladin and (ii) ERES has received
aggregate distributions pursuant to Section 5.01 and this Section 5.02 which would produce a 15% IRR to ERES on all Class A Capital Contributions made by ERES; 

(c) Third, to the Members pro rata in accordance with their respective Class A Distribution Percentages until the
Unpaid Yield Maintenance Amount has been reduced to zero; 
 (d) Third, to ERES until ERES’ Unrecovered
Class B Contribution Account has been reduced to zero and ERES has received aggregate distributions pursuant to Section 5.01 and this Section 5.02 which would produce a 15% IRR to ERES on all Class B Capital Contributions
made by ERES; and 

  
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 (e) Thereafter, thirty percent (30%) to Paladin and seventy percent
(70%) to ERES, or if a Cash Flow Bonus Forfeiture Event exists, to the Members pro rata in accordance with their respective Percentage Interests. 
  

	 	5.03	Limitations on Distributions 

 Notwithstanding any other provision contained in this Agreement, the Company shall not make a distribution of Cash Flow (or other proceeds) to any Member if such distribution would violate any applicable
provision of the Georgia Act or other applicable law. 
  

	 	5.04	In-Kind Distribution 

 Assets of the Company (other than cash) shall not be distributed in kind to the Members without the prior written approval of the Members. 

 

	 	5.05	Right to Withhold 


The Management Committee, on behalf of the Company, shall withhold from any distribution such amounts as are required to be withheld by
the laws of any taxing jurisdiction (as determined in the sole and absolute discretion of the Management Committee). In addition, the Management Committee, on behalf of the Company shall withhold from any distribution to any Member any amounts for
which such Member (or any Affiliate thereof) may be liable or responsible to the Company, and shall apply such withheld amount to such liability or responsibility. All amounts so withheld shall be treated as amounts distributed to the respective
Member(s) on whose account the withholding was imposed. 
 ARTICLE 6  

RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS 

 

	 	6.01	Limitations on Transfer 

 Except as permitted pursuant to Section 6.02 below, no Member or assignee of a Member shall be entitled to sell, exchange, assign, transfer, convey or otherwise dispose of, pledge,
hypothecate, encumber or otherwise grant a security interest in, directly or indirectly, for value or no value, whether voluntary or involuntary (including by operation of law or other legal or equitable proceedings) (collectively,
“Transfer”), all or any part of such Member’s or assignee’s Interest, including, without limitation, Transfers of any economic interest, without the prior written consent of the other Members, which consent may be granted
or withheld in each such other Member’s sole discretion. Any attempted Transfer, or withdrawal by a Member in violation of the restrictions set forth in this Article 6 shall, unless this provision is waived by the other Members (each
acting in its sole and absolute discretion), be null and void ab initio and of no force or effect and, in addition to the other rights and remedies at law and in equity, any of the other Members shall be entitled to injunctive relief enjoining the
prohibited 

  
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action. The Members expressly agree that damages at law would be an inadequate remedy for a breach or threatened breach of the Transfer restrictions set forth in this Agreement. 

 

	 	6.02	Permitted Transfers 


Notwithstanding the foregoing, any Member may Transfer all or any portion of such Member’s Interest to any of the following
(collectively, “Permitted Transferees”) without complying with the provisions of Section 6.01: 
 (a) In the case of Transfers by Paladin, (i) any Transfer of any direct or indirect Interest in Paladin to any Affiliate of Paladin and (ii) any Transfer of a direct or indirect interest in
Paladin Realty Income Properties, L.P. or the Paladin REIT to any Person; and 
 (b) In the case of Transfers by
ERES, any Transfer of an interest in ERES to any Immediate Family Member of any individual member of ERES upon the death or disability of such member. 
 Upon receipt by the Management Committee of notice of such Transfer (along with a copy of the instrument(s) of transfer), any such Permitted Transferees shall receive and hold such Interest or portion
thereof, subject to the terms of this Agreement (including Article 4) and to the obligations hereunder of the transferor, and there shall be no further Transfer of such Interest (or economic interest) or portion thereof except to a Person to
whom such Permitted Transferee could have transferred such Interest (or economic interest) or portion thereof in accordance with this Section 6.02 had such Permitted Transferee originally been a Member or otherwise in accordance with the
terms of this Agreement. Notwithstanding any other provision contained herein, any Transfer described in this Section 6.02 shall be null and void ab initio and of no force or effect if such Transfer would otherwise violate the provisions
of Section 6.04. 
  

	 	6.03	Admission of Substitute Members 

 If any Member Transfers such Member’s Interest to a transferee in accordance with Sections 6.01 or 6.02, then such transferee shall only be entitled to be admitted into the Company as a
substitute Member if (i) the books and records of the Company are amended to reflect such admission; (ii) the Management Committee approves the admission of such transferee (but only in the event of a transfer in accordance with
Section 6.01) and approves the form and content of the instrument of transfer; (iii) the transferor and transferee named therein execute and acknowledge such other instruments as the Management Committee may deem reasonably
necessary to effectuate such admission; (iv) the transferee in writing accepts and adopts all of the terms and conditions of this Agreement, as the same may have been amended; and (v) the transferor pays, as the Management Committee may
reasonably determine, all reasonable expenses incurred in connection with such admission, including, without limitation, legal fees and costs. In the event of a Transfer in part of a Member’s Interest under Section 


  
 -27-









 
6.02 and the admission of the transferee into the Company as a member, such transferee member shall be required to act together as one Person with the Person(s) holding the remainder of the
entire Interest as of the date of this Agreement from whence such transferee member’s interest originally derived. To the fullest extent permitted by law, any transferee of an Interest who does not become a substituted Member shall have no
right to require any information or account of the Company’s transactions, to inspect the Company books, or to vote on any of the matters as to which a Member would be entitled to vote under this Agreement. Any such transferee shall only be
entitled to share, as an assignee, in such Net Profits and Net Losses, to receive such distributions, and to receive such allocations of income, gain, loss, deduction or credit or similar items to which the transferor was entitled, to the extent
assigned. A Member that Transfers its Interest shall not cease to be a member of the Company until the admission of the transferee as a substituted member of the Company and, except as provided in the preceding sentence, shall continue to be
entitled to exercise, and shall continue to be subject to, all of the rights, duties and obligations of such Member under this Agreement. 
  

	 	6.04	Additional Restrictions on Transfer 

 Notwithstanding any other provision contained herein, unless the Management Committee waives any applicable restriction set forth in this Section 6.04, any Transfer described in this
Article 6 shall be null and void ab initio and of no force or effect if: (i) such Transfer requires the registration of such Interest pursuant to, or otherwise directly or indirectly violates, any applicable federal or state securities
laws; (ii) such transfer causes or will cause the Company to become a “Publicly Traded Partnership” as such term is defined in Section 7704(b) of the Code; (iii) such Transfer results in a violation of applicable laws;
(iv) such Transfer would, in the opinion of the Company’s counsel, cause the Company to cease to be classified as a partnership for state and federal income tax purposes; (v) such Transfer is made to any Person lacking the legal power
or capacity to own any Interest; or (vi) such Transfer causes an acceleration of any loan or debt instrument to which the Company is a party. 
  

	 	6.05	Election; Allocations Between Transferor and Transferee 

 Upon the Transfer of the Interest of any Member or the distribution of any property of the Company to a Member, the Company may file, with the approval of the Management Committee, in its sole and
absolute discretion, an election in accordance with applicable Treasury Regulations, to cause the basis of the Company property to be adjusted for federal income tax purposes as provided by Sections 734 and 743 of the Code. 

 

	 	6.06	Partition 

 No
Member shall have the right to partition any assets of the Company or any interest therein, nor shall a Member make an application or proceeding for a partition thereto and, upon any breach of the provisions of this Section 6.07 by any
Member, the other Member (in addition to all rights and remedies afforded by law or equity) shall be entitled to a decree or order restraining or enjoining such application, action or 

  
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proceeding. Upon the Transfer of all or any part of the Interest of a Member as hereinabove provided, Net Profits and Net Losses shall be allocated between the transferor and transferee on the
basis of the computation method which with the approval of the Management Committee, in its sole and absolute discretion, is in the best interests of the Company, provided such method is in conformity with the methods prescribed by Section 706
of the Code and Treasury Regulation Section 1.706-1(c)(2)(ii). 
  

	 	6.07	Waiver of Withdrawal 

 No Member may voluntarily withdraw, resign or retire from the Company without the prior written consent of the Members, which consent may be granted or withheld in each such Member’s sole and
absolute discretion. Each Member hereby waives any and all rights such Member may have to withdraw or resign from the Company pursuant to the Georgia Act or otherwise and hereby waives any and all rights such Member may have to receive the fair
value of such Member’s Interest in the Company upon such withdrawal, resignation or retirement pursuant to the Georgia Act. No admission or withdrawal of a Member, whether in accordance with this Agreement or otherwise, shall cause the
dissolution of the Company except as otherwise provided in Section 8.01. Any purported admission, withdrawal or removal which is not in accordance with this Agreement shall be null and void and, in addition to other rights and remedies
at law and in equity, the other Member(s) shall be entitled to injunctive relief enjoining the prohibited action. The Members expressly acknowledge that damages at law would be an inadequate remedy for a breach or threatened breach of the foregoing
restrictions. 
 ARTICLE 7  
 DEFAULT BUY-SELL AGREEMENT 
  

	 	7.01	Default Buy-Sell Events 

 For purposes of this Article 7, the following shall constitute “Default Buy-Sell Events”: 
 (a) Prohibited Withdrawal or Retirement. The withdrawal, retirement, or other cessation to serve as a Member of the Company by any Member in violation of the terms of this Agreement; 

(b) Default by the Operating Member. The fraud, willful misconduct, gross negligence or Material Breach (which
shall include the notice and cure provisions to the extent provided in the definition of Material Breach) by the Operating Member (or its representatives) in performing or failing to perform the Operating Member’s duties and obligations under
this Agreement; 

  
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 (c) Prohibited Transfer or Encumbrance. Any Transfer or encumbrance
or attempted Transfer or encumbrance by any Member of such Member’s Interest contrary to the provisions of Article 6; 
 (d) Breach of Agreement. Any Material Breach (which shall include the notice and cure provisions to the extent provided in the definition of Material Breach) by any Member (except for the failure
of any Member to make an Additional Contribution required hereunder); 
 (e) Bankruptcy or Insolvency. The
rendering, by a court with appropriate jurisdiction, of a decree or order (i) adjudging a Member bankrupt or insolvent; or (ii) approving as properly filed a petition seeking reorganization, readjustment, arrangement, composition, or
similar relief for a Member under the federal bankruptcy laws or any other similar applicable law or practice, and if such decree or order referred to in this Section 7.01(e) shall have continued undischarged and unstayed for a period of
sixty (60) days; 
 (f) Appointment of Receiver. The rendering, by a court with appropriate
jurisdiction, of a decree or order (i) for the appointment of a receiver, a liquidator, or a trustee or assignee in bankruptcy or insolvency of a Member, or for the winding up and liquidation of a Member’s affairs, provided that such
decree or order shall have remained in force undischarged and unstayed for a period of ninety (90) days, or (ii) for the sequestration or attachment of any property of a Member without its return to the possession of such Member or its
release from such sequestration or attachment within ninety (90) days thereafter; and 
 (g) Bankruptcy
Proceedings. A Member (i) institutes proceedings to be adjudicated a voluntary bankrupt or an insolvent, (ii) consents to the filing of a bankruptcy proceeding against such Member, (iii) is unable to or admits in writing such
Member’s inability to pay such Member’s debts generally as they become due, or (iv) files a petition or answer or consent seeking reorganization, readjustment, arrangement, composition, or similar relief for such Member under the
federal bankruptcy laws or any other similar applicable law or practice, (iv) consents to the filing of any such petition, or to the appointment of a receiver, a liquidator, or a trustee or assignee in bankruptcy or insolvency for such Member
or a substantial part of such Member’s property, (v) makes an assignment for the benefit of such Member’s creditors, or (vi) takes any action in furtherance of any of the aforesaid purposes. 

For the purposes of implementing the provisions contained in this Article 7 and otherwise for purposes of this Agreement,
(A) each of the events set forth in Sections 7.01(a)-(g) shall constitute a “Default Buy-Sell Event”; (B) the “Defaulting Member” shall be (i) in the case of the occurrence of the event
referenced in Section 7.01(a), the Member that has withdrawn, retired or ceased to serve as a Member of the Company in violation of the terms of this Agreement; (ii) in the case of the occurrence of the event referenced in
Section 7.01(b), the Operating Member; (iii) in the case of the 

  
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occurrence of the event referenced in Section 7.01(c), the Member that purports to undertake a Transfer of such Member’s rights or interests contrary to the provisions of
Article 6; (iv) in the case of the occurrence of the event referenced in Section 7.01(d), the Member that has breached any material covenant, duty or obligation under this Agreement; and (v) in the case of any of the
events referenced in Section 7.01(e), (f), or (g), the Member who is the subject of such court decree or order or has instituted such proceedings or filed such petitions or who is insolvent, etc; and (C) the “Non-Defaulting
Member” is the Member that is not the Defaulting Member. 
  

	 	7.02	Rights Arising From a Default Buy-Sell Event 

 At any time following the occurrence of a Default Buy-Sell Event, the Non-Defaulting Member shall have the right (but shall not be obligated to) either to (i) cause the sale of the Company or its
assets to any unaffiliated third party for a purchase price based upon the sole and absolute judgment of the Non-Defaulting Member (“Third-Party Purchase Price,” as further set forth in Section 7.03(c)), and such other terms
and conditions as are determined in the sole discretion of the Non-Defaulting Member or (ii) purchase the Interest of the Defaulting Member in accordance with the terms and conditions set forth in this Article 7, in either case, by
delivering written notice (“Default Notice”) thereof to the Defaulting Member, or (iii) exercise any other rights or remedies available to the Non-Defaulting Member under this Agreement or at law or in equity as a result of
such Default Buy-Sell Event; provided, however, that the failure of the Non-Defaulting Member to exercise any of the foregoing rights shall not be deemed to constitute a waiver of any Default Buy-Sell Event or any rights and remedies (and the
provisions of Section 7.09 shall apply to the Defaulting Member). For a period of fifteen (15) days following the Effective Date of any Default Notice, the Members shall attempt to agree upon a purchase price for the Defaulting
Member’s Interest (the “Buyout Purchase Price”) in the event the Non-Defaulting Member desires to purchase the Interest of the Defaulting Member. If the Members are unable to agree on a Buyout Purchase Price, then the Default
Purchase Price shall be determined in accordance with the provisions of Section 7.03(a) based on the Appraised Value as determined pursuant to Section 7.03(b). 

 

	 	7.03	Determination of Purchase Price 

 (a) Member Buyout. Within thirty (30) days after the determination of the Buyout Purchase Price or, in the absence thereof, the determination of the Appraised Value of the Company pursuant to
Section 7.03(b), the accountants regularly employed by the Company shall determine the amount of cash which would be distributed to each Member pursuant to Section 5.02 if (i) the Company (including all of its assets)
were sold (as applicable) for the Buyout Purchase Price or Appraised Value thereof (as applicable) as of the Effective Date of the Default Notice (after deducting therefrom an amount equal to reasonable and customary closing costs); (ii) the
remaining liabilities of the Company were liquidated pursuant to Section 8.02(a); (iii) reasonable reserves were established for any contingent, conditional or unmatured liabilities or obligations of the Company


  
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pursuant to Section 8.02(b); (iv) if (and only if) the Defaulting Member is ERES, a Cash Flow Bonus Forfeiture Event existed for purposes of Sections 5.01(d) and 5.02(h);
and (v) the Company distributed any remaining amounts to the Members in accordance with the provisions of Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a notice
thereof (the “Price Determination Notice”). The determination by the accountants of such amounts, including all components thereof, shall be deemed conclusive absent any material computational error. If the Non-Defaulting Member
purchases the Interest of the Defaulting Member, ninety percent (90%) of the amount that would be distributed to the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for
purposes of this Article 7; provided, however, that if the Buy-Sell Event applicable to the Defaulting Member is not one of the Buy-Sell Events referenced in Sections 7.01(a), (b), (c) or (d), then one hundred percent
(100%) of the amount that would be distributed to the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7. 

(b) Determination of Appraised Value. For purposes of this Article 7 and Section 6.05, the appraised value
(“Appraised Value”) of the assets of the Company shall be determined by one (1) or more independent Qualified Appraisers. The Non-Defaulting Member shall select one (1) Qualified Appraiser and shall include such selection
in the Default Notice. Within fifteen (15) days following the Effective Date of the Default Notice, the Defaulting Member shall either agree to the Qualified Appraiser selected by the Non-Defaulting Member or select a second
(2nd) Qualified Appraiser and give written notice to the Non-Defaulting Member of the person so selected. If either the Non-Defaulting Member or the Defaulting Member fails to appoint a Qualified Appraiser within the time period specified and
after the expiration of five (5) days following the Effective Date of written demand that a Qualified Appraiser be appointed, the Qualified Appraiser duly appointed by the Member making such demand to appoint such Qualified Appraiser shall
proceed to make the appraisal as herein set forth, and the determination thereof shall be conclusive on all the Members. 
 (1) The Qualified Appraiser or two (2) Qualified Appraisers, as the case may be, shall promptly fix a time for the completion of the appraisal, which shall not be later than thirty (30) days
from the Effective Date of the appointment of the last Qualified Appraiser. 
 (2) The Qualified Appraiser(s)
shall determine the Appraised Value by determining the fair market value of the assets of the Company, such being the fairest price estimated in the terms of money which the Company could obtain if the assets of the Company were sold, for all cash,
in the open market allowing a reasonable time to find a purchaser. 
 (3) Upon submission of the appraisals
setting forth the opinions as to the Appraised Value of the assets of the Company, the average of the two (2) appraisals shall constitute the Appraised Value of the assets of the Company for purposes of this Article 7. 

  
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 (c) Sale to Third Party. Within ten (10) days after the closing of any sale of
the Company or its assets to any third party pursuant to clause (i) of Section 7.02, the accountants regularly employed by the Company shall determine the amount of cash which would be distributed to each Member pursuant to
Section 5.02 after (i) the sale of the Company (including all of its assets) to the third party for the Third-Party Purchase Price as of the closing of the sale of the Company or its assets (after deducting therefrom an amount equal
to reasonable and customary closing costs and any prepayment fees on any indebtedness that would be payable in connection with any such sale); (ii) the liquidation of the remaining liabilities of the Company pursuant to
Section 8.02(a); (iii) the establishment of reserves in an amount reasonably determined by the Non-Defaulting Member for any contingent, conditional or unmatured liabilities or obligations of the Company pursuant to
Section 8.02(b); (iv) if ERES is the Defaulting Member, the existence of a Cash Flow Bonus Forfeiture Event for purposes of Sections 5.01(d) and 5.02(h); and (v) the distribution by the Company of any remaining amounts
to the Members in accordance with the provisions of Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a Price Determination Notice thereof. The determination by the
accountants of such amounts, including all components thereof, shall be deemed conclusive absent any material computational error. In the event of any such third party sale, ninety percent (90%) of the amount that would be distributed to the
Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7. 

(d) Payment of Costs. The Non-Defaulting Member shall pay for the services of the Qualified Appraiser
appointed by such Member, and the Defaulting Member shall pay for the services of the Qualified Appraiser appointed by such Member. The cost of the services of the third (3rd) Qualified Appraiser, if any, shall be paid one-half ( 1/2) by the Non-Defaulting Member and one-half ( 1/2) by the Defaulting Member. The costs of the services of the
accountants and, in the event only one (1) Qualified Appraiser is required, the cost of the services of such Qualified Appraiser, shall be paid one-half
( 1/2) by the Non-Defaulting Member and one-half ( 1/2) by the Defaulting Member.

  

	 	7.04	Member’s Option 

 For a period of ninety (90) days following the determination of the Default Purchase Price pursuant to Section 7.03(a), the Non-Defaulting Member shall have the right, but not the
obligation, to (i) purchase the entire Defaulting Member’s Interest for the Default Purchase Price thereof (as determined pursuant to Section 7.03(a)), and on the terms and conditions set forth in this Article 7,
(ii) elect to sell the Company or cause the Company to sell its assets to a third party in accordance with the provisions set forth above in this Article 7 or (iii) waive the right to purchase the Defaulting Member’s Interest
or cause such third party sale with respect to the particular Default Buy-Sell Event, in each case by delivering written notice thereof to the Defaulting Member within such thirty (30)-day period. The failure of the Non-Defaulting Member to timely
give any such written notice pursuant to this Section 7.04 shall be deemed an election by such Member to waive such rights with respect to the particular Buy-Sell Event that resulted in the implementation of the provisions of this
Article 7. If the Non-Defaulting Member 

  
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elects to sell the Company or cause the Company to sell its assets to a third party in accordance with the provisions set forth above in this Article 7, then, in lieu of electing to
purchase the Defaulting Member’s Interest, at the Non-Defaulting Member’s option, the Non-Defaulting Member may cause the sale to such third party to occur. If the Non-Defaulting Member causes the sale to such third party to occur, then,
notwithstanding the provisions of Articles 5 and 8 (and any other provision contained in this Agreement), the aggregate amount of Cash Flow to be distributed to the Defaulting Member from such sale shall be equal to the Default
Purchase Price for the Defaulting Member’s Interest determined in accordance with the provisions of Section 7.03(c) and the balance of such proceeds shall be distributed to the Non-Defaulting Member. 

 

	 	7.05	Closing of Purchase and Sale 

 The closing of any purchase and sale of the Interest of any Member selling its Interest (the “Selling Member”) pursuant to this Article 7 shall be held at the principal office of
the Member that is purchasing the Interest of the Selling Member (the “Purchasing Member”) Member (or its counsel) on or before the forty-fifth (45th) day after the expiration of the applicable thirty (30)-day period set forth
in Section 7.04 (if applicable), or, if earlier, the forty-fifth (45th) day after the Effective Date of the Default Notice or Buy-Sell Notice, as applicable). The Selling Member shall transfer to the Purchasing Member (or such
Member’s nominee(s)) the entire Interest of the Selling Member free and clear of all liens, security interests, and competing claims and shall deliver to the Purchasing Member (or such Member’s nominee(s)) such instruments of transfer and
such evidence of due authorization, execution, and delivery, and of the absence of any such liens, security interests, or competing claims as such Purchasing Member (or such Member’s nominee(s)) shall reasonably request. 

 

	 	7.06	Payment of Purchase Price 

 The Purchase Price for the purchase of the Selling Member’s Interest shall be paid by the Purchasing Member (or such Member’s nominee(s)) at the closing, in cash or one (1) or more
certified or bank cashier’s checks drawn and made payable to the order of the Selling Member. If the Company or its assets are sold to a third party pursuant to this Article 7, then the entire Third Party Purchase Price shall be paid
concurrently with such closing. 
  

	 	7.07	Release and Indemnity 

 On or before the closing of a purchase held pursuant to this Article 7, the Purchasing Member shall use such Member’s reasonable efforts to obtain written releases of the Selling Member (and
such Member’s Affiliates) from all liabilities of the Company and from all guarantees of such liabilities of the Company previously executed by the Selling Member (and its Affiliates). To the extent such releases cannot be obtained by the
Purchasing Member, the Purchasing Member shall indemnify, defend, protect and hold the Selling Member (and such Affiliates) wholly free and harmless from and against any and all claims, liabilities, causes of action, liens, charges, and all other
matters arising 

  
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from such liabilities or guarantees, arising subsequent to the Effective Date of such closing. 
  

	 	7.08	Repayment of Member Loans 

 The Purchase Price to be paid by the Purchasing Member for the Interest of the Selling Member shall be offset at the closing of such purchase by the then outstanding principal balance (together with all
accrued, unpaid interest thereon) of any and all (i) Member Loans made by the Purchasing Member to the Selling Member and (ii) loans or advances of funds made by the Company to the Selling Member (each a “Seller Loan”).
Such Member Loans and Seller Loans (together with all accrued, unpaid interest thereon) shall be deemed paid to the extent of such offset, with such deemed payment to be applied first to the accrued interest thereon and thereafter to the payment of
the outstanding principal amount thereof. If the Purchase Price for the Defaulting Member’s Interest is insufficient to fully offset the then unpaid principal balance of any and all Member Loans and Seller Loans (together with all accrued,
unpaid interest thereon), then the portion of any such Member Loans and Seller Loans (and accrued, unpaid interest thereon) that remains outstanding following such offset shall be due and payable in full at the closing of the purchase of the Selling
Member’s Interest pursuant to this Article 7. Also, notwithstanding any other provision contained in this Agreement, the unpaid principal balance of any and all Member Loans and Seller Loans (together with all accrued, unpaid interest
thereon) shall be due and payable in full at the closing of the purchase of the Selling Member’s Interest pursuant to this Article 7. 
  

	 	7.09	Voting Rights Following Default Buy-Sell Event 

 From and after the occurrence of a Default Buy-Sell Event (unless and until the Non-Defaulting Member waives in writing any Default Buy-Sell Event or fails to timely consummate the closing of any
applicable transaction described in this Article 7 pursuant to Section 7.05), (i) the Defaulting Member shall not be entitled to participate in the management of, or otherwise vote upon, any matter affecting the business and
affairs of, the Company or any matter that such Member is entitled to vote upon under this Agreement, (ii) the Defaulting Member shall no longer have any right to appoint any representative to the Management Committee and any previously
appointed representatives of the Defaulting Member shall be replaced by one (1) or more representatives to be appointed by the Non-Defaulting Member, and (iii) the rights of the Defaulting Member shall be limited solely to those of an
assignee. 
  

	 	7.10	Withdrawal of the Selling Member 

 If the Interest of the Selling Member is purchased by the Purchasing Member pursuant to this Article 7, then, effective as of the closing for such purchase, (i) the Selling Member shall
withdraw as a Member of the Company, and (ii) if the Selling Member is ERES, then ERES shall be automatically removed as the Operating Member of the Company. In connection with any such withdrawal of the Selling Member, the Purchasing Member
may cause any nominee designated in the sole and absolute 

  
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discretion of the Purchasing Member to be admitted as a substitute partner of the Company. 
 ARTICLE 8  
 DISSOLUTION AND WINDING UP OF THE COMPANY

  

	 	8.01	Events Causing Dissolution of the Company 

 Upon any Member’s bankruptcy, retirement, resignation, expulsion or other cessation to serve, or the admission or substitution of a new Member, the Company shall not be dissolved but its business
shall continue without interruption or break in continuity. Upon the bankruptcy, retirement, resignation, expulsion or other cessation to serve of any Member, the other Member shall continue to serve as a Member of the Company in accordance with the
provisions of this Agreement. The Company shall be dissolved upon the first to occur of: (a) the expiration of the term of the Company, unless such term has been extended by the unanimous agreement of the Members; (b) the sale, transfer or
other disposition by the Company of all or substantially all of its assets and the collection by the Company of its distributive share of any and all cash proceeds delivered therefrom; or (c) the affirmative election of the Management Committee
to dissolve the Company. Except as may be permitted in accordance with this Section 8.01 or other terms of this Agreement, no Member shall have the right to, and each Member hereby agrees that it shall not, seek to dissolve or cause the
dissolution of the Company or seek to cause a partial or whole distribution or sale of Company assets whether by court action or otherwise, it being agreed that any actual or attempted dissolution, distribution or sale would cause a substantial
hardship to the Company and the remaining Members. 
  

	 	8.02	Winding Up of the Company 

 Upon the Liquidation of the Company caused by other than the termination of the Company under Section 708(b)(1)(B) of the Code (in which latter case the Company shall remain in existence in
accordance with the provisions of such Section of the Code), the Members shall proceed to the winding up of the affairs of the Company. During such winding up process, the Net Profits, Net Losses and Cash Flow distributions shall continue to be
shared by the Members in accordance with this Agreement. The assets shall be liquidated as promptly as consistent with obtaining a fair value therefor, and the proceeds therefrom, to the extent available, shall be applied and distributed by the
Company on or before the end of the taxable year of such Liquidation or, if later, within ninety (90) days after such Liquidation, in the following order: (a) first, to creditors of the Company (including Members who are creditors), in the
order of priority as provided by law, (b) second, to the setting up of any reasonable reserves which the Management Committee deems reasonably necessary for any contingent, conditional or unmatured liabilities or obligations of the Company
(which shall be distributed as soon as reasonably practicable to the Members in proportion to their respective positive Capital Account balances), and (c) thereafter, to the Members in accordance with Section 5.02 hereof.

  

	 	8.03	No Negative Capital Account Restoration 


  
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 No Member shall have any obligation whatsoever upon the Liquidation of such Member’s
Interest, the Liquidation of the Company or in any other event, to contribute all or any portion of any negative balance standing in such Member’s Capital Account to the Company, to any other Member or to any other Person. 

ARTICLE 9 

BOOKS AND RECORDS;  
 ACCOUNTING; TAX ELECTIONS 
  

	 	9.01	Company Books 

 The
Operating Member shall cause to be kept, at the principal office of the Company, or at such other location as the Management Committee shall reasonably deem appropriate, full and proper ledgers, other books of account, and records of all receipts
and disbursements, other financial activities, and the internal affairs of the Company for at least the current and past four (4) Fiscal Years. 
  

	 	9.02	Delivery of Records; Inspection 

 The Operating Member, subject to such reasonable standards as may be established from time to time by the Management Committee, shall deliver to any Member (or, to the extent so directed, to its agent or
attorney) a copy of the following information at any time if requested in writing: 
 (a) Financial
Reports. True and full information regarding the status of the business and financial condition of the Company (including, without limitation, the annual financial reports and all supporting calculations and information for such reports),
including (without limitation,) the information required by Section 9.03(c); 
 (b) Tax
Returns. Promptly after becoming available, copies of the Company’s federal, state and local income or information tax returns for the year; 
 (c) Names and Addresses. A current list of the name and last known-business, residence or mailing address of each Member and the date on which each became a Member; 

(d) Formation Documents. A copy of this Agreement, as amended, and any other formation documents for the Company,
together with executed copies of any written powers of attorney pursuant to which this Agreement, as amended, and any other formation documents have been executed; and 

(e) Contribution Information. True and full information regarding the amount of cash and a description and
statement of the agreed value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future. 

  
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 Any Member (personally or through an authorized representative) may, for any purpose
reasonably related to such Member’s Interest, inspect and copy (at its own cost and expense) the books and records of the Company at all reasonable business hours. 

 

	 	9.03	Reports and Tax Information 

 (a) General. The Operating Member shall cause to be prepared, at the cost and expense of the Company, and delivered to each Member at such times as are determined by the Management Committee (or
otherwise in accordance with the terms of this Agreement), the Annual Business Plans, the Operating Budgets, any and all periodic operating reports, and any and all other financial statements or reports requested from time to time by any
representative of the Management Committee. In addition, the Operating Member shall cause to be prepared, at the cost and expense of the Company, and delivered to each Member, within ninety (90) days after the end of each tax year, the
information necessary for such Member to complete its federal, state and local income tax or information returns. 
 (b) Tax
Returns. The Operating Member shall cause to be prepared by a reputable accounting firm approved by the Management Committee and delivered to each Member, within ninety (90) days from and after the final day of each tax year, the
Company’s federal, state and local income or information tax returns for the year, as well as any additional information necessary for such Member to complete its federal, state and local income tax or information returns. In addition, upon the
request of any Member, the Operating Member shall prepare estimates of the projected federal, state and local taxable income of the Company, and the portion thereof allocable to each Member, within a reasonable time period specified by the Member
prior to the end of each tax year. 
 (c) Periodic Financial Statements. The Operating Member shall furnish quarterly
financial statements, including a balance sheet, income statement, statement of Members’ capital, statement of cash flows and notes thereon, that are prepared on a historical cost basis in accordance with generally accepted accounting
principles within fifteen (15) calendar days following the close of a given quarter. 
 (d) Audited Financial
Statements. If required by Paladin, the Operating Member shall prepare, at the expense of the Company, and furnish the following information to each Member within sixty (60) calendar days after the end of each Fiscal Year (with a final
reviewable draft thereof to be furnished to each Member within forty-five (45) days after the end of each Fiscal Year): (i) an audited balance sheet of the Company dated as of the end of such Fiscal Year, (ii) an audited related
income statement of the Company for such Fiscal Year, (iii) an audited statement of cash flows for such Fiscal Year, (iv) an audited statement of each Member’s Capital Account for such Fiscal Year, and (v) notes thereon, prepared
on a historical cost basis in accordance with generally accepted accounting principles, all of which shall be certified by the Operating Member as being, to the best of its knowledge, true and correct and all of which shall be certified in the
customary manner by a reputable accounting firm 

  
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approved by the Management Committee (which firm shall provide such balance sheet, income statement and statement of Capital Account in draft form within forty (40) calendar days after the
end of each Fiscal Year, to the Members for review prior to finalization and certification thereof). 
 (e) Securities
Exchange Act. The Operating Member acknowledges that the financial statements of the Company will be consolidated with those of the Paladin REIT and that the Paladin REIT is subject to the reporting requirements of the Securities Exchange Act of
1934, as amended. The Operating Member shall permit the officers, agents and representatives of the Paladin REIT (including its attorneys and accountants) to have unfettered access to such financial and other information for the Company at such
times as such officer, agent or representatives may reasonably request to enable the Paladin REIT to obtain the information required in order to timely comply with such reporting requirements. The Operating Member, at its expense, shall employ, or
contract with, such individuals and implement such accounting practices and procedures as are necessary for the provision of a reasonably professional level of accounting, reporting and internal controls for the Company, including (without
limitation) the provision of the following: (i) documentation of property level and corporate accounting and financial reporting policies and procedures; (ii) documentation of Information Technology (IT) policies and procedures, and
disaster recovery plan; (iii) “sign off” by ERES’ property, accounting and supervisory/review personnel after their preparation, review and/or approval of accounting transactions and workpapers, and (iv) preparation of
written variance analysis of significant accounts quarterly and year-to-date, as compared to the prior year period. In addition, the Operating Member shall institute such additional reasonable internal accounting controls as may be requested
by the Paladin REIT, including, without limitation, those which are necessitated for compliance with the Sarbanes-Oxley Act of 2002, as amended. 
  

	 	9.04	Company Tax Elections; Tax Controversies 

 The Management Committee shall have the right in its sole and absolute discretion to make elections for the Company provided for in the Code including, without limitation, the elections provided for in
Section 754 of the Code. Additionally, the Management Committee shall have the right to seek to revoke any such election (including without limitation, any election under Section 754 of the Code) upon the Management Committee’s
determination that such revocation is in the best interests of the Company or its Members. Paladin is hereby designated as the “Tax Matters Partner” pursuant to the requirements of Section 6231(a)(7) of the Code, and in such capacity
shall represent the Company in any disputes, controversies or proceedings with the Internal Revenue Service. 
  

	 	9.05	Accounting and Fiscal Year 

 Subject to Section 448 of the Code, the books of the Company shall be kept on such method of accounting for tax and financial reporting purposes as may be determined by the Management Committee. The
Fiscal Year of the Company shall be the calendar year. 

  
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	 	9.06	Confidentiality of Information 

 Each party hereto agrees that the provisions of this Agreement, all understandings, agreements and other arrangements between and among the parties, and all other non-public information received from or
otherwise relating to the Company, shall be confidential and shall not be disclosed or otherwise released to any other person or entity (other than another party hereto) without the written consent of the Management Committee. Notwithstanding the
foregoing, confidential information may be disclosed by a party if such party is required to do so: (i) by operation of law, rule or regulation; (ii) pursuant to applicable legal process; (iii) by the commercial lenders to the
Company; (iv) by the title insurer to the Company or Project lender; (v) to any proposed transferee of an Interest; or (vi) to prosecute any claim or defend any action between the Members relating to the Company, without the written
consent of the Management Committee. Accordingly, each party hereto shall, and shall cause its agents and attorneys to, hold in confidence all such information. 
 ARTICLE 10  
 MISCELLANEOUS 

 

	 	10.01	Subscription Agreement 

 As a condition to its admission to the Company, each Member may be required by the Management Committee to execute a subscription agreement in a form satisfactory to the Management Committee, which
subscription agreement shall contain certain representations made by each such Member. 
  

	 	10.02	Investment Interest; Nature of Investment 

 Each Member hereby represents and warrants to the Company and to each other Member that such Member is acquiring its Interest in the Company for its own account and not with a view to, or for resale in
connection with, any distribution thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws. Such Member possesses experience and sophistication as an investor
adequate for the evaluation of the merits and risks of such Member’s investment in the Company, has investigated the Company and its business, and the Company has made available to such Member all information necessary for such Member to make
an informed decision to acquire an Interest in the Company. Such Member also understands that its Company Interest may not be transferred absent compliance with the registration requirements of the Securities Act and applicable state securities laws
or pursuant to an exemption therefrom and otherwise in compliance with the terms of this Agreement. Each Member understands the meaning and consequences of the representations, warranties and covenants made by such Member set forth herein and that
the Company has relied upon such representations, warranties and covenants. Each Member hereby indemnifies, defends, protects and holds wholly free and harmless the Company from and against any and all losses, damages, expenses or liabilities
arising out of the breach or inaccuracy of any such representation, warranty or covenant. All 

  
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representations, warranties and covenants contained herein shall survive the execution of this Agreement, the formation of the Company, and the liquidation of the Company. 

 

	 	10.03	Appointment of Attorney-in-Fact 

 Each of the Members by its execution of this Agreement, irrevocably constitutes and appoints any Member(s), agent or other representative as is designated by the Management Committee as such Member’s
true and lawful attorney-in-fact with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to carry out
the provisions of this Agreement including, without limitation: 
 (a) Formation Documents. All formation
documents and other instruments (including counterparts of this Agreement), and all amendments thereto, which the Management Committee deems appropriate to form, qualify, continue or otherwise operate the Company as a limited liability company, in
the jurisdictions in which the Company may conduct business. 
 (b) Amendments. All amendments to this
Agreement adopted in accordance with the terms of this Agreement, and all instruments which the Management Committee deems appropriate to reflect a change or modification of the Company in accordance with the terms of this Agreement. 

(c) Conveyance Documents. All conveyances of Company assets in accordance with the terms of this Agreement, and
other instruments which the Management Committee reasonably deems necessary in order to complete a dissolution and liquidation of the Company in accordance with the terms of this Agreement. 

The foregoing appointment shall be deemed to be a power coupled with an interest, in recognition that each of the Members under this
Agreement will be relying upon the power of the Management Committee to act as contemplated by this Agreement in any filing and other action by it on behalf of the Company, shall survive the bankruptcy or other incapacity of any Member hereby giving
such power, and the transfer or assignment of all or any portion of the Interest of such Member in the Company, and shall not be affected by the subsequent bankruptcy or other incapacity of such Member. If any Member assigns all or any portion of
its Interest in the Company, then the foregoing power of attorney shall survive such assignment. 
  

	 	10.04	Waiver of Conflict of Interest 

 The Company and each Member are not represented by separate counsel; provided, however, in connection with the formation of the Company and the drafting and negotiation of this Agreement,
(i) Paladin (and not the Company or ERES) has been represented separately by King & Spalding LLP and (ii) ERES (and not the Company or Paladin) has been represented separately by Brick Gentry, P.C. The attorneys, accountants and
other experts who perform services for any Member may also perform 

  
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services for the Company. To the extent that the foregoing representation constitutes a conflict of interest, the Company and each Member hereby expressly waive any such conflict of interest.

  

	 	10.05	Amendment 

 The
written consent of each Member shall be required to amend any provision of this Agreement, which consent may be given, withheld or made subject to such conditions as are determined by each such Member in such Member’s sole and absolute
discretion. No provision of this Agreement may be amended except in a writing signed by all Members and expressly stating (i) that it is an amendment of this Agreement and (ii) the provisions of this Agreement being amended and how it is
being amended. Notwithstanding the foregoing provisions of this Section 10.05 to the contrary, this Agreement may be amended by Paladin, by executing an instrument of amendment and giving each Member notice thereof, without the consent
of any of the other Members, to effect or implement actions approved by the Management Committee if the Operating Member fails to take action to effect or implement such actions. 

 

	 	10.06	No Assignments; Binding Effect 

 This Agreement shall not be assigned or otherwise transferred (by operation of law or otherwise) by any Member except as is otherwise permitted hereby. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and assigns permitted in accordance with this Agreement and the Georgia Act. 

 

	 	10.07	Further Assurances 


Each of the parties hereto hereby covenants and agrees on behalf of itself, its successors, and its assigns, without further
consideration, to prepare, execute, acknowledge, verify, file, record, publish and deliver such other instruments, documents and statements, and to take such other action as may be required by law or reasonably necessary to effectively carry out the
purposes of this Agreement. 
  

	 	10.08	Notices 

 Any
notice, approval, consent, payment, demand or communication required or permitted to be given to any Member under this Agreement shall be in writing and shall be deemed to have been duly given or made as of the date (the “Effective
Date”) set forth below: (i) if delivered personally by courier or otherwise, then as of the date delivered or if delivery is refused, then as of the date presented; (ii) if sent or mailed by Federal Express, Express Mail, or other
nationally recognized overnight mail service which maintains evidence of delivery and receipt, to the Company at its principal office and to each Member at its address appearing in the current records of the Company, then as of the date received;
(iii) if sent or mailed by certified U.S. Mail, return receipt requested, to the Company at its principal office and to each Member at its address appearing in the current records of the Company, then as of the third Business Day after


  
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the date so mailed; or (iv) if sent by facsimile to the Company at its facsimile telephone number or to any Member at its facsimile telephone appearing in the current records of the Company,
then either (A) as of the date on which the appropriate electronic confirmation of receipt is received by the sending party at or before 5:00 p.m. (receiver’s time) on any Business Day, or (B) as of the next Business Day if the time
of the appropriate electronic confirmation of receipt is received by the sending party after 5:00 p.m. (receiver’s time). Notices to each Member shall be addressed as follows (which address(es) may be changed by the Member from time to time by
written notice to the Members). 
  

			
	 To Paladin:
	  	c/o Paladin Realty Partners, LLC
		  	10880 Wilshire Boulevard, Suite 1400
		  	Los Angeles, California 90024
		  	Attention: William K. Dunbar
		  	Fax: (310) 996-8708
		  	Telephone: (310) 996-8754
		
		  	King & Spalding LLP
		  	1185 Avenue of the Americas
		  	New York, New York 10036
		  	Attention: Timothy N. Tucker, Esq.
		  	Fax: (212) 556-2236
		  	Telephone: (212) 556-2222
		
	 To ERES:
	  	 c/o Evergreen Residential, Inc.
 519 Harrison Avenue, Suite 512

		  	Boston, MA USA 02118
		  	Attention: Charles M. Thompson
		  	Telephone: 617-216-1908
		  	Fax: 617-812-5815
		
	 With a copies to:
	  	Northview Realty Group, Inc.
		  	550 Sherbrook, Suite 1480
		  	Montreal QC Canada H3A 1B9
		  	Attention: Doug Reim
		  	Telephone: (514)904-0124
		  	Fax: (514)987-9500
		
		  	and
		
		  	Brick Gentry, P.C.
		  	6701 Westown Parkway, Suite 100
		  	West Des Moines, Iowa 50266
		  	Attention: Amy S. Beattie, Esq.
		  	Telephone: (515)274-1450
		  	Fax: (515)274-1488


  
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	 	10.09	Waivers 

 No waiver
by any Member of any default with respect to any provision, condition or requirement hereof shall be deemed to be a waiver of any other provision, condition or requirement hereof; nor shall any delay or omission of any Member to exercise any right
hereunder in any manner impair the exercise of any such right accruing to it hereafter. 
  

	 	10.10	Preservation of Intent 

 If any provision of this Agreement is determined by an arbitrator or any court having jurisdiction to be illegal or in conflict with any laws of any state or jurisdiction, then the Members agree that such
provision shall be modified to the extent legally possible so that the intent of this Agreement may be legally carried out. If any one (1) or more of the provisions contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect or for any reason, then the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Members’ rights and privileges shall be enforceable to the fullest extent permitted by law. 
  

	 	10.11	Entire Agreement 


This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereto and fully supersedes
any and all prior or contemporaneous agreements or understandings between the parties thereto pertaining to the subject matter hereof. 
  

	 	10.12	Certain Rules of Construction 

 Any ambiguities shall be resolved without reference to which party may have drafted this Agreement. All Article or Section titles or other captions in this Agreement are for convenience only, and they
shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting
term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles; (iii) “or” is not exclusive; (iv) words in the singular include the plural, and words in the plural include
the singular; (v) provisions apply to successive events and transactions; (vi) “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other
subdivision; (vii) all references to “clauses,” “Sections” or “Articles” refer to clauses, Sections or Articles of this Agreement; and (viii) any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms. 

  
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	 	10.13	Counterparts 

 This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one (1) and the same instrument. 

 

	 	10.14	Governing Law 


This Agreement, including its existence, validity, construction, and operating effect, and the rights of each of the Members hereto, shall
be governed by and construed in accordance with the laws of the State of Georgia without regard to any otherwise governing principles of conflicts of law. 
  

	 	10.15	Assurances 

 Each
of the Members shall hereafter execute and deliver such further instruments and do such further acts and things as may be reasonably required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the terms
hereof. 
  

	 	10.16	Time is of the Essence 

 Time is of the essence hereof in connection with all obligations of the parties hereunder. 
  

	 	10.17	Other Matters 

 If
any proceeding is brought by any Member or the Company against any other Member or the Company that arises out of, or is connected with, this Agreement, then the prevailing party in such proceeding shall be entitled to recover reasonable
attorneys’ fees and costs. Any agreement to pay any amount and any assumption of liability herein contained, express or implied, shall be only for the benefit of the Members and their respective successors and assigns, and such agreements and
assumptions shall not inure to the benefit of the obligees of any indebtedness or any other party, whomsoever, deemed to be a third-party beneficiary of this Agreement. 

 

	 	10.18	No Dissenters’ Rights 

 No Member shall have any of the rights to dissent set forth in Article 10 of the Georgia Act. 
  

	 	10.19	Ownership of ERES 


ERES represents and warrants that ERES is a limited liability company duly organized under the laws of the State of Louisiana and
Exhibit D sets forth the following information with respect to the ownership and structure of ERES and each Person that owns any direct or indirect interest therein: 

  
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 (a) The name, type and percentage ownership interest of each such Person;
and 
 (b) The name of each officer, if any, and the title thereof, in any corporate entity, the name of each
partner in any partnership entity, and the name of each member and the name of each manager in any limited liability company. 

ERES represents that there are no commitments, options, warrants or rights of any kind which evidence a right to acquire or receive any
ownership interest in ERES. 
 ARTICLE 11  
 DEFINITIONS 
  

	 	11.01	Additional Contribution 

 The term “Additional Contribution” means any and all additional contributions approved in writing by the Management Committee and made by any Member to the capital of the Company pursuant
to Section 3.02. 
  

	 	11.02	Additional Member 


The term “Additional Member” means any Person that has been admitted to the Company as a Member pursuant to this
Agreement by virtue of such Person receiving its Interest in the Company from the Company and not from another Member or an assignee. 
  

	 	11.03	Adjusted Capital Account 

 The term “Adjusted Capital Account” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account (a) increased for any amount which the
Member is deemed to be obligated to restore with respect to any negative balance in the Member’s Capital Account pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or pursuant to the penultimate sentence of Treasury Regulation
Section 1.704-2(g)(1) or 1.704-2(i)(5); and (b) decreased by any items described in Treasury Regulation Sections 1.704-1(b)(2)(d)(4), (5) or (6). 
  

	 	11.04	Affiliate 

 The
term “Affiliate” means, with reference to a specified Person, any other Person that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified
Person. As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities of that Person, by
contract, relationship or otherwise) and 

  
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includes, in any event, the ownership of twenty-five percent (25%) or more of the outstanding voting interests of such Person. 

 

	 	11.05	Agreement 

 The
term “Agreement” means this Operating Agreement of Evergreen at Coursey Place, LLC, as it may be further amended. 
  

	 	11.06	Annual Business Plan 

 The term “Annual Business Plan” is defined in Section 2.04. 
  

	 	11.07	Appraised Value 


The term “Appraised Value” is defined in Section 7.03(b). 

 

	 	11.08	Business Day 

 The
term “Business Day” means any weekday excluding any legal holiday observed pursuant to United States federal law or California state law or regulation. 

 

	 	11.09	Buyout Purchase Price 

 The term “Buyout Purchase Price” is defined in Section 7.02. 
  

	 	11.10	Buy-Sell Notice 


The term “Buy-Sell Notice” is defined in Section 7.02. 

 

	 	11.11	Capital Account 


The term “Capital Account” means with respect to each Member the amount of money contributed by such Member to the
capital of the Company, increased by the aggregate Gross Asset Value at the time of contribution (as determined by the Members) of all property contributed by such Member to the capital of the Company (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), the aggregate amount of all Net Profits allocated to such Member, and any and all items of gross income or gain specially allocated
to such Member pursuant to Sections 4.02 and 4.03, and decreased by the amount of money distributed to such Member by the Company (exclusive of any guaranteed payment within the meaning of Section 707(c) of the Code paid to such
Member), the aggregate fair market value at the time of distribution (as determined by the Members) of all property distributed to such Member by the Company (net of liabilities secured by such distributed property that such Member is considered to
assume or take subject to under Section 752 of the Code), the amount of any Net Losses charged to such Member, and any items of loss or deduction specially allocated to such Member pursuant


  
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to Sections 4.02 and 4.03. The provisions hereof governing the maintenance of Capital Accounts are intended to satisfy the requirements of Treasury Regulation
Section 1.704-1(b)(2)(iv) and shall be interpreted and applied in a manner consistent therewith. 
  

	 	11.12	Capital Contribution 

 The term “Capital Contribution” means (i) with respect to Paladin, the aggregate amount of any and all amounts credited to Paladin’s Unrecovered Contribution Account in
accordance with the terms of this Agreement and (ii) with respect to ERES, the aggregate amount of any and all amounts credited to ERES’ Unrecovered Class A Contribution Account and Unrecovered Class B Contribution Account in
accordance with the terms of this Agreement. 
  

	 	11.13	Capital Event 

 The
term “Capital Event” means and includes: (i) any transaction involving the sale, exchange or other disposition of the Project or the Company (but excluding any incidental sales or exchanges of tangible personal property and
fixtures), (ii) any financing, refinancing or borrowing secured by the Project or the Company, and (iii) any condemnation or recovery of damage awards and property insurance proceeds (excluding proceeds from any rent or business
interruption insurance). 
  

	 	11.14	Cash Flow 

 The
term “Cash Flow” means the sum of any and all Ordinary Cash Flow and Extraordinary Cash Flow. 
  

	 	11.15	Cash Flow Bonus Forfeiture Event 

 The term “Cash Flow Bonus Forfeiture Event” shall mean any of the following: (i) the failure of ERES to make all or any portion of any Additional Contribution ERES is required to
contribute pursuant to Section 3.02, (ii) the removal of ERES as Operating Member pursuant to Section 2.06(a) or (iii) the existence of Default Buy-Sell Event and ERES is the Defaulting Member. 

 

	 	11.16	Class A Capital Contribution 

 The term “Class A Capital Contribution” means with respect to ERES, the aggregate amount of any and all amounts credited to ERES’ Unrecovered Class A Contribution Account in
accordance with the terms of this Agreement. Any Class A Capital Contributions made at any time during throughout the term hereof shall be deemed made on the date contributed. 

 

	 	11.17	Class B Capital Contribution 


  
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 The term “Class B Capital Contribution” means with respect to ERES, the
aggregate amount of any and all amounts credited to such Member’s Class B Unrecovered Contribution Account in accordance with the terms of this Agreement. The Class B Capital Contributions shall be deemed made on the date of this Agreement.

  

	 	11.18	Class A Distribution Percentage 

 The term “Class A Distribution Percentage” means, at any given time, an amount expressed in percentage points (rounded to the nearest one-hundredth of a percentage point) equal to
(i) with respect to Paladin, the aggregate amount of Capital Contributions that have been made by Paladin to the Company divided by the total of the aggregate amount of Capital Contributions that have been made by Paladin to the Company, plus
the aggregate amount of Class A Capital Contributions that have been made by ERES to the Company, and (ii) with respect to ERES, the aggregate amount of Class A Capital Contributions that have been made by ERES to the Company divided
by the total of the aggregate amount of Capital Contributions that have been made by Paladin to the Company, plus the aggregate amount of Class A Capital Contributions that have been made by ERES to the Company. 

 

	 	11.19	Code 

 The term
“Code” means the Internal Revenue Code of 1986, as heretofore and hereafter amended from time to time (or any corresponding provision of any superseding revenue law). 

 

	 	11.20	Company 

 The term
“Company” means the limited liability company governed by this Agreement and created upon the filing of the Certificate of Formation with the Georgia Secretary of State in accordance with the provisions of the Georgia Act, which
limited liability company is referenced in the first paragraph of this Agreement. 
  

	 	11.21	Company Minimum Gain 

 The term “Company Minimum Gain” has the meaning set forth in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase “partnership minimum gain.” 

 

	 	11.22	Contributing Member 


The term “Contributing Member” is defined in Section 3.03(a). 

 

	 	11.23	Contribution Date 


The term “Contribution Date” is defined in Section 3.02(b). 

 

	 	11.24	Contribution Notice 


  
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 The term “Contribution Notice” is defined in Section 3.02(b).

  

	 	11.25	Contribution Percentage 

 The term “Contribution Percentage” means, with respect to each Member, the percentage set forth opposite such Member’s name on Exhibit A attached hereto under the column
labeled “Contribution Percentage.” 
  

	 	11.26	Default Buy-Sell Event 

 The term “Default Buy-Sell Event” is defined in Section 7.01. 
  

	 	11.27	Default Notice 


The term “Default Notice” is defined in Section 7.02. 

 

	 	11.28	Defaulting Member 


The term “Defaulting Member” is defined in Section 7.01. 

 

	 	11.29	Default Purchase Price 

 The term “Default Purchase Price” is defined in Section 7.03(a). 
  

	 	11.30	Delinquent Contribution 

 The term “Delinquent Contribution” is defined in Section 3.03(a). 
  

	 	11.31	Dilution Percentage 


The term “Dilution Percentage” is defined in Section 3.03(c). 

 

	 	11.32	Effective Date 


The term “Effective Date” is defined in Section 10.08. 

 

	 	11.33	Emergency Situations 

 The term “Emergency Situations” means any emergency affecting the safety of persons, or which is likely to result in substantial injury, damage or financial loss to the Project or
Company. 
  

	 	11.34	ERES  

 The term
“ERES” means ERES Coursey LLC, a Louisiana limited liability company. 

  
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	 	11.35	Extraordinary Cash Flow 

 The term “Extraordinary Cash Flow” means the cash proceeds (including, without limitation, any insurance proceeds, recoveries, damages and awards, but excluding the proceeds of any rent
insurance or business interruption insurance) realized by the Company, directly or indirectly, as a result of the occurrence of a Capital Event, plus cash interest payments received with respect to such proceeds, decreased by the sum of
(i) the amount of such proceeds applied by the Company to pay debts and liabilities of the Company which are then due and payable (inclusive of any guaranteed payment within the meaning of Section 707(c) of the Code paid to any Member);
(ii) the amount of such proceeds used, set aside or committed by the Company or required to be used by any secured lender for the Project for restoration and repair of any property in the event of damage or destruction to the Project;
(iii) any incidental or ancillary expenses, costs or liabilities incurred by the Company in effecting or obtaining any such Capital Event, or the proceeds thereof (including, without limitation, attorneys’ fees, expert witness’ fees,
accountants’ fees, court costs, recording fees, transfer taxes and fees, appraisal costs and the like) all of which expenses, costs and liabilities shall be paid from the gross amount of such cash proceeds to the extent thereof; (iv) the
payment of such other Company debts and liabilities as are determined in the reasonable discretion of the Management Committee; and (v) a reserve, established in the reasonable discretion of the Management Committee, for anticipated cash
disbursements that will have to be made before additional cash receipts from third parties will provide funds therefore. 
  

	 	11.36	Fiscal Year 

 The
term “Fiscal Year” means, except as otherwise provided in this definition, the twelve (12) month period commencing on January 1 of each calendar year and ending on December 31 of each calendar year, with the first
Fiscal Year commencing on the date hereof and ending on December 31, 2011 and the last Fiscal Year being the period beginning on January 1 of the year in which the final liquidation and termination of the Company is completed and ending on
the date such final liquidation and termination is completed. To the extent any computation or other provision hereof provides for an action to be taken on the basis of a Fiscal Year, an appropriate proration or other adjustment shall be made in
respect of the initial and final Fiscal Years to reflect that such periods are less than twelve (12) month periods. 
  

	 	11.37	Georgia Act 

 The
term “Georgia Act” means the Georgia Limited Liability Company Act (Official Code of Georgia Annotated § 14-11-100, et seq.), as hereafter amended from time to time. 

 

	 	11.38	Gross Asset Value 


The term “Gross Asset Value” shall mean, except as set forth below, such asset’s adjusted basis for federal income
tax purposes: 

  
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 (i) The initial Gross Asset Value of any asset contributed by a Member to
the Company shall be the gross fair market value of such asset, as determined by the contributing Member and the Company. 
 (ii) The Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Members as of the following times: (A) the acquisition of
an additional interest in the Company by any new or existing Members in exchange for more than a de minimis Capital Contribution if the Members reasonably determine that such adjustment is necessary or appropriate to reflect the relative
economic interests of the Members in the Company; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company if the Members reasonably determine
that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company; and (C) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g).

 (iii) The Gross Asset Value of any Company asset distributed to any Member shall be the gross fair market
value of such asset on the date of distribution; and 
 (iv) The Gross Asset Values of Company assets shall be
increased or decreased to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Members determine that an
adjustment pursuant to subparagraph (ii) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). 

If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs (i), (ii) or (iv) of this
provision, such Gross Asset Value shall thereafter be computed in accordance with Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations. 
  

	 	11.39	Immediate Family 


The term “Immediate Family” means an individual Person’s current spouse, parents, grandparents, siblings, children,
children’s spouses, grandchildren or grandchildren’s spouses or any trusts or estates (or other estate-planning vehicles) for the exclusive benefit of any one or more of the foregoing that is controlled by such individual Person.

  

	 	11.40	Indemnified Party 


  
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 The term “Indemnified Party” is defined in Section 2.07(a).

  

	 	11.41	Interest 

 The term
“Interest” means in respect to any Member, all of such Member’s right, title and interest in and to the Net Profits, Net Losses, Cash Flow, distributions and capital of the Company, and any and all other interests therein in
accordance with the provisions of this Agreement and the Georgia Act. 
  

	 	11.42	IRR 

 The term
“IRR” means, with respect to any Member, the annual discount rate, determined by iterative process, which results in a net present value approximating zero (0) when such discount rate is applied to the applicable Capital
Contributions made by such Member from time to time and distributions made to such Member from time to time (except for Section 707(c) payments), and calculated using Microsoft Office Excel, xIRR function in accordance with the formula attached
hereto as Exhibit E. 
  

	 	11.43	Liquidation 

 The
term “Liquidation” means, (i) in respect to the Company, the earlier of the date upon which the Company is terminated under Section 708(b)(1) (except for any deemed liquidation under Section 708(b)(1)(B) of the Code)
or the date upon which the Company ceases to be a going concern (even though it may continue in existence for the purpose of winding up its affairs, paying its debts and distributing any remaining balance to its Members), and (ii) in respect to
a Member wherein the Company is not in Liquidation, the liquidation of a Member’s interest in the Company under Treasury Regulation Section 1.761-1(d). 
  

	 	11.44	Majority of Representatives 

 The term “Majority of Representatives” means a majority (in number) of the representatives on the Management Committee, provided that, at any meeting of the Management Committee,
all of the representatives collectively shall have a number of votes equal to the representatives that Paladin or ERES, as the case may be, is entitled to elect, and such votes shall be cast (whether by one or more of such representatives) as a
block, with a majority of such votes constituting a “Majority of Representatives.” 
  

	 	11.45	Management Committee 

 The term “Management Committee” is defined in Section 2.01(a). 
  

	 	11.46	Material Breach 


The term “Material Breach” means any material breach or default by a Member of any material covenant, duty or obligation
under this Agreement or any 

  
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Exhibits hereto (including, without limitation, the failure of any Member to contribute any Additional Contribution to the extent required to be made pursuant to Section 3.02 and
Section 3.03), provided that in any such instance: (i) such Member shall have received written notice from the other Member of such breach or default, and (ii) if curable, such Member shall have failed to cure or remedy
such breach or default within ten (10) days following the Effective Date of such notice (except that no such notice shall be required in the case of the failure of any Member to contribute any Additional Contribution pursuant to
Section 3.02 and Section 3.03) or, if such breach or default is not curable within such 10-day period, such Member shall have failed to diligently and continuously pursue such a cure or remedy and in any event fully cure or
remedy such breach or default within thirty (30) days of the Effective Date of such notice. 
  

	 	11.47	Member Loan 

 The
term “Member Loan” is defined in Section. 3.03(b). 
  

	 	11.48	Member Minimum Gain 


The term “Member Minimum Gain” means minimum gain attributable to a Member Nonrecourse Debt determined in accordance with
Treasury Regulation Section 1.704-2(i) for the phrase “partner minimum gain.” 
  

	 	11.49	Member Nonrecourse Debt 

 The term “Member Nonrecourse Debt” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4) for the phrase “partner nonrecourse debt.” 

 

	 	11.50	Member Nonrecourse Deductions 

 “Member Nonrecourse Deductions” has the meaning set forth in Treasury Regulation Section 1.704-2(i) for the phrase “partner nonrecourse deductions.” 

 

	 	11.51	Member(s) 

 The
term “Members” means Paladin and ERES, collectively; the term “Member” means any one of the Members. 
  

	 	11.52	Mortgage Loan 

 The
term “Mortgage Loan” is defined in Section 1.05. 
  

	 	11.53	Net Profits and Net Losses 

 The term “Net Profits” or “Net Losses” shall mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for this purpose, all items of 

  
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income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments: 

(i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net
Profits and Net Losses pursuant to this subparagraph (i) shall be added to such taxable income or loss; 

(ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(1), and not otherwise taken into account in computing Net Profits or Net Losses pursuant to this provision shall be subtracted from such taxable
income or loss; 
 (iii) In the event of the Gross Asset Value of any Company property is adjusted pursuant to
subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profits or Net Losses;

 (iv) Gain or loss resulting from any disposition of Company property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; 

(v) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account depreciation computed in accordance with Section 1.704-1(b)(2)(iv)(2) of the Treasury Regulations for such Fiscal Year or other period; and 

(vi) Notwithstanding anything contained herein to the contrary, any items which are specially allocated pursuant to
Article 4 hereof shall not be taken into account in computing Net Profits or Net Losses. 
  

	 	11.54	Non-Contributing Member 

 The term “Non-Contributing Member” is defined in Section 3.03(a). 
  

	 	11.55	Nonrecourse Deductions 

 The term “Nonrecourse Deductions” means deductions as described in Treasury Regulation Section 1.704-2(b)(l). 

 

	 	11.56	Operating Account 


  
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 The term “Operating Account” means an account of the Company at a financial
institution approved by the Management Committee and into which all Capital Contributions and other funds for and from the ownership and operation of the Project by the Company shall be deposited and held until properly disbursed and on which at
least one of the representatives of Paladin on the Management Committee shall be a signatory. 
  

	 	11.57	Operating Budget 


The term “Operating Budget” is defined in Section 2.05. 

 

	 	11.58	Operating Member 


The term “Operating Member” is defined in Section 2.03(a). 

 

	 	11.59	Ordinary Cash Flow 


The term “Ordinary Cash Flow” means the amount, if any, of all cash receipts of the Company as of any applicable
determination date (including, without limitation, any cash receipts realized from operations of the Company but excluding any cash receipts or proceeds from a Capital Event), in excess of the sum of (i) all cash disbursements (inclusive of any
reimbursements and guaranteed payments made to any Member, but exclusive of disbursements made from the proceeds of a Capital Event and distributions to the Members in their capacities as such) of the Company prior to that date, plus (ii) any
reserve, determined in the sole and absolute discretion of the Management Committee, for anticipated cash disbursements that will have to be made before additional cash receipts from third parties will provide the funds therefor. Ordinary Cash Flow
shall be determined and distributed no more frequently than monthly and no less frequently than on a quarterly basis or at such other times as the Management Committee determines that funds are available therefor, taking into account the reasonable
business needs of the Company. 
  

	 	11.60	Paladin 

 The term
“Paladin” means PRIP Coursey, LCC, a Delaware limited liability company. 
  

	 	11.61	Paladin REIT 

 The
term “Paladin REIT” means Paladin Realty Income Properties, Inc. a Maryland corporation, or any successor thereto. 
  

	 	11.62	Percentage Interest 


The term “Percentage Interest” means, with respect to each Member, the percentage set forth opposite such Member’s
name on Exhibit A attached hereto under the column labeled “Percentage Interest,” as such percentage shall be modified from time 

  
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to time in accordance with this Agreement. The initial Percentage Interests of the Members shall be as follows: 
  

					
	 Paladin:
	  	 	51.73	% 
	 ERES:
	  	 	48.27	% 

  

	 	11.63	Permitted Transferees 

 The term “Permitted Transferees” is defined in Section 6.02. 
  

	 	11.64	Person 

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

	 	11.65	Preferred Return 


The term “Preferred Return” means, with respect to each Member, an amount calculated like interest and accrued on the
balance standing from time to time in such Member’s Unrecovered Contribution Account at a simple interest rate equal to ten percent (10%) per annum, non-compounded, and determined on a cumulative basis each calendar year. For financial and
income tax reporting purposes, neither accrual nor payment of the Preferred Return shall be an expense of the Company nor be treated as a guaranteed payment under Section 707(c) of the Code. 

 

	 	11.66	Price Determination Notice 

 The term “Price Determination Notice” is defined in Section 7.03(a). 
  

	 	11.67	Project 

 The term
“Project” is defined in Section 1.03. 
  

	 	11.68	Project Shortfall 


The term “Project Shortfall” means any means any and all cash required to satisfy any actual or projected financial
requirements of the Company (not including, however, payment of Unpaid Preferred Return or any other obligations of the Company to the Members), as determined by the Management Committee. 

 

	 	11.69	Property Management Agreement 

 The term “Property Management Agreement” is defined in Section 2.12. 

  
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	 	11.70	Property Manager 


The term “Property Manager” means the Person engaged or designated by the Company from time to time to manage and operate
the Project. 
  

	 	11.71	Purchasing Member 


The term “Purchasing Member” is defined in Section 7.05. 

 

	 	11.72	Qualified Appraiser 


The term “Qualified Appraiser” means an appraiser who is not an Affiliate or Related Party of any Member and has not been
an employee of any Member or any Affiliate or Related Party of the Member at any time, who is qualified to appraise assets of the same type owned by the Company and is a member of the Appraisal Institute (or any successor association or body of
comparable standing if such Institute is not then in existence), and who has held his or her certificate as an M.A.I. or its equivalent for a period of not fewer than ten (10) years, and has been actively engaged in the appraisal of such
projects immediately preceding his or her appointment under this Agreement. 
  

	 	11.73	Regulatory Allocations 

 The term “Regulatory Allocations” is defined in Section 4.02(f). 
  

	 	11.74	REIT 

 The term
“REIT” is defined in Section 2.02(d). 
  

	 	11.75	Removal Event 

 The
term “Removal Event” is defined in Section 2.06(a). 
  

	 	11.76	Removal Notice 


The term “Removal Notice” is defined in Section 2.06(a). 

 

	 	11.77	Securities Act 


The term “Securities Act” is defined in Section 10.02. 

 

	 	11.78	Seller Loan 

 The
term “Seller Loan” is defined in Section 7.08. 
  

	 	11.79	Selling Member 


The term “Selling Member” is defined in Section 7.05 

  
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	 	11.80	Tax Matters Partner 


The term “Tax Matters Partner” is defined in Section 9.04. 

 

	 	11.81	Third-Party Purchase Price 

 The term “Third-Party Purchase Price” is defined in Section 7.02. 
  

	 	11.82	Transfer 

 The term
“Transfer” is defined in Section 6.01. 
  

	 	11.83	Treasury Regulation 


The term “Treasury Regulation” means any proposed, temporary, or final federal income tax regulation promulgated by the
United States Department of the Treasury as heretofore and hereafter amended from time to time (or any corresponding provisions of any superseding revenue law or regulation). 

 

	 	11.84	Unanimous Written Consent 

 The term “Unanimous Written Consent” means a written consent executed by at least one representative of each Member. 

 

	 	11.85	Unpaid Preferred Return 

 The term “Unpaid Preferred Return” means, (i) with respect to Paladin and as of any specified date, the Preferred Return accrued through such date, decreased by the amount of money
and the agreed upon net fair market value of any property distributed by the Company to Paladin pursuant to Section 5.01(a) and (ii) with respect to ERES as of any specified date, the Preferred Return accrued through such date,
decreased by the amount of money and the agreed upon net fair market value of any property distributed by the Company to such ERES Member pursuant to Sections 5.01(b). 

 

	 	11.86	Unpaid Yield Maintenance Amount 

 The term “Unpaid Yield Maintenance Amount” means (i) the amount of Four Million Eleven Thousand Six Hundred Twenty-Eight and 59/100 Dollars ($4,011,628.59), plus (ii) an
additional amount, calculated with respect to each Additional Contribution, equal to the product obtained by multiplying fifteen percent (15%) of the amount of each such Additional Contribution times four (4), decreased by the amount of
money and the agreed upon net fair market value of any property distributed by the Company to the Members pursuant to Section 5.01 and pursuant to Section 5.02(b). 

 

	 	11.87	Unrecovered Class A Contribution Account 


  
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 The term “Unrecovered Class A Contribution Account” means, with
respect to ERES, the amount of money or the agreed upon fair market value of any property contributed (or deemed contributed) by ERES to the capital of the Company as Class A Capital Contribution pursuant to Section 3.01 (net of
liabilities secured by such contributed property that the Company is considered to assume or take subject to pursuant to Section 752 of the Code), and decreased by the amount of money and the agreed upon fair market value of any property
(net of liabilities secured by such distributed property that ERES is considered to assume or take subject to under Section 752 of the Code) distributed (or deemed distributed) by the Company to ERES pursuant to Section 5.02(a).

  

	 	11.88	Unrecovered Class B Contribution Account 

 The term “Unrecovered Class B Contribution Account” means, with respect to ERES, the amount of money or the agreed upon fair market value of any property contributed (or deemed
contributed) by ERES to the capital of the Company as Class B Capital Contributions pursuant to Section 3.01 and otherwise pursuant to Section 3.02 and Section 3.03 (net of liabilities secured by such contributed
property that the Company is considered to assume or take subject to pursuant to Section 752 of the Code), and decreased by the amount of money and the agreed upon fair market value of any property (net of liabilities secured by such
distributed property that ERES is considered to assume or take subject to under Section 752 of the Code) distributed (or deemed distributed) by the Company to ERES pursuant to Section 5.02(c) 

 

	 	11.89	Unrecovered Contribution Account 

 The term “Unrecovered Contribution Account” means, (i) with respect to Paladin, the amount of money or the agreed upon fair market value of any property contributed (or deemed
contributed) by Paladin to the capital of the Company pursuant to Section 3.01, Section 3.02 and Section 3.03, as the case may be (net of liabilities secured by such contributed property that the Company is
considered to assume or take subject to pursuant to Section 752 of the Code), and decreased by the amount of money and the agreed upon fair market value of any property (net of liabilities secured by such distributed property that
Paladin is considered to assume or take subject to under Section 752 of the Code) distributed by the Company to Paladin pursuant to Section 5.02(a), and (ii) with respect to ERES, the aggregate amount of its Unrecovered
Class A Contribution Account and Unrecovered Class B Contribution Account. 
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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of
the day and year first above written. 
  

							
	“Paladin”
	
	PRIP COURSEY, LLC, a Delaware limited liability company
		
	By:	 	Paladin Realty Income Properties, L.P., a Delaware limited partnership
			
		 	By:	 	Paladin Realty Income Properties, Inc., a Maryland corporation, its general partner
				
		 		 	By:	 	 /s/ William K. Dunbar

		 		 		 	William K. Dunbar
		 		 		 	Chief Investment Officer


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 [Signatures Continued From Previous Page] 

 

			
	“ERES”
	
	ERES COURSEY LLC, a Louisiana limited liability company
		
	By:	 	 /s/ Charles M. Thompson

		 	Charles M. Thompson, its manager



  
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