Exhibit 10.5


 


LIMITED LIABILITY COMPANY AGREEMENT


OF


PROCACCIANTI CONVERTIBLE FUND, LLC


 


THIS LIMITED LIABILITY
COMPANY AGREEMENT (“Agreement”) is entered into effective as of April 21, 2017 (the “Effective
Date”), among PROCACCIANTI CONVERTIBLE FUND, LLC (the “Company”), a limited liability company organized
under the laws of the State of Delaware and the Persons listed on Exhibit A attached hereto as Members (the “Members”).


 


ARTICLE
I

ORGANIZATION AND DEFINITIONS


 


1.1         Organization.
The Company was formed through the filing of the Charter (as herein defined) with the Secretary of State of the Charter State.
The Company shall be governed by the laws of the Charter State in accordance with this Agreement. 


 


1.2          Principal
Office; Registered Office; Registered Agent. The principal and registered office of the Company shall be at such location as
may be determined by the Manager. The registered agent of the Company shall be as determined by the Manager. The initial registered
office and registered agent shall be as set forth in the Charter, and shall remain unchanged until changed by the Manager.


 


1.3         Term.
The Company was formed on the Formation Date (as herein defined), and will continue perpetually, unless it is sooner terminated
under this Agreement.


 


1.4          Certain
Definitions. As used in this Agreement, the following terms have the meanings ascribed to them in this Section 1.4 and
include the plural as well as the singular number:


 


“Act”
means the Delaware Limited Liability Company Act, in its present form or as may be amended from time to time.


 


“Additional
Capital Contribution Preferred Return” means, in respect of any Member, a cumulative preferred return to such Member
that accrues and accumulates at a rate to be determined in each case by the Manager on the amount of Unreturned Additional Capital
Contributions of such Member, compounded annually; provided that, with respect to all Additional Capital Contributions,
such rate shall be not less eight percent (8%) per annum and not greater than fifteen percent (15%) per annum, as so determined
by the Manager in his, her or its sole discretion. A pro rata daily share of the Additional Capital Contribution Preferred Return
determined in accordance with the number of days in each Fiscal Year shall accrue and accumulate on a daily basis.


 


“Additional
Capital Contributions” has the meaning set forth in Section 3.3(b)(i) hereof. For the avoidance of doubt, the
term “Additional Capital Contributions” means and includes additional Capital Contributions made pursuant to Section
3.3(b) hereof, but does not include any initial Capital Contributions made as of the Effective Date pursuant to Section
3.3(a) hereof.


 


“Additional
Members” means those Persons who become Members after the Effective Date in accordance with this Agreement, other than
Substituted Members.


 




     


     


    

 


“Affiliate”
means, with respect to any Person, any person or entity which directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with a specified person or entity. For purposes hereof, the terms “control”,
“controlled”, or “controlling” with respect to a specified person or entity shall include, without limitation,
(i) the ownership, control or power to vote ten percent (10%) or more of (x) the outstanding shares of any class of voting securities
or (y) beneficial interests, of any such person or entity, as the case may be, directly or indirectly, or acting through one or
more persons or entities, (ii) the control in any manner over the managing member(s) or the election of more than one director
or trustee (or persons exercising similar functions) of such person or entity, or (iii) the power to exercise, directly or indirectly,
control over the management or policies of such person or entity.


 


“Agreement”
means this Limited Liability Company Agreement, as amended from time to time. Words such as “herein,” “hereafter,”
“hereof,” “hereto,” and “hereunder” refer to this Agreement as a whole, unless the context
otherwise requires.


 


“Approved Transfer”
means any Transfer of Interests approved in writing by the Manager, which may be granted or withheld in the Manager’s sole
and absolute discretion. Notwithstanding the foregoing, the Manager shall, subject to the terms and conditions contained herein
(including without limitation the provisions of Article VII hereof), consent to any Permitted Transfer.


 


“Bankruptcy”
means, with respect to any Person, if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy
or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment,
liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing
to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties,
or (vii) if 120 days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition,
readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or
if within 90 days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator
of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 90 days
after the expiration of any such stay, the appointment is not vacated. The foregoing definition of “Bankruptcy” is
intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(l)
and 18-304 of the Act.


 


“Book Value”
of an asset means, as of any particular date, the value at which the asset is reflected on the books of the Company as of such
date. In the case of an asset other than cash transferred as a Capital Contribution to the Company, the initial book value of such
asset shall be equal to the gross fair market value of such asset, as determined by the Manager in good faith and recorded on the
books of the Company. Company assets may be revalued and the Book Value thereof adjusted to equal their respective Fair Market
Values, to reflect economic arrangements among the Members upon the admission of Additional Members to the Company, or at such
other times as are provided for in Treasury Regulations Section 1.704-l(b)(2)(iv) (including subclause (f) thereof), 1.704-2 or
1.704-3 and such Book Values shall be revalued consistently with any adjustments to the Members’ Capital Accounts pursuant
to the last sentence of Section 3.4(b). The Book Value of a Company asset distributed to a Member shall be adjusted to its Fair
Market Value as of the date of distribution. The foregoing adjustments shall be included in Profits or Losses and allocated to
the Members and reflected in their Capital Accounts in the manner provided in Regulations Section 1.704-1(b)(2)(iv)(f)(2). The
Book Value of an asset shall be reduced by depreciation, amortization or other cost recovery deductions relating thereto on the
books of the Company; in the case of assets whose Book Values have been adjusted to Fair Market Value, their Book Values shall
be reduced by the amount of depreciation, amortization or other cost recovery deductions relating thereto arising after such adjustment.


 




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“Business”
means the business of acquiring, owning and dealing with operations and ownership of the Properties, including having mortgage
indebtedness secured by any Property.


 


“Capital Account”
means the Capital Account established for each Member and maintained in accordance with the provisions of this Agreement and the
Treasury Regulations.


 


“Capital Contribution”
means the total amount of cash or Fair Market Value of other property contributed or deemed to be contributed to the equity of
the Company by each Member pursuant to this Agreement. Any reference in this Agreement to the Capital Contribution of either a
Member or any assignee of a Member includes any Capital Contribution previously made by any prior Member to whose Interests the
then existing Member or assignee succeeded. The amounts of the Capital Contributions of the Members are set forth in Exhibit A
hereto, as may be amended from time to time by the Manager to reflect appropriate changes in accordance with the terms of this
Agreement.


 


“Capital Proceeds”
means the net proceeds from a Capital Transaction minus all expenses related thereto and any reasonable reserves determined by
the Manager.


 


“Capital Transaction”
means (a) a sale of the Company, whether accomplished by a sale (including a merger, consolidation, reorganization, recapitalization
or other business combination or otherwise) of (i) all of the Interests or (ii) all or substantially all of the assets of the Company,
(b) a financing or refinancing of the debt of the Company, (c) the sale of any Property, or (d) the refinancing of any debt secured
by any of the Property.


 


“Charter”
means the Certificate of Formation of the Company filed with the Secretary of State of the Charter State on February 24, 2017 by
an “authorized person” within the meaning of the Act for the purpose of forming the Company pursuant to the laws of
the Charter State, as may be amended. 


 


“Charter
State” means the State of Delaware.


 


“Class
A Member” means the holders of the Class A Interests.


 


“Class A Interests”
means with respect to any Class A Member, (a) the Class A Member’s share of the income, gain, loss, deduction and credits
of, and the right to receive distributions from, the Company; (b) all other rights, benefits and privileges enjoyed by a Class
A Member (under the Act, this Agreement, or otherwise) in its capacity as a Class A Member; and (c) all obligations, duties and
liabilities imposed on a Class A Member (under the Act, this Agreement or otherwise) in its capacity as a Class A Member.


 


“Class
B Member” means the holder of the Class B Interests.


 




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“Class B Interests”
means with respect to any Class B Member, (a) the Class B Member’s share of the income, gain, loss, deduction and credits
of, and the right to receive distributions from, the Company; (b) all other rights, benefits and privileges enjoyed by a Class
B Member (under the Act, this Agreement, or otherwise) in its capacity as a Class B Member; and (c) all obligations, duties and
liabilities imposed on a Class B Member (under the Act, this Agreement or otherwise) in its capacity as a Class B Member.


 


“Code”
means the Internal Revenue Code of 1986, as it may be amended, or any subsequent federal law concerning income tax as enacted in
substitution for, or that corresponds with, such Code.


 


“Company”
means the limited liability company identified as the “Company” in the first paragraph of this Agreement.


 


“Control”
means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise. The term “controls,” “controlled
by” and “under common control with” have correlative meanings, irrespective of capitalization.


 


“Covered Person”
has the meaning set forth in Section 6.10.


 


“Fair Market
Value” means, with respect to any item, the price (in cash or other consideration) at which such item would be sold in
a sales transaction between a willing buyer and a willing seller negotiating on arms’ length terms. The Fair Market Value
of an item shall be deemed for all purposes to be equal to the Fair Market Value of such item as determined by the Manager, so
long as such determination is reasonable and made in good faith by the Manager. 


 


“Fiscal Year”
means the period beginning on January 1 and ending on December 31 or any other fiscal period selected by the Manager
for financial reporting and tax purposes. 


 


“Formation Date”
means the date on which the Charter was filed with the Secretary of State or other governmental agency of the Charter State.


 


“Gross Revenue”
means the gross revenue of the Company for each Fiscal Year, or part thereof, arising from the Company’s Business including
Capital Proceeds excluding Capital Contributions.


 


“Immediate Family
Members” means a child, stepchild, grandchild, spouse, sibling, or parent, each of whom are not Prohibited Persons (as
such term is defined in the Company’s loan documents executed on or about the date of the acquisitions of each of the Properties).


 


“Indirect Transfer”
means any (i) Transfer of Interests by a Member which is a corporation, limited liability company, trust, partnership or other
entity by any means, voluntarily or involuntarily, of any capital stock in such corporation, membership or ownership interests
in such limited liability company, beneficial interests in such trust, partnership interests in such partnership, or equity interests
in any such other entity, or any Transfer of Interests by such a Member that directly or indirectly results in any change in the
ultimate underlying beneficial or record ownership, voting rights with respect to or control of such capital stock, membership
or ownership interests, beneficial interests, partnership interests or other equity interests of the Member; and/or (ii) Transfer
of direct or indirect ownership interest in the Company by any Member.




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“Knowledge”
means, as to the representations of TPG INC CI, LLC, the actual (as opposed to constructive or imputed) knowledge, without independent
investigation or inquiry, of Richard A. Tasca.


 


“Manager”
means James A. Procaccianti and, if it completes a REIT Transaction, and becomes a Manager in accordance with Section 5.6, then
also the REIT, and each of their successors as provided in this Agreement.


 


“Members”
means the Class A Members, the Class B Members and each of the Persons designated in this Agreement as the members of the Company
and any Persons who become members of the Company, pursuant to this Agreement. To the extent that distributions, allocations or
other items are to be determined under this Agreement by reference to cumulative amounts that relate to a Member, for purposes
of determining such cumulative amounts, references to a Member shall include references to the predecessors in interest of such
Member.


 


“Net Cash Flow”
means, for each calendar month, Fiscal Year or other period of the Company for which it must be determined, the Gross Revenue of
the Company from all sources excluding Capital Proceeds, less all Operating Expenditures, provided that Net Cash Flow shall not
include unexpended Capital Contributions.


 


“Operating Expenditures”
means the expenditures of the Company for each Fiscal Year, or part thereof, arising from the Company’s Business, including,
but not limited to, the following:


 


(a)           general
operating expenses including, but not limited to, management, legal, accounting and other professional fees, wages, salaries and
other compensation in connection with its Business operations, and all fees, costs and expenses associated with entitlement, development,
construction, and marketing with respect to either Property, monies expended to comply with and perform contractual and other obligations,
and any other expenses expended on behalf of the Company in relation to its general administrative and management needs;


 


(b)        payments
of principal and interest upon any indebtedness of the Company (whether third-party indebtedness or loans made by Members to the
Company pursuant to this Agreement);


 


(c)        any
other cash expended by the Company for Business operations, including, without limitation, capital expenditures; and


 


(d)        the
establishment of appropriate reserves for debt service, the provision of working capital or any other contingency of the Company
as determined by the Manager.


 


“Option Agreement”
has the meaning set forth in Section 5.6.


 


“Percentage
Interest” means, with respect to a Member, the quotient obtained by dividing the Interests held by such Member by the
total Interests held by all the Members, subject to adjustment as provided in Section 3.3(b).


 




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“Permitted Transfer”
means a Transfer by a Member of all or a portion of such Member’s Interests for estate planning purposes that does not violate
any state or federal law or regulation or other material agreement by which the Company is bound) and is to:


 


(A)          Immediate
Family Members of such Member, each of whom must have obtained the legal age of majority;


 


(B)          United
States domiciled trusts established for the benefit of such Member or Immediate Family Members of such Member transferor; or


 


(C)           partnerships
or limited liability companies of which the partners or members, respectively, are comprised entirely of (i) such Member and Immediate
Family Members (each of whom must have obtained the legal age of majority) of such Member, (ii) Immediate Family Members (each
of whom must have obtained the legal age of majority) of such Member, or (iii) United States domiciled trusts established for the
benefit of such Member or Immediate Family Members of such Member.


 


“Person”
means a natural person, corporation, trust, partnership, joint venture, association, limited liability company or other business
or other legal entity of any kind.


 


“Profit”
or “Loss” means, for a period, an amount equal to the Company’s taxable income or loss for such period,
determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be
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 Profit or
Loss 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 Regulations Section 1.704-1(b)(2)(iv) shall be subtracted
from such taxable income or loss; (iii) in lieu of the amounts of depreciation, amortization or other cost recovery deductions
taken into account in computing such taxable income or loss, the amounts taken into account shall be the amounts determined in
the manner provide in Regulations Section 1.704-1(b)(2)(iv)(g)(3); (iv) in lieu of any tax gain or tax loss recognized by the Company
with respect to the disposition of an asset, there shall be taken into account gain or loss recognized by the Company for book
purposes under the principles of Treasury Regulations Section 1.704-1(b)(2)(iv), computed by reference to the Book Value of the
asset as of the date of disposition rather than by reference to the tax basis of the asset; and (v) items of income, gain, loss,
or deduction allocated separately pursuant to Section 4.4 hereof shall be excluded from the computation of Profit or Loss.
If the Company’s taxable income or loss for such period, as adjusted in the manner provided above, is a positive amount,
such amount shall be the Company’s Profit for such period, and if negative, such amount shall be the Company’s Loss
for such period.


 


“Prohibited
Person” means any of the following: (i) a Person that is listed in the Annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001) (the “Executive Order”);
(ii) a Person owned or controlled by, or acting for or on behalf of any Person that is listed in the Annex to, or is otherwise
subject to the provisions of, the Executive Order; (iii) a Person that is named as a “specially designated national”
or “blocked person” on the most current list published by the U.S. Treasury Department’s Office of Foreign Assets
Control (“OFAC”) at its official website, http://www.treas.gov/offices/enforcement/ofac; (iv) a Person
that is otherwise the target of any economic sanctions program currently administered by OFAC; or (v) a Person that is affiliated
with any Person identified in any of clauses (i), (ii), (iii) or (iv) above.


 




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“Property”
or “Properties” means either or both of the properties listed in Exhibit B.


 


“REIT”
has the meaning set forth in Section 5.6.


 


“REIT Transactions”
has the meaning set forth in Section 5.6.


 


“Substituted
Member” means a Person who acquires Interests of a Member pursuant to an Approved Transfer, a Permitted Transfer or any
other Transfer expressly permitted under and in compliance with the provisions of Article VII of this Agreement.


 


“Transfer”
means, as a noun, any voluntary or involuntary, direct or indirect, transfer, sale, assignment, conveyance, pledge, hypothecation
or other disposition and, as a verb, voluntarily or involuntarily, directly or indirectly, to transfer, sell, assign, convey, pledge,
hypothecate or otherwise dispose of.


 


“Treasury Regulations”
and “Regulations” means the regulations of the United States Treasury Department pertaining to the Code, as
amended, and any successor provision thereto. 


 


“Interests”
means limited liability company interests in the Company issued to each Member hereunder, which represent, subject to adjustment
as provided in Section 3.3(b), (a) such Member’s Capital Contribution and the right to receive such Member’s
share of the Profits and Losses, distributions and liquidation proceeds of the Company in accordance with the terms of this Agreement,
(b) such Member’s voting, consent and other rights, if any, provided in this Agreement and (c) the rights of such Member
as a member of a limited liability company under the laws of the Charter State to the extent consistent with the terms of this
Agreement. Unless otherwise determined by the Manager, Interests shall not be evidenced by certificates and their ownership is
evidenced solely by this Agreement and by the records of the Company. The number of Interests owned by each Member is set forth
in Exhibit “A” hereto.


 


“Unpaid Additional
Capital Contribution Preferred Return” means, in respect of any Member as of a particular date, an amount (but not below
zero) equal to the Additional Capital Contribution Preferred Return accrued and accumulated for such Member through such date less
the aggregate amounts distributed to such Member through such date pursuant to Section 5.1(a) and Section 5.2(a)
(including by operation of Section 9.2(b)).


 


“Unreturned
Additional Capital Contributions” means, in respect of any Member as of a particular date, an amount (but not below zero)
equal to the aggregate Additional Capital Contributions made to the Company by such Member through such date less the aggregate
amounts distributed to such Member through such date pursuant to Section 5.2(b) (including by operation of Section 9.2(b)).


 


“Unreturned
Capital Contributions” means, in respect of any Member as of a particular date, an amount (but not below zero) equal
to the aggregate Capital Contributions (other than Additional Capital Contributions) made to the Company by such Member through
such date less the aggregate amounts distributed to such Member through such date pursuant to Section 5.2(c) (including
by operation of Section 9.2(b)).


 




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ARTICLE
II

PURPOSES, AUTHORITY AND PROPERTY OF THE COMPANY


 


2.1          Purposes.
The purpose of the Company is to conduct the Business, and to engage in such other activities solely incident or related thereto.


 


2.2          Authority.
To carry out its purposes, the Company, and the Manager acting on behalf of the Company, consistent with and subject to the provisions
of this Agreement and applicable law, is empowered and authorized to do any and all acts and things incident to, or necessary,
appropriate, proper, advisable, or convenient for, the furtherance and accomplishment of its purposes.


 


2.3          Property
of the Company. All property of any kind acquired or developed in any manner by the Company shall be the exclusive property
of the Company, and not of any Member or other Person; provided, however, that the foregoing clause shall not impair the authority
of the Company to dispose of any of its property to any Person, or to distribute property to its Members in accordance with this
Agreement.


 


ARTICLE
III

MEMBERS; CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; FEES TO AFFILIATES


 


3.1          Members.
The name, Capital Contribution, number of Interests, and Percentage Interest of or in respect of each Member are set forth in Exhibit A
hereto, as may be amended pursuant to the terms of this Agreement from time to time to reflect applicable changes in the information
set forth in Exhibit A.  Each Member was admitted as a member of the Company upon its execution of a counterpart signature
page hereto. The address, fax number and email address of each Member is indicated on the signature pages made a part of this Agreement.


 


3.2          Additional
Members. Additional Members may be admitted to the Company only with the consent of the Manager. This Agreement shall be amended
to reflect the Additional Members as parties, and Exhibit A shall be amended to set forth the information relating
to the Additional Members. Each Additional Member shall be required to execute this Agreement, as so amended, or an instrument
in form satisfactory to the Manager pursuant to which such Additional Member agrees to be bound by the terms of this Agreement,
as may be amended from time to time.


 


3.3          Capital
Contributions.


 


(a)           Initial
Capital Contributions. The Members have made Capital Contributions in the amounts set forth opposite their respective names
on Exhibit A and such amounts shall be credited to each such Member’s Capital Account.


 


(b)           Additional
Funding.


 




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(i)         Subject
to Section 3.3(f), if the Manager determines that additional funds are required by the Company, then, subject to the provisions
of Section 3.3(b)(vi) hereof, the Manager shall first offer to the Members the opportunity to provide such funding either
in the form of loans to the Company (“Member Loan(s)”) or additional capital contributions to the Company (“Additional
Capital Contributions”), as determined by the Manager in his, her or its sole and absolute discretion, by delivering
to each Member written notice of such opportunity as herein provided (the “Funding Notice”). The Funding Notice
shall specify (A) the purpose(s) of the required funding, (B) the total amount of funding required by the Company (the “Funding
Amount”), (C) whether the Funding Amount shall be in the form of Member Loans or Additional Capital Contributions, or
any combination thereof, (D) the time or times (which shall be not sooner than five (5) business days after the date of the Funding
Notice) when the Funding Amount shall be provided to the Company and (E) the terms of such Member Loans or Additional Capital Contributions.
The decision as to whether such funding shall be in the form of Member Loans or Additional Capital Contributions and the terms
of the Member Loans or Additional Capital Contributions shall be determined by the Manager in his, her or its sole and absolute
discretion. The terms and conditions of the Member Loans or Additional Capital Contributions set forth in the Funding Notice shall
be the same for all Members.


 


(ii)        Upon
receipt of the Funding Notice, each Member shall have the right, but not the obligation, to make a Member Loan or Additional Capital
Contribution to the Company on the terms set forth in the Funding Notice and in accordance with the terms of this Section 3.3(b).
Each such Member may exercise such right by delivering to the Manager, within five (5) business days after receipt of the Funding
Notice, written notice of such Member’s exercise of such right. Such notice of exercise shall be irrevocable upon delivery.
A Member’s failure to so exercise such right within such five (5) business day period shall be deemed a waiver by such Member
of such right. Each Member exercising such right shall have the right to make a Member Loan or Additional Capital Contribution,
as applicable, up to an amount equal to (A) the Funding Amount multiplied by (B) such Member’s Percentage Interest (such
product referred to as such Member’s “Proportionate Share”). Each Member shall state in such Member’s
notice of exercise hereunder the amount of the Member Loan or Additional Capital Contribution that such Member desires to provide
(up to such Member’s Proportionate Share).


 


(iii)       If
any such Member fails to fund such Member’s entire Proportionate Share of the Funding Amount pursuant to the Funding Notice
(each, a “Non-Funding Member”), each Member who elected to fund such Member’s entire Proportionate Share
of the Funding Amount pursuant to the Funding Notice (each, a “Funding Member”) shall have the right, but not
the obligation, to fund the amount of each Non-Funding Member’s Proportionate Share which such Non-Funding Member failed
to fund (the “Shortfall”), in proportion to such Funding Member’s Percentage Interest relative to the
Percentage Interests of all Funding Members who elect to fund the Shortfall, in the form of a Member Loan or Additional Capital
Contribution in accordance with the Funding Notice. Such right shall be exercisable for a period of five (5) business days following
the initial five (5) business day exercise period by delivering to all other Members written notice of exercise.


 




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(iv)       If
the Funding Amount is required to be made in the form of Additional Capital Contributions, then each Funding Member who contributes
all or a portion of any Shortfall as an Additional Capital Contribution shall be a “Shortfall Funding Member”.
Immediately upon the contribution by any Shortfall Funding Member(s) of any Additional Capital Contributions to fund a Shortfall
of any Non-Funding Member, the Percentage Interest of each such Non-Funding Member (expressed as a decimal) immediately preceding
such funding shall be decreased by an amount (expressed as a decimal) equal to the “Shortfall Dilution Factor”
(as hereinafter defined) multiplied by a percentage computed as a fraction (the “Dilution Amount”), the numerator
of which shall be the amount of the Shortfall of such Non-Funding Member contributed by the Shortfall Funding Member(s), and the
denominator of which shall be the aggregate of all Capital Contributions and Additional Capital Contributions made by such Non-Funding
Member up to and including the date of the Funding Notice. With respect to each Funding Notice issued by the Manager the Shortfall
Dilution Factor as applied to each Non-Funding Member shall be equal to 1.50. Each Shortfall Funding Member(s)’ Percentage
Interest(s) (expressed as a decimal) immediately preceding such funding shall thereafter, for all purposes hereof, be increased
by the Dilution Amount of each Non-Funding Member based on the percentage of the Shortfall funded by such Shortfall Funding Member.
The number of Interests of each Member shall be adjusted accordingly to reflect and correspond with their adjusted Percentage Interests
pursuant to this Section 3.3(b)(iv).


 


(v)        If
the Members fail or refuse to provide the entire Funding Amount required by the Company pursuant to the terms of this Section 3.3(b),
then the Manager may cause the Company to obtain funding from Persons other than the Members, but only during the twelve-month
period following the date of delivery of the Funding Notice to the Members and on substantially the same terms as contained in
the Funding Notice and only up to the amount equal to the difference between the Funding Amount and the amount of funding provided
by the Members pursuant to this Section 3.3(b); and the Company shall not otherwise solicit any additional funding from
Persons other than the Members without first offering to the Members the opportunity to provide such additional funding in accordance
with the provisions of this Section 3.3(b).


 


(c)           No
Third Party Rights. The provisions of this Section 3.3 are not for the benefit of any creditor or other Person (other
than a Member) to whom any debts, liabilities or obligations are owed by, or who otherwise has any claim against, the Company or
any Member, and no creditor or other Person shall obtain any rights under this Section or by reason of this Section, or shall be
able to make any claim in respect of any debts, liabilities or obligations against the Company or any Member.


 


(d)           No
Interest Paid. No Member shall receive any interest on such Member’s Capital Contributions, Capital Account or Interests.
Any loans made to the Company by a Member will not increase such Member’s Capital Account or Interests, but will be a debt
due from the Company and repaid accordingly.


 


(e)           No
Withdrawal of Capital. A Member shall not receive from the Company or out of Company property and shall have no right to withdraw
or demand, and the Company shall not return to a Member, any part of such Member’s Capital Contribution or Capital Account,
except as expressly provided in this Agreement. Distributions to the Members shall be made only as expressly provided for in this
Agreement.


 


(f)            Limitation
on Additional Capital Contributions. If the Manager determines that additional funds are required by the Company prior to the
expiration or termination of the Option Agreement, then any Capital Contributions shall be made following the same procedures,
mutatis mutandis, as those set forth in Section 3.3(b) but shall be considered Capital Contributions and not Additional
Capital Contributions and shall not earn an Additional Capital Contribution Preferred Return.


 




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3.4          Capital
Accounts.


 


(a)           A
separate Capital Account shall be maintained for each Member in accordance with the following provisions:


 


(i)         To
each Member’s Capital Account there shall be credited such Member’s Capital Contributions, such Member’s distributive
share of Profits, and any items thereof that are specially allocated pursuant to Article IV, and the amount of any Company
liabilities that are assumed by such Member or that are secured by, or subject to, any Company property distributed to such Member.


 


(ii)        To
each Member’s Capital Account there shall be debited the amount of cash and the Fair Market Value of any Company property
distributed to such Member pursuant to any provisions of this Agreement, such Member’s distributive share of Losses, and
any items in the nature of expenses or losses that are specially allocated pursuant to Article IV, and the amount of any liabilities
of such Member that are assumed by the Company or that are secured by, or subject to, any property contributed by such Member to
the Company.


 


(b)           Except
as provided to the contrary in this Agreement, the foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-l(b), and shall be interpreted
and applied in a manner consistent with such Treasury Regulations.  In the event the Manager shall determine in good faith
that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order
to comply with such Treasury Regulations, the Company may make such modification.  The Manager may also in good faith make
any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury
Regulations Section 1.704-l(b). The Manager may in good faith also cause Capital Accounts to be revalued in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv) to reflect a revaluation of Company property (including intangible assets such as goodwill)
on the Company's books, based upon the Fair Market Value of the Company property (taking into account Section 7701(g) of the Code),
as of the following times:  (a) immediately before and in connection with a contribution of money or other property (other
than a de minimis amount) to the Company by a new or existing Member as consideration for Interests or an interest in the Company;
(b) immediately before and in connection with the distribution of money or other property (other than a de minimis amount) to a
retiring or continuing Member as consideration for Interests or an interest in the Company; (c) immediately before and in connection
with the liquidation of the Company; and (d) immediately before and in connection with the grant of Interests or an interest in
the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company
by an existing Member acting in a Member capacity, or by a new Member acting in a Member capacity or in anticipation of becoming
a Member.


 


(c)           In
the event of a transfer of Interests in accordance with this Agreement, the Capital Account balance and other rights attributable
to such Interests shall be transferred to the assignee. For purposes of determining the Capital Account balance of a Member attributable
to a Unit and distributions to be made to a Member with respect to an Interest, (i) the Capital Account balances of the Members,
adjustments to such Capital Accounts relating to the allocation of Profits or Losses, distributions and other items, and other
attributes of a Member’s Interests, shall be apportioned and allocated in equal amounts among all Interests held by a Member
to which such balances, adjustments or attributes relate, and (ii) Capital Contributions made by a Member after the date hereof
shall be allocated and apportioned in equal amounts among all Interests held by the contributing Member, except as may otherwise
be specified in writing by such Member and agreed to in a written resolution duly adopted by the Manager.


 




    	 	11	 



     


    

 


3.5          Liability
of Members.


 


(a)           Except
as expressly provided by the Act and subject to Section 3.5(b), no Member shall have any personal liability whatsoever in
such Member’s capacity as a Member, whether to the Company, to any of the Members, or to the creditors of the Company, for
the debts, liabilities, contracts, or any other obligations of the Company, or for any losses of the Company.  A Member shall
be liable only to make such Member’s Capital Contributions as expressly provided for herein and shall not be required to
lend any funds to the Company or to make any further capital contributions to the Company.


 


(b)           In
accordance with applicable law, a Member of the Company may, under certain circumstances, be required to return to the Company,
for the benefit of Company creditors, amounts previously distributed to such Member. It is the intent of the parties that no distribution
to any Member shall be deemed a return or withdrawal of capital, and that no Member shall be obligated to pay any such amount to
or for the account of the Company or any creditor of the Company. However, if any court of competent jurisdiction holds that, notwithstanding
the provisions of this Agreement, any Member is obligated to make any such payment, such obligation shall be the obligation of
such Member only and not of any other Member.


 


(c)           A
Member shall not be personally liable for the payment or repayment of any amounts standing in the account of another Member including,
but not limited to, the Capital Contributions. Any such payment or repayment, if required to be made, shall be made solely from
the Company’s assets.


 


(d)           A
Member shall have no personal liability to repay to the Company, any Member or any creditor of the Company all or any portion of
any negative amount of the Member’s Capital Account or otherwise be obligated to restore any deficit balance in the Member’s
Capital Account.


 


3.6          Transaction
Expenses. The Company shall pay and assume any pre-formation, organizational and offering expenses of the Company and the direct
expenses of the Manager in connection with the consummation of the transactions contemplated in this Agreement; provided, however,
that each Member shall pay and assume such Member’s own expenses in connection with such Member’s evaluation of an
investment in the Company and such Member’s review of and determination to enter into this Agreement.


 


3.7          Omitted.


 


3.8          Voting
Rights of Members. In the event the Members are expressly required to vote on a matter of the Company either under the Act
or pursuant to this Agreement, then (i) such Member shall be entitled to vote based on the Percentage Interest held by such Member
and (ii) the affirmative vote of the Members holding more than fifty percent (50%) of the Percentage Interests shall be the act
of the Members, unless a greater percentage is expressly required. No Member, in its capacity as such, shall participate in the
control or management of the Company’s business, transact any business in the Company’s name, have the power to sign
documents for or otherwise bind the Company, or have any rights of voting, veto, consent or approval, except as otherwise expressly
required under the Act or as otherwise provided under this Agreement.


 




    	 	12	 



     


    

 


3.9          Manner
of Consent. Any consent or approval of the Members required by this Agreement may be given as follows:


 


(a)           by
a written consent given by the consenting Member at or prior to the taking of the action for which the consent is solicited; or


 


(b)           by
the affirmative vote of the consenting Member to the taking of the action for which the consent is solicited at any meeting duly
called and held to consider the taking of such action.


 


3.10       Conflict
of Interest.


 


(a)           The
Members acknowledge and agree that the Manager is an Affiliate of a Member and that the Manager may represent and serve the interests
of such affiliated Member. Thus, a Manager does not violate its duty or obligation under this Agreement or applicable law solely
because such Manager’s conduct furthers the interest of such affiliated Member.


 


(b)           Except
as expressly prohibited by the Act and set forth in this Agreement, the Company is specifically authorized to engage in (i) any
transaction that involves a Member or an Affiliate of a Member providing services, equipment or supplies to the Company in exchange
for consideration in an amount reasonably determined by the Manager and (ii) the transactions contemplated by this Agreement.


 


ARTICLE
IV

ALLOCATIONS


 


4.1         Determination
of Profits and Losses. Profits and Losses of the Company shall be determined for each Fiscal Year of the Company in accordance
with the method of income tax accounting adopted by the Manager for the Company consistently applied and shall be allocated among
the Members in the manner provided in this Article IV.


 


4.2          Allocation
of Profits and Losses. The net amount of Profits or Losses for any Fiscal Year shall be allocated among the Members in such
manner that, as of the end of such Fiscal Year, the sum of (a) the Capital Account of each Member, (b) such Member’s share
of “partnership minimum gain” (as determined according to Regulations Section 1.704-2(g)) and (c) such Member’s
“partner nonrecourse debt minimum gain” (as determined according to Regulations Section 1.704-2(i)(3)) shall be equal
to the respective net amount, positive or negative, which would be distributed to such Member or for which such Member would be
liable to the Company under this Agreement, determined as if the Company were to (i) sell the assets of the Company for an amount
equal to their Book Value, (ii) satisfy all liabilities of the Company (limited with respect to each nonrecourse liability to the
Book Value of the assets securing such liability), and (iii) distribute the proceeds of liquidation pursuant to Section 9.2(b).


 




    	 	13	 



     


    

 


4.3         Tax
Allocations.


 


(a)           Except
as otherwise provided in this Agreement, for Federal income tax purposes, all items of Company income, gain, loss, deduction, basis,
amount realized and credit, and the character and source of such items, shall be allocated among the Members in the same manner
as the corresponding items of income, gain, loss, deduction or credit are allocated to Capital Accounts in accordance with Sections 4.2
or 4.4. The Company shall maintain such books, records and accounts as are necessary to make such allocations.


 


(b)           The
Manager is authorized to make, for tax purposes only, allocations of income, gain, loss or deduction or adopt conventions as are
necessary or appropriate to comply with the relevant Treasury Regulations or Internal Revenue Service pronouncements under Section 704(c)
of the Code, and in particular, in respect of a Capital Contribution of property other than cash and adjustments to the Book Value
of Company assets at the times specified in the definition of Book Value. Allocations will be made under methods selected by the
Manager in good faith and in a manner consistent with Treasury Regulations Section 1.704-3 and in conformity with Treasury Regulations
Sections 1.704-l(b)(2)(iv)(f) and 1.704-l(b)(4)(i). Without limiting the foregoing, the Company is authorized to make such allocations
as are permitted by Regulations Section 1.704-3 to correct distortions arising from application of the ceiling rule referred to
in such Regulations with respect to depreciation, amortization or other cost recovery deductions relating to property treated as
contributed by a Member and to make such elections and take such steps as may be necessary to permit such allocations.


 


4.4         Regulatory
Allocations.


 


(a)           Certain
Regulatory Allocations. The allocations set forth in clauses (i), (ii) and (iii) below shall be made to the extent applicable
in the order set forth below:


 


(i)       Items
of income and gains shall be allocated to the Members in such manner as shall cause the Company to make allocations in accordance
with provisions in the Regulations relating to: first, “minimum gain chargebacks” under Regulations Sections 1.704-2(f)
and related provisions; second, “partner nonrecourse debt minimum gain chargebacks” under Regulations Sections 1.704-2(i)(4)
and related provisions; and third, “qualified income offsets” under Regulations Section 1.704-1(b)(2)(ii)(d) and related
provisions; and then


 


(ii)       Nonrecourse
deductions within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated to the Members in proportion to their Capital
Account balances; and then


 


(iii)       Partner
nonrecourse deductions within the meaning of Regulations Section 1.704-2(i) shall be allocated to the Member who bears the economic
risk of loss with respect to the particular partner nonrecourse liabilities to which they relate in accordance with such Regulations.


 




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(b)           Curative
Allocations. The allocations set forth in Section 4.4(a) above (the “Regulatory Allocations”) shall
be applied to the extent necessary for allocations under this Agreement to be respected under Regulations Section 1.704-1. The
Regulatory Allocations may not be consistent with the manner in which the Members intend to allocate Profit and Loss or make Company
distributions. Accordingly, notwithstanding the other provisions of this Agreement but subject to the Regulatory Allocations, the
Company is hereby directed to reallocate items of income, gain, deduction and loss among the Members so as to eliminate the effect
of the Regulatory Allocations as quickly as possible and consistent with the Regulations providing for the Regulatory Allocations,
and thereby to cause the respective Capital Account balances of the Members to be in the amounts (or as close thereto as possible)
they would have been if Profit and Loss (and such other items of income, gain, deduction and loss) had been allocated without reference
to the Regulatory Allocations. This may be accomplished by making offsetting special allocations of Profit and Loss (and such other
items of income, gain, deduction and loss) among the Members so that the net amount of the Regulatory Allocations and such offsetting
special allocations to each such Member is zero.


 


(c)           Priority.
The allocations under this Section 4.4 shall be made prior to the allocations under Section 4.2.


 


4.5         Allocations
in Event of Assignment; Prorations.


 


(a)           Subject
in all cases to applicable law, if there is a Transfer of all or any part of a Member’s Interests in accordance with this
Agreement, for purposes of allocations of Profits and Losses and distributions of cash and property, (i) the effective date of
the Transfer as to the Company will be the effective date stated in the Transfer instrument or such other date as the assignor
and assignee agree, but not earlier than the date the Manager receives written notice of the Transfer, or, in the case of an involuntary
Transfer, the date of the operative event. Distributions of cash and property with respect to any Interests shall be made to the
Person who is shown as the holder of such Interests in the Company’s books at the time of the distribution.


 


(b)           In
the event of a change in a Member’s percentage interest in the Company during the course of a period as the result of the
admission of a new Member, for purposes of determining the income, gain, loss, deduction or credit, or any other items allocable
to any period, such items shall be determined on a daily, monthly or other basis as determined by the Manager in good faith using
any permissible method under Code Section 706 and the Treasury Regulations thereunder.


 


4.6          Imputed
Interest. If any Member makes a loan to the Company, or the Company makes a loan to any Member, and interest in excess of the
amount actually payable is imputed under Code Sections 7872, 483, or 1271 through 1288 or corresponding provisions of subsequent
Federal income tax law, then any item of income or expense of the Company attributable to any such imputed interest shall be allocated
solely to the Member who made or received the loan and shall be credited or charged to its Capital Account, and a corresponding
Capital Contribution by or distribution to such Member shall be deemed to have occurred, as appropriate.


 


ARTICLE
V

DISTRIBUTIONS


 


5.1          Timing
and Priority of Distributions of Net Cash Flow to Members. The Company shall distribute Net Cash Flow in such amounts and at
such times as the Managers shall determine. Except as otherwise provided in this Agreement, all such distributions shall be made
in the following order and priority:


 




    	 	15	 



     


    

 


(a)           First:
to the Members, pro rata in accordance with their respective Unpaid Additional Capital Contribution Preferred Returns, until their
respective Unpaid Additional Capital Contribution Preferred Returns are reduced to zero; and then


 


(b)          Thereafter:
to all of the Members pro rata in accordance with their Percentage Interests adjusted as provided in Section 3.3(b).


 


5.2          Timing
and Priority of Distributions of Capital Proceeds. The Company shall distribute Capital Proceeds or other property in such
amounts and at such times as the Managers shall determine. Except as otherwise provided in this Agreement, all such distributions
shall be made in the following order and priority:


 


(a)           First:
to the Members, pro rata in accordance with their respective Unpaid Additional Capital Contribution Preferred Returns, until their
respective Unpaid Additional Capital Contribution Preferred Returns are reduced to zero; and then


 


(b)           Second:
to the Members, pro rata in accordance with their respective Unreturned Additional Capital Contributions, until their respective
Unreturned Additional Capital Contributions are reduced to zero; and then


 


(c)           Third:
to the Members, pro rata in accordance with their respective Unreturned Capital Contributions, until their respective Unreturned
Capital Contributions are reduced to zero; and then


 


(d)           Thereafter:
to all of the Members pro rata in accordance with their Percentage Interests adjusted as provided in Section 3.3(b).


 


5.3         Distributions
In Kind. If the Company distributes property other than cash to its Members, the amount of such distribution shall be deemed
to be equal to the Fair Market Value of the property distributed, net of any liabilities that such property may be subject to or
that may be assumed by the Members in connection therewith.


 


5.4          Payments
to Tax Authorities. Notwithstanding anything to the contrary in this Agreement, the Company shall withhold such amounts as
may be required pursuant to the Code (including Section 1446 thereof), Treasury Regulations or any provision of any state, local
or foreign law with respect to any payment, distribution or allocation of income to the Members and such withheld amounts shall
be treated for all purposes of this Agreement as amounts distributed pursuant to Article V or Article IX to the Members to which
such withholdings are attributable and distributions to be made to such Members shall be reduced by the amount so withheld. If
the Company is required to withhold and pay over to a taxing authority amounts on behalf of a Member exceeding available amounts
then remaining to be distributed to such Member, the Company shall provide the Member with written notice of such shortfall and,
to the extent that the Member does not reimburse the Company for such excess amount or such withholding requirement, as the case
may be, within five (5) business days of receiving such notice, the unreimbursed portion of such payment by the Company shall constitute
a loan to such Member that is repayable by the Member on demand of the Company, together with interest at a rate of fifteen percent
(15%) or the maximum rate permitted under applicable law, whichever is less, calculated upon the outstanding principal balance
of such loan. Any such loan shall be repaid to the Company, in whole or in part, as determined by the Company in its sole discretion,
either (i) out of any distributions from the Company which the Member is (or becomes) entitled to receive, or (ii) by the Member
in cash (said Member bearing all of the Company's costs of collection, including reasonable attorney's fees, if payment is not
remitted promptly by the Member after a demand for payment). Each Member shall, to the fullest extent permitted by applicable law,
indemnify and hold harmless the Company and the other Members against all claims, liabilities and expenses of whatever nature relating
to the Company's obligation to withhold and to pay over, or otherwise pay, any Company withholding taxes with respect to such Member
or as a result of such Member's participation in the Company. The Company shall pay over to any federal, state, local or foreign
government any amounts required to be so withheld in accordance with applicable law.


 




    	 	16	 



     


    

 


5.5          Limitation
on Distributions to Members. The Company shall not distribute cash or property to any Member unless, after such distribution
is made, the fair value of the Company’s assets exceeds its liabilities, and unless such distribution is in compliance with
any loan agreements or similar documents to which the Company is subject and applicable law.


 


5.6         Distributions
Relative to REIT. Notwithstanding anything to the contrary set forth in Sections 5.1 or 5.2, it is anticipated that, pursuant
to an Option Agreement (“Option Agreement”) with Procaccianti Hotel REIT, Inc. (the “REIT”),
the REIT will upon exercise of the option set forth in the Option Agreement, in one or two transactions, purchase a minimum of
a 25.5% interest in the Company and a maximum of a 51% interest in the Company, each interest in the form of Class B Interests
(any such transaction, a “REIT Transaction” and, collectively, the “REIT Transactions”).
The Manager shall reasonably promptly after the issuance of Class B Interests to the REIT in connection with the REIT Transactions,
pursuant to the terms of this Article V, distribute or cause the distribution to the Members (excluding the REIT Member) of the
proceeds available from the REIT Transactions to the Members (excluding the REIT Member) pro rata based on their Unreturned Capital
Contributions.


 


ARTICLE
VI

MANAGEMENT


 


6.1         Management
Power Vested in Manager.


 


(a)           The
right to conduct the Business of the Company is vested exclusively in the Manager, and all decisions affecting the Company, its
policies and management shall be made exclusively by the Manager. The Manager shall have and exercise all of the powers that a
manager of a limited liability company may have or exercise under applicable law and is authorized and empowered to carry out and
implement the Business, to engage in such other activities solely incident or related thereto and to take all other actions on
behalf of the Company, including, without limitation, admitting additional Members to the Company without the consent of any other
Member, subject to the terms of this Agreement. All Company acts and decisions shall require the affirmative act or consent of
the Manager, and no Company act or decision shall be taken or made without the affirmative act or consent of the Manager. Each
of the Members agrees that all determinations, decisions and actions made or taken by the Manager shall be conclusive and absolutely
binding upon the Company, the Members and their respective successors, assigns and personal representatives.


 




    	 	17	 



     


    

 


(b)           The
Manager is hereby authorized to execute or cause to be executed all other instruments, certificates, notices and documents, and
to do or cause to be done all such filing, recording, publishing and other acts as may be deemed by the Manager to be necessary
or appropriate from time to time to comply with all applicable requirements for the formation or operation or, when appropriate,
termination of a limited liability company in the State of Delaware and all other jurisdictions where the Company does or shall
desire to conduct its business. Any person dealing with the Company may rely on a certificate signed by the Manager: (i) as to
the identity of the Members and Manager hereunder; (ii) as to the existence or nonexistence of any fact or facts, which constitute
conditions precedent to acts by the Manager or are in any other manner germane to the affairs of this Company; (iii) as to who
is authorized to execute and deliver any instrument or document of the Company; (iv) as to the authenticity of any copy of this
Agreement and amendments thereto; or (v) as to any act or failure to act by the Company or as to any other matter whatsoever involving
the Company or any Member.


 


(c)           Subject
to Section 6.12(c), if at any time there is more than one Manager, any action requiring the consent of the Manager under
this Agreement shall require the unanimous consent of all Managers, provided that any single Manager may execute any instrument,
certificate, notice, or document (other than a written consent under Section 6.2) on behalf of the Company as long as such
execution was authorized by all Managers. References in this Agreement to the Manager in the singular shall be deemed to include
the plural and vice versa as the context may require.


 


6.2         Action
by Manager by Written Consent. Any action or decision required or permitted to be taken or made by the Manager may be taken
or made without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action
or decision so taken or made, shall be signed by the Manager.


 


6.3          No
Exclusive Duty to Company. The Manager shall not be required to manage or participate or otherwise be involved in the Company’s
Business and affairs as such Manager’s sole and exclusive function.


 


6.4          No
Liability. No Manager shall be liable under a judgment, decree or order of court, or in any other manner, for a debt, obligation
or liability of the Company.


 


6.5          Appointment
of Manager; Resignation; Vacancies. The Manager may resign from office by delivering or causing to be delivered to the Members
a written resignation, which shall take effect upon being so delivered or at such other time as may be therein specified. If the
Manager resigns or otherwise fails to serve as Manager, a substitute Manager may be selected by the majority vote of the holders
of the Class A Interests, provided that for so long as the REIT is a Member, the REIT shall have the authority to appoint a Manager.
The Manager may not be removed by the Members. Upon the closing of the one or more REIT Transactions, the REIT (or other affiliate
of the REIT) shall become a Manager of the Company.


 


6.6          Reimbursement
and Compensation of Manager. The Manager shall be entitled to be reimbursed by the Company for out-of-pocket expenses incurred
in connection with the management of the Company and its Business, including, without limitation, reasonable travel expenses. The
Manager shall not receive compensation for any activities as Manager.


 


6.7          Liability
of Manager. 


 


(a)           The
Manager shall not be liable for the return of all or any part of the capital contributions of the Members to the Company. Any returns
shall be made solely from the assets of the Company according to the terms of this Agreement.


 




    	 	18	 



     


    

 


(b)           In
carrying out its duties hereunder, the Manager shall not be liable to the Company or to any other Member for any actions taken
in good faith and reasonably believed to be in the best interests of the Company, or for errors of judgment, but shall be liable
for willful misconduct, breach of its fiduciary duties, or a material adverse breach of this Agreement. Notwithstanding any other
provision of this Agreement or otherwise applicable provision of law or equity, whenever in this Agreement the Manager is permitted
or required to make a decision (i) in his, her or its “sole discretion” or “discretion” or under a grant
of similar authority or latitude, the Manager will be entitled to consider only such interests and factors as he, she or it desires,
including his, her or its own interests and will, to the fullest extent permitted by applicable law, have no duty or obligation
to give any consideration to any interest of or factors affecting the Company or any Member, or (ii) in its “good faith”
or under another expressed standard, the Manager will act under such express standard and will not be subject to any other or different
standards.


 


(c)           The
Manager shall not be liable to the Members for any breach of its duties under the Agreement or the Act except as provided by the
Act.


 


6.8         Officers.
The Manager may designate one or more persons to be officers of the Company. No officer need be a resident of the Charter State
or a Member. Any officer so designated shall have such authority and perform such duties as the Manager may delegate to them. The
Manager may assign titles to particular officers. Each officer shall hold office until his or her successor shall be duly designated
and shall qualify or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter
provided. Any number of offices may be held by the same person. Any officer may resign as such at any time. Such resignation shall
be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt
by the Manager. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the
resignation. Any officer may be removed as such, either with or without cause, by the Manager, in his sole and absolute discretion;
provided, however, that such removal shall be without prejudice to the contract rights, if any, of the person so removed.
Designation of an officer shall not of itself create contract rights. Any vacancy occurring in any office of the Company may be
filled by the Manager.


 


6.9          Rights
of the Members.


 


(a)           Except
as provided in Section 6.5, the Members shall not have any right or power to participate in the management or control of the Company
or its Business and affairs or to act for or bind the Company in any way, in their capacity as members of the Company, such rights
being vested exclusively in the Manager.


 


(b)           Notwithstanding
anything to the contrary contained herein, the Manager shall not incur additional indebtedness unless permitted by the Company’s
lender.


 


6.10        Indemnification.



 


(a)           The
Company shall indemnify, defend and hold harmless the Members, the Manager and, in the discretion of the Manager, the Company’s
agents, employees, advisers and consultants (each a “Covered Person”), from and against any claim, loss, liability,
damages or expense (including, without limitation, reasonable attorneys’ fees) arising as a result of business or activities
undertaken on behalf of the Company including, without limitation, any demand, claim or lawsuit initiated by a Member or resulting
from or relating to the offer and sale of an Interest, provided that the acts or omissions of such Persons are not found by a court
of competent jurisdiction, upon entry of a final judgment, to be the result of fraud, gross negligence or intentional misconduct.
All rights of the Covered Persons to indemnification shall survive the dissolution of the Company.


 




    	 	19	 



     


    

 


(b)           The
Persons entitled to indemnification pursuant to this Section shall be entitled to receive advances to cover the cost of defending
any claim or action against such Person; provided, however, that such advances shall be repaid to the Company if the Manager
or such other Person entitled to indemnification pursuant to this Section, as applicable, is found by a court of competent jurisdiction,
upon entry of a final judgment, to have violated the standard set forth in Section 6.10(a).


 


(c)           The
Manager shall have the power to purchase and maintain reasonable insurance on behalf of the Covered Persons at the expense of the
Company, against any liability asserted against or incurred by any of them in any such capacity or arising out of their status
as such, whether or not the Company would have the power to indemnify the Covered Persons against such liability under the provisions
of this Agreement.


 


(d)          Without
limiting the foregoing, the indemnities by the Company provided for herein shall apply with respect to all actions taken by the
Covered Persons that they believe to be in the best interest of the Company in accordance with the business judgment rule, other
than actions that constitute fraud, willful misconduct or gross negligence.


 


(e)           Each
Covered Person may rely upon and shall be protected in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by them to be
genuine and to have been signed or presented by the proper party or parties.


 


(f)            To
the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto
to the Company or to any other Covered Person, to the fullest extent permitted by applicable law, a Covered Person acting under
this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions
of this Agreement or any approval or authorization granted by the Company or any other Covered Person. The provisions of this Agreement,
to the extent that they eliminate or restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity,
are agreed by the Members to replace such other duties and liabilities of such Covered Person to the fullest extent permitted by
applicable law.


 


(g)           The
foregoing provisions of this Section 6.10 shall survive any termination of this Agreement.


 


6.11        Express
Waiver of Business Opportunity. This Agreement and the Members’ relationship by virtue hereof is limited solely to the
Business. Notwithstanding anything to the contrary set forth herein each Member and Manager may engage in any other activity and
take advantage of any other business opportunity without any restriction of any nature whatsoever, including, but not limited to,
first offering same to the Company. No Member or Manager shall be restricted from competing against the Company. No Member or Manager
shall have any right to participate, in any manner whatsoever, in any profits or income earned or derived by any other Member or
Manager in the conduct of any business other than the Business pursuant to the terms of this Agreement. No Member or Manager will
incur any liability to the Company or to any of the other Members or Manager or be disqualified from voting or taking any action
respecting the Company as a result of engaging in any other business or venture.


 




    	 	20	 



     


    

 


6.12       REIT
Compliance.


 


(a)           The
Members acknowledge and understand that, following a REIT Transaction, the REIT will be a Member of the Company, and that in order
for the REIT to maintain its status as a real estate investment trust under the Code, the REIT must comply with numerous and complex
rules and regulations set forth in the Code and the Regulations, many of which are applied on a quarterly and/or annual basis and
that the management and operation of the Company will have a material effect on the ability of the REIT to qualify and maintain
its status as a real estate investment trust. Accordingly, notwithstanding any other provision of this Agreement or any non-mandatory
provision of the Act, the Managers agree to use reasonable best efforts to manage the business and affairs of the Company in a
manner that will satisfy the following objectives (collectively, the “REIT Objectives”) relating to the status
of the REIT as a real estate investment trust under the Code: (i) to ensure the continued qualification of the REIT as a real estate
investment trust under Code Section 856 and (ii) to avoid the imposition of additional taxes on the REIT under Code Sections 857
or 4981. The Managers shall cooperate in good faith to determine and implement a course of action that shall, to the greatest extent
possible, satisfy the REIT Objectives. The Members agree to use commercially reasonable efforts to cooperate with the REIT Objectives
at the REIT’s cost and expense and upon Manager’s request.


 


(b)          Without
limiting the generality of Section 6.12(a), (i) each of the Properties will be leased to an entity that is taxable as an
association taxable as a corporation (a “Lessee”) for U.S. federal income tax purposes at market-rate leases,
and each such Lessee will contract with a property manager that meets the definition of “eligible independent contractor”
pursuant to Section 856(d)(9)(B) of the Code and (ii) the Company will cause the Lessee (or each Lessee, if there be more than
one) to make a taxable REIT subsidiary election with the REIT by jointly filing a Form 8875 upon the REIT’s acquisition of
an Interest in the Company.


 


(c)           For
the avoidance of doubt, the REIT in its capacity as a Manager, and notwithstanding any implication to the contrary in Section
6.1(c), shall have the right (either itself or through the Company), in consultation with the its counsel or tax accountants,
to authorize and approve any action (including a determination not to take an action) that is necessary in order to preserve the
status of the REIT as a real estate investment trust.


 


ARTICLE
VII

TRANSFER OF INTERESTS


 


7.1         General
Prohibition Against Transfers. No Transfer of any Interests, or any rights or interest in or to any Interests, in whole or
in part, may be made by a Member to any Person, whether directly, indirectly, voluntarily, involuntarily or by operation of law,
including, without limitation, pursuant to an Indirect Transfer, except for Approved Transfers. Any attempted or purported Transfer
in violation of this Agreement (a “Prohibited Transfer”) shall be invalid and null and void ab initio.


 




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7.2          Certain
Agreements by Transferees. No Approved Transfer shall be valid or permitted, nor shall any transferee of Interests by means
of any such Transfer have any rights hereunder, unless and until all of the following conditions are satisfied:


 


(a)           The
transferee shall have executed and delivered to the Members and the Company a counterpart of this Agreement pursuant to which the
transferee agrees to be bound by the provisions of this Agreement and the written acceptance and adoption by the transferee of
the provisions of this Agreement and the assumption by the transferee of all obligations of the transferor under this Agreement.
The failure or refusal of a transferee to execute and deliver to the Company such a counterpart shall not limit the applicability
of this Agreement to the Interests transferred;


 


(b)           The
transferor shall deliver to the Manager the fully executed and acknowledged written instrument of assignment or other applicable
document setting forth the intention of the transferor to transfer such transferor’s Interests to the transferee;


 


(c)           The
transferor and transferee shall execute and acknowledge such other instruments as the Manager may reasonably deem necessary or
desirable to effect such Transfer and admission of the transferee as a Member;


 


(d)           If
requested by the Manager, counsel reasonably satisfactory to the Company shall have rendered an opinion, at the transferor’s
sole cost and expense, that (i) such Transfer may be effected without registration under the Securities Act of 1933, as amended,
or violation of applicable state securities laws, (ii) such Transfer will not result in the termination of the Company’s
tax treatment as a partnership for federal income tax purposes or the termination of the limited liability of the Members under
applicable law, (iii) if there is a deed of trust, security agreement or other material contract to which the Company is a party
or by which the Company or any of its properties or assets are bound or subject, such Transfer will not entitle the holder of the
indebtedness secured thereby or other contractual party to accelerate the indebtedness or terminate or otherwise materially alter
the terms of the contract, and (iv) the Company will not be required to register under the Investment Company Act of 1940, as in
effect at the time of rendering such opinion; and


 


(e)           The
transferee has paid all reasonable expenses incurred by the Company (including its legal fees) in connection with the Company’s
determination of the transferee’s and transferor’s compliance with the foregoing provisions, or otherwise in connection
with such Transfer, including any fees charged by lenders as a result of such Transfer under any loan documents by which the Company
is bound.


 


7.3          Indemnity.
Each Member shall indemnify and hold harmless the Company and the other Members from and against any and all loss, liability, claim,
damages or expense (including, without limitation, attorneys’ fees and court costs) arising from or in any way relating to
any Prohibited Transfer by or in respect of such Member or such Member’s failure to comply with any provision of this Article
VII (collectively, “Indemnifiable Damages”). The Company shall have the right, in addition to any other rights
or remedies, to offset the amount of any Indemnifiable Damages for which a Member is responsible against any Capital Account balance
of such Member or any amounts owed or distributable by the Company to such Member under this Agreement.


 




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7.4          Interests
Subject to this Agreement. In the event of any Transfer pursuant to this Agreement, at any time and from time to time, the
transferee shall take such Interests pursuant and subject to all of the provisions, conditions and agreements set forth in this
Agreement.


 


ARTICLE
VIII

REPRESENTATIONS AND WARRANTIES OF THE MEMBERS


 


8.1          Representations
and Warranties. Each of the Members, in being admitted as a member of the Company hereunder, hereby represents and warrants
to the Company and all of the other Members as follows:


 


(a)           Such
Member’s acquisition of Interests is made for its own account only and not with a view toward the distribution of all or
any portion thereof; and under no circumstances will such Member Transfer all or any portion of its Interests except in compliance
with the provisions of this Agreement;


 


(b)           Such
Member’s Interests constitute securities that have not been registered under any federal or state securities laws by virtue
of exemptions from the registration provisions thereof and consequently cannot be sold except pursuant to appropriate registration
or exemption from registration as applicable;


 


(c)           Such
Member is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act
of 1933, as amended, and is relying on its own business and financial knowledge and experience, or that of a duly qualified investment
and tax advisor, in making a decision to enter into and execute this Agreement; such Member, either alone or together with such
investment advisor, has such knowledge and experience in business and financial matters as will enable it to evaluate the merits
and risks of this investment, and to make an informed decision, and is able to bear the economic risk of its participation in the
Company; and such Member is not relying on the advice of the Company or any Affiliates thereof in becoming a Member hereunder;


 


(d)           Such
Member is aware of the restrictions on Transfer of its Interests hereunder, and that the same will at no time be freely transferable
or be assignable otherwise than to a Person accepting similar restrictions on transferability and otherwise in accordance with
the terms of this Agreement, and that no trading market for Interests will exist at any time;


 


(e)           Such
Member has adequate means of providing for current needs and possible personal contingencies, no need for liquidity of its Interests,
and no reason to anticipate any change in personal circumstances, financial or otherwise, that should cause it to sell or distribute,
or necessitate or require any sale or distribution, of such Interests;


 


(f)            Such
Member is familiar with the nature of and risks attendant to investments in business, real estate and/or in securities, and has
not relied on any representations or warranties of the Company or its representatives other than those set forth in this Agreement,
if any;


 


(g)           Such
Member was provided with an adequate opportunity to review all material documents, records and books of the Company, including
all documents relating to the Properties;


 




    	 	23	 



     


    

 


(h)          Such
Member had an opportunity to ask questions of and receive answers from the Company, or a person or persons acting on its behalf,
concerning the terms and conditions of the investment in the Interests, as well as the affairs of the Company and related matters,
and the Properties; and such Member had an opportunity to request and obtain all additional information reasonably deemed necessary
to verify the accuracy of the answers to such questions;


 


(i)            Such
Member is not relying on the Company or on any legal or other opinion in the materials reviewed by the Member with respect to the
financial or tax considerations of the Member relating to the Member’s investment in the Interests; and such Member has relied
solely on its examination and independent investigation in making its decision to acquire the Interests;


 


(j)            Such
Member understands that no federal or state agency has recommended or endorsed the Interests or made any finding or determination
as to the fairness for public investment of the Interests;


 


(k)           Such
Member is fully aware of the restrictions on resale of its Interests under this Agreement and under federal and state law (including
any applicable securities law); in particular, it is aware that the Interests will not at any time be freely saleable and that
any sale thereof may have significant adverse tax consequences;


 


(l)            Such
Member will not, in any event, sell or distribute its Interests or any portion thereof unless, in the opinion of counsel, which
opinion shall be satisfactory to counsel for the Company, such Interests may be legally sold or distributed;


 


(m)          Such
Member is fully aware that the Interests are being issued to such Member in reliance upon applicable exemptions of the Securities
Act of 1933, as amended, and/or Section 4(a)(2) thereof and/or Regulation D thereunder and applicable state laws on the grounds
that no public offering is involved, and upon the representations, warranties and agreements made by such Member in this Article
VIII and that the Interests may not be offered, sold, pledged, assigned, hypothecated, disposed of, or otherwise transferred unless
registered under the Securities Act of 1933, as amended, and all of such other applicable laws or an opinion of counsel satisfactory
to the Company is obtained to the effect that such registration is not required;


 


(n)           Such
Member has full power and complete authority to enter into this Agreement, and perform its obligations hereunder, without the need
of any consent of others;


 


(o)           Such
Member will not, directly or indirectly, take any action or fail to take any action, that would terminate this Company and/or cause
the Company to not be taxed as a partnership; and


 


(p)           Such
Member acknowledges that such Member’s Capital Contribution will, in part, be used by the Company to acquire the Properties;
and that by investing in the Company, such Member risks losing his, her or its entire investment.


 


8.2       Additional
Representations and Warranties of the Class B Members. Each Class B Member severally represents and warrants to the Company
as follows:


 




    	 	24	 



     


    

 


(a)           It
is a limited liability company duly organized, validly existing and in good standing under the laws of its state of formation.


 


(b)           It
has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions
provided for herein have been duly authorized by all necessary action on the part of such Class B Member and constitutes the legal,
valid and binding obligation of such Class B Member, enforceable against it in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights and by general
principles of equity (whether applied in a proceeding at law or in equity).


 


(c)           The
execution, delivery and compliance with, and performance of the terms and provisions of this Agreement by it, will not: (i) conflict
with or result in any violation of the organizational documents of such Class B Member; (ii) conflict with or result in any
violation of any provision of any bond, note or other instrument of indebtedness, contract, indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a party in its individual capacity; or (iii) to the
Knowledge of such Class B Member, violate any existing term or provision of any order, writ, judgment, injunction, decree, statute,
law, rule or regulation applicable to it or its respective assets or properties. To the Knowledge of such Class B Member, any consent,
license, approval, order, permit or authorization of, or registration, filing or declaration with, any court, administrative agency
or commission or other governmental authority or instrumentality, domestic or foreign, that is required to be made or obtained
by it in connection with the execution, delivery and performance of this Agreement or any of the transactions required or contemplated
hereby has been made or has been obtained and is in full force and effect.


 


(d)           There
are no actions, suits, proceedings or investigations pending or, to the Knowledge of such Class B Member or any of its Affiliates,
threatened against or affecting it or any of its Affiliates or any of their properties, assets, or businesses in any court or by
any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitration which would, if adversely
determined (or, in the case of an investigation could lead to any action, suit, or proceeding, which if adversely determined) could
reasonably be expected to materially impair such Class B Member's ability to perform its obligations under this Agreement or to
have a material adverse effect on the consolidated financial condition of such Class B Member; and none of such Class B Member
or any of its Affiliates has received any currently effective notice of any default, and such Class B Member or any of its Affiliates
is not in default under any applicable order, writ, injunction, decree, permit, determination, or award of any court or of any
governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected
to materially impair such Class B Member 's ability to perform its obligations under this Agreement or to have a material adverse
effect on the consolidated financial condition of such Class B Member.


 


(e)           (i)
such Class B Member is not a Prohibited Person and no Person owning or controlling it is a Prohibited Person; (ii) none of its
investors, Affiliates or brokers or other agents (if any), acting or benefiting in any capacity on behalf of it in connection with
this Agreement is a Prohibited Person; and (iii) it has not violated the International Money Laundering Abatement and Financial
Anti-Terrorism Act of 2001 or the regulations or orders promulgated thereunder (as amended from time to time).


 




    	 	25	 



     


    

 


(f)            It
has reviewed the risks and merits of its participation in the Company with tax and legal counsel and its advisors to the extent
it deems advisable;


 


(g)           It
has the capacity to protect its own interests by reason of its business or financial experience or the business or financial experience
of its professional advisors who are unaffiliated with and who are not compensated by the Company or any Affiliate of the Company,
whether directly or indirectly;


 


(h)           It
acknowledges that it has not received or been presented with any advertisement in connection with its acquisition of its Interests;


 


(i)           It
acknowledges that it is acquiring its Interests in reliance solely on (i) its inspection of the Company or the Properties or, if
none, its independent determination not to make such an inspection, (ii) its independent verification of the accuracy of any (A)
documents delivered by the Company to it, and (B) statements made by the Company or others to such Class B Member concerning the
Properties or the Company, and (iii) any opinions and advice concerning the Properties and/or the Company of third-party consultants
and/or advisors engaged by such Class B Member, or, if none, it’s independent determination not to obtain such opinion or
advice;


 


(j)            such
Class B Member is an “accredited investor” and each member of it is an “accredited investor” (as defined
in Regulation D promulgated under the Securities Act of 1933, as amended);


 


(k)           it
has complied with all applicable the federal and state (“blue sky”) securities laws in connection with the formation
of such Class B Member and the sale of membership interests therein;


 


(l)            it
is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended and is not required
to register in any jurisdiction as an investment advisor;


 


(m)           It understands
that the Interests have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state or
jurisdiction and may not be offered, sold, pledged, assigned, hypothecated, disposed of, or otherwise transferred unless registered
under the Securities Act of 1933, as amended, and all of such other applicable laws or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is not required; and


 


(n)            Each
Class B Member has complied with all applicable the federal and state ("blue sky") securities laws in connection with
the formation of such Class B Member and the sale of membership interests therein.


 


8.3       Survival.
The representations and warranties of each Member under this Article VIII shall survive after the Effective Date.


 




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ARTICLE
IX

DISSOLUTION; LIQUIDATION


 


9.1         Dissolution.



 


(a)           The
Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following: (i) the written resolution
of the Manager to dissolve the Company, (ii) the termination of the legal existence of the last remaining member of the Company
or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the
Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act or (iii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act. Upon the occurrence of any event that causes the last remaining
member of the Company to cease to be a member of the Company, to the fullest extent permitted by law, the personal representative
of such member is hereby authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the
continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the
personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of
the occurrence of the event that terminated the continued membership of the last remaining member of the Company. 


 


(b)           Dissolution
of the Company shall be effective on the day on which the event occurs giving rise to the dissolution, but the Company shall not
terminate until the Business of the Company has been wound-up and the assets of the Company distributed as provided in Section
9.2 and the Charter has been canceled.


 


9.2         Liquidation.


 


(a)           Upon
dissolution of the Company, the Manager or a liquidating trustee, if one is appointed, shall wind up the affairs of the Company
and liquidate all or any part of the assets of the Company. The Manager or such liquidating trustee shall determine the time, manner
and terms of any sale or other disposition of the Company’s property for the purpose of obtaining, in its opinion, fair value
for such assets.


 


(b)           Profits
and Losses arising from such sales and distributions upon liquidation shall be allocated to the Member’s Capital Accounts
as provided in Article IV prior to making liquidating distributions to the Members. In settling accounts after dissolution, the
assets of the Company shall first be paid out to creditors, whether by payment or by establishment of due and adequate reserves,
in the order of priority as provided by law; and then to the Members in the same order of priority as distributions are required
to be made pursuant to Section 5.2.


 


(c)           When
the Manager or liquidating trustee has complied with the foregoing liquidation plan and the Charter of the Company has been cancelled
as provided in the Act, the Company shall cease to be as such. The provisions of this Agreement shall remain in full force and
effect during the period of winding up and until the cancellation of the Charter of the Company.


 


ARTICLE
X

RECORDS AND ACCOUNTING; REPORTS; TAX MATTERS


 


10.1        Records
and Accounting.The books and records of the Company shall be kept on such basis of accounting as may be determined by the
Manager. Proper and complete records and books of account of the Business of the Company, including a list of the names and addresses
and the number of Interests of all Members, shall be maintained by the Manager at the Company’s principal place of business,
and each Member or its duly authorized representative shall have access to them, upon reasonable notice and for a proper purpose,
at all reasonable times during business hours. Any Member, or its duly authorized representatives, upon paying the costs of collection,
duplication and mailing, shall be entitled for any proper purpose to a copy of the list of names and addresses of the Members and
number of Interests held by the Members and other records or books specified in applicable law. Such information shall be used
for Company purposes only. There shall be an interim closing of the books of account of the Company at such time as the Company’s
taxable year ends pursuant to the Code and at such other times as the Manager determines is required under this Agreement.


 




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10.2       Tax
Information. Within a reasonable period of time after the end of each calendar year, the Manager will cause to be delivered
to each Person who was a Member at any time during such calendar year all information necessary for the preparation of such Member’s
federal income tax returns, including a statement showing each Member’s share of Profits or Losses, and the amount of any
distribution made to or for the account of such Member pursuant to this Agreement.


 


10.3       Designation
of Tax Matters Member.


 


(a)           The
Manager shall act as the Tax Matters Member of the Company, as provided in Treasury Regulations pursuant to Section 6231 of the
Code (referred to therein as “tax matters partner”). Each Member hereby approves of such designation and agrees to
execute, certify, acknowledge, deliver, swear to, file, and record at the appropriate public offices such documents as may be deemed
necessary or appropriate to evidence such approval, including statements required to be filed with the tax returns of the Company
in order to effect the election and designation of the foregoing Member as Tax Matters Member.


 


(b)           To
the extent and in the manner provided by applicable Code sections and Treasury Regulations thereunder, the Tax Matters Member shall
furnish the name, address, profits interest, and taxpayer identification number of each Member (or assignee) or each indirect member
(as defined in Section 6231(a)(10) of the Code) to the IRS. The Tax Matters Member shall have the duties and authority accorded
to a tax matters partner in Sections 6221 through 6234 of the Code and the Treasury Regulations thereunder in the event of an administrative
or judicial proceeding relating to the adjustment of Company items required to be taken into account by a Member or indirect member
for United States federal income tax purposes.


 


(c)           Notwithstanding
any other provision of this Agreement, the Company shall indemnify and reimburse, to the fullest extent provided by law, the Tax
Matters Member for all expenses, including legal and accounting fees (as such fees are incurred), claims, liabilities, losses,
and damages incurred in connection with any tax audit or judicial review proceeding with respect to the tax liability of the Members,
the payment of all such expenses to be made before any cash distributions are made to the Members. No Member shall be obligated
to provide funds for such purpose.


 


(d)           The
Members shall take all reasonable actions to avoid the application of the provisions of Sections 6221 through 6241 of the Code,
as amended by the Bipartisan Budget Act of 2015, to the Company, including filing all necessary elections to avoid the application
of such provisions, and shall not cause the Company to elect to have such provisions apply to it before their general effective
date. If, however, such provisions do apply to the Company, the Tax Matters Member shall also act as the partnership representative
(“Partnership Representative”) for purposes of Sections 6221 through 6241 of the Code, as amended by the Bipartisan
Budget Act of 2015, and, as such, shall be authorized and required to represent the Company (at the Company's expense) in connection
with all examinations of the Company's affairs by tax authorities, including resulting administrative and judicial proceedings,
and to (i) sign consents, enter into settlement and other agreements with such authorities with respect to any such examinations
or proceedings and (ii) expend the Company's funds for professional services incurred in connection therewith. In such event, the
Partnership Representative shall duly and timely elect under Section 6226 of the Code to require each Person who was a Member during
the taxable year of Company that was audited to personally bear any tax, interest and penalty resulting from adjustments based
on such audit and shall notify each such Person (and the Internal Revenue Service) of their share of such audit adjustments and,
if for any reason, the Company is liable for a tax, interest, addition to tax or penalty as a result of such an audit, each Person
who was a Member during the taxable year of the Company that was audited shall pay to the Company an amount equal to such Person's
proportionate share of such liability, as determined by the Manager, based on the amount each such Person should have borne (computed
at the tax rate used to compute the Company's liability) had the Company's tax return for such taxable year reflected the audit
adjustment, and the expense for the Company's payment of such tax, interest, addition to tax and penalty shall be specially allocated
to such Persons (or their successors) in such proportions.


 




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10.4        Elections.
The Manager may in good faith cause the Company to make all elections required or permitted to be made by the Company under
the Code and not otherwise expressly provided for in this Agreement.


 


ARTICLE
XI

MISCELLANEOUS


 


11.1        Notice.


 


(a)           Any
notice to any Member shall be at the mailing or email address or fax number of such Member set forth on the respective signature
page of such Member made a part hereof or such other mailing or email address or fax number of which such Member shall advise all
other Members in writing (by email or otherwise).


 


(b)           Any
notice shall be deemed to have been duly given if personally delivered or sent by United States mail or by facsimile transmission
or email transmission and will be deemed given, unless earlier received (i) if sent by certified or registered mail, return receipt
requested, five (5) calendar days after being deposited in the United States mails, postage prepaid; (ii) if sent by United States
Express Mail, two (2) calendar days after being deposited in the United States mails, postage prepaid; (iii) if sent by facsimile
or email transmission, the date sent; and (iv) if delivered by hand, on the date of receipt.


 


11.2       Waiver
of Attorney Conflicts of Interest. Each of the Members acknowledges that it has read, understands and agrees to the terms of
the following:


 


(a)           The
parties to this Agreement acknowledge that the Agreement has been prepared by Ron M. Hadar, Esq., in house counsel for an affiliate
of Manager (“TPG Counsel”).  In connection with this Agreement, TPG Counsel has represented Company, Manager
and TPG PCF Investor, LLC, and DarrowEverett LLP (“DarrowEverett”) has represented TPG INV CI, LLC and Richard
Tasca (“Tasca”), individually, and in his respective capacities as Managing Member of TPG INV CI, LLC.


 




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(b)           In
connection with the Transaction both (i) TPG Counsel and (ii) DarrowEverett (collectively, the “Attorneys”)
have represented, and may continue to represent, certain parties hereto and other Persons, as applicable.  DarrowEverett represented
TPG INV CI, LLC in its formation and Tasca as Managing Member to the foregoing in preparation and negotiation of this and other
limited liability company operating agreements, among other things. TPG Counsel represented Company and TPG PCF Investor, LLC in
applicable formation matters and Manager and TPG PCF Investor, LLC, LLC in preparation and negotiation of this and other limited
liability company operating agreements, among other things. Since the interests of each Member, Company, and Manager may be adverse
to any one or more of the others, each of the parties hereby waives, as evidenced by the execution of this Agreement, any and all
potential conflicts of interest that may arise as a result of the above representations and actions by the Attorneys.  In
addition, no Member will seek to disqualify any of the Attorneys from their respective representation of the Persons identified
above, as applicable, in any dispute between the parties as a result of such conflicts of interest.


 


(c)           There
is an inherent potential for conflicts of interest among the parties to this Agreement because the Agreement establishes rights
and obligations (including tax obligations) of each of the parties. The interests of each of the Members, Company and Manager may
conflict, at least in part.  The Attorneys have advised and each hereby advises each of such parties that it would be in the
best interest of all parties to this Agreement to obtain the services of their own independent counsel (at such party’s sole
cost and expense) to review this document and to provide tax and legal advice with respect to this document. Notwithstanding the
fact that the Attorneys have prepared this Agreement and each has provided legal advice to one or more parties in preparation of
the Agreement and in related matters (and the fact that one or more of the Attorneys may hereafter continue to represent Persons
identified above, the parties hereby waive as evidenced by the execution of this Agreement any potential conflicts of interest
that may arise as a result of the above actions by the Attorneys, whether or not one or more of the parties to this Agreement may
have consulted with separate legal counsel concerning the Agreement.


 


(d)           The
foregoing is not intended to suggest that the Attorneys have provided any advice or services to any Member or Affiliate thereof
other than their applicable clients.


 


11.3       Governing
Law; Severability of Provisions. It is the intention of the parties that the internal laws of the Charter State shall govern
the validity of this Agreement, the construction of its terms and interpretation of the rights and duties of the parties, without
regard to its conflict of law provisions. If any provision of this Agreement shall be held to be invalid, the remainder of this
Agreement shall not be affected thereby.


 


11.4       Consent
to Jurisdiction. Each party hereby consents to the exclusive jurisdiction of any state or federal court situated in Delaware,
and waives any objection based on lack of personal jurisdiction, improper venue or forum non conveniens, with regard to
any actions, claims, disputes or proceedings relating to this Agreement, or any document delivered hereunder or in connection herewith,
or any transaction arising from or connected to any of the foregoing. Each party to this Agreement waives personal service of any
and all process, and consents to all such service of process made by mail or by messenger directed to the address specified in
Section 11.1. Nothing herein shall affect a party’s right to serve process in any manner permitted by law, or limit any right
under this Agreement to seek relief provided for under this Agreement in the competent courts of any other jurisdiction or jurisdictions.


 




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11.5       Waiver
of Partition. Each of the Members hereby irrevocably waives any and all rights that such Member may have to maintain any action
for partition of any of the Company’s property.


 


11.6       Entire
Agreement. This Agreement (including the Exhibit(s) attached hereto) contains the entire understanding of the parties in respect
of its subject matter and supersedes all prior agreements, understandings, representations or warranties (oral or written) between
or among the parties with respect to such subject matter. The Exhibit(s) constitute(s) a part hereof as though set forth in full
above.


 


11.7       Amendment.
No amendment of this Agreement shall be valid or binding unless such amendment is made in writing with the written consent
of the Manager and at least a simple majority of the Members; provided, however, that all of the Class A Members shall consent;
provided, further, that no amendment shall be made that would (i) adversely and disproportionately affect the economic rights
and obligations of any Member and/or (ii) adversely affect the rights and/or obligations set forth in Sections 6.10(b) or (c) and
Section 6.12 in either case without such Member’s prior written consent.


 


11.8       Waiver.
This Agreement may not be modified, amended, supplemented, canceled or discharged, except as provided in this Agreement. No failure
to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege.
No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or any
other provision, nor shall any waiver be implied from any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance
of any other obligations or any other acts. The rights and remedies of the parties under this Agreement are in addition to all
other rights and remedies, at law or equity that they may have against each other.


 


11.9       Binding
Effect; Assignment. The rights and obligations of this Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns. Nothing expressed or implied herein shall be construed to give any other Person any
legal or equitable rights hereunder. Except as expressly provided herein, the rights and obligations of this Agreement may not
be assigned by any of the parties hereto.


 


11.10     Counterparts.
This Agreement may be executed in any number of counterparts (whether by original signature, facsimile or other electronic means,
including .PDF), each of which shall be an original but all of which together shall constitute one and the same instrument. It
shall not be necessary for all parties to execute the same counterpart hereof.


 




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11.11     Interpretation.
When a reference is made in this Agreement to an article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings contained herein and on the schedules are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement or the schedules. References to the
“Company” and the “Members” in this Agreement standing alone or as part of other defined terms shall be
deemed to correspond to references to a “partnership” and “partners,” respectively, for purposes of applying
the Code and Treasury Regulations as provided in this Agreement. The words “herein,” “hereof,” “hereunder,”
and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement. Any use of
the singular or plural, or the masculine, feminine, or neuter gender, includes the others, unless the context otherwise requires;
“any” means any one, more than one, or all; “or” means and/or;” “written consent” includes
a consent transmitted by “electronic transmission.” Unless otherwise specified, any reference to any agreement (including
this Agreement), instrument, or other document includes all schedules, exhibits, or other attachments referred to therein, and
any reference to a statute or other law includes any rule, regulation, ordinance, or the like promulgated thereunder, in each case,
as amended, from time to time. Any reference to a “party” or the “parties” is a reference to the Persons
signing this Agreement. Any reference in this Agreement to a “day” shall be interpreted as referring to a calendar
day; if any action is required to be taken or notice is required to be given within a specified number of days following a date
or event, the day of such date or event is not counted in determining the last day for such action or notice; if any action is
required to be taken or notice is required to be given on or by a particular day, and such day is not a business day, then such
action or notice shall be considered timely if it is taken or given on or before the next business day.


 


11.12     Additional
Documents. Subject to the provisions of this Agreement, each party hereto agrees to execute, with acknowledgment or affidavit,
if required, any and all documents and writings which may be reasonably necessary or expedient in connection with the creation
of the Company and the achievement of its purposes, specifically including (a) any amendments to this Agreement and such certificates
and other documents as the Manager reasonably deems necessary or appropriate to form, qualify or continue the Company as a limited
liability company in all jurisdictions in which the Company conducts or plans to conduct business and (b) all such agreements,
certificates, tax statements, tax returns and other documents as may be required of the Company or its Members by the laws of the
United States of America or any jurisdiction in which the Company conducts or plans to conduct business, or any political subdivision
or agency thereof.


 


11.13     Confidentiality.
Each Member agrees, as set forth below, with respect to any information pertaining to the Company or its investments or Affiliates
that is provided to such Member pursuant to this Agreement or otherwise (collectively, “Confidential Matter”), to treat
as confidential all such information, together with any analyses, studies or other documents or records prepared by such Member,
its Affiliates, or any representative or other Person acting on behalf of such Member (collectively, its “Authorized Representatives”),
which contain or otherwise reflect or are generated from Confidential Matters, and will not, and will not permit any of its Authorized
Representatives to, disclose any Confidential Matter, provided that any Member (or its Authorized Representative) may disclose
any such information (a) as has become generally available to the public, (b) as to which such Member has received from a Third
Party and about which such Member has no knowledge of a confidentiality agreement between such Third Party and the Company, (c)
as may be required or appropriate in any report, statement or testimony submitted to any Governmental Authority having or claiming
to have jurisdiction over such Member (or its Authorized Representative); (d) as may be required or appropriate in response to
any summons or subpoena or in connection with any litigation or (e) as to which the Manager has consented in writing.


 


11.14     Arm’s
Length Negotiations. Each party hereto expressly represents and warrants to all other parties hereto that (a) before executing
this Agreement, such party has fully informed itself of the terms, contents, conditions and effects of this Agreement; (b) such
party has relied solely and completely upon its own judgment in executing this Agreement; (c) such party has had the opportunity
to seek and has obtained the advice of counsel before executing this Agreement; (d) such party has acted voluntarily and of his
or its own free will in executing this Agreement; (e) such party is not acting under duress, whether economic or physical, in executing
this Agreement; and (f) this Agreement is the result of arm’s length negotiations conducted by and among the parties hereto
and their respective counsel, and, therefore, shall not be construed or interpreted in the event of any ambiguity in favor of or
against any party as the drafter of this Agreement or because it may have been drafted initially by that party or otherwise. .


 




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11.15     Dispute
Resolution.


 


(a)           In
the event of any dispute, controversy, claim, or disagreement arising out of or relating to this Agreement, or the breach, termination,
validity, or enforceability of any provision of this Agreement (each a “Dispute”), the parties shall use their
best commercial efforts to resolve and settle any Dispute by consulting and negotiating with each other in good faith and attempting
to reach a just and equitable solution satisfactory to both parties.


 


(b)           If
the parties fail to reach a solution through such consultation and negotiation, then upon notice by either party to the other,
all Disputes shall be settled finally by binding arbitration administered by the American Arbitration Association (“AAA”)
in accordance with the provisions of its Commercial Arbitration Rules and the Federal Arbitration Act (Title 9, U.S. Code). In
such case, the parties shall make good faith efforts to shall select a mutually satisfactory arbitrator from a panel of arbitrators
submitted to the parties by the AAA who has, to the fullest extent possible, experience and knowledge of the issues related to
the Dispute. In the event that the parties cannot mutually agree on an arbitrator, the parties agree that they will request that
AAA appoint an arbitrator who has, to the fullest extent possible, sufficient experience and knowledge of the issues related to
the Dispute. Prior to the commencement of any hearing, each of the arbitrators shall provide an oath or undertaking of impartiality.


 


(c)           The
first arbitration hearing shall commence within 120 business days of a party’s notice to require arbitration. The arbitration
shall be conducted at the offices of the AAA located in New York, New York. Discovery as permitted by the Rules of Civil Procedure
for the State of New York will be allowed to the extent consistent with the purpose of arbitration and as allowed by the arbitrators.


 


(d)           The
arbitration award to the prevailing party shall include the cost of the AAA for administering the arbitration and the cost of the
arbitrators. The arbitrators are not empowered to award damages in excess of compensatory damages, and each party hereby irrevocably
waives any right to recover special, incidental, punitive, or multiple damages with respect to any Dispute. Judgment upon any award
rendered in any arbitration may be entered into a court of competent jurisdiction for judicial acceptance of the award and an enforcement
as the law of such jurisdiction may require or allow.


 


11.16     No
Partnership, No Agency. Except as otherwise provided in this Agreement, this Agreement shall not be deemed to create any partnership
between the parties hereto in relation to the Company. Except as otherwise expressly provided in this Agreement, nothing herein
contained shall be construed to constitute any Member hereof the agent of any other Member hereof or to limit in any manner the
Members in the carrying on of their own respective businesses or activities.


 


[Signatures on following page]


 




    	 	33	 



     


    

 


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


 


	 	THE COMPANY:
	 	 
	 	PROCACCIANTI CONVERTIBLE FUND, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ James A. Procaccianti
	 	Name:  	James A. Procaccianti
	 	Title:	Manager
	 	 	 
	 	MANAGER:
	 	 
	 	/s/ James A. Procaccianti
	 	James A. Procaccianti


 


[Signature Page to Procaccianti Convertible
Fund, LLC Operating Agreement]


 




     


     


    

 


	 	CLASS A MEMBERS:
	 	 
	 	TPG PCF INVESTOR, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ James A. Procaccianti
	 	Name:	James A. Procaccianti
	 	Its:	Manager
	 	 	 
	 	Address:
	 	 
	 	1140 Reservoir Avenue
	 	 
	 	Cranston, Rhode Island, 02920
	 	 
	 	Email address: jproc@procaccianti.com


 


[Signature Page to Procaccianti Convertible
Fund, LLC Operating Agreement]


 




     


     


    

 


	 	WARSP, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Richard Tasca
	 	Name:	Richard Tasca
	 	Its:	Managing Member
	 	 
	 	Address:
	 	 
	 	c/o Bluedog Capital Partners, LLC
	 	 
	 	One Custom House, Suite 4
	 	 
	 	Providence, RI 02903
	 	 
	 	Email address: richard@bluedogcap.com


 




    	 	34	 



     


    

 


	 	PB Investments LLC, a Florida limited liability company
	 	 
	 	By:	/s/ Sean Posner
	 	Name:	Sean Posner
	 	Its:	Managing Member
	 	 	 
	 	Address:
	 	 
	 	c/o Posner Group
	 	 
	 	1691 Michigan Avenue, Suite 445
	 	 
	 	Miami Beach, Florida 33139
	 	 
	 	Email address: sp@posnergroup.com


 




    	 	35	 



     


    

 


	 	CLASS B MEMBERS:
	 	 
	 	TPG INV CI, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Richard Tasca
	 	Name:	Richard Tasca
	 	Its:	Managing Member
	 	 	 
	 	Address:
	 	 
	 	c/o Bluedog Capital Partners, LLC
	 	 
	 	One Custom House, Suite 4
	 	 
	 	Providence, RI 02903
	 	 
	 	Email address: richard@bluedogcap.com


 




    	 	36	 



     


    

 


	 	PCF Holdings, LLC, a Florida limited liability company
	 	 
	 	By:	/s/ Sean Posner
	 	Name:	Sean Posner
	 	Its:	Authorized Representative
	 	 	 
	 	Address:
	 	 
	 	c/o Posner Group
	 	 
	 	1691 Michigan Avenue, Suite 445
	 	 
	 	Miami Beach, Florida 33139
	 	 
	 	Email address: sp@posnergroup.com


 




    	 	37	 



     


    

 


EXHIBIT A


 


MEMBERS


 


	NAME	 	Capital
 Contribution	 	 	Percentage 
 Interest	 	 	Class A
 Interests	 	 	Class B
 Interests	 
	TPG PCF INVESTOR, LLC	 	$	1,641,915.00	 	 	 	10	%	 	 	10	%	 	 	 	 
	WARSP, LLC	 	$	820,958.00	 	 	 	5	%	 	 	5	%	 	 	 	 
	PB Investments LLC	 	$	820,958.00	 	 	 	5	%	 	 	5	%	 	 	 	 
	TPG INV CI, LLC	 	$	6,567,662.00	 	 	 	40	%	 	 	 	 	 	 	40	%
	PCF Holdings, LLC	 	$	6,567,662.00	 	 	 	40	%	 	 	 	 	 	 	40	%
	Total:	 	$	16,419,155.00	 	 	 	100	%	 	 	20	%	 	 	80	%



 




    	 	A-1	 



     


    

 


EXHIBIT B


 


Properties


 


	Springhill Suites Wilmington Mayfaire	 
	1014 Ashes Drive	 
	Wilmington, NC	 
	 	 
	Staybridge Suites St. Petersburg Downtown	 
	940 5th Avenue	 
	St. Petersburg, FL	 


 




    	 	B-1