Unassociated Document


    Exhibit
10.2

     

     

     

     

     

     

     

    AMENDED
AND RESTATED

    LIMITED
LIABILITY

    COMPANY
AGREEMENT

     

    of

     

    ROYAL
CORNERSTONE SOUTH CAROLINA PORTFOLIO, LLC,

    a
Delaware limited liability company,

     

    by
and between

     

    CORNERSTONE
OAKLEAF VILLAGE, LLC,

    a
Delaware limited liability company,

    as
a member

     

    and

     

    RSC
SOUTH CAROLINA INTERESTS, LLC,

    a
Florida limited liability company,

    as
a member

     

    Dated
as of April 30, 2010

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              	 
      	 	
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                                                                                      Article I FORMATION AND OTHER ORGANIZATION
      MATTERS

                                                                                    	 	
                                                                                      1

                                                                                    
	
                                                                                      Section
      1.1

                                                                                    	
                                                                                      Formation; Changes

                                                                                    	 	
                                                                                      1

                                                                                    
	
                                                                                      Section 1.2

                                                                                    	
                                                                                      Name.

                                                                                    	 	
                                                                                      2

                                                                                    
	
                                                                                      Section 1.3

                                                                                    	
                                                                                      Term.

                                                                                    	 	
                                                                                      2

                                                                                    
	
                                                                                      Section 1.4

                                                                                    	
                                                                                      Business.

                                                                                    	 	
                                                                                      2

                                                                                    
	
                                                                                      Section 1.5

                                                                                    	
                                                                                      Names and Addresses of
    Members.

                                                                                    	 	
                                                                                      2

                                                                                    
	
                                                                                      Section
      1.6

                                                                                    	
                                                                                      Registered Office and Principal Place of
      Business.

                                                                                    	 	
                                                                                      3

                                                                                    
	
                                                                                      Section 1.7

                                                                                    	
                                                                                      Certain Definitions.

                                                                                    	 	
                                                                                      3

                                                                                    
	
                                                                                      Article II CERTAIN TAX AND ACCOUNTING MATTERS

                                                                                    	 	
                                                                                      3

                                                                                    
	
                                                                                      Article III CONTRIBUTIONS BY MEMBERS;
      FINANCING

                                                                                    	 	
                                                                                      3

                                                                                    
	
                                                                                      Section
      3.1

                                                                                    	
                                                                                      Capital Contributions.

                                                                                    	 	
                                                                                      3

                                                                                    
	
                                                                                      Section 3.2

                                                                                    	
                                                                                      Additional Capital
      Contributions.

                                                                                    	 	
                                                                                      3

                                                                                    
	
                                                                                      Section 3.3

                                                                                    	
                                                                                      Recoupment for
    Contributions.

                                                                                    	 	
                                                                                      5

                                                                                    
	
                                                                                      Section 3.4

                                                                                    	
                                                                                      Execution and Compliance with Senior Loan
      Documents.

                                                                                    	 	
                                                                                      5

                                                                                    
	
                                                                                      Article IV DISTRIBUTIONS TO
      MEMBERS

                                                                                    	 	
                                                                                      5

                                                                                    
	
                                                                                      Section
      4.1

                                                                                    	
                                                                                      Distributions
      of Available Cash from Operations.

                                                                                    	 	
                                                                                      5

                                                                                    
	
                                                                                      Section 4.2

                                                                                    	
                                                                                      Distributions of Net Capital Transaction
      Proceeds.

                                                                                    	 	
                                                                                      6

                                                                                    
	
                                                                                      Section 4.3

                                                                                    	
                                                                                      Withholding
      Taxes with Respect to Members.

                                                                                    	 	
                                                                                      7

                                                                                    
	
                                                                                      Section 4.4

                                                                                    	
                                                                                      Violation of Law.

                                                                                    	 	
                                                                                      8

                                                                                    
	
                                                                                      Section 4.5

                                                                                    	
                                                                                      Deemed Distribution/Re-contribution of
      Excess Expenses and Non-Recurring
      Capital Expenditures.

                                                                                    	 	
                                                                                      8

                                                                                    
	
                                                                                      Section 4.6

                                                                                    	
                                                                                      Performance Termination of RSC Manager under RSC
      Management Agreement.

                                                                                    	 	
                                                                                      8

                                                                                    
	
                                                                                      Article V MANAGEMENT OF THE
      COMPANY

                                                                                    	 	
                                                                                      8

                                                                                    
	
                                                                                      Section
      5.1

                                                                                    	
                                                                                      Authority of Managing
    Member.

                                                                                    	 	
                                                                                      8

                                                                                    
	
                                                                                      Section 5.2

                                                                                    	
                                                                                      Management Agreements.

                                                                                    	 	
                                                                                      13

                                                                                    
	
                                                                                      Section 5.3

                                                                                    	
                                                                                      Selection of Auditors.

                                                                                    	 	
                                                                                      13

                                                                                    
	
                                                                                      Section 5.4

                                                                                    	
                                                                                      Limited Reimbursement of
      Expenses.

                                                                                    	 	
                                                                                      14

                                                                                    
	
                                                                                      Article VI BUY-SELL
    PROCEDURES

                                                                                    	 	
                                                                                      14

                                                                                    
	
                                                                                      Section
      6.1

                                                                                    	
                                                                                      Buy-Sell Procedures.

                                                                                    	 	
                                                                                      14

                                                                                    


                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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                              Section
      6.2

                            	
                              Buy-Sell
      Procedures for
      the Purchase and Sale of Membership
    Interests.

                            	 	17
	
                              Section
      6.3

                            	
                              Other
      Buy-Sell Requirements.

                            	 	
                              19

                            
	
                              Article
      VII STATUS OF MEMBERS; indemnification

                            	 	
                              20

                            
	
                              Section
      7.1

                            	
                              Role
      of Non-Managing
      Members.

                            	 	
                              20

                            
	
                              Section
      7.2

                            	
                              Liability
      of Members.

                            	 	
                              20

                            
	
                              Section
      7.3

                            	
                              Bankruptcy
      of Member.

                            	 	
                              21

                            
	
                              Section
      7.4

                            	
                              Relationship
      of Members.

                            	 	
                              21

                            
	
                              Section
      7.5

                            	
                              Other
      Activities; Affiliates.

                            	 	
                              21

                            
	
                              Section
      7.6

                            	
                              Indemnification.

                            	 	
                              22

                            
	
                              Article
      VIII
      TRANSFER OF MEMBERSHIP INTERESTS

                            	 	
                              24

                            
	
                              Section
      8.1

                            	
                              General.

                            	 	
                              24

                            
	
                              Section
      8.2

                            	
                              Permitted
      Transferees.

                            	 	
                              24

                            
	
                              Section
      8.3

                            	
                              Right
      of First Refusal.

                            	 	
                              25

                            
	
                              Section
      8.4

                            	
                              Tag-Along
      Rights.

                            	 	
                              26

                            
	
                              Section
      8.5

                            	
                              Effect
      of Assignment.

                            	 	
                              26

                            
	
                              Section
      8.6

                            	
                              Substitute
      Member.

                            	 	
                              27

                            
	
                              Section
      8.7

                            	
                              Further
      Requirements.

                            	 	
                              27

                            
	
                              Section
      8.8

                            	
                              Transfer
      Taxes.

                            	 	
                              27

                            
	
                              Article
      IX CERTAIN REMEDIES

                            	 	
                              27

                            
	
                              Section
      9.1

                            	
                              No
      Partition.

                            	 	
                              27

                            
	
                              Section
      9.2

                            	
                              Litigation
      Without Termination.

                            	 	
                              28

                            
	
                              Section
      9.3

                            	
                              Attorneys’ Fees.

                            	 	
                              28

                            
	
                              Section
      9.4

                            	
                              Cumulative
      Remedies.

                            	 	
                              28

                            
	
                              Section
      9.5

                            	
                              No
      Waiver.

                            	 	
                              28

                            
	
                              Article
      X DISSOLUTION OF COMPANY

                            	 	
                              28

                            
	
                              Section
      10.1

                            	
                              Events
      Giving Rise to Dissolution.

                            	 	
                              28

                            
	
                              Section
      10.2

                            	
                              Procedure.

                            	 	
                              29

                            
	
                              Article
      XI MISCELLANEOUS

                            	 	
                              30

                            
	
                              Section
      11.1

                            	
                              Notices.

                            	 	
                              30

                            
	
                              Section
      11.2

                            	
                              Entire
      Agreement.

                            	 	
                              32

                            
	
                              Section
      11.3

                            	
                              Amendments.

                            	 	
                              32

                            
	
                              Section
      11.4

                            	
                              Governing
      Law.

                            	 	
                              32

                            


                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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                            Section
      11.5

                          	
                            Successors
      and Assigns.

                          	 	32
	
                            Section
      11.6

                          	
                            Interpretation.

                          	 	32
	
                            Section 11.7

                          	
                            Severability.

                          	 	
                            33

                          
	
                            Section
      11.8

                          	
                            Legal
      Counsel.

                          	 	
                            33

                          
	
                            Section
      11.9

                          	
                            Advice
      from Independent Counsel/Voluntary Agreement.

                          	 	
                            33

                          
	
                            Section
      11.10

                          	
                            Counterparts.

                          	 	
                            33

                          
	
                            Section
      11.11

                          	
                            Benefits
      of Agreement; No Third-Party Rights.

                          	 	
                            34

                          
	
                            Section
      11.12

                          	
                            WAIVER
      OF JURY TRIAL.

                          	 	
                            34

                          
	
                            Section
      11.13

                          	
                            Special
      Purpose Provisions.

                          	 	
                            34

                          
	
                            Section
      11.14

                          	
                            Patriot
      Act Representation

                          	 	
                            35

                          
	
                            Section
      11.15

                          	
                            OFAC
      Compliance and Source of Funds

                          	 	
                            35

                          
	Article
      XII BOOKS AND RECORDS	 	
                            37

                          
	
                            Section
      12.1

                          	
                            Books
      and Records; Periodic Reporting.

                          	 	
                            37

                          
	
                            Section
      12.2

                          	
                            Right
      to Inspection; Delivery of Information.

                          	 	
                            37

                          
	
                            Section
      12.3

                          	
                            Notices
      of Default or Litigation.

                          	 	
                            38

                          
	Article
      XIII OBLIGATIONs OF MANAGING MEMBER	 	
                            38

                          
	
                            Section 13.1

                          	
                            Duties
      and Obligations of Managing Member.

                          	 	
                            38

                          
	
                            Section
      13.2

                          	
                            Non-Managing
      Member’s Right to Perform Obligations of Managing Member.

                          	 	
                            40

                          


                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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    AMENDED
AND RESTATED

    LIMITED
LIABILITY COMPANY AGREEMENT

    OF

    ROYAL
CORNERSTONE SOUTH CAROLINA PORTFOLIO, LLC

     

    THIS AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT (the “Agreement”)
of ROYAL CORNERSTONE SOUTH CAROLINA PORTFOLIO,
LLC, a Delaware limited liability company, dated as of April 30, 2010
(the “Effective
Date”) by
and among CORNERSTONE
OAKLEAF VILLAGE, LLC, a
Delaware limited liability company (“Managing
Member”), as the Managing Member, and RSC SOUTH CAROLINA INTERESTS,
LLC, a Florida limited liability company (“Non-Managing
Member”), as the Non-Managing Member.

     

    WITNESSETH:

     

    WHEREAS, Royal Senior Care,
LLC, a Florida limited liability company (“RSC” or “Royal”) formed Royal
Cornerstone South Carolina Portfolio, LLC (the “Company”)
as a limited liability company under the provisions of the Delaware Limited
Liability Company Act, as amended from time to time (the “Delaware
Act”);

     

    WHEREAS, RSC executed that
certain Limited Liability Company Agreement for the Company, effective as of
March 26, 2010 (the “Original
Agreement”);

     

    WHEREAS, RSC and Managing
Member have entered into that certain Membership Interests Sale and Purchase
Agreement dated as of March 5, 2010 (the “Purchase Agreement”), pursuant
to which, among other things, the Managing Member has purchased from RSC, and
RSC has sold and assigned to Managing Member an eighty percent (80%) membership
interest in the Company;

     

    WHEREAS, RSC has contributed
to Non-Managing Member its twenty percent (20%) membership interest in the
Company;

     

    WHEREAS, Managing Member and
Non-Managing Member desire to amend and restate the Original Agreement in its
entirety to set forth their respective rights and obligations with respect to
the Company.

     

    NOW, THEREFORE, in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

     

    
      
        
        

      

      
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    ARTICLE
I

     

    FORMATION AND OTHER
ORGANIZATION MATTERS

     

    Section
1.1    Formation;
Changes.

    
    

    The
Company was formed under the Delaware Act on March 26, 2010 (the “Formation
Date”) by the execution, delivery and filing with the Secretary of the
State of Delaware, of the Certificate of Formation of the Company, by Roger S.
Goldman, as an “authorized person” within the meaning of the Delaware Act. Upon
the filing of the Certificate of Formation with the Delaware Secretary of State
his powers as an “authorized person” ceased, and RSC thereupon became the sole
“authorized person”. Upon execution and delivery of this
Agreement,  Managing Member became the sole “authorized person” and
shall continue as the designated “authorized person” within the meaning of the
Delaware Act, but subject to the provisions hereof.   The Members
hereby amend and restate the Original Agreement of the Company in its entirety
as set forth herein.  This Agreement replaces the Original Agreement
of the Company and sets forth the ongoing rights and obligations of the Members
and certain matters related thereto. Except as expressly stated herein to the
contrary, the rights and obligations of the Members and the administration and
termination of the Company shall be governed by the Delaware Act.

     

    Section
1.2    Name.

     

    The
business of the Company shall be conducted under the name “Royal Cornerstone
South Carolina Portfolio, LLC.”

     

    Section
1.3    Term.

     

    The term
(“Term”)
of the Company shall be from the Formation Date until December 31, 2069,
inclusive, unless sooner terminated as hereinafter provided. The existence of
the Company as a separate legal entity shall continue until cancellation of the
Company as provided in the Delaware Act.

     

    Section
1.4    Business.

     

    The
business of the Company is solely to (a) own, hold, finance, pledge and manage
the sole equity interest in each of the Operating Companies  and (b)
take any and all actions and make any and all decisions (i) in its capacity as
the sole member of each of the Operating Companies  which owns or
leases the Property, including, without limitation, in connection with the
acquisition, management, financing, refinancing, ownership, vacating,
renovating, leasing, insuring, selling, assigning, transferring and prosecuting
or defending any and all legal proceedings relating to the Property and (ii) in
connection with the ownership, financing, refinancing, selling, assigning,
transferring and prosecuting or defending any and all legal proceedings relating
to the interests of the Company in each of the Operating Companies; and do any
and all other acts or things that may be necessary or incidental to carry on the
business of the Company as described in clauses (a) and (b) above. The Company
is not authorized to, and shall not, engage in any business other than as
described in this Section 1.4.

     

    Section
1.5    Names and Addresses
of Members.

     

    The names
and addresses of the Members are as follows:

     

    
      
        
          
            	 	
                    Cornerstone
      Oakleaf Village, LLC

                    c/o
      Cornerstone Healthcare Plus REIT, Inc.

                    Attn:  Sharon
      C. Kaiser, Chief Financial Officer

                    1920
      Main Street, Suite 400

                    Irvine,
      California 92614

                  


          

        

      

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                RSC
      South Carolina Interests, LLC

                c/o
      Gazit Senior Care, Inc.

                1696
      N.E. Miami Gardens Drive

                North
      Miami Beach, Florida 33179

                Attn:  Sean
      Kanov

              


      

    

     

    Section
1.6    Registered Office and
Principal Place of Business.

     

    The
registered office of the Company in the State of Delaware shall be 2711
Centerville Road, Suite 400, Wilmington, Delaware and its registered agent for
service of process on the Company at such office shall be Corporation Service
Company.  The principal place of business of the Company shall be 1920
Main Street, Suite 400, Irvine, California 92614, or such other location
hereafter determined by the Managing Member.

     

    Section
1.7    Certain
Definitions.

     

    Certain
capitalized words and phrases used in this Agreement and not otherwise defined
in the body hereof are defined in Exhibit A and shall
have the meanings set forth therein.

     

    ARTICLE
II

    CERTAIN TAX AND ACCOUNTING
MATTERS

     

    The
Members intend that the Company shall be taxed as a partnership for federal and
state income tax purposes and shall not take any action that may result in the
Company being taxed as other than a partnership for such purposes. Each and all
of the provisions of Exhibit B annexed
hereto and made a part hereof are incorporated herein and shall constitute part
of this Agreement. Exhibit B provides
for, among other matters, the maintenance of Capital Accounts, the allocation of
profits and losses, and the maintenance of books and records.

     

    ARTICLE
III

    CONTRIBUTIONS BY MEMBERS;
FINANCING

     

    Section
3.1    Capital
Contributions.

     

    (a)           Non-Managing
Member has contributed to the Company (i) a one hundred percent (100%)
membership interest in RSC Oakleaf Lexington LLC, a Florida limited liability
company, and (ii) a one hundred percent (100%) membership interest in RSC
Oakleaf Greenville LLC, a Florida limited liability company.

     

    (b)           Pursuant
to the Purchase Agreement, Managing Member has purchased from RSC, among other
things, an eighty percent (80%) Membership Interest in the Company.

     

    Section
3.2    Additional Capital
Contributions.

     

    


    
      
        
           


        

        
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    (a)           Except
as otherwise provided herein, no Member or Affiliate of any Member shall have
the right or obligation to make any loan to the Company without the prior
written consent of all Members. No Member shall have the right or be required to
make any additional Capital Contribution to the Company unless such Capital
Contribution has been approved as a Major Decision; provided, however, that
Managing Member or Non-Managing Member, each in its sole and absolute
discretion, may elect to make additional Capital Contributions to pay Necessary
Expenses if Available Cash from Operations is not sufficient to pay for any such
Necessary Expenses. If any additional Capital Contributions are approved or
permitted as set forth above, then, prior to making any such contribution, one
of the Members shall request in writing that the other Member fund its
Membership Percentage of such additional Capital Contribution. In such event,
Managing Member or Non-Managing Member shall have the right, but not the
obligation, to contribute their Membership Percentage of the specified amount
within thirty (30) days (or such shorter time period as may be appropriate under
the circumstances, but in no event less than five (5) Business Days) after the
date of receipt of notice of the request for such additional Capital
Contributions.  Any amounts contributed pursuant to this Subsection 3.2(a) by
any Member shall be added to the Capital Account of that Member.

     

    (b)           If
Managing Member or Non-Managing Member (in such instance, a “Non-Contributing
Member”) does not contribute all of an additional Capital Contribution
that is requested under Section 3.2(a) within
the time period described in Section 3.2(a), then
the contributing Member (the “Contributing
Member”) shall elect either: (i) to cancel the request for the additional
Capital Contribution made pursuant to Section 3.2(a) or
(ii) (x) if the Non-Contributing Member does not contribute any portion of the
requested additional Capital Contribution, to fund all amounts requested
pursuant to Section
3.2(a) as a loan to the Company (a “Member
Loan”) or (y) if the Non-Contributing Member shall have funded a portion,
but not all, of the additional Capital Contribution requested from the
Non-Contributing Member, to fund as an additional Capital Contribution such
portion of the Capital Contribution requested from the Contributing Member the
amount necessary to keep the additional Capital Contributions so made by the
Members in proportion to their Membership Percentages and to fund the balance as
a Member Loan to the Company. A Member Loan shall not be deemed to be a Capital
Contribution for purposes of this Agreement. Each Member Loan shall bear
interest at a rate equal to the lower of twelve percent (12%) per annum,
compounded monthly, or the maximum rate of interest permitted by applicable law,
and shall be recourse only to the assets of the Company. If a Member makes a
Member Loan pursuant to this Section 3.2(b), then
such Member shall receive payments with respect to such Member Loan as described
in Sections 4.1 and
4.2 before any distributions are made with respect to Capital
Contributions made by the Members pursuant to Sections 3.1 and
3.2(a).  The
remedies provided in this Section 3.2(b) for
the failure of a Member to fund its share of a requested Capital Contribution
shall be the sole remedies available with respect thereto.  Nothing in
this Section
3.2 shall be deemed to obligate any Member to cause any of its Affiliates
to incur any Recourse Liabilities. The Company shall cause each of the Operating
Companies to defer and accrue without remedy or recourse against the applicable
Operators except to income actually received by such Operators, any rent and
additional rent due under the Lexington Master Lease, or Greenville Master
Lease, as the case may be, that is in excess of the amount of the monthly
normally accruing payment of principal, interest and reserves under the Senior
Loan (the “Loan Payment
Excess”) and the payment or contribution by any Member of all or any
portion of the Loan Payment Excess shall be a nullity and not be, or deemed or
construed to be, the payment of any Necessary Expenses, or a Member Loan (nor to
avoid all doubt, a Capital Contribution), and such payment or contribution shall
not affect in any manner, any calculation or determination of any return on
investment, annual return upon and in respect to any Unreturned Capital
Contribution, or considered in determining or calculating any distributions
hereunder or in determining or calculating the financial performance by the
applicable RSC Manager pursuant to Section 1301.8 of the Management Agreement
attached hereto as Exhibit C, or any substantially similar provisions in any
subsequent RSC Management Agreement, or in any other agreement between or among
the Managing Member or any one of its Affiliates, on one hand and Non-Managing
Member or any one of its Affiliates, on the other hand (but does not cure or
prevent what would otherwise be a event giving rise to a financial performance
termination under any such RSC Management Agreement).

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

     

    Section
3.3    Recoupment for
Contributions.

     

    Except as
expressly provided herein, (a) no Member shall receive any recoupment or payment
on account of or with respect to the Capital Contributions made by it pursuant
to this Agreement, (b) no Member shall be entitled to interest on or with
respect to any Capital Contributions, (c) no Member shall be entitled to
withdraw any part of such Member’s Capital Contributions, and (d) no Member
shall be entitled to receive any distributions from the Company except as
otherwise set forth herein.

     

    Section
3.4    Execution and
Compliance with Senior Loan Documents.

     

    The
Members hereby approve and ratify (i) the Senior Loan, as obtained by the
Operating Company from the Senior Lender pursuant to the Senior Loan Documents,
as modified by that certain term sheet dated March 16, 2010, from the Senior
Lender (as it may now or hereafter be amended from time to time, the “Term
Sheet”) and (ii) execution and delivery of all documents and instruments
necessary and appropriate to modify the Senior Loan Documents substantially in
accordance with the provisions of the Term Sheet.  No Member shall be
required to make additional Capital Contributions or loans to the Company so
that the Company and the Operating Company can comply with those terms and
conditions.  Managing Member will cause the Cornerstone Principal to
execute and deliver customary “non-recourse” guaranties in connection with the
Senior Loan, any replacement or refinancing thereof, or any other loan which
shall be secured in part by a first mortgage encumbering the Property, covering
matters ordinarily guaranteed in such agreements, including without limitation
environmental liability of the Company (the “Recourse
Liabilities”).

     

    ARTICLE
IV

    DISTRIBUTIONS TO
MEMBERS

     

    Section
4.1    Distributions of
Available Cash from Operations.

     

    Subject
to the provisions of the Senior Loan Documents (or any other loan documents
entered into in accordance with the provisions of Section 5.1(b)(ii)),
the Annual Budget, the Company shall make distributions of Available Cash from
Operations quarterly; provided, notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not be required to make a
distribution to the Members if such distribution would violate Section 18-607 of
the Delaware Act or any other applicable law.  Distributions of
Available Cash from Operations shall be made in the following order of
priority:

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

     

    (a)           First, to the Members who
have made Member Loans in accordance with Section 3.2(b) on a pro rata basis in
accordance with the amounts of their respective unpaid Member Loans until each
of them has received cumulative payments pursuant to this Section 4.1(a) equal
to all interest due in respect of such Member Loans.

     

    (b)           Second, to the Members who
have made Member Loans pursuant to Section 3.2(b) on a pro rata basis in
accordance with the amounts of their respective Member Loans until each of them
has received cumulative payments pursuant to this Section 4.1(b) equal
to the outstanding principal amounts of its respective Member
Loans.

     

    (c)           Third, to the Managing
Member, until the Managing Member has achieved a 9% cumulative, non-compounding
annual return upon and in respect to the amount of the Unreturned Capital
Contribution (as hereinafter defined) of the Managing Member (the “Managing
Member Preferred Return”).

     

    (d)           Fourth, to the Non-Managing
Member, until the Non-Managing Member has achieved a 9% cumulative,
non-compounding annual return upon and in respect to the amount of the
Unreturned Capital Contribution of the Non-Managing Member (the “Non-Managing
Member Preferred Return”).

     

    (e)           Fifth, until the Managing
Member and Non-Managing Members have each achieved a 12% cumulative,
non-compounding annual return upon and in respect to the amount of their
respective Unreturned Capital Contribution, to the Members on a pro rata basis
in accordance with their respective Membership Percentages.

     

    (f)           Sixth, until the Managing
Member and Managing Members have each achieved a 15% cumulative, non-compounding
annual return upon and in respect to the amount of their respective Unreturned
Capital Contribution, (i) 40.00% to Non-Managing Member, and (ii) 60.00% to
Managing Member.

     

    (g)           Seventh,
thereafter:  (i) 45.00% to Non-Managing Member, and (ii) 55.00% to
Managing Member.

     

    Section
4.2    Distributions of Net
Capital Transaction Proceeds.

     

    Distributions
of Net Capital Transaction Proceeds shall be made promptly following the
Company’s receipt thereof.  All such distributions shall be made in
the following order of priority:

     

    (a)           First, to the Members who
have made Member Loans in accordance with Section 3.2(b) on a
pro rata basis in accordance with the amounts of their respective unpaid Member
Loans until each of them has received cumulative distributions pursuant to Section 4.1(a) and
this Section
4.2(a) equal to all interest due in respect of such Member
Loans.

     

    (b)           Second, to the Members who
have made Member Loans pursuant to Section 3.2(b) on a
pro rata basis in accordance with the amounts of their respective Member Loans
until each of them has received cumulative distributions pursuant to Section 4.2(b) and
this Section
4.2(b) equal to the outstanding principal amounts of its respective
Member Loans.

    


    
      
        
           


        

        
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    (c)           Third, to the Managing
Member, until the Managing Member has received and achieved the Managing Member
Preferred Return, that is, a 9% cumulative, non-compounding annual return upon
and in respect to the amount of the Unreturned Capital Contribution of Managing
Member.

     

    (d)           Fourth, to the Non-Managing
Member, until the Non-Managing Member has received and achieved the Non-Managing
Member Preferred Return, that is, a 9% cumulative, non-compounding annual return
upon and in respect to the amount of the Unreturned Capital Contribution of
Non-Managing Member.

     

    (e)           Fifth, to the Managing
Member, until the Managing Member has been repaid its entire Unreturned Capital
Contribution.

     

    (f)           Sixth, to the Non-Managing
Member, until the Non-Managing Member has been repaid its entire Unreturned
Capital Contribution, to the Non-Managing Member.

     

    (g)           Seventh, until the Managing
Member and Non-Managing Members have each achieved a 12% cumulative,
non-compounding annual return upon and in respect to the amount of their
respective Unreturned Capital Contribution, to the Members on a pro rata basis
in accordance with their respective Membership Percentages.

     

    (h)           Eighth, until the Managing
Member and Managing Members have each achieved a 15% cumulative, non-compounding
annual return upon and in respect to the amount of their respective Unreturned
Capital Contribution, (i) 40.00% to Non-Managing Member, and (ii) 60.00% to
Managing Member.

     

    (i)           Ninth,
thereafter:  (i) 45.00% to Non-Managing Member, and (ii) 55.00% to
Managing Member.

     

    Notwithstanding
the foregoing, any distributions of Net Capital Transaction Proceeds occurring
as a result of the Loan refinancing or restructuring with GECC as generally
contemplated by the Term Sheet shall be distributed (i) 20.00% to Non-Managing
Member, and (ii) 80.00% to Managing Member.

     

    Section
4.3    Withholding Taxes
with Respect to Members.

     

    The
Company shall comply with any withholding requirements under federal, state and
local law that the Managing Member determines is required, and shall remit any
amounts withheld to, and file required forms with, the applicable jurisdictions.
All amounts withheld from Company revenues or distributions by or for the
Company pursuant to the Code or any provision of any federal, state or local
law, and any taxes, fees or assessments levied upon the Company, shall be
treated for purposes of this Article 4 as having
been distributed (as an advance) to those Members who received a credit for tax
or other benefit with respect to the withheld amounts, or whose identity or
status caused the withholding obligations, taxes, fees or assessments to be
incurred. If the amount withheld exceeded the affected Member’s actual share of
cash available for distribution, such Member shall reimburse the Company for
such excess withholding or other amounts paid (as described above). Each Member
agrees to furnish the Company with such representations, forms, or other
information as the Managing Member shall reasonably request to assist it in
determining the extent of, and in fulfilling, the Company’s withholding
obligations, if any. As soon as practicable after becoming aware that any
withholding requirement may apply to a Member, the Managing Member shall advise
such Member of such requirement and the anticipated effect thereof. Such Member
shall pay or reimburse to the Company all identifiable costs or expenses of the
Company caused by or resulting from withholding taxes (including expenses
incurred to reduce withholding taxes) with respect to such Member.

    


    
      
        
           


        

        
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    Section
4.4    Violation of
Law.

     

    Notwithstanding
any other provision contained in this Agreement, the Company shall not make a
distribution to a Member in respect of its interest in the Company if such
distribution would violate the Delaware Act or other applicable
law.

     

    Section
4.5    Deemed
Distribution/Re-contribution of Excess Expenses and Non-Recurring Capital
Expenditures.

     

    Notwithstanding
any other provision contained in this Agreement, the Company shall upon actual
payment thereof be deemed to have made distributions of:

     

    (a)           Excess
Expenses; and

     

    (b)           Non-Recurring
Capital Expenditures funded from Available Cash From Operations.

     

    These
distributions shall be deemed to have been made from Available Cash From
Operations to the Members in accordance with, and in the order of priority of,
Section 4.1 and
immediately re-contributed by the respective members as additional Capital
Contributions.

     

    Section
4.6    Performance
Termination of RSC Manager under RSC Management Agreement.

        

    If any
RSC Management Agreement shall terminate by reason of the exercise by Lexington
Operator or Greenville Operator, as the case may be, of their right to terminate
for financial non-performance by the applicable RSC Manager pursuant to Section
1301.8 of the Management Agreement attached hereto as Exhibit C, or any
substantially similar provisions in any subsequent RSC Management Agreement,
then the distributions to Non-Managing Member hereunder in Sections 4.1(f) and
(g) and Sections 4.2 (h) and
(i) shall be automatically redetermined and adjusted to reduce the
proportion of such distributions to Non-Managing Member in Sections 4.1 (f) and Section
4.2 (h) from 40.00% to 20.00% and in Sections 4.1 (g) and Section
4.2 (i) from 45.00% to 20.00% and increase the proportion of such
distributions to Managing Member in Sections 4.1 (f) and Section
4.2 (h) from 60.00% to 80.00% and in Sections 4.1 (g) and Section
4.2 (i) from 55.00% to 80.00%.

     

    ARTICLE
V

    MANAGEMENT OF THE
COMPANY

     

    Section
5.1    Authority of Managing
Member.

    


    (a)           The
Managing Member shall have the sole and exclusive authority to manage and
implement the policies, operations and affairs of the Company and to make all
decisions regarding the major policy decisions and over-all direction of the
Company and the Operating Company and their respective businesses, including,
without limitation causing the Operating Company to take any action in
furtherance thereof; provided,
however, that the Managing Member shall not have the authority to make
any Major Decisions with respect to the Company or the Operating Company without
the prior written consent of Non-Managing Member.

     

    
      
        
        

      

      
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    (b)          Each
of the following matters (each a “Major
Decision” and collectively, the “Major
Decisions”) shall require the prior written approval of the Managing
Member and Non-Managing Member:

     

    (i)           acquisition
by the Company or the Operating Company of any additional property, assets,
business or project, either directly or indirectly, other than the acquisition
or replacement of personal property in the ordinary course of
business;

     

    (ii)          causing
or permitting the Company or any of the Operating Companies to incur any
indebtedness whatsoever other than trade payables and other indebtedness in an
amount less than $100,000.00, whether recourse or non-recourse, and securing the
same with mortgages, deeds of trust and/or other assignments of assets of the
Company; except that the Members acknowledge and agree that the Company is
authorized and directed, on behalf of the Company and each of the Operating
Companies, to comply with the provisions of the documents securing or governing
the indebtedness which has been defined herein as, and constitutes, the Senior
Loan from General Electric Credit Corporation, Agent for itself and one or more
lenders (together with its successors and/or assigns, the “Senior
Lender”), as the same may be modified substantially in accordance with
the Term Sheet (to avoid all doubt, any additional amendments, modifications or
extensions of the Senior Loan or any other loan is a Major
Decision);

     

    (iii)         the
sale or other disposition of all or any material portion of the Company Property
or the Property other than the sale or disposition of personal property being
replaced in the ordinary course of business (the parties confirm that this Major
Decision shall always be deemed to be above the Major Decision Materiality
Threshold, regardless of the amount in dispute);

     

    (iv)         the
merger or consolidation of the Company or Operating Company with or into any
other Person, any reorganization of the Company, the liquidation or dissolution
of the Company or Operating Company, or the change or organization of the
Company or Operating Company into any other legal form;

     

    (v)          causing
or permitting the Company or Operating Company to make any loan to any Person
(for the purpose of this clause, accounts receivable from tenants or other
occupants of the Property shall not be deemed to be a loan),  or to
act as guarantor or surety to, for or on behalf of any other
Person;

     

    (vi)         issuance
or sale of additional Membership Interests or admission of a new member in the
Company or Operating Company other than in accordance with Article
8;

    


    
      
        
           


        

        
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    (vii)        filing
or commencement of any Bankruptcy proceeding by or on behalf of the Company or
Operating Company; consenting to the institution or continuation of any
involuntary Bankruptcy proceeding against the Company or Operating Company or
the conversion of an involuntary proceeding into a voluntary proceeding; the
admission in writing by the Company or the Operating Company of its inability to
pay its debts generally as they become due; or the making by the Company or
Operating Company of a general assignment for the benefit of its
creditors;

     

    (viii)    
  the making of any additional Capital Contributions other than for
Necessary Expenses in accordance with Section
3.2;

     

    (ix)         entering
into, modifying or exercising any rights or remedies under any contract (an
“Affiliate
Contract”) between the Company or Operating Company, on the one hand, and
any Person in which any Member, Affiliate of any Member or any Family Member
thereof,  or in which any partner, shareholder, member, director or
officer, manager, or employee of any Member, Affiliate of any Member, or any
Family Member thereof, directly or indirectly, owns or Controls more than five
percent (5%) of the beneficial interest, on the other hand;

     

    (x)           renewing,
extending or modifying an Affiliate Contract or terminating an Affiliate
Contract, provided however, that an RSC Management Agreement may be terminated
in accordance with its terms without the consent of the Non-Managing
Member;

     

    (xi)         any
amendment or modification of this Agreement, the Certificate of Formation of the
Company, the Limited Liability Company Agreement, the Operating Company Limited
Liability Company Agreement or Certificate of Formation of each of the Operating
Companies ;

     

    (xii)         commencing
or threatening any legal proceeding or litigation of any type on behalf of the
Company or Operating Company or settling, compromising or taking any other
material action with respect to any litigation or legal proceeding of any type
by, against or involving the Company if the amount in controversy shall exceed
Fifty Thousand Dollars ($50,000.00);

     

    (xiii)        causing
or permitting the Company or Operating Company to distribute any Company
Property or Operating Company Property in kind to any Member;

     

    (xiv)       causing
or permitting the Company or Operating Company to refinance, amend, modify or
extend any loan obligation of the Company or Operating Company;

     

    (xv)        the
engagement of, or otherwise entering into any agreement with, any real estate
broker or investment banker to market or list the Property for sale and the
terms and conditions of any such brokerage, listing or similar
agreement;

    


    
      
        
           


        

        
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    (xvi)       subject
to the provisions of Section 5.3, the
engagement of, or otherwise entering into any agreement with, an accountant or
accounting firm to provide auditing services to the Company, except that the
Members agree that Moore Stephens Lovelace, P.A. shall be the Company’s initial
auditors (the “Auditors”)
provided that Managing Member shall have the right to engage any
reputable  accounting firm for auditing services at its sole cost and
expense (and expressly not a Company cost or expense);

     

    (xvii)      any
action outside the purposes specified in Section
1.4;

     

    (xviii)     the
engagement of, or otherwise entering into any agreement with, any real estate
broker with respect to leasing the Property and the terms and conditions of any
such brokerage, listing or similar agreement;

     

    (xix)        the
hiring of any employees by the Company and the setting and increasing of their
compensation, whether by salary, bonus, or otherwise;

     

    (xx)         the
hiring of any employees by the Operating Company for an annual salary or other
compensation in excess of an aggregate of $50,000.00 and the setting and
increasing of their compensation, whether by salary, bonus, or
otherwise;

     

    (xxi)        entering
into or causing or permitting the Operating Company to enter into any lease for
(Y) an potential aggregate term in excess of three (3) years (including all
renewal and extension terms), (Z) or more than 2,000 rentable square feet,
whether a commercial or residential lease.

     

    (xxii)       the
amendment, modification or revocation of the Lexington Master Lease or the
Greenville Master Lease.

     

    (xxiii)      without
limiting the generality of the foregoing, indirectly or directly causing the
Operating Company to take any of the foregoing actions;

     

    (xxiv)      the
adoption of the Annual Budget or any amendment or revision thereto;
and

     

    (xxv)       the
amendment, modification or revocation of any Major Decision previously approved
in accordance with this Agreement; and

     

    (xxvi)      entering
into, terminating or causing or permitting the termination of a Management
Agreement, except if the same is a RSC Management Agreement, (to avoid all
doubt, the Members acknowledge and agree that, if applicable, subject to its
terms or as otherwise provided herein, Managing Member may terminate or cause or
permit an RSC Management Agreement to be terminated without the consent of the
Non-Managing Member and the engagement of the initial replacement manager in
such event is not a Major Decision, all pursuant to the provisions of Section
5.2 hereof).

    


    
      
        
           


        

        
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    (c)          Each
of the Managing Member and Non-Managing Member may propose to adopt, modify or
revoke a Major Decision at any time.  Whenever a Member proposes to
adopt, modify or revoke a Major Decision, it shall deliver a written notice (a
“Major
Decision Notice”) to the other Member (i) describing the proposal in
sufficient detail and (ii) containing sufficient information to permit the other
Member to make an informed decision on the proposal and shall subsequently
provide to the other Member such additional information as the other Member may
reasonably request.

     

    (d)          A
“Deadlock”
shall be deemed to exist if, after receiving a Major Decision
Notice:  (i) the Managing Member and Non-Managing Member have failed
for any reason to mutually agree on accepting or rejecting the Major Decision
for at least thirty (30) days after the Major Decision Notice was given and (ii)
one such Member has delivered a notice (a “Deadlock
Notice”) to the other Member in writing, given at any time before or
after the end of such 30-day period that continuing failure to agree on the
proposed Major Decision will constitute a Deadlock for purposes of this
Agreement unless the Major Decision is agreed upon by the later of (A) five (5)
days after the other Member’s receipt of the Deadlock Notice or (B) the end of
the 30-day period described above.  As provided herein, if a Deadlock
shall exist, then Managing Member or Non-Managing Member may initiate the
Buy/Sell Procedures as provided in Article
6.

     

    (e)        
  Subject to the provisions of the Senior Loan Documents (or any other
loan documents (or any other loan documents entered into in accordance with the
provisions of Section
5.1(b)(ii)), and the Annual Budget, the Managing Member shall cause the
Operating Company to make quarterly distributions of Operating Company Available
Cash to the Company.  Notwithstanding the foregoing, the Managing
Member shall not be required to cause the Operating Company to make a
distribution to the Company if such distribution would violate Section 18-607 of
the Delaware Act or any other applicable law.

     

    (f)           During
the period of time ending two (2) years after the Effective Date (the “Major
Decision Threshold Period”), the Members shall only have the right to
initiate the Buy/Sell Procedures as provided in Article 6 if the
Major Decision which is the subject of the Deadlock Notice shall involve a sum
or value equal to, or in excess of, the Major Decision Materiality
Threshold.  If during the period of time ending two years after the
Effective Date, the Major Decision which is the subject of the Deadlock Notice
shall involve a sum or value which is equal to or less than the Major Decision
Materiality Threshold, then either Member shall have the right to submit the
same to arbitration pursuant to the provisions of Section 5.1 (g)
hereof.  After the Major Decision Threshold Period, such Major
Decision Materiality Threshold shall not apply and the Buy/Sell Procedures may
be initiated with respect to any Deadlock or for any or no reason.

     

    (g)           During
the period of time ending two (2) years after the Effective Date, each Member,
as its sole recourse with respect to the resolution of any dispute or
controversy arising out of a Deadlock with respect to a Major Decision involving
a sum or value which is equal to or less than the Major Decision Materiality
Threshold, may submit the same to settlement by binding arbitration administered
by the American Arbitration Association under its then current Commercial
Arbitration Rules. The judgment or award rendered by the arbitrator(s) shall be
final and judgment may be entered upon it in accordance with applicable law in
any court having jurisdiction thereof. Notice of demand for arbitration shall be
filed by either Member in writing with the other Member and the American
Arbitration Association.  The demand for arbitration shall be made
within sixty (60) days after the Deadlock Notice. After the Major Decision
Threshold Period, the arbitration requirements provided in this Section 5.1(g)
shall not apply.

    


    
      
        
           


        

        
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    Section
5.2    Management
Agreements.

     

    (a)           The
Members acknowledge and agree that from time to time, Lexington Operator and
Greenville Operator shall enter into management agreements with property
managers with respect to the applicable Property (each, a “Management
Agreement”). The Members do not object to and hereby authorize to the
extent applicable, RSC-LSC Management Company, LLC, a Florida limited liability
company (“RSC-LSC”)
being engaged as property manager of the Lexington Property and RSC-GSC
Management Company, LLC, a Florida limited liability company (“RSC-GSC”)
being engaged as property manager of the Greenville Property pursuant to
Management Agreements substantially in the from attached hereto and incorporated
by reference as Exhibit C.  RSC-LSC and RSC-GSC, and any other
Affiliate of RSC or a Royal Principal (each an “RSC
Manager”), may serve as the property manager for the Property; subject to
the applicable termination provisions of the Management Agreement, as long as
the Non-Managing Member is Controlled by one or more Royal Principals, Royal or
an entity Controlled by one or more Royal Principals. Each of the Management
Agreements attached hereto as Exhibit C and any other Management Agreement with
RSC-LSC, RSC-GSC, or any other Affiliate of RSC or a Royal Principal is referred
to a “RSC
Management Agreement”).   In the event that RSC-LSC and
RSC-GSC, or any other Affiliate of RSC or a Royal Principal is removed or
otherwise ceases to serve as the property manager for the Property (other than
by reason of an event of default by the applicable RSC Manager), the Managing
Member shall choose the initial replacement property manager, subject to the
consent of the Non-Managing Member, which consent shall not be unreasonably
withheld.

     

    (b)           In
the event that any of the RSC Management Agreements shall be terminated or
expire for any reason other than by reason of an event  of default
thereunder by the RSC Manager or termination for convenience by the applicable
RSC Manager under the applicable RSC Management Agreement by RSC-LSC, RSC-GSC,
and any other Affiliate of RSC or a Royal Principal that is then currently
serving as the property manager for the Lexington Property or Greenville
Property, then the Non-Managing Member shall at any time thereafter have the
right to initiate the Buy-Sell Procedures hereunder (except as limited by
subclauses 6.1(a)(A) and (B)).

     

    Section
5.3    Selection of
Auditors.

     

    At any
time after December 31, 2011, either Member (the “Member
Electing Removal of Auditor”) may elect to change the Auditors by
providing written notice of such election (an “Auditor
Removal Notice”) to the other Member (the “Member
Responding to Auditor Removal Notice”).  In the Auditor Removal
Notice, the Member Electing Removal of Auditor shall propose to the Member
Responding to Auditor Removal Notice a list of three (3) possible accounting
firms acceptable to the Member Electing Removal of Auditor. The Member
Responding to Auditor Removal Notice shall select one (1) accounting firm from
the list, and shall give the Member Electing Removal of Auditor written notice
of the selected accounting firm within ten (10) days after receipt of the
Auditor Removal Notice.

    


    
      
        
           


        

        
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    Section
5.4    Limited Reimbursement
of Expenses.

     

    The
Company shall, or shall cause the Operating Company to reimburse the Members and
their respective agents or representatives for all direct, actual, reasonable,
verifiable, out-of-pocket incidental costs and expenses incurred by them with
Third Parties which are incurred by the Members in connection with the
acquisition and financing of the Property and the preparation and negotiation of
this Agreement and the documents required hereunder (which costs and expenses
shall expressly not include, the structuring of the investment by the Members
and their respective Affiliates), which shall not exceed _________ for Managing
Member and _____________ for Non-Managing Member, or (b) are directly
attributable to the business of the Company and/or the Operating Company and are
incurred for and on behalf of the Company and/or the Operating Company, in
accordance with an Approved Budget.  It is expressly understood that
the Company shall not be responsible for, or reimburse any of, the salaries or
other compensation of such Member’s employees, or any general or administrative
overhead of any Member, including, but not limited to, rent.  Without
waiving the effect of the foregoing provisions, the Members hereby authorize and
direct the Company to cause the following to be paid or reimbursed, as costs and
expenses of the Company:  (i) the fees and costs of the law firms of
Foley & Lardner LLP, and DLA Piper and the accounting firm of Deloitte and
Touche LLP, which represented the interest of Managing Member in connection with
this transaction; (ii) the fees and costs of the law firms of Carlton Fields,
P.A. and Womble Carlyle Sandridge & Rice, PLLC, which represented the
interests of the Non-Managing Member in connection with this transaction.


     

    ARTICLE
VI

    BUY-SELL
PROCEDURES

     

    Section
6.1    Buy-Sell
Procedures.

    


    (a)           Managing
Member or Non-Managing Member shall each have the right to initiate and complete
the buy-sell procedures described in this Article (collectively, the “Buy-Sell
Procedures”) at any time: (i) during the continuance of a Deadlock with
respect to a Major Decision, but during the period of time expiring two (2)
years after the Effective Date, only if such continuing Deadlock shall pertain
to a Major Decision involving a sum or value which shall exceed the “Major
Decision Materiality Threshold”, (ii) in any event, for any or no reason,
after two (2) years from the Effective Date, or (iii) if any RSC Management
Agreement shall (1) terminate, (2) expire or (3) the applicable Operator shall
reenter or retake possession of any portion of any Facility, in respect to any
of subclauses (1), (2) or (3) of this Section 6.1(a)(iii), for any reason other
than a termination by the applicable RSC Manager by convenience pursuant to
Section 1301.6 of the Management Agreement attached hereto as Exhibit C, or any
substantially similar provisions in any subsequent RSC Management Agreement, or
a termination or retaking of possession of any portion of any Facility by the
applicable Operator by reason of an event of default by the applicable RSC
Manager pursuant to Section 1301.3, of the Management Agreement attached hereto
as Exhibit C, or any substantially similar provisions in any subsequent RSC
Management Agreement, provided however that the termination of any RSC
Management Agreement or retaking of possession of any portion of any Facility by
the applicable Operator by reason of an event of default by the applicable RSC
Manager shall be deemed to be a termination by the applicable Operator for
convenience (to avoid all doubt, there shall be no termination or other fee
payable in such event) and permit the initiation of the Buy-Sell Procedures by
Non-Managing Member unless the applicable RSC Manager failed to use reasonable
commercial efforts to prevent such event of default. Notwithstanding the
foregoing or anything else in this Agreement to the contrary: (A) to the extent
the Company has agreed, in accordance with the terms of this Agreement, to sell
the Property to a Third Party pursuant to a legally binding agreement that has
not been terminated, the Buy-Sell Procedures specified in this Article 6 shall not
be initiated; (B) no Member shall have the right to initiate the Buy-Sell
Procedures while the Buy-Sell Procedures previously initiated by a Member are
continuing and have not yet been completed or terminated in accordance with the
applicable provisions of this Agreement; and (C) Managing Member shall not have
the right to initiate the Buy-Sell Procedures if any of the transfers
contemplated thereby would be prohibited by the terms of the Senior Loan
Documents (unless the only transfer so prohibited would be the transfer to the
initiating Member and such Member pays off the Senior Loan or obtains the
consent of the Senior Lender thereto and indicates its intention to so pay off
the Senior Loan or that it intends to obtain such consent in the Buy-Sell
Notice). The Buy-Sell Procedures shall also govern and control the Membership
Interests in Tenant Portfolio so that the initiating of the Buy-Sell Procedures
hereunder shall automatically include, at no additional charge or expense, the
purchase of the entire Membership Interest of the Seller, or its Affiliate, if
applicable, in Tenant Portfolio. The Members acknowledge and agree that the
Tenant Portfolio Agreement does not contain comparable buy-sell provisions as
the intent of the Members is that the initiating of the Buy-Sell Procedures
under this Agreement shall govern and control in each instance, the applicable
membership interests in Tenant Portfolio. Cornerstone Oakleaf Village TRS, and
RSC South Carolina Interests, LLC shall join in the execution of this Agreement
to evidence that its, and their respective successors’ and assigns’, entire
membership interest in Tenant Portfolio shall be subject to, and governed by,
the Buy-Sell Procedures.

     

    
      
        
        

      

      
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    (b)           The
Member who elects to initiate the Buy-Sell Procedures (the “Offeror”)
shall give written notice (the “Buy-Sell
Notice”, and the date on which the Buy-Sell Notice is given shall be
referred to herein as the “Buy-Sell
Notice Date”) to the other Member (the “Offeree”),
which notice shall:

     

    (i)           specify
an amount (the “Gross
Price”) representing a gross sales price for the Company
Property;

     

    (ii)          specify
the aggregate amounts that each Member would be entitled to receive (including
as a result of the repayment of any Member Loans) if all of the Property were
sold for such Gross Price (but without taking any reductions or credits from the
Gross Price on account of transfer taxes, closing costs or other general
transaction expenses that would have been incurred in connection with an actual
sale for the Gross Price), all loans or indebtedness owed by the Company and/or
the Operating Company were repaid, the Operating Company and the Company were
immediately dissolved and the net proceeds of such sale were distributed in
liquidation in accordance with Article 4 (the amount
so payable to the Offeree being referred to herein as the “Offeree
Price” and the amount so payable to the Offeror being referred to herein
as the “Offeror
Price”; the Offeror Price or the Offeree Price, as applicable are
sometimes referred to herein as the “Purchase
Price”);

    


    
      
        
           


        

        
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    (iii)         specify
that the Offeror desires to purchase the Membership Interest of the Offeree for
the Offeree Price or to sell the Membership Interest of the Offeror to the
Offeree for the Offeror Price; and

     

    (iv)         specifically
request Offeree to respond to the Buy-Sell Notice as required under Section
6.1(c).

     

    The
Offeror’s delivery of the Buy-Sell Notice to the Offeree shall constitute its
legally binding and irrevocable offer to complete the purchase as described in
this Article, and the delivery of the Buy-Sell Notice shall constitute the
Offeror’s irrevocable offer to sell its Membership Interest as described in this
Article.  Together with the Buy-Sell Notice, the Offeror shall also
deliver to the Offeree copies of any written offers or communications delivered
to the Offeror (whether addressed to the Offeror or the Company or others)
regarding the sale of all or any portion of the Property or the interests in the
Company received by the Offeror within the preceding one (1) year, without
limiting the obligations of the Offeror with respect to such
notices.

     

    (c)           The
Offeree shall have thirty (30) days from the Buy-Sell Notice Date to send a
written response (“Response
Notice”) to the Offeror, which Response Notice shall set forth Offeree’s
election (i) to be the “Purchaser” under the Buy-Sell Procedures (the “Purchaser”)
and to purchase the entire Membership Interest in the Company owned by the
Offeror for the Offeror Price or (ii) to be the “Seller” under the Buy-Sell
Procedures (the “Seller”)
and to sell its entire Membership Interest in the Company to the Offeror for the
Offeree Price.  The Response Notice may not contain any conditions or
qualifications to such election and must contain one of the following
statements:

     

    (i)           In
response to the Buy-Sell Notice, [Insert name of Offeree]
hereby irrevocably elects to sell its (and any Affiliate’s) Membership Interests
to [Insert name of
Offeror]; or

     

    (ii)           In
response to the Buy-Sell Notice, [Insert name of Offeree]
hereby irrevocably elects to purchase the Membership Interests of [Insert name of Offeror and any
Affiliate].

     

    If the
Offeree elects to be Purchaser, its Response Notice shall constitute its legally
binding and irrevocable obligation to complete the purchase described in this
Article and shall not be effective unless accompanied by a bank cashier’s check
in an amount (if applicable, the “Deposit”)
equal to the greater of two percent (2%) of the Offeror Price or
$500,000.00.  The Offeror shall hold the Deposit in an
interest-bearing, segregated account at a federally insured financial
institution.

     

    If the
Offeree elects in its Response Notice to be the Seller or does not comply with
any applicable requirement of Section 6.1(c) in a
timely manner, then the Offeree shall be designated the Seller and the Offeror
shall be designated the Purchaser. Within ten (10) days after the Response
Notice or the expiration of the time to give the Response Notice in the event of
the Offeree’s failure to give the Response Notice, as applicable, the Offeror,
as Purchaser, shall deliver to the Offeree a bank cashier’s check in an amount
(if applicable, the “Deposit”)
equal to the greater of two percent (2%) of the Offeree Price or $500,000.00.
The Offeree shall hold the Deposit in an interest-bearing, segregated account at
a federally insured financial institution.

    


    
      
        
           


        

        
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    The
designation of the Offeree as the Seller as described above shall constitute the
Offeree’s irrevocable obligation to sell its Membership Interest as described in
this Article
6.

     

    (d)           If
all or any portion of a Member’s Membership Interest has been assigned to any
other Person, whether or not an Affiliate of such Member, then all references in
this Article to a Member, whether specifically or as the Offeror, Offeree,
Seller or Purchaser, shall be deemed to mean and include a reference to all such
Member’s successors and assigns hereunder (collectively, and together with such
Member, such Member’s “Group”).  Notwithstanding
the foregoing to the contrary, only the original Member (or the permitted
successor to the entire Membership Interest of such original Member) shall be
authorized or permitted to give a Buy-Sell Notice or a Response Notice, and any
such notice shall be binding upon all members of such Member’s Group, jointly
and severally, to purchase, sell and/or cooperate as required herein with
respect to such Member.

     

    Section
6.2    Buy-Sell Procedures
for the Purchase and Sale of Membership Interests.

     

    If the
Membership Interests of a Member are to be sold pursuant to Section 6.1, then the
following provisions and the provisions of Section 6.3 shall
apply:

     

    (a)           The
Purchaser shall fix a date (“Buy-Sell
Closing Date”) for the closing of the purchase and sale of the Seller’s
Membership Interest (the “Buy-Sell
Closing”), which must be a Business Day not later than seventy-five (75)
days following the Buy-Sell Notice Date.  The Purchaser shall notify
the Seller in writing of the Buy-Sell Closing Date not less than ten (10) days
prior thereto.  If the Purchaser does not fix the Buy-Sell Closing
Date within ten (10) days prior to last day to close days following the Buy-Sell
Notice Date, then the Buy-Sell Closing Date shall automatically be the
seventy-fifth (75th) day
following the Buy-Sell Notice Date; provided, however, that if that
date is not a Business Day, then the Buy-Sell Closing Date shall be the next
Business Day.  The Buy-Sell Closing Date shall be postponed for not
more that sixty (60) days, (i) if Non-Managing Member shall be the Purchaser, to
obtain the South Carolina Department of Health and Environmental Control, or the
applicable agency body or authority thereof (collectively, “DHEC”)
consent to the change in control of Lexington Operator and Greenville Operator,
the holders of the Community Residential Care licenses for the community
residential care facilities operated on the Lexington Property and Greenville
Property, and if applicable, effectuate the transfer of the applicable Community
Residential Care licenses, or (ii) if Non-Managing Member shall be the Purchaser
and if such transfer is prohibited by the provisions of the Senior Loan
Documents, to obtain the consent of Senior Lender to the transfer of the
applicable Membership Interests. The Buy-Sell Closing shall take place on the
Buy-Sell Closing Date in Florida at a location designated by the
Purchaser.

     

    (b)           At
the Buy-Sell Closing:

     

    (i)           the
Purchaser shall deliver the Purchase Price (less any required withholding) in
U.S. dollars in immediately available funds and paid through wire transfer to
the Seller and/or its designee(s); and

    


    
      
        
           


        

        
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    (ii)           the
Seller shall convey to the Purchaser good and marketable title to its Membership
Interests free and clear of all Liens (other than any Liens relating to any
mezzanine loans made to both Members and secured by Liens on the Membership
Interests of both Members to the extent that the same is acceptable to the
Purchaser and lender thereof consents to the transfer of such Membership
Interests) and the Purchaser shall accept the conveyance of Membership Interests
from the Seller and assume all obligations with respect to those Membership
Interests accruing or arising after the date of the conveyance, and the Seller
and the Purchaser shall execute and deliver such assignments of interest, deeds,
bills of sale, instruments of conveyance, amendments to this Agreement and the
Certificate of Formation (if and to the extent required), and other instruments
as the Purchaser may reasonably require to evidence such
conveyance.

     

    (c)           The
Purchaser shall be required at its expense on the Buy-Sell Closing Date to
either (i) obtain the release and/or return, as appropriate, of the Seller and
its Affiliates and other related parties from any personal undertakings,
guarantees, letters of credit, bonds or indemnities or other security or
Recourse Liabilities provided by the Seller or any such other party on behalf or
for the benefit of the Company and/or the Operating Company (whether through the
provision of substitute security acceptable to the beneficiaries of such
obligations or otherwise); or (ii) if obtaining such release is not reasonably
feasible prior to the Buy-Sell Closing Date, provide an indemnity to the Seller
and/or such other parties, as applicable, in connection with the obligations
described in clause (i) above in form and substance reasonably acceptable to the
Seller and secured by net worth or other collateral reasonably satisfactory to
the Seller (it being understood that for the purposes of this Agreement an
indemnity given by a Member or the Company shall  not be
satisfactory).

     

    (d)           The
Company shall distribute to its Members in accordance with Section 4.1 the
amount of any Available Cash from Operations that it holds one (1) Business Day
prior to the Buy-Sell Closing Date.  If the Company and/or the
Operating Company is prohibited by the terms of any loan or any other agreement
of the Company and/or the Operating Company from making such a distribution, the
Purchaser shall pay to the Seller on the Buy-Sell Closing Date (in addition to
the other amounts payable under this Article) the amount that would have been
distributed to the Seller under Article 4 had such distribution been
permitted.

     

    (e)           Any
risk of casualty, condemnation or loss prior to the Buy-Sell Closing Date shall
be borne by the Purchaser, who shall succeed to all rights to insurance proceeds
(other than loss of rent proceeds allocable to any period prior to the Buy-Sell
Closing Date) or condemnation awards, without credit or offset against any
amounts owed by the Purchaser to the Seller.

     

    (f)           If
the Purchaser defaults in its obligation to complete the Buy-Sell Closing by the
Buy-Sell Closing Date, then the Seller shall (i) have the right, to be exercised
by notice to the Purchaser and completed within sixty (60) days of the original
Buy-Sell Closing Date determined under Section 6.2(a), to
become the Purchaser at a price equal to 95% of the applicable original Purchase
Price that Purchaser would have paid to Seller if the Buy-Sell Closing was
completed, in which case Purchaser shall have the right to the return of the
Deposit (together with the interest thereon), (ii) have the right to market and
sell the Company Property to a Third Party for not less than 90% of the Gross
Price, in which event Purchaser and Seller shall cooperate in the efforts to
market and sell the Property and Purchaser shall have the right to the return of
the Deposit (together with the interest thereon) or (iii) be entitled to retain
the Deposit (together with the interest thereon) as liquidated damages, which
the Members acknowledge to be a fair calculation of the damages suffered as a
result of the Purchaser’s default, in lieu of any other legal and equitable
remedies other than such other remedies as may be expressly set forth
herein.

    


    
      
        
           


        

        
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    (g)           If
the Seller defaults in its obligation to complete the Buy-Sell Closing by the
Buy-Sell Closing Date, then the Purchaser shall (i) have the right to the
immediate return of the Deposit (together with the interest thereon) and (ii) be
entitled to all available legal and equitable remedies against the Seller,
including specific performance of the Seller’s obligation to complete the
Buy-Sell Closing and recovery of all Losses of Purchaser caused by Seller’s
default (including without limitation attorney’s fees and costs paid or incurred
in any legal or equitable action).

     

    (h)           Each
Member shall be responsible for all costs and expenses incurred by such Member
in connection with any Buy-Sell Closing.

     

    Section
6.3    Other Buy-Sell
Requirements.

     

    (a)           Each
Member expressly agrees and acknowledges that TIME IS OF THE ESSENCE with
respect to all time requirements, delivery and payment dates and other deadlines
set forth in this Article; provided, however, that the
applicable closing shall be postponed for up to ten (10) days in order to obtain
any necessary Third Party consents to the transaction. In that regard, all
payments and other actions or documents required to be paid, delivered, received
or taken on or prior to a specified date shall be so paid, delivered, received
or taken on or prior to the specified or required date unless such date is
extended in writing by the Member entitled to such performance or payment and
failure to make such payment or performance by such date shall be a default
under this Agreement by such party.  The Members shall use their good
faith efforts to obtain all Third Party consents to the transaction on or before
the scheduled closing date.

     

    (b)           After
the Buy-Sell Closing, upon reasonable notice, the Purchaser and the Seller shall
reasonably cooperate with each other and make available to each other and their
representatives, employees, counsel and accountants the documents, books and
records relating to activities of the Company or with respect to the Property as
may reasonably be required after the Buy-Sell Closing in connection (i) with any
contractual obligations to third parties, (ii) the transfer of  the
community residential care licenses issued by South Carolina Department of
Health and Environmental Control with respect to the community residential care
facilities operated pursuant to the Master Leases, if applicable or (iii) to
defend or prepare for the defense of any claim or assessment relating to the
Company or the Property or to prosecute or prepare for the prosecution of claims
against third parties relating to the conduct of the Company or with respect to
the Property or in connection with any governmental investigation; provided,
however, that such access and assistance does not unreasonably disrupt the
normal operations of the Purchaser, in the case of access and assistance given
to Seller, or the Seller, in the case of access and assistance given to the
Purchaser.

     

    (c)           Between
the Buy-Sell Notice Date and the Buy-Sell Closing Date under this Article, the
Managing Member shall conduct the business, operations and financial affairs of
the Company and the Operating Company only in the ordinary course and consistent
with the prior practices of the Company in accordance with this Agreement and
all other applicable Major Decisions of the Members.

    


    
      
        
           


        

        
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    (d)           The
cost of any fees or expenses incurred in connection with obtaining the consent
of a lender under any applicable loan documents or amending any applicable loan
documents to ensure compliance with all applicable requirements and conditions
of any loan documents in effect at the time of the Buy-Sell Closing shall be
paid by the Purchaser.  Except as set forth above, each Member shall
bear its own closing costs and expenses incurred in the purchase or sale of
Membership Interests, including the payment of any transfer or similar taxes, in
accordance with the provisions of this Article 6.

     

    (e)           Each
Member agrees to cooperate and to take all reasonable actions and execute all
documents reasonably necessary or appropriate to facilitate and accomplish the
transactions described in or contemplated under this Article 6.

     

    (f)           Each
Party agrees that specific performance shall be available to ensure compliance
with the provisions of this Article 6 (except with respect to a default by a
Purchaser in its obligation to purchase).  The Members each agree that
any court having jurisdiction over the specific performance remedy shall be
entitled to order the appropriate Member or other Person to execute all
necessary documents and to further appoint an appropriate Person to be
authorized to execute such documents on behalf of the defaulting Member or other
Person. If the Purchaser shall have satisfied the conditions for the completion
of the Buy-Sell Closing as set forth herein, including payment of the applicable
amounts due on the Buy-Sell Closing Date, and the Seller for any reason does not
take any action necessary to transfer the Membership Interests in accordance
with the applicable provisions of this Agreement, such Membership Interests
shall at such time be deemed to have been sold, assigned, transferred, and
conveyed to the Purchaser, the Seller shall have no further right or interest in
or to such Membership Interests, and the Company shall record the transfer in
its records.

     

    (g)           Notwithstanding
anything to the contrary, nothing contained in the Senior Loan Documents, or any
other document or instrument now or hereafter executed, shall in any way
supersede, modify, amend or rescind (i) the right, without obligation or
liability except as set forth herein, of Non-Managing Member to initiate the
Buy-Sell Procedures and (ii) the right of Non-Managing Member to sell, and the
obligation of Managing Member to purchase, the Membership Interest of
Non-Managing Member, pursuant to the provisions this Agreement.

     

    ARTICLE
VII

    STATUS OF MEMBERS;
INDEMNIFICATION

     

    Section
7.1    Role
of Non-Managing Members.

     

    Except as
expressly provided herein, the Non-Managing Member shall not participate in the
management or control of the Company’s business, nor shall it transact any
business for the Company, but such Member’s consent shall be required whenever
this Agreement provides for the consent or approval of all Members or such
Member.

     

    
      
        
        

      

      
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    Section
7.2    Liability of
Members.

    


    Except as
otherwise expressly required by law, each Member shall have no personal
liability whatsoever, whether to the Company, to the other Members or to the
creditors of the Company, for the debts of the Company or any of its losses. The
foregoing shall not, however, limit the personal liability of a Member for its
obligations to the Company or any Indemnitee under this Agreement or to the
Company or any other Person under any other agreement to which such Member may
be a party. In no event shall any partner, member, manager, officer, director,
stockholder, shareholder or owner of either Member or any affiliate thereof be
liable for the obligations of the Members hereunder.

     

    Section
7.3    Bankruptcy of
Member.

     

    Notwithstanding
any other provision of this Agreement, the Bankruptcy of any Member shall not
cause such Member to cease to be a member of the Company and upon the occurrence
of such an event, the Company shall continue without dissolution.  In
the event of the Bankruptcy of Managing Member, Non-Managing Member shall have
the right, but not the obligation, to be Managing Member upon written notice of
such election.  If Non-Managing Member does not so elect to become
Managing Member within ninety (90) days after the Bankruptcy of Managing Member,
or if Non-Managing Member does elect to become Managing Member and in the event
of a Bankruptcy of Non-Managing Member, then the Company may only act with the
joint consent of Managing Member and Non-Managing Member.

     

    Section
7.4    Relationship of
Members.

     

    Each
Member agrees that, to the fullest extent permitted by Section 18-1101 and other
provisions of the Delaware Act and except to the extent expressly stated in this
Agreement or in any other agreement to which a Member is a party:

     

    (a)           Except
as expressly provided in this Agreement, no Member shall have any authority to
bind or act for, or assume any obligation or responsibility on behalf of, any
other Member, the Company or to act as the agent, representative or
attorney-in-fact for any other Member.

     

    (b)           Except
as expressly provided herein, any consent, approval, determination or other
action by a Member shall be given or taken in the sole and absolute discretion
of that Member in its own best interests and without regard to the best
interests of another Member, the Company or the financial, tax or other effect
on another Member or the Company. Each Member acknowledges and agrees that (i)
to the extent a Member is acting or proposing to act on behalf of the Company,
such Member shall be acting in the capacity as a fiduciary of the Company and
the other Members (subject to the provisions of Section 7.5) and (ii)
to the extent a Member is determining whether to initiate or approve a Major
Decision or in connection with a Buy-Sell under Article 6 hereof,
such Member is entitled to act in a manner deemed by such Member to be in its
own best interest.

     

    
      
        
        

      

      
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    Section
7.5    Other Activities;
Affiliates.

    


    The
Company and each Member expressly acknowledge and agree that Non-Managing Member
and Affiliates of Non-Managing Member and other Persons related to Non-Managing
Member or Affiliates of Non-Managing Member, on the one hand (collectively
“Non-Managing
Member Related Persons”) and Managing Member and Affiliates of Managing
Member and other Persons related to Managing Member and Affiliates of Managing
Member (collectively the “Managing
Member Related Persons”), on the other hand (the Non-Managing Member
Related Persons and the Managing Member Related Persons being hereinafter
collectively referred to as “Related
Persons”) have direct and/or indirect interests in investing in, owning,
operating, transferring, managing, leasing and otherwise using, real property
and interests therein for profit, and engaging in any and all activities related
or incidental thereto and/or that such Related Persons will make other
investments consistent with such interests. Except to the extent expressly
provided herein or in other agreements among one or more of the parties hereto:
(i) neither the Company nor any Member shall have any right by virtue of this
Agreement or the Company relationship created hereby in or to any other ventures
or activities in which any Related Person is involved or to the income or
proceeds derived therefrom; (ii) the pursuit of other ventures and activities by
any Related Person, even if competitive with the business of the Company, is
hereby consented to by the Company and all Members and shall not be deemed
wrongful or improper under this Agreement; and (iii) no Related Person shall be
obligated to present any particular investment opportunity to the Company or to
any Member, even if such opportunity is of a character which, if presented to
the Company, could be taken by the Company.

     

    Section
7.6    Indemnification.

     

    (a)           The
Company shall indemnify and hold each Member and its Affiliates, and each of the
direct and indirect members, partners, principals, officers, directors, managers
and employees of each of the Members and each of their Affiliates (each, an
“Indemnitee”),
harmless from and against any Losses (including without limitation Losses
arising from Recourse Liabilities) suffered or sustained by it by reason of the
Recourse Liabilities or by reason of any acts, omissions or alleged acts or
omissions by such Indemnitee on behalf of the Company within the scope of
authority conferred on it by this Agreement, including, any judgment, award,
settlement, reasonable attorneys’ fees and other costs and expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided that no Person shall be entitled to indemnification hereunder to
the extent that the Losses incurred by such Person arose out of or were the
result of such Person’s fraud, gross negligence or willful misconduct, the
failure of such Person to comply with the provisions of this Agreement (other
than the failure to make any additional Capital Contribution pursuant to Section 3.2), or such
Person’s obligations to indemnify any other Person pursuant to the provisions of
the Purchase Agreement.

     

    (b)           No
Indemnitee shall be liable, responsible or accountable in damages or otherwise
to the Company or any Member for any action taken or failure to act on behalf of
the Company unless such action or omission constituted fraud, gross negligence
or willful misconduct or the failure of such Indemnitee to comply with the
provisions of this Agreement (other than the failure to make any additional
Capital Contribution pursuant to Section
3.2).  Each Member shall indemnify, protect, defend and hold
the Company, each other Member and each such other Member’s related Indemnitees
harmless from and against any and all Losses suffered or sustained by it by
reason of any act or omission constituting fraud, gross negligence or willful
misconduct by such Member or any related Indemnitee of such Member or failure of
such Member to comply with the provisions of this Agreement (other than the
failure to make any additional Capital Contribution pursuant to Section 3.2); provided, however, that no
Person shall be entitled to indemnification hereunder to the extent that the
Losses incurred by such Person arose out of or were the result of such Person’s
fraud, gross negligence or willful misconduct or the failure of such Person to
comply with the provisions of this Agreement (other than the failure to make any
additional Capital Contribution pursuant to Section
3.2).

    


    
      
        
           


        

        
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    (c)           If
a claim or assertion of liability is made or asserted by a third party against
an Indemnitee that, if prevailed upon by any such third party, would result in
such Indemnitee being entitled to indemnification pursuant to this Section 7.6, such
Indemnitee will forthwith give to the applicable indemnitor written notice of
the claims or assertion of liability and request the indemnitor to defend the
same.  Failure to so notify the indemnitor will not relieve the
indemnitor of any liability that the indemnitor might have to such Indemnitee
except to the extent that such failure actually prejudices the indemnitor’s
legal position.  The indemnitor will have the obligation to defend the
Indemnitee against such claim or assertion (if such Indemnitee is entitled to
indemnification pursuant to this Section) and the indemnitor will give written
notice to the Indemnitee of acceptance of the defense of such claim and the name
of the counsel (who shall be reasonably acceptable to the Indemnitee) selected
by the indemnitor to defend such claim.  The Indemnitee will be
entitled to participate with the indemnitor at the expense of the indemnitor in
such defense and also will be entitled at its option (and at the expense of the
Company) to employ separate counsel for such defense; provided, however, that if
and to the proportionate extent the Indemnitee is found (by a final judgment of
a court of competent jurisdiction) not to be entitled to indemnification
hereunder, the Indemnitee shall reimburse the indemnitor for such expense). The
indemnitor and the Indemnitee will cooperate with each other in the defense of
any such action and the relevant records of each will be made available to the
other with respect to such defense.

     

    (d)           No
Indemnitee will be entitled to indemnification under this Section if it has
entered into any settlement or compromise of any claim giving rise to any
indemnifiable loss without the written consent of the indemnitor. If a bona fide
settlement offer is made with respect to a claim and the indemnitor desires to
accept and agree to such offer, the indemnitor will give written notice to the
Indemnitee to that effect (the “Settlement
Notice”). If the settlement offer includes a full release of the
Indemnitee and the Indemnitee fails to consent to the settlement offer within
ten calendar days after receipt of the Settlement Notice, then the Indemnitee
will be deemed to have rejected such settlement offer and will be responsible
for continuing the defense of such claim and, in such event, the maximum
liability of the indemnitor as to such claim will not exceed the amount of such
settlement offer plus any and all reasonable costs and expenses paid or incurred
by the Indemnitee up to the date of the Settlement Notice and which are
otherwise the responsibility of the indemnitor pursuant to this Section. If the
settlement offer does not include a full release of the Indemnitee and the
Indemnitee fails to consent to the settlement offer, the indemnitor shall
continue to remain liable to the Indemnitee to the full extent set forth in this
Section.

     

    (e)           Any
indemnification permitted under subsection (a) shall be made only out of the
assets of the Company, and no Member shall be obligated to contribute to the
capital of, or loan funds to, the Company to enable the Company to provide such
indemnification.

     

    (f)           The
indemnification provided by this Section shall be in addition to any other
rights to which each Indemnitee may be entitled as a matter of law or otherwise,
as to action in the Indemnitee’s capacity as a Managing Member, Member, as a
director, officer, employee, constituent partner, shareholder or other Affiliate
of a Member and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns,
administrators and personal representatives of the Indemnitee.

    


    
      
        
           


        

        
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    (g)           To
the extent provided in the Annual Budget, the Company may purchase and maintain
insurance on behalf of any one or more Indemnitees. If insurance is obtained for
any Indemnitee, it shall be obtained on the same basis for all other Indemnitees
who have comparable risks.

     

    (h)           In
no event may an Indemnitee subject an Affiliate or other related Indemnitee of a
Member to personal liability by reason of the indemnification provisions of this
Agreement.

     

    (i)           The
provisions of this Section are for the benefit of the Indemnitees and the heirs,
successors, assigns, administrators and personal representatives of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Persons. The indemnification obligations under this Section shall survive
the sale of the Membership Interests by any Member, the sale of the Property by
the Company or the dissolution of the Company.

     

    (j)           Notwithstanding
anything to the contrary contained herein, all indemnification obligations of
the Company are fully subordinated to any obligations relative to the Senior
Loan or respecting the Property and such indemnification obligations shall in no
event constitute a claim against the Company if cash flow in excess of amounts
necessary to pay obligations under the Senior Loan is insufficient to pay such
indemnification obligations.

     

    ARTICLE
VIII

    TRANSFER OF MEMBERSHIP
INTERESTS

     

    Section
8.1    General.

     

    No Member
may Transfer or permit the Transfer of all or any portion of its Membership
Interest or any direct or indirect interest in such Member without the prior
written consent of the other Member, which consent may be withheld at the sole
and absolute discretion of such other Member, unless the Transfer is to either a
Permitted Managing Member Transferee or a Permitted Non-Managing Member
Transferee and unless and until all requirements and conditions stated in this
Article, which shall be read and construed as a whole, have been satisfied in
full or have been waived by the non-transferring Member.  Any Transfer
in violation of this Article shall be invalid, ineffective and not enforceable
for any purpose.  No authorization, consent or waiver applicable to
one Transfer shall apply or be deemed to apply to any other Transfer or
requested Transfer.

     

    Section
8.2    Permitted
Transferees.

     

    (a)           A
“Permitted
Managing Member Transferee” means any Person Controlling, Controlled by
or under common Control with Managing Member.

     

    (b)           A
“Permitted
Non-Managing Member Transferee” means any Person Controlling, Controlled
by or under common Control with Non-Managing Member.

    


    
      
        
           


        

        
          24

          
            

          

        

        
           


        

      

    

     

    Section
8.3    Right of First
Refusal.

     

    (a)                      Third Party
Offer.  Any Member ("Selling Member") who has
received a Bona Fide Offer from a Third Party prospective purchaser ("Qualified Purchaser"), to
purchase all (but not less than all) of the Selling Member's Membership
Interest, before selling any of its Membership Interest, shall first offer the
sale thereof to the other Member (the “Remaining Member”) upon the
same terms and conditions stated in such Bona Fide Offer ("Right of First Refusal"). To
avoid all doubt, any sale of less than all of the Membership Interest of a
Member is subject to the prior written consent of the other Member (which may be
withheld at the sole and absolute discretion of such other Member), except to
the extent any exception contained in Section 8.2 applies, that is, the Transfer
is to either a Permitted Managing Member Transferee or a Permitted Non-Managing
Member Transferee. Notwithstanding the foregoing or anything else in this
Agreement to the contrary: (A) to the extent the Company has agreed, in
accordance with the terms of this Agreement, to sell the Property to a Third
Party pursuant to a legally binding agreement that has not been terminated, no
Member may Transfer or permit the Transfer of all or any portion of its
Membership Interest or any direct or indirect interest in such Member while the
Buy-Sell Procedures specified in Article 6 previously initiated by a Member are
continuing and have not yet been completed or terminated in accordance with the
applicable provisions of this Agreement; (B) no Member may Transfer or permit
the Transfer of all or any portion of its Membership Interest or any direct or
indirect interest in such Member while any such Transfer previously initiated by
another Member is continuing and have not yet been completed or terminated in
accordance with the applicable provisions of this Agreement.

     

    (b)           Remaining Member’s Right to
Purchase.  The Remaining Member shall have the right to
purchase all, but not part, of the Membership Interest of the Selling Member. If
the Remaining Member does not exercise its right by written notice forwarded no
later than thirty (30) days after receipt of such offer, then: a) the Selling
Member may sell all (but not less than all) or its Membership Interest to the
Qualified Purchaser under the same terms and conditions as are set forth in the
original Bona Fide Offer and b) the Qualified Purchaser’s  Unreturned
Capital Contribution shall be the same as the Unreturned Capital Contribution of
the Selling Member immediately before the sale.  The sale to the
Qualified Purchaser must be consummated within thirty (30) days from the last
date on which the Remaining Member had the right to accept the offer to
purchase, subject to reasonable extensions (not to exceed ninety (90) days) to
(i) obtain an agreement with the holder(s) of any mortgage encumbering the
Property and/or any mezzanine loan encumbering the Membership Interest to permit
the Qualified Purchaser (and its designees, if applicable) to assume such
loan(s), and release the Selling Member (and its designees, if applicable) from
all liability with respect to such loan(s) arising from and after the closing
with the Qualified Purchaser, and (ii) if applicable, transfer the community
residential care licenses issued by South Carolina Department of Health and
Environmental Control with respect to the community residential care facilities
operated pursuant to the Master Leases. Evidence that the sale has been so
consummated shall be supplied in writing by the Selling Member and the Qualified
Purchaser to the Company and the Remaining Member.  If the sale has
not been consummated within said thirty (30) day period, as it may be extended,
the rights of the Remaining Members to purchase shall again attach to the
Membership Interest of the Selling Member and no sale may be made to any
purchaser without again complying with the provisions of this Section 8.3 and
the remainder of Article 8.

    


    
      
        
           


        

        
          25

          
            

          

        

        
           


        

      

    

     

    (c)           Closing.  The
purchase referred to in Section 8.3 shall be closed (the "ROFR Closing") within forty-five
(45) days following acceptance by the Remaining Member (the "ROFR Closing Date"), subject to
reasonable extensions (not to exceed ninety (90) days) to (i) obtain an
agreement with the holder(s) of any mortgage encumbering the Property and/or any
mezzanine loan encumbering the Membership Interest to if applicable, to permit
the Remaining Member (and its designees, if applicable) to assume such loan(s),
release the Selling Member (and its designees, if applicable) from all liability
with respect to such loan(s) arising from and after the ROFR Closing Date, and
(iii) if applicable, transfer the community residential care licenses issued by
South Carolina Department of Health and Environmental Control with respect to
the company residential care facilities operated pursuant to the Master
Leases.  The ROFR Closing shall be held at the offices of Carlton
Fields, P.A., 100 S.E. Second Street, 42nd Floor,
Miami, Florida 33131, at 10:00 a.m. on the ROFR Closing Date, or at such other
time or place as parties may agree.  At the ROFR Closing: (i) the
Selling Member shall deliver (A) an assignment of Membership Interest
representing the Membership Interest sold by the Selling Member, subject to no
pledge, lien or other encumbrance and (B) any and all other documents that may
be reasonably required by the purchaser thereof, and (ii) the Remaining Member
shall pay the agreed upon consideration.

     

    Section
8.4    Tag-Along
Rights.

     

    If
Managing Member desires to sell all or any portion of its Membership Interests
to a Qualified Purchaser, upon the notice of the Non-Managing Member declining
to exercise its Right of First Refusal under Section 8.3, the Non-Managing
Member shall have the right to require the Managing Member to cause the
Qualified Purchaser to purchase all of the Membership Interest of the
Non-Managing Member owned by the Non-Managing Member in accordance with the
terms and conditions of the Bona Fide Offer and this Section 8.4 (the "Tag-Along
Right").  The Tag-Along Right shall be exercisable only by
written notice provided to the Managing Member prior to the expiration of the
thirty (30) day period governing the exercise of the Right of First
Refusal.  If exercised as provided herein, the Tag-Along Right shall
require the Managing Member to require the Qualified Purchaser to purchase from
Non-Managing Member all of the Membership Interest of the Non-Managing Member,
and if that not be the case, Managing Member shall not be permitted to sell any
of its Membership Interest to the  Qualified Purchaser.

     

    Section
8.5    Effect of
Assignment.

     

    (a)           In
the event of any sale, assignment or transfer permitted hereunder, the Company
shall not be dissolved or wound up, but shall continue. No such sale, assignment
or transfer shall relieve the assignor from any of its obligations under this
Agreement accruing prior to such sale, assignment or transfer. Notwithstanding
the foregoing, as a condition to any sale, transfer or assignment by a Member,
the transferee or assignee must execute this Agreement (as amended) and agree to
be bound by all of its terms and provisions.

     

    (b)           Upon
the Transfer of its entire Membership Interest in the Company and the admission
of such Member’s transferee(s) as a substitute Member pursuant to this Article,
a Member shall be deemed to have withdrawn from the Company.

    


    
      
        
           


        

        
          26

          
            

          

        

        
           


        

      

    

    


    (c)           If
a Member Transfers less than all of its Membership Interest in the Company or if
all or part of the direct or indirect ownership or other interests in a Member
are Transferred such Member shall continue to have the sole and exclusive right
to approve Major Decisions and to take other actions required or permitted under
this Agreement, to the extent such Member had such right prior to the
Transfer.

     

    Section
8.6    Substitute
Member.

     

    The
transferee of a Membership Interest shall be automatically admitted to the
Company as a substitute Member, upon its compliance with this Article. Unless a
transferee of a Membership Interest is admitted as a substitute Member under
this Section
8.6, it shall have none of the powers of a Member hereunder and shall
have only such rights of an assignee under the Delaware Act as are consistent
with the other terms and provisions of this Agreement.

     

    Section
8.7    Further
Requirements.

        

    In
addition to the other requirements of this Article, and unless waived or
modified in whole or in part by Non-Managing Member (if the transfer is by
Managing Member or one of its transferees) or Managing Member (if the transfer
is by Non-Managing Member or one of its transferees), no transfer of all or any
portion of a Membership Interest may be made unless the following conditions are
met:

     

    (a)           The
delivery to the Company of a fully executed copy of all transfer documents
relating to the transfer, including (but without limitation) this Agreement, an
instrument of transfer and the agreement in writing of the transferee to (i) be
bound by the terms of this Agreement and (ii) pay all costs and expenses of the
Company incident to the transfer.

     

    (b)           The
representation of the transferring Member and the transferee, and the delivery
of an opinion of counsel reasonably acceptable to the non-transferring Members,
that (i) the transfer will not cause the Company to be treated as an association
taxable as a corporation for Federal income tax purposes, (ii) the transfer will
not cause the Company to be treated as a “publicly traded Company” within the
meaning of Section 7704 of the Code and (iii) the transfer will not violate the
Securities Act of 1933, as amended, or any other applicable Federal or state
securities laws, rules or regulations.

     

    Section
8.8    Transfer
Taxes.

     

    The
transferor of any Membership Interest shall be responsible for the payment of
any transfer taxes payable in connection therewith unless the transferee shall
otherwise agree.

     

    ARTICLE
IX

    CERTAIN
REMEDIES

     

    Section
9.1    No
Partition.

     

    Each
Member hereby irrevocably waives any and all rights that it may have to maintain
any action for partition of the Company Property.

    


    
      
        
           


        

        
          27

          
            

          

        

        
           


        

      

    

     

    Section
9.2    Litigation Without
Termination.

     

    Each
Member shall be entitled to maintain, on its own behalf or on behalf of the
Company, any action or proceeding against any other Member or the Company
(including, without limitation, any action for damages, specific performance or
declaratory relief) for or by reason of the breach by such party of this
Agreement or any other agreement entered into in connection with this Agreement,
notwithstanding the fact that any or all of the parties to such proceeding may
then be Members in the Company.

     

    Section
9.3    Attorneys’
Fees.

     

    In the
event of any dispute hereunder, or in connection with the execution of this
Agreement, or otherwise relating to the relationship of the Members contemplated
hereby, the prevailing party in any legal proceeding brought to resolve such
dispute shall be entitled to recover from the non-prevailing party in any such
proceeding, all of such prevailing party’s reasonable attorneys’ fees and
disbursements, at both trial and appellate levels and in any administrative
proceeding or bankruptcy proceeding.  The provisions of this Section
shall survive the sale of the Membership Interests by any Member, the sale of
the Property by the Company or the dissolution of the Company.

     

    Section
9.4    Cumulative
Remedies.

     

    No remedy
conferred upon the Company or any Member pursuant to this Agreement is intended
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity or by statute (subject,
however, to the limitations expressly herein set forth).

     

    Section
9.5    No
Waiver.

     

    No waiver
by a Member or the Company of any breach of this Agreement shall be deemed to be
a waiver of any other breach of any kind or nature, and no acceptance of payment
or performance by a Member or the Company after any such breach shall be deemed
to be a waiver of any breach of this Agreement, whether or not such Member or
the Company knows of such breach at the time it accepts such payment or
performance. Subject to any applicable statutes of limitation and any provisions
in this Agreement to the contrary, no failure or delay on the part of a Member
or the Company to exercise any right it may have under this Agreement shall
prevent the exercise thereof by such Member or the Company, and no such failure
or delay shall operate as a waiver of any breach of, or default under, this
Agreement.

     

    ARTICLE
X

    DISSOLUTION OF
COMPANY

     

    Section
10.1          Events Giving Rise to
Dissolution.

     

    No act,
thing, occurrence, event or circumstance shall cause or result in the
dissolution of the Company, except that the happening of any one of the
following events shall work an immediate dissolution of the
Company:

    


    
      
        
           


        

        
          28

          
            

          

        

        
           


        

      

    

    

      (a)           The
sale of all or substantially all of the Company Property;

       

      (b)           The
unanimous agreement in writing by the Members to dissolve the
Company;

       

      (c)           The
expiration of the Term of the Company;

       

      (d)           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
Delaware Act; or

       

      (e)           The
entry of a decree of judicial dissolution under Section 18-802 of the Delaware
Act, provided,
however, that
to the fullest extent permitted by law, the Members waive the right to seek and
shall not seek or acquiesce in the entry of a decree of judicial
dissolution.

       

      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 in the Company.

       

      Without
limitation on the other provisions hereof, neither the assignment of all or any
part of a Membership Interest permitted hereunder nor the admission of a
substitute member nor the bankruptcy, insolvency or dissolution of a Member
shall, in and of itself, work the dissolution of the Company. Except as
otherwise provided in this Agreement, each Member agrees that a Member may not
withdraw or resign from or, to the fullest extent permitted by law, cause a
voluntary dissolution of the Company.

       

      Notwithstanding
any other provision of this Agreement, the Bankruptcy of a Member shall not
cause the Member to cease to be a member of the Company and upon the occurrence
of such an event, the Company shall continue without dissolution.

       

      Notwithstanding
any other provision of this Agreement, each of the Members waives any right it
might have to dissolve the Company upon the Bankruptcy of a Member or the
occurrence of an event that causes a Member to cease to be a member of the
Company.

       

      Section
10.2         Procedure.

       

      (a)           Upon
the dissolution of the Company, the Managing Member or, if Managing Member or
its Affiliate is not the Managing Member, then such Person as the remaining
Members or if there are no remaining Members, their personal representatives or
other successors, shall select to wind up the Company’s affairs (the Managing
Member or such other Person being referred to herein as the “Liquidating
Trustee”) shall wind up the affairs of the Company. The Members shall
continue to receive allocation of Net Income and Net Losses and distributions of
Available Cash from Operations during the period of liquidation of the Company
in the same manner and proportion as though the Company had not
dissolved.  The Liquidating Trustee shall, exercising due and prudent
business judgment, determine the time, manner and terms of any sale or sales of
Company Property pursuant to such liquidation, having due regard to the activity
and condition of the relevant market and general financial and economic
conditions.
 

      
        
           


        

        
          29

          
            

          

        

        
           


        

      

       

      (b)           Following
the satisfaction of all debts and liabilities of the Company and all expenses of
liquidation (whether by payment or reasonable provision for payment thereof),
the proceeds of the liquidation and any other funds of the Company shall be
distributed in accordance with Article
4.

       

      (c)           Each
Member shall look solely to the assets of the Company for all distributions that
such Member may be entitled to under this Agreement and shall have no recourse
therefor (in the event of any deficit in an Member’s Capital Account or
otherwise) against any other Member; provided that nothing herein contained
shall relieve any Member of such Member’s obligation to pay any liability or
indebtedness owing the Company by such Member and any reimbursements required to
be made to the Company (including, without limitation, pursuant to Section 4.2) and the
Company and the Members shall be entitled at all times to enforce such
obligations of such Member. No Member shall have any right to demand or receive
property other than cash upon dissolution and termination of the
Company.

       

      (d)           Notwithstanding
any other provision of this Agreement to the contrary, upon liquidation of a
Membership Interest (whether or not in connection with a liquidation of the
Company), no Member shall have any liability to restore any deficit in its
Capital Account. In addition, no allocation to any Member of any loss, whether
attributable to depreciation or otherwise, shall create any asset of or
obligation to the Company, even if such allocation reduces a Member’s Capital
Account or creates or increases a deficit in such Member’s Capital Account; it
is also the intent of the Members 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.
The obligations of the Members to make contributions pursuant to Article 3 are for the
exclusive benefit of the Company and not of any creditor of the Company; and no
such creditor is intended as a third party beneficiary of this Agreement nor
shall any such creditor have any rights hereunder, including, but without
limitation, the right to enforce any Capital Contribution obligations of the
Members.

       

      (e)           Upon
the completion of the liquidation of the Company and the distribution of all
Company assets and if the Certificate of Formation of the Company shall have
been cancelled in the manner required by the Delaware Act, the Company shall
terminate.

       

      ARTICLE
XI

      MISCELLANEOUS

       

      Section
11.1         Notices.

       

      All
notices, consents or waivers shall be in writing and shall be deemed to have
been duly given:

       

      (a)           when
delivered personally; or
 

      
        
           


        

        
          30

          
            

          

        

        
           


        

      

       

      (b)           seventy-two
(72) hours after being mailed, registered or certified mail, return receipt
requested, postage prepaid, to the respective addresses set forth below;
or

       

      (c)           one
(1) Business Day after being delivered to a nationally-recognized overnight
courier service, prepaid, marked for next day delivery, addressed to the
addressee at its address set forth below; or

       

      (d)           on
the Business Day of receipt if received during normal business hours and, if
received after the close of business, the first Business Day after receipt, if
delivered by facsimile transmission to the fax number (if any) of the receiving
party listed below, if receipt is confirmed in writing by the sending facsimile
machine.

       

      (e)           The
addresses for notice are:

       

      if to the
Company, to its address set forth in Section 1.6
hereof:

       

      
        If to
Managing

      

      
        	
                 
      

              	
                Member:

              	
                Cornerstone
      Oakleaf Village, LLC

              


      

      
        	
                 
      

              	
                c/o
      Cornerstone Healthcare Plus REIT,
Inc.

              


      

      
        	
                 
      

              	
                Attn:  Sharon
      C. Kaiser, Chief Financial Officer

              


      

      
        	
                 
      

              	
                1920
      Main Street, Suite 400

              


      

      
        	
                 
      

              	
                Irvine,
      California 92614

              


      

      
        	
                 
      

              	
                Telephone
      No.:  949.263.4326

              


      

      Telecopy
No.:    949.250.0592

       

      With a
copy
to:                Servant
Healthcare Investments, LLC

       Attn: Kevin
Maddron

       1000 Legion Place, Ste.
1650

       Orlando, Florida
32801

       Telephone
No.:   407.999.7772

       Telecopy
No.:     407.999.7759

       

      With a
copy
to:                Foley
& Lardner LLP.

       111 North Orange
Avenue

       Suite 1800

       Orlando, Florida
32801

       Attention:         Michael
A. Okaty, Esq.

       Telephone:       407.244.3229

       Facsimile:        407.648.1743

       

      
        If to
Non-Managing

      

      Member:                          RSC
South Carolina Interests, LLC

       c/o Gazit Senior Care,
Inc.

       1696
N.E. Miami Gardens Drive

       North
Miami Beach, Florida 33179

       Attention:  Sean
Kanov

       Telephone:      305.947.8800

       Facsimile:        305.947.4200
 

      
        
           


        

        
          31

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                With
      copies to:

              	
                Carlton
      Fields, P.A.

              


      

      
        	
                 
      

              	
                100
      SE 2nd
      Street, Suite 4000

              


      

      Miami,
Florida  33131

      Attention:        Roger
S. Goldman, Esq.

      Telephone:      305.530.0050

      Facsimile:        305.530.0055

       

      Section
11.2         Entire
Agreement.

       

      This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter hereof, except for the Tenant Portfolio Agreement. This Agreement
supersedes any prior agreement or understandings between the parties and/or
their Affiliates with respect to the subject matter hereof and shall not amend
or modify or in any way affect any other agreement or understanding between the
parties hereto that are not related to the subject matter hereof.

       

      Section
11.3         Amendments.

       

      This
Agreement may be amended by written agreement of amendment executed by all
Members, but not otherwise.

       

      Section
11.4         Governing
Law.

       

      This
Agreement and the rights of the parties hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware, without regard
to its conflict of law provisions.

       

      Section
11.5         Successors and
Assigns.

       

      Except as
limited by this Agreement, this Agreement shall be binding upon and inure to the
benefit of the parties and their legal representatives, successors and permitted
assigns.

       

      Section
11.6         Interpretation.

       

      The
section headings and captions contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. As used herein, the neuter gender shall include the masculine
and feminine genders, and vice versa, and the singular, the plural, and vice
versa, as the context demands. The word “including” and words of similar
import when used in this Agreement shall mean “including, without limitation,”
unless the context otherwise requires or unless otherwise
specified.  The word “or” shall not be
exclusive.  References herein to this Agreement shall be deemed
to refer to this Agreement as of the date of such Agreement and as it may
be amended thereafter, unless otherwise specified.  The parties hereto
agree that this Agreement is the product of negotiation between sophisticated
parties, all of whom were represented by counsel, and each of whom had an
opportunity to participate in and did participate in the drafting of each
provision hereof. In the event any court or other adjudicative body of competent
jurisdiction is called upon to interpret this Agreement, the language of
this Agreement shall be construed as a whole, according to its fair meaning
and intent, and not strictly for or against any party, regardless of which party
drafted or was principally responsible for drafting the Agreement or any
specific term or condition hereof.  The Settlement Agreement has been
circulated for editing to all parties.  As such, the Agreement
shall be deemed to have been drafted by all parties jointly, and no party shall
be deemed to have drafted this Agreement, or any of its individual terms or
conditions.  No party may offer in evidence or otherwise use, for
purposes of suggesting any interpretation of this Settlement Agreement, any
prior drafts of this Agreement.
 

      
        
           


        

        
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      Section
11.7         Severability.

       

      If any
provision of this Agreement, or the application of such provision to any Person
or circumstance, shall be held invalid, the remainder of this Agreement, or the
application of such provision to other Persons or circumstances, shall not be
affected thereby.

       

      Section
11.8         Legal
Counsel.

       

      Legal
counsel for a Member or one of its Affiliates (“Counsel”)
may represent the Company in connection with legal work or issues arising in
connection with the Company and/or the Operating Company (each, a “Matter”).  Each
Member recognizes and acknowledges that any such Counsel will be acting as legal
counsel for the Company and/or the Operating Company with respect to each Matter
and shall not be acting as the legal counsel of any individual
Member.  Each Member further recognizes and accepts that its interest
with respect to any Matter may be adverse to the interests of the other Members
and of the Company and/or the Operating Company.  Each Member
nevertheless consents to the representation of the Company and/or the Operating
Company by such Counsel with respect to each Matter and waives for the benefit
of each other Member and of such Counsel any potential or actual conflict of
interest between or among such Members and between any such Members and the
Company and/or the Operating Company.  Each Member acknowledges that
in the event of any future dispute or litigation between or among the Members
and/or between any of the Members and the Company and/or the Operating Company,
the Counsel may continue to represent its Member client, notwithstanding any
such dispute and its prior representation of the Company and/or the Operating
Company.

       

      Section
11.9         Advice from
Independent Counsel/Voluntary Agreement.

       

      Notwithstanding
the provisions of Section 11.8, the
Members represent and warrant that (a) each of them is represented by legal and
tax counsel of its choice, (b) each of them has consulted with such counsel
regarding this Agreement, (c) each of them is fully aware of the meaning and the
tax and other consequences of the provisions contained herein, (d) each of them
has not relied in any way on any representation or other statement made by any
other Member or its legal or tax counsel or by any other Person and (e) each of
them has entered into this Agreement voluntarily and without coercion or duress
of any kind.

       

      Section
11.10       Counterparts.

       

      This Agreement may
be executed in any number of counterparts, and/or by facsimile and/or by
electronic mail, each of which counterpart shall be deemed to be an original and
all such counterparts taken together shall be deemed to constitute one and the
same instrument.  The signatories hereto confirm that any facsimile or
electronic copy of another signatory’s executed counterpart of
this Agreement (or its signature page) will be deemed to be an
executed original.
 

      
        
           


        

        
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      Section
11.11       Benefits of Agreement; No
Third-Party Rights.

       

      None of
the provisions of this Agreement shall be for the benefit of or enforceable by
any creditor of the Company or by any creditor of a Member, and nothing in this
Agreement shall be deemed to create any right in any Person not a party hereto,
and this Agreement shall not be construed in any respect to be a contract in
whole or in part for the benefit of any third Person, provided, however, that the
Indemnitees and their respective successors and assigns are intended third-party
beneficiaries of this applicable indemnification provisions set forth in this
Agreement.

       

      Section
11.12       WAIVER OF JURY
TRIAL.

       

      EACH
MEMBER AND THE COMPANY HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
AGREEMENT. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY THE MEMBERS AND THE COMPANY, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO TRIAL BY JURY
WOULD OTHERWISE ACCRUE. THE MEMBERS AND THE COMPANY ARE EACH HEREBY AUTHORIZED
TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER.

       

      Section
11.13       Special Purpose
Provisions.

       

      (a)           Notwithstanding
anything to the contrary set forth herein, the Company and the Members hereby
agree that at all times:

       

      (i)           The
Company shall not own any asset or property other than (A) the membership
interests in each of the Operating Companies and (B) incidental personal
property necessary for the ownership of such interests.  The Company
shall not allow the Operating Company to own any asset or property other than
(x) the Property and (y) incidental personal property (including
intangible personal property) necessary for the ownership or operation of the
Property.

       

      (ii)           The
Company shall not allow the Operating Company to engage in any business other
than as stated in Section 2.3 of each
of the Operating Companies LLC Agreement.  The Company will not engage
in any business other than as stated in Section
1.4.

       

      (iii)           The
Company will maintain, and the Company shall cause the Operating Company to
maintain, an arms-length relationship with their Affiliates, constituent parties
and any other Persons furnishing services to them, and the Company will not
enter, nor shall the Company allow the Operating Company to enter, into any
contract or agreement or engage in any material transaction (as transferor or
transferee) with any Affiliate of each of the Operating Companies  or
the Company or any constituent party of each of the Operating
Companies  or the Company, except for fair value and upon terms and
conditions that are intrinsically fair, commercially reasonable and
substantially similar to those that would be available on an arms-length basis
with third parties other than any such party.  The Company will not
engage, nor shall the Company allow the Operating Company to engage, in any
transaction with any Affiliate of the Company, the Operating Company, any
constituent party of the Company, any guarantors of the obligations of the
Company or the Operating Company or any Affiliate of any constituent party,
owner or guarantor (individually, a “Related
Party” and collectively the “Related
Parties”) involving any intent to hinder, delay or defraud any
Person.
 

      
        
           


        

        
          34

          
            

          

        

        
           


        

      

       

      (iv)           The
Company will be, and the Company shall cause the Operating Company to be, and at
all times hold itself out to the public as, a legal entity separate and distinct
from any other entity (including any Affiliate or any constituent party thereof)
except that the Operating Company shall be treated as a disregarded entity for
federal, and to the extent applicable, state and local income tax purposes
only.

       

      (b)           The
Members acknowledge that this Section 11.13 may be modified to include
additional special purpose provisions if such provisions are required by a third
party lender with respect to a transaction involving the Company.

       

      Section
11.14       Patriot Act
Representation.

       

      Each
Member hereby represents and warrants that on the date hereof and throughout the
term of this Agreement (a) none of the funds or other assets or any Member, or
any principal of any of them, constitute property of, or are beneficially owned,
directly or indirectly, by any person, entity or government subject to trade
restrictions under U.S. Law, including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq., the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act) Act of 2001 (Public Law 107-56), the
Trading with the Enemy Act, 50 U.S.C. App 1 et seq., and any Executive Orders or
regulation promulgated under any such legislation with the result that the
investment in the Company is prohibited by law or is in violation of law (any
such person, entity or government being referred to herein as an “Embargoes
Person”), and (b) none of the funds of any Member or any such principal,
as applicable have been derived from any unlawfully activity with the result
that the investment in the Company or in any principal, as applicable, whether
directly or indirectly, is prohibited by law or is in violation of
law.

       

      Section
11.15       OFAC Compliance and Source of
Funds.


      (a)           Compliance with
International Trade Control Laws and OFAC Regulations.  Each
Member represents and warrants that such Member is not now nor shall it be at
any time hereafter an individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity with
whom a United States citizen, entity organized under the laws of the United
States or its territories or entity having its principal place of business
within the United States or any of its territories (collectively, a “U.S.
Person”), is prohibited from transacting business of the type
contemplated by this Agreement, whether such prohibition arises under United
States law, regulation, executive orders and lists published by the Office of
Foreign Assets Control, U.S. Department of the Treasury (“OFAC”)
(including those executive orders and lists published by OFAC with respect to
Persons that have been designated by executive order or by the sanction
regulations of OFAC as Persons with whom U.S. Persons may not transact business
or must limit their interactions to types approved by OFAC “Specially
Designated Nationals and Blocked Persons”) or
otherwise.  Neither Member nor any Person who owns an interest in
Member (collectively, a “Purchaser
Party”) is now nor shall be at any time hereafter a Person with whom a
U.S. Person, including a “financial institution” as defined in 31 U.S.C. §
5312(a)(2) (“Financial
Institution”), is prohibited from transacting business of the type
contemplated by this Agreement, whether such prohibition arises under United
States law, regulation, executive orders and lists published by the OFAC
(including those executive orders and lists published by OFAC with respect to
Specially Designated Nationals and Blocked Persons) or otherwise.

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      (b)           Member’s
Funds.  Each Member represents and warrants that such Member
has taken, and shall continue to take hereafter, such measures as are required
by law to assure that the funds used to pay to the Company the Capital
Contribution are derived from: (i) transactions that do not violate United
States law nor, to the extent such funds originate outside the United States, do
not violate the laws of the jurisdiction in which they originated; and (ii)
permissible sources under United States law and to the extent such funds
originate outside the United States, under the laws of the jurisdiction in which
they originated.

       

      (c)           Anti-Money Laundering
Laws.  Each Member represents and warrants that to the best of
such Member’s knowledge after making due inquiry, neither Member nor any
Purchaser Party, nor any Person providing funds to Member:  (i) is
under investigation by any governmental authority for, or has been charged with,
or convicted of, money laundering, drug trafficking, terrorist related
activities, any crimes which in the United States would be predicate crimes to
money laundering, or any violation of any Anti Money Laundering Laws (as
hereinafter defined in this Section); (ii) has been assessed civil or criminal
penalties under any Anti-Money Laundering Laws; or (iii) has had any of its
funds seized or forfeited in any action under any Anti Money Laundering
Laws.  For purposes of this Subsection (i), the term “Anti-Money
Laundering Laws” shall mean laws, regulations and sanctions, state and
federal, criminal and civil, that: (w) limit the use of and/or seek the
forfeiture of proceeds from illegal transactions; (x) limit commercial
transactions with designated countries or individuals believed to be terrorists,
narcotics dealers or otherwise engaged in activities contrary to the interests
of the United States; (y) require identification and documentation of the
parties with whom a Financial Institution conducts business; or (z) are designed
to disrupt the flow of funds to terrorist organizations.  Such laws,
regulations and sanctions shall be deemed to include the USA PATRIOT Act of
2001, Pub. L. No. 107-56 (the “Patriot
Act”), the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., the Trading with
the Enemy Act, 50 U.S.C. App. §§ 1 et seq., the International Emergency Economic
Powers Act, 50 U.S.C. §§ 1701 et seq., and the sanction regulations promulgated
pursuant thereto by the OFAC, as well as laws relating to prevention and
detection of money laundering in 18 U.S.C. §§ 1956 and 1957.


      
        
           


        

        
          36

          
            

          

        

        
           


        

      

       

      ARTICLE
XII

      BOOKS AND
RECORDS

       

      Section
12.1         Books and Records;
Periodic Reporting.

       

      (a)           The
Managing Member shall maintain at the principal place of business of the Company
separate books of account for the Company that shall show a true and accurate
record of all costs and expenses incurred, all charges made, all credits made
and received, and all income derived in connection with the conduct of the
Company and the operation of its business in accordance with modified accrual
based income tax accounting consistently applied.

       

      (b)           Except
as provided in Section
4.2, The Company's federal and state income and other tax returns shall
be prepared at the expense of the Company.  All tax returns shall be
signed on behalf of the Company and filed by the Managing Member and prepared in
accordance with Section 2.1 of Exhibit B. At least
ten (10) days prior to the due date, as the same may be extended, of each such
Company tax return, the Managing Member shall transmit copies thereof to the
Members for their review.  In addition, as soon as reasonably possible
each year, the Managing Member shall furnish each Member with such information
as may be needed to enable such Member to file its federal income tax return and
any required state income tax return.  The cost of all such reporting
shall be paid by the Company as a Company expense.

       

      (c)           Within
ten (10) business days after the property manager of the Property has provided
the appropriate month-end data and reports, the Managing Member shall cause to
be prepared and provided to each Member the following monthly reports for the
Property and/or the Company: financial summary, variance report, balance sheet,
income statement, cash flow statement and aged delinquency report.

       

      (d)           Each
Member may require, the Company to cause auditors selected by the Company to
prepare and furnish to each Member audited financial statements for any
completed  Fiscal Year accompanied by a report thereon of the
accounting firm engaged by the Company (unless the Senior Lender requires
another auditor), including the following: (i) a copy of the balance sheet of
the Company as of the last day of such Fiscal Year; (ii) a statement of income
or loss for the Company for such Fiscal Year; (iii) a statement of the Members’
Capital Accounts and changes therein for such Fiscal Year; and (iv) a statement
of Company cash flow for such Fiscal Year.  The cost of all such
reporting shall be paid by the Company as a Company expense.

       

      Section
12.2         Right to Inspection;
Delivery of Information.

       

      The
Members shall have the right at all reasonable times, during their respective
periods of membership in the Company, upon reasonable notice to examine and copy
at the expense of the Company, the books and records of the Company. The
Managing Member shall promptly forward copies of written documentation and
written correspondence relating to the Company which is received by the Managing
Member and which is reasonably of interest to the Members, could have a material
economic effect on the Company, or is some indication of the value of the
Property, including without limitation, any offers, letters of intent or
expressions of interest with respect to the possible purchase of all or any
substantial portion of the Property or all of the Member Interests in the
Company.
 

      
        
           


        

        
          37

          
            

          

        

        
           


        

      

       

      Section
12.3         Notices of Default or
Litigation.

       

      In
addition to the foregoing, any Member receiving any of the following notices or
information (a “Receiving
Member”) Managing Member shall promptly provide the other
Member:

       

      (a)           written
notice of any litigation, arbitration, or other proceeding or governmental
investigation (including any survey results or inspection reports from any
governmental authority) pending or, to Receiving Member’s knowledge, threatened
against or relating to the Company, the Operating Company, the Property or the
Receiving Member (other than any litigation, arbitration or other proceeding
concerning any bankruptcy or default by a tenant); provided, that with respect
to any such litigation, arbitration or other proceeding relating solely to a
monetary claim of less than $10,000.00, Receiving Member shall not be required
to provide notice (written or otherwise) of such claim in accordance with the
terms of this clause;

       

      (b)          a
copy of all notices of default and violations of laws, regulations, codes,
ordinances and the like received by the Company or Receiving Member relating to
(i) the Company, (ii) the Operating Company, (iii) any Member, or (iv) the
Property;

       

      (c)           a
copy of all notices of default or any other correspondence sent by the Company
to, or received by the Company from, the (i) Manager under the Management
Agreement or the (ii) Senior Lender.

       

      ARTICLE
XIII

      OBLIGATIONS OF MANAGING
MEMBER

       

      Section
13.1         Duties and Obligations
of Managing Member.

       

      The
Managing Member shall have full, exclusive, and complete discretion, power, and
authority, subject in all cases to the other provisions of this Agreement and
the requirements of applicable law, to manage, control, administer, and operate
the business and affairs of the Company for the purposes herein stated, and
shall be obligated to use reasonable commercial efforts to perform, or cause to
be performed all of the following:

       

      (a)           operate,
maintain and manage the Company Property in a manner necessary and appropriate
for the accomplishment of the purposes of the Company;

       

      (b)           cause
the Operating Company to enter into any necessary and appropriate agreements and
contracts deemed necessary and appropriate in connection with the management,
maintenance and operation of the Property;

       

      (c)           as
a fiduciary for the Company, hold and distribute funds to the Members by way of
cash, income and return of capital, or otherwise, in accordance with the
provisions of this Agreement (provided, however, that this duty applies to any
Member who may hold and distribute funds to the Members);

       

      (d)           in
accordance with the Approved Budget (as hereinafter defined), contract on behalf
of the Company and/or the Operating Company for the engagement of independent
contractors and supervise such contractors in connection with the rendering of
services to the Company and/or the Operating Company;
 

      
        
           


        

        
          38

          
            

          

        

        
           


        

      

       

      (e)           obtaining
insurance policies for that the Property and potential liabilities and risks of
the Company in appropriate amounts (subject to availability at commercially
reasonable rates;

       

      (f)           The
following provisions shall apply with respect to Approved Budgets:

       

      (i)           As
soon as reasonably practicable after the Effective Date, but in no event later
than thirty (30) days after the Effective Date, the Managing Member shall
furnish to Non-Managing Member for its approval a proposed budget for the
balance of the 2010 Fiscal Year.  With respect to each subsequent
Fiscal Year not less than thirty (30) days prior to the expiration of the then
current Fiscal Year, the Managing Member shall furnish to Non-Managing Member
for the approval of Non-Managing Member, a proposed annual budget of the
estimated expenses and obligation of the Company for the Fiscal Year to follow.
The proposed budget shall be detailed and shall show the amounts budgeted by
accounts and expense classifications. Non-Managing Member shall act reasonably,
diligently and in good faith in reviewing the budget and if appropriate,
suggesting modifications thereto within thirty (30) days after receipt thereof.
If and when the budget shall be approved by Non-Managing Member, the same shall
be referred to herein as an “Approved
Budget.”  The Members shall endeavor to resolve any
disagreements with respect to any proposed budget as soon as reasonably
possible.

       

      (ii)           In
the case of a proposed budget described in Section 13.1(f)(i),
if the Members fail for any reason to approve all or part of such proposed
budget by such effective date, the portions of the proposed budget that have
been approved shall become effective on the effective date.  The
portions of the prior Approved Budget that cover substantially the same matter
as the portions of the proposed budget that were not approved shall remain in
effect and shall be carried over into the period for which the proposed budget
is intended to be effective.  The portions of the proposed budget that
have been approved, together with the portions of the existing budget that are
so carried over, shall constitute the Approved Budget for the period for which
the proposed budget is intended to be effective.

       

      (iii)           The
Managing Member shall secure the prior written approval of Non-Managing Member
before expending, obligating the Company and/or the Operating Company for or
approving any expenditure in connection with the ownership, operation and
management of the Property that would result in an Approved Budget line item or
category being exceeded (“Cost
Overrun”) by the greater of (A) $5,000.00 or (B) ten percent (10%) or
more in that line item or category of the Approved Budget except to the extent
such Cost Overrun is caused by or results from Uncontrollable Expenses or
Emergency Costs.  Where emergency action is necessary to prevent
imminent risk to health and safety to Persons on or about the Property, imminent
property damage, imminent imposition of criminal or civil sanctions against the
Company, the Operating Company or any Member or the foreclosing of a Lien
against the Property, then any Member shall have the right, but not the
obligation, to make, or cause to be made, expenditures not contemplated by the
Approved Budget if any expenditure made without the approval of the Members is,
in such Member’s good faith judgment, reasonable and necessary under the
circumstances set forth above (all such costs being collectively referred to
herein as “Emergency
Costs”), provided that such Member endeavors diligently and in good faith
(y) to notify the other Members of any such emergency and (z) obtain verbal
approval for any required expenditure.
 

      
        
           


        

        
          39

          
            

          

        

        
           


        

      

       

      (g)           The
Members stipulate and agree that Managing Member has used reasonable commercial
efforts to perform its obligations under this Section 13.1 with respect to the
management and operation of the Company if and to the extent and during the
applicable time periods that such management and operational matters are within
the purview of the obligations of an RSC Manager pursuant to an applicable RSC
Management Agreement.

       

      Section
13.2         Non-Managing Member’s
Right to Perform Obligations of Managing Member.

       

      If
Managing Member shall fail, refuse or neglect to make any payment or perform any
act required by this Agreement, then upon the expiration of ten (10) days prior
written notice to Managing Member and without waiving or releasing any other
right, remedy or recourse Non-Managing Member may have by reason of such
failure, refusal or neglect, Non-Managing Member may (but shall not be obligated
to) make such payment or perform such act for the account of and at the expense
of the Company, and shall have the right to enter upon the Property for such
purpose and to take all such action thereon and with respect to the Property as
it may deem necessary or appropriate.  If Non-Managing Member shall
elect to pay any sum due with reference to the Property, Non-Managing Member may
do so in reliance on any bill, statement or assessment procured from the
appropriate governmental authority or other issuer thereof without inquiring
into the accuracy or validity thereof.  Similarly, in making any
payments to protect the Property, Non-Managing Member shall not be bound to
inquire into the validity of any apparent or threatened adverse title, lien,
encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same.   In exercising any rights under
this Agreement or taking any actions provided for therein, Non-Managing Member
may act through its employees, agents or independent contractors as authorized
by Non-Managing Member.  All sums paid by Non-Managing Member pursuant
to this Section
13.2 shall be deemed to be a Member Loan. Notwithstanding the foregoing,
if during the ten (10) days notice period set forth in this Section 13.2,
Managing Member shall notify Non-Managing Member that the such matter is in
dispute between the relevant parties and demands that Non-Managing Member
refrain from taking any action with respect to same, then any payment or
performance by Non-Managing Member shall be for its own account and not an the
expense of the Company unless and until the same is adjudicated or otherwise
resolved to be an expense of the Company between Managing Member and
Non-Managing Member.

       

      [Signature
Pages Follow]
 

      
        
           


        

        
          40

          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the undersigned have executed and delivered this Agreement, as
of the date first set forth above.

       

      
        
          
            
              
                
                  
                    
                      	
                              CORNERSTONE OAKLEAF
      VILLAGE,
      LLC,

                            
	
                              a
      Delaware limited liability company

                            
	 
      
	
                              By:

                            	/s/
      Terry G. Roussel
	
                              Name:

                            	Terry
      G. Roussel
	
                              Title:

                            	President
	 
      
	
                              RSC
      SOUTH CAROLINA INTERESTS, LLC,

                            
	
                              a
      Florida limited liability company

                            
	 
      
	
                              By:

                            	 
      /s/ Aharon Soffer
	 
      	
                              Aharon
      Soffer, Manager

                            
	 
      
	
                              By:

                            	 
      /s/ Avi Bittan
	 
      	
                              Avi
      Bittan,
Manager

                            


                    

                  

                

              

            

          

        

      

       

      [JOINDER
BY MEMBERS ON THE FOLLOWING PAGE]
 

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

       

      JOINDER

      BY MEMBERS
IN

      ROYAL CORNERSTONE SOUTH
CAROLINA TENANT PORTFOLIO, LLC,

      a Delaware limited liability
company

      
 

      The
undersigned being the sole members in Royal Cornerstone South Carolina Tenant
Portfolio, LLC, a Delaware limited liability company, do hereby join in the
execution of this Agreement to confirm their agreement that each of their
respective entire membership interests shall be subject to and governed by the
provisions of the Buy Sell Procedures as set forth in this
Agreement.

       

      
        
          
            
              
                
                  
                    
                      	
                              CORNERSTONE OAKLEAF VILLAGE
      TRS,

                            
	
                              LLC, a Delaware limited
      liability company

                            
	 
      
	
                              By:

                            	/s/
      Terry G. Roussel
	
                              Name:

                            	Terry
      G. Roussel
	
                              Title:

                            	President
	 
      	 
      
	
                              RSC SOUTH CAROLINA INTERESTS,
      LLC,

                            
	
                              a
      Florida limited liability company

                            
	 
      	 
      
	
                              By:

                            	 
      /s/ Aharon Soffer
	 
      	
                              Aharon
      Soffer, Manager

                            
	 
      	 
      
	
                              By:

                            	 
      /s/ Avi Bittan
	 
      	
                              Avi
      Bittan,
Manager

                            


                    

                  

                

              

            

          

        

      
 

      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      EXHIBIT
A

       

      DEFINITIONS

       

      “Affiliate”
shall mean, as to any Person, any other Person that, directly or indirectly, is
in control of, is Controlled by or is under common Control with such Person or
of an Affiliate of such Person.

       

      “Affiliate
Contract” shall have the meaning set forth in Section
5.1(b)(iv).

       

      “Agreement”
shall mean this limited liability company agreement, as amended, modified or
supplemented from time to time in accordance with its terms together with the
Exhibits attached hereto.

       

      “Anti-Money
Laundering Laws” shall have the meaning set forth in Section
11.15(c).

       

       “Approved
Budget” shall have the meaning set forth in Section
13.1(f)(i).

       

      “Auditors”
shall have the meaning set forth in Section
5.1(b)(xvi).

       

      “Auditor
Removal Notice” shall have the meaning set forth in Section
5.3.

       

      “Available
Cash from Operations” shall mean all cash funds of the Company on hand
from time to time after reduction for (a) all Company Costs and Expenses that
are due and payable as of such date and the Threshold Working Capital Amount
(but expressly not reduced by (i) Excess Expenses or (ii) Non-Recurring Capital
Expenditures funded from Available Cash from Operations) and (b) Recurring
Capital Expenditures).

       

      “Bankruptcy”
shall mean, with respect to any Person, if such Person: (a) makes an assignment
for the benefit of creditors; (b) files a voluntary petition in bankruptcy, (c)
is adjudged a bankrupt or insolvent, or has entered against it an order for
relief, in any bankruptcy or insolvency proceedings; (d) files a petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation or similar relief under any statute, law or
regulation; (e) 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 (f) if one hundred twenty (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(1) and 18-304 of the Delaware
Act.

       

      “Bona Fide
Offer" means a written offer by a Qualified Purchaser to buy the entire
Membership Interest of a Member accompanied by a cash deposit of a sum not less
than five percent (5%) of the total proposed purchase price.

       

      “Business
Day” shall mean Monday through Friday of each week, except that a legal
holiday recognized as such by the United States or the State of South Carolina
shall not be regarded as a Business Day.
 

      
        
           


        

        
          A-1

          
            

          

        

        
           


        

      

       

      “Buy-Sell
Closing” shall have the meaning set forth in Section 6.2(a)

       

      “Buy-Sell
Closing Date” shall have the meaning set forth in Section
6.2(a)

       

      “Buy-Sell
Notice” shall have the meaning set forth in Section
6.1(b).

       

      “Buy-Sell
Notice Date” shall have the meaning set forth in Section
6.1(b).

       

      “Buy-Sell
Procedures” shall have the meaning set forth in Section
6.1(a).

       

      “Capital
Account” shall mean, with respect to each Member, the account established
and maintained for the Member on the books of the Company in compliance with
Treasury Regulation §§1.704-1(b)(2)(iv) and 1.704-2, as amended.  This
definition shall be interpreted and applied in a manner consistent with such
Treasury Regulations.  Subject to the preceding sentence, each
Member’s Capital Account will initially equal the amount of cash and fair market
value of property contributed (as of the date of such contribution, net of
liabilities that the Company is considered to assume or take subject to under
Code Section 752) by such Member to the Company and throughout the term of the
Company will be (a) increased by the amount of (1) income and gains allocated to
such Member and (2) the amount of any cash and the fair market value of any
property subsequently contributed by such Member to the Company (as of the date
of such contribution, net of liabilities that the Company is considered to
assume or take subject to under Code Section 752), and (b) decreased by the
amount of (1) losses and deductions allocated to such Member and (2) the amount
of distributions of cash and the fair market value of distributions of property
(as of the date of such distribution, net of liabilities that the Member is
considered to assume or take subject to under Code Section 752) distributed to
such Member.

       

      “Capital
Contributions” shall mean the capital contributions of the Members
required or permitted under Section 3.1 or 3.2.

       

      “Capital
Expenditure” shall mean any expenditure(s) for assets having a useful
life in excess of one (1) year.

       

      “Code”
means the Internal Revenue Code of 1986, as amended from time to time (or any
succeeding law).

       

      “Commissioner”
means the Commissioner of the Internal Revenue Service of the United States of
America.

       

      “Company”
shall mean Royal Cornerstone South Carolina Portfolio, LLC, a Delaware limited
liability company.

       

      “Company
Costs and Expenses” shall mean all of the permitted expenditures of any
kind made or to be made with respect to the direct or indirect operations of the
Company and/or the Operating Company, including, without limitation, all
required debt service payments, all amounts payable pursuant to any management,
leasing or other agreement relating to the Property, costs of improvements to be
made with respect to the Property, ad valorem taxes, federal,
state and local taxes, assessment and school fees, insurance premiums, repair
and maintenance costs, engineering fees, advertising and other marketing
expenses, professional fees, utilities costs, overhead, costs, general and
administrative costs of each of the Operating Companies  and the
Company and all other types of permitted costs, expenses, charges, liabilities
and obligations of the Company and/or the Operating Company, as limited
herein.

       

      “Company
Minimum Gain” has the same meaning as “partnership minimum gain” set
forth in Regulations Sections 1.704-2(b)(2) and
1.704-2(d).
 

      
        
           


        

        
          A-2

          
            

          

        

        
           


        

      

       

      “Company
Property” shall mean the Property and all other property of whatever kind
or nature owned by the Company from time to time.

       

      “Contributing
Member” shall have the meaning set forth in Section
3.2(b).

       

      “Control”
when used with respect to any specified Person, as such or in any related
meaning, shall mean the power to direct or cause the direction of the management
and policies of such Person, directly or indirectly, whether through ownership
of voting securities, membership or partnership interests, by contract or
otherwise.

       

      “Cornerstone
Oakleaf Village TRS”  shall mean Cornerstone Oakleaf Village,
TRS, LLC, a Delaware limited liability company, the owner of an eighty percent
(80%) membership interest in Tenant Portfolio, and its successors or assigns
under the provisions of the Tenant Portfolio Agreement.

       

      “Cornerstone
Principal” shall
mean Cornerstone Healthcare Plus REIT, Inc., a Maryland corporation


       

      “Cost
Overrun” shall have the meaning set forth in Section
13.1(f)(iii).

       

      “Counsel”
shall have the meaning set forth in Section
11.8.

       

      “Deadlock”
shall have the meaning set forth in Section
5.1(d).

       

      “Deadlock
Notice” shall have the meaning set forth in Section
5.1(d).

       

      “Delaware
Act” shall have the meaning set forth in the Explanatory
Statement.

       

      “Deposit”
shall have the meaning set forth in Section
6.1(c).

       

      “Effective
Date” shall have the meaning set forth in the Preamble.

       

      “Embargoes
Person” shall have the meaning set forth in Section
11.14.

       

      “Emergency
Costs” shall have the meaning set forth in Section
13.1(f)(iii).

       

      “Excess
Expenses” shall mean, for the Company and the Operating Companies: (a)
expenses which are required by either of the Operating Companies or Senior
Lender, which have not been incurred or required to be incurred in RSC Manager's
prior operation of the Properties, and which are generally considered not be
operating expenses in nature in accordance with prevailing industry standards
for similarly situated senior living facilities (by way of example only and
without limitation, expenses relating to the audit of the Company or insurance
required by either of the Operating Companies or Senior Lender in excess of the
coverages required in Exhibit B to the RSC Management Agreement attached hereto
as Exhibit C, and (b) working capital expenditures in excess of the Threshold
Working Capital Amount.  In any event, but without in any way limiting
the foregoing, any expense provided for in an Approved Budget shall never be an
"Excess Expense".

       

      “Family
Members” shall mean:  (a) any parent, sibling, spouse or lineal
descendant of a Royal Principal; (b) any trust set up for the benefit of a Royal
Principal and/or any of the individuals described in clause (a) above; (c) any
Person in which an Royal Principal and/or any one or more of the individuals or
trusts described in clause (a) and/or (b) own one hundred percent (100%) of
beneficial interests; and/or (d) the estates or legal representatives of a Royal
Principal.

       

      “Financial
Institution” shall have the meaning set forth in Section
11.15(a).
 

      
        
           


        

        
          A-3

          
            

          

        

        
           


        

      

       

      “Fiscal
Year” shall mean the 12-month period ending December 31 of each year; the
first Fiscal Year shall begin on the date of this Agreement and the last Fiscal
Year shall be the period beginning on January 1 of the calendar year in which
the final liquidation and termination of the Company is completed and ending on
the date such final liquidation and termination is completed. To the extent any
computation or other provision hereof provides for action to be taken on a
Fiscal Year basis, an appropriate proration or other adjustment shall be made in
respect of the initial and final Fiscal Years to reflect that such periods are
less than full calendar year periods.

       

      “Formation
Date” shall have the meaning set forth in Section
1.1.

       

      “Greenville
Master Lease” shall mean that certain Amended and Restated Ground Lease
Agreement dated as of even date herewith between RSC Oakleaf Greenville, LLC, a
Florida limited liability company (being an Operating Company) and Greenville
Operator with respect to the Greenville Property, as the same may be modified,
amended, restated or consolidated with the written consent of the Members from
time to time.

       

      “Greenville
Operator” shall mean that RSC Greenville, LLC, a Florida limited
liability company.

       

      “Group”
shall have the meaning set forth in Section
6.1(d).

       

      “Gross
Price” shall have the meaning set forth in Section
6.1(b).

       

      “Indemnitee”
shall have the meaning set forth in Section
7.6(a).

       

      “Interests”
shall mean the interests of the Company in and to the Operating
Company.

       

      “Lexington
Master Lease” shall mean that certain Amended and Restated Ground Lease
Agreement dated as of even date herewith between RSC Oakleaf Lexington, LLC, a
Florida limited liability company (being an Operating Company) and Lexington
Operator with respect to the Lexington Property, as all of the same may be
modified, amended, restated or consolidated with the written consent of the
Members from time to time.

       

      “Lexington
Operator” shall mean that RSC Lexington, LLC, a Florida limited liability
company.

       

      “Lien”
shall mean any mortgage, deed of trust, pledge, lien, encumbrance, charge or
security interest, other than liens for taxes not yet due and payable or for
taxes that the taxpayer is contesting in good faith through appropriate
proceedings.

       

      “Liquidating
Trustee” shall have the meaning set forth in Section
10.2(a).

       

      “Losses”
shall mean the dollar amounts of all costs, claims, suits, actions, losses,
liabilities, obligations, reasonable fees and expenses of any kind or nature,
including costs and expenses of accountants, attorneys and other professionals,
judgments, fines, penalties, settlements and all other costs and expenses of any
nature or type actually paid or incurred by a specified Person; provided, however, that Losses
shall not include lost profits or consequential or punitive
damages.

       

      “Major
Decision Materiality Threshold” shall mean a Major Decision in which the
event, change or condition which is the subject of the proposed Major Decision
has required or involved, or could reasonably be expected to require or involve,
income or an expenditure or obligation involving a sum or value in excess of
$250,000 for any transaction or other action or of $250,000 for any group of
similar transactions or similar actions.
 

      
        
           


        

        
          A-4

          
            

          

        

        
           


        

      

       

      “Major
Decision Notice” shall have the meaning set forth in Section
5.1(c).

       

      “Major
Decision(s)” shall have the meaning set forth in Section
5.1(b).

       

       “Management
Agreement” shall have the meaning set forth in Section
5.2.

       

      “Managing
Member” shall mean CORNERSTONE OAKLEAF VILLAGE, LLC, a
Delaware limited liability company, and its permitted successors and assigns in
its capacity as the Managing Member of the Company.

       

      “Managing
Member Related Persons” shall have the meaning set forth in Section
7.5.

       

      “Matter”
shall have the meaning set forth in Section
11.8.

       

      “Member(s)”
shall mean Managing Member and Non-Managing Member and their permitted
successors and assigns in its or their capacities as Members in the
Company.

       

      “Member
Electing Removal of Auditor” shall have the meaning set forth in Section
5.3.

       

      “Member
Loan” shall have the meaning set forth in Section
3.2(b).

       

      “Member
Responding to Auditor Removal Notice” shall have the meaning set forth in
Section
5.3.

       

      “Membership
Interest” shall mean the interest of a Member in the Company, including,
without limitation, such Member’s right (a) to allocations of items of income,
gain, loss, deduction, and credit of the Company as set forth in Exhibit B hereto; (b)
to a distributive share of the assets of the Company as set forth in Articles 4 and 10; and (c) to
participate in the management and operation of the Company in accordance with
this Agreement.

       

      “Membership
Percentage” shall mean, for Non-Managing Member, 20% and for Managing
Member, 80%.

       

      “Necessary
Expenses” shall mean: (a) Emergency Costs; (b) Uncontrollable Expenses;
and (c) any other costs or expenses (without duplication) provided for in any
budget approved by Managing Member and Non-Managing Member.

       

      “Net
Capital Transaction Proceeds” shall mean the proceeds from (a) any
financing or refinancing of the Property or any part thereof and (b) any sale,
disposition, taking or loss of any direct or indirect interest in the Property
or any part thereof, or all of the Membership Interests (but not part thereof)
or any other interest therein, less payment of all costs and other expenses
related thereto, any amounts expended to repair or replace any part of the
Property taken or destroyed, all Company Costs and Expenses and all other
obligations of the Company and/or the Operating Company then due. Without
limiting the generality of the foregoing, proceeds shall include but not be
limited to the proceeds from any eminent domain proceeding or conveyance in lieu
thereof or from title insurance or casualty insurance, other than rental income
insurance.

       

      “Net
Income” and
“Net
Losses” mean the income or losses of the Company as determined in
accordance with the method of accounting followed by the Company for federal
income tax purposes, including for all purposes: (1) any income exempt from tax;
(2) any expenditures of the Company which are described in Code Section
705(a)(2)(B) or are treated as Code Section 705(a)(2)(B) expenditures under
Treasury Regulation § 1.704-1(b)(2)(iv)(i); and (3) any adjustments to the book
value of any Company asset pursuant to the Treasury Regulations; provided, however, if any
property is carried on the books of the Company at a value that differs from
that property’s adjusted basis for tax purposes, then any gain, loss,
depreciation and amortization with respect to such property shall be computed
with reference to the book value of such property, consistently with the
requirement of Treasury Regulation §
1.704-1(b)(2)(iv)(g).
 

      
        
           


        

        
          A-5

          
            

          

        

        
           


        

      

       

      “Non-Contributing
Member” shall have the meaning set forth in Section
3.2(b).

       

      “Non-Managing
Member” shall mean RSC
SOUTH CAROLINA INTERESTS, LLC, a Florida limited liability company, and
its successors and assigns in its capacity as a Non-Managing Member of the
Company.

       

      “Non-Managing
Member Related Persons” shall have the meaning set forth in Section
7.5.

       

      “Non-Recurring
Capital Expenditures” shall mean Capital Expenditures in excess of the
amount allocated for Recurring Capital Expenditures in the Approved
Budget.

       

       “OFAC”
shall have the meaning set forth in Section
11.15(a).

       

      “Offeree”
shall have the meaning set forth in Section
6.1(b).

       

      “Offeree
Price” shall have the meaning set forth in Section
6.1(b).

       

      “Offeror”
shall have the meaning set forth in Section
6.1(b).

       

      “Offeror
Price” shall have the meaning set forth in Section
6.1(b).

       

      “Operating
Company” shall mean RSC Oakleaf Lexington, LLC and/or RSC Oakleaf
Greenville, LLC, each a Florida limited company and the fee owner of the
Property, as the context may require.

       

      “Operating
Company Available Cash” shall mean all cash funds of each of the
Operating Companies on hand from time to time after: (a) payment of all Company
Costs and Expenses (relating to the Operating Company) that are due and payable
as of such date; and (b) provision for the payment of all Company Costs and
Expenses that the Operating Company is obligated to pay within ninety (90) days
of such date.

       

      “Operator”
shall mean Lexington Operator and/or Greenville Operator, as the context may
require.

       

      “Original
Agreement” shall have the meaning set forth in the Whereas
Clauses.

       

      “Other
Preferred Return Payments” shall mean all distributions considered
payments of the preferred returns referred to in Sections 4.1(e), 4.1(f),
4.2.(g) and 4.2(h).

       

      “Patriot
Act” shall have the meaning set forth in Section
11.15(c)

       

      “Person”
shall mean an individual, corporation, partnership, limited liability company,
trust, estate, unincorporated organization, association or other legally
recognized entity.

       

      “Permitted
Managing Member Transferee” shall have the meaning set forth in Section
8.2(a).

       

      “Permitted
Non-Managing Member Transferee” shall have the meaning set forth in Section
8.2(b).

       

      “Property”
shall mean that certain land and improvements (i) located at 800 North Lake
Drive, Lexington, South Carolina (sometimes, the “Lexington
Property”) and/or (ii) located at 1560 Thornblade Boulevard, Greenville,
South Carolina (sometimes the “Greenville
Property”), as the context may require.
 

      
        
           


        

        
          A-6

          
            

          

        

        
           


        

      

       

      “Purchase
Price” shall have the meaning set forth in Section
6.1(b).

       

      “Purchaser”
shall have the meaning set forth in Section
6.1(c).

       

      “Purchaser
Party” shall have the meaning set forth in Section
11.15(a).

       

      “Qualified
Purchaser” shall have the meaning set forth in Section 8.3(a)
hereof.

       

      “Recourse
Liabilities” shall have the meaning set forth in Section 3.4.

       

      “Recurring
Capital Expenditures” shall mean the Capital Expenditures reflected in
(and limited by) the Approved Budget for recurring items.

       

       “Related
Party” and “Related
Parties” shall have the meaning set forth in Section
11.13(a)(iii).

       

      “Related
Persons” shall have the meaning set forth in Section
7.5.

       

      “Remaining
Member” shall have the meaning set forth in Section
8.3(a).

       

       “Response
Notice” shall have the meaning set forth in Section
6.1(c).

       

      “Right of
First Refusal” shall have the meaning set forth in Section 8.3(a)
hereof.

       

      “ROFR
Closing” shall have the meaning set forth in Section
8.3(c).

       

      “ROFR
Closing Date” shall have the meaning set forth in Section
8.3(c).

       

      “Royal
Principal” shall
mean Avi Bittan and/or Gazit Group USA, Inc, a Florida limited liability
company, as the context may require. 

       

      “RSC-GSC”
shall have the meaning set forth in Section
5.2.

       

      “RSC-LSC”
shall have the meaning set forth in Section
5.2.

       

      “RSC
Management Agreement” shall have the meaning set forth in Section
5.2.

       

       “Seller”
shall have the meaning set forth in Section
6.1(c).

       

      “Selling
Member” shall have the meaning set forth in Section 8.3(a)
hereof.

       

      “Senior
Lender” shall have the meaning set forth in Section
5.1(b)(ii).

       

      “Senior
Loan” shall mean that certain loan from Senior Lender to Operating
Company in the principal amount of Thirteen Million Five Hundred Thousand
Dollars ($13,500,000.00).

       

      “Senior
Loan Documents” shall mean that (i) certain Promissory Note dated January
10, 2006, executed by RSC Lexington LLC and RSC Greenville LLC, both Florida
limited liability companies to and in favor of Senior Lender in the original
principal amount of $13,500,000.00 (ii) as to the Lexington Property, that
certain Mortgage, Security Agreement, Assignment of Rents, Security Agreement
and Fixture Filing Statement executed by RSC Lexington LLC, a Florida limited
liability company to and in favor of Senior Lender dated as of January 10, 2006,
and recorded in Book 10751, Page 107 of the Recorder of Deeds of Lexington
County, South Carolina (iii) as to the Greenville Property, that certain
Mortgage, Security Agreement, Assignment of Rents, Security Agreement and
Fixture Filing Statement  executed by RSC Greenville LLC, a Florida
limited liability company to and in favor of Senior Lender dated as of January
10, 2006, and recorded in Book 4498, Page 828 of the Recorder of Deeds of
Greenville County, South Carolina and (iv) any other agreements, documents or
certificates executed by the Operating Company or other Persons in connection
the foregoing, as all of the same are  modified substantially in
accordance with the provisions of the Term Sheet, and as all of the same may be
further modified, amended, restated or consolidated with the written consent of
the Members from time to time.
 

      
        
           


        

        
          A-7

          
            

          

        

        
           


        

      

       

      “Settlement
Notice” shall have the meaning set forth in Section 7.6(d)
hereof.

       

      “Specially
Designated Nationals and Blocked Persons” shall have the meaning set
forth in Section
11.15(a).

       

      “Tag-Along
Right” shall have the meaning set forth in Section 8.4
hereof.

       

      “Tenant
Portfolio” shall mean Royal Cornerstone South Carolina Tenant Portfolio,
LLC, a Delaware limited company and the owner of a one hundred percent (100%)
membership interest in the Tenant Portfolio Operating Company.

       

      “Tenant
Portfolio Agreement”
shall mean shall mean the limited liability company agreement of Tenant
Portfolio, as amended, modified or supplemented from time to time in accordance
with its terms together with the Exhibits attached hereto.

       

      “Tenant
Portfolio Operating Company” shall mean RSC Lexington, LLC and/or RSC
Greenville, LLC, each a Florida limited company and master tenant of the
Property, as the context may require.

       

      “Term”
shall have the meaning set forth in Section
1.3.

       

      “Term
Sheet” shall have the meaning set forth in Section
3.4.

       

      “Third
Party” shall mean any Person that is not a Member or an Affiliate of a
Member.

       

      “Threshold
Working Capital Amount” shall mean, without duplication of any required
minimum working capital requirements as set forth in the Tenant Portfolio
Agreement, the aggregate amount of Ten Thousand Dollars ($10,000.00) for each of
RSC Oakleaf Lexington, LLC and/or RSC Oakleaf Greenville, LLC, both Florida
limited companies and Seventy Five Thousand Dollars ($75,000.00) for each of RSC
Lexington, LLC and RSC Greenville, LLC, both Florida limited
companies.

       

      “Transfer”
and related usages of that term shall mean any sale, transfer, assignment,
pledge, hypothecation or other disposal of all or any part of a Membership
Interest (including economic interests) or any direct or indirect ownership
interest in a Member in any manner, whether directly or indirectly by Transfer
of all or a portion of any type of equity, profits, distribution or other
ownership interest, and shall include the ability to approve or have any right
to vote on, consent to or veto any decision or matter set forth in this
Agreement and a right to receive any share or portion of payments of dividends,
distributions or profits.

       

      “Treasury
Regulations” or “Regulations”
shall mean the regulations promulgated under the Code, as such regulations are
in effect from time to time.

       

      “Uncontrollable
Expenses” shall mean the following expenditures: (i) taxes, (ii) utility
charges, (iii) costs of insurance, (iv) payments due under any loan to the
Company and/or the Operating Company, including any fees, costs or other charges
and including establishing any required reserves (or payment of any other
scheduled payment under any such loan, including without limitation, the entire
amount of the loan at maturity) and (v) payments under non-Affiliate Contracts
binding on the Company and/or the Operating Company.

      

        
          
             


          

          
            A-8

            
              

            

          

          
             


          

        
 

      “Unreturned
Capital Contribution” shall mean, as calculated and determined with
respect to each Member, the initial capital contribution of such Member (which
shall include, but not be limited to, the permitted closing costs incurred by
each such Member, or its respective Affiliates,  with respect to the
closing of the transaction evidenced by that certain Membership Interest Sale
and Purchase Agreement dated March 5, 2010, between RSC, therein designated as
Seller, and Managing Member, therein designated as Purchaser, as amended or
modified from time to time, with the express exception of the brokerage fees
incurred by RSC), increased by additional Capital Contributions and reduced by
any distributions of capital per Sections 4.2(e) and (f)
hereof  (which expressly is not adjusted for profits or losses or
distributions thereof).

       

      “U.S.
Person” shall have the meaning set forth in Section
11.15(a).
 

      
        
           


        

        
          A-9

          
            

          

        

        
           


        

      


      EXHIBIT
B

      
 

      CERTAIN TAX AND ACCOUNTING
MATTERS

       

      ARTICLE
I

      ALLOCATION
OF INCOME AND LOSSES

       

      Section
1.1           Capital Account.  Capital
Account shall have the meaning set forth in Exhibit A to this
Agreement.

       

      Section
1.2          Capital Account Adjustments
for Revaluations.  Whenever the Company
would be permitted to adjust the Capital Accounts of the Members pursuant to
Treasury Regulation §1.704-1(b)(2)(iv)(f) to reflect revaluations of Company
Property, the Company may so adjust the Capital Accounts of the
Members.  In the event that the Capital Accounts of the Members are
adjusted pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(f) to reflect
revaluations of Company Property (a) the Capital Accounts of the Members shall
be adjusted in accordance with Treasury Regulation §1.704-1(b)(2)(iv)(g) for
allocations of depreciation, depletion, amortization and gain or loss, as
computed for book purposes, with respect to such property, (b) the Members’
distributive shares of depreciation, depletion, amortization and gain or loss,
as computed for tax purposes, with respect to such property shall be determined
so as to take account of the variation between the adjusted tax basis and book
value of such property in accordance with Code Section 704(c), and (c) the
amount of upward and/or downward adjustments to the book value of any Company
Property shall be treated as income, gain, deduction and/or loss for purposes of
applying the allocation provisions of this Exhibit.  In the event that
Code Section 704(c) applies to any Company Property, the Capital Accounts
of the Members shall be adjusted in accordance with Treasury Regulation
§1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization
and gain and loss, as computed for book purposes, with respect to such Company
Property.

       

      Section
1.3           Allocations
of Net Income and Net Losses.

       

      (a)           Allocation of Net
Income.

       

      After
giving effect to Section 1.5 of this
Exhibit, for any Fiscal Year, the items of income, expense, gain and loss of the
Company comprising Net Income shall be allocated as follows:

       

      (1)           First,
to the Members who have previously been allocated Net Losses pursuant
to Section
1.5(f)(3) of this Exhibit in the reverse order (as to the periods in
which such Net Losses were allocated) and in the same ratio of such Net Losses
so allocated, until the aggregate Net Income allocated to each such Member
pursuant to this Section
1.3(a)(1)  is equal to the aggregate Net Losses allocated to
that Member pursuant to said Section
1.4(f)(3);

       

      (2)           Second,
to the Members who have previously been allocated Net Losses pursuant to Section 1.5(f)(2) of
this Exhibit in the reverse order (as to the periods in which such Net Losses
were allocated) and in the same ratio of such Net Losses so allocated, until the
aggregate Net Income allocated to each such Member pursuant to this Section
1.3(a)(2)  is equal to the aggregate Net Losses allocated to
that Member pursuant to said Section
1.5(f)(2);
 

      
        
           


        

        
          B-1

          
            

          

        

        
           


        

      

       

      (3)           Third,
to the Members who have previously been allocated Net Losses pursuant to Section 1.3(b)(3) of
this Exhibit in the reverse order (as to the periods in which such Net Losses
were allocated) and in the same ratio of Net Losses so allocated, until the
aggregate Net Income allocated to each such Member pursuant to this Section 1.3(a)(3) is
equal to the aggregate Net  Losses allocated to that Member pursuant
to said Section
1.3(b)(3);

       

      (4)           Fourth,
to the Managing Member until the aggregate Net Income allocated to the Managing
Member pursuant to this Section 1.3(a)(4)
equals the (i) sum of (A) the amount of distributions for the current and all
prior Fiscal Years to the Managing Member pursuant to Section 4.1(c), (B)
the additional amount that currently would be required to be distributed to the
Managing Member pursuant to Section 4.1(c) of the
Agreement to provide the Managing Member with the 9% Managing Member Preferred
Return and (C) the aggregate amount of Net Losses allocated to the Managing
Member pursuant to Section
1.3(b)(5) of this Exhibit less (ii) the
Managing Member's Capital Contributions;

       

      (5)           Fifth,
to the Non-Managing Member until the aggregate Net Income allocated to the
Non-Managing Member pursuant to this Section 1.3(a)(5)
equals the (i) sum of (A) the amount of distributions for the current and all
prior Fiscal Years to the Non-Managing Member pursuant to Section 4.1(d), (B)
the additional amount that currently would be required to be distributed to the
Non-Managing Member pursuant to Section 4.1(d) of the
Agreement to provide the Non-Managing Member with the 9% Non-Managing Member
Preferred Return and (C) the aggregate amount of Net Losses allocated to the
Non-Managing Member pursuant to Section
1.3(b)(4) of this Exhibit less (ii) the
Non-Managing Member's Capital Contributions;

       

      (6)           Sixth,
to the Members, in accordance with their respective Membership Percentages until
the aggregate Net Income allocated to each Member pursuant to this Section 1.3(a)(6)
equals (A) the amount of distributions for the current and all prior Fiscal
Years to said Member pursuant to Section 4.1(e), (B)
the additional amount that currently would be required to be distributed to said
Member pursuant to Section 4.1(e) of the
Agreement to provide the Members with a 12% cumulative, non-compounding annual
return upon and in respect to the amount of their respective Unreturned Capital
Contribution and (C) the aggregate amount of Net Losses allocated to said Member
pursuant to Sections
1.3(b)(4) and (5) of this
Exhibit;

       

      (7)           Seventh,
(i) 40% to Non-Managing Member, and (ii) 60% to Managing Member, until the
aggregate Net Income allocated to the Non-Managing Member pursuant to this Section 1.3(a)(7)
equals the sum of (i) the amount of distributions to the Non-Managing Member for
the current and all prior Fiscal Years pursuant to Section 4.1(f) of the
Agreement and (ii) the additional amount which would be required to be
distributed to the Non-Managing Member pursuant to Section 4.1(f) to provide the
Non-Managing Member with a 15% cumulative, non-compounding annual return upon
and in respect to the amount of their respective Unreturned Capital Contribution
and (iii) the aggregate amount of Net Losses allocated pursuant to Sections 1.3(b)(4) and (5) of
this Exhibit; and
 

      
        
           


        

        
          B-2

          
            

          

        

        
           


        

      

       

      (8)           Thereafter,
(i) 45% to the Non-Managing Member, and (ii) 55% to the Managing
Member.

       

      (b)           Allocation of Net
Losses.  After giving effect to Section
1.5  of this Exhibit, for any Fiscal Year, the items of income,
expense, gain and loss of the Company comprising Net Losses shall be allocated
as follows:

       

      (1)           First,
(i) 45% to Non-Managing Member, and (ii) 55% to Managing Member, until the
aggregate amount of Net Losses allocated pursuant to this Section 1.3(b)(1)
equals the aggregate amount of Net Income allocated pursuant to Section 1.3(a)(8) of
this Exhibit;

       

      (2)           Second,
(i) 40% to the Non-Managing Member, and (ii) 60% to Managing Member, until the
aggregate amount of Net Losses allocated pursuant to this Section 1.3(b)(2) equals the
aggregate amount Net Income allocated pursuant to Section 1.3(a)(7) of
this Exhibit;

       

      (3)           Third,
to the Members, pro
rata in accordance with their respective Membership Percentages until the
aggregate amount of Net Losses allocated pursuant to this Section 1.3(b)(3)
equals the aggregate amount Net Income allocated pursuant to Section 1.3(a)(6) of
this Exhibit; and

       

      (4)           Fourth,
to the Non-Managing Member until the aggregate amount of Net Losses allocated to
the Non-Managing Member pursuant to this Section 1.3(b)(4)
equals the aggregate amount Net Income allocated pursuant to Section 1.3(a)(5) of
this Exhibit;

       

      (5)           Fifth,
to the Managing Member until the aggregate amount of Net Losses allocated to the
Managing Member pursuant to this Section 1.3(b)(5) equals the
aggregate amount Net Income allocated pursuant to Section 1.3(a)(4) of
this Exhibit;

       

      (6)           Thereafter,
to the Members, pro
rata in accordance with their respective Membership
Percentages.

       

      (c)           Interest
paid or accrued in connection with Member Loans shall be deducted in accordance
with the appropriate U.S. income tax rules and shall be deducted as a deductible
partnership expense for purposes of calculating taxable income, taxable loss,
Net Profits and Net Losses.

       

      Section
1.4           Allocations of Net Capital
Gain and Net Capital Loss.

       

      (a)          Allocation of Net Capital
Gain.  After giving effect to Section 1.5 and
Section 1.3 of
this Exhibit, for any Fiscal Year, the items of income, expense, gain and loss
of the Company comprising Net Capital Gain shall be allocated as
follows:

       

      (1)           First,
to the Members who have previously been allocated Net Losses or Net Capital Loss
pursuant to Section 1.5(f)(3)
of this Exhibit in the reverse order and in the same ratio of such Losses so
allocated, until the aggregate Net Capital Gain and Net Income allocated to each
such Member pursuant to this Section 1.4(a)(1)
and Section
1.3(a)(1) is equal to the aggregate Net Losses and Net Capital Loss
allocated to that Member pursuant to said Section 1.5(f)(3);
 

      
        
           


        

        
          B-3

          
            

          

        

        
           


        

      

       

      (2)           Second,
to the Members who have previously been allocated Net Losses or Net Capital Loss
pursuant to Section 1.5(f)(2)
of this Exhibit in the reverse order and in the same ratio of such Losses so
allocated, until the aggregate Net Capital Gain and Net Income allocated to each
such Member pursuant to this Section 1.4(a)(2)
and Section
1.3(a)(2) is equal to the aggregate Net Losses and Net Capital Loss
allocated to that Member pursuant to said Section 1.5(f)(2);

       

      (3)           Third,
to the Members who have previously been allocated Net Capital Loss pursuant to
Section 1.4(b)(8)
of this Exhibit in the reverse order and in the same ratio of Net Capital Loss
so allocated, until the aggregate Net Capital Gain allocated to each such Member
pursuant to this Section 1.4(a)(5)
is equal to the aggregate Net Capital Loss allocated to that Member pursuant to
said Section 1.4(b);

       

      (4)           Fourth,
to the Managing Member until the aggregate Net Capital Gain allocated to the
Managing Member pursuant to this Section 1.4(a)(4)
causes the Adjusted Capital Account of the Managing Member to equal the amount,
which, if distributed pursuant to Section 4.2(d) of the
Agreement on the date on which such allocation is being made, would cause the
Managing Member to achieve a 9% cumulative, non-compounding annual return upon
and in respect to the amount of the Unreturned Capital Contribution of Managing
Member taking into account the aggregate amount distributed to the Managing
Member pursuant to Sections 4.1 and 4.2
of the Agreement from the inception of the Company through the date on which the
allocation under this Section 1.4(a)(4) is
being made;

       

      (5)           Fifth,
to the Non-Managing Member until the aggregate Net Capital Gain allocated to the
Non-Managing Member pursuant to this Section 1.4(a)(5)
causes the Adjusted Capital Account of the Non-Managing Member to equal the
amount, which, if distributed pursuant to Section 4.2(d) of the
Agreement on the date on which such allocation is being made, would cause the
Managing Member to achieve a 9% cumulative, non-compounding annual return upon
and in respect to the amount of the Unreturned Capital Contribution of
Non-Managing Member taking into account the aggregate amount distributed to the
Non-Managing Member pursuant to Sections 4.1 and 4.2
of the Agreement from the inception of the Company through the date on which the
allocation under this Section 1.4(a)(5) is
being made;

       

      (6)           Sixth,
to the Members, in accordance with their respective Membership Percentages until
the aggregate Net Capital Gain allocated to the Members pursuant to this Section 1.4(a)(6)
causes the Adjusted Capital Account of each Member to equal the amount, which,
if distributed pursuant to Section 4.2(g) of the
Agreement on the date on which such allocation is being made, would cause said
Member to achieve a 12% cumulative, non-compounding annual return upon and in
respect to the amount of their respective Unreturned Capital Contribution taking
into account the aggregate amount distributed to said Member pursuant to Sections 4.1 and 4.2
of the Agreement from the inception of the Company through the date on which the
allocation under this Section 1.4(a)(6) is
being made;
 

      
        
           


        

        
          B-4

          
            

          

        

        
           


        

      


      (7)           Seventh,
(i) 40% to Non-Managing Member, and (ii) 60% to Managing Member, until the
aggregate Net Capital Gain allocated to the Members pursuant to this Section 1.4(a)(7)
causes the Adjusted Capital Account of each Member to equal the amount, which,
if distributed pursuant to Section 4.2(h) of the
Agreement on the date on which such allocation is being made, would cause said
Member to achieve a 15% cumulative, non-compounding annual return upon and in
respect to the amount of their respective Unreturned Capital Contribution taking
into account the aggregate amount distributed to said Member pursuant to Sections 4.1 and 4.2
of the Agreement from the inception of the Company through the date on which the
allocation under this Section 1.4(a)(7) is
being made; and

       

      (8)           Thereafter,
(i) 45% to Non-Managing Member, and (ii) 65% to Managing Member.

       

      (b)          Allocation of Net Capital
Loss.  After giving effect to Section 1.5 and
Section 1.3 of
this Exhibit, for any Fiscal Year, the items of income, expense, gain and loss
of the Company comprising Net Capital Loss shall be allocated as
follows:

       

      (1)           First,
(x) 45% to Non-Managing Member, and (y) 65% to Managing Member, in an amount
equal to the excess, if any, of (i) the cumulative Net Capital Gain allocated
pursuant to Section
1.4(a)(8) of this Exhibit B for all prior Fiscal Years over (ii) the
cumulative Net Capital Loss allocated pursuant to this Section 1.4(b)(1) of
this Exhibit B for all prior Fiscal Years;

       

      (2)           Second,
(i) 40% to Non-Managing Member, and (ii) 60% to Managing Member, in an amount
equal to the excess, if any, of (i) the cumulative Net Capital Gain allocated
pursuant to Section
1.4(a)(7) of this Exhibit B for all prior Fiscal Years over (ii) the
cumulative Net Capital Loss allocated pursuant to this Section 1.4(b)(2) of
this Exhibit B for all prior Fiscal Years;

       

      (3)           Third,
to the Members, pro
rata in accordance with their respective Membership Percentages in an
amount equal to the excess, if any, of (i) the cumulative Net Capital Gain
allocated pursuant to Section 1.4(a)(6) of
this Exhibit B for all prior Fiscal Years over (ii) the cumulative Net Capital
Loss allocated pursuant to this Section 1.4(b)(3) of
this Exhibit B for all prior Fiscal Years; and

       

      (4)           Thereafter,
to the Members, pro
rata in accordance with their respective Membership
Percentages.

       

      Section
1.5           Other
Allocation Provisions.

       

      (a)           Minimum Gain
Chargeback.  Except as otherwise provided in Treasury
Regulations 1.704-2(f), notwithstanding anything to the contrary in this
Exhibit, if there is a net decrease in “partnership minimum gain” (within the
meaning of Treasury Regulation § 1.704-2(d)) for a Fiscal Year, then there shall
be allocated to each Member items of income and gain for such Fiscal Year equal
to such Member’s share of the net decrease in partnership minimum gain (within
the meaning of Treasury Regulation § 1.704-2(f), provided, that if the Company
has any discretion as to an exception set forth in Treasury Regulation §
1.704-2(f)(5), the Managing Member may exercise such discretion on behalf of the
Company).  In the event that the application of the minimum gain
chargeback requirement would cause a distortion in the economic arrangement
among the Members, the Managing Member may request that the Commissioner waive
the minimum gain chargeback requirement pursuant to Treasury Regulation §
1.704-2(f)(4).  Any Member’s share of Company Minimum Gain shall be
determined in accordance with Treasury Regulation §1.704-2(g)(1).  The
foregoing is intended to be a “minimum gain chargeback” provision as described
in Treasury Regulation § 1.704-2(f) and shall be interpreted and applied in all
respects in accordance with that Treasury Regulation.
 

      
        
           


        

        
          B-5

          
            

          

        

        
           


        

      

       

      (b)           Member Minimum Gain
Chargeback.  If during a Fiscal Year there is a net decrease in
partner nonrecourse debt minimum gain (as determined in accordance with Treasury
Regulation § 1.704-2(i)(3)), then, in addition to the amounts, if any, allocated
pursuant to the preceding paragraph, any Member with a share of that partner
nonrecourse debt minimum gain (determined in accordance with Treasury Regulation
§1.704-2(i)(5)) as of the beginning of the Fiscal Year shall, subject to the
exceptions in Treasury Regulation §1.704-2(i)(4) (including the exceptions
analogous to those in Treasury Regulation §1.704-2(f)(2), (3), (4) and (5),
provided, that if the Company has any discretion as to the exception set forth
in Treasury Regulation §1.704-2(f)(5) as made applicable by Treasury
Regulation §1.704-2(i)(4), the Managing Member may exercise such discretion on
behalf of the Company), be allocated items of income and gain for the year (and,
if necessary, for succeeding years) equal to that Member’s share of the net
decrease in the partner nonrecourse debt minimum gain.  In the event
that the application of the partner nonrecourse debt minimum gain chargeback
requirement would cause a distortion in the economic arrangement among the
Members, the Managing Member may request that the Commissioner waive the minimum
gain chargeback requirement pursuant to Treasury Regulation §§1.704-2(f)(4) and
1.704-2(i)(4).  The foregoing is intended to be the “chargeback of
partner nonrecourse debt minimum gain” required by Treasury Regulation
§1.704-2(i)(4) and shall be interpreted and applied in all respects in
accordance with that Treasury Regulation.

       

      (c)           Nonrecourse
Deductions.  Notwithstanding anything to the contrary in this
Exhibit, nonrecourse deductions shall be allocated to the Members on a pro rata basis, in proportion
to their Membership Percentages.  Nonrecourse deductions shall have
the meaning set forth in Treasury Regulation §1.704-2(b)(1).

       

      (d)           Qualified Income
Offset.  If, during any Fiscal Year, a Member unexpectedly
receives an adjustment, allocation or distribution described in Treasury
Regulation § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), which causes or increases a
deficit balance in such Member’s Adjusted Capital Account, there shall be
allocated to such Member items of income and gain (consisting of a pro rata portion of each item
of Company income (including gross income, and gain for such year), in an amount
and manner sufficient to eliminate such deficit as quickly as
possible.  The foregoing is intended to be a “qualified income offset”
provision as described in Treasury Regulation § 1.704-1(b)(2)(ii)(d) and shall
be interpreted and applied in all respects in accordance with that Treasury
Regulation.  A Member’s “Adjusted Capital Account,” at any time, shall
equal the Member’s Capital Account at such time (i) increased by the sum of (A)
the amount of the Member’s share of partnership minimum gain as defined in
Treasury Regulation §1.704-2(g)(1) and (3), (B) the amount of the Member’s share
of partner nonrecourse debt minimum gain as defined in Treasury Regulation
§1.704-2(i)(5), and (C) any amount of the deficit balance in its Capital Account
the Member is obligated to restore on liquidation of the Company, and (ii)
decreased by reasonably expected adjustments, allocations and distributions
described in Treasury Regulation §§1.704-1(b)(2)(ii)(d)(4), (5) or
(6).  The foregoing is intended to comply with the provisions of
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d) and shall be interpreted and
applied in all respects in accordance with that Treasury
Regulation.
 

      
        
           


        

        
          B-6

          
            

          

        

        
           


        

      

       

      (e)           Member Nonrecourse
Deductions.  Notwithstanding anything to the contrary in this
Exhibit, to the extent required by Treasury Regulation §1.704-2(i), any items of
income, gain, loss or deduction of the Company that are attributable to a
nonrecourse debt of the Company that constitutes partner nonrecourse debt as
defined in Treasury Regulation §1.704-2(b)(4) shall be allocated in accordance
with the provisions of Treasury Regulation §1.704-2(i).  This Section 1.5(e) is
intended to satisfy the requirements of Treasury Regulation §1.704-2(i) and
shall be interpreted and applied in a manner consistent therewith.

       

      (f)           Loss
Limitation.  Notwithstanding anything to the contrary in Section 1.3(b) of
this Exhibit,

       

      (1)           The
Net Losses allocated pursuant to Section 1.3(b) of
this Exhibit to any Member for any Fiscal Year shall not exceed the maximum
amount of Net Losses that may be allocated to such Member without causing such
Member to have a negative balance in its Adjusted Capital Account at the end of
such Fiscal Year.

       

      (2)           If
some but not all of the Members would have deficits in their Adjusted Capital
Accounts as a consequence of allocations of Net Losses pursuant to Section 1.3(b) of
this Exhibit, the limitations set forth in this Section 1.5(f)(2)
shall be applied by allocating Net Losses pursuant to this Section 1.5(f)(2)
only to those Members who would not have a deficit in their Adjusted Capital
Accounts as a consequence of receiving such an allocation of Net Losses (the
allocation of such Net Losses among those Members to be in proportion to their
aggregate Capital Contributions to the Company).

       

      (3)           If
no other Member may receive an additional allocation of Net Losses pursuant to
Section
1.5(f)(2) of this Exhibit, such additional Net Losses not allocated
pursuant to said Section 1.5(f)(2)
shall be allocated solely to those Members who bear the economic risks for such
additional Net Losses within the meaning of Section 704(b) of the Code and the
Treasury Regulations thereunder.

       

      (g)           Reversal of Regulatory
Allocations.  To the extent that any item of income, gain, loss
or deduction has been specially allocated pursuant to paragraphs (a), through
(e) of this Section
1.5 and such allocation is inconsistent with the way in which the same
amount otherwise would have been allocated under Section 1.3 of this
Exhibit, subsequent allocations under said Section 1.3 shall be
made, to the extent possible and without duplication in a manner consistent with
the Treasury Regulations under Code Section 704(b), which negate as rapidly as
possible the effect of all such inconsistent allocations under paragraphs (a)
through (e).  This Section 1.5(g) shall
be interpreted and applied in such a manner and to such extent as is reasonably
necessary to eliminate, as quickly as possible, permanent economic distortions
that would otherwise occur as a consequence of the allocations pursuant to
paragraphs (a) through (e) of this Section 1.5, in the
absence of this Section
1.5(g).

       

      (h)           Distributions of
Property.  Solely for the purpose of adjusting the Capital
Accounts of the Members, and not for tax purposes, if any property is
distributed in kind to any Member, the difference between its fair market value
(as determined in the reasonable judgment of the Managing Member) and its book
value at the time of distribution shall be treated as gain or loss recognized by
the Company and allocated pursuant to the provisions of Section 1.3 of this
Exhibit.
 

      
        
           


        

        
          B-7

          
            

          

        

        
           


        

      

       

      (i)   
       Transfer of Membership
Interest.  Except to the extent otherwise required by the Code
and Treasury Regulations, if a Membership Interest or part thereof is
transferred in any Fiscal Year, the items of income, gain, loss, deduction and
credit allocable to such Membership Interest or part thereof, as the case
may be, for such Fiscal Year shall be allocated to the person who held the
interest on the date such items were realized or incurred by the Company as if
the books of the Company had been closed, and the partnership tax year had
ended, immediately after such transfer.  At the request of the
transferee, the Managing Member may, in its sole discretion, make the election
provided for in Code Section 754.

       

      (j)         
 Order of
Allocations.  Any allocations made pursuant to this Exhibit
shall be made in the following order of priority:

       

      (i)          
 Section
1.5(a);

       

      (ii)           Section
1.5(b);

       

      (iii)          Section
1.5(d);

       

      (iv)          Section
1.5(e);

       

      (v)           Section 1.5
(c);

       

      (vi)          Section 1.5(g);
and

       

      (vii)         Section 1.3 as
modified by Section
1.5(f).

       

      (k)          Liquidation of
Company.  In the event of a liquidation of the Company or any
Member’s Interest in the Company, as defined in Treasury Regulation
§1.704-1(b)(2)(ii)(g):  (1) Notwithstanding anything to the contrary
that may be expressed or implied in this Exhibit (except paragraphs (a) through
(j) of this Section 1.5),
allocations of income, gain, loss, deduction and credit shall be allocated in a
manner so that distributions to be made in connection with such liquidation
shall be made in accordance with the positive Capital Account balances of the
Member(s) entitled to receive such distributions, as described in Treasury
Regulation Section 1.704-(1)(b)(2)(ii)(b), with the Code and other sections of
the Treasury Regulations and, to the extent possible, in an amount equal to the
aggregate net distributions that each such Member would have received pursuant
to Article 4 of
this Agreement; and (2) distributions made in accordance with a liquidation
described in provision (1) hereof, shall, to the extent possible, be made within
the time periods specified by Treasury Regulation
§1.704-1(b)(2)(ii)(b).

       

      Section
1.6          Allocations for Income Tax
Purposes.  These provisions shall be applied as if all
distributions and allocations were made at the end of the Fiscal
Year.  Where any provision depends on the Capital Account of any
Member, that Capital Account shall be determined after the operation of all
preceding provisions for the year.  The income, gains, losses,
deductions and credits of the Company for federal, state and local income tax
purposes shall be allocated in the same manner as the corresponding items
entering into the computation of Net Income and Net Losses were allocated
pursuant to Sections
1.3 , 1.4 and 1.5 of this Exhibit; provided that solely for federal,
local and state income and franchise tax purposes and not for book or Capital
Account purposes, income, gain, loss and deduction shall be allocated, other
than with respect to the tax basis of property, as follows:  in the
case of property contributed in kind and other property to the extent
applicable, in accordance with the principles of Code Sections 704(b) and
704(c) and the Treasury Regulations promulgated under such Code
Sections.
 

      
        
           


        

        
          B-8

          
            

          

        

        
           


        

      

       

      Section
1.7          Distributions of Nonrecourse
Liability Proceeds.  If during a Fiscal Year the Company makes
a distribution to any Member that is allocable to the proceeds of any
nonrecourse liability of the Company that is allocable to an increase in Company
Minimum Gain pursuant to Treasury Regulation §1.704-2(h), then the Company shall
elect, to the extent permitted by Treasury Regulation §1.704-2(h)(3), to treat
such distribution as a distribution that is not allocable to an increase in
Company Minimum Gain.

       

      ARTICLE
II

      MISCELLANEOUS
MATTERS

       

      Section
2.1          Preparation of Records and
Returns; Tax Matters Member. All federal, state and local income tax
returns, and financial and accounting books and records of the Company shall be
prepared under the direction of the Managing Member in its sole and absolute
discretion, and all tax audits and litigation shall be conducted under the
direction of the Managing Member in its sole and absolute discretion. The
determination of whether the Company shall make available elections for
accounting or federal, state or local income tax purposes shall be made by the
Managing Member in its sole and absolute discretion. The Managing Member is
hereby designated as the “tax matters partner” for the Company (as such term is
defined in Section 6231(a)(7) of the Code). The tax matters partner shall
promptly notify Members who do not qualify as “notice partners” within the
meaning of Code Section 6231(a)(8) at the beginning and completion of an
administrative proceeding at the Company level promptly upon such notice being
received by the tax matters partner.

       

      Section
2.2          Method of Making
Contributions. References to contributions of property appearing in Article 1 of this
Exhibit are included for the purpose of conforming to the requirements set forth
in the Regulations and shall not give rise to an inference that contributions
may be made in a form other than cash except as set forth in the Operating
Agreement or any other written agreement of the
Members.