Exhibit
10.6


LIMITED
LIABILITY COMPANY AGREEMENT OF

BEHRINGER HARVARD RESIDENCES AT CORDILLERA, LLC


THIS LIMITED LIABILITY COMPANY AGREEMENT (“Agreement”) is made and entered
into effective as of the 10th day of May 2007, by and between BEHRINGER
HARVARD CORDILLERA RESIDENCES, INC., a Delaware corporation (“BH Investor”), and CORDILLERA PARTNERS, LLC, a
Delaware limited liability company (“CP
Investor”).  The BH Investor and the
CP Investor, together with any such additional parties as and when admitted to the
Company (as defined below) as members shall be individually a “Member”
and, collectively, the “Members”.


ARTICLE
I.



FORMATION, NAME, PRINCIPAL PLACE OF BUSINESS - AGENT

PURPOSES, TERM AND DEFINITIONS


1.1                               Formation.  For
and in consideration of the mutual covenants herein contained, the Members
hereby form a limited liability company (hereinafter the “Company”)
under and pursuant to the Delaware Limited Liability Company Act, as amended
from time to time (the “Act”).  The
Company shall be governed by the Act. 
The Certificate (as hereinafter defined) has been or shall promptly be
filed and recorded in such office and places as is required by the Act.


1.2                               Name.  The
business of the Company shall be conducted under the name of “Behringer Harvard
Cordillera, LLC.”


1.3                               Company Office, Registered
Office and Registered Agent.  The Company shall maintain its principal
office in the State of Texas at 15601 Dallas Parkway, Suite 600, Addison, Texas
75001, or at such other place where the BH Investor headquarters is located as
the BH Investor may from time to time designate.  The Registered Office in the State of
Delaware is c/o of the Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801, and the agent for service of process at such
address shall be the Corporation Trust Center. 
The Company may maintain such different or additional offices as the
Members may determine.


1.4                               Purposes.  The nature and business of the
Company and the purposes to be conducted and promoted by the Company are to
engage solely in the following activities:


(a)                                  To acquire, improve, develop, redevelop,
renovate, construct, maintain, operate, manage, finance, lease, refinance, and
sell or exchange the Property (as hereinafter defined);


(b)                                 To exercise all powers enumerated in the Act
or this Agreement necessary or convenient to the conduct, promotion or
attainment of the business or purposes set forth in Section 1.4(a); and


(c)                                  Notwithstanding anything in this Agreement to
the contrary, the Company shall not take, or refrain from taking, any action
which, in the judgment of BH Investor, in its sole and absolute discretion, (i)
could adversely affect the ability of Behringer Harvard Opportunity REIT I,
Inc., a Maryland corporation (“BH REIT”) to achieve or maintain
qualification as a real estate investment trust, (ii) could subject BH REIT to
any additional taxes under Section 857 or Section 4981 of the Code or (iii)
could violate any law or regulation of any governmental body or agency having
jurisdiction over BH REIT or its securities, unless such action (or inaction)
shall have been specifically consented to by BH



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REIT
in writing.  Any such action or inaction
in contravention of Section 1.4 of this Agreement shall be void ab
initio, and shall not be given any effect.


1.5                               Term.  The Company shall continue until
December 31, 2057, unless earlier dissolved pursuant to the provisions of this
Agreement.


1.6                               Definitions.  As used in this Agreement, unless
the context clearly requires otherwise, the following words and phrases shall have
the following meanings:


“Additional Capital Contributions” means all
amounts contributed (or deemed to be contributed) to the Company as additional
Capital Contributions by the Members under Section 3.3.


“Additional Scheduled Capital Contributions”
means all amounts contributed to the Company as additional Scheduled Capital
Contributions by the Members under Section 3.2.


“Adjustment Date” means the close of business
on the last day of any fiscal year of the Company and any other date as of
which Profits and Losses are allocable under this Agreement.


“Affiliate” means, with respect to any Person
(a) any other Person, directly or indirectly controlling, controlled by or
under common control with such Person; (b) any Person owning or controlling ten
percent (10%) or more of the outstanding voting securities of such specified
Person; (c) any officer, director, partner, member or trustee of such specified
Person; and (d) if any Person who is an Affiliate is an officer, director,
partner, member or trustee of another Person, such other Person.  The term “control” shall mean the ability,
directly or indirectly, to control the management of an entity.


“Agreement” means this Limited Liability
Company Agreement.


“Approval by Company Vote” means approval by a
Majority in Interest of the Members pursuant to a Company Vote.  Any determination made by Approval by Company
Vote shall be binding on all Members without further consent and approval.


“Asset Management Fee” has the meaning set
forth in Section 4.9(c).


“Assets” means all of the assets of the Company
(including, without limitation, the Property).


“Business Plan” means any business plan
prepared by the CP Investor and approved by the BH Investor and setting forth
the estimated business activities of the Company for the then current or
immediately succeeding calendar year and for each month and each calendar
quarter of such calendar year, in such detail as determined by the Members.


“Capital Account” means, with respect to each
Member, the account established and maintained on the books and records of the
Company for each Member pursuant to Section 3.5 below, adjusted as
provided for therein.


“Capital Contribution” means the amount of
money and the Gross Asset Value of other property or consideration contributed
to the capital of the Company (net of liabilities securing such property that
the Company has assumed or taken subject to, under Section 752 of the Code) by
a Member.



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“Capital Contribution Balance”
means, for the Members, the cumulative Capital Contributions of that Member
less the cumulative distributions to that Member in return thereof pursuant to Sections
6.1.


“Capital Transaction” means any transaction pursuant to which (i) the Company sells all or substantially all of the
Property; or (ii) the Company obtains permanent mortgage financing with a term
of five (5) years or more secured by all or substantially all of the
Property.  It is expressly agreed that
any mezzanine loan financing, any revolving credit loan, line of credit loan,
or similar lending arrangement made by the Company shall not be considered a
Capital Transaction.


“Cash Needs” has the meaning set forth in Section 3.3(a).


“Certificate” means the Certificate of Formation of the Company.


“Code” means the Internal Revenue Code of 1986 as it may be
amended or revised from time to time, or any provision of succeeding law.


“Company” means Behringer Harvard Residences at Cordillera, LLC,
a Delaware limited liability company.


“Company Minimum Gain” has the meaning set forth in Section
1.704-2(d) of the Regulations.  Subject
to the foregoing, Company Minimum Gain shall equal the amount of gain, if any,
which would be recognized by the Company with respect to each nonrecourse
liability of the Company (or Property owner) if the Company were to Transfer
the Company property (or the Property owner were to Transfer the Property owner
property) which is subject to such nonrecourse liability in full satisfaction
thereof.


“Company Percentage” means initially (a) eighty-five percent
(85%) as to BH Investor, and (b) fifteen percent (15%) as to CP Investor,
subject to adjustment in accordance with the terms of this Agreement.


“Company Vote” shall mean a vote of the Members.  A Company Vote may be conducted at a meeting
of the Members, which meeting may take place by means of telephone conference,
video conference or similar communications equipment by means of which all
Persons participating therein can hear each other.  Alternatively, a Company Vote may be
conducted by notice sent by one of the Members, which notice shall set forth
the matter with respect to which the Company Vote is to be made.  If a written consent or consents setting
forth the matter to be determined is signed by a Majority in Interest of the
Members, Approval by Company Vote shall be deemed to have been obtained with
respect to such matter.


“Depreciation” means, with regard to any Company asset for any
fiscal year or other period, the depreciation, depletion or amortization, as
the case may be, allowed or allowable for federal income tax purposes; provided,
however, that if there is a difference between the Gross Asset Value and the
adjusted tax basis of such asset, Depreciation shall mean “book depreciation,
depletion or amortization” as determined under
Section 1.704-1(b)(2)(iv)(g)(3) of the Regulations.


“Developer” means TP Cordillera, LLC a Delaware limited
liability company.


“Development Agreements” means the Hotel Development Agreement
and the Fractional Development Agreement.



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“Development Budget” means the budget for construction of the
Improvements and the development of the Fractional Land prepared by the CP
Investor and approved by the BH Investor and setting forth the estimated
capital and operating expenses of the Company for the then current or
immediately succeeding calendar year and for each month and each calendar
quarter of such calendar year, in such detail as determined by the Members.


“Development Property” means the Fractional Land and the Raw
Land.


“Distributable Cash” means all cash, revenues, and funds
received by the Company, and any amounts released from Reserves to the extent
the Members through approval of the Operating Budgets deem that the amount
released is no longer required to be retained in Reserves, less the sum of the
following to the extent paid or set aside by the Company: (a) all principal and
interest payments on indebtedness of the Company and all other sums paid to
lenders; (b) all cash expenditures incurred incident to the normal operation of
the Company business; (c) such amounts as may be added to Reserves as the
Members through approval of the Operating Budgets deem reasonably necessary to
the proper operation of the Company’s business.


“Fractional Development Agreement” means a Development Agreement
by and between Behringer Harvard
Cordillera, LLC, a Delaware limited liability company, and Developer
providing for performance by Developer of development services with respect to
the Fractionals as set forth in the Fractional Development Agreement and
payment by the Company of a development fee to Developer, to be entered into on
behalf of the Company, in accordance with the provisions of Section 4.9(a)
hereof.


“Fractional Land” means that certain tract of land of
approximately three (3) acres that will be subdivided from the Hotel & Spa
land on which fractional units are anticipated to be developed.


“Fractional Management Agreement” means a Sales and Management
Agreement between the Company
and Fractional Manager of sales and management services with respect to the
Fractionals and the Raw Land as set forth in the Fractional Management
Agreement and payment by the Company of a sales management fee to Fractional
Manager, to be entered into on behalf of the Company, in accordance with the
provisions of Section 4.9(b) hereof..


“Fractional Manager” means TP Cordillera, LLC, a Delaware
limited liability company.


“Fractionals” means those certain fractional units that are
anticipated to be developed on the Fractional Land and potentially on the Raw
Land.


“Gross Asset Value” means, except as set forth below, the
adjusted basis of an asset for federal income tax purposes:


(a)                                  The initial Gross Asset Value of any asset
contributed by a Member to the Company shall be the gross fair market value of
such asset at the time of contribution, as determined by the BH Investor
(subject to Approval by Company Vote);


(b)                                 The Gross Asset Value of all Company assets
shall be adjusted to equal their respective gross fair market values, as
determined by the BH Investor (subject to Approval by Company Vote), as of the
following times: (i) the acquisition of an additional interest in the Company
by any new or existing Members in exchange for more than a de minimis
Capital Contribution and any such other time as the BH Investor reasonably
determines that such adjustment is necessary or appropriate to reflect the
relative economic interest of the Members in the Company; (ii) the distribution
by the Company to a Member of more than a de minimis
amount of Company property as consideration for an interest in the



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Company and any such other
time as the BH Investor reasonably determines that such adjustment is necessary
or appropriate to reflect the relative economic interests of the Members in the
Company; and (iii) the liquidation of the Company within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g);


(c)                                  The Gross Asset Value of any Company asset
distributed to any Member shall be the gross fair market value of such asset on
the date of distribution, as determined by the BH Investor (subject to Approval
by Company Vote); and


(d)                                 The Gross Asset Values of Company assets
shall be increased or decreased to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section 743(b) as
determined by the BH Investor (subject to Approval by Company Vote), but only
to the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subsection (d) to the extent the BH Investor determines that an adjustment
pursuant to subsection (b) hereof is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment pursuant this
subsection (d).


(e)                                  After the Gross Asset Value of an asset has
been determined or adjusted pursuant to subsections (a), (b), or (d) hereof,
Gross Asset Value will be adjusted by the Depreciation taken into account with
respect to the asset for purposes of computing Profits or Losses.  If the Gross Asset Value of an asset has been
determined or adjusted pursuant to subsections (a), (b), (c) or (d) of this
provision, such Gross Asset Value shall thereafter be computed in accordance
with Section 1.704-1(b)(2)(iv) of the Regulations.


(f)                                    At no time shall the Gross Asset Value of all
of the Company Assets exceed the total investment of debt and equity in the
Company.


“Hotel” means The Lodge and Spa at Cordillera
located at 2205 Cordillera Way, Edwards, Colorado.


“Hotel Development Agreement” means a Development Agreement by
and between Behringer Harvard Cordillera, LLC and Developer providing for the
performance by Developer of development services with respect to the Hotel as
set forth in the Hotel Development Agreement.


“Hotel Management Agreement” means a Management Agreement
between the Company and Hotel Manager providing for the performance by Hotel
Manager of management services with respect to the Hotel.


“Hotel Manager” means RockResorts International, LLC, a Delaware
limited liability company or such other manager approved by the Members.


“Hotel Operating Budget” means an annual budget prepared by the
Hotel Manager and approved by the BH Investor and setting forth the estimated
capital and operating expenses of the Company for the then current or immediately
succeeding calendar year and for each month and each calendar quarter of such
calendar year, in such detail as determined by the Members.


“Improvements” means any improvements and
related amenities now located or to be constructed on the Property.


“Initial Capital Contributions” means all
amounts contributed (or deemed to be contributed) to the Company as a Capital
Contribution by the Members under Section 3.1.



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“IRR” means, as to the Members, the actual internal rate of
return on the investment in the Company made by the Members, as calculated by
the Members consistent with the example set forth on Exhibit D attached
hereto on a compounded monthly basis (calculated on a 30-day month) taking into
consideration the timing and amount of the Capital Contributions made by the
Members, as well as the timing and amount of all distributions received as a
result of such investment.  If there is a
variance in the result of the calculation between the Members, then the value
calculated by BH Investor shall control in the absence of manifest error.  For purposes of calculating the IRR, all
Property owned by the Company shall be treated as a single investment and the
income from the Property owned by the Company shall be treated as from a single
source.  For purposes of calculating the
IRR, the Capital Contributions made by the Members shall be deemed invested on
the first day of the month in which made, if made on or before the fifteenth
(15th) day of such month, and on the first day
of the following month, if made after the fifteenth (15th) day of such month. 
For purposes of calculating the IRR, all distributions shall be deemed
to have been made by the Company on the first day of the month, if paid on or
before the fifteenth (15th) day of such month, and on the first day
of the following month, if made after the fifteenth (15th) day of such month.


“Land Transfer” means that certain transfer of the Property to
the Company by Behringer Harvard Cordillera, LLC, a Delaware limited liability
company.


“Landlord” means Behringer Harvard Cordillera, LLC.


“Lease” means the Lease between the Landlord, as lessor, and the Company, as tenant, providing for
the lease of the Hotel.


“Major Decision” has the meaning set forth in Section 4.2
of this Agreement.


“Majority in Interest” shall mean Members owning more than fifty
percent (50%) of the Company Percentages.


“Management Agreements” means the Hotel Management Agreement and
the Fractional Management Agreement.


“Members” means each of BH Investor and CP Investor, and any
other Person that is admitted as a member in the Company pursuant to the
provisions of Article VIII, and “Members” means collectively all of such
Members.


“Member Minimum Gain” means an amount, with respect to each
Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if
such Member Nonrecourse Debt were treated as a Nonrecourse Liability.


“Member Nonrecourse Debt” has the meaning set forth in Section
1.704-2(b)(4) of the Regulations.


“Member Nonrecourse Deductions” has the meaning set forth in
Section 1.704-2(i) of the Regulations. 
Subject to the foregoing, the amount of Member Nonrecourse Deductions
with respect to a Member Nonrecourse Debt for a Company fiscal year equals the
excess, if any, of the net increase, if any, in the amount of Member Minimum
Gain attributable to such Member Nonrecourse Debt during that fiscal year over
the aggregate amount of any distribution during that fiscal year to the Member
that bears the economic risk of loss for such Member Nonrecourse Debt to the
extent such distributions are from the proceeds of such Member Nonrecourse Debt
and are allocable to an increase in Member Minimum Gain



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attributable to such Member Nonrecourse Debt,
determined in accordance with Section 1.704-2(i) of the Regulations.


“Net Cash Flow” means, for any period, the excess of (i)
revenues for such period, over (ii) expenses for such period.


“Nonrecourse Deductions” has the meaning set forth in Sections
1.704-2(b)(1) and 1.704-2(c) of the Regulations.  Subject to the preceding sentence, the amount
of Nonrecourse Deductions for a Company fiscal year equals the excess, if any,
of the net increase, if any, in the amount of Company Minimum Gain during the
fiscal year (determined under Section 1.704-2(d) of the Regulations) over the
aggregate amount of any distributions during the fiscal year of proceeds of a
Nonrecourse Liability that are allocable to an increase in Company Minimum Gain
(determined under Section 1.704-2(h) of the Regulations).


“Nonrecourse Liability” has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.


“Operating Budgets” means the Development Budget and the Hotel
Operating Budget.


“Operating Expenses” means all the cash expenditures made or
required to be made by the Company in connection with the operation of the
Company in the ordinary course of business, including without limitation, cash
expenditures made or required to be made by the Company in connection with the
development, ownership, management, improvement, operation, maintenance,
financing and upkeep of the Property, as well as debt service (principal and
interest) and capital expenditures of the Company; provided, however, Operating
Expenses shall not include (a) any overhead or general administrative costs or
expenses of the Members or salaries or other compensation paid to its
employees, officers, directors or shareholders (unless specifically provided
for in this Agreement); (b) any expenditures paid or payable from cash Reserves
of the Company (provided that to the extent any capital expenditures are made
in excess of any such Reserves established for such capital expenditures, such
excess amounts shall be included as an Operating Expense); and (c) non-cash
items such as depreciation and amortization.


“Partially Adjusted Capital Accounts” means, with respect to any
Member as of an Adjustment Date, the Capital Account of such Member as of the
beginning of the fiscal year ending on such Adjustment Date (where such Capital
Account does not reflect such Member’s share of either cumulative Member
Minimum Gain or cumulative Company Minimum Gain), after giving effect to all
allocations of items of income, gain, loss or deduction not included in Profits
and Losses and all Capital Contributions and distributions during such period,
but before giving effect to any allocations of Profits or Losses for such
period pursuant to Section 7.1 hereof, increased by (a) such Member’s
share of Company Minimum Gain as of the end of such fiscal year, and (b) such
Member’s share of Member’s Minimum Gain as of the end of such fiscal year.


“Person” means any individual or entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
such Person where the context so admits, and, unless the context otherwise
requires, the singular shall include the plural, and the masculine gender shall
include the feminine and the neuter and vice versa.


“Profits” and “Losses” means, for each fiscal year or other
period, an amount equal to the Company’s taxable income or loss for such year
or period, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately



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


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


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


(c)                                  In the event the Gross Asset Value of any of
the Company assets is adjusted pursuant to subsections (b) or (c) of the
definition of Gross Asset Value, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for purposes of
computing Profits or Losses;


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


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


(f)                                    Notwithstanding anything contained herein to
the contrary, any items which are specially allocated pursuant to Sections
7.3(a), 7.3(b), 7.3(c), 7.3(d), 7.3(e) and 7.3(f)
shall not be taken into account in computing Profits or Losses.


“Property” means those certain portions of the tracts of land
(and all rights and appurtenances incident thereto) described in Exhibit A
attached hereto and all Improvements located, or to be constructed, or
developed thereon including, but not limited to, the existing 56-room lodge,
approximately 20,000 square feet of spa/fitness center space, approximately
3,000 square feet of meeting/banquet space, 2 restaurants, in place
entitlements to add 19 units to the existing lodge, a ski in / ski out condo at
the Strawberry Park Beaver Creek lift, approximately 90 daily deeded tee times
at 3 area country clubs, options to purchase, with the approval of club
members, 20 country club memberships that may be fractionalized, and an
adjacent undeveloped 23.2-acre tract fully entitled for 45 residential units
and 38,000 square feet of commercial office space that will be conveyed to the
Company pursuant to the Land Transfer.


“Raw Land” means that certain 23.2-acre tract with entitlements
for 45 residential units and 38,000 square feet of commercial office space.


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


“REIT” means a real estate investment trust as such term is
defined in Section 856 of the Code.



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“Reserves” means funds set aside or amounts allocated to
reserves for working capital, taxes, insurance, debt service or other costs and
expenses incident to the ownership, development and operation of the
Property.  The amount of funds to be set
aside in Reserves shall be determined by the Members pursuant to the approval
of the Operating Budgets.


“Target Account” means, with respect to any Member as of any
Adjustment Date, a balance (which may be positive or negative) equal to the
hypothetical amount that such Member would receive upon the liquidation of the
Company, assuming that (a) all assets of the Company were sold for an amount
equal to their respective Gross Asset Values, (b) all liabilities of the
Company became due and were satisfied in accordance with their terms (limited
with respect to each non-recourse liability, to the Gross Asset Value of the
asset securing such liability), and (c) all net assets of the Company were
distributed pursuant to Section 6.1 hereof, computed after the Capital
Contributions have been made for the period ending on such Adjustment
Date.  The Members (subject to Approval
by Company Vote) shall determine Gross Asset Value as of each Adjustment Date.


“Tenant” means that certain Tenant under the Lease dated as of
the date of this Agreement between Behringer Harvard Cordillera, LLC as Lessor
and the Company as Lessee.


“Transfer” means, with respect to a particular property, right
or interest, the assignment, sale, transfer, pledge, disposition,
hypothecation, mortgage, pledge or the grant of a lien or security interest in
such right or interest (or any part thereof), whether voluntarily,
involuntarily or by operation of law, and whether for consideration or no
consideration.


ARTICLE
II.



MEMBERS


2.1                               Members.  The names and addresses of the Members are as follows:




	
  Name

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Behringer
  Harvard Cordillera Residences, Inc.

  	
   

  	
  15601 Dallas Parkway, Suite 600

  Addison, Texas 75001

  Attn: Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
  Cordillera
  Partners, LLC

  	
   

  	
  260 Townsend Street, 7th Floor

  San Francisco, California 94107-1790

  






 


ARTICLE III.


CAPITAL


3.1                               Initial Capital Contributions. 
The Members shall each
make an Initial Capital Contribution to the Company of cash and/or property in
the amount set forth on Exhibit B attached hereto and made a part hereof
(it being agreed that time is of the essence with respect to the making of such
Initial Capital Contributions).


3.2                               Additional Scheduled Capital
Contributions.  After the Initial Capital Contributions are
made, the parties agree that additional funds will be necessary pursuant to the
Development Budget and the parties agree that each party will make Additional
Scheduled Capital Contributions in the



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amounts
set forth in the Development Budget as defined and as set forth in the
Fractional Development Agreement.


3.3                               Additional Capital
Contributions.


(a)                                  If at any time the BH Investor determines (up
to an aggregate amount of One Million Dollars ($1,000,000.00) on a pro rata
basis according to each Member’s Company Percentage and pursuant to one or more
requests) or for any amount over One Million Dollars ($1,000,000.00) in the
aggregate the Members determine pursuant to Section 4.2 herein that the Company
requires (or will require) additional funds for any purpose (“Cash Needs”),
then the BH Investor shall use reasonable efforts to secure third party or
Member loans to fulfill such Cash Needs.  If such efforts to secure third party
or Member loans are unsuccessful, the BH Investor may send the Members written
notice (“Additional Capital Notice”) requesting that the Members
contribute in cash such amounts as are necessary to satisfy such Cash Needs and
describing the purpose for which the funds are needed.  If so requested, each Member shall be obligated to make an Additional Capital
Contribution equal to the product of its Company Percentage and the amount of
the Cash Needs.  The time for the payment
of any Additional Capital Contribution to the Company shall be determined by
the BH Investor, but shall in no event be less than ten (10) days after the
delivery of the Additional Capital Notice.


(b)                                 If a Member fails to timely contribute all or
any portion of any Additional Capital Contribution required of such Member,
then such Member shall be considered a “Delinquent Member.”  The Company may, upon notice to a Delinquent
Member, exercise the following remedies:


(i)                                     permit the non-Delinquent Member(s) to
advance that portion of the Additional Capital Contribution that is in default
as a loan (a “Default Loan”) with the following results: (A) the sum
thus advanced shall constitute a loan to the Delinquent Member for which the
Delinquent Member will pledge its interests in the Company as security for such
loan; (B) such loan and all accrued unpaid interest thereon shall be due on
demand, or if no demand is made, twelve (12) months after such advance is made;
(C) the loan shall bear interest at the lesser of twelve percent (12%) per
annum or the highest rate permitted by applicable law, from the date made until
the date fully repaid compounding monthly; (D) all Company distributions and
other payments that otherwise would be made to the Delinquent Member (whether
before or after dissolution of the Company) under this Agreement (including
those under Article 6) shall be paid to the non-Delinquent Member until the
loan and all interest accrued thereon is paid in full (with all such payments
being applied first to accrued and unpaid interest and then to principal and
being deemed to be a distribution or payment (as may apply) to the Delinquent
Member, and, in turn, a payment by the Delinquent Member with respect to the
loan from the non-Delinquent Member); and (E) the non-Delinquent Member may, in
addition to the other rights granted herein, take such action as the
non-Delinquent Member may deem appropriate to obtain payment of the loan at the
expense of the Delinquent Member; or


(ii)                                  permit the non-Delinquent Member to
contribute that portion of the Additional Capital Contribution that is in
default as an Additional Capital Contribution made by the non-Delinquent
Member, in which case the non-Delinquent Member shall have its Company
Percentage increased and the Delinquent Member shall have its Company
Percentage decreased in the following manner: (A) the Company Percentage of the
non-Delinquent Member immediately following such Additional Capital
Contributions shall be increased by an amount equal to one hundred fifty
percent (150%) x A/B, where ‘A’ equals the amount the non-Delinquent Member
contributed in respect of the Delinquent Member’s required Additional Capital
Contribution, and ‘B’ equals the sum of all unreturned Capital Contributions
previously made to the Company by all Members after giving effect to the
amounts advanced under this Section 3.3(b)(ii) on behalf of the
Delinquent Member; and (B) the Company Percentage of the Delinquent Member
shall be decreased by the increase of the non-Delinquent Member’s



 10
 









Company Percentage.  An example
of the operation of this Section 3.3(b)(ii) is set forth in Exhibit C
attached hereto.


(c)                                  The exercise by the Company of the remedies
set forth in Section 3.3(b) above shall be determined by the
non-Delinquent Members in their sole discretion and not by any Delinquent
Member.


(d)                                 With respect to any efforts by the BH
Investor to obtain loans to the Company from a third party or a Member, the
financing terms must be substantially similar to (or more favorable than) loans
which the Company could obtain on a competitive arms-length basis.  If the BH Investor is unable to determine
whether the financing terms are competitive on an arms-length basis, the BH
Investor may seek and rely upon the advice of an independent expert in
financing.  If any Member makes any loan
or loans to the Company or advances money on its behalf, the amount of any loan
or advance shall not be treated as a Capital Contribution but shall be treated
as a debt due from the Company to such Member.


Any Default Loan
made by a non-Delinquent Member hereunder may be assigned by such
non-Delinquent Member to an Affiliate of the non-Delinquent Member and such
Affiliate shall have the right to exercise any and all rights granted to the
non-Delinquent Member hereunder with respect to such Default Loan.  The Partners agree that in the event that the
BH Investor shall make a Default Loan hereunder, the BH Investor may structure
the loan with such terms (including, if necessary, structuring the Default Loan
as a loan to the Company or structuring the Default Loan so that it complies
with the requirements of Revenue Procedure 2003-65, I.R.B. 2003-32) as may be
required to ensure that BH REIT will not be treated as holding securities
having a value of more than ten percent (10%) of the total voting power or the
total value of any one issuer for purposes of Code Section 856(c)(4).


3.4                               Bridge Financing.  BH
Investor shall make a loan to Behringer Harvard Cordillera, LLC (the “Acquisition
Loan”) in the amount of seventy-five percent (75%) of the acquisition price
of the Project as set forth in that certain Agreement of Purchase and Sale and
Joint Escrow Instructions by and between Colorado Hotel Holding, LLC, Cordillera
Lodge & Spa, LLC, Colorado Hotel Operator, Inc., and Cordillera Land, LLC, and Cordillera Partners, LLC, as amended, at an interest rate of nine percent (9%) to
be used solely in connection with the acquisition of the Project which loan
shall be secured by the Property.  The
Members agree that permanent third party financing shall be obtained as soon as
is commercially reasonable (which shall be no later than six months after the
acquisition of the Property) and the Acquisition Loan shall be repaid to BH
Investor along with any accrued interest out of the proceeds of such
financing.  In connection with such permanent
financing, the Members acknowledge that this Agreement may be amended to
include customary and reasonable special purpose entity provisions required by
lender provided that no such changes will result in a change in the relative
economic position between the parties as set forth in this Agreement.


3.5                               Capital Accounts.  The Company shall establish and
maintain on its books and records for each Member a capital account
(collectively the “Capital Accounts”) in accordance with Section 1.704-1(b)(2)(iv)
of the Regulations.  Subject to the foregoing,
each Member’s Capital Account generally shall be:


(a)                                  increased by (i) the amount of money
contributed by such Member to the Company, including Company liabilities
assumed by such Member; (ii) the fair market value of property (net of
liabilities securing such property that the Company has assumed, or taken
subject to, under Section 752 of the Code), or other consideration contributed
by such Member to the Company; and (iii) allocations to such Member of Net
Profits (and items thereof, including certain tax exempt income) and income and
gain described in Section 1.704-1(b)(2)(iv)(g) of the Regulations; and



 11
 









(b)                                 decreased by (i) the amount of money
distributed to such Member by the Company, including such Member’s individual
liabilities assumed by the Company; (ii) the fair market value of all property
distributed to such Member by the Company (net of liabilities that such Member
is considered to assume or take subject to under Section 752 of the Code); and
(iii) allocations to such Member of Net Losses and deductions, including
expenses described in Section 705(a)(2)(B) of the Code which are not deductible
for tax purposes.


3.6                               Interest on and Withdrawal
of Capital Contributions.  The
Members shall not be entitled to receive any interest on Capital Contributions,
nor shall the Members be entitled to withdraw or otherwise receive a return of
their Capital Contributions from the Company, except pursuant to the terms and
conditions of this Agreement.  No Member
shall be required to contribute or lend any cash or property to the Company to
enable the Company to return any Member’s Capital Contributions.


3.7                               Resignation; Redemption. 
Except as otherwise expressly permitted by this Agreement, no Member may
resign or withdraw from the Company without Approval by Company Vote.  A Member’s interest in the Company may not be
redeemed or purchased by the Company without prior Approval by Company Vote.


3.8                               Transfers.  If
any interest in the Company is Transferred in accordance with the terms of this
Agreement, the Transferee will succeed to the Capital Account of the Transferor
to the extent it relates to the Transferred interest.


ARTICLE
IV.


MANAGEMENT


4.1                               General Powers of the
Members.  Except
as provided in Section 4.2 hereof, the day-to-day administrative
management of the Company and the implementation of the policy and decisions of
the Company (as approved by Approval by Company Vote) shall rest with the
Member holding the Majority in Interest of the Company Percentages, which shall
have all the rights and powers as are necessary, advisable or convenient to the
management of the business and affairs of the Company, subject to the
limitations contained herein, including those matters described in Section
4.2 below.  The Members shall
exercise sound business judgment in managing the affairs of the Company.  Notwithstanding anything set forth to the
contrary in this Agreement, the Member holding the Majority in Interest of the
Company Percentages shall be the only Member entitled to bind the Company and
enter into agreements and sign on the Company’s behalf.  Notwithstanding the foregoing, the Member
holding the Majority in Interest of the Company Percentages may give express
written authorization, in its sole discretion, to the other Member, delegating
the authority to sign on the Company’s behalf. 
In addition, the Member holding the Majority in Interest hereby approves
of the delegation of certain administrative rights to CP Investor through the
approval process of the Development Budget and Business Plan, as set forth in
the Fractional Development Agreement.  In
addition, subject to the provisions of Section 4.2 below, no Member
(other than a Member holding a Majority in Interest of the Company Percentages)
may make or implement any decision set forth in this Agreement to be made or
implemented by the Members or give any notices required to be given without the
written approval of the Member holding the Majority in Interest of the Company
Percentages or pursuant to Approval by Company Vote.


4.2                               Major Decisions.  Except as otherwise
provided in Section 4.12(a),
the Member Holding the Majority in Interest of the Company Percentages must
obtain the approval of the other Member prior to implementing a Major Decision
(as hereinafter defined).  A “Major
Decision” as used in this Agreement means any decision with respect to the
following matters:



 12
 









(a)                                  any merger or consolidation of the Company
with another entity;


(b)                                 any borrowing by the Company secured by a
deed of trust or lien against the Property in excess of Two Million Dollars
($2,000,000);


(c)                                  guarantee of Debt of any other Person;


(d)                                 causing the Company to file a voluntarily
bankruptcy petition, seeking or consenting to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian or any similar official
for the Company or a substantial portion of its assets, causing the Company to
file a petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, causing the Company to file 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 or to take any action in
furtherance of the foregoing;


(e)                                  causing the Company to file any lawsuit
involving an amount in dispute in excess of Five Hundred Thousand Dollars
($500,000);


(f)                                    any payment by the Company of any
compensation to a Member or an Affiliate of a Member, or any transaction
between the Company and any Member or Affiliate of a Member, except to the
extent that any payment to, or transaction with, a Member is set forth in an
approved Operating Budget or expressly authorized or approved pursuant to the
terms of this Agreement;


(g)                                 the dedication of any portion of the Property
to any federal, state or local government or political subdivision;


(h)                                 executing or approving any agreement,
arrangement or contract that imposes an obligation or liability on the Company
in excess of One Million Dollars ($1,000,000);


(i)                                     assigning the Company’s rights in specific
Company property for other than Company purposes;


(j)                                     any act which would make it substantially
impractical to carry on the ordinary business of the Company, other than a
Transfer of all or substantially all of the assets of the Company;


(k)                                  any confession of a judgment against the
Company;


(l)                                     making, executing or delivering any
assignment for the benefit of creditors of the Company, or signing any bond,
confession of judgment, indemnity bond or surety bond by or on behalf of the
Company;


(m)                               any sale or other disposition of any Asset of
the Company having a value in excess of One Million Dollars ($1,000,000), with
the exception of lots or fractional interests sold pursuant to a sales plan
previously approved by BH Investor or its affiliate;


(n)                                 any admission of any new Member to the
Company;


(o)                                 the dissolution or termination of the Company


(p)                                 determining whether Additional Capital
Contributions are needed to fulfill Cash Needs after $1,000,000 in aggregate
Additional Capital Contributions have been made;



 13
 









(q)                                 approving any agreement whereby any service
or activity to be performed for the Company is to be performed by an Affiliate
of a Member (excluding any agreements with an affiliate of BH Investor in
connection with services regarding asset management, financing and disposition
as contemplated in this Agreement);


(r)                                    payment of compensation to Officers;


(s)                                  the approval of any tax election that
adversely affects a Member; and


(t)                                    any other decision or action which by the
provisions of this Agreement is required to be authorized by the Members.


4.3                               Mechanism for Major Decision
Approvals.  All requests for approvals
required under Section 4.2 shall be promptly considered and acted upon by the
Members.  A response shall be given by
each Member within ten (10) days of receipt of the written notice of the Major
Decision to be approved or disapproved. 
In the event that a Member fails to expressly approve or disapprove of
any item within ten (10) days of receipt of such written notice, such Member
shall be deemed to have disapproved such Major Decision.


4.4                               Operating Budgets.  The Company shall operate under the Operating
Budgets which shall be prepared by the CP Investor and Hotel Manager and
approved by the BH Investor.  After the
Operating Budgets have been approved by the BH Investor, the Members shall
implement them on behalf of the Company as set forth in the Development
Agreement and Hotel Management Agreement and may cause the Company to incur the
expenditures and obligations as therein provided.


4.5                               Delegated Authority to
Management.  The Member holding the Majority in Interest
of the Company Percentages may delegate certain of its powers and
responsibilities to the officers of the Company (the “Officers”), and in
such event, the Officers shall have such power and authority specified by the
Member holding the Majority in Interest of the Company Percentages.  The current officers of the Company are set
forth on Schedule 4.5.  The Member
holding the Majority in Interest of the Company Percentages shall appoint the
Officers including any successors.  Any
Officer appointed by the Member holding the Majority in Interest of the Company
Percentages may be removed by the Member holding the Majority in Interest of
the Company Percentages whenever it determines. 
No Officer shall be paid any compensation unless approved by the Members
in accordance with Section 4.2 above and such compensation shall be reasonable,
at market rates and subject to industry standard for the tasks performed.


4.6                               Payment of Costs and Expenses.  The Company will be responsible for paying
all costs and expenses of forming and continuing the Company, conducting the
business of the Company, including, without limitation, accounting costs, legal
expenses and office supplies.  In the
event any such costs and expenses are incurred and paid by the Members on
behalf of the Company, then, except as expressly provided to the contrary in
this Agreement, such Member shall be entitled to be reimbursed for such payment
so long as such cost or expense was reasonably necessary and is reasonable in
amount.  The Company may use the proceeds
of any revenues of the Company to reimburse a Member for any such costs and
expenses so paid.


4.7                               Transactions with Affiliates.  Any
agreement whereby any service or activity to be performed for the Company is to
be performed by an Affiliate of a Member will be a Major Decision governed by
Section 4.2 above.  The Members hereby
acknowledge and agree that approval by the Members has been obtained with
respect to the Fractional Development Agreement.



 14
 









4.8                               No Employees.  The
Company shall have no employees.


4.9                               Fees Payable by the Company.


(a)                                  The Company shall assume the Fractional
Development Agreement in substantially the form attached hereto as Exhibit E,
with Developer  to perform
development services in respect of the Hotel, pursuant to which the Developer
will receive a development fee from the Company, as more specifically set forth
in the Development Agreement at the time of the Land Transfer if such agreement
has not been terminated pursuant to its terms.


(b)                                 The Company shall, concurrently with the
execution of this Agreement, enter into the Fractional Management Agreement in
substantially the form attached hereto as Exhibit F, with Fractional
Manager  to perform sales
management services in respect of the Fractionals, pursuant to which the
Fractional Manager will receive a sales management fee from the Company, as
more specifically set forth in the Fractional Management Agreement.


(c)                                  The Company shall pay to Behringer Harvard
Opportunity Advisors LP, an affiliate of BH Investor (“BH Advisors”), an
annual asset management fee (the “Asset Management Fee”).  Such Asset Management Fee shall be .75% of
the total amount invested in the Company as debt and equity as determined on
first day of January of each year for the following six months and the first
day of July of each year for the following six months.  The Asset Management Fee will be payable in monthly
installments on the first of the month and shall be payable from cash flow
generated by the Property after the payment of all debt service, management
fees and FF&E reserve fund deposits. 
To the extent that Property cash flows are insufficient for the payments
of the Asset Management Fee, such fee will accrue and be added to the next
installment payable.


(d)                                 Upon the initial loan funding of any project
financing, the Company shall pay to BH Advisors a fee equal to one percent
(1.0%) of the loan amount.


4.10                        Other Compensation. 
Except as provided in this Agreement, no Member or its Affiliate shall
be entitled to any compensation unless Approval by Company Vote is obtained
with respect thereto.


4.11                        Construction Requirements.  The completion or renovation of
improvements which are to be constructed on the Property shall be guaranteed at
the price contracted either by an adequate completion bond or by other
assurances satisfactory to the Members, which assurances shall include one or
more (at the discretion of the Members) of the following: (a) a written
personal guarantee of one or more of the general contractor’s principals
accompanied by the financial statements of such guarantor indicating a
substantial net worth; (b) a written fixed price contract with a general
contractor that has a substantial net worth; (c) a retention of a reasonable
portion of construction costs as a potential offset to such construction costs
in the event the general contractor does not perform in accordance with the
construction contract; or (d) a program of disbursements control which provides
for direct payments to subcontractors and suppliers.  The Company shall make no periodic progress
or other advance payments to the general contractor or any subcontractor unless
the Company has first received an architect’s certification as to the
percentage of the improvements which has been completed and as to the dollar
amount of the construction then completed.


4.12                        Financing.


(a)                                  BH Investor shall be responsible for
identifying sources of project financing including both acquisition and
construction financing.  Such financing
will require Approval by Company Vote. 
BH Investor will use commercially reasonable efforts to obtain
non-recourse financing in amounts



 15
 









of up to seventy to
seventy-five percent (70-75%) of fair market value of the Project as permanent
financing for the Project and in amounts of up to seventy five to eighty
percent (75-80%) of fair market value of any construction financing.  However, if such non-recourse financing is
not available or commercially reasonable, BH Investor and CP Investor shall
provide guarantees for their pro-rata portion of the financing.  CP Investor, at its option, in writing, may
request that BH Investor provide the guarantee for one hundred percent (100%)
of the debt incurred and in exchange, CP Investor shall pay to BH Investor an
annual fee of one and one-half percent (1.5%) of its pro-rata share of any
recourse debt incurred by the Company. 
Notwithstanding anything contained in this Agreement to the contrary, in
the event that CP Investor elects not to guarantee its prorata share of
indebtedness of the Partnership pursuant to the preceding sentence, then so
long as BH Investor (or any Affiliate) remains the guarantor of such
indebtedness: (a) the decisions described in Sections 4.2(b), 4.2(h) and 4.2(m)
shall not be Major Decisions requiring the approval of each Member but shall be
made by the Member holding the Majority in Interest, provided, however, that at
any time that the Member holding the Majority in Interest has the right to
decide on certain Major Decisions as set forth herein, any borrowing as set
forth in Section 4.2(b) shall be commercially reasonable and consistent with
market rate and term financing and, any sale of a Company Asset as set forth in
Section 4.2(m) shall be made to a third party and once an offer is received in
connection with such sale that is acceptable to the Member holding the Majority
in Interest, in its sole discretion, the Member holding the Majority in
Interest shall present such offer to CP Investor and CP Investor shall have
three days to determine whether it wishes to purchase such Asset on the terms
and conditions and at the price set forth in such offer; however, if CP
Investor does not give the Member holding the Majority in Interest written
notice of its intent to purchase the Asset within the three day period then the
Member holding the Majority in Interest may sell the Asset at a price that is
at least 90% of the price set forth in the offer; (b) the Member holding the
Majority in Interest shall have the sole right to approve any Additional
Capital Contributions, without the joinder of any other Member, provided,
however that while the Member holding the Majority in Interest has the sole
right, it will act in prudent manner, consistent with good business practice in
real estate management in requesting such Additional Capital Contributions and
such requests will be in amounts and at times reasonably necessary to fund
obligations of the Company; and (c) no other Member shall engage in any act or
omission that will create or increase the liability of BH Investor (or any
Affiliate) under its guaranty.


(b)                                 The Members agree that Realty Financial
Resources, Inc. (“RFR”) shall be entitled to a one time fee to be paid
by the Company in the amount of one percent (1.0%) of any initial third party
financing that is obtained by the Company from any financing offer brought to
the Company by RFR from West LB and accepted and closed on by the Company.  The Members agree that the Company is under
no obligation to accept any financing offer presented by RFR and any financing
will be selected by BH Investor subject to Approval by Company Vote.  CP Investor agrees that should any claim be
made for brokerage commissions or finder’s fees by any broker or finder other
than as specifically set forth herein or for any claim by RFR for payment in
connection with that certain letter from RFR to Jeff Nelsen dated as of June
22, 2006, or otherwise by RFR, CP Investors will hold BH Investor and the
Company free and harmless from and indemnify BH Investor and the Company
against any and all loss, liability, cost, damage and expense in connection
therewith including attorney fees and BH Investor and the Company shall have no
liability in connection with any such claim.


ARTICLE
V.


RIGHTS
AND POWERS OF MEMBERS


5.1                               Limitation of Liability of
Members.  The Members shall not be bound by, or personally liable for,
obligations or liabilities of the Company to outside third parties beyond the
amount of their Capital Contributions to the Company, and the Members shall not
be required to contribute any capital to



 16
 









the
Company for any obligations to third parties in excess of the Capital
Contributions actually made under Sections 3.1, 3.2 and 3.3
hereof.


5.2                               Indemnification.


(a)                                  The Members (including their members,
partners, officers, directors, agents, employees and representatives) shall be
indemnified by the Company to the fullest extent permitted by law, against any
losses, judgments, liabilities, expenses and amounts paid in settlement of any
claims sustained by it or any of them in connection with the Company, provided
that (1) the Member has determined in good faith that such course of conduct
was in, and not opposed to, the best interests of the Company and such
liability or loss was not the result of gross negligence or willful misconduct,
or a material breach of this Agreement on the part of the Member or such
person, and (2) any such indemnification will only be recoverable from the
assets of the Company and the Members shall not have any liability on account
thereof.  All rights to indemnification
permitted herein and payment of associated expenses shall not be affected by
the dissolution or other cessation of the existence of any Member, or the
withdrawal, adjudication of bankruptcy or insolvency of any Member.


(b)                                 Expenses incurred in defending a threatened
or pending civil, administrative or criminal action, suit or proceeding against
any person who may be entitled to indemnification pursuant to this Section
5.2 may be paid by the Company in advance of the final disposition of such
action, suit or proceeding, if (i) the legal action relates to the performance
of duties or services by such person on behalf of the Company, (ii) the legal
action is initiated by a third party who is not a Member, and (iii) such person
undertakes to repay the advanced funds to the Company in cases in which it is
not entitled to indemnification under this Section 5.2.


5.3                               Other Business Activities.  Subject to the other express provisions of
this Agreement, each Member and any Affiliate thereof may engage in and possess
interests in other business ventures of any and every type and description,
independently or with others, including ones in direct or indirect competition
with the Company, with no obligation to offer to the Company or any other
Member the right to participate therein or to account therefor.  Notwithstanding the foregoing, CP Investor
and its affiliates (except for Swinerton, Inc.) shall not own an interest in or
participate in the acquisition, development or redevelopment of any project
similar to any component of the Property in or within thirty (30) miles of
Vail, Colorado on their own or with any other party during the term of the
Management Agreements or Development Agreements.


5.4                               Information.  In
addition to the other rights specifically set forth in this Agreement, each
Member is entitled to the following information: (a) true and full information
regarding the status of the business and financial condition of the Company;
(b) promptly after becoming available, a copy of the Company’s federal, state
and local income tax returns for each year; (c) a current list of the name and
last known business, residence or mailing address of each Member; (d) a copy of
this Agreement, the Certificate, and all amendments to such documents; and (e)
other information regarding the affairs of the Company to which that Member is
entitled pursuant to the Act.


5.5                               Press Releases.  No public announcement, press release or
other similar public disclosure of the terms of this Agreement, the activities
of the Company, or the plans of the Company will be made unless same is
authorized in writing by the BH Investor. 
However, notwithstanding the preceding sentence, any Member shall have
the right, without obtaining the consent of any other Member, to make such
disclosures as may, in the reasonable judgment of such Member’s counsel, be
required by applicable law.  Furthermore,
it is agreed that the foregoing provisions of this Section 5.5 shall not
prohibit a Member from disclosing such information to the accountants,
attorneys, consultants, lenders and vendors of the Company as is necessary to
allow such parties to provide services, funds or goods to the Company.



 17
 









Marketing
and promotional materials approved as part of the Business Plan shall be
excluded from this Section 5.5. 
The Members have agreed that if a Member breaches the obligation set
forth in the first sentence of this Section 5.5 (the “Non-Disclosure
Obligation”), the actual damages that will be incurred by the other Members
as a result of such breach would be extremely difficult or impracticable to determine.  Therefore, the Members agree that if a Member
or any Affiliate of a Member breaches the Non-Disclosure Obligation, such
Member shall pay to each of the other Members liquidated damages (the “Liquidated
Damages”) in the amount of Fifty Thousand Dollars ($50,000) for each such
breach, such amount having been agreed upon, after negotiation, as the Members’
reasonable estimate of the damages that will be suffered by reason of a breach
of the Non-Disclosure Obligation.  Any
Liquidated Damages becoming payable pursuant to this Section 5.5 shall
be paid within ten (10) days after the breach of the Non-Disclosure Obligation
giving rise to the Liquidated Damages. 
If not paid within such ten (10) day period, the Liquidated Damages
shall thereafter bear interest at the lesser of twelve percent (12%) per annum
or the highest rate permitted by applicable law.  All Company distributions and other payments
that otherwise would be made to the Member that is liable for Liquidated
Damages shall be paid to the other Members until the Liquidated Damages and all
interest accrued thereon are paid in full (with all such payments being applied
first to accrued and unpaid interest and then to the Liquidated Damages).


ARTICLE
VI.


DISTRIBUTIONS/ALLOCATIONS
OF PROFITS AND LOSSES


6.1                               Distributions of Distributable Cash from Operations or from a Capital
Transaction.  Within twenty (20) days following the end of
each calendar quarter, the Company shall distribute Distributable Cash
(including Distributable Cash arising from a Capital Transaction) in the
following order of priority:


(a)                                  First, to BH Investor and CP Investor in
proportion to their respective Company Percentages, until they have each
received distributions resulting from their respective investment of Additional
Scheduled Capital Contributions and Additional Capital Contributions in the
Company sufficient to provide an IRR of twenty-five percent (25%) (including
the return of their Additional Scheduled Capital Contributions and Additional
Capital Contributions);


(b)                                 Second, to BH Investor and CP Investor in
proportion to their respective Company Percentages, until they have each
received distributions resulting from their respective investment of their
Initial Capital Contributions in the Company sufficient to provide an IRR of
twenty-five percent (25%) (including the return of their Initial Capital
Contributions);


(c)                                  Third, fifty percent (50%) to BH Investor and
fifty percent (50%) to CP Investor.


(d)                                 Notwithstanding anything to the contrary set
forth above, if any Member’s Company Percentage has been diluted by failure to
make an Additional Capital Contribution pursuant to Section 3.3, then
the distribution percentage with respect to the Delinquent Member set forth in
paragraphs (a), (b) and (c) above shall be reduced in proportion by the same
percentage as the Member’s Company Percentage has been reduced as a result of
the dilution and the percentage of the non-diluted Member shall be increased by
the same amount.


(e)                                  An example of the calculation of the
distributions contemplated above is set forth in Exhibit E attached
hereto.



 18















(f)                                    Notwithstanding anything set forth herein,
upon receipt of the proceeds of the initial third party permanent financing, BH
Investor shall be entitled to be repaid from the proceeds of such financing in
the amount of the Acquisition Loan plus any interest that has accrued thereon.


(g)                                 In the event cash distributions are available
at the end of each calendar quarter, CP Investor has the right, upon request to
the BH Investor, to receive a minimum amount of forty-five percent (45%) of
taxable income allocated to the CP Investor.


ARTICLE VII.



ALLOCATION OF PROFITS AND LOSSES


7.1                               Allocation of Profits and
Losses.  After
application of Section 7.3 hereof, Profits and Losses for each fiscal
year or a portion thereof shall be allocated among the Members as of each
Adjustment Date so as to reduce, proportionately, in the case of any Profits,
the difference between their respective Target Accounts and Partially Adjusted
Capital Accounts as of each Adjustment Date and, in the case of Losses, the
difference between their respective Partially Adjusted Capital Accounts and
Target Accounts as of each Adjustment Date. 
To the extent that, in the fiscal year in which all or substantially all
of the Company’s assets are disposed of, or in the fiscal year in which the
Company is liquidated, the allocation of Profit or Loss set forth in the
preceding sentence does not cause each Member’s Partially Adjusted Capital
Account balance to equal the balance of its Target Account, items of income or
gain will be reallocated to any Member with a Partially Adjusted Capital
Account which is less than its Target Account, and items of loss, deduction or
expense will be reallocated to any Member with a Partially Adjusted Capital
Account that is greater than its Target Account in such manner as to reduce, to
the greatest extent possible, the difference between each Member’s respective
balance in its Target Account and its Partially Adjusted Capital Account
balance.


7.2                               Limitation on Loss Allocations.  Notwithstanding anything in this Agreement to
the contrary, no Losses or item of deduction shall be allocated to a Member if
such allocation would cause the Capital Account of such Member to have a
deficit in excess of the sum of (a) the amount of additional capital such
Member would be required to contribute to the Company if the Company were to
dissolve on the last day of the accounting period to which such allocation
relates, if any, plus (b) such Member’s distributive share of Company Minimum
Gain as of the last day of such accounting period, determined pursuant to
Regulations Section 1.704-2(g)(1), plus (c) such Member’s share of Member
Minimum Gain as of the last day of such year, determined pursuant to Regulation
Section 1.704-2(i)(5).  Any amounts not
allocated to a Member pursuant to the limitations set forth in this paragraph  shall be allocated to the other Members to
the extent possible without violating the limitations set forth in this
paragraph.  For purposes of the foregoing
provisions, the balance of a Member’s Capital Account shall be determined after
reducing such Capital Account by (i) all anticipated allocations of loss or
deduction pursuant to Sections 704(e)(2) and 706(d) of the Code, and Section
1.751-1(b)(2)(ii) of the Regulations, and (ii) anticipated distributions to
such Member to the extent such anticipated distributions exceed anticipated
increases to such Member’s Capital Account during or prior to the year of
distribution (other than increases which may not be taken into account pursuant
to Section 1.704-1(b)(2)(ii)(d)(6) of the Regulations).


7.3                               Special Allocations.  The following special allocations shall be
made in the following order:


(a)                                  Minimum Gain Chargeback. 
Except as otherwise provided in Section 1.704-2(f) of the
Regulations, in the event there is a net decrease in Company Minimum Gain
during a Company taxable year, each Member shall be allocated (before any other
allocation is made



 19
 









pursuant
to this Section 7.3) items of income and gain for such year (and, if
necessary, for subsequent years) equal to that Member’s share of the net
decrease in Company Minimum Gain.  The
determination of a Member’s share of the net decrease in Company Minimum Gain
shall be determined in accordance with Regulations Section 1.704-2(g).  The items to be specially allocated to the Members
in accordance with this Section 7.3(a) shall be determined in accordance
with Regulation Section 1.704-2(f)(6). 
This Section 7.3(a) is intended to comply with the Minimum Gain
chargeback requirement set forth in Section 1.704-2(f) of the Regulations
and shall be interpreted consistently therewith.


(b)                                 Member Minimum Gain Chargeback. 
Except as otherwise provided in Section 1.704-2(i)(4), in the event
there is a net decrease in Member Minimum Gain during a Company taxable year,
each Member who has a share of that Member Minimum Gain as of the beginning of
the year, to the extent required by Regulation Section 1.704-2(i)(4), shall be
specially allocated items of Company income and gain for such year (and, if
necessary, subsequent years) equal to that Member’s share of the net decrease
in Member Minimum Gain.  Allocations
pursuant to this subparagraph (b) shall be made in accordance with Regulation
Section 1.704-2(i)(4).  This Section
7.3(b) is intended to comply with the requirement set forth in Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.


(c)                                  Qualified Income Offset
Allocation.  In the event any Member unexpectedly receives
any adjustments, allocations or distributions described in Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6)
or which would cause the negative balance in such Member’s Capital Account to
exceed the sum of (i) his obligation to restore a Capital Account deficit upon
liquidation of the Company, plus (ii) his share of Company Minimum Gain
determined pursuant to Regulation Section 1.704-2(g)(1), plus (iii) such Member’s
share of Member Minimum Gain determined pursuant to Regulation Section 1.704-2(i)(5),
items of Company income and gain shall be specially allocated to such Member in
an amount and manner sufficient to eliminate such excess negative balance in
his Capital Account as quickly as possible. 
This Section 7.3(c) is intended to comply with the alternative
test for economic effect set forth in Regulation Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith.


(d)                                 Gross Income Allocation.  In
the event any Member has a deficit Capital Account at the end of any Company
fiscal year which is in excess of the sum of (i) any amounts such Member is
obligated to restore pursuant to this Agreement, plus (ii) such Member’s
distributive share of Minimum Gain as of such date, plus such Member’s share of
Member Minimum Gain determined pursuant to Regulation Section 1.704-2(i)(5),
each such Member shall be specially allocated items of Company income and gain
in the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 7.3(d) shall be made only if and to
the extent that such Member would have a deficit Capital Account in excess of
such sum after all other allocations provided for in this Section 7.3
have been made, except assuming that Section 7.3(c) above and this Section
7.3(d) were not contained in this Agreement.


(e)                                  Allocation of Nonrecourse
Deductions.  Nonrecourse Deductions shall be allocated to
the Members in accordance with their respective Company Percentages.


(f)                                    Allocation of Member Nonrecourse
Deductions.  Member Nonrecourse Deductions shall be
allocated as prescribed by the Regulations.


(g)                                 Basis Adjustment under
Section 754.  To the extent an adjustment to the adjusted
tax basis of any Company assets pursuant to Code Section 734(b) or Code Section
743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of



 20
 









gain,
if the adjustment increases the basis of the asset, or loss, if the adjustment
decreases such basis, and such gain or loss shall be specially allocated to the
Members in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations.


7.4                               Built-In Gain or Loss/Section
704(c) Tax Allocations.  In the event that the Capital Accounts of the Members are credited with
or adjusted to reflect the Gross Asset Value of the Company’s property and
assets, 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 pursuant to Section 704(c) of the Code and
the Regulations thereunder, so as to take account of the variation between the
adjusted tax basis and Gross Asset Value of such property in a manner determined
by Approval by Company Vote.  Any
deductions, income, gain or loss specially allocated pursuant to this Section
7.4 shall not be taken into account for purposes of determining Profits or
Losses or for purposes of adjusting a Member’s Capital Account.


7.5                               Recapture.  Ordinary income arising from the recapture of
depreciation and unrecaptured Section 1250 gain shall be allocated to the
Members in the manner that is prescribed by the Regulations, or if the
Regulations do not prescribe a manner in which depreciation is to be
recaptured, then depreciation shall be recaptured in the same manner as such
depreciation was allocated to the Members.


7.6                               Retention of Section 751 Assets.  Upon the occurrence of an event which would
otherwise cause a reduction in a Member’s respective interest in the Company’s
Section 751 assets (“substantially appreciated inventory” and “unrealized
receivables” as defined in Section 751 of the Code), such as the admission of
new Members or otherwise, no such reduction shall occur with respect to Members
who were Members immediately preceding such event and who continue to be
Members after the occurrence of such event but, rather, each such Member shall
retain his respective interest in the Company’s Section 751 assets existing
immediately prior to such event.


7.7                               Prohibition Against Retroactive
Allocations.  In
the event that a Member Transfers all or a portion of its Company interest, or
if there is a reduction in a Member’s Company Percentage due to the admission
of new Members or otherwise, each Member’s distributive share of Company items
of income, loss, credit, etc., shall be allocated using any permissible method
under Code Section 706 and the related Treasury Regulations in the sole
discretion of the BH Investor.


7.8                               Allocation of Nonrecourse
Liabilities.  The “excess nonrecourse liabilities” of the
Company (within the meaning of Section 1.752-3(a)(3) of the Regulations) shall
be allocated to the Members in accordance with their respective Company
Percentage.


ARTICLE VIII.



TRANSFER OF COMPANY INTEREST


8.1                               General Prohibition Against
Transfers of Member’s Interest.  A Member may not Transfer any or all of such Member’s interest in the
Company except as permitted in Section 8.2 or 8.4; provided,
however, that BH Investor may Transfer all or any portion of its interest in
the Company to an Affiliate without the consent of any other Member and CP
Investor may Transfer all or any portion of its interest in the Company to an
Affiliate with the consent of BH Investor, which consent shall not be
unreasonably withheld.  CP Investor may
transfer the ownership interests in CP Investor so long as Jeff Nelsen remains
an investor and a managing member in CP Investors and retains the ability to
direct and is actively involved, to the satisfaction of BH Investor, in the
day-to-day management of the business affairs of CP Investor and such ownership
interests are not transferred to any person or entity that would



 21
 









adversely
impact the REIT status of BH REIT or the reputation of the Company.  Any act in violation of this Article shall be
null and void as against the Company and the Members, except as otherwise
provided by law.


8.2                               Conditions Upon Transfers by a
Member.  A Member may Transfer all or any part of such
Member’s interest in the Company only with the written consent of the Members
(subject to Approval by Company Vote); provided, however, that the Members’
written consent shall not be given unless:


(i)                                     the Members are satisfied that the proposed
Transfer will not have any adverse effect upon the Company or the Members under
federal income tax laws then in effect or cause any default in any loan
documents of the Company or the Property owner;


(ii)                                  the Members have received, if requested, an
opinion from counsel for the Company to the effect that such Transfer will not
violate federal or state securities laws or regulations;


(iii)                               the person, firm or entity to acquire such
interest agrees to comply with all terms of this Agreement, including without
limitation Section 8.5 below; and


(iv)                              the Members confirm with tax counsel for BH
REIT that such transfer will not adversely impact the REIT Status of BH REIT.


8.3                               Substitution of Assignee.   Except as otherwise permitted herein, no
Transferee of the whole or any portion of a Member’s interest in the Company
shall have the right to be admitted to the Company and become a Member unless
and until all of the Members in their absolute discretion consent and all of
the following conditions are satisfied:


(a)                                  the Transferor and Transferee execute and
acknowledge a written instrument of assignment, together with such other
instruments as the Members may deem necessary or desirable to effect the
admission of the Transferee as a substitute Member; and


(b)                                 an instrument specifically Transferring such
interest, signed by both assignor and assignee, shall be filed with the
remaining Member, and until such instrument is so filed, the Company shall not
recognize any Transfer of interest for the purposes of making payments of
profits, income or any other distribution with respect to such interest.


8.4                               Buy-Sell Agreement.


(a)                                  Upon the failure of Members to agree on any
Major Decision or any other issue that could have a material impact on the
Company, in the event of termination of the Hotel Development Agreement, the Fractional
Development Agreement or the Fractional Management Agreement, or at any time
after three (3) years after the execution of this Agreement, any Member that is
not a Delinquent Member (the “Offeror”) may make an offer in writing
(the “Offer”) to the other Members (the “Offeree”), which shall
state an amount (the “Buy-Sell Value”) determined in the sole and
absolute discretion of the Offeror.  The
Buy-Sell Value shall equal the fair market value of the Assets.  An offer made pursuant to this Section 8.4
shall constitute an irrevocable offer by the Offeror to the Offeree either (i)
to sell all, but not less than all, of the Offeror’s interests in the Company
(including any interests held by, or Transferred to, its Affiliates), so long
as the Offeree is not a Delinquent Member, or (ii) to purchase all, but not
less than all, of the Offeree’s interests in the Company (including any
interests held by or Transferred to its Affiliates).



 22
 









(b)                                 If the Offeree believes in good faith that
the Buy-Sell Value represents less than the fair market value of the Assets at
the time of the Offer, then Offeree may, within ten (10) days of receipt of the
Offer, deliver a written notice to the Offeror indicating that that an
appraisal shall be required to determine the Buy-Sell Value.  If the Offeree does not deliver such a notice
within the ten (10) -day period, the Offeree will be deemed to have accepted
the Buy-Sell Value.  Both Offeror and
Offeree shall each select an appraiser from a nationally recognized business
valuation services firm qualified to perform hotel/spa business valuation
appraisals within ten (10) days after receipt by Offeror of written notice that
an appraisal shall be required.  The two
appraisers shall determine the Buy-Sell Value as of the time of the Offer
within thirty (30) days after the expiration of the 10-day appraiser selection
period.  If the two appraisers can not
agree on the Buy-Sell Value within the 30-day period (the “Initial Appraisal
Period”) then the appraisers shall jointly select a third appraiser with
similar qualifications within five (5) business days after the end of the
Initial Appraisal Period and such appraiser shall determine the Buy-Sell Value
within thirty (30) days after the end of the five (5) -day appraiser selection
period (the “Additional Appraisal Period”).  The determination of the Buy-Sell Value by
the third appraiser shall be final.


(c)                                  The Offeree shall have thirty (30) days after
the later of (i) receipt of an Offer made pursuant to this Section 8.4(a)
or (ii) the expiration of the Initial Appraisal Period (or, if necessary, the
Additional Appraisal Period), if necessary, to elect either (A) to sell its
interests in the Company at a price equal to the amount the Offeree would have
received pursuant to a liquidation of the Company if the Assets had been sold
to a third party for the Buy-Sell Value and the proceeds therefrom had been
applied and distributed in accordance with Section 12.2 (assuming that
all allocations resulting from the sale had been made and no reserves are
established) (the “Buy-Sell Election Period”); or (B) to buy the Offeror’s
interest in the Company at a price equal to the amount the Offeror would have
received pursuant to a liquidation of the Company if the Assets had been sold
to a third party for the Buy-Sell Value and the proceeds therefrom had been
applied and distributed in accordance with Section 12.2 (assuming that
all allocations resulting from the sale had been made and no reserves are
established).  If the Offeree fails to
make such an election within the Buy-Sell Election Period, the Offeree shall be
deemed to have elected to sell its interests in the Company.  Within ten (10) days of the expiration of the
Buy-Sell Election Period, the purchasing Member shall deposit into escrow a
non-refundable amount equal to one percent (1.0%) of the Buy-Sell Value (the “Escrow
Deposit”) with a nationally recognized title insurance company mutually
acceptable to the Members, which amount shall be applied to the purchase price
as of the Closing.  In any case in which
there is more than one purchasing Member, the purchasing Members shall
determine the proportions of the interests in the Company to be purchased by
each such Member.


(d)                                 Closing shall occur at the offices of the
Company no later than thirty (30) days following the date after the expiration
of the Buy-Sell Election Period.  It is
understood and agreed that if a portion of the Assets are sold between the time
that the Offeror initiates the procedure set forth Section 8.4(a)
above and closing, the proceeds of such sale shall be retained by the Company
and not distributed to the Members.  At
the closing, the applicable interests in the Company shall be duly conveyed,
free of all liens and encumbrances, and the purchase price shall be paid by
wire transfer of immediately available federal funds.  At the election of the purchasing Member, the
applicable interests in the Company to be purchased may be acquired in the name
of a nominee (whether or not such nominee is an Affiliate of the Purchasing
Member), provided, that the Purchasing Member shall have designated such
nominee by written notice prior to the date of purchase.  It shall be a condition of the selling Member’s
obligation to proceed with any such purchase that the purchasing Member shall
have obtained releases of any guaranties of indebtedness of the Company
executed by the selling Member or any Affiliates of (or principals in) such
selling Member.  The purchasing Member,
in addition to paying at the closing the purchase price, shall be obligated to
loan to the Company an amount sufficient to discharge at the closing all
outstanding and unpaid obligations of the Company to the selling Member as of
such time.



 23
 









(e)                                  Upon receipt of the purchase price, the
selling Member shall execute and deliver all documents reasonably required to
transfer the interest in the Company being sold.  The selling Member shall also execute such
resignations and other documents as may be reasonably required by counsel for
the Company to accomplish the withdrawal of the selling Member as a Member of
the Company and the purchasing Member shall assume all of the selling Member’s
obligations to the Company and any of its creditors under any loans to the
Company permitted by this Agreement, such assumptions to be in form reasonably
satisfactory to counsel for the selling Member.


(f)                                    It is expressly agreed that the remedy at law
for breach of any of the obligations set forth in this Section 8.4 is
inadequate in view of (i) the complexities and uncertainties in measuring the
actual damages that would be sustained by reason of the failure of a Member to
comply fully with each of said obligations, and (ii) the uniqueness of the
Company business and Members’ relationship. 
Accordingly, each of the aforesaid obligations shall be, and is hereby
expressly made, enforceable by specific performance.


8.5                               Cost and Expense of Transfer;
Allocation of Profits and Losses.  All costs and expenses incurred by the Company in connection with any
disposition of a Member’s interest, including any filing, recording and
publishing costs and the fees and disbursements of counsel, shall be paid by
the Member disposing of such interest. 
If an interest in the Company is disposed of pursuant to this Article
VIII, the selling Member shall nevertheless be entitled to a portion of the
profits and be charged with a portion of the losses allocated to such interest
or part thereof for the fiscal year of the Company in which such disposition
occurs, consistent with Section 7.7 above.


ARTICLE IX.



OWNERSHIP OF COMPANY PROPERTY


All real or personal
property, including all improvements placed or located thereon, acquired by the
Company shall be owned by and in the name of the Company, such ownership being
subject to the other terms and provisions of this Agreement.


ARTICLE X.



FISCAL MATTERS


10.1                        Fiscal Year.  The
fiscal year of the Company shall be the calendar year.


10.2                        Records; Financial
Statements.


(a)                                  Proper books and records shall be kept with
reference to all Company transactions at the principal place of business of the
Company, and each Member shall at all reasonable times during business hours
have access thereto.  The books shall be
kept in such manner of accounting as shall properly reflect the actions of the
Company in accordance with accounting principles generally accepted within the
United States and consistently applied on such basis as will, in the opinion of
the Company’s accountants, be most advantageous to the Company.  The books and records shall include the
designation and identification of any property in which the Company owns a
beneficial interest.  The books and
records of the Company shall be reviewed annually at the expense of the Company
by an independent certified public accountant selected by the BH Investor, who
shall prepare and deliver to the Company, for filing, the appropriate federal
Company income tax return(s) before March 31 of each year.  Each Member shall receive a copy of the
Company income tax return at least ten (10) business days prior



 24
 









to
filing such return.  The Company shall
report its operations for tax purposes on the accrual basis.  K-1 statements for each partner must be
delivered no later than March 30th of each year.


(b)                                 The BH Investor shall, at Company expense,
furnish (or request the manager of the Property to furnish) to the Members (i)
on or before the thirtieth (30th) day of each month, an unaudited statement
setting forth and describing in reasonable detail the receipts and expenditures
of the Company during the preceding month and comparing the results of operations
of the Company for such month and for the year to date to the appropriate
Operating Budget, (ii) on or before sixty (60) days after the end of each
fiscal year, a balance sheet of the Company dated as of the end of such fiscal
year, a statement of the Members’ Capital Accounts and Capital Contribution
Balances, a statement of Distributable Cash, and a statement setting forth the
Profits and Losses for such fiscal year, audited by an independent firm of
certified public accountants as determined by the BH Investor, and (iii) from
time to time, all other information relating to the Company and the business
and its affairs reasonably requested by any Member.


10.3                        Accounts.  All
funds of the Company shall be deposited in its name in an account or accounts
maintained at a bank designated by the BH Investor or with an agent designated
by the Members.  Checks shall be drawn
upon the Company account or accounts only for purposes of the Company and shall
be signed by the Member holding a Majority in Interest of the Company
Percentages or such officers as the Member holding a Majority in Interest of
the Company Percentages shall designate. 
Notwithstanding the foregoing, CP Investor may designate such bank to be
used solely for cash used for day to day operations so long as such bank is
federally chartered and insured and the short term unsecured debt obligations
of such bank are rated at least “A-1” by S&P, “P-1” by Moody’s and “F-1+”
by Fitch if deposits are held for a period of less than a year or the long term
unsecured debt obligations of such bank are rated at least “ AA-” by S&P, “Aa2”
by Moody’s and “AA” by Fitch if deposits are held for a period of one year or
more.


10.4                        Federal Tax Elections.  All
elections for federal tax purposes, including but not limited to an election to
adjust the basis of the assets of the Company pursuant to Section 754 of the
Code, and the adoption of accelerated depreciation or cost recovery methods
required or permitted to be made by the Company under the Code shall be
determined by the BH Investor.


10.5                        Tax Audits.  The
BH Investor shall be designated as the “tax matters member” of the Company as
defined in Sections 6221 et seq, of the Code and, in the event of an
audit of the Company by the Internal Revenue Service (“IRS”), the BH
Investor, at Company expense, shall have the exclusive right to conduct all
negotiations with the Internal Revenue Service on behalf of the Company, and
the attorneys and accountants selected by the Members to conduct such
negotiations are hereby specifically authorized by the Members to act on behalf
of the Company in such negotiations, and each Member will execute such further
authority as the IRS may require to permit the BH Investor and its selected
attorneys and accountants to so represent the Members; provided the BH Investor
shall not take any action take any action contemplated by Sections 6222 through
6232 of the Code without prior Approval by Company Vote.  This provision is not intended to authorize
the BH Investor to take any action left to the determination of an individual
Member under Sections 6222 through 6232 of the Code.



 25
 









ARTICLE XI.



AMENDMENT


This Agreement may not be
altered or amended except by a written instrument signed by the Members,
provided that no amendment may reduce a Member’s economic interest in the
Company without the Member’s prior written consent


ARTICLE XII.



DISSOLUTION OF THE COMPANY


12.1                        Dissolution.


(a)                                  It is the intention of the Members that the
Company shall be continued by the Members, or those remaining, pursuant to the
provisions of this Agreement, notwithstanding the occurrence of any event which
would otherwise result in a dissolution of the Company pursuant to the law of
the State of Delaware and no Member shall be released or relieved of any duty
or obligation hereunder by reason of any such dissolution; provided, however,
that the Company shall be terminated, its affairs wound up and its property and
assets distributed on the earlier of:


(i)                                     expiration of the Company term as provided in
Section 1.5 hereof;


(ii)                                  the written consent of the Members;


(iii)                               the disposition (including condemnation or
casualty loss) of all or substantially all of the property and assets of the
Company and receipt of the proceeds from such sale of other disposition (except
under circumstances where (x) all or a portion of the purchase price is payable
after the closing of the sale or other disposition, or (y) the Company retains
a material economic or ownership interest in the entity to which all or
substantially all of its assets are Transferred); or


(iv)                              dissolution by law or appropriate judicial
decree.


(b)                                 Dissolution of the Company shall be effective
on December 31, 2057 or the day on which the event occurs giving rise to the
dissolution, but the Company shall not terminate until the Certificate shall
have been canceled and the assets of the Company shall have been distributed as
provided below.  Notwithstanding the
dissolution of the Company, prior to the termination of the Company as
aforesaid, the business of the Company and the affairs of the Members shall
continue to be governed by this Agreement.


(c)                                  The bankruptcy, insolvency, dissolution, or
adjudication of incompetency of a Member shall not cause the dissolution of the
Company.  In the event of the bankruptcy,
or incompetency of a Member, its administrators or representatives (“Successor”)
shall have the same rights that such Member would have had if it had not become
bankrupt, except that, in the event of bankruptcy, such Successor shall have no
right to participate in the management of the Company or vote on any Company
matter unless such Successor is admitted to the Company as a Member pursuant to
Section 8.5, and the interest of such Member in the Company shall, until
the termination of the Company, otherwise be subject to the terms, provisions
and conditions of this Agreement as if such Member had not become
bankrupt.  In the event of any other
withdrawal of a Member, the Member shall only be entitled to



 26
 









Company
distributions distributable to it but not actually paid to it prior to such
withdrawal and shall not have any right to have its interest in the Company
purchased or paid for.


(d)                                 Notwithstanding anything in this Agreement to
the contrary, upon a sale of all or substantially all of the assets of the
Company in a single transaction (a “Single Sale Transaction”) where all
or any portion of the consideration payable to the Company is to be received by
the Company more than ninety (90) days after the date on which such Single Sale
Transaction occurs, the Company shall continue for purposes of collecting the
deferred payments and making distributions to the Members.  In such event (i) gain recognized and cash
distributed in any year as a result of such Single Sale Transaction shall be allocated
and distributed among the Members in the same proportion as such gain and cash
would have been allocated and distributed were the entire gain resulting from
such Single Sale Transaction required to be recognized for Federal income tax
purposes in the year in which such Single Sale Transaction occurred; and (ii)
income attributable to interest on deferred payments shall be allocated among,
and such interest shall be distributed to, the Members as if the deferred
payment obligations received by the Company had been distributed to the Members
pursuant to Section 6.1.


12.2                        Wind-Up of Affairs.  As expeditiously as possible following the
occurrence of an event giving rise to a termination of the Company pursuant to Section
12.1 above, a liquidator appointed by the BH Investor (subject to Approval
by Company Vote) (such liquidator is referred to herein as the “Liquidator”)
shall liquidate the assets of the Company, apply and distribute the proceeds
thereof as contemplated by this Agreement and cause the cancellation of the
Certificate.  As soon as possible after
the dissolution of the Company, a full account of the assets and liabilities of
the Company shall be taken, and a statement shall be prepared by the
independent accountants then acting for the Company setting forth the assets
and liabilities of the Company.  A copy
of such statement shall be furnished to each of the Members within ninety (90)
days after such dissolution.  Thereafter,
the Liquidator shall wind up the affairs of the Company and distribute the
Company assets in the following order of priority:


(a)                                  to creditors (including Members who are
creditors) in satisfaction of the liabilities of the Company, other than
liabilities to existing and former Members for distributions from the Company;


(b)                                 to the establishment of any reserves which
the Liquidator deems reasonably necessary for any contingencies or unforeseen
liabilities or obligations of the Company. 
Such reserves shall be paid over by the Liquidator to an escrow agent or
shall be held by the Liquidator for the purpose of disbursing such reserves in
payment of any of such contingencies.  At
the expiration of such period as the Liquidator deems advisable, the balance
thereof shall be distributed in the manner and order provided in this Section;


(c)                                  to existing and former Members in
satisfaction of any liabilities to them, if any, for distributions from the
Company;


(d)                                 to the Members in accordance with Section
6.1 above.


Notwithstanding
anything to the contrary, in the event the Company is “liquidated” within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g) and an event described in Section
12.1(a) shall have occurred, liquidating distributions shall be made
pursuant to this Section 12.2 by the end of the taxable year in which
the Company is liquidated, or, if later, within ninety (90) days after the date
of such liquidation.  Distributions
pursuant to the preceding sentence may be made to a trust for the purpose of an
orderly liquidation of the Company by the trust in accordance with the Act.



 27
 









12.3                        Compliance with Treasury Regulations.  It is
the intent of the Members that the allocations provided in Section 7.1
result in distributions required pursuant to Section 12.2(d) being in
accordance with positive Capital Accounts as provided for in the Treasury
Regulations under Code Section 704(b). 
However, if after giving hypothetical effect to the allocations required
by Section 7.1, the Capital Accounts of the Members are in such ratios
or balances that distributions pursuant to Section 12.2(d) would not be
in accordance with the positive Capital Accounts of the Members as required by
the Treasury Regulations under Code Section 704(b), such failure shall not
affect or alter the distributions required by Section 12.2(d).  Rather, the liquidator will have the
authority to make other allocations of Profits and Losses (or items thereof)
among the Members which, to the extent possible, will result in the Capital
Accounts of each Members having a balance prior to distribution equal to the
amount of distributions to be received by such Members pursuant to Section
12.2(d).


12.4                        No Deficit Capital Account
Obligation.  Notwithstanding anything else to the contrary
in this Agreement, upon a liquidation within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Regulations, if any Member has a deficit Capital
Account (after giving effect to all contributions, distributions, allocations
and other Capital Account adjustments for all taxable years, including the year
during which such liquidation occurs), such Member shall have no obligation to
make any Capital Contribution, and the negative balance of such Member’s
Capital Account shall not be considered a debt owed by such Member to the
Company or to any other Person for any purpose whatsoever.


12.5                        Distribution in Kind.  If any assets of the Company are to be
distributed in kind, the net fair market value of such assets as of the date of
dissolution shall be determined by independent appraisal or by agreement of the
Members.  Prior to distribution, such
assets shall be deemed to have been sold for their fair market values and the
Capital Accounts of the Members shall be adjusted pursuant to the terms of this
Agreement to reflect the allocation of gain or loss which would have resulted
from such deemed sale.


12.6                        Cancellation of Certificate.  Upon the dissolution and the final
liquidation of the Company, there shall be filed for record as provided by
Delaware law a Certificate of Cancellation executed by the Member holding the
Majority in Interest of the Company Percentages.


12.7                        Return of Contribution
Nonrecourse to Other Members.  Except as provided by law or as expressly provided in this Agreement,
upon dissolution each Member shall look solely to the assets of the Company for
the return of its Capital Contribution. 
If the Company property remaining after the payment or discharge of the
debts and liabilities of the Company is insufficient to return the cash
contribution of one or more Members, such Member or Members shall have no
recourse against any other Member.


ARTICLE XIII.



MISCELLANEOUS PROVISIONS


13.1                        Notices.  Except as may be otherwise specifically
provided in this Agreement, all notices required or permitted hereunder shall
be in writing and shall be deemed to be delivered on the earlier of (i) when
delivered in person, or (ii) when delivered by commercial courier such as
Federal Express, Express Mail or other overnight delivery service where
delivery is evidenced by written receipt, addressed to the appropriate party at
the addresses set forth in Article II, or such other address of the party as
may have been changed as provided herein. 
Any party may change the address to which notices will be given by
giving notice of such change to the other parties, in accordance with the
provisions of this Section 13.1.



 28
 









13.2                        Governing Law.  This Agreement shall be construed under and
in accordance with the laws of the State of Delaware, excluding any conflicts
of law rule or principle which might refer such construction to the laws of
another state or country.


13.3                        Execution of Other Agreements.  The parties hereto covenant and agree that
they will execute such other further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the Company created
by this Agreement.  The Members
acknowledge that the Company will enter into the Hotel Management Agreement,
the Fractional Management Agreement and the Fractional Development Agreement
and the Members agree to work together in good faith to finalize such
agreements.


13.4                        No Action for Partition.  No Member shall be entitled to bring an
action for partition against the Company, and each Member hereby irrevocably
waives, during the term of the Company and during the period of its liquidation
following any dissolution, any right to maintain an action for partition with respect
to any of the assets of the Company.


13.5                        Paragraph Headings.  The headings used in this Agreement are used
for administrative purposes only and do not constitute substantive matter to be
considered in construing the terms of this Agreement.


13.6                        Binding Effect and Benefit.  This Agreement is binding on, and shall inure
to the benefit of, all of the parties hereto and to their respective heirs,
executors, administrators, legal representatives, and successors and assigns
where permitted by this Agreement.


13.7                        Severability.  In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.


13.8                        Counterparts.  This Agreement may be executed in any number
of counterparts, all of which together shall constitute a single contract, and
each of such counterparts shall for all purposes be deemed to be an
original.  This Agreement may be executed
and delivered by fax (telecopier); any original signatures that are initially
delivered by fax shall be physically delivered with reasonable promptness
thereafter.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.


13.9                        Gender.  Wherever the context so requires, all words
herein in the neuter gender shall be deemed to include the feminine or
masculine genders, and vice versa, all singular words shall include the plural,
and all plural words shall include the singular.


13.10                 Entire Agreement.  This Agreement, together with all Exhibits
hereto and all other documents referred to herein, constitutes the entire
agreement among the parties hereto with 
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understanding, inducements or conditions, express
or implied, oral or written.


13.11                 Validity.  In the event that all or any portion of any
provision of this Agreement shall be held to be invalid, the same shall not
affect in any respect whatsoever the validity of the remainder of this
Agreement.



 29
 









13.12                 Indulgences, Etc.  Neither the failure nor any delay on the part
of any party hereto to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or any other right, remedy, power or privilege;
nor shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.  No
waiver shall be effective unless it is in writing and signed by the party
asserted to have granted such waiver.


13.13                 Remedies.  In the event of any breach of this Agreement
by any Member or default by any Member in connection with performing any
obligation of such Member under this Agreement, the Company’s and the
non-defaulting Member’s rights and remedies contained herein or in any other
agreement shall be cumulative and shall not be exclusive of any other rights or
remedies which the Company or the non-defaulting Member may have at law or in
equity.


13.14                 Interpretation.  No provision of this Agreement is to be
interpreted for or against either party because that party or that party’s
legal representative drafted such provision.


13.15                 Time of Essence.  TIME IS OF THE ESSENCE in connection with
this Agreement.


13.16                 Dispute Resolution.  THE
MEMBERS HAVE AGREED TO SUBMIT DISPUTES TO MANDATORY ARBITRATION IN ACCORDANCE
WITH THE PROVISIONS OF THIS SECTION 13.16.  EACH MEMBER WAIVES THE RIGHT TO COMMENCE AN
ACTION IN CONNECTION WITH THIS AGREEMENT IN ANY COURT AND EXPRESSLY AGREES TO
BE BOUND BY THE DECISION OF THE ARBITRATOR DETERMINED IN THIS SECTION 13.16;
PROVIDED, HOWEVER, THE WAIVER IN THIS SECTION 13.16 WILL NOT PREVENT ANY
MEMBER FROM COMMENCING AN ACTION IN ANY COURT FOR THE SOLE PURPOSES OF
ENFORCING THE OBLIGATION OF ANOTHER MEMBER TO SUBMIT TO BINDING ARBITRATION OR
THE ENFORCEMENT OF AN AWARD GRANTED BY ARBITRATION HEREIN.  NOTWITHSTANDING THE FOREGOING, PRIOR TO
SUBMITTING ANY DISPUTE HEREUNDER TO ARBITRATION, THE MEMBERS SHALL FIRST
ATTEMPT IN GOOD FAITH, FOR THIRTY (30) DAYS AFTER THE FIRST NOTICE GIVEN UNDER
THIS AGREEMENT REGARDING SUCH DISPUTE, TO RESOLVE ANY SUCH DISPUTE PROMPTLY BY
NEGOTIATION BETWEEN EXECUTIVES OF EACH PARTY WHO HAVE AUTHORITY TO SETTLE THE
DISPUTE, WHICH SHALL INCLUDE AN IN-PERSON MEETING BETWEEN SUCH EXECUTIVES IN
DALLAS, TEXAS.


(a)                                  Any dispute between the Members as to the interpretation
of any provision of this Agreement or the rights and obligations of any party
hereunder shall be resolved through binding arbitration as hereinafter provided in Denver, Colorado.  If arbitration is required to resolve
a dispute between the Members, a panel of three (3) arbitrators shall be
convened.  Each of BH Investor and CP
Investor shall each select one (1) arbitrator with at least five (5) years
experience in commercial real estate in general and hotel operation in particular,
and those two (2) arbitrators shall by agreement select a third arbitrator
having recognized expertise and at least five (5) years experience in
commercial real estate in general and hotel operation in particular.


(b)                                 The arbitrators selected pursuant to Section
13.16(b) above will establish the rules for proceeding with the arbitration
of the dispute, which will be binding upon all parties to the arbitration
proceeding.  The arbitrators may use the
rules of the American Arbitration Association for commercial arbitration but
are encouraged to adopt the rules the arbitrators deem appropriate to
accomplish the arbitration in the quickest and least expensive manner
possible.  Accordingly, the arbitrators
may (i) dispense with any formal rules of evidence and allow hearsay
testimony so as to limit



 30
 









the number of witnesses
required, (ii) minimize discovery procedures as the arbitrators deem
appropriate, (iii) limit the time for presentation of any party’s case as
well as the amount of information or number of witnesses to be presented in
connection with any hearing, and (iv) impose any other rules which the
arbitrators believe appropriate to effect a resolution of the dispute as
quickly and inexpensively as possible. 
In any event, the arbitrators (A) shall permit each side no more than
two (2) depositions (including any deposition of experts), which depositions
may not exceed four (4) hours each, one set of 10 interrogatories (inclusive of
sub-parts) and one set of five (5) document requests (inclusive of sub-parts);
(B) shall not permit any requests for admissions; (C) shall limit the hearing,
if any, to two (2) days; and (D) shall render their decision within sixty (60)
days of the filing of the arbitration.


(c)                                  The arbitrators will have the exclusive authority
to determine and award costs of arbitration and the costs incurred by any party
for its attorneys, advisors and consultants.


(d)                                 Any award made by the arbitrators shall be
binding on the Members and all parties to the arbitration and shall be enforceable
to the fullest extent of the law.


(e)                                  In reaching any determination or award, the
arbitrators will apply the laws of the state of Delaware.  Except as permitted under Section 13.16(d)
above, the arbitrators’ award will be limited to actual damages and will not
include consequential, special, punitive or exemplary damages.  Nothing contained in this Agreement will be
deemed to give the arbitrators any authority, power or right to alter, change,
amend, modify, add to or subtract from any of the provisions of this
Agreement.  All privileges under state
and federal law, including, without limitation, attorney-client, work product
and party communication privileges, shall be preserved and protected.  All experts engaged by a party must be
disclosed to the other party within fourteen (14) days after the date of notice
and demand for arbitration is given.


(f)                                    Notwithstanding any provision of this
Agreement to the contrary, any party may seek injunctive relief or other form
of ancillary relief at any time from any court of competent jurisdiction in
Denver, Colorado.  In the event that a
dispute or controversy requires emergency relief before the matter may be
resolved under the arbitration procedures of this Section 13.16,
notwithstanding the fact that any court of competent jurisdiction may enter an
order providing for injunctive or other form of ancillary relief, the parties
expressly agree that such arbitration procedures will still govern the ultimate
resolution of that portion of the dispute or controversy not resolved pursuant
to said court order.


13.17                 NOTICE OF INDEMNIFICATION. 
THE PARTIES TO THIS AGREEMENT HEREBY ACKNOWLEDGE AND AGREE THAT THIS
AGREEMENT CONTAINS CERTAIN INDEMNIFICATION PROVISIONS PURSUANT TO SECTION
5.2.


ARTICLE XIV.


SECURITIES LAW CONSIDERATIONS


14.1                        No Registration/Restriction on
Sale.  THE COMPANY INTERESTS HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, NOR HAVE THEY BEEN REGISTERED WITH THE SECURITIES
COMMISSION OF ANY OTHER APPLICABLE STATE, INCLUDING WITHOUT LIMITATION THE
STATE OF DELAWARE.  THE COMPANY INTERESTS
MAY BE ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THIS AGREEMENT AND IN A TRANSACTION WHICH IS



 31
 









EITHER
EXEMPT FROM REGISTRATION UNDER SUCH ACTS OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACTS.


(a)                                  Compliance with Securities Laws.  The Members acknowledge and
confirm that their Member interests have not been registered under any federal
or state securities laws by virtue of exemptions from the registration
provisions thereof and consequently cannot be sold except pursuant to
appropriate registration or exemption from registration as applicable.  No Transfer of all or any part of a Member
interest (except a Transfer upon the death, incapacity or bankruptcy of a
Member to his personal representative and beneficiaries), including, without
limitation, any Transfer of a right to distributions, profits and/or losses to
a person who does not become a Member, may be made unless the Company is
provided with an opinion of counsel acceptable to the Members (both as to the
identity of the counsel and the substance of the opinion) to the effect that
such offer or assignment (a) may be effected without registration under the
Securities Act of 1933, as amended, or the Investment Company Act of 1940, as
amended, and (b) does not violate any applicable federal or state securities laws
(including any investment suitability standards) applicable to the Company or
the Members.  Each of the Members hereby
(1) represents and warrants that it is an “accredited investor,” as such term
is defined in Rule 501(a) of Regulation D promulgated under the Securities Act
of 1933, as amended, and that the investment made by such Member in the Company
is for its own account for investment and (2) covenants that such Member shall
not sell, transfer, hypothecate or assign its interest in the Company or transfer
interests in such Member in contravention of the Securities Act of 1933, as
amended, or any applicable state securities laws.


14.2                        Access to Information.  Each of the Members represents to the Company
that before determining to enter into this Agreement and to invest in the
Company, each Member made an independent investigation into the Company and
that it received whatever information it deemed necessary or relevant in order
to decide whether to enter into this Agreement or invest in the Company.  Each Member acknowledges that the financial
materials provided to the Members are only estimates of expected future
operations based on assumptions about future markets and there is no assurance
that such projections will be realized.


14.3                        Limitations of Fees. 
Reference is made to that certain Amended and Restated Agreement of
Limited Partnership of Behringer Harvard Opportunity OP I, LP dated as of
November 24, 2004 (together with all amendments thereto, the “BH Investor
Agreement”) in respect of BH Investor. 
Notwithstanding anything contained in this Agreement to the contrary, if
any fee paid by the Company to any general partner in BH Investor or any
Affiliate of any such general partner (each a “BH Investor Manager Party”)
results in BH Investor paying, through its interest in the Company, fees in
excess of those fees permitted to be paid to such BH Investor Manager Party
under the terms of the BH Investor Agreement or any other related agreement,
then such BH Investor Manager Party shall reimburse directly to BH Investor its
allocable share of such fee to the extent necessary to comply with the terms of
the BH Investor Agreement.  In the event
that a BH Investor Manager Party receives from the Company a fee whose retention
by such BH Investor Manager Party is, under the terms of the BH Investor
Agreement or any other related agreement, contingent upon the happening of
future events, such BH Investor Manager Party shall hold BH Investor’s
allocable share of such fee until the applicable contingencies are resolved,
and shall thereafter dispose of BH Investor’s allocable share of such fee in
accordance with the BH Investor Agreement or any other related agreement.  It is understood and agreed that the
limitations and provisions set forth in this Section 14.4 are for the
sole benefit of BH Investor, and, accordingly, no other party shall be entitled
to a refund of fees paid by the Company under this Agreement or any other
benefit set forth in this Section 14.4. 
Furthermore, it is understood and agreed that the limitations and other
provisions set forth in this Section 14.4 shall not be applicable at
such time as BH Investor no longer owns a direct or indirect interest in the
Company.



 32
 









14.4                        Amendments to Agreement. 
Notwithstanding anything contained herein to the contrary, in the event
that legal counsel for BH Investor reasonably determines that an amendment to
this Agreement is necessary or advisable in order for this Agreement to comply
with applicable securities laws, the BH Investor Agreement, or NASAA Guidelines
(as such term is defined in the BH Investor Agreement), then each Member shall,
within ten (10) days after request from BH Investor, execute such an amendment;
provided, however, that no such amendment may reduce a Member’s economic
interest in the Company or increase a Member’s liabilities or obligations under
this Agreement without such Member’s prior written consent.


14.5                        Limitation on Liability of
BH Investor.  Notwithstanding anything contained in this
Agreement to the contrary, any liability of BH Investor arising under this
Agreement or in respect of the Company shall be satisfied solely from the
interest of BH Investor in the Company, and each Member and any other Person
having the right to enforce such liability shall look solely to the interest of
BH Investor in the Company for the satisfaction of such liability and shall
have no claim or recourse against any other asset of BH Investor.  In no event shall any of the partners,
officers, directors, agents or advisors of BH Investor be held to any personal
liability whatsoever or be liable for any of the obligations of BH Investor,
nor shall the property of any such Persons be subject to the payment of any
obligations of BH Investor arising under this Agreement or in respect of the
Company.


[Signatures Follow on Next Page]



 33














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


	
  

  	
  MEMBER:

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD CORDILLERA RESIDENCES, INC.,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President

  
					



 


[This space
intentionally left blank]











 


	
  

  	
  MEMBER:

  
	
   

  	
   

  	
   

  
	
   

  	
  CORDILLERA PARTNERS, LLC

  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jefford
  S. Nelsen

  	
   

  
	
   

  	
   

  	
  Jefford S. Nelsen

  
	
   

  	
   

  	
  Member

  
					



 















Exhibit A


LEGAL DESCRIPTION OF PROPERTY


Legal Description of Lodge and Spa Real Property


LOT 1, ACCORDING TO THE
“AMENDED FINAL PLAT, LOT 36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2;
LOT 1, FILING NO. 1, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; AND
TRACT X, CORDILLERA SUBDIVISION FILING NO. 3”, RECORDED JANUARY 14, 2003 AT
RECEPTION NO. 820221, COUNTY OF EAGLE, STATE OF COLORADO.


Legal
Description of Village Center Real Property


TRACT X, “AMENDED FINAL
PLAT, LOT 36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING
NO. 1, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; AND TRACT X,
CORDILLERA SUBDIVISION, FILING NO. 3”, RECORDED JANUARY 14, 2003 AT RECEPTION
NO. 820221, COUNTY OF EAGLE, STATE OF COLORADO.


TOGETHER WITH EASEMENTS
AND BENEFITS AS DESCRIBED IN AMENDED AND RESTATED DECLARATION OF PROTECTIVE
COVENANTS RECORDED MAY 12, 1993 IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT
THERETO RECORDED MAY 11, 1998 AT RECEPTION NO. 655728, AFFIDAVIT OF
CLARIFICATION RECORDED MAY 10, 1995 IN BOOK 663 AT PAGE 72, COUNTY OF EAGLE,
STATE OF COLORADO.


TOGETHER WITH
NONEXCLUSIVE INGRESS AND EGRESS EASEMENTS RESERVED PURSUANT TO THE QUITCLAIM
DEEDS RECORDED APRIL 21, 2003 AT RECEPTION NO. 830524, 830525, 830526, 830527,
830528, 830529 AND 830530, COUNTY OF EAGLE, STATE OF COLORADO.



 1
 








Legal Description of
Cordillera Mountain Club


 


CONDOMINIUM UNIT 333-C, THE STRAWBERRY PARK CONDOMINIUMS, IN ACCORDANCE
WITH AND SUBJECT TO THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
OF THE STRAWBERRY PARK CONDOMINIUMS, RECORDED APRIL 3, 1989, IN BOOK 503 AT
PAGE 354, AND AMENDMENT THERETO RECORDED APRIL 12, 1991 IN BOOK 551 AT PAGE
656, AND SECOND AMENDMENT THERETO RECORDED JUNE 4, 1992 IN BOOK 581 AT PAGE
544, AND RECORDED SEPTEMBER 25, 1992 IN BOOK 590 AT PAGE 185 AND MAP RECORDED
ON APRIL 3, 1989 IN BOOK 503 AT PAGE 353.


 


FIRST STATEMENT OF INTENTION TO ANNEX ADDITIONAL CONDOMINIUM UNITS AND
COMMON ELEMENTS AND SUPPLEMENT TO DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS OF STRAWBERRY PARK CONDOMINIUMS, RECORDED ON MAY 30, 1989 IN BOOK
507 AT PAGE 220, AND FIRST AMENDMENT THERETO RECORDED MAY 16, 1991 IN BOOK 554
AT PAGE 86, AND THE SUPPLEMENTAL CONDOMINIUM MAP RECORDED MAY 30, 1989 IN BOOK
507 AT PAGE 219, AND SECOND AMENDMENT THERETO RECORDED AUGUST 4, 1992 IN BOOK
586 AT PAGE 212, COUNTY OF EAGLE, STATE OF COLORADO.


 


TOGETHER WITH PARKING SPACE NOS. 67 AND 68 AS DEPICTED AND DESCRIBED ON
THE MAPS REFERENCED ABOVE, WHICH PARKING SPACES SHALL BE LIMITED COMMON
ELEMENTS APPURTENANT TO CONDOMINIUM UNIT NO. 333-C, THE STRAWBERRY PARK
CONDOMINIUMS.


 


TOGETHER WITH BENEFITS AS CREATED BY THE BEAVER CREEK DECLARATION
RECORDED DECEMBER 27, 1979 IN BOOK 296 AT PAGE 446 AND ANY AND ALL AMENDMENTS
THERETO AND TOGETHER WITH BENEFITS AS CREATED BY THE STRAWBERRY PARK CONDOMINIUM
DECLARATION RECORDED APRIL 3, 1989 IN BOOK 503 AT PAGE 354 AND ANY AND ALL
SUPPLEMENTS AND AMENDMENTS THERETO


 


Legal Description of
Grouse on the Green Real Property


 


TRACT F, CORDILLERA SUBDIVISION, FILING NO. 16, ACCORDING TO THE
CORRECTION PLAT RECORDED NOVEMBER 21, 1994 IN BOOK 655 AT PAGE 562, COUNTY OF
EAGLE, STATE OF COLORADO.



 2















Exhibit B


COMPANY PERCENTAGES AND CAPITAL CONTRIBUTIONS


	
  Members

  	
   

  	
  Company Percentage

  	
   

  	
  Capital Contribution

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Behringer Harvard
  Cordillera Residences, Inc.

  	
   

  	
  85.0

  	
  %

  	
  $

  	
  212,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cordillera Partners, LLC

  	
   

  	
  15.0

  	
  %

  	
  $

  	
  37,500

  	
   

  



 



 1















Exhibit C


DILUTION EXAMPLE


For
purposes of example, assume that the Capital Contributions made to the LLC
total $2,000,000.  BH Investor (owning a
company percentage of 85%) has contributed $1,700,000 and CP Investor (owning a
company percentage of 15%) has contributed $300,000. Assume that the BH
Investor sends an Additional Capital Notice for $400,000 to the Members, and
that in response thereto the CP Investor makes an Additional Capital
Contribution of $60,000 and BH Investor fails to make its Additional Capital
Contribution of $340,000.  If CP Investor
contributes said $340,000 as an Additional Capital Contribution (thus making
the total Capital Contributions equal $2,400,000), then the following
adjustments to the Company Percentages would be made:


(1)           The
Company Percentage of CP Investor would be increased by 21.25% (being 150% of
14.17%, which is $340,000 divided by $2,400,000, expressed as a
percentage).  The Company Percentage of
CP Investor would thus be adjusted to 36.25%.


(2)           The
Company Percentage of BH Investor would be decreased by 21.25%, and thus would
be adjusted to 63.75%.


(3)           The
increase in the Company Percentage of CP Investor and the decrease in the
Company Percentage of BH Investor would remain applicable after any scheduled
adjustment in the Company Percentage of such Members.  For example, if it was originally
contemplated that CP Investor and BH Investor would have their Company
Percentages adjusted to 20% and 80%, respectively, at such time as the Members
had received the return of their Capital Contributions, then, based upon the
adjustments set forth in clauses (1) and (2) above, upon the return of such
Capital Contributions the Company Percentage of CP Investor would be 41.25% and
the Company Percentage of BH Investor would be 58.75%.



 1















Exhibit D


DISTRIBUTION EXAMPLE


IRR Example


	
  

  	
  DEAL LEVEL 100%

  
	
   

  	
  Acquisition           (Monthly)

  



 


	
   

  	
   

  	
  12/31/2006

  	
   

  	
  1/31/2007

  	
   

  	
  2/28/2007

  	
   

  	
  3/31/2007

  	
   

  	
  4/30/2007

  	
   

  	
  5/31/2007

  	
   

  	
  6/30/2007

  	
   

  	
  7/31/2007

  	
   

  	
  8/31/2007

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contributions (1),(2)

  	
   

  	
  (1,000,000

  	
  )

  	
  (100,000

  	
  )

  	
  (250,000

  	
  )

  	
  (250,000

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (100,000

  	
  )

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50,000

  	
   

  	
  55,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  
	
  Net Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash
  Flow

  	
   

  	
  (1,000,000

  	
  )

  	
  (100,000

  	
  )

  	
  (250,000

  	
  )

  	
  (250,000

  	
  )

  	
  50,000

  	
   

  	
  55,000

  	
   

  	
  60,000

  	
   

  	
  (40,000

  	
  )

  	
  60,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Overall Deal 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  XIRR

  	
   

  	
  30.28

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (calculated monthly)

  	
   

  



 


	
   

  	
   

  	
  9/30/2007

  	
   

  	
  10/31/2007

  	
   

  	
  11/30/2007

  	
   

  	
  12/31/2007

  	
   

  	
  1/31/2008

  	
   

  	
  2/29/2008

  	
   

  	
  3/31/2008

  	
   

  	
  4/30/2008

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  11

  	
   

  	
  12

  	
   

  	
  13

  	
   

  	
  14

  	
   

  	
  15

  	
   

  	
  16

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contributions (1),(2)

  	
   

  	
  (50,000

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
   

  	
   

  
	
  Net Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,500,000

  	
   

  	
  Net
  Proceeds

  	
   

  
	
  Cash
  Flow

  	
   

  	
  10,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  1,570,000

  	
   

  	
   

  	
   

  



 






(1) Venture contributes $1,000,000 towards the purchase of the asset.


(2) Venture contributes equity of $100,000 in month 1, $250,000 in
months 2 and 3.


(3) Net Income distributed to Venture


(4) Net Sales proceeds available for distribution


	
  Solve for:

  	
  Acquisition     (Monthly)

  
	
  25% IRR

  	
   

  



 


	
   

  	
   

  	
  12/31/2006

  	
   

  	
  1/31/2007

  	
   

  	
  2/28/2007

  	
   

  	
  3/31/2007

  	
   

  	
  4/30/2007

  	
   

  	
  5/31/2007

  	
   

  	
  6/30/2007

  	
   

  	
  7/31/2007

  	
   

  	
  8/31/2007

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  
	
  Contributions (1),(2)

  	
   

  	
  (1,000,000

  	
  )

  	
  (100,000

  	
  )

  	
  (250,000

  	
  )

  	
  (250,000

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (100,000

  	
  )

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50,000

  	
   

  	
  55,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  
	
  Net Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Flow

  	
   

  	
  (1,000,000

  	
  )

  	
  (100,000

  	
  )

  	
  (250,000

  	
  )

  	
  (250,000

  	
  )

  	
  50,000

  	
   

  	
  55,000

  	
   

  	
  60,000

  	
   

  	
  (40,000

  	
  )

  	
  60,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Solver for hurdle 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  XIRR

  	
   

  	
  25.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (calculated monthly)

  	
   

  



 


	
   

  	
   

  	
  9/30/2007

  	
   

  	
  10/31/2007

  	
   

  	
  11/30/2007

  	
   

  	
  12/31/2007

  	
   

  	
  1/31/2008

  	
   

  	
  2/29/2008

  	
   

  	
  3/31/2008

  	
   

  	
  4/30/2008

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  11

  	
   

  	
  12

  	
   

  	
  13

  	
   

  	
  14

  	
   

  	
  15

  	
   

  	
  16

  	
   

  	
   

  	
   

  
	
  Contributions (1),(2)

  	
   

  	
  (50,000

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
   

  	
   

  
	
  Net Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,399,700

  	
   

  	
  Solve @ 25%

  	
   

  
	
  Cash Flow

  	
   

  	
  10,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  1,469,700

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100,300

  	
   

  	
  remaining

  to-be split

  	
   

  



 


	
  

  	
  BH 85% 85/15, then 50/50 after 25% IRR

  



 


	
   

  	
   

  	
  12/31/2006

  	
   

  	
  1/31/2007

  	
   

  	
  2/28/2007

  	
   

  	
  3/31/2007

  	
   

  	
  4/30/2007

  	
   

  	
  5/31/2007

  	
   

  	
  6/30/2007

  	
   

  	
  7/31/2007

  	
   

  	
  8/31/2007

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  
	
  Contributions
  (1),(2)

  	
   

  	
  (850,000

  	
  )

  	
  (85,000

  	
  )

  	
  (212,500

  	
  )

  	
  (212,500

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (85,000

  	
  )

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  42,500

  	
   

  	
  46,750

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  
	
  Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Add’l Promote

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Flow

  	
   

  	
  (850,000

  	
  )

  	
  (85,000

  	
  )

  	
  (212,500

  	
  )

  	
  (212,500

  	
  )

  	
  42,500

  	
   

  	
  46,750

  	
   

  	
  51,000

  	
   

  	
  (34,000

  	
  )

  	
  51,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  BH

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  XIRR

  	
   

  	
  28.11

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (calculated monthly)

  	
   

  



 


	
   

  	
   

  	
  9/30/2007

  	
   

  	
  10/31/2007

  	
   

  	
  11/30/2007

  	
   

  	
  12/31/2007

  	
   

  	
  1/31/2008

  	
   

  	
  2/29/2008

  	
   

  	
  3/31/2008

  	
   

  	
  4/30/2008

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  11

  	
   

  	
  12

  	
   

  	
  13

  	
   

  	
  14

  	
   

  	
  15

  	
   

  	
  16

  	
   

  	
   

  	
   

  
	
  Contributions
  (1),(2)

  	
   

  	
  (42,500

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  	
  59,500

  	
   

  	
  59,500

  	
   

  	
  59,500

  	
   

  	
  59,500

  	
   

  	
   

  	
   

  
	
  Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,189,745

  	
   

  	
   

  	
   

  
	
  Add’l Promote

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50,150

  	
   

  	
  50,00

  	
  %

  
	
  Cash Flow

  	
   

  	
  8,500

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  	
  51,000

  	
   

  	
  59,500

  	
   

  	
  59,500

  	
   

  	
  59,500

  	
   

  	
  1,299,395

  	
   

  	
   

  	
   

  



 


	
  

  	
  Partner 15%

  



 


	
   

  	
   

  	
  12/31/2006

  	
   

  	
  1/31/2007

  	
   

  	
  2/28/2007

  	
   

  	
  3/31/2007

  	
   

  	
  4/30/2007

  	
   

  	
  5/31/2007

  	
   

  	
  6/30/2007

  	
   

  	
  7/31/2007

  	
   

  	
  8/31/2007

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  
	
  Contributions (1),(2)

  	
   

  	
  (150,000

  	
  )

  	
  (15,000

  	
  )

  	
  (37,500

  	
  )

  	
  (37,500

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (15,000

  	
  )

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7,500

  	
   

  	
  8,250

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  
	
  Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Add’l Promote

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Flow

  	
   

  	
  (150,000

  	
  )

  	
  (15,000

  	
  )

  	
  (37,500

  	
  )

  	
  (37,500

  	
  )

  	
  7,500

  	
   

  	
  8,250

  	
   

  	
  9,000

  	
   

  	
  (6,000

  	
  )

  	
  9,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  XIRR

  	
   

  	
  42.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (calculated monthly)

  	
   

  



 


	
   

  	
   

  	
  9/30/2007

  	
   

  	
  10/31/2007

  	
   

  	
  11/30/2007

  	
   

  	
  12/31/2007

  	
   

  	
  1/31/2008

  	
   

  	
  2/29/2008

  	
   

  	
  3/31/2008

  	
   

  	
  4/30/2008

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  11

  	
   

  	
  12

  	
   

  	
  13

  	
   

  	
  14

  	
   

  	
  15

  	
   

  	
  16

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contributions (1),(2)

  	
   

  	
  (7,500

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (3)

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  	
  10,500

  	
   

  	
  10,500

  	
   

  	
  10,500

  	
   

  	
  10,500

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reversion (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  209,955

  	
   

  	
   

  	
   

  	
  1,399,700

  	
   

  
	
  Add’l Promote

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50,150

  	
   

  	
  50,00

  	
  %

  	
   

  	
   

  
	
  Cash Flow

  	
   

  	
  1,500

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  	
  9,000

  	
   

  	
  10,500

  	
   

  	
  10,500

  	
   

  	
  10,500

  	
   

  	
  270,605

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,570,000

  	
   

  



 



 1















Exhibit E


FRACTIONAL DEVELOPMENT AGREEMENT



 1















Exhibit F


FRACTIONAL MANAGEMENT AGREEMENT



 1















Schedule 4.5


OFFICERS


	
  OFFICERS

  	
   

  	
  TITLE

  
	
   

  	
   

  	
   

  
	
  Robert M. Behringer

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Robert S. Aisner

  	
   

  	
  President and Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
  Gerald J. Reihsen, III

  	
   

  	
  Executive Vice President – Corporate Development &
  Legal and Secretary

  
	
   

  	
   

  	
   

  
	
  Gary S. Bresky

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Cindy A. Fallis-Cooper

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
  Jon L. Dooley

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Samuel A. Gillespie

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  William Terry Kennon

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Edward J. Kittleson

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Andrew J. Bruce

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Richard Frank

  	
   

  	
  Vice-President

  



 



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