Document:

Amended and Restated Operating Agreement

 EXHIBIT 10.2 
 Execution Copy 
 AMENDED AND RESTATED OPERATING AGREEMENT 
 OF 
 GLENWOOD HOUSING PARTNERS I, LLC

 THIS AMENDED AND RESTATED OPERATING AGREEMENT OF GLENWOOD HOUSING PARTNERS I, LLC (the “Company”), is entered into
effective as of December 1, 2006, by and between PRIP 10637, LLC, a Delaware limited liability company (“Paladin”), and Shiloh Crossing Partners II, LLC, an Indiana limited liability company (“Buckingham”). The
capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to such terms in Article 11. 
 ARTICLE 1 
 FORMATION 
  

	 	1.01	Formation 

 The Company has
been formed as an Indiana limited liability company pursuant to the provisions of the Indiana Act. In connection with the formation of the Company, a duly authorized representative of the Company has caused to be filed with the office of the Indiana
Secretary of State the duly executed Articles of Organization for the Company in accordance with the Indiana Act. A duly authorized representative also shall execute, acknowledge and/or verify such other documents and/or instruments as may be
necessary and/or appropriate in order to continue its existence in accordance with the provisions of the Indiana Act and/or to register, qualify to do business and/or operate its business as a foreign limited liability company in any other state in
which the Company conducts business. In connection with the formation of the Company, there was executed and delivered an Operating Agreement, dated September 23, 1998, which the parties hereto desire to amend and restate in its entirety
pursuant to this Agreement. From and after the date hereof, the Company shall be operated in accordance with, and the Members shall be governed by, the terms and conditions of this Agreement. If any terms of this Agreement are inconsistent with any
terms of the Act that are not mandatory, then the terms of this Agreement shall control. 
  

	 	1.02	Names and Addresses 

 The
name of the Company is Glenwood Housing Partners I, LLC. The registered office of the Company in the State of Indiana shall be at 333 N. Pennsylvania Street, 10th Floor, Indianapolis, Indiana 46204 and the name of the registered agent for the Company at such registered office is Buckingham Investment Corporation. For so long as Buckingham is the Operating
Member, the principal office for the Company shall be maintained at 333 N. Pennsylvania Street, 10th Floor,
Indianapolis, 

 
Indiana 46204, or such other location at which Buckingham maintains an office and thereafter at such other place as the Management Committee may designate
from time to time. Copies of any material notices or other matters received by the Company shall be promptly delivered by the Operating Member to the Members. 
  

	 	1.03	Nature of Business 

 The
purpose for which the Company is to exist is (i) to acquire, own, manage, operate, maintain, finance, hold for investment, and sell that certain real property more particularly described on Exhibit B attached hereto, together with
existing improvements consisting of an approximately 266 unit apartment complex and related amenities and improvements located thereto located at 10637 Springfield Pike in Woodlawn, Ohio (the “Project”); (ii) to conduct such
other activities with respect to, and otherwise realize and optimize the economic internal rates of return from, the Project and any and all other related assets the Company may hereinafter acquire as are appropriate to carrying out the foregoing
purposes; and (iii) to do all things incidental to or in furtherance of the above enumerated purposes. 
  

	 	1.04	Term of the Company 

 The
term of the Company commenced on the date the Articles of Organization for the Company were filed with the Indiana Secretary of State and shall continue until December 31, 2046, unless otherwise dissolved pursuant to Article 8 or unless
extended by the unanimous agreement of the Members. The existence of the Company as a separate legal entity shall continue until the filing of articles of dissolution of the Company in accordance with the provisions of the Indiana Act. 

ARTICLE 2 
 MANAGEMENT OF THE
COMPANY 
  

	 	2.01	Management Committee 

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

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

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 (g) Notice and Attendance. Notice of any meeting of, or of any action taken
without a meeting pursuant to Section 2.01(i) by, the Management Committee shall be given as far in advance of the meeting as is reasonably practicable. Representatives, absent exigent circumstances, shall use their best efforts to give
any such notice at least forty-eight (48) hours prior to such meeting, unless otherwise agreed by the representatives, and to attend all meetings of the Management Committee. 
 (h) Quorum. A quorum shall be required to conduct any business at any meeting of the Management Committee, and shall be deemed
present at any such meeting so long as at least one representative of each Member is in attendance (whether in person or otherwise); provided, however, that if written notice of any such meeting has been given at least ten (10) days prior to
such meeting, then a quorum shall be deemed present at any such meeting so long as a Majority of Representatives of the Management Committee are present at such meeting. 
 (i) Actions Without Meetings. Any action required or permitted to be taken at a meeting of the Management Committee may be taken
without a meeting with Unanimous Written Consent, which consent shall set forth the actions to be so taken. Any such Unanimous Written Consent shall have the same effect as an act of a Majority of Representatives at a properly called and constituted
meeting of the Management Committee. Copies of any such written consent shall be delivered promptly to all representatives. 
 (j) Execution of Documents. Except as provided in Section 2.03 below, all contracts, agreements and other documents or instruments affecting or relating to the business and affairs of the Company may be executed on the
Company’s behalf only by the Members, or such other person(s) as may be designated by the Management Committee and without execution by any other Member. 
 (k) Unauthorized Actions. None of the Members or officers of the Company, without the prior consent of the Management Committee,
shall take any action on behalf of or in the name of the Company, or enter into any commitment or obligation binding upon the Company, except for (i) actions expressly authorized by this Agreement, (ii) actions by any Member (or officer)
within the scope of such Member’s (or officer’s) authority expressly granted hereunder, and (iii) actions authorized by the Management Committee in the manner set forth herein. Each Member hereby indemnifies, defends, protects and
holds wholly harmless the other Members and each such other Member’s Affiliates, shareholders, officers, directors, constituent members, Members, employees, agents, and representatives (including the representative(s) to the Management
Committee appointed by such Member) from and against any and all losses, liability, damages, costs and expenses (including attorneys’ fees) arising out of the breach of any of the foregoing provisions by such indemnifying Member, any
representative of the Management Committee selected by such Member or such Member’s Affiliates, shareholders, officers, directors, constituent members, Members, employees, agents, or representatives. 
  

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	 	2.02	Authority of the Management Committee 

 Without limiting the generality of Section 2.01, and except as otherwise provided by this Agreement, the consent of the Management Committee shall be required for the Company to undertake, and the
Management Committee shall have the right, power and authority to approve and cause the Company to undertake, all of the following actions (which actions shall be approved by a Majority of Representatives unless otherwise expressly provided below):

 (a) Issuance of Additional Interests. The issuance of any additional Interests in the Company or the admission of
any Additional Member into the Company; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written
Consent; 
 (b) Sale or Other Transfer. Except as provided in accordance with the provisions of Article 7, the
sale, lease, exchange, transfer or other disposition of all or any portion of the Project or any other assets of the Company; provided, however, if a decision to sell substantially all of the assets of the Company (including the Project) is
approved by a Majority of Representatives, but is not approved by all of the representatives present at a meeting of the Management Committee at which a quorum is present or by Unanimous Written Consent, then Paladin shall have the right to invoke
the procedure set forth in Section 6.06 by giving Buckingham written notice (a “Paladin Sale Notice”) within thirty (30) days after the date of such approval by a Majority of Representatives; 
 (c) Financing or Refinancing. Any and all financing or refinancing for the Company or the Project, the terms and conditions
thereof, or any modifications or amendments thereto; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous
Written Consent; 
 (d) Material Company Transactions. The entry into by the Company and the taking by the Company of
any and all actions permitted or required by the Company in connection with any acquisition, disposition, merger, “roll-up” consolidation, reorganization, recapitalization, restructuring, joint venture, partnership, limited liability
company, or any other material business transaction involving the Company or its assets, including, without limitation, any and all actions required or permitted in connection with any initial public offering of ownership interests in the Company
(or in connection with the merger or the transfer of the assets of the Company to any corporation or other entity that is the successor to the Company that intends to conduct an initial public offering) or any transfer of all or any portion of the
assets of the Company to a public or private market vehicle that intends to qualify as a real estate investment trust (“REIT”) under Section 856 et. seq. of the Code or to a partnership, limited liability company or
other entity whose general partner, managing member or other owner, intends to qualify as a REIT or to a comparable public or private REIT vehicle; provided, however, that such a decision shall require the approval of all of the
representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; 
  

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 (e) Plans and Budgets. The approval of each Annual Business Plan and Operating
Budget for the Company prepared by the Operating Member, and any modifications or amendments thereof; 
 (f) Expenditures
Outside of Plans or Budgets. The making of any expenditure by the Company which is a material deviation from any applicable Annual Business Plan and Operating Budget, other than as permitted within any parameters agreed to by the Management
Committee and specified in any such plan or budget (e.g., application of line item cost savings, contingency line amounts, budget variances, etc.) and excluding any reasonable expenditures resulting from any emergency or unforeseen events;

 (g) Additional Capital Contributions. Calling for the Members to make any Additional Contributions to the capital of
the Company pursuant to Section 3.02; 
 (h) Unrelated Businesses. The entry into by the Company of any
business that is not related to the purpose of the Company set forth in Section 1.03; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management
Committee at which a quorum is present or Unanimous Written Consent; 
 (i) Liquidation of the Company. Except to the
extent dissolution of the Company is permitted or required by this Agreement or any nonwaivable provision of applicable law, the dissolution and winding up of the Company; 
 (j) Contracts with Affiliates. Except as otherwise expressly permitted under this Agreement, the entry by the Company into any
contract with, or the making of any payment to, any Member or any Affiliate of any Member and with respect to any such contract, the making of any amendment, modification, waiver, termination, extension or rescission thereof; the declaration of any
default thereunder or the exercise of any remedy thereunder; the institution, settlement or compromise of any claim with respect thereto; the waiver of any rights of the Company against the other party(ies) thereto; or the consent to the assignment
of any rights or the delegation of any duties by the other party(ies) thereto. The Members further acknowledge and agree that, except as otherwise expressly permitted under this Agreement or as otherwise approved by the Management Committee, the
fees paid in connection with any such contracts, payments, etc., made with or to any Member or any Affiliate thereof shall in all events be commensurate with fees negotiated at arm’s length and paid to independent third parties for providing
similar services to projects similar in size, nature and location to the Project; 
  

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 (k) Cash Flow and Reserves. Subject to the provisions of
Section 5.03, the determination of any policies or procedures for making Cash Flow distributions by the Company including, without limitation, the establishment of any reserves with respect thereto; 
 (l) Material Agreements. The execution by the Company of any material agreement in order to acquire, develop, redevelop, renovate,
operate, manage, maintain, market, lease, sell, transfer, convey, pledge or otherwise dispose of all or any portion of the Project or any other asset of the Company and any undertaking by the Company to implement the terms of any such agreement,
including the granting or withholding of approvals and consents thereunder other than (i) as is necessary to implement the applicable Annual Business Plan or Operating Budget, (ii) the sale or disposition of obsolete personal property and
equipment within the Project in the ordinary management and operation of the Property, and (iii) the marketing and leasing of apartment units within the Project in the ordinary course of business and in accordance with the Annual Business Plan;

 (m) Consultants. The employment and engagement of any agents, brokers, appraisers, architects, contractors,
subcontractors, attorneys, accountants, bookkeepers, engineers, environmental consultants, real property and mortgage brokers and analysts, underwriters, escrow agents, depositories, agents for collection, banks, builders, building managers and
operators and marketing agents, other than as permitted by the applicable Annual Business Plan or Operating Budget or to the extent that the applicable Annual Business Plan or Operating Budget provides that any such service provider may be selected
by the Operating Member; 
 (n) Legal Proceedings. The institution or defense of any legal proceedings (including
arbitration) in the name of the Company, the settlement of any such legal proceedings against the Company and the confession of any judgment against the Company, or any property thereof other than (i) those involving tenant disputes in the
ordinary course of business or (ii) matters involving sums less than Twenty-Five Thousand Dollars ($25,000); 
 (o)
Bankruptcy. Any of the following: (i) the filing of any voluntary petition in bankruptcy on behalf of the Company; (ii) the consenting to the filing of any involuntary petition and bankruptcy against the Company; (iii) the
filing on behalf of the Company of any petition seeking, or consenting to, the reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency; (iv) the consenting to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a substantial part of their respective properties; (v) the making on behalf of the Company of any assignment for the benefit of creditors; (vi) the
admission in writing of the Company’s inability to pay its debts generally as they become due; or (vii) the taking of any action by the Company in furtherance of any such action; provided, however, that such a decision shall require
the approval of all of the representatives present at a 

  

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meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; and provided further, however, if Buckingham no longer
has any right to appoint any representative to the Management Committee, then for so long as Bradley B. Chambers or any other Affiliate of Buckingham is the guarantor of any mortgage loan of the Company for which such guarantor will have personal
liability upon the taking of any action described in clauses (i)-(vii) immediately above, the decision to take any such action shall also require the approval of Buckingham. 
 (p) Insurance. The entry into by the Company of any and all contracts of insurance for the Company that the Management Committee
deems necessary or proper for the protection of the Company, either for the conservation of their respective assets or for any purpose convenient or beneficial to the Company; provided, however, that the Operating Member may select such insurance
vendors and enter into such contracts of insurance as long as the coverage equals or exceeds the requirements of the holder of the first mortgage line on the Project; 
 (q) Tax and Accounting Elections. Any and all tax or accounting elections permitted or required to be made by the Company;

 (r) Actions pertaining to Paladin REIT Status. The undertaking of any action that is deemed necessary, in the sole
discretion of the Tax Matters Partner, to maintain the status of Paladin REIT as a REIT under the Code; and 
 (s)
Transfers from Operating Account. The drawing of any single check on, or the making of any single transfer or expenditure of funds from, any Operating Account in excess of $25,000, or drawing of any multiple number of checks on, or the making
of any multiple number of transfers or expenditures of funds from, any Operating Account which collectively total more than $25,000 to any one Person, unless such single check or transfer, or multiple checks or transfers, are drawn or made, as the
case maybe, pursuant to the Operating Budget. 
 The provisions of this Section 2.02 shall not be construed as
exclusive or so as to bar the Management Committee from delegating responsibility for any of the Management Committee’s management decisions to any Member, officer, or other representative or agent of the Company. The Members also acknowledge
that signatory authority for any of the foregoing items may be delegated by the Management Committee to any Member, officer, or other representative or agent of the Company. Signatory Authority for any of the foregoing matters approved by the
Management Committee is initially delegated to the Operating Member. 
  

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	 	2.03	Operating Member 

 (a)
Designation of Operating Member. Buckingham is hereby designated as the “Operating Member” of the Company (the “Operating Member”). Buckingham shall serve in such capacity unless and until Buckingham is removed by
the Management Committee in accordance with the provisions of Section 2.06. Following any removal of Buckingham as the Operating Member, the Person (who may be, but need not be, a Member of the Company) selected by the Management
Committee in accordance with the provisions of Section 2.06 shall serve as the replacement Operating Member or manager of the Company. 
 (b) Responsibilities of Operating Member. The Operating Member shall be responsible for implementing the decisions of the Management Committee and for regularly reporting to the Management Committee as to the
status of the business and affairs of the Company. The Operating Member also shall be responsible for (i) procuring any and all financing required for the Project as approved by the Management Committee, (ii) supervising the management,
leasing and operation of the Project in accordance with a Property Management Agreement approved by the Management Committee and entered into, by and between the Company, as owner, and either the Property Manager or such other manager as may be
designated by the Management Committee, as manager, (iii) undertaking such other matters as are determined by the Management Committee, (iv) coordinating, supervising and otherwise overseeing any sale of the Project, (v) preparing
and, as and when reasonably requested by the Management Committee, updating any applicable Annual Business Plan or Operating Budget for the Company and the Project (provided, that, for the avoidance of any doubt, the foregoing provisions are
not intended to permit the Operating Member to amend, modify or deviate in any material respect from any of the foregoing documents, plans or budgets without the prior consent of the Management Committee (except as otherwise expressly provided
therein), (vi) advising the Management Committee on day-to-day matters affecting the business and affairs of the Company, (vii) diligently conducting the day-to-day operations of the Company in accordance with the Annual Business Plan and
Operating Budget, (viii) performing the duties assigned to such Member under this Agreement or by the Management Committee, and (ix) diligently endeavoring to carry out all decisions and resolutions of the Management Committee. 

(c) Authority of Operating Member. The Operating Member shall at all times be subject to the direction and control of the
Management Committee, and shall conform to the policies and procedures established and approved by the Management Committee in conformity with this Agreement, and the scope of the Operating Member’s authority shall be limited solely to the
matters set forth above in this Section 2.03. The Operating Member shall keep the Management Committee and the Members informed as to all matters of concern to the Management Committee, the Company and the Members. The Operating Member
shall not be authorized to bind the Company without the prior written approval of the Management Committee, except for matters delegated to the Operating Member by the Management Committee or any agreements, contracts or other documents or
instruments affecting or relating to the day-to-day business and affairs of the Company provided that any such agreement, contract or other document is within the parameters established in the applicable Annual Business Plan or Operating
Budget. 
 (d) Expenditures. The Operating Member shall have the authority to incur costs and expenditures and only the
costs and expenditures set forth in an approved Operating Budget (subject to the ability to apply line item cost savings; contingency line item amounts; budget variances, etc., if any, contained in such Operating Budget) without any further approval
of the Management Committee (or the Members). 
  

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 (e) Indemnification. The Operating Member shall indemnify and hold harmless the
Company and the other Member(s), their Affiliates, subsidiaries, officers, directors, employees, partners, members, shareholders, agents and representatives to the full extent permitted by law from and against any and all losses, claims, costs,
damages and expenses (including attorneys’ fees) arising from any and all claims, actions, suits or proceedings, arising from, or in connection with, the Project or any act or failure to act of the Operating Member that results from the
Operating Member’s fraud, willful misconduct or gross negligence. 
  

	 	2.04	Annual Business Plan 

 On or
before October 31 of each Fiscal Year of the Company, commencing on October 31, 2007, the Operating Member shall submit a new annual business plan for the ensuing Fiscal Year for the review and approval of the Management Committee (the
initial and each new business plan, as approved, being the “Annual Business Plan”). Each Annual Business Plan shall include, without limitation: (i) a narrative description of the proposed objectives and goals for the Company,
which shall include for such Fiscal Year (without limitation), any proposed sale or refinancing of the Project; (ii) the status of the Project; (iii) a property management and leasing plan for the Project for such Fiscal Year; and
(iv) such other items as are reasonably requested by any representative of the Management Committee or as otherwise reasonably necessary to keep the Management Committee informed as to the business and affairs of the Company and the Project.

  

	 	2.05	Operating Budget 

 Attached
hereto as Exhibit C is the annual operating budget for the Company for the 2007 Fiscal Year. On October 31 of each Fiscal Year of the Company commencing on October 31, 2007, the Operating Member shall submit a new annual operating
budget for the Company for the ensuing Fiscal Year for the review and approval of the Management Committee (the initial and each new annual operating budget, as approved, being the “Operating Budget”). Each Operating Budget shall
set forth on a detailed itemized basis: (i) all receipts projected for the period of such Operating Budget and all expenses, by category, for the Company (including, without limitation, all repairs and capital expenditures projected to be
incurred during such period), (ii) the anticipated operating reserves and working capital projected to be required for such period, (iii) a schedule setting forth the timing and amount of any Additional Contributions projected to be
required by the Members for such Fiscal Year (or other period); and (iv) a five (5)-year projection setting forth the estimated revenues, expenses and net operating income (or loss) expected to be incurred for the next five (5) years
for the Company which shall be updated to compare the actual results to the projected results set forth in the prior Operating Budget. The Operating Budget shall also include a detailed description of such other information, contracts, agreements
and other matters reasonably necessary to inform the Management Committee of all 

  

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matters relevant to the ownership, operation, management, maintenance, leasing and sale of the Project (or any portion thereof) or as may be reasonably
requested by any representative of the Management Committee. The Operating Member shall have the authority to incur only the costs and expenditures set forth in an approved Operating Budget (subject to the ability to apply line item cost savings,
contingency line item amounts, budget variances, etc., if any, contained in such Operating Budget, as and if so permitted by the parameters of such Operating Budget), without any further approval of the Management Committee (or the Members). Except
as otherwise provided within any Operating Budget, the Operating Budget may not be materially modified without the prior approval of the Management Committee. 
 2.06 Removal of the Operating Member 
 (a) Upon Removal Event. Upon the occurrence of a Removal Event, then at
any time until the Removal Event has been cured by the Operating Member, the Management Committee shall have the right to remove Buckingham as the Operating Member of the Company by delivering written notice (“Removal Notice”)
thereof at any time following the occurrence of a Removal Event in accordance with the provisions of this Section 2.06. As used herein, the term “Removal Event” means the occurrence of any of the Buy-Sell Events set
forth in Section 7.01 with respect to which the Operating Member is the Defaulting Member (regardless of whether Paladin, as the Non-Defaulting Member, exercises any of its rights under Article 7 in connection therewith). Any
removal of Buckingham as the Operating Member shall be effective upon the Effective Date of the Removal Notice relating to any Removal Event (or such later time as may be provided in the Removal Notice). 
 (b) Effect of Removal Upon Removal Event. If Buckingham is removed as the Operating Member of the Company pursuant to Section 2.06(a),
then (i) a Cash Flow Bonus Forfeiture Event shall exist for purposes of Sections 5.01(d) and 5.02(h), (ii) Buckingham shall retain the remaining portion of its Interest in the Company (unless Paladin purchases such Interests as a
result of the exercise of the Buy-Sell provisions set forth in Article 7), (iii) neither Buckingham nor its Affiliates shall be entitled to receive any further fees to which it would otherwise be entitled pursuant to
Section 2.12; and (iv) the Management Committee may, in its sole and absolute discretion, designate any person or entity as a replacement Operating Member or as a manager who shall fulfill the duties and obligations of the Operating
Member, that may be (but need not be) a Member of the Company (including, without limitation, Paladin (or any Affiliate thereof). From and after any such removal: (1) the replacement Operating Member (and not Buckingham or its Affiliates) shall
be entitled to exercise all the rights, duties and obligations, and to receive any and all fees of the Operating Member under this Agreement, (2) Buckingham shall have no further obligations under Section 2.03,
Section 2.04 or Section 2.05, and (3) Buckingham shall no longer have any right to appoint any representative to the Management Committee and any previously appointed representatives of Buckingham shall be replaced by
one (1) or more representatives to be appointed by the Management Committee. In the event there is a dispute as to whether a Removal Event occurred, then Buckingham shall cease to be the Operating Member and shall no longer have any right to
appoint any 

  

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representative to the Management Committee, and, if it shall be later determined by a court of competent jurisdiction that a Removal Event did not occur,
then Buckingham shall be deemed to have been terminated pursuant to Section 2.06(c). 
 (c) Other Removal.
For any reason, the Management Committee may elect (in its sole and absolute discretion) at any time after December 1, 2009, without cause and for any or no reason, to remove Buckingham as the Operating Member and to designate any Person as a
replacement Operating Member or as a manager who shall fulfill the duties and obligations of the Operating Member, which election may be made by written notice to Buckingham not less than fifteen (15) days prior to the effective date of such
removal, provided that, the Management Committee agrees to meet and confer with Buckingham during such fifteen (15) day period, at the request of Buckingham, in connection with such removal. In such event, Buckingham (or its Affiliates,
as applicable) shall: (i) have no further obligations under Sections 2.03, 2.04 or 2.05, and (ii) otherwise retain its Interest in the Company, including its interests in the Net Income and Net Losses or similar items of, and to
receive distributions from, the Company as provided in Articles 4 and 5 of this Agreement. If Buckingham is removed as Operating Member pursuant to this Section 2.06(c), then (A) any such replacement Operating Member shall
not receive any additional fees or “carried interest” or other profits interest in the Company unless such interest is paid from Paladin’s Interest in the Company and (B) Buckingham may elect, by written notice to Paladin within
thirty (30) days after the effective date of such removal, to require Paladin to purchase all of Buckingham’s Interest in accordance with the procedures set forth in the last two sentences of Section 7.02, and in
Section 7.03(a), (b) and (d) and Section 7.05, Section 7.06, Section 7.07, Section 7.08 and Section 7.10 as if Buckingham were a Defaulting Member as a result of one of the Buy-Sell
Events referenced in Section 7.01(e)-(g) and Buckingham were the Selling Member and Paladin the Purchasing Member under such provisions of this Agreement. If Buckingham fails to make such election by written notice to Paladin at or before
the end of such thirty (30) day period, then Buckingham shall be deemed to have waived its rights under clause (B) immediately above. 
 (d) Contracts. If Buckingham is removed as the Operating Member (whether pursuant to either Section 2.06(a) or Section 2.06(c)), then Paladin (acting alone and outside of the Management Committee), on
behalf of the Company, shall also have the right to terminate Buckingham’s right to provide the services provided for in Section 2.12 and to terminate any other agreement between the Company and Buckingham or any Affiliate of
Buckingham (including, without limitation, the Property Management Agreement described in Section 2.12), without penalty. If Buckingham is removed as the Operating Member pursuant to Section 2.06(c) and Paladin elects to
terminate Buckingham’s right to provide the services provided for in Section 2.12 or to terminate any contract between the Company and Buckingham or an Affiliate of Buckingham, then the Company shall be obligated to engage a third
party other than an Affiliate of Paladin to undertake the services previously provided by Buckingham or the Affiliate of Buckingham and which were terminated. If Buckingham is removed as the Operating Member pursuant to Section 2.06(a)
as a result of the occurrence of a Removal Event, then the Company may engage either an Affiliate of Paladin or a third party to complete the services that were being provided under the terminated contract or other arrangement. 
  

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	 	2.07	Liability and Indemnity 

 (a)
Indemnification. Except as otherwise expressly provided in this Agreement, no Member, officer of the Company, representative on the Management Committee or other authorized representative of the Company (each, an “Indemnified
Party”) shall be liable or accountable in damages or otherwise to the Company or to the other Members for any error of judgment or any mistake of fact or law or for anything that such Indemnified Party may do or refrain from doing
hereafter, except in the case of fraud, willful misconduct or gross negligence in performing or failing to perform such Indemnified Party’s duties for the Company. To the maximum extent permitted by law, the Company hereby indemnifies, defends,
protects and agrees to hold each Indemnified Party wholly harmless from and against any and all loss, expense or damage suffered by such Indemnified Party by reason of anything which such Indemnified Party may do or refrain from doing hereafter for
and on behalf of the Company and in furtherance of its interest; provided, however, (i) no Indemnified Party shall be indemnified, defended, protected or held harmless from any loss, cost, expense or damage which such Indemnified Party
may suffer as a result of such Indemnified Party’s fraud, willful misconduct or gross negligence in performing or in failing to perform such Indemnified Party’s duties for the Company, and (ii) any such indemnity shall be recoverable
only from the assets of the Company. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Member (or representative thereof) otherwise existing at law or in equity, are agreed by the Members to replace
such duties and liabilities of such Member (or such representative). 
 (b) No Third Party Beneficiaries. The
provisions of this Section 2.07 are for the benefit of the Indemnified Parties and shall not be deemed to create any rights for the benefit of any other Person. 
 (c) Survival. The provisions of this Section 2.07 shall survive the termination of this Agreement. 
  

	 	2.08	Limited Liability 

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

	 	2.09	Other Activities 

 Buckingham, as the Operating Member, agrees to use commercially reasonable efforts to carry out the business and affairs of the Company in accordance with the terms and conditions of this Agreement and shall devote all such time to the
Company as is necessary for the efficient operation of the business and affairs of the Company. Except as otherwise provided in Section 2.11 of this Agreement or any Operating Budget, or as otherwise approved by the Management Committee,
the Operating Member 

  

 -13- 

 
shall not be paid any compensation by the Company for providing such services to the Company. No Member shall have any obligations (fiduciary or otherwise)
with respect to the Company or to the other Member insofar as making other investment opportunities available to the Company or to the other Members. Each Member may engage in whatever activity such Member may choose without having or incurring any
obligation to offer any interest in such activity to the Company or to the other Members. 
  

	 	2.10	Brokers Indemnity 

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

	 	2.11	Reimbursement; Compensation 

 (a) Compensation. Except as otherwise expressly provided in this Agreement or as provided in any applicable Operating Budget, no Member or any constituent partner, member, shareholder, officer, director, employee, agent,
representative or Affiliate thereof shall receive any remuneration for services rendered to or in connection with the Company or be reimbursed for general administrative and overhead expenses. 
 (b) Reimbursement of Expenses. Notwithstanding the foregoing, each Member shall be reimbursed from the initial contributions made
by the Members pursuant to Section 3.01 for any and all costs (including legal fees) reasonably and actually incurred by such Member in connection with the transactions contemplated herein (including the formation of the Company, and the
negotiation and documentation of this Agreement) up to and including (but only up to and including) the closing date of the transactions contemplated herein. 
  

	 	2.12	Property Management 

 Buckingham Management, L.L.C., an Indiana limited liability company, which is an Affiliate of Buckingham, initially shall be the Property Manager of the Project and shall manage and operate the Project in accordance with a Property
Management Agreement between the Company and such Property Manager in the form approved by the Management Committee (the “Property Management Agreement”). The Property Management Agreement shall provide for (i) an initial one
year term with automatic one year renewals, (ii) termination by either the Company or the Property Manager for cause or upon a sale of the Project, and (iii) a management fee payable monthly, in arrears, to the Property Manager with
respect to the Project equal to four 

  

 -14- 

 
percent (4%) of the monthly gross revenues from the Project; provided, however, that if during any month for which such management fee is due and
payable, there is insufficient Cash Flow to fund payment to Paladin of its Unpaid Preferred Return accrued and owing through the end of such month, then such portion of the management fees payable to the Property Manager for such month up to, but
not exceeding, three quarters of one percent (0.75%) of the monthly gross revenues of the Project for such month shall be deferred by the Property Manager and paid to Paladin to the extent (but only to the extent) of its Unpaid Preferred Return
(collectively, the “Deferred Management Fees”) and shall be paid to the Property Manager only from available Cash Flow pursuant to Section 5.01(b) and Section 5.02(a). All amounts paid to the Property Manager
as management fees (including Deferred Management Fees) shall be treated as amounts paid to a person other than a Member as described in Section 707(a) of the Code. 
 ARTICLE 3 
 MEMBERS’ CAPITAL CONTRIBUTIONS 
  

	 	3.01	Initial Contributions of the Members 

 (a) Initial Capital Contributions. Buckingham has previously contributed to the Company cash and property that the parties agree have the aggregate amount of the agreed upon net fair market value as shown on Exhibit A hereto
and shall be deemed Buckingham’s Initial Capital Contribution for purposes of this Agreement. Simultaneously with the execution of this Agreement, Paladin shall be deemed to have contributed as its Initial Capital Contribution cash in the
amount shown on Exhibit A hereto. The Initial Capital Contributions and current Capital Account balances of the Members are identified on Exhibit A hereto. 
 (b) Credit to Capital Accounts. Any and all Capital Contributions made by each Member pursuant to this Section 3.01 and
Section 3.02 and Section 3.03 shall be credited to the Capital Account and Unrecovered Contribution Account of each such Member as of the date any such Capital Contribution is made. 
  

	 	3.02	Additional Contributions 

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

 -15- 

	 	3.03	Remedy For Failure to Contribute Capital 

 (a) Failure to Contribute. If any Member (the “Non-Contributing Member”) fails timely to make all or any portion of any Additional Contribution such Member is required to contribute pursuant to
Section 3.02 (the “Delinquent Contribution”) and such failure continues for five (5) days following the Effective Date of notice thereof from the other Member, such other Member (the “Contributing
Member”), in addition to any and all other remedies available to the Contributing Member under this Agreement or otherwise at law or in equity (including, without limitation, instituting a legal proceeding to collect the Delinquent
Contribution), shall have the right, but not the obligation, to proceed in accordance with the terms and conditions set forth below in this Section 3.03 and, in addition, if Buckingham is the Non-Contributing Member, a Cash Flow Bonus
Forfeiture Event shall exist for purposes of Sections 5.01(d) and 5.02(h). 
 (b) Default Loan. The Contributing
Member may advance to the Company, in cash, within thirty (30) days following the Contribution Date, an amount equal to the Delinquent Contribution, and such advance by the Contributing Member shall be treated as a non-recourse loan by the
Contributing Member to the Non-Contributing Member (a “Member Loan”), bearing interest at a rate equal to eight and one quarter percentage points (8.25%). Each Member Loan shall be due and payable upon the earlier of six
(6) months from the date such Member Loan is advanced or the dissolution of the Company. If Paladin is the Contributing Member, then both Members shall take all actions and execute all documents (including a written promissory note evidencing
the obligation of the Non-Contributing Member) necessary to ensure that the obligation meets the “straight debt safe harbor” described in Section 856(m) of the Code. 
 As of the Effective Date of any advance of a Member Loan, the Non-Contributing Member shall be deemed to have contributed an amount equal
to the principal amount of such Member Loan to the capital of the Company, and the Capital Account and Unrecovered Contribution Account of the Non-Contributing Member shall be credited with a like amount. Notwithstanding the provisions of
Articles 5 and 8, until any and all Member Loans are repaid in full, the Non-Contributing Member shall draw no further distributions from the Company, and all cash or property otherwise distributable with respect to the Non-Contributing
Member’s Interest (or fees payable to the Non-Contributing Member or any of its Affiliates including, without limitation, any fees payable under Section 2.12) shall be distributed to the Contributing Member in repayment of the
outstanding balance of the Member Loan, with such funds being applied first to reduce any and all interest accrued on such Member Loan and then to reduce the principal amount thereof. Any amounts so applied shall be treated, for all purposes under
this Agreement, as having actually been distributed to the Non-Contributing Member and applied by the Non-Contributing Member to repay the outstanding Member Loan. 
  

 -16- 

 If, upon the maturity of a Member Loan (taking into account any agreed upon extensions
thereof), any principal thereof or accrued interest thereon remains outstanding, the Contributing Member shall elect one of the following options: (i) to renew such Member Loan (or portion thereof) pursuant to the terms and provisions of this
Section 3.03(b) for an additional term of six (6) months; (ii) to contribute all or any portion of such outstanding principal of and accrued, unpaid interest on such Member Loan (or portion thereof) to the capital of the
Company and dilute the Percentage Interest of the Non-Contributing Member in accordance with the provisions of Section 3.03(c); or (iii) elect to exercise the buy-sell provisions contained in Article 7 in accordance with the
provisions of Section 3.03(d), in which event the Member Loan shall remain in effect until the closing of the buy-sell transaction contemplated under Article 7. The Contributing Member may elect any of the options set forth in the
immediately preceding sentence by giving written notice of such election to the Non-Contributing Member within thirty (30) days prior to such maturity date of the Member Loan. Failure of the Contributing Member to timely give such written
notice to the Non-Contributing Member shall be deemed to constitute an election to renew such Member Loan for an additional term of six (6) months on the terms set forth herein. 
 (c) Dilution. The Contributing Member may contribute to the capital of the Company, in cash, within thirty (30) days following
the Contribution Date, an amount equal to the Delinquent Contribution, and the Capital Account and Unrecovered Contribution Account of the Contributing Member shall be credited with the amount so contributed. In the alternative, if the Contributing
Member elected to make a Member Loan, then upon the maturity of a Member Loan that is not fully repaid on or before the maturity date thereof, the Contributing Member also may contribute to the capital of the Company, in accordance with the
provisions of Section 3.03(b) above, all or any portion of the outstanding principal of and accrued, unpaid interest on such Member Loan (or portion thereof) and (i) the amount of such outstanding principal and interest so
contributed shall be deemed repaid and satisfied, (ii) the amount of such outstanding principal and interest shall be deemed to have been distributed to the Non-Contributing Member, and debited from the Capital Account and Unrecovered
Contribution Account of the Non-Contributing Member, and (iii) the Capital Account and Unrecovered Contribution Account of the Contributing Member shall be increased by the amount of such outstanding principal and interest so contributed.

 Upon the contribution of any Delinquent Contribution (or the contribution of the principal and interest of any Member Loan
by the Contributing Member pursuant to this Section 3.03(c)), the Percentage Interest and the Contribution Percentage of the Non-Contributing Member shall be decreased by the Dilution Percentage. The “Dilution
Percentage” shall equal the amount expressed in percentage points (rounded to the nearest one-hundredth of a percentage point) calculated based upon the following formula: 
  

			
		  	 Delinquent Contribution (or the outstanding balance of any Member Loan (including interest) contributed by
the Contributing Member)
  

	Dilution Percentage = 200% x        	  	  
 Aggregate amount of the balances standing in all of the Members’
respective Unrecovered Contribution Accounts (including the Additional Contribution contributed by the Contributing Member(s) and the Delinquent Contribution or the outstanding balance of any Member Loan (including interest) contributed by the
Contributing Member)

  

 -17- 

 The Percentage Interest and the Contribution Percentage, of the Contributing Member shall be increased by
the amount of the reduction in the Percentage Interest of the Non-Contributing Member. 
 The application of the provisions of this
Section 3.03(c) is illustrated by the following example: Assume that (i) the Unrecovered Contribution Amount of the Members was equal to $8,000,000, (ii) an Additional Contribution of $500,000 was required to be contributed by
the Members to the capital of the Company, (iii) the Non-Contributing Member whose Percentage Interest is 35% failed to contribute its share of such contribution of $175,000 (i.e., 35% x $500,000), and (iv) pursuant to this
Section 3.03(c), the Contributing Member whose Percentage Interest is 65% made the Delinquent Contribution of $175,000 to the capital of the Company on behalf of such Non-Contributing Member pursuant to this Section 3.03(c).

 The Dilution Percentage applicable to the Non-Contributing Member would be equal to 4.12 percentage points as calculated in accordance
with the following formula: 
  

															
		  	$   175,000	  		  		  		  		  		  	
	4.12% = 200% x        	  	 $8,500,000
	  		  		  		  		  		  	

 The Percentage Interest and the Contribution Percentage of the Non-Contributing Member therefore would be reduced
by 4.12 percentage points from 35% to 30.88%, and the Percentage Interest and the Contribution Percentage of the Contributing Member would be increased by a like amount of percentage points from 65% to 69.12%. 
 (d) Implementation of Buy-Sell. In addition to the options set forth in Sections 3.03(b) and 3.03(c) above, the Contributing Member
may elect to implement the buy-sell provisions contained in Article 7 for a Default Buy-Sell Event by delivery of written notice of such election to the Non-Contributing Member in accordance with the provisions thereof (and in which case the
Non-Contributing Member shall be deemed to be the Defaulting Member and the Contributing Member shall be deemed to be the Non-Defaulting Member for purposes of Article 7); provided, however, that if the Contributing Member so elects to
implement the buy-sell provisions contained in Article 7 and the Contributing Member also exercises its rights under Section 3.03(c), then in computing the Dilution Percentage in Section 3.03(c) in connection with the
contribution of the Delinquent Contribution or any portion of the outstanding principal of and/or accrued, unpaid interest on any Member Loan that is the subject of the Default Buy-Sell Event, the 200% number used in the dilution formula in
Section 3.03(c) above shall be 100%. 
  

 -18- 

 (e) Application of Provisions. Any and all adjustments to the Non-Contributing
Member’s Percentage Interest shall be rounded to the nearest .01% and (except as provided otherwise in the first paragraph of Section 3.03(b)) the Contributing Member shall not succeed to all or any portion of the Capital Account or
Unrecovered Contribution Account of the Non-Contributing Member as the result of any such adjustment. In addition, notwithstanding any provision contained in this Article 3, the Non-Contributing Member’s Percentage Interests shall in no
event be reduced below .01% by operation of Section 3.03(d). As a result of any contribution to the capital of the Company pursuant to this Section 3.03, the Contributing Member shall have the right, but not the obligation,
to cause the Capital Accounts of the Members to be booked-up or booked-down in accordance with the provisions of Treasury Regulation Section l.704-l(b)(2)(iv)(f) to reflect the fair market value of the Company’s assets (as reasonably determined
by the Contributing Member) at the time of such contribution. 
  

	 	3.04	Debt Financing 

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

	 	3.05	Loans from Members 

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

	 	3.06	Capital Contributions in General 

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

 -19- 

 ARTICLE 4 
 ALLOCATION OF PROFITS AND LOSSES 
  

	 	4.01	Allocation of Net Profits and Net Losses 

 After application of Sections 4.02 and 4.03, Net Profits and Net Losses for each Fiscal Year shall be allocated among the Members so as to reduce, proportionately, in the case of any Net Profits, the difference
between their respective Target Capital Accounts and Partially Adjusted Capital Accounts for such Fiscal Year and, in the case of Net Losses, the difference between their respective Partially Adjusted Capital Accounts and Target Capital Accounts for
such Fiscal Year. No portion of Net Profits or Net Losses for any Fiscal Year shall be allocated to a Member, in the case of Net Profits, whose Partially Adjusted Capital Account is greater than its Target Capital Accounts or, in the case of Net
Losses, whose Target Capital Account is greater than or equal to its Partially Adjusted Capital Account for such Fiscal Year. 
  

	 	4.02	Regulatory Allocations 

 Prior to making any allocations pursuant to Section 4.01 hereof, the following special allocations shall be made each Fiscal Year, to the extent required, in the following order: 
 (a) Minimum Gain Chargebacks. Items of Company income and gain shall be allocated for any Fiscal Year to the extent, and in an
amount sufficient to satisfy the “minimum gain chargeback” requirements of Treasury Regulation Sections 1.704-2(f) and (i)(4). 
 (b) Qualified Income Offset. Items of Company income and gain shall be allocated any Fiscal Year to the extent, and in an amount sufficient to satisfy the “qualified income offset” requirements of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(3). 
 (c) Member Nonrecourse Deductions. Member Nonrecourse
Deductions shall be allocated to the Member who bears the economic risk of loss associated with such deductions, in accordance with Treasury Regulations Section 1.704-2(i). 
 (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be allocated among the Members in accordance with
their Contribution Percentages. 
 (e) Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of such adjustment to
the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with the
requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(m). 
  

 -20- 

	 	4.03	Other Special Allocations 

 (a) If the Company has Net Profits for any Fiscal Year (determined prior to giving effect to this Section 4.03) and the balance of any Member’s Partially Adjusted Capital Account is greater than the balance of its Target Capital
Account, then the Member with such excess balance shall be specially allocated items of Company deduction or loss (to the extent available) equal to the difference between its Partially Adjusted Capital Account and its Target Capital Account;

 (b) If the Company has Net Losses for any Fiscal Year (determined prior to giving effect to this Section 4.03) and the
balance of any Member’s Partially Adjusted Capital Account is less than the balance of its Target Capital Account, then the Member with such deficit balance shall be specially allocated items of Company income or gain for such Fiscal Year (to
the extent available) equal to the difference between its Partially Adjusted Capital Account and its Target Capital Account; and 
 (c) If the Company has neither Net Profits nor Net Losses for any Fiscal Year (determined prior to giving effect to this Section 4.03) and, notwithstanding the application of Section 4.01, the balance of any Member’s
Partially Adjusted Capital Account differs from the balance of its Target Capital Account, then the Member with an excess or deficit balance, as the case may be, shall be specially allocated items of Company deduction or loss or income or gain, as
the case may be, for such Fiscal Year (to the extent available) to eliminate the difference between its Partially Adjusted Capital Account and its Target Capital Account; provided, however, that no Member shall be allocated any Net Losses or items
in the nature of deduction or loss pursuant to Section 4.01 or this Section 4.03 to the extent that such allocation would cause or increase an Adjusted Capital Account Deficit with respect to such Member. Allocations of Net Losses that
would be made to a Member but for the proviso in the first sentence of this Section 4.03(c) shall be made to the other Member to the extent not inconsistent with such proviso. To the extent allocations of Net Losses cannot be made to either
Member because of such proviso, such allocations shall be made to the Members in accordance with their respective Percentage Interests, notwithstanding such proviso. 
  

	 	4.04	Other Allocation Rules 

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

 -21- 

 (b) Variations in Interests During any Fiscal Year. For purposes of determining
the Net Profits, Net Losses, or any other items allocable to any period, Net Profits, Net Losses, and any such other items shall be determined on a daily, monthly, interim closing of the books or other basis, as determined by the Management
Committee using any permissible method under Section 706 of the Code and the regulations promulgated thereunder. 
 (c)
Allocations of Items. Any allocation to a Member of Net Profit or Net Loss shall be treated as an allocation to such Member of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Profit
or Net Loss. Unless otherwise specified herein to the contrary, any allocation to a Member of items of Company income, gain, loss, deduction or credit (or item thereof) shall be treated as an allocation of a pro rata portion of each item of Company
income, gain, loss, deduction or credit (or item thereof). 
 ARTICLE 5 
 DISTRIBUTIONS 
  

	 	5.01	Distribution of Ordinary Cash Flow 

 Subject to the provisions of Sections 5.03, 7.04 and 8.02, Ordinary Cash Flow realized by the Company shall be distributed to the Members as soon as practicable following the Company’s receipt thereof in the following order of
priority: 
 (a) First, to Paladin until Paladin’s Unpaid Preferred Return has been reduced to zero; 
 (b) Second, unless a Cash Flow Bonus Forfeiture Event Exists, to the Property Manager until the Deferred Management Fee Account has been
reduced to zero. 
 (c) Third, to Buckingham until Buckingham’s Unpaid Preferred Return has been reduced to zero; and

 (d) Thereafter, fifty percent (50%) to Paladin and fifty percent (50%) to Buckingham, or if a Cash Flow Bonus
Forfeiture Event exists, to the Members pro rata in accordance with their respective Percentage Interests. 
  

 -22- 

	 	5.02	Distribution of Extraordinary Cash Flow 

 Subject to the provisions of Sections 5.03, 7.04 and 8.02, Extraordinary Cash Flow realized by the Company shall be distributed to the Members as soon as practicable following the Company’s receipt thereof
in the following order of priority: 
 (a) First, unless a Cash Flow Bonus Forfeiture Event Exists, to the Property Manager
until the Deferred Management Fee Account has been reduced to zero; 
 (b) Second, to Paladin until Paladin’s Unpaid
Preferred Return is reduced to zero; 
 (c) Third, to Paladin until Paladin’s Unrecovered Contribution Account is reduced
to zero; 
 (d) Fourth, to Buckingham until Buckingham’s Unpaid Preferred Return is reduced to zero; 
 (e) Fifth, to Buckingham until Buckingham’s Unrecovered Contribution Account is reduced to zero; 
 (f) Sixth, to Paladin until Paladin has received distributions under Section 5.01 and this Section 5.02 in an
amount equal to Paladin’s Threshold Return; 
 (g) Seventh, to Buckingham until Buckingham has received distributions
under Section 5.01, this Section 5.02 and Section 6.05 in an amount equal to Buckingham’s Threshold Return; and 
 (h) Thereafter, fifty percent (50%) to Paladin and fifty percent (50%) to Buckingham, or if a Cash Flow Bonus Forfeiture Event exists, to the Members pro rata in accordance with their respective Percentage
Interests. 
  

	 	5.03	Limitations on Distributions 

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

	 	5.04	In-Kind Distribution 

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

 -23- 

	 	5.05	Right to Withhold 

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

  

	 	6.01	Limitations on Transfer 

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

	 	6.02	Permitted Transfers 

 Notwithstanding the foregoing, any Member may Transfer all or any portion of such Member’s Interest to any of the following (collectively, “Permitted Transferees”) without complying with the provisions of
Section 6.01: 
 (a) In the case of Transfers by Paladin, (i) any Transfer of any direct or indirect Interest
in Paladin to any Affiliate of Paladin and (ii) any Transfer of a direct or indirect interest in Paladin Realty Income Properties, L.P. or the Paladin REIT to any Person; and 
 (b) In the case of Transfers by Buckingham, any Transfer of an interest in Buckingham to any Immediate Family Member of Bradley B.
Chambers or a trust(s) therefor provided that Bradley B. Chambers continues to manage or control Buckingham. 
  

 -24- 

 Upon receipt by the Management Committee of notice of such Transfer (along with a copy of
the instrument(s) of transfer), any such Permitted Transferees shall receive and hold such Interest or portion thereof, subject to the terms of this Agreement (including Article 6) and to the obligations hereunder of the transferor, and there
shall be no further Transfer of such Interest (or economic interest) or portion thereof except to a Person to whom such Permitted Transferee could have transferred such Interest (or economic interest) or portion thereof in accordance with this
Section 6.02 had such Permitted Transferee originally been a Member or otherwise in accordance with the terms of this Agreement. Notwithstanding any other provision contained herein, any Transfer described in this
Section 6.02 shall be null and void ab initio and of no force or effect if such Transfer would otherwise violate the provisions of Section 6.04. 
  

	 	6.03	Admission of Substitute Members 

 If any Member Transfers such Member’s Interest to a transferee in accordance with Sections 6.01 or 6.02, then such transferee shall only be entitled to be admitted into the Company as a substitute Member if (i) the
books and records of the Company are amended to reflect such admission; (ii) the Management Committee approves the admission of such transferee and the form and content of the instrument of transfer; (iii) the transferor and transferee
named therein execute and acknowledge such other instruments as the Management Committee may deem reasonably necessary to effectuate such admission; (iv) the transferee in writing accepts and adopts all of the terms and conditions of this
Agreement, as the same may have been amended; and (v) the transferor pays, as the Management Committee may reasonably determine, all reasonable expenses incurred in connection with such admission, including, without limitation, legal fees and
costs. To the fullest extent permitted by law, any transferee of an Interest who does not become a substituted Member shall have no right to require any information or account of the Company’s transactions, to inspect the Company books, or to
vote on any of the matters as to which a Member would be entitled to vote under this Agreement. Any such transferee shall only be entitled to share, as an assignee, in such Net Profits and Net Losses, to receive such distributions, and to receive
such allocations of income, gain, loss, deduction or credit or similar items to which the transferor was entitled, to the extent assigned. A Member that Transfers its Interest shall not cease to be a member of the Company until the admission of the
transferee as a substituted member of the Company and, except as provided in the preceding sentence, shall continue to be entitled to exercise, and shall continue to be subject to, all of the rights, duties and obligations of such Member under this
Agreement. 
  

	 	6.04	Additional Restrictions on Transfer 

 Notwithstanding any other provision contained herein, unless the Management Committee waives any applicable restriction set forth in this Section 6.04, any Transfer described in this Article 6 shall be null and void ab
initio and of no force or effect if: (i) such Transfer requires the registration of such Interest pursuant to, or otherwise directly or indirectly violates, any applicable federal or state securities laws; (ii) such transfer causes or will
cause the Company to become a “Publicly Traded Partnership” as such term is defined in Section 7704(b) of the Code; (iii) such Transfer results in a violation of applicable laws; (iv) such 

  

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Transfer would, in the opinion of the Company’s counsel, cause the Company to cease to be classified as a partnership for state and federal income tax
purposes; (v) such Transfer is made to any Person lacking the legal power or capacity to own any Interest; or (vi) such Transfer causes an acceleration of any loan or debt instrument to which the Company is a party. 
  

	 	6.05	Buckingham Put Right 

 (a)
Grant of Put Right. Paladin grants to Buckingham the right to require Paladin to purchase all or any portion of the Buckingham Put Interest (the “Put Right”) upon and subject to the following terms and conditions: 

(1) The Put Right may be exercised at any time and from time to time after the first anniversary of the date of this Agreement by
written notice from Buckingham to Paladin specifying the portion of the Buckingham Put Interest (but which shall include no fractional percentage interests) that Buckingham requires Paladin to purchase (the “Designated Put
Interest”), provided that at the time of the exercise of the Put Right the following conditions shall have been satisfied: (i) no Cash Flow Bonus Forfeiture Event shall then exist; (ii) there shall then exist no Unpaid
Preferred Return to Paladin, or Buckingham shall agree that any Unpaid Preferred Return may be offset against the purchase price; and (iii) during the twelve (12) calendar months preceding the month in which the Put Right is exercised,
there shall have been, as verified by Paladin, Ordinary Cash Flow sufficient to have made distributions pursuant to Section 5.01(a) and Section 5.01(c) of all Paladin’s Preferred Return and all of Buckingham’s
Preferred Return that has accrued with respect to the Designated Put Interest during such twelve (12) month period. 
 (2) The purchase price for the Designated Put Interest shall be Sixty-Two Thousand Five Hundred and No/100 Dollars ($62,500.00) multiplied by each one percent (1%) Percentage Interest (but which shall not include any fractional
percentage interests) in the Company included in the Designated Put Interest. 
 (b) Closing. Each closing of the
purchase of any Designated Put Interest shall occur on a date designated by Paladin on or before the date that is forty-five (45) days after the Effective Date of Buckingham’s exercise of the Put Right with respect to the applicable
Designated Put Interest. At the closing of each such Designated Put Interest, Buckingham shall execute such instruments of conveyance and make such representations and warranties as Paladin shall reasonably request to deliver good title to the
Designated Put Interest, free and clear of all liens, pledges, encumbrances, security interests or restrictions of any kind whatsoever (other than restrictions on transfer arising under federal and state securities laws). Additionally, the parties
agree to execute and deliver to each other any and all additional documents necessary or appropriate to consummate the closing of the purchase of the Designated Put Interest pursuant to the terms and conditions of this Section 6.05. Each
party shall bear its own expenses in connection with the closing of any Designated Put Interest contemplated in this Section 6.05. Upon the closing of any Designated Put Interest under this Section 6.05, (i) the
Percentage Interest and the Contribution Percentage of Buckingham 

  

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shall be reduced, and the Percentage Interest and the Contribution Percentage of Paladin shall be increased, by the Percentage Interest in the Company
included in the Designated Put Interest so purchased by Paladin and (ii) the amount of the purchase price paid for the Designated Put Interest shall be deemed to have been distributed to Buckingham and debited from the Capital Account and
Unrecovered Contribution Account of Buckingham, and (iii) the amount of the purchase price paid for the Designated Put Interest shall be deemed to have been contributed by Paladin to the capital of the Company and credited to the Capital
Account and Unrecovered Contribution Account of Paladin. If Paladin fails to close the purchase of any Designated Put Interest pursuant to the provisions of this Section 6.05 on or before the closing date provided for above for any
reason other than the default of Buckingham, then, in addition to any other remedy available in law or equity, Buckingham shall be entitled to implement the provisions of Section 3.03(c) and the amount of the purchase price that was
payable for such Designated Put Interest shall be deemed to be a “Delinquent Contribution” due from Paladin under Section 3.03(c) for such purposes. 
 (c) Default Under Phase II Option. Notwithstanding anything in this Agreement to the contrary, in the event that Glenwood Housing
Partners II, LLC, an Indiana limited liability company and an Affiliate of Buckingham, shall default or fail to perform its obligations under that certain Phase II Option Agreement of even date herewith between Glenwood Housing Partners II, LLC and
Paladin, then the Put Right and the provisions of this Section 6.05 shall terminate and become null and void and of no further force and effect. 
  

	 	6.06	Buckingham Pre-Emptive Put Right 

 (a) Institution of Procedures. Within ten (10) Business Days following the date of any Paladin Sale Notice, Paladin shall deliver to Buckingham an offer to sell all of Paladin’s Interest in the Company (the “Paladin
Sale Offer”). The offer to sell Paladin’s Interest set forth in the Paladin Sale Offer shall specify the purchase price (which shall be based on the purchase price that a Majority of Representatives proposes to sell the assets of the
Company pursuant to the action approved by them pursuant to Section 2.02(b) (the “Paladin Valuation”)) and a determination of the amount of cash which would be distributable to each Member pursuant to
Section 5.02 if (i) the Company (including all of its assets) were sold for the Paladin Valuation as of the Effective Date of the Paladin Sale Notice; (ii) the remaining liabilities of the Company were liquidated pursuant to
Section 8.02(a); (iii) reserves in an amount reasonably determined by Paladin were established for any contingent, conditional or unmatured liabilities or obligations of the Company pursuant to Section 8.02(b); and
(iv) the Company distributed any remaining amounts to the Members in accordance with the provisions of Section 5.02. 
 (b) Election by Buckingham. Buckingham shall have fifteen (15) Business Days after the Effective Date of the Paladin Sale Offer to elect, by written notice to Paladin, to purchase Paladin’s Interest
at the price specified in the Paladin Sale Offer. Failure of Buckingham to make such election with such fifteen (15) Business Day period shall be deemed to be an election not to 

  

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purchase Paladin’s Interest. Paladin agrees that for a period of fifteen (15) Business Days from the Effective Date of the Paladin Sale Offer,
Paladin shall refrain from causing the Management Committee, on behalf of the Company, to implement any decision described in Section 2.02(b) that resulted in the institution of the procedures pursuant to this Section 6.06,
and in the event that Buckingham, within such fifteen (15) Business Day period, elects to purchase Paladin’s Interest in the Company, then Paladin shall thereafter refrain from causing the Management Committee, on behalf of the Company, to
implement any such decision unless Buckingham fails to close the purchase of Paladin’s Interest pursuant to the provisions of this Section 6.06 on or before the closing date provided for below for any reason, other than the default
of Paladin. Otherwise, the Management Committee, on behalf of the Company shall be entitled to implement any such decision, unless within the fifteen (15) Business Day period described above, Buckingham elects to purchase Paladin’s
Interest in the Company pursuant to this Section 6.06. 
 (c) Closing. If Buckingham so elects to purchase
Paladin’s Interest in the Company, the closing shall occur on or before the date that is ninety (90) days after the Effective Date of Buckingham’s election. Buckingham shall pay, in cash, to Paladin on the closing date the amount
offered sale price set forth in the Paladin Sale Offer. At the closing of such transfer of Paladin’s Interest, Paladin shall execute such instruments of conveyance and make such representations and warranties as Buckingham shall reasonably
request to deliver good title to all of Paladin’s Interest, free and clear of all liens, pledges, encumbrances, security interests or restrictions of any kind whatsoever (other than restrictions on transfer arising under federal and state
securities laws). 
 (d) Failure to Close. If Buckingham fails to close the purchase of Paladin’s Interest
pursuant to the provisions of this Section 6.06 on or before the closing date provided for above for any reason, other than the default of Paladin, then Paladin shall be entitled to implement any decision described in
Section 2.02(b) that resulted in the institution of the procedures pursuant to this Section 6.06 or shall otherwise be entitled to cause any sale of substantially all of the assets of the Company (including the Project) as
may be approved by a Majority of Representatives without any further duty or obligation to implement the provisions of this Section 6.06. 
  

	 	6.07	Buckingham Unwind Right. 

 Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence of the Unwind Event, Buckingham shall have the right, at any time thereafter, to notify Paladin in writing that it is invoking its right under this
Section 6.07 (the “Unwind Right”). Upon Buckingham’s exercise of the Unwind Right, then on or before the date that is thirty (30) days after Paladin’s receipt of the written notice of exercise of the
Unwind Right, Buckingham shall pay to Paladin the Unwind Purchase Price and upon such payment, Paladin shall execute such instruments of conveyance and make such representations and warranties as Buckingham shall reasonably request to deliver to
Buckingham good title to all of Paladin’s Interest, free and clear of all liens, pledges, encumbrances, security interests or restrictions of any kind whatsoever (other than restrictions on transfer arising under federal and state securities
laws). 
  

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	 	6.08	Election; Allocations Between Transferor and Transferee 

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

	 	6.09	Partition 

 No Member shall
have the right to partition any assets of the Company or any interest therein, nor shall a Member make an application or proceeding for a partition thereto and, upon any breach of the provisions of this Section 6.09 by any Member, the
other Member (in addition to all rights and remedies afforded by law or equity) shall be entitled to a decree or order restraining or enjoining such application, action or proceeding. Upon the Transfer of all or any part of the Interest of a Member
as hereinabove provided, Net Profits and Net Losses shall be allocated between the transferor and transferee on the basis of the computation method which with the approval of the Management Committee, in its sole and absolute discretion, is in the
best interests of the Company, provided such method is in conformity with the methods prescribed by Section 706 of the Code and Treasury Regulation Section 1.706-1(c)(2)(ii). 
  

	 	6.10	Waiver of Withdrawal 

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

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 ARTICLE 7 
 DEFAULT BUY-SELL AGREEMENT 
  

	 	7.01	Default Buy-Sell Events 

 For
purposes of this Article 7, the following shall constitute “Default Buy-Sell Events”: 
 (a)
Prohibited Withdrawal or Retirement. The withdrawal, retirement, or other cessation to serve as a Member of the Company by any Member in violation of the terms of this Agreement; 
 (b) Default by the Operating Member. The fraud, willful misconduct, gross negligence or Material Breach (which shall include the
notice and cure provisions to the extent provided in the definition of Material Breach) by the Operating Member (or its representatives) in performing or failing to perform the Operating Member’s duties and obligations under this Agreement;

 (c) Prohibited Transfer or Encumbrance. Any Transfer or encumbrance or attempted Transfer or encumbrance by any
Member of such Member’s Interest contrary to the provisions of Article 6; 
 (d) Breach of Agreement.
Any Material Breach (which shall include the notice and cure provisions to the extent provided in the definition of Material Breach) by any Member (except for the failure of any Member to make an Additional Contribution required hereunder);

 (e) Bankruptcy or Insolvency. The rendering, by a court with appropriate jurisdiction, of a decree or order
(i) adjudging a Member bankrupt or insolvent; or (ii) approving as properly filed a petition seeking reorganization, readjustment, arrangement, composition, or similar relief for a Member under the federal bankruptcy laws or any other
similar applicable law or practice, and if such decree or order referred to in this Section 7.01(e) shall have continued undischarged and unstayed for a period of sixty (60) days; 
 (f) Appointment of Receiver. The rendering, by a court with appropriate jurisdiction, of a decree or order (i) for the
appointment of a receiver, a liquidator, or a trustee or assignee in bankruptcy or insolvency of a Member, or for the winding up and liquidation of a Member’s affairs, provided that such decree or order shall have remained in force undischarged
and unstayed for a period of sixty (60) days, or (ii) for the sequestration or attachment of any property of a Member without its return to the possession of such Member or its release from such sequestration or attachment within sixty
(60) days thereafter; and 
 (g) Bankruptcy Proceedings. A Member (i) institutes proceedings to be
adjudicated a voluntary bankrupt or an insolvent, (ii) consents to the filing of a bankruptcy proceeding against such Member, (iii) is unable to or admits in writing such Member’s inability to pay such Member’s debts generally as
they become due, or (iv) files a petition or answer or 

  

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consent seeking reorganization, readjustment, arrangement, composition, or similar relief for such Member under the federal bankruptcy laws or any other
similar applicable law or practice, (iv) consents to the filing of any such petition, or to the appointment of a receiver, a liquidator, or a trustee or assignee in bankruptcy or insolvency for such Member or a substantial part of such
Member’s property, (v) makes an assignment for the benefit of such Member’s creditors, or (vi) takes any action in furtherance of any of the aforesaid purposes. 
 For the purposes of implementing the provisions contained in this Article 7 and otherwise for purposes of this Agreement,
(A) each of the events set forth in Sections 7.01(a)-(g) shall constitute a “Default Buy-Sell Event”; (B) the “Defaulting Member” shall be (i) in the case of the occurrence of the event
referenced in Section 7.01(a), the Member that has withdrawn, retired or ceased to serve as a Member of the Company in violation of the terms of this Agreement; (ii) in the case of the occurrence of the event referenced in
Section 7.01(b), the Operating Member); (iii) in the case of the occurrence of the event referenced in Section 7.01(c), the Member that purports to undertake a Transfer of such Member’s rights or interests contrary
to the provisions of Article 6; (iv) in the case of the occurrence of the event referenced in Section 7.01(d), the Member that has breached any material covenant, duty or obligation under this Agreement; and (v) in
the case of any of the events referenced in Section 7.01(e), (f), or (g), the Member who is the subject of such court decree or order or has instituted such proceedings or filed such petitions or who is insolvent, etc; and (C) the
“Non-Defaulting Member” is the Member that is not the Defaulting Member. 
  

	 	7.02	Rights Arising From a Default Buy-Sell Event 

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

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	 	7.03	Determination of Purchase Price 

 (a) Member Buyout. Within thirty (30) days after the determination of the Buyout Purchase Price or, in the absence thereof, the determination of the Appraised Value of the Company pursuant to Section 7.03(b), the
accountants regularly employed by the Company shall determine the amount of cash which would be distributed to each Member pursuant to Section 5.02 if (i) the Company (including all of its assets) were sold (as applicable) for the
Buyout Purchase Price or Appraised Value thereof (as applicable) as of the Effective Date of the Default Notice (after deducting therefrom an amount equal to reasonable and customary closing costs that would be payable in connection with any such
sale); (ii) the remaining liabilities of the Company were liquidated pursuant to Section 8.02(a); (iii) reasonable reserves were established for any contingent, conditional or unmatured liabilities or obligations of the Company
pursuant to Section 8.02(b); (iv) if (and only if) the Defaulting Member is Buckingham, a Cash Flow Bonus Forfeiture Event existed for purposes of Sections 5.01(d) and 5.02(h); and (v) the Company distributed any
remaining amounts to the Members in accordance with the provisions of Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a notice thereof (the “Price Determination
Notice”). The determination by the accountants of such amounts, including all components thereof, shall be deemed conclusive absent any material computational error. If the Non-Defaulting Member purchases the Interest of the Defaulting
Member, ninety-five percent (95%) of the amount that would be distributed to the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7;
provided, however, that if the Buy-Sell Event applicable to the Defaulting Member is not one of the Buy-Sell Events referenced in Sections 7.01(a), (b), (c) or (d), then one hundred percent (100%) of the amount that would be
distributed to the Defaulting Partner pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7. 
 (b) Determination of Appraised Value. For purposes of this Article 7, the appraised value (“Appraised
Value”) of the assets of the Company shall be determined by one (1) or more independent Qualified Appraisers. The Non-Defaulting Member shall select one (1) Qualified Appraiser and shall include such selection in the Default
Notice. Within fifteen (15) days following the Effective Date of the Default Notice, the Defaulting Member shall either agree to the Qualified Appraiser selected by the Non-Defaulting Member or select a second (2nd) Qualified Appraiser and
give written notice to the Non-Defaulting Member of the person so selected. If either the Non-Defaulting Member or the Defaulting Member fails to appoint a Qualified Appraiser within the time period specified and after the expiration of five
(5) days following the Effective Date of written demand that a Qualified Appraiser be appointed, the Qualified Appraiser duly appointed by the Member making such demand to appoint such Qualified Appraiser shall proceed to make the appraisal as
herein set forth, and the determination thereof shall be conclusive on all the Members. If two (2) Qualified Appraisers are selected, then such selected Qualified Appraisers shall thereafter appoint a third (3rd) Qualified Appraiser. If
the two (2) selected Qualified Appraisers fail to appoint a third (3rd) Qualified Appraiser 

  

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within ten (10) days following the Effective Date of written notice from the Defaulting Member notifying the Non-Defaulting Member of the selection of
the second (2nd) Qualified Appraiser, either Member may petition a court of competent jurisdiction to appoint a third (3rd) Qualified Appraiser. 
 The Qualified Appraiser or three (3) Qualified Appraisers, as the case may be, shall promptly fix a time for the completion of the appraisal, which shall not be later than thirty (30) days from the Effective
Date of the appointment of the last Qualified Appraiser. 
 The Qualified Appraiser(s) shall determine the Appraised Value by
determining the fair market value of the assets of the Company, such being the fairest price estimated in the terms of money which the Company could obtain if the assets of the Company were sold, for all cash, in the open market allowing a
reasonable time to find a purchaser. 
 Upon submission of the appraisals setting forth the opinions as to the Appraised Value
of the assets of the Company, the two (2) such appraisals which are nearest in amount shall be retained, and the third (3rd) appraisal shall be discarded. The average of the two (2) retained appraisals shall constitute the Appraised
Value of the assets of the Company for purposes of this Article 7; unless one (1) appraisal is the mean of the other two (2) appraisals, in which case such appraisal shall constitute the Appraised Value of the assets of the
Company for purposes of this Article 7. 
 (c) Sale to Third Party. Within ten (10) days after the
closing of any sale of the Company or its assets to any third party pursuant to clause (i) of Section 7.02, the accountants regularly employed by the Company shall determine the amount of cash which would be distributed to each
Member pursuant to Section 5.02 after (i) the sale of the Company (including all of its assets) to the third party for the Third-Party Purchase Price as of the closing of the sale of the Company or its assets (after deducting
therefrom an amount equal to reasonable and customary closing costs and any prepayment fees on any indebtedness that would be payable in connection with any such sale); (ii) the liquidation of the remaining liabilities of the Company pursuant
to Section 8.02(a); (iii) the establishment of reserves in an amount reasonably determined by the Non-Defaulting Member for any contingent, conditional or unmatured liabilities or obligations of the Company pursuant to
Section 8.02(b); (iv) if Buckingham is the Defaulting Member, the existence of a Cash Flow Bonus Forfeiture Event for purposes of Sections 5.01(d) and 5.02(h); and (v) the distribution by the Company of any remaining
amounts to the Members in accordance with the provisions of Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a Price Determination Notice thereof. The determination by the
accountants of such amounts, including all components thereof, shall be deemed conclusive absent any material computational error. In the event of any such third party sale, ninety-five percent (95%) of the amount that would be distributed to
the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7. 
  

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

	 	7.04	Member’s Option 

 (a)
Non-Defaulting Member’s Option. For a period of thirty (30) days following the determination of the Default Purchase Price pursuant to Section 7.03(a), the Non-Defaulting Member shall have the right, but not the
obligation, to (i) purchase the entire Defaulting Member’s Interest for the Default Purchase Price thereof (as determined pursuant to Section 7.03(a)), and on the terms and conditions set forth in this Article 7,
(ii) elect to sell the Company or cause the Company to sell its assets to a third party in accordance with the provisions set forth above in this Article 7 or (iii) waive the right to purchase the Defaulting Member’s Interest
or cause such third party sale with respect to the particular Default Buy-Sell Event, in each case by delivering written notice thereof to the Defaulting Member within such thirty (30)-day period. The failure of the Non-Defaulting Member to timely
give any such written notice pursuant to this Section 7.04 shall be deemed an election by such Member to waive such rights with respect to the particular Buy-Sell Event that resulted in the implementation of the provisions of this
Article 7. If the Non-Defaulting Member elects to sell the Company or cause the Company to sell its assets to a third party in accordance with the provisions set forth above in this Article 7, then, in lieu of electing to purchase the
Defaulting Member’s Interest, at the Non-Defaulting Member’s option, the Non-Defaulting Member may cause the sale to such third party to occur. If the Non-Defaulting Member causes the sale to such third party to occur, then,
notwithstanding the provisions of Articles 5 and 8 (and any other provision contained in this Agreement), the aggregate amount of Cash Flow to be distributed to the Defaulting Member from such sale shall be equal to the Default Purchase Price
for the Defaulting Member’s Interest determined in accordance with the provisions of Section 7.03(c) and the balance of such proceeds shall be distributed to the Non-Defaulting Member. 
 (b) Defaulting Member’s Option Prior to Sale to Third Party. Prior to accepting an offer to sell the Company or its assets to
any third party pursuant to clause (i) of Section 7.02 at the Third-Party Purchase Price, the Non-Defaulting Member shall give the Defaulting Member written notice and a copy of the offer (“Third Party Offer
Notice”). The Defaulting Member then shall have five (5) days after receipt of the Third Party Offer Notice to elect, by written notice to the Non-Defaulting Member, to purchase the Non-Defaulting Member’s Interest at a purchase
price equal to the amount that the Non-Defaulting Member would 

  

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have received pursuant to the last sentence of Section 7.04(a) from the sale to the third party (the “Defaulting Party Purchase
Price”). If the Defaulting Member fails to make such election by written notice to the Non-Defaulting Member at or before the end of such five (5) day period, then the Defaulting Member shall be deemed to have waived its rights under
this Section 7.04(b) and the provisions of this Section 7.04(b) shall thereafter be null and void, even if the transaction to sell the Company or its assets to any third party pursuant to clause (i) of Section 7.02 at the
Third-Party Purchase Price is not consummated. If the Defaulting Party fails to close the purchase of Non-Defaulting Party’s Interest pursuant to the provisions of this Section 7.04(b) on or before the date five (5) days after
receipt of the Third Party Offer Notice for any reason, other than the default of the Non-Defaulting Party, then the Non-Defaulting Member may once again exercise its rights as the Non-Defaulting Member under this Article 7 from and after
such date; provided, however, that in connection therewith the percentages of “ninety-five percent (95%)” and “one hundred percent (100%),” respectively, set forth in the last sentence of Section 7.03(a) shall
thereafter be “ninety percent (90%)” and “ninety-five percent (95%),” respectively, and the percentage of “ninety-five percent (95%)” set forth in the last sentence of Section 7.03(c) thereafter be
“ninety percent (90%).” 
  

	 	7.05	Closing of Purchase and Sale 

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

	 	7.06	Payment of Purchase Price 

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

 

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	 	7.07	Release and Indemnity 

 On or
before the closing of a purchase held pursuant to this Article 7, the Purchasing Member shall use such Member’s reasonable efforts to obtain written releases of the Selling Member (and such Member’s Affiliates) from all liabilities
of the Company and from all guarantees of such liabilities of the Company previously executed by the Selling Member (and its Affiliates). To the extent such releases cannot be obtained by the Purchasing Member, Paladin or Buckingham, as the case may
be, or such Affiliate entity satisfactory to the Selling Member shall indemnify, defend, protect and hold the Selling Member (and such Affiliates) wholly free and harmless from and against any and all claims, liabilities, causes of action, liens,
charges, and all other matters arising from such liabilities or guarantees, arising subsequent to the Effective Date of such closing. The Members acknowledge and agree that the provisions of this Section 7.07 shall only apply if the
applicable Buy-Sell Event is that referenced in Section 7.01(b) or Section 7.01(d) and is not attributable to the fraud, willful misconduct or gross negligence of the Selling Member. 
  

	 	7.08	Repayment of Member Loans 

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

	 	7.09	Voting Rights Following Default Buy-Sell Event 

 From and after the occurrence of a Default Buy-Sell Event (unless and until the Non-Defaulting Member waives in writing any Default Buy-Sell Event or fails to timely consummate the closing of any applicable
transaction described in this Article 7 pursuant to Section 7.05), (i) the Defaulting Member shall not be entitled to participate in the management of, or otherwise vote upon, any matter affecting the business and affairs of,
the Company or any matter that such Member is entitled to vote upon under this Agreement, (ii) the Defaulting Member shall no longer have any right to appoint any representative to the 

  

 -36- 

 
Management Committee and any previously appointed representatives of the Defaulting Member shall be replaced by one (1) or more representatives to be
appointed by the Non-Defaulting Member, and (iii) the rights of the Defaulting Member shall be limited solely to those of an assignee. 
  

	 	7.10	Withdrawal of the Selling Member 

 If the Interest of the Selling Member is purchased by the Purchasing Member pursuant to this Article 7, then, effective as of the closing for such purchase, (i) the Selling Member shall withdraw as a Member of the Company, and
(ii) if the Selling Member is Buckingham, then Buckingham shall be automatically removed as the Operating Member of the Company. In connection with any such withdrawal of the Selling Member, the Purchasing Member may cause any nominee
designated in the sole and absolute discretion of the Purchasing Member to be admitted as a substitute partner of the Company. 
 ARTICLE 8

 DISSOLUTION AND WINDING UP OF THE COMPANY 
  

	 	8.01	Events Causing Dissolution of the Company 

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

	 	8.02	Winding Up of the Company 

 Upon the Liquidation of the Company caused by other than the termination of the Company under Section 708(b)(1)(B) of the Code (in which latter case the Company shall remain in existence in accordance with the provisions of such
Section of the Code), the Members shall proceed to the winding up of the affairs of the Company. During such winding up process, the Net Profits, Net Losses and Cash Flow distributions shall continue to be shared by the Members in accordance with
this Agreement. The assets shall be liquidated as promptly as consistent with obtaining a fair value therefor, and the proceeds therefrom, to the 

  

 -37- 

 
extent available, shall be applied and distributed by the Company on or before the end of the taxable year of such Liquidation or, if later, within ninety
(90) days after such Liquidation, in the following order: (a) first, to creditors of the Company (including Members who are creditors), in the order of priority as provided by law, (b) second, to the setting up of any reasonable
reserves which the Management Committee deems reasonably necessary for any contingent, conditional or unmatured liabilities or obligations of the Company (which shall be distributed as soon as reasonably practicable to the Members in proportion to
their respective positive Capital Account balances), and (c) thereafter, to the Members in accordance with Section 5.02 hereof. 
  

	 	8.03	No Negative Capital Account Restoration 

 No Member shall have any obligation whatsoever upon the Liquidation of such Member’s Interest, the Liquidation of the Company or in any other event, to contribute all or any portion of any negative balance
standing in such Member’s Capital Account to the Company, to any other Member or to any other Person. 
 ARTICLE 9 
 BOOKS AND RECORDS;  
 ACCOUNTING; TAX ELECTIONS 
  

	 	9.01	Company Books 

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

	 	9.02	Delivery of Records; Inspection 

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

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 (c) Names and Addresses. A current list of the name and last known-business,
residence or mailing address of each Member and the date on which each became a Member; 
 (d) Formation Documents. A
copy of this Agreement, as amended, and any other formation documents for the Company, together with executed copies of any written powers of attorney pursuant to which this Agreement, as amended, and any other formation documents have been
executed; and 
 (e) Contribution Information. True and full information regarding the amount of cash and a description
and statement of the agreed value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future. 
 Any Member (personally or through an authorized representative) may, for any purpose reasonably related to such Member’s Interest,
inspect and copy (at its own cost and expense) the books and records of the Company at all reasonable business hours. 
  

	 	9.03	Reports and Tax Information 

 (a) General. The Operating Member shall cause to be prepared, at the cost and expense of the Company, and delivered to each Member at such times as are determined by the Management Committee (or otherwise in accordance with the terms
of this Agreement), the Annual Business Plans, the Operating Budgets, any and all periodic operating reports, and any and all other financial statements or reports requested from time to time by any representative of the Management Committee. In
addition, the Operating Member shall cause to be prepared, at the cost and expense of the Company, and delivered to each Member, within ninety (90) days after the end of each tax year, the information necessary for such Member to complete its
federal, state and local income tax or information returns. 
 (b) Tax Returns. The Operating Member shall cause to be
prepared by a reputable accounting firm approved by the Management Committee and delivered to each Member, within ninety (90) days from and after the final day of each tax year, the Company’s federal, state and local income or information
tax returns for the year, as well as any additional information necessary for such Member to complete its federal, state and local income tax or information returns. In addition, upon the request of any Member, the Operating Member shall prepare
estimates of the projected federal, state and local taxable income of the Company, and the portion thereof allocable to each Member, within a reasonable time period specified by the Member prior to the end of each tax year. 
 (c) Periodic Financial Statements. The Operating Member shall furnish quarterly financial statements, including a balance sheet,
income statement, statement of Members’ capital, statement of cash flows and notes thereon, that are prepared on a historical cost basis in accordance with generally accepted accounting principles within fifteen (15) calendar days
following the close of a given quarter. 
  

 -39- 

 (d) Audited Financial Statements. The Operating Member shall prepare, at the
expense of the Company, and furnish the following information to each Member within sixty (60) calendar days after the end of each Fiscal Year (with a final reviewable draft thereof to be furnished to each Member within forty-five
(45) days after the end of each Fiscal Year): (i) an audited balance sheet of the Company dated as of the end of such Fiscal Year, (ii) an audited related income statement of the Company for such Fiscal Year, (iii) an audited
statement of cash flows for such Fiscal Year, (iv) an audited statement of each Member’s Capital Account for such Fiscal Year, and (v) notes thereon, prepared on a historical cost basis in accordance with generally accepted accounting
principles, all of which shall be certified by the Operating Member as being, to the best of its knowledge, true and correct and all of which shall be certified in the customary manner by a reputable accounting firm approved by the Management
Committee (which firm shall provide such balance sheet, income statement and statement of Capital Account in draft form within forty (40) calendar days after the end of each Fiscal Year, to the Members for review prior to finalization and
certification thereof). 
 (e) Securities Exchange Act. The Operating Member acknowledges that the financial
statements of the Company will be consolidated with those of the Paladin REIT and that the Paladin REIT is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. The Operating Member shall permit the
officers, agents and representatives of the Paladin REIT (including its attorneys and accountants) to have unfettered access to such financial and other information for the Company at such times as such officer, agent or representatives may
reasonably request to enable the Paladin REIT to obtain the information required in order to timely comply with such reporting requirements. The Operating Member, at its expense, shall employ, or contract with, such individuals and implement
such accounting practices and procedures as are necessary for the provision of a reasonably professional level of accounting, reporting and internal controls for the Company, including (without limitation) the provision of the following:
(i) documentation of property level and corporate accounting and financial reporting policies and procedures; (ii) documentation of Information Technology (IT) policies and procedures, and disaster recovery plan; (iii) “sign
off” by Buckingham’s property, accounting and supervisory/review personnel after their preparation, review and/or approval of accounting transactions and workpapers, and (iv) preparation of written variance analysis of significant
accounts quarterly and year-to-date, as compared to the prior year period. In addition, the Operating Member shall institute such additional reasonable internal accounting controls as may be requested by the Paladin REIT, including, without
limitation, those which are necessitated for compliance with the Sarbanes-Oxley Act of 2002, as amended; provided, however, that Paladin shall bear all costs associated with such compliance. 
  

 -40- 

	 	9.04	Company Tax Elections; Tax Controversies 

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

	 	9.05	Accounting and Fiscal Year 

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

	 	9.06	Confidentiality of Information 

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

 MISCELLANEOUS 
  

	 	10.01 	Subscription Agreement 

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

	 	10.02 	Investment Interest; Nature of Investment 

 Each Member hereby represents and warrants to the Company and to each other Member that such Member is acquiring its Interest in the Company for its own account and not with a view to, or for resale in connection
with, any distribution thereof 

  

 -41- 

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

	 	10.03 	Appointment of Attorney-in-Fact 

 Each of the Members by its execution of this Agreement, irrevocably constitutes and appoints any Member(s), agent or other representative as is designated by the Management Committee as such Member’s true and lawful attorney-in-fact
with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to carry out the provisions of this Agreement
including, without limitation: 
 (a) Formation Documents. All formation documents and other instruments (including
counterparts of this Agreement), and all amendments thereto, which the Management Committee deems appropriate to form, qualify, continue or otherwise operate the Company as a limited liability company, in the jurisdictions in which the Company may
conduct business. 
 (b) Amendments. All amendments to this Agreement adopted in accordance with the terms of this
Agreement, and all instruments which the Management Committee deems appropriate to reflect a change or modification of the Company in accordance with the terms of this Agreement. 
 (c) Conveyance Documents. All conveyances of Company assets in accordance with the terms of this Agreement, and other instruments
which the Management Committee reasonably deems necessary in order to complete a dissolution and liquidation of the Company in accordance with the terms of this Agreement. 
 The foregoing appointment shall be deemed to be a power coupled with an interest, in recognition that each of the Members under this
Agreement will be relying upon the power of the Management Committee to act as contemplated by this Agreement 

  

 -42- 

 
in any filing and other action by it on behalf of the Company, shall survive the bankruptcy or other incapacity of any Member hereby giving such power, and
the transfer or assignment of all or any portion of the Interest of such Member in the Company, and shall not be affected by the subsequent bankruptcy or other incapacity of such Member. If any Member assigns all or any portion of its Interest in
the Company, then the foregoing power of attorney shall survive such assignment. 
  

	 	10.04 	Waiver of Conflict of Interest 

 The Company and each Member are not represented by separate counsel; provided, however, in connection with the formation of the Company and the drafting and negotiation of this Agreement, (i) Paladin (and not the Company or
Buckingham) has been represented separately by King & Spalding LLP and (ii) Buckingham (and not the Company or Paladin) has been represented separately by Ice Miller LLP. The attorneys, accountants and other experts who perform
services for any Member may also perform services for the Company. To the extent that the foregoing representation constitutes a conflict of interest, the Company and each Member hereby expressly waive any such conflict of interest. 
  

	 	10.05 	Amendment 

 The written
consent of each Member shall be required to amend any provision of this Agreement, which consent may be given, withheld or made subject to such conditions as are determined by each such Member in such Member’s sole and absolute discretion. No
provision of this Agreement may be amended except in a writing signed by all Members and expressly stating (i) that it is an amendment of this Agreement and (ii) the provisions of this Agreement being amended and how it is being amended.

  

	 	10.06 	No Assignments; Binding Effect 

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

	 	10.07 	Further Assurances 

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

 -43- 

	 	10.08 	Notices 

 Any notice,
approval, consent, payment, demand or communication required or permitted to be given to any Member under this Agreement shall be in writing and shall be deemed to have been duly given or made as of the date (the “Effective Date”)
set forth below: (i) if delivered personally by courier or otherwise, then as of the date delivered or if delivery is refused, then as of the date presented; (ii) if sent or mailed by Federal Express, Express Mail, or other nationally
recognized overnight mail service which maintains evidence of delivery and receipt, to the Company at its principal office and to each Member at its address appearing in the current records of the Company, then as of the date received; (iii) if
sent or mailed by certified U.S. Mail, return receipt requested, to the Company at its principal office and to each Member at its address appearing in the current records of the Company, then as of the third Business Day after the date so mailed; or
(iv) if sent by facsimile to the Company at its facsimile telephone number or to any Member at its facsimile telephone appearing in the current records of the Company, then either (A) as of the date on which the appropriate electronic
confirmation of receipt is received by the sending party at or before 5:00 p.m. (receiver’s time) on any Business Day, or (B) as of the next Business Day if the time of the appropriate electronic confirmation of receipt is received by
the sending party after 5:00 p.m. (receiver’s time). Notices to each Member shall be addressed as follows (which address(es) may be changed by the Member from time to time by written notice to the Members). 
  

			
	 To Paladin:
	  	c/o Paladin Realty Partners, LLC
		  	10880 Wilshire Boulevard, Suite 1400
		  	Los Angeles, California 90024
		  	Attention: William K. Dunbar
		  	Fax: (310) 996-8708
		  	Telephone: (310) 996-8754
		
		  	King & Spalding LLP
		  	1180 Peachtree Street, N.E.
		  	Atlanta, Georgia 30309
		  	Attention: Scott J. Arnold, Esq.
		  	Fax: (404) 572-5131
		  	Telephone: (404) 572-4600
		
	 To Buckingham:
	  	Shiloh Crossing Partners II, LLC
		  	c/o Buckingham Companies
		  	333 N. Pennsylvania Street, 10th Floor
		  	Indianapolis, Indiana 46204
		  	Attention: Bradley B. Chambers
		  	Fax: (317) 974-1238
		  	Telephone: (317) 974-1234

  

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	With a copy to:	  	Ice Miller LLP
		  	One American Square
		  	Suite 3100
		  	Indianapolis, Indiana 46282-0200
		  	Attention: Zeff A. Weiss, Esq.
		  	Fax: (317) 592-4788
		  	Telephone: (317) 236-2319

  

	 	10.09 	Waivers 

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

	 	10.10 	Preservation of Intent 

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

	 	10.11 	Entire Agreement 

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

	 	10.12 	Certain Rules of Construction 

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

 -45- 

	 	10.13 	Counterparts 

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

	 	10.14 	Governing Law 

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

	 	10.15 	Assurances 

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

  

	 	10.16 	Time is of the Essence 

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

	 	10.17 	Other Matters 

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

	 	10.18 	Ownership of Buckingham and Property Manager  

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

 (a) The name, type and percentage ownership interest of each such Person; and 
  

 -46- 

 (b) The name of each officer, if any, and the title thereof, in any corporate entity, the
name of each partner in any partnership entity, and the name of each member and the name of each manager in any limited liability company. 
 Buckingham represents that there are no commitments, options, warrants or rights of any kind which evidence a right to acquire or receive any ownership interest in Buckingham or the Property Manager. 
 ARTICLE 11 
 DEFINITIONS

  

	 	11.01 	Additional Contribution 

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

	 	11.02 	Additional Member 

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

	 	11.03 	Adjusted Capital Account 

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

	 	11.04 	Affiliate 

 The term
“Affiliate” means, with reference to a specified Person, any other Person that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified Person.
As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities of that Person, by
contract, relationship or otherwise) and includes, in any event, the ownership of twenty-five percent (25%) or more of the outstanding voting interests of such Person. 
  

 -47- 

	 	11.05 	Agreement 

 The term
“Agreement” means this Amended and Restated Operating Agreement of Glenwood Housing Partners I, LLC, as it may be further amended. 
  

	 	11.06 	Annual Business Plan 

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

	 	11.07 	Appraised Value 

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

	 	11.08 	Buckingham 

 The term
“Buckingham” means Shiloh Crossing Partners II, LLC, an Indiana limited liability company. 
  

	 	11.09 	Buckingham Put Interest 

 The
term “Buckingham Put Interest” means a twenty-five percent (25%) Interest in the Company initially owned by Buckingham, less the amount of any reduction in the Percentage Interest of Buckingham made pursuant to the provisions
of Section 3.03(c). 
  

	 	11.10 	Business Day 

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

	 	11.11 	Buyout Purchase Price 

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

	 	11.12 	Buy-Sell Notice 

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

	 	11.13 	Capital Account 

 The term
“Capital Account” means with respect to each Member the amount of money contributed by such Member to the capital of the Company, increased by the aggregate Gross Asset Value at the time of contribution (as determined by the

  

 -48- 

 
Members) of all property contributed by such Member to the capital of the Company (net of liabilities secured by such contributed property that the Company
is considered to assume or take subject to under Section 752 of the Code), the aggregate amount of all Net Profits allocated to such Member, and any and all items of gross income or gain specially allocated to such Member pursuant to
Section 4.02 and Section 4.03, and decreased by the amount of money distributed to such Member by the Company (exclusive of any guaranteed payment within the meaning of Section 707(c) of the Code paid to such
Member), the aggregate fair market value at the time of distribution (as determined by the Members) of all property distributed to such Member by the Company (net of liabilities secured by such distributed property that such Member is
considered to assume or take subject to under Section 752 of the Code), the amount of any Net Losses charged to such Member, and any items of loss or deduction specially allocated to such Member pursuant to Section 4.02 and
Section 4.03. The provisions hereof governing the maintenance of Capital Accounts are intended to satisfy the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv) and shall be interpreted and applied in a manner consistent
therewith. 
  

	 	11.14 	Capital Contribution 

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

	 	11.15 	Capital Event 

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

	 	11.16 	Cash Flow 

 The term
“Cash Flow” means the sum of any and all Ordinary Cash Flow and Extraordinary Cash Flow. Any Cash Flow distributions made at any time during any calendar month throughout the term hereof shall be deemed to have been made as of the
last day of such calendar month. 
  

	 	11.17 	Cash Flow Bonus Forfeiture Event 

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

 -49- 

	 	11.18 	Code 

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

	 	11.19 	Company 

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

	 	11.20 	Company Minimum Gain 

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

	 	11.21 	Contributing Member 

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

	 	11.22 	Contribution Date 

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

	 	11.23 	Contribution Notice 

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

	 	11.24 	Contribution Percentage 

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

	 	11.25 	Default Buy-Sell Event 

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

 -50- 

	 	11.26 	Default Notice 

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

	 	11.27 	Defaulting Member 

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

	 	11.28 	Defaulting Party Purchase Price 

 The term “Defaulting Party Purchase Price” is defined in Section 7.04(b). 
  

	 	11.29 	Default Purchase Price 

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

	 	11.30 Deferred	Management Fees 

 The term
“Deferred Management Fees” is defined in Section 2.12. 
  

	 	11.31 	Deferred Management Fee Account  

 The term “Deferred Management Fee Account” means, as to the Property Manager and as of any relevant date, the excess, if any, of the aggregate amount of the Deferred Management Fees, over the
aggregate amount of payments made to the Property Manager prior to such relevant date pursuant to Section 5.01(b) and Section 5.02(a). 
  

	 	11.32 	Delinquent Contribution 

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

	 	11.33 	Designated Put Interest 

 The
term “Designated Put Interest” is defined in Section 6.05(a). 
  

	 	11.34 	Dilution Percentage 

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

	 	11.35 	Effective Date 

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

	 	11.36 	Extraordinary Cash Flow 

 The
term “Extraordinary Cash Flow” means the cash proceeds (including, without limitation, any insurance proceeds, recoveries, damages and awards, but excluding the proceeds of any rent insurance or business interruption insurance)
realized by the Company, directly or indirectly, as a result of the occurrence of a Capital Event, plus cash interest payments received with respect to such proceeds, decreased by the sum of (i) the amount of such proceeds applied by the
Company to pay debts and 

  

 -51- 

 
liabilities of the Company which are then due and payable (inclusive of any guaranteed payment within the meaning of Section 707(c) of the Code paid to
any Member); (ii) the amount of such proceeds used, set aside or committed by the Company or required to be used by any secured lender for the Project for restoration and repair of any property in the event of damage or destruction to the
Project; (iii) any incidental or ancillary expenses, costs or liabilities incurred by the Company in effecting or obtaining any such Capital Event, or the proceeds thereof (including, without limitation, attorneys’ fees, expert
witness’ fees, accountants’ fees, court costs, recording fees, transfer taxes and fees, appraisal costs and the like) all of which expenses, costs and liabilities shall be paid from the gross amount of such cash proceeds to the extent
thereof; (iv) the payment of such other Company debts and liabilities as are determined in the reasonable discretion of the Management Committee; and (v) a reserve, established in the reasonable discretion of the Management Committee, for
anticipated cash disbursements that will have to be made before additional cash receipts from third parties will provide funds therefore. 
  

	 	11.37 	Fiscal Year 

 The term
“Fiscal Year” means, except as otherwise provided in this definition, the twelve (12) month period commencing on January 1 of each calendar year and ending on December 31 of each calendar year, with the first Fiscal
Year commencing on the date hereof and ending on December 31, 2006 and the last Fiscal Year being the period beginning on January 1 of the year in which the final liquidation and termination of the Company is completed and ending on the
date such final liquidation and termination is completed. To the extent any computation or other provision hereof provides for an action to be taken on the basis of a Fiscal Year, an appropriate proration or other adjustment shall be made in respect
of the initial and final Fiscal Years to reflect that such periods are less than 12 month periods. 
  

	 	11.38 	Gross Asset Value 

 The term
“Gross Asset Value” shall mean, except as set forth below, such asset’s adjusted basis for federal income tax purposes: 
 (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the contributing Member and the Company. 
 (ii) The Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by
the Members as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Members in exchange for more than a de minimis Capital Contribution if the Members reasonably determine that
such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the 

  

 -52- 

 
Company; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an
interest in the Company if the Members reasonably determine that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company; and (C) the liquidation of the Company within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g). 
 (iii) The Gross Asset Value of any Company asset distributed to any
Member shall be the gross fair market value of such asset on the date of distribution; and 
 (iv) The Gross Asset Values of
Company assets shall be increased or decreased to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Members
determine that an adjustment pursuant to subparagraph (ii) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). 
 If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs (i), (ii) or (iv) of this
provision, such Gross Asset Value shall thereafter be computed in accordance with Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations. 
  

	 	11.39 	Immediate Family 

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

	 	11.40 	Indemnified Party 

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

	 	11.41 	Indiana Act 

 The term
“Indiana Act” means the Indiana Business Flexibility Act (Ind. Code § 23-18-1-1, et seq.), as hereafter amended from time to time. 
  

 -53- 

	 	11.42 	Interest 

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

	 	11.43 	IRR 

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

	 	11.44 	Liquidation 

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

	 	11.45 	Majority of Representatives 

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

	 	11.46 	Management Committee 

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

	 	11.47 	Material Breach 

 The term
“Material Breach” means any material breach or default by a Member of any material covenant, duty or obligation under this Agreement or any Exhibits hereto (including, without limitation, the failure of any Member to contribute any
Additional Contribution to the extent required to be made pursuant to Section 3.02 and Section 3.03), provided that in any such 

  

 -54- 

 
instance: (i) such Member shall have received written notice from the other Member of such breach or default, and (ii) if curable, such Member
shall have failed to cure or remedy such breach or default within ten (10) days following the Effective Date of such notice (except that no such notice shall be required in the case of the failure of any Member to contribute any Additional
Contribution pursuant to Section 3.02 and Section 3.03) or, if such breach or default is not curable within such 10-day period, such Member shall have failed to diligently and continuously pursue such a cure or remedy and in
any event fully cure or remedy such breach or default within sixty (60) days of the Effective Date of such notice. 
  

	 	11.48 	Member Loan 

 The term
“Member Loan” is defined in Section. 3.02(b). 
  

	 	11.49 	Member Minimum Gain 

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

	 	11.50 	Member Nonrecourse Debt 

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

	 	11.51 	Member Nonrecourse Deductions 

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

	 	11.52 	Member(s) 

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

	 	11.53 	Net Profits and Net Losses 

 The term “Net Profits” or “Net Losses” shall mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with
Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

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

 -55- 

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

 (iv) Gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; 
 (v) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account depreciation computed in accordance with Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations for such Fiscal Year or other period; and 
 (vi) Notwithstanding anything contained herein to the contrary, any items which are specially allocated pursuant to Article 4
hereof shall not be taken into account in computing Net Profits or Net Losses. 
  

	 	11.54 	Non-Contributing Member 

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

	 	11.55 	Nonrecourse Deductions 

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

 -56- 

	 	11.56 	Operating Account 

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

	 	11.57 	Operating Budget 

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

	 	11.58 	Operating Member 

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

	 	11.59 	Ordinary Cash Flow 

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

	 	11.60 	Paladin 

 The term
“Paladin” means PRIP 10637, LCC, a Delaware limited liability company. 
  

	 	11.61 	Paladin Sale Notice 

 The
term “Paladin Sale Notice” is defined in Section 2.02(b). 
  

	 	11.62 	Paladin Sale Offer 

 The term
“Paladin Sale Offer” is defined in Section 6.06(a). 
  

	 	11.63 	Paladin Valuation 

 The term
“Paladin Valuation” is defined in Section 6.06(a). 
  

 -57- 

	 	11.64 	Paladin REIT 

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

	 	11.65 	Partially Adjusted Capital Account 

 The term “Partially Adjusted Capital Account” means, with respect to any Member as of the close of business on the last day of any Fiscal Year (an “Adjustment Date”), the Capital Account of such Member as
of the beginning of the period ending in such Adjustment Date, after giving effect to all allocations of items of income, gain, loss or deduction not included in Net Profits and Net Losses and all capital contributions and distributions during such
period but before giving effect to any allocations of Net Profits or Net Losses for such period pursuant to Section 4.01 increased by (i) such Member’s share of “partnership minimum gain,” as determined pursuant to
Regulations Section 1.704(2)(d), as of the end of such Fiscal Year and (ii) such Member’s share of “partner nonrecourse debt minimum gain,” as determined pursuant to Regulations Section 1.704(2)(i), as of the end of
such Fiscal Year 
  

	 	11.66 	Percentage Interest 

 The
term “Percentage Interest” means, with respect to each Member, the percentage set forth opposite such Member’s name on Exhibit A attached hereto under the column labeled “Percentage Interest,” as such
percentage shall be modified from time to time in accordance with this Agreement. The initial Percentage Interests of the Members shall be as follows: 
  

				
	 Paladin:
	  	65	%
	 Buckingham:
	  	35	%

  

	 	11.67 	Permitted Transferees 

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

	 	11.68 	Person 

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

	 	11.69 	Price Determination Notice 

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

 -58- 

	 	11.70 	Preferred Return 

 The term
“Preferred Return” means, with respect to each Member, an amount calculated like interest and accrued on the balance standing from time to time in such Member’s Unrecovered Contribution Account at a simple interest rate equal
to eight and twenty-five one hundredths percent (8.25%) per annum, non-compounded, and determined on a cumulative basis. For financial and income tax reporting purposes, neither accrual nor payment of the Preferred Return shall be an expense of
the Company nor be treated as a guaranteed payment under Section 707(c) of the Code 
  

	 	11.71 	Project 

 The term
“Project” is defined in Section 1.03. 
  

	 	11.72 	Project Shortfall 

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

	 	11.73 	Property Management Agreement 

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

	 	11.74 	Property Manager 

 The term
“Property Manager” means the Person engaged or designated by the Company from time to time to manage and operate the Project, and which initially shall be Buckingham Management, L.L.C., an Indiana limited liability company.

  

	 	11.75 	Purchasing Member 

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

	 	11.76 	Put Right 

 The term
“Put Right” is defined in Section 6.05(a). 
  

	 	11.77 	Qualified Appraiser 

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

 -59- 

	 	11.78 	REIT 

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

	 	11.79 	Removal Event 

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

	 	11.80 	Removal Notice 

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

	 	11.81 	Securities Act 

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

	 	11.82 	Seller Loan 

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

	 	11.83 	Selling Member 

 The term
“Selling Member” is defined in Section 7.05 
  

	 	11.84 	Target Capital Account 

 The
term “Target Capital Account” means, with respect to any Member as of any Adjustment Date, an amount (which may be either a positive or a deficit balance) equal to the amount such Member would receive as a distribution if all assets
of the Company as of such Adjustment Date were sold for cash equal to the Gross Asset Value of such assets, all the Company liabilities were satisfied to the extent required by their terms and the net proceeds were distributed pursuant to
Section 5.02, computed after the capital contributions have been made for the period ending on such Adjustment Date. 
  

	 	11.85 	Tax Matters Partner 

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

	 	11.86 	Threshold Return 

 The term
“Threshold Return” means, with respect to each Member, aggregate cash distributions pursuant to Section 5.01 and Section 5.02 which would produce an 11.5% IRR to such Member on all Capital Contributions made
by such Member. 
  

 -60- 

	 	11.87 	Third-Party Offer Notice 

 The term “Third-Party Offer Notice” is defined in Section 7.04(b). 
  

	 	11.88 	Third-Party Purchase Price 

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

	 	11.89 	Transfer 

 The term
“Transfer” is defined in Section 6.01. 
  

	 	11.90 	Treasury Regulation 

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

	 	11.91 	Unanimous Written Consent 

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

	 	11.92 	Unpaid Preferred Return 

 The
term “Unpaid Preferred Return” means, (i) with respect to Paladin and as of any specified date, the Preferred Return accrued through such date, decreased by the amount of money and the agreed upon net fair market value of any
property distributed by the Company to Paladin pursuant to Sections 5.01(a) and 5.02(b) and (ii) with respect to Buckingham and as of any specified date, the Preferred Return accrued through such date, decreased by the amount of money
and the agreed upon net fair market value of any property distributed by the Company to Buckingham pursuant to Sections 5.01(c) and 5.02(d). 
  

	 	11.93 	Unrecovered Contribution Account 

 The term “Unrecovered Contribution Account” means (i) with respect to Paladin, the amount of money or the agreed upon fair market value of any property contributed (or deemed contributed) by Paladin to the capital of
the Company pursuant to Section 3.01, Section 3.02, Section 3.03 and Section 6.05, as the case may be (net of liabilities secured by such contributed property that the Company is considered to assume
or take subject to pursuant to Section 752 of the Code), and decreased by the amount of money and the agreed upon fair market value of any property (net of liabilities secured by such distributed property that Paladin is considered to
assume or take subject to under Section 752 of the Code) distributed by the Company to Paladin pursuant to Section 5.02(c) and (ii) with respect to Buckingham, the amount of money or the agreed upon fair market value of any
property contributed (or deemed contributed) by Buckingham to the capital of the Company pursuant to Section 3.01, Section 3.02 and Section 3.03, as the case may be (net of liabilities secured by such contributed
property that the Company is 
  

 -61- 

 
considered to assume or take subject to pursuant to Section 752 of the Code), and decreased by (A) the aggregate amount of purchase price
paid to Buckingham by Paladin for all Designated Put Interests purchased by Paladin pursuant to Section 6.05 and (B) the amount of money and the agreed upon fair market value of any property (net of liabilities secured by such
distributed property that Buckingham is considered to assume or take subject to under Section 752 of the Code) distributed (or deemed distributed) by the Company to Buckingham pursuant to Section 5.02(e) and Section 6.05

  

	 	11.94 	Unwind Event 

 The term
“Unwind Event” means the payment by Bradley B. Chambers of any amounts under Article 5 of the Membership Interest Purchase and Sale Agreement, dated December 1, 2006, by and among Buckingham, Paladin and the Company for
Guaranteed Obligations (as defined therein) in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00). 
  

	 	11.95 	Unwind Right 

 The term
“Unwind Right is defined in Section 6.07.” 
  

	 	11.96 	Unwind Purchase Price 

 The
term “Unwind Purchase Price” means an amount equal to (i) the aggregate amount then outstanding in Paladin’s Unrecovered Contribution Account, plus (ii) the amount necessary, when added to the cash distributions
previously made to Paladin pursuant to Sections 5.01(a), 5.01(d), 5.02(b), 5.02(f) and 5.02(g), to produce an 12.5% IRR to Paladin on all Capital Contributions made by Paladin. 
 [Signatures Commence on Next Page] 
  

 -62- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and
year first above written. 
  

							
	“Paladin”
	
	PRIP 10637, LLC, a Delaware limited liability company
		
	By:	 	Paladin Realty Income Properties, L.P., a Delaware limited partnership
			
		 	By:	 	Paladin Realty Income Properties, Inc., a Maryland corporation, its general partner
				
		 		 	By:	 	/s/ Michael Lenard
		 		 		 	Michael Lenard, Executive Vice President, Secretary and Counselor

 [Signatures Continue on Next Page] 
  

 -63- 

 [Signatures Continued From Previous Page] 
  

					
	“Buckingham”
	
	SHILOH CROSSING PARTNERS I,
LLC, an Indiana limited liability company
		
	By:	 	Buckingham Investment Corporation, an Indiana corporation, its Manager
			
		 	By:	 	/s/ Bradley B. Chambers
		 		 	Bradley B. Chambers, its President

  

 -64- 

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

 AMENDED AND RESTATED OPERATING AGREEMENT 
 OF 
 GLENWOOD HOUSING PARTNERS I, LLC 
 TABLE OF CONTENTS 
  

					
	  	  	 	  	Page
	 ARTICLE 1 FORMATION
	  	1
			
	 1.01
	  	Formation	  	1
	 1.02
	  	Names and Addresses	  	1
	 1.03
	  	Nature of Business	  	2
	 1.04
	  	Term of the Company	  	2
		
	ARTICLE 2 MANAGEMENT OF THE COMPANY	  	2
			
	 2.01
	  	Management Committee	  	2
	 2.02
	  	Authority of the Management Committee	  	5
	 2.03
	  	Operating Member	  	9
	 2.04
	  	Annual Business Plan	  	10
	 2.05
	  	Operating Budget	  	10
	 2.06
	  	Removal of the Operating Member	  	11
	 2.07
	  	Liability and Indemnity	  	13
	 2.08
	  	Limited Liability	  	13
	 2.09
	  	Other Activities	  	13
	 2.10
	  	Brokers Indemnity	  	14
	 2.11
	  	Reimbursement; Compensation	  	14
	 2.12
	  	Property Management	  	14
		
	ARTICLE 3 MEMBERS’ CAPITAL CONTRIBUTIONS	  	15
			
	 3.01
	  	Initial Contributions of the Members	  	15
	 3.02
	  	Additional Contributions	  	15
	 3.03
	  	Remedy For Failure to Contribute Capital	  	16
	 3.04
	  	Debt Financing	  	19
	 3.05
	  	Loans from Members	  	19
	 3.06
	  	Capital Contributions in General	  	19
		
	ARTICLE 4 ALLOCATION OF PROFITS AND LOSSES	  	20
			
	 4.01
	  	Allocation of Net Profits and Net Losses	  	20
	 4.02
	  	Regulatory Allocations	  	20
	 4.03
	  	Other Special Allocations	  	21
	 4.04
	  	Other Allocation Rules	  	21
		
	ARTICLE 5 DISTRIBUTIONS	  	22
			
	 5.01
	  	Distribution of Ordinary Cash Flow	  	23
	 5.02
	  	Distribution of Extraordinary Cash Flow	  	23
	 5.03
	  	Limitations on Distributions	  	23
	 5.04
	  	In-Kind Distribution	  	23
	 5.05
	  	Right to Withhold	  	24

					
	 ARTICLE 6 RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS
	  	24
			
	 6.01
	  	Limitations on Transfer	  	24
	 6.02
	  	Permitted Transfers	  	24
	 6.03
	  	Admission of Substitute Members	  	25
	 6.04
	  	Additional Restrictions on Transfer	  	25
	 6.05
	  	Buckingham Put Right	  	26
	 6.06
	  	Buckingham Pre-Emptive Put Right	  	27
	 6.07
	  	Buckingham Unwind Right	  	28
	 6.08
	  	Election; Allocations Between Transferor and Transferee	  	29
	 6.09
	  	Partition	  	29
	 6.10
	  	Waiver of Withdrawal	  	29
		
	 ARTICLE 7 DEFAULT BUY-SELL AGREEMENT
	  	30
			
	 7.01
	  	Default Buy-Sell Events	  	30
	 7.02
	  	Rights Arising From a Default Buy-Sell Event	  	31
	 7.03
	  	Determination of Purchase Price	  	32
	 7.04
	  	Member’s Option	  	34
	 7.05
	  	Closing of Purchase and Sale	  	35
	 7.06
	  	Payment of Purchase Price	  	35
	 7.07
	  	Release and Indemnity	  	36
	 7.08
	  	Repayment of Member Loans	  	36
	 7.09
	  	Voting Rights Following Default Buy-Sell Event	  	36
	 7.10
	  	Withdrawal of the Selling Member	  	37
		
	 ARTICLE 8 DISSOLUTION AND WINDING UP OF THE COMPANY
	  	37
			
	 8.01
	  	Events Causing Dissolution of the Company	  	37
	 8.02
	  	Winding Up of the Company	  	37
	 8.03
	  	No Negative Capital Account Restoration	  	38
		
	 ARTICLE 9 BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS
	  	38
			
	 9.01
	  	Company Books	  	38
	 9.02
	  	Delivery of Records; Inspection	  	38
	 9.03
	  	Reports and Tax Information	  	39
	 9.04
	  	Company Tax Elections; Tax Controversies	  	41
	 9.05
	  	Accounting and Fiscal Year	  	41
	 9.06
	  	Confidentiality of Information	  	41
		
	 ARTICLE 10 MISCELLANEOUS
	  	41
			
	 10.01
	  	Subscription Agreement	  	41
	 10.02
	  	Investment Interest; Nature of Investment	  	41
	 10.03
	  	Appointment of Attorney-in-Fact	  	42
	 10.04
	  	Waiver of Conflict of Interest	  	43
	 10.05
	  	Amendment	  	43

					
	10.06	  	No Assignments; Binding Effect	  	43
	10.07	  	Further Assurances	  	43
	10.08	  	Notices	  	44
	10.09	  	Waivers	  	45
	10.10	  	Preservation of Intent	  	45
	10.11	  	Entire Agreement	  	45
	10.12	  	Certain Rules of Construction	  	45
	10.13	  	Counterparts	  	46
	10.14	  	Governing Law	  	46
	10.15	  	Assurances	  	46
	10.16	  	Time is of the Essence	  	46
	10.17	  	Other Matters	  	46
	10.18	  	Ownership of Buckingham and Property Manager	  	46
		
	ARTICLE 11 DEFINITIONS	  	47
			
	11.01	  	Additional Contribution	  	47
	11.02	  	Additional Member	  	47
	11.03	  	Adjusted Capital Account	  	47
	11.04	  	Affiliate	  	47
	11.05	  	Agreement	  	48
	11.06	  	Annual Business Plan	  	48
	11.07	  	Appraised Value	  	48
	11.08	  	Buckingham	  	48
	11.09	  	Buckingham Put Interest	  	48
	11.10	  	Business Day	  	48
	11.11	  	Buyout Purchase Price	  	48
	11.12	  	Buy-Sell Notice	  	48
	11.13	  	Capital Account	  	48
	11.14	  	Capital Contribution	  	49
	11.15	  	Capital Event	  	49
	11.16	  	Cash Flow	  	49
	11.17	  	Cash Flow Bonus Forfeiture Event	  	49
	11.18	  	Code	  	50
	11.19	  	Company	  	50
	11.20	  	Company Minimum Gain	  	50
	11.21	  	Contributing Member	  	50
	11.22	  	Contribution Date	  	50
	11.23	  	Contribution Notice	  	50
	11.24	  	Contribution Percentage	  	50
	11.25	  	Default Buy-Sell Event	  	50
	11.26	  	Default Notice	  	51
	11.27	  	Defaulting Member	  	51
	11.28	  	Defaulting Party Purchase Price	  	51
	11.29	  	Default Purchase Price	  	51
	11.30	  	Deferred Management Fees	  	51

  

					
	11.31	  	Deferred Management Fee Account	  	51
	11.32	  	Delinquent Contribution	  	51
	11.33	  	Designated Put Interest	  	51
	11.34	  	Dilution Percentage	  	51
	11.35	  	Effective Date	  	51
	11.36	  	Extraordinary Cash Flow	  	51
	11.37	  	Fiscal Year	  	52
	11.38	  	Gross Asset Value	  	52
	11.39	  	Immediate Family	  	53
	11.40	  	Indemnified Party	  	53
	11.41	  	Indiana Act	  	53
	11.42	  	Interest	  	54
	11.43	  	IRR	  	54
	11.44	  	Liquidation	  	54
	11.45	  	Majority of Representatives	  	54
	11.46	  	Management Committee	  	54
	11.47	  	Material Breach	  	54
	11.48	  	Member Loan	  	55
	11.49	  	Member Minimum Gain	  	55
	11.50	  	Member Nonrecourse Debt	  	55
	11.51	  	Member Nonrecourse Deductions	  	55
	11.52	  	Member(s)	  	55
	11.53	  	Net Profits and Net Losses	  	55
	11.54	  	Non-Contributing Member	  	56
	11.55	  	Nonrecourse Deductions	  	56
	11.56	  	Operating Account	  	57
	11.57	  	Operating Budget	  	57
	11.58	  	Operating Member	  	57
	11.59	  	Ordinary Cash Flow	  	57
	11.60	  	Paladin	  	57
	11.61	  	Paladin Sale Notice	  	57
	11.62	  	Paladin Sale Offer	  	57
	11.63	  	Paladin Valuation	  	57
	11.64	  	Paladin REIT	  	58
	11.65	  	Partially Adjusted Capital Account	  	58
	11.66	  	Percentage Interest	  	58
	11.67	  	Permitted Transferees	  	58
	11.68	  	Person	  	58
	11.69	  	Price Determination Notice	  	58
	11.70	  	Preferred Return	  	59
	11.71	  	Project	  	59
	11.72	  	Project Shortfall	  	59
	11.73	  	Property Management Agreement	  	59
	11.74	  	Property Manager	  	59
	11.74	  	Property Manager TC	  	59

					
	11.75	  	Purchasing Member	  	59
	11.76	  	Put Right	  	59
	11.77	  	Qualified Appraiser	  	59
	11.78	  	REIT	  	60
	11.79	  	Removal Event	  	60
	11.80	  	Removal Notice	  	60
	11.81	  	Securities Act	  	60
	11.82	  	Seller Loan	  	60
	11.83	  	Selling Member	  	60
	11.84	  	Target Capital Account	  	60
	11.85	  	Tax Matters Partner	  	60
	11.86	  	Threshold Return	  	60
	11.87	  	Third-Party Offer Notice	  	61
	11.88	  	Third-Party Purchase Price	  	61
	11.89	  	Transfer	  	61
	11.90	  	Treasury Regulation	  	61
	11.91	  	Unanimous Written Consent	  	61
	11.92	  	Unpaid Preferred Return	  	61
	11.93	  	Unrecovered Contribution Account	  	61
	11.94	  	Unwind Event	  	63
	11.95	  	Unwind Right	  	63
	11.96	  	Unwind Purchase Price	  	63

 Exhibit List 
  

			
	Exhibit “A”        	  	Initial Capital Contributions
	Exhibit “B”	  	Property Description for Project
	Exhibit “C”	  	Annual Operating Budget for 2006
	Exhibit “D”	  	Information Regarding Buckingham
	Exhibit “E”	  	xIRR CalculationPromissory Note

 EXHIBIT 10.3 
 PROMISSORY NOTE 
 $2,000,000.00 
 Date: December 1, 2006 
  

			
	BORROWER	  	
		
	Name:	  	Paladin Realty Income Properties, Inc.
		
	Address:	  	10880 Wilshire Blvd
		  	Suite 1400
		  	Los Angeles, CA 90024
		
	LENDER	  	
		
		  	Paladin Realty Partners, LLC
		
	Address:	  	10880 Wilshire Blvd
		  	Suite 1440
		  	Los Angeles, CA 90024

 Borrower promises to pay to the order of Lender, in lawful money of the United States of America, at its office
indicated above or wherever else Lender may specify, the sum of Two Million and No/100 Dollars ($2,000,000.00) or such sum as may be advanced and outstanding from time to time, with interest on the unpaid principal balance at the rate and on the
terms provided in this Promissory Note (including all renewals, extensions or modifications hereof, this “Note”). 
 INTEREST RATE. Interest
shall accrue on the unpaid principal balance of this Note from the date hereof at the LIBOR Market Index Rate plus 2.5%, as that rate may change from day to day in accordance with changes in the LIBOR Market Index Rate (“Interest Rate”).
“LIBOR Market Index Rate”, for any day, means the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London business day, then the immediately
preceding London business day (or if not so reported, then as determined by Lender from another recognized source or interbank quotation). 
 DEFAULT
RATE. In addition to all other rights contained in this Note, if a Default (as defined herein) occurs and as long as a Default continues, all outstanding Obligations, other than Obligations under any swap agreements (as defined in 11 U.S.C.
§ 101, as in effect from time to time) between Borrower and Lender or its affiliates, shall bear interest at the Interest Rate plus 3% (“Default Rate”). The Default Rate shall also apply from acceleration until the Obligations or any
judgment thereon is paid in full. 
 INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall be computed on the basis of a
360-day year for the actual number of days in the applicable period (“Actual/360 Computation”). The Actual/360 Computation determines the annual effective interest yield by taking the stated (nominal) rate for a year’s period and then
dividing said rate by 360 to determine the daily periodic rate to be applied for each day in the applicable period. Application of the Actual/360 Computation produces an annualized effective rate exceeding the nominal rate. 

 REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly payments of accrued interest only,
commencing on January 1, 2007, and continuing on the same day of each month thereafter until fully paid. In any event, all principal and accrued interest shall be due and payable on November 3, 2007. 
 APPLICATION OF PAYMENTS. Monies received by Lender from any source for application toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in any manner or order deemed appropriate by Lender. 
 If any payment received
by Lender under this Note or other Loan Documents is rescinded, avoided or for any reason returned by Lender because of any adverse claim or threatened action, the returned payment shall remain payable as an obligation of all persons liable under
this Note or other Loan Documents as though such payment had not been made. 
 DEFINITIONS. Loan Documents. The term “Loan Documents”, as
used in this Note and the other Loan Documents, refers to all documents executed in connection with or related to the loan evidenced by this Note and any prior notes which evidence all or any portion of the loan evidenced by this Note, and any
letters of credit issued pursuant to any loan agreement to which this Note is subject, any applications for such letters of credit and any other documents executed in connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty agreements, security agreements, security instruments, financing statements, mortgage instruments, any renewals or modifications, whenever any of the foregoing are
executed, but does not include swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time). Obligations. The term “Obligations”, as used in this Note and the other Loan Documents, refers to any and all
indebtedness and other obligations under this Note, all other obligations under any other Loan Document(s), and all obligations under any swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time) between Borrower
and Lender, or its affiliates, whenever executed. Certain Other Terms. All terms that are used but not otherwise defined in any of the Loan Documents shall have the definitions provided in the Uniform Commercial Code. 
 LATE CHARGE. If any payments are not timely made, Borrower shall also pay to Lender a late charge equal to 4% of each payment past due for 15 or more days. This
late charge shall not apply to payments due at maturity or by acceleration hereof, unless such late payment is in an amount not greater than the highest periodic payment due hereunder. 
 Acceptance by Lender of any late payment without an accompanying late charge shall not be deemed a waiver of Lender’s right to collect such late charge or to collect a late charge for any subsequent late payment
received. 
  

 Page 2 

 ATTORNEYS’ FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Lender’s reasonable expenses
actually incurred to enforce or collect any of the Obligations including, without limitation, reasonable arbitration, paralegals’, attorneys’ and experts’ fees and expenses, whether incurred without the commencement of a suit, in any
trial, arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding. 
 USURY. If at any time the effective interest rate
under this Note would, but for this paragraph, exceed the maximum lawful rate, the effective interest rate under this Note shall be the maximum lawful rate, and any amount received by Lender in excess of such rate shall be applied to principal and
then to fees and expenses, or, if no such amounts are owing, returned to Borrower. 
 GRACE/CURE PERIOD. Grace Period. The failure of timely
payment of the Obligations shall not be a Default until 5 days after such payment is due. Cure Period. Except as provided below, any Default, other than non-payment, may be cured within 10 days after written notice thereof is mailed to
Borrower by Lender. Borrower’s right to cure shall be applicable only to curable defaults and shall not apply, without limitation, to Defaults based upon False Warranty, Cessation, Bankruptcy, Guaranty or Material Capital Structure of Business
Alteration. Borrower shall have the right to cure a Default only once during any 12 month period. 
 DEFAULT. If any of the following occurs and is
not cured within the applicable Cure Period, a default (“Default”) under this Note shall exist: Nonpayment; Nonperformance. The failure of timely payment or performance of the Obligations or Default under this Note or any other Loan
Documents. False Warranty. A warranty or representation made or deemed made in the Loan Documents or furnished Lender in connection with the loan evidenced by this Note proves materially false, or if of a continuing nature, becomes materially
false. Defaults Under Other Loan Documents. Borrower shall breach any of the provisions contained in any of the other Loan Documents. Cessation; Bankruptcy. The death of, appointment of a guardian for, dissolution of, termination of
existence of, loss of good standing status by, appointment of a receiver for, assignment for the benefit of creditors of, or commencement of any bankruptcy or insolvency proceeding by or against Borrower or John A. Gerson or James R. Worms, or any
party to the Loan Documents. Material Capital Structure or Business Alteration. Without prior written consent of Lender, (i) a material alteration in the kind or type of Borrower’s business or that of Borrower’s Subsidiaries or
Affiliates, if any; (ii) the sale of substantially all of the business or assets of Borrower, any of Borrower’s Subsidiaries or Affiliates or any guarantor, or a material portion (10% or more) of such business or assets if such a sale is
outside the ordinary course of business of Borrower, or any of Borrower’s Subsidiaries or Affiliates or any guarantor, or more than 50% of the outstanding stock or voting power of or in any such entity in a single transaction or a series of
transactions; (iii) the acquisition of substantially all of the business or assets or more than 50% of the outstanding stock or voting power of any other entity; or (iv) should any Borrower or any of Borrower’s Subsidiaries or
Affiliates or any guarantor enter into any merger or consolidation. Material Adverse Change. Lender determines in good faith, in its sole discretion, that the prospects for payment or performance of the Obligations are impaired or there has
occurred a material adverse change in the business or prospects of Borrower, financial or otherwise. 
  

 Page 3 

 REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan Documents, Lender may at any time
thereafter, take the following actions: Acceleration Upon Default. Accelerate the maturity of this Note and, at Lender’s option, any or all other Obligations, other than Obligations under any swap agreements (as defined in 11 U.S.C.
§ 101, as in effect from time to time) between Borrower and Lender, or its affiliates, which shall be due in accordance with and governed by the provisions of said swap agreements; whereupon this Note and the accelerated Obligations shall be
immediately due and payable; provided, however, if the Default is based upon a bankruptcy or insolvency proceeding commenced by or against Borrower or any guarantor or endorser of this Note, all Obligations (other than Obligations under any swap
agreement as referenced above) shall automatically and immediately be due and payable. Cumulative. Exercise any rights and remedies as provided under the Note and other Loan Documents, or as provided by law or equity. 
 FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Lender such information as Lender may reasonably request from time to time, including without
limitation, financial statements and information pertaining to Borrower’s financial condition. Such information shall be true, complete, and accurate. 
 WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and other Loan Documents shall be valid unless in writing and signed by an officer of Lender. No waiver by Lender of any Default shall operate as a waiver
of any other Default or the same Default on a future occasion. Neither the failure nor any delay on the part of Lender in exercising any right, power, or remedy under this Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 
 Except to the
extent otherwise provided by the Loan Documents or prohibited by law, each Borrower and each other person liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate maturity, notice
of acceleration of maturity, notice of sale and all other notices of any kind. Further, each agrees that Lender may (i) extend, modify or renew this Note or make a novation of the loan evidenced by this Note, and/or (ii) grant releases,
compromises or indulgences with respect to any collateral securing this Note, or with respect to any Borrower or other person liable under this Note or any other Loan Documents, all without notice to or consent of each Borrower and other such
person, and without affecting the liability of each Borrower and other such person; provided, Lender may not extend, modify or renew this Note or make a novation of the loan evidenced by this Note without the consent of the Borrower, or if there is
more than one Borrower, without the consent of at least one Borrower; and further provided, if there is more than one Borrower, Lender may not enter into a modification of this Note which increases the burdens of a Borrower without the consent of
that Borrower. 
 MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents shall inure to the benefit of and be binding upon the
parties and their respective heirs, legal representatives, successors and assigns. Lender’s interests in and rights under this Note and the other Loan Documents are freely assignable, in whole or in part, by Lender. In addition, nothing in this
Note or any of the other Loan Documents shall prohibit Lender from pledging or assigning this Note or any of the other Loan Documents or any 

  

 Page 4 

 
interest therein to any Federal Reserve Bank. Borrower shall not assign its rights and interest hereunder without the prior written consent of Lender, and
any attempt by Borrower to assign without Lender’s prior written consent is null and void. Any assignment shall not release Borrower from the Obligations. Applicable Law; Conflict Between Documents. This Note and, unless otherwise
provided in any other Loan Document, the other Loan Documents shall be governed by and construed under the law of the State of New York without regard to that state’s conflict of laws principles (other than Section 5-1402 of the General
Obligations Law of the State of New York). If the terms of this Note should conflict with the terms of any loan agreement or any commitment letter that survives closing, the terms of this Note shall control. Borrower’s Accounts.
[Intentionally Deleted] Swap Agreements. All swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time), if any, between Borrower and Lender or its affiliates are independent agreements governed by the written
provisions of said swap agreements, which will remain in full force and effect, unaffected by any repayment, prepayment, acceleration, reduction, increase or change in the terms of this Note, except as otherwise expressly provided in said written
swap agreements, and any payoff statement from Lender relating to this Note shall not apply to said swap agreements except as otherwise expressly provided in such payoff statement. Jurisdiction. Borrower irrevocably agrees to non-exclusive
personal jurisdiction in the State of New York. Severability. If any provision of this Note or of the other Loan Documents shall be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note or other such document. Notices. Any notices to Borrower shall be sufficiently given, if in writing and mailed or
delivered to the Borrower’s address shown above or such other address as provided hereunder, and to Lender, if in writing and mailed or delivered to Paladin Realty Partners, LLC, 10880 Wilshire Boulevard, Suite 1400, Los Angeles, California
90024 or such other address as Lender may specify in writing from time to time. Notices to Lender must include the mail code. In the event that Borrower changes Borrower’s address at any time prior to the date the Obligations are paid in full,
Borrower agrees to promptly give written notice of said change of address by registered or certified mail, return receipt requested, all charges prepaid. Plural; Captions. All references in the Loan Documents to Borrower, guarantor, person,
document or other nouns of reference mean both the singular and plural form, as the case may be, and the term “person” shall mean any individual, person or entity. The captions contained in the Loan Documents are inserted for convenience
only and shall not affect the meaning or interpretation of the Loan Documents. Advances. Lender may, in its sole discretion, make other advances which shall be deemed to be advances under this Note, even though the stated principal amount of
this Note may be exceeded as a result thereof. Posting of Payments. All payments received during normal banking hours after 2:00 p.m. local time at the office of Lender first shown above shall be deemed received at the opening of the
next banking day. Joint and Several Obligations. If there is more than one Borrower, each is jointly and severally obligated. Fees and Taxes. Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on
this transaction whether assessed at closing or arising from time to time. LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING LENDER BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR
ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR 

  

 Page 5 

 
DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER
FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. Patriot Act Notice. To help fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. For purposes of this section, account shall be understood to include loan accounts. FINAL AGREEMENT. This Note
and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the
parties. 
 [Signature page follows.] 
  

 Page 6 

 IN WITNESS WHEREOF, Borrower, on the day and year first above written, has caused this Note to be executed under
seal. 
 Place of Execution and Delivery. Borrower hereby certifies that this note was executed in the state of New Jersey and delivered to the Lender
in the state of California. 
  

			
	BORROWER:
	Paladin Realty Income Properties, Inc.
		
	By:	 	/s/ John A. Gerson
	Name:	 	John A. Gerson
	Title:	 	 Executive Vice President,
 Chief Financial
Officer

  

 Page 7

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