Document:

Exhibit 10.17

 

Execution Version

 

THE LIMITED LIABILITY COMPANY
INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN
JURISDICTION AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH
APPLICABLE FEDERAL, STATE OR FOREIGN SECURITIES LAWS.  IN ADDITION, TRANSFER OR OTHER DISPOSITION OF
THE LIMITED LIABILITY COMPANY INTERESTS IS RESTRICTED AS PROVIDED IN THIS
AGREEMENT

 

 

 

LIMITED LIABILITY COMPANY
AGREEMENT

 

OF

 

15250 Sonoma Drive, LLC

 

Dated September 9, 2009

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINED
  TERMS

  	
  1

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
  1.2

  	
  Other References

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  ORGANIZATION

  	
  12

  
	
  2.1

  	
  Formation

  	
  12

  
	
  2.2

  	
  Name and Principal
  Place of Business

  	
  12

  
	
  2.3

  	
  Term

  	
  12

  
	
  2.4

  	
  Registered Agent and
  Registered Office

  	
  12

  
	
  2.5

  	
  Purpose

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  MEMBERS

  	
  13

  
	
  3.1

  	
  Members

  	
  13

  
	
  3.2

  	
  Limitation on Liability

  	
  14

  
	
  3.3

  	
  Transaction Fee

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CAPITAL

  	
  14

  
	
  4.1

  	
  Initial Capital
  Contributions

  	
  14

  
	
  4.2

  	
  Additional Capital
  Contributions

  	
  16

  
	
  4.3

  	
  Capital Accounts

  	
  18

  
	
  4.4

  	
  No Further Capital
  Contributions

  	
  19

  
	
  4.5

  	
  Acquisition Loans

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  INTERESTS
  IN THE COMPANY

  	
  20

  
	
  5.1

  	
  Percentage Interest

  	
  20

  
	
  5.2

  	
  Return of Capital

  	
  20

  
	
  5.3

  	
  Ownership

  	
  20

  
	
  5.4

  	
  Waiver of Partition;
  Nature of Interests in the Company

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ALLOCATIONS
  AND DISTRIBUTIONS

  	
  21

  
	
  6.1

  	
  Allocations

  	
  21

  
	
  6.2

  	
  Allocations and
  Compliance with Section 704(b)

  	
  21

  
	
  6.3

  	
  Distributions

  	
  22

  
	
  6.4

  	
  Special Distributions

  	
  23

  
	
  6.5

  	
  Distributions in
  Liquidation

  	
  23

  
	
  6.6

  	
  Tax Matters

  	
  23

  
	
  6.7

  	
  Tax Matters Partner

  	
  24

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  Section 704(c)

  	
  24

  
	
  6.9

  	
  Withholding

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MANAGEMENT

  	
  25

  
	
  7.1

  	
  Managing Member and
  Major Decisions

  	
  25

  
	
  7.2

  	
  Administrative Member

  	
  31

  
	
  7.3

  	
  Management of the
  Property

  	
  35

  
	
  7.4

  	
  Duties and Conflicts

  	
  35

  
	
  7.5

  	
  Company Expenses

  	
  36

  
	
  7.6

  	
  Venture Coordinator

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  BOOKS,
  RECORDS, REPORTS AND PROJECT PLAN

  	
  37

  
	
  8.1

  	
  Books and Records

  	
  37

  
	
  8.2

  	
  Accounting and Fiscal
  Year

  	
  37

  
	
  8.3

  	
  Reports

  	
  38

  
	
  8.4

  	
  The Company Accountant

  	
  40

  
	
  8.5

  	
  Reserves

  	
  40

  
	
  8.6

  	
  The Budget and
  Operating Plan

  	
  40

  
	
  8.7

  	
  Accounts

  	
  41

  
	
  8.8

  	
  REIT Matters

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  TRANSFER
  OF INTERESTS

  	
  42

  
	
  9.1

  	
  No Transfer

  	
  42

  
	
  9.2

  	
  Permitted Transfers

  	
  42

  
	
  9.3

  	
  Transferees

  	
  43

  
	
  9.4

  	
  Section 754
  Election

  	
  43

  
	
  9.5

  	
  Tag-Along Right

  	
  43

  
	
  9.6

  	
  Drag-Along Right

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  EXCULPATION
  AND INDEMNIFICATION

  	
  46

  
	
  10.1

  	
  Exculpation

  	
  46

  
	
  10.2

  	
  Indemnification

  	
  46

  
	
  10.3

  	
  Acquisition Loan

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  DISSOLUTION
  AND TERMINATION

  	
  48

  
	
  11.1

  	
  Dissolution

  	
  48

  
	
  11.2

  	
  Termination

  	
  49

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Liquidating Member

  	
  50

  
	
  11.4

  	
  Claims of the Members

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  DEFAULT
  BY MEMBER

  	
  50

  
	
  12.1

  	
  Events of Default

  	
  50

  
	
  12.2

  	
  Effect of Event of
  Default

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  MISCELLANEOUS

  	
  51

  
	
  13.1

  	
  Representations and
  Warranties of the Members

  	
  51

  
	
  13.2

  	
  Further Assurances

  	
  53

  
	
  13.3

  	
  Notices

  	
  53

  
	
  13.4

  	
  Governing Law

  	
  54

  
	
  13.5

  	
  Captions

  	
  54

  
	
  13.6

  	
  Pronouns

  	
  54

  
	
  13.7

  	
  Successors and Assigns

  	
  55

  
	
  13.8

  	
  Extension Not a Waiver

  	
  55

  
	
  13.9

  	
  Creditors Not Benefited

  	
  55

  
	
  13.10

  	
  Recalculation of
  Interest

  	
  55

  
	
  13.11

  	
  Severability

  	
  55

  
	
  13.12

  	
  Entire Agreement

  	
  56

  
	
  13.13

  	
  Publicity

  	
  56

  
	
  13.14

  	
  Confidentiality

  	
  56

  
	
  13.15

  	
  Venue

  	
  57

  
	
  13.16

  	
  Waiver of Jury Trial

  	
  57

  
	
  13.17

  	
  Cooperation

  	
  57

  
	
  13.18

  	
  Counterparts

  	
  58

  
	
  13.19

  	
  Attorney Fees

  	
  58

  
	
  13.20

  	
  Pre-Closing Escrow of
  BH Share of Deposit

  	
  58

  

 

EXHIBIT A - FUNDING
OF DEPOSIT

 

iii

 

LIMITED LIABILITY COMPANY
AGREEMENT OF

15250 Sonoma Drive, LLC

 

LIMITED LIABILITY COMPANY AGREEMENT of 15250 Sonoma Drive, LLC dated September 9,
2009 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, this “Agreement”), made by, between and among Behringer
Harvard Palms of Monterrey, LLC, a
Delaware limited liability company (together with its successors and permitted
assigns, “BH”), and DD-CTP, LLC, a Florida limited liability company
(together with its successors and permitted assigns, “DD-CTP”).

 

WHEREAS, the Company (as hereinafter defined) was formed
pursuant to a Certificate of Formation signed by Terri Warren Reynolds as
authorized person (the “Certificate of Formation”), filed with the
Secretary of State of Delaware on September 3, 2009.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

ARTICLE
I

DEFINED TERMS

 

1.1                                 Defined Terms.

 

As
used in this Agreement, the following terms have the meanings set forth below:

 

“Acquisition
Loan” means, either individually or collectively as the context requires or
otherwise indicates, any loan obtained by the Company or an SPV, including
(without limitation) the secured loan expected to be obtained by Company or an
SPV on the Closing Date to finance a portion of the purchase price for the
acquisition of the Initial Company Property, but not including any Priority
Capital Contribution or any loan made by the Company.

 

“Acquisition
Loan Documents” means, collectively, any loan agreement, promissory notes,
mortgages and/or other security instrument, guaranties, indemnities and all
other agreements, certificates, instruments and documents evidencing or
securing the Acquisition Loan or otherwise entered into and/or delivered by or
on behalf of the Company or an SPV, any Member and/or their respective
Affiliates in connection with any Acquisition Loan and the transactions
contemplated thereby, in each case as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Additional
Capital Contribution” has the meaning set forth in Section 4.2(a).

 

“Adjusted
Capital Account” means, with respect to any Member, the balance, if any, in
that Member’s Capital Account after crediting to such Capital Account the
amount such Member is deemed obligated to restore pursuant to the penultimate
sentences of Treasury Regulation Sections 1.704-2(g)(1) and (i)(5).

 

“Adjusted
Capital Account Deficit” means, with respect to any Member for any taxable
year or other period, the deficit balance, if any, in such Member’s Capital
Account as of the end of such year or other period, after giving effect to the
following adjustments:

 

1

 

(a)                                  credit to such Capital Account any
amounts that such Member is obligated to restore or is deemed obligated to
restore as described in the penultimate sentence of Treasury Regulation Section 1.704-2(g)(1) and
in Treasury Regulation Section 1.704-2(i)(5); and

 

(b)                                 debit to such Capital Account the items
described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and
(6).

 

“Adjusted
Percentage” means a percentage expressed as a fraction, the numerator of
which is the Percentage Interest of DD-CTP and the denominator of which is the
Percentage Interest of BH.

 

“Administrative
Member” has the meaning set forth in Section 7.2(a).

 

“Affiliate”
or “Affiliated” means, with respect to any Person, (a) any other
Person directly or indirectly Controlling, Controlled by, or under common
Control with such Person, or (b) any other Person owning or controlling
ten percent (10%) or more of the outstanding voting interests of such Person,
or (c) any officer, director, general partner or managing member of such
Person, or (d) any other Person which is an officer, director, general
partner, managing member or holder of ten percent (10%) or more of the voting
interests of any other Person described in clauses (a) through (c) of
this definition.

 

“Agreement”
has the meaning set forth in the introductory paragraph hereof.

 

“Approve”, “Approved”, “Approval”
or “Consent” means a proposed decision, action, report, budget, election
or any other matter that has been proposed by a Member, the Managing Member or
the Administrative Member and has received the written approval or consent of
the other Member or Managing Member, as applicable.

 

“Bankruptcy
Action” has the meaning set forth in Section 7.1(a)(xiv).

 

“BH”
has the meaning set forth in the introductory paragraph hereof, together with
its successors and permitted assigns.

 

“Book
Basis” means, with respect to any asset of the Company, the adjusted basis
of such asset for federal income tax purposes; provided, however, that (a) if
any asset is contributed to the Company, the initial Book Basis of such asset
shall equal its fair market value on the date of contribution as determined by
the Managing Member, and (b) the Book Basis of all Company assets shall be
adjusted to equal their respective gross fair market values, as determined by
the Managing Member, as of the following times: 
(i) the acquisition of an additional Interest by any new or
existing Member in exchange for more than a de minimis Capital Contribution; (ii) the
distribution by the Company to a Member of more than a de minimis amount of
property as consideration for an Interest; (iii) in connection with the
liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); and (iv) in any other circumstances permitted by
the Code or Treasury Regulations, provided, however, that adjustments pursuant
to clauses (i), (ii) and (iv) above shall be made only if the Managing
Member determines that such adjustments are necessary or appropriate to reflect
the relative economic interests of the Members in the Company.  The Book Basis of all assets of the Company
shall be adjusted 

 

2

 

thereafter by depreciation as provided in Treasury
Regulation Section 1.704-1(b)(2)(iv)(g) and any other adjustment to
the basis of such assets other than depreciation or amortization.

 

“Budget”
means the initial and each subsequent annual budget prepared by or on behalf of
the Administrative Member covering the Company’s and any SPV’s anticipated
operations, as Approved by the Managing Member and in effect from time to time
pursuant to the terms hereof, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.

 

“Business
Day” means any day other than Saturday, Sunday, any day that is a legal
holiday in the State of Texas or Florida, or any other day on which banking
institutions in Texas or Florida are authorized to close.

 

“Capital
Account” means the separate account maintained for each Member under Section 4.3.

 

“Capital
Contribution” means, with respect to any Member, the aggregate amount of
all Initial Capital Contributions and any Additional Capital Contributions made
(or deemed made) by such Member to the Company pursuant to this Agreement, in
each case as the same may be adjusted from time to time in accordance with the
provisions hereof.

 

“Certificate
of Formation” has the meaning set forth in the recital paragraphs to this
Agreement.

 

“Change
in Control” means the occurrence of any of the following:

 

(i)                                     Christian Tyler Properties, LLC or
DeBartolo Development, LLC cease for any reason to be the managers of and to
control DD-CTP;

 

(ii)                                  Kirk D. Eicholtz and Edward M. Kobel
cease to be managers or managing members of Christian Tyler Properties, LLC and
DeBartolo Development, LLC, respectively;

 

(iii)                               DD-CTP or any DD-CTP Person is dissolved,
terminated, liquidated, merged, consolidated or reorganized into or with
another Person;

 

(iv)                              DD-CTP or any DD-CTP Person sells all or
substantially all of its assets to any Person; or

 

(v)                                 Kirk D. Eicholtz ceases to devote a
majority of his business time and attention to the affairs of Christian Tyler
Properties, LLC (other than due to death or Incapacity) or Edward M. Kobel
ceases to devote a majority of his business time and attention to the affairs
of DeBartolo Development, LLC which failure is not remedied within a 15-day
cure period after written demand from BH.

 

“Closing
Date” means the date of the “Closing” under the Purchase Agreement.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

3

 

“Company”
means the limited liability company continued and governed by the terms of this
Agreement.

 

“Company
Accountant” has the meaning set forth in Section 8.4.

 

“Company
Minimum Gain” means “partnership minimum gain” as defined in Treasury
Regulation Section 1.704-2(d).

 

“Company
Property” means, either individually or collectively as the context
requires or otherwise indicates, any asset or other property (real, personal or
mixed) owned by the Company from time to time (or indirectly by an SPV).  Initially, the Company Property will consist
of the Initial Company Property.

 

“Confidential
Information” has the meaning set forth in Section 13.15(a).

 

“Contributing
Member” has the meaning set forth in Section 4.2(b).

 

“Control”
means, when used with respect to any Person, the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities or other beneficial interests, by contract or
otherwise, and the terms “Controlling”, “Controlled by” and “under common
Control with” shall have the meanings correlative therewith.

 

“DD-CTP”
has the meaning set forth in the introductory paragraph hereof.

 

“DD-CTP
Person” means, individually or collectively as the context indicates,
DeBartolo Development, LLC, Christian Tyler Properties, LLC, and any of their
respective Affiliates.

 

“Delaware
Act” means the Delaware Limited Liability Company Act, as amended from time
to time.

 

“Deposit”
has the meaning set forth in Section 4.1(a).

 

“Drag-Along
Notice” has the meaning set forth in Section 9.6(a).

 

“Drag-Along
Purchase Price” has the meaning set forth in Section 9.6(a).

 

“Event
of Default” has the meaning set forth in Section 12.1.

 

“Exchanging
Member” has the meaning set forth in Section 13.18.

 

“Existing
PMA” has the meaning set forth in Section 7.3.

 

“Expenses”
means, for any period, without duplication, the sum of the total gross
expenditures of the Company and any SPV reasonably relating to the operations
of the Company and/or the acquisition, ownership, development, renovation,
maintenance, management, servicing, operation, sale, financing and/or
refinancing of the Company Property during such period contemplated by the then
applicable Budget and Operating Plan or otherwise approved (either
prospectively or retroactively) by the Managing Member from time to time,
including 

 

4

 

(a) all cash operating expenses (including
without limitation real estate taxes and assessments, personal property taxes,
sales taxes, and all fees, commissions, expenses and allowances paid or
reimbursed to any Member or any of its Affiliates pursuant to any loan
servicing or property management agreement or otherwise as permitted
hereunder), (b) all deposits of Revenues to the Company’s reserve
accounts, (c) all debt service payments including debt service on loans
made to the Company by the Members or any of their Affiliates, (d) all
expenditures which are treated as capital expenditures (as distinguished from
expense deductions included in clause (a) above) under generally
accepted accounting principles, and (e) all expenditures related to any
acquisition, sale, disposition, financing, refinancing or securitization of any
Company Property; provided, however, that Expenses shall not include any
payment or expenditure to the extent the sources of funds used for such payment
or expenditure are not included in Revenues, or to the extent such payment or
expenditure is paid out of any Company reserve account.

 

“Extension
Fee Payments” means any payments of extension fees under the Purchase
Agreement prior to the Closing Date in order to extend the Closing Date under
the Purchase Agreement.

 

“Failed
Contribution” has the meaning set forth in Section 4.1(f).

 

“Financing
Guaranty” means a guarantee of payment from a Member or any Affiliate of a
Member to a Lender as credit support in connection with any Acquisition Loan or
other loan made to the Company or an SPV.

 

“First
Promote Percentage” means 11.122%, subject to adjustment as provided in Section 4.2(d).

 

“For
Cause Event” has the meaning set forth in Section 7.2(e).

 

“GAAP”
means United States generally accepted accounting principles consistently
applied.

 

“Incapacity”
means, with respect to any individual, either the death of such individual, or
the physical or mental disability or incapacity of such individual that, in the
reasonable opinion of an appropriately qualified independent physician
reasonably acceptable to the Managing Member, renders such individual legally
incompetent or otherwise incapable of adequately managing such individual’s
business and affairs or renders such individual unable to participate in any
reasonable manner in decisions regarding the Company and the ownership,
operation and management of the Company Property; provided that, such event
shall not be an Incapacity for the purposes of this Agreement so long as, at
all times after such event first occurs, a replacement individual or
individuals reasonably acceptable to BH perform the services for the Company’s
benefit that were being performed, and which remain to be performed, by such
individual prior to such event.

 

“Indemnitees”
has the meaning set forth in Section 10.2.

 

“Initial
Budget and Operating Plan” has the meaning set forth in Section 8.6.

 

5

 

“Initial
Capital Contribution” means, with respect to any Member, any capital
contribution made by such Member pursuant to Section 4.1 hereof.

 

“Initial
Company Property” means, collectively, the interest in the Loan and Loan
Documents (as defined in the Purchase Agreement) to be acquired by the Company
or an SPV on the Closing Date pursuant to the Purchase Agreement, including
(without limitation) all rights and interests of the purchaser under the
Purchase Agreement.

 

“Interest”
means, with respect to any Member at any time, the interest of such Member in
the Company at such time, including the right of such Member to any and all of
the benefits to which such Member may be entitled as provided in this
Agreement, together with the obligations of such Member to comply with all of
the terms and provisions of this Agreement.

 

“IRR”
means the annual percentage rate, compounded monthly, which, when utilized to
calculate the present value of the distributions of Net Cash Flow to all of the
Members, causes such present value of distributions to equal the present value
of total Capital Contributions (other than Priority Capital Contributions) made
to the Company by all of the Members.  A
specified IRR shall be deemed to have been attained as of any date that the sum
of the present values of all amounts distributed to the Members (on an
aggregate basis) pursuant to Sections 6.3 (other than Sections 6.3(a)),
6.4, 6.5 and 11.2(c)(iii) for all periods, as of the time of determination
, when discounted to their present values as of the Closing Date by using a
discount rate equal to such specified IRR and assuming that such amounts were
distributed or deemed distributed as of the end of the applicable month to
which such amounts relate, equals the sum of the separate present values of all
amounts taken into account in determining the Members’ total Capital
Contributions (other than Priority Capital Contributions) when discounted to
their present values as of the Closing Date, using a discount rate equal to the
specified IRR, and assuming that all such amounts were contributed or deemed
contributed as of the time such amounts are received by the Company or
otherwise taken into account pursuant to the definition of Capital
Contributions.  For purposes of the
foregoing, present value shall be determined using monthly compounding periods.

 

“Lender”
means, either individually or collectively as the context requires or otherwise
indicates, any lender with respect to an Acquisition Loan, together with its
respective successors and permitted assigns.

 

“Liquidating
Member” means the Member designated as such by the Managing Member;
provided, however, that any Member that is then in default hereunder or that
causes the dissolution of the Company under Section 11.1(a)(iv) shall
not serve as the Liquidating Member (in which event the Liquidating Member
shall be the non-defaulting Member).

 

“Loss”
means, for each taxable year or other period, an amount equal to the Company’s
items of taxable deduction and loss for such year or other period, determined
in accordance with Section 703(a) of the Code (including all items of
loss or deduction required to be stated separately under Section 703(a)(1) of
the Code), with the following adjustments:

 

(a)                                  any expenditures of the Company described
in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures
under Treasury Regulation 

 

6

 

Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Loss, will be considered an
item of Loss;

 

(b)                                 Loss resulting from any disposition of
Company Property with respect to which gain or loss is recognized for federal
income tax purposes will be computed by reference to the Book Basis of such
property, notwithstanding that the adjusted tax basis of such property may
differ from its Book Basis;

 

(c)                                  in lieu of depreciation, amortization and
other cost recovery deductions taken into account in computing taxable income
or loss, there will be taken into account depreciation for the taxable year or
other period as determined in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g);

 

(d)                                 any items of deduction and loss specially
allocated pursuant to Section 6.8 shall not be considered in determining
Loss; and

 

(e)                                  any decrease to the Book Basis of Company
assets pursuant to Treasury Regulation Section 1.704-1(b)(2) (iv)(e) or
(f) shall constitute an item of Loss.

 

“Major
Decision” has the meaning set forth in Section 7.1(a).

 

“Management
Services” means, collectively, (a) the services performed by or on
behalf of the Administrative Member pursuant to and as provided in this
Agreement and all actions in the day-to-day management of the Company
contemplated hereunder and under the Budget and Operating Plan and (b) all
other services reasonably requested from time to time by the Managing Member,
and reasonably agreed to by the Administrative Member, consistent with other
services customarily provided by administrative members or managers in
comparable circumstances.

 

“Managing
Member” means BH, and its successors and permitted assigns.

 

“Member”
means one or more of BH and/or DD-CTP or any other Person who is admitted as a
member of the Company in accordance with this Agreement and applicable law.

 

“Member
Group” means, with respect to any Member, such Member and any Affiliate of
such Member that is a member of the Company.

 

“Member
Minimum Gain” means the Company’s “partner nonrecourse debt minimum gain”
as defined in Treasury Regulation Section 1.704-2(i)(2).

 

“Missed
Contribution” has the meaning set forth in Section 4.2(d)

 

“Necessary
Expense” has the meaning set forth in Section 7.2(b)(iii).

 

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

 

7

 

“Net
Loss” means, for any period, the excess of (i) Losses for such period,
over (ii) Profits, if applicable, for such period determined without
regard to any Profits or Losses allocated pursuant to Section 6.2.

 

“Net
Profit” means, for any period, the excess of (i) Profits for such
period, over (ii) Losses, if applicable, for such period determined
without regard to any Profits or Losses allocated pursuant to Section 6.2.

 

“Non-Contributing
Member” has the meaning set forth in Section 4.2(b).

 

“Nonrecourse
Deductions” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(1).

 

“Non-Withdrawing
Member” has the meaning set forth in Section 4.1(f).

 

“Notices”
has the meaning set forth in Section 13.3.

 

“OFAC”
means the United States Office of Foreign Assets Control, Department of the
Treasury, any successor governmental or similar authority thereto.

 

“Operating
Plan” means the initial and each subsequent annual strategic and
comprehensive operating plan prepared by or on behalf of the Administrative
Member covering the Company’s anticipated operations and including (to the
extent applicable) any capital expenditures at the Property once the Company
acquires title, as Approved by the Managing Member and in effect from time to
time pursuant to the terms hereof, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

 

“Organizational
Documents” has the meaning set forth in Section 13.1(b)(i).

 

“Other
Members” has the meaning set forth in Section 9.6(a).

 

“Partially
Adjusted Capital Account” means, with respect to any Member for any taxable
year or other period of the Company, the Capital Account balance of such Member
at the beginning of such year or period, adjusted for all contributions and
distributions made or deemed made to or by such Member during such year or
period and all special allocations to such Member pursuant to Section 6.2
with respect to such year or period, but before giving effect to any
allocations of Net Profit or Net Loss to such Member pursuant to Section 6.1
with respect to such year or period.

 

“Percentage
Interest” means, with regard to each Member the percentage set forth below
opposite its name (in each case subject to adjustment as provided in this
Agreement):

 

	
  Member

  	
   

  	
  Percentage Interest

  	
   

  
	
  BH

  	
   

  	
  90

  	
  %

  
	
  DD-CTP

  	
   

  	
  10

  	
  %

  

 

8

 

“Person”
means any individual, partnership, corporation, limited liability company,
limited liability partnership, trust or other entity.

 

“Priority
Capital Contribution” has the meaning set forth in Section 4.2(b).

 

“Profit”
means, for each taxable year or other period, an amount equal to the Company’s
items of taxable income and gain for such year or other period, determined in
accordance with Section 703(a) of the Code (including all items of
income and gain required to be stated separately under Section 703(a)(1) of
the Code), with the following adjustments:

 

(i)                                     any income of the Company that is exempt
from federal income tax and not otherwise taken into account in computing
Profit will be added to Profit;

 

(ii)                                  any gain resulting from any disposition
of Company Property with respect to which gain or loss is recognized for
federal income tax purposes will be computed by reference to the Book Basis of such
property, notwithstanding that the adjusted tax basis of such property may
differ from its Book Basis;

 

(iii)                               any items specially allocated pursuant to
Section 6.8 shall not be considered in determining Profit; and

 

(iv)                              any increase to the Book Basis of Company
assets pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or
(f) shall constitute an item of Profit.

 

“Prohibited
Person” means a Person with whom a U.S. Person is prohibited from
transacting business of the type contemplated by this Agreement or any other
Transaction Document, whether such prohibition arises under United States law,
regulation, executive orders and lists published by OFAC, including those
executive orders and lists published by OFAC with respect to Persons that have
been designated by executive order or by the sanction regulations of OFAC as
Persons with whom U.S. Persons may not transact business or must limit their
interactions to types approved by OFAC or otherwise.

 

“Promote
Percentage” means the First Promote Percentage and the Second Promote
Percentage.

 

“Property”
shall have the meaning set forth in the Purchase Agreement.

 

“Purchase
Agreement” means that certain Loan Documents Purchase and Sale Agreement,
made as of June 8, 2009 as amended, between Seller, as seller, and
Christian Tyler Properties LLC, as purchaser, pursuant to which the Company
shall take an assignment of Christian Tyler Properties LLC’s interest to
purchase the Initial Company Property for a purchase price and upon the other
terms set forth therein, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time with the Approval of the
Managing Member or, if applicable, BH, in accordance with the terms hereof.

 

“Pursuit
Costs” has the meaning set forth in Section 4.1(b)(i).

 

9

 

“Reasonable
Period” means, with respect to any defaulting member, a period of thirty
(30) days after such defaulting Member receives written notice of its default
from a non-defaulting Member; provided, however, that if such breach can be
cured but cannot reasonably be cured within such thirty (30) day period, the
period shall continue, if such defaulting Member commences to cure the breach
within such thirty (30) day period, for so long as such defaulting Member
diligently prosecutes the cure to completion up to a maximum of the lesser of (i) an
additional sixty (60) days following the expiration of such thirty (30) day
period, or (ii) the period of time allowed for such performance under the
Loan Documents.

 

“Residential
Tenant Lease” means a lease of space within the Company Property by an
individual for residential purposes in the ordinary course of business.

 

“Revenues”
means, for any period, without duplication, the sum of the total gross revenues
received by the Company or any SPV during such period, including all revenues
of the Company or any SPV from (a) interest, principal, loan fees, and
other amounts payable to the Company under the Loan Documents (as defined in
the Purchase Agreement), (b) rent, cost, expense and other recoveries and
all additional rent paid to the Company (including for parking facilities), (c) concessions
to the Company which are in the nature of revenues, (d) rent or business
interruption insurance, and casualty and liability insurance, if any, (de)
funds made available to the extent such funds are withdrawn from the Company’s
or a third party’s reserve account and deposited into the Company’s operating
accounts, (f) proceeds from the sale or other disposition of any Company
Property, (g) proceeds from the financing, refinancing or securitization
of any Company Property, and (h) other revenues and receipts realized by
the Company, including, without limitation, excess cash from any reserve
established by or on behalf of the Company or from any Capital Contribution.

 

“Second
Promote Percentage” means 27.78%, subject to adjustment as provided in Section 4.2(d).

 

“Seller”
means Corus Bank, N.A., a national banking association, as the current owner of
the loan secured by the Property and the seller under the Purchase Agreement,
together with its successors and permitted assigns in any such capacity.

 

“Shortfall”
has the meaning set forth in Section 4.2(a).

 

“SPV”
has the meaning set forth in Section 2.5(c).

 

“Substitute
Contribution” has the meaning set forth in Section 4.2(b).

 

“Substituted
Capital Contribution” has the meaning set forth in Section 4.2(d).

 

“Tag-Along
Assignee” has the meaning set forth in Section 9.5(a).

 

“Tag-Along
Notice” has the meaning set forth in Section 9. 5(a).

 

“Tag-Along
Offer” has the meaning set forth in Section 9.5(a).

 

“Tag-Along
Option Period” has the meaning set forth in Section 9.5(a).

 

10

 

“Tag-Along
Right” has the meaning set forth in Section 9.5(a).

 

“Tag-Along
Sale” has the meaning set forth in Section 9.5(a).

 

“Target
Account” means, with respect to any Member for any taxable year of the
Company or other period, the excess of (a) an amount equal to the
hypothetical distribution such Member would receive if all assets of the
Company, including cash, were sold for cash equal to their Book Basis (taking
into account any adjustments to Book Basis for such year or other period but
not adjustments caused by any such hypothetical distributions pursuant to this
sub-clause), all liabilities allocable to such assets were then due and were
satisfied according to their terms (limited, with respect to each non-recourse
liability, to the Book Basis of the assets securing such liability) and all remaining
proceeds from such sale were distributed pursuant to Section 6.3 or 6.4,
as applicable, over (b) the amount of Company Minimum Gain and Member
Minimum Gain that would be charged back to such Member as determined pursuant
to Treasury Regulation Section 1.704-2 immediately prior to such sale.

 

“Transaction
Documents” means, collectively, this Agreement, the Purchase Agreement and
the Acquisition Loan Documents, together with any other agreement, document or
instrument executed and/or delivered pursuant to the provisions of any of the
foregoing or in connection with the transactions contemplated thereby, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.

 

“Transfer”
has the meaning set forth in Section 9.1.

 

“Treasury
Regulation” or “Regulation” means, with respect to any referenced
provision, such provision of the regulations of the United States Department of
the Treasury or any successor provision.

 

“U.S.
Person” means a United States citizen, a permanent resident of the United
States, an entity organized under the laws of the United States or any of its
territories or having its principal place of business within the United States
or any of its territories, or any other Person that is a “United States person”
as described in, or for the purposes of, Executive Order 13224 of September 23,
2001 or any amendment, replacement or other modification thereto.

 

“Venture
Coordinator” shall have the meaning set forth in Section 7.6.

 

“Winding
Up Profit and Loss” means items of Net Profit or Net Loss in the Winding Up
Year.

 

“Winding
Up Year” means the taxable year of the Company in which all of its assets
are disposed of, or the Company liquidates.

 

“Withdrawing
Member” shall have the meaning set forth in Section 4.1(e).

 

11

 

1.2                                 Other References.

 

As
used in this Agreement, unless otherwise specified, all references to Sections,
Articles or Exhibits are to Sections, Articles or Exhibits of this Agreement.

 

ARTICLE
II

ORGANIZATION

 

2.1                                 Formation.

 

The
Members hereby agree to form the Company as a limited liability company under
the Delaware Act, upon the terms and subject to the conditions set forth in
this Agreement.  The Managing Member is
hereby authorized to file and record any amendments to the Certificate of
Formation and such other documents as may be reasonably required or appropriate
under the Delaware Act or the laws of any other jurisdiction in which the
Company may conduct business or own property.

 

2.2                                 Name and Principal Place of Business.

 

(a)                                  The name of the Company is set forth on
the cover page to this Agreement. 
The Managing Member may change the name of the Company or adopt such
trade or fictitious names for use by the Company as the Managing Member may
from time to time determine.  All
business of the Company shall be conducted under such name, and title to all
Company Property shall be held in such name.

 

(b)                                 The principal place of business and
office of the Company shall be located at such place or places as the Managing
Member may from time to time designate.

 

2.3                                 Term.

 

The
term of the Company commenced on the date of the filing of the Certificate of
Formation pursuant to the Delaware Act, and shall continue until December 31,
2059, unless sooner terminated pursuant to the provisions of this
Agreement.  The existence of the Company
as a separate legal entity shall continue until cancellation of the Certificate
of Formation as provided in the Delaware Act.

 

2.4                                 Registered Agent and Registered Office.

 

The
name of the Company’s registered agent for service of process shall be
Corporation Service Company, and the address of the Company’s registered agent
and the address of the Company’s registered office in the State of Delaware
shall be 2711 Centerville Road, Suite 400, in the City of Wilmington,
Delaware 19808.  Such agent and such
office may be changed from time to time by the Managing Member with written
notice to all Members.

 

12

 

2.5                                 Purpose.

 

(a)                                  The purpose of the Company shall be to:

 

(i)                                     perform its obligations and exercise its
rights under the Transaction Documents and any other agreements or contracts
contemplated by the foregoing, and to carry out the terms of and engage in the
transactions contemplated by the Transaction Documents;

 

(ii)                                  directly or indirectly acquire, own,
manage, service, operate, improve, finance, refinance, develop, redevelop,
construct, renovate, market, lease, sell and otherwise deal with and dispose of
the Company Property, including (without limitation) the Initial Company
Property; and

 

(iii)                               conduct all other activities reasonably
necessary or desirable to accomplish the foregoing purposes.

 

(b)                                 The Company shall not engage in other
businesses and activities except with the prior approval of all Members.

 

(c)                                  In order to facilitate the purposes of
the Company, as set forth above, the Company may form or acquire one or more
subsidiary special purpose entities to own all or any part of the Company
Property or to conduct a portion of the Company’s business (each an “SPV”).  In the event that one or more SPVs are
formed, unless otherwise determined by the Managing Member, the Administrative
Member shall perform the same or substantially identical services for each such
SPV as the Administrative Member performs for the Company.  In the connection therewith, the
Administrative Member agrees to perform such duties for and on behalf of each
SPV, and in such circumstances and with regard to such duties, the
Administrative Member is subject to the same standards of conduct and will have
the same rights and obligations with regards to such duties performed or to be
performed on behalf of any such SPV as are set forth in this Agreement with
regard to the same or substantially identical services to be performed for or
on behalf of the Company (including, without limitation, the indemnification
and exculpation rights and obligations of the Administrative Member and the
removal or termination provisions, as set forth in this Agreement).

 

ARTICLE
III

MEMBERS

 

3.1                                 Members.

 

Effective
as of the date of this Agreement, the Members of the Company shall be BH and
DD-CTP and BH shall be the sole Managing Member of the Company.  No other Person shall be admitted as a member
of the Company and no additional Interest shall be issued, without the Approval
of all of the Members, except as expressly permitted by this Agreement.

 

13

 

3.2                                 Limitation on Liability.

 

Except
as otherwise expressly provided in the Delaware 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 no
Member shall be obligated personally for any such debt, obligation or liability
of the Company solely by reason of being a member of the Company.  Except as otherwise expressly provided in the
Delaware Act and to the extent set forth in Section 10.3, the liability of
each Member shall be limited to the amount of Capital Contributions required to
be made by such Member in accordance with the provisions of this Agreement, but
only when and to the extent the same shall become due pursuant to the
provisions of this Agreement.  Further,
except as otherwise expressly provided herein to the contrary, no general or
limited partner of any Member, shareholder, member or other holder of an equity
interest in any Member or Managing Member, or any officer, director or employee
of any of the foregoing or any of their Affiliates is obligated personally for
any debt, obligation or other liability of the Company solely by reason of
their being a general or limited partner of any Member, shareholder, member or
other holder of an equity interest in any Member and/or Managing Member, or
officer, director or employee of any of the foregoing or any of their
Affiliates.  Further, failure of the
Company to observe any corporate or company governance or other formalities or
requirements relating to the exercise of its powers or the management of its
business or affairs under this Agreement or the Delaware Act will not be
grounds for any Member, general or limited partner of any Member, shareholder,
member or other holder of an equity interests in any Member, or any officer,
director or employee of any of the foregoing or any of their Affiliates to be
held liable or obligated for any debt, obligation or other liability of the
Company.

 

3.3                                 Transaction Fee.

 

The
Company shall pay to DD-CTP on the Closing Date a transaction fee in an amount
equal to 1.92% of the total purchase price of the Initial Company Property
payable to Seller under the Purchase Agreement.

 

ARTICLE
IV

CAPITAL

 

4.1                                 Initial Capital Contributions.

 

(a)                                  Deposits Under the Purchase Agreement;
Extension Fee Payments.  It is acknowledged that, prior
to the date hereof, DD-CTP (or an Affiliate) has paid the initial deposit
required under the Purchase Agreement and a “Sixth Amendment Fee” due
thereunder in the aggregate amount of Four Hundred Thousand Dollars ($400,000)
(the “Deposit”).  On the date BH
Approves a binding commitment for the Acquisition Loan or on such earlier date
elected in a written notice from BH to DD-CTP, DD-CTP or an Affiliate will
cause the Purchase Agreement to be assigned to and assumed by the Company in
consideration of a payment by the Company equal to the Deposit and any
Extension Fee Payments previously made. 
It is agreed that on such date, Initial Capital Contributions shall be
made by the Members to the Company in proportion to their Percentage Interests
in the amount of the required payment to DD-CTP pursuant to the preceding
sentence.  It is further agreed that
DD-CTP will make any additional required 

 

14

 

Extension Fee Payments after the date hereof and will
be credited on the Closing Date with making Initial Capital Contributions in
the amount of any such additional Extension Fee Payments in accordance with
Sections 4.1(b)(ii) and 4.1(d) below so that each Member will have
funded and contributed its pro rata share of the Deposit and all Extension
Fee Payments based on their respective Percentage Interests as set forth on Exhibit A.

 

(b)                                 Pursuit Costs.  (i) 
Prior to the date hereof, DD-CTP and BH and their respective Affiliates, have
incurred, and may hereafter incur prior to the Closing Date third party
out-of-pocket costs and expenses in connection with the negotiation and closing
of the Purchase Agreement and their respective due diligence analyses and other
evaluations of the Initial Company Property and/or the Property (including,
without limitation, costs of environmental and engineering and other
feasibility reports and studies, costs related to analyzing the Initial Company
Property and the Property (including, without limitation, travel costs) and
costs (including, without limitation, attorneys’ fees) incurred by the Members
in reviewing and analyzing work conducted by DD-CTP or its agents) and costs to
complete an audit of the financial statements in respect of the Property in
compliance with certain laws and regulations applicable to BH and/or its
Affiliates (collectively, the “Pursuit Costs”); and

 

(ii)                                  Provided that the Company acquires the
Initial Company Property pursuant to the Purchase Agreement, the Company shall
pay or reimburse each Member for the portion of any Deposit and Extension Fee
Payments it made after the date the Purchase Agreement is assigned to the
Company and all Pursuit Costs actually incurred by such Member in good faith
pursuant to the terms hereof to the extent set forth in a budget approved by
all Members, or shall credit such amounts against such Member’s Initial Capital
Contribution as provided in Section 4.1(d) below, so that each Member’s
share of such costs shall be in proportion to their respective Percentage
Interests.  If the Managing Member elects
not to cause the Company to acquire the Initial Company Property or the Company
fails to acquire the Initial Company Property for any reason, then, each Member
shall be responsible for and pay all Pursuit Costs incurred by such Member.

 

(iii)                               Fees of legal counsel for the Members
incurred in connection with or related to the negotiation of this Agreement
shall be borne by each Member and shall not be reimbursed by the Company.

 

(c)                                  Failure to Close Purchase. 
Whether the Company shall proceed with the transactions contemplated by
the Purchase Agreement, including (without limitation) whether it shall close
the purchase of the Initial Company Property, shall be determined by the Managing
Member in its sole discretion, and no Member or any Affiliate thereof shall
have any claim against the Company or any Member or Affiliate of a Member
including the Managing Member or the members thereof by reason of such
determination; provided that if BH unilaterally determines not to close the
acquisition of the Initial Company Property, it shall use reasonable efforts to
keep DD-CTP updated as to its decision making process, and it shall provide
notice of such final decision to DD-CTP as soon as possible.

 

(d)                                 Closing Contributions. 
In the event that the Managing Member decides to cause the Company to
close the purchase of the Initial Company Property pursuant to the 

 

15

 

Purchase Agreement, then five (5) Business Days
after any request by the Managing Member (or upon the closing of the
acquisition of the Initial Company Property, if earlier), the Members shall
contribute in cash (or be credited to the extent as provided in Section 4.1(b)(ii) with
making cash contributions) to the capital of the Company their pro rata share
(based upon their relative Percentage Interests) of the sum of (i) the
amount reasonably necessary to close the acquisition of the Initial Company
Property (taking into account the net proceeds of the Acquisition Loan),
closing costs, Pursuit Costs, other amounts payable or reimbursable by the
Company under Section 4.1(b)(ii) and the fee payable pursuant to Section 3.3,
and (ii) a reasonable amount of initial working capital and reserves
(which shall include budgeted costs to foreclose or otherwise acquire title to
the Property, grant a mortgage lien to the Acquisition Lender on the Property,
as well as anticipated capital expenditures to be made in the period following
acquisition of title to the Property as set forth in the Initial Budget and
Operating Plan) for the Company, as determined by the Managing Member.  DD-CTP will deliver to the Members for
Approval a statement of sources and uses for the closing and a detailed
estimate of the Initial Capital Contributions. 
Amounts payable to the Company by a Member on the Closing Date may be
set off from amounts the Company owes to a Member and each Member shall receive
credits for payments made prior to the Closing Date for amounts paid to a third
party as set forth in such Approved closing statement.

 

(e)                                  Withdrawing Members. 
Subject to the provisions of Sections 4.1(d) and 4.1(e), if
any Member (a “Withdrawing Member”) fails to timely make all or any
portion of its Initial Capital Contributions pursuant to this Section 4.1
(a “Failed Contribution”), then one or more of the other Members that is
not an Affiliate of the Withdrawing Member (the “Non-Withdrawing Member”)
may either pursue all of its rights and remedies at law and in equity, or elect
to make such Failed Contribution, in which case, as such Non-Withdrawing Member’s
sole and exclusive remedy with respect thereto (i) the Withdrawing Member
shall be automatically terminated as a Member for all purposes hereunder and (ii) the
Interest of the Withdrawing Member (and its share of the Deposit) shall be
deemed forfeited in its entirety and such Withdrawing Member shall cease to
have any interest in the Company or any rights under this Agreement with
respect thereto.  Each Member acknowledges
and agrees that the other Members would not be entering into this Agreement
were it not for (i) the Members agreeing to make the Initial Capital
Contributions provided for in this Section 4.1, and (ii) the remedy
provisions set forth above in this Section 4.1(f).  Each Member acknowledges and agrees that in
the event any Member fails to make its Initial Capital Contributions pursuant
to this Agreement, the other Members will suffer substantial damages and the
remedy provisions set forth above are fair, just and equitable in all respects.

 

4.2                                 Additional Capital Contributions.

 

(a)                                  If at any time or from time to time after
all of the Initial Capital Contributions have been contributed, the Managing
Member determines that additional funds (a “Shortfall”) are reasonably
required (i) for costs contemplated by the Initial Budget and Operating
Plan, including but not limited to costs associated with a foreclosure
proceeding involving the Property, survey and title for the Property upon
completion of such foreclosure proceeding, startup costs or costs associated
with working capital, but only to the extent not covered by the Initial Capital
Contributions, as adjusted, made pursuant to Section 4.1, (ii) to
meet the ongoing obligations, liabilities, Expenses or reasonable business
needs of the Company 

 

16

 

in accordance with the then applicable Budget or
Operating Plan, or to pay Necessary Expenses or other costs which are not
provided for in the Budget and Operating Plan, but which are Approved by the
Managing Member to the extent not covered by the Initial Capital Contributions,
or (iii) for any other purpose, the Managing Member may (but shall not be
obligated to), require that each of the Members contribute its pro rata share
(based upon the Percentage Interests of the Members at the time of such
request) of such Shortfall (such pro rata share, an “Additional Capital
Contribution”).  If so requested by
the Managing Member, such payment shall be due within five (5) Business
Days thereafter (or by the 1st calendar day of the next month, whichever is
later).

 

(b)                                 Notwithstanding anything to the contrary
contained herein, a failure by any Member to make any Additional Capital
Contribution to the extent required or requested hereunder shall not constitute
an Event of Default by such Member and the sole consequences of such failure
shall be as set forth in this Section 4.2. 
If any Member (the “Non-Contributing Member”) fails to timely
make all or any portion of any Additional Capital Contribution as required
pursuant to Section 4.2(a) above, then one or more of the other
Members that is not an Affiliate of the Non-Contributing Member (the “Contributing
Member”) may make such Additional Capital Contribution on behalf of the
Non-Contributing Member (any such Capital Contribution by a Contributing
Member, a “Substitute Contribution”). 
In such an event, the Contributing Member may elect by written notice
given with five (5) Business Days of making the Substitute Contribution either
(i) to treat the entire amount contributed by the Contributing Member
(including both the Contributing Member’s and the Non-Contributing Member’s
pro rata portion thereof) as a Priority Capital Contribution (a “Priority
Capital Contribution”) by such Contributing Member in accordance with Section 4.2(c) below,
or (ii) to treat the Substitute Contribution as a regular Capital
Contribution in accordance with Section 4.2(d) below.

 

(c)                                  To the extent any Contributing Member
elects to treat its own Additional Capital Contribution and such Substitute
Contribution as a Priority Capital Contribution, such Priority Capital
Contribution shall be returned on a priority basis together with an eighteen
percent (18%) per annum cumulative annual preferred return thereon as provided
in Section 6.3(a).

 

(d)                                 If a Contributing Member elects to treat
a Substitute Contribution as a regular Capital Contribution, then the
Percentage Interest of each of the Members shall be adjusted to equal the
percentage equivalent of the quotient determined by dividing:

 

(i)                                     the positive difference, if any, between:

 

(A)                              the sum of (I) one hundred percent
(100%) of the aggregate Capital Contributions (excluding Substituted Capital
Contributions) then or theretofore made by such Member to the Company, plus (II) two
hundred percent (200%) of the Substituted Capital Contributions then or
theretofore made by such Member to the Company; minus

 

(B)                                the Substituted Capital Contributions
then or theretofore made by the other Member to the Company; by

 

17

 

(ii)                                  one hundred percent (100%) of the
aggregate Capital Contributions (including, without limitation, Substituted
Capital Contributions) then or theretofore made by all of the Members to the
Company.

 

In addition, in the event the Non-Contributing
Member is DD-CTP, then in such case the Promote Percentages will be reduced to
the same extent DD-CTP’s Percentage Interest is reduced (i.e., if DD-CTP’s
Percentage Interest is reduced by 50%, then all Promote Percentages shall be
reduced by 50%).

 

For
purposes of this Section 4.2(d), each Member, together with the members of
their respective Member Groups (if any), shall be considered to be one Member,
and after performing such calculation, each Member shall allocate the
Percentage Interest of such Member among the members of its Member Group (if
any) in an equitable manner.  As used
herein, the term “Substituted Capital Contribution” shall mean an
Additional Capital Contribution made on behalf of the Non-Contributing Member
pursuant to this Section 4.2(d). 
Any Non-Contributing Member shall have until seventy five (75) days
after the date on which its missed Additional Capital Contribution (the “Missed
Contribution”) was due in order to cure its failure to make such Missed
Contribution by depositing into an account designated by the Managing Member an
amount equal to the amount of the Missed Contribution together with interest
thereon at a eighteen percent (18%) per annum rate from the due date
established by the Managing Member until such amount has been so deposited in
full into such account, at which point such amount shall promptly be
distributed to the Contributing Member if and to the extent the Contributing
Member made a Substitute Contribution on account of the Missed Contribution.  If the Non-Contributing Member makes such
deposits as aforesaid, any dilution to Percentage Interests and Promote
Percentages and adjustments of Capital Contributions and Capital Accounts (and
the distributions affected thereby) caused by its failure to make the
applicable Additional Capital Contribution shall be unwound, and the payment
and distribution of interest described above shall not be reflected in the
Members’ Capital Accounts.

 

(e)                                  Each Member acknowledges and agrees that
the other Members would not be entering into this Agreement were it not for (i) the
Members agreeing to make the Capital Contributions provided for in this Section 4.2,
and (ii) the remedy provisions set forth above in this Section 4.2.  Each Member acknowledges and agrees that in
the event any Member fails to make its Capital Contributions pursuant to this
Agreement, the other Members will suffer substantial damages and the remedy
provisions set forth above are fair, just and equitable in all respects.

 

(f)                                    All Capital Contributions shall be made
by wire transfer of funds to accounts designated by the Managing Member from
time to time.

 

4.3                                 Capital Accounts.

 

A
separate Capital Account will be maintained for each Member in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv). Consistent therewith, the
Capital Account of each Member will be determined and adjusted as follows:

 

18

 

(a)                                  Each Member’s Capital Account will be
credited with:

 

(i)                                     any contributions of cash made by such
Member to the capital of the Company plus the fair market value of any property
contributed by such Member to the capital of the Company (net of any
liabilities to which such property is subject or which are assumed by the
Company);

 

(ii)                                  the Member’s distributive share of Net
Profit and any items in the nature of income or gain specially allocated to
such Member pursuant to Section 6.2; and

 

(iii)                               any other increases required by Treasury
Regulation Section 1.704-1(b)(2)(iv), without duplication.

 

(b)                                 Each Member’s Capital Account will be
debited with:

 

(i)                                     any distributions of cash made from the
Company to such Member plus the fair market value of any property distributed
in kind to such Member (net of any liabilities to which such property is
subject or which are assumed by such Member);

 

(ii)                                  the Member’s distributive share of Net
Loss and any items in the nature of expenses or losses specially allocated to
such Member pursuant to Section 6.2; and

 

(iii)                               any other decreases required by Treasury
Regulation Section 1.704-1(b)(2)(iv), without duplication.

 

(c)                                  The provisions of this Section 4.3
and any other provisions of this Agreement relating to the maintenance of
Capital Accounts have been included in this Agreement to comply with Section 704(b) of
the Code and the Treasury Regulations promulgated thereunder and will be
interpreted and applied in a manner consistent with those provisions.

 

4.4                                 No Further Capital Contributions.

 

Except
as expressly provided in this Agreement or with the prior written consent of
all of the Members, no Member shall be required or entitled to contribute any
other or further capital to the Company, nor shall any Member be required or
entitled to loan any funds to the Company. 
No Member will have any obligation to restore any negative balance in
its Capital Account at any time including upon liquidation or dissolution of
the Company.

 

4.5                                 Acquisition Loans.

 

(a)                                  It is acknowledged that, on or prior to
the Closing Date, DD-CTP on behalf of the Company shall use diligent efforts to
apply for and secure one or more Acquisition Loans in the minimum amount of
$15,000,000 on terms which are acceptable to the Managing Member, the proceeds
of which will be applied to a portion of the purchase price for the Initial
Company Property and other costs and expenses relating thereto and which will
be secured (in part) by a pledge and security interest in the Company’s right,
title and interests in the Initial 

 

19

 

Company Property. 
The terms of the Acquisition Loan shall be non-recourse to BH and its
Affiliates and any guarantees or other credit support which are required by the
Lender shall be provided by DD-CTP or its Affiliates, rather than BH or its
Affiliates.

 

(b)                                 On or prior to the maturity (or earlier
termination) of any Acquisition Loan, the Company and the Members shall use
their diligent efforts to apply for and secure a replacement loan on terms
which are acceptable to the Managing Member. 
The Managing Member shall direct the Company to solicit financing from
potential lenders, and the Managing Member shall have the sole discretion and
authority to select which loan and lender is in the Company’s best interests
pursuant to the requirements of Section 7.1 but subject to the provisions
of Section 7.1(f)(xi).  The Members
agree to make such reasonable changes to this Agreement as may be requested by
the Lender under any loan (including the Acquisition Loan), provided that such
changes shall not alter the economic terms, or any fundamental rights of the
Members, set forth herein.

 

ARTICLE
V

INTERESTS
IN THE COMPANY

 

5.1                                 Percentage Interest.

 

The
Percentage Interests of the Members may be adjusted only as set forth in this
Agreement.

 

5.2                                 Return of Capital.

 

No
Member, including the Managing Member, shall be liable for the return of the
Capital Contributions (or any portion thereof) of any other Member, it being
expressly understood that any such return shall be made solely from the assets
of the Company.  No Member shall be
entitled to withdraw or receive a return of any part of its Capital
Contributions or Capital Account, to receive interest on its Capital
Contributions or Capital Account or to receive any distributions from the
Company, except as expressly provided for in this Agreement or under applicable
law.  No Member shall have any obligation
to restore any negative or deficit balance in its Capital Account.

 

5.3                                 Ownership.

 

All
Company Property shall be owned by the Company, subject to the terms and
provisions of this Agreement.  Title to
Company Property shall be held by the Company in the Company’s name.

 

5.4                                 Waiver of Partition; Nature of Interests
in the Company.

 

Except as otherwise expressly provided for in this
Agreement, each of the Members hereby irrevocably waives any right or power
that such Member might have to:

 

(a)                                  cause the Company or any of its assets to
be partitioned;

 

20

 

(b)                                 cause the appointment of a receiver for
all or any portion of the assets of the Company;

 

(c)                                  compel any sale of all or any portion of
the assets of the Company pursuant to any applicable law; or

 

(d)                                 file a complaint, or to institute any
proceeding at law or in equity, to cause the termination, dissolution or
liquidation of the Company.

 

Each
of the Members has been induced to enter into this Agreement in reliance upon
the waivers set forth in this Section 5.4, and without such waivers no
member would have entered into this Agreement. 
No Member shall have any interest in any specific Company Property.  The interests of all Members in this Company
are personal property.

 

ARTICLE
VI

ALLOCATIONS
AND DISTRIBUTIONS

 

6.1                                 Allocations.

 

For each taxable year or
portion thereof, Net Profit and Net Loss shall be allocated (after all
allocations pursuant to Section 6.2 have been made) as follows:

 

(a)                                  Except as provided in Section 6.1(b),
Net Profit or Net Loss shall be allocated to make the Partially Adjusted
Capital Accounts of the Members equal, as nearly as possible, their respective
Target Accounts.

 

(b)                                 Winding Up Profit and Loss shall be
allocated in such a manner so as to cause the Partially Adjusted Capital
Accounts of the Members to equal, as nearly as possible, their respective
Target Accounts (provided, however, that in no event shall an allocation under
this Section 6.1 be made to the extent it would result in the allocations
under this Article VI failing to satisfy the requirements of Section 514(c)(9) (E) of
the Code and the applicable Treasury Regulations thereunder treating BH as a “qualified
organization” under Section 514(c)(9) of the Code for this purpose.

 

6.2                                 Allocations and Compliance with Section 704(b).

 

The following special allocations shall, except as
otherwise provided, be made in the following order:

 

(a)                                  Notwithstanding anything to the contrary
contained in this Article VI, if there is a net decrease in Company
Minimum Gain or in any Member Minimum Gain during any taxable year or other
period, prior to any other allocation pursuant hereto, such Member shall be
specially allocated items of Profit for such year (and, if necessary,
subsequent years) in an amount and manner required by Treasury Regulation
Sections 1.704-2(f) or 1.704-2(i)(4). 
The items of Profit to be so allocated shall be determined in accordance
with Treasury Regulation Section 1.704-2.

 

21

 

(b)                                 Non-recourse Deductions for any taxable
year or other period shall be allocated (as nearly as possible) under Treasury
Regulation Section 1.704-2 to the Members, pro rata in proportion to
their respective Percentage Interests.

 

(c)                                  Any Member Non-recourse Deductions for
any taxable year or other period shall be allocated to the Member that made or
guaranteed or is otherwise liable with respect to the loan to which such Member
Non-recourse Deductions are attributable in accordance with principles under
Treasury Regulation Section 1.704-2(i).

 

(d)                                 Any Member who unexpectedly receives an
adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6) which causes or increases a negative balance in his or its Capital
Account shall be allocated items of Profit sufficient to eliminate such
increase or negative balance caused thereby, as quickly as possible, to the
extent required by such Treasury Regulation.

 

(e)                                  No allocation of an item of Loss shall be
made to any Member if, as a result of such allocation, such Member would have
an Adjusted Capital Account Deficit.  Any
such disallowed allocation shall be made to the Members entitled to receive
such allocation under Treasury Regulation Section 1.704 in proportion to
their respective Percentage Interests.

 

(f)                                    For purposes of Section 752 of the
Code and the Treasury Regulations thereunder, excess non-recourse liabilities
(within the meaning of Treasury Regulations Section 1.752-3(a)(3)) shall
be allocated to the Members pro rata in proportion to their respective
Percentage Interest.

 

6.3                                 Distributions.

 

Except
as provided in Sections 6.4 and 6.5, the Company shall, as soon as
reasonably practical (but no less often than monthly, if appropriate), make
distributions of Net Cash Flow to the Members in the following manner and order
of priority:

 

(a)                                  first, an amount of such Net Cash Flow will be distributed
(in the order and priority set forth below) to the Members until each of the
Members has received aggregate distributions pursuant to this Section 6.3(a) for
the current period and all previous periods, equal to the sum of (i) the
aggregate amount of its Priority Capital Contributions made pursuant to this
Agreement, and (ii) an eighteen percent (18%) per annum (using a 365 day
year) cumulative preferred returned thereon (amounts distributed under this Section 6.3(a) will
be distributed in the reverse order in which such Priority Capital
Contributions were made — that is, the most recent Priority Capital
Contribution, together with the eighteen percent (18%) per annum cumulative
return thereon, will be returned and paid first to the Member having made such
Priority Capital Contribution, and then the next most recent Priority Capital
Contribution, together with the eighteen percent (18%) per annum cumulative
return thereon, will be returned and paid to the Member having made such
Priority Capital Contribution, etc.).

 

(b)                                 second, remaining Net Cash Flow shall be distributed to the
Members in proportion to their then respective Percentage Interests, until
aggregate distributions have been made to the Members in an amount necessary to
provide a 15% IRR with respect to total Capital Contributions made to the
Company;

 

22

 

(c)                                  third, a percentage of the remaining Net Cash Flow equal to
the First Promote Percentage to DD-CTP, and the balance to BH and DD-CTP in
proportion to their Percentage Interests, until aggregate distributions have
been made to the Members in an amount necessary to provide an 18% IRR with
respect to total Capital Contributions made to the Company;

 

(d)                                 fourth, a percentage of the remaining Net Cash Flow equal to
the Second Promote Percentage to DD-CTP, and the balance to BH and DD-CTP in
proportion to their Percentage Interests.

 

6.4                                 Special Distributions.

 

From
and after the time DD-CTP shall have been terminated as the Administrative
Member due to a For Cause Event or an Event of Default, Net Cash Flow otherwise
distributable under Section 6.3 shall not be distributed as provided in Section 6.3
but rather pursuant to this Section 6.4, and, except as provided in Section 6.5,
the Company shall, as soon as reasonably practical (but no less often than
monthly, if appropriate), make distributions of such Net Cash Flow (i) first,
as provided in Section 6.3(a), and (ii) second, to the Members in
proportion to their respective Percentage Interests.

 

6.5                                 Distributions in Liquidation.

 

(a)                                  Upon the dissolution and winding-up of
the Company, the proceeds of sale and other assets of the Company distributable
to the Members under Section 11.2(c)(iii) shall be distributed, not
later than the latest time specified for such distributions pursuant to
Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2) to
the Members in proportion to and in accordance with their respective positive
Capital Account balances (after adjustment to reflect the allocations pursuant
to this Article VI).

 

(b)                                 With the Approval of the Managing Member,
a pro rata portion of the distributions that would otherwise be made to the
Members under the preceding provisions of this Section 6.5 may be
distributed to a trust reasonably established, for a reasonable period of time,
for the benefit of the Members for the purposes of liquidating Company assets,
collecting amounts owed to the Company, and paying any contingent or unforeseen
liabilities or obligations of the Company arising out of or in connection with
the Company.  The assets of any trust
established under this Section 6.5 will be distributed to the Members from
time to time by the trustee of the trust upon Approval of the Managing Member
in the same proportions as the amount distributed to the trust by the Company
would otherwise have been distributed to the Members under this Agreement.

 

6.6                                 Tax Matters.

 

The
Members intend for the Company to be treated as a partnership for federal
income tax purposes.  The Managing Member
shall make all applicable elections, determinations and other decisions under
the Code and applicable Treasury Regulations, including, without limitation,
the deductibility of a particular item of expense and the positions to be taken
on the Company’s tax return, and shall approve the settlement or compromise of
all audit matters raised by the Internal Revenue Service affecting the Members
generally.  The Members shall each take 

 

23

 

reporting positions on their respective federal, state
and local income tax returns consistent with the positions determined for the
Company by the Managing Member.  The
Administrative Member shall cause all federal, state and local income and other
tax returns to be timely filed by the Company and shall, after receiving the
Managing Member’s approval of such returns, be authorized to execute such
returns (provided that the Administrative Member shall, for so long as it
diligently performs its obligations hereunder, not be responsible for the
delays of any other Member or reputable accountants or auditors retained by the
Administrative Member or at the request of the Managing Member on behalf of the
Company).

 

6.7                                 Tax Matters Partner.

 

BH
shall be the tax matters partner within the meaning of Section 6231(a)(7) of
the Code and, subject to Section 6.6, shall exercise all rights,
obligations and duties of a tax matters partner under the Code; and the Members
shall be kept informed of, and be given an opportunity to participate in a
non-binding manner in, all such matters which the tax matters partner deems to
be material.

 

6.8                                 Section 704(c).

 

In
accordance with Section 704(c) of the Code and the applicable
Treasury Regulations thereunder, income, gain, loss, deduction and tax
depreciation with respect to any property contributed to the capital of the
Company, or with respect to any property which has a Book Basis different than
its adjusted tax basis, shall, solely for federal income tax purposes, be
allocated among the Members so as to take into account any variation between
the adjusted tax basis of such property to the Company and the Book Basis of
such property.  Any elections, accounting
conventions or other decisions relating to such allocations shall be made by
the Managing Member in a manner that (i) reasonably reflects the purposes
and intention of this Agreement, and (ii) complies with Code
Sections 704(b) and 704(c) and the Treasury Regulations
thereunder.  For such allocations, the
Managing Member may select any method permitted in the Treasury Regulations
under Code Section 704(c) with respect to such allocations, including
the “traditional method”, the “traditional method with curative allocations”
and the “remedial allocation method”.

 

6.9                                 Withholding.

 

All
amounts required to be withheld pursuant to Section 1446 of the Code or
any other provision of federal, state, or local tax law shall be withheld and
shall be treated as amounts actually distributed to the Members for all
purposes under this Agreement.  If the
Managing Member determines that the Company has insufficient liquid assets to
satisfy such withholding obligation, the Member as to which withholding applies
shall pay cash to the Company (which in no event shall constitute a Capital
Contribution) within 5 days of a demand therefor in an amount sufficient to
satisfy such withholding obligation.  Any
failure to timely make such payment shall result in a fully recourse loan
bearing interest at 20% interest per annum until paid.

 

24

 

ARTICLE
VII

MANAGEMENT

 

7.1                                 Managing Member and Major Decisions.

 

Except as otherwise expressly provided in this
Agreement, the business and affairs of the Company shall be vested in and
controlled by the Managing Member as provided below.

 

(a)                                  Subject to the delegation of the
management of the day-to-day activities of the Company to the Administrative
Member pursuant to Section 7.2, the business and affairs of the Company
shall be vested in and controlled exclusively by the Managing Member.  The Managing Member shall have responsibility
for establishing the policies and operating procedures with respect to the
business and affairs of the Company and for making all decisions as to all
matters which the Company has authority to perform.  All decisions made with respect to the
management and control of the Company and Approved by the Managing Member shall
be binding on the Company and all Members. 
The Managing Member may elect officers of the Company to implement the
decisions (including without limitation executing documents) of the Managing
Member from time to time.  Pursuant to such
delegation, the Administrative Member shall be responsible for performing, or
for causing to be performed, and shall have the authority to perform (subject
to the requirement of receiving the Managing Member’s Approval, as applicable,
if and when required by the terms hereof), the duties described in Section 7.2.  Except as otherwise expressly provided in
this Agreement or as otherwise previously Approved by the Managing Member, or
provided for in any Budget or Operating Plan, the Managing Member shall have
the sole authority to authorize and approve the following matters (a “Major
Decision”):

 

(i)                                     The execution and delivery of any
agreement or instrument with respect to the purchase of the Initial Company
Property and the taking of any action required or permitted to be taken
thereunder (including without limitation, all action necessary to close the
purchase of the Initial Company Property and an election as to whether or not
to purchase the Initial Company Property) or any waiver under, amendment of or
assignment (in whole or in part) of any Transaction Document (including,
without limitation, the Purchase Agreement), the execution and delivery of  any agreements with any governmental agency,
any neighboring or adjacent property owner, any community organizations or any
other third parties, or sending
any correspondence to or having any other material communications with, any
governmental agency which directly binds the Company or advocates a position on
behalf of the Company with respect to the foregoing, any election under the
Purchase Agreement or other Transaction Documents which the Company may
exercise under same and exercise by the Company of rights and remedies
thereunder.

 

(ii)                                  Any financing, refinancing or
securitization of any Company Property (including without limitation, any
Acquisition Loan) and the use of any proceeds thereof, including, without
limitation, interim and permanent financing, and any other financing or
refinancing of the operations of the Company and the execution and delivery of
any documents, agreements or instruments evidencing, securing or relating to 

 

25

 

any such
financing; provided, however, that no guarantees or credit enhancements can be
required from any Member or its Affiliates without such party’s consent.

 

(iii)                               The approval of any Budget and Operating
Plan, and any amendments or modifications thereto (which shall only be
permitted in accordance with this Agreement) and the approval of any
supplemental budget, operating plan or other proposal relating to any
development and/or renovation of any portion of the Company Property and any
amendment or modifications thereto and the making or incurring of any
expenditure which is not included or contemplated thereby.

 

(iv)                              Any sale, assignment, transfer or other
disposition of all or any material portion of the Company Property or any
merger, consolidation or other business combination transaction involving the
Company entirely for cash consideration.

 

(v)                                 Any decision to advance funds under the
loan documents evidencing the loan acquired pursuant to the Purchase Agreement,
or to amend, modify or waive provisions of such loan documents, or to declare a
default or event of default thereunder, or to exercise any remedy thereunder
including foreclosure of any mortgage or security interest.

 

(vi)                              Any improvement, renovation, development,
rehabilitation, alteration, repair, or completion of construction of any
Company Property, or taking any action relating thereto which burdens or encumbers
the Company Property.

 

(vii)                           Any activity which generates revenues, or
which is otherwise on terms that vary materially from the ranges and guidelines
in the Budget or Operating Plan; provided that, for purposes of this Section 7.1(a)(vii),
such a material variance shall include (I) an amount that is not within
the ranges established in the Operating Plan or is in excess of the amount set
forth in the Budget for such revenues, expenditure or line item by more than
ten percent (10%) of the line item or five percent (5%) of the total Budget,
whichever is less (in addition to individual expenditures and obligations, such
test shall be applied to aggregate expenditures and obligations made on a
quarterly basis as well), and (II) terms that materially conflict with any
other guidelines in the Operating Plan regarding such transactions or any other
requirements of the Managing Member.

 

(viii)                        Any lease of any space within the Company
Property, or any amendment or modification of any lease or any termination
thereof, excluding Residential Tenant Leases made within guidelines established
by the Managing Member.

 

(ix)                                The making of any recurring operating
expenditure or incurring of any recurring operating obligation by or on behalf
of the Company that varies materially from the Budget or entering into (or
amending or modifying) of any agreement which was not specifically included or
contemplated in the Budget or under the Operating Plan, or otherwise Approved
by the Managing Member; provided that, for purposes of this Section 7.1(a)(ix),
such a material variance shall include (A) expenditures or obligations
involving an amount that is in excess of the amount set forth on a quarterly
basis or on an annual basis in the Budget or Operating Plan for such expenditure
on a line item basis by 

 

26

 

more than ten
percent (10%) of the line item or five percent (5%) of the total Budget,
whichever is less, for such period, (B) expenditures or obligations
involving the incurrence of an expenditure or obligation for any transaction or
any series of related transactions when taken with all prior expenditures or
obligations during the particular quarter or fiscal year related thereto
exceeds the maximum expenditure amount provided in the Budget or the Operating
Plan for such particular transaction or series of transactions for such period
by the lesser of ten percent (10%) of such maximum expenditure amount for such
particular transaction or series of transactions for such period or five
percent (5%) of the total Budget for such period, or (C) in the case of
any material service, maintenance or similar agreement proposed to be entered
into, such agreement is not terminable (without penalty) by the Company on
thirty (30) days or less written notice to the other party; provided, however,
that expenditures made or obligations incurred or agreements entered into
pursuant to, or which are specifically included in or contemplated under, the
Budget or the Operating Plan shall not be Major Decisions to the extent they do
not vary (other than immaterial variances) from amounts, provisions and
requirements set forth in the Budget and the Operating Plan and any other
conditions or requirements adopted by the Managing Member from time to time.

 

(x)                                   Entering into or consummating any
transaction or arrangement with any Member or any Affiliate of any Member, or
any other transaction involving an actual or potential conflict of interest,
including (without limitation) the terms and provisions of any property
management agreement to be entered into by the Company following its
acquisition of title to the Property by foreclosure or otherwise with DD-CTP or
its Affiliates, all of which shall (with the exception of the transactions
described in Section 9.5 hereof which shall not require such approval)
require the Approval of the non-interested Member(s) notwithstanding
anything contained herein to the contrary.

 

(xi)                                The establishment of reasonable reserves,
determination of the amount of available Net Cash Flow, and making of
distributions to Members (subject to the requirements of Sections 6.3, 6.4 and
6.5).

 

(xii)                             The institution of any legal proceedings
in the name of the Company (including any proceedings relating to foreclosure
of the Company’s mortgage and security interest in the Property), settlement of
any legal proceedings against the Company and confession of any judgment
against the Company or any property of the Company other than the institution
of any eviction, suits for breach of tenant leases, or similar proceedings
contemplated or provided for in the Operating Plan.

 

(xiii)                          The possession or pledge of any Company
Property for other than Company purposes (which shall require the Approval of
all Members);

 

(xiv)                         (A) The filing of any voluntary
petition in bankruptcy on behalf of the Company, (B) the consenting to the
filing of any involuntary petition in bankruptcy against the Company, (C) the
filing of any petition seeking, or consenting to, the reorganization or relief
under any applicable federal or state law relating to bankruptcy or insolvency,
(D) the consenting to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or a
substantial part of its 

 

27

 

property, (E) the
making of any assignment for the benefit of creditors, (F) the admission
in writing of the Company’s inability to pay its debts generally as they become
due or (G) the taking of any action by the Company in furtherance of any
such action (collectively, the “Bankruptcy Actions”).

 

(xv)                            Entering into any loan servicing, asset
or property management or leasing or development agreement, or other third
party contract with respect to which funds are not explicitly provided for, or
the existence of which is not contemplated, in the Budget and/or Operating
Plan, as applicable, with regard to the Company or any Company Property.

 

(xvi)                         The engagement of any servicer, manager,
contractor, or sales or placement agent or broker not expressly permitted
hereunder for the management, leasing, servicing, disposition, financing or
refinancing of any Company Property.

 

(xvii)                      Exercising any right, and the making of
any material claim, demand or application, the conduct of any material
proceedings, the approval, consent or determination of any material matter
and/or the taking of any other material action by or on behalf of the Company
under any agreement or contract to which the Company is a party.

 

(xviii)                   The negotiation, amendment, restatement,
replacement, supplement or other modification of any of the Transaction
Documents and any approval, consent or other determination with respect to the
foregoing.

 

(xix)                           Determining the types and amounts of
insurance coverage for the Company and the Company Property, and the
deductibles and underwriters with regard thereto.

 

(xx)                              The removal, dismissal, termination,
replacement or employment of the on-site manager of the Property or any other
individual acting in a similar capacity with respect to the Property.

 

(xxi)                           Any other material matter pertaining to
the Company’s or any SPV’s business.

 

(xxii)                        The approval, determination or any other
action expressly reserved to the Managing Member under this Agreement,
including, without limitation, any modification, amendment, or renewal of any
matter previously requiring the Approval of the Managing Member.

 

(xxiii)                     With regard to any SPV or any other
Person in which the Company holds a direct or indirect equity interest, the
making of any decision, taking any action or providing any consent or approval
with regard to any matter which if made or taken by the Company would have been
a Major Decision as set forth in this Agreement or which requires the consent
of approval of the shareholders, board of directors, executive committee,
managing members, general partners or similar management body or persons 

 

28

 

of any SPV or any
other Person in which the Company or any SPV holds an equity interest pursuant
to any agreement, contract, document or law.

 

(b)                                 The Managing Member shall have all of the
same powers and duties as a general partner of a general partner under the laws
of the State of Delaware, including, without limitation, the full power and
authority to:

 

(i)                                     acquire, hold, operate, sell, transfer,
assign, convey, exchange, lease, sublease, mortgage or otherwise dispose of or
deal with all or any part of the Company Property;

 

(ii)                                  in furtherance of the Company’s purposes
and business, borrow money (including without limitation, the Acquisition
Loan), whether on a secured or unsecured basis, refinance, recast, modify,
amend, extend, compromise or otherwise deal with any such loan, and in
connection therewith, issue evidences of indebtedness and secure the same by
mortgages, deeds of trust, security agreements or other similar documents
affecting the assets of the Company;

 

(iii)                               authorize other persons to execute and
deliver such documents on behalf of the Company as the Managing Member may deem
necessary or desirable for the Company’s business, including, without
limitation, guarantees and indemnities;

 

(iv)                              perform, or cause to be performed, all of
the Company’s obligations under any agreement to which the Company is a party;

 

(v)                                 enter into contracts on behalf of the
Company and make expenditures as are required to operate and manage the Company
and the Company Properties; and

 

(vi)                              do, or cause to be done, any act which is
necessary or desirable to carry out any of the purposes of the Company.

 

(c)                                  The Company may employ, engage or retain
any Persons (including any Affiliate of any Member) to act as loan servicer,
property manager, brokers, accountants, attorneys, engineers or in such other
capacities as the Managing Member may determine are necessary or desirable in
connection with the Company’s business, and the Managing Member, Administrative
Member and the Members shall be entitled to rely in good faith upon the
recommendations, reports and advice given them by any such Persons in the
course of their professional engagement.

 

(d)                                 Only the Managing Member shall have the
right or power to make decisions on behalf of and exercise control over the
Company business, affairs or operations; provided, however, that the Managing
Member may elect to implement those decisions through any Member it selects in
writing, including without limitation through the Administrative Member
pursuant to the terms hereof, and/or through one or more officers it elects in
writing; and provided further that the Administrative Member may not, without
the Consent of the Managing Member, take any action which specifically requires
the Consent of the Managing Member and/or BH pursuant to the terms hereof.

 

29

 

(e)                                  Notwithstanding anything in this
Agreement to the contrary, the Administrative Member shall have no authority to
perform any act for, on behalf of or with respect to the Company in violation
of any provision of any property management agreement to which the Company is a
party, the Acquisition Loan Documents, the other Transaction Documents and all
applicable laws, rules or regulations.

 

(f)                                    Notwithstanding anything in this
Agreement to the contrary, neither the Managing Member nor the Administrative
Member shall, without the Approval or ratification of the specific act by all
the Members given in this Agreement or by other written instrument executed and
delivered by all the Members subsequent to the date of this Agreement, cause or
permit the Company to:

 

(i)                                     except as otherwise provided in this
Agreement, make any loans to any Member or its Affiliates;

 

(ii)                                  amend this Agreement;

 

(iii)                               acquire any additional material real
property other than the Property, unless such property is contemplated by the
Budget and Operating Plan;

 

(iv)                              do any act in contravention of this
Agreement or which would make it impossible to carry out the business of the
Company;

 

(v)                                 except as otherwise provided in this
Agreement (including without limitation pursuant to Section 9  hereof), admit any additional Member into the Company or
otherwise issuing any equity interest in the Company;

 

(vi)                              cause the Company to make any
distribution of Company Property in kind to any Member;

 

(vii)                           change the nature of the business
conducted by the Company or its purposes as described in Section 2.5
hereof;

 

(viii)                        any merger, consolidation or other
business combination transaction involving the Company where the consideration
consists of any non-cash consideration including property or securities;

 

(ix)                                extend the term of the Company;

 

(x)                                   enter into any transaction with an
Affiliate of a Member, except for any such transaction that is on an arms’
length basis and substantially the same terms as would be applicable to a
similar transaction with a third party;

 

(xi)                                consummate the Acquisition Loan or enter
into the Acquisition Loan Documents or refinance the Acquisition Loan with
replacement financing if DD-CTP or its Affiliates will not be released from
recourse liability with respect to the Acquisition Loan or will have the
recourse liability on the replacement financing;

 

30

 

(xii)                             undertake any Bankruptcy Action by the
Company or any SPV; or

 

(xiii)                          sell, transfer, or otherwise dispose of
the Company Property for consideration less than the amount of any debt secured
by the Company Property in circumstances where a Member or its Affiliates is
obligated on a Financing Guaranty with respect to such debt and/or in
circumstances where such debt would be assumed by the buyer or transferee with
no release of any related Financing Guaranty provided by any Member or its
Affiliates.

 

(g)                                 Notwithstanding anything to the contrary
contained in this Agreement, all Net Cash Flow of the Company shall be deposited
into an account in the name of the Company designated and controlled by
Administrative Member, as set forth in Section 7.2(c)(vi), prior to
distribution of all or any portion thereof pursuant to Article VI.  The designation of such account pursuant to
this Section 7.1(g) shall have no effect on the distributions to be
made pursuant to Article VI.

 

7.2                                 Administrative Member.

 

(a)                                  The Managing Member shall designate one
of the Members to act as the administrative member of the Company (the “Administrative
Member”) and implement the decisions of the Managing Member.  Pursuant to such designation, the
Administrative Member shall be responsible for performing, or for causing to be
performed, and shall have the authority to perform the duties described in this
Section 7.2 or as otherwise specifically set forth herein, in each
instance subject to the requirement of receiving the prior Approval of the
Managing Member and/or BH, as applicable, if and when required by the terms
hereof.  The Administrative Member shall:

 

(i)                                     conduct the business of the Company on a
day-to-day basis, and use diligent efforts to cause such operations to be
conducted in accordance with the Budget and the Operating Plan and such other
guidelines or requirements as shall be adopted by the Managing Member from time
to time, which duties may be discharged by delegating the same to a property
manager Approved by the Managing Member pursuant to a property management
agreement in form and substance acceptable to the Managing Member;

 

(ii)                                  use all diligent efforts to provide the
Management Services and perform the duties assigned to it hereunder;

 

(iii)                               carry out all decisions of the Managing
Member;

 

(iv)                              subject to the limitations set forth in
this Agreement and the guidelines reasonably adopted by the Managing Member,
enter into contracts and leases on behalf of the Company in accordance with the
current Budget and Operating Plan Approved by the Managing Member, and make
expenditures as are required to implement such Budget and Operating Plan, but
only to the extent that any such expenditures and amounts required to be paid
by the Company under such contracts, leases and other instruments and documents
have either been Approved by the Managing Member or otherwise authorized by the
terms of this Agreement; and

 

31

 

(v)                                 perform such other duties and obligations
as the Managing Member may reasonably require from time to time.

 

The
initial Administrative Member shall be DD-CTP which shall remain the Administrative
Member until the resignation or removal of DD-CTP as the Administrative
Member.  In the event that DD-CTP or any
other Person should retire, resign or be removed as the Administrative Member,
the Managing Member shall be under no obligation to appoint a replacement
thereof.  Subject to any right provided
to the Administrative Member to charge certain matters to the Company as
provided in this Agreement, and subject further to the provisions of Section 7.4,
the Administrative Member shall not be entitled to receive any fees or other
compensation in respect of any Management Services or its activities as the
Administrative Member, and will not receive reimbursement for compensation
payable to any of its employees or other direct or indirect overhead which may
be attributable to the Management Services and/or the performance of its duties
as the Administrative Member.

 

(b)                                 Notwithstanding anything to the contrary
contained in Section 7.1(a)(iii), if at the beginning of any calendar year
the Budget and Operating Plan or any item or portion thereof shall not have
been Approved by the Managing Member, then:

 

(i)                                     any items or portions of the Budget and
Operating Plan and amounts of expenses provided therein which have been so
approved shall become operative immediately and the Administrative Member shall
be entitled to expend funds in accordance with those operative portions;

 

(ii)                                  with respect to the Budget, the
Administrative Member shall be entitled to, and shall, expend, in respect of
non-capital, recurring expenses in any month of the then-current calendar year,
an amount equal to the budgeted amount for the corresponding month of the
immediately preceding calendar year, as set forth on the immediately preceding
calendar year Budget after giving effect to any dispositions or other material
changes to the Company Property during the prior or current year; provided,
however, that if any contract Approved by the Managing Member or entered into
pursuant to the provisions hereof provides for an automatic increase in costs
thereunder after the beginning of the then current calendar year, then the
Administrative Member shall be entitled to expend the amount of such increase;
and

 

(iii)                               the Administrative Member shall be
entitled to, and shall, expend funds in respect of debt service on the Company’s
financing (including the expense of curing any defaults thereunder), utilities,
real estate taxes and assessments, insurance and emergency repairs, any annual
or other periodic fees, or other expenditures which the Managing Member
determines are necessary for the continued ordinary operation of the Company
Property, including without limitation uninsured losses or deductibles,
operating shortfalls, repairs, additions or modifications to comply with
applicable laws or insurance requirements, insurance premiums for insurance
policies Approved by the Managing Member, and any final orders, judgments, or
other proceedings and all costs and expenses related thereto, regardless of
whether the Budget has been approved or whether such expenditures exceed the
amounts provided for in the applicable Budget (all of the foregoing described
in this clause (iii), collectively, “Necessary Expenses”).

 

32

 

(c)                                  Subject to the availability of adequate
funds therefor in the Budget and from Revenues, Capital Contributions or other
sources, and subject further, in any event, to the provisions of Section 7.1
and any other relevant provisions hereof, in addition to and without limiting
any other duties set forth in this Agreement, the Administrative Member shall
(subject to the control and direction of the Managing Member):

 

(i)                                     oversee, coordinate and process the
operations of the Company on a day-to-day basis, including without limitation,
the acquisition, management, servicing, leasing, development, renovation and
sale of any and all of the assets which comprise any portion of the Company
Property, and prepare all communications with any property manager, any tenant,
the Lender and any other relevant third parties;

 

(ii)                                  take all proper and necessary actions
reasonably required to cause the Company and all third parties at all times to
perform and comply with the terms and provisions (including without limitation,
any provisions requiring the expenditure of funds by the Company) of the
Acquisition Loan Documents, the other Transactions Documents and any other loan
commitment, agreement, mortgage, lease, or other contract, instrument or
agreement to which the Company is a party or bound, or which affects all or any
portion of the Company Property or the operation thereof;

 

(iii)                               pay in a timely manner all non-disputed
operating expenses of the Company in accordance with the terms of the Budget
and the Operating Plan or as otherwise provided herein;

 

(iv)                              to the extent available, obtain and
maintain insurance coverage on the Company Property as required by the Managing
Member and pay all non-disputed taxes, assessments, charges and fees payable in
connection with the ownership, use and occupancy of the Company Property;

 

(v)                                 deliver to the other Members promptly
upon the receipt or sending thereof, copies of all material notices, reports
and communications (other than routine, usual and customary notices and other
standard communications) between the Company and any Property manager, the
Lender, governmental agencies, neighboring property owners, community groups
and other relevant third parties affecting all or any portion of any Company
Property, or any of such other parties, which relates to any existing or
pending default thereunder or to any financial or operational information
required by such Person;

 

(vi)                              deposit all receipts from operations of
the Company Property to a separate account established and maintained by the
Administrative Member in the name of the Company, and not commingle those
receipts with any other funds or accounts of the Administrative Member;

 

(vii)                           assist in the management and
administration of the process of selling and refinancing all or any portion of
the Company Property;

 

(viii)                        if and to the extent the Administrative
Member delegates to any loan servicer or property manager (previously Approved
by the Managing Member) or 

 

33

 

subcontracts with
any third party or Affiliate for the performance of any of the services to be
performed by the Administrative Member, supervise and oversee the performance
of the services performed by such third parties or Affiliates and cause the
same to be performed in the manner required hereunder; and

 

(ix)                                execute and deliver agreements,
certificates and similar documents (in the name or on behalf of the Company)
which are necessary to obtain and/or maintain any Acquisition Loans or
otherwise required to be delivered pursuant to the Acquisition Loan Documents,
as well as manage any approved financing or refinancing, on terms Approved by
the Managing Member.

 

(d)                                 Notwithstanding anything to the contrary
contained in this Agreement, the Managing Member shall have the absolute right,
power and authority at any time upon and after (i) the occurrence of any
For Cause Event (as set forth in Section 7.2(e) below), (ii) the
occurrence of any Event of Default (as set forth in Article XII), or (iii) upon
at least thirty (30) days notice to DD-CTP for no reason whatsoever, to remove
DD-CTP as the Administrative Member and appoint or designate a replacement.

 

(e)                                  Upon and after the occurrence of any For
Cause Event as described in this Section 7.2(e), or any Event of Default
with respect to DD-CTP, BH shall have the right in its sole and absolute
discretion to terminate DD-CTP as the Administrative Member by the delivery of
written notice and, upon any such termination (i) BH may designate a
successor Administrative Member, (ii) any distributions to the Members under
Section 6.3 shall no longer be made under Section 6.3 hereof and from
that time forward shall be made instead under Section 6.4 hereof, and
notwithstanding anything to the contrary contained in this Agreement, BH shall
have the unilateral right and authority to make all decisions on behalf of the
Company and cause the Company to take any and all actions BH, in its sole
discretion, may determine.  For the
purposes of this Agreement, a “For Cause Event” shall mean any of the
following:

 

(i)                                     any actions or omissions on the part of
DD-CTP or any of its representatives (including, without limitation any DD-CTP
Person), or by any other Person at the explicit direction of any of the
foregoing which amounts to fraud, willful misconduct or gross negligence; or

 

(ii)                                  any act, omission, breach or default of
any provision of this Agreement (excluding a failure to make Capital
Contributions, the exclusive remedy for which are set forth in Article IV
hereof) by any DD-CTP Person in each case which (I) is not cured by such
DD-CTP Person within a Reasonable Period after notice thereof has been given,
and (II) causes the Company loss or damage equal to or in excess of Five
Hundred Thousand Dollars ($500,000), exclusive of insurance proceeds (fidelity
bonds or the like) actually received by the Company on account thereof; or

 

(iii)                               any Change in Control with respect to any
DD-CTP Person; or

 

(iv)                              any reduction in DD-CTP’s Percentage
Interest to less than 5.0% pursuant to Section 4.2(d); or

 

34

 

(v)                                 (I) the filing of any voluntary
petition in bankruptcy or the consenting to the filing of any involuntary
petition in bankruptcy against any DD-CTP Person, (II) the filing by any
DD-CTP Person of any petition seeking, or consenting to, the reorganization or
relief under any applicable federal or state law relating to bankruptcy or
insolvency against or with respect to any DD-CTP Person, (III) the filing
by any other Person of any petition seeking, or consenting to, the
reorganization or relief under any applicable federal or state law relating to
bankruptcy or insolvency with respect to any DD-CTP Person, upon the same not
being discharged, stayed or dismissed within one hundred and twenty (120) days,
(IV) the consenting by any DD-CTP Person to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) over
the property of DD-CTP, (V) the making of any assignment for the benefit
of creditors by any DD-CTP Person, (VI) the admission by any DD-CTP Person
in writing of its inability to pay its debts generally as they become due, or (VII) the
taking of any action by any DD-CTP Person in furtherance of any such action.

 

(f)                                    DD-CTP’s appointment as the
Administrative Member shall automatically terminate if DD-CTP (or a permitted
transferee thereof) is no longer a member of the Company.

 

7.3                                 Management of the Property.

 

The Property is currently managed pursuant to a
Management Agreement entered into by the current titleholder and Property
Counselors Management Group II LLC (the “Existing PMA”).  Upon the Company’s acquisition of title to
the Property by foreclosure or otherwise, the Managing Member will determine in
its sole discretion whether to continue the Existing PMA or cause the Company
to enter into a new property management agreement with Behringer Harvard
Opportunity II Management Services, LLC or another Person (which may be an
Affiliate of the Managing Member).  Any
and all property management fees payable under the Existing PMA (or any replacement
property management agreement entered into by the Company) upon the Company’s
acquisition of title to the Property shall be a Company expense pursuant to Section 7.5.

 

7.4                                 Duties and Conflicts.

 

(a)                                  The Members and their respective
officers, employees, and Affiliates shall devote such time to the Company
business as they deem to be necessary or desirable in connection with their
respective duties and responsibilities hereunder.  Except as provided hereunder or as otherwise
agreed to in writing by the Managing Member and all disinterested Members, no
Member nor any member, partner, shareholder, officer, director, employee, agent
or representative of any Member shall receive any salary or other remuneration
for its services rendered pursuant to this Agreement.

 

(b)                                 Each of the Members recognizes,
acknowledges and agrees as follows:

 

(i)                                     each of the Members and their respective
Affiliates, employees, agents, and representatives have or may have in the
future other business interests, activities and investments, some of which may
be in conflict or competition with the 

 

35

 

business of the
Company, and are entitled to carry on such other business interests, activities
and investments;

 

(ii)                                  each of the Members and their respective
Affiliates, employees, agents, and representatives may engage, invest in and/or
possess an interest in, independently, with one another, or with others, any
business activity of any type or description, including without limitation, those
that might be the same as or similar to the business of the Company and that
might be in direct or indirect competition with the Company, and including,
without limitation, owning, financing, acquiring, leasing, promoting,
developing, improving, operating, managing and servicing real property and
mortgage loans on its own behalf or on behalf of other entities with which any
of the Members is affiliated or otherwise;

 

(iii)                               each of the Members and their respective
Affiliates, employees, agents, and representatives may engage in any such
activities, whether or not competitive with the Company, without any obligation
to offer any interest in such activities to the Company or to the other
Members;

 

(iv)                              neither the Company nor any Member shall
have any right, by virtue of this Agreement, in or to such ventures or
activities, or the income or profits derived therefrom, and the pursuit of such
activities, even if competitive with the business of the Company, shall not be
deemed wrongful or improper; and

 

(v)                                 the obligations and duties of the Members
to each other and to the Company shall be limited solely to those arising under
the Transaction Documents, and neither the Members nor their respective
Affiliates shall be obligated to present any investment opportunity or
prospective economic advantage to the Company or the Members, even if the
opportunity is of the character that, if presented to the Company or the
Members, could be taken by any of them.

 

7.5                                 Company Expenses.

 

The
Company shall be responsible for paying, and shall pay, all costs and expenses
related to the business of the Company and of acquiring, holding, owning,
developing, servicing, collecting upon and operating the Company Property,
except for (i) costs of preparing the reports to Members specifically
called for by the terms hereof and the Budget and the Operating Plan, which
shall be the cost of the Administrative Member (provided that reasonable third
party costs (including audit and legal) incurred in connection with the same
shall be at the Company’s expense), (ii) costs to be borne by any third
party under any agreement with the Company, and (iii) costs to be borne by
any Member or its Affiliates as specifically provided in this Agreement or the
Property Management Agreement.  Subject
to the preceding sentence, all fees and expenses payable under Sections 3.3 and
7.3, costs and expenses relating to any employees, staff or other personnel
Approved by the Managing Member to provide day-to-day operations and financial
reporting to oversee the operations of the Company Property, costs of
financing, fees and disbursements of attorneys, financial advisors,
accountants, appraisers, brokers and engineers, travel expenses, and all other
fees, costs and expenses directly attributable to the business and operations
of the Company shall be borne by the Company. 
In the event any such 

 

36

 

costs and expenses are or have been paid by any
Member, such Member shall be entitled to be reimbursed for such payment so long
as such payment is reasonably necessary for Company business or operations and
has been Approved by the Managing Member or is expressly authorized in this
Agreement or the appropriate Budget or Operating Plan (including any permitted
variance hereunder).  Notwithstanding the
foregoing, in no event shall the Company have any obligation to pay or
reimburse any Member or any of their respective Affiliates for any general
overhead or similar costs and expenses of such Member or Affiliate.

 

7.6                                 Venture Coordinator.

 

BH will designate an asset manager for its
investment in the Company (the “Venture Coordinator”) who will have
primary responsibility for fulfilling BH’s obligations under this Agreement and
will be empowered to Approve matters for and on behalf of BH, including with
respect to Major Decisions.

 

ARTICLE
VIII

BOOKS, RECORDS, REPORTS AND PROJECT PLAN

 

8.1                                 Books and Records.

 

The
Administrative Member shall maintain, or cause to be maintained, at the expense
of the Company, in a manner customary and consistent with good accounting
principles, practices and procedures, a comprehensive system of office records,
books and accounts (which records, books and accounts shall be and remain the
property of the Company) in which shall be entered fully and accurately each
and every financial transaction with respect to the ownership and operation of
the Company Property.  Bills, receipts
and vouchers shall be maintained on file by the Administrative Member.  The Administrative Member shall maintain or
cause to be maintained said books and accounts in a safe manner and separate
from any records not having to do directly with the Company or any Company
Property.  At the cost and expense of the
Company, the Administrative Member shall cause audits to be performed and
audited statements and income tax returns to be prepared as required by Section 8.3
(provided that the Administrative Member shall, for so long as it diligently
performs its obligations hereunder, not be responsible for the delays of any
other non-Affiliated Member or reputable accountants or auditors retained by
the Administrative Member or at the request of the Managing Member on behalf of
the Company).  Such books and records of
account shall be prepared and maintained by the Administrative Member at the
principal place of business of the Administrative Member or such other place or
places as may from time to time be reasonably determined by the Managing
Member.  Each Member or its duly
authorized representative shall have the right to inspect, examine and copy
such books and records of account at the Company’s office during reasonable
business hours.  Additionally, upon
request of a Member, all professionals given access to any such books or
records shall be directed to provide such books or records to such Member.

 

8.2                                 Accounting and Fiscal Year.

 

The
books of the Company shall be kept on the accrual basis in accordance with GAAP
and on a tax basis and the Company shall report its operations for tax purposes
on the accrual 

 

37

 

method.  The
fiscal year and federal income tax year of the Company shall end on December 31
of each year, unless a different tax year shall be required by the Code.

 

8.3                                 Reports.

 

(a)                                  The Administrative Member will prepare,
or cause to be prepared, at the expense of the Company, and furnish to each
Member the following within the periods set forth below (provided that for so
long as it diligently performs its obligations hereunder, the Administrative
Member shall not be responsible for the delays of any Person that is not an
Affiliate of Administrative Member or reputable accountants or auditors
retained by the Administrative Member or at the request of the Managing Member
on behalf of the Company), all of which shall be certified by the
Administrative Member as being, to the best of its knowledge, true and correct:

 

(i)                                     within twelve (12) days after the end of
each fiscal quarter of the Company, unless such fiscal quarter is the last
fiscal quarter of any fiscal year of the Company, (A) an unaudited balance
sheet of the Company dated as of the end of such fiscal quarter, (B an
unaudited related income statement of the Company for such fiscal quarter, (C) an
unaudited statement of each Member’s Capital Account for such fiscal quarter, (D) an
unaudited statement of cash flows of the Company for such fiscal quarter, and (E) a
reconciliation of actual Expenses and Revenues during such period compared with
the Budget amounts for such items, and (F) a quarterly explanation of the
discrepancies; and

 

(ii)                                  within twelve (12) days after the end of
each calendar month, a status report of the Company’s activities during such
calendar month, including summary descriptions of additions to, dispositions of
and leasing and occupancy of Company Properties and any material legal issues
such as material claims filed or threatened against the Company, the arising of
material claims by the Company against other parties and developments in any
then pending material legal actions affecting the Company during such month.

 

(b)                                 The Administrative Member will prepare,
or cause to be prepared, on an accrual basis in accordance with GAAP and on a
tax basis, at the expense of the Company, and furnish to each Member no later
than January 15 after the end of each fiscal year of the Company the
following, all of which shall be certified by the Administrative Member as
being, to the best of its knowledge, true and correct:

 

(i)                                     an unaudited balance sheet of the Company
dated as of the end of such fiscal year;

 

(ii)                                  an unaudited related income statement of
the Company for such fiscal year;

 

(iii)                               an unaudited statement of each Member’s
Capital Account for such fiscal year;

 

38

 

(iv)                              an unaudited statement of cash flows of
the Company as of the end of the fiscal year; and

 

(v)                                 such other supporting schedules, reports
and backup information as are reasonably requested by BH.

 

(c)                                  In addition, if requested by BH, the
Administrative Member will prepare, at the expense of the Company, and furnish
to each Member within forty-five (45) calendar days after the end of each
taxable year of the Company, the final audited amount of net income of the
Company for such fiscal year and, within sixty (60) calendar days after the end
of such taxable year, each of the following, all of which shall be certified by
the Administrative Member as being, to the best of its knowledge, true and
correct and all of which shall be certified in the customary manner by the
Company Accountant (which firm shall provide such balance sheet, income
statement and statement of Capital Account in draft form to the Members for
review prior to finalization and certification thereof) (i) an audited
balance sheet of the Company dated as of the end of such taxable year; (ii) an
audited related income statement of the Company for such taxable year; (iii) an
audited statement of cash flows for such taxable year; and (iv) an audited
statement of each Member’s Capital Account for such taxable year.

 

(d)                                 All schedules of book income shall be
prepared on a GAAP basis.  Promptly after
the end of each fiscal year, the Administrative Member will cause the Company
Accountant to prepare and deliver to each Member a report setting forth in
sufficient detail all such additional information and data with respect to
business transactions effected by or involving the Company during the fiscal
year as will enable the Company and each Member to timely prepare its federal,
state and local income tax returns in accordance with applicable laws, rules and
regulations.  The Administrative Member
will use its diligent commercially reasonable efforts to cause the Company
Accountant to prepare all federal, state and local tax returns required of the
Company, submit those returns to the other Members for their approval not later
than March 1st of the year following such fiscal year and will file the
tax returns after they have been Approved by the Managing Member.  If the Managing Member shall not have
approved any such tax return prior to the date required for the filing thereof
(including any extensions granted), the Administrative Member will diligently
endeavor to timely obtain an extension of such date to the extent such an
extension is available.

 

(e)                                  The Administrative Member shall prepare,
or cause to be prepared, at Company expense, such additional financial reports
and other information as the Managing Member may determine are
appropriate.  The Administrative Member
will furnish to each Member upon request, at the expense of the Company, copies
of all reports, statements, notices and other material written information
received by the Company or the Administrative Member from, or delivered by or
on behalf of the Company to, any Lender. 
In addition, the Administrative Member will furnish to each Member
copies of all reports, financial information and other notices delivered to the
Company by the borrower under the loan purchased pursuant to the Purchase
Agreement.  Subject to the provisions of Section 13.15,
each Member shall be permitted to deliver to any of its Affiliates, and BH
shall be permitted to deliver to any of its direct or indirect members,
partners or investors, a copy of any of the reports and statements provided to
such Member pursuant to this Section 8.3.

 

39

 

(f)                                    All decisions as to accounting principles
shall be made by the Managing Member, subject to the provisions of this
Agreement.

 

(g)                                 Notwithstanding anything to the contrary
herein, BH shall have the authority to prepare and file all Company tax returns
and shall be entitled to make all interpretations of this Agreement with
respect thereto, all in its sole discretion, and in preparing such returns or
making any such interpretations may rely on the advice of its legal counsel
and/or accountants.

 

8.4                                 The Company Accountant.

 

The
Company shall retain as the regular accountant and auditor for the Company (the
“Company Accountant”) any nationally-recognized accounting firm
designated by the Managing Member from time to time or any other accountant and
auditor Approved by the Managing Member. 
The reasonable fees and expenses of the Company Accountant shall be a
Company expense.

 

8.5                                 Reserves.

 

The
Managing Member may, in its discretion and subject to such conditions as it
shall determine, establish reasonable reserves for the purposes and
requirements as it may deem appropriate.

 

8.6                                 The Budget and Operating Plan.

 

No
later than the Closing Date, the Administrative Member shall have prepared and
submitted to the Managing Member for approval (and the Managing Member shall
have Approved) a preliminary estimated Budget for the period through December 31,
2009 and Operating Plan for the Company for the period from the Closing Date
through December 31, 2010 (the “Initial Budget and Operating Plan”),
which shall include projected costs to foreclose or otherwise acquire title to
the Property, grant a mortgage lien on the Property to the Acquisition Lender
and capital expenditures to be set forth therein to be made in the budget
period following acquisition of title to the Property.  To the extent required by the Managing
Member, the Administrative Member shall revise and update the Initial Budget
and Operating Plan from time to time which will set forth all anticipated
income, operating expenses, and capital expenditures of the Company, together
with an exit valuation/strategy and projected quarterly/annual capital
contributions and capital returns and, in any event, shall be consistent with
any preliminary figures previously provided to the Managing Member by the Administrative
Member.  Thereafter, commencing for the
2011 fiscal year, the Budget and Operating Plan shall be prepared in proposed
form and submitted annually by the Administrative Member to the Managing Member
for approval at least sixty (60) calendar days prior to the end of the current
fiscal year (so that the Administrative Member will submit a Budget and
Operating Plan for the 2011 fiscal year no later than November 1, 2010 to
the Managing Member for its Approval) with respect to the following fiscal
year, together with five (5) year forward projections (provided if the
Administrative Member should fail to timely prepare and submit in proposed form
any such Budget and Operating Plan, the Managing Member shall be authorized to
prepare such Budget and Operating Plan). 
In formulating the comprehensive Budget and 

 

40

 

Operating Plan, to the extent reasonably feasible at
the time of preparation thereof, the Administrative Member will develop (for
Approval by the Managing Member) proposed strategies regarding (i) plans
for renovation, leasing, financing, sale and rehabilitation of the Property and
any other real property and proposed reductions to Expenses and other Company
costs and expenses and increases in revenues, (ii) preparation and release
of all promotional and advertising relating to, and a marketing plan for, the
Company Property or concerning the Company, (iii) terms for any proposed
sale or disposition of any Company Property, or acquisition of additional
Company Property, and (iv) selection of legal counsel, accountants,
appraisers and other consultants for the Company to efficiently implement the
Budget and Operating Plan.  The
Administrative Member will also consider and make recommendations to the extent
it deems the same appropriate regarding the amendment, modification,
alteration, change, cancellation, or prepayment of any indebtedness evidenced
by any mortgage loan presently or hereafter affecting any Company Property, and
procurement of title insurance and other insurance for the Company, or decrease
or vary the insurance carried by or on behalf of the Company and any other
matters affecting the Company’s business. 
The Managing Member may review the Initial Budget and Operating Plan and
make such amendments or modifications thereto as the Managing Member shall
determine appropriate or necessary in its discretion based on the actual
operating results for the Company Property.

 

8.7                                 Accounts.

 

All
funds of the Company shall be deposited in such checking accounts, savings
accounts, time deposits, or certificates of deposit in the name of the Company
or shall be invested in the name of the Company, in such manner as shall be
designated by the Managing Member.  Company
funds shall not be commingled with those of any other person or entity.  Company funds shall be used only for the
business of the Company.

 

8.8                                 REIT Matters.

 

Within
twenty-five (25) days following the end of each calendar quarter, the Company
shall provide to BH all tax information necessary for BH (or its REIT
affiliates) to comply with the REIT requirements under Sections 856 and 857 of
the Code.  Notwithstanding anything to
the contrary in this Agreement, neither the Company nor any Member (acting on
the Company’s behalf) shall take any action which would cause BH (or its REIT
affiliates) to (a) fail to qualify as a “real estate investment trust” (as
defined under Sections 856 & 857 of the Code) or (b) incur
any additional taxes under Section 857 or Section 4981 of the Code
(or any successor provisions).  In
particular, the Company shall conduct its business affairs in a manner so as to
avoid incurring income that would not qualify under Sections 856(c)(2) and
856(c)(3) of the Code and will not acquire assets that are not described
in Section 856(c)(4) of the Code unless approved by BH.  The Members shall periodically consult with
each other (or their designee) to ensure that any prospective transaction
undertaken by the Company, or a  Member
acting on behalf of the Company, shall not cause BH (or its REIT affiliates) to
fail to qualify as a REIT.  If the
Members disagree as to whether any transaction will cause BH (or its REIT
affiliates) to fail to qualify as a REIT (as defined under Sections 856
and 857 of the Code) or incur any additional taxes under Section 857 or Section 4981
of the Code (or any successor provisions), the reasonable determination of BH
shall be final.

 

41

 

ARTICLE
IX

TRANSFER OF INTERESTS

 

9.1                                 No Transfer.

 

Except
as expressly permitted or contemplated by this Agreement, no Member may sell,
assign, give, hypothecate, pledge, encumber or otherwise transfer (“Transfer”)
all or any portion of its Interest, whether directly or indirectly, without the
written consent of the other Members. Except as expressly permitted or
contemplated by this Agreement, DD-CTP agrees not to permit any Transfer of any
equity interest in such Member, or in its managing member.  Any Transfer in contravention of this Article IX
shall be null and void.  No Member,
without the prior written consent of the other Members, shall resign from the
Company except as a result of such Member’s involuntary dissolution or final
adjudication as a bankrupt or in connection with a Transfer permitted by this Article IX.  The same restrictions set forth herein shall
apply to a Transfer in or of an interest in DD-CTP’s managing member, and such
a Transfer shall have the same effect as a Transfer of an interest in DD-CTP.

 

9.2                                 Permitted Transfers.

 

(a)                                  Notwithstanding anything to the contrary
contained in this Agreement but subject to the provisions of Sections 9.5 and
9.6, BH may from time to time and in its sole discretion without the consent of
any other Member, Transfer (directly or indirectly) all or any portion of its
direct or indirect interest in the Company to any Person other than a
Prohibited Person.

 

(b)                                 Notwithstanding anything to the contrary
contained in this Agreement, any Member, its constituents and/or the direct or
indirect individual holders of any interest in the Company may Transfer
(directly or indirectly) all or any portion of its direct or indirect interest
in the Company to any Person (other than a Prohibited Person) for estate
planning purposes or to a trust for the benefit of the immediate family members
of the ultimate direct or indirect individual holders of an interest in such
Member on the date of this Agreement; provided that, any such Transfer (either
individually or when aggregated with any other prior Transfers by such Member
and such Member’s Group) shall not result in a Change in Control with respect
to such Member’s interest in the Company hereunder.

 

(c)                                  Any permitted Transfer under Sections 9.2(a) and
9.2(b) above of a direct interest in the Company shall not relieve the
transferor of any of its obligations prior to such Transfer.  The parties hereto agree to amend the
transfer provisions of Article IX if any Member reasonably determines that
such amendment is necessary for the Company to be treated as a partnership for
federal and state income tax purposes. 
Nothing contained in this Article IX shall prohibit a Transfer
indirectly of any interest in the Company if a direct Transfer would otherwise
be permitted under this Section 9.2. 
Subject to Section 9.3, any permitted transferee pursuant to this Section 9.2
shall become a Member of the Company. 
The provisions of this Section 9.2 will not apply to or be deemed
to authorize or permit any collateral transfer of, or grant of a security
interest in, a Member’s interest in the Company, or in Company Property (which
transfer or grant shall be subject to the other provisions of this Agreement).

 

42

 

9.3                                 Transferees.

 

Notwithstanding
anything to the contrary contained in this Agreement, no transferee of all or
any portion of any Interest shall be admitted as a Member unless (a) such
Interest is transferred in compliance with the applicable provisions of this
Agreement, (b) such transferee shall have furnished evidence of
satisfaction of the requirements of Section 9.2 reasonably satisfactory to
the remaining Members, and (c) such transferee shall have executed and
delivered to the Company such instruments as the remaining Members reasonably
deem necessary or desirable to effectuate the admission of such transferee as a
Member and to confirm the agreement of such transferee to be bound by all of
the terms and provisions of this Agreement with respect to such Interest.  At the request of the remaining Members, each
such transferee shall also cause to be delivered to the Company, at the
transferee’s sole cost and expense, a favorable opinion of legal counsel
reasonably acceptable to the Company, to the effect that (i) such
transferee has the legal right, power and capacity to own the Interest proposed
to be transferred, (ii) if applicable, such Transfer does not violate any
provision of any loan commitment or any mortgage, deed of trust or other
security instrument encumbering all or any portion of the Company Property, and
(iii) such Transfer does not violate any federal or state securities laws
and will not cause the Company to become subject to the Investment Company Act
of 1940, as amended.  As promptly as
practicable after the admission of any Person as a Member, the books and
records of the Company shall be changed to reflect such admission.  All reasonable costs and expenses incurred by
the Company in connection with any Transfer of any Interest and, if applicable,
the admission of any transferee as a Member shall be paid by such transferee.

 

9.4                                 Section 754 Election.

 

In the
event of a Transfer of all or part of the Interest of a Member, at the request
of the transferee or if required by the Code, or if otherwise in the best
interests of the Company (as determined by the Managing Member), the Company
shall elect pursuant to Section 754 of the Code to adjust the basis of
Company Property as provided by Sections 734 and 743 of the Code, and any
cost of such election or cost of administering or accounting for such election
shall be at the sole cost and expense of the requesting transferee.

 

9.5                                 Tag-Along Right.

 

(a)                                  Without limiting any of the rights of BH
under this Agreement, if BH receives a bona fide written offer (a “Tag-Along
Offer”) from an unrelated third party (the “Tag-Along Assignee”) to
purchase all or any portion of BH’s Interest, and BH wishes to accept the
Tag-Along Offer, except if a For Cause Event shall have occurred or an uncured
Event of Default shall have occurred and be continuing, BH shall give DD-CTP
written notice (the “Tag-Along Notice”) stating the terms of the
proposed sale, the amount of BH’s Interest which the Tag-Along Assignee intends
to purchase and the name of the Tag-Along Assignee.  DD-CTP shall have the right (the “Tag-Along
Right”), exercisable by the delivery of written notice during the fifteen
(15) day period (the “Tag-Along Option Period”) immediately following
the date that the Tag-Along Notice is received by DD-CTP, to require the
Tag-Along Assignee to purchase up to the same proportionate part of DD-CTP’s
Interest.  The Tag-Along Right shall be
on the same terms and conditions as the Tag-Along Offer and will be for the
same proportionate purchase 

 

43

 

price and, unless otherwise agreed by DD-CTP, a
closing pursuant to the Tag-Along Right shall be a condition precedent to the
sale of all or any portion of BH’s Interest to the Tag-Along Assignee (a “Tag-Along
Sale”) to the extent DD-CTP exercises such Tag-Along Right in accordance
with the terms hereof and such sale by BH is to an unrelated third party.

 

(b)                                 If (i) DD-CTP fails to exercise the
Tag-Along Right during the Tag-Along Option Period, or (ii) if DD-CTP
notifies BH, in writing, during the Tag-Along Option Period, that DD-CTP will
not exercise the Tag-Along Right, then BH may sell the Interest that was the
subject of the Tag-Along Offer to the Tag-Along Assignee on the terms specified
in the Tag-Along Offer free of the Tag-Along Right; provided that as a
condition precedent to such Tag-Along Sale, the Tag-Along Assignee agrees, in
writing, to be subject to and abide by all the terms, provisions, covenants,
agreements and conditions of this Agreement. 
If, however, the sale to the Tag-Along Assignee is not consummated
pursuant to the terms and conditions contained in the Tag-Along Offer within
one hundred and eighty (180) days after DD-CTP receives the Tag-Along Notice,
the Tag-Along Right as set out in this Section 9.5 shall again be
effective.

 

(c)                                  At the closing of any Tag-Along Sale,
each of the Members shall execute and deliver such bills of sale, instruments
of conveyance, assignments and other instruments as may reasonably be required,
to give good and clear title to its interest in the Company.  Each Member shall share pro rata (based upon
their respective Company Interests) in (i) any indemnity liability to the
proposed transferee, (ii) any escrow established for the purpose of
satisfying any such liability, (iii) the proceeds from the sale, (iv) any
real property transfer taxes, (v) any prepayment or penalty fees in
connection with any loan secured by the Company Property (vi) all expenses
of investigating and consummating the transactions contemplated by this Section 9.5
(whether or not consummated), and (vii) all other rights and obligations
with respect to the sale.

 

9.6                                 Drag-Along Right.

 

(a)                                  If BH intends to sell, directly or
indirectly, to one or more third party purchasers, (i) more than
twenty-five (25%) of its Interest (in one or more related transactions), or (ii) any
portion of its Interest as part of a transaction immediately after which BH
will no longer Control the Company, BH may, in its discretion, whether or not
DD-CTP exercises its rights pursuant to Section 9.5 above, require DD-CTP
and any other Members (all Members other than BH, the “Other Members”)
to sell their Interests pursuant to and in accordance with the terms and
conditions of such sale, subject to the condition that if DD-CTP or any of its
Affiliates is obligated on a Financing Guaranty such Financing Guaranty is
released in connection with such sale. 
If BH elects to exercise its rights pursuant to this Section 9.6,
BH shall give written notice (the “Drag-Along Notice”) to the Other
Members that BH intends to sell its Interest (or portion thereof), which
Drag-Along Notice shall set forth the purchase price at which an unrelated
third party purchaser has proposed to purchase such Interest (or portion
thereof) and the other material terms of such proposed sale (as proportionately
adjusted to reflect the acquisition of BH’s Interest and expressed as the
purchase price for each one (1%) percent of interest in the Company, the “Drag-Along
Purchase Price”).  The consideration
received in connection with such sale shall be allocated between BH and the
Other Members in proportion with the Interest sold by each party.

 

44

 

(b)                                 In connection with any such sale pursuant
to which any Other Members shall participate in accordance with this Section 9.6,
the Interests of BH and such Other Members shall be consummated simultaneously
and the proceeds attributable to such sale of each Member’s Interest shall be
paid simultaneously to BH and each such Other Member.

 

(c)                                  If BH delivers the Drag-Along Notice to
the Other Members, then:

 

(i)                                     the Other Members shall sell all of their
respective Interests for a proportionate amount of the Drag-Along Purchase
Price and upon the terms set forth in the Drag-Along Notice and otherwise in
accordance with this Section 9.6;

 

(ii)                                  the transfer of the Other Members’ respective
Interests shall occur at a closing on a date specified by BH, which shall be no
more than one hundred eighty (180) days after the date the Drag-Along Notice is
delivered;

 

(iii)                               the Other Members shall execute all
documents, agreements and instruments which BH may reasonably request to
consummate the conveyance of the Other Members’ respective Interests, provided
that BH shall execute substantially the same documents, agreements and
instruments with respect to its Interest;

 

(iv)                              each of the Other Members shall be deemed
to represent and warrant to the purchaser of their Interests, on and as of the
date of closing of the transfer of the Other Members’ respective Interests to
such purchaser, that (A) such Other Member is the sole owner of such
Interest in the Company and holds the same free and clear of any liens or other
encumbrances, and (B) such Other Member has all requisite power and
authority to transfer its Interest to such purchaser pursuant to this Section 9.6;

 

(v)                                 the Other Members shall bear their
respective pro rata share of all closing costs and deliver their respective pro
rata share of all closing escrow funds, reserves and similar closing
obligations; provided that no Other Member shall be liable or responsible for
any default or breach with respect to any escrow funds caused by BH, its
Affiliates or any Member of the Company other than such Other Member and its
Member Group; and

 

(vi)                              if any of the Other Members fail to
transfer their Interest in accordance with this Section 9.6, BH and the
Company shall have all rights and remedies available pursuant to law and in
equity, including (without limitation) the exercise of any power of attorney
granted to BH pursuant to Section 9.6(d) and/or the right to enforce
their respective rights under this Section 9.6 by specific performance and
to bring an action for damages against such Other Member.

 

(d)                                 Each Other Member hereby represents and
warrants to, and agrees with and for the benefit of, BH and the Company that BH
has all requisite authority to complete and facilitate any sale of such Other
Member’s Interest in accordance with this Section 9.6, including
transferring such Other Member’s Interest and, if and to the extent any of the
Other Members fail to transfer their Interest in accordance with this Section 9.6,
provided BH shall have given such Other Member at least ten (10) days
prior written notice of the closing of the transfer of such Other Member’s
Interest pursuant to this Section 9.6, such Other Member hereby
irrevocably 

 

45

 

appoints BH as its true and lawful attorney-in-fact
(which appointment shall be deemed coupled with an interest) to execute all
documents, agreements and instruments which BH may reasonably request, and take
any and all other action necessary or appropriate, to consummate the conveyance
of such Other Members’ respective Interests. 
This Section 9.6(d) is self-operative and no additional
authorization or consent of any Other Member or any of their respective
members, managers, officers, directors or owners shall be required for the sale
under this Section 9.6 of such Other Member’s Interest.

 

ARTICLE
X

EXCULPATION AND INDEMNIFICATION

 

10.1                           Exculpation.

 

No
Member, Administrative Member, the Managing Member, general or limited partner
of any Member, shareholder or member or other holder of an equity interest of
any Member or manager, officer or director of any of the foregoing, shall be
liable to the Company or to any other Member for monetary damages for any
losses, claims, damages or liabilities arising from any breach of fiduciary
duty or act or omission performed or omitted by it and arising out of or in
connection with this Agreement or the Company’s business or affairs; provided,
however, in the case of any such act or omission it was taken in good faith,
was reasonably believed to be in the best interests of the Company and it was
within the scope of authority granted to such Person, and in the case of a
Member or related Person, was not attributable to such Member’s or Person’s
fraud, bad faith, willful misconduct or gross negligence.  No general or limited partner of any Member,
shareholder, member or other holder of an equity interest in such Member or
manager, officer of director of any of the foregoing shall be personally liable
for the performance of any such Member’s obligations of this Agreement, but the
foregoing shall not relieve any partner or member of any Member from its
obligations to such Member.

 

10.2                           Indemnification.

 

(a)                                  The Company shall, to the fullest extent
permitted by applicable law, indemnify, defend and hold harmless each Member,
the Administrative Member, the Managing Member and each general or limited
partner of any Member or such Member’s Affiliate, shareholder, member or other
holder of any equity interest in such Member or its Affiliate, or any manager,
officer or director of any of the foregoing (collectively, the “Indemnitees”),
from and against any losses, claims, demands, liabilities, costs, damages,
expenses (including, without limitation, reasonable fees and expenses of
outside counsel) and causes of action imposed on, incurred by, asserted against
or to which such Indemnitee may otherwise become subject by reason of or in
connection with any breach of fiduciary duty or matter arising out of or
incidental to any act performed or omitted to be performed by any such
Indemnitee in connection with this Agreement or the Company’s business or
affairs; provided, however, that any such act or omission was taken in good
faith, was reasonably believed by the applicable Indemnitee to be in the best
interest of the Company and within the scope of authority granted to such
member or applicable Indemnitee, and in the case of a Member or related
Indemnitee, was not attributable to such Indemnitee’s fraud, bad faith, willful
misconduct or gross negligence.  Any
indemnity under this Section 10.2 shall be paid solely out of and to the
extent of Company assets and shall not be a personal obligation of any Member
and in no event will any Member be required, or 

 

46

 

permitted without the consent of all of the Members,
to contribute additional capital under Section 4.2 to enable the Company
to satisfy any obligation under this Section 10.2.  All judgments against the Company and the
Members, or any one or more thereof, wherein such Member (or Members) is
entitled to indemnification, must first be satisfied from Company assets before
the Members shall be responsible therefor.

 

(b)                                 The Company and the other Members shall
be indemnified and held harmless by each Member from and against any and all
claims, demands, liabilities, costs, damages, expenses and causes of action of
any nature whatsoever arising out of or attributable to (i) any act
performed by or on behalf of any such Member (including acts performed as the
Managing Member or Administrative Member) which is not performed in good faith
or is not reasonably believed by such Member or Managing Member to be in the
best interest of the Company and within the scope of authority conferred upon
such Member or Managing Member under this Agreement, (ii) the fraud, bad
faith, willful misconduct or gross negligence of such Member or Managing
Member, (iii) the breach by the Company of any of its representations and
warranties made under any purchase, loan or other agreement entered into in
connection with the acquisition of Company Property, which breach was the
result of information or matters relating to such Member, or (iv) any
denial of an insurance claim by the Company based on an intentional
misstatement or intentional withholding of information by any Member.

 

(c)                                  The provisions of this Section 10.2
shall survive for a period of four years from the date of dissolution of the
Company, provided that, if at the end of such period there are any actions,
proceedings or investigations then pending, any Indemnitee may so notify the
Company and the other Members at such time (which notice shall include a brief
description of each such action, proceeding or investigation and the
liabilities asserted therein) and the provisions of this Section 10.2
shall survive with respect to each such action, proceeding or investigation set
forth in such notice (or any related action, proceeding or investigation based
upon the same or similar claim) until such date that such action, proceeding or
investigation is finally resolved.

 

(d)                                 Notwithstanding anything to the contrary
contained in this Agreement, the obligations of the Company or any Member under
this Section 10.2 shall (i) be in addition to any liability which the
Company or such Member may otherwise have and (ii) inure to the benefit of
such Indemnitee, its Affiliates and their respective members, managers,
directors, officers, employees, agents and Affiliates and any successors, assigns,
heirs and personal representatives of such Persons.

 

(e)                                  Notwithstanding any of the preceding
provisions of this Section 10.2, in no event shall the Company have any
obligation under this Section 10.2 that is prohibited by the charter of
Behringer Harvard Opportunity REIT II, Inc.

 

10.3                           Acquisition Loan.

 

(a)                                  In the event DD-CTP or an Affiliate of
DD-CTP is required to enter into a Financing Guaranty as a condition to a
Lender making the Acquisition Loan or other loans to the Company, any such
guarantees shall be provided by DD-CTP or its Affiliates and any such guarantor
(the “Guarantor”) waives any right it might otherwise have to recover
from BH or 

 

47

 

require BH or any of its Affiliates to contribute to
or reimburse the Guarantor for any amount paid under a Financing Guaranty to
any Lender.

 

(b)                                 If a default or event of default occurs
under any Acquisition Loan due to actions of a Guarantor or failure of a
Guarantor to comply with financial or other covenants applicable to it
thereunder or under a Financing Guaranty, DD-CTP and such Guarantor hereby
agree, to the fullest extent required by applicable law, to indemnify the
Company and hold the Company harmless from and against any and all losses, claims,
demands, liabilities, costs, damages, expenses (including, without limitation,
reasonable fees and expenses of outside counsel) and causes of action imposed
on, incurred by, asserted against or to which the Company may otherwise become
subject by reason of or arising from such default or event of default.  Notwithstanding any other provision of this
Agreement to the contrary, DD-CTP and each Guarantor shall have personal
liability to the Company and BH for all obligations arising under this Section 10.3(b).

 

(c)                                  If DD-CTP, any of its Affiliates or any
Guarantor breaches any provision of Section 10.3(a) or (b) and
fails after written demand to make any required payments to the Company and/or
BH thereunder, in addition to any other right or remedy available at law or in
equity, BH will have the option to purchase from DD-CTP its Interest for
consideration of $10.00 exercisable by written notice from BH to DD-CTP.  Any closing pursuant to this Section 10.3(c) will
take place at the principal office of BH no later than 45 calendar days after
the exercise of such option and shall be effectuated pursuant to documentation
customary for transactions of this sort and shall otherwise be reasonably
acceptable to BH and DD-CTP.  BH will
have the right to enforce its rights under this Section 10.3(c) by
specific performance.  In addition,
DD-CTP does hereby constitute and appoint BH as its true and lawful
attorney-in-fact coupled with an interest, with full power to prepare and
execute any instruments and documents required to effectuate the provisions of
this Section 10.3(c).

 

ARTICLE
XI

DISSOLUTION AND TERMINATION

 

11.1                           Dissolution.

 

(a)                                  The Company shall be dissolved and its
business wound up upon the earliest to occur of any of the following events,
unless a majority in interest of the Members vote to continue the term of the
Company upon the occurrence of such event:

 

(i)                                     the sale, condemnation or other
disposition of all Company Property and the receipt of all consideration
therefor;

 

(ii)                                  the expiration of the period set forth in
Section 2.3;

 

(iii)                               the written determination of the Managing
Member to terminate the Company; or

 

(iv)                              the resignation, expulsion, bankruptcy or
dissolution of the last remaining Member (which shall not include the
occurrence of such an event with respect to any Member’s underlying members or
partners which does not cause such an event to 

 

48

 

occur with respect
to the Member itself) or the occurrence of any other event that terminates the
continued membership of any Member in the Company, unless, within ninety (90)
days after such event, each of the remaining Members elects in writing to
continue the business of the Company.

 

(b)                                 Without limitation on, but subject to,
the other provisions hereof, the assignment of all or any part of a Member’s
Interest permitted hereunder will not result in the dissolution of the
Company.  Except as otherwise
specifically provided in this Agreement, each Member agrees that, without the
consent of the other Members, any Member may not withdraw from or cause a
voluntary dissolution of the Company.  In
the event any Member withdraws from or causes a voluntary dissolution of the
Company in contravention of this Agreement, such withdrawal or the causing of a
voluntary dissolution shall not affect such Member’s liability for obligations
of the Company.

 

11.2                           Termination.

 

In all
cases of dissolution of the Company, the business of the Company shall be wound
up and the Company terminated as promptly as practicable thereafter, and each
of the following shall be accomplished:

 

(a)                                  The Liquidating Member shall cause to be
prepared a statement setting forth the assets and liabilities of the Company as
of the date of dissolution, a copy of which statement shall be furnished to all
of the Members.

 

(b)                                 The Company Property shall be liquidated
by the Liquidating Member as promptly as possible, but in an orderly and
businesslike and commercially reasonable manner and subject to the provisions
of the Operating Plan then in effect or a liquidating plan Approved by the
Managing Member.  The Liquidating Member
may distribute Company Property in kind only with the consent of all of the
Members.

 

(c)                                  The proceeds of sale and all other assets
of the Company shall be applied and distributed as follows and in the following
order of priority:

 

(i)                                     First, to the payment of (A) the
debts and liabilities of the Company (including any outstanding amounts due on
any indebtedness encumbering the Company Property, or any part thereof) and (B) the
expenses of liquidation.

 

(ii)                                  Second, to the setting up of any reserves
which the Liquidating Member and the Managing Member shall determine to be
reasonably necessary for contingent, unliquidated or unforeseen liabilities or
obligations of the Company or any Member arising out of or in connection with
the Company.  Such reserves may, in the
discretion of the Liquidating Member, be paid over to a national bank or
national title company selected by it and authorized to conduct business as an
escrow agent to be held by such bank or title company as escrow agent for the
purposes of disbursing such reserves to satisfy the liabilities and obligations
described above, and at the expiration of such period as the Liquidating Member
may reasonably deem advisable, distributing any remaining balance as provided
in Section 11.2(c)(iii); provided, however, that, to the extent that it
shall have been necessary, by reason of applicable law or regulation, to 

 

49

 

create any reserves
prior to any and all distributions which would otherwise have been made under Section 11.2(c)(i) and,
by reason thereof, a distribution under Section 11.2(c)(i) has not
been made, then any balance remaining shall first be distributed pursuant to Section 11.2(c)(i).

 

(iii)                               Thereafter, the balance, if any, to the
Members in accordance with Section 6.5.

 

11.3                           Liquidating Member.

 

The
Liquidating Member is hereby irrevocably appointed as the true and lawful
attorney in the name, place and stead of each of the Members, such appointment
being coupled with an interest, to make, execute, sign, acknowledge and file
with respect to the Company all papers which shall be necessary or desirable to
effect the dissolution and termination of the company in accordance with the
provisions of this Article XI. 
Notwithstanding the foregoing, each Member, upon the request of the
Liquidating Member or the Managing Member, shall promptly execute, acknowledge
and deliver all such documents, certificates and other instruments as the
Liquidating Member or the Managing Member shall reasonably request to
effectuate the proper dissolution and termination of the Company, including the
winding up of the business of the Company.

 

11.4                           Claims of the Members.

 

Members
and former Members shall look solely to the Company’s assets for the return of
their Capital Contributions, and if the assets of the Company remaining after
payment of or due provision for all debts, liabilities and obligations of the
Company are insufficient to return such Capital Contributions, the Members and
former Members shall have no recourse against the Company or any other Member.

 

ARTICLE
XII

DEFAULT BY MEMBER

 

12.1                           Events of Default.

 

For the purposes of this Agreement, an “Event of
Default” shall exist with respect to a Member if and so long as any of the
following shall occur and be continuing:

 

(a)                                  such Member or its Affiliates shall
violate any material term, breach any material provision or default in the
performance of any material covenant applicable to such Member as set forth in
this Agreement and (i) such violation, breach or default causes Material
Damage or Loss to the Company or any of its Members or their respective
Affiliates, (“Material Damage or Loss” is a violation breach or default
which causes the Company liability, losses or damages, exclusive of insurance
proceeds actually received by the Company on account thereof, equal to or in
excess of Five Hundred Thousand Dollars ($500,000) and (ii) such
violation, breach or default is not cured (including without limitation, by the
breaching Member reimbursing the Company for the resulting material damage or
loss) within a Reasonable Period; or

 

50

 

(b)                                 solely with respect to DD-CTP, either (i) DD-CTP
shall default in the performance of any of its duties hereunder or breach any
of the terms hereof beyond any applicable grace, cure or notice period
resulting in Material Damage or Loss, (ii) an “event of default” shall
occur and be continuing under any property management agreement the Company
enters into with DD-CTP or any of its Affiliates, or (iii) any DD-CTP
Person shall otherwise violate any material term, breach any material provision
or default in the performance of any material covenant applicable to it
hereunder and (A) such violation, breach or default causes Material Damage
or Loss to the Company or any of its Members or their respective Affiliates,
and (B) such violation, breach or default is not cured (including without
limitation, by DD-CTP or such DD-CTP Person reimbursing the Company for the
resulting Material Damage or Loss) within a Reasonable Period.

 

Notwithstanding
the foregoing provisions of this Section 12.1, a failure by any Member to
make any Additional Capital Contribution to the extent required or requested
hereunder shall not constitute an Event of Default by such Member.

 

12.2                           Effect of Event of Default.

 

Subject
to the provisions hereof, upon the occurrence of an Event of Default by any
Member, the non-defaulting Member shall have the right, at any time within one
year from the date of such Event of Default and upon giving the defaulting
Member at least ten (10) days prior written notice of such election to
pursue any right or remedy available to it at law or in equity.

 

ARTICLE
XIII

MISCELLANEOUS

 

13.1                           Representations and Warranties of the
Members.

 

(a)                                  Each Member represents and warrants to
the other Members as follows:

 

(i)                                     It is duly organized, validly existing
and in good standing under the laws of its jurisdiction of formation with all
requisite power and authority to enter into this Agreement and to conduct the
business of the Company.

 

(ii)                                  This Agreement constitutes the legal,
valid and binding obligation of the Member enforceable in accordance with its
terms.

 

(iii)                               No consents or approvals are required
from any governmental authority or other person or entity for the Member to
enter into this Agreement and the Company. 
All limited liability company, corporate or partnership action on the
part of the Member necessary for the authorization, execution and delivery of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly taken.

 

(iv)                              The execution and delivery of this
Agreement by the Member, and the consummation of the transactions contemplated
hereby, does not conflict with or contravene the provisions of its
organizational documents or any agreement or instrument by which it or its
properties are bound or any law, rule, regulation, order or decree to which it
or its properties are subject.

 

51

 

(v)                                 The Member has not retained any broker,
finder or other commission or fee agent and no such person has acted on its
behalf in connection with the acquisition of the Company Property or the
execution and delivery of this Agreement.

 

(vi)                              It understands that (A) an
investment in the Company involves substantial and a high degree of risk, (B) no
federal or state agency has passed on the offer and sale of the Interest in the
Company to such Person, (C) it must bear the economic risk of such Person’s
investment in the Company for an indefinite period of time, since such Person’s
Interest in the Company has not been registered for sale under the Securities
Act of 1933 and, therefore, cannot be sold or otherwise transferred unless
subsequently registered under the Securities Act of 1933 or an exemption from
such registration is available, and the Interest in the Company of such Person
cannot be sold or otherwise transferred unless registered under applicable
state securities or blue sky laws or an exemption from such registration is
available, (D) there is no established market for the Interest of such
Person in the Company and no public market will develop and (E) such
Person’s principals have such knowledge and experience in real estate and,
other financial and business matters that they are capable of evaluating the
merits and risks of an investment in the Company.  It has acquired its Interest solely for
investment purposes only and not for the purpose of resale.

 

(vii)                           Neither such Member nor, to such Member’s
knowledge, any Person who holds any interest in such Member, is a Prohibited
Person nor a Person with whom a U.S. Person, including a “financial institution”
as defined in 31 U.S.C. 5312 (a)(z), as amended, is prohibited from
transacting business of the type contemplated by this Agreement or any
Transaction Agreement, whether such prohibition arises under United States law,
regulation, executive orders and lists published by the OFAC (including those
executive orders and lists published by OFAC with respect to Specially
Designated Nationals and Blocked Persons) or otherwise.

 

(viii)                        Such Member has taken, and shall continue
to take, such measures as are required by applicable law to assure that the
funds used to pay sellers and lessors under the Transaction Agreements are
derived: (i) from transactions that do not violate United States law nor,
to the extent such funds originate outside the United States, do not violate
the laws of the jurisdiction in which they originated; and (ii) from
permissible sources under United States law and to the extent such funds
originate outside the United States, under the laws of the jurisdiction in
which they originated.

 

(ix)                                Such Member is compliance with all
applicable provisions of the USA Patriot Act of 2001, Pub. L. No. 107-56.

 

(b)                                 In addition to the representations and
warranties set forth above, DD-CTP represents and warrants to BH as follows:

 

(i)                                     DD-CTP is a limited liability company
currently existing pursuant to Articles of Organization filed with the
Secretary of State of Florida, and that certain Operating Agreement dated September 
, 2009 (collectively, the “Organizational 

 

52

 

Documents”),
and a true and correct copy of the Organizational Documents have been provided
to counsel for BH.

 

(ii)                                  The aforementioned Organizational
Documents have not been terminated nor modified or amended and continue to be
in full force and effect.

 

(iii)                               No consent or authorization of any other
persons or entities, other than those whose consent has been secured, is
required for DD-CTP to enter into this Agreement or to take any action or grant
any consent or approval under this Agreement.

 

(iv)                              DD-CTP is owned, directly or indirectly,
and Controlled by Kirk D. Eicholtz and Edward M. Kobel who have the power
to direct the management and policies of DD-CTP.

 

(c)                                  DD-CTP hereby covenants and agrees that
DD-CTP shall not transfer all or any part of its Interest to any Person, if, as
a result of such transfer, a tax-exempt entity would be the direct, indirect or
beneficial owner of all or a portion of such Interest.

 

(d)                                 Each Member agrees to indemnify and hold
harmless the Company and each other Member and their officers, directors,
shareholders, partners, members, employees, successors and assigns from and
against any and all loss, damage, liability or expense (including costs and
attorneys’ fees) which they may incur by reason of, or in connection with, any
breach of the foregoing representations and warranties by such Member and all
such representations and warranties shall survive the execution and delivery of
this Agreement and the termination and dissolution of DD-CTP and/or the Company
or any other Member.

 

13.2                           Further Assurances.

 

Each
Member agrees to execute, acknowledge, deliver, file, record and publish such
further instruments and documents, and do all such other acts and things as may
be required by law, or as may be required to carry out the intent and purposes
of this Agreement.

 

13.3                           Notices.

 

All
notices, demands, consents, approvals, requests or other communications which
any of the parties to this Agreement may desire or be required to give
hereunder (collectively, “Notices”) shall be in writing and shall be
given by (i) personal delivery, (ii) facsimile transmission or (iii) a
reputable overnight courier service, fees prepaid, addressed as follows:

 

	
  If to BH to:

  	
  Behringer Harvard Palms of Monterrey, LLC

  
	
   

  	
  15601 Dallas Parkway, Suite 600

  
	
   

  	
  Addison, TX 75001

  
	
   

  	
  Attn:

  	
  Executive Vice President of Real Estate

  
	
   

  	
  Fax:

  	
  (214) 655-1610

  

 

53

 

	
  With a copy to:

  	
  Behringer Harvard
  Opportunity OP II LP

  
	
   

  	
  15601 Dallas Parkway,
  Suite 600

  
	
   

  	
  Addison, TX 75001

  
	
   

  	
  Attn:

  	
  Chief Legal Officer

  
	
   

  	
  Fax:

  	
  (214) 655-1610

  
	
   

  	
   

  
	
  If to DD-CTP to:

  	
  DD-CTP, LLC

  
	
   

  	
  c/o Christian Tyler Properties, LLC

  
	
   

  	
  403 East Madison Street, Suite 400

  
	
   

  	
  Tampa, FL 33602

  
	
   

  	
  Attn:

  	
  Kirk D. Eicholtz

  
	
   

  	
  Fax:

  	
  (813) 222-0104

  
	
   

  	
   

  
	
  With a copy to:

  	
  c/o DeBartolo Development, LLC

  
	
   

  	
  4401 West Kennedy Boulevard, 3rd Floor

  
	
   

  	
  Tampa, FL 33609

  
	
   

  	
  Attn:

  	
  Edward M. Kobel

  
	
   

  	
  Fax:

  	
  (813) 676-7696

  
	
   

  	
   

  
	
  And a copy to:

  	
  c/o DeBartolo Holdings, LLC

  
	
   

  	
  15436 N. Florida Avenue

  
	
   

  	
  Tampa, FL 33613

  
	
   

  	
  Attn: 

  	
  James Palermo, General Counsel

  
	
   

  	
  Fax: 

  	
  (813) 969-2871

  

 

Any
Member may designate another addressee (and/or change its address) for Notices
hereunder by a Notice given pursuant to this Section 13.3.  A Notice sent in compliance with the
provisions of this Section 13.3 shall be deemed given on the date of
receipt.

 

13.4                           Governing Law.

 

This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to agreements made and to be performed wholly
within that State.

 

13.5                           Captions.

 

All
titles or captions contained in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit, extend, or describe
the scope of this Agreement or the intent of any provision in this Agreement.

 

13.6                           Pronouns.

 

All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, and neuter, singular and plural, as the identity of the party or
parties may require.

 

54

 

13.7                           Successors and Assigns.

 

This
Agreement shall be binding upon the parties hereto and their respective
executors, administrators, legal representatives, heirs, successors and
assigns, and shall inure to the benefit of the parties hereto and, except as
otherwise provided herein, their respective executors, administrators, legal
representatives, heirs, successors and permitted assigns.

 

13.8                           Extension Not a Waiver.

 

No
delay or omission in the exercise of any power, remedy or right herein provided
or otherwise available to a Member or the Company shall impair or affect the
right of such Member or the Company thereafter to exercise the same.  Any extension of time or other indulgence
granted to a member hereunder shall not otherwise alter or affect any power,
remedy or right of any other Member or of the Company, or the obligations of
the Member to whom such extension or indulgence is granted.

 

13.9                           Creditors Not Benefited.

 

Nothing
contained in this Agreement is intended or shall be deemed to benefit any
creditor of the Company or any Member, and no creditor of the Company shall be
entitled to require the Company or the Members to solicit or accept any
Additional Capital Contribution for the Company or to enforce any right which
the Company or any Member may have against any Member under this Agreement or
otherwise or under any Guaranty.

 

13.10                     Recalculation of Interest.

 

If any
applicable law is ever judicially interpreted so as to deem any distribution,
contribution, payment or other amount received by any Member or the Company
under this Agreement as interest and so as to render any such amount in excess
of the maximum rate or amount of interest permitted by applicable law, then it
is the express intent of the Members and the Company that all amounts in excess
of the highest lawful rate or amount theretofore collected be credited against
any other distributions, contributions, payments or other amounts to be paid by
the recipient of the excess amount or refunded to the appropriate Person, and
the provisions of this Agreement immediately be deemed reformed, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the payment of the fullest amount otherwise
required hereunder.  All sums paid or
agreed to be paid that are judicially determined to be interest shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the term of such obligation so that the rate or amount of
interest on account of such obligation does not exceed the maximum rate or
amount of interest permitted under applicable law.

 

13.11                     Severability.

 

In
case any one or more of the provisions contained in this Agreement or any
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and other application thereof shall not in any way be affected or
impaired thereby.

 

55

 

13.12                     Entire Agreement.

 

This
Agreement contains the entire agreement between the parties relating to the
subject matter hereof and all prior agreements relative hereto which are not
contained herein are terminated. 
Amendments, variations, modifications or changes herein may be made
effective and binding upon the Members by, and only by, the setting forth of
same in a document duly executed by each Member, and any alleged amendment,
variation, modification or change herein which is not so documented shall not
be effective as to any Member.

 

13.13                     Publicity.

 

The
parties agree that no Member shall issue any press release or otherwise
publicize or disclose the terms of this Agreement or the proposed terms of any
acquisition of the Company Property, without the consent of each of the other
Members, except as such disclosure may be made in the course of normal
reporting practices by any Member to its members, shareholders or partners or
as otherwise required by law, rule, or regulation.

 

13.14                     Confidentiality.

 

(a)                                  The terms of this Agreement, the identity
of any person with whom the Company may be holding discussions with respect to
any investment, acquisition, disposition or other transaction, and all other
business, financial or other information relating directly to the conduct of the
business and affairs of the Company or the relative or absolute rights or
interests of any of the Members (collectively, the “Confidential Information”)
that is not already publicly available or that has not been publicly disclosed
pursuant to authorization by all of the Members is confidential and proprietary
information of the Company, the disclosure of which would cause irreparable
harm to the Company and the Members. 
Accordingly, each Member represents that it has not and agrees that it
will not and will direct its shareholders, partners, directors, officers,
agents, advisors and Affiliates not to, disclose to any Person any Confidential
Information or confirm any statement made by third Persons regarding
Confidential Information until the Company has publicly disclosed the
Confidential Information pursuant to authorization by the Managing Member and
has notified each Member that it has done so; provided, however, that any
Member (or its Affiliates) may disclose such Confidential Information if required
by law (it being specifically understood and agreed that anything set forth in
a registration statement or any other document filed pursuant to law will be
deemed required by law), if necessary for it to perform any of its duties or
obligations hereunder or in any property management agreement to which it is a
party covering any Company Property, or to market the Company Property or any
Interests as permitted by the terms of this Agreement, and to its attorneys and
advisors who agree to maintain a similar confidence.

 

(b)                                 Subject to the provisions of Section 13.14(a),
each Member agrees not to disclose any Confidential Information to any Person
(other than a Person (including without limitation an attorney or advisor)
agreeing to maintain all Confidential Information in strict confidence or a
judge, magistrate or referee in any action, suit or proceeding relating to or
arising out of this Agreement or otherwise), and to keep confidential all
documents (including without limitation, responses to discovery requests)
containing any Confidential Information. 
Each Member hereby consents in advance to any motion for any protective
order brought by any other 

 

56

 

Member represented as being intended by the movant to
implement the purposes of this Section 13.14, provided that, if a Member
receives a request to disclose any Confidential Information under the terms of
a valid and effective order issued by a court or governmental agency and the
order was not sought by or on behalf of or consented to by such Member, then
such Member may disclose the Confidential Information to the extent required if
the Member as promptly as practicable (i) notifies each of the other
Members of the existence, terms and circumstances of the order, (ii) consults
in good faith with each of the other Members on the advisability of taking
legally available steps to resist or to narrow the order, and (iii) if
disclosure of the Confidential Information is required, exercises its best
efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded to the portion of the disclosed
Confidential Information that any other Member designates.  The cost (including without limitation,
attorneys’ fees and expenses) of obtaining a protective order covering
Confidential Information designated by such other Member will be borne by the
Company.

 

(c)                                  The covenants contained in this Section 13.14
will survive the Transfer of the Interest of any Member and the termination of
the Company.

 

13.15                     Venue.

 

Each
of the Members consents to the jurisdiction of any court in Wilmington,
Delaware for any action arising out of matters related to this Agreement.  Each of the Members waives the right to
commence an action in connection with this Agreement in any court outside of
Wilmington, Delaware.

 

13.16                     WAIVER OF JURY TRIAL.

 

EACH
OF THE MEMBERS HEREBY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF MATTERS
RELATED TO THIS AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.

 

13.17                     Cooperation.

 

In
connection with the sale of the Company Property or any portion thereof, the
Managing Member agrees to reasonably cooperate with each Member (the “Exchanging
Member”), which seeks to structure the disposition of its Interest in a
manner that will afford the Exchanging Member an opportunity to take advantage
of provisions of the Code governing tax free exchanges or reorganizations;
provided that such structuring does not have an adverse effect on any such sale
(including without limitation, with respect to timing), and provided that the
Exchanging Member shall bear all costs and expenses associated with such
structuring, the other Member Group shall not be required to take title to any
property or interest or assume or be subject to any obligations, and the
Exchanging Member shall indemnify, defend and hold the other Member(s) and
the Company harmless from and against any and all liabilities that they may
incur by reason of their participation or cooperation in such exchange or
reorganization transaction, and such structuring shall not delay any such
transaction, and shall be subject to any reasonable restrictions proposed by
the Managing Member and/or the Members that are not Exchanging Members.

 

57

 

13.18                     Counterparts.

 

This
Agreement may be executed in multiple counterparts, each of which shall be an
original but all of which together shall constitute but one and the same
agreement.

 

13.19                     Attorney Fees.

 

If the
Company or any Member obtains a judgment against any Member by reason of the
breach of this Agreement or the failure to comply with the terms hereof, it is
the intent of the parties that reasonable attorneys’ fees and costs as fixed by
the court shall be included in such judgment.

 

13.20                     Pre-Closing Escrow of BH Share of Deposit.

 

On the date of this Agreement, BH shall pay over
its share of the Deposit ($360,000) into an escrow account with Stewart Title
Guaranty Company which shall be completely refundable to BH unless and until a
binding commitment for the Acquisition Loan in the minimum amount of
$15,000,000 has been obtained on terms acceptable to BH in its sole discretion
(the “Condition”).  Upon
satisfaction of the Condition, BH will release such funds to the Company for
application in accordance with Section 4.1(a).

 

[Signature
Page Follows]

 

58

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the introductory paragraph hereof.

 

	
   

  	
  BEHRINGER HARVARD PALMS OF MONTERREY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel A. Gillespie

  
	
   

  	
  Name: 

  	
  Samuel A. Gillespie

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DD-CTP, LLC, a Florida limited liability company  

  
	
   

  	
   

  
	
   

  	
  By: Christian Tyler
  Properties, LLC, a Florida limited liability company, as its Manager 

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Kirk D. Eicholtz
  Revocable Trust, of 1996, its sole Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk D. Eicholtz

  
	
   

  	
  Name: 

  	
  Kirk D. Eicholtz

  
	
   

  	
  Title:

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEBARTOLO DEVELOPMENT, LLC, a Delaware limited liability company, as
  its Manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Edward M. Kobel

  
	
   

  	
  Name: 

  	
  Edward M. Kobel

  
	
   

  	
  Title:

  	
  Managing Member

  

 

 

SIGNATURE OF OTHER PARTIES

Guaranty

 

For
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and for the purpose of inducing BH to enter into this Limited
Liability Company Agreement, the undersigned, DeBartolo Development, LLC, and
Christian Tyler Properties, LLC join in the execution of this Limited Liability
Company Agreement in order to acknowledge their joinder and agreement to the
terms set forth in Section 10.3 and also in order to unconditionally and
absolutely guarantee on a joint and several liability basis the prompt payment
by DD-CTP of all its obligations set forth in Section 10.3 of this Limited
Liability Company Agreement.  This
guaranty is an absolute, unconditional, irrevocable and continuing guaranty of
payment and not a guaranty of collection. 
The undersigned’s obligations under this guaranty shall be joint and
several, shall not be released, diminished, impaired, reduced or adversely
affected, and the undersigned hereby waives any common law, equitable,
statutory or other right that it may otherwise have, as a result of the
invalidity, illegality or unenforceability of all or any part of this Limited
Liability Company Agreement, for any reason whatsoever.

 

This separate signature page shall
be considered a part of the attached Limited Liability Company Agreement as
fully as if and with the same force and effect as if the provisions hereof had
been included therein in full.

 

	
   

  	
  DEBARTOLO DEVELOPMENT, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward M. Kobel

  
	
   

  	
  Name: 

  	
  Edward M. Kobel

  
	
   

  	
  Title:

  	
  President &
  Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHRISTIAN TYLER PROPERTIES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk D. Eicholtz

  
	
   

  	
  Name: 

  	
  Kirk D. Eicholtz

  
	
   

  	
  Title:

  	
  Managing Member

  

 

 

EXHIBIT A

 

FUNDING OF DEPOSIT

 

	
  Member

  	
   

  	
  Share of

  Deposit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BH

  	
   

  	
  $

  	
  360,000

  	
   

  
	
  DD-CTP

  	
   

  	
  $

  	
  40,000

  	
   

  
	
   

  	
   

  	
  $

  	
  400,000

  	
   

  

 

D-1Exhibit 10.18

 

LOAN DOCUMENTS PURCHASE AND SALE AGREEMENT

 

THIS
LOAN DOCUMENTS PURCHASE AND SALE AGREEMENT (the “Agreement”) is made as of June 8th, 2009 (the “Effective
Date”) by and between CORUS BANK, N.A., a national banking association, whose
address is 3959 N. Lincoln Ave., Chicago, Illinois 60613 (the “Seller” or “Corus”),
and CHRISTIAN TYLER PROPERTIES, LLC, a Florida limited liability company, whose
address is 403 East Madison Street, Suite 400, Tampa, Florida 33602 (the “Purchaser”
or “CTP”).

 

RECITALS:

 

A.                                   Seller is the holder of a loan (the “Loan”) evidenced by a Promissory
Note dated March 21, 2006 (the “Note”) in the principal amount of Sixty-Nine
Million and No/100 Dollars ($69,000,000.00) which Note is secured by, among
other things, a Mortgage Security Agreement, Assignment of Leases and Rents and
Fixture Filing dated March 21, 2006 and recorded as Instrument Number
2006000119757 in the Official Records of Lee County, Florida, and re-recorded
on April 4, 2006 as Instrument No. 2006000138157 of the Circuit Court
(the “Mortgage”), that certain Subordination and Intercreditor Agreement, dated
as of March 21, 2006 as Instrument No. 2006000119761 of the Circuit
Court, and re-recorded on April 4, 2006 as Instrument No. 2006000138161
of the Circuit Court, as amended by that certain First Amendment and
Modification to Subordination and Intercreditor Agreement dated February 5,
2007 and recorded in the Official Records of the Lee County, Florida (as
amended, the “Intercreditor Agreement”) and all other loan documents associated
with the foregoing and more particularly described in Exhibit “B”
attached hereto and made a part hereof (collectively, the “Loan Documents”).
The Loan Documents encumber a parcel of land, buildings, and improvements known
as The Palms of Monterrey, which land is more particularly described in Exhibit “A”
attached hereto and made a part hereof (the “Property”). Purchaser desires to
purchase from Seller, and Seller desires to sell to Purchaser, all of Seller’s
right, title and interest in and to the Loan and Loan Documents, all upon the
terms, provisions, and conditions set forth in this Agreement.

 

B.                                     Purchaser acknowledges and agrees that Seller holds some documents that
pertain to the Loan which Seller will not disclose or transfer any rights to,
including without limitation, certain internal correspondence, internal
analysis, internal memoranda, internal assessments of value, proprietary
information and correspondence between Seller and its attorney which Seller
deems to be confidential or within the generally accepted definition of
attorney/client privilege (collectively, the “Excluded Documents”).

 

C.                                     Seller is willing to sell the Loan and Loan Documents on an “as is”, “where
is”, “with all faults” basis, without recourse, and with no representations or
warranties of any kind other than those set forth in this Agreement.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

 

 

1.                                      Sale, Purchase and Assignment. Seller agrees to sell, assign and convey unto Purchaser all of Seller’s
right, title and interest in and to the Loan and Loan Documents (other than the
Excluded Documents), subject to the terms and conditions of this Agreement and
to the following limitations (the “Disclaimers”):

 

(a)                                  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IT IS
EXPRESSLY UNDERSTOOD AND AGREED THAT PURCHASER IS PURCHASING THE LOAN “AS IS”, “WHERE
IS” AND “WITH ALL FAULTS” AND WITHOUT RECOURSE AND THAT SELLER IS MAKING NO
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, BY OPERATION OF LAW
OR OTHERWISE, WITH RESPECT TO THE QUALITY, CONDITION OR VALUE OF THE LOAN OR
THE PROPERTY, THE LEGALITY, VALIDITY, SUFFICIENCY OF ANY LOAN DOCUMENT OR RELATED
SECURITY INTEREST OR THE PRIORITY OR PERFECTION OF ANY SUCH SECURITY INTEREST,
THE INCOME OR EXPENSES FROM OR OF THE LOAN OR THE PROPERTY, OR THE COMPLIANCE
OF THE LOAN OR PROPERTY WITH APPLICABLE BUILDING OR FIRE CODES, ZONING LAWS OR
REGULATIONS, ENVIRONMENTAL LAWS OR REGULATIONS, LAWS OR REGULATIONS RELATED TO
THE AMERICANS WITH DISABILITIES ACT OR OTHER LAWS OR REGULATIONS. PURCHASER
AGREES THAT SELLER IS NOT LIABLE FOR OR BOUND BY ANY GUARANTEES, PROMISES,
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE LOAN OR THE
PROPERTY MADE OR FURNISHED BY ANY REAL ESTATE AGENT, BROKER, EMPLOYEE, SERVANT
OR OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER, EXCEPT AS AND
TO THE EXTENT EXPRESSLY SET FORTH HEREIN.

 

(b)                                 WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, NO
REPRESENTATIONS OR WARRANTIES ARE OR HAVE BEEN MADE BY SELLER OR ANY
REPRESENTATIVE, AGENT, OFFICER OR EMPLOYEE OF SELLER REGARDING (i) THE
CREDIT WORTHINESS OF THE BORROWER (AS DEFINED IN EXHIBIT “B”) OR ANY GUARANTOR
(AS DEFINED IN EXHIBIT “B”), (ii) THE VALUE OF ANY COLLATERAL DESCRIBED IN
THE NOTE OR LOAN DOCUMENTS, OR (iii) THE COLLECTIBILITY OF THE LOAN.

 

(c)                                  NEITHER SELLER NOR ANYONE ACTING ON SELLER’S BEHALF HAS OR WILL HAVE ANY
DUTY, EITHER INITIALLY OR ON A CONTINUING BASIS, TO MAKE ANY INVESTIGATION,
EVALUATION, APPRAISAL OF, OR HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
TO THE ACCURACY OR COMPLETENESS OF, ANY INFORMATION PROVIDED TO PURCHASER WHICH
HAS BEEN PROVIDED TO EITHER SELLER OR ANYONE ACTING ON SELLER’S BEHALF BY
BORROWER OR ANY GUARANTOR. NOTHING IN THIS AGREEMENT OR IN THE LOAN DOCUMENTS
SHALL IMPOSE UPON SELLER OR ANYONE

 

2

 

ACTING ON SELLER’S BEHALF ANY FIDUCIARY RELATIONSHIP
IN RESPECT OF THE PURCHASER.

 

(d)                            PURCHASER ACKNOWLEDGES THAT THE LOAN IS CURRENTLY IN DEFAULT.

 

(e)                             PURCHASER AGREES THAT IT WILL PERFORM EXAMINATIONS AND
INVESTIGATIONS OF THE LOAN PRIOR TO THE EXPIRATION OF THE HEREINAFTER DEFINED
DUE DILIGENCE PERIOD, AND THAT PURCHASER WILL RELY SOLELY UPON SUCH
EXAMINATIONS AND INVESTIGATIONS IN PURCHASING THE LOAN. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT THE PURCHASE PRICE TO BE PAID TO SELLER FOR THE
LOAN TAKES INTO ACCOUNT THAT THE LOAN IS BEING SOLD SUBJECT TO THE FOREGOING
DISCLAIMERS. IN ADDITION TO SECTIONS OF THIS AGREEMENT CONTAINING OR RELATING
TO OBLIGATIONS TO BE PERFORMED OR SATISFIED POST-CLOSING, PURCHASER AND SELLER
AGREE THAT THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE CLOSING OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT.

 

(f)                               NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, HOWEVER,
SELLER NEVERTHELESS RETAINS, ON A NONEXCLUSIVE BASIS, THE BENEFIT AND
PROTECTION OF ANY INDEMNITY(IES) PROVIDED BY THE BORROWER AND ANY GUARANTOR
UNDER THE LOAN DOCUMENTS FOR THE BENEFIT OF SELLER.

 

2.                                      Sale Price and Payment Terms.

 

(a)                                  Purchase Price. The sale price (the “Purchase
Price”) for the Loan and Loan Documents shall be Thirty Million and No/100
Dollars ($30,000,000.00).

 

(b)                                 Deposit. Concurrently with the
execution of this Agreement by both parties, Purchaser shall place in escrow
with Colliers Arnold Commercial Real Estate Services or other mutually
agreeable escrow agent (the “Escrow Agent”) an earnest money deposit of Three
Hundred Thousand and No/100 Dollars ($300,000.00) (the “Deposit”). The Deposit
shall be refundable to Purchaser in the event that this Agreement is terminated
by written notice given by the Purchaser on or before the expiration of the Due
Diligence Period (as hereinafter defined). The period of time from the
Effective Date through 5:00 p.m. (EST) on the day which is twenty-five
(25) calendar days from the Effective Date of this Agreement shall be known as
the “Due Diligence Period.” If this Agreement is not terminated by the Purchaser
prior to the expiration of the Due Diligence Period, the Deposit shall become
non-refundable to Purchaser except in the event of a breach of this Agreement
by the Seller. The entirety of the Deposit shall be credited towards payment of
the Purchase Price in the event the Closing (as hereinafter defined) occurs.

 

3

 

(c)                                  Closing. The closing of the
purchase under this Agreement (the “Closing”) shall take place on or before the
date which is forty (40) days following the Effective Date of this Agreement
(the “Closing Date”).

 

(d)                                 Payment Terms. The balance of the
Purchase Price under this Agreement shall be paid by Purchaser to Seller by
wire transfer of immediately available funds using wire instructions to be
provided by Corus.

 

3.                                      Due Diligence. During the Due Diligence
Period, Purchaser shall:

 

(a)                                  have the right and shall be entitled to examine the originals of the Loan
Documents, at Purchaser’s expense, at the address for Seller set forth herein;
and

 

(b)                                 have the right to inspect the Property in accordance with the terms and
conditions set forth in Section 14 of this Agreement.

 

4.                                      Closing. At the closing under
this Agreement, Seller shall deliver to Purchaser or its designee: (i) the
original Loan Documents, (ii) a properly executed Allonge to Note in the
form attached hereto as Exhibit “C” (the “Allonge”), (iii) a
properly executed Absolute Assignment of Mortgage, Promissory Note, and Other
Documents in the form attached hereto as Exhibit “D” (the “Assignment
of Mortgage”), and (iv) a UCC-3 Statement of Change reflecting the
assignment of the Loan Documents to Seller in the form attached hereto as Exhibit “E”
(the “UCC-3”). Purchaser shall deliver to Seller or its designee: (i) the
Purchase Price in immediately available wire transferred funds less the amount
of the Deposit, which Purchaser shall cause to be delivered to Seller from the
Escrow Agent along with the balance of the Purchase Price, (ii) evidence
reasonably satisfactory to Seller that the person executing any documents at
the Closing on behalf of Purchaser has the full right, power, and authority to
do so, and (iii) an assumption agreement in a form reasonably satisfactory
to Seller wherein Purchaser agrees to be bound by the terms and conditions of
the Intercreditor Agreement and remakes each of the representations and
warranties contained therein previously made by Seller, if any, for the benefit
of the Mezzanine Lender.

 

5.                                      Costs. The Purchaser shall pay (i) any
fees necessary to record the Assignment of Mortgage and UCC-3, (ii) any
transfer, documentary stamp, and intangibles taxes due in connection with the
sale of the Loan and assignment of the Loan Documents to Purchaser, and (ii) any
costs and fees of Escrow Agent for establishing and maintaining the escrow for
the Deposit. Purchaser and Seller shall each pay all its other respective legal
costs and expenses relating to this transaction or the Loan, including without
limitation all attorneys’ fees and costs, and neither shall be liable to the
other for any such legal costs and expenses.

 

6.                                      Termination, Default, and Remedies.

 

(a)                                  If Purchaser fails or refuses to consummate the purchase of the Loan and
Loan Documents pursuant to this Agreement at the Closing, or fails to perform
any of Purchaser’s other obligations under this Agreement either prior to or at
the Closing for any reason other than termination of this Agreement by
Purchaser

 

4

 

pursuant to a right to terminate expressly set forth
in this Agreement or Seller’s failure to perform Seller’s obligations under
this Agreement, then Seller shall have the right to pursue any and all remedies
available at law or in equity including, but not limited to, the right to
terminate this Agreement by giving written notice of the termination to
Purchaser prior to or at the Closing, whereupon neither party shall have any
further rights or obligations under this Agreement, and the Escrow Agent shall
deliver the Deposit to Seller which shall constitute liquidated damages under
this Agreement, free of any claims by Purchaser. It is agreed that the Deposit
to which the Seller may be entitled under this Agreement is a reasonable
forecast of just compensation for the harm that would be caused by Purchaser’s
breach, that the harm that would be caused by such breach is one that is
incapable or very difficult to accurately estimate.

 

(b)                                 If Seller fails or refuses to consummate the sale of the Loan pursuant to
this Agreement at the Closing or fails to perform any of Seller’s other
obligations under this Agreement for any reason other than Purchaser’s failure
to perform Purchaser’s obligations under this Agreement, then Purchaser shall
have the right to either: (i) terminate this Agreement and receive the
return of the Deposit, in which event the parties shall be released from any
and all liability under this Agreement (except for obligations that are
expressly intended to survive the termination of this Agreement), or (ii) seek
specific performance of Seller’s obligations hereunder with the Deposit
remaining in escrow pending the outcome of such proceedings. The foregoing
shall be Purchaser’s sole remedies in the event of a Seller default and
Purchaser shall have no action against Seller for damages hereunder.

 

(c)                                  If either Seller or Purchaser becomes entitled to the Deposit upon
termination of this Agreement in accordance with its terms, Purchaser and
Seller covenant and agree to deliver a letter of instruction to the Escrow
Agent directing disbursement of the Deposit to the party entitled thereto. If
either party fails or refuses to sign or deliver such instruction letter when
the other party is entitled to disbursement of the Deposit such party shall
pay, upon the final order of a court with appropriate jurisdiction, all
reasonable attorneys’ fees and expenses (including, without limitation, court
costs and fees and expenses of expert witnesses and other professionals)
incurred by the party so entitled to the Deposit in connection with the
recovery of the Earnest Money. This obligation shall survive termination of
this Agreement.

 

7.                                      Representations and Warranties of Seller.

 

Seller makes no warranties or representations of any
kind or nature with respect to the Note, Mortgage, Loan, the Loan Documents or
any documents contained in the Seller’s files on the Note, Mortgage, Loan, the
Loan Documents or any other documents related to any of the foregoing, except
as expressly set forth below:

 

(a)                                  Seller hereby warrants that: (i) the Loan is fully advanced with no
written or oral modifications except as otherwise set forth on Exhibit “B”,
(ii) as of June 1, 2009,

 

5

 

the principal balance due under the Note is
$59,664,003.78, accrued interest is $3,907,134.69, costs advanced for the
protection of the Property are $0.00, and per diem interest thereafter is
$19,473.67, (iii) no portion of the Exit Fee (as defined in the Loan
Agreement) has been paid to Lender, and (iv) the Tax Escrow Account (as
defined in the Loan Agreement) has deposits in the amount of $227,512.19.

 

(b)                                 Seller is the current owner and holder of the originals of the Loan
Documents, has the full right to assign and transfer its interest in the Loan
Documents to Purchaser, and has not previously conveyed, assigned or pledged
its interest in the Loan Documents.

 

(c)                                  Seller has the right, legal capacity, power and authority to enter into
and perform its obligations under this Agreement and no approvals or consents
are required in connection with the execution or performance of this Agreement
by Seller, other than such approvals and consents that have been or will be
obtained by Seller prior to Closing. The execution of this Agreement by Seller
and the consummation of the transactions contemplated hereby will not result in
or constitute any default or event that, with notice or lapse of time or both,
would constitute a default, breach or violation of the organizational
instruments governing Seller or of any agreements or any order or decree of any
court or other governmental authority to which Seller is a party or to which
Seller is subject.

 

(d)                                 Purchaser represents that it has not relied upon any warranties or
representations of Seller, Seller’s officers, employees, attorneys or agents
other than those expressly set forth in this Agreement and, has made or will
make, independently and without reliance on Seller, its own analysis and
decision to purchase the Loan and Loan Documents. At all times from the
Effective Date until the Closing, Seller shall use commercially reasonable
efforts to keep and perform all of the obligations to be performed by the
Seller under the Loan Documents.

 

(e)                                  Seller agrees that Seller, from the Effective Date until the Closing,
will not modify, cancel, extend or otherwise change in any manner any of the
terms, covenants, or conditions of any of the Loan Documents, nor enter into
any other agreements affecting the Loan, without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed; provided, however, Seller may, at Seller’s sole option and without
Purchaser’s consent, exercise any and all rights and remedies as set forth in
the Loan Documents so long as Seller does not consummate any foreclosure sale
of the Property until after the Closing Date.

 

(f)                                    Seller agrees that from the Effective Date until the Closing, Seller
shall not grant or consent to any security interest, pledgee’s interest, or
other encumbrances to be placed against or upon the Loan, consent to any
easements or encumbrances upon the Property, or, except with respect to tax
liens, if any, subordinate or release any security for the Loan.

 

6

 

(g)                                 Seller shall notify Purchaser promptly upon learning of the institution
or pendency of any action, suit, or proceeding against or affecting the Loan or
the Property, or relating to or arising out of the ownership of the Property.

 

8.                                      Representations, Warranties and Agreements of the Purchaser. The Purchaser, without conceding that the Loan is a security as defined
in the Securities Act (as hereinafter defined), hereby makes the following
representations, warranties and agreements, which shall have been deemed to
have been made as of the Closing Date:

 

(a)                                 The Purchaser is acquiring the Loan for its own account only and not for
any other person.

 

(b)                                The Purchaser considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of investment in the Loan
and is in the business of acquiring commercial real estate loans for investment
and other purposes.

 

(c)                                  Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Loan, any interest in
the Loan or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Loan, any interest in the
Loan or any other similar security from, or otherwise approached or negotiated
with respect to the Loan, any interest in the Loan or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
that would constitute a distribution of the Loan under the Securities Act of
1933, as amended (the “Securities Act”), or that would render the disposition
of the Loan a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it authorize any person to act, in such manner with respect to the Loan.

 

(d)                                 Purchaser acknowledges and agrees that, except as expressly set forth in
this Agreement, the Loan is being sold on an “as is” “where is” and “with all
faults” basis and without recourse on the terms and conditions herein set
forth.

 

(e)                                  Purchaser expressly agrees and acknowledges that Purchaser’s obligations
hereunder are not in any way conditional upon, or qualified by, Purchaser’s
ability to obtain financing of any type or nature whatsoever (i.e., whether by
way of debt, financing or equity investment or otherwise) to consummate the
transactions contemplated hereby.

 

(f)                                    Purchaser represents that it has full power and authority and has taken all
action necessary to authorize it to enter into and perform its obligations
under this Agreement and all other documents or instruments contemplated
hereby. Purchaser represents and warrants that this Agreement has been duly
authorized, executed and delivered by Purchaser. This Agreement constitutes the
legal, valid

 

7

 

and binding obligation of Purchaser, enforceable in
accordance with its terms. Purchaser represents and warrants that the
execution, delivery and performance of this Agreement by Purchaser does not
conflict with the organizational documents of Purchaser, or with any law,
statute or regulation applicable to Purchaser, or any mortgage, indenture or
other Agreement or agreement to which Purchaser is a party. Purchaser
represents and warrants that no litigation exists against Purchaser that would
have a material adverse effect on the transactions contemplated by this
Agreement.

 

9.                                      Post-Closing Duties / Obligations. Effective
at Closing, Purchaser hereby assumes and shall undertake, comply with and
discharge all duties and obligations of Seller under any applicable law,
statute, ordinance, order finding, decree, rule or regulation and all
obligations under all the applicable Loan Documents with respect to or in any
way related to the Loan and Property, including without limitation such duties
and obligations pertaining to unfair credit collection practices, any funding
requirements related to unfunded commitments and any deposits held in the Tax
Escrow Account. Purchaser agrees that Purchaser will not retroactively enforce
or attempt to enforce the Loan Documents for any undercharge of interest
occurring under the Loan Documents for the period prior to the Closing Date.
This Section and all other Sections that contain or relate to obligations
to be performed or satisfied post-Closing on the part of either the Seller or
the Purchaser shall survive Closing.

 

10.                                Indemnification of Seller by Purchaser.
Purchaser shall defend, indemnify and hold harmless Seller from and against all
losses, causes of action, liabilities, claims, demands, obligations, damages,
costs and expenses, including without limitation attorneys’ fees and costs, to
which Seller may become subject to on account of (i) any breach by Purchaser
of its obligations, representations, warranties or covenants under this
Agreement, (ii) actions by Purchaser or its agents to pursue any remedies
against any maker, borrower or guarantor with respect to obligations related to
the Loan or Property, that have been discharged in bankruptcy or as to which
such maker, borrower or guarantor has been released from liability, (iii) actions
by Purchaser or its agents to pursue remedies against collateral that does not
secure the Loan, provided that such fact can reasonably be determined by
information contained in the Loan Documents, (iv) Seller’s actions in
cooperating with Purchaser pursuant to this Agreement, or (v) any claim
that the transactions contemplated by this Agreement (or any prior attempted
sale of the Loan, or negotiations with respect thereto, between Seller and
Purchaser) constitute a breach of a duty by Seller or any owner, member,
partner, shareholder, officer or director of Seller. The obligations in this Section shall
survive termination of the Agreement and the Closing.

 

11.                                Environmental Assessment.
Notwithstanding anything to the contrary contained herein, Purchaser
acknowledges that Seller makes no warranties or representations of any kind or
nature as to any environmental condition at the Property that serves as
collateral for the Loan.

 

12.                                Real Estate Taxes. Notwithstanding
anything to the contrary contained herein, Seller makes no representation or
warranty regarding the status of real estate taxes affecting the

 

8

 

Property. Purchaser agrees to determine to Purchaser’s
satisfaction the status of real estate and personal property taxes which may be
assessed against the Property. Without in any way limiting the foregoing,
Seller agrees to assign to Purchaser the amounts held in the Tax Escrow Account
at Closing; provided, however, if any taxes become due and payable on the
Property prior to Closing, then Seller reserves the right to pay same using
such amounts that are held in the Tax Escrow Account.

 

13.                                Purchaser’s Acknowledgement.
Purchaser understands that the Loan Documents will not contain any other
documents in Seller’s possession, custody or control that may contain
information relating to Seller’s perceived value of the Note, the Mortgage
and/or the Loan, the Excluded Documents, or any other documents other than the
Loan Documents. Purchaser has sought or will seek independent legal counsel to
provide Purchaser with legal advice concerning the collectibility of the Note
and enforceability of the Loan Documents.

 

14.                           Inspection of the Property.
Purchaser represents and warrants that it has made an initial inspection of the
Property. Purchaser acknowledges that Seller does not have a possessory right
to the Property. Therefore, if the Purchaser desires to further inspect the
Property, the Purchaser must obtain permission of the Seller who will then seek
permission from the current owner or occupant of the Property; provided,
however, any right of Purchaser to inspect the Property shall be subject to
limitations set forth in the Loan Documents, if any. At Seller’s option, Seller
or its agent may be present for any entry, inspection or examination of the
Property. Seller agrees to use commercially reasonable efforts to facilitate
Purchaser’s inspection of the Property. Purchaser agrees to hold harmless and
indemnify Seller, its officers, employees and agents for any damages associated
with any inspection of the Property. Notwithstanding anything to the contrary
contained herein, no physical testing or sampling shall be conducted during any
entry by Purchaser or any of its agents upon the Property without Seller’s
specific prior written consent. This Section shall survive the termination
of this Agreement.

 

15.                           Information and Confidentiality.
The confidentiality agreement that Purchaser and Seller have previously
executed related to the Loan (the “Confidentiality Agreement”) shall remain in
full force and effect and survive the termination of this Agreement. In the
event this Agreement is terminated, upon Seller’s request, Purchaser shall
return or destroy all materials and documents obtained from or at the request
of Seller and concerning the Loan. Until such time as the Purchaser consummates
the purchase of the Loan from Seller, Purchaser covenants and agrees that
Purchaser and its agents, representatives and employees shall not make any
direct or indirect contact with Borrower, any Guarantor, Mezzanine Lender (as
defined in Exhibit “B”), junior lender, lien claimant or obligor of the
Loan or any of their respective officers, directors, shareholders, employees,
partners, attorneys, independent experts or other representatives, without the
prior written consent of Seller, which consent shall be in Seller’s sole
discretion.

 

9

 

16.                                Miscellaneous.

 

(a)                                  Notices. Any notice which any
party to this Agreement is required to, or may wish to, give to any other party
in connection with this Agreement, shall be in writing and shall be delivered
by hand, facsimile or by overnight courier delivery service, at their
respective addresses set forth below:

 

	
  As to Seller:  

  	
   

  	
  Corus
  Bank, N.A.

  3959 North Lincoln Avenue

  Chicago, Illinois 33759

  Attention: Chris Barkidjija

  Phone: (773) 832-3555

  Fax: (773) 832-3540

  
	
   

  	
   

  	
   

  
	
  As to Purchaser:

  	
   

  	
  Christian
  Tyler Properties, LLC  

  403 East Madison Street, Suite 400  

  Tampa, Florida 33602-4614

  Attention: Kirk D. Eicholtz, Managing
  Member 

  Phone: 813.222.0101 x 22  

  Fax: 813.222.0104

  

 

Notices shall be deemed to have been
delivered on the date when received. Receipt via facsimile transmission shall
be acceptable provided that the original of the notice is delivered via
overnight courier delivery service on the first business day following the date
the facsimile transmission is received.

 

(b)                                 Entire Agreement. The
Confidentiality Agreement, this Agreement and the Exhibits hereto contain the
entire agreement between the parties and may not be changed except by a
subsequent written instrument signed by the party against whom the enforcement
of such change is sought.

 

(c)                                  Time. Time shall be of the
essence of this Agreement.

 

(d)                                 Assignment. The Purchaser shall have
the right to assign its rights under this Agreement to an affiliate of
Purchaser. Purchaser shall have no right to assign any of its right, title or
interest in or to this Agreement to any person or entity other than to an
affiliate of Purchaser, and no assignment shall relieve CHRISTIAN TYLER
PROPERTIES, LLC of any of its obligations under this Agreement. For this
purpose, “affiliate” shall mean (i) an entity which is a subsidiary of, or
controlled by, the entity or any person owning a controlling interest in
Purchaser, (ii) any person or entity directly or indirectly controlling,
controlled by or under common control with Purchaser, and (iii) a person
or entity owning or controlling fifty (50%) per cent or more of the outstanding
voting securities of Purchaser, or a subsidiary thereof.

 

(e)                                  Brokers. Except as identified
herein, each party represents to the other party that no real estate broker,
mortgage broker, salesperson, or finder was involved in the

 

10

 

transaction contemplated by this Agreement.
Purchaser acknowledges that John W. Stone and Colliers Arnold Commercial Real
Estate Services (collectively, the “Purchaser’s Broker”) have acted as a broker
in this transaction on behalf of Purchaser, but not on behalf of Seller. Any
fees or claims for compensation asserted by Purchaser’s Broker in connection
with the transaction contemplated by this Agreement shall be borne exclusively
by Purchaser. Other than any claim for fees or compensation asserted by
Purchaser’s Broker, which shall be borne solely and exclusively by Purchaser,
if a claim for brokerage fees or other compensation in connection with this
transaction is made by any other broker, salesman, or finder claiming to have
dealt through or on behalf of one of the parties hereto, such party will
indemnify and hold the other party harmless from any liabilities, costs, fees,
and expenses in respect to such claim for brokerage fees. The provisions of
this subparagraph (e) shall survive the Closing.

 

(f)                                    Ambiguities. This Agreement and the
Exhibits hereto have been negotiated at arms’ length by Seller and Purchaser,
and the parties mutually agree that, for the purpose of construing the terms of
this Agreement and the Exhibits, neither party shall be deemed responsible for
the authorship hereof.

 

(g)                                 Severability. If any provision of this
Agreement (the deletion of which does not adversely affect the receipt of any
material benefit by or in favor of any party hereunder or substantially
increase the burden on any party hereto) shall be held invalid or unenforceable
to any extent, the same shall not affect in any respect whatsoever the validity
or enforceability of the remainder of this Agreement.

 

(h)                                 No Third Party Beneficiary.
The provisions of this Agreement and of the documents to be executed and
delivered at Closing are and will be for the benefit of Seller and Purchaser
only and are not for the benefit of any third party, including, but not limited
to any Broker executing or discussed in this Agreement. Accordingly, no third
party shall have the right to enforce the provisions of this Agreement or of
the documents to be executed and delivered at Closing.

 

(i)                                     Headings: Construction.
Descriptive headings are for convenience only and shall not control or affect
the meaning or construction of any provision of this Agreement.

 

(j)                                     Counterparts. This Agreement may be
executed in any number of counterparts. Each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one agreement. For purposes of this provision, facsimile or
scanned email copies of the executed Agreement shall also be deemed an original
instrument.

 

(k)                                  Attorneys’ Fees. If either party
retains the services of an attorney to enforce its rights under this Agreement
through litigation, the party prevailing in any such litigation shall be
entitled to recover reasonable attorneys’ fees from the other party, including
any appellate attorneys’ fees.

 

11

 

17.                                WAIVER OF JURY TRIAL. SELLER AND
PURCHASER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND UNCONDITIONALLY
WANE THEIR RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, PROCEEDING,
CLAIM, OR COUNTERCLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT, THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, OR ANY OF THE RIGHTS
AND OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT DELIVERED OR WHICH
IN THE FUTURE MAY BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT, AND SELLER AND PURCHASER HEREBY
FURTHER AGREE THAT ANY SUCH ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

12

 

IN
WITNESS WHEREOF, Seller and Purchaser have executed this Agreement to be
effective as of the date of Agreement.

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  CORUS
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chris Barkidjija

  
	
   

  	
   

  	
  Printed Name:

  	
  Chris Barkidjija

  
	
   

  	
   

  	
  Title:

  	
  First Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
  CHRISTIAN TYLER
  PROPERTIES, LLC, a Florida

  limited liability company,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  The Kirk D. Eicholtz
  Revocable Trust

  of 1996, its sole managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk D. Eicholtz

  
	
   

  	
   

  	
  Kirk D. Eicholtz, trustee

  

 

13

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