Document:

ex102

099999\14127737v20     1       CERTAIN INFORMATION, IDENTIFIED BY, AND REPLACED WITH, A MARK OF  “[**]” HAS BEEN EXCLUDED FROM THIS DOCUMENT BECAUSE IT IS BOTH (I)  NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS  PRIVATE OR CONFIDENTIAL.  LIMITED LIABILITY COMPANY AGREEMENT  OF  TMVP BTR VENTURE, LLC  THIS LIMITED LIABILITY COMPANY AGREEMENT OF TMVP BTR VENTURE,  LLC (this “Agreement”) is made and entered into as of April 26, 2022 (the “Effective Date”), by  and between TM BTR VENTURE LLC, a Delaware limited liability company (“Builder”), and  VP MOONDANCE HOLDINGS LLC, a Delaware limited liability company (“Investor”).   Initially capitalized terms in this Agreement shall have the meanings set forth in Section 1.7,  elsewhere in this Agreement as identified in the “Index of Defined Terms” attached to this  Agreement or in the Tax Appendix.  R E C I T A L S  A. TMVP BTR Venture, LLC (the “Company”) was formed as a limited liability  company, pursuant to the provisions of the Delaware Limited Liability Company Act,  6 Del. C. § 18 101 et seq., as the same may be amended from time to time (the “Act”), by filing  the certificate of formation with the Secretary of State of the State of Delaware on December 8,  2021, as SR 2021-6455996 (the “Certificate of Formation”).  B. The parties deem a limited liability company agreement to be necessary and  advisable to set out their agreement as to the conduct of business and the affairs of the Company  and desire to enter into this Agreement.  NOW, THEREFORE, the parties hereby agree as follows:  ARTICLE I  FORMATION AND PURPOSE OF COMPANY; DEFINITIONS  Section 1.1 Formation.  The Company has been formed by the filing of the Certificate  of Formation with the Secretary of State of the State of Delaware.  Section 1.2 Name.  The Company’s business shall be conducted solely under the name  of “TMVP BTR Venture, LLC”.  Section 1.3 Term.  The term of the Company shall be from the date hereof until the  Company is dissolved as hereinafter provided.  Section 1.4 Purpose.  1.4.1 Generally.  The purposes for which the Company is formed are, and the  business of the Company shall be, to, either directly or indirectly (through a Subsidiary  

 

099999\14127737v20     2       Entity), (a) pursue and acquire fully entitled and completely or partially permitted land  plats, parcels or lots that have not been subdivided for the sale of separate single-family  residences (each a “BTR Parcel”), and (b) upon acquisition of a BTR Parcel, develop and  operate horizontal apartment units as a single site like a multi-family apartment project.  The Company intends to use the Approved Projects in the manner contemplated by the  applicable Approved Package or otherwise approved by the Board and to engage in all  activities related and incidental thereto.   1.4.2 Tranches.  The business of the Company initially shall be allocated  between and accounted for as two separate tranches of Subsidiary Entities, Approved  Projects and BTR Parcels for the purposes described in Section 1.4, which shall be referred  to herein as “Tranche I” or “Tranche II”.  Tranche I and Tranche II are sometimes  referred herein individually as a “Tranche” or collectively as the “Tranches”.  The  economics of each Tranche will be treated separately except as otherwise expressly  provided in Section 2.5.4.  Each reference to a Tranche in this Agreement shall include the  Subsidiary Entities, the Approved Projects and the BTR Parcels within such Tranche.  Each  Tranche has separate rights, powers, obligations, funding obligations, distributions, profit,  losses and duties with respect to the Subsidiary Entities, Approved Projects and BTR  Parcels within such Tranche, all of which is more particularly described in Section 2.5.  Section 1.5 Registered Office; Principal Office.  The principal place of business and  mailing address of the Company shall be located at c/o Taylor Morrison Home Corporation,  4900 N. Scottsdale Road, Suite 2200, Scottsdale, Arizona 85251 or such other additional location  as Manager may from time to time designate with the Board’s approval.  The name and address of  the Company’s registered agent shall be National Registered Agents, Inc., 160 Greentree Drive,  Suite 101, Dover, Delaware 19904, or such other registered agent as Manager may from time to  time designate.  Section 1.6 Subsidiary Entity.  The Members intend that the Company will own each  Approved For-Rent Development Project through one or more wholly owned subsidiaries  (individually and collectively, a “Subsidiary Entity”) unless otherwise approved by the Board.   In addition, the Company shall pursue Approved Pursuit Projects through a Subsidiary Entity  formed solely for the purpose of pursuing Approved Pursuit Projects.  Any provision of this  Agreement giving Manager the authority to take any action or refrain from taking any action, or  to cause the Company to take any action or refrain from taking any action, shall be interpreted to  give Manager the identical authority with respect to each Subsidiary Entity.  Any provision of this  Agreement that limits Manager’s authority or requires Manager to obtain the Members’ approval  with respect to the Company shall be interpreted to impose the identical limitation on authority or  approval rights with respect to each Subsidiary Entity.  Any provision of this Agreement that  entitles Manager to indemnification shall entitle Manager to the same indemnification rights with  respect to a Subsidiary Entity’s activities.  Any provision of this Agreement that limits Manager’s  or a Member’s duties (fiduciary or otherwise), obligations or liabilities with respect to the  Company shall be interpreted to impose the identical limitation on Manager or such Member with  respect to each Subsidiary Entity.  

 

099999\14127737v20     3       Section 1.7 Certain Defined Terms.  “Adjusted Labor Budget” means, with respect to an Approved Budget, the amount of  hard costs of the applicable Approved Project (including hard costs for services and labor but  excluding hard costs for materials) as (A) set forth in the Approved Budget, and (B) increased  each calendar year by the same percentage increase, if any, in the ECI from (i) December of the  calendar year in which the Approved Budget was last amended with the Board’s approval to  (ii) December of the then calendar year when Manager is determining the CM Fee Base or the Pre- Development Fee Base.  “Affiliate” of a Person (or words of similar import, whether or not capitalized) means any  corporation, partnership, limited liability company, trust or other Person controlling or under  common control with the Person in question (whether directly or indirectly through one or more  intermediaries).  However, neither the Company nor a Subsidiary Entity shall be deemed to be an  Affiliate of Manager or a Member.  For the purpose of this definition, the defined term “Restricted  Person” and Sections 8.2 and 8.3, “control” means, with respect to a Person, the possession,  directly or indirectly, of more than 50% of the voting interests in such Person.  “Apartment Unit” means a “for-rent” attached or detached rental unit that will, together  with other Apartments Units, be operated as a single unified multi-family rental project and not  sold to individual consumer buyers.  For sake of clarity, even if an Apartment Unit resembles a  “for sale” single-family residential dwelling, such Apartment Unit will only be sold as part of an  Approved Project together with the other Apartment Units within such Approved Project.    “Applicable Rate” means the lesser of (A) an interest rate of [**]% per annum,  compounded annually, or (B) the maximum interest rate permitted by applicable law.  “Approved Budgets” means, collectively, the project budgets for the Approved Projects,  together with such modifications, supplements and amendments thereto (subject to obtaining the  Board’s approval if such approval is required under Section 5.2).  Unless otherwise approved by  the Board, each project budget shall be created in MS Excel (or, if MS Excel ceases to be available,  such other software reasonably selected by the Submitting Party) and shall contain detailed  information on cost, revenue and monthly cashflow.  “Approved Contribution Value” means a value ascribed to a Contributed Property that  has been approved by all Members.  “Approved For-Rent Development Project” means a Proposed Project approved by the  Members and acquired by the Company or a Subsidiary Entity.  “Approved Packages” means, collectively, the Proposal Packages for Approved Projects,  together with such modifications, supplements and amendments thereto (subject to obtaining the  Board’s approval if such approval is required under Section 5.2).  “Approved Project” means an Approved For-Rent Development Project or an Approved  Pursuit Project, as the case may be.  

 

099999\14127737v20     4       “Approved Pursuit Project” means a Proposed Project approved by the Members with  respect to which the Company or a Subsidiary Entity will negotiate a Purchase Agreement and, if  approved by the Members, execute such Purchase Agreement.  “Arbitrator” means an individual who: (A) to the extent reasonably possible, has  experience in the specific matters in dispute and in the arbitration of commercial real estate  disputes generally; (B) is independent of each Member; and (C) is a lawyer, retired lawyer or  retired judge.  In the event that (i) the Members are unable to agree upon an Arbitrator within seven  Business Days after the PDR Triggering Member and the PDR Responding Member both elect to  bid on the Dispute Project under Article 11, (ii) the appraisers are unable to agree upon a third  appraiser within seven Business Days after a Member requests the other two appraisers to appoint  a third appraiser, or (iii) the Arbitrator appointed by the Members is unable or unwilling to serve  as arbitrator, then either Member may petition the Delaware Court of Chancery to appoint an  arbitrator using the same procedures that would be implement if the Delaware Court of Chancery  was appointing an arbitrator under Section 5805 of the Delaware Rapid Arbitration Act, 10 Del.  C. § 5801, et seq.  “Available Cash” means, with respect to each Tranche, all cash from such Tranche on  hand and in banks, savings and loan associations and cash equivalents, after taking into account  any restrictions under loan documents and any other Company financings (including payment of  Financing Fees, if any), and after payment or provision for payment of all Company obligations,  anticipated expenditures, provision for Working Capital and Reserves, in each case, for such  Tranche.  “Bad Conduct” means, with respect to a Person, acts constituting gross negligence, willful  or wanton misconduct or fraud arising out of the performance of such Person’s obligations or  duties under this Agreement.  “Bankruptcy Event” means with, respect to a Person, the commencement or occurrence  of any of the following with respect to such Person:  (A) a case under Title 11 of the U.S. Code,  as now constituted or hereafter amended, or under another applicable state bankruptcy law; (B) the  appointment of a trustee or receiver of all or substantially all of such Person’s property interests;  or (C) an attachment of all or substantial all of such Person’s property interests; except that such  event shall not be a Bankruptcy Event if the same is (i) involuntary and not consented to in writing,  (ii) contested within 60 days after such Person or its Affiliate has received written notice thereof,  and (iii) dismissed or set aside, as the case may be, within 150 days of the commencement thereof.  “Board” means the Company’s board consisting of four Board Representatives, two of  whom shall be appointed by Investor and two of whom shall be appointed by Builder.  “Board Representative” means a natural person appointed by Investor or Builder to serve  as a representative on the Board.  Each appointee may be removed and replaced in the sole  discretion of the Member that appointed him or her.  “Budgeted Costs” means those Project Costs set forth in an Approved Budget.  

 

099999\14127737v20     5       “Buy Price” means a price equal to the distributions that would be made to FL Triggering  Member upon a liquidation of the Company under Section 12.2 if the Company’s assets had been  sold based on, as applicable, the Mutual Valuation, the Non-Triggering Member Valuation or the  Fair Market Value, in each case, subject to adjustment for the allocations in Section 13.5.6.  “Capital Call” means a written request for capital issued by Manager for any one or more  of (A) Budgeted Costs, (B) Unbudgeted Permitted Organizational Costs up to $[**] per calendar  year, (C) Unbudgeted Permitted Project Costs for an Approved Project provided that the amount  of such Unbudgeted Permitted Project Costs for such Approved Project does not exceed $[**] or,  if such limit is reached, the new limit approved by the Members for such Approved Project, (D) an  amount necessary to restore Working Capital or Warranty Reserves, or (E) an amount necessary  to pay Warranty Expenses that exceed the Warranty Reserve.  Each Capital Call shall contain (i) a  reasonable description of the Project Costs (including the portion of the Pre-Development Fee and  CM Fee) to be paid from the proceeds contributed by the Members, (ii) a reconciliation with the  Approved Budget, (iii) invoices, bills or, if neither an invoice nor a bill is available, other  information to substantiate the Project Costs that have been incurred or are anticipated to be  incurred, and (iv) the designation of Mandatory Capital or Discretionary Capital, as applicable.  “Capital Contributions” means all capital contributions made (or deemed made) by a  Member to the Company, including (A) cash and cash equivalents, and (B) the Total Contribution  Value of a Contributed Property.  “CTC” means Christopher Todd Communities, LLC, an Arizona limited liability  company.  “Claim/Loss” or “Claims/Losses” means any obligation, liability, claim, suit, action,  proceeding, investigation, dispute, cost or expense (including any judgment, award, settlement,  reasonable attorneys’ fees, reasonable consultant and expert fees, and other costs and expenses  incurred in connection with the defense or resolution of any actual or threatened suit, action,  proceeding, investigation, dispute or claim, including appellate or bankruptcy proceedings, and  any collection or enforcement costs).  “CM Fee Base” means the total hard costs relating to construction of the applicable  Approved Project (excluding hard costs included in the Pre-Development Fee Base and land costs)  for the applicable Approved Project; except that (A) the CM Fee Base shall not include cost  overruns that would not have been incurred absent a material breach on the part of Manager under  this Agreement (while Builder is Manager) or a material breach on the part of Construction  Manager under the applicable Construction Management Agreement, and (B) the CM Fee Base  for an Approved Project shall not exceed the sum of (i) the hard costs for materials relating to  construction of the applicable Approved Project set forth in the Approved Budget, and (ii) the  Adjusted Labor Budget.  “CM Responsible Cost Overruns” shall, with respect to an Approved Project, have the  meaning set forth in the applicable Construction Management Agreement.  “Company Asset” means each asset in which the Company owns a direct or indirect  interest.  

 

099999\14127737v20     6       “Company Payment” shall, with respect to a Contributed Property, have the meaning set  forth in the applicable Contribution Agreement.  “Contributed Property” means property (other than cash or cash equivalents) that has  been approved by the Members to be contributed by a Member to the Company (or to a Subsidiary  Entity on behalf of the Company).  “Contributing Member Corresponding Funded Amount” means, with respect to a  specified Capital Call, if a Non-Contributing Member funds a portion of the Capital Contributions  specified in such Capital Call (but fails to fund its entire share of the Capital Contributions  specified in such Capital Call), an amount (if any) equal to (A) the quotient derived when dividing  (i) the Non-Contributing Member Funded Amount with respect to such Capital Call by (ii) the  Non-Contributing Member’s Percentage Interest, times (B) the Contributing Member’s Percentage  Interest.  If the Non-Contributing Member Funded Amount with respect to such Capital Call is  zero dollars, then the Contributing Member Corresponding Funded Amount with respect to such  Capital Call shall also be zero dollars.  “Contributing Member Excess Capital Share” means, with respect to a specified Capital  Call, if (A) the sum of (i) the Capital Contributions funded by a Non-Contributing Member with  respect to such Capital Call plus (ii) the Non-Contributing Member Funded Amount is less than  the Non-Contributing Member’s entire share of the Capital Contributions specified in such Capital  Call, and (B) a Contributing Member funds more than the Contributing Member Corresponding  Funded Amount with respect to such Capital Call, the portion of such Capital Call funded by such  Contributing Member that exceeds the Contributing Member Corresponding Funded Amount.   “Cure Period” means (A) in connection with a monetary default, 10 business days after  written notice to a defaulting Member specifying the nature of a default or breach under this  Agreement; and (B) in connection with a non-monetary default, 30 days after written notice to a  defaulting Member specifying the nature of a default or breach under this Agreement (provided,  however, that if such non-monetary default cannot reasonably be cured within such 30-day period,  and such defaulting Member promptly commences the cure of such default and diligently pursues  such cure to completion, then such 30-day period shall be extended to the extent reasonably  necessary).  “Date of Value” means the date on which FL Triggering Member delivers a Forced  Liquidation Notice.  “Discretionary Capital” means, as of the applicable measuring date, all Capital  Contributions other than those Capital Contributions for Mandatory Capital.  “Disposition PSA” means (A) a purchase and sale agreement relating to the sale of all or  any portion of the Company Assets to a Third-Party Potential Purchaser that complies in all  material respects with the terms contained in this Agreement and has otherwise been approved by  the Board, or (B) a purchase and sale agreement relating to the sale of all or any portion of the  Company Assets to a Member or its Affiliate that complies in all material respects with the terms  contained in this Agreement and has otherwise been approved by the Member that is neither the  purchasing Member nor an Affiliate of the purchasing Member.  Unless waived by the Board,  

 

099999\14127737v20     7       (i) each Disposition PSA shall contain the PSA Required Terms, (ii) each Disposition PSA  between the Company or a Subsidiary, on the one hand, and a Member or its Affiliate, on the other  hand, shall contain the PSA Preferred Terms, (iii) the Company shall use commercially reasonable  efforts to include those PSA Preferred Terms described in Paragraphs 1 and 2 of Part II in  Exhibit D in each Disposition PSA that is also a Third-Party PSA, and (iv) the Company shall use  best efforts to include those PSA Preferred Terms described in Paragraph 3 of Part II in Exhibit D  in each Disposition PSA that is also a Third-Party PSA.  “Distributable Cash” means, with respect to a Tranche, all Available Cash on the date of  any proposed distribution for such Tranche pursuant to this Agreement.  “ECI” means, as used in this Agreement, the Employment Cost Index issued by the U.S.  Bureau of Labor Statistics set forth in the table for “Wages and salaries (not seasonally adjusted):  Employment Cost Index for wages and salaries, for private industry workers, by occupational  group and industry” in the row corresponding to “Construction” under the heading “Goods- producing industries” or, if the ECI ceases to be published or the subject index is no longer  published, Manager shall select an index to approximate the ECI and shall use such replacement  index in lieu of the ECI, which replacement index shall be subject to the Board’s approval acting  in its reasonable discretion.   “Employee Misconduct” means conduct attributable to an employee of a Member or its  Affiliate involving Bad Conduct in connection with the Company or a Subsidiary Entity.  “Excluded Materials” means (A) reports or studies that have been superseded by  subsequent reports or studies, (B) with respect to attorneys engaged by a Member (as opposed to  attorneys engaged by the Company or a Subsidiary Entity), material that is subject to attorney- client privilege or attorney work product, (C) financial documents relating to a Member or its  Affiliates (other than evidence of due authorization and organization required under this  Agreement and as required to verify such Person is not a Restricted Person), or (D) material that a  Member or its Affiliate is legally required not to disclose, including a Person’s compliance with  security regulations governing publicly-traded company’s disclosure of non-public information.   To the extent that the disclosure of information or agreements is restricted by an agreement with a  third-party Person, such Member shall exercise commercially reasonable efforts to obtain the  approval of such third-party Person to permit the disclosure of such information.  “Excluded Opportunity” means a project involving acquisition, development or sale of  real property that falls within any one or more of the following: (A) Builder determines does not  conform with the Investment Parameters; (B) Builder or its Affiliate intends to acquire such project  for any reason other than to commence construction of a project containing Apartment Units prior  to the expiration of the Investment Period; (C) such project is listed on Exhibit I; (D) the apartment  units at such project will be constructed as part of a garden-style, Texas-wrap, podium or other  traditional apartment complex; or (E) Builder or it Affiliate intends to sell all or a portion of the  units at such project to Persons in the business of renting single-family residences (such as, without  limitation, American Homes 4Rent, Invitation Homes, Home Partners of America, etc.) provided  that the relevant project described in this clause (E) is not a single plat apartment project.  

 

099999\14127737v20     8       “Exclusivity Termination Event” means any one or more of (A) a material breach on the  part of Investor, (B) more than two PDR Trigger Notices have been delivered, or (C) a Three- Strikes Event.  “Excusable Delay” means, with respect to the Project Schedule, delays caused by any one  or more of the following: (A) strikes, lockouts or other labor or industrial disturbances of a regional  or national character; (B) civil disturbance; (C) future order of or delay caused by any government,  court or regulatory body claiming  jurisdiction (including delays in processing or release of  necessary permits); (D) tariffs; (E) a default by a contractor, a design professional and any third- party Person not affiliated with Builder; (F) act of the public enemy, war, riot, terrorism, sabotage,  blockade or embargo; (G) failure or inability to secure materials, supplies, utilities or labor through  ordinary sources by reason of shortages or priority, system failure (e.g., failure causing interruption  of electricity, telecommunications, water or other utilities) or regulation or order of any  government or regulatory body; (H) epidemics or pandemics; (I) lightning, earthquake, fire, storm,  hurricane, tornado, flood or other Acts of God of unusual duration or volume (including, rain  delays in excess of the permitted days for rain delay specified in the general construction contract);  (J) transportation disasters, whether by sea, rail, air or land; (K) financial crises of a nature  materially affecting the purchase and sale of investment securities or the closing of the New York  Stock Exchange or industry-wide closing of banks other than normal closing dates; or (L) other  delays reasonably beyond Builder’s or its Affiliate’s control.  “Excused Employee Misconduct” means Employee Misconduct that is excused because,  after the applicable Member learns of the Employee Misconduct, such Member (A) removes the  employee who committed Employee Misconduct from any future association with the Company  or a Subsidiary Entity, and (B) reimburses the Company for losses incurred by the Company by  reason of such Employee Misconduct (after deducting insurance proceeds received by the  Company or a Subsidiary Entity in connection with such Employee Misconduct).  “Fair Market Value” means the fair market value of the real property owned by the  Company or a Subsidiary Entity (without double-counting) on the Date of Value, which shall be  determined by an appraiser appointed by the Members having at least 10 years of experience  appraising similar real property in the city or county in which such real property is located.  The  fees and costs of the appraiser shall be paid by the Company and deducted from the Fair Market  Value when determining the Buy Price.  If the Members are unable to agree upon an appraiser,  each Member shall have 30 days from the date of the Responsive Notice (or, if Builder fails to  deliver a Responsive Notice, 30 days from the expiration of the Responsive Notice Period) to  select an appraiser to determine the Fair Market Value.  If a Member fails to timely select an  appraiser, the appraiser selected by the other Member shall determine the Fair Market Value.  If  two appraisers are selected, the two appraisers shall select a third appraiser after completing the  appraisals, who shall select one of the two appraisals as the Fair Market Value.  Any inability to  agree upon a third appraiser shall be resolved by an Arbitrator who has been appointed by either  the Members or, if the Members are unable to agree on an Arbitrator, the Delaware Court of  Chancery.  “Financing Fee” means, with respect to a Loan obtained by the Company or a Subsidiary  Entity from a Lender not affiliated with Värde or TMHC, a fee equal to [**]% of the proceeds  disbursed by the Lender under such Loan (other than amounts disbursed by Lender after a default  

 

099999\14127737v20     9       has occurred on the part of the Company or a Subsidiary Entity under such Loan, including any  one or more of default interest, protective advances or Lender’s attorneys’ fees and court costs);  provided, however, that, (A) if refinancing is obtained to replace one or more existing Loans, a  Financing Fee shall only be payable with respect to the disbursed portion of the new Loan (i.e.,  the refinancing) that exceeds the disbursed portion of the existing Loan (e.g., in other words, the  fee shall be calculated based on the incremental additional proceeds disbursed under the new  Loan), and (B) the aggregate Financing Fees paid to a Member shall not exceed $[**] for both  Tranches (combined).  “Fundamental Decisions” means those Major Decisions identified as Fundamental  Decisions on Exhibit F or elsewhere in this Agreement.  “Hazardous Substances” means collectively (A) those substances included within the  definitions of or identified as solid wastes, special wastes, hazardous chemicals, hazardous waste,  hazardous substances, hazardous materials, toxic substances or similar terms in or pursuant to the  Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C.  § 9601, et seq.), Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901, et seq.), the  Occupational, Safety and Health Act of 1970 (29 U.S.C. § 651, et seq.), the Hazardous Materials  and Transportation Act (49 U.S.C. § 1801, et seq.), Clean Water Act, 33 U.S.C. § 1321, et seq., or  Clean Air Act (42 U.S.C. § 7401, et seq.), all as amended at any time, and all regulations  promulgated pursuant to such laws, (B) those substances listed in the United States Department of  Transportation Table (49 CFR 172.101 and amendments thereto) or by the EPA as hazardous  substances (40 CFR Part 302 and amendments thereto), (C) any material, waste or substance  which is or contains petroleum or petroleum-related products, including crude oil or any fraction  thereof, natural gas, synthetic gas usable for fuel or any mixture thereof, asbestos or  asbestos-containing materials, polychlorinated biphenyls, flammable explosives, radioactive  materials, and (D) such other substances, materials and wastes, which are or become regulated or  classified as a hazardous, toxic, solid or a special waste, under any federal, state, county, municipal  or other local environmental laws now in effect or promulgated in the future.  “Horizontal Improvements” means the improvements to be constructed on, below or at  an Approved Project, which may include wet and dry utilities, gutters, sidewalks, landscaping,  streets, walls, mailboxes, roads, amenities, sewer lines and other improvements typically  consistent with vacant land used for the development of horizontal multi-family apartments in the  Target Market.  The Horizontal Improvements to be constructed at an Approved Project will be  specified in the Approved Package.  The Horizontal Improvements for each Approved Project may  vary.  “Incentive Distributions” means (A) in the case of Tranche I, the amounts distributable  to Builder under Sections 4.1.2, 4.1.3 and 4.1.4 in excess of the amounts that would have been  distributable to Builder had the amounts under Sections 4.1.2, 4.1.3 and 4.1.4 been distributed to  the Members pro rata in proportion to each Member’s Percentage Interest, or (B) in the case of  Tranche II, the amounts distributable to Builder under Sections 4.2.2, 4.2.3 and 4.2.4 in excess of  the amounts that would have been distributable to Builder had the amounts under Sections 4.2.2,  4.2.3 and 4.2.4 been distributed to the Members pro rata in proportion to each Member’s  Percentage Interest.  

 

099999\14127737v20     10       “Investment Parameters” means the parameters described in Exhibit A.  “Investment Period” means the period commencing on the Effective Date and ending on  the earlier of (A) the expiration of the Tranche I Investment Period if the Tranche I Investment  Period is terminated by Builder by reason of an Exclusivity Termination Event, or (B) the  expiration of the Tranche II Investment Period.  “Investor Guarantor” means The Värde Fund XIII L.P., a Cayman Islands limited  partnership.  “Investor IRR” means [**].  “Investor Sourced Loans” means Loans sourced by Investor for which Investor is entitled  to a Financing Fee.  “Lender” means a Person making a Loan to the Company or a Subsidiary Entity.  “Loan” means, subject to obtaining the Board’s approval, a loan, purchase-money  financing, land banking financing or other indebtedness for money borrowed by the Company or  a Subsidiary Entity.  For sake of clarity, trade payables, retentions and deferred amounts payable  with respect to a specific contractor, subcontractor, consultant, design professional or supplier shall  not be deemed a Loan.  “Manager” means Builder, or if Builder is removed, a Person appointed by Investor;  except that Investor shall obtain Builder’s prior written consent with respect to such Person if any  one or more of the following matters are applicable: (A) such Person selected by Investor has been  involved in an action, suit or formal dispute directly adverse to Builder or its Affiliate during the  period that is ten years prior to the appointment of such Person as replacement Manager; (B)  such  Person or its Affiliate has been convicted of a felony, a crime involving defrauding, stealing or  other misappropriation of funds or is the subject of a grand jury or similar investigation involving  any of the foregoing; (C) the appointment of such Person as Manager would potentially violate  any one or more of (i) the Securities Act of 1933 or 1934, (ii) regulations or conventions governing  anti-money laundering, (iii) Executive Order No. 13224 issued by the President of the United  States on September 24, 2001 (Executive Order Blocking Property and Prohibiting Transactions  with Persons Who Commit, Threaten to Commit, or Support Terrorism), as may be amended or  supplemented from time to time or (iv) other applicable laws; or (D) the appointment of such  Person would constitute a breach under agreements governing the Loan or other material  agreements to which the Company, a Subsidiary Entity or a Project is bound.  “Mandatory Capital” means, as of the applicable measuring date, Capital Contributions  required to be funded by a Member to pay (A) Budgeted Costs and Unbudgeted Permitted Project  Costs for an Approved Project identified in a Capital Call, provided that such Member’s  Mandatory Capital for such Approved Project shall not exceed the lesser of (i) such Member’s  Total Tranche Commitment minus the aggregate Capital Contributions previously funded by such  Member for the applicable Tranche, or (ii) such Member’s Total Project Commitment for such  Approved Project minus Capital Contributions previously funded by such Member for such  

 

099999\14127737v20     11       Approved Project, and (B) Unbudgeted Permitted Organizational Costs up to $[**] per calendar  year.  “Material Milestones” means the material milestones identified in a Project Schedule,  which dates shall be adjusted when the dates in such Project Schedule are adjusted, amended or  modified for Excusable Delay or by Board approval.  “Material Notices” means any one or more of (A) a notice alleging that a material  breach  has occurred, (B) a notice that a Member has failed to timely contribute Mandatory Capital or  Discretionary Capital after the issuance of a Capital Call (even if such failure to fund such Capital  Contribution is not a breach), (C) a Forced Liquidation Notice, (D) a Responsive Notice, (E) a  Non-Triggering Member Valuation Notice, (F) a PDR Trigger Notice, (G) an FOV Notice, (H) a  ROFR Notice, (I) an Arbitration Notice, and (J) a Removal Notice.  “Member” means each Person who (A) is an initial signatory to this Agreement or has  been admitted to the Company as a Member in accordance with the express provisions set forth in  this Agreement, and (B) has not resigned, withdrawn, been expelled or, if other than a natural  person, dissolved.  “Maturity Date” means the earliest to occur of (A) the date on which any Member  transfers its direct interest in the Company or withdraws from the Company, (B) all of the Property  is sold, directly or indirectly, (C) six years after the making of such Member Loan, or (D) the  occurrence of a Bankruptcy Event on the part of, or the insolvency, dissolution or liquidation of,  any one or more of the Company, a Subsidiary Entity, Investor Guarantor (if Investor is a Non- Contributing Member) or TM Guarantor (if Builder is a Non-Contributing Member).  If the  provisions herein contemplate a hypothetical dissolution, the Maturity Date shall be deemed to  have occurred on the date of such hypothetical dissolution.  “Non-Contributing Member Funded Amount” means, if a Member fails to fund its  entire share of the Capital Contributions specified in a Capital Call based on its Percentage Interest,  the sum of (A) an amount equal to the portion of such Capital Call funded by such Non- Contributing Member, and (B) an amount equal to the portion of such Capital Call deemed funded  by a Non-Contributing Member by reason of a Member Loan.  “Non-Refundability Condition” means the earnest money deposit under a Third-Party  PSA shall be non-refundable no later than (A) 60 days after the Third-Party PSA is executed, if  such Third-Party PSA relates to an undeveloped Approved For-Rent Development Project or  (B) 30 days after the Third-Party PSA is executed, if such Third-Party PSA relates to a developed  Approved For-Rent Development Project.  “Off-Site Improvements” means improvements required to be constructed around an  Approved Project to construct such Approved Project.  

 

099999\14127737v20     12       “Percentage Interest” means the following respective percentages for each of the  Members:  Member Percentage Interest  Builder 40%  Investor 60%  “Person” means any natural person, general partnership, limited partnership, limited  liability company, corporation, trust, estate, association or other entity.  “Pre-Development Fee Base” means the total hard costs relating to the Horizontal  Improvements and the Off-Site Improvements (excluding land costs, insurance premiums, taxes,  financing costs, salaries of on-site project supervisors and the development fee itself) for the  applicable Approved Project; except that (A) the Pre-Development Fee Base shall not include cost  overruns that would not have been incurred absent a material breach on the part of Manager under  this Agreement (while Builder is Manager) or a material breach on the part of Construction  Manager under the applicable Construction Management Agreement, and (B) the Pre- Development Fee Base for an Approved Project shall not exceed the sum of (i) the hard costs for  materials relating to construction of the applicable Approved Project set forth in the Approved  Budget, and (ii) the Adjusted Labor Budget.  “Pro Forma” means a pro forma prepared by a Submitting Party; to the extent applicable,  a Pro Forma shall include budgets, project schedules, projected cash flows and projected returns  for the applicable Proposed Project or the applicable Approved Project, as the case may be.  “Project Costs” means, collectively, (A) all costs, fees and expenses incurred in  connection with the formation, operation and continued existence of the Company or a Subsidiary  Entity, and (B) all costs, fees and expenses incurred in connection with the pursuit, acquisition,  entitlement, development, use, operation and maintenance of each Approved Project (including  amounts payable by the Company under each Contribution Agreement).  “Project Improvements” means, with respect to a Proposed Project or an Approved  Project, the Horizontal Improvements, the Vertical Improvements and the Off-Site Improvements  described in the Proposal Package for such Proposed Project or the Approved Package for such  Approved Project.  “Project Schedule” means, with respect to a Proposed Project or an Approved Project, the  project schedule to acquire, develop and rent such Proposed Project (as described in the Proposal  Package for such Proposed Project) or such Approved Project (as described in the Approved  Package for such Approved Project), which dates shall be extended for Excusable Delays.  “Proposal Package” means a package prepared by a Submitting Party that, at a minimum,  includes the following items for a Proposed Project: (A) Pro Forma; (B) market comparisons and  historical data in nearby projects (both build-for-rent and multi-family projects);  

 

099999\14127737v20     13       (C) documentation evidencing entitlements; (D) information on supply and demand dynamics in  the market/submarket; (E) availability of financing to complete the Project Improvements at the  Proposed Project, including a description of any financing districts; (F) projected rental rates;  (G) support for development cost and vertical construction assumptions; (H) current inventory,  unit mix and historical data of other residential for-rent projects that are anticipated to compete  with the Proposed Project; (I) a description of the Project Improvements, including key project  elements (e.g., necessary off-site work and major third-party involvement); and (J) broker’s  opinion of value from Northmarq or other equally-qualified broker.  “Proposed Project” means a project meeting each of the Investment Parameters (unless  waived by the Board) that a Member recommends for the Company involving the acquisition of  real property, the construction of Project Improvements and the rental of Apartment Units at such  project.  “Proposed Competitive Project” means a project that (A) is located within 2.5 miles of  an Approved For-Rent Development Project, and (B) meets the Investment Parameters set forth in  Paragraphs 2 and 3 of Exhibit A.  “PSA Preferred Terms” means each of the terms set forth in Part II of Exhibit D.  “PSA Required Terms” means each of the terms set forth in Part I of Exhibit D.  “Pursuit Cost” means the earnest money deposits deposited by the Company, Manager,  Builder or Investor and the due diligence, pre-closing and other Project Costs incurred by the  Company or Investor prior to the acquisition of the Approved Project, including costs incurred by  the Members in connection with the formation, termination or dissolution of the Company or a  Subsidiary Entity (including each Member’s reasonable attorneys’ fees) and all “dead deal” costs.  “Reserves” means the reserves maintained by the Company or a Subsidiary Entity,  including the Unknown Claims Warranty Reserve.  “Restricted Person” means a Person controlled by, funded by or employed by a natural  person, the identity of whom could subject the Company, a Subsidiary Entity, a Member or  Affiliates of any of them to liability under the USA PATRIOT Improvement and Reauthorization  Act of 2005, as amended or other legislation governing relationships with transactional counter- parties.  “Restrictive Covenant” means a restrictive covenant that conforms to the form attached  as Exhibit L together with such modifications as may be required by applicable law or approved  by the Members.  “Special Distribution Amount” means, with respect to a Contributed Property, (A) the  True Up Amount, less (B) the Company Payment.  “Stabilized Project” means an Approved Project when [**]% of the Apartment Units  within such Approved Project are occupied by tenants paying rent.  

 

099999\14127737v20     14       “Target Market” means markets within which TMHC then has an existing presence,  including Arizona, Texas, Florida, Georgia, California, Nevada, North Carolina, Colorado and  South Carolina. The Members may add or remove Target Markets subject to obtaining the Board’s  approval.  “Tax Appendix” means the tax appendix described in Section 14.1 and attached hereto as  Exhibit B.  “Third-Party Offered Terms” means an offer received by the Company or, if applicable,  a Subsidiary Entity from a Third-Party Potential Purchaser to purchase an Approved Project.  “Third-Party Potential Purchasers” means reputable Persons that are not Restricted  Persons.  “Third-Party PSA” means a Disposition PSA between the Company or a Subsidiary  Entity, on the one hand, and a Third-Party Potential Purchaser, on the other hand.  Each Third- Party PSA shall have a market-rate earnest money deposit reasonably acceptable to the Members.  “Three Strikes Event” means Investor has disapproved or is deemed to have disapproved  three Proposal Packages that satisfy those Investment Parameters set forth in Paragraphs 1, 2, 3  and 10 of Exhibit A out of five consecutive Proposal Packages that satisfy those Investment  Parameters set forth in Paragraphs 1, 2, 3 and 10 of Exhibit A.  “TM Guarantor” means Taylor Morrison Communities Inc., a Delaware corporation.  “TMHC” means (A) Taylor Morrison Home Corporation, a Delaware corporation, (B) in  the event of the merger of Taylor Morrison Home Corporation with or into any other Person, the  Person resulting from such merger, (C) in the event any Person acquires all or substantially all of  the assets of Taylor Morrison Home Corporation, such acquiring Person, or (D) in the event of a  conversion of Taylor Morrison Home Corporation into another type of Person or its domestication  to another jurisdiction, the new converted form or domesticated Person.  “TMHC Subsidiary” means a Person wholly owned directly or indirectly by TMHC.  “Total Tranche Commitment” means (A) in the case of Tranche I, the Total Tranche I  Commitment, and (B) in the case of Tranche II, the Total Tranche II Commitment.  “Total Tranche I Commitment” means $450,000,000, and with respect to a Member,  such Member’s Percentage Interest times $450,000,000; provided, however, that if the amount  needed to fund an Approved Project is greater than the then Uncommitted Tranche I Commitment,  then the Total Tranche I Commitment shall be reduced by the Uncommitted Tranche I  Commitment, in which case, the Total Tranche II Commitment shall be increased by an amount  equal to the Uncommitted Tranche I Commitment.  “Total Tranche II Commitment” means $400,000,000, and with respect to a Member,  such Member’s Percentage Interest times $400,000,000 (or such higher amount approved by the  Board); provided, however, that the Total Tranche II Commitment shall be increased by the  

 

099999\14127737v20     15       Uncommitted Tranche I Commitment, if any, at the expiration of the Tranche I Investment Period.   In no event shall the sum of the Total Tranche I Commitment and the Total Tranche II  Commitment exceed $850,000,000 except as may be approved by the Board.  “Total Contribution Value” means, with respect to a Contributed Property, the sum of  (A) the Approved Contribution Value, and (B) the Company Payment.  “Total Project Commitment” means, with respect to an Approved Project, the total equity  required from the Company as set forth in the Approved Budget for such Approved Project, and  with respect to a Member, such Member’s Percentage Interest times the amount of total equity for  such Approved Project.  “Tranche I Capital Contributions” means Capital Contributions funded for Tranche I  Assets.  “Tranche I Investment Period” means the period commencing on the Effective Date and  ending on the earliest of (A) the two-year anniversary of the date that the Company or a Subsidiary  Entity acquires the first Tranche I Project, (B) the date on which the amount needed to fund the  acquisition and development of the next Approved For-Rent Development Project to be acquired  by the Company or a Subsidiary Entity is greater than the then Uncommitted Tranche I  Commitment, (C) the date on which a Member has funded or committed to fund Capital  Contributions totaling such Member’s Total Tranche I Commitment, or (D) the date on which  Builder terminates the Investment Period if an Exclusivity Termination Event has occurred.  “Tranche I Assets” means all Company Assets (including, the Approved Projects,  Subsidiary Entities and BTR Parcels) acquired using proceeds from the Total Tranche I  Commitment.  “Tranche I Projects” means the Approved Pursuit Projects acquired using proceeds from  the Total Tranche I Commitment.  “Tranche II Capital Contributions” means Capital Contributions funded for Tranche II  Assets.  “Tranche II Investment Period” means the period commencing one calendar day the  expiration of the Tranche I Investment Period and ending on the earliest of (A) the two-year  anniversary of the date that the Company or a Subsidiary Entity acquires the first Tranche II  Project, as the same be extended with the Board’s approval, (B) the date on which a Member has  funded or committed to fund Capital Contributions totaling such Member’s Total Tranche II  Commitment, or (C) the date on which Builder terminates the Investment Period if an Exclusivity  Termination Event has occurred.  Notwithstanding the foregoing, the Tranche II Investment Period  shall not commence if the Tranche I Investment Period was terminated based on the occurrence of  an Exclusivity Termination Event.  “Tranche II Assets” means all Company Assets (including, the Approved Projects,  Subsidiary Entities and BTR Parcels) acquired using proceeds from the Total Tranche II  Commitment.  

 

099999\14127737v20     16       “Tranche II Projects” means the Approved Pursuit Projects acquired using proceeds from  the Total Tranche II Commitment.  “True Up Amount” means, with respect to a Contributed Property, an amount equal to the  product of (A) the Percentage Interest of the Member not contributing the Contributed Property,  times (B) the Total Contribution Value.  “Unbudgeted Permitted Costs” means, collectively, Unbudgeted Permitted  Organizational Costs and Unbudgeted Permitted Project Costs.  “Unbudgeted Permitted Organizational Costs” means, with respect to the Company or  a Subsidiary Entity, costs and expenses not allocable to an Approved Project that pertain to one or  more of the following: (A) recurring non-discretionary costs and expenses, such as franchise taxes,  insurance premiums and filing expenses; and (B) costs and expenses payable to comply with  applicable laws or agreements to which the Company or a Subsidiary Entity is subject.  “Unbudgeted Permitted Project Costs” means, with respect to an Approved Project,  Project Costs not contemplated by the Approved Budget for such Approved Project that pertain to  one or more of the following: (A) recurring non-discretionary expenses, such as real estate taxes  and assessments, insurance premiums and utility costs; (B) Project Costs payable to comply with  applicable laws or agreements to which the Approved Project is subject; (C) Project Costs payable  to satisfy demands, requirements or obligations under Loans (including balancing deposits or re- margining payments) if failure to pay such Project Costs may result in loss of title or personal  liability to a Member or its Affiliate; (D) Project Costs that are reasonably necessary to avoid  imminent injury or loss to persons or property; (E) Project Costs needed to remove liens  encumbering one or more Approved Project if failure to pay such amount may result in loss of title  or personal liability to a Member or its Affiliate, such as, without limitation, mechanics’ liens; and  (F) Project Costs needed to fund the Company’s or a Subsidiary Entity’s indemnification  obligations.  “Uncommitted Tranche I Commitment” means, as of the applicable measuring date, the  amount by which (A) the Total Tranche I Commitment, exceeds (B) the Capital Contributions that  the Members have funded or committed to fund to the Tranche I Approved Projects.  “Värde” means Värde Partners, Inc., a Delaware corporation.  “Vertical Improvements” means all improvements to be constructed at an Approved  Project other than the Horizontal Improvements and the Off-Site Improvements, which shall  include the Apartment Units and other improvements typically contemplated by the construction  of horizontal multi-family “for rent” projects in the Target Market.  The Vertical Improvements to  be constructed on an Approved Project will be specified in the Approved Package.  The Vertical  Improvements for each Approved Project may vary.  “Warranty Expenses” means Claims/Losses arising out of, relating to or in connection  with Approved Projects that are under construction or have been completed.  Without limitation  on the foregoing, Warranty Expenses include Claims/Losses arising out of one or more of the  following: (i) to investigate and cause the Company or a Subsidiary Entity to repair of defects,  

 

099999\14127737v20     17       mistakes, omissions, or errors; (ii) to pay insurance deductibles and self-insured retentions on  behalf of the Company or a Subsidiary Entity related thereto; or (iii) to cause the Company or a  Subsidiary Entity to fulfill its indemnification obligations arising out of an agreement with  Construction Manager or any other Person.  “Working Capital” means, $[**] per Approved Project (excluding Approved Projects that  are, as of the date calculation, Stabilized Projects) or such lesser amount approved by the Board,  which amount shall be restored by the Members if the amount of Working Capital in the  Company’s Account is less than $[**] per Approved Project (excluding Approved Projects that  are, as of the date calculation, Stabilized Projects).  The aggregate Working Capital in the Account  shall not exceed $[**] at any one time except as otherwise approved by the Board.  ARTICLE II  IDENTIFICATION OF PROPOSED PROJECTS  Section 2.1 Identification of Proposed Projects.  2.1.1 Identifying Proposed Projects.  If (A) Builder or its Affiliate identifies a  Proposed Project or a Proposed Competitive Project, and (B) TMHC or a TMHC  Subsidiary intends to acquire and develop such Proposed Project or such Proposed  Competitive Project during the Investment Period, then Builder shall first offer the  Company an opportunity to invest in such Proposed Project or such Proposed Competitive  Project; except that, notwithstanding the foregoing, Builder shall not be required to offer  Excluded Opportunities to the Company.  2.1.2 Submitting Proposal Package.  A Proposal Package for a Proposed  Project or a Proposed Competitive Project may be submitted by Manager or a Member  (such Person, the “Submitting Party”) at any time prior to closing on such Proposed  Project or such Proposed Competitive Project; provided, however, that a Submitting Party  shall endeavor to present such Proposal Package to the Company not later than 60 days  prior to the scheduled closing for such Proposed Project or such Proposed Competitive  Project.  Manager or such Member may withdraw such Proposal Package if (A) such  Person elects not to pursue such Proposed Project or such Proposed Competitive Project,  or (B) such Person elects to pursue such Proposed Project or such competitive Proposed  Project outside of the Company because (i) such Proposed Project does not conform to the  Investment Parameters or (ii) such Proposed Project or such Proposed Competitive Project  is otherwise an Excluded Opportunity.  Notwithstanding anything to the contrary contained  herein, Builder may enter into a Term Sheet or a Purchase Agreement with respect to a  Proposed Project or a Proposed Competitive Project prior to submitting a Proposal Package  for such Proposed Project or such Proposed Competitive Project to the Company.  2.1.3 Approving or Declining Proposal Package.  Upon Manager’s or a  Member’s receipt of a Proposal Package from a Submitting Party (such Person, the  “Receiving Party”), the Receiving Party shall have 15 business days (the “Pursuit  Response Period”) by delivering written notice (a “Pursuit Notice”) to the Submitting  Party to approve or disapprove the Proposed Project or the Proposed Competitive Project.   If the Receiving Party approves the Proposed Project or the Proposed Competitive Project,  

 

099999\14127737v20     18       the Proposed Project or the Proposed Competitive Project shall thereafter be an Approved  Pursuit Project, until the Company or a Subsidiary Entity acquires such Approved Pursuit  Project, at which time such Approved Pursuit Project shall thereafter be an Approved For- Rent Development Project.  If the Receiving Party disapproves a Proposed Project or fails  to respond to the Pursuit Notice within the Pursuit Response Period for a Proposed  Project (such Proposed Project, a “Declined Project”), the Submitting Party may pursue  the Declined Project outside of the Company.  Section 2.2 Approved Pursuit Project.  2.2.1 Assignment.  After obtaining all required third-party consents, the  Submitting Party shall assign to the Company all agreements (including Term Sheets,  access agreements and Purchase Agreements) and all due diligence (including all reports  and studies) pertaining to the Approved Pursuit Project other than Excluded Materials,  which assignment shall be made pursuant to an assignment agreement in the form of  Exhibit C (“Assignment Agreement”).  2.2.2 Reimbursement.  As a condition to the effectiveness of the Assignment  Agreement, the Company or a Subsidiary Entity shall concurrently with the delivery of the  Assignment Agreement, reimburse Manager, the Members and their respective Affiliates  for all costs and expenses paid by such Person in connection with the Approved Pursuit  Project and shall assume and indemnify such Person for all costs and expenses incurred  (but not yet paid) by such Person in connection with the Approved Pursuit Project.  2.2.3 Purchase Agreement; Term Sheet.  If the Submitting Party has not  entered into a term sheet for the Approved Pursuit Project (each, a “Term Sheet”) or a  purchase and sale agreement for the Approved Pursuit Project (each, a “Purchase  Agreement”), Manager shall negotiate a non-binding Term Sheet (if necessary) and a  Purchase Agreement on behalf of the Company or a Subsidiary Entity for such Approved  Pursuit Project on terms and conditions consistent with the Approved Package or otherwise  approved by the Board (if Board approval is required under Section 5.2).  When negotiating  a Term Sheet or a Purchase Agreement, Manager, acting reasonably and in good faith, shall  consider comments made by the Members.  2.2.4 Oversight.  Manager shall direct and oversee the feasibility analysis for  each Approved Pursuit Project.  In carrying out its responsibilities, Manager may hire  engineers, contractors, design professionals, consultants and advisors, engage third-party  suppliers and service providers, negotiate entitlements with governmental agencies,  provided that (A) the terms upon which such Persons are hired and the negotiations with  governmental agencies shall be conducted on an arms-length basis with the objective of  achieving market-rate or better terms taking into account the Company’s negotiating  power, the availability of labor and materials, the schedule for acquiring, entitling and  developing the Approved Pursuit Project and other customary considerations, (B) such  costs and expenses are Budgeted Costs or Unbudgeted Permitted Project Costs, and  (C) Manager obtains the Board’s approval if such approval is required under Section 5.2.   Manager shall keep the Members informed as to the deposits and deadlines under the  Purchase Agreement and coordinate the delivery of notices, the taking of actions and the  

 

099999\14127737v20     19       disapproval, approval or waiver of feasibility inspections, title and survey review,  settlement statements, closing conditions or other matters requiring buyer’s or purchase’s  approval, in each case, under the Purchase Agreement and subject to obtaining Board  approval if Board approval is required under Section 5.2.  Section 2.3 Approved For-Rent Development Project.  If the Board approves the  acquisition of an Approved Pursuit Project, the Company or a Subsidiary Entity shall acquire the  applicable Approved For-Rent Development Project in accordance with the Purchase Agreement.   The Company shall use Tranche I Capital Contributions to acquire all Approved For-Rent  Development Projects acquired by the Company or a Subsidiary Entity prior to the expiration of  the Tranche I Investment Period.  If, prior to the expiration of the Tranche I Investment Period, the  proceeds from the Uncommitted Tranche I Commitment are insufficient to fund the acquisition  and development of the next Approved For-Rent Development Project to be acquired by the  Company or a Subsidiary Entity, then (A) the Total Tranche I Commitment shall be reduced by  the Uncommitted Tranche I Commitment, (B) the Total Tranche II Commitment shall be increased  by the Uncommitted Tranche I Commitment, (C) the Tranche I Investment Period shall terminate,  (D) the Tranche II Investment Period shall commence, (E) such Approved For-Rent Development  Project shall be acquired as part of Tranche II using proceeds from Tranche II Capital  Contributions, and (F) if proceeds derived from Tranche I Capital Contributions or Tranche I  Assets were used to fund Pursuit Costs for such Approved For-Rent Development  Contributions (“Tranche I Reimbursement”), the Members shall fund Tranche II Capital  Contributions in an amount equal to the Tranche I Reimbursement, the proceeds of which shall be  added to Tranche I’s Available Cash or distributed pursuant to the Tranche I Distribution  Waterfall.  Section 2.4 Representations and Warranties.  Each Member, as to itself, represents and  warrants to the other Member that: (A) this Agreement and all agreements, instruments and  documents herein provided to be executed or to be caused to be executed by such Member are and,  as of the Effective Date, will be duly authorized, executed and delivered by and are and will be  binding upon the same; (B) such Member is a corporation, partnership or limited liability company  duly formed, validly existing and in good standing under the laws of the state of its formation;  (C) such Member is duly authorized and qualified to enter into and do all things required of such  Member under this Agreement; (D) none of this Agreement or any agreement, document or  instrument executed or to be executed in connection with the same or anything provided in or  contemplated by this Agreement or any such other agreement, document or instrument, breaches,  invalidates, cancels, makes inoperative or interferes with, or results in the acceleration or maturity  of, or requires any consent or authorization that has not been obtained under, any contract,  agreement, lease, easement, right or interest, law or regulation to which such Member is subject;  and (E) neither such Member nor any Affiliate of such Member is a Restricted Person.  Section 2.5 Application to Tranches.  2.5.1 General Statement.  The Company may acquire assets or incur debts,  liabilities, expenses, or other obligations that apply specifically to a Tranche or generally  to the Company.  

 

099999\14127737v20     20       2.5.2 Specific to Tranche.  To the extent an asset, liability, debt, expense, or  other obligation is acquired or incurred solely in connection with a Tranche, then such  asset, liability, debt, expense, or other obligation shall be allocated to such Tranche.   Accordingly, (A) Capital Contributions funded for, revenue derived from or financing  proceeds attributable to a Subsidiary Entity, an Approved Project, a BTR Parcel or a  Company Asset (“Source of Funds”) shall only be used to pay Project Costs, Loans,  Reserves, Working Capital and other amounts attributable to such Approved Project, such  BTR Parcel, such Company Asset  or other Approved Projects, BTR Parcels or Company  Assets within the same Tranche as such Approved Project, such BTR Parcel or such  Company Asset  (“Use of Funds”), and (B) Distributable Cash generated by a Tranche  shall only be distributed under the applicable Tranche Distribution Waterfall.  2.5.3 General to Company.  If an asset, liability, debt, expense, obligation,  Source of Funds or Use of Funds is not solely related to one Tranche’s business or affairs,  then Manager shall provide a fair and equitable allocation for such asset, liability, debt,  expense, obligation, Source of Funds or Use of Funds which shall be subject to the  Members’ approval in their reasonable discretion.  Accordingly, Manager, acting  reasonably and in good faith, may make adjustments from time to time to the Capital  Contributions made, the Distributable Cash received and the related tax, audit and  accounting matters if assets held by the Company for one Tranche are used to pay  liabilities, debts, expenses or obligations of the other Tranche.  Manager shall notify the  Members when making such adjustments.  If Manager determines that a Member has  underfunded Capital Contributions by reason of the adjustments made by Manager to the  Tranches, Manager shall deliver written notice (a “Shortfall Notice”) to the Members  setting forth the Capital Contributions required to be made by such Member in respect of  such underfunded Capital Contributions (such shortfall, the “Shortfall Amount”).  An  underfunded Member that owes a Shortfall Amount shall pay an amount equal to the  Shortfall Amount to the overfunded Member within 10 business days after Manager  delivers a Shortfall Notice; at which time, the Shortfall Amount paid by the underfunded  Member shall be treated as a Capital Contribution and the overfunded Member shall be  deemed to have received a distribution.  If such Member fails to pay the Shortfall Amount  within 10 business days, then (A) the Shortfall Amount shall accrue interest at the  Applicable Rate, (B) all distributions which would otherwise be distributed to such  Member shall be paid instead to the other Member until the Shortfall Amount (and all  interest thereon) has been paid in full, (C) any such distributions shall be deemed to have  been distributed to such Member and then paid over by such Member to the other Member  in payment of the Shortfall Amount (and all interest thereon), and (D) the payment of  interest by the underfunded Member shall not be treated as a Capital Contribution and the  receipt of interest by the overfunded Member shall not be treated as a distribution.  2.5.4 Override Provisions.  Notwithstanding the foregoing, Distributable Cash  generated by all Tranches shall be used to repay Member Loans owing by a Non- Contributing Member before a Non-Contributing Member is entitled to receive any  

 

099999\14127737v20     21       Distributable Cash relating to either Tranche (even if the Distributable Cash relates to one  Tranche and the Member Loan being repaid relates to the other Tranche).  2.5.5 Records.  To the extent feasible, Manager shall coordinate separate and  distinct records for each Tranche, and the assets, liabilities, debts, expenses, and other  obligations solely related to a Tranche or allocated to a Tranche shall be held and accounted  for separately from the assets, liabilities, debts, expenses, and other obligations of the other  Tranche.  Manager is authorized to interpret the provisions of this Agreement to give effect  to the intent of the other provisions of this Section 2.5.  ARTICLE III  CAPITALIZATION AND LOANS BY MEMBERS  Section 3.1 Capital Contributions for Working Capital.  Within five business days after  the Effective Date and within five business days after the commencement of Tranche II, each  Member shall fund into the Company’s Account an amount equal to such Member’s Percentage  Interest times $[**].  Section 3.2 Subsequent Capital Contributions.  Manager may issue Capital Calls from  time to time for additional Capital Contributions.  After a Capital Call has been issued, each  Member shall fund its Percentage Interest of the amount specified in such Capital Call into the  Company’s Account (or as otherwise directed by Manager) within 10 business days after such  Capital Call is delivered to the Members.  Section 3.3 Failure to Contribute Capital.  Each Member shall be obligated to contribute  Mandatory Capital, and each Member shall be permitted (but not required to) contribute  Discretionary Capital.  If a Member fails to contribute the entire amount specified in a Capital Call  within the time periods set forth in Section 3.2, then such Member shall be a “Non-Contributing  Member”, and the portion thereof not contributed by such Non-Contributing Member is referred  to herein as the “Non-Contributing Member Unfunded Amount”.  In the event a Non- Contributing Member Unfunded Amount exists and the other Member (the “Contributing  Member”) has funded its entire share of the Capital Contributions specified in a Capital Call based  on its Percentage Interest, the Contributing Member shall notify the Non-Contributing Member in  writing of its failure to timely contribute Mandatory Capital or Discretionary Capital and shall  have the remedies set forth below in this Section 3.3.  In addition, if the Non-Contributing Member  has failed to fund Mandatory Capital, the Non-Contributing Member’s Board Representative(s)  shall not thereafter have approval or voting rights with respect to the Approved Project intended  to be benefited by such Mandatory Capital (other than with respect to matters constituting  Fundamental Decisions).  3.3.1 Return of Capital Contributions.  The Contributing Member may elect  for the Company to return all Capital Contributions funded by the Members in respect of  such Capital Call, in which case, prior to making a distribution of Distributable Cash, the  Company shall (A) immediately return the Contributing Member’s applicable Capital  Contributions to the Contributing Member with a return computed thereon at the  Applicable Rate, and (B) return the Non-Contributing Member’s Capital Contributions to  the Non-Contributing Member without a return computed thereon.  

 

099999\14127737v20     22       3.3.2 Return of Excess Capital Contributions.  The Contributing Member may  elect for the Company to return to the Contributing Member all Capital Contributions made  by the Contributing Member in respect of the Contributing Member Excess Capital Share;  in which case, prior to making a distribution of Distributable Cash, the Company shall  immediately return such Capital Contributions to the Contributing Member with a return  computed thereon at the Applicable Rate.  3.3.3 Member Loan.  A. The Contributing Member may advance to the Company on behalf  of the Non-Contributing Member all or a portion of the Non-Contributing Member  Unfunded Amount as a loan to the Non-Contributing Member (each such loan, a  “Member Loan”); in which case, the Contributing Member shall be deemed to  have made a Member Loan to the Non-Contributing Member and the Non- Contributing Member shall be deemed to have made a Capital Contribution, in each  case, in an amount equal to the Member Loan.  If the Contributing Member elects  to fund a portion (but not all) of the Non-Contributing Member Unfunded Amount,  then (i) each of (1) the Contributing Member Corresponding Funded Amount,  (2) the Non-Contributing Member Funded Amount, and (3) Contributing Member  Excess Capital Share shall each be recalculated, in that order, after accounting for  the deemed Capital Contribution made by the Non-Contributing Member by reason  of the Contributing Member funding the Member Loan, and (ii) the Company shall  immediately return to the Contributing Member all Capital Contributions made by  the Contributing Member in respect of the Contributing Member Excess Capital  Share with a return computed thereon at the Applicable Rate.  B. To the fullest extent permitted by law, the Member Loan shall bear  interest at a rate equal to the Applicable Rate.  Each Member Loan shall be  immediately due and payable upon the Maturity Date.  The Non-Contributing  Members shall be personally liable for such Member Loan, and if requested by the  Contributing Member, shall execute a promissory note to the Contributing Member  evidencing such obligation (provided that the absence of such promissory note shall  not invalidate or relieve the Non-Contributing Member of its obligations described  herein).  No distributions shall be distributed to the Non-Contributing Member  while any Member Loan is outstanding (even if the Maturity Date has not then  elapsed).  All distributions which would otherwise be distributed to the Non- Contributing Member shall be paid instead to the Contributing Member (even if the  Maturity Date has not then elapsed) until the Member Loan (and all interest  thereon) has been paid in full.  Any such distributions shall be deemed to have been  distributed to the Non-Contributing Member and then paid over by the Non- Contributing Member to the Contributing Member in payment of such Member  Loan (and all interest thereon).  All payments shall be applied first to interest  accruing on all unpaid Member Loans (in reverse chronological order so that the  most recently accrued interest is paid first) and then to the unpaid principal balance  owing in respect of all Member Loans.  The making of a Member Loan shall not  excuse non-performance or default.  

 

099999\14127737v20     23       C. For avoidance of doubt, amounts treated as Member Loans shall not  constitute a Capital Contribution on the part of the Contributing Member, and  payments in respect of Member Loans pursuant to this Section 3.3.3 do not  constitute distributions to the Contributing Member under Article IV.  D. Each Member Loan shall be secured by a lien upon the membership  interest of the Non-Contributing Member (and the parties intend hereby to create a  security interest), which lien will automatically attach to such membership interest  without the necessity of further action.  Upon request made by the Contributing  Member, the Non-Contributing Member shall execute and deliver any financing  statement in favor of the Contributing Member to perfect such lien and, in  connection therewith, the Non-Contributing Member hereby authorizes the filing  of Uniform Commercial Code financing statements in favor of the Contributing  Member to evidence the foregoing lien.  The lien held by the Contributing Member  upon the Membership Interest of the Non-Contributing Member in connection with  such Member Loan (i) shall constitute a lien solely upon the economic interest of  the Non-Contributing Member, (ii) shall not entitle the holder thereof to foreclose  upon the Non-Contributing Member’s membership interest, and (iii) shall not  entitle the Contributing Member to exercise any rights or powers of Non- Contributing or to exercise or succeed to any voting rights of the Non-Contributing  Member.  Section 3.4 Company Loans.  No loan to the Company or a Subsidiary Entity shall be  made by a Member or its Affiliate and no Member or its Affiliate shall purchase a Loan (or an  interest therein) obtained by the Company or a Subsidiary Entity, in each case, without prior  written approval from the Board.  Section 3.5 Financing.  3.5.1 Generally.  The Members anticipate that the Company or a Subsidiary  Entity will obtain Loans to finance Project Costs relating to an Approved Project.  3.5.2 Financing Fee.  A Member that sourced a Loan shall be paid a Financing  Fee provided that, prior to seeking the Board’s approval of such Loan, such Member has  identified the basis for and the amount of such Financing Fee.  A Member entitled to the  Financing Fee will be paid the Financing Fee when the proceeds from the Loan are  disbursed by Lender; except that, in connection with the first Investor Sourced Loan, the  Company shall make a one-time advance to Investor equal to [**].  After the Required  Loan Disbursements have been disbursed by Lender to the Company, the balance of the  Financing Fees, if any, payable to Investor with respect to subsequent disbursements under  Investor Sourced Loans shall be payable only when such subsequent incremental additional  proceeds are actually disbursed under the Investor Sourced Loans to the Company.  For  clarity, Investor shall only be entitled to one Financing Fee advance with respect to the  Investor Sourced Loans.   3.5.3 Recourse; Guaranties; Backstop.  Unless approved by the Board, each  Loan shall be non-recourse other than completion guaranties, a guaranty of non-recourse  

 

099999\14127737v20     24       “bad boy” carve outs and environmental indemnities.  If a Lender requires guaranties or  indemnities (collectively, “Loan Guaranties”) from a credit-worthy affiliate of the  borrower under the Loan Documents (each, a “Loan Guarantor”), Manager shall request  that such Lender accept the Company as the Loan Guarantor.  If such Lender requires  additional Loan Guarantors and such requirement has been approved by the Board, each  Member shall provide a credit-worthy affiliate of such Member to act as a Loan Guarantor  and provide Loan Guaranties; in which case, (A) Manager shall request that the liability of  each Loan Guarantor be several based on the Percentage Interest of the Member affiliated  with such Loan Guarantor, and (B) the Company, the Members, TM Guarantor and  Investor Guarantor shall enter into a backstop agreement in the form of Exhibit E (the  “Backstop Agreement”).  Each Member shall comply with the loan documents governing  a Loan and shall cause each Loan Guarantor affiliated with such Member to comply with  the terms of the Loan Guaranties executed by such Loan Guarantor.  Section 3.6 Contributed Property.  The Members may elect to permit one or more  Members to contribute Contributed Property to the Company or a Subsidiary Entity.  If a Member  contributes Contributed Property to the Company, then (A) the Member contributing the  Contributed Property shall be deemed to have made a Capital Contribution to the Company in an  amount equal to the Total Contribution Value, (B) a Member contributing the Contributed  Property shall enter into (or cause its Affiliate that holds title to the Contributed Property to enter  into) a contribution agreement with the Company or a Subsidiary Entity substantially in the same  form as attached hereto as Exhibit L (a “Contribution Agreement”) and such Member shall  perform (or cause its Affiliate to perform) the obligations of the transferor under the Contribution  Agreement, (C) the Member not contributing the Contributed Property shall make a Capital  Contribution in an amount equal to the True Up Amount which shall be deemed a Capital  Contribution and shall cooperate to cause the Company or a Subsidiary Entity to perform its  obligations under the Contribution Agreement, and (D) the Special Distribution Amount (less the  amounts, if any, specified in Section 4(d) of the Contribution Agreement) shall be paid to the  Member contributing the Contributed Property in accordance with the Contribution Agreement  and Section 4.7.  Notwithstanding anything herein to the contrary, with respect to each  Contribution Agreement, the Member not contributing the Contributed Property shall retain all  decision-making power under this Agreement to pursue claims and take all action, grant waivers  and consent under such Contribution Agreement.  ARTICLE IV  DISTRIBUTIONS  Section 4.1 Tranche I Distributions.  Subject to the terms contained herein (including  Sections 2.5.4C, 3.3 and 4.6), each distribution of Distributable Cash from Tranche I shall be made  in the following order of priority (the “Tranche I Distribution Waterfall”):  4.1.1 First Tier.  To the Members pro rata in proportion to each Member’s  Percentage Interest until Investor has received distributions from Tranche I to generate an  Investor IRR of [**]% with respect to the Tranche I Capital Contributions.  

 

099999\14127737v20     25       4.1.2 Second Tier.  [**]% to Investor and [**]% to Builder, until Investor has  received distributions from Tranche I to generate an Investor IRR of [**]% with respect to  the Tranche I Capital Contributions.  4.1.3 Third Tier.  [**]% Investor and [**]% to Builder, until Investor has  received distributions from Tranche I to generate an Investor IRR of [**]% with respect to  the Tranche I Capital Contributions.  4.1.4 Balance.  [**]% Investor and [**]% to Builder.    Amounts owed by a Member for Member Loans or other obligations or liabilities arising under  this Agreement (in each case, even if such Member Loans or other obligations or liabilities relate  to Tranche II) shall be deducted from Distributable Cash that would have otherwise been  distributable to such Member in respect of Tranche I; in which case, the amount deducted shall be  deemed to have been distributed to such Member and then paid by such Member to the Person  entitled thereto.  Section 4.2 Tranche II Distributions.  Subject to the terms contained herein (including  Sections 2.5.4C, 3.3 and 4.6), each distribution of Distributable Cash from Tranche II shall be  made in the following order of priority (the “Tranche II Distribution Waterfall”; the Tranche I  Distribution Waterfall and the Tranche II Distribution Waterfall are sometimes referred to herein  individually as a “Tranche Distribution Waterfall” and collectively as the “Tranche  Distribution Waterfalls”):  4.2.1 First Tier.  To the Members pro rata in proportion to each Member’s  Percentage Interest until Investor has received distributions from Tranche II to generate an  Investor IRR of [**]% with respect to the Tranche II Capital Contributions.  4.2.2 Second Tier.  [**]% to Investor and [**]% to Builder, until Investor has  received distributions from Tranche II to generate an Investor IRR of [**]% with respect  to the Tranche II Capital Contributions.  4.2.3 Third Tier.  [**]% Investor and [**]% to Builder, until Investor has  received distributions from Tranche II to generate an Investor IRR of [**]% with respect  to the Tranche II Capital Contributions.  4.2.4 Balance.  [**]% Investor and [**]% to Builder.    Amounts owed by a Member for Member Loans or other obligations or liabilities arising under  this Agreement (in each case, even if such Member Loans or other obligations or liabilities relate  to Tranche I) shall be deducted from Distributable Cash that would have otherwise been  distributable to such Member in respect of Tranche II; in which case, the amount deducted shall  be deemed to have been distributed to such Member and then paid by such Member to the Person  entitled thereto.  Section 4.3 Timing of Distributions.  Distributions of Distributable Cash shall be  distributed to the Members at such times as determined by the Board.  To the extent permitted by  

 

099999\14127737v20     26       the governing documents of any Loan, the Members anticipate that Distributable Cash will be  distributed on a monthly basis depending on the Company’s capital requirements and availability  of Loan proceeds.  Section 4.4 Distributions of Capital.  Except as expressly provided in this Agreement,  no Member shall be entitled to withdraw capital or to receive distributions of or against capital  without the prior written approval of, and upon the terms and conditions agreed upon by, the Board.   Each Member shall look solely to the assets of the Company for return of such Member’s Capital  Contributions.  Nothing herein contained shall relieve any Member of such Member’s obligation  to pay any liability or indebtedness owing the Company or the other Member by such Member,  and the Company and the other Member shall be entitled at all times to enforce such obligations  of such Member.  Section 4.5 Limitation on Distributions.  Notwithstanding any other provision of this  Agreement, neither the Company nor Manager acting on behalf of the Company shall make a  distribution to a Member on account of its interest in the Company if such distribution would  violate the Act or other applicable law.  Section 4.6 Reimbursement.  Manager shall be reimbursed for all Budgeted Costs and  Unbudgeted Permitted Costs incurred by Manager or its Affiliates on behalf of or for the benefit  of the Company or a Subsidiary Entity.  In addition, when the Company or a Subsidiary Entity  acquires the first Approved Project, each Member shall be reimbursed legal fees incurred by such  Member to negotiate this Agreement, the Construction Management Agreement and the other  documents relating to the Company.  Section 4.7 Special Distribution.  Concurrently with the closing under a Contribution  Agreement (and, without limitation on the foregoing, prior to making any further distributions of  Distributable Cash under Section 4.1 or 4.2), the Company shall make all special distributions to  each Member that made a Capital Contribution of Contributed Property pursuant to a Contribution  Agreement, which special distribution shall equal the corresponding Special Distribution Amount  for such Contributed Property.  ARTICLE V  POWERS, RIGHTS AND DUTIES OF MEMBERS.  Section 5.1 Appointment and Authority of Manager.  Builder shall serve as Manager  unless Builder is removed as Manager under Section 9.2.  Management of the Company shall be  vested in Manager, and Manager shall oversee the day-to-day direction and oversight of the  Company.  Manager shall devote such time and attention to affairs of the Company as may be  reasonably necessary for the proper management and supervision of the business of the Company.   Subject to obtaining the Board’s approval with respect to Major Decisions, Manager shall have  the power and authority to manage and carry out the business, property and affairs of the Company,  including, the power to sign contracts and obligations on behalf of the Company.  No other  Member or Person shall have any right or authority to act for or bind the Company except as  expressly permitted by this Agreement or as required by applicable law.  Without limiting the  foregoing, Manager shall have the power to do any of the following at the Company’s or a  

 

099999\14127737v20     27       Subsidiary Entity’s sole cost and expense subject to obtaining the Board’s approval with respect  to Major Decisions and acting in a manner consistent with this Agreement:  5.1.1 General Management. To perform such administrative, supervisory,  regulatory and managerial functions as Manager determines in connection with the  management of the Company, the Subsidiary Entities and their businesses, properties,  prospective properties and other interests and to execute any and all other instruments,  contracts and agreements to carry out the intention and purposes hereof.  5.1.2 Projects.  To identify Proposed Projects, submit Proposal Packages,  recommend entitlements, negotiate Term Sheets (taking into consideration comments  made by the Members when negotiating Term Sheets), access agreements and Purchase  Agreements (taking into consideration comments made by the Members when negotiating  Purchase Agreements), hire consultants and oversee: (A) due diligence activities,  (B) development activities; (C) sourcing, underwriting and negotiating the acquisition and  disposition of each Approved For-Rent Project; (D) the Applicable Property Manager’s  activities in connection with the lease and maintenance of the Proposed Project; (E) the  horizontal and vertical construction of each Approved For-Rent Project; (F) debt facilities  obtained by the Company or a Subsidiary Entity; and (G) enforcement of any warranties  associated with the Apartments Units.  5.1.3 Borrowing. To cause the Company or a Subsidiary Entity to borrow  money and to execute and deliver any and all documents necessary, incidental or related  thereto.  5.1.4 Payments and Collections. To cause to be paid all amounts due and  payable by the Company or a Subsidiary Entity to any Person and to collect all amounts  due by any Person to the Company or a Subsidiary Entity.  5.1.5 Attorneys, Accountants and Consultants. To engage or terminate on  behalf of the Company or a Subsidiary Entity such agents, managers, accountants,  attorneys, consultants and other Persons necessary or appropriate to carry out the business  and affairs of the Company and the Subsidiary Entities, and to pay such fees, expenses or  other compensation to such Persons as Manager determines.  5.1.6 Dispute Resolution.  To pay, extend, renew, modify, adjust, submit to  arbitration, prosecute, defend or compromise, upon such terms and upon such evidence as  Manager determines, any obligation, suit, liability, cause of action or claim, including  taxes, either in favor of or against the Company or a Subsidiary Entity.  5.1.7 Organizational Expenses.  To pay any and all fees and to make any and  all expenditures which Manager determines in connection with the Company’s and each  Subsidiary Entity’s business, including the organization of the Company or a Subsidiary  Entity, the management the Company’s and each Subsidiary Entity’s business affairs and  the enforcement of the Company’s and each Subsidiary Entity’s rights and remedies.  

 

099999\14127737v20     28       5.1.8 Invested Capital. To invest the Company’s and each Subsidiary Entity’s  business funds to the extent not then required for the Company’s and a Subsidiary Entity’s  primary business operations, in securities, including money market accounts, certificates  of deposit, treasury bonds or stocks, in each case, as Manager reasonably determines and  that can be readily sold without volume limitation on a stock exchange or in an over-the- counter market.  5.1.9 Disposition and Encumbrance. To sell, mortgage, option, convey, grant,  encumber or otherwise deal with real or personal property owned by or subject to a  purchase contract in favor of the Company or a Subsidiary Entity.  5.1.10 Executing Agreements. To enter into, execute, acknowledge, terminate,  enforce and deliver on behalf of the Company (in its individual capacity or as managing  member of a Subsidiary Entity) any and all contracts, agreements, deed, easements,  options, purchase and sale agreements, loan documents or other instruments to carry on the  Company’s and each Subsidiary Entity’s business.  5.1.11 Delegate.  To delegate in writing its authority, rights or obligations,  whether arising under this Agreement, under the Act or otherwise, to any one or more  agents or other duly authorized representatives.  5.1.12 Taxes. To cause to be paid or contested taxes, charges and assessments  levied, assessed or imposed upon any of the Company’s and each Subsidiary Entity’s  assets.  5.1.13 Insurance. To acquire and contract for insurance as Manager determines,  provided such insurance shall meet the minimum requirements in Exhibit K.  5.1.14 Reserves. To establish and maintain Reserves for such purposes and in  such amounts as Manager determines from time to time provided that the Reserves exceed  the thresholds designated by the Board (but not less than the thresholds required by  applicable law).  5.1.15 Bank Accounts. To establish and maintain one or more accounts for the  Company and each Subsidiary Entity at such bank or banks as Manager may from time to  time designate.  5.1.16 Distributions. To make distributions periodically to the Members in  accordance with the provisions of this Agreement.  5.1.17 In Furtherance.  To engage in any kind of activity and to perform and  carry out contracts of any kind necessary to, or in connection with or convenient or  incidental to, the accomplishment of the Company’s and each Subsidiary Entity’s purposes,  so long as such activities and contracts may be lawfully carried on or performed by a  limited liability company under applicable law and are consistent with this Agreement.  

 

099999\14127737v20     29       Section 5.2 Major Decisions.  Each of the matters described in Exhibit F (collectively,  the “Major Decisions”) shall require the prior written approval of the Board.   All approvals given  by the Board (including those approvals expressly required from the Board under this Agreement)  need to be voted on and approved by one Board Representative from Builder and one Board  Representative from Investor.  Manager or a Member may from time to time propose Major  Decisions (or other matters that expressly require the Board’s approval under this Agreement) for  the consideration of the Board by notifying the Board Representative in writing (which  notifications may be accomplished by email) (such notices, “Approval Request”).   Section 5.3 Meetings; Approval.  5.3.1 Monthly Meetings.  During the period when the Company or a  Subsidiary Entity has one or more Approved Projects, Manager shall provide a written  report to the Board Representatives based on a template approved by the Members acting  in their reasonable discretion within 90 days after the Effective Date, which report shall  contain the information provided in Exhibit G-1, and Manager shall schedule a monthly  meeting with the Board Representatives to discuss Approved Projects and the pipeline of  Proposed Projects and Proposed Competitive Projects (in each case, to the extent  applicable).  The Property Manager will be required to deliver those monthly reports  identified in the Property Management Agreement.  5.3.2 Meetings.  With respect to Major Decisions, Manager or a Member shall  be permitted to call a meeting of the Board upon three business day prior written notice  concurrently with the issuance of an Approval Request.  The meetings of the Board shall  be held by telephone or video conference unless one Board Representative from Builder  and one Board Representative from Investor mutually agree that a “face-to-face” meeting  is required; in which case, the location and time of such “face-to-face” meeting shall be  determined by the mutual agreement of one Board Representative from each of Builder  and Investor.  Each Board Representative shall notify Manager in writing (which  notifications may be accomplished by email) if such Board Representative approves or  disapproves of a Major Decision within three business days after the Approval Request.   Each Board Representative shall be entitled to vote on each Major Decision and make such  determination to approve or disapprove such matter in its discretion (except as otherwise  provided herein).  A Board Representative may be accompanied at meetings by such non- voting advisors, attorneys and consultants as such Board Representative may deem  necessary or appropriate to advise him or her with respect to matters coming before the  Board.  5.3.3 Approval.  A Major Decision shall be deemed “approved by the Board”  or to have obtained the “approval of the Board” if approved by one Board Representative  from Builder and one Board Representative from Investor.  If a Board Representative does  not notify Manager within such applicable time period, then such Board Representative  shall be deemed to have disapproved the Approval Request (i.e., to maintain the status  quo).  If the Board Representatives disagree as to a Major Decision, Manager may request  that the Board Representatives meet in good faith for a period of 20 calendar days to resolve  such disagreement.  If the Board Representatives refuse to engage in good faith  negotiations or are unable to resolve such disagreement within such 20-day period, a  

 

099999\14127737v20     30       material impasse (“Material Impasse”) shall be deemed to exist with respect to the  Approved Project which is the subject of the Approval Request (such Approved Project,  the “Dispute Project”); in which case, a Member may trigger the project disagreement  remedies in Article XI if 18 months have elapsed since the Dispute Project was acquired  by the Company or a Subsidiary Entity (the “Project Disagreement Remedy”).  5.3.4 Resolution; Authorization.  With respect to a Major Decision that is to  be voted on, consented to or approved by the Board, Manager may (A) take such action if  approved at a meeting of the Board by one Board Representative from Builder and one  Board Representative from Investor, or (B) take such action without a meeting if consented  to, in writing or by electronic transmission, by one Board Representative from Builder and  one Board Representative from Investor.  5.3.5 Reliance.  Any Person may rely on a certificate addressed to that Person  and signed by Manager relating to any one or more of the following: (A) identifying the  Members hereunder; (B) as to the existence or non-existence of any fact which constitutes  a condition precedent to acts by the Members or in any other manner germane to the affairs  of the Company; (C) concerning the authority to execute, acknowledge, verify or deliver  any instrument or document on behalf of the Company (in its individual capacity or as  managing member of a Subsidiary Entity); (D) as to the authenticity of any copy of the  Certificate of Formation, this Agreement, amendments thereto or restatements thereof, and  any other document relating to the conduct of the affairs of the Company; or (E) as to any  act or failure to act by the Company or a Subsidiary Entity or as to any other matter  whatsoever involving the Company, any Member or any Subsidiary Entity.  Section 5.4 Approved Package; Approved Budget.  Within 30 days prior to the end of  each calendar year, Manager shall prepare and submit for the Board’s approval (not to be  unreasonably withheld) updates, amendments, supplements and modifications to the Approved  Budget for each Approved Project.  To the extent that material changes have occurred with respect  to an Approved Project during the preceding calendar year that requires updates to the Approved  Package, Manager shall prepare and submit for the Board’s approval (not to be unreasonably  withheld) amendments, supplements and modifications to the Approved Package for such  Approved Project within 30 days prior to the end of the then calendar year.  Until Manager obtains  the Board’s approval, Manager shall continue to operate such Approved Project in a manner  consistent with the then Approved Package and the then Approved Budget to the extent reasonably  feasible.  Section 5.5 Construction Manager.  5.5.1 CM Fee. An Affiliate of TMHC (each Affiliate, a “Construction  Manager”) shall serve as construction manager for an Approved Project pursuant to a  construction management agreement (each, a “Construction Management Agreement”)  in the form of Exhibit H between or among a Construction Manager, on the one hand, and  one or more of the Company or a Subsidiary Entity, on the other hand.  Each Construction  Manager shall be paid (A) a pre-development fee (a “Pre-Development Fee”) under each  Construction Management Agreement equal to [**]% of the Pre-Development Fee Base,  which Pre-Development Fee shall be paid in equal monthly installments over the portion  

 

099999\14127737v20     31       of the anticipated Project Schedule relating to the construction of the Horizontal  Improvements, and (B) a construction management fee (a “CM Fee”) under each  Construction Management Agreement equal to [**]% of the CM Fee Base, except that,  notwithstanding the foregoing, the CM Fee for an Approved Project shall (i) not be less  than $[**] times the total number of Apartment Units contained within such Approved  Project, and (ii) not be greater than $[**] times the total number of Apartment Units  contained within such Approved Project.  The CM Fee shall be paid in equal monthly  installments over the portion of the anticipated Project Schedule relating to the construction  of the Project Improvements (excluding the period of time, if any, when only Horizontal  Improvements and the Off-Site Improvements are being constructed).  A Construction  Manager may request an increase to one or more of the Pre-Development or CM Fee for  an Approved Project to cover additional resources to manage such Approved Project; in  which case, the Company (on behalf of itself or the applicable Subsidiary Entity) shall take  such request under consideration and submit such matter to the Board provided that the  Board’s approval shall not be unreasonably withheld or delayed.  5.5.2 Construction Manager Overhead. A Construction Manager will not be  reimbursed for the salaries, benefits and general overhead expense attributable to such  Approved Project; provided however, that such Construction Manager shall be reimbursed  for “on-site” project management costs (such as, without limitation, an “on-site” project  supervisor and day laborers) but only to the extent such Project Costs are reflected in the  Approved Budget.  5.5.3 Termination of Construction Management Agreement.  Each  Construction Management Agreement shall be terminable by the Members not Affiliated  with the applicable Construction Manager (acting on behalf of the Company or a  Subsidiary Entity) if the applicable Construction Manager materially breaches such  Construction Management Agreement (and fails to cure such material breach within the  Cure Period) or the applicable Construction Manager fails to achieve the Material  Milestones; in which case, the Company or the applicable Subsidiary Entity shall engage  a third-party Person approved by the Board (not to be unreasonably withheld or delayed by  the Board) to replace such Construction Manager on terms reasonably satisfactory to the  Board.  For sake of clarity and without limiting the rights under this Section 5.5.3, failure  to achieve the Material Milestones shall not be deemed a breach or default on the part of  Builder or a Construction Manager.  5.5.4 Construction Manager Personnel.  Under each Construction  Management Agreement, if Construction Manager is seeking reimbursement for “on-site”  project management costs relating to an “on-site” project supervisor under Section 5.5.2,  the Board’s approval (not to be unreasonably withheld or delayed) shall be required with  respect to the identity of such “on-site” project supervisor.  5.5.5 Cost Overruns.  The Company shall be responsible for and shall pay all  Project Costs other than Project Costs that constitute CM Responsible Cost Overruns.  Each  Construction Management Agreement will provide that the Construction Manager shall be  responsible for and shall pay the CM Responsible Cost Overruns with respect to the  applicable Approved Project.  

 

099999\14127737v20     32       Section 5.6 Property Management.  Manager shall cause the Company to cause each  Subsidiary Entity that owns an Approved For-Rent Development Project to engage a property  manager (the “Applicable Property Manager”) pursuant to a property management agreement  approved by the Members (the “Applicable Property Management Agreement”).  Initially,  Greystar Worldwide LLC or its Affiliate shall serve as the Applicable Property Manager for the  Approved For-Rent Development Projects acquired or contributed on or around the Effective Date.  Section 5.7 CTC Communities.  One or more of the Approved Projects may use the  brands owned or licensed by CTC or its Affiliates.  In such event, the Company or a Subsidiary  Entity shall be required to pay certain fees and other amounts under one or more agreements  between or among TMHC, CTC or their Affiliates (collectively, the “CTC Agreements”).  The  CTC Agreements may be terminated by TMHC or amended from time to time by TMHC or their  Affiliates without having to obtain the approval of the Company, a Subsidiary or the Members,  except that amendments to the CTC Agreements after the Effective Date that materially increase  the fees payable or materially increase the liability of the Company or a Subsidiary shall require  the approval of the Board.  Builder agrees to keep Investor apprised of all material discussions and  negotiations with respect to the CTC Agreements on a timely basis.  Section 5.8 Bulk Discounts.  Investor acknowledges that TMHC and its Affiliates may  earn refunds, rebates, discounts or credits (collectively, “Rebates”) for purchasing supplies,  fixtures, equipment, merchandise, materials and services from certain suppliers or providers based  on the volume purchased by TMHC and its Affiliates across various businesses.  If TMHC or its  Affiliate allocates Rebates as determined in their sole discretion to Builder, Builder shall provide  those Rebates to the Company.  Notwithstanding anything to the contrary contained herein and to  the fullest extent permitted by applicable law, Investor and the Company agree and acknowledge  that (A) neither TMHC nor its Affiliates are required to allocate Rebates to Builder, (B) neither  Investor nor the Company are entitled to (and both Investor and the Company waive any right at  law or in equity to) review, obtain or audit any information or agreements relating to the Rebates,  (C) all information and agreements relating to the Rebates are highly confidential and proprietary  and none of TMHC or its Affiliates is permitted to share information or agreements relating to the  Rebates, and (D) with respect to the manner in which the Rebates are allocated by TMHC and its  Affiliates, Builder shall not be deemed to have breached or violated (and both Investor and the  Company waive any right at law or in equity that Builder breached or violated) any duties relating  to (i) the taking or using for its own benefit Company property or Company opportunities,  (ii) misappropriation or misapplication of Company property, (iii) failing to properly account for  Company property, or (iv) Claims/Losses based on similar legal theories.  ARTICLE VI  BOOKS & RECORDS; ACCOUNTS; REPORTING; INSURANCE  Section 6.1 Books and Records.  At the Company’s cost and expense, Manager shall  coordinate the keeping of the Company’s records and books to reflect transactions and other  matters relating to the Company’s business as are usually entered into such records and books of  account kept for businesses of a like character.  Manager shall select the Company’s  accountant (the “Accountant”).  Unless otherwise approved by Builder, the Accountant shall be  the same accountant used by TMHC.  Each Member shall have the right to inspect the Company’s  books and records at the Company’s principal place of business during reasonable business hours  

 

099999\14127737v20     33       and upon reasonable advance notice for purposes reasonably related to its status as a Member.  All  reports and taxes shall be prepared at the Company’s cost and expense.  Manager shall not be in  breach or subject to liability due to delays in delivering reports, filings or other information if such  delays are caused by the Accountant or other third-party Persons engaged by or under contract  with the Company or a Subsidiary Entity.  Section 6.2 Reports.  Within 30 days after the end of each calendar quarter, Manager  shall provide the Members with quarterly reports based on a template approved by the Members  acting in their reasonable discretion within 90 days after the Effective Date, which report shall  contain the information provided in Exhibit G-2, for each Approved Project.  Manager shall  provide such other reports as may be reasonably requested by a Member.  On or before the 15th day  of each calendar month, Manager shall provide (A) an unaudited statement setting forth and  describing in reasonable detail the receipts and expenditures of the Company during the preceding  month and comparing the results of the Company and each Approved Project for such month and  for the year-to-date to the relevant Approved Budget together with a narrative summary of property  operations for said preceding calendar month and (B) a statement of Distributable Cash.  Manager  shall provide such other reports as may be reasonably requested by a Member.  The Company shall  pay all costs for underwriting, servicing and reporting services to the extent provided in the  Approved Budget, including (if applicable) fees payable to Trimont Real Estate Advisors, LLC or  its Affiliate.  Section 6.3 Tax Reporting.  By February 28th of each Taxable Year, Manager shall  direct the Accountant to provide each Member with a copy of an estimated IRS form commonly  referred to as a “Schedule K-1” plus a copy of its state equivalents (if applicable).  By May 31st of  each Taxable Year, Manager shall direct the Accountant to provide each Member with a final copy  of that certain IRS form commonly referred to as a “Schedule K-1” plus a copy of its state  equivalents (if applicable) and all other information necessary for preparation of such Member’s  federal, state and location income tax returns for the previous Taxable Year.  Manager shall direct  the Accountant to deliver to Investor a copy of the Company’s federal and state income tax returns  no later than 20 days prior to filing such tax returns for the Members’ review and comment, which  comments shall be considered by the Accountant acting reasonably when preparing the final tax  returns.  Section 6.4 Auditing.  Manager may require that the Company’s books and records be  audited annually at the Company’s cost and expense.  Unless otherwise approved by Builder, the  Company’s auditor shall be the same auditor engaged by TMHC.  Section 6.5 Reserves.  6.5.1 Generally.  Manager shall establish and maintain Reserves in the  Company’s Accounts, which Reserves shall be funded from the Company’s cash flow and  used for Company expenses.  Reserves established by Manager shall include (A) a Reserve  for Warranty Expenses (the “Unknown Claims Warranty Reserves”) arising from claims  or disputes asserted by third-party Persons not affiliated with the Members that were not  known, alleged or pending at the time of dissolution and liquidation (“Unknown Claims”),  (B) a Reserve for known, pending or existing Warranty Expenses (the “Existing Claims  Warranty Reserves”) and (C) such other Reserves that are advisable in the exercise of  

 

099999\14127737v20     34       good governance and prudent practices or necessary to comply with the Act (the  “Customary Reserves”) .  The Existing Claims Warranty Reserve and the Customary  Reserves shall be established and expended by Manager from time to time in accordance  with this Agreement.  For avoidance of doubt, the provisions in Section 6.5.2 below pertain  only to the Unknown Claims Warranty Reserve that will be established prior to the  Company’s dissolution and liquidation.  In the event that (i) Investor forfeits its portion of  the Unknown Claims Warranty Reserves, and (ii) the Company has dissolved and  liquidated, Manager shall not use funds (other than the Unknown Claims Warranty  Reserves) to pay Warranty Expenses relating to Unknown Claims.  6.5.2 Unknown Claims.  A. Unless Builder (acting on behalf of each Construction Manager)  approves a lesser Unknown Claims Warranty Reserve, the Unknown Claims  Warranty Reserve shall be not less than (i) [**], or (ii) [**] (the “Warranty  Threshold Amount”), whichever is greater.  B. The Unknown Claims Warranty Reserve shall be funded with an  amount equal to the Warranty Threshold Amount from the proceeds derived from  the sale of an Approved Project if, after the sale of such Approved Project, Builder  determines, in its reasonable discretion, that the proceeds from the sale of the  remaining unsold Approved Projects may not be sufficient to fund the Unknown  Claims Warranty Reserve with an amount equal to the Warranty Threshold Amount  upon the sale of such remaining Approved Projects.  After funding the Unknown  Claims Warranty Reserve, the Company shall maintain the Unknown Claims  Warranty Reserves until the expiration of the statute of repose for all Approved  Projects; upon the expiration of the statute of repose for all Approved Projects,  except as provided in clause (iii) of Section 6.5.2F below, the unused portion of the  Unknown Claims Warranty Reserves shall be distributed to the Members in  accordance with Article XII (the “Warranty Distribution Date”).  C. When the Company dissolves, Investor may request that the  Unknown Claims Warranty Reserve be reduced (or eliminated) and that the excess  proceeds in (or the entirety of) the Unknown Claims Warranty Reserve be treated  as Available Cash and used or distributed by the Company to the Members as  provided elsewhere in this Agreement (provided that the distribution of such  Available Cash shall be a Major Decision determined by the Board at the Board’s  discretion).  If Builder does not approve Investor’s request to reduce (or eliminate)  the Unknown Claims Warranty Reserve when the Company dissolves, Investor  may request (a “Request for Analysis”) by written notice to Builder that the  Company obtain an actuarial analysis with respect to the Company’s contingent or  unknown liabilities arising out of the construction of the Approved Projects (an  “Actuarial Analysis”).  D. If Investor delivers a Request for Analysis, the Members shall  appoint by mutual agreement an actuary having at least 10 years of risk  management experience in connection with similar real property in the city or  

 

099999\14127737v20     35       county in which such real property is located.  The selected actuary shall be a  member of the American Academy of Actuaries, knowledgeable and experienced  in the warranty and construction defect exposures of residential construction used  solely for rental purposes.  Utilizing known methods of analysis (including a review  of (or receiving legal advice as to) the sale contract entered into for the sale of the  applicable Projects and the provisions therein related to the limitation of seller’s  liability for a breach of its representations, warranties or covenants and the related  survival period of the buyer thereunder to make such claims), the actuary shall  establish an actuarial sound estimates of ultimate liabilities for unknown Warranty  Expenses and provide a recommendation regarding the amount of the Unknown  Claims Warranty Reserve and the scope of such analysis to be specifically  described by the Members.  If the Members are unable to agree upon an actuary  within 30 days after the Request for Analysis, then each Member shall have 30 days  from such date to select an actuary to prepare an Actuarial Analysis.  If a Member  fails to timely select an actuary, the actuary selected by the other Member shall  prepare the Actuarial Analysis.  If two actuaries are selected, the two actuaries shall  select a third actuary after completing their analyses, who shall select one of the  two analyses as the Actuarial Analysis.  Any inability to agree upon a third actuary  shall be resolved by an Arbitrator who has been appointed by either the Members  or, if the Members are unable to agree on an Arbitrator, the Delaware Court of  Chancery.  If the Actuarial Analysis recommends an Unknown Claims Warranty  Reserve in an amount less than the amount then held in the Unknown Claims  Warranty Reserve, such Unknown Claims Warranty Reserve shall be decreased to  match the recommended amount, and the amounts in the Unknown Claims  Warranty Reserve in excess of the recommended amount shall be treated as  Available Cash and used or distributed by the Company to the Members as provided  elsewhere in this Agreement (provided that the distribution of such Available Cash  shall be a Major Decision determined by the Board at the Board’s discretion).  For  clarity, if the Actuarial Analysis finds that an Unknown Claims Warranty Reserve  is no longer necessary, all amounts in the Unknown Claims Warranty Reserve shall  be treated as Available Cash and used or distributed by the Company to the  Members as provided elsewhere in this Agreement (provided that the distribution  of such Available Cash shall be a Major Decision determined by the Board at the  Board’s discretion).  Notwithstanding what the actuary recommends, (i) in no event  shall the Unknown Claims Warranty Reserve exceed the Warranty Threshold, and  (ii) Builder may from time to time direct that the Unknown Claims Warranty  Reserve be reduced (or eliminated), in which case, the excess proceeds in (or the  entirety of) the Warranty Reserve shall be treated as Available Cash and used or  distributed by the Company to the Members as provided elsewhere in this  Agreement (provided that the distribution of such Available Cash shall be a Major  Decision determined by the Board at the Board’s discretion).  E. The fees and costs related to the Actuarial Analysis shall be paid by  the Company.  

 

099999\14127737v20     36       F. Prior to the 30th day after the Members receive the results from the  Actuarial Analysis, Investor may again request that the Unknown Claims Warranty  Reserve be eliminated and that the entirety of the Unknown Claims Warranty  Reserve be treated as Available Cash and used or distributed by the Company to  the Members as provided elsewhere in this Agreement (provided that the  distribution of such Available Cash shall be a Major Decision determined by the  Board at the Board’s discretion).  If Builder does not approve Investor’s request to  eliminate the Unknown Claims Warranty Reserve when the Company dissolves and  liquidates, Investor may forfeit Investor’s right to the proceeds in the Unknown  Claims Warranty Reserve by notifying Manager in writing, in which case  (i) Builder and the Company shall indemnify, defend and hold harmless Investor  from and against Warranty Expenses arising out of Unknown Claims; and  (ii) notwithstanding anything herein to the contrary, Builder shall be entitled to all  proceeds held in the Unknown Claims Warranty Reserve and shall be entitled to  cause the Company to disburse such proceeds at such time as Builder elects.  G. Neither the existence of or use of the Warranty Reserve shall alter  or limit the indemnity obligations under this Agreement or the Construction  Management Agreement.  Section 6.6 Company Accounts; Loan Draws.  6.6.1 Accounts.  All funds of the Company and each Subsidiary Entity shall  be deposited by Manager into one or more federally-insured operating accounts (each, an  “Account”).  Each Account shall be maintained in the name of the Company or such  Subsidiary Entity, as applicable, with a banking institution selected by Manager.  Funds  within each Account shall be segregated from, and not commingled with, the accounts of  Manager, a Member or an Affiliate of either of them.  Funds within the Company’s  Accounts shall be segregated from each Subsidiary Entity’s Accounts, funds within each  Subsidiary Entity’s Accounts shall be segregated from the Company’s Accounts and the  other Subsidiary Entities’ Accounts.  6.6.2 Loan Draws.  If a Loan is obtained, Manager shall process disbursement  requests for Budgeted Costs and Unbudgeted Permitted Costs, in each case, to the extent  permitted under the Loan Documents and shall otherwise oversee the Company’s or the  applicable Subsidiary Entity’s compliance with the Loan Documents.  If the Loan  Documents have restrictions specific to a Member or its Affiliate (e.g., restrictions on  indirect transfers, financial covenants or acceleration upon bankruptcy), such Member shall  (and shall cause its Affiliate) to not violate such restrictions if a violation of such restriction  would materially and adversely impact the Company or a Subsidiary Entity.  Section 6.7 Insurance.  To the extent commercially available at commercially  reasonable rates, Manager at the Company’s cost and expense shall cause the Company and the  Subsidiary Entities to obtain the minimum insurance required under Exhibit K through brokers,  carriers, providers and other third parties selected by Manager.  If the minimum insurance required  under Exhibit K is not commercially available at commercially reasonable rates, Manager shall  

 

099999\14127737v20     37       request the insurance brokers to recommend alternative policies comparable to the minimum  insurance required under Exhibit K.  ARTICLE VII  COMPETITIVE ACTIVITIES; EXCULPATION; INDEMNIFICATION.  Section 7.1 Competitive Activities.  7.1.1 Other Opportunities.  Each Member recognizes that Manager, the other  Member and each of their Affiliates has an interest in investing in, developing,  constructing, operating, transferring, leasing and otherwise using real property and  interests therein for profit, and engaging in any and all activities related or incidental  thereto and that each will make other investments consistent with such interests.  None of  the Company, a Subsidiary Entity, a Member, a Manager or an Affiliate of any of them  shall have any right by virtue of this Agreement, or the relationship created hereby in or to  any other investments, ventures or activities in which a Member or its Affiliate is involved  or to the income or proceeds derived therefrom.  The pursuit of other investments, ventures  and activities by Manager, a Member or an Affiliate of any of them, even if directly or  indirectly competitive with the business of the Company or a Subsidiary Entity, is hereby  consented to by the other Member and shall not be deemed wrongful or improper.  Except  as provided in Section 2.1.1, none of Manager, a Member or an Affiliate of any of them  shall be obligated to present any investment opportunity to the Company or a Subsidiary  Entity, even if such opportunity is of a character which, if presented to the Company or a  Subsidiary Entity, could be taken by the Company or such Subsidiary Entity.  Manager,  each Member and each of their Affiliates shall have the right to take for its own account,  or to recommend to others, any such particular investment opportunity.  7.1.2 TMHC Marketing.  TMHC and its Affiliates shall have the exclusive  right to market “for sale” single-family residences to the tenants at the Approved Projects.   Without Builder’s approval, no other homebuilder shall be permitted to market “for sale”  single-family residences to tenants at the Approved Projects.  TMHC and its Affiliates may  (without any obligation to do so) display advertising materials at the Approved Projects,  distribute promotional materials to prospective and existing tenants at the Approved  Projects, offer incentives for prospective and existing tenants at the Approved Projects to  purchase single-family residences and conduct other activities to promote the sale of “for  sale” single-family residences.  None of the Company, a Subsidiary Entity or Investor shall  interfere with TMHC’s and its Affiliates’ efforts to market “for sale” single-family  residences to prospective and existing tenants at the Approved Projects.  Section 7.2 Liability of Members; Limitation on Duties.  7.2.1 Exculpation.  Subject to the provisions of any other agreement to which  the Members are parties, and except for the obligations to a Member or Members or the  Company imposed under such other agreement or as set forth in this Agreement, to the  fullest extent permitted by applicable law, no Member shall be liable, responsible or  accountable in damages or otherwise to the Company or the other Member for any action  taken by such Member or such Member’s failure to act if such Member acted in its business  

 

099999\14127737v20     38       judgment on behalf of the Company within the scope of the authority conferred on it by  this Agreement unless such action or omission constitutes Bad Conduct.  Unless otherwise  agreed upon in writing by the Members, to the fullest extent permitted by the Act:  (A) no  Member shall be liable for the debts, liabilities, contracts or any other obligations of the  Company or a Subsidiary Entity; (B) the Members shall be liable to make Capital  Contributions only to the extent required under this Agreement; and (C) without limitation  on the foregoing or Manager’s right to issue a Capital Call, any indemnification obligation  of the Company hereunder shall be limited to the assets of the Company.  Except as  expressly provided in this Agreement (including the rights of a Loan Guarantor, TM  Guarantor or Investor Guarantor rights under Section 7.4 and a Board Representative’s  rights under Section 7.5), nothing in this Agreement shall confer any rights or remedies  under or by reason of this Agreement on any Person other than the Members, and their  respective successors and assigns, nor shall anything in this Agreement relieve or discharge  the obligation or liability of any third-party Person to any party to this Agreement, nor shall  any provision of this Agreement give any third-party Person any right of subrogation or  action over or against any party to this Agreement.  For sake of clarity, each Loan  Guarantor, TM Guarantor, Investor Guarantor and each Board Representative shall be a  third-party beneficiary and entitled to enforce the indemnification provisions under  Section 7.4 or 7.5, respectively.  Without limitation on the foregoing, to the fullest extent  permitted by the Act, no third-party Person shall have any right to enforce any contribution  obligation on a Member.  7.2.2 Limitation on Duties.  No Member (acting in the capacity as a Manager,  a Member or a Person designating Board Representatives) shall owe a fiduciary or other  duty to any other Member, the Company or a Subsidiary Entity.  Duties imposed by law or  otherwise are waived to the fullest extent permitted by the Act.  To the extent that anything  set forth in this Article VII or any other provision of this Agreement restricts the duties and  liabilities of Manager or a Member otherwise existing at law or in equity, the Members  agree that the terms of this Article VII and the other provisions of this Agreement replace  such other duties and liabilities of Manager or such Person.  Unless another standard of  review or conduct is imposed hereunder (such as reasonableness or diligent efforts),  Manager and each Member shall be permitted to act in its sole and absolute discretion when  making a proposal, recommendation, determination, calculation, offer or election with  respect to any matters, when providing authorization to proceed in any manner, when  directing parties to omit from taking certain actions and when consenting to, approving or  disapproving any matters.  Such Person shall be entitled to consider only such interests and  factors as it desires, including its own self-interests, and shall, to the fullest extent permitted  by applicable law, have no duty or obligation to give any consideration to any interest of  or factors affecting the Company, a Subsidiary Entity or any other Member.  Neither  Manager nor a Member, in any way, guarantees a profit for the Members from the  operations of the Company or a Subsidiary Entity or from a Proposed Project or a Proposed  Competitive Project.  Neither Manager nor a Member shall be liable (A) for any act or  omission if the Board’s approval is required under Section 5.2 but not given after such  approval is requested, or (B) for the failure to act due to insufficient funds (provided that  the insufficient funds is not due to such Member’s failure to contribute Mandatory Capital).  

 

099999\14127737v20     39       7.2.3 No Liability for Board Representative.  No Board Representative shall  have any personal liability solely by reason of serving as a Board Representative, and to  the fullest extent permitted by applicable law, each Board Representative shall be  exculpated of liability arising from and no Board Representative shall be personally liable,  responsible or accountable in damages or otherwise to the Company, the Subsidiary  Entities, Manager, the Members or any other Person for any action taken or not taken by  such Board Representative.  Each Board Representative shall be permitted to act solely in  the interests of the Member that appointed such Board Representative (even if such  interests conflict with the interests of the Company, a Subsidiary Entity, Manager or other  Members) and shall have no duty or obligation to give consideration to the interests of or  factors affecting the Company, a Subsidiary Entity, Manager or other Members.  The  limitations of liability provided in this Section 7.2.3 are in addition to, and not in limitation  of, any limitation on liability applicable to such Person provided by law or in any other  contract, agreement or instrument.  Notwithstanding the foregoing, each Member shall be  responsible for the actions or inactions of a Board Representative appointed by such  Member.  Section 7.3 Indemnification by Company.  The Company shall, to the fullest extent  permitted by applicable law, indemnify, defend (with counsel reasonably acceptable to each  Member to be defended) and hold each Member harmless from and against any Company or  Subsidiary Entity liabilities for which it is alleged to be responsible (and any Claim/Loss resulting  from such allegations suffered or sustained by it) by reason of any acts, omissions or alleged acts  or omissions by such Member on behalf of the Company or a Subsidiary Entity within the scope  of authority conferred on it by this Agreement or by reason of the fact that such Member is a  Member of the Company; provided that the acts or omissions or alleged acts or omissions upon  which such actual or threatened action, proceeding or claim is based (A) were in good faith in  accordance with its business judgment, (B) did not constitute Bad Conduct, a breach on the part  of such Member under this Agreement or, in the case of a Member affiliated with Construction  Manager, a breach on the part of a Construction Manager under a Construction Management  Agreement, and (C) were not outside of such Member’s scope of authority.  Section 7.4 Indemnification of Loan Guarantor.  The Company shall, to the fullest  extent permitted by applicable law, indemnify, defend (with counsel reasonably acceptable to each  indemnitee to be defended) and hold each Loan Guarantor, TM Guarantor and Investor Guarantor  harmless from and against any liabilities of the Company or a Subsidiary Entity for which it is  alleged to be responsible (and any Claim/Loss resulting from such allegations suffered or sustained  by it) by reason of the loan documents (other than amounts paid by Loan Guarantor, TM Guarantor  and Investor Guarantor  that the Company would not have been required to pay when the Loan  came due absent acts or omissions of Loan Guarantor, TM Guarantor, Investor Guarantor or their  respective Affiliates in violation of those provisions in the loan documents that are specific to Loan  Guarantor, TM Guarantor, Investor Guarantor or their respective Affiliates (such as, without  limitation, restrictions on transfer, financial covenants and prohibitions on bankruptcy)).  Section 7.5 Indemnification of Board Representative.  The Company shall, to the fullest  extent permitted by applicable law, indemnify, defend (with counsel reasonably acceptable to each  Board Representative to be defended) and hold each Board Representative harmless from and  

 

099999\14127737v20     40       against any liabilities of the Company or a Subsidiary Entity for which it is alleged to be  responsible (and any Claim/Loss resulting from such allegations suffered or sustained by it) other  than Claims/Losses arising out of such Board Representative’s Bad Conduct.  Section 7.6 Article VII Survival.  The provisions of this entire Sections 7.2 through 7.5,  inclusive, shall survive the termination of the Agreement, the liquidation of the Company, the  dissolution of the Company, the withdrawal, resignation or retirement of a Member from the  Company, the transfer of a Member’s interest in the Company and the liquidation of a Member’s  interest in the Company.  ARTICLE VIII  TRANSFER OF COMPANY INTERESTS.  Section 8.1 Transfer Restrictions.  No Member shall sell, exchange, assign, dispose,  encumber, pledge, hypothecate or otherwise transfer, whether voluntary, involuntary, by operation  of law, resulting from death, disability or otherwise (a “Transfer”) the whole or any part of any  direct or indirect interest in the Company (and no issuance of additional ownership interests in  such Member shall occur) without the prior written approval of the Board.  For all purposes of this  Agreement, an involuntary Transfer shall include (A) the entry of a final order of a court in a  divorce proceeding that is not subject to appeal that directs transfer of an interest in the Company,  or (B) any other Transfer occasioned by a separation agreement or a divorce proceeding that is not  subject to appeal.  No Transfer in violation of the provisions hereof shall be valid or effective for  any purpose, and no consent to one or more Transfers shall be deemed consent to any other  Transfer.  Section 8.2 Builder Permitted Transfers.  Notwithstanding the foregoing, so long as  Builder’s interest in the Company continues to be controlled by TMHC, the restrictions in  Section 8.1 shall not restrict (A) direct or indirect Transfers in Builder, (B) Transfers by Builder  of all of its direct interest in the Company to Builder’s Affiliate, (C) the issuance of additional  direct or indirect ownership interests in Builder, or (D) other Transfers of Builder or any interest  in Builder that involve direct or indirect financing.  Section 8.3 Investor Permitted Transfers.  Notwithstanding the foregoing, so long as  51% or more of the ownership interests and voting control in Investor (or, if a Person succeeds to  Investor’s interest in the Company, such Person that owns Investor’s interest in the Company)  continues to be beneficially owned directly or indirectly (whether individually or through a trust,  limited liability company, corporation or other Person) by Värde, the restrictions in Section 8.1  shall not restrict (A) direct or indirect Transfers in Investor, (B) Transfers by Investor of all of its  direct interest in the Company to Investor’s Affiliate, (C) the issuance of additional direct or  indirect ownership interests in Investor, or (D) other Transfers of Investor or any interest in  Investor that involve direct or indirect financing.  Section 8.4 Effect of Assignment; Documents.  In the event of any sale or assignment  permitted hereunder, subject to Article XII, the Company shall not be dissolved but instead shall  continue as before, with, however, the addition or substitution of such transferee or assignee as a  Member of the Company.  No Transfer shall relieve assignor from any of its obligations under this  Agreement without the prior approval of the Board.  Notwithstanding the foregoing, as a condition  

 

099999\14127737v20     41       to any sale or assignment by a Member, the assignee must execute and deliver to Manager on  behalf of the Company an assumption of assignor’s obligations under this Agreement arising from  and after the date of such assignment.  Upon execution and delivery of such assumption, the  Members shall execute a document in form reasonably approved by Manager evidencing the  admission of such transferee.  Section 8.5 No Withdrawal.  No Member may withdraw or attempt to withdraw from  the Company other than as a result of (A) the consummation of a permitted Transfer under this  Article VIII, (B) a Member acquiring the other Member’s membership interest pursuant to the  terms of this Agreement or (C) Builder’s failure to obtain the OBS Confirmation under  Section 15.18.  Notwithstanding the foregoing, Investor shall have the right to withdraw from the  Company after the expiration of the survival period of the seller’s representations and warranties  with the latest outside date in the sale contracts entered into in connection with the sale of the  Projects if and only if, at such time when Investor notifies Manager of Investor’s request to  withdraw, (i) Manager refuses to file certificates of cancellation (or the equivalent thereof) in the  states in which the Company is organized or qualified, (ii) the Existing Claims Warranty Reserve  and Customary Reserves have been distributed, (iii) no Claims/Losses (excluding Unknown  Claims) are alleged or pending by or among any one or more of Builder, Investor, the Company,  their respective Affiliates or any other Person with respect to the Company or the Company Assets,  and (iv) Investor’s withdrawal will not violate the Act, any applicable laws or any order issued by  a governmental or quasi-governmental authority.  ARTICLE IX  CERTAIN REMEDIES.  Section 9.1 Removal Events.  The following occurrences are removal events (each, a  “Removal Event”):  9.1.1 Manager commits Bad Conduct (other than Excused Employee  Misconduct) when performing its obligations under this Agreement.  9.1.2 The occurrence of a Bankruptcy Event on the part of Manager.  Section 9.2 Removal; Dispute.  9.2.1 Removal Notice.  Investor may deliver written notice to Builder  describing the Removal Event in reasonable detail (a “Removal Notice”).  9.2.2 Dispute.  Builder may dispute the existence of grounds for the Removal  Notice by written notice (“Dispute Notice”) to Investor within 60 days after its receipt of  the Removal Notice.  If a Dispute Notice is given, then the dispute shall be resolved by a  court of competent jurisdiction in accordance with Section 15.7 or other alternative dispute  resolution process approved by Builder and Investor.  9.2.3 Remedies.  After (A) a Removal Event occurs, and (B) if applicable,  such Removal Event has been finally adjudicated, (i) the Person acting as Manager shall  no longer oversee the day-to-day activities of the Company, (ii) the Company or a  

 

099999\14127737v20     42       Subsidiary Entity may terminate each Construction Management Agreement between the  Company or a Subsidiary Entity, on the one hand, and a Construction Manager that is an  Affiliate of Manager, on the other hand (in which case, such Construction Manager shall  not be entitled to the portion of the Pre-Development Fee or the CM Fee that accrues after  the termination date), (iii) Investor may (without obtaining Builder’s approval, except that  Builder’s approval shall continue to be required for all Fundamental Decisions other than  the appointment of a manager under Paragraph 11 of Exhibit E), either (1) cause the  Company and each Subsidiary Entity to market and sell the portfolio of Approved Projects  to Third-Party Potential Purchasers, or (2) appoint a third-party Person as replacement  Manager and compensate such replacement Manager in a manner consistent with market  terms between arms-length parties as determined by Investor in its sole, good faith  discretion, (iv) Builder shall not be thereafter entitled to further Incentive Distributions (in  which case, all amounts that would have otherwise been Incentive Distributions shall be  distributed to the Members pro rata in accordance with the Member’s Percentage  Interests), (v) Builder shall have no further approval or voting rights other than  Fundamental Decisions (which approval shall not be unreasonably withheld), and (vi) if a  Construction Management Agreement between the Company or a Subsidiary Entity, on the  one hand, and a Construction Manager that is an Affiliate of Manager, on the other hand,  has not been terminated by the Company or a Subsidiary Entity, the applicable  Construction Manager shall be permitted to terminate such Construction Management  Agreement (in which case, such Construction Manager shall not be entitled to the portion  of the Pre-Development Fee or the CM Fee that accrues after the termination date)  Section 9.3 No Partition.  Each Member hereby irrevocably waives any and all rights  that it may have to maintain any action for partition of any of the assets of the Company.  Section 9.4 Cumulative Remedies.  Subject to the limitations expressly herein set forth,  no remedy conferred upon the Company or any Member in this Agreement is intended to be  exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative  and shall be in addition to every other remedy given hereunder or now or hereafter existing at law,  in equity or by statute.  Notwithstanding the foregoing, no Member (acting in the capacity as a  Manager, a Member or a Person designating Board Representatives) shall be liable for lost profits,  lost opportunities, consequential damages, incidental damages, exemplary damages, punitive  damages, indirect damages, special damages or speculative damages.  Section 9.5 Attorneys’ Fees.  If the Company or a Member obtains a judgment against  any other Member in connection with a dispute arising under or in connection with this Agreement,  such party shall be entitled to recover its court costs, and reasonable attorneys’ fees (including the  reasonable value of in-house attorney services) and disbursements incurred in connection  therewith and in any appeal or enforcement proceeding thereafter, including any bankruptcy  proceeding (and any action for relief from the automatic stay of any bankruptcy proceeding), in  addition to all other recoverable costs.  Section 9.6 No Waiver.  No waiver by a Member or the Company of any breach of this  Agreement or any Affiliate Agreement shall be deemed to be a waiver of any other breach of any  kind or nature, and no acceptance of payment or performance by a Member or the Company after  any such breach shall be deemed to be a waiver of any breach of this Agreement or any Affiliate  

 

099999\14127737v20     43       Agreement, whether or not such Member or the Company knows of such breach at the time it  accepts such payment or performance.  No failure or delay on the part of a Member or the Company  to exercise any right it may have by reason of any breach of this Agreement or any Affiliate  Agreement shall prevent the exercise thereof by such Member or the Company at any time and no  such failure or delay shall operate as a waiver of any such breach.  Section 9.7 Interest Rate Calculation.  When calculating interest with respect to a  Member Loan, the following principles shall be applied:  (A) the accrual of interest shall be  computed on a daily basis (on the basis of the actual number of days elapsed, 365-day year);  (B) accrued and unpaid interest shall be compounded annually, and (C) interest shall commence  accruing on the date when such Member Loan is funded.  If it is determined by a court of competent  jurisdiction that the rate used is usurious or otherwise in violation of applicable law, the rate to be  used shall be the highest maximum rate permitted by applicable law.  Section 9.8 No Suretyship Defenses.  Each Member hereby unconditionally waives any  guarantor or suretyship defense that may otherwise apply with respect to this Agreement.  ARTICLE X  DISPOSITION OF APPROVED PROJECTS  Section 10.1 Disposition.  The sale of an Approved Project, the Approved Projects or the  Remaining Portfolio to a Third-Party Potential Purchaser and the terms each Third-Party PSA shall  be subject to the approval of the Board.  The Members agree that a Board Representative’s  approval may be conditioned upon the corresponding Member receiving a right of first refusal on  terms approved by the Members in connection with the sale of such Approved Project, such  Approved Projects or the Remaining Portfolio.  Without limiting the Board’s ability to require the  sale of an Approved Project, the Members do not intend to market an Approved Project for sale to  a Third-Party Potential Purchaser until such time that (A) such Approved Project has achieved  stabilization as reasonably determined by the Members, (B) the Loan to construct such Approved  Project is able to be repaid without the assessment of a fee or penalty, and (C) the Company has  acquired and developed a diverse and robust portfolio of Approved Projects as reasonably  determined by the Members.  The Members shall consider packaging multiple Approved Projects  or the Remaining Portfolio for sale to achieve maximum pricing from Third-Party Potential  Purchasers.  In the event that the Board approves the sale of one or more Approved Projects or the  Remaining Portfolio, Manager shall engage a broker approved by the Board on behalf of the  Company or the applicable Subsidiary Entity to market and sell such Approved Project, Approved  Projects or Remaining Portfolio.  Section 10.2 Unsolicited Offers.  10.2.1 No Marketing.  No Member shall solicit offers from third-party Persons  for Approved Projects without the approval of the Board.  10.2.2 Third-Party Offers.  If Manager or a Member receives an unsolicited  third-party offer (each, an “Unsolicited Third-Party Offer”), such Person shall disclose  such Unsolicited Third-Party Offer to the Members.    

 

099999\14127737v20     44       10.2.3 Board Approval.  If the Board approves an Unsolicited Third-Party  Offer, the Company or, if applicable, the Subsidiary Entity shall sell the applicable  Approved Project in accordance with such Unsolicited Third-Party Offer pursuant to a  Third-Party PSA approved by the Board.  ARTICLE XI  PROJECT DISAGREEMENT REMEDY  Section 11.1 Occurrence of a Material Impasse.  After the occurrence of a Material  Impasse, a Member (a “PDR Triggering Member”) may trigger the Project Disagreement  Remedy in this Article XI by delivering written notice to the other Member (a “PDR Trigger  Notice”) if, and only if, 18 months have elapsed since the Company or a Subsidiary Entity acquired  title to the Dispute Project.  In the PDR Trigger Notice, the PDR Triggering Member shall provide  a reasonable description of the Material Impasse and state whether the PDR Triggering Member  intends to bid on the Dispute Project.  If the PDR Triggering Member fails to state that the PDR  Triggering Member will bid on the Dispute Project in the PDR Trigger Notice, then the PDR  Triggering Member shall be deemed to have elected not to bid on the Dispute Project.  Within  10 days after receipt of the PDR Trigger Notice, the other Member (the “PDR Responding  Member”) shall notify the PDR Triggering Member if the PDR Responding Member intends to  bid on the Dispute Project.  If the PDR Responding Member fails to notify the PDR Triggering  Member within such 10-day period that the PDR Responding Member will bid on the Dispute  Project, then the PDR Responding Member shall be deemed to have elected not to bid on the  Dispute Project.  Within the 10-day period after receipt of the PDR Trigger Notice, the PDR  Responding Member may also concede to the PDR Triggering Member’s position regarding the  matter that is the subject of the Material Impasse; in which case, the PDR Trigger Notice shall be  deemed null and void and of no force or effect.  If neither Member elects to bid on the Dispute  Project, Manager shall market and sell the Dispute Project on behalf of the Company or, if  applicable, the Subsidiary Entity on terms approved by the Board (not to be unreasonably withheld  or delayed).   Section 11.2 Two Members Bid.  If the PDR Triggering Member and the PDR  Responding Member both elect to bid on the Dispute Project, the PDR Triggering Member and  the PDR Responding Member shall select an Arbitrator.  Each Member shall have 30 days to  submit a written offer to the Arbitrator.  Each offer shall be on an all-cash, AS-IS, WHERE-IS  BASIS without any representation or warranty as to the real or personal property.  The purchase  agreement shall require a [**]% earnest money deposit and otherwise conform in all material  respects to the Disposition PSA.  The Arbitrator shall select the Member that submitted the most  advantageous offer (the “Prevailing Member”), and the Prevailing Member, on the one hand, and  the Company or the Subsidiary Entity, on the other hand, shall enter into a Disposition PSA.  If  the Prevailing Member materially breaches the Disposition PSA, (A) the Company or, if  applicable, the Subsidiary Entity shall retain the earnest money deposit as liquidated damages,  (B) the defaulting Member shall no longer have the right to acquire the Dispute Project under this  Article 11, and (C) the other Member shall have the right to purchase the Dispute Project on the  terms submitted by such other Member to the Arbitrator or to market and sell the Dispute Project  on behalf of the Company or a Subsidiary Entity on terms acceptable to such other Member without  obtaining the Board’s prior approval.  In connection with the transfer of a Dispute Project to a  

 

099999\14127737v20     45       Member or its Affiliate, if requested by the Member acquiring such Dispute Project, the Members  shall transfer the membership interest in the Subsidiary Entity (as opposed to transferring fee title  in such Dispute Project);  in which case, the Company shall represent and warrant that the  Company owns all membership interests in such Subsidiary Entity free and clear of all liens other  than those liens disclosed to the Person acquiring the membership interests in such Subsidiary  Entity.  Section 11.3 One Member Bid.  11.3.1 Non-Bidding Member Determination.  If only one Member elects to bid  on the Dispute Project (the “Bidding Member”), the other Member (the “Non-Bidding  Member”) may approve or disapprove of the Bidding Member’s bid (the “Bid”).    11.3.2 Non-Bidding Member Approval.  If the Non-Bidding Member approves  the Bid, the Company or the applicable Subsidiary Entity, on the one hand, and the Bidding  Member (or its designee), on the other hand, shall enter into a Disposition PSA with respect  to the Dispute Project.  After a Disposition PSA is executed, the terms of such Disposition  PSA shall govern the sale of such Dispute Project.  11.3.3 Non-Bidding Member Disapproval.  If the Non-Bidding Member does  not initially approve the Bid because the Non-Bidding Member (acting reasonably and in  good faith) determines that the Bid is below-market, the Company or the applicable  Subsidiary Entity shall market the Dispute Project to Third-Party Potential Purchasers.  11.3.4 No Better Offer.  If the Company or, if applicable, the Subsidiary Entity  does not receive an offer from a Third-Party Potential Purchaser within 60 days containing  more advantageous terms than the Bid, then the Company or the applicable Subsidiary  Entity, on the one hand, and the Bidding Member (or its designee), on the other hand, shall  enter into a Disposition PSA with respect to the Dispute Project.  After such Disposition  PSA is executed, the terms of such Disposition PSA shall govern the sale of the Dispute  Project.  11.3.5 Right of First Refusal.  If the Company or, if applicable, the Subsidiary  Entity has received Third-Party Offered Terms within the 60-day period described above  containing more advantageous terms than the Bid, then the Company or, if applicable, the  Subsidiary Entity shall offer the Dispute Project to the Bidding Member on the same terms  as the Third-Party Offered Terms.  11.3.6 Acceptance of ROFR.  If the Bidding Member accepts the Third-Party  Offered Terms by written notice (a “ROFR Notice”) within five business days after the  Bidding Member receives written notice of the Third-Party Offered Terms under  Section 11.3.5, then the Company or the applicable Subsidiary Entity, on the one hand, and  the Bidding Member (or its designee), on the other hand, shall enter into a Disposition PSA  with respect to the Dispute Project.  After such Disposition PSA is executed, the terms of  such Dispute Project PSA shall govern the sale of the Dispute Project.  

 

099999\14127737v20     46       11.3.7 Rejection of ROFR.  If the Bidding Member rejects the Third-Party  Offered Terms by written notice or the Bidding Member fails to accept the Third-Party  Offered Terms in writing within the five-business day period under Section 11.3.6, then  the Company or the applicable Subsidiary Entity, on the one hand, and the applicable  Third-Party Potential Purchaser, on the other hand, shall enter into Third-Party PSA for the  Dispute Project based on the Third-Party Offered Terms within 60 days after the expiration  of the five-business day period under Section 11.3.6.  If (A) the Third-Party PSA is not  entered into within such 60-day period, (B) the Non-Refundability Condition is not timely  satisfied, or (C) the Third-Party PSA is otherwise terminated prior to the closing under the  Third-Party PSA, the procedure under this Section 11.3 shall be repeated (i.e., the Bidding  Member shall be permitted to resubmit the Bid under Section 11.3.1, the Non-Bidding  Member shall be permitted to approve or disapprove the Bid, and so on).  11.3.8 Bidding Member Default.  If a Bidding Member materially breaches the  terms of such Disposition PSA, then (A) the right under this Article XI to acquire the  Dispute Project under such Disposition PSA shall thereafter terminate, and (B) the Non- Bidding Member shall be permitted to sell the Dispute Project on behalf of the Company  or a Subsidiary Entity on terms acceptable to the Non-Bidding Member without obtaining  the Board’s or the Bidding Member’s prior approval.  Section 11.4 No Member Bids.  11.4.1 Market Dispute Project.  If neither Member bids on the Dispute Project,  the Dispute Project shall be marketed to Third-Party Potential Purchasers.  If the Company  or, if applicable, a Subsidiary Entity receives Third-Party Offered Terms for a Dispute  Project that are reasonably acceptable to Investor, then the Company or, if applicable, the  Subsidiary Entity shall offer such Dispute Project to Builder on the same terms as the  Third-Party Offered Terms.  11.4.2 Builder Election to Purchase.  If Builder accepts the Third-Party Offered  Terms within 15 days after Builder receives written notice of the Third-Party Offered  Terms, then the Company or the applicable Subsidiary Entity, on the one hand, and Builder,  on the other hand, shall enter into a Disposition PSA with respect to such Dispute Project  based on the Third-Party Offered Terms.  After a Disposition PSA is executed, the terms  of the Disposition PSA shall govern the sale of the Dispute Project that is the subject of  such Disposition PSA.  11.4.3 Builder Election to Sell.  If Builder fails to deliver written notice within  the 15-day period or elects not to purchase such Dispute Project based on the Third-Party  Offered Terms, then the Company or the applicable Subsidiary Entity, on the one hand,  and the applicable Third-Party Potential Purchaser, on the other hand, shall enter into a  Third-Party PSA for the Dispute Project based on the Third-Party Offered Terms within  60 days after the expiration of such 15-day period.  If (A) the Third-Party PSA is not  entered into within such 60-day period, (B) the Non-Refundability Condition is not timely  satisfied, or (C) the Third-Party PSA is otherwise terminated prior to the closing under the  Third-Party PSA, each Member shall be given 15 days to bid on the Dispute Project and  the procedure under this Article 11 shall be repeated (i.e., Section 11.2 shall govern if two  

 

099999\14127737v20     47       Members bid, Section 11.3 shall govern if one Member bids and Section 11.4 shall govern  if no Member bids).  ARTICLE XII  DISSOLUTION OF THE COMPANY  Section 12.1 Events Giving Rise to Dissolution.  No act, thing, occurrence, event or  circumstance shall cause or result in the dissolution of the Company; except that the happening of  any one of the following events (individually, a “Dissolution Event”) shall work an immediate  dissolution of the Company.  12.1.1 Election of the Board.  The written election by the Board to dissolve the  Company.  12.1.2 Sale of Assets.  The sale of all (or substantially all) of the Company’s  assets as provided in Section 13.8  12.1.3 Judicial Dissolution.  The entry of a decree of judicial dissolution of the  Company under Section 18-802 of the Act.  Without limitation on the other provisions hereof, the withdrawal, retirement, resignation,  expulsion or dissolution of any Member, the occurrence of a Bankruptcy Event with respect to a  Member, the assignment of all or any part of a Member’s interest in the Company, the occurrence  of any event that terminates the continued membership of a Member under the Act or the admission  of a new Member shall neither dissolve the Company nor discontinue the business of the Company.   Except as otherwise provided in this Agreement: (A) without the approval of the Members, no  Member may retire, resign or withdraw from the Company; and (B) a withdrawing Member shall  not be entitled to receive any distributions and shall not otherwise be entitled to receive the fair  value of its membership interest in the Company.  Section 12.2 Procedure.  In the event of the dissolution of the Company for any reason,  the “Winding-Up Member” (i.e., Manager) shall commence to wind up the affairs of the  Company and to liquidate its investments.  The Members shall continue to share profits, losses,  gain or loss on sale or disposition, and Distributable Cash during the period of liquidation in the  same manner and proportion as though the Company had not dissolved.  The Winding-Up Member  shall have discretion to determine in good faith the time, manner and terms of any sale or sales of  the assets of the Company pursuant to such liquidation having due regard to the activity and  condition of the relevant market and general financial and economic conditions. To the fullest  permitted by law, the Company shall distribute the funds in a manner consistent with the intent of  the other provisions of Section 2.5  12.2.1 Debt and Liabilities.  Following the satisfaction of all debts and liabilities  of the Company and all expenses of liquidation (whether by payment or the making of  reasonable provision for payment thereof), the Distributable Cash shall be distributed in  accordance with Sections 4.1 and 4.2, as applicable, and the other applicable provisions of  this Agreement (after deducting from the distributive share of a Member any sum such  Member owes the Company or the other Member).  

 

099999\14127737v20     48       12.2.2 Distribution from Company Assets.  Each Member shall look solely to  the assets of the Company for all distributions with respect to the Company and its Capital  Contributions thereto and shall have no recourse therefor (in the event of any deficit in a  Member’s “Book Capital Account” (as defined in the Tax Appendix) or otherwise) against  the other Member; provided that nothing herein contained shall relieve any Member of  such Member’s obligation to make the Capital Contributions herein provided or to pay or  perform all obligations, liabilities and indebtedness owing the Company or the other  Member by such Member, and the Company and the other Member shall be entitled at all  times to enforce such liabilities and obligations of such Member.  No holder of a Company  interest shall have any right to demand or receive property other than cash upon dissolution  of the Company.  12.2.3 Cancellation of Certificate.  Upon the completion of the winding up of  the Company and the distribution of all Company funds, the Winding-Up Member shall  have the authority to execute and record a certificate of cancellation of the certificate of  formation of the Company, as well as any and all other documents required to effectuate  the dissolution and termination of the Company, and the Company shall terminate.  ARTICLE XIII  FORCED LIQUIDATION  Section 13.1 Forced Liquidation Notice.  Subject to the terms and conditions set forth in  this Agreement, either Investor or Builder (the “FL Triggering Member”) may trigger the  operation of this Section 13.1 by delivering written notice (in each case, the “Forced Liquidation  Notice”) to the other Member (the “Non-Triggering Member”) after the fifth anniversary of the  date on which the Company or a Subsidiary Entity acquired title to the first Approved Project.  No  Forced Liquidation Notice may be rescinded once given without the written consent of all  Members.  If the Non-Triggering Member elects to acquire the FL Triggering Member’s interest  in the Company (the “FL Triggering Member Membership Interest”), then within 60 days after  receipt of a Forced Liquidation Notice, the Non-Triggering Member shall identify by written  notice to Manager and the FL Triggering Member (a “Non-Triggering Member Valuation  Notice”) a single value for all of the real property owned by the Company and the Subsidiary  Entities as of the Date of Value as the basis for the calculation required under this Article XIII (a  “Non-Triggering Member Valuation”), which calculation shall include Non-Triggering  Member’s calculation of the Buy Price for the FL Triggering Member Membership Interest.  Non- Triggering Member’s calculation of the Buy Price based on the Non-Triggering Member Valuation  shall be subject to verification and correction if it does not correctly reflect the calculations  required by this Agreement.  Section 13.2 Responsive Notice.  13.2.1 Failure to Deliver Non-Triggering Member Valuation Notice.  If Non- Triggering Member fails to provide a Non-Triggering Member Valuation Notice, FL  Triggering Member may cause the Company and each Subsidiary Entity to market and sell  the portfolio of Approved Projects (the “Remaining Portfolio”) in accordance with  Section 13.8 below.  

 

099999\14127737v20     49       13.2.2 FL Triggering Member Determination.  If Non-Triggering Member  provides a Non-Triggering Member Valuation and FL Triggering Member disagrees with  such Non-Triggering Member Valuation, FL Triggering Member and Non-Triggering  Member shall negotiate in good faith to determine a mutually acceptable valuation (a  “Mutual Valuation”) during the 45-day period following the date of the Non-Triggering  Member Valuation Notice (the “Responsive Notice Period”). Prior to the expiration of the  Responsive Notice Period, FL Triggering Member shall deliver to Non-Triggering  Member a responsive notice (the “Responsive Notice”) electing either of the following (if   FL Triggering Member fails to respond prior to the expiration of the Responsive Notice  Period,  FL Triggering Member shall be deemed to have elected to proceed under clause A  below):  A. To value the Remaining Portfolio and, if the Fair Market Value is  greater than the Non-Triggering Member Valuation, to market and sell the  Remaining Portfolio in accordance with Section 13.8 below if Non-Triggering  Member does not elect to purchase FL Triggering Member’s interest for the Buy  Price using the Fair Market Value in accordance with clause (i) of Section 13.3; or  B. To sell the FL Triggering Member Membership Interest at the Buy  Price using the Non-Triggering Member Valuation or the Mutual Valuation as set  forth in the Responsive Notice.  No Responsive Notice may be rescinded once given without the written consent of all  Members (even if the calculation of the Buy Price initially calculated by Manager, Non- Triggering Member or FL Triggering Member is incorrect).  Section 13.3 FL Triggering Member Determination.  If FL Triggering Member elects (or  is deemed to have elected) to proceed under Section 13.2.2A, then within 30 days after the  expiration of the Responsive Notice Period, (A) the Members shall engage a single appraiser to  determine the Fair Market Value of the Remaining Portfolio or (B) each Member shall select an  appraiser to determine the Fair Market Value of the Remaining Portfolio (in accordance with the  procedures set forth in the defined term “Fair Market Value”) if the Members are unable to agree  upon a single appraiser.  After the Fair Market Value has been determined, if the Fair Market Value  is less than the Non-Triggering Member Valuation, Non-Triggering Member shall acquire FL  Triggering Member’s interest for the Buy Price using the Non-Triggering Member Valuation.  If  the Fair Market Value is greater than the Non-Triggering Member Valuation, Non-Triggering  Member may elect to either (i) acquire FL Triggering Member’s interest for the Buy Price using  the Fair Market Value or (ii) cause the Company and each Subsidiary Entity to sell the Remaining  Portfolio in accordance with Section 13.8 below.  Section 13.4 Loans.  If a Loan becomes due as a result of the Buy/Sell Closing or at the  time of closing any indebtedness of the Company or a Subsidiary Entity is prepaid (any such  indebtedness shall be collectively “Accelerated Debt”), then the Company indebtedness used to  determine the Buy Price (i.e., the amount of indebtedness deducted for the hypothetical  liquidation) shall include all prepayment penalties and yield maintenance payments due on  Accelerated Debt as of the date of Buy/Sell Closing.  If the above calculations result in a Buy Price  that is zero or a negative number, the Buy Price shall be deemed to be $100.  

 

099999\14127737v20     50       Section 13.5 Closing Process.  13.5.1 Closing Date.  The closing for the sale of the FL Triggering Member  Membership Interest (the “Buy/Sell Closing”) shall be conducted through a national title  company if the Members mutually agree to use a formal escrow agent (as opposed to not  using an escrow agent).  The closing date (the “Buy/Sell Closing Date”) shall be (A) the  date that is 60 days from the determination of the Buy Price, or (B) an earlier date selected  by Non-Triggering Member after the determination of the Buy Price.  The Buy/Sell Closing  shall take place on the Buy/Sell Closing Date.  13.5.2 Payment of Buy Price.  The Buy Price for the FL Triggering Member  Membership Interest shall be paid in immediately available funds.  13.5.3 Transfer of Interest. FL Triggering Member shall transfer its  membership interest in the Company to Non-Triggering Member (or its designee) free and  clear of all liens and encumbrances.  The assignment of membership interests shall be in  the form of Exhibit J (the “Membership Assignment”).  A creditworthy Affiliate of FL  Triggering Member shall join the Membership Assignment to guaranty that each of the  representations and warranties set forth therein are true, correct and complete.  For the  purposes of this Section 13.5.3, (A) Builder hereby agrees that Investor Guarantor, is an  approved creditworthy Affiliate of  Investor and (B) Investor hereby agrees that TM  Guarantor, is an approved creditworthy Affiliate of Builder.  Non-Triggering Member shall  be entitled to require FL Triggering Member to transfer the FL Triggering Member  Membership Interest to Non-Triggering Member’s affiliate or designee.  Prior to the  Buy/Sell Closing, the Members shall use commercially reasonable efforts (without  implying any obligation to expend additional funds) to obtain a release of  FL Triggering  Member and its Affiliates with respect to liabilities under Loan Guaranties relating to  matters first arising from and after the Buy/Sell Closing (such liabilities are referred to  herein as “Post-Closing Liabilities”).  If the Members are unable to obtain the release of  FL Triggering Member and its Affiliates with respect to Post-Closing Liabilities,  FL  Triggering Member and its Affiliates shall be indemnified under the Backstop Agreement.  13.5.4 Accounting.  Not later than 10 days before the Buy/Sell Closing Date,  Manager shall direct the Accountant to provide the Members with balance sheets for the  Company and each Subsidiary Entity as of the Buy/Sell Closing Date showing all items of  income and expense of the Company and each Subsidiary Entity earned or accrued as of  the Buy/Sell Closing Date.  13.5.5 Assurances.  Each Member agrees to cooperate and to take all actions  and execute all documents reasonably necessary or appropriate to reflect the purchase of  the FL Triggering Member Membership Interest.  13.5.6 Closing Costs; Prorations.  A. Each party shall pay its own legal fees.  

 

099999\14127737v20     51       B. Closing costs shall be borne by the party who customarily bears such  costs in the jurisdiction where the Approved Project is located when real property  is sold or purchased (as opposed to the sale and purchase of a membership interest)  as if the Company or a Subsidiary Entity is the seller, on the one hand, and Non- Triggering Member is the buyer, on the other hand.  Real estate taxes and special  assessments on the Approved Project shall be prorated on the basis of the taxes and  assessments paid for the most recent fiscal year that has been assessed and billed.   If the actual taxes and special assessments for the year of the Buy/Sell Closing are  not determinable at the Buy/Sell Closing, taxes and special assessments shall be re- prorated promptly after issuance of the tax bill for the year of closing.  Collected  rents and expense pass-throughs shall be adjusted to the date of the Buy/Sell  Closing in the manner customary in the jurisdiction where the Approved Project is  located.  Management or development fees, insurance, debt service and other  operating costs through the date of the Buy/Sell Closing shall be prorated and  adjusted as of the Buy/Sell Closing.  All adjustments shall be made on the basis of  good faith estimates of the Members using currently available information, and  final adjustment shall be made promptly after precise figures are determined or  available, and in any event within 90 days after the Buy/Sell Closing.  All prorations  and adjustments shall be made without duplication and in a manner consistent with  customary practice in the jurisdiction in which the Approved Project is located.   Any disagreement between Non-Triggering Member and FL Triggering Member  in such prorations and adjustments or otherwise in the calculation of the final net  payment due FL Triggering Member shall be conclusively resolved by the  Accountant.  C. The Buy Price shall be reduced by any distributions made by the  Company to FL Triggering Member during the period between the determination  of the Buy Price and the Buy/Sell Closing.  Section 13.6 Reasonableness of Forced Liquidation Rights.  The Members hereby  expressly acknowledge and agree that the rights to acquire the FL Triggering Member Membership  Interests in accordance with this Article XIII (the “Buy-Out Rights”) are not intended to be a  penalty, but have been established as the result of an arm’s-length negotiation and in recognition  of the fact that the such interests represent illiquid interests in a privately held company.  Without  limiting the foregoing, the Members acknowledge and agree that: (A) the Buy-Out Rights are a  material inducement to each Member’s willingness to enter into this Agreement and to make  capital contributions to the Company; (B) each Member has received a material economic benefit  from the actions described in clause (A) above; (C) each Member has carefully read and  considered all of the terms and conditions of the Buy-Out Rights and agrees that they are  reasonable and proper; (D) were any Member to materially breach its obligation to transfer its  interest in the Company in accordance with the terms of this Agreement, the damage to the other  Member would be irreparable and such other Member’s remedies at law would be inadequate and,  in the event of any breach of any of such obligations, and in addition to its remedies at law, such  other Member shall be entitled to obtain (and the other Member shall not oppose) equitable relief  in the form of specific performance or other appropriate equitable remedies, without having to post  bond; and (E) in the event that any provision of the Buy-Out Rights shall be determined by any  

 

099999\14127737v20     52       court of competent jurisdiction to be unenforceable, such provision shall be deemed to be modified  to permit its enforcement to the maximum extent permitted by law.  Section 13.7 Transition of Operations.  If Non-Triggering Member is acquiring the  FL  Triggering Member Membership Interest under this Article XIII, Non-Triggering Member shall  no longer need approval from FL Triggering Member or the Board during the period between the  determination of the Buy Price and the Buy/Sell Closing.  Section 13.8 Sale of Remaining Portfolio.  13.8.1 Third-Party Offered Terms.  If Non-Triggering Member does not elect  to acquire the FL Triggering Member Membership Interest as provided in this Article XIII,  then the Remaining Portfolio shall be marketed to a third-party purchaser.  If the Company  or, if applicable, a Subsidiary Entity receives Third-Party Offered Terms for the Remaining  Portfolio (or an Approved Project within the Remaining Portfolio) that are reasonably  acceptable to FL Triggering Member, then the Company or, if applicable, the Subsidiary  Entity shall offer the Remaining Portfolio (or such Approved Project within the Remaining  Portfolio) to Non-Triggering Member on the same terms as the Third-Party Offered Terms.  13.8.2 Non-Triggering Member Election to Purchase.  If Non-Triggering  Member accepts the Third-Party Offered Terms within 15 days after Non-Triggering  Member receives written notice of the Third-Party Offered Terms, then the Company or  the applicable Subsidiary Entity, on the one hand, and Non-Triggering  Member, on the  other hand, shall enter into a Disposition PSA with respect to the Remaining Portfolio (or  an Approved Project within the Remaining Portfolio) based on the Third-Party Offered  Terms.  After a Disposition PSA is executed, the terms of the Disposition PSA shall govern  the sale of the Remaining Portfolio or such Approved Project within the Remaining  Portfolio that is the subject of such Disposition PSA.  13.8.3 Non-Triggering Member Election to Sell.  If Non-Triggering Member  fails to deliver written notice within the 15-day period or elects not to purchase the  Remaining Portfolio or such Approved Project within the Remaining Portfolio based on  the Third-Party Offered Terms, then the Company or the applicable Subsidiary Entity, on  the one hand, and the applicable third-party purchaser, on the other hand, shall enter into a  Third-Party PSA for the Remaining Portfolio or such Approved Project within the  Remaining Portfolio based on the Third-Party Offered Terms within 60 days after the  expiration of such 15-day period.  If (A) the Third-Party PSA is not entered into within  such 60-day period, (B) the Non-Refundability Condition is not timely satisfied, or (C) the  Third-Party PSA is otherwise terminated prior to the closing under the Third-Party PSA,  the procedure under this Section 13.8 shall be repeated (i.e., Non-Triggering Member shall  have a right of first refusal based on the Third-Party Offered Terms received by the  Company or the applicable Subsidiary Entity).  ARTICLE XIV  CERTAIN INCORPORATED MATTERS.  

 

099999\14127737v20     53       Section 14.1 Income Tax Matters.  Each and all of the provisions of the Tax Appendix  are incorporated herein and shall constitute part of this Agreement.  The Tax Appendix shall  provide for, among other income tax matters, the establishment and maintenance of Book Capital  Accounts, and allocations for “book” and “tax” purposes.  The Company shall be operated as a  partnership, with the Members as the “partners” of such partnership, solely for federal, state and  relevant local income tax purposes.   ARTICLE XV  MISCELLANEOUS.  Section 15.1 Notices.  Any notice which a party is required or may desire to give the  other party shall be in writing and may be delivered (A) personally, (B) by Federal Express or  other reputable courier service regularly providing evidence of delivery (with charges paid by the  party sending the notice), or (C) by electronic email, provided that in the case of clause (C), (i) the  party sending such notice shall not have received an automatic reply stating that the recipient of  such notice is unavailable, out of the office or otherwise not in receipt of such electronic mail, and  (ii) if such notice is a Material Notice, such delivery shall be followed within two business days  of such email by delivery of such notice pursuant to clause (A) or (B) above unless the recipient  thereof acknowledges receipt of such email (either by expressly acknowledging receipt thereof or  by affirmatively replying thereto – the parties shall act reasonably to acknowledge receipt of  electronic mail to avoid additional costs and inconveniences associated with personal delivery or  overnight courier).  Any such notice to a party shall be addressed at the address set forth below the  name of such party on the signature pages at the end of this Agreement (subject to the right of a  party to designate a different address for itself by notice similarly given).  Service of any such  notice or other communications so made shall be deemed effective on the day of actual delivery  (whether accepted or refused) as confirmed by the courier/delivery service if by courier or delivery;  provided, however, that if such actual delivery occurs after 5:00 p.m. (local time where received)  or on a non-business day, then such notice or communication so made shall be deemed effective  on the first business day after the day of actual delivery.  Section 15.2 Acknowledgement by Members.  Each Member acknowledges the  following:  (A) it is familiar with the business proposed to be conducted by the Company; (B) it  has been advised that its interest in the Company may not be sold, transferred, or otherwise  disposed of except as provided in this Agreement; (C) it understands that its interest in the  Company has not been registered under the Securities Act of 1933, as amended from time to time  (the “Securities Act”), or any State securities laws, in reliance on an exemption for private  offerings or the fact that it is not a security and if its interest in the Company is a security, such  Member may not be able to resell it unless it is registered under the Securities Act and applicable  State securities laws or unless an exemption from such registration is available; (D) it is a  “sophisticated investor” with substantial prior experience in high-risk business investments of the  type described in this Agreement and is aware of and familiar with the risks associated with a  private limited liability company and would qualify as an “accredited investor” as such is defined  in Rule 501 of Regulation D, as enacted pursuant to Sections 3(b) and 4(2) of the Securities Act;  (E) it is acquiring its interest in the Company for its own account, for investment only and with no  present intention of distributing, reselling, pledging, or otherwise disposing of its interest; and  (F) that it is familiar with the type of investment which its interest in the Company constitutes and  

 

099999\14127737v20     54       has reviewed the acquisition of such interest with its tax and independent legal counsel and  investment representatives to the extent it deems necessary.  Section 15.3 Construction.  Every covenant, term, and provision of this Agreement shall  be construed simply according to its fair meaning and not strictly for or against any Member  (notwithstanding any rule of law requiring an agreement to be strictly construed against the  drafting party).    Section 15.4 Time is of the Essence.  Subject to Section 15.13, time is of the essence with  respect to this Agreement.  Section 15.5 Entire Agreement.  This Agreement constitutes the entire agreement  between the parties.  This Agreement supersedes any prior agreement or understandings between  the parties.  Section 15.6 Amendments.  This Agreement may be amended by written agreement of  amendment executed by all Members, but not otherwise, unless expressly provided herein.  Section 15.7 Governing Law; Venue; Jury Trial Waiver.  15.7.1 Governing Law.  This Agreement and the rights of the parties hereunder  shall be governed by and interpreted in accordance with the laws of the State of Delaware  (without regard to conflicts of laws).  15.7.2 Venue.  Each of the parties hereto irrevocably and unconditionally agrees  (A) to be subject to the exclusive jurisdiction of the courts of the State of Delaware and of  the U.S. federal courts sitting in the State of Delaware, and (B)(i) to the extent such party  is not otherwise subject to service of process in the State of Delaware, to appoint and  maintain an agent in the State of Delaware as such party’s agent for acceptance of legal  process and notify the other party or parties hereto of the name and address of such agent,  and (ii) that service of process may, to the fullest extent permitted by law, also be made on  such party by prepaid certified mail with a proof of mailing receipt validated by the United  States Postal Service constituting evidence of valid service, and that service made pursuant  to clause (B)(i) or (B)(ii) above shall, to the fullest extent permitted by law, have the same  legal force and effect as if served upon such party within the State of Delaware.  FOR  PURPOSES OF IMPLEMENTING THE PARTIES’ AGREEMENT TO APPOINT AND  MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF  DELAWARE, EACH MEMBER THAT HAS NOT AS OF THE DATE HEREOF  ALREADY DULY APPOINTED SUCH AN AGENT DOES HEREBY APPOINT  NATIONAL REGISTERED AGENTS, INC., 160 GREENTREE DRIVE, SUITE 101,  DOVER, DELAWARE 19904, AS SUCH AGENT.  15.7.3 Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY  APPLICABLE LAW THAT CANNOT BE WAIVED, EACH MEMBER WAIVES, AND  COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,  DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM  IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF OR  

 

099999\14127737v20     55       RELATING TO THIS AGREEMENT OR THE CONDUCT OF THE PARTIES,  WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN  CONTRACT, TORT OR OTHERWISE.  Each Member acknowledges that it has been  informed by the other Members that the foregoing sentence constitutes a material  inducement upon which the other Members have relied and will rely in entering into this  Agreement.  Each Member may file an original counterpart or a copy of this Agreement  with any court as written evidence of the consent of the Members to the waiver of their  rights to trial by jury.  Section 15.8 Successors and Assigns.  Except as herein otherwise specifically provided,  this Agreement shall be binding upon and inure to the benefit of the parties and their legal  representatives, successors and assigns.  Section 15.9 Captions.  Captions contained in this Agreement in no way define, limit or  extend the scope or intent of this Agreement.  Section 15.10 Severability.  If any provision of this Agreement, or the application of such  provision to any Person or circumstance, shall be held invalid, the remainder of this Agreement,  or the application of such provision to the Persons or circumstances, shall not be affected thereby.  Section 15.11 Counterparts.  This Agreement may be executed in several counterparts,  each of which shall be deemed an original, but all of which shall constitute one and the same  document.  Section 15.12 Certain Terminology.  15.12.1 Including.  Whenever the words “including”, “include” or “includes” are  used in this Agreement, they shall be interpreted in a non-exclusive manner as though the  words “, without limitation,” immediately followed the same.  15.12.2 Reference.  Except as otherwise indicated, all Article, Section, Appendix  and Exhibit references in this Agreement shall be deemed to refer to the Sections and  Articles in, and the Exhibits and Appendices to, this Agreement.  15.12.3 Herein.  Wherever the words “herein” or “hereunder” appear in this  Agreement, they shall be interpreted to mean “in this Agreement” or “under this  Agreement”, respectively.  15.12.4 Discretion.  As used herein, “in its sole discretion” or “in its discretion”  or “in its sole and absolute discretion” or under a grant of similar authority or latitude, such  Member shall be entitled to consider only such interests and factors as it desires, including  its own interests, and shall have no duty or obligation to give any consideration to any  interest of or factors affecting the Company or any other Person and may act in a manner  adverse to the Company or any other Person.  Section 15.13 Non-Business Days.  Whenever action must be taken (including the giving  of notice or the delivery of documents) under this Agreement during a certain period of time or by  

 

099999\14127737v20     56       a particular date that ends or occurs on a non-business day (i.e., Saturday, Sunday or a holiday  recognized by the U.S. federal government or the states in which the Approved Projects are  located), then such period or date shall be extended until the immediately following business day.   A “business day” as used herein shall mean any day other than a Saturday, Sunday or any day on  which commercial banks are closed in the states in which the Approved Projects are located.  Section 15.14 Effectiveness.  In no event shall any draft of this Agreement create any  obligation or liability, it being understood that this Agreement shall be effective and binding only  when a counterpart hereof has been executed and delivered by each party hereto; until such time,  neither Builder nor Investor shall have any obligation or liability with respect to the transactions  described herein and neither Builder nor Investor shall be permitted to rely on any correspondence  or communication (verbal, electronic or otherwise) as a commitment or agreement of any type on  the part of the other party or any of its Affiliates with respect to the transactions described herein.  Section 15.15 Confidentiality.  The Members shall keep the terms of this Agreement  confidential except for (A) disclosure to such Member’s legal counsel, accountants, financial  advisors, lenders, investors and any prospective investors (provided that such Member instructs  the recipient to keep the information confidential, it being understood that any breach by any such  recipient shall be deemed to constitute a material breach by such Member disclosing such  information), (B) public disclosures which such Member determines to be necessary in order to  fulfill the disclosure obligations of such Member or its Affiliates imposed by law, legal process or  the rules of any national securities exchange or automated quotation system, and (C) disclosure to  defend, institute or enforce such Member’s rights and remedies under this Agreement.  This  Section 15.15 shall survive the termination of the Agreement, the liquidation of the Company, the  dissolution of the Company, the withdrawal, resignation or retirement of a Member from the  Company, the transfer of a Member’s interest in the Company and the liquidation of a Member’s  interest in the Company.  Section 15.16 Legal Representation.  15.16.1 CCN.  Members acknowledge and agree that Cox Castle & Nicholson  LLP (“CCN”) has represented and may (in the future) represent Builder and certain of its  Affiliates in connection with (A) this Agreement, (B) all other agreements contemplated  by this Agreement or pertaining to the Proposed Projects, the Proposed Competitive  Projects, the Approved Projects, the Company and the Subsidiary Entities, and  (C) unrelated matters.  From time to time, CCN shall provide legal services to Builder or  certain of its Affiliates with respect to the Proposed Projects, the Proposed Competitive  Projects, the Approved Projects, the Company, the Subsidiary Entities and related matters  at fees and costs to be paid by Builder, the Company, the Subsidiary Entities or certain of  their Affiliates.  In no event shall an attorney/client relationship exist between CCN, on the  one hand, and the Company, a Subsidiary Entity, Investor or any of their Affiliates, on the  other hand, as a result of any such representation.  CCN shall be permitted to render legal  advice and to provide legal services to the Company and the Subsidiary Entities from time  to time, and each Member covenants and agrees that such representation of the Company  or a Subsidiary Entity by CCN shall not: (i) result in the existence of an attorney/client  relationship between CCN, on the one hand, and the Company, a Subsidiary Entity,  

 

099999\14127737v20     57       Investor or their Affiliates, on the other hand; or (ii) disqualify CCN from providing legal  advice and legal services as set forth in this Section 15.16.1 at any time in the future.  15.16.2 K&E.  Members acknowledge and agree that Kirkland & Ellis  LLP (“K&E”) has represented and may (in the future) represent Investor and certain of its  Affiliates in connection with (A) this Agreement, (B) all other agreements contemplated  by this Agreement or pertaining to the Proposed Projects, the Proposed Competitive  Projects, the Approved Projects, the Company and the Subsidiary Entities, and  (C) unrelated matters.  From time to time, K&E shall provide legal services to Investor or  certain of its Affiliates with respect to the Proposed Projects, the Proposed Competitive  Projects, the Approved Projects, the Company, the Subsidiary Entities and related matters  at fees and costs to be paid by Investor, the Company, the Subsidiary Entities or certain of  their Affiliates.  In no event shall an attorney/client relationship exist between K&E, on the  one hand, and the Company, a Subsidiary Entity, Builder or any of their Affiliates, on the  other hand, as a result of any such representation.  K&E shall be permitted to render legal  advice and to provide legal services to the Company and the Subsidiary Entities from time  to time, and each Member covenants and agrees that such representation of the Company  or a Subsidiary Entity by K&E shall not: (i) result in the existence of an attorney/client  relationship between K&E, on the one hand, and the Company, a Subsidiary Entity, Builder  or their Affiliates, on the other hand; or (ii) disqualify K&E from providing legal advice  and legal services as set forth in this Section 15.16.2 at any time in the future.  15.16.3 Survival.  This Section 15.16 shall survive the termination of the  Agreement, the liquidation of the Company, the dissolution of the Company, the  withdrawal, resignation or retirement of a Member from the Company, the transfer of a  Member’s interest in the Company and the liquidation of a Member’s interest in the  Company.  Section 15.17 Environmental, Social and Governance.  15.17.1 Policies.  Builder has adopted certain environmental, social and  governance policies, statements and procedures, including those policies, statements and  procedures published in the Taylor Morrison Environmental, Social and Governance  Report 2020 and on the Taylor Morrison website (https://www.taylormorrison.com/) (such  policies procedures and any future policies and procedures adopted by Builder, each an  “ESG Policy” and together, the “ESG Policies”). While the ESG Policies often share the  same general goals of supporting a healthy environment, advancing social equality and  dignity, and promoting good corporate governance principles, the means by which a Person  chooses to achieve these objectives and the balance a Person strikes between these  objectives and other objectives, such as business and financial objectives, can vary  significantly.  Manager recognizes the benefits of following good environmental, social  and corporate governance policies and expects that in many cases these objectives should  align with the business, financial and other objectives that Manager will take into  consideration in managing the Company and the Subsidiary Entities.  Because Manager  must balance these competing policies and objectives, Manager will use commercially  reasonable efforts to comply with the ESG Policies and agrees to consider such ESG  Policies in conjunction with any other such policies when managing the Company.  Failure  

 

099999\14127737v20     58       to comply with the ESG Policies shall not be a breach on the part of Manager or subject  Manager to damages, unless such non-compliance violates another unrelated provision of  this Agreement.  15.17.2 Information. Manager shall provide Investor, upon Investor’s written  request, such information available to Manager that is reasonably requested by Investor so  that Investor may monitor Investor’s compliance with Investor’s own environmental,  social and governance current and future reporting requirements (e.g., requirements of  being a member of Principles for Responsible Investment) with respect to the Proposed  Projects and the Proposed Competitive Projects,  including a copy of each Taylor Morrison  Environmental, Social and  Governance Report issued by TMHC or its Affiliate. In the  event Investor requires additional environmental, social or governance investigations or  audits of the Proposed Projects or the Proposed Competitive Projects, Investor will do so  at its sole cost and expense and Manager will reasonably cooperate with Investor’s efforts.  [SIGNATURES CONTINUED ON NEXT PAGE]    

 

099999\14127737v20     S-1       IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date  first above written.  BUILDER:  TM BTR VENTURE LLC, a Delaware limited  liability company  By /s/ Darrell C. Sherman____    Name:  Darrell C. Sherman  Title: EVP, CLO, Secretary  Address:  c/o Taylor Morrison Home Corporation  4900 N. Scottsdale Road, Suite 2000  Scottsdale, Arizona 85251  Attention:  Ryan Huey  Email:  [__]  Telephone: [__]  With Copy to:  c/o Taylor Morrison Home Corporation  4900 N. Scottsdale Road, Suite 2000  Scottsdale, Arizona 85251  Attention:  Darrell Sherman  Email:  [__]  Telephone: [__]    With Copy to:  Cox, Castle & Nicholson LLP  2029 Century Park East, 21st Floor  Los Angeles, California 90067  Attention:  Matthew L. Levy, Esq.  Email:  [__]  Telephone: [__]  

 

099999\14127737v20     S-2       INVESTOR:  VP MOONDANCE HOLDINGS LLC, a Delaware  limited liability company  By: Värde Partners, Inc. a Delaware corporation,  its Manager  By____/s/ Brendan Bosman _________  Name:  __Brendan Bosman__________  Title:    __Senior Managing Director___  Address:  c/o VÄRDE Partners, Inc.  901 S Marquette Avenue, Suite 3300  Minneapolis, Minnesota 55402  Attention:  Brendan Bosman  Email: [__]  Telephone: [__]  With Copy To:  Kirkland & Ellis LLP  300 North LaSalle  Chicago, Illinois 60654  Attention:    Rachel S. Brown  Email:  [__]  Telephone: [__]   Kirkland & Ellis LLP  1601 Elm Street  Dallas, Texas 75201  Attention: Andrew R. Van Noord  Email:[__]  Telephone: [__]  

 

099999\14127737v20     1       Limited Liability Company Agreement  of   TMVP BTR VENTURE LLC, LLC  EXHIBITS  A – Investment Parameters  B – Tax Appendix  C – Form of Assignment Agreement  D – Required PSA Terms  E – Form of Backstop Agreement  F – Major Decisions  G -1 – Form of Monthly Reports  G -2 – Form of Quarterly Reports  H – Form of Construction Management Agreement  I – List of Excluded Projects  J – Form of Membership Assignment  K – Minimum Insurance Requirements  L – Form of Contribution Agreementtmhc-06

THIRD SUPPLEMENTAL INDENTURE    THIRD SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of  June 27, 2022, is made by and among Taylor Morrison Communities, Inc., a Delaware corporation (the  “Issuer”), the undersigned Guarantors (as defined in the Indenture referred to herein) and U.S. Bank Trust  Company, National Association, as trustee under the Indenture referred to below (the “Trustee”).   W I T N E S S E T H    WHEREAS, the Issuer, the Guarantors and the Trustee are party to that certain Indenture, dated  as of February 10, 2020 (as supplemented from time to time, the “Indenture”), providing for the issuance  of the Issuer’s 6.625% Senior Notes due 2027 (the “Notes”);   WHEREAS, Section 9.02 of the Indenture provides, inter alia, that, in certain circumstances, the  Issuer, the Guarantors and the Trustee may amend the Indenture or the Notes with the consent of the  holders of at least a majority in aggregate principal amount of the Notes then outstanding (excluding any  Notes owned by the Issuer or any Guarantor or by any person directly or indirectly controlled by the  Issuer or any Guarantor) (the “Requisite Consents”);   WHEREAS, the Issuer has solicited consents (the “Consents”) to certain amendments to the  Indenture and the Notes (the “Proposed Amendments”) upon the terms and subject to the conditions set  forth in that certain Offer to Purchase and Consent Solicitation Statement, dated June 13, 2022 (the  “Statement”);   WHEREAS, the holders of a majority of the aggregate principal amount of the Notes outstanding  (excluding any Notes owned by the Issuer or any Guarantor, or by any person directly or indirectly  controlled by the Issuer or any Guarantor) validly delivered and did not validly revoke their Consents to  the adoption of all of the Proposed Amendments effected by this Supplemental Indenture in accordance  with the provisions of the Indenture, and evidence of such Consents has been provided by the Issuer to the  Trustee;    WHEREAS, the board of directors of the Issuer, each authorizing body of each Guarantor and the  Trustee are authorize to execute and delivery this Supplemental Indenture;   WHEREAS, the Issuer, having received the Requisite Consents from the holders of the  outstanding Notes, pursuant to Section 9.02 of the Indenture, desires to amend the Indenture and the  Notes as provided for herein (the “Amendment”);    WHEREAS, in accordance with Sections 9.06 and 12.04 of the Indenture, the Issuer has delivered  to the Trustee an Officer’s Certificate and an Opinion of Counsel with respect to this Supplemental  Indenture on the date hereof; and   WHEREAS, pursuant to Sections 9.02 and 9.06 of the Indenture, the Trustee is authorized to  execute and deliver this Supplemental Indenture.    NOW THEREFORE, in consideration of the foregoing and for other good and valuable  consideration, the receipt of which is hereby acknowledged, in order to effect the Amendment, the parties  mutually covenant and agree as follows:     

 

ARTICLE I  Defined Terms  Section 1.1 Capitalized Terms. Capitalized terms used herein without being defined  herein shall have the meanings assigned to them in the Indenture.   Section 1.2 Certain Definitions, etc.. Any definitions used exclusively in the  provisions of the Indenture or Notes that are deleted pursuant to the amendments set forth under this  Supplemental Indenture, and any definitions used exclusively within such definitions, are hereby deleted  in their entirety from the Indenture and the Notes, and all textual references in the Indenture and the Notes  exclusively relating to paragraphs, Sections, Articles or other terms or provisions of the Indenture that  have been otherwise deleted pursuant to this Supplemental Indenture are hereby deleted in their entirety.   Any of the terms or provisions present in the Notes that relate to any of the provisions of the Indenture  amended by this Supplemental Indenture shall also be amended so as to be consistent with the  amendments made in this Supplemental Indenture.  ARTICLE II  Amendments to Article 3 – REDEMPTION AND PREPAYMENT  Section 2.1 The first paragraph of Section 3.03 of the Indenture is hereby amended  and restated as set forth below:  “At least three Business Days but not more than 60 days before a redemption date, the Issuer shall  mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes  are to be redeemed at its registered address, except that redemption notices may be mailed more  than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of  the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or 11 of this  Indenture.”  ARTICLE III  Amendments to Article 4 - COVENANTS  Section 3.1 Section 4.03 of the Indenture is hereby amended and restated to read in  its entirety as set forth below:    “Section 4.03. [Intentionally omitted].”    Section 3.2 Section 4.07 of the Indenture is hereby amended and restated to read in  its entirety as set forth below:  “Section 4.07. [Intentionally omitted].”    Section 3.3 Section 4.08 of the Indenture is hereby amended and restated to read in  its entirety as set forth below:  “Section 4.08. [Intentionally omitted].”    Section 3.4 Section 4.09 of the Indenture is hereby amended and restated to read in  its entirety as set forth below:    “Section 4.09. [Intentionally omitted].”  

 

  Section 3.5 The second paragraph of Section 4.10 of the Indenture is hereby  amended and restated to read in its entirety as set forth below  “Any designation of a Subsidiary of the Restricted Parent as an Unrestricted Subsidiary  shall be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the  Board of Directors of the Restricted Parent giving effect to such designation and an Officer’s  Certificate certifying that such designation complied with the preceding conditions. If, at any  time, any Unrestricted Subsidiary would fail to meet the requirements of an Unrestricted  Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this  Indenture. The Board of Directors of the Restricted Parent or the Issuer may at any time designate  any Unrestricted Subsidiary to be a Restricted Subsidiary of the Restricted Parent.”    Section 3.6 Section 4.12 of the Indenture is hereby amended and restated to read in  its entirety as set forth below:    “Section 4.12. [Intentionally omitted].”    Section 3.7 Section 4.13 of the Indenture is hereby amended and restated to read in  its entirety as set forth below:    “Section 4.13. [Intentionally omitted].”    ARTICLE IV  Amendments to Article 5 – SUCCESSORS  Section 4.1 Section 5.01(a) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:  “(a) None of Holdings, the Restricted Parent nor the Issuer shall, directly or indirectly: (i)  consolidate or merge with or into another Person (whether or not it is the surviving corporation);  or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties  or assets of the Restricted Parent and its Restricted Subsidiaries, taken as a whole, in one or more  related transactions, to another Person, unless:  (1) in the case of a consolidation or merger of, or a sale, assignment, transfer, conveyance  or other disposition by, the Issuer or the Restricted Parent, the Person formed by or  surviving any such consolidation or merger (if other than the Issuer or the Restricted  Parent) or to which such sale, assignment, transfer, conveyance or other disposition has  been made is a corporation or other Person; provided that if any successor Issuer is not a  corporation, then a Person that is a corporation shall become a co-issuer or co-obligor of  the Notes and the Issuer’s obligations under this Indenture; and  (2) the Person formed by or surviving any such consolidation or merger (if other than the  Restricted Parent or the Issuer) or the Person to which such sale, assignment, transfer,  conveyance or other disposition has been made assumes all the obligations of Holdings,  the Restricted Parent and/or the Issuer, as applicable, under the Notes or the Note  Guarantees, as applicable, and this Indenture pursuant to agreements reasonably  satisfactory to the Trustee.”    

 

ARTICLE V  Amendments to Article 6 – DEFAULTS AND REMEDIES  Section 5.1 Section 6.01(4) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:  “(4) [Intentionally omitted];”  Section 5.2 Section 6.01(5) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:    “(5) [Intentionally omitted];”    Section 5.3 Section 6.01(6) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:    “(6) [Intentionally omitted];”    Section 5.4 Section 6.01(7) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:  “(7) except as permitted by this Indenture, any Note Guarantee of the Restricted Parent is  declared to be unenforceable or invalid by any final and nonappealable judgment or decree or  ceases for any reason to be in full force and effect, or the Restricted Parent or any Person acting  on behalf of the Restricted Parent denies or disaffirms its obligations in writing under its Note  Guarantee and such Default continues for 10 days after receipt of the notice specified in this  Indenture;”  Section 5.5 Section 6.01(8) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:  “(8) any of Holdings, the Restricted Parent or the Issuer pursuant to or within the  meaning of Bankruptcy Law:  (A) commences a voluntary case;  (B) consents to the entry of an order for relief against it in an involuntary case;  (C) consents to the appointment of a custodian of it or for all or substantially all  of its property;  (D) makes a general assignment for the benefit of its creditors; or  (E) generally is not paying its debts as they become due; and”  Section 5.6 Section 6.01(9) of the Indenture is hereby amended and restated to read  in its entirety as set forth below:  “(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy  Law that:  

 

(A) is for relief against any of Holdings, the Restricted Parent or the Issuer in an  involuntary case;  (B) appoints a custodian of any of Holdings, the Restricted Parent or the Issuer  for all or substantially all of the property of Holdings, the Restricted Parent, the  Issuer or such Significant Subsidiary, as applicable; or  (C) orders the liquidation of any of Holdings, the Restricted Parent or the Issuer;  and the order or decree remains unstayed and in effect for 60 consecutive days.”    ARTICLE VI  Effectiveness  Section 6.1 Effectiveness. This Supplemental Indenture shall become a binding  agreement between the parties hereto and effective when executed by the parties hereto.  Notwithstanding  the foregoing sentence, the amendments to the Indenture and the Notes set forth herein shall become  operative only upon the Issuer’s acceptance for purchase, pursuant to the Offer (as defined in the  Statement), of at least a majority in aggregate principal amount of the outstanding Notes (excluding any  Notes owned by the Issuer or any Guarantor, or by any person directly or indirectly controlled by the  Issuer or any Guarantor). The Issuer shall notify the Trustee in writing promptly after the occurrence of  such acceptance for purchase or promptly after the Issuer shall determine that such acceptance for  purchase will not occur.  The Proposed Amendments to the Indenture effected by the Supplemental  Indenture shall be deemed to be revoked retroactively to the date of the Supplemental Indenture, and the  Indenture shall remain in its form as of the date of the Statement, if the purchase of the Notes pursuant to  the Offer does not occur.    ARTICLE VII  Miscellaneous  Section 7.1 Notes; Corresponding Amendments. Amendments to the Indenture  pursuant to this Supplemental Indenture shall also apply to the Notes.  Pursuant to Section 11 of each  Global Note, with effect on and from the date hereof, each Global Note shall be deemed supplemented,  modified and amended in such manner as necessary to make the terms of such Global Note consistent  with the terms of the Indenture, as amended by this Supplemental Indenture.  Section 7.2 Incorporation. All provisions of this Supplemental Indenture shall be  deemed to be incorporated in, and made a part of, the Indenture, and the Indenture, as amended and  supplemented by this Supplemental Indenture, shall be read, taken and construed as one and the same  instrument.  Section 7.3 Third Parties. Nothing in this Supplemental Indenture, express or  implied, shall give to any Person, other than the parties hereto and their successors under the Indenture  and the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under the  Indenture.  Section 7.4 New York Law to Govern. THE INTERNAL LAW OF THE STATE  OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL  INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS  

 

OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER  JURISDICTION WOULD BE REQUIRED THEREBY.   Section 7.5 Counterparts. The parties may sign any number of copies of this  Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the  same agreement.  The exchange of copies of this Supplemental Indenture and of signature pages by  facsimile or electronic (including in “.pdf” or “tif” format) transmissions shall constitute effective  execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of  the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by  facsimile or electronically (including in “.pdf” or “tif” format) shall be deemed to be their original  signatures for all purposes.  Section 7.6 Effect of Headings. The Article and Section headings herein are for  convenience only and shall not affect the construction hereof.   Section 7.7 The Trustee. The Trustee shall not be responsible in any manner  whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in  respect of the recitals contained herein, all of which recitals are made solely by the Issuer.   Section 7.8 Successors. All agreements of the Issuer in this Supplemental Indenture  shall bind its successors, except as otherwise provided in this Supplemental Indenture. All agreements of  the Trustee in this Supplemental Indenture shall bind its successors, except as provided in Section 10.05  of the Indenture.  Section 7.9 Severability Clause. In case any provision in this Supplemental Indenture  shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining  provisions shall not in any way be affected or impaired thereby.  Section 7.10 Ratification of Indenture; Supplemental Indenture; Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the  terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture  shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter  authenticated and delivered shall be bound hereby.     [Remainder of page intentionally left blank.]     

 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental  Indenture to be duly executed as of the date first written above.  ISSUER:  TAYLOR MORRISON COMMUNITIES, INC.        By: /s/ Darrell C. Sharman     Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary                      

 

  TRUSTEE:  U.S. BANK TRUST COMPANY, NATIONAL  ASSOCIATION,   as Trustee        By: /s/ Benjamin J. Krueger      Name: Benjamin J. Krueger  Title: Vice President              

 

  GUARANTORS:    ATPD, LLC  AV HOMES OF ARIZONA, LLC  AV HOMES OF RALEIGH, LLC  AV HOMES, INC.  AVATAR PROPERTIES INC.  AVH CAROLINAS, LLC  AVH DFW, LLC  AVH EM, LLC  AVH NORTH FLORIDA, LLC  BONTERRA BUILDERS, LLC  CALIFORNIA EQUITY FUNDING, INC.  DARLING HOMES OF TEXAS, LLC  DFP TEXAS (GP), LLC  DUXFORD FINANCIAL, INC.  HSP INC.  JCH GROUP, LLC  PH VENTURES-SAN JOSE  PH-LP VENTURES  PH-RIELLY VENTURES  PRESLEY CMR, INC.  PRESLEY HOMES  ROYAL OAK HOMES, LLC  RSI COMMUNITIES – CALIFORNIA LLC  RSI CONSTRUCTION SERVICES LLC  RSI JURUPA VALLEY LLC  SYCAMORE CC, INC.  TAYLOR MORRISON AT CRYSTAL FALLS, LLC  TAYLOR MORRISON BTR, INC.  TAYLOR MORRISON ESPLANADE NAPLES, LLC  TAYLOR MORRISON FINANCE, INC.  TAYLOR MORRISON HOLDINGS OF ARIZONA, INC.  TAYLOR MORRISON HOLDINGS, INC.  TAYLOR MORRISON HOME III CORPORATION  TAYLOR MORRISON MARBLEHEAD HOLDINGS,  LLC  TAYLOR MORRISON NORTHWEST, LLC.    TAYLOR MORRISON OF CALIFORNIA, LLC  TAYLOR MORRISON OF CAROLINAS, INC.  TAYLOR MORRISON OF COLORADO, INC.  TAYLOR MORRISON OF FLORIDA, INC.  TAYLOR MORRISON OF GEORGIA, LLC  TAYLOR MORRISON OF ILLINOIS, INC.  TAYLOR MORRISON OF TEXAS, INC.  TAYLOR MORRISON PACIFIC POINT HOLDINGS,  LLC  TAYLOR MORRISON SERVICES, INC.  TAYLOR MORRISON TRAMONTO HOLDINGS, LLC  TAYLOR MORRISON, INC.  

 

TAYLOR MORRISON/ARIZONA, INC.  TAYLOR WOODROW COMMUNITIES – LEAGUE  CITY, LTD.  TAYLOR WOODROW COMMUNITIES AT ARTISAN  LAKES, L.L.C.  TAYLOR WOODROW COMMUNITIES AT MIRASOL,  LTD.  TAYLOR WOODROW COMMUNITIES AT PORTICO,  L.L.C.  TAYLOR WOODROW COMMUNITIES AT ST. JOHNS  FOREST, L.L.C.  TAYLOR WOODROW HOMES HOUSTON (GP),  L.L.C.  TAYLOR WOODROW HOMES – CENTRAL FLORIDA  DIVISION, L.L.C.  TAYLOR WOODROW HOMES – SOUTHWEST  FLORIDA DIVISION, L.L.C.  TM 1464 MEMBER, LLC  TM 529 MEMBER, LLC  TM BTR OF CAROLINAS, LLC  TM BTR OF COLORADO, LLC  TM BTR OF ELLSWORTH, LLC  TM BTR OF FLORIDA, LLC  TM BTR OF PHOENIX, LLC  TM BTR OF TEXAS, LLC  TM CALIFORNIA SERVICES, INC.  TM HIGHLAND LAKES MEMBER, LLC  TM HOMES OF ARIZONA, INC.  TM OAKWOOD TRAILS MEMBER, LLC  TM OYSTER HARBOR, LLC  TM RIDGE GP, LLC  TM RIDGE LP, LLC  TM SENDERA, LLC  TW ACQUISITIONS, INC.  TWC/FALCONHEAD WEST, L.L.C.  TWC/MIRASOL, INC.  TWC/STEINER RANCH, LLC  VITALIA AT TRADITION, LLC  WILLIAM LYON HOMES  WILLIAM LYON HOMES, INC.  WILLIAM LYON SOUTHWEST, INC.  WLH COMMUNITIES – ALDERWOOD LLC  WLH COMMUNITIES – TEXAS LLC  WLH COMMUNITIES LLC  WLH ONION CREEK LLC  WLH PRADO LLC  WLH STILLWATER LLC  WLH STONEWALL LLC  WLH TRAILS AT LEANDER LLC    

 

On behalf of each of the above named entities,      By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary  

 

  LYON EAST GARRISON COMPANY I, LLC  LYON WATERFRONT, LLC  MOUNTAIN FALLS, LLC    By: William Lyon Homes, Inc.  Its: Sole Member        By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary      CHARLESTON 215, LLC  SOUTH COOPER MOUNTAIN OWNER, LLC    By: William Lyon Homes, Inc.  Its: Managing Member        By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary      WLH ENTERPRISES      By: William Lyon Homes, Inc.  Its: General Partner        By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary      By: Presley CMR, Inc.  Its: General Partner       

 

  By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary        MOUNTAIN FALLS GOLF COURSE, LLC    By: WLH Enterprises   Its: Managing Member    By: William Lyon Homes, Inc.  Its: General Partner        By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary      By: Presley CMR, Inc.  Its: General Partner         By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary      460 CENTRAL, L.L.C.  BASELINE WOODS SFD I, L.L.C.  BASELINE WOODS SFD II, L.L.C.  BASELINE WOODS WEST, L.L.C.  BETHANY CREEK FALLS, L.L.C.  BROWNSTONE AT ISSAQUAH HIGHLANDS,  L.L.C.  BRYANT HEIGHTS, L.L.C.  BULL MOUNTAIN RIDGE, L.L.C.  CALAIS AT VILLEBOIS, L.L.C  CASCADIAN KING COMPANY, L.L.C.  CASCARA AT REDMOND RIDGE, L.L.C.  CEDAR FALLS WAY LLC  CORNELIUS PASS TOWNHOMES, L.L.C.  EDGEWATER TUALATIN, L.L.C.  GRANDE POINTE AT VILLEBOIS, L.L.C.  

 

HIGH POINT III, L.L.C.  HIGHCROFT AT SAMMAMISH, L.L.C.  ISSAQUAH HIGHLANDS INVESTMENT FUND,  L.L.C.  LES BOIS AT VILLEBOIS, L.L.C.  MILL CREEK TERRACE, L.L.C.  MURRAY & WEIR SFD, L.L.C.  ORENCO WOODS SFD, L.L.C.  PEASLEY CANYON HOMES, L.L.C.  PNW CASCADIAN COMPANY, L.L.C.  POLYGON AT BRENCHLEY ESTATES, L.L.C.  POLYGON AT SUNSET RIDGE, L.L.C.  POLYGON AT VILLEBOIS II, L.L.C.  POLYGON AT VILLEBOIS III, L.L.C.  POLYGON AT VILLEBOIS IV, L.L.C.  POLYGON AT VILLEBOIS V, L.L.C.  POLYGON NORTHWEST COMPANY, L.L.C.  POLYGON PAYMASTER, L.L.C.  RIDGEVIEW TOWNHOMES, L.L.C.  RIVERFRONT MF, L.L.C.  RIVERFRONT SF, L.L.C.  SILVERLAKE CENTER, L.L.C.  SPANAWAY 230, L.L.C.  SPARROW CREEK, L.L.C.  THE RESERVE AT MAPLE VALLEY, L.L.C.  THE RESERVE AT NORTH CREEK, L.L.C.  TWIN CREEKS AT COOPER MOUNTAIN, L.L.C.  VIEWRIDGE AT ISSAQUAH HIGHLANDS, L.L.C.  W.R. TOWNHOMES F, L.L.C.  CASCADIAN SOUTH L.L.C.    By: Taylor Morrison Northwest, LLC  Its: Sole Member         By: /s/ Darrell C. Sherman      Name: Darrell C. Sherman  Title: Chief Legal Officer, Executive Vice   President and Secretary

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