Document:

Purchase and Sale Agreement

 EXHIBIT 10.1 
  

 PURCHASE AND SALE AGREEMENT 
 BY AND BETWEEN 
 THE RETREAT, LLC 
 a Florida limited liability company 
 AS SELLER 
 AND 
 KC RETREAT ASSOCIATES, LLC, 
 a Delaware limited liability company 
 AS PURCHASER 
 As of
January 11, 2008 
  

 TABLE OF CONTENTS 
  

							
	 	 	 	  	 	  	PAGE
	 ARTICLE 1        PURCHASE AND SALE
	  	1
				
		 	  1.1	  	Agreement of Purchase and Sale	  	1
		 	  1.2	  	Property Defined	  	2
		 	  1.3	  	Permitted Exceptions	  	2
		 	  1.4	  	Purchase Price	  	2
		 	  1.5	  	Payment of Purchase Price	  	2
		
	ARTICLE 2        TITLE AND SURVEY	  	3
				
		 	  2.1	  	Title Examination; Commitment for Title Insurance	  	3
		 	  2.2	  	Survey	  	3
		 	  2.3	  	Title Objections; Cure of Title Objections	  	3
		 	  2.4	  	Title to the Property	  	4
		 	  2.5	  	Pre-Closing “Gap” Title Defects	  	4
		 	  2.6	  	Seller’s Covenant Not to Encumber	  	4
		
	ARTICLE 3        INSPECTION	  	5
				
		 	  3.1	  	Right of Inspection of the Property	  	5
		
	ARTICLE 4        CLOSING	  	6
				
		 	  4.1	  	Time and Place	  	6
		 	  4.2	  	Seller’s Obligations at Closing	  	6
		 	  4.3	  	Purchaser’s Obligations at Closing	  	8
		 	  4.4	  	Credits and Prorations	  	8
		 	  4.5	  	Closing Costs	  	11
		 	  4.6	  	Conditions Precedent to Obligation of Purchaser	  	11
		 	  4.7	  	Conditions Precedent to Obligation of Seller	  	12
		
	ARTICLE 5        REPRESENTATIONS, WARRANTIES AND COVENANTS	  	13
				
		 	  5.1	  	Representations and Warranties of Seller	  	13
		 	  5.2	  	Survival of Seller’s Representations and Warranties	  	16
		 	  5.3	  	Representations and Warranties of Purchaser	  	16
		 	  5.4	  	Survival of Purchaser’s Representations and Warranties	  	16
		 	  5.5	  	Covenants of Seller	  	17
		
	ARTICLE 6        DEFAULT	  	19
				
		 	  6.1	  	Default by Purchaser	  	19
		 	  6.2	  	Default by Seller	  	19
		 	  6.3	  	Notice of Default; Opportunity to Cure	  	19
		 	  6.4	  	Recoverable Damages	  	19
		
	ARTICLE 7        CASUALTY AND CONDEMNATION	  	20
				
		 	  7.1	  	Casualty	  	20
		 	  7.2	  	Condemnation	  	20

  

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	 ARTICLE 8        COMMISSIONS
	  	21
				
		 	   8.1
	  	Representation and Indemnity	  	21
		 	   8.2
	  	Survival	  	21
		
	ARTICLE 9        MISCELLANEOUS	  	21
				
		 	   9.1
	  	Public Disclosure	  	21
		 	   9.2
	  	Assignment	  	21
		 	   9.3
	  	Notices	  	21
		 	   9.4
	  	Modifications	  	22
		 	   9.5
	  	Calculation of Time Periods	  	23
		 	   9.6
	  	Successors and Assigns	  	23
		 	   9.7
	  	Entire Agreement	  	23
		 	   9.8
	  	Further Assurances	  	23
		 	   9.9
	  	Counterparts	  	23
		 	   9.10
	  	Severability	  	23
		 	   9.11
	  	Applicable Law	  	23
		 	   9.12
	  	No Third Party Beneficiary	  	24
		 	   9.13
	  	Exhibits and Schedules	  	24
		 	   9.14
	  	Captions	  	24
		 	   9.15
	  	Construction	  	24
		 	   9.16
	  	Termination of Agreement	  	24
		 	   9.17
	  	Survival	  	24
		 	   9.18
	  	Time of Essence	  	24

  

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 PURCHASE AND SALE AGREEMENT 
 THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of January 11, 2008 (the “Effective Date”), by and between THE RETREAT, LLC, a Florida limited liability company
(the “Seller”) and KC RETREAT ASSOCIATES, LLC, a Delaware limited liability company (“Purchaser”). 
 WITNESSETH: 
 ARTICLE 1 
 PURCHASE AND SALE 
 1.1 Agreement of Purchase and Sale. Subject to the terms and conditions hereinafter set
forth, Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase from Seller, the following: 
 (a) that
certain tract or parcel of land located in Shawnee, Johnson County, Kansas, and more particularly described on Schedule 1.2(a), attached hereto and by this reference made a part hereof (the property described in this clause (a) being
herein referred to as the “Land”), together with any rights, easements and appurtenances pertaining to the Land; 
 (b) those rights, easements and appurtenances pertaining to the Land, including (i) all right, title and interest of Seller (if any) in and to adjacent streets, alleys or rights-of-way, (ii) strips, gaps and gores, if any, in
connection with the Land, (iii) any and all oil, gas and minerals lying under, in, on or about or constituting a part of the Land, regardless of whether the minerals are considered part of the surface estate or part of the mineral estate, and
(iv) all right, title and interest of Seller with respect any easements or covenants that benefit or burden the Land (the property described in this clause (b) herein referred to collectively as the “Related Rights”)

 (c) the buildings, structures, fixtures and other improvements (if any) on the Land (the property described in this clause
(c) being herein referred to as the “Improvements”, and the Land and the Improvements being hereinafter sometimes collectively referred to as the “Real Property”); 
 (d) all tangible personal property upon the Land or within the Improvements, including specifically, without limitation, appliances,
equipment, furniture, carpeting, draperies and curtains, tools and supplies, and other items of tangible personal property owned by Seller and used in connection with the ownership, use, maintenance or operation of the Land and the Improvements, and
including those items of tangible 

 
personal property identified on Schedule 1.2(c), attached hereto and incorporated herein by this reference, but excluding (i) personal property
owned by tenants under the Leases, (ii) any equipment installed by, or in connection with, any telecommunication or utility provider and which is owned by any party other than Seller, and (iii) any items leased to Seller (the property
described in this clause (d), other than the excluded items, being herein referred to collectively as the “Tangible Personal Property”). 
 (e) all of the right, title and interest as landlord or lessor in, to and under all agreements listed and described on Schedule 1.2(d) (the “Rent Roll”) attached hereto and made a part hereof,
pursuant to which any portion of the Land or Improvements is used or occupied by anyone other than Seller (the property described in this clause (e) being herein referred to collectively as the “Leases”); 
 (f) all right, title and interest as the owner in, to and under (i) the contracts listed and described on Schedule 1.2(e) (the
“Service Contracts”) attached hereto and made a part hereof, (ii) all existing warranties and guaranties issued to or inuring to the benefit of Seller in connection with the Improvements or the Tangible Personal Property, and
(iii) all governmental permits, licenses and approvals, if any, belonging to or inuring to the benefit of Seller and pertaining to the Real Property or the Tangible Personal Property (the property described in this clause (f) being
sometimes herein referred to collectively as the “Intangible Property”. 
 1.2 Property Defined. The Land, the
Related Rights, the Improvements, the Tangible Personal Property, the Leases and the Intangible Property are hereinafter sometimes referred to collectively as the “Property.” 
 1.3 Permitted Exceptions. At Closing, Seller shall covey to Purchaser good, marketable and indefeasible title to the Property subject only
to the matters which are, or are deemed to be, Permitted Exceptions pursuant to ARTICLE 2 hereof (herein referred to collectively as the “Permitted Exceptions”). 
 1.4 Purchase Price. Seller shall sell, and Purchaser shall purchase, the Property for a total purchase price (the “Purchase
Price”) of Fifteen Million Nine Hundred Thousand No/100 Dollars ($15,900,000.00). 
 1.5 Payment of Purchase Price.
The Purchase Price, as adjusted by prorations and adjustments as herein provided, shall be paid at Closing in cash by wire transfer of immediately available federal funds to a bank account of Assured Quality Title Company, as escrow agent (1001
Walnut, Kansas City, Missouri 64106) (the “Escrow Agent”) designated by Escrow Agent in writing to Purchaser prior to Closing and shall be subsequently payable in full at Closing in cash by wire transfer of immediately available
federal funds to a bank account designated by Seller in writing to Escrow Agent prior to Closing. 
  

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 ARTICLE 2 
 TITLE AND SURVEY 
 2.1 Title Examination; Commitment for Title Insurance. Prior to the
Effective Date, Seller has delivered to Purchaser an owner’s title insurance commitment (as initially issued to Purchaser, the “Title Commitment”) issued by Escrow Agent (in its capacity as title insurer sometimes herein called
the “Title Company”) with an effective date of November 8, 2007. 
 2.2 Survey. Prior to the Effective
Date, Seller has delivered to Purchaser that certain plat of survey, dated December 27, 2007, entitled “ALTA/ACSM Land Title Survey - Retreat of Shawnee” prepared by Thomas Clemons Area Surveyors and bearing the seal and certification
of Thomas W. Clemons, P.L.S. KS. No. 854 (the “Survey”). 
 2.3 Title Objections; Cure of Title
Objections. 
 (a) Purchaser shall have until the Closing Date (the “Title Objection Date”) to notify
Seller, in writing, of such objections as Purchaser may have to the Title Commitment (including the title exception documents referred to therein) or the Survey, other than the Permitted Exceptions described in clauses (a) and (b) of
Section 2.4. The items set forth on Schedule 2.3(a), attached hereto and by this reference made a part hereof, together with any item contained in the Title Commitment or shown on the Survey to which Purchaser does not object on or
before the Title Objection Date shall be deemed a “Permitted Exception.”  
 (b) In the event
Purchaser shall notify Seller of objections to title or matters shown on the Survey on or before the Title Objection Date, Seller shall have the right, but not the obligation, to cure such objections. If Seller elects not to or is unable to
cure any objections specified in Purchaser’s notice, then in either such case Purchaser shall have the right to elect one, but not both, of the following options, which election must in each case be made at or before the Closing: 
 (1) to accept the Seller’s title to the Property subject to the Permitted Exceptions, specifically including any matter objected to
by Purchaser which Seller is unwilling or unable to cure, and without reduction of the Purchase Price; or 
 (2) to terminate
this Agreement by sending written notice thereof to Seller, and upon delivery of such notice of termination, this Agreement shall terminate and thereafter neither party hereto shall have any further rights, obligations or liabilities hereunder
except to the extent that any right, obligation or liability set forth herein expressly survives termination of this Agreement. 
 (c) Notwithstanding anything contained herein to the contrary, Seller shall be obligated at Closing to discharge all mortgages and other monetary liens encumbering 

  

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the Property (regardless of whether Purchaser objects to such mortgage). (The term “mortgage” as used herein includes any mortgage, deed of
trust, deed to secure debt and similar security instrument securing an indebtedness of Seller and encumbering the Property or any portion thereof; the terms “discharge” and “discharged” as used herein include
compliance with a statutory bonding procedure that has the legal effect of removing the mortgage or other item as a lien on the Property); provided, however, that Purchaser shall pay any prepayment penalty, yield maintenance payment or any other
similar charge or expense imposed by the holder of the existing mortgage loan (the “Existing Mortgage Loan”) encumbering the Property in connection with the prepayment of the Existing Mortgage Loan. 
 2.4 Title to the Property. At Closing, Seller shall convey good, marketable and indefeasible title to the Property, subject only the
Permitted Exceptions. It shall be a condition to Purchaser’s obligation to close this transaction that the Title Company shall have issued the Title Policy to Purchaser (or unconditionally committed to issue the Title Policy to Purchaser upon
receipt of the title insurance premium therefor). “Title Policy” means an extended coverage American Land Title Association (ALTA) Form 1992 Owner’s Policy of Title Insurance insuring Purchaser’s fee simple title to the
Real Property, in the amount of the Purchase Price, with the standard exceptions and the creditor’s rights exclusion deleted, and including the endorsements set forth in Schedule 2.2, attached hereto and by this reference made a part
hereof, and subject only to the following matters (the “Permitted Exceptions”): 
 (a) the lien of all ad
valorem real estate taxes and assessments not yet due and payable as of the Closing Date, subject to proration and adjustment as herein provided; 
 (b) the rights of tenants, as tenants only, under the Leases described in the Rent Roll and any new Leases entered into between the Effective Date and Closing and (if required) approved by Purchaser in accordance with
the terms of this Agreement; and 
 (c) additional items, if any, appearing of record or shown on the Survey, approved or
deemed approved by Purchaser pursuant to Section 2.3 or 2.5 hereof. 
 2.5 Pre-Closing “Gap” Title Defects.
Whether or not Purchaser shall have furnished to Seller any notice of title objections pursuant to the foregoing provisions of this Agreement, Purchaser may, at or prior to Closing, notify Seller in writing of any objections to title first
raised by the Title Company or the Survey after the effective date of the Title Commitment or the Survey, as appropriate; provided, however, that Purchaser must notify Seller of any such objections within ten (10) days of Purchaser’s first
receipt of the updated title commitment or updated survey, whichever first provides notice of the condition giving rise to any such objection. With respect to any objections to title set forth in such notice, Seller shall have the same option to
cure and Purchaser shall have the same option to accept title subject to such matters or to terminate this Agreement as those which apply to any notice of objections made by Purchaser on or before the Title Objection Date 
 2.6 Seller’s Covenant Not to Encumber. Seller agrees that, between the Effective Date and the Closing Date, Seller will not sell,
assign, rent, convey (absolutely or as security), 

  

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grant a security interest in, or otherwise encumber or dispose of, the Property (or any part thereof or estate therein) in any manner that will survive
Closing, except as approved in writing by Purchaser or as expressly provided in this Agreement. 
 ARTICLE 3 
 INSPECTION 
 3.1 Right of
Inspection of the Property. 
 (a) From and after the Effective Date and so long as this Agreement remains in full
force and effect, Purchaser shall have the right to make a physical inspection of the Property, and Purchaser, personally or through agents, employees or contractors, may go upon the Property during normal business hours or at other reasonable times
to make boundary line or topographical surveys and to conduct such studies, tests, samplings, investigations and analyses of any and all aspects of the Property as Purchaser deems necessary or desirable, including, without limitation, engineering,
environmental, soil, and groundwater and other tests, samplings and studies of the Property. Purchaser’s environmental study of the Property may include, among other matters, studies of soil and groundwater contamination, asbestos,
polychlorinated biphenyls (PCBs), lead in drinking water, lead based paint, radon gas, and wetlands. Seller will provide Purchaser and its agents with access to the Property and will cooperate with Purchaser’s surveys, studies, tests,
samplings, investigations, and analyses. 
 (b) In addition to any other obligation to assist Purchaser in the inspection of
the Property, Seller has provided to Purchaser prior to the Effective Date true and correct copies of all materials described on Schedule 3.1(b) attached hereto and by this reference made a part hereof, to the extent Seller has not already
done so and these materials are available to Seller or any consultants employed by Seller, or are in the reasonable control of Seller or any consultants employed by Seller. 
 (c) Purchaser shall indemnify, hold harmless and defend Seller from and against any and all claims, demands, causes of action,
liabilities, losses, costs, damages and expenses (including reasonable attorneys’ fees and expenses and court costs incurred in defending any such claim or in enforcing this indemnity) of whatsoever nature (individually, a
“Claim,” and collectively, “Claims”) that may be incurred by Seller and arise out of or in connection with the acts or omissions of Purchaser and its agents, representatives, contractors and consultants, or any of
them in the inspection of the Property. Such Claims shall include, but are not limited to, Claims arising out of or in connection with personal injury or death of persons, loss, destruction or damage to property, or liens or Claims of lien filed
against the Property. Such Claims shall exclude, however, any Claims to the extent such Claims arise out of the discovery of, or the non-negligent, accidental or inadvertent actual or threatened release or movement of, any Hazardous Materials
resulting from Purchaser’s inspections and other activities (unless the Hazardous Materials are brought onto the Property by Purchaser or Purchaser’s 

  

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authorized agents, employees, consultants or contractors). In defending the Indemnitee, Purchaser shall provide counsel that is reasonably acceptable to the
Indemnitee. Purchaser shall backfill all trenches, fill holes and similarly repair damage and eliminate dangerous conditions created during its inspections, tests, and studies, whether such conditions are created by the Purchaser or any of its
agents, employees, contractors, or consultants. This Section 3.1(c) shall survive any termination of this Agreement. 
 (d) Purchaser shall maintain or shall cause its contractors to maintain a One Million Dollar ($1,000,000) comprehensive general liability insurance on an occurrence basis (including, without limitation, contractual liability,
contractor’s protective liability, personal injury and property damage coverage) in a combined single limit of at least Two Million Dollars ($2,000,000) with reasonable deductibles, and a One Million Dollar ($1,000,000) worker’s
compensation insurance in such amounts and with such coverages as may be required in the jurisdiction where the Property is located. Purchaser shall provide Seller evidence of such insurance, prior to any entry upon the Property to perform the
inspections, in the form of an insurance certification. This Paragraph shall survive the termination of this Agreement. 
 ARTICLE 4 

 CLOSING 
 4.1
Time and Place. The consummation of the transaction contemplated hereby (“Closing”) shall be held in escrow at the offices of the Escrow Agent in Kansas City, Missouri at 10:00 a.m. (eastern time) on January
    , 2008 (or such extended date as may be provided under other provisions of this Agreement). The Closing may be held at such other place or such earlier time and date as Seller and Purchaser shall mutually approve in
writing. The date on which the Closing is scheduled to occur hereunder (or, if earlier, the date on which Closing occurs) is sometimes referred to herein as the “Closing Date.” 
 4.2 Seller’s Obligations at Closing. At Closing, Seller shall: 
 (a) deliver to Purchaser a special warranty deed in the form in the form attached hereto as Schedule 4.2(a) and by this reference
made a part hereof, duly executed by Seller, pursuant to which Seller shall convey the Real Property to Purchaser subject only to the Permitted Exceptions; 
 (b) deliver to Purchaser a blanket bill of sale and assignment, in the form attached hereto as Schedule 4.2(b) and by this reference made a part hereof (the “Bill of Sale and Assignment”), duly
executed by Seller, pursuant to which (i) Seller shall convey the Tangible Personal Property and the Intangible Property to Purchaser, and (ii) Seller shall assign to Purchaser, and Purchaser shall assume from and after the date of
Closing, Seller’s interest in and to the Leases and Service Contracts; 
 (c) execute and deliver to Purchaser a
certificate (“Seller’s Closing Certificate”), dated as of the Closing Date, in the form of attached hereto as Schedule 4.2(c) 

  

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and by this reference made a part hereof, stating that the representations and warranties of Seller contained in Section 5.1 of this Agreement are true
and correct in all material respects as of the Closing Date; 
 (d) deliver to Purchaser an updated Rent Roll, certified by
Seller to be true and correct in all material respects. 
 (e) execute and deliver to Purchaser an affidavit duly executed by
Seller stating that Seller is not a “foreign person” as defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act; 
 (f) join with Purchaser to execute a notice (the “Tenant Notice”) in form and content reasonably satisfactory to
Purchaser and Seller, which Purchaser shall send to each tenant under each of the Leases informing such tenant of the sale of the Property and of the assignment to Purchaser of Seller’s interest in, and obligations under, the Leases (including,
if applicable any security deposits) and directing that all rent and other sums payable after the Closing under each such Lease shall be paid as set forth in the notice; 
 (g) deliver to Purchaser a closing statement, duly executed by Seller and approved by Purchaser, consistent with the terms of this
Agreement; 
 (h) deliver to Purchaser such evidence as Purchaser’s counsel and/or the Title Company may reasonably
require as to the authority of the person or persons executing documents on behalf of Seller; 
 (i) deliver to the Title
Company a title insurance affidavit, duly executed by Seller or a representative of Seller, in form and content reasonably satisfactory to Purchaser and the Title Company and sufficient for the Title Company to issue the Title Policy; 
 (j) deliver such additional documents as shall be reasonably requested by the Title Company or Purchaser or required to consummate the
transaction contemplated by this Agreement; provided, however, that in no event shall Seller be required to indemnify the Title Company, Purchaser, or any other party pursuant to any such documents, or undertake any other material liability not
expressly contemplated in this Agreement, unless Seller elects to do so in its sole discretion; 
 (k) deliver to Purchaser at
the place of Closing or at the Property all keys and access control cards or fobs for the property, the Leases, the Service Contracts and licenses and permits, if any, in the possession of Seller or Seller’s agents, including any originally
executed Leases and Service Contracts in Seller’s possession at the Property or otherwise in Seller’s reasonable control, together with such leasing and property files and records which are material in connection with the continued
operation, leasing and maintenance of the Property and including all items of Tangible Personal Property or Intangible Personal Property that are in Seller’s possession or control; and 
  

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 (l) deliver to Purchaser possession and occupancy of the Property, subject only to the
Permitted Exceptions. 
 4.3 Purchaser’s Obligations at Closing. At Closing, Purchaser shall: 
 (a) deliver to the Escrow Agent the full amount of the Purchase Price, as increased or decreased by prorations and adjustments as herein
provided, in immediately available federal funds wire transferred to an account designated in writing by Escrow Agent as set forth in Section 1.6 (“Escrow Agent’s Account”), and, as adjusted by prorations and adjustments
as herein provided, shall be subsequently payable in full at Closing in cash by wire transfer of immediately available federal funds to a bank account designated by Seller in writing to Escrow Agent prior to the Closing; 
 (b) deliver to Seller such evidence as Seller’s counsel and/or the Title Company may reasonably require as to the authority of the
person or persons executing documents on behalf of Purchaser; and 
 (c) join Seller in execution of the Bill of Sale and
Assignment and the Tenant Notice; and 
 (d) deliver to Seller a closing statement, duly executed by Purchaser and approved by
Seller, consistent with the terms of this Agreement. 
 4.4 Credits and Prorations. 
 (a) If the transaction closes before 2:00 P.M. Eastern time on the Closing Date, all income and expenses in connection with the operation
of the Property shall be apportioned, as of 12:01 A.M., on the Closing Date, as if Purchaser were vested with ownership of the Property during the entire Closing Date, and such that, except as otherwise expressly provided to the contrary in this
Agreement, Seller shall have the benefit of all income and the burden of all expenses for all periods preceding the Closing Date. If the transaction closes after 2:00 P.M. Eastern Time on the Closing Date, all income and expenses in connection with
the operation of the Property shall be apportioned, as of 12:01 A.M., on the day after the Closing Date, as if Purchaser were vested with ownership of the Property during the entire day after the Closing Date, and such that, except as
otherwise expressly provided to the contrary in this Agreement, Seller shall have the benefit of all income and the burden of all expenses for all periods preceding the day after the Closing Date. Items (1)-(5) below will be prorated at Closing
utilizing the information known at that time. A post-closing “true-up” shall take place within ninety (90) days of the Closing Date to adjust the prorations of said items (1), (3), (4) and (5), if necessary, and within a
reasonable time to adjust the proration of said item (2), if necessary. Such prorated items shall include, without limitation, the following: 
 (1) rents, if any, based on the amount collected for the current month. The term “rents” as used in this Agreement includes all payments due and payable by tenants under the Leases other than refundable
deposits, application fees, late charges, pet charges and termination payments (of which deposits and termination payments shall be treated as set forth in Section 4.4(b)(1) but such other amounts shall be retained by Seller); 
  

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 (2) ad valorem taxes and assessments levied against the Property (including personal
property taxes on the Tangible Personal Property), which shall be prorated as set forth in Section 4.4(b)(2) hereof; 
 (3) payments under the Service Contracts, which shall not include any “key” or “door” money; 
 (4) Seller utilizes the services of RUBS (residential utility billing service) to collect certain utility payments from tenants. All RUBS monies which have accrued to the credit of Seller which are unpaid at the Close of Escrow shall be
credited to Seller. All other utility service charges for electricity, heat and air conditioning service which are expenses of the Property (not of individual tenants), other utilities, taxes (other than real estate and personal property taxes) such
as rental taxes, other expenses incurred in operating the Property that Seller customarily pays, and any other costs incurred in the ordinary course of business or the management and operation of the Property shall be prorated on an accrual basis.
Seller shall pay all such expenses that accrue prior to the Close of Escrow and Buyer shall pay all such expenses accruing on the Close of Escrow and thereafter. To the extent possible, Seller and Buyer shall obtain billings and meter readings as of
the Close of Escrow to aid in such prorations; 
 (5) if applicable, annual assessments or similar periodic charges under any
private covenants, conditions, restrictions or easements affecting the Property; and 
 (6) any other operating expenses or
other items pertaining to the Property which are customarily prorated between a purchaser and a seller in comparable commercial transactions in the area in which the Property is located. 
 (b) Notwithstanding anything contained in the foregoing provisions: 
 (1) At Closing, (A) Seller shall, at Seller’s option, either deliver to Purchaser any unforfeited resident deposits shown on the
Rent Roll or credit to Purchaser the amount of such unforfeited resident deposits and any interest thereon, (B) Purchaser shall credit to the account of Seller all refundable cash or other deposits posted with utility companies serving the
Property, or, at either party’s option, Purchaser shall contract directly with the utility companies and Seller shall be entitled to receive and retain such refundable cash and deposits; provided that Purchaser and Seller will cooperate so that
utility service to the Property is not interrupted; and (C) Purchaser shall receive a credit for the any termination payment equal to the unamortized amount thereof as of the Closing Date. For the purposes of this Section 4.4(b)(1) the
term “unforfeited resident deposits” means any refundable resident deposits which are held by Seller and which Seller has not applied, and is not entitled to apply, against delinquent rents, property damage or otherwise; 
  

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 (2) Any ad valorem taxes paid at or prior to Closing shall be prorated based upon the
amounts actually paid. If taxes and assessments for the current year have not been paid before Closing, Seller shall be charged at Closing an amount equal to that portion of such taxes and assessments which relates to the period before
Closing, and Purchaser shall pay the taxes and assessments prior to their becoming delinquent. Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed shall be based upon
the tax rate and/or assessed valuation last fixed. To the extent that the actual taxes and assessments for the current year differ from the amount apportioned at Closing, the parties shall make all necessary adjustments by appropriate
payments between themselves following Closing upon the availability of the final tax bills. 
 (3) Gas, electricity and other
utility charges which are payable by any tenant to a third party shall not be apportioned hereunder, except as to the RUBS payments described in Section 4.4(a)(5). 
 (4) Seller shall pay in full prior to the Closing all leasing commissions and locators’ and finders’ fees, if any, due to
leasing or other agents (pursuant to a contractual arrangement with Seller) for each Lease entered into by Seller prior to the Closing Date promptly when due. Trade payables in the nature of open accounts payable to trade vendors or suppliers and
all other accounts payable which have accrued prior to the Closing Date shall be the obligation of Seller. 
 (5) Unpaid and
delinquent rent collected by Seller and Purchaser after the date of Closing shall be delivered as follows: (a) if Seller collects any unpaid or delinquent rent for the Property, Seller shall, within fifteen (15) days after the receipt
thereof, deliver to Purchaser any such rent which Purchaser is entitled to hereunder relating to the date of Closing and any period thereafter, and (b) if Purchaser collects any unpaid or delinquent rent from the Property, Purchaser shall,
within fifteen (15) days after the receipt thereof, deliver to Seller any such rent which Seller is entitled to hereunder relating to the period prior to the date of Closing. Seller and Purchaser agree that all rent received by Seller or
Purchaser after the Closing shall be applied first to current rentals and then to delinquent rentals, if any. Purchaser will make a good faith effort after Closing to collect all rents in the usual course of Purchaser’s operation of the
Property, but Purchaser will not be obligated to institute any lawsuit or other collection procedures to collect delinquent rents; and 
 (6) If after Closing any ad valorem taxes or other assessments with respect to the Property are or become due for the year of Closing or prior years, then Seller shall pay to Purchaser, within ten (10) days
following receipt of Purchaser’s statement therefor, (i) the full amount of such additional taxes for any 

  

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year prior to the year of Closing and (ii) Seller’s share of any such additional taxes for the year of Closing, prorated in the manner set forth
above; and such obligation of Seller shall not merge with the deed(s) to be delivered hereunder but shall survive the Closing. 
 (c) The provisions of this Section 4.4 shall survive Closing. 
 4.5 Closing Costs.  
 (a) Seller shall pay (i) the fees of any counsel representing it in connection
with this transaction, (ii) one-half ( 1/2) of any escrow fees charged by Escrow Agent or the Title Company,
(iii) the costs of recording all mortgage cancellations, if any, (iv) if applicable, any and all applicable transfer taxes, documentary stamp taxes, recordation taxes, and similar charges relating to the transfer of the Property, and
(v) the premium for the Title Policy except for endorsements required by Purchaser. 
 (b) Purchaser shall pay (i) the fees of any counsel representing Purchaser in connection with this transaction, (ii) the cost of the Survey, (iii) the cost of recording the Deed, and (iv) one-half
( 1/2) of any escrow fees charged by Escrow Agent or the Title Company. 
 (c) Except as otherwise provided herein, all other costs and expenses incident to this transaction and the closing thereof shall be paid
by the party incurring same. 
 4.6 Conditions Precedent to Obligation of Purchaser. The obligation of Purchaser to consummate
the transaction hereunder shall be subject to the fulfillment on or before the Closing Date (or such earlier time as otherwise required hereby) of all of the following conditions, any or all of which may be waived by Purchaser in its sole
discretion: 
 (a) Seller shall have delivered to Purchaser all of the items required to be delivered to Purchaser by Seller
or Seller’s agents pursuant to the terms of this Agreement 
 (b) All of the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects as of the Closing Date, as if made and updated as of the Closing Date (without any reference to “knowledge”). 
 (c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and
observed by Seller as of the Closing Date. 
 (d) The Title Company shall have issued the Title Policy to Purchaser (or
unconditionally committed to issue the Title Policy to Purchaser upon receipt of the title insurance premium therefor). 
  

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 (e) All other conditions precedent to Purchaser’s obligation to consummate the
transaction hereunder (if any) which are expressly set forth in this Agreement shall have been satisfied on or before the Closing Date. 
 In
the event any of the foregoing conditions has not been satisfied by the Closing Date other than through failure of Purchaser to fully comply with its obligations under this Agreement, Purchaser shall have the right to terminate this Agreement by
written notice given to Seller on the Closing Date, whereupon the parties shall have no further rights, duties or obligations hereunder, other than those which are expressly provided herein to survive the termination of this Agreement; provided,
however, that if any of the foregoing conditions has not been satisfied due to a default by Purchaser or Seller hereunder, then Purchaser’s and Seller’s respective rights, remedies and obligations shall instead be determined in accordance
with ARTICLE 5. 
 4.7 Conditions Precedent to Obligation of Seller. The obligation of Seller to consummate the transaction
hereunder shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Seller in its sole discretion: 
 (a) Seller shall have received the Purchase Price as adjusted pursuant to and payable in the manner provided for in this Agreement.

 (b) Purchaser shall have delivered to Seller all of the items required to be delivered to Seller by Purchaser or
Purchaser’s agents pursuant to the terms of this Agreement. 
 (c) All of the representations and warranties of Purchaser
contained in this Agreement shall be true and correct in all material respects as of the Closing Date, as if made and updated as of the Closing Date. 
 (d) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date. 
 (e) All other conditions precedent to Seller’s obligation to consummate the transaction hereunder (if any) which are expressly set
forth in this Agreement shall have been satisfied on or before the Closing Date. 
 In the event any of the foregoing
conditions has not been satisfied by the Closing Date other than through failure of Seller to fully comply with its obligations under this Agreement, Seller shall have the right to terminate this Agreement by written notice given to Purchaser on the
Closing Date, whereupon the parties shall have no further rights, duties or obligations hereunder, other than those which are expressly provided herein to survive a termination of this Agreement; provided, however, that if any of the foregoing
conditions has not been satisfied due to a default by Purchaser or Seller hereunder, then Purchaser’s and Seller’s respective rights, remedies and obligations shall instead be determined in accordance with ARTICLE 5. 
  

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 ARTICLE 5 
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
 5.1 Representations and Warranties of Seller.
Seller hereby represents and warrants to, and covenants with, Purchaser as of the Effective Date and as of the Closing Date, that: 
 (a) Authority of Seller. Neither the execution and delivery of this Agreement nor any other documents executed and delivered, or to be executed and delivered, by Seller in connection with the
transactions described herein, will violate any material agreements, regulations, or laws to or by which Seller is bound. 
 (b) Organization and Authority. Seller has been duly organized and is validly existing and in good standing as a limited liability company under the laws of the State of Florida, and Seller is qualified to conduct business in
the State of Kansas. Seller has the full right and authority to enter into this Agreement and to transfer the Property pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein. The person signing this
Agreement on behalf of Seller is authorized to do so. Neither the execution and delivery of this Agreement nor any other documents executed and delivered, or to be executed and delivered, by Seller in connection with the transactions described
herein, will violate (i) any provision of the Seller’s organizational documents; or (ii) any material agreements, regulations, or laws to or by which Seller is bound. This Agreement has been duly authorized, executed and delivered by
Seller. 
 (c) No Consent. No consents, approvals, waivers, permits or authorizations from any governmental
authority or Person not a party hereto are required to be obtained or made by Seller in connection with the execution, delivery and performance of or compliance by Seller with this Agreement or any of the closing documents or the consummation by
Seller of the transaction contemplated hereby. 
 (d) Pending Actions. No action, suit, arbitration,
administrative or judicial proceeding, or unsatisfied order or judgment is pending or, to Seller’s knowledge, threatened against Seller or the Property. 
 (e) Condemnation. Seller has not received notice of, and, to the best of Seller’s knowledge, there is not, any pending,
threatened or contemplated action by any governmental authority or agency having the power of eminent domain, which might result in any part of the Property being taken by condemnation or conveyed in lieu thereof or concerning the widening, change
of grade or limitation on the use of streets abutting the Property. Seller shall, promptly upon Seller’s receiving any such notice or learning of any such contemplated or threatened action, give Purchaser written notice thereof. 
  

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 (f) Taxes and Assessments. To Seller’s knowledge, no assessments have
been made against any portion of the Property which are unpaid (except ad valorem taxes for the current year, if any, that are not currently due and payable), whether or not they have become liens; and Seller shall notify Purchaser upon
Seller’s learning of any such assessments. Seller has not filed any pending notices of protest against real property tax assessments with respect to the Real Property, nor has Seller engaged anyone to file such a protest (other than protests
which have been concluded). True and complete copies of the most recent real estate tax bills for the Property have been or will be delivered to Purchaser. Except for the Permitted Exceptions, Seller does not have any knowledge of any pending or
threatened liens, special assessments, or impositions against the Property by any governmental or public authority. 
 (g)
Leases and Rent Roll. Seller is the lessor or landlord under the Leases. The information contained in the Rent Roll is true and correct in all material respects as of the date thereof. Except as set forth in the Rent Roll, there are no
other leases or occupancy agreements affecting the Property (other than such Leases, if any, as may have been entered into in the ordinary course of business since the date of the Rent Roll). Except as otherwise set forth in the Rent Roll, no rent
concessions have been given to any tenants that would be applied against rent after the Closing, and except for rent paid by tenants in advance for the month in which the Closing occurs, no rent has been paid in advance by any tenants respecting a
period subsequent to the Closing. Except as set forth in the Rent Roll, no tenant is in material default under its Lease, and, to Seller’s knowledge, Seller is not in material default under any of the Leases. 
 (h) Existing Agreements; Service Contracts. There are no management, service, supply, equipment rental and similar
agreements to which Seller is a party affecting the Property other than the Service Contracts. Those Service Contracts which have been or will be delivered by Seller to Purchaser are true, correct and complete in all material respects and include
any material amendments or modifications thereto. To Seller’s knowledge, Seller is not in default with respect to its obligations or liabilities under any of the Service Contracts. Other than the Leases, the Service Contracts and the Permitted
Exceptions, there are no leases, ground leases, service contracts, maintenance contracts, management agreements or other agreements or understandings, whether oral or written, relating to the Property to which Seller is a party or by which Seller is
bound that will be binding on Purchaser or the Property on or after the Closing Date. To Seller’s knowledge, Seller is not in default with respect to its obligations or liabilities under the Restriction Agreement. 
 (i) Environmental Matters. Except as may be set forth in those environmental reports and other matters, if any, identified
on Schedule 5.1(i) (collectively, the “Environmental Reports”), (i) Seller has not received any written notice from any governmental authority, neighboring property owner or other party asserting any violation of
Environmental Laws related to the Property which has not been cured or corrected as of the Effective Date, (ii) Seller has not commissioned any study or investigation relating to the presence or absence of Hazardous Materials on the Property,
(iii) to Seller’s knowledge, no areas on the Property exist where Hazardous 

  

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Materials have been generated, disposed of, released or found, (iv) Seller has no knowledge of the existence of any areas for the storage or disposal of
any Hazardous Materials on the Property, (v) to Seller’s knowledge, there are no storage tanks located on the Property, either above or below ground, or any underground pipes or lines on the Property, and the Property previously has not
been used as a landfill or as a dump for garbage or refuse, and (vi) Seller has no knowledge of an Mold Condition affecting the Property. The term “Environmental Laws” as used herein includes without limitation the Resource
Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation, and Liability Act and other federal laws governing the environment as in effect on the date of this Agreement together with their implementing regulations as
of the date of this Agreement applicable to the Property, and all applicable state, regional, county, municipal and other local laws, regulations and ordinances that are equivalent or similar to the federal laws recited above or that purport to
regulate hazardous or toxic substances and materials. The term “Hazardous Materials” as used herein includes petroleum (including crude oil or any fraction thereof) and any substance, material, waste, pollutant or contaminant listed
or defined as hazardous or toxic under any Environmental Laws, in any case at levels or concentrations requiring monitoring, reporting, remediation or removal in accordance with Environmental Laws. The term “Mold Condition” as used
herein means the presence or suspected presence of Mold or any condition that reasonably can be expected to give rise to or indicate the presence of Mold, including observed or suspected instances of water damage or intrusion, the presence of wet or
damp wood, cellulose wallboard, floor coverings or other materials, inappropriate climate control, discoloration of walls, ceilings or floors, complaints of respiratory ailment or eye irritation by residents, employees or any other occupants or
invitees in the Property, or any notice from a governmental agency of complaints regarding the indoor air quality at the Property. The term “Mold” as used herein means mold, mildew, fungus or other potentially dangerous organisms.

 (j) Contractors and Suppliers. All contractors, subcontractors, suppliers, architects, engineers, and others
who have performed services or labor for or supplied material to Seller with respect to the Property have been paid in full, and all liens arising from any such services, labor or materials (or claims with which the passage of time or notice or both
could mature into liens) have been satisfied and released. 
 (k) Utilities and Curb Cuts. To Seller’s
knowledge, all water, sewer, electric, natural gas, telephone, and storm water and drainage facilities and all other utilities required in the normal operation of the Improvements are available and are installed to the property lines of the Land,
are connected to the Improvements, and are adequate to serve the Improvements for their current use. To Seller’s knowledge, the Land has direct access (either directly or through valid public or private easements) to public roads through the
curb cuts now in place and Seller has not received any written notice concerning the widening, change of grade or limitation on the use of streets abutting the Property. 
  

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 (l) Permits and Legal Compliance. Seller has not received any written
notice of an intention of any governmental authority to revoke any license, permit or certificate required for the development, use, operation or occupancy of the Property. Seller has not received any written notice that the Property is in violation
of any zoning, building, fire, health, environmental or other law, statute, ordinance, regulation or order of any governmental or public authority applicable to the Property or any private covenants or restrictions encumbering the Property that
remains uncured. 
 5.2 Survival of Seller’s Representations and Warranties. The representations and warranties of Seller
set forth in Section 5.1 shall survive Closing for a period of one (1) year after Closing, unless notice setting forth a specific claim under any such representation or warranty shall be given to Seller within that period, in which case
such representation or warranty shall survive until such claim is finally and fully resolved. 
 5.3 Representations and Warranties of
Purchaser. Purchaser hereby makes the following representations and warranties to Seller as of the Effective Date: 
 (a) Organization and Authority. Purchaser has been duly organized and is validly existing as a limited liability company under the laws of the State of Delaware. Purchaser has the full right and authority to enter into this
Agreement and to consummate the transaction contemplated herein pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein. The person signing this Agreement on behalf of Purchaser is authorized to do so.
Neither the execution and delivery of this Agreement nor any other documents executed and delivered, or to be executed and delivered, by Purchaser in connection with the transactions described herein, will violate any provision of Purchaser’s
organizational documents or of any agreements, regulations, or laws to or by which Purchaser is bound. 
 (b)
Consents. Purchaser has obtained all consents and permissions (if any) related to the transactions herein contemplated and required under Purchaser’s organizational documents or any covenant, agreement, encumbrance, law or
regulation by which Purchaser is bound. 
 (c) Pending Actions. There is no action, suit, arbitration,
administrative or judicial administrative proceeding, or unsatisfied order or judgment pending or, to Purchaser’s knowledge, threatened against Purchaser or the transaction contemplated by this Agreement, which, if adversely determined, could
individually or in the aggregate have a material adverse effect on Purchaser’s ability to consummate the transaction contemplated herein. 
 5.4 Survival of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser set forth in Section 5.3 shall survive Closing for a period of one (1) year after Closing, unless
notice setting forth a specific claim under any such representation or warranty shall be given to Purchaser within that period, in which case such representation or warranty shall survive until such claim is finally and fully resolved. 

 

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 5.5 Covenants of Seller. Seller hereby covenants with Purchaser, from the Effective Date
until the Closing or earlier termination of this Agreement, as follows: 
 (a) Satisfaction of Closing
Obligation. Seller shall use reasonable and diligent efforts to satisfy each of the Closing conditions expressly set forth in Sections 4.6 and 4.7 (other than those conditions which are within Purchaser’s control) as soon as
practicable. 
 (b) Action or Inaction in Conformity with Representations and Warranties. Seller shall not take
any action or inaction, or commit to take any action or inaction, which would result in the representations and warranties of Seller contained in Article 5 or elsewhere in this Agreement or in any schedule, attachment or exhibit hereto or in any
certificate delivered by Seller to Purchaser to not be true and correct in all respects as of the Closing. 
 (c)
Maintenance of Property. Seller shall maintain the Property in a manner generally consistent with the manner in which Seller has maintained the Property prior to the date hereof. 
 (d) Provide Copies of Notices. Seller shall furnish Purchaser with a copy of all written notices received by Seller from any
governmental authority or other party of any violation of any law, statute, ordinance, regulation or order of any governmental or public authority relating to the Property within five (5) business days following Seller’s receipt thereof,
but, if received by such date, in no event later than two (2) business days prior to the Closing Date. 
 (e)
Execution of New Leases and Renewals. Seller shall use reasonable efforts to negotiate new leases for unrented apartment units in the Improvements and/or Lease renewals for rented apartment units in the Improvements and shall maintain
an advertising and marketing program for apartment units in the Improvements consistent with Seller’s past practices at the Property. Unless Purchaser agrees otherwise in writing, any new leases for such apartment units entered into by Seller
after the Effective Date until the Closing or earlier termination of this Agreement shall be on Seller’s standard apartment lease form for the Property and shall be consistent with Seller’s past leasing practices. In all cases, Seller
shall retain the discretion to set rent rates, concessions and other terms of occupancy, provided Seller shall only enter into new leases or renewals in the ordinary course of business taking into account Seller’s then-current good faith
evaluation of market conditions. Each such new lease or renewal entered into by Seller shall constitute a “Lease” for purposes of this Agreement. 
 (f) Maintenance of Insurance. Seller shall keep the Improvements insured against loss or damage (including rental loss) by
fire and all risks covered by Seller’s insurance that is currently in force, provided that Seller may make adjustments in Seller’s insurance coverage for the Property which are consistent with Seller’s general insurance program.

  

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 (g) Enforcement of Existing Leases. Seller shall perform the
landlord’s material obligations to the tenants under the Leases and enforce the material obligations of the tenants under the Leases, in each case in accordance with the current management standards of Seller and its property manager for its
apartment properties. 
 (h) Preparation of Vacant Units for Lease. Seller shall place apartment units that are
now vacant or that are vacated not less than ten (10) day prior to the Closing Date into rent-ready condition on or before the Closing Date in accordance with Seller ‘s current management standards for its apartment properties as though no
sale of the Property were contemplated; provided, however, in no event shall there be more than six (6) vacant apartment units that are not in rent-ready condition on the Closing Date. Purchaser shall receive a credit at the Closing of One
Thousand Dollars ($1,000.00) per each of any such six (6) units that are not in rent-ready condition as of the Closing Date. 
 (i) Removal and Replacement of Tangible Personal Property. Seller shall not remove any Tangible Personal Property except as may be required for necessary repair or replacement (which repair and replacement shall be of
equal quality and quantity as existed as of the time of the removal), or otherwise in accordance with current inventory and management standards of Seller and its property manager for its apartment properties. 
 (j) Execution of New Contracts. Seller shall not, without Purchaser’s prior written consent in each instance,
materially amend or terminate any of the Service Contracts, or enter into any contract or agreement that will be an obligation affecting the Property or binding on Purchaser after the Closing, except that (i) Seller may enter into, amend or
enforce (including enforcement by termination) service contracts in the ordinary course of business as reasonably necessary for the continued operation and maintenance of the Property, provided any new service contracts are terminable without cause
or penalty on thirty (30) days notice, and (ii) Seller may conduct leasing activity as provided in Section 5.7(e) hereof. Each such new service contract entered into by Seller shall constitute a “Service Contract” for
purposes of this Agreement. 
 (k) OFAC Compliance. Purchaser is currently in compliance with, and shall at all
times during the term of this Agreement (including any extension thereof) remain in compliance with, the regulations of the OFAC of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List)
and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating
thereto. 
 (l) Maintenance of Permits. Seller shall maintain in existence all licenses, permits and approvals
that are now in existence with respect to, and are required for, the ownership, operation or improvement of the Property, and are of a continuing nature. 
  

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 ARTICLE 6 
 DEFAULT 
 6.1 Default by Purchaser. If the sale of the Property as contemplated
hereunder is not consummated due to Purchaser’s default hereunder, then Seller shall be entitled, as its sole and exclusive remedy for such default, to terminate this Agreement and receive from Purchaser the sum of Fifty Thousand and No/100
Dollars ($50,000.00)(the “Liquidated Damages Amount”) as liquidated damages for the breach of this Agreement and not as a penalty, it being agreed between the parties hereto that the actual damages to Seller in the event of such
breach are impractical to ascertain and the Liquidated Damages Amount is a reasonable estimate thereof, Seller hereby expressly waiving and relinquishing any and all other remedies at law or in equity. Seller’s right to receive the Liquidated
Damages Amount is intended not as a penalty, but as full liquidated damages. The right to receive the Liquidated Damages Amount as full liquidated damages is Seller’s sole and exclusive remedy in the event of default hereunder by Purchaser, and
Seller hereby waives and releases any right to (and hereby covenants that it shall not) sue Purchaser: (a) for specific performance of this Agreement, or (b) to recover any damages of any nature or description other than or in excess of
the Liquidated Damages Amount. Purchaser hereby waives and releases any right to (and hereby covenants that it shall not) sue Seller or seek or claim that the Liquidated Damages Amount (or any part thereof) on the grounds it is unreasonable
in amount and exceeds Seller’s actual damages or that its payment by Seller constitutes a penalty and not agreed upon and reasonable liquidated damages. This Section 6.1 is subject to Section 6.4 hereof. 
 6.2 Default by Seller. If the sale of the Property as contemplated hereunder is not consummated due to Seller’s default hereunder,
Seller may pursue any rights or remedies of Purchaser hereunder, at law or in equity. Without limitation on the foregoing, Purchaser shall have the right to seek specific performance of this Agreement, injunctive relief and other equitable remedies,
but Purchaser shall not have any action for damages against Seller unless Seller’s default results from one or more of the following: (a) fraudulent misrepresentation, (b) criminal conduct (i.e. conduct that constitutes a felony under
applicable law), or (c) an intentional and deliberate act of Seller taken on or after the Effective Date (including, but not limited to, sale of the Property to another person or entity while this Agreement is in effect) that is intended to
result in, and does result in, Purchaser’s inability to consummate the transaction contemplated in this Agreement. 
 6.3 Notice
of Default; Opportunity to Cure. Neither Seller nor Purchaser shall be deemed to be in default hereunder until and unless such party has been given written notice of its failure to comply with the terms hereof and thereafter does not
cure such failure within five (5) business days after receipt of such notice, except that the failure to close on the Closing Date shall be a material default for which no notice need be given. 
 6.4 Recoverable Damages. Notwithstanding Sections 6.1 and 6.2 hereof, in no event shall the provisions of Sections 6.1 and 6.2 limit
either Purchaser’s or Seller’s obligation to indemnify the other party or the damages recoverable by the indemnified party against the indemnifying party due to a party’s express obligation to indemnify the other party in accordance
with Section 3.1(c), Section 8.1 or any other provision of this Agreement. 
  

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 ARTICLE 7 
 CASUALTY AND CONDEMNATION 
 7.1 Casualty. If prior to Closing the Property is damaged
by fire or other casualty, Seller shall estimate the cost to repair and the time required to complete repairs and will provide Purchaser written notice of Seller’s estimation (the “Casualty Notice”) as soon as reasonably
possible after the occurrence of the casualty. 
 (a) Material Damage. In the event of any Material Damage to or destruction of the
Property or any portion thereof prior to Closing, either Seller or Purchaser may, at its option, terminate this Agreement by delivering written notice to the other on or before the expiration of thirty (30) days after the date Seller delivers
the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be extended to give the parties the full thirty (30) day period to make such election and to obtain insurance settlement agreements with Seller’s insurers). Upon
any such termination, the parties hereto shall have no further rights or obligations hereunder, other than those that by their terms survive the termination of this Agreement. If neither Seller nor Purchaser so terminates this Agreement within said
thirty (30) day period, then the parties shall proceed under this Agreement and close on schedule, and as of Closing, Seller shall assign to Purchaser, without representation or warranty by or recourse against Seller, all of Seller’s
rights in and to any resulting insurance proceeds due Seller as a result of such damage or destruction, and Purchaser shall assume full responsibility for all needed repairs, and Purchaser shall receive a credit at Closing for any deductible amount
under such insurance policies (but the amount of the deductible plus insurance proceeds shall not exceed the lesser of (A) the cost of repair or (B) the Purchase Price and a pro rata share of the rental or business loss proceeds, if any).
For the purposes of this Agreement, “Material Damage” and “Materially Damaged” means damage which, in Seller’s reasonable estimation, exceeds $500,000.00 to repair or which, in Seller’s reasonable
estimation, will take longer than ninety (90) days to repair. 
 (b) Not Material Damage. If the Property is not Materially
Damaged, then neither Purchaser nor Seller shall have the right to terminate this Agreement, and Seller shall, at its option, either (i) repair the damage before the Closing in a manner reasonably satisfactory to Purchaser, or (ii) credit
Purchaser at Closing for the reasonable cost to complete the repair (in which case Seller shall retain all insurance proceeds and Purchaser shall assume full responsibility for all needed repairs), except that Purchaser will receive loss of rent
insurance proceeds applicable to the period after Closing, if any. 
 7.2 Condemnation. If proceedings in eminent domain are
instituted with respect to the Property or any portion thereof, Purchaser may, at its option, by written notice to Seller given within ten (10) days after Seller notifies Purchaser of such proceedings (and if necessary the Closing Date shall be
automatically extended to give Purchaser the full ten (10) day period to make such election), either: (i) terminate this Agreement, in which case the parties hereto shall have no further rights or obligations other than those that by their
terms survive the termination of this Agreement, or (ii) proceed under this Agreement, in which event Seller shall, at the 

  

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Closing, assign to Purchaser its entire right, title and interest in and to any condemnation award, and Purchaser shall have the sole right after the Closing
to negotiate and otherwise deal with the condemning authority in respect of such matter. If Purchaser does not give Seller written notice of its election within the time required above, then Purchaser shall be deemed to have elected option (ii)
above. 
 ARTICLE 8 
 COMMISSIONS 
 8.1 Representation and Indemnity. Purchaser and Seller each hereby represent and warrant to the
other that it has not disclosed this Agreement or the subject matter hereof to, and has not otherwise dealt with, any real estate broker, agent or salesman so as to create any legal right or claim in any such broker, agent or salesman for a
real estate commission or similar fee or compensation with respect to the negotiation and/or consummation of this Agreement or the sale and conveyance of the Property by Seller to Purchaser. Purchaser and Seller shall indemnify, hold harmless
and defend each other from and against any and all claims and demands for a real estate brokerage commission or similar fee or compensation arising out of any claimed dealings with the indemnifying party and relating to this Agreement or the
purchase and sale of the Property (including reasonable attorneys’ fees and expenses and court costs incurred in defending any such claim or in enforcing this indemnity). 
 8.2 Survival. This ARTICLE 8 shall survive the rescission, cancellation, termination or consummation of this Agreement. 
 ARTICLE 9 
 MISCELLANEOUS

 9.1 Public Disclosure. Prior to Closing, any release to the public of information with respect to the sale contemplated
herein or any matters set forth in this Agreement will be made only in the form approved by Purchaser and Seller. 
 9.2
Assignment. Neither Seller nor Purchaser may assign its rights or obligations under this Agreement without first obtaining the other party’s written approval. 
 9.3 Notices. Any notice, request or other communication (a “notice”) required or permitted to be given hereunder shall be
in writing and shall be delivered by hand or overnight courier (such as United Parcel Service or Federal Express), sent by facsimile (provided a copy of such notice is deposited with an overnight courier for next business day delivery) or mailed by
United States registered or certified mail, return receipt requested, postage prepaid and addressed to each party at its address as set forth below. Any such notice shall be considered given on the date of such hand or courier delivery,
confirmed facsimile transmission (provided a copy of such notice is deposited with an overnight courier for next business day delivery), deposit with such overnight courier for next business day delivery, or deposit in the United States mail, but
the time period (if any is provided herein) in which to respond to such notice shall commence on the  

  

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date of hand or overnight courier delivery or on the date received following deposit in the United States mail as provided above. Rejection or other
refusal to accept or inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice. By giving at least five (5) days’ prior written notice thereof, any party may from time
to time and at any time change its mailing address hereunder. Any notice of any party may be given by such party’s counsel. 
 The parties’ respective addresses for notice purposes are as follows. Telephone numbers are given for convenience of reference only. Notice by telephone shall not be effective. 
  

			
	 If to Purchaser:
	  	KC Retreat Associates, LLC
		  	c/o Paladin Realty Partners, LLC
		  	 10880 Wilshire Boulevard, Suite 1400
 Los Angeles,
California 90024

		  	Attention: William K. Dunbar
		  	Telephone: (310) 996-8754
		  	Facsimile: (310) 996-8708
		
	 with a copy to:
	  	King & Spalding LLP
		  	 1180 Peachtree Street, N.E.
 Atlanta, Georgia
30309

		  	Attention: Timothy N. Tucker
		  	Telephone: (404) 572-4600
		  	Facsimile: (404) 572-5131
		
	 If to Seller:
	  	c/o CRES Management Co.
		  	Two Pershing Square
		  	 2300 Main Street, Suite 910
 Kansas City, Missouri 64108

		  	Attention: James Lippert
		  	Telephone: (816) 268-1498
		  	Facsimile: (816) 756-1881
		
	 with a copy to:
	  	 White Goss Bowers March Schulte &
 Weisenfels, a
Professional Corporation

		  	 4510 Belleview, Suite 300
 Kansas City, Missouri 64111

		  	Attention: John R. Weisenfels, Esq.
		  	Telephone: (816) 753-9201
		  	Facsimile: (816) 753-9200

 9.4 Modifications. This Agreement cannot be changed orally, and no agreement shall
be effective to waive, change, modify or discharge it in whole or in part unless such 

  

 -22- 

 
agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought. In no event shall
this Agreement be altered, amended or modified by electronic mail or electronic record. The parties acknowledge and agree that this Agreement shall not be executed, entered into, altered, amended or modified by electronic means. Without limiting the
generality of the foregoing, the parties hereby agree that the transactions contemplated by this Agreement shall not be conducted by electronic means. 
 9.5 Calculation of Time Periods. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to
run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday under the laws of the State in which the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday or legal holiday. The final day of any such period shall be deemed to end at 5:00 p.m., Eastern time. 
 9.6 Successors and Assigns. Subject to Section 9.2 hereof, the terms and provisions of this Agreement are to apply to and bind the permitted successors and assigns of the parties hereto. 

9.7 Entire Agreement. This Agreement, including the Exhibits, contains the entire agreement between the parties pertaining to the
subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter. 
 9.8 Further Assurances. Each party agrees that it will without further consideration execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be
reasonably requested by the other party to consummate more effectively the purposes or subject matter of this Agreement. Without limiting the generality of the foregoing, Purchaser shall, if requested by Seller, execute acknowledgments of
receipt with respect to any materials delivered by Seller to Purchaser with respect to the Property. The provisions of this Section 9.8 shall survive Closing. 
 9.9 Counterparts. This Agreement may be executed in counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such
counterpart in proving this Agreement. 
 9.10 Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect. 
 9.11 Applicable Law. This Agreement is performable in the state in which the Property is located and shall in all respects be governed by, and construed in accordance with, the substantive federal laws of the United States and
the laws of such state. Purchaser and Seller hereby irrevocably submit to the jurisdiction of any state or federal court sitting in the state and judicial district in which the Property is located in any action or proceeding arising out of or
relating to this Agreement and hereby irrevocably agree that all claims in respect of such action 

  

 -23- 

 
or proceeding shall be heard and determined in a state or federal court sitting in the state and judicial district in which the Property is located.
Purchaser and Seller agree that the provisions of this Section 9.11 shall survive the Closing of the transaction contemplated by this Agreement. 
 9.12 No Third Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Purchaser and Seller only and are not for
the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing. 
 9.13 Exhibits and Schedules. The following schedules or exhibits attached hereto shall be deemed to be an integral part of this Agreement:

  

					
	 Schedule 1.2(a)
	  	-	  	Legal Description of the Land
	 Schedule 1.2(c)
	  	-	  	List of Tangible Personal Property
	 Schedule 1.2(d)
	  	-	  	Rent Roll
	 Schedule 1.2(e)
	  	-	  	Service Contracts
	 Schedule 2.2
	  	-	  	Required Endorsements
	 Schedule 2.3(a)
	  	-	  	Permitted Exceptions
	 Schedule 3.1(b)
	  	-	  	Property Documents
	 Schedule 4.1(a)
	  	-	  	Form of Special Warranty Deed
	 Schedule 4.2(b)
	  	-	  	Form of Bill of Sale and Assignment
	 Schedule 4.2(c)
	  	-	  	Form of Seller’s Closing Certificate
	 Schedule 5.1(i)
	  	-	  	Environmental Reports

 9.14 Captions. The section headings appearing in this Agreement are for convenience
of reference only and are not intended, to any extent or for any purpose, to limit or define the text of any section or any subsection hereof. 
 9.15 Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto. 
 9.16 Termination
of Agreement. It is understood and agreed that if either Purchaser or Seller terminates this Agreement pursuant to a right of termination granted hereunder, such termination shall operate to relieve Purchaser and Seller (in which event the
defaulting Party shall remain liable as and to the extent provided in this Agreement) from all obligations under this Agreement, except for such obligations as are specifically stated herein to survive the termination of this Agreement. 

9.17 Survival. All provisions of this Agreement which are not fully performed as of Closing shall survive Closing subject to the terms
and provisions set forth in Sections 5.2, 5.4 and 4.6, respectively. 
 9.18 Time of Essence. Time is of the essence with
respect to this Agreement. 
  

 -24- 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.

  

											
	PURCHASER:
	
	 KC RETREAT ASSOCIATES, LLC,
 a Delaware limited liability company

		
	 By:
	 	PRIP 11128, LLC, a Delaware limited liability company, its sole member
			
		 	 By:
	 	Paladin Realty Income Properties, L.P.,
Delaware limited partnership, its sole member
				
		 		 	 By:
	 	Paladin Realty Income Properties, Inc.,
a Maryland corporation, its general partner
					
		 		 		 	 By:
	 	 /s/ WILLIAM K. DUNBAR

		 		 		 	 Name:
	 	William K. Dunbar
		 		 		 	 Title:
	 	Chief Investment Officer

 [SIGNATURES CONTINUED ON THE FOLLOWING PAGES] 

			
	SELLER:
	
	THE RETREAT, LLC,
	 a Florida limited liability company

		
	 By:
	 	 /s/ JAMES E. LIPPERT

	 Name:
	 	James E. Lippert
	 Title:
	 	ManagerOperating Agreement

 EXHIBIT 10.2 
 OPERATING AGREEMENT 
 OF 
 KC RETREAT ASSOCIATES, LLC 
 THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “FEDERAL ACT”), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL ACT. IN ADDITION, THE ISSUANCE OF THIS SECURITY
HAS NOT BEEN QUALIFIED UNDER THE DELAWARE SECURITIES ACT OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY, THE “STATE ACTS”), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF THE STATE ACTS. IT IS
UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN TO, OR TO RECEIVE ANY CONSIDERATION THEREFOR FROM, ANY PERSON OR ENTITY WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED SALE OR OTHER TRANSFER
OF THIS SECURITY DOES NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH PROPOSED SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES LAWS. THE
TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED UNDER THE TERMS OF THE OPERATING AGREEMENT GOVERNING THE COMPANY, A COPY OF WHICH IS ON FILE WITH THE OPERATING MEMBER OF THE COMPANY. 

 OPERATING AGREEMENT 
 OF 
 KC RETREAT ASSOCIATES, LLC 
 TABLE OF CONTENTS 
  

							
	 	  	Page
	ARTICLE 1        FORMATION	  	1
				
		 	  1.01	  	Formation	  	1
		 	  1.02	  	Names and Addresses	  	1
		 	  1.03	  	Nature of Business	  	2
		 	  1.04	  	Term of the Company	  	2
		
	ARTICLE 2        MANAGEMENT OF THE COMPANY	  	2
				
		 	  2.01	  	Management Committee	  	2
		 	  2.02	  	Authority of the Management Committee	  	5
		 	  2.03	  	Operating Member	  	8
		 	  2.04	  	Annual Business Plan	  	10
		 	  2.05	  	Operating Budget	  	10
		 	  2.06	  	Removal of the Operating Member	  	11
		 	  2.07	  	Liability and Indemnity	  	13
		 	  2.08	  	Limited Liability	  	14
		 	  2.09	  	Other Activities	  	14
		 	  2.10	  	Brokers Indemnity	  	14
		 	  2.11	  	Reimbursement; Compensation	  	14
		 	  2.12	  	Property Management	  	15
		
	ARTICLE 3        MEMBERS’ CAPITAL CONTRIBUTIONS	  	15
				
		 	  3.01	  	Initial Contributions of the Members	  	15
		 	  3.02	  	Additional Contributions	  	16
		 	  3.03	  	Remedy For Failure to Contribute Capital	  	16
		 	  3.04	  	Debt Financing	  	20
		 	  3.05	  	Loans from Members	  	20
		 	  3.06	  	Capital Contributions in General	  	20
		
	ARTICLE 4        ALLOCATION OF PROFITS AND LOSSES	  	20
				
		 	  4.01	  	Allocation of Net Profits and Net Losses	  	20
		 	  4.02	  	Regulatory Allocations	  	22
		 	  4.03	  	Special Allocation	  	23
		 	  4.04	  	Other Allocation Rules	  	23
		
	ARTICLE 5        DISTRIBUTIONS	  	24
				
		 	  5.01	  	Distribution of Ordinary Cash Flow	  	24
		 	  5.02	  	Distribution of Extraordinary Cash Flow	  	25
		 	  5.03	  	Limitations on Distributions	  	25

							
		 	  5.04	  	In-Kind Distribution	  	26
		 	  5.05	  	Right to Withhold	  	26
		
	ARTICLE 6        RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS	  	26
				
		 	  6.01	  	Limitations on Transfer	  	26
		 	  6.02	  	Permitted Transfers	  	26
		 	  6.03	  	Admission of Substitute Members	  	27
		 	  6.04	  	Additional Restrictions on Transfer	  	28
		 	  6.05	  	Paladin Purchase Option	  	28
		 	  6.06	  	Election; Allocations Between Transferor and Transferee	  	29
		 	  6.07	  	Partition	  	29
		 	  6.08	  	Waiver of Withdrawal	  	30
		
	ARTICLE 7        DEFAULT BUY-SELL AGREEMENT	  	30
				
		 	  7.01	  	Default Buy-Sell Events	  	30
		 	  7.02	  	Rights Arising From a Default Buy-Sell Event	  	32
		 	  7.03	  	Determination of Purchase Price	  	32
		 	  7.04	  	Member’s Option	  	34
		 	  7.05	  	Closing of Purchase and Sale	  	35
		 	  7.06	  	Payment of Purchase Price	  	35
		 	  7.07	  	Release and Indemnity	  	35
		 	  7.08	  	Repayment of Member Loans	  	36
		 	  7.09	  	Voting Rights Following Default Buy-Sell Event	  	36
		 	  7.10	  	Withdrawal of the Selling Member	  	36
		
	ARTICLE 8        DISSOLUTION AND WINDING UP OF THE COMPANY	  	37
				
		 	  8.01	  	Events Causing Dissolution of the Company	  	37
		 	  8.02	  	Winding Up of the Company	  	37
		 	  8.03	  	No Negative Capital Account Restoration	  	38
		
	ARTICLE 9        BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS	  	38
				
		 	  9.01	  	Company Books	  	38
		 	  9.02	  	Delivery of Records; Inspection	  	38
		 	  9.03	  	Reports and Tax Information	  	39
		 	  9.04	  	Company Tax Elections; Tax Controversies	  	40
		 	  9.05	  	Accounting and Fiscal Year	  	41
		 	  9.06	  	Confidentiality of Information	  	41
		
	ARTICLE 10        MISCELLANEOUS	  	41
				
		 	10.01	  	Subscription Agreement	  	41
		 	10.02	  	Investment Interest; Nature of Investment	  	41
		 	10.03	  	Appointment of Attorney-in-Fact	  	42
		 	10.04	  	Waiver of Conflict of Interest	  	43
		 	10.05	  	Amendment	  	43
		 	10.06	  	No Assignments; Binding Effect	  	43
		 	10.07	  	Further Assurances	  	43

							
		 	10.08	  	Notices	  	44
		 	10.09	  	Waivers	  	45
		 	10.10	  	Preservation of Intent	  	45
		 	10.11	  	Entire Agreement	  	45
		 	10.12	  	Certain Rules of Construction	  	45
		 	10.13	  	Counterparts	  	46
		 	10.14	  	Governing Law	  	46
		 	10.15	  	Assurances	  	46
		 	10.16	  	Time is of the Essence	  	46
		 	10.17	  	Other Matters	  	46
		 	10.18	  	Ownership of the Lippert Members and Property Manager	  	47
		
	ARTICLE 11        DEFINITIONS	  	47
				
		 	11.01	  	12% IRR Amount	  	47
		 	11.02	  	Additional Contribution	  	47
		 	11.03	  	Additional Member	  	47
		 	11.04	  	Adjusted Capital Account	  	47
		 	11.05	  	Affiliate	  	48
		 	11.06	  	Agreement	  	48
		 	11.07	  	Annual Business Plan	  	48
		 	11.08	  	Appraised Value	  	48
		 	11.09	  	Business Day	  	48
		 	11.10	  	Buyout Purchase Price	  	48
		 	11.11	  	Buy-Sell Notice	  	48
		 	11.12	  	Capital Account	  	48
		 	11.13	  	Capital Contribution	  	49
		 	11.14	  	Capital Event	  	49
		 	11.15	  	Cash Flow	  	49
		 	11.16	  	Cash Flow Bonus Forfeiture Event	  	49
		 	11.17	  	Code	  	50
		 	11.18	  	Company	  	50
		 	11.19	  	Company Minimum Gain	  	50
		 	11.20	  	Contributing Member	  	50
		 	11.21	  	Contribution Date	  	50
		 	11.22	  	Contribution Notice	  	50
		 	11.23	  	Contribution Percentage	  	50
		 	11.24	  	Default Buy-Sell Event	  	50
		 	11.25	  	Default Notice	  	51
		 	11.26	  	Defaulting Member	  	51
		 	11.27	  	Default Purchase Price	  	51
		 	11.28	  	Deferred Management Fees	  	51
		 	11.29	  	Deferred Management Fee Account	  	51
		 	11.30	  	Delaware Act	  	51
		 	11.31	  	Delinquent Contribution	  	51
		 	11.32	  	Dilution Percentage	  	51
		 	11.33	  	Effective Date	  	51

							
		 	11.34	  	Extraordinary Cash Flow	  	51
		 	11.35	  	Fiscal Year	  	52
		 	11.36	  	Gross Asset Value	  	52
		 	11.37	  	Immediate Family	  	53
		 	11.38	  	Indemnified Party	  	53
		 	11.39	  	Interest	  	53
		 	11.40	  	IRR	  	53
		 	11.41	  	Lippert Holdings	  	54
		 	11.42	  	Lippert Management	  	54
		 	11.43	  	Lippert Member(s)	  	54
		 	11.44	  	Liquidation	  	54
		 	11.45	  	Majority of Representatives	  	54
		 	11.46	  	Management Committee	  	55
		 	11.47	  	Material Breach	  	55
		 	11.48	  	Member Loan	  	55
		 	11.49	  	Member Minimum Gain	  	55
		 	11.50	  	Member Nonrecourse Debt	  	55
		 	11.51	  	Member Nonrecourse Deductions	  	55
		 	11.52	  	Member(s)	  	55
		 	11.53	  	Minimum Current Preferred Return	  	56
		 	11.54	  	Net Profits and Net Losses	  	56
		 	11.55	  	Non-Contributing Member	  	57
		 	11.56	  	Nonrecourse Deductions	  	57
		 	11.57	  	Operating Account	  	57
		 	11.58	  	Operating Budget	  	57
		 	11.59	  	Operating Member	  	57
		 	11.60	  	Option Notice	  	57
		 	11.61	  	Option Price	  	57
		 	11.62	  	Ordinary Cash Flow	  	57
		 	11.63	  	Paladin	  	58
		 	11.64	  	Paladin REIT	  	58
		 	11.65	  	Percentage Interest	  	58
		 	11.66	  	Permitted Transferees	  	58
		 	11.67	  	Person	  	58
		 	11.68	  	Price Determination Notice	  	58
		 	11.69	  	Preferred Return	  	58
		 	11.70	  	Project	  	59
		 	11.71	  	Project Shortfall	  	59
		 	11.72	  	Property Management Agreement	  	59
		 	11.73	  	Property Manager	  	59
		 	11.74	  	Purchase Option	  	59
		 	11.75	  	Purchasing Member	  	59
		 	11.76	  	Qualified Appraiser	  	59
		 	11.77	  	Regulatory Allocations	  	60
		 	11.78	  	REIT	  	60
		 	11.79	  	Removal Event	  	60

							
		 	11.80	  	Removal Notice	  	60
		 	11.81	  	Securities Act	  	60
		 	11.82	  	Seller Loan	  	60
		 	11.83	  	Selling Member	  	60
		 	11.84	  	Tax Matters Partner	  	60
		 	11.85	  	Threshold Return	  	60
		 	11.86	  	Third-Party Purchase Price	  	60
		 	11.87	  	Transfer	  	60
		 	11.88	  	Treasury Regulation	  	61
		 	11.89	  	Unanimous Written Consent	  	61
		 	11.90	  	Unpaid Minimum Current Preferred Return	  	61
		 	11.91	  	Unpaid Preferred Return	  	61
		 	11.92	  	Unrecovered Contribution Account	  	61

 OPERATING AGREEMENT 
 OF 
 KC RETREAT ASSOCIATES, LLC 
 THIS OPERATING AGREEMENT OF KC RETREAT ASSOCIATES, LLC (the “Company”), is entered into effective as of January 11, 2008, by
and between PRIP 11128, LLC, a Delaware limited liability company (“Paladin”), and JTL HOLDINGS, LLC, a Missouri limited liability company (“Lippert Holdings”), and JTL ASSET MANAGEMENT, INC., a
Missouri limited liability company (“Lippert Management”). The capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to such terms in Article 11. 
 ARTICLE 1 
 FORMATION 

 1.01 Formation 
 The Company has been formed as a Delaware limited liability company pursuant to the provisions of the Delaware Act. The Company shall be operated in accordance with, and the Members shall be governed by, the terms and conditions of this
Agreement. If any terms of this Agreement are inconsistent with any terms of the Act that are not mandatory, then the terms of this Agreement shall control. In connection with the formation of the Company, a duly authorized representative of the
Company has caused to be filed with the office of the Delaware Secretary of State a duly executed Certificate of Formation for the Company in accordance with the Delaware Act. A duly authorized representative also shall execute, acknowledge and
verify such other documents or instruments as may be necessary or appropriate in order to form the Company under the Delaware Act or to continue its existence in accordance with the provisions of the Delaware Act or to register, qualify to do
business or operate its business as a foreign limited liability company in any other state in which the Company conducts business. 
 1.02
Names and Addresses 
 The name of the Company is KC Retreat Associates, LLC. The registered office of the Company in the State of
Delaware shall be at c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801 and the name of the registered agent for the Company at such registered office is The Corporation Trust Company. For so long as Lippert Management
is the Operating Member, the principal office for the Company shall be maintained at Two Pershing Square, 2300 Main Street, Suite 910, Kansas City, Missouri 64108, or such other location at which Lippert Management maintains an office and thereafter
at such other place as the Management 

  

 1 

 
Committee may designate from time to time. Copies of any material notices or other matters received by the Company shall be promptly delivered by the
Operating Member to the Members. 
 1.03 Nature of Business 
 The purpose for which the Company is to exist is (i) to acquire, own, manage, operate,
maintain, finance, hold for investment, and sell that certain real property more particularly described on Exhibit B attached hereto, together with existing improvements consisting of an approximately 343 unit apartment complex and related
amenities and improvements located thereto located at 11128 W 76th Terrace in Shawnee, Kansas (the “Project”); (ii) to conduct such
other activities with respect to, and otherwise realize and optimize the economic internal rates of return from, the Project and any and all other related assets the Company may hereinafter acquire as are appropriate to carrying out the foregoing
purposes; and (iii) to do all things incidental to or in furtherance of the above enumerated purposes. 
 1.04 Term of the
Company 
 The term of the Company commenced on the date the Certificate of Formation for the Company was filed with the Delaware
Secretary of State and shall continue until December 31, 2048, unless otherwise dissolved pursuant to Article 8 or unless extended by the unanimous agreement of the Members. The existence of the Company as a separate legal entity shall
continue until the cancellation of the Certificate of Formation of the Company in accordance with the provisions of the Delaware Act. 
 ARTICLE 2 
 MANAGEMENT OF THE COMPANY 
 2.01 Management Committee 
 (a)
Management by Management Committee. Except as otherwise provided in this Agreement, all aspects of the business and affairs of the Company shall be managed, and all decisions affecting the business and affairs of the Company (including,
without limitation, investment and Project related decisions) shall be made, by the Members acting through a management committee (the “Management Committee”) composed of five (5) representatives in accordance with the
provisions contained below. The Members, exclusively through the Management Committee, shall have the right, power and authority to take any and all actions consistent with the purpose of the Company that is permitted hereunder and under applicable
law. No Member shall have any right, power or authority to act (as agent or otherwise) for, or to bind, the Company in any manner (other than as expressly provided herein) except through the Management Committee. 
 (b) Representatives. Paladin shall be entitled to select three (3) representatives of the Management Committee, and Lippert Management shall
be entitled 

  

 2 

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

  

 3 

 
Management Committee telephonically or through other similar communications equipment, as long as all of the representatives participating in the meeting can
hear one another. Participation in a meeting pursuant to the preceding sentence shall constitute presence in person at such meeting for all purposes of this Agreement. 
 (g) Notice and Attendance. Notice of any meeting of, or of any action taken without a meeting pursuant to Section 2.01(i) by, the Management Committee shall be given as far in advance of the meeting
as is reasonably practicable. Representatives, absent exigent circumstances, shall use their best efforts to give any such notice at least forty-eight (48) hours prior to such meeting, unless otherwise agreed by the representatives, and to
attend all meetings of the Management Committee. 
 (h) Quorum. A quorum shall be required to conduct any business at any meeting of
the Management Committee, and shall be deemed present at any such meeting so long as at least one representative of each Member is in attendance (whether in person or otherwise); provided, however, that if written notice of any such meeting has been
given at least five (5) days prior to such meeting, then a quorum shall be deemed present at any such meeting so long as a Majority of Representatives of the Management Committee are present at such meeting. 
 (i) Actions Without Meetings. Any action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting
with Unanimous Written Consent, which consent shall set forth the actions to be so taken. Any such Unanimous Written Consent shall have the same effect as an act of a Majority of Representatives at a properly called and constituted meeting of the
Management Committee. Copies of any such written consent shall be delivered promptly to all representatives. 
 (j) Execution of
Documents. Except as provided in Section 2.03 below, all contracts, agreements and other documents or instruments affecting or relating to the business and affairs of the Company may be executed on the Company’s behalf only by the
Members, or such other person(s) as may be designated by the Management Committee and without execution by any other Member. 
 (k)
Unauthorized Actions. None of the Members or officers of the Company, without the prior consent of the Management Committee, shall take any action on behalf of or in the name of the Company, or enter into any commitment or obligation binding
upon the Company, except for (i) actions expressly authorized by this Agreement, (ii) actions by any Member (or officer) within the scope of such Member’s (or officer’s) authority expressly granted hereunder, and
(iii) actions authorized by the Management Committee in the manner set forth herein. Each Member hereby indemnifies, defends, protects and holds wholly harmless the other Members and each such other Member’s Affiliates, shareholders,
officers, directors, constituent members, Members, employees, agents, and representatives (including the representative(s) to the Management Committee appointed by such Member) from and against any and all losses, liability, damages, costs and
expenses (including attorneys’ fees) arising out of the breach 

  

 4 

 
of any of the foregoing provisions by such indemnifying Member, any representative of the Management Committee selected by such Member or such Member’s
Affiliates, shareholders, officers, directors, constituent members, Members, employees, agents, or representatives. 
 2.02 Authority
of the Management Committee 
 Without limiting the generality of Section 2.01, and except as otherwise provided by this
Agreement, the consent of the Management Committee shall be required for the Company to undertake, and the Management Committee shall have the right, power and authority to approve and cause the Company to undertake, all of the following actions
(which actions shall be approved by a Majority of Representatives unless otherwise expressly provided below): 
 (a)
Issuance of Additional Interests. The issuance of any additional Interests in the Company or the admission of any Additional Member into the Company; provided, however, that such a decision shall require the approval of all of the
representatives present at a meeting of the Management Committee at which a quorum is present or Unanimous Written Consent; 
 (b) Sale or Other Transfer. Except as provided in accordance with the provisions of Article 7, the sale, lease, exchange, transfer or other disposition of all or any portion of the Project or any other assets of the Company;

 (c) Financing or Refinancing. Any and all financing or refinancing for the Company or the Project, the terms and
conditions thereof, or any modifications or amendments thereto; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum is present or
Unanimous Written Consent; 
 (d) Material Company Transactions. The entry into by the Company and the taking by the
Company of any and all actions permitted or required by the Company in connection with any acquisition, disposition, merger, “roll-up” consolidation, reorganization, recapitalization, restructuring, joint venture, partnership, limited
liability company, or any other material business transaction involving the Company or its assets, including, without limitation, any and all actions required or permitted in connection with any initial public offering of ownership interests in the
Company (or in connection with the merger or the transfer of the assets of the Company to any corporation or other entity that is the successor to the Company that intends to conduct an initial public offering) or any transfer of all or any portion
of the assets of the Company to a public or private market vehicle that intends to qualify as a real estate investment trust (“REIT”) under Section 856 et. seq. of the Code or to a partnership, limited liability company
or other entity whose general partner, managing member or other owner, intends to qualify as a REIT or to a comparable public or private REIT 

  

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vehicle; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management
Committee at which a quorum is present or Unanimous Written Consent; 
 (e) Plans and Budgets. The approval of each
Annual Business Plan and Operating Budget for the Company prepared by the Operating Member, and any modifications or amendments thereof; 
 (f) Expenditures Outside of Plans or Budgets. The making of any expenditure by the Company that is not specifically included or contemplated under any applicable Annual Business Plan and Operating Budget, other
than as permitted within any parameters agreed to by the Management Committee and specified in any such plan or budget (e.g., application of line item cost savings, contingency line amounts, budget variances, etc.); 
 (g) Additional Capital Contributions. The making of any Additional Contributions to the capital of the Company pursuant to
Section 3.02; 
 (h) Unrelated Businesses. The entry into by the Company of any business that is not
related to the purpose of the Company set forth in Section 1.03; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of the Management Committee at which a quorum
is present or Unanimous Written Consent; 
 (i) Liquidation of the Company. Except to the extent dissolution of the
Company is permitted or required by this Agreement or any nonwaivable provision of applicable law, the dissolution and winding up of the Company; 
 (j) Contracts with Affiliates. Except as otherwise expressly permitted under this Agreement, the entry by the Company into any contract with, or the making of any payment to, any Member or any Affiliate of any
Member and with respect to any such contract, the making of any amendment, modification, waiver, termination, extension or rescission thereof; the declaration of any default thereunder or the exercise of any remedy thereunder; the institution,
settlement or compromise of any claim with respect thereto; the waiver of any rights of the Company against the other party(ies) thereto; or the consent to the assignment of any rights or the delegation of any duties by the other party(ies) thereto.
The Members further acknowledge and agree that, except as otherwise expressly permitted under this Agreement or as otherwise approved by the Management Committee, the fees paid in connection with any such contracts, payments, etc., made with or to
any Member or any Affiliate thereof shall in all events be commensurate with fees negotiated at arm’s length and paid to independent third parties for providing similar services to projects similar in size, nature and location to the Project;

  

 6 

 (k) Cash Flow and Reserves. Subject to the provisions of
Section 5.03, the determination of any policies or procedures for making Cash Flow distributions by the Company including, without limitation, the establishment of any reserves with respect thereto; 
 (l) Material Agreements. The execution by the Company of any material agreement in order to acquire, develop, redevelop, renovate,
operate, manage, maintain, market, lease, sell, transfer, convey, pledge or otherwise dispose of all or any portion of the Project or any other asset of the Company and any undertaking by the Company to implement the terms of any such agreement,
including the granting or withholding of approvals and consents thereunder, and any amendment or termination of any such material agreement (including, without limitation, the Property Management Agreement); 
 (m) Consultants. The employment and engagement of any agents, brokers, appraisers, architects, contractors, subcontractors,
attorneys, accountants, bookkeepers, engineers, environmental consultants, real property and mortgage brokers and analysts, underwriters, escrow agents, depositories, agents for collection, banks, builders, building managers and operators, marketing
agents, property managers and any other service providers other than as permitted by the applicable Annual Business Plan or Operating Budget; 
 (n) Legal Proceedings. The institution or defense of any legal proceedings (including arbitration) in the name of the Company, the settlement of any such legal proceedings against the Company and the confession
of any judgment against the Company, or any property thereof; 
 (o) Bankruptcy. Any of the following: (i) the
filing of any voluntary petition in bankruptcy on behalf of the Company; (ii) the consenting to the filing of any involuntary petition and bankruptcy against the Company; (iii) the filing on behalf of the Company of any petition seeking,
or consenting to, the reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency; (iv) the consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or a substantial part of its property; (v) the making on behalf of the Company of any assignment for the benefit of creditors; (vi) the admission in writing of the Company’s inability to pay its debts
generally as they become due; or (vii) the taking of any action by the Company in furtherance of any such action; provided, however, that such a decision shall require the approval of all of the representatives present at a meeting of
the Management Committee at which a quorum is present or Unanimous Written Consent; provided, further, however, that if Lippert Management is removed as Operating Member of the Company pursuant to Section 2.06 (and as a result no
longer has a representative on the Management Committee) and the then current mortgage lender for the Project fails or refuses to release any guaranty of James E. Lippert for which he would have liability upon the occurrence of one or more of the
events specified in 

  

 7 

 
clauses (i) - (vii) immediately above, then for so long as Lippert Management remains a Member of the Company the approval of Lippert Management shall
continue to be required for the Company to take any such action specified in clauses (i) - (vii) immediately above until such guaranty is released or such mortgage loan is paid in full; 
 (p) Insurance. The entry into by the Company of any and all contracts of insurance for the Company that the Management Committee
deems necessary or proper for the protection of the Company or the Project, either for the conservation of the Company’s assets or for any purpose convenient or beneficial to the Company; 
 (q) Tax and Accounting Elections. Any and all tax or accounting elections permitted or required to be made by the Company;

 (r) Actions pertaining to Paladin REIT Status. The undertaking of any action that deemed necessary, in the sole and
but reasonable discretion of the Tax Matters Partner, to maintain the status of Paladin REIT as a REIT under the Code. 
 (s)
Transfers from Operating Account. The drawing of any single check on, or the making of any single transfer or expenditure of funds from, the Operating Account in excess of $25,000, or drawing of any multiple number of checks on, or the making
of any multiple number of transfers or expenditures of funds from, any Operating Account which collectively total more than $25,000 to any one Person, unless such single check or transfer, or multiple checks or transfers, are drawn or made, as the
case maybe, pursuant to the directive of the Management Committee as contained in the Operating Budget, and the Operating Member has confirmed, for the benefit of the Company, that any such check or transfer is in proper order for payment; and

 (t) Other Actions. Any and all other actions required or permitted to be taken by the Management Committee under
this Agreement and any and all other actions relating to the business and affairs of the Company or necessary to carry out the intentions and purposes of the Company. 
 The provisions of this Section 2.02 shall not be construed as exclusive or so as to bar the Management Committee from delegating responsibility for any of the Management Committee’s management
decisions to any Member, officer, or other representative or agent of the Company. The Members also acknowledge that signatory authority for any of the foregoing items may be delegated by the Management Committee to any Member, officer, or other
representative or agent of the Company. 
 2.03 Operating Member 
 (a) Designation of Operating Member. Lippert Management is hereby designated as the “Operating Member” of the Company (the
“Operating Member”). 

  

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Lippert Management shall serve in such capacity unless and until Lippert Management is removed by the Management Committee in accordance with the provisions
of Section 2.06. Following any removal of Lippert Management as the Operating Member, the Person (who may be, but need not be, a Member of the Company) selected by the Management Committee in accordance with the provisions of
Section 2.06 shall serve as the replacement Operating Member or manager of the Company. 
 (b) Responsibilities of Operating
Member. The Operating Member shall be responsible for implementing the decisions of the Management Committee and for regularly reporting to the Management Committee as to the status of the business and affairs of the Company. The Operating
Member also shall be responsible for (i) procuring any and all financing required for the Project as approved by the Management Committee, (ii) supervising the management, leasing and operation of the Project in accordance with a Property
Management Agreement approved by the Management Committee and entered into, by and between the Company, as owner, and either the Property Manager or such other manager as may be designated by the Management Committee, as manager,
(iii) undertaking such other matters as are determined by the Management Committee, (iv) coordinating, supervising and otherwise overseeing any sale of the Project, (v) preparing and, as and when reasonably requested by the Management
Committee, updating any applicable Annual Business Plan or Operating Budget for the Company and the Project (provided, that, for the avoidance of any doubt, the foregoing provisions are not intended to permit the Operating Member to amend,
modify or deviate from any of the foregoing documents, plans or budgets without the prior consent of the Management Committee (except as otherwise expressly provided therein), (vi) advising the Management Committee on day-to-day matters
affecting the business and affairs of the Company, (vii) diligently conducting the day-to-day operations of the Company in accordance with the Annual Business Plan and Operating Budget, (viii) performing the duties assigned to such Member
under this Agreement or by the Management Committee, and (ix) diligently endeavoring to carry out all decisions and resolutions of the Management Committee. 
 (c) Authority of Operating Member. The Operating Member shall at all times be subject to the direction and control of the Management Committee, and shall conform to the policies and procedures established and
approved by the Management Committee in conformity with this Agreement, and the scope of the Operating Member’s authority shall be limited solely to the matters set forth above in this Section 2.03. The Operating Member shall keep
the Management Committee and the Members informed as to all matters of concern to the Management Committee, the Company and the Members. The Operating Member shall not be authorized to bind the Company without the prior written approval of the
Management Committee, except for matters delegated in writing to the Operating Member by the Management Committee or any nonmaterial agreements, contracts or other documents or instruments affecting or relating to the day-to-day business and affairs
of the Company provided that any such agreement, contract or other document is within the parameters established in the applicable Annual Business Plan or Operating Budget. 
  

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 (d) Expenditures. The Operating Member shall have the authority to incur costs and expenditures
and only the costs and expenditures set forth in an approved Operating Budget (subject to the ability to apply line item cost savings; contingency line item amounts; budget variances, etc., if any, contained in such Operating Budget) without any
further approval of the Management Committee (or the Members). 
 (e) Indemnification. The Operating Member shall indemnify and hold
harmless the Company and the other Member(s), their Affiliates, subsidiaries, officers, directors, employees, partners, members, shareholders, agents and representatives to the full extent permitted by law from and against any and all losses,
claims, costs, damages and expenses (including attorneys’ fees) arising from or in connection with any act or failure to act of the Operating Member which was not in good faith, within the scope of its authority, or in accordance with the
directives of the Management Committee, and (ii) or constituted fraud, willful misconduct, gross negligence, or a Material Breach. 
 2.04 Annual Business Plan 
 On or before October 31 of each Fiscal Year of the Company, commencing on
October 31, 2008, the Operating Member shall submit a new annual business plan for the ensuing Fiscal Year for the review and approval of the Management Committee (the initial and each new business plan, as approved, being the “Annual
Business Plan”). Each Annual Business Plan shall include, without limitation: (i) a narrative description of the proposed objectives and goals for the Company, which shall include for such Fiscal Year (without limitation), any proposed
sale or refinancing of the Project; (ii) the status of the Project; (iii) a property management and leasing plan for the Project for such Fiscal Year; and (iv) such other items as are requested by any representative of the Management
Committee or as otherwise reasonably necessary to keep the Management Committee informed as to the business and affairs of the Company and the Project. 
 2.05 Operating Budget 
 Attached hereto as Exhibit C is the annual operating budget for
the Company for the remainder of the 2008 Fiscal Year. On October 31 of each Fiscal Year of the Company commencing on October 31, 2008, the Operating Member shall submit a new annual operating budget for the Company for the ensuing Fiscal
Year for the review and approval of the Management Committee (the initial and each new annual operating budget, as approved, being the “Operating Budget”). Each Operating Budget shall set forth on a detailed itemized basis:
(i) all receipts projected for the period of such Operating Budget and all expenses, by category, for the Company (including, without limitation, all repairs and capital expenditures projected to be incurred during such period), (ii) the
anticipated operating reserves and working capital projected to be required for such period, (iii) a schedule setting forth the timing and amount of any Additional Contributions projected to be required by the Members for such Fiscal Year (or
other period); and (iv) a five (5)-year projection setting forth the estimated revenues, expenses and net operating income (or loss) expected to be incurred for the next five (5)

  

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

  

 11 

 
any representative to the Management Committee and any previously appointed representatives of Lippert Management shall be replaced by one (1) or more
representatives to be appointed by the Management Committee. In the event there is a dispute as to whether a Removal Event occurred, then Lippert Management shall cease to be the Operating Member and shall no longer have any right to appoint any
representative to the Management Committee, and, if it shall be later determined by a court of competent jurisdiction that a Removal Event did not occur, then Lippert Management shall be deemed to have been terminated pursuant to
Section 2.06(c). 
 (c) Other Removal. For any reason, the Management Committee may elect (in its sole and absolute
discretion) at any time, without cause and for any or no reason, to remove Lippert Management as the Operating Member and to designate any Person as a replacement Operating Member or as a manager who shall fulfill the duties and obligations of the
Operating Member, which election may be made by written notice to Lippert Management not less than fifteen (15) days prior to the effective date of such removal, provided that, the Management Committee agrees to meet and confer with
Lippert Management during such fifteen (15) day period, at the request of Lippert Management, in connection with such removal. In such event, Lippert Management (or its Affiliates, as applicable) shall: (i) have no further obligations
under Sections 2.03, 2.04 or 2.05, and (ii) otherwise retain its Interest in the Company, including its interests in the Net Income and Net Losses or similar items of, and to receive distributions from, the Company as provided in
Articles 4 and 5 of this Agreement. If Lippert Management is removed as Operating Member pursuant to this Section 2.06(c), then (A) any such replacement Operating Member shall not receive any additional fees or “carried
interest” or other profits interest in the Company unless such interest is paid from Paladin’s Interest in the Company and (B) Lippert Management may elect, by written notice to Paladin within thirty (30) days after the effective
date of such removal, to require Paladin to purchase 100% of the Lippert Members’ Interests in accordance with the procedures set forth in the last two sentences of Section 7.02, and in Section 7.03(a), (b) and
(d) and Section 7.05, Section 7.06, Section 7.07, Section 7.08 and Section 7.10 as if a Lippert Member were a Defaulting Member as a result of one of the Buy-Sell Events referenced in
Section 7.01(e)-(g) and the Lippert Members were the Selling Member and Paladin the Purchasing Member under such provisions of this Agreement (but in such case the provisions of clause (iv) of Section 7.03(a) shall not
apply). If Lippert Management fails to make such election by written notice to Paladin at or before the end of such thirty (30) day period, then Lippert Management shall be deemed to have waived its rights under clause (B) immediately
above. In addition, if Lippert Management is removed as Operating Member pursuant to this Section 2.06(c), then Paladin shall use its reasonable efforts to obtain written releases of the Lippert Members (and their respective Affiliates)
from all guarantees of liabilities of the Company previously executed by the Lippert Members (and its Affiliates). To the extent such releases cannot be obtained by Paladin, Paladin shall indemnify, defend, protect and hold the Lippert Members (and
such Affiliates) wholly free and harmless from and against any and all claims, liabilities, causes of action, liens, charges, and all other matters arising from such liabilities or guarantees, arising subsequent to the Effective Date of such
removal. 
  

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 (d) Contracts. If Lippert Management is removed as the Operating Member (whether pursuant to
either Section 2.06(a) or Section 2.06(c)), then Paladin (acting alone and outside of the Management Committee), on behalf of the Company, shall also have the right to terminate Lippert Management’s right to provide the services
provided for in Section 2.12 and to terminate any other agreement between the Company and Lippert Management or any Affiliate of either the Lippert Members (including, without limitation, the Property Management Agreement described in
Section 2.12), without penalty. If Lippert Management is removed as the Operating Member pursuant to Section 2.06(c) and Paladin elects to terminate Lippert Management’s (or its Affiliate’s) right to provide the
services provided for in Section 2.12 or to terminate any contract between the Company and Lippert or an Affiliate of either of the Lippert Members, then the Company shall be obligated to engage a third party other than an Affiliate of
Paladin to undertake the services previously provided by Lippert Management or the Affiliate of Lippert Members and which were terminated. If Lippert Management is removed as the Operating Member pursuant to Section 2.06(a) as a result
of the occurrence of a Removal Event, then the Company may engage either an Affiliate of Paladin or a third party to complete the services that were being provided under the terminated contract or other arrangement. 
 2.07 Liability and Indemnity 
 (a) Indemnification. Except as otherwise expressly provided in this Agreement, no Member, officer of the Company, representative on the Management Committee or other authorized representative of the Company (each, an
“Indemnified Party”) shall be liable or accountable in damages or otherwise to the Company or to the other Members for any error of judgment or any mistake of fact or law or for anything that such Indemnified Party may do or refrain
from doing hereafter, except in the case of fraud, willful misconduct or gross negligence in performing or failing to perform such Indemnified Party’s duties for the Company. To the maximum extent permitted by law, the Company hereby
indemnifies, defends, protects and agrees to hold each Indemnified Party wholly harmless from and against any and all loss, expense or damage suffered by such Indemnified Party by reason of anything which such Indemnified Party may do or refrain
from doing hereafter for and on behalf of the Company and in furtherance of its interest; provided, however, (i) no Indemnified Party shall be indemnified, defended, protected or held harmless from any loss, cost, expense or damage which
such Indemnified Party may suffer as a result of such Indemnified Party’s fraud, willful misconduct or gross negligence in performing or in failing to perform such Indemnified Party’s duties for the Company, and (ii) any such
indemnity shall be recoverable only from the assets of the Company. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Member (or representative thereof) otherwise existing at law or in equity, are
agreed by the Members to replace such duties and liabilities of such Member (or such representative). 
 (b) No Third Party
Beneficiaries. The provisions of this Section 2.07 are for the benefit of the Indemnified Parties and shall not be deemed to create any rights for the benefit of any other Person. 
  

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 (c) Survival. The provisions of this Section 2.07 shall survive the termination of
this Agreement. 
 2.08 Limited Liability 
 Except as otherwise required hereunder or pursuant to any non-waivable provision of the Delaware Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be
solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company. 
 2.09 Other Activities 
 Lippert
Management, as the Operating Member, agrees to carry out the business and affairs of the Company in accordance with the terms and conditions of this Agreement and shall devote all such time to the Company as is necessary for the efficient operation
of the business and affairs of the Company. Except as otherwise provided in Section 2.11 of this Agreement or any Operating Budget, or as otherwise approved by the Management Committee, the Operating Member shall not be paid any
compensation by the Company for providing such services to the Company. No Member shall have any obligations (fiduciary or otherwise) with respect to the Company or to the other Member insofar as making other investment opportunities available to
the Company or to the other Members. Each Member may engage in whatever activity such Member may choose without having or incurring any obligation to offer any interest in such activity to the Company or to the other Members. 
 2.10 Brokers Indemnity 
 Each
Member represents and warrants that it has not dealt with any broker or agent in connection with this Agreement or the relationship contemplated hereby, and each Member hereby agrees to indemnify, defend, protect and hold the other Member and the
Company wholly harmless from and against any and all liability, loss, cost, damage and expense (including without limitation, attorneys’ fees and costs) which the other Member or the Company may suffer or incur by reason of any claim by any
broker or agent for any compensation with respect to such indemnifying Member’s dealings in connection with this Agreement or the transactions described herein. 
 2.11 Reimbursement; Compensation 
 (a) Compensation. Except as otherwise expressly
provided in this Agreement or as provided in any applicable Operating Budget, no Member or any constituent partner, member, shareholder, officer, director, employee, agent, representative or Affiliate thereof shall receive any remuneration for
services rendered to or in connection with the Company or be reimbursed for general administrative and overhead expenses. 
  

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 (b) Reimbursement of Expenses. Notwithstanding the foregoing: (i) each Member shall be
reimbursed from the initial contributions made by the Members pursuant to Section 3.01 for any and all costs (including legal fees) reasonably and actually incurred by such Member in connection with the transactions contemplated herein
(including the formation of the Company, and the negotiation and documentation of this Agreement), and (ii) each Member and its representatives shall be reimbursed for any out-of-pocket travel and other costs and expenses reasonably and
actually incurred in connection with the business and affairs of the Company, but such reimbursement shall not include any costs or charges for time expended by any Member’s employees or other representatives or overhead costs of any Member.

 2.12 Property Management 
 C.R.E.S. Management, L.L.C., a Missouri limited liability company, which is an Affiliate of Lippert Management, initially shall be the Property Manager of the Project and shall manage and operate the Project in
accordance with a Property Management Agreement between the Company and such Property Manager in the form approved by the Management Committee (the “Property Management Agreement”). The Property Management Agreement shall provide
for (i) an initial one year term with automatic one year renewals, (ii) termination by either the Company or the Property Manager upon not less than thirty (30) days prior written notice or upon a sale of the Project, and (iii) a
management fee payable monthly, in arrears, to the Property Manager with respect to the Project equal to four and one-half percent (4.5%) of the monthly gross revenues from the Project; provided, however, that if during any month for
which such management fee is due and payable, there is insufficient Cash Flow to fund payment to Paladin of its Unpaid Minimum Current Preferred Return accrued and owing through the end of such month, then a portion of the management fees payable to
the Property Manager for such month up to, but not exceeding, two and one quarter percent (2.25%) of the monthly gross revenues of the Project for such month shall be deferred by the Property Manager and paid to Paladin to the extent (but only
to the extent) of its Unpaid Minimum Current Preferred Return (collectively, the “Deferred Management Fees”) and shall be paid to the Property Manager only from available Cash Flow pursuant to Section 5.01(b) and
Section 5.02(a). All amounts paid to the Property Manager as management fees (including Deferred Management Fees) shall be treated as amounts paid to a person other than a Member as described in Section 707(a) of the Code.

 ARTICLE 3 
 MEMBERS’ CAPITAL CONTRIBUTIONS 
 3.01 Initial Contributions of the Members 
 (a) Initial Capital Contributions. Simultaneously with the execution of this Agreement, Paladin has contributed to the Company in cash its initial
Capital Contribution in the amounts shown on Exhibit A hereto. The Lippert Members have made no initial Capital Contributions to the Company. 
  

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 (b) Credit to Capital Accounts. Any and all Capital Contributions made by each Member pursuant to
this Section 3.01 and Sections 3.02 and 3.03 shall be credited to the Capital Account and Unrecovered Contribution Account of each such Member as of the date any such Capital Contribution is made. 
 3.02 Additional Contributions 
 (a) Need for Contributions. Except as otherwise required by law or pursuant to this Section 3.02 or Section 3.03, no Member shall be required or permitted to make any additional capital contributions to the
Company. 
 (b) Required Additional Contributions. From time to time, the Management Committee may require the Members to make
Additional Contributions to the capital of the Company pursuant to this Section 3.02(b) in connection with the Project to fund Project Shortfalls by delivering written notice (“Contribution Notice”) of such Additional
Contribution to the Members, which Contribution Notice shall include a contribution date (“Contribution Date”) (which date shall not be less than fifteen (15) Business Days following the Effective Date of such notice), upon
which Contribution Date each Member shall be obligated to contribute to the capital of the Company its pro rata share of such Additional Contribution (measured by such Member’s Contribution Percentage). 
 3.03 Remedy For Failure to Contribute Capital 
 (a) Failure to Contribute. If any Member (the “Non-Contributing Member”) fails timely to make all or any portion of any Additional Contribution such Member is required to contribute pursuant to
Section 3.02 (the “Delinquent Contribution”) and such failure continues for five (5) days following the Effective Date of notice thereof from the other Member, such other Member (the “Contributing
Member”), in addition to any and all other remedies available to the Contributing Member under this Agreement or otherwise at law or in equity (including, without limitation, instituting a legal proceeding to collect the Delinquent
Contribution), shall have the right, but not the obligation, to proceed in accordance with the terms and conditions set forth below in this Section 3.03 and, in addition, if either of the Lippert Members is the Non-Contributing Member, a
Cash Flow Bonus Forfeiture Event shall exist for purposes of Sections 5.01(d) and 5.02(h). For purposes of this Section 3.03, the Lippert Members shall be treated collectively as one party and shall act as one Member (and shall be
either the Contributing Member or the Non-Contributing Member, as the case may be) and any increases or decreases in their Percentage Interests shall be allocated between them pro rata, in proportion to their Percentage Interests at such time.

 (b) Default Loan. The Contributing Member may advance to the Company, in cash, within thirty (30) days following the
Contribution Date, an amount equal to the Delinquent Contribution, and such advance by the Contributing Member shall be treated as a non-recourse loan by the Contributing Member to the Non-Contributing Member (a “Member Loan”),
bearing interest at a rate equal to the lesser of 

  

 16 

 
the then current prime rate as most recently reported by the Western Edition of the Wall Street Journal, plus five percentage points, adjusted and
compounded concurrently with any adjustments to such prime rate, or the maximum, nonusurious rate then permitted by applicable law for such loans. Each Member Loan shall be due and payable upon the earlier of six (6) months from the date such
Member Loan is advanced or the dissolution of the Company. If Paladin is the Contributing Member, then both Members shall take all actions and execute all documents (including a written promissory note evidencing the obligation of the
Non-Contributing Member) necessary to ensure that the obligation meets the “straight debt safe harbor” described in Section 856(m) of the Code. 
 As of the Effective Date of any advance of a Member Loan, the Non-Contributing Member shall be deemed to have contributed an amount equal to the principal amount of such Member Loan to the capital of the Company, and
the Capital Account and Unrecovered Contribution Account of the Non-Contributing Member shall be credited with a like amount. Notwithstanding the provisions of Articles 5 and 8, until any and all Member Loans are repaid in full, the
Non-Contributing Member shall draw no further distributions from the Company, and all cash or property otherwise distributable with respect to the Non-Contributing Member’s Interest (or fees payable to the Non-Contributing Member or any of its
Affiliates, excluding, however, any fees payable under Section 2.12) shall be distributed to the Contributing Member in repayment of the outstanding balance of the Member Loan, with such funds being applied first to reduce any and all
interest accrued on such Member Loan and then to reduce the principal amount thereof. Any amounts so applied shall be treated, for all purposes under this Agreement, as having actually been distributed to the Non-Contributing Member and applied by
the Non-Contributing Member to repay the outstanding Member Loan. 
 If, upon the maturity of a Member Loan (taking into account any agreed
upon extensions thereof), any principal thereof or accrued interest thereon remains outstanding, the Contributing Member shall elect one of the following options: (i) to renew such Member Loan (or portion thereof) pursuant to the terms and
provisions of this Section 3.03(b) for an additional term of six (6) months; (ii) to contribute all or any portion of such outstanding principal of and accrued, unpaid interest on such Member Loan (or portion thereof) to the
capital of the Company and dilute the Percentage Interest of the Non-Contributing Member in accordance with the provisions of Section 3.03(c); or (iii) elect to exercise the buy-sell provisions contained in Article 7 in
accordance with the provisions of Sections 3.03(c) and (d), in which event the Member Loan shall remain in effect until the closing of the buy-sell transaction contemplated under Article 7. The Contributing Member may elect any of the
options set forth in the immediately preceding sentence by giving written notice of such election to the Non-Contributing Member within thirty (30) days prior to such maturity date of the Member Loan. Failure of the Contributing Member to
timely give such written notice to the Non-Contributing Member shall be deemed to constitute an election to renew such Member Loan for an additional term of six (6) months on the terms set forth herein. 
 (c) Dilution. The Contributing Member may contribute to the capital of the Company, in cash, within thirty (30) days following the
Contribution Date, an 

  

 17 

 
amount equal to the Delinquent Contribution, and the Capital Account and Unrecovered Contribution Account of the Contributing Member shall be credited with
the amount so contributed. In the alternative, if the Contributing Member elected to make a Member Loan, then upon the maturity of a Member Loan that is not fully repaid on or before the maturity date thereof, the Contributing Member also may
contribute to the capital of the Company, in accordance with the provisions of Section 3.03(b) above, all or any portion of the outstanding principal of and accrued, unpaid interest on such Member Loan (or portion thereof) and
(i) the amount of such outstanding principal and interest so contributed shall be deemed repaid and satisfied, (ii) the amount of such outstanding principal and interest shall be deemed to have been distributed to the Non-Contributing
Member, and debited from the Capital Account and Unrecovered Contribution Account of the Non-Contributing Member, and (iii) the Capital Account and Unrecovered Contribution Account of the Contributing Member shall be increased by the amount of
such outstanding principal and interest so contributed. 
 Upon the contribution of any Delinquent Contribution (or the contribution of the
principal and interest of any Member Loan by the Contributing Member pursuant to this Section 3.03(c)), the Percentage Interest (but not the Contribution Percentage) of the Non-Contributing Member shall be decreased by the Dilution
Percentage. The “Dilution Percentage” shall equal the amount expressed in percentage points (rounded to the nearest one-hundredth of a percentage point) calculated based upon the following formula: 
  

			
		  	Delinquent Contribution (or the outstanding balance of any Member Loan (including interest)) contributed by the Contributing Member
	Dilution Percentage = 200% x                    	  	
	  	
  

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

 The Percentage Interest, but not the Contribution Percentage, of the Contributing Member shall be
increased by the amount of the reduction in the Percentage Interest of the Non-Contributing Member. 
 The application of the provisions of
this Section 3.03(c) is illustrated by the following example: Assume that (i) the Unrecovered Contribution Amount of the Members was equal to $4,000,000, (ii) an Additional Contribution of $200,000 was required to be
contributed by the Members to the capital of the Company, (iii) the Non-Contributing Member whose aggregate Percentage Interest is 2.5% failed to contribute its share of such contribution of $5,000 (i.e., 2.5% x $200,000), and
(iv) pursuant to this Section 3.03(c), the Contributing Member whose Percentage Interest is 97.5% made the Delinquent Contribution of $5,000 to the capital of the Company on behalf of such Non-Contributing Member pursuant to this
Section 3.03(c). 
  

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 The Dilution Percentage applicable to the Non-Contributing Member would be equal to 0.24 percentage
points as calculated in accordance with the following formula: 
  

								
		 		    	$	 5,000	  	
		 		    	 	 	  	
		 	0.24% = 200% x	    	$	4,200,000	  	

 The Percentage Interest of the Non-Contributing Member therefore would be reduced by 0.24 percentage points from
2.5% to 2.26%, and the Percentage Interest of the Contributing Member would be increased by a like amount of percentage points from 97.5% to 97.74%. 
 The Contribution Percentages of the Members would not be adjusted as a result of the foregoing dilution. 
 (d) Implementation of Buy-Sell. In addition to the options set forth in Sections 3.03(b) and 3.03(c) above, the Contributing Member may elect to implement the buy-sell provisions contained in Article 7 for a Default
Buy-Sell Event by delivery of written notice of such election to the Non-Contributing Member in accordance with the provisions thereof (and in which case the Non-Contributing Member shall be deemed to be the Defaulting Member and the Contributing
Member shall be deemed to be the Non-Defaulting Member for purposes of Article 7); provided, however, that if the Contributing Member so elects to implement the buy-sell provisions contained in Article 7 and the Contributing
Member also exercises its rights under Section 3.03(c), then in computing the Dilution Percentage in Section 3.03(c) in connection with the contribution of the Delinquent Contribution or any portion of the outstanding principal of
and/or accrued, unpaid interest on any Member Loan that is the subject of the Default Buy-Sell Event, the 200% number used in the dilution formula in Section 3.03(c) above shall be 100%. 
 (e) Application of Provisions. Any and all adjustments to the Non-Contributing Member’s Percentage Interest shall be rounded to the nearest
..01% and (except as provided otherwise in the first paragraph of Section 3.03(b)) the Contributing Member shall not succeed to all or any portion of the Capital Account or Unrecovered Contribution Account of the Non-Contributing Member
as the result of any such adjustment. In addition, notwithstanding any provision contained in this Article 3, the Non-Contributing Member’s Percentage Interests shall in no event be reduced below .01% by operation of
Section 3.03(d). As a result of any contribution to the capital of the Company pursuant to this Section 3.03, the Contributing Member shall have the right, but not the obligation, to cause the Capital Accounts of the Members
to be booked-up or booked-down in accordance with the provisions of Treasury Regulation Section l.704-l(b)(2)(iv)(f) to reflect the fair market value of the Company’s assets (as reasonably determined by the Contributing Member) at the time of
such contribution. 
  

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 3.04 Debt Financing 
 The Members acknowledge that the Management Committee may cause the Company to obtain debt financing from one or more third-party lenders in order to fund
all or any portion of any actual or projected financial requirements of the Company or in connection with other costs that may be incurred by the Company. Any such financing shall be obtained on the best available market rates and terms, all as
determined in the sole and absolute discretion of the Management Committee. In connection with obtaining any financing, it is expected that the Lippert Members and their respective Affiliates shall provide such repayment and “carve-out”
guarantees that are customarily requested, and on such terms and conditions as are customarily requested, by lenders with respect to similar projects of similar size, type and location. Paladin shall not be required to personally guarantee any
financing obtained by the Company. 
 3.05 Loans from Members 
 The Management Committee may elect, in its discretion, to cause the Members to fund Project Shortfalls and other financial requirements of the Company as
loans to the Company in lieu of making Additional Contributions to the Company, on such terms and conditions as it shall determine from time to time. 
 3.06 Capital Contributions in General 
 Except as otherwise expressly provided in this
Agreement, (i) no part of the contributions of any Member to the capital of the Company may be withdrawn by such Member, (ii) no Member shall be entitled to receive interest on such Member’s contributions to the capital of the
Company, (iii) no Member shall have the right to demand or receive property other than cash in return for such Member’s contributions to the Company, and (iv) no Member shall be required or be entitled to contribute additional capital
to the Company other than as permitted or required by this Article 3. 
 ARTICLE 4 
 ALLOCATION OF PROFITS AND LOSSES 
 4.01 Allocation of Net Profits and Net Losses 
 (a) Net Profits. After application of Sections 4.02 and
4.03, Net Profits for each Fiscal Year shall be allocated among the Members in the following order and priority: 
 (i) first,
to the Members, in proportion to and to the extent of the amounts necessary to cause the cumulative allocations of Net Profits to each Member under this Section 4.01(a)(i) for the current and all prior Fiscal Years to equal the
cumulative allocations of Net Losses to such Member pursuant to Section 4.01(b)(iv) hereof; 
  

 20 

 (ii) second, to Paladin, until the balance of Paladin’s Capital Account (as of the
last day of such Fiscal Year, but adjusted to reflect any Net Profits for such Fiscal Year allocated to Paladin pursuant to Section 4.01(a)(i) and Section 4.02 and 4.03 hereof) equals Paladin’s 12% IRR Amount (as of the
last day of such Fiscal Year); 
 (iii) third, to the Lippert Members, in proportion to and to the extent of the amounts that
would cause the balances of each of the Lippert Members’ Capital Accounts (as of the last day of such Fiscal Year, but adjusted to reflect any Net Profits for such Fiscal Year allocated to such Lippert Member pursuant to
Section 4.01(a)(i) and Section 4.02 and 4.03 hereof) to equal such Lippert Member’s 12% IRR Amount (as of the last day of such Fiscal Year); 
 (iv) fourth, subject to Section 4.03(b), 50% to Paladin, and 50% to the Lippert Members, pro rata, in proportion to their
respective Percentage Interests. 
 For purposes of determining the amount of Net Profits to be allocated pursuant to Section 4.01(a)(ii)
and (iii) for any Fiscal Year, the Capital Account of each Member shall be increased by such Member’s share of “partnership minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(g)(1)
of the Regulations, and by such Member’s share of “partner nonrecourse debt minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(i)(5) of the Regulations.  
 (b) Net Losses. After application of Sections 4.02 and 4.03, Net Losses for each Fiscal Year shall be allocated among the Members in the
following order and priority: 
 (i) first, 50% to Paladin, and 50% to the Lippert Members, pro rata, in proportion to their
respective Percentage Interests, until the cumulative Net Losses allocated to each Member under this Section 4.01(b)(i) for the current and all prior Fiscal Years equal the excess, if any, of (A) the cumulative Net Profits allocated
to such Member pursuant to Section 4.01(a)(iii) for all prior Fiscal Years, over (B) the cumulative distributions to such Member pursuant to Section 5.02(h); 
 (ii) second, to the Lippert Members, in proportion to and to the extent of the amounts that would cause the Capital Accounts of each
Lippert Member to equal zero; 
 (iii) third, to Paladin, until Paladin’s Capital Account equals zero; 
 (iv) fourth, to the Members, in proportion to their Percentage Interests. 
  

 21 

 For purposes of determining the amount of Net Losses to be allocated pursuant to Section 4.01(b)(ii) and
(iii) for any Fiscal Year, the Capital Account of each Member shall be increased by such Member’s share of “partnership minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(g)(1) of
the Regulations, and by such Member’s share of “partner nonrecourse debt minimum gain” as of the last day of such Fiscal Year, determined pursuant to Section 1.704-2(i)(5) of the Regulations. 
 (c) Net Loss Limitation. Notwithstanding anything in this Agreement to the contrary, no Member shall be allocated Net Losses under
Section 4.01(b) to the extent such allocation would cause or increase an Adjusted Capital Account deficit for such Member as of the last day of the Fiscal Year to which such allocation relates. Any amounts not allocated to a Member
pursuant to the limitation set forth in the preceding sentence shall be allocated to the other Members in proportion to and to the extent that such allocations would not cause them to have, or increase their, Adjusted Capital Account deficits. Any
remaining Net Losses shall be allocated among the Members in proportion to their then-current respective Percentage Interests. This provision is intended to ensure that allocations of Net Losses have economic effect pursuant to Treas. Reg.
§1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. 
 4.02 Regulatory Allocations 
 Prior to making any allocations pursuant to Sections 4.01 or 4.03 hereof, the following special allocations shall be made each Fiscal Year, to the
extent required, in the following order: 
 (a) Minimum Gain Chargebacks. Items of Company income and gain shall be
allocated for any Fiscal Year to the extent, and in an amount sufficient to satisfy the “minimum gain chargeback” requirements of Treasury Regulation Sections 1.704-2(f) and (i)(4). 
 (b) Qualified Income Offset. Items of Company income and gain shall be allocated any Fiscal Year to the extent, and in an amount
sufficient to satisfy the “qualified income offset” requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(3). 
 (c) Member Nonrecourse Deductions. Member Nonrecourse Deductions shall be allocated to the Member who bears the economic risk of loss associated with such deductions, in accordance with Treasury Regulations
Section 1.704-2(i). 
 (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be allocated
among the Members in accordance with their Percentage Interests. 
 (e) Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of 

  

 22 

 
the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount
of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in
accordance with the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(m). 
 (f) Curative
Allocations. The allocations set forth in Section 4.01(c) and 4.02(a) through (e) (the “Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulation Sections 1.704-1(b) and 1.704-2.
The Regulatory Allocations may affect results which would be inconsistent with the manner in which the Members intend to divide Company distributions. Accordingly, Paladin authorized to specially allocate items of income, gain, loss or deduction
which otherwise would be included in the computation of Net Profits and Net Losses and other items among the Members, to the extent that they exist, so that, to the extent possible, the cumulative net amount of allocations of Company items under
Sections 4.01, 4.02, and 4.03 hereof shall be equal to the net amount that would have been allocated to each Member if the Regulatory Allocations had not occurred. Paladin will have discretion to accomplish this result in any reasonable
manner that is consistent with Section 704 of the Code and the related Regulations. 
 4.03 Special Allocation 

(a) After giving effect to the allocations provided for in Section 4.02 hereof, items of gross income or gain shall be specially allocated
for each Fiscal Year to the Members in proportion to and to the extent of the excess of (A) the cumulative amounts distributed to each Member pursuant to Sections 5.01(a), (c), and (d) for the current and all prior Fiscal Years,
over (B) the cumulative amounts allocated to each Members pursuant to this Section 4.03(a) for all prior Fiscal Years; and 
 (b) Appropriate adjustments shall be made to the allocations provided for in Section 4.01 hereof if a Cash Flow Bonus Forfeiture Event has existed at any time during the life of the Company, or if the Percentage Interests of the
Members change pursuant to Section 3.03(c). 
 4.04 Other Allocation Rules 
 (a) Tax/Book Differences. In the event that any Company property has a book value which differs from the adjusted tax basis of such property, then
allocations with respect to such property for income tax purposes shall be made in a manner which takes into consideration differences between such book value and such adjusted tax basis in accordance with Section 704(c) of the Code, the
Treasury Regulations promulgated thereunder and Treasury Regulation Section 

  

 23 

 
1.704-1(b)(2)(iv)(f)(4). Such allocations for income tax purposes shall be made using the traditional method or such other method as may be agreed to by the
Members. Such tax allocations shall neither affect, nor in any way be taken into account in computing, any Member’s Capital Account or share of Net Profits, Net Losses, other items, or distributions pursuant to any provision of this Agreement.

 (b) Variations in Interests During any Fiscal Year. For purposes of determining the Net Profits, Net Losses, or any other items
allocable to any period, Net Profits, Net Losses, and any such other items shall be determined on a daily, monthly, interim closing of the books or other basis, as determined by the Management Committee using any permissible method under
Section 706 of the Code and the regulations promulgated thereunder. 
 (c) Allocations of Items. Any allocation to a Member of
Net Profit or Net Loss shall be treated as an allocation to such Member of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Profit or Net Loss. Unless otherwise specified herein to the
contrary, any allocation to a Member of items of Company income, gain, loss, deduction or credit (or item thereof) shall be treated as an allocation of a pro rata portion of each item of Company income, gain, loss, deduction or credit (or item
thereof). 
 ARTICLE 5 
 DISTRIBUTIONS 
 5.01 Distribution of Ordinary Cash Flow 
 Subject to the provisions of Sections 5.03, 7.04 and 8.02, Ordinary Cash Flow realized by the Company shall be distributed to the Members as soon
as practicable following the Company’s receipt thereof in the following order of priority: 
 (a) First, to Paladin until
Paladin’s Unpaid Minimum Current Preferred Return has been reduced to zero; 
 (b) Second, unless a Cash Flow Bonus
Forfeiture Event exists, to the Property Manager until the Deferred Management Fee Account has been reduced to zero; 
 (c)
Third, to Paladin until Paladin’s Preferred Return has been reduced to zero 
 (d) Fourth, to the Lippert Members, in
proportion to and to the extent of the amounts necessary to cause each of the Lippert Member’s Unpaid Preferred Return to be reduced to zero; and 
 (e) Thereafter, fifty percent (50%) to Paladin and fifty percent (50%) to the Lippert Members, or if a Cash Flow Bonus Forfeiture Event exists, to the Members pro rata in accordance with their respective
Percentage Interests. 
  

 24 

 5.02 Distribution of Extraordinary Cash Flow 
 Subject to the provisions of Sections 5.03, 7.04 and 8.02, Extraordinary Cash Flow realized by the Company shall be distributed to the Members as
soon as practicable following the Company’s receipt thereof in the following order of priority: 
 (a) First, unless a
Cash Flow Bonus Forfeiture Event exists, to the Property Manager until the Deferred Management Fee Account has been reduced to zero; 
 (b) Second, to Paladin until Paladin’s Unpaid Preferred Return is reduced to zero; 
 (c) Third, to Paladin
until Paladin’s Unrecovered Contribution Account is reduced to zero; 
 (d) Fourth, to Paladin until Paladin has received
distributions under Section 5.01 and this Section 5.02 in an amount equal to Paladin’s Threshold Return; 
 (e) Fifth, to the Lippert Members, in proportion to and to the extent of the amounts necessary to cause each of the Lippert Member’s Unpaid Preferred Return to be reduced to zero; 
 (f) Sixth, to the Lippert Members, in proportion to and to the extent of the amounts necessary to cause each of the Lippert Member’s
Unrecovered Contribution Account to be reduced to zero; 
 (g) Seventh, to the Lippert Members, in proportion to and to the
extent of the amounts necessary to cause each of the Lippert Members to have received distributions under Section 5.01 and this Section 5.02 in an amount equal to such Lippert’s Member’s Threshold Return; and

 (h) Thereafter, fifty percent (50%) to Paladin and fifty percent (50%) to the Lippert Members, pro rata in
accordance with their respective Percentage Interests, or if a Cash Flow Bonus Forfeiture Event exists, to the Members pro rata in accordance with their respective Percentage Interests. 
 5.03 Limitations on Distributions 
 Notwithstanding any other provision contained in this Agreement, the Company shall not make a distribution of Cash Flow (or other proceeds) to any Member if such distribution would violate any applicable provision of the Delaware Act or
other applicable law. 
  

 25 

 5.04 In-Kind Distribution 
 Assets of the Company (other than cash) shall not be distributed in kind to the Members without the prior written approval of the Members. 
 5.05 Right to Withhold 
 The
Management Committee, on behalf of the Company, shall withhold from any distribution such amounts as are required to be withheld by the laws of any taxing jurisdiction (as determined in the sole and absolute discretion of the Management Committee).
In addition, the Management Committee, on behalf of the Company shall withhold from any distribution to any Member any amounts for which such Member (or any Affiliate thereof) may be liable or responsible to the Company, and shall apply such
withheld amount to such liability or responsibility. All amounts so withheld shall be treated as amounts distributed to the respective Member(s) on whose account the withholding was imposed. 
 ARTICLE 6 
 RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS

 6.01 Limitations on Transfer 
 Except as permitted pursuant to Section 6.02 below, no Member or assignee of a Member shall be entitled to sell, exchange, assign, transfer, convey or otherwise dispose of, pledge, hypothecate, encumber or
otherwise grant a security interest in, directly or indirectly, for value or no value, whether voluntary or involuntary (including by operation of law or other legal or equitable proceedings) (collectively, “Transfer”), all or any
part of such Member’s or assignee’s Interest, including, without limitation, Transfers of any economic interest, without the prior written consent of the other Members, which consent may be granted or withheld in each such other
Member’s sole discretion. Any attempted Transfer, or withdrawal by a Member in violation of the restrictions set forth in this Article 6 shall, unless this provision is waived by the other Members (each acting in its sole and absolute
discretion), be null and void ab initio and of no force or effect and, in addition to the other rights and remedies at law and in equity, any of the other Members shall be entitled to injunctive relief enjoining the prohibited action. The Members
expressly agree that damages at law would be an inadequate remedy for a breach or threatened breach of the Transfer restrictions set forth in this Agreement. 
 6.02 Permitted Transfers 
 Notwithstanding the foregoing, any Member may Transfer all or any
portion of such Member’s Interest to any of the following (collectively, “Permitted Transferees”) without complying with the provisions of Section 6.01: 
 (a) In the case of Transfers by Paladin, (i) any Transfer of any direct or indirect Interest in Paladin to any Affiliate of Paladin
and (ii) any Transfer of a direct or indirect interest in Paladin Realty Income Properties, L.P. or the Paladin REIT to any Person; and 
  

 26 

 (b) In the case of Transfers by any Lippert Member, any Transfer of an interest in
Lippert Management or Lippert Holdings to any Immediate Family Member of James Lippert or Teresa Lippert upon the death or disability of James Lippert or Theresa Lippert. 
 Upon receipt by the Management Committee of notice of such Transfer (along with a copy of the instrument(s) of transfer), any such Permitted Transferees shall receive and hold such Interest or portion thereof, subject
to the terms of this Agreement (including Article 4) and to the obligations hereunder of the transferor, and there shall be no further Transfer of such Interest (or economic interest) or portion thereof except to a Person to whom such
Permitted Transferee could have transferred such Interest (or economic interest) or portion thereof in accordance with this Section 6.02 had such Permitted Transferee originally been a Member or otherwise in accordance with the terms of
this Agreement. Notwithstanding any other provision contained herein, any Transfer described in this Section 6.02 shall be null and void ab initio and of no force or effect if such Transfer would otherwise violate the provisions of
Section 6.04. 
 6.03 Admission of Substitute Members 
 If any Member Transfers such Member’s Interest to a transferee in accordance with Sections 6.01 or 6.02, then such transferee shall only be
entitled to be admitted into the Company as a substitute Member if (i) the books and records of the Company are amended to reflect such admission; (ii) the Management Committee approves the admission of such transferee (but only in the
event of a transfer in accordance with Section 6.01) and approves the form and content of the instrument of transfer; (iii) the transferor and transferee named therein execute and acknowledge such other instruments as the Management
Committee may deem reasonably necessary to effectuate such admission; (iv) the transferee in writing accepts and adopts all of the terms and conditions of this Agreement, as the same may have been amended; and (v) the transferor pays, as
the Management Committee may reasonably determine, all reasonable expenses incurred in connection with such admission, including, without limitation, legal fees and costs. In the event of a Transfer in part of a Member’s Interest under
Section 6.02 and the admission of the transferee into the Company as a member, such transferee member shall be required to act together as one Person with the Person(s) holding the remainder of the entire Interest as of the date of this
Agreement from whence such transferee member’s interest originally derived. To the fullest extent permitted by law, any transferee of an Interest who does not become a substituted Member shall have no right to require any information or account
of the Company’s transactions, to inspect the Company books, or to vote on any of the matters as to which a Member would be entitled to vote under this Agreement. Any such transferee shall only be entitled to share, as an assignee, in such Net
Profits and Net Losses, to receive such distributions, and to receive such allocations of income, gain, loss, deduction or credit or similar items to which the transferor was entitled, to the extent assigned. A Member that Transfers its Interest
shall 

  

 27 

 
not cease to be a member of the Company until the admission of the transferee as a substituted member of the Company and, except as provided in the preceding
sentence, shall continue to be entitled to exercise, and shall continue to be subject to, all of the rights, duties and obligations of such Member under this Agreement. 
 6.04 Additional Restrictions on Transfer 
 Notwithstanding any other provision contained
herein, unless the Management Committee waives any applicable restriction set forth in this Section 6.04, any Transfer described in this Article 6 shall be null and void ab initio and of no force or effect if: (i) such
Transfer requires the registration of such Interest pursuant to, or otherwise directly or indirectly violates, any applicable federal or state securities laws; (ii) such transfer causes or will cause the Company to become a “Publicly
Traded Partnership” as such term is defined in Section 7704(b) of the Code; (iii) such Transfer results in a violation of applicable laws; (iv) such Transfer would, in the opinion of the Company’s counsel, cause the Company
to cease to be classified as a partnership for state and federal income tax purposes; (v) such Transfer is made to any Person lacking the legal power or capacity to own any Interest; or (vi) such Transfer causes an acceleration of any loan
or debt instrument to which the Company is a party. 
 6.05 Paladin Purchase Option 
 (a) Grant of Option. The Lippert Members hereby grant to Paladin the right and option to purchase all of the Interests of the Lippert Members (the
“Purchase Option”) for the purchase price determined in accordance with Section 6.05(b) (the “Option Price”) and otherwise upon and subject to the following terms and conditions of this
Section 6.05. The Purchase Option may be exercised at any time and from time to time after the first anniversary of the date of this Agreement by written notice from Paladin to the Lippert Members (the “Option Notice”).

 (b) Option Price. For a period of thirty (30) days following the Effective Date of the Option Notice, the Members shall
attempt to agree upon the Option Price. If the Members are unable to agree on the Option Price within such thirty (30) day period, then the Option Purchase Price shall be determined in accordance with the provisions of the following provisions
of this Section 6.05. Within fifteen (15) days after the expiration of such thirty (30) day period, Paladin shall select one (1) Qualified Appraiser and shall notify the Lippert Members in writing of such selection. Within
fifteen (15) days following the Effective Date of such notice from Paladin, the Lippert Members (acting together as one Person) shall either agree to the Qualified Appraiser selected by Paladin or select a second (2nd) Qualified Appraiser
and give written notice to Paladin of the Person so selected. If either Paladin or the Lippert Members fail to appoint a Qualified Appraiser within the time period specified above and after the expiration of five (5) days following the
Effective Date of written demand that a Qualified Appraiser be appointed, the Qualified Appraiser duly appointed by the Member making such demand to appoint such Qualified Appraiser shall proceed to make the appraisal as herein set forth, and the
determination thereof shall be conclusive on all the Members. Thereafter the Qualified 

  

 28 

 
Appraiser or two (2) Qualified Appraisers shall determine the Appraised Value in accordance with the provisions of Section 7.03(b)(1)-(3).
Within thirty (30) days after such determination of the Appraised Value of the Company, the accountants regularly employed by the Company shall determine the Option Price, which shall be an amount equal to the amount of cash which would be
distributed to the Lippert Members pursuant to Section 5.02 if (i) the Company (including all of its assets) were sold (as applicable) for the Appraised Value thereof as of the Effective Date of the Option Notice (after deducting
therefrom an amount equal to reasonable and customary closing costs); (ii) the remaining liabilities of the Company were liquidated pursuant to Section 8.02(a); (iii) reasonable reserves were established for any contingent,
conditional or unmatured liabilities or obligations of the Company pursuant to Section 8.02(b); and (iv) the Company distributed any remaining amounts to the Lippert Members in accordance with the provisions of
Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a notice thereof. 
 (c) Closing. The closing of the purchase by Paladin of the Interests of the Lippert Members shall occur on or before the date that is thirty (30) days after the determination of the Option Price. Paladin shall pay the Option
Price to the Lippert Members, in cash, on the closing date, and at the closing, the Lippert Members shall execute such instruments of conveyance and make such representations and warranties as Paladin shall reasonably request to deliver good title
to all of the Interests of the Lippert Members, free and clear of all liens, pledges, encumbrances, security interests or restrictions of any kind whatsoever (other than restrictions on transfer arising under federal and state securities laws).

 6.06 Election; Allocations Between Transferor and Transferee 
 Upon the Transfer of the Interest of any Member or the distribution of any property of the Company to a Member, the Company may file, with the approval of
the Management Committee, in its sole and absolute discretion, an election in accordance with applicable Treasury Regulations, to cause the basis of the Company property to be adjusted for federal income tax purposes as provided by Sections 734 and
743 of the Code. 
 6.07 Partition 
 No Member shall have the right to partition any assets of the Company or any interest therein, nor shall a Member make an application or proceeding for a partition thereto and, upon any breach of the provisions of
this Section 6.07 by any Member, the other Member (in addition to all rights and remedies afforded by law or equity) shall be entitled to a decree or order restraining or enjoining such application, action or proceeding. Upon the
Transfer of all or any part of the Interest of a Member as hereinabove provided, Net Profits and Net Losses shall be allocated between the transferor and transferee on the basis of the computation method which with the approval of the Management
Committee, in its sole and absolute discretion, is in the best interests of the Company, provided such method is in conformity with the methods prescribed by Section 706 of the Code and Treasury Regulation Section 1.706-1(c)(2)(ii).

  

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 6.08 Waiver of Withdrawal 
 No Member may voluntarily withdraw, resign or retire from the Company without the prior written consent of the Members, which consent may be granted or
withheld in each such Member’s sole and absolute discretion. Each Member hereby waives any and all rights such Member may have to withdraw or resign from the Company pursuant to the Delaware Act or otherwise and hereby waives any and all rights
such Member may have to receive the fair value of such Member’s Interest in the Company upon such withdrawal, resignation or retirement pursuant to the Delaware Act. No admission or withdrawal of a Member, whether in accordance with this
Agreement or otherwise, shall cause the dissolution of the Company except as otherwise provided in Section 8.01. Any purported admission, withdrawal or removal which is not in accordance with this Agreement shall be null and void and, in
addition to other rights and remedies at law and in equity, the other Member(s) shall be entitled to injunctive relief enjoining the prohibited action. The Members expressly acknowledge that damages at law would be an inadequate remedy for a breach
or threatened breach of the foregoing restrictions. 
 ARTICLE 7 
 DEFAULT BUY-SELL AGREEMENT 
 7.01 Default Buy-Sell Events 

 For purposes of this Article 7, the following shall constitute “Default Buy-Sell Events”: 
 (a) Prohibited Withdrawal or Retirement. The withdrawal, retirement, or other cessation to serve as a Member of the Company by any
Member in violation of the terms of this Agreement; 
 (b) Default by the Operating Member. The fraud, willful
misconduct, gross negligence or Material Breach (which shall include the notice and cure provisions to the extent provided in the definition of Material Breach) by the Operating Member (or its representatives) in performing or failing to perform the
Operating Member’s duties and obligations under this Agreement; 
 (c) Prohibited Transfer or Encumbrance. Any
Transfer or encumbrance or attempted Transfer or encumbrance by any Member of such Member’s Interest contrary to the provisions of Article 6; 
 (d) Breach of Agreement. Any Material Breach (which shall include the notice and cure provisions to the extent provided in the definition of Material Breach) by any Member (except for the failure of any Member
to make an Additional Contribution required hereunder); 
  

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 (e) Bankruptcy or Insolvency. The rendering, by a court with appropriate
jurisdiction, of a decree or order (i) adjudging a Member bankrupt or insolvent; or (ii) approving as properly filed a petition seeking reorganization, readjustment, arrangement, composition, or similar relief for a Member under the
federal bankruptcy laws or any other similar applicable law or practice, and if such decree or order referred to in this Section 7.01(e) shall have continued undischarged and unstayed for a period of sixty (60) days; 
 (f) Appointment of Receiver. The rendering, by a court with appropriate jurisdiction, of a decree or order (i) for the
appointment of a receiver, a liquidator, or a trustee or assignee in bankruptcy or insolvency of a Member, or for the winding up and liquidation of a Member’s affairs, provided that such decree or order shall have remained in force undischarged
and unstayed for a period of ninety (90) days, or (ii) for the sequestration or attachment of any property of a Member without its return to the possession of such Member or its release from such sequestration or attachment within ninety
(90) days thereafter; and 
 (g) Bankruptcy Proceedings. A Member (i) institutes proceedings to be
adjudicated a voluntary bankrupt or an insolvent, (ii) consents to the filing of a bankruptcy proceeding against such Member, (iii) is unable to or admits in writing such Member’s inability to pay such Member’s debts generally as
they become due, or (iv) files a petition or answer or consent seeking reorganization, readjustment, arrangement, composition, or similar relief for such Member under the federal bankruptcy laws or any other similar applicable law or practice,
(iv) consents to the filing of any such petition, or to the appointment of a receiver, a liquidator, or a trustee or assignee in bankruptcy or insolvency for such Member or a substantial part of such Member’s property, (v) makes an
assignment for the benefit of such Member’s creditors, or (vi) takes any action in furtherance of any of the aforesaid purposes. 
 For the purposes of implementing the provisions contained in this Article 7 and otherwise for purposes of this Agreement, (A) each of the events set forth in Sections 7.01(a)-(g) shall constitute a “Default
Buy-Sell Event”; (B) the “Defaulting Member” shall be (i) in the case of the occurrence of the event referenced in Section 7.01(a), the Member that has withdrawn, retired or ceased to serve as a Member
of the Company in violation of the terms of this Agreement; (ii) in the case of the occurrence of the event referenced in Section 7.01(b), the Operating Member; (iii) in the case of the occurrence of the event referenced in
Section 7.01(c), the Member that purports to undertake a Transfer of such Member’s rights or interests contrary to the provisions of Article 6; (iv) in the case of the occurrence of the event referenced in
Section 7.01(d), the Member that has breached any material covenant, duty or obligation under this Agreement; and (v) in the case of any of the events referenced in Section 7.01(e), (f), or 

  

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(g), the Member who is the subject of such court decree or order or has instituted such proceedings or filed such petitions or who is insolvent, etc; and
(C) the “Non-Defaulting Member” is the Member that is not the Defaulting Member. In addition, for purposes of implementing the provisions of this Article VII, a Default Buy/Sell Event with respect one of the Lippert
Members shall constitute a Default Buy/Sell Event with respect to all of the Lippert Members, and with respect to any Default Buy/Sell Event, the Lippert Members shall be treated and act collectively as one Member (and shall be either the Defaulting
Member or the Non-Defaulting Member, as the case may be). 
 7.02 Rights Arising From a Default Buy-Sell Event 
 At any time following the occurrence of a Default Buy-Sell Event, the Non-Defaulting Member shall have the right (but shall not be obligated to) either to
(i) cause the sale of the Company or its assets to any unaffiliated third party for a purchase price based upon the sole and absolute judgment of the Non-Defaulting Member (“Third-Party Purchase Price,” as further set forth in
Section 7.03(c)), and such other terms and conditions as are determined in the sole discretion of the Non-Defaulting Member or (ii) purchase the Interest of the Defaulting Member in accordance with the terms and conditions set forth in
this Article 7, in either case, by delivering written notice (“Default Notice”) thereof to the Defaulting Member, or (iii) exercise any other rights or remedies available to the Non-Defaulting Member under this Agreement
or at law or in equity as a result of such Default Buy-Sell Event; provided, however, that the failure of the Non-Defaulting Member to exercise any of the foregoing rights shall not be deemed to constitute a waiver of any Default Buy-Sell
Event or any rights and remedies (and the provisions of Section 7.09 shall apply to the Defaulting Member). For a period of fifteen (15) days following the Effective Date of any Default Notice, the Members shall attempt to agree
upon a purchase price for the Defaulting Member’s Interest (the “Buyout Purchase Price”) in the event the Non-Defaulting Member desires to purchase the Interest of the Defaulting Member. If the Members are unable to agree on a
Buyout Purchase Price, then the Default Purchase Price shall be determined in accordance with the provisions of Section 7.03(a) based on the Appraised Value as determined pursuant to Section 7.03(b). 
 7.03 Determination of Purchase Price 
 (a) Member Buyout. Within thirty (30) days after the determination of the Buyout Purchase Price or, in the absence thereof, the determination of the Appraised Value of the Company pursuant to Section 7.03(b), the
accountants regularly employed by the Company shall determine the amount of cash which would be distributed to each Member pursuant to Section 5.02 if (i) the Company (including all of its assets) were sold (as applicable) for the
Buyout Purchase Price or Appraised Value thereof (as applicable) as of the Effective Date of the Default Notice (after deducting therefrom an amount equal to reasonable and customary closing costs); (ii) the remaining liabilities of the Company
were liquidated pursuant to Section 8.02(a); (iii) reasonable reserves were established for any contingent, conditional or unmatured liabilities or obligations of the Company pursuant to Section 8.02(b); (iv) if
(and only if) the Defaulting Member is a Lippert 

  

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Member, a Cash Flow Bonus Forfeiture Event existed for purposes of Sections 5.01(d) and 5.02(h); and (v) the Company distributed any remaining
amounts to the Members in accordance with the provisions of Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a notice thereof (the “Price Determination
Notice”). The determination by the accountants of such amounts, including all components thereof, shall be deemed conclusive absent any material computational error. If the Non-Defaulting Member purchases the Interest of the Defaulting
Member, ninety percent (90%) of the amount that would be distributed to the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7;
provided, however, that if the Buy-Sell Event applicable to the Defaulting Member is not one of the Buy-Sell Events referenced in Sections 7.01(a), (b), (c) or (d), then one hundred percent (100%) of the amount that would be
distributed to the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7. 
 (b) Determination of Appraised Value. For purposes of this Article 7 and Section 6.05, the appraised value (“Appraised
Value”) of the assets of the Company shall be determined by one (1) or more independent Qualified Appraisers. The Non-Defaulting Member shall select one (1) Qualified Appraiser and shall include such selection in the Default
Notice. Within fifteen (15) days following the Effective Date of the Default Notice, the Defaulting Member shall either agree to the Qualified Appraiser selected by the Non-Defaulting Member or select a second (2nd) Qualified Appraiser and
give written notice to the Non-Defaulting Member of the person so selected. If either the Non-Defaulting Member or the Defaulting Member fails to appoint a Qualified Appraiser within the time period specified and after the expiration of five
(5) days following the Effective Date of written demand that a Qualified Appraiser be appointed, the Qualified Appraiser duly appointed by the Member making such demand to appoint such Qualified Appraiser shall proceed to make the appraisal as
herein set forth, and the determination thereof shall be conclusive on all the Members. 
 (1) The Qualified Appraiser or two
(2) Qualified Appraisers, as the case may be, shall promptly fix a time for the completion of the appraisal, which shall not be later than thirty (30) days from the Effective Date of the appointment of the last Qualified Appraiser.

 (2) The Qualified Appraiser(s) shall determine the Appraised Value by determining the fair market value of the assets of
the Company, such being the fairest price estimated in the terms of money which the Company could obtain if the assets of the Company were sold, for all cash, in the open market allowing a reasonable time to find a purchaser. 
 (3) Upon submission of the appraisals setting forth the opinions as to the Appraised Value of the assets of the Company, the average of
the two (2) appraisals shall constitute the Appraised Value of the assets of the Company for purposes of this Article 7. 
  

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 (c) Sale to Third Party. Within ten (10) days after the closing of any sale of the Company or
its assets to any third party pursuant to clause (i) of Section 7.02, the accountants regularly employed by the Company shall determine the amount of cash which would be distributed to each Member pursuant to
Section 5.02 after (i) the sale of the Company (including all of its assets) to the third party for the Third-Party Purchase Price as of the closing of the sale of the Company or its assets (after deducting therefrom an amount equal
to reasonable and customary closing costs and any prepayment fees on any indebtedness that would be payable in connection with any such sale); (ii) the liquidation of the remaining liabilities of the Company pursuant to
Section 8.02(a); (iii) the establishment of reserves in an amount reasonably determined by the Non-Defaulting Member for any contingent, conditional or unmatured liabilities or obligations of the Company pursuant to
Section 8.02(b); (iv) if a Lippert Member is the Defaulting Member, the existence of a Cash Flow Bonus Forfeiture Event for purposes of Sections 5.01(d) and 5.02(h); and (v) the distribution by the Company of any
remaining amounts to the Members in accordance with the provisions of Section 5.02. Upon such determination, the accountants regularly employed by the Company shall give each Member a Price Determination Notice thereof. The determination
by the accountants of such amounts, including all components thereof, shall be deemed conclusive absent any material computational error. In the event of any such third party sale, ninety percent (90%) of the amount that would be distributed to
the Defaulting Member pursuant to clause (v) above shall be deemed to be the “Default Purchase Price” for purposes of this Article 7. 
 (d) Payment of Costs. The Non-Defaulting Member shall pay for the services of the Qualified
Appraiser appointed by such Member, and the Defaulting Member shall pay for the services of the Qualified Appraiser appointed by such Member. The cost of the services of the third (3rd) Qualified Appraiser, if any, shall be paid one-half ( 1/2) by the Non-Defaulting Member and one-half ( 1/2) by the Defaulting Member. The costs of the services of the accountants and, in the event only one (1) Qualified Appraiser is required, the cost of the services of such
Qualified Appraiser, shall be paid one-half ( 1/2) by the Non-Defaulting Member and one-half ( 1/2) by the Defaulting Member. 
 7.04 Member’s Option 
 For
a period of ninety (90) days following the determination of the Default Purchase Price pursuant to Section 7.03(a), the Non-Defaulting Member shall have the right, but not the obligation, to (i) purchase the entire Defaulting
Member’s Interest for the Default Purchase Price thereof (as determined pursuant to Section 7.03(a)), and on the terms and conditions set forth in this Article 7, (ii) elect to sell the Company or cause the Company to
sell its assets to a third party in accordance with the provisions set forth above in this Article 7 or (iii) waive the right to purchase the Defaulting Member’s Interest or cause such third party sale with respect to the particular
Default Buy-Sell Event, in each case by delivering written notice thereof to the Defaulting Member within such thirty (30)-day period. The failure of the Non-Defaulting Member to timely give any such written notice pursuant to this
Section 7.04 shall be deemed an election by such 

  

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Member to waive such rights with respect to the particular Buy-Sell Event that resulted in the implementation of the provisions of this Article 7. If
the Non-Defaulting Member elects to sell the Company or cause the Company to sell its assets to a third party in accordance with the provisions set forth above in this Article 7, then, in lieu of electing to purchase the Defaulting
Member’s Interest, at the Non-Defaulting Member’s option, the Non-Defaulting Member may cause the sale to such third party to occur. If the Non-Defaulting Member causes the sale to such third party to occur, then, notwithstanding the
provisions of Articles 5 and 8 (and any other provision contained in this Agreement), the aggregate amount of Cash Flow to be distributed to the Defaulting Member from such sale shall be equal to the Default Purchase Price for the
Defaulting Member’s Interest determined in accordance with the provisions of Section 7.03(c) and the balance of such proceeds shall be distributed to the Non-Defaulting Member. 
 7.05 Closing of Purchase and Sale 
 The closing of any purchase and sale of the Interest of any Member selling its Interest (the “Selling Member”) pursuant to this Article 7 shall be held at the principal office of the Member that is purchasing the
Interest of the Selling Member (the “Purchasing Member”) Member (or its counsel) on or before the forty-fifth (45th) day after the expiration of the applicable thirty (30)-day period set forth in Section 7.04 (if
applicable), or, if earlier, the forty-fifth (45th) day after the Effective Date of the Default Notice or Buy-Sell Notice, as applicable). The Selling Member shall transfer to the Purchasing Member (or such Member’s nominee(s)) the entire
Interest of the Selling Member free and clear of all liens, security interests, and competing claims and shall deliver to the Purchasing Member (or such Member’s nominee(s)) such instruments of transfer and such evidence of due authorization,
execution, and delivery, and of the absence of any such liens, security interests, or competing claims as such Purchasing Member (or such Member’s nominee(s)) shall reasonably request. 
 7.06 Payment of Purchase Price 
 The Purchase Price for the purchase of the Selling Member’s Interest shall be paid by the Purchasing Member (or such Member’s nominee(s)) at the closing, in cash or one (1) or more certified or bank cashier’s checks
drawn and made payable to the order of the Selling Member. If the Company or its assets are sold to a third party pursuant to this Article 7, then the entire Third Party Purchase Price shall be paid concurrently with such closing. 

7.07 Release and Indemnity 
 On or before the closing of a purchase held pursuant to this Article 7, the Purchasing Member shall use such Member’s reasonable efforts to obtain written releases of the Selling Member (and such Member’s Affiliates) from
all liabilities of the Company and from all guarantees of such liabilities of the Company previously executed by the Selling Member (and its Affiliates). To the extent such releases cannot be obtained by 

  

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the Purchasing Member, the Purchasing Member shall indemnify, defend, protect and hold the Selling Member (and such Affiliates) wholly free and harmless from
and against any and all claims, liabilities, causes of action, liens, charges, and all other matters arising from such liabilities or guarantees, arising subsequent to the Effective Date of such closing. 
 7.08 Repayment of Member Loans 
 The Purchase Price to be paid by the Purchasing Member for the Interest of the Selling Member shall be offset at the closing of such purchase by the then outstanding principal balance (together with all accrued, unpaid interest thereon) of
any and all (i) Member Loans made by the Purchasing Member to the Selling Member and (ii) loans or advances of funds made by the Company to the Selling Member (each a “Seller Loan”). Such Member Loans and Seller Loans
(together with all accrued, unpaid interest thereon) shall be deemed paid to the extent of such offset, with such deemed payment to be applied first to the accrued interest thereon and thereafter to the payment of the outstanding principal amount
thereof. If the Purchase Price for the Defaulting Member’s Interest is insufficient to fully offset the then unpaid principal balance of any and all Member Loans and Seller Loans (together with all accrued, unpaid interest thereon), then the
portion of any such Member Loans and Seller Loans (and accrued, unpaid interest thereon) that remains outstanding following such offset shall be due and payable in full at the closing of the purchase of the Selling Member’s Interest pursuant to
this Article 7. Also, notwithstanding any other provision contained in this Agreement, the unpaid principal balance of any and all Member Loans and Seller Loans (together with all accrued, unpaid interest thereon) shall be due and payable in
full at the closing of the purchase of the Selling Member’s Interest pursuant to this Article 7. 
 7.09 Voting Rights
Following Default Buy-Sell Event 
 From and after the occurrence of a Default Buy-Sell Event (unless and until the Non-Defaulting
Member waives in writing any Default Buy-Sell Event or fails to timely consummate the closing of any applicable transaction described in this Article 7 pursuant to Section 7.05), (i) the Defaulting Member shall not be
entitled to participate in the management of, or otherwise vote upon, any matter affecting the business and affairs of, the Company or any matter that such Member is entitled to vote upon under this Agreement, (ii) the Defaulting Member shall
no longer have any right to appoint any representative to the Management Committee and any previously appointed representatives of the Defaulting Member shall be replaced by one (1) or more representatives to be appointed by the Non-Defaulting
Member, and (iii) the rights of the Defaulting Member shall be limited solely to those of an assignee. 
 7.10 Withdrawal of the
Selling Member 
 If the Interest of the Selling Member is purchased by the Purchasing Member pursuant to this Article 7, then,
effective as of the closing for such purchase, (i) the Selling Member shall withdraw as a Member of the Company, and (ii) if the 

  

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Selling Member is the Lippert Members, then Lippert Management shall be automatically removed as the Operating Member of the Company. In connection with any
such withdrawal of the Selling Member, the Purchasing Member may cause any nominee designated in the sole and absolute discretion of the Purchasing Member to be admitted as a substitute partner of the Company. 
 ARTICLE 8 
 DISSOLUTION AND
WINDING UP OF THE COMPANY 
 8.01 Events Causing Dissolution of the Company 
 Upon any Member’s bankruptcy, retirement, resignation, expulsion or other cessation to serve, or the admission or substitution of a new Member, the
Company shall not be dissolved but its business shall continue without interruption or break in continuity. Upon the bankruptcy, retirement, resignation, expulsion or other cessation to serve of any Member, the other Member shall continue to serve
as a Member of the Company in accordance with the provisions of this Agreement. The Company shall be dissolved upon the first to occur of: (a) the expiration of the term of the Company, unless such term has been extended by the unanimous
agreement of the Members; (b) the sale, transfer or other disposition by the Company of all or substantially all of its assets and the collection by the Company of its distributive share of any and all cash proceeds delivered therefrom; or
(c) the affirmative election of the Management Committee to dissolve the Company. Except as may be permitted in accordance with this Section 8.01 or other terms of this Agreement, no Member shall have the right to, and each Member
hereby agrees that it shall not, seek to dissolve or cause the dissolution of the Company or seek to cause a partial or whole distribution or sale of Company assets whether by court action or otherwise, it being agreed that any actual or attempted
dissolution, distribution or sale would cause a substantial hardship to the Company and the remaining Members. 
 8.02 Winding Up of
the Company 
 Upon the Liquidation of the Company caused by other than the termination of the Company under Section 708(b)(1)(B)
of the Code (in which latter case the Company shall remain in existence in accordance with the provisions of such Section of the Code), the Members shall proceed to the winding up of the affairs of the Company. During such winding up process, the
Net Profits, Net Losses and Cash Flow distributions shall continue to be shared by the Members in accordance with this Agreement. The assets shall be liquidated as promptly as consistent with obtaining a fair value therefor, and the proceeds
therefrom, to the extent available, shall be applied and distributed by the Company on or before the end of the taxable year of such Liquidation or, if later, within ninety (90) days after such Liquidation, in the following order:
(a) first, to creditors of the Company (including Members who are creditors), in the order of priority as provided by law, (b) second, to the setting up of any reasonable reserves which the Management Committee deems reasonably necessary
for any contingent, conditional or unmatured liabilities or obligations of the Company (which shall be distributed as soon as reasonably practicable to the Members in proportion to their respective positive Capital Account balances), and
(c) thereafter, to the Members in accordance with Section 5.02 hereof. 
  

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

The Operating Member shall cause to be kept, at the principal office of the Company, or at such other location as the Management Committee shall
reasonably deem appropriate, full and proper ledgers, other books of account, and records of all receipts and disbursements, other financial activities, and the internal affairs of the Company for at least the current and past four (4) Fiscal
Years. 
 9.02 Delivery of Records; Inspection 
 The Operating Member, subject to such reasonable standards as may be established from time to time by the Management Committee, shall deliver to any Member (or, to the extent so directed, to its agent or attorney) a
copy of the following information at any time if requested in writing: 
 (a) Financial Reports. True and full
information regarding the status of the business and financial condition of the Company (including, without limitation, the annual financial reports and all supporting calculations and information for such reports), including (without limitation,)
the information required by Section 9.03(c); 
 (b) Tax Returns. Promptly after becoming available, copies
of the Company’s federal, state and local income or information tax returns for the year; 
 (c) Names and
Addresses. A current list of the name and last known-business, residence or mailing address of each Member and the date on which each became a Member; 
 (d) Formation Documents. A copy of this Agreement, as amended, and any other formation documents for the Company, together with executed copies of any written powers of attorney pursuant to which this
Agreement, as amended, and any other formation documents have been executed; and 
  

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 (e) Contribution Information. True and full information regarding the amount of
cash and a description and statement of the agreed value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future. 
 Any Member (personally or through an authorized representative) may, for any purpose reasonably related to such Member’s Interest, inspect and copy
(at its own cost and expense) the books and records of the Company at all reasonable business hours. 
 9.03 Reports and Tax
Information 
 (a) General. The Operating Member shall cause to be prepared, at the cost and expense of the Company, and
delivered to each Member at such times as are determined by the Management Committee (or otherwise in accordance with the terms of this Agreement), the Annual Business Plans, the Operating Budgets, any and all periodic operating reports, and any and
all other financial statements or reports requested from time to time by any representative of the Management Committee. In addition, the Operating Member shall cause to be prepared, at the cost and expense of the Company, and delivered to each
Member, within ninety (90) days after the end of each tax year, the information necessary for such Member to complete its federal, state and local income tax or information returns. 
 (b) Tax Returns. The Operating Member shall cause to be prepared by a reputable accounting firm approved by the Management Committee and delivered
to each Member, within ninety (90) days from and after the final day of each tax year, the Company’s federal, state and local income or information tax returns for the year, as well as any additional information necessary for such Member
to complete its federal, state and local income tax or information returns. In addition, upon the request of any Member, the Operating Member shall prepare estimates of the projected federal, state and local taxable income of the Company, and the
portion thereof allocable to each Member, within a reasonable time period specified by the Member prior to the end of each tax year. 
 (c)
Periodic Financial Statements. The Operating Member shall furnish quarterly financial statements, including a balance sheet, income statement, statement of Members’ capital, statement of cash flows and notes thereon, that are prepared on
a historical cost basis in accordance with generally accepted accounting principles within fifteen (15) calendar days following the close of a given quarter. 
 (d) Audited Financial Statements. The Operating Member shall prepare, at the expense of the Company, and furnish the following information to each Member within sixty (60) calendar days after the end of
each Fiscal Year (with a final reviewable draft thereof to be furnished to each Member within forty-five (45) days after the end of each Fiscal Year): (i) an audited balance sheet of the Company dated as of the end of such Fiscal Year,
(ii) an audited related income statement of the Company for such 

  

 39 

 
Fiscal Year, (iii) an audited statement of cash flows for such Fiscal Year, (iv) an audited statement of each Member’s Capital Account for
such Fiscal Year, and (v) notes thereon, prepared on a historical cost basis in accordance with generally accepted accounting principles, all of which shall be certified by the Operating Member as being, to the best of its knowledge, true and
correct and all of which shall be certified in the customary manner by a reputable accounting firm approved by the Management Committee (which firm shall provide such balance sheet, income statement and statement of Capital Account in draft form
within forty (40) calendar days after the end of each Fiscal Year, to the Members for review prior to finalization and certification thereof). 
 (e) Securities Exchange Act. The Operating Member acknowledges that the financial statements of the Company will be consolidated with those of the Paladin REIT and that the Paladin REIT is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended. The Operating Member shall permit the officers, agents and representatives of the Paladin REIT (including its attorneys and accountants) to have unfettered access to such financial and other information
for the Company at such times as such officer, agent or representatives may reasonably request to enable the Paladin REIT to obtain the information required in order to timely comply with such reporting requirements. The Operating Member, at its
expense, shall employ, or contract with, such individuals and implement such accounting practices and procedures as are necessary for the provision of a reasonably professional level of accounting, reporting and internal controls for the Company,
including (without limitation) the provision of the following: (i) documentation of property level and corporate accounting and financial reporting policies and procedures; (ii) documentation of Information Technology (IT) policies and
procedures, and disaster recovery plan; (iii) “sign off” by Lippert Management’s property, accounting and supervisory/review personnel after their preparation, review and/or approval of accounting transactions and workpapers, and
(iv) preparation of written variance analysis of significant accounts quarterly and year-to-date, as compared to the prior year period. In addition, the Operating Member shall institute such additional reasonable internal accounting
controls as may be requested by the Paladin REIT, including, without limitation, those which are necessitated for compliance with the Sarbanes-Oxley Act of 2002, as amended. 
 9.04 Company Tax Elections; Tax Controversies 
 The Management Committee shall have the right in its sole and absolute discretion to make elections for the Company provided for in the Code including, without limitation, the elections provided for in
Section 754 of the Code. Additionally, the Management Committee shall have the right to seek to revoke any such election (including without limitation, any election under Section 754 of the Code) upon the Management Committee’s
determination that such revocation is in the best interests of the Company or its Members. Paladin is hereby designated as the “Tax Matters Partner” pursuant to the requirements of Section 6231(a)(7) of the Code, and in such capacity
shall represent the Company in any disputes, controversies or proceedings with the Internal Revenue Service. 
  

 40 

 9.05 Accounting and Fiscal Year 
 Subject to Section 448 of the Code, the books of the Company shall be kept on such method of accounting for tax and financial reporting purposes as
may be determined by the Management Committee. The Fiscal Year of the Company shall be the calendar year. 
 9.06 Confidentiality of
Information 
 Each party hereto agrees that the provisions of this Agreement, all understandings, agreements and other arrangements
between and among the parties, and all other non-public information received from or otherwise relating to the Company, shall be confidential and shall not be disclosed or otherwise released to any other person or entity (other than another party
hereto) without the written consent of the Management Committee. Notwithstanding the foregoing, confidential information may be disclosed by a party if such party is required to do so: (i) by operation of law, rule or regulation;
(ii) pursuant to applicable legal process; (iii) by the commercial lenders to the Company; (iv) by the title insurer to the Company or Project lender; (v) to any proposed transferee of an Interest; or (vi) to prosecute any
claim or defend any action between the Members relating to the Company, without the written consent of the Management Committee. Accordingly, each party hereto shall, and shall cause its agents and attorneys to, hold in confidence all such
information. 
 ARTICLE 10 
 MISCELLANEOUS 
 10.01 Subscription Agreement 
 As a condition to its admission to the Company, each Member may be required by the Management Committee to execute a subscription agreement in a form
satisfactory to the Management Committee, which subscription agreement shall contain certain representations made by each such Member. 
 10.02 Investment Interest; Nature of Investment 
 Each Member hereby represents and warrants to the Company and to
each other Member that such Member is acquiring its Interest in the Company for its own account and not with a view to, or for resale in connection with, any distribution thereof in violation of the Securities Act of 1933, as amended (the
“Securities Act”), or any applicable state securities laws. Such Member possesses experience and sophistication as an investor adequate for the evaluation of the merits and risks of such Member’s investment in the Company, has
investigated the Company and its business, and the Company has made available to such Member all information necessary for such Member to make an informed decision to acquire an Interest in the Company. Such Member also 

  

 41 

 
understands that its Company Interest may not be transferred absent compliance with the registration requirements of the Securities Act and applicable state
securities laws or pursuant to an exemption therefrom and otherwise in compliance with the terms of this Agreement. Each Member understands the meaning and consequences of the representations, warranties and covenants made by such Member set forth
herein and that the Company has relied upon such representations, warranties and covenants. Each Member hereby indemnifies, defends, protects and holds wholly free and harmless the Company from and against any and all losses, damages, expenses or
liabilities arising out of the breach or inaccuracy of any such representation, warranty or covenant. All representations, warranties and covenants contained herein shall survive the execution of this Agreement, the formation of the Company, and the
liquidation of the Company. 
 10.03 Appointment of Attorney-in-Fact 
 Each of the Members by its execution of this Agreement, irrevocably constitutes and appoints any Member(s), agent or other representative as is designated
by the Management Committee as such Member’s true and lawful attorney-in-fact with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such
documents as may be necessary or appropriate to carry out the provisions of this Agreement including, without limitation: 
 (a) Formation Documents. All formation documents and other instruments (including counterparts of this Agreement), and all amendments thereto, which the Management Committee deems appropriate to form, qualify, continue or otherwise
operate the Company as a limited liability company, in the jurisdictions in which the Company may conduct business. 
 (b)
Amendments. All amendments to this Agreement adopted in accordance with the terms of this Agreement, and all instruments which the Management Committee deems appropriate to reflect a change or modification of the Company in accordance with
the terms of this Agreement. 
 (c) Conveyance Documents. All conveyances of Company assets in accordance with the
terms of this Agreement, and other instruments which the Management Committee reasonably deems necessary in order to complete a dissolution and liquidation of the Company in accordance with the terms of this Agreement. 
 The foregoing appointment shall be deemed to be a power coupled with an interest, in recognition that each of the Members under this Agreement will be
relying upon the power of the Management Committee to act as contemplated by this Agreement in any filing and other action by it on behalf of the Company, shall survive the bankruptcy or other incapacity of any Member hereby giving such power, and
the transfer or assignment of all or any portion of the Interest of such Member in the Company, and shall not be affected by the subsequent bankruptcy or other incapacity of such Member. If any Member assigns all or any portion of its Interest in
the Company, then the foregoing power of attorney shall survive such assignment. 
  

 42 

 10.04 Waiver of Conflict of Interest 
 The Company and each Member are not represented by separate counsel; provided, however, in connection with the formation of the Company and the
drafting and negotiation of this Agreement, (i) Paladin (and not the Company or any Lippert Member) has been represented separately by King & Spalding LLP and (ii) the Lippert Members (and not the Company or Paladin) has been
represented separately by White Goss Bowers March Schulte & Weisenfels, a Professional Corporation. The attorneys, accountants and other experts who perform services for any Member may also perform services for the Company. To the extent
that the foregoing representation constitutes a conflict of interest, the Company and each Member hereby expressly waive any such conflict of interest. 
 10.05 Amendment 
 The written consent of each Member shall be required to amend any provision
of this Agreement, which consent may be given, withheld or made subject to such conditions as are determined by each such Member in such Member’s sole and absolute discretion. No provision of this Agreement may be amended except in a writing
signed by all Members and expressly stating (i) that it is an amendment of this Agreement and (ii) the provisions of this Agreement being amended and how it is being amended. Notwithstanding the foregoing provisions of this
Section 10.05 to the contrary, this Agreement may be amended by Paladin, by executing an instrument of amendment and giving each Member notice thereof, without the consent of any of the other Members, to effect or implement actions
approved by the Management Committee if the Operating Member fails to take action to effect or implement such actions. 
 10.06 No
Assignments; Binding Effect 
 This Agreement shall not be assigned or otherwise transferred (by operation of law or otherwise) by any
Member except as is otherwise permitted hereby. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and assigns permitted in accordance
with this Agreement and the Delaware Act. 
 10.07 Further Assurances 
 Each of the parties hereto hereby covenants and agrees on behalf of itself, its successors, and its assigns, without further consideration, to prepare,
execute, acknowledge, verify, file, record, publish and deliver such other instruments, documents and statements, and to take such other action as may be required by law or reasonably necessary to effectively carry out the purposes of this
Agreement. 
  

 43 

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

			
	To Paladin:	  	c/o Paladin Realty Partners, LLC
		  	10880 Wilshire Boulevard, Suite 1400
		  	Los Angeles, California 90024
		  	Attention: William K. Dunbar
		  	Fax: (310) 996-8708
		  	Telephone: (310) 996-8754
		
		  	King & Spalding LLP
		  	1180 Peachtree Street, N.E.
		  	Atlanta, Georgia 30309
		  	Attention: Scott J. Arnold, Esq.
		  	Fax: (404) 572-5131
		  	Telephone: (404) 572-4600
		
	 To either of the
 Lippert Members:

	  	c/o CRES Management Co.
		  	Two Pershing Square
		  	2300 Main Street, Suite 910
		  	Kansas City, Missouri 64108
		  	Attention: James Lippert
		  	Fax: (816) 756-1881
		  	Telephone: (816) 268-1498

  

 44 

			
	With a copy to:	  	White Goss Bowers March Schulte &
		  	Weisenfels, a Professional Corporation
		  	4510 Belleview, Suite 300
		  	Kansas City, Missouri 64111
		  	Attention: John R. Weisenfels, Esq.
		  	Fax: (816) 753-9200
		  	Telephone: (816) 753-9201

 10.09 Waivers 
 No waiver by any Member of any default with respect to any provision, condition or requirement hereof shall be deemed to be a waiver of any other
provision, condition or requirement hereof; nor shall any delay or omission of any Member to exercise any right hereunder in any manner impair the exercise of any such right accruing to it hereafter. 
 10.10 Preservation of Intent 
 If any provision of this Agreement is determined by an arbitrator or any court having jurisdiction to be illegal or in conflict with any laws of any state or jurisdiction, then the Members agree that such provision shall be modified to the
extent legally possible so that the intent of this Agreement may be legally carried out. If any one (1) or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in
any respect or for any reason, then the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected, it being intended that all of the
Members’ rights and privileges shall be enforceable to the fullest extent permitted by law. 
 10.11 Entire Agreement 

 This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereto and fully supersedes any
and all prior or contemporaneous agreements or understandings between the parties thereto pertaining to the subject matter hereof. 
 10.12 Certain Rules of Construction 
 Any ambiguities shall be resolved without reference to which party may have
drafted this Agreement. All Article or Section titles or other captions in this Agreement are for convenience only, and they shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any
provisions hereof. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to 

  

 45 

 
it in accordance with generally accepted accounting principles; (iii) “or” is not exclusive; (iv) words in the singular include the
plural, and words in the plural include the singular; (v) provisions apply to successive events and transactions; (vi) “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision; (vii) all references to “clauses,” “Sections” or “Articles” refer to clauses, Sections or Articles of this Agreement; and (viii) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms. 
 10.13 Counterparts 
 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall
constitute one (1) and the same instrument. 
 10.14 Governing Law 
 This Agreement, including its existence, validity, construction, and operating effect, and the rights of each of the Members hereto, shall be governed by
and construed in accordance with the laws of the State of Delaware without regard to any otherwise governing principles of conflicts of law. 
 10.15 Assurances 
 Each of the Members shall hereafter execute and deliver such further instruments and do such
further acts and things as may be reasonably required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the terms hereof. 
 10.16 Time is of the Essence 
 Time is of the essence hereof in connection with all obligations
of the parties hereunder. 
 10.17 Other Matters 
 If any proceeding is brought by any Member or the Company against any other Member or the Company that arises out of, or is connected with, this Agreement, then the prevailing party in such proceeding shall be
entitled to recover reasonable attorneys’ fees and costs. Any agreement to pay any amount and any assumption of liability herein contained, express or implied, shall be only for the benefit of the Members and their respective successors and
assigns, and such agreements and assumptions shall not inure to the benefit of the obligees of any indebtedness or any other party, whomsoever, deemed to be a third-party beneficiary of this Agreement. 
  

 46 

 10.18 Ownership of the Lippert Members and Property Manager 
 The Lippert Members represent and warrant that Lippert Holdings is a limited liability company duly organized under the laws of the State of Missouri,
that Lippert Management is a corporation duly organized under the laws of the State of Missouri, and that the Property Manager is a limited liability company duly organized under the laws of the State of Missouri, and that Exhibit D sets
forth the following information with respect to the ownership and structure of the Lippert Members and the Property Manager and each Person that owns any direct or indirect interest therein: 
 (a) The name, type and percentage ownership interest of each such Person; and 
 (b) The name of each officer, if any, and the title thereof, in any corporate entity, the name of each partner in any partnership entity,
and the name of each member and the name of each manager in any limited liability company. 
 The Lippert Members represent that there are no
commitments, options, warrants or rights of any kind which evidence a right to acquire or receive any ownership interest in the Lippert Members or the Property Manager. 
 ARTICLE 11 
 DEFINITIONS 
 11.01 12% IRR Amount 
 The term
“12% IRR Amount” means, as of any date, the amount which would have to be received by a Member on such date in order for such Member to receive an IRR of twelve percent (12%). 
 11.02 Additional Contribution 
 The term “Additional Contribution” means any and all additional contributions approved in writing by the Management Committee and made by any Member to the capital of the Company pursuant to Section 3.02.

 11.03 Additional Member 
 The term “Additional Member” means any Person that has been admitted to the Company as a Member pursuant to this Agreement by virtue of such Person receiving its Interest in the Company from the Company and not from another
Member or an assignee. 
 11.04 Adjusted Capital Account 
 The term “Adjusted Capital Account” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account
(a) increased for any amount which the Member is deemed to be obligated to restore with respect to any 

  

 47 

 
negative balance in the Member’s Capital Account pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or pursuant to the penultimate
sentence of Treasury Regulation Section 1.704-2(g)(1) or 1.704-2(i)(5); and (b) decreased by any items described in Treasury Regulation Sections 1.704-1(b)(2)(d)(4), (5) or (6). 
 11.05 Affiliate 
 The term
“Affiliate” means, with reference to a specified Person, any other Person that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified Person.
As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities of that Person, by
contract, relationship or otherwise) and includes, in any event, the ownership of twenty-five percent (25%) or more of the outstanding voting interests of such Person. 
 11.06 Agreement 
 The term
“Agreement” means this Operating Agreement of KC Retreat Associates, LLC, as it may be further amended. 
 11.07
Annual Business Plan 
 The term “Annual Business Plan” is defined in Section 2.04. 
 11.08 Appraised Value 
 The
term “Appraised Value” is defined in Section 7.03(b). 
 11.09 Business Day 
 The term “Business Day” means any weekday excluding any legal holiday observed pursuant to United States federal law or California state
law or regulation. 
 11.10 Buyout Purchase Price 
 The term “Buyout Purchase Price” is defined in Section 7.02. 
 11.11
Buy-Sell Notice 
 The term “Buy-Sell Notice” is defined in Section 7.02. 
 11.12 Capital Account 
 The
term “Capital Account” means with respect to each Member the amount of money contributed by such Member to the capital of the Company, increased  

  

 48 

 
by the aggregate Gross Asset Value at the time of contribution (as determined by the Members) of all property contributed by such Member to the capital of
the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), the aggregate amount of all Net Profits allocated to such Member, and any and all
items of gross income or gain specially allocated to such Member pursuant to Sections 4.02 and 4.03, and decreased by the amount of money distributed to such Member by the Company (exclusive of any guaranteed payment within the meaning
of Section 707(c) of the Code paid to such Member), the aggregate fair market value at the time of distribution (as determined by the Members) of all property distributed to such Member by the Company (net of liabilities secured by such
distributed property that such Member is considered to assume or take subject to under Section 752 of the Code), the amount of any Net Losses charged to such Member, and any items of loss or deduction specially allocated to such Member pursuant
to Sections 4.02 and 4.03. The provisions hereof governing the maintenance of Capital Accounts are intended to satisfy the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv) and shall be interpreted and applied in a manner
consistent therewith. 
 11.13 Capital Contribution 
 The term “Capital Contribution” means with respect to each Member, the aggregate amount of any and all amounts credited to such
Member’s Unrecovered Contribution Account in accordance with the terms of this Agreement. Any Capital Contributions made at any time during throughout the term hereof shall be deemed made on the date contributed. 
 11.14 Capital Event 
 The term
“Capital Event” means and includes: (i) any transaction involving the sale, exchange or other disposition of the Project or the Company (but excluding any incidental sales or exchanges of tangible personal property and
fixtures), (ii) any financing, refinancing or borrowing secured by the Project or the Company, and (iii) any condemnation or recovery of damage awards and property insurance proceeds (excluding proceeds from any rent or business
interruption insurance). 
 11.15 Cash Flow 
 The term “Cash Flow” means the sum of any and all Ordinary Cash Flow and Extraordinary Cash Flow. 
 11.16 Cash Flow Bonus Forfeiture Event 
 The term “Cash Flow Bonus Forfeiture Event” shall mean any
of the following: (i) the failure of any Lippert Member to make all or any portion of any Additional Contribution such Lippert Member is required to contribute pursuant to Section 3.02, (ii) the removal of Lippert Management as
Operating Member pursuant to Section 2.06(a) or (iii) the existence of Default Buy-Sell Event and a Lippert Member is the Defaulting Member. 
  

 49 

 11.17 Code 
 The term “Code” means the Internal Revenue Code of 1986, as heretofore and hereafter amended from time to time (or any corresponding provision of any superseding revenue law). 
 11.18 Company 
 The term
“Company” means the limited liability company governed by this Agreement and created upon the filing of the Certificate of Formation with the Delaware Secretary of State in accordance with the provisions of the Delaware Act, which
limited liability company is referenced in the first paragraph of this Agreement. 
 11.19 Company Minimum Gain 
 The term “Company Minimum Gain” has the meaning set forth in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase
“partnership minimum gain.” 
 11.20 Contributing Member 
 The term “Contributing Member” is defined in Section 3.03(a). 
 11.21 Contribution Date 
 The
term “Contribution Date” is defined in Section 3.02(b). 
 11.22 Contribution Notice 

The term “Contribution Notice” is defined in Section 3.02(b). 
 11.23 Contribution Percentage 
 The term “Contribution Percentage” means, with respect to each Member, the percentage set forth opposite such Member’s name on Exhibit A attached hereto under the column labeled “Contribution
Percentage.” 
 11.24 Default Buy-Sell Event 
 The term “Default Buy-Sell Event” is defined in Section 7.01. 
  

 50 

 11.25 Default Notice 
 The term “Default Notice” is defined in Section 7.02. 
 11.26 Defaulting Member 
 The
term “Defaulting Member” is defined in Section 7.01. 
 11.27 Default Purchase Price 
 The term “Default Purchase Price” is defined in Section 7.03(a). 
 11.28 Deferred Management Fees 
 The term “Deferred Management Fees” is defined in Section 2.12. 
 11.29 Deferred Management Fee
Account  
 The term “Deferred Management Fee Account” means, as to the Property Manager and as
of any relevant date, the excess, if any, of the aggregate amount of the Deferred Management Fees, over the aggregate amount of payments made to the Property Manager prior to such relevant date pursuant to Section 5.01(b) and
Section 5.02(a). 
 11.30 Delaware Act 
 The term “Delaware Act” means the Delaware Limited Liability Company Act (6 Del.C. § 17-101, et seq.), as hereafter amended from time to time. 
 11.31 Delinquent Contribution 
 The term “Delinquent Contribution” is defined in Section 3.03(a). 
 11.32 Dilution
Percentage 
 The term “Dilution Percentage” is defined in Section 3.03(c). 
 11.33 Effective Date 
 The term
“Effective Date” is defined in Section 10.08. 
 11.34 Extraordinary Cash Flow 
 The term “Extraordinary Cash Flow” means the cash proceeds (including, without limitation, any insurance proceeds, recoveries, damages
and awards, but excluding the proceeds of any rent insurance or business interruption insurance) realized by the Company, directly or indirectly, as a result of the occurrence of a Capital Event, plus cash interest payments received with respect to
such proceeds, decreased by the sum of (i) the 

  

 51 

 
amount of such proceeds applied by the Company to pay debts and liabilities of the Company which are then due and payable (inclusive of any guaranteed
payment within the meaning of Section 707(c) of the Code paid to any Member); (ii) the amount of such proceeds used, set aside or committed by the Company or required to be used by any secured lender for the Project for restoration and
repair of any property in the event of damage or destruction to the Project; (iii) any incidental or ancillary expenses, costs or liabilities incurred by the Company in effecting or obtaining any such Capital Event, or the proceeds thereof
(including, without limitation, attorneys’ fees, expert witness’ fees, accountants’ fees, court costs, recording fees, transfer taxes and fees, appraisal costs and the like) all of which expenses, costs and liabilities shall be paid
from the gross amount of such cash proceeds to the extent thereof; (iv) the payment of such other Company debts and liabilities as are determined in the reasonable discretion of the Management Committee; and (v) a reserve, established in
the reasonable discretion of the Management Committee, for anticipated cash disbursements that will have to be made before additional cash receipts from third parties will provide funds therefore. 
 11.35 Fiscal Year 
 The term
“Fiscal Year” means, except as otherwise provided in this definition, the twelve (12) month period commencing on January 1 of each calendar year and ending on December 31 of each calendar year, with the first Fiscal
Year commencing on the date hereof and ending on December 31, 2008 and the last Fiscal Year being the period beginning on January 1 of the year in which the final liquidation and termination of the Company is completed and ending on the
date such final liquidation and termination is completed. To the extent any computation or other provision hereof provides for an action to be taken on the basis of a Fiscal Year, an appropriate proration or other adjustment shall be made in respect
of the initial and final Fiscal Years to reflect that such periods are less than 12 month periods. 
 11.36 Gross Asset Value 

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

  

 52 

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

 11.37 Immediate Family 
 The term “Immediate Family” means an individual Person’s current spouse, parents, grandparents, siblings, children, children’s spouses, grandchildren or grandchildren’s spouses or any trusts or estates (or
other estate-planning vehicles) for the exclusive benefit of any one or more of the foregoing that is controlled by such individual Person. 
 11.38 Indemnified Party 
 The term “Indemnified Party” is defined in Section 2.07(a).

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

 53 

 11.40 IRR 
 The term “IRR” means, with respect to any Member, the annual discount rate, determined by iterative process, which results in a net present value approximating zero (0) when such discount rate is
applied to the Capital Contributions made by such Member from time to time and distributions made to such Member from time to time (except for Section 707(c) payments), and calculated using Microsoft Office Excel, xIRR function in accordance
with the formula attached hereto as Exhibit E. 
 11.41 Lippert Holdings 
 The term “Lippert Holdings” means JLT Holdings, LLC, a Missouri limited liability company. 
 11.42 Lippert Management 
 The
term “Lippert Management” means JLT Management, Inc., a Missouri corporation. 
 11.43 Lippert Member(s)

 The term “Lippert Members” means Lippert Management and Lippert Holdings, collectively; the term “Lippert
Member” means any one of the Lippert Members. 
 11.44 Liquidation 
 The term “Liquidation” means, (i) in respect to the Company, the earlier of the date upon which the Company is terminated under
Section 708(b)(1) (except for any deemed liquidation under Section 708(b)(1)(B) of the Code) or the date upon which the Company ceases to be a going concern (even though it may continue in existence for the purpose of winding up its
affairs, paying its debts and distributing any remaining balance to its Members), and (ii) in respect to a Member wherein the Company is not in Liquidation, the liquidation of a Member’s interest in the Company under Treasury Regulation
Section 1.761-1(d). 
 11.45 Majority of Representatives 
 The term “Majority of Representatives” means a majority (in number) of the representatives on the Management Committee, provided
that, at any meeting of the Management Committee, all of the representatives collectively shall have a number of votes equal to the representatives that Paladin or Lippert Management, as the case may be, is entitled to elect, and such votes
shall be cast (whether by one or more of such representatives) as a block, with a majority of such votes constituting a “Majority of Representatives.” 
  

 54 

 11.46 Management Committee 
 The term “Management Committee” is defined in Section 2.01(a). 
 11.47 Material Breach 
 The
term “Material Breach” means any material breach or default by a Member of any material covenant, duty or obligation under this Agreement or any Exhibits hereto (including, without limitation, the failure of any Member to contribute
any Additional Contribution to the extent required to be made pursuant to Section 3.02 and Section 3.03), provided that in any such instance: (i) such Member shall have received written notice from the other
Member of such breach or default, and (ii) if curable, such Member shall have failed to cure or remedy such breach or default within ten (10) days following the Effective Date of such notice (except that no such notice shall be required in
the case of the failure of any Member to contribute any Additional Contribution pursuant to Section 3.02 and Section 3.03) or, if such breach or default is not curable within such 10-day period, such Member shall have failed
to diligently and continuously pursue such a cure or remedy and in any event fully cure or remedy such breach or default within thirty (30) days of the Effective Date of such notice. 
 11.48 Member Loan 
 The term
“Member Loan” is defined in Section. 3.03(b). 
 11.49 Member Minimum Gain 
 The term “Member Minimum Gain” means minimum gain attributable to a Member Nonrecourse Debt determined in accordance with Treasury
Regulation Section 1.704-2(i) for the phrase “partner minimum gain.” 
 11.50 Member Nonrecourse Debt

 The term “Member Nonrecourse Debt” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4) for the
phrase “partner nonrecourse debt.” 
 11.51 Member Nonrecourse Deductions 
 “Member Nonrecourse Deductions” has the meaning set forth in Treasury Regulation Section 1.704-2(i) for the phrase “partner
nonrecourse deductions.” 
 11.52 Member(s) 
 The term “Members” means Paladin, Lippert Management and Lippert Holdings, collectively; the term “Member” means any one of the Members. 
  

 55 

 11.53 Minimum Current Preferred Return 
 The term “Minimum Current Preferred Return” means, with respect to each Member, an amount calculated like interest and accrued on the
balance standing from time to time in such Member’s Unrecovered Contribution Account at a simple interest rate equal to nine percent (9%) per annum, non-compounded, and determined on a cumulative basis 
 11.54 Net Profits and Net Losses 
 The term “Net Profits” or “Net Losses” shall mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with
Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

 (i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net
Profits and Net Losses pursuant to this subparagraph (i) shall be added to such taxable income or loss; 
 (ii) Any
expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(1), and not otherwise taken into account in computing
Net Profits or Net Losses pursuant to this provision shall be subtracted from such taxable income or loss; 
 (iii) In the
event of the Gross Asset Value of any Company property is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Net Profits or Net Losses; 
 (iv) Gain or loss resulting from any
disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value; 
 (v) In lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there shall be taken into account depreciation computed in accordance with Section 1.704-1(b)(2)(iv)(2) of the Treasury Regulations for such Fiscal Year or other period;
and 
 (vi) Notwithstanding anything contained herein to the contrary, any items which are specially allocated pursuant to
Article 4 hereof shall not be taken into account in computing Net Profits or Net Losses. 
  

 56 

 11.55 Non-Contributing Member 
 The term “Non-Contributing Member” is defined in Section 3.03(a). 
 11.56 Nonrecourse Deductions 
 The term “Nonrecourse Deductions” means deductions as described in Treasury Regulation Section 1.704-2(b)(l). 
 11.57 Operating Account 
 The term “Operating Account” means an account of the Company at a financial
institution approved by the Management Committee and into which all Capital Contributions and other funds for and from the ownership and operation of the Project by the Company shall be deposited and held until properly disbursed and on which at
least one of the representatives of Paladin on the Management Committee shall be a signatory. 
 11.58 Operating Budget

 The term “Operating Budget” is defined in Section 2.05. 
 11.59 Operating Member 
 The
term “Operating Member” is defined in Section 2.03(a). 
 11.60 Option Notice 
 The term “Option Notice” is defined in Section 6.05(a). 
 11.61 Option Price 
 The term
“Option Price” is defined in Section 6.05(a). 
 11.62 Ordinary Cash Flow 
 The term “Ordinary Cash Flow” means the amount, if any, of all cash receipts of the Company as of any applicable determination date
(including, without limitation, any cash receipts realized from operations of the Company but excluding any cash receipts or proceeds from a Capital Event), in excess of the sum of (i) all cash disbursements (inclusive of any reimbursements and
guaranteed payments made to any Member, but exclusive of disbursements made from the proceeds of a Capital Event and distributions to the Members in their capacities as such) of the Company prior to that date, plus (ii) any reserve, determined
in the sole and absolute discretion of the Management Committee, for anticipated cash disbursements that will have to be made before additional cash receipts from third parties will provide the funds therefor. Ordinary Cash Flow shall be determined
and distributed no more frequently than monthly and no less frequently than 

  

 57 

 
on a quarterly basis or at such other times as the Management Committee determines that funds are available therefor, taking into account the reasonable
business needs of the Company. 
 11.63 Paladin 
 The term “Paladin” means PRIP 11128, LCC, a Delaware limited liability company. 
 11.64
Paladin REIT 
 The term “Paladin REIT” means Paladin Realty Income Properties, Inc. a Maryland corporation, or
any successor thereto. 
 11.65 Percentage Interest 
 The term “Percentage Interest” means, with respect to each Member, the percentage set forth opposite such Member’s name on
Exhibit A attached hereto under the column labeled “Percentage Interest,” as such percentage shall be modified from time to time in accordance with this Agreement. The initial Percentage Interests of the Members shall be as follows:

  

				
	 Paladin:
	  	97.5	%
	 Lippert Holdings:
	  	1.5	%
	 Lippert Management:
	  	1.0	%

 11.66 Permitted Transferees 
 The term “Permitted Transferees” is defined in Section 6.02. 
 11.67 Person 
 The term
“Person” means and includes an individual, a corporation, a partnership, a limited liability company, a joint venture, a trust, an unincorporated organization and a government or any department or agency thereof, or any entity
similar to any of the foregoing. 
 11.68 Price Determination Notice 
 The term “Price Determination Notice” is defined in Section 7.03(a). 
 11.69 Preferred Return 
 The
term “Preferred Return” means, with respect to each Member, an amount calculated like interest and accrued on the balance standing from time to time in such Member’s Unrecovered Contribution Account at a simple interest rate
equal to twelve 

  

 58 

 
percent (12%) per annum, non-compounded, and determined on a cumulative basis. For financial and income tax reporting purposes, neither accrual nor
payment of the Preferred Return shall be an expense of the Company nor be treated as a guaranteed payment under Section 707(c) of the Code. 
 11.70 Project 
 The term “Project” is defined in Section 1.03.

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

 The term “Property Management Agreement” is defined in Section 2.12. 
 11.73 Property Manager 
 The
term “Property Manager” means the Person engaged or designated by the Company from time to time to manage and operate the Project. 
 11.74 Purchase Option 
 The term “Purchase Option” is defined in Section 6.05(a).

 11.75 Purchasing Member 
 The term “Purchasing Member” is defined in Section 7.05. 
 11.76 Qualified Appraiser 

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

 59 

 11.77 Regulatory Allocations 
 The term “Regulatory Allocations” is defined in Section 4.02(f). 
 11.78 REIT 
 The term
“REIT” is defined in Section 2.02(d). 
 11.79 Removal Event 
 The term “Removal Event” is defined in Section 2.06(a). 
 11.80 Removal Notice 
 The term
“Removal Notice” is defined in Section 2.06(a). 
 11.81 Securities Act 
 The term “Securities Act” is defined in Section 10.02. 
 11.82 Seller Loan 
 The term
“Seller Loan” is defined in Section 7.08. 
 11.83 Selling Member 
 The term “Selling Member” is defined in Section 7.05 
 11.84 Tax Matters Partner 
 The
term “Tax Matters Partner” is defined in Section 9.04. 
 11.85 Threshold Return 
 The term “Threshold Return” means, with respect to each Member, aggregate cash distributions pursuant to Sections 5.01 and 5.02
which would produce a 12% IRR to such Member on all Capital Contributions made by such Member. 
 11.86 Third-Party Purchase Price

 The term “Third-Party Purchase Price” is defined in Section 7.02. 
 11.87 Transfer 
 The term
“Transfer” is defined in Section 6.01. 
  

 60 

 11.88 Treasury Regulation 
 The term “Treasury Regulation” means any proposed, temporary, or final federal income tax regulation promulgated by the United States
Department of the Treasury as heretofore and hereafter amended from time to time (or any corresponding provisions of any superseding revenue law or regulation). 
 11.89 Unanimous Written Consent 
 The term “Unanimous Written Consent” means a
written consent executed by at least one representative of each Member. 
 11.90 Unpaid Minimum Current Preferred Return

 The term “Unpaid Preferred Return” means, (i) with respect to Paladin and as of any specified date, the Minimum
Current Preferred Return accrued through such date, decreased by the amount of money and the agreed upon net fair market value of any property distributed by the Company to Paladin pursuant to Sections 5.01(a) and 5.02(a). 
 11.91 Unpaid Preferred Return 
 The term “Unpaid Preferred Return” means, (i) with respect to Paladin and as of any specified date, the Preferred Return accrued through such date, decreased by the amount of money and the agreed upon net fair market
value of any property distributed by the Company to Paladin pursuant to Sections 5.01(a) and 5.02(a) and (ii) with respect to each of the Lippert Members and as of any specified date, the Preferred Return accrued through such date,
decreased by the amount of money and the agreed upon net fair market value of any property distributed by the Company to such Lippert Member pursuant to Sections 5.01(c) and 5.02(e). 
 11.92 Unrecovered Contribution Account 
 The term “Unrecovered Contribution Account” means, (i) with respect to Paladin, the amount of money or the agreed upon fair market value of any property contributed by Paladin to the capital of the Company pursuant to
Section 3.01, Section 3.02 and Section 3.03 (or deemed contributed pursuant to Section 3.03), as the case may be (net of liabilities secured by such contributed property that the Company is considered
to assume or take subject to pursuant to Section 752 of the Code), and decreased by the amount of money and the agreed upon fair market value of any property (net of liabilities secured by such distributed property that Paladin is
considered to assume or take subject to under Section 752 of the Code) distributed by the Company to Paladin pursuant to Section 5.02(c) and (ii) with respect to each Lippert Member, the amount of money or the agreed upon fair
market value of any property contributed by such Lippert Member to the capital of the Company pursuant to Section 3.02 and Section 3.03 (or deemed contributed pursuant to Section 3.03), as the case may be (net of
liabilities secured by such 

  

 61 

 
contributed property that the Company is considered to assume or take subject to pursuant to Section 752 of the Code), and decreased by the
amount of money and the agreed upon fair market value of any property (net of liabilities secured by such distributed property that such Lippert Member is considered to assume or take subject to under Section 752 of the Code) distributed (or
deemed distributed) by the Company to such Lippert Member pursuant to Section 5.02(f). 
 [Signatures Commence on Next Page]

  

 62 

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

							
	“Paladin”
	
	PRIP 11128, LLC, a Delaware limited liability company
		
	By:	 	Paladin Realty Income Properties, L.P., a Delaware limited partnership
			
		 	By:	 	Paladin Realty Income Properties, Inc., a Maryland corporation, its general partner
				
		 		 	By:	 	 /s/ WILLIAM K. DUNBAR

		 		 	Name:	 	William K. Dunbar
		 		 	Title:	 	Chief Investment Officer

 [Signatures Continue on Next Page] 
  

 63 

 [Signatures Continued From Previous Page] 
  

			
	“Lippert Holdings”
	
	 JLT HOLDINGS, LLC,
 a Missouri limited
liability company

		
	By:	 	 /s/ JAMES E. LIPPERT

	Name:	 	James E. Lippert
	Title:	 	Managing Member
	
	“Lippert Management”
	
	 JLT ASSET MANAGEMENT, INC.,
 a
Missouri corporation

		
	By:	 	 /s/ JAMES E. LIPPERT

	Name:	 	James E. Lippert
	Title:	 	President

  

 64

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