Document:

Exhibit 10.40

 

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

 

	
   

  	
   

  

 

LIMITED
LIABILITY COMPANY AGREEMENT

 

OF

 

BH-AW
FLORIDA MOB VENTURE, LLC

 

Dated
August 12, 2010

 

	
   

  	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINED TERMS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined
  Terms

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Other
  References

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  ORGANIZATION

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Formation

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Name
  and Principal Place of Business

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Term

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Registered
  Agent and Registered Office

  	
  15

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Purpose

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  MEMBERS

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Admission
  of Members

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Limitation
  on Liability

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Transaction
  Fee

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CAPITAL

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Initial
  Capital Contributions

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Additional
  Capital Contributions

  	
  19

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Capital
  Accounts

  	
  22

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  No
  Further Capital Contributions

  	
  22

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Acquisition
  Loans

  	
  23

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Bridge
  Loan

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  INTERESTS IN THE COMPANY

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Contribution
  and Promote Percentage Adjustments

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Return
  of Capital

  	
  24

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Ownership

  	
  24

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Waiver
  of Partition; Nature of Interests in the Company

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ALLOCATIONS AND DISTRIBUTIONS

  	
  24

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Allocations

  	
  24

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Allocations
  and Compliance with Section 704(b)

  	
  25

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Distributions
  from Operations

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  Distributions
  from Capital Transactions

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Special
  Distributions

  	
  27

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Distributions
  in Liquidation

  	
  28

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  Tax
  Matters

  	
  28

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  Tax
  Matters Partner

  	
  28

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  Tax
  Allocations

  	
  29

  
	
   

  	
   

  	
   

  
	
  6.10

  	
  Withholding

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MANAGEMENT

  	
  30

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Managing
  Member and Major Decisions

  	
  30

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Duties
  of Managing Member

  	
  35

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Management
  of the Property

  	
  39

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Duties
  and Conflicts

  	
  39

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Company
  Expenses

  	
  41

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Venture
  Coordinator

  	
  41

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Enforcement
  of Affiliate Agreements

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  BOOKS, RECORDS, REPORTS AND PROJECT PLAN

  	
  42

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Books
  and Records

  	
  42

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Accounting
  and Fiscal Year

  	
  42

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Reports

  	
  42

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  The
  Company Accountant

  	
  44

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Reserves

  	
  44

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  The
  Budget and Operating Plan

  	
  45

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  Accounts

  	
  45

  
	
   

  	
   

  	
   

  
	
  8.8

  	
  REIT
  Matters

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  TRANSFER OF INTERESTS

  	
  46

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  No
  Transfer

  	
  46

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Permitted
  Transfers

  	
  46

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Transferees

  	
  47

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Section 754
  Election

  	
  48

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  Other
  Transfers

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  EXCULPATION AND INDEMNIFICATION

  	
  50

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Exculpation

  	
  50

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Indemnification

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  DISSOLUTION AND TERMINATION

  	
  52

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Dissolution

  	
  52

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Termination

  	
  52

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Liquidating
  Member

  	
  53

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  Claims
  of the Members

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  DEFAULT BY MEMBER

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Events
  of Default

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Effect
  of Event of Default

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  MISCELLANEOUS

  	
  55

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Representations
  and Warranties of the Members

  	
  55

  
	
   

  	
   

  	
   

  
	
  13.2

  	
  Further
  Assurances

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Notices

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.4

  	
  Governing
  Law

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.5

  	
  Captions

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.6

  	
  Pronouns

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.7

  	
  Successors
  and Assigns

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.8

  	
  Extension
  Not a Waiver

  	
  58

  
	
   

  	
   

  	
   

  
	
  13.9

  	
  Creditors
  Not Benefited

  	
  58

  
	
   

  	
   

  	
   

  
	
  13.10

  	
  Recalculation
  of Interest

  	
  58

  
	
   

  	
   

  	
   

  
	
  13.11

  	
  Severability

  	
  58

  
	
   

  	
   

  	
   

  
	
  13.12

  	
  Entire
  Agreement

  	
  58

  
	
   

  	
   

  	
   

  
	
  13.13

  	
  Publicity

  	
  59

  
	
   

  	
   

  	
   

  
	
  13.14

  	
  Confidentiality

  	
  59

  
	
   

  	
   

  	
   

  
	
  13.15

  	
  Venue

  	
  60

  
	
   

  	
   

  	
   

  
	
  13.16

  	
  Waiver
  of Jury Trial

  	
  60

  
	
   

  	
   

  	
   

  
	
  13.17

  	
  Cooperation

  	
  60

  
	
   

  	
   

  	
   

  
	
  13.18

  	
  Counterparts

  	
  60

  
	
   

  	
   

  	
   

  
	
  13.19

  	
  Attorney
  Fees

  	
  61

  
	
   

  	
   

  	
   

  
	
  13.20

  	
  Member
  Group Actions

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  PATRIOT ACT

  	
  61

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Compliance
  with International Trade Control Laws and OFAC Regulations

  	
  61

  
	
   

  	
   

  	
   

  
	
  14.2

  	
  Member’s
  Funds

  	
  61

  
	
   

  	
   

  	
   

  
	
  14.3

  	
  Member
  Compliance with Patriot Act

  	
  62

  

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  14.4

  	
  Cooperation
  with Other Members

  	
  62

  
	
   

  	
   

  	
   

  
	
  14.5

  	
  Actions
  Taken Pursuant to Anti-Money Laundering Laws

  	
  62

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
  BUY-SELL PROCEDURE

  	
  63

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  General
  Provisions

  	
  63

  
	
   

  	
   

  	
   

  
	
  15.2

  	
  Termination
  of Other Agreements

  	
  64

  
	
   

  	
   

  	
   

  
	
  15.3

  	
  Power
  of Attorney

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  	
  RIGHT OF BH TO TRIGGER SALE OF THE PROJECTS; ROFO

  	
  65

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  ROFO
  on the Sale of Projects

  	
  65

  
	
   

  	
   

  	
   

  
	
  16.2

  	
  Termination
  of Other Agreements

  	
  68

  
	
   

  	
   

  	
   

  
	
  16.3

  	
  Power
  of Attorney

  	
  68

  

 

	
  Appendix A

  	
  -

  	
  FORM OF
  BRIDGE NOTE

  
	
  Appendix B

  	
  -

  	
  FORM OF
  PROPERTY MANAGEMENT SUBCONTRACT

  
	
  Appendix C

  	
  -

  	
  FORM OF
  LEASING SERVICES AGREEMENT

  

 

iv

 

LIMITED
LIABILITY COMPANY AGREEMENT

OF

BH-AW
FLORIDA MOB VENTURE, LLC

 

LIMITED LIABILITY COMPANY AGREEMENT of BH-AW Florida MOB Venture, LLC dated
August 12, 2010 (as amended, restated, replaced, supplemented or otherwise
modified from time to time, this “Agreement”), made by, between and
among Behringer Harvard Florida MOB Member, LLC, a Delaware limited liability company (together with its
successors and permitted assigns, “BH”), AW SFMOB Investor, LLC, a
Florida limited liability company (together with its successors and permitted
assigns, “AW Investor  “)  and AW SFMOB Managing Member, LLC, a
Florida limited liability company (together with its successors and permitted
assigns, “AW Manager  “).

 

WHEREAS, the Company (as hereinafter defined) was formed pursuant to a
Certificate of Formation (the “Certificate of Formation”), filed with
the Secretary of State of Delaware on August     ,
2010.

 

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

 

ARTICLE I

DEFINED TERMS

 

1.1          Defined Terms.

 

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

 

“Acceptable
Transfer Terms” has the meaning set forth in Section 9.5(a).

 

“Acquisition Loan”
has the meaning set forth in Section 4.5(a).

 

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

 

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

 

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

 

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

 

1

 

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

 

“Affiliate”
or “Affiliated” means, with respect to any Person, (a) any other
Person directly or indirectly Controlling, Controlled by, or under common
Control with such Person.

 

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

 

“Anti-Money
Laundering Laws” shall mean those laws, regulations and sanctions, state
and federal, criminal and civil, that (a) limit the use of and/or seek the
forfeiture of proceeds from illegal transactions; (b) limit commercial
transactions with designated countries or individuals believed to be
terrorists, narcotics dealers or otherwise engaged in activities contrary to
the interests of the United States; (c) require identification and
documentation of the parties with whom a Financial Institution conducts
business; or (d) are designed to disrupt the flow of funds to terrorist
organizations.  Such laws, regulations
and sanctions shall be deemed to include the Patriot Act, the Bank Secrecy Act
, the Trading with the Enemy Act, 50 U.S.C. App. Section 1 et seq., the
International Emergency Economic Powers Act, 50 U.S.C. Section 1701
et seq., and the sanction regulations promulgated pursuant thereto by the
OFAC, as well as laws relating to prevention and detection of money laundering
in 18 U.S.C. Sections 1956 and 1957.

 

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

 

“Asset Manager”
means Behringer Harvard Opportunity Management Services, LLC, a Texas limited
liability company.

 

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

 

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

 

“AW Member Group”
means the collective reference to AW Investor and AW Manager.

 

“AW Person”
means initially Brian K. Waxman and Peter J. Applefield.  In the event of a Key Person Event, the AW
Manager may nominate a successor AW Person subject to the Approval of BH.  If BH is satisfied with such nominated
successor (in its sole discretion) after six months of service, such person
will be an “AW Person” in the place and stead of either Brian K. Waxman or
Peter J. Applefield, as applicable, and if BH is not satisfied, any such
successor will not be considered an AW Person hereunder.  For the avoidance of doubt, any person
nominated as a successor AW Person shall be considered an AW Person unless and
until BH rejects such person as being unsatisfactory at the end of the
aforementioned six-month trial period.

 

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

 

“Book Basis”
means, with respect to any asset of the Company, the adjusted basis of such
asset for federal income tax purposes; provided, however, that (a) if
any asset is contributed to

 

2

 

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

 

“Bridge Lender”
means BH, in its capacity as the lender of the loan to be evidenced by the
Bridge Note.

 

“Bridge Loan”
means the loan evidenced by the Bridge Note.

 

“Bridge Note”
means that certain promissory note dated on the Closing Date in the form
attached as Appendix A hereto to be issued by the Company and
payable to the Bridge Lender in the principal amount Approved by BH.

 

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

 

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

 

“Buy-Sell
Offer” shall have the meaning set forth in Section 15.1.

 

“Buy-Sell
Offer Price” shall have the meaning set forth in Section 15.1(a).

 

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

 

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

 

“Capital
Transaction” means any insurance award, condemnation, sale of all or any
portion of the Company Property or interest therein, sale of easements, rights
of way or similar

 

3

 

interest in the
Company Property, any financing or refinancing, and any similar items, and any
other transaction undertaken as part of or which results in the dissolution of
the Company.

 

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

 

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

 

(i)            The AW Persons cease to
Control the AW Manager;

 

(ii)           The AW Manager is dissolved,
terminated, liquidated, merged, consolidated or reorganized into or with
another Person;

 

(iii)          Brian K. Waxman or Peter J.
Applefield ceases to devote a majority of his business time and attention to
the affairs of the AW Manager, AW Management, LLC and/or Applefield Waxman, Inc.
(other than due to death or Incapacity) which failure is not remedied within a
15-day cure period after written demand from BH.

 

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

 

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

 

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

 

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

 

“Company Minimum
Gain” means “partnership minimum gain” as defined in Treasury Regulation
Section 1.704-2(d) and shall generally mean the amount by which the
Nonrecourse Liabilities secured by any assets of the Company exceed the
adjusted tax basis of such assets as of the date of determination.  A Member’s share of Company Minimum Gain (and
any net decrease thereof) at any time shall be determined in accordance with
Regulation Section 1.704-2(g).

 

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

 

“Confidential
Information” has the meaning set forth in Section 13.14(a).

 

“Contribution
Agreement” means that certain Contribution Agreement by and between BH, AW
Manager and AW Investor, in the form Approved by BH.

 

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

 

“Contribution
Percentage” means, with regard to each Member at any time, the proportion
which such Member’s aggregate Capital Contributions to the Company bears to the

 

4

 

total of all Capital
Contributions to the Company, as adjusted pursuant to Section 4.2(d),
which shall initially be in the percentages set forth below opposite its name
below:

 

	
  Member

  	
   

  	
  Contribution Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BH

  	
   

  	
  90

  	
  %

  
	
  AW Investor

  	
   

  	
  9.99

  	
  %

  
	
  AW Manager

  	
   

  	
  .01

  	
  %

  

 

“Control”
means, when used with respect to any Person, the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership
of voting securities or other beneficial interests, by contract or otherwise,
and the terms “Controlling”, “Controlled by” and “under common Control with”
shall have the meanings correlative therewith; provided, however, that a Person
will not be considered to lack Control of another Person merely due to the
existence of key decision or major decision approval rights in favor of another
Person.

 

“Deadlock Event”
means the failure of the AW Manager and BH to reach agreement with regard to a
Major Decision which continues for a period of at least thirty (30) calendar
days following notice from either AW Manager or BH to the other party.

 

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

 

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

 

“Election”
shall have the meaning set forth in Section 15.1(c).

 

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

 

“Exchanging
Member” has the meaning set forth in Section 13.17.

 

“Excluded Project”
means the leasehold, fee interest and other interests in St. Mary’s
Professional Building, West Palm Beach, Florida to be acquired by an Affiliate
of the AW Member Group pursuant to the Purchase Agreement.

 

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

 

“First Tier
Capital Transaction Promote Percentage” means 20.0%, subject to adjustment
as provided in Section 4.2(d).

 

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

 

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

 

“GMP LLC”
means Gardens Medical Pavilion, LLC, a Florida limited liability company.

 

5

 

“Ground Leases”
means the Ground Leases to be entered by and between the Seller and the applicable
SPV that is acquiring a leasehold interest in the applicable Projects under the
Purchase Agreement.

 

“Incapacity”
means, with respect to any individual, either the death of such individual, or
the physical or mental disability or incapacity of such individual that, in the
reasonable opinion of an appropriately qualified independent physician
reasonably acceptable to BH, renders such individual legally incompetent or
otherwise incapable of adequately managing such individual’s business and
affairs or renders such individual unable to participate in any reasonable
manner in decisions regarding the Company and the ownership, operation and
management of the Company Property.

 

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

 

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

 

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

 

“Initial
Percentage” means 95.0%.

 

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

 

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

 

“Key Person Event”
means the death or Incapacity of an AW Person.

 

“Leasing
Guidelines” the leasing guidelines for the Projects then in effect, as
Approved by BH.

 

6

 

“Leasing Services
Agreement” means the Leasing Services Agreement to be entered into by
Applefield Waxman, Inc., a Florida corporation and each SPV on or before
the Closing Date in the form attached as Appendix C hereto.

 

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

 

“Loan Documents”
means the documents from time to time evidencing, securing or otherwise entered
into by the Company or any SPV in connection with a loan or financing extended
by a third party lender.

 

“LOI” means
that certain letter agreement by and between Behringer Harvard Opportunity
REIT II, Inc. and Applefield Waxman Capital, Inc. dated as of
June 3, 2010.

 

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

 

(a)           any expenditures of the Company described in
Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures
under Treasury Regulation Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Loss, will be considered an
item of Loss;

 

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

 

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

 

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

 

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

 

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

 

“Majority-In-Interest”
means, as to the class or group of Members referred to, required or to be
determined, such of those Members of that class or group having more than 50%
of the Contribution Percentages of the Members in such class or group.

 

7

 

“Management
Agreement” means the collective reference to the Property Management
Subcontracts and the Leasing Services Agreements.

 

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

 

“Material Damage
or Loss” is a violation, breach or default which causes loss or damage
having a material adverse effect on the Company, the SPVs and the value of the
Projects taken as a whole (valued together on an aggregate basis).

 

“Member” means
one or more of BH, AW Investor, AW Manager or any other Person who is admitted
as a member of the Company in accordance with this Agreement and applicable
law.

 

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

 

“Member
Nonrecourse Debt” means “partner nonrecourse debt” as defined in
Regulations Section 1.704-2(b)(4).

 

“Member
Nonrecourse Debt Minimum Gain” means an amount for each Member Nonrecourse
Debt, equal to the Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance with
Regulations Section 1.704-2(i)(3).

 

“Member
Nonrecourse Deductions” means “partner nonrecourse deductions” as defined in
Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

 

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

 

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

 

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

 

“Net Capital
Proceeds” means, for any period of determination, the excess of
(a) the sum of the net gross proceeds received by the Company during such
period from Capital Transactions, including all receipts or net proceeds of the
Company from or related to (i) any the sale or other disposition of all or
any portion of the Company Property, (ii) any condemnation of or casualty
loss with regard to all or any portion of the Company Property (including any
and all insurance awards with regard thereto), (iii) any financing,
refinancing, monetization or securitization of the Company Property or any
interest therein, and (iv) any and all other Capital Transactions,
including, without limitation, (A) distributions and other amounts
received directly or indirectly from any SPV or other entity in which the
Company owns an interest which is attributable to a Capital Transaction, and (B) net
proceeds or receipts received by the Company incident to the dissolution and
liquidation of the Company, but specifically excluding revenues from
operations; over (b) the sum of the total cash expenditures of the Company
during such period attributable to Capital Transactions, including without
limitation, (i) fees and commissions paid with regard thereto, (ii) all
costs and expenses incurred as a result of the 

 

8

 

applicable Capital
Transaction, (iii) all costs, expenses and payments to discharge part or
all of any loan or other financing required to be made as a result of the
applicable Capital Transaction, (iv) all costs and expenses relating to
any sale, disposition, financing, refinancing, monetization or securitization
of the Property or any SPV, and (v) all other closing costs attributable
or related to the applicable Capital Transaction.

 

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

 

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

 

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

 

“Nonrecourse
Deductions” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(1).  The amount
of Nonrecourse Deductions for a given period equals the excess, if any, of the
net increase, if any, in the amount of Company Minimum Gain during such period,
over the aggregate amount of any distributions during such period of proceeds
of a Nonrecourse Liability that are allocable to any increase in Company
Minimum Gain, determined according to the provisions of Regulations Section 1.704-2(c).

 

“Nonrecourse
Liability” has the meaning given such term in Regulations
Section 1.704-2(b)(3).

 

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

 

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

 

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

 

“Offeree”
shall have the meaning set forth in Section 15.1.

 

“Offeree
Value” shall have the meaning set forth in Section 15.1(b).

 

“Offeror”
shall have the meaning set forth in Section 15.1.

 

“Offeror
Value” shall have the meaning set forth in Section 15.1(b).

 

“Operating
Expenses” means, for any period, the sum of the total gross cash
expenditures of the Company attributable to operations during such period,
including without limitation (a) all cash operating expenses (including,
without limitation, all fees, commissions, expenses and allowances paid to any
third party or paid or reimbursed to any Member or any of its Affiliates
pursuant to any agreement or contract (including the Management Agreements) or
otherwise, as permitted hereunder), (b) all debt service payments
including debt service on loans made to the Company by the Members or any of
their Affiliates (including the Bridge Note), (c) all 

 

9

 

expenditures which
are treated as capital expenditures (as distinguished from expense deductions)
under GAAP, (d) all real estate taxes, personal property taxes and sales
taxes, (e) all deposits to the Company’s reserve accounts, (f) all
costs and expenditures related to any acquisition of the Property or any SPV
and (g) all cash contributions, loans or advances directly or indirectly
made to any SPV; provided, however, that Operating Expenses shall
not include (i) any payment or expenditure to the extent (A) the
sources of funds used for such payment or expenditure are not included in
Operating Revenues or (B) such payment or expenditure is paid out of any
reserve account of the Company, (ii) any expenditure properly attributable
to any Capital Transaction, including the dissolution and liquidation of the
Company, or (iii) non-cash expenses such as depreciation or amortization.

 

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

 

“Operating
Revenues” means, for any period, the sum of the total gross cash revenues
received by the Company during such period from operations, including all
receipts of the Company from (a) proceeds from Capital Contributions ,
(b) rent (including additional rent and percentage rent) paid to the
Company (including for parking facilities), (c) concessions,
(d) expense reimbursements, (e)  proceeds from rent or business
interruption insurance, if any, (g) funds made available to the extent
such funds are withdrawn from the Company’s reserve accounts and deposited into
the Company’s operating accounts, and (h) all other operating revenues and
receipts realized by the Company, including, without limitation, distributions
and other payments and amounts received directly or indirectly from any SPV or
other entity in which the Company owns an interest (and attributable to
operations) and interest accrued on any funds held by the Company; provided, however, that Operating Revenues shall not include any
revenues or receipts realized by the Company incident to or from a Capital
Transaction, including the dissolution and liquidation of the Company.

 

“Operations
Promote Percentage” means 15.0%, subject to adjustment as provided in
Section 4.2(d).

 

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

 

“Permitted
Exceptions” has the meaning set forth in Section 16.1(a).

 

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

 

10

 

“Pledge Agreement”
means the Pledge Agreement to be entered into by the Company and the Bridge
Lender pursuant to which the Company pledges its membership interest in each of
the SPVs to the Bridge Lender in order to secure repayment of the Bridge Note.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Project”
shall have the meaning set forth in the Purchase Agreement but shall exclude
the Excluded Project.

 

“Promote
Percentages” means the collective reference to the Operations Promote
Percentage, First Tier Capital Transaction Promote Percentage and Second Tier
Capital Transaction Promote Percentage.

 

“Property”
shall have the meaning set forth in the Purchase Agreement but shall exclude
the Excluded Project.

 

“Property
Management Subcontract” means the separate Property Management Subcontracts
to be entered into on or before the Closing Date by the Subcontractor, the
Asset Manager and joined in by the applicable SPV relating to the management of
the Project owned by such SPV in the form attached as Appendix B
hereto.

 

11

 

“Purchase
Agreement” means that certain Purchase and Sale Agreement and Agreement to
Enter Into Ground Lease, effective May 27, 2010 as amended, between
Seller, as seller, and Applefield Waxman Capital, Inc., as purchaser,
pursuant to which the SPVs shall take an assignment of Applefield Waxman
Capital, Inc.’s interest to purchase the Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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

 

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

 

“Recapture Gain”
has the meaning set forth in Section 6.9(b).

 

“Recipient Party”
has the meaning set forth in Section 9.5(a).

 

“Reserved Matter”
means any matter relating to a Company action pertaining to the Bridge Note and
Bridge Loan.

 

“ROFO Election”
has the meaning set forth in Section 16.1(b).

 

“ROFO Escrow
Agent” has the meaning set forth in Section 16.1(c).

 

“ROFO Escrow
Deposit” has the meaning set forth in Section 16.1(c).

 

“ROFO Notice”
has the meaning set forth in Section 16.1(a).

 

“ROFO Response
Period” has the meaning set forth in Section 16.1(b).

 

“Second Tier
Capital Transaction Promote Percentage” means 50.0%, subject to adjustment
as provided in Section 4.2(d).

 

“Seller”
means the collective reference to Douglas E. Rabe, as successor trustee
pursuant to the FMC Land Trust Agreement Number 1001, Tenet Hialeah
Healthsystem, Inc., Tenet Healthsystem North Shore, Inc., Lifemark
Hospitals, Inc., Tenet Good Samaritan, Inc. and Tenet St. Mary’s
Inc.

 

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

 

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

 

“Subcontractor”
means Applefield Waxman Management, LLC, a Florida limited liability company.

 

12

 

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

 

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

 

“Target Interest”
has the meaning set forth in Section 9.5(a).

 

“Target Property”
has the meaning set forth in Section 16.1(a).

 

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

 

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

 

“Transfer
Election” has the meaning set forth in Section 9.5(a).

 

“Transfer Escrow
Agent” has the meaning set forth in Section 9.5(b).

 

“Transfer Escrow
Deposit” has the meaning set forth in Section 9.5(b).

 

“Transfer ROFO
Notice” has the meaning set forth in Section 9.5(a).

 

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

 

“Triggering Party”
has the meaning set forth in Section 9.5(a).

 

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

 

13

 

“Unreturned
Capital Contributions” means, as to each Member and any time, the excess,
if any, of (i) such Member’s aggregate Capital Contributions made or
deemed made prior to such time, over (ii) all distributions made to such
Member pursuant to Section 6.4(c).

 

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

 

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

 

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

 

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

 

1.2           Other References.

 

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

 

ARTICLE II

ORGANIZATION

 

2.1           Formation.

 

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

 

2.2           Name and Principal Place of
Business.

 

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

 

(b)           The principal place of
business and office of the Company shall be located at 2801 PGA Boulevard,
Suite 220, Palm Beach Gardens, Florida 33410.

 

2.3           Term.

 

The term of the
Company commenced on the date of the filing of the Certificate of Formation
pursuant to the Delaware Act, and shall continue until terminated pursuant to
the 

 

14

 

provisions of this
Agreement.  The existence of the Company
as a separate legal entity shall continue until cancellation of the Certificate
of Formation as provided in the Delaware Act.

 

2.4           Registered Agent and
Registered Office.

 

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

 

2.5           Purpose.

 

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

 

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

 

(ii)           directly or indirectly
acquire, own, manage, service, operate, improve, finance, refinance, develop,
redevelop, construct, renovate, market, lease, sell and otherwise deal with and
dispose of the Company Property; and

 

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

 

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

 

(c)           In order to facilitate the
purposes of the Company, as set forth above, the Company may form or acquire
one or more subsidiary special purpose entities to own all or any part of the
Company Property or to conduct a portion of the Company’s business (each an “SPV”).  The Managing Member shall cause the Company
to form a separate SPV to acquire the leasehold interest and/or fee title to
each of the Projects which the Company shall acquire pursuant to the Purchase
Agreement.  For the avoidance of doubt,
GMP LLC shall be an SPV hereunder to the extent the contribution of
membership interests in GMP LLC to the Company is completed pursuant to
the Contribution Agreement.  Unless
otherwise determined by a Majority-In-Interest of the Members, the Managing
Member shall perform the same or substantially identical services for each such
SPV as the Managing Member performs for the Company.  In connection therewith, the Managing Member
agrees to perform such duties for and on behalf of each SPV, and in such
circumstances and with regard to such duties, the Managing Member is subject to
the same standards of conduct and will have the same rights and obligations
with regards to such duties performed or to be performed on behalf of any such
SPV as are set forth in this Agreement with regard to the same or substantially
identical services to be performed for or on behalf of the Company (including,
without limitation, the indemnification 

 

15

 

and exculpation rights and obligations of the
Managing Member and the removal or termination provisions, as set forth in this
Agreement).

 

ARTICLE III

MEMBERS

 

3.1           Admission of Members.

 

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

 

3.2           Limitation on Liability.

 

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

 

3.3           Transaction Fee.

 

The Company shall pay to AW  Management, LLC on the Closing Date a
transaction fee in the amount of $300,000.

 

16

 

ARTICLE IV

CAPITAL

 

4.1           Initial Capital
Contributions.

 

(a)           Deposits Under the Purchase
Agreement.  It is
acknowledged that, on or prior to the date hereof, the AW Member Group (or
their Affiliates) has paid all or a portion of the deposits required under the
Purchase Agreement (the “Deposit”). 
On the date BH elects in a written notice from BH to AW Manager (which
shall not be later than the end of the Inspection Period under the Purchase
Agreement), AW Manager or an Affiliate will cause the Purchase Agreement
(excluding the rights thereunder to acquire the Excluded Project) to be
assigned to and assumed by the Company in consideration of a cash reimbursement
paid to the applicable Member (or its Affiliate) which paid such Deposit equal
to the portion of the Deposit paid by such Member in excess of its Contribution
Percentage of such Deposit which shall be paid by the other Member or Members
(as applicable) in order to insure that the funding of the Deposits under the
Purchase Agreement has been made on a pro rata
basis by the Members in accordance with the Contribution Percentages as of such
date.  It is further agreed that on such
date at the election of BH, AW Manager will further cause the rights under the
Purchase Agreement to acquire the Excluded Project to be assigned to a separate
Affiliate of AW Manager.  At Closing (as
defined in the Purchase Agreement), although the Company will be responsible
for paying the aggregate purchase price to the Seller under the Purchase
Agreement, the Company will direct the Seller to convey title to the Excluded
Project directly to an Affiliate of the AW Manager which is not a member of the
AW Member Group.  At Closing, the Company
shall reimburse the AW Member Group (or its Affiliate) for any previously
unreimbursed portion of the Deposit.

 

(b)           Pursuit Costs.  (i)  Prior to the date hereof, the AW
Member Group and BH and their respective Affiliates, have incurred, and may
hereafter incur prior to the Closing Date third party out-of-pocket costs and
expenses in connection with the negotiation and closing of the Purchase
Agreement and their respective due diligence analyses and other evaluations of
the Property (including, without limitation, costs of environmental and
engineering and other feasibility reports and studies, costs related to
analyzing the Property (including, without limitation, travel costs) and costs
(including, without limitation, attorneys’ fees) incurred by the Members in
reviewing and analyzing work conducted by Applefield Waxman Capital, Inc.
or its agents) and costs to complete an audit of the financial statements in
respect of the Property in compliance with certain laws and regulations
applicable to BH and/or its Affiliates (collectively, the “Pursuit Costs”).  For the avoidance of doubt, those
expenditures identified on Schedule B of the LOI shall be considered
Pursuit Costs for purposes of this Section 4.1(b).

 

(ii)           On the date the Purchase
Agreement is assigned to the Company pursuant to Section 4.1(a) above,
and on the Closing Date (provided that the Company or its SPVs acquire the
Property pursuant to the Purchase Agreement), the Company shall pay or
reimburse each Member for the portion of any Deposit it made after the date the
Purchase Agreement is assigned to the Company and all Pursuit Costs actually
incurred by such Member in good faith pursuant to the terms hereof to the
extent set forth in a budget approved by all Members, or shall credit such
amounts against such Member’s Initial Capital Contribution as provided in
Section 4.1(d) below, so that each Member’s 

 

17

 

share of such costs shall be
in proportion to their respective Contribution Percentages.  If BH elects not to cause the Company to
acquire the Property or the Company or its SPVs fails to acquire the Property
for any reason, then, each Member shall be responsible for and pay all Pursuit
Costs incurred by such Member.

 

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

 

(c)           Failure to Close Purchase.  Whether the Company shall proceed with the
transactions contemplated by the Purchase Agreement, including (without
limitation) whether it shall close the purchase of the Property, shall be
determined by BH in its sole discretion, and neither the AW Member Group nor
any Affiliate of the AW Member Group shall have any claim against the Company
or BH or any of its Affiliates by reason of such determination; provided that
if BH unilaterally determines not to close the acquisition of the Property, it
shall use reasonable efforts to keep the AW Member Group updated as to its
decision making process, and it shall provide notice of such final decision to
the AW Member Group as soon as possible. 
If BH elects not to cause the Company to close the purchase of the
Property pursuant to the Purchase Agreement, then at the election of AW Manager
or Applefield Waxman Capital, Inc., the Company will further assign the
Purchase Agreement to AW Manager or its designee, together with any and all
third party reports and other due diligence materials in possession of the
Company in consideration of such assignee’s payment to the Company of any and
all Deposits previously made under the Purchase Agreement by or on behalf of
the Company.

 

(d)           Closing Contributions.  In the event that BH decides to cause the
Company to close the purchase of the Property pursuant to the Purchase
Agreement, then on or before the Closing Date, the Members shall contribute in
cash (or be credited to the extent as provided in Section 4.1(a),
Section 4.1(b)(ii) or the Contribution Agreement with making cash
contributions) to the capital of the Company their pro rata
share (based upon their relative Contribution Percentages) of the sum of (x) the
amount reasonably necessary to close the acquisition of the Property, closing
costs, Pursuit Costs, other amounts payable or reimbursable by the Company
under Section 4.1(b) and (y) a reasonable amount of initial
working capital and reserves (which shall include anticipated capital
expenditures to be made in the period following acquisition of the Property as
set forth in the Initial Approved Budget and Operating Plan as well as any and
all anticipated third party loan commitment fees and closing costs which may be
incurred in connection with any permanent financing to be obtained by the
Company) for the Company, as Approved by the Members minus (z)  the
principal amount of the Bridge Note (subject to the last sentence of this
Section 4.1(d)).  For purposes of
the preceding sentence, AW Investor will be credited with having made a cash
contribution to the Company in the amount set forth in the Contribution
Agreement and AW Manager will be credited with having made a cash contribution
to the Company in the amount set forth in the Contribution Agreement based upon
their respective contributions of the membership interests in GMP LLC pursuant
to the terms and conditions of the Contribution Agreement.  AW Manager will deliver to the Members for
Approval a statement of sources and uses for the closing and a detailed
estimate of the Initial Capital Contributions. 
Amounts payable to the Company by a Member on the Closing Date may be
set off from amounts the Company owes to a Member, each Member shall receive
credits for payments made prior to the Closing Date for amounts paid to a third
party and/or amounts will 

 

18

 

be reimbursed or paid to a Member to the extent
necessary to result in the initial Contribution Percentages standing in the
proportions set forth in the definition thereof on the Closing Date, all as set
forth in such Approved statement of sources and uses.  On the Closing Date, provided BH has elected
to cause the Company or its SPVs to acquire the Property pursuant to the
Purchase Agreement, the Company, AW Investor and AW Manager shall additionally execute
and deliver the Contribution Agreement and, subject to the provisions of the
following sentence, the Company shall execute and deliver the Bridge Note and
Pledge Agreement to BH.  BH and the AW
Member Group acknowledge and agree that they will cooperate and use good faith
efforts to secure an Acquisition Loan from a third party lender on or before
the Closing Date in an amount not less than the amount which would otherwise
have been funded under the Bridge Note upon terms mutually acceptable to BH and
the AW Member Group (and if such third party financing is obtained, it shall
replace the amount otherwise provided for in clause (z) of this
Section 4.1(d) above).

 

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

 

4.2           Additional Capital
Contributions.

 

(a)           If at any time or from time
to time after all of the Initial Capital Contributions have been contributed,
the Managing Member determines that additional funds (a “Shortfall”) are
reasonably required (i) for development and tenant improvement costs and
other capital expenditures contemplated by the Approved Budget and Operating
Plan, (ii) to meet the ongoing obligations, liabilities, Operating
Expenses or reasonable business needs of the Company in accordance with the
then applicable Approved Budget or Operating Plan, or to pay Necessary Expenses
or other costs which are not provided for in the Approved Budget and Operating
Plan, but which are Approved by BH to the extent not covered by the Initial
Capital Contributions, or (iii) for any other purpose Approved by BH, the
Managing Member may (but shall not be obligated to), require that each of the
Members contribute its pro rata
share (based upon the Contribution Percentages of the Members at the time of
such request) of such Shortfall (any such contribution, an “Additional
Capital Contribution”).  In addition,
if the Bridge Note has not been paid in full by the maturity date set forth
therein, any Member may (but shall not be 

 

19

 

obligated to) require that each of the Members
contribute its pro rata share (based upon
the Contribution Percentages of the Members at such time) of the amount
necessary to pay in full the balance of the Bridge Note on such date, such
contribution also being an “Additional Capital Contribution” hereunder.  If so requested by the Managing Member or a
Member pursuant to the foregoing provisions, such contributions shall be due
within ten (10) calendar days.

 

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

 

(c)           To the extent any
Contributing Party elects to treat its own Additional Capital Contribution and
such Substitute Contribution as a Priority Capital Contribution, such Priority
Capital Contribution shall be returned on a priority basis together with an
eighteen percent (18%) per annum cumulative annual preferred return thereon as
provided in Section 6.3(a) and/or Section 6.4(a), as applicable.

 

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

 

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

 

(A)          the sum of (I) one
hundred percent (100%) of the aggregate Capital Contributions (excluding
Substitute Contributions) then or theretofore made by such Member or AW Member
Group to the Company, plus (II) two hundred percent (200%) of the
Substitute Contributions then or theretofore made by such Member or AW Member
Group to the Company (the excess of 200% of such Member or AW Member Group’s
Substitute Contributions over such Member or AW Member Group’s Substituted
Contributions is referred to herein as the “Excess Amounts”); minus

 

(B)           the Substitute Contributions
then or theretofore made by the other Member or AW Member Group to the Company;
by

 

20

 

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

 

and the Contribution Percentage of the
Non-Contributing Party shall be reduced by the percentage necessary to insure
that the Contribution Percentages add up to 100%.  At the same time, the Promote Percentages of
each Member shall be adjusted (increased or decreased in the same proportions
as the Contribution Percentages were adjusted pursuant to the foregoing
provisions (e.g., if a Member’s Contribution Percentage is reduced by half
or 50%, then the Promote Percentages of such Member will also be reduced by
half or 50%).  In addition, an amount of
Unreturned Capital Contributions equal to such Excess Amount shall be treated
as having been transferred from the Non-Contributing Party to the Contributing
Party but such transfer shall be solely for the purpose of computing preferred
return pursuant to Sections 6.3(b) and 6.4(b) and Unreturned
Capital Contributions pursuant to Section 6.4(c) with the result that
each Member will have Unreturned Capital Contributions in proportion to its
adjusted Contribution Percentage after giving effect to such transfer.  The Capital Accounts shall be adjusted
accordingly.

 

Any Non-Contributing
Party shall have until seventy-five (75) days after the date on which its
missed Additional Capital Contribution (the “Missed Contribution”) was
due in order to cure its failure to make such Missed Contribution by depositing
into an account designated by the Contributing Party an amount equal to the
amount of the Missed Contribution together with interest thereon at a eighteen
percent (18%) per annum rate from the due date established by the Managing
Member until such amount has been so deposited in full into such account, at
which point such amount shall promptly be distributed to the Contributing Party
if and to the extent the Contributing Party made a Substitute Contribution on
account of the Missed Contribution.  If
the Non-Contributing Party makes such deposits as aforesaid, any adjustment to
Contribution Percentages, dilution to Promote Percentages (and the
distributions affected thereby) and transfers of Unreturned Capital
Contributions caused by its failure to make the applicable Additional Capital
Contribution shall be unwound, and the payment, dilution and transfers
described above shall not be reflected in the Members’ Capital Accounts.

 

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

 

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

 

21

 

4.3           Capital Accounts.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.4           No Further Capital
Contributions.

 

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

 

22

 

4.5           Acquisition Loans.

 

(a)           If not obtained before the
Closing Date pursuant to the last sentence of Section 4.1(d), it is
acknowledged that promptly after the Closing Date, both BH and the Managing
Member on behalf of the Company shall use good faith efforts to secure a
permanent loan secured by all or a portion of the Company Property (the “Acquisition
Loan”) in the estimated amount of $32,000,000 but in no event less than 50%
of the total capitalization of the Company, on terms which are acceptable to
both BH and the Managing Member, the proceeds of which will be applied to,
first, pay off in full the remaining balance of the Bridge Note, and
thereafter, any remaining available balance not otherwise applied as required
by the terms of this Agreement or by the terms of such Acquisition Loan or as
otherwise agreed will be distributed as provided in Section 6.4.

 

(b)           If either BH or the Managing
Member does not Approve a financing proposal for an Acquisition Loan presented
by the other party (the “Presenting Member”), the party who fails to
Approve such proposal (the “Rejecting Member”) must identify to the
Presenting Member the basis for such disapproval in writing and the Rejecting
Member will thereafter have a period of 60 calendar days in which to obtain an
alternative financing commitment including terms not materially worse (taken as
a whole) than the financing terms originally proposed by the Presenting Member
and including improved or different terms with respect to the item(s) the
Rejecting Member originally identified as the reason for its disapproval.  If the Rejecting Member has not delivered to
the Presenting Member a financing commitment on such revised terms by the end
of such 60-day period, the Presenting Member shall be empowered to alone cause
the Company to Approve the original financing proposal by such Member
(notwithstanding the provisions of Section 7.01(a)(ii)).  Each Member agrees to act in a commercially
reasonable manner in proposing, voting to Approve or dis-Approve or otherwise
acting in connection with a financing proposal under Section 7.01(a)(ii) or
under this Section 4.5.

 

4.6           Bridge Loan.

 

(a)           The Bridge Loan shall be
evidenced by the Bridge Note which shall be secured by the Pledge Agreement.

 

(b)           The proceeds of the Bridge
Loan shall be used to pay off in full the existing third party debt secured by
the Gardens Medical Pavilion asset and to pay a portion of the Purchase Price
due and payable under the Purchase Agreement, as well as closing costs all as
identified in the closing statement to be prepared under Section 4.1(d).

 

ARTICLE V

INTERESTS IN THE COMPANY

 

5.1           Contribution and Promote
Percentage Adjustments.

 

The Promote
Percentages and Contribution Percentages of the Members may be adjusted only as
set forth in this Agreement.

 

23

 

5.2           Return of Capital.

 

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

 

5.3           Ownership.

 

All Company Property
shall be owned by the Company or an SPV, subject to the terms and provisions of
this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE VI

ALLOCATIONS AND
DISTRIBUTIONS

 

6.1           Allocations.

 

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

 

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

 

24

 

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

 

6.2           Allocations and Compliance
with Section 704(b).

 

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

 

(a)           Notwithstanding anything to
the contrary contained in this Article VI, if there is a net decrease in
Company Minimum Gain or in any Member Minimum Gain during any taxable year or
other period, prior to any other allocation pursuant hereto, such Member shall
be specially allocated items of Profit for such year (and, if necessary,
subsequent years) in an amount and manner required by Treasury Regulation
Sections 1.704-2(f) or 1.704-2(i)(4). 
The items of Profit allocated pursuant to this Section 6.2(a) in
any taxable year shall consist first of gains recognized from the disposition
of property subject to one or more Nonrecourse Liabilities of the Company, and
any remainder shall consist of a pro rata
portion of other items of Profit of the Company.  The allocation otherwise required by this Section 6.2(a) shall
not apply to a Member to the extent provided in Regulation
Section 1.704-2(f)(2) through (5).

 

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

 

(c)           Any Member Nonrecourse
Deductions shall be allocated to those Members that bear the economic risk of
loss for the applicable Member Nonrecourse Debt, and among such Members in
accordance with the ratios in which they share such economic risk, determined
in accordance with Regulation Section 1.704-2(i).  If there is a net decrease for a Company
taxable year in any Member Nonrecourse Debt Minimum Gain, each Member with a
share of such Member Nonrecourse Debt Minimum Gain as of the beginning of such
year shall be allocated items of gross income and gain in the manner and to the
extent provided in Regulation Section 1.704-2(i)(4).

 

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

 

(e)           No allocation of an item of
Loss shall be made to any Member if, as a result of such allocation, such
Member would have an Adjusted Capital Account Deficit.  Any such disallowed allocation shall be made
to the Members entitled to receive such allocation 

 

25

 

under Treasury Regulation Section 1.704 in
proportion to their respective Contribution Percentages.

 

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

 

(g)           The foregoing provisions of
this Section 6.2 are intended to comply with Regulation Sections 1.704-1(b) and
1.704-2 and shall be interpreted consistently with this intention.  Any terms used in such provisions that are
not specifically defined in this Agreement shall have the meaning, if any,
given such terms in the Regulations cited above.

 

6.3           Distributions from
Operations.

 

Except as provided
in Sections 6.5 and 6.6, the Company shall, as soon as reasonably
practical (but no less often than monthly, if appropriate), make distributions
of Net Cash Flow to the Members in the following manner and order of priority:

 

(a)           First, an amount of
such Net Cash Flow will be distributed (in the order and priority set forth
below) to the Members until each of the Members has received aggregate
distributions pursuant to this Section 6.3(a) for the current period
and all previous periods, equal to the sum of (i) the aggregate amount of
its Priority Capital Contributions made pursuant to this Agreement, and (ii) an
eighteen percent (18%) per annum (using a 360 day year) cumulative preferred
returned thereon (amounts distributed under this Section 6.3(a) will
be distributed in the reverse order in which such Priority Capital
Contributions were made — that is, the most recent Priority Capital
Contribution, together with the eighteen percent (18%) per annum cumulative
return thereon, will be returned and paid first to the Member having made such
Priority Capital Contribution, and then the next most recent Priority Capital
Contribution, together with the eighteen percent (18%) per annum cumulative
return thereon, will be returned and paid to the Member having made such
Priority Capital Contribution, etc.).

 

(b)           Second, remaining Net
Cash Flow shall be distributed to each Member, until each Member has received a
cumulative preferred return on its Unreturned Capital Contributions outstanding
from time to time of 8.0% per annum, with such distributions being made pro rata to each Member in accordance
with the Members’ relative amounts of such cumulative unpaid preferred return
at such time.

 

(c)           Third, a percentage
of the remaining Net Cash Flow equal to the Operations Promote Percentage to AW
Manager, and the balance to the Members (pro rata
in accordance with the Contribution Percentages).

 

6.4           Distributions from Capital
Transactions.

 

Except as provided in Sections 6.5 and
6.6, the Company shall, as soon as reasonably practical (but no less often than
monthly, if appropriate), make distributions of Net Capital Proceeds (after
establishment of appropriate and reasonable reserves, as determined by the 

 

26

 

Managing Member or to the extent set forth in
an Approved Budget) to the Members in the following manner and order of
priority:

 

(a)           first, an amount of
such Net Capital Proceeds will be distributed (in the order and priority set
forth below) to the Members until each of the Members has received aggregate
distributions pursuant to this Section 6.4(a) for the current period
and all previous periods, equal to the sum of (i) the aggregate amount of
its Priority Capital Contributions made pursuant to this Agreement, and (ii) an
eighteen percent (18%) per annum (using a 360 day year) cumulative preferred
returned thereon (amounts distributed under this Section 6.4(a) will
be distributed in the reverse order in which such Priority Capital
Contributions were made — that is, the most recent Priority Capital
Contribution, together with the eighteen percent (18%) per annum cumulative
return thereon, will be returned and paid first to the Member having made such
Priority Capital Contribution, and then the next most recent Priority Capital
Contribution, together with the eighteen percent (18%) per annum cumulative
return thereon, will be returned and paid to the Member having made such
Priority Capital Contribution, etc.);

 

(b)           second, remaining Net
Capital Proceeds shall be distributed to each Member, until each Member
received a cumulative preferred return (including amounts received pursuant to Section 6.3(b))
on its Unreturned Capital Contributions outstanding from time to time of 8.0%
per annum, with such distribution being made pro rata
to each Member in accordance with the Members’ relative amounts of such
cumulative unpaid preferred return at such time;

 

(c)           third, remaining Net
Capital Proceeds shall be distributed to each Member, pro rata in accordance with the
Contribution Percentages, until each Member’s Unreturned Capital Contributions
have been reduced to zero;

 

(d)           fourth, a percentage
of the remaining Net Capital Proceeds, if any, equal to the Initial Percentage
to the Members (pro rata in
accordance with the Contribution Percentages) and the balance to AW Manager,
until aggregate distributions have been made to BH and AW Investor in an amount
necessary to provide a 17.0% IRR to BH and AW Investor with respect to their
total Capital Contributions made to the Company;

 

(e)           fifth, a percentage
of the remaining Net Capital Proceeds, if any, equal to the First Tier Capital
Transaction Promote Percentage to AW Manager and the balance to the Members (pro rata in accordance with the
Contribution Percentages) until aggregate distributions have been made to BH
and AW Investor in an amount necessary to provide a 20.0% IRR to BH and AW
Investor with respect to their total Capital Contributions to the Company; and

 

(f)            sixth, a percentage
of the remaining Net Capital Proceeds, if any, equal to the Second Tier Capital
Transaction Promote Percentage to AW Manager and the balance to the Members (pro rata in accordance with the
Contribution Percentages).

 

6.5           Special Distributions.

 

From and after the
time AW Manager shall have been terminated as the Managing Member due to a For
Cause Event or an Event of Default, Net Cash Flow otherwise distributable 

 

27

 

under
Section 6.3 and Net Capital Proceeds otherwise distributable under
Section 6.4(d) shall not be distributed as provided in such Sections
but rather shall be distributed as provided pursuant to this Section 6.5,
and, except as provided in Section 6.6, the Company shall, as soon as
reasonably practical (but no less often than monthly, if appropriate), make
distributions of such Net Cash Flow of Net Capital Proceeds (i) first, as
provided in Section 6.3(a), and (ii) second, to the Members in
proportion to their respective Contribution Percentages.

 

6.6           Distributions in Liquidation.

 

(a)           Upon the dissolution and
winding-up of the Company, the proceeds of sale and other assets of the Company
distributable to the Members under Section 11.2(c)(iii) shall be
distributed, not later than the latest time specified for such distributions
pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2) to
the Members as provided in Section 6.4 above.

 

(b)           With the Approval of each
Member, a pro rata portion of the
distributions that would otherwise be made to the Members under the preceding
provisions of this Section 6.6 may be distributed to a trust reasonably
established, for a reasonable period of time, for the benefit of the Members
for the purposes of liquidating Company assets, collecting amounts owed to the
Company, and paying any contingent or unforeseen liabilities or obligations of
the Company arising out of or in connection with the Company.  The assets of any trust established under
this Section 6.6 will be distributed to the Members from time to time by
the trustee of the trust in the same proportions as the amount would otherwise
have been distributed by the Company to the Members under this Agreement.

 

6.7           Tax Matters.

 

The Members intend
for the Company to be treated as a partnership for federal income tax
purposes.  BH shall make all applicable
elections, determinations and other decisions under the Code and applicable
Treasury Regulations, including, without limitation, the deductibility of a
particular item of expense and the positions to be taken on the Company’s tax
return, and shall approve the settlement or compromise of all audit matters
raised by the Internal Revenue Service affecting the Members generally.  The AW Member Group shall take reporting
positions on their respective federal, state and local income tax returns
consistent with the positions determined for the Company by BH.  The Managing Member shall cause all federal,
state and local income and other tax returns to be timely filed by the Company
after same are Approved by BH and shall, after receiving BH’s Approval of such
returns, be authorized to execute such returns (provided that the Managing
Member shall, for so long as it diligently performs its obligations hereunder,
not be responsible for the delays of BH or reputable accountants or auditors
retained by the Managing Member or at the request of BH on behalf of the
Company).

 

6.8           Tax Matters Partner.

 

BH shall be the tax
matters partner within the meaning of Section 6231(a)(7) of the Code
and, subject to Section 6.7, shall exercise all rights, obligations and
duties of a tax matters partner under the Code; and the AW Member Group shall
be kept informed of, and be given an opportunity to participate in a
non-binding manner in, all such matters which the tax matters partner deems to
be material.

 

28

 

6.9           Tax Allocations.

 

(a)           Generally.  Except as otherwise provided in this Section 6.9,
items of income, gain, loss and deduction of the Company to be allocated for
income tax purposes shall be allocated among the Members on the same basis as
the corresponding book items are allocated under Sections 6.1 through 6.2.

 

(b)           Depreciation Recapture.  Subject to Section 6.9(c), if any
portion of taxable gain recognized from the disposition of property by the
Company represents the “recapture” of previously allocated deductions by virtue
of the application of Code Section 1(h)(1)(D), 1245 or 1250 (“Recapture
Gain”), such Recapture Gain shall be allocated as follows:

 

(i)            First, to the Members in
proportion to the lesser of each Member’s (A) allocable share of the total
taxable gain recognized from the disposition of such property and
(B) share of depreciation or amortization with respect to such property
(as determined in the manner provided under Regulations
Sections 1.1245-1(e)(2) and (3)), until each such Member has been
allocated Recapture Gain equal to such lesser amount.

 

(ii)           Second, the balance of
Recapture Gain shall be allocated among the Members whose allocable shares of
total taxable gain from the disposition of such property exceed their shares of
depreciation or amortization with respect to such property (as determined in
the manner provided under Regulations Sections 1.1245-1(e)(2) and
(3)), in proportion to their shares of total taxable gain (including Recapture
Gain)) from the disposition of such property; provided, however, that no Member
shall be allocated Recapture Gain under this Section 6.9(b) in excess
of the total taxable gain otherwise allocated to such Member from such
disposition.

 

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

 

29

 

6.10         Withholding.

 

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

 

ARTICLE VII

MANAGEMENT

 

7.1           Managing Member and Major
Decisions.

 

Except as otherwise
expressly provided in this Agreement (including with respect to the Reserved
Matter and as otherwise provided in Section 4.5 with regard to Acquisition
Loans), the business and affairs of the Company shall be vested in and
controlled by the Managing Member as provided below.

 

(a)           The Managing Member shall
have responsibility for establishing the policies and operating procedures with
respect to the business and affairs of the Company and for making all decisions
as to all matters which the Company has authority to perform.  Subject to the remaining provisions of this
Article VII, all decisions made with respect to the management and control
of the Company and Approved by the Managing Member shall be binding on the
Company and all Members.  The Managing
Member may elect officers of the Company to implement the decisions (including
without limitation executing documents) of the Managing Member from time to
time.  The Managing Member shall be
responsible for performing, or for causing to be performed, and shall have the
authority to perform (subject to the requirement of receiving BH’s Approval, as
applicable, if and when required by the terms hereof), the duties described in
Section 7.2.  Except as otherwise
expressly provided in this Agreement or as otherwise previously Approved by BH,
or provided for in any Approved Budget or Operating Plan, the Managing Member
shall not cause the Company or any SPV to undertake any of the following
matters without the prior Approval of BH (a “Major Decision”):

 

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

 

30

 

of the Company or any SPV
with respect to the foregoing, any election under the Purchase Agreement or
other Transaction Documents which the Company or any SPV may exercise under
same and exercise by the Company or any SPV of rights and remedies thereunder;

 

(ii)           any financing, refinancing
or securitization of any Company Property and the use of any proceeds thereof,
including, without limitation, interim and permanent financing, and any other
financing or refinancing of the operations of the Company and the execution and
delivery of any documents, agreements or instruments evidencing, securing or
relating to any such financing; provided, however, that no
guaranties or credit enhancements can be required from any Member or its
Affiliates without such party’s consent;

 

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

 

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

 

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

 

(vi)          any activity which generates
revenues, or which is otherwise on terms that vary materially from the ranges
and guidelines in the Approved Budget or Operating Plan; provided that, for
purposes of this Section 7.1(a)(vi), such a material variance shall include
(I) an amount that is not within the ranges established in the Approved
Operating Plan or is in excess of the amount set forth in the Approved Budget
for such revenues, expenditure or line item by more than eight percent  (8.0%) of the line item or eight percent  (8.0%) of the total Budget, whichever is
less (in addition to individual expenditures and obligations, such test shall
be applied to aggregate expenditures and obligations made on a quarterly basis
as well), and (II) terms that materially conflict with any other
guidelines in the Operating Plan regarding such transactions or any other
requirements of BH;

 

(vii)         any lease with regard to
space in a Project which is not in accord with the Leasing Guidelines;

 

(viii)        the making of any recurring
operating expenditure or incurring of any recurring operating obligation by or
on behalf of the Company that varies materially from the Approved Budget or
entering into (or amending or modifying) of any agreement which was not
specifically included or contemplated in the Approved Budget or 

 

31

 

Approved Operating Plan, or
otherwise Approved by BH; provided that, for purposes of this
Section 7.1(a)(viii), such a material variance shall include (A) expenditures
or obligations involving an amount that is in excess of the amount set forth on
a quarterly basis or on an annual basis in the Approved Budget or Approved
Operating Plan for such expenditure on a line item basis by more than eight
percent  (8.0%) of the line item or
eight percent  (8.0%) of the total
Budget, whichever is less, for such period, (B) expenditures or
obligations involving the incurrence of an expenditure or obligation for any
transaction or any series of related transactions when taken with all prior
expenditures or obligations during the particular quarter or fiscal year
related thereto exceeds the maximum expenditure amount provided in the Approved
Budget or the Approved Operating Plan for such particular transaction or series
of transactions for such period by the lesser of eight percent  (8.0%) 
of such maximum expenditure amount for such particular transaction or
series of transactions for such period or eight percent  (8.0%) 
of the total Budget for such period, or (C) in the case of any
material service, maintenance or similar agreement proposed to be entered into,
such agreement is not terminable (without penalty) by the Company on thirty
(30) days or less written notice to the other party; provided, however,
that expenditures made or obligations incurred or agreements entered into
pursuant to, or which are specifically included in or contemplated under, the
Approved Budget or the Approved Operating Plan shall not be Major Decisions to
the extent they do not vary from amounts, provisions and requirements set forth
in the Approved Budget and the Approved Operating Plan and any other conditions
or requirements adopted by BH from time to time;

 

(ix)           except with regard to the
Management Agreements to be executed on the Closing Date, entering into or
consummating any transaction or arrangement by and between the Company or any
SPV and the Managing Member or any Affiliate of the Managing Member, or any
other transaction involving an actual or potential conflict of interest;

 

(x)            the establishment of
reasonable reserves, determination of the amount of available Net Cash Flow and
Net Capital Proceeds, and making of distributions to Members (subject to the
requirements of Sections 6.3, 6.4, 6.5 and 6.6);

 

(xi)           the institution of any legal
proceedings in the name of the Company, settlement of any legal proceedings
against the Company and confession of any judgment against the Company or any
property of the Company other than the institution of any eviction, suits for
breach of tenant leases, or similar proceedings contemplated or provided for in
the Approved Operating Plan;

 

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

 

(xiii)         (A) the filing of any
voluntary petition in bankruptcy on behalf of the Company, (B) the
consenting to the filing of any involuntary petition in bankruptcy against the
Company, (C) the filing of any petition seeking, or consenting to, the
reorganization or relief under any applicable federal or state law relating to
bankruptcy or insolvency, (D) the consenting to the appointment of a
receiver, liquidator, assignee, 

 

32

 

trustee, sequestrator (or
other similar official) of the Company or a substantial part of its property, (E) the
making of any assignment for the benefit of creditors, (F) the admission
in writing of the Company’s inability to pay its debts generally as they become
due or (G) the taking of any action by the Company in furtherance of any
such action;

 

(xiv)        except with regard to the
Management Agreements to be executed on or before the Closing Date, entering
into any asset or property management or leasing or development agreement, or
other third party contract with respect to which funds are not explicitly
provided for, or the existence of which is not contemplated, in the Approved
Budget and/or Approved Operating Plan, as applicable, with regard to the
Company or any Company Property;

 

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

 

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

 

(xvii)       the execution and delivery,
amendment, restatement, replacement, supplement or other modification of any of
the Transaction Documents and any approval, consent or other determination with
respect to the foregoing;

 

(xviii)      determining the types and
amounts of insurance coverage for the Company and the Company Property, and the
deductibles and underwriters with regard thereto;

 

(xix)         any other material matter
pertaining to the Company’s or any SPV’s business;

 

(xx)          the approval, determination
or any other action expressly reserved to BH under this Agreement, including,
without limitation, any modification, amendment, or renewal of any matter
previously requiring the Approval of BH;

 

(xxi)         except as otherwise provided
in this Agreement, extension of any loans to any Member or its Affiliates;

 

(xxii)        acquisition of or lease of
any additional real property by the Company or any SPV other than the Property;

 

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

 

33

 

(xxiv)       admission of any additional
Member into the Company or any SPV or otherwise issuing any equity interest in
the Company or authorizing the issuance of any equity interest in any SPV;

 

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

 

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

 

(xxvii)      any merger, consolidation or
other business combination transaction involving the Company; and

 

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

 

Notwithstanding the
foregoing provisions of this Section 7.1 (or anything else in this
Agreement to the contrary), BH shall have exclusive authority and the power to
unilaterally determine what actions the Company shall take or omit to take with
regard to the Reserved Matter except for actions relating to the exercise of
any extension options provided for in the Bridge Note and/or the payoff of the
Bridge Loan out of Net Cash Flow or Net Capital Proceeds of the Company (which
matters shall be determined by the mutual agreement of BH and AW Manager).

 

(b)           The Managing Member shall
have all of the same powers and duties as a general partner of a limited
partnership under the laws of the State of Delaware, including, without
limitation (but subject to the other provisions of this Agreement), the full
power and authority to cause the Company to:

 

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

 

(ii)           in furtherance of the
Company’s purposes and business, borrow money, whether on a secured or
unsecured basis, refinance, recast, modify, amend, extend, compromise or
otherwise deal with any such loan, and in connection therewith, issue evidences
of indebtedness and secure the same by mortgages, deeds of trust, security
agreements or other similar documents affecting the assets of the Company;

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

7.2           Duties of Managing Member.

 

(a)           The Managing Member shall
use commercially reasonable efforts to implement the Approved Budget and
Approved Operating Plan (including the Initial Approved Budget and Approved
Operating Plan) and shall otherwise perform those duties set forth below, and
shall have the authority to perform the duties described in this Section 7.2
or as otherwise specifically set forth herein, in each instance subject to the
requirement of receiving the prior Approval of BH, if and when required by the
terms hereof.  Specifically, the Managing
Member shall:

 

(i)            conduct the business of the
Company on a day-to-day basis, and use diligent efforts to cause such
operations to be conducted in accordance with the Approved Budget and the
Approved Operating Plan, which duties may be discharged by delegating the same
to a property and/or development manager pursuant to the Management Agreements;

 

35

 

(ii)           subject to the limitations
set forth in this Agreement, enter into contracts and leases for the Company
Property on behalf of the Company and the SPVs in accordance with the current
Approved Budget and Approved Operating Plan, and make expenditures as are
required to implement such Approved Budget and Approved Operating Plan, but
only to the extent that any such expenditures and amounts required to be paid
by the Company or the SPVs under such contracts, leases and other instruments
and documents are consistent with the parameters set forth in the Approved
Budget and Approved Operating Plan or otherwise authorized by the terms of this
Agreement; and

 

(iii)          perform such other duties
and obligations as BH and AW Manager shall agree from time to time.

 

Subject to any right
provided to the Managing Member to be reimbursed for Company Expenses pursuant
to Section 7.5, and subject further to the fees authorized pursuant to the
provisions of Section 7.3, the Managing Member shall not otherwise be
entitled to receive any fees or other compensation in respect of any duties or
services, and will not receive reimbursement for compensation payable to any of
its employees or other direct or indirect overhead which may be attributable to
such duties and services.

 

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

 

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

 

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

 

(iii)          the Managing Member shall be
entitled to, and shall, expend funds in respect of debt service on the Company’s
or any SPV’s financing (including the expense of curing any defaults
thereunder), utilities, real estate taxes and assessments, insurance and
emergency repairs, any annual or other periodic fees, or other expenditures
which the Managing Member determines are necessary for the continued ordinary
operation of the Company Property, including without limitation uninsured
losses or deductibles, operating shortfalls, repairs, additions or
modifications to comply with applicable laws or insurance requirements,
insurance premiums for insurance policies 

 

36

 

Approved by BH, and any
final orders, judgments, or other proceedings and all costs and expenses
related thereto, regardless of whether the Budget has been approved or whether
such expenditures exceed the amounts provided for in the applicable Budget (all
of the foregoing described in this clause (iii), collectively, “Necessary
Expenses”).

 

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

 

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

 

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

 

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

 

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

 

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

 

(vi)          deposit all receipts from
operations of the Company Property to a separate account established and
maintained by the Managing Member in the name of the 

 

37

 

Company or applicable SPV,
and not commingle those receipts with any other funds or accounts of the
Managing Member;

 

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

 

(viii)        if and to the extent the
Managing Member delegates to any loan servicer or property manager (previously
Approved by BH) or subcontracts with any third party or Affiliate for the
performance of any of the services to be performed by the Managing Member, supervise
and oversee the performance of the services performed by such third parties or
Affiliates and cause the same to be performed in the manner required hereunder;
and

 

(ix)           execute and deliver
agreements, certificates and similar documents (in the name or on behalf of the
Company) which are necessary to obtain and/or maintain any third party loan
pursuant to Loan Documents Approved by BH, as well as manage any approved
financing or refinancing, on terms Approved by BH.

 

(d)           Intentionally omitted.

 

(e)           Subject to the provisions of
Section 7.2(f) below, upon and after the occurrence of any For Cause
Event as described in this Section 7.2(e), or any Event of Default with
respect to the AW Manager, BH shall have the right in its sole and absolute
discretion to terminate AW Manager as the Managing Member by the delivery of
written notice and, upon any such termination (i) BH may cause the Company
(or any applicable SPV) to terminate any Management Agreement immediately and
without payment of a termination fee, (ii) BH may designate a successor
Managing Member (which may be itself or an Affiliate of BH), (iii) any
distributions to the Members under Sections 6.3 and 6.4 shall no longer be made
under Sections 6.3 and 6.4 hereof and from that time forward shall be made
instead under Section 6.5 hereof, (iv) BH may make a Buy-Sell Offer
under Section 15.1 and, notwithstanding anything to the contrary contained
in this Agreement, BH shall have the unilateral right and authority to make all
decisions on behalf of the Company and cause the Company to take any and all
actions which BH, in its sole discretion, may determine.  For the purposes of this Agreement, a “For
Cause Event” shall mean any of the following:

 

(i)            any actions or omissions on
the part of the AW Member Group or any of its representatives (including,
without limitation any AW Person), or by any other Person at the explicit
direction of any of the foregoing which amounts to fraud, willful misconduct or
gross negligence (which, in the case of gross negligence, results in a Material
Damage or Loss to the Company or the Projects); or

 

(ii)           any Change in Control
occurs; or

 

(iii)          (I) the filing of any
voluntary petition in bankruptcy or the consenting to the filing of any
involuntary petition in bankruptcy against the AW Manager or any AW Person, (II) the
filing by AW Manager or any AW Person of any petition seeking, or consenting
to, the reorganization or relief under any applicable federal or state law
relating to bankruptcy or insolvency against or with respect to AW 

 

38

 

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

 

(f)            In the event of a Change in
Control arising from a Key Person Event, BH’s sole remedy shall be to make a Buy-Sell
Offer under Article XV.  For the
purpose of this paragraph, a Key Person Event shall include the rejection by BH
of a successor AW Person, as provided in the definition of “AW Person” set
forth in Section 1.1 hereof.

 

(g)           AW Manager’s appointment as
the Managing Member shall automatically terminate if it (or a permitted
transferee thereof) is no longer a Member of the Company.

 

7.3           Management of the Property.

 

(a)           On the Closing Date, the
Asset Manager and the Subcontractor shall enter into a Property Management
Subcontract for each Project and joined in by each SPV in the form attached
hereto as Appendix B which shall provide for the payment of (i) development
fees in the amount of 5.0% of total project costs and (ii) management fees
in the amount of 4.0% of the “Gross Revenues” (as defined therein) and subject
to the terms set forth therein.

 

(b)           On the Closing Date, the
Managing Member shall cause each SPV to enter into a Leasing Services Agreement
with a qualified Affiliate of the Managing Member in the form attached hereto
as Appendix C which shall provide for the payment of market
standard leasing commissions by the SPV subject to the terms set forth therein.

 

(c)           The Company shall pay to the
Asset Manager or to its designee as an asset management fee an amount equal to
0.5% of the “Gross Revenues” (as defined in the Property Management
Subcontracts).

 

7.4           Duties and Conflicts.

 

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

 

39

 

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

 

(i)            each of the Members and
their respective Affiliates, employees, agents, and representatives have or may
have in the future other business interests, activities and investments, some
of which may be in conflict or competition with the business of the Company and
the SPVs, and are entitled to carry on such other business interests,
activities and investments;

 

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

 

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

 

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

 

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

 

(c)           Until such time as the
Company has been dissolved in accordance with Section 11.1, the AW Member
Group and its respective Affiliates (but excluding for the avoidance of doubt
any individual members of AW Investor other than an AW Person) shall not own or
manage or participate in the ownership or management of any medical office building
project within a three (3) mile radius of any Project that may compete
with or be detrimental to any Project, unless BH has been first offered by the
AW Member Group the opportunity to co-invest in such opportunity.  Such co-investment rights shall (i) cease
to be applicable to any Project in which the Company ceases to have an
ownership interest, and (ii) not apply to the existing projects of the AW
Member Group and its Affiliates owned or managed on the date of this Agreement
or to the St. Mary’s medical office building.

 

40

 

(d)           Notwithstanding the
preceding provisions of this Section 7.4, no member of the AW Member Group
or their Affiliates shall initiate the solicitation of tenants in any building
that comprises any part of a Project to move to other buildings owned or
managed by any member of the AW Member Group or their Affiliates outside of the
Company without the prior written consent of BH.  As used herein the term “initiate the
solicitation of” shall mean the initiation of contact directly between the AW
Member Group or its Affiliates and a tenant regarding a move by such tenant to
a property which is not a Project; provided, however, that such term shall in
no event apply to (i) responses to requests for proposals submitted by
tenants or their brokers, agents or representatives or (ii) new or
additional requirements of such tenants. 
Furthermore, no member of the AW Member Group nor their Affiliates shall
actively discourage prospective tenants from leasing available space in a
building that comprises all or part of a Project and shall not discriminate
against a building that comprises any part of a Project in favor of other
properties owned outside the Company and the SPVs in its presentations and
communications with potential tenants.

 

7.5           Company Expenses.

 

The Company shall be
responsible for paying, and shall pay, all costs and expenses related to the
business of the Company and of acquiring, holding, owning, developing, leasing,
servicing, collecting upon and operating the Company Property, except for (i) costs
of preparing the reports to Members specifically called for by the terms hereof
and the Approved Budget and Operating Plan, which shall be the cost of the
Managing Member (provided that reasonable third party costs (including audit
and legal) incurred in connection with the same shall be at the Company’s
expense), (ii) costs to be borne by any third party under any agreement
with the Company, and (iii) costs to be borne by any Member or its
Affiliates as specifically provided in this Agreement or the Management
Agreements.  Subject to the preceding
sentence and the other provisions of this Agreement, all management fees and
expenses payable under Section 7.3, costs of financing and financing fees,
fees and disbursements of attorneys, financial advisors, accountants,
appraisers, brokers and engineers, travel expenses, and all other fees, costs
and expenses directly attributable to the business and operations of the
Company shall be borne by the Company. 
In the event any such costs and expenses are or have been paid by any
Member, such Member shall be entitled to be reimbursed for such payment so long
as such payment is reasonably necessary for Company business or operations and
has been Approved by the other Member or is expressly authorized in this
Agreement or the appropriate Approved Budget or Approved Operating Plan
(including any permitted variance hereunder). 
Notwithstanding the foregoing, in no event shall the Company have any
obligation to pay or reimburse any Member or any of their respective Affiliates
for any general overhead or similar costs and expenses of such Member or
Affiliate.

 

7.6           Venture Coordinator.

 

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

 

41

 

7.7           Enforcement of Affiliate
Agreements.

 

Notwithstanding
anything herein or in any other agreement to the contrary, in the event the
Company or any SPV has the right to terminate, amend, modify, extend, renew,
waive, consent to or approve any material right or exercise any remedy with
regard to any Management Agreement or other agreement between the Managing
Member or any Affiliate of the Managing Member, on the one hand, and the
Company or any SPV, on the other hand, then the exercise of any such right on
behalf of the Company or such SPV, including the giving of any notice or
approval with regard thereto, will be controlled solely by BH which shall have
the right to cause the Company and any SPV to exercise any rights to vote or influence
the actions of such SPV in connection therewith, and the Managing Member shall
not have the right to exercise any control over the Company’s or any SPV’s
actions in respect thereof.  Any decision
made by BH in accordance with the preceding sentence shall be implemented
solely by BH.

 

ARTICLE VIII

BOOKS, RECORDS, REPORTS AND PROJECT PLAN

 

8.1           Books and Records.

 

The Managing Member
shall maintain, or cause to be maintained, at the expense of the Company, in a
manner customary and consistent with good accounting principles, practices and
procedures, a comprehensive system of office records, books and accounts (which
records, books and accounts shall be and remain the property of the Company) in
which shall be entered fully and accurately each and every financial
transaction with respect to the ownership and operation of the Company
Property.  Bills, receipts and vouchers
shall be maintained on file by the Managing Member.  The Managing Member shall maintain or cause
to be maintained said books and accounts in a safe manner and separate from any
records not having to do directly with the Company, any SPV or any Company
Property.  At the cost and expense of the
Company, the Managing Member shall cause audits to be performed and audited
statements and income tax returns to be prepared as required by
Section 8.3.  Such books and records
of account shall be prepared and maintained by the Managing Member at the
principal place of business of the Managing Member.  Each Member or its duly authorized
representative shall have the right to inspect, examine and copy such books and
records of account at the Company’s office during reasonable business
hours.  Additionally, upon request of a
Member, all professionals given access to any such books or records shall be
directed to provide such books or records to such Member.

 

8.2           Accounting and Fiscal Year.

 

The books of the
Company shall be kept on the accrual basis in accordance with GAAP and on a tax
basis and the Company shall report its operations for tax purposes on the
accrual method.  The fiscal year and
federal income tax year of the Company shall end on December 31 of each
year, unless a different tax year shall be required by the Code.

 

8.3           Reports.

 

(a)           The Managing Member will
prepare, or cause to be prepared, on an accrual basis in accordance with GAAP
at the expense of the Company, and furnish to each 

 

42

 

Member the following within the periods set forth
below (provided that for so long as it diligently performs its obligations
hereunder, the Managing Member shall not be responsible for the delays of any
Person that is not an Affiliate of Managing Member or reputable accountants or
auditors retained by the Managing Member on behalf of the Company), all of
which shall be certified by the Managing Member as being true and correct:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)           In addition, if requested by
BH, the Managing Member will prepare, at the expense of the Company, and
furnish to each Member within forty-five (45) calendar days after the end of
each fiscal year of the Company, the final audited amount of net income of the
Company for such fiscal year and, within sixty (60) calendar days after the end
of such taxable

 

43

 

year, each of the following, all of which
shall be certified by the Managing Member as being true and correct and all of
which shall be certified in the customary manner by the Company Accountant
(which firm shall provide such balance sheet, income statement and statement of
Capital Account in draft form to the Members for review prior to finalization
and certification thereof) (i) an audited balance sheet of the Company
dated as of the end of such taxable year; (ii) an audited related income
statement of the Company for such taxable year; (iii) an audited statement
of cash flows for such taxable year; and (iv) an audited statement of each
Member’s Capital Account for such taxable year.

 

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

 

(e)           The Managing Member shall
prepare, or cause to be prepared, at Company expense, such additional financial
reports and other information as BH may determine are appropriate.  The Managing Member will furnish to each
Member upon request, at the expense of the Company, copies of all reports,
statements, notices and other material written information received by the
Company or the Managing Member from, or delivered by or on behalf of the
Company to, any third party lender. 
Subject to the provisions of Section 13.14, each Member shall be
permitted to deliver to any of its Affiliates, and BH shall be permitted to
deliver to any of its direct or indirect members, partners or investors, a copy
of any of the reports and statements provided to such Member pursuant to this Section 8.3.

 

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

 

8.4           The Company Accountant.

 

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

 

8.5           Reserves.

 

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

 

44

 

8.6           The Budget and Operating
Plan.

 

No later than the Closing
Date, the Managing Member shall have prepared and submitted to BH for Approval
(and BH shall have Approved) a preliminary estimated Budget for the period
through December 31, 2010 and Operating Plan for the Company for the
period from the Closing Date through December 31, 2010, which shall
include projected costs to operate the Company and make tenant improvements,
leasing conversions and capital expenditures to be set forth therein to be made
in the budget period following acquisition of the Property and shall be in the
form agreed by BH and the AW Manager (the “Initial Approved Budget and
Operating Plan”).  Thereafter,
commencing for the 2011 fiscal year, the Budget and Operating Plan shall be
prepared in proposed form and submitted annually by the Managing Member to BH
for Approval at least sixty (60) calendar days prior to the end of the current
fiscal year (so that the Managing Member will submit a Budget and Operating
Plan for the 2011 fiscal year no later than October 1, 2010 to BH for its
Approval) with respect to the following fiscal year, together with five (5) year
forward projections (provided if the Managing Member should fail to timely
prepare and submit in proposed form any such Budget and Operating Plan, BH
shall be authorized to prepare such Budget and Operating Plan).  In formulating the comprehensive Budget and
Operating Plan, to the extent reasonably feasible at the time of preparation
thereof, the Managing Member will develop (for Approval by BH) proposed
strategies regarding (i) plans for renovation, leasing, financing, sale
and rehabilitation of the Property and any other real property and proposed
reductions to Operating Expenses and other Company costs and expenses and
increases in revenues, (ii) preparation and release of all promotional and
advertising relating to, and a marketing plan for, the Company Property or
concerning the Company, (iii) terms for any proposed sale or disposition
of any Company Property, or acquisition of additional Company Property, and (iv) selection
of legal counsel, accountants, appraisers and other consultants for the Company
to efficiently implement the Approved Budget and Operating Plan.  The Managing Member will also consider and
make recommendations to the extent it deems the same appropriate regarding the
financing, amendment, modification, alteration, change, cancellation, or
prepayment of any indebtedness evidenced by any loan presently or hereafter
affecting any Company Property, and procurement of title insurance and other
insurance for the Company, or decrease or vary the insurance carried by or on
behalf of the Company and any other matters affecting the Company’s
business.  BH and the Managing Member may
from time to time review the Approved Budget and Operating Plan and make such
amendments or modifications thereto as they shall jointly determine to be
appropriate or necessary.

 

8.7           Accounts.

 

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

 

45

 

8.8           REIT Matters.

 

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

 

ARTICLE IX

TRANSFER OF INTERESTS

 

9.1           No Transfer.

 

Except as expressly
permitted or contemplated by this Agreement (including pursuant to
Sections 9.2 and 9.5 below, and pursuant to Article XV), no Member
may sell, assign, give, hypothecate, pledge, encumber or otherwise transfer (“Transfer”)
all or any portion of its Interest, whether directly or indirectly, without the
Approval of the other Members.  Any
Transfer in contravention of this Article IX shall be null and void.  No Member, without the prior Approval of the
other Members, shall resign from the Company except as permitted by this
Article IX.  Nothing in this Article IX
is meant to or will be interpreted to restrict in any way the ability of any
equity holder in Behringer Harvard Opportunity REIT II, Inc. BHO II, Inc.,
BHO Business Trust II or Behringer Harvard Opportunity OP II, LP and/or
their constituent owners from transferring securities issued by such entities.

 

9.2           Permitted Transfers.

 

(a)           Notwithstanding anything to
the contrary contained in this Agreement, BH, AW Investor and AW Manager may
from time to time without the consent or Approval of BH or the AW Member Group,
as applicable, Transfer (directly or indirectly) all or any portion of its
direct or indirect interest in the Company to any Affiliate other than a
Prohibited Person; provided, however, that any such Transfer
(either individually or when aggregated with any other prior Transfer by such
Member or AW Member Group under this Section 9.2(a) shall not result
in a Change in Control).

 

46

 

(b)           Notwithstanding anything to
the contrary contained in this Agreement, any Member, its constituents and/or
the direct or indirect individual holders of any interest in the Company may
Transfer (directly or indirectly) all or any portion of its direct or indirect
interest in the Company to any Person (other than a Prohibited Person) for
estate planning purposes or to a trust for the benefit of the immediate family
members of the ultimate direct or indirect individual holders of an interest in
such Member on the date of this Agreement; provided, however,
that, any such Transfer (either individually or when aggregated with any other
prior Transfers by such Member or AW Member Group under this
Section 9.2(b)) shall not result in a Change in Control.

 

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

 

9.3           Transferees.

 

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

 

47

 

9.4           Section 754 Election.

 

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

 

9.5           Other Transfers.

 

(a)           On or after the second annual anniversary of this Agreement, in the
event BH or the AW Member Group desires to Transfer its Interest in a manner
which is not a permitted Transfer under Section 9.2(a) or (b), BH or
the AW Member Group, as applicable, may otherwise Transfer all of its Interest
to a bona fide third party transferee provided that as a condition
to completing such Transfer, the transferring Member or the AW Member Group (“Triggering
Party”) shall initially deliver a pre-notice of its intent to exercise its
rights under this Section 9.5 to the Recipient Party.  Thereafter, in the event the Triggering Party
wishes to exercise its rights under Section 9.5, no sooner than 30 days
after the date that the pre-notice was delivered to the Recipient Party, the
Triggering Party shall deliver to the other Member or AW Member Group (“Recipient
Party”) written notice of its intention to sell all of its Interest (“Target
Interest”) setting forth the proposed purchase price and such other terms
and conditions of the proposed sale (“Transfer ROFO Notice”).  At any time within thirty (30) calendar days
after the date the Recipient Party receives the Transfer ROFO Notice (the “Transfer
Response Period”), the Recipient Party shall have the right, exercisable by
delivery of notice in writing (the “Transfer Election”) to the
Triggering Member, to either:

 

(i)            Approve the sale of the Target Interests and authorize the Triggering
Party to attempt to sell or dispose of the Target Interests on the terms and
conditions set forth in the Transfer ROFO Notice; or

 

(ii)           offer to purchase all of the Target Interests for a cash purchase price
and on the terms set forth in the Transfer ROFO Notice and subject to no other
terms and conditions (the “Acceptable Transfer Terms”).

 

(b)           Any election pursuant to Section 9.5(a)(ii) above shall be
made by (x) delivering to
the Triggering Party the Transfer Election, which shall affirmatively state
that the Recipient Party is exercising such option, and (y) depositing in an escrow account at a bank or other
financial institution selected by the Triggering Party (the “Transfer Escrow
Agent”), a deposit equal to 5% of the purchase price (the “Transfer
Escrow Deposit”) (as set forth in the applicable Acceptable Transfer Terms)
within five calendar days of such election. 
In the event of an election to purchase pursuant to Section 9.5(a)(ii) above,
within 90 calendar days of the date of the Recipient Party’s Transfer Election
to purchase, the Recipient Party and the Triggering Party shall close the
purchase of the Target Interests and the Triggering Party shall assign the
Target Interest to the Recipient Party or to a designee of the Recipient Party,
upon receipt of payment of the purchase price. 
All closings of any purchase and sale under this Section 9.5 will
be held at 

 

48

 

the Company’s principal
office and will take place no later than the closing date set forth in the
applicable Acceptable Transfer Terms.

 

(c)           If during the Transfer Response Period the Recipient Party neither
(x) authorizes the Triggering Party to attempt to sell the applicable
Target Interests as provided in Section 9.5(a)(i) nor (y) elects
to purchase the Target Interests of the Triggering Party’s provided in
Section 9.5(a)(ii), then the Recipient Party shall be deemed to have
authorized and have Approved a Transfer of the Target Interests pursuant to
Section 9.5(a)(i) to a bona fide third party transferee, for a
purchase price not less than 95.0% of the purchase price set forth in the
Acceptable Transfer Terms, and otherwise pursuant to such other terms,
conditions and provisions as are determined appropriate in the reasonable
discretion of the Triggering Party.  In
the event the Recipient Party authorized or is deemed to have authorized the
Transfer of the applicable Target Interests pursuant to the terms described
above, and the Triggering Party thereafter receives a bona fide offer for the
purchase of the Target Interests from any party for a purchase price which is
at least equal to 95.0% of the purchase price set forth in the Acceptable
Transfer Terms, the Triggering Party may consummate the sale of the Target
Interest on such terms, without the requirement of any Approval of the
Recipient Party; provided,
the Triggering Party shall have entered into a binding contract for the
transfer of the applicable Target Interests within 180 calendar days after the
date on which the Recipient Party authorized or was deemed to have authorized
such transfer, and such Transfer must be consummated within the same 180-day
calendar day period.  The failure of the
Triggering Party to enter into such binding contract within the 180-day period
referred to in the immediately preceding sentence, shall require the Triggering
Party to again deliver to the Recipient Party a Transfer ROFO Notice and to
again follow the procedures set forth in this Section 9.5.

 

(d)           In the event the Recipient Party should default in its obligation to
purchase a Target Interest pursuant to the terms of this Section 9.5, the
following shall be the sole remedies for such default:

 

(i)            The Recipient Party will immediately and without any further action
cease to have any rights of first offer pursuant to the provisions of this
Section 9.5, including with regard to any future or subsequent Transfers
of any Interest by the Triggering Party;

 

(ii)           The Recipient Party will immediately and without any further action
cease to have any right to make a Buy-Sell Offer or otherwise trigger or
initiate the provisions set forth in Article XV;

 

(iii)          The Transfer Escrow Agent shall immediately deliver to the Triggering
Party the Transfer Escrow Deposit as liquidated damages to retain for its own
account (such amount shall not be deemed to be a contribution or distribution
of capital, or effect in any way the Capital Account of any Member or the
allocation provisions or any other provisions of this Agreement); and

 

(iv)          Thereafter, the Triggering Party may at any time Transfer all or any
portion of its Interests in the Company, without the prior Approval of the
Recipient Party and without having to comply with the provisions of this
Section 9.5.

 

49

 

(e)           Notwithstanding the foregoing, if the provisions of Article XV have
been initiated by any Member, then no Member may initiate the provisions of
this Section 9.5 until the procedures set forth in Article XV have
been completed or terminated pursuant to the provisions of such Article.

 

(f)            All elections by the AW Member Group under this Section 9.5 must be
made jointly and as a group and shall not be exercised by either AW Investor or
AW Manager individually.

 

ARTICLE X

EXCULPATION AND INDEMNIFICATION

 

10.1         Exculpation.

 

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

 

10.2         Indemnification.

 

(a)           The Company shall, to the
fullest extent permitted by applicable law, indemnify, defend and hold harmless
each Member, the Managing Member and each general or limited partner of any
Member or such Member’s Affiliates, shareholder, member, partner or other
holder of any equity interest in such Member or its Affiliates, or any manager,
officer or director of any of the foregoing (collectively, the “Indemnitees”),
from and against any losses, claims, demands, liabilities, costs, damages,
expenses (including, without limitation, reasonable fees and expenses of
outside counsel) and causes of action imposed on, incurred by, asserted against
or to which such Indemnitee may otherwise become subject by reason of or in
connection with any breach of fiduciary duty or matter arising out of or incidental
to any act performed or omitted to be performed by any such Indemnitee in
connection with this Agreement or the Company’s or any SPVs business or
affairs; provided, that any such act or omission was taken in good
faith, was reasonably believed by the applicable Indemnitee to be in the best
interest of the Company and was within the scope of authority granted to such
member or applicable Indemnitee, and in the case of a Member or related
Indemnitee, was not attributable to such 

 

50

 

Indemnitee’s fraud, bad faith, willful misconduct or
gross negligence.  Any indemnity under
this Section 10.2 shall be paid solely out of and to the extent of Company
assets and shall not be a personal obligation of any Member and in no event
will any Member be required, or permitted without the Approval of all of the
Members, to contribute additional capital under Section 4.2 to enable the
Company to satisfy any obligation under this Section 10.2.  All judgments against the Company and the
Members, or any one or more thereof, wherein such Member (or Members) is
entitled to indemnification, must first be satisfied from Company assets.

 

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

 

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

 

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

 

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

 

51

 

ARTICLE XI

DISSOLUTION AND TERMINATION

 

11.1         Dissolution.

 

(a)           The Company shall be
dissolved and its business wound up upon the earliest to occur of any of the
following events:

 

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

 

(ii)           the unanimous agreement of
the Members to dissolve the Company; or

 

(iii)          the bankruptcy or
dissolution of the last remaining Member (which shall not include the
occurrence of such an event with respect to any Member’s constituent equity
owners which does not cause such an event to occur with respect to the Member
itself) or the occurrence of any other event that terminates the continued
membership of any Member in the Company.

 

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

 

11.2         Termination.

 

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

 

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

 

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

 

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

 

52

 

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

 

(ii)           second, subject to the
Approval of BH, to the setting up of any reserves which the Liquidating Member
and the Managing Member shall determine to be reasonably necessary for
contingent, unliquidated or unforeseen liabilities or obligations of the
Company or any Member arising out of or in connection with the Company.  Such reserves may, in the discretion of the
Liquidating Member, be paid over to a national bank or national title company
selected by it and authorized to conduct business as an escrow agent to be held
by such bank or title company as escrow agent for the purposes of disbursing
such reserves to satisfy the liabilities and obligations described above, and
at the expiration of such period as the Liquidating Member may reasonably deem
advisable, distributing any remaining balance as provided in
Section 11.2(c)(iii); provided, however, that, to the extent
that it shall have been necessary, by reason of applicable law or regulation,
to create any reserves prior to any and all distributions which would otherwise
have been made under Section 11.2(c)(i) and, by reason thereof, a
distribution under Section 11.2(c)(i) has not been made, then any
balance remaining shall first be distributed pursuant to
Section 11.2(c)(i);

 

(iii)          thereafter, the balance, if
any, to the Members in accordance with Section 6.6.

 

11.3         Liquidating Member.

 

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

 

11.4         Claims of the Members.

 

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

 

53

 

ARTICLE XII

DEFAULT BY MEMBER

 

12.1         Events of Default.

 

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

 

(a)           Such Member or its
Affiliates shall violate any material term, breach any material provision or
default in the performance of any of its duties or material covenant applicable
to such Member as set forth in this Agreement (excluding a failure to make
Additional Capital Contributions, the exclusive remedy for which is set forth
in Section 4.2) and (i) such violation, breach or default causes
Material Damage or Loss, and (ii) such violation, breach or default is not
cured (including without limitation, by the breaching Member reimbursing the
Company or the affected SPV or Member for the resulting material damage or
loss) within a Reasonable Period.

 

(b)           Solely with respect to the
AW Manager, a breach or an “event of default” shall occur and be continuing
under any Management Agreement or other material agreement that the Company or
an SPV enters into with the AW Manager or any of its Affiliates, and (i) such
violation, breach or default causes Material Damage or Loss to the Company, the
SPVs or the Projects taken as a whole, and (ii) such violation, breach or
default is not cured (including without limitation, by the AW Manager
reimbursing the Company or the affected SPV or Member for the resulting
Material Damage or Loss) within a Reasonable Period.

 

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

 

12.2         Effect of Event of Default.

 

Subject to the
provisions hereof, upon the occurrence of an Event of Default by BH or AW
Member Group, then the non-defaulting party (BH or the AW Member Group) shall
have the right, at any time within one year from the date of such Event of
Default and upon giving the defaulting party at least ten (10) days prior
written notice of such election to pursue any right or remedy available to it
at law or in equity against the defaulting party (which shall represent a
recourse obligation of such party).  In
addition, BH shall have the remedies set forth in Section 7.2(e) if
the defaulting party is any member of the AW Member Group.

 

54

 

ARTICLE XIII

MISCELLANEOUS

 

13.1         Representations and
Warranties of the Members.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

(b)           In addition, each of AW
Investor and AW Manager represent and warrant to BH that they are Controlled by
the AW Persons.

 

(c)           Each Member agrees to
indemnify and hold harmless the Company and each other Member and their
officers, directors, shareholders, partners, members, employees, successors and
assigns from and against any and all loss, damage, liability or expense
(including costs and attorneys’ fees) which they may incur by reason of, or in
connection with, any breach of the foregoing representations and warranties or
those set forth in Article XIV and/or in the Contribution Agreement made
by such Member and all such representations and warranties shall represent
recourse obligations of the Members and will survive the execution and delivery
of this Agreement and the termination and dissolution of the Company or any
Member.

 

13.2         Further Assurances.

 

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

 

13.3         Notices.

 

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

 

56

 

	
  If to BH to:

  	
  Behringer Harvard
  Florida MOB Member, LLC

  
	
   

  	
  15601 Dallas
  Parkway, Suite 600

  
	
   

  	
  Addison, TX 75001

  
	
   

  	
  Attn:

  	
  Executive Vice
  President of Real Estate

  
	
   

  	
  Fax:

  	
  (214) 655-1610

  
	
   

  	
   

  
	
  With a copy to:

  	
  Behringer Harvard
  Opportunity REIT II, Inc.

  
	
   

  	
  15601 Dallas
  Parkway, Suite 600

  
	
   

  	
  Addison, TX 75001

  
	
   

  	
  Attn:

  	
  Chief Legal
  Officer

  
	
   

  	
  Fax:

  	
  (214) 655-1610

  
	
   

  	
   

  
	
  If to AW Manager

  	
   

  
	
  and AW Investor
  to:

  	
  c/o Brian K.
  Waxman

  
	
   

  	
  2801 PGA
  Boulevard, Suite 200

  
	
   

  	
  Palm Beach
  Gardens, Florida 33410

  
	
   

  	
  Fax:

  	
  (561) 689-1255

  
	
   

  	
   

  
	
  With a copy to:

  	
  Scott L.
  McMullen, Esq.

  
	
   

  	
  Jones, Foster,
  Johnston & Stubbs, P.A.

  
	
   

  	
  801 Maplewood
  Drive, Suite 22-A

  
	
   

  	
  Jupiter, Florida
  33458

  
	
   

  	
  Fax:

  	
  (561) 746-6933

  

 

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

 

13.4         Governing Law.

 

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

 

13.5         Captions.

 

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

 

13.6         Pronouns.

 

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

 

13.7         Successors and Assigns.

 

This Agreement shall
be binding upon the parties hereto and their respective executors, administrators,
legal representatives, heirs, successors and assigns, and shall inure to the
benefit

 

57

 

of the parties hereto and, except as otherwise provided herein, their
respective executors, administrators, legal representatives, heirs, successors
and permitted assigns.

 

13.8         Extension Not a Waiver.

 

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

 

13.9         Creditors Not Benefited.

 

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

 

13.10       Recalculation of Interest.

 

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

 

13.11       Severability.

 

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

 

13.12       Entire Agreement.

 

This Agreement
contains the entire agreement between the parties relating to the subject
matter hereof and all prior agreements relative hereto which are not contained
herein are

 

58

 

terminated.  Amendments,
variations, modifications or changes herein may be made effective and binding
upon the Members by, and only by, the setting forth of same in a document duly
executed by each Member, and any alleged amendment, variation, modification or
change herein which is not so documented shall not be effective as to any
Member.

 

13.13       Publicity.

 

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

 

13.14       Confidentiality.

 

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

 

(b)           Subject to the provisions of
Section 13.14(a), each Member agrees not to disclose any Confidential
Information to any Person (other than a Person (including without limitation an
attorney or advisor) agreeing to maintain all Confidential Information in
strict confidence or a judge, magistrate or referee in any action, suit or
proceeding relating to or arising out of this Agreement or otherwise), and to
keep confidential all documents (including without limitation, responses to
discovery requests) containing any Confidential Information.  Each Member hereby consents in advance to any
motion for any protective order brought by any other Member represented as
being intended by the movant to implement the purposes of this
Section 13.14, provided that, if a Member receives a request to disclose
any Confidential Information under the terms of a valid and effective order
issued by a court or governmental agency and the order was not sought by or on
behalf of or consented to by such Member, then

 

59

 

such Member may disclose the Confidential
Information to the extent required if the Member as promptly as practicable (i) notifies
each of the other Members of the existence, terms and circumstances of the
order, (ii) consults in good faith with each of the other Members on the
advisability of taking legally available steps to resist or to narrow the
order, and (iii) if disclosure of the Confidential Information is
required, exercises its best efforts to obtain a protective order or other
reliable assurance that confidential treatment will be accorded to the portion
of the disclosed Confidential Information that any other Member
designates.  The cost (including without
limitation, attorneys’ fees and expenses) of obtaining a protective order
covering Confidential Information designated by such other Member will be borne
by the Company.

 

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

 

13.15       Venue.

 

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

 

13.16       WAIVER OF JURY TRIAL.

 

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

 

13.17       Cooperation.

 

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

 

13.18       Counterparts.

 

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

 

60

 

13.19       Attorney Fees.

 

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

 

13.20       Member Group Actions.

 

Except as otherwise
specifically provided in this Agreement, any consent, Approval or any other
action to be taken or given by the AW Member Group, pursuant to any provision
of this Agreement (including, for example, in its capacities as either the
Contributing Party or the Non-Contributing Party, Triggering Party or Recipient
Party, Offeror or Offeree) may be given or taken by a Majority-In-Interest of
the members of the AW Member Group, and the consent, Approval, or other action
of such Majority-In-Interest shall be binding upon all the members of the AW
Member Group, and to the extent any item or matter is required to or may be
allocated among the members of the AW Member Group, unless otherwise
specifically provided herein to the contrary, such item or matter shall be
allocated among the members of the AW Member Group as they shall unanimously
agree, and should they fail to unanimously agree, then in accordance with their
relative Contribution Percentages.

 

ARTICLE XIV

PATRIOT ACT

 

14.1         Compliance with
International Trade Control Laws and OFAC Regulations.

 

Each Member represents,
warrants and covenants to the other that:

 

(a)           It is not now nor shall it
be at any time during the term of this Agreement a Person with whom a U.S.
Person, including a Financial Institution, is prohibited from transacting
business of the type contemplated by this Agreement, whether such prohibition
arises under U.S. law, regulation, executive orders and lists published by the
OFAC (including those executive orders and lists published by OFAC with respect
to Specially Designated Nationals and Blocked Persons) or otherwise.

 

(b)           No Member and no Person who
owns a direct interest in a Member is now nor shall be at any time during the
term of this Agreement a Person with whom a U.S. Person, including a Financial
Institution, is prohibited from transacting business of the type contemplated
by this Agreement, whether such prohibition arises under U.S. law, regulation,
executive orders and lists published by the OFAC (including those executive
orders and lists published by OFAC with respect to Specially Designated
Nationals and Blocked Persons) or otherwise.

 

14.2         Member’s Funds.

 

(a)           Each Member represents,
warrants and covenants to the other Member that it has taken, and shall
continue to take during the term of this Agreement, such measures as are required
by law to assure that the funds invested in the Company and/or used to make
payments in connection therewith are derived (i) from transactions that do
not violate U.S. law

 

61

 

nor, to the extent such funds originate
outside the United States, do not violate the laws of the jurisdiction in which
they originated; and (ii) from permissible sources under U.S. law or to
the extent such funds originate outside the United States, under the laws of
the jurisdiction in which they originated.

 

(b)           Each Member further
represents, warrants and covenants to the other Member that, to the best of its
knowledge after making due inquiry, neither the Member, nor any Affiliate, nor
any holder of a direct interest in such Member, nor any Person providing funds
to such Member (i) is under investigation by any governmental authority
for, or has been charged with, or convicted of, money laundering, drug
trafficking, terrorist related activities, any crimes which in the United States
would be predicate crimes to money laundering, or any violation of any
Anti-Money Laundering Laws; (ii) has been assessed civil or criminal
penalties under any Anti-Money Laundering Laws; (iii) has been convicted
of any crimes involving moral turpitude or tax fraud; and (iv) has had any
of its funds seized or forfeited in any action under any Anti-Money Laundering
Laws.

 

14.3         Member Compliance with
Patriot Act.

 

Each Member
represents and warrants that it is in compliance with any and all applicable
provisions of the Patriot Act.

 

14.4         Cooperation with Other
Members.

 

Each Member agrees
to cooperate with the other Member, in providing such additional information
and documentation on such Member’s legal or beneficial ownership, policies,
procedures and sources of funds as any Member deems necessary or prudent to
enable such Member to comply with Anti-Money Laundering Laws as now in
existence or hereafter amended.  From
time to time upon the written request of any Member, each Member shall deliver
to the other Member a schedule of the name, legal domicile address and
jurisdiction of organization, if applicable, for such Member and each holder of
a legal interest in such Member.

 

14.5         Actions Taken Pursuant to
Anti-Money Laundering Laws.

 

If any Member
reasonably believes that a Member may have breached any of the representations,
warranties or covenants set forth in this Article XIV, each such Member
has the right (and may have the obligation under applicable law), with or
without notice to such other Member, to (a) notify the appropriate
governmental authority (or authorities) and to take such action as such
governmental authority (or authorities) may direct; and/or (b) withhold
distributions and segregate the assets constituting the Capital Contribution by
such Member or any of such Member’s funds or assets deposited with or otherwise
controlled by the Company pursuant to this Agreement or otherwise.  Each Member agrees that it shall not assert
any claim (and hereby waives any claim that it may now or hereafter have)
against any other Member, or agents of such member for any form or type of
damages as a result of any of the foregoing actions, regardless of whether such
other Member’s reasonable belief is ultimately demonstrated to be accurate.

 

62

 

ARTICLE XV

BUY-SELL PROCEDURE

 

15.1         General
Provisions.

 

Either BH or the AW
Member Group (the “Offeror”) may, upon the occurrence of a Deadlock
Event, or if earlier, at any time following an Event of Default or a For Cause
Event with respect to BH or the AW Member Group, in which event the
non-breaching party (BH or the AW Member Group) may be the Offeror, make an
offer as described below (the “Buy-Sell Offer”) to the other (the “Offeree”),
as set forth below.

 

(a)           At least thirty (30)
calendar days before any Offeror makes a Buy-Sell Offer under this Section 15.1,
such Offeror shall first deliver a pre-notice of its intent to exercise its
rights under this Section 15.1 to the Offeree.  After such thirty (30) calendar day period
has expired, the Offeror may then deliver the Buy-Sell Offer which must
(i) be in writing and be signed by the Offeror, (ii) specify the
Offeror’s good faith estimate of the fair market value of the Company Property
(the “Buy-Sell Offer Price”) at which the Offeror would purchase all of
the assets of the Company, as if such assets were free and clear of all liens,
claims and encumbrances (that can be discharged or removed with the payment of
money), (iii) disclose all liabilities and potential liabilities of the
Company known to the Offeror and a good faith estimate of the monetary amount
of such liabilities, and (iv) disclose the terms and details of any
financing, refinancing, proposed sale, or other monetization event that the
Offeror has initiated, negotiated or discussed during the prior one hundred
eighty (180) calendar days with a third party for all or any portion of the
Company Property.

 

(b)           A copy of the Buy-Sell Offer
must be delivered to the Offeree and to the Company Accountant who shall,
within ten (10) Business Days of the Buy-Sell Offer, determine and notify
the Members of the amount the Offeree would receive (the “Offeree Value”)
and the amount the Offeror would receive (the “Offeror Value”) on
account of its or their respective Interest(s) and any Priority Capital
Contributions if all Company Property were sold for the aggregate Buy-Sell
Offer Price, all liabilities of the Company and the SPVs were paid in full, and
the remaining proceeds were distributed to the Members in accordance with
Section 6.4.

 

(c)           The Offeree will have the
right, exercisable by delivery of notice in writing (the “Election”) to
the Offeror within thirty (30) calendar days after its receipt of the Buy-Sell
Offer, to elect to either:

 

(i)            sell to the Offeror all of
the Offeree’s rights, title and interests in and to its or their Interest(s) in
the Company (and in any Priority Capital Contributions) for a cash purchase
price equal to the Offeree Value; or

 

(ii)           purchase all of the Offeror’s
rights, title and interests in and to its or their Interest(s) in the
Company (and in any Priority Capital Contributions) for a cash purchase price
equal to the Offeror Value.

 

Failure of the
Offeree to timely give the Offeror notice of the Offeree’s Election will be
deemed, upon the expiration of such 30-day period, to be an Election to sell
under Section 15.1(c)(i).

 

63

 

(d)           Contemporaneously with the
Offeree’s Election or deemed Election, the purchasing party under this Section 15.1
shall deposit in escrow with a national title company or bank or other
financial institution selected by the selling party as escrowee an earnest
money deposit in cash in an amount equal to 5% multiplied by the purchase price
to be paid in connection with such purchase, and, if for any reason such
purchasing party fails to close such purchase as provided in this Section 15.1,
then the selling party may retain such deposit as liquidated damages for its
own account or elect to purchase all of the rights, title and interests of the
purchasing party in and to its or their Interest(s) (and in any Priority
Capital Contributions) for a cash purchase price equal to 95% of the Offeree
Value or Offeror Value, as applicable and apply such deposit toward the
purchase price.  All closings of any
purchase and sale under this Section 15.1 will be held at the principal
office of the Company and shall take place no later than that date which is 90
calendar days after the later of the Offeree’s Election or deemed Election.

 

(e)           Each of BH and the AW Member
Group will be entitled to enforce its rights under this Section 15.1 by
specific performance.  If the purchasing
party defaults under this Section 15.1, it will have no right to make any
future Buy-Sell Offer hereunder.

 

(f)            Any party may freely assign
its rights and obligations pursuant to this Section 15.1 by delivering
notice of such assignment to BH or AW Member Group (as applicable), provided that the assigning party
will remain liable for any and all obligations of its assignee, as if such
party had not assigned its rights pursuant to this Section 15.1.

 

(g)           Notwithstanding the
foregoing, if the provisions of Section 9.5 of this Agreement have been
initiated by a Member or AW Member Group, then no Member or AW Member Group may
initiate the provisions of this Section 15.1 until the procedures set
forth in Section 9.5 have been completed or terminated pursuant to the
provisions thereof.  No Buy-Sell Offer
may be made until all periods for making elections and performing obligations
under any previous Buy-Sell Offer pursuant to this Section 15.1 have
terminated.

 

(h)           All elections by the AW
Member Group under this Article XV must be made jointly and as a group and
shall not be exercised by either AW Investor or AW Manager acting individually.

 

15.2         Termination of Other
Agreements.

 

If a purchase and
sale of Interests under this Article XV is completed, all agreements
between the Company and a Member or its Affiliates related to the Company
Property (including the Management Agreements) will (at the election of the
purchasing party) be terminated on the date such Interest is purchased without
payment of any penalty or termination fee. 
In addition, if all of the Interests are purchased under this
Article XV, at the closing of such purchase, the purchaser shall, at its
option, either (i) obtain a release of the Company from all liability,
direct or contingent, by all holders of all Company debts, obligations or
claims for which the selling party may be personally liable (including any
guaranties of the non-recourse carve-outs) or (ii) deliver to the selling
party an agreement in form and substance reasonably satisfactory to the selling
party from a creditworthy Affiliate to assume the obligations of the selling
party and its Affiliates with respect to, and to defend, indemnify and save the
selling party and its Affiliates harmless from, any liability to the holders of
such Company debts, obligations or claims;

 

64

 

provided, however, that such assumption and indemnification
shall not extend to those claims arising from the fraud, bad faith, willful
misconduct or gross negligence of the selling party or any of its
Affiliates.  Unless such agreement and
the indemnity from such credit worthy party have been Approved by the selling
party in its reasonable discretion by the closing, then the purchaser shall
obtain the release provided for above.

 

15.3         Power of
Attorney.

 

In the event that
the Offeror or Offeree shall have failed or refused, within five calendar days
after receipt of a notice from the other requesting such party to execute,
acknowledge and deliver such documents, or cause the same to be done, as shall
be required to effectuate the provisions of Section 15.1 hereof, then the
non-defaulting party may execute, acknowledge and deliver such documents for,
on behalf of and in the stead of the defaulting party or on behalf of and in
the name of the Company, as applicable, and such execution, acknowledgment and
delivery by the non-defaulting party shall be for all purposes effective
against and binding upon the defaulting party or the Company, as applicable, as
though such execution, acknowledgment and delivery had been by the defaulting
party or the Company, as applicable. 
Each of the Members does hereby irrevocably constitute and appoint the
other Members as the true and lawful attorney in fact of such appointing Member,
in the name, place and stead of such appointing Member, as the case may be, to
execute, acknowledge and deliver such documents under the circumstances
contemplated by this Section 15.3. 
It is expressly understood, intended and agreed by each Member, that the
grant of the power of attorney to the other Members pursuant to this Section 15.3
is coupled with an interest, is irrevocable and shall survive the death,
dissolution, termination or legal incompetency of such appointing Member, as
the case may be, or the assignment of the interest of such appointing Member in
the Company, or the dissolution of the Company.

 

ARTICLE XVI

RIGHT OF BH TO TRIGGER SALE OF THE PROJECTS; ROFO

 

16.1         ROFO on the Sale of Projects.

 

(a)           If on or after the second
annual anniversary of this Agreement BH desires to sell one or more of the
Projects (such single Project or multiple Projects being the “Target
Property”) to any third party, BH shall first deliver a pre-notice of its
intent to exercise its rights under this Section 16.1 to the AW Member
Group.  Thereafter, in the event BH
wishes to exercise its rights under Section 16.1, no sooner than thirty
(30) calendar days after the date that the pre-notice was delivered to the AW
Member Group, BH shall deliver to the AW Member Group written notice of its
intention to offer to sell the Target Property setting forth the proposed cash
purchase price which BH is willing to accept and all other material terms and
conditions of the proposed sale (“ROFO Notice”).  BH need not have located a prospective
purchaser or have in its possession an actual offer to purchase in order to
exercise its rights pursuant to this Section 16.1(a).  The ROFO Notice shall include a statement by
BH setting forth the financing and encumbrances, if any, to which the Target
Property will remain subject to upon conveyance (the “Permitted Exceptions”)
and shall be at a price stated in U.S. dollars only.

 

65

 

(b)           At any time within thirty
(30) calendar days after the date the AW Member Group receives the ROFO Notice
(the “ROFO Response Period”), the AW Member Group shall have the right,
exercisable by delivery of notice in writing (the “ROFO Election”) to BH
to either:

 

(i)            approve the terms of the
proposed sale of the Target Property and authorize BH to cause the Company or
the applicable SPVs to sell or dispose of the Target Property on the terms and
conditions set forth in the ROFO Notice; or

 

(ii)           purchase the Target Property
for a cash purchase price equal to the sum of any debt or other obligations to
be assumed by the purchaser and on the other terms and conditions set forth in
the ROFO Notice and subject to no other terms and conditions.

 

(c)           Any election pursuant to
subparagraph (ii) of Section 16.1(b) above shall be made by (i) delivering
to BH the ROFO Election, which shall affirmatively state that the AW Member
Group is exercising such option, and (ii) depositing in escrow with a
national title company or a bank or other financial institution selected by BH
(the “ROFO Escrow Agent”), as escrowee, a non-refundable earnest money
deposit in cash equal to five percent (5%) of the purchase price (the “ROFO
Escrow Deposit”) (as set forth in the ROFO Notice) within five (5) calendar
days of such election.  BH and the AW Member
Group shall close the purchase of the Target Property within 90 calendar days
of the date of the AW Member Group’s ROFO Election to purchase pursuant to
subparagraph (ii) above and the Company shall convey the entire fee simple
title to the Target Property by special warranty deed to the AW Member Group or
its designee, against receipt of payment of the cash portion of the purchase
price and assumption of any debt as aforesaid, subject to no title exceptions
or other encumbrances other than the Permitted Exceptions (and such other title
exceptions as do not materially affect the operations of the Target Property).

 

(d)           If during the ROFO Response
Period, the AW Member Group does not (i) authorize BH to attempt to sell
the Target Property as provided in Section 16.1(b)(i) above, or
(ii) timely elect to purchase the Target Property by following the
procedures in Section 16.1(b)(ii) above, then the AW Member Group
shall be deemed to have authorized and approved the sale of the Target Property
pursuant to Section 16.1(b)(i), for a purchase price not less than
ninety-five (95%) of the purchase price set forth in the ROFO Notice and
otherwise pursuant to such other terms, conditions and provisions as are
determined appropriate in the reasonable discretion of BH.  If the AW Member Group authorizes or is
deemed to have authorized the sale of the Target Property pursuant to the terms
described above, and the Company thereafter receives a bona fide offer for the
purchase of the Target Property from any third party for a purchase price
payable at closing which is at least equal to ninety-five percent (95%) of the
purchase price set forth in the ROFO Notice, BH may consummate the sale of the
Target Property on such terms set forth in the ROFO Notice, without the requirement
of any consent or Approval of any other Member (including the AW Member Group);
provided, however, such sale must be consummated within 360
calendar days after the date on which the AW Member Group authorized or was
deemed to have authorized such sale.  The
failure of the Company to close such sale within the 360-day period referred to
in the immediately preceding

 

66

 

sentence requires BH to again deliver to the
AW Member Group an additional ROFO Notice and to again follow the procedures
set forth in this Section 16.1.

 

(e)           All closings of any purchase
and sale under this Section 16.1 will be held at the principal office of
the Company and all transfer, stamp and recording taxes imposed on the transfer,
and all prepayment fees, exit fees or other fees or penalties payable to any
lender in connection with any prepayment of any financing incident to any
purchase and sale under this Section 16.1 and all other closing costs
shall be allocated as set forth in the ROFO Notice (and in the absence of such
specific allocation, in accordance with local custom), and each of the Company
and the AW Member Group shall each pay its own attorney’s fees.  Upon the closing of the purchase and sale
under this Section 16.1, the AW Member Group shall execute and deliver to
the Company an agreement in mutually acceptable form providing in effect that
the AW Member Group shall indemnify and hold harmless the Company and the
applicable SPVs from and after the closing date for all costs, expenses,
liabilities and obligations of and regarding the Target Property arising after
the closing date.

 

(f)            If the AW Member Group shall
default in its obligations to purchase the Target Property pursuant to the
terms of this Section 16.1, the following shall be the sole and exclusive
remedies for such default:

 

(i)            the AW Member Group will
immediately and without any further action cease to have any right to make a
Buy-Sell Offer or otherwise trigger or initiate the provisions of Article XV;

 

(ii)           the ROFO Escrow Agent shall
immediately deliver to BH the ROFO Escrow Deposit as liquidated damages;

 

(iii)          thereafter, BH may cause the
Company and the applicable SPVs to sell at any time the Target Property (or any
or all of the Projects) to any Person, without the prior written consent of the
AW Member Group and without having to comply with the provisions of this
Section 16.1.

 

If BH shall default
in its obligations to cause the Company and the applicable SPVs to sell the
Target Property pursuant to the terms of this Section 16.1, then the AW
Member Group shall have the right to pursue specific performance of such sale.

 

(g)           Notwithstanding the
foregoing, if the provisions of Section 9.5 or Article 15 of this
Agreement have been initiated by a Member or the AW Member Group, then BH may
not initiate the provisions of this Section 16.1 until the procedures set
forth in Section 9.5 or Article 15 have been completed or terminated
pursuant to the provisions thereof.  No ROFO Notice may
be delivered until all periods for making elections and performing obligations
under any previous ROFO Notice pursuant to this Section 16.1 have
terminated.

 

(h)           The AW Member Group may
freely assign its rights and obligations pursuant to this Section 16.1 to
an Affiliate by delivery of notice of such assignment to BH and the Company,
provided that the AW Member Group will remain liable for any and all
obligations of its assignee, as if the AW Member Group had not assigned its
rights pursuant to this Section 16.1(h).

 

67

 

16.2         Termination of Other
Agreements.

 

If any or all of the
Projects are sold under this Article XVI, all other agreements between the
Company and the AW Member Group or its Affiliates applicable to such Project(s) will
be terminated on the date the Target Property is purchased (without payment of
any termination fee or penalty).

 

16.3         Power of
Attorney.

 

If any Member shall
have failed or refused, within five (5) calendar days after receipt of a
notice from the other Member requesting such Member to execute, acknowledge and
deliver such documents, or cause the same to be done, as shall be required to
effectuate the provisions of Section 16.1, as applicable, then the other
Member may execute, acknowledge and deliver such documents for, on behalf of
and in the stead of the other Member or on behalf of and in the name of the
Company and any applicable SPV, as applicable, and such execution,
acknowledgment and delivery by that Member shall be for all purposes effective
against and binding upon the other Member and the Company and any applicable
SPV, as applicable, as though such execution, acknowledgment and delivery had
been by the refusing Member or the Company or any SPV as applicable.  Each Member does hereby irrevocably
constitute and appoint each other Member as the true and lawful
attorney-in-fact of such appointing Member and the successors and assigns
thereof, in the name, place and stead of such appointing Member or the
successors or assigns thereof, as the case may be, to execute, acknowledge and
deliver such documents under the circumstances contemplated by
Section 16.1.  It is expressly
understood, intended and agreed by each Member, for such Member and its successors
and assigns, that the grant of the power of attorney to any other Member
pursuant to this Section 16.3 is coupled with an interest, is irrevocable
and shall survive the death, dissolution, termination or legal incompetency, as
applicable, of such appointing Member, or the assignment of the Interest of
such appointing Member, or the dissolution of the Company.

 

[Signature Page Follows]

 

68

 

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

 

	
   

  	
  BEHRINGER
  HARVARD FLORIDA

  
	
   

  	
  MOB
  MEMBER, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Samuel A.
  Gillespie

  
	
   

  	
  Name: 

  	
  Samuel A.
  Gillespie

  
	
   

  	
  Title: 

  	
  Chief Operating
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AW
  SFMOB INVESTOR, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Brian K.
  Waxman

  
	
   

  	
  Name: 

  	
  Brian K. Waxman

  
	
   

  	
  Title: 

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AW
  SFMOB MANAGING MEMBER, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Brian K.
  Waxman

  
	
   

  	
  Name: 

  	
  Brian K. Waxman

  
	
   

  	
  Title: 

  	
  Managing Member

  

 

 

Appendix A

 

FORM OF BRIDGE NOTE

 

[Attached]

 

 

Appendix B

 

FORM OF PROPERTY MANAGEMENT SUBCONTRACT

 

[Attached]

 

 

Appendix C

 

FORM OF LEASING SERVICES AGREEMENT

 

[Attached]Exhibit 10.41

 

FIRST AMENDMENT TO THE 

LIMITED LIABILITY COMPANY AGREEMENT 

OF

BH-AW FLORIDA MOB VENTURE, LLC

 

This FIRST AMENDMENT TO THE LIMITED LIABILITY
COMPANY AGREEMENT OF BH-AW FLORIDA MOB VENTURE, LLC (this “Amendment”)
is made and entered into on and effective as of October 8, 2010, among
Behringer Harvard Florida MOB Member, LLC, a Delaware limited liability company
(the “BH”), AW SFMOB Investor, LLC, a Florida limited liability company
(“AW Investor”) and AW SFMOB Managing Member, LLC, a Florida limited
liability company (“AW Manager”).

 

RECITALS:

 

A.            The
parties hereto previously formed BH-AW Florida MOB Venture, LLC, a Delaware
limited liability company (the “Company”), pursuant to that certain
Certificate of Formation filed with the Secretary of State of Delaware on August 11,
2010.  The Company is governed by that
certain Limited Liability Company Agreement of the Company entered into by the
parties hereto and dated August 12, 2010 (the “Agreement”).  Capitalized terms used but not otherwise defined
herein shall have the meanings set forth in the Agreement.

 

B.            The
Company was formed, inter alia, for the purpose of acquiring the medical office
buildings pursuant to the Purchase Agreement (the “Tenet Assets”).  The transaction contemplated by the Purchase
Agreement is scheduled to close on the date hereof.

 

C.            BH
has made its Initial Capital Contribution to the Company on the date
hereof.  The AW Member Group has failed
to make its Initial Capital Contribution as required by Section 4.1(d) of
the Agreement and each member of the AW Member Group is accordingly a “Withdrawing
Member” pursuant to the provisions of Section 4.1(e) of the
Agreement.

 

D.            Notwithstanding
the foregoing, BH has elected on the date hereof to cause the Company to close
the purchase of the Tenet Assets pursuant to the Purchase Agreement on the date
hereof .  BH has further elected pursuant
to Section 4.1(e) of the Agreement to make the Failed Contribution to
the Company with the result that the AW Investor and AW Manager are each
terminated Members as of the date hereof and the Interest of each (and their
share of the Deposit) is deemed forfeited in its entirety and they shall cease
to have any Interest in the Company or any rights under the Agreement from and
after effective on the date hereof.

 

E.             Subject
to the terms and conditions set forth herein, the parties have further agreed
that the AW Member Group may be re-admitted as Members of the Company in the
circumstances set forth in this Amendment.

 

NOW, IT IS HEREBY AGREED as follows:

 

1.             Membership of Company.  The parties acknowledge and agree that AW
Investor and AW Manager are Withdrawing Members pursuant to the provisions of Section 4.1(e) of
the Agreement which provisions are in full force and effect.  From and after the date hereof, until the 

 

1

 

Readmission (as defined in section 4 below): (a) BH
will be the sole Member and Managing Member of the Company and shall be
credited with having made a Capital Contribution (including the Failed
Contribution) in the amount of
$                        ;
(b) the AW Member Group shall forfeit their interest in the Deposit; and (c) the
AW Member Group shall cease to have any Interest in the Company or any rights
under the Agreement from and after the date hereof.

 

2.             Transaction Fee.  Notwithstanding the provisions of Section 3.3
of the Agreement, no transaction fee shall be payable to AW Management, LLC
unless and until Readmission has occurred.

 

3.             Removal of Certain Officers.  Effective at 12:01 a.m. EST on the day
immediately following the Closing Date, the following officers of the Company
and each SPV shall be removed from their respective officer positions and shall
be automatically reinstated to such positions on the date of the Readmission
(if and when Readmission occurs):  Peter
J. Applefield, Brian K. Waxman and Mali Liberty.

 

4.             Readmission.  Subject to satisfaction of the following
conditions by November 1, 2010 (the “Readmission Date”), the AW
Member Group shall be re-admitted to the Company (the “Readmission”) and
the provisions of the Agreement, except to the extent modified herein, shall
again come into full force and effect:

 

(a)           The Contribution Agreement
shall have been executed and delivered by the AW Member Group in form and
substance satisfactory to BH and AW in their reasonable discretion and all
transactions contemplated therein shall have been duly performed.

 

(b)           An amendment to the
Operating Agreement for Gardens Medical Pavilion, LLC (“GMP”) shall have
been executed and delivered by all members of GMP including the physician
practice members in form and substance satisfactory to BH and AW in their
reasonable discretion.

 

(c)           The AW Member Group shall
have made to the Company any cash Capital Contribution (assuming completion of
the transaction contemplated by the Contribution Agreement) required by the
provisions of Section 4.1(d) of the Agreement as in effect on the
date hereof, plus interest thereon at the rate of 18% per annum.

 

5.             Other Agreements.  If Readmission has not occurred by the
Readmission Date, the AW Member Group shall be obligated to pay to BH on the
Readmission Date the allocated purchase price for the Excluded Project in cash
($453,000) plus interest thereon at the rate of 18% per annum.

 

6.             Ratification.  The parties hereby ratify and confirm the
terms and provisions of the Agreement as modified by this Amendment, and the
Agreement, as modified by this Agreement, remains in full force and effect.  This Amendment is limited as specified herein
and shall not constitute a modification or waiver of any other provision of the
Agreement.  If a conflict arises between
the terms of this Amendment and the Agreement, the terms of this 

 

2

 

Amendment will control.  This Amendment shall inure to the benefit of
and be binding upon the Members and their respective permitted successors and
assigns.

 

7.             Governing Law.  This Amendment will be governed by and
construed in accordance with the laws of the State of Delaware (without regard
to conflict of laws principles).

 

8.             Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

[The
signature page follows.]

 

3

 

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

 

	
   

  	
  BEHRINGER HARVARD FLORIDA

  MOB MEMBER, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Samuel A. Gillespie

  
	
   

  	
  Name: 

  	
  Samuel A. Gillespie

  
	
   

  	
  Title: 

  	
  Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AW SFMOB INVESTOR, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Brian K. Waxman

  
	
   

  	
   

  	
  Brian K. Waxman

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Peter J. Applefield

  
	
   

  	
   

  	
  Peter J. Applefield

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AW SFMOB MANAGING MEMBER,

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Brian K. Waxman

  
	
   

  	
   

  	
  Brian K. Waxman

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Peter J. Applefield

  
	
   

  	
   

  	
  Peter J. Applefield

  
	
   

  	
   

  	
  Managing Member

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]