8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report

(Date of earliest event reported)

October 4, 2021

MACKENZIE REALTY CAPITAL INC.

 (Exact name of registrant as specified in its charter)

Maryland	000-55006	45-4355424
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

89 Davis Road, Suite 100 Orinda, California	94563
(Address of principal executive offices)	(Zip Code)

(925) 631-9100

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On October 4, 2021, MacKenzie Realty Capital, Inc.’s (the “Company”) operating partnership, MacKenzie Realty Operating Partnership, LP (the “OP”) acquired a 90.0% limited liability company interest in Hollywood Hillview Owner, LLC, a Delaware limited liability company (“Hollywood”).  Hollywood owns 100% of the membership interests in PT Hillview GP, LLC (the “Property Owner”), which is a special purpose limited liability company formed to acquire, renovate, and own the 54-unit multifamily building located at 6533 Hollywood Blvd., Hollywood, Blvd., CA (the “Property”).  Property Owner also had previously entered into a loan agreement with Ladder Capital Finance, LLC in the amount of $17,500,000.

The OP agreed to invest approximately $7.6 million to acquire the interest in Hollywood.  The OP has entered into a joint venture operating agreement for Hollywood (the “Hollywood Agreement”).  The Hollywood Agreement contains terms, conditions, and indemnities that are customary and standard for joint ventures in the real estate industry.  Hollywood also entered into an operating agreement with Property Owner with customary provisions related to the operation of the Property (the “SPE Agreement”).

Under the Hollywood Agreement, the manager, True USA, LLC, has sole authority to make all decisions on behalf of Hollywood, except for certain major decisions that are reserved to the approval of the Class B Member, which is the OP, including but not limited to (i) the cause Property Owner to sell the Property, (ii) the incurrence of debt in excess of $1,000,000, (iii) the creation of any new entity, (iv) the filing or initiating a bankruptcy or similar creditor protection action, (v) making any assignment for the benefit Hollywood’s creditors, (vi) admitting in writing that Hollywood cannot pay its debts as they become due, (vii) the guaranty by Hollywood of any indebtedness of another, (viii) the compromise of the obligation of a member to make a capital contribution, (ix) the amendment of the Hollywood Agreement, and (x) removing True USA as manager.

The OP, in addition other distribution rights, has the right to a preferred return of $1.5 million of capital before True USA receives any return of capital.  The Company (along with three other principals of True USA) guaranteed: (1) the “Recourse Obligations” under the loan, which are triggered only if the borrower of the loan engages in “Bad Boy Acts” (such as fraud, intentional misrepresentation, willful misconduct, waste, conversion, intentional failure to pay taxes or maintain insurance, filing for bankruptcy, ADA noncompliance, and environmental contamination, etc.), (2) a “Debt Service and Carry Guaranty” under the loan, which guarantees the payment of interest on the loan and other “Basic Carrying Costs”, and (3) a “Guaranty of Completion” guaranteeing that the redevelopment work contracted to be performed will be completed as agreed.  The Company was comfortable issuing such guarantees because the loan provides for a substantial “Carrying Costs” reserve and for the full funding of the construction contract, which is subject to a guaranteed maximum price.

The foregoing descriptions of the Hollywood Agreement and SPE Agreement are only a summary, do not purport to be complete and are qualified in its entirety by reference to the full text of the Agreements, which are filed as Exhibit 10.1 and Exhibit 10.2 hereto and is incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The description set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01 in its entirety.

The following table provides information regarding the Property as of August 1, 2021:

Property Name	Sector	Location	Square Feet	Units	Percentage Leased	Annual Base Rent	Monthly Base Rent/Occupied Unit
Hollywood Hillview Property	Multi-Family Residential	Hollywood, CA	63,374	54	24%	$520,170	$1,759.77

Item 7.01 Regulation FD Disclosure.

On or about October 30, 2021, MacKenzie Realty Capital, Inc., will mail a letter to stockholders accompanying the Third Calendar Quarter 2021 dividend.

The full text of the letter is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The information in this Current Report is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This information will not be deemed an admission as to the materiality of any information contained herein that is required to be disclosed solely by Regulation FD.

Item 8.01 Other Events.

Third Calendar Quarter 2021 Dividend

Mackenzie Realty Capital, Inc. is pleased to announce an increase in our regular quarterly dividend, now at the rate of $0.07 per share.  The Board hopes to continue to raise this rate in future quarters.  The dividend will be payable to shareholders of record September 30, 2021, and it will be paid on or about October 30, 2021.  As with the previous quarter, we have mainly been focused on consolidating our previously existing investments under our control.  On September 10, the sale of the Bishop Berkeley apartment complex closed for $10.25 million.

Statements in this Current Report on Form 8-K, including intentions, beliefs, expectations or projections relating to items such as the timing of payment of dividends are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and assumptions with respect to, among other things, future economic, competitive and market conditions and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the risks described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended June 30, 2020, and its other filings with the Securities and Exchange Commission.

Share Repurchase Plan

On September 13, 2021, the Board of Directors of the Company approved the Company’s Share Repurchase Plan (the “SRP”). The SRP (1) currently limits repurchase requests to death and qualifying disability only; (2) sets a limit on the amount of repurchases by the Company in any calendar year of 5.0% of the weighted average number of Shares outstanding in the prior calendar year (3) sets a limit on the number of Shares repurchased during any calendar year to the proceeds available from sales of Common Stock under our DRIP; and (4) set the repurchase price to an amount equal to the most recent publicly disclosed estimated value per share as determined by the Board (the “NAV”).

Further, the SRP provides that in the event the Company is unable to process all repurchases requests in any quarter, pending requests will be honored among all requests for repurchases in any given repurchase period as follows: (i) first, pro rata as to repurchases sought upon a stockholder’s death or disability; and (ii) next, if open to ordinary repurchases, pro rata, rounded to the nearest whole share, based upon the total number of shares for which repurchase was requested, and the total funds available for repurchases. Requests not fulfilled in one quarter will automatically be carried forward to the next quarter, unless such request is revoked, and will receive priority over requests made in the carryover quarter. Requests can be revoked by sending a letter requesting revocation to our Investor Relations department. There can be no assurances that we will have sufficient funds to repurchase any shares.

The foregoing description of the SRP does not purport to be complete and is subject to, and qualified by its entirety by, the SRP that is filed as Exhibit 99.2 to this Current Report on Form 8-K, and incorporated herein by reference.

This Form 8-K does not constitute an offer to purchase or sell Mackenzie securities, and no securities can be subscribed from the Offering Circular until it is qualified, nor should the Offering Circular be relied upon for any investment decision prior to qualification. No money or consideration is being solicited by the information in this letter or any other communication and, if sent, money will not be accepted and will be promptly returned. No offer by a potential investor to buy our securities can be accepted and, if made, any such offer can be withdrawn before qualification of this offering by the SEC. A potential investor’s indication of interest does not create a commitment to purchase the securities we are offering. Any such indication of interest may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance is given and all other requirements to accept an investment from a potential investor are met after the offering qualification date.  A copy of the preliminary Offering Circular that forms a part of the Offering Statement may be obtained on the SEC’s website: https://www.sec.gov/Archives/edgar/data/1550913/000155091321000044/mrc091221form1aa.htm.

Item 9.01 Financial Statements and Exhibits

(d)  Exhibits

Exhibit Number	Description
10.1	Limited Liability Company Agreement of Hollywood Hillview Owner, LLC dated September 30, 2021
10.2	Limited Liability Company Agreement of PT Hillview GP, LLC dated September 30, 2021
99.1	Letter to stockholders regarding 3rd Quarter 2021 dividend
99.2	Share Repurchase Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MACKENZIE REALTY CAPITAL, INC.
	(Registrant)
Date: October 5, 2021	By:	/s/ Robert Dixon
		Robert Dixon
		President

EX-99.1

Exhibit 99.1

October 29, 2021

Dear Stockholder:

MacKenzie Realty Capital, Inc. is pleased to announce that after resuming our regular quarterly dividend earlier this year, we are increasing the dividend again, to a rate of $0.07 per share.  The dividend will be more than supported by cash flow from operations for the quarter ended September 30, 2021.  The dividend is payable to shareholders of record as of September 30, 2021.

We anticipate continued recovery in the performance of our portfolio and believe that we may be able to continue to increase our dividend rate in the future.

We are also aware that many shareholders are concerned about liquidity options in general, and our repurchase plans specifically.  The first step toward re-starting our repurchase plan was to re-start the dividend.  Because the Dividend Reinvestment Program funds the Share Repurchase Plan, we needed to have a dividend before we can have repurchases.  After two quarters of dividends already paid and a third declared, we are now ready to reopen the Share Repurchase Plan for repurchases in the case of the death or long-term disability of the stockholder.  As soon as we have sufficient funds in the DRIP to fund more repurchases, we can open the Share Repurchase Plan to all stockholders.  We anticipate publishing a new annual estimate of NAV in January, and will revisit this issue at that time.

We have completed a transformational year, and we are pleased with our progress growing the Company into a successful real estate operating venture.  We believe the Company’s future is bright.  We are excited to continue this journey, and we are thankful for our shareholders’ continued support.

Enclosed is your Investor Statement with this quarter’s payment details.  If you invested through a trustee or custodian or requested a third-party deposit, or if you participate in the Dividend Reinvestment Plan, your dividend has been transmitted as directed.  If you receive a cash dividend, your check will arrive separately.  The Board of MRC anticipates making future dividends, if any, within 30 days after the close of the previous fiscal quarter

We appreciate your investment in MRC.  We are excited about the interest we have received in MRC from investors and the investment opportunities we have encountered.  We believe your confidence in us will be rewarded.

Sincerely,

MacKenzie Realty Capital, Inc.

Robert E. Dixon, President

The statements and certain other information contained in this letter, which can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “continue,” “remains,” “intend,” “aim,” “towards,” “should,” “prospects,” “could,” “future,” “potential,” “believe,” “plans,” “likely,” “anticipate,” “position,” “probable,” “committed,” “achieve,” “rewarded,” and “focused,” or the negative thereof or other variations thereon or comparable terminology, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, and other risk factors.

This letter does not constitute an offer to purchase or sell Mackenzie securities, and no securities can be subscribed from the Offering Circular until it is qualified, nor should the Offering Circular be relied upon for any investment decision prior to qualification. No money or consideration is being solicited by the information in this letter or any other communication and, if sent, money will not be accepted and will be promptly returned. No offer by a potential investor to buy our securities can be accepted and, if made, any such offer can be withdrawn before qualification of this offering by the SEC. A potential investor’s indication of interest does not create a commitment to purchase the securities we are offering. Any such indication of interest may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance is given and all other requirements to accept an investment from a potential investor are met after the offering qualification date.

A copy of the preliminary Offering Circular that forms a part of the Offering Statement may be obtained on the SEC’s website: https://www.sec.gov/Archives/edgar/data/1550913/000155091321000044/mrc091221form1aa.htm.

EX-99.2

Exhibit 99.2

Share Repurchase Plan

The share repurchase plan is designed to provide eligible stockholders with limited, interim liquidity by enabling them to sell shares back to us. The terms under which we may repurchase shares may differ between repurchases upon the death or “qualifying disability” of a stockholder (referred to herein as “exceptional repurchases”) and all other repurchases (referred to herein as “ordinary repurchases”).

Repurchase Price.  Subject to certain restrictions discussed below, we may make ordinary repurchases, from time to time, at the following prices:

•95% of NAV until February 2022;

•97.5% of NAV until February 2023; and

•100% of NAV thereafter.

In the case of exceptional repurchases, we may repurchase shares at a repurchase price equal to 100% of NAV.

Ordinary Repurchases.  In the case of ordinary repurchases, we may repurchase shares beneficially owned by a stockholder continuously for at least one year and who acquired the Shares directly from us or the transferees mentioned below, and is not intended to provide liquidity to any shareholder who acquired his or her Shares by purchase from another shareholder. In connection with a request for repurchase, the shareholder or his or her estate, heir or beneficiary will be required to certify to us that the shareholder either (1) acquired the Shares requested to be repurchased directly from us or (2) acquired the Shares from the original subscriber by way of a bona fide gift not for value to, or for the benefit of, a member of the subscriber’s immediate or extended family (including the subscriber’s spouse, parents, siblings, children or grandchildren and including relatives by marriage) or through a transfer to a custodian, trustee or other fiduciary for the account of the subscriber or members of the subscriber’s immediate or extended family in connection with an estate planning transaction, including by bequest or inheritance upon death or operation of law.

We may make ordinary repurchases only if we have sufficient funds available to complete the repurchase.  In any given calendar quarter, we are authorized to use only the proceeds from our distribution reinvestment plan during that quarter to make ordinary repurchases; provided that, if we have excess funds during any particular quarter, we may, but are not obligated to, carry those excess funds to the subsequent calendar quarter for the purpose of making ordinary repurchases.  Subject to funds being available, in the case of ordinary repurchases, we will limit the number of shares repurchased during any calendar year to 5% of the number of shares of common stock outstanding on December 31st of the previous calendar year.  In the event that we determine not to repurchase all of the shares presented during any quarter, including as a result of having insufficient funds or satisfying the 5% limit, to the extent we decide to repurchase shares, shares will be repurchased on a pro rata basis up to the limits described above.  Any stockholder whose ordinary repurchase request has been partially accepted in a particular calendar quarter will have the remainder of his or her request included with all new repurchase requests we have received in the immediately following calendar quarter, unless he or she chooses to withdraw that request. There is no fee in connection with a repurchase of shares of our common stock.

Exceptional Repurchases.  We are authorized to use any funds to make exceptional repurchases.  In addition, the 5% limit described may be waived by the Board.  With respect to any exceptional repurchases, we must receive the repurchase request within one year after the death or qualifying disability of the stockholder.  If persons are joint registered holders of shares, the request to repurchase the shares may be made if either of the registered holders dies or becomes disabled.  If the stockholder is not a natural person, such as a partnership, corporation or other similar entity, the right to an exceptional repurchase does not apply.

In the case of exceptional repurchases upon the death of a stockholder, we may repurchase shares upon the death of a stockholder who is a natural person, including shares held by the stockholder through a trust, or an IRA or other retirement or profit-sharing plan, after receiving a written request from: (1) the estate of the beneficial owner; (2) the recipient of the shares through bequest or inheritance, even where the recipient subsequently registered the shares in his or her own name; or (3) in the case of the death of a beneficial owner who purchased shares and held those shares through a trust, the beneficiary of the trust, even where the beneficiary subsequently registered the shares in his or her own name, or, with respect to a revocable grantor trust, the trustee of that trust.

In order for a disability to entitle a stockholder to qualify for an exceptional repurchase upon a disability (i.e. to be a “qualifying disability”); (1) the stockholder would have to receive a determination of disability arising after the date the stockholder acquired the shares to be repurchased; and (2) the determination of disability would have to be made by the governmental agency responsible for reviewing the disability retirement benefits that the stockholder could be eligible to receive, which we refer to as the applicable governmental agencies. The applicable governmental agencies would be limited to the following: (a) if the stockholder paid Social Security taxes and, therefore, could be eligible to receive Social Security disability benefits, then the applicable governmental agency would be the Social Security Administration or the agency charged with responsibility for administering Social Security disability benefits at that time if other than the Social Security Administration; (b) if the stockholder did not pay Social Security taxes and, therefore, could not be eligible to receive Social Security disability benefits, but the stockholder could be eligible to receive disability benefits under the Civil Service Retirement System, or “CSRS,” then the applicable governmental agency would be the U.S. Office of Personnel Management or the agency charged with responsibility for administering CSRS benefits at that time if other than the Office of Personnel Management; or (c) if the stockholder did not pay Social Security taxes and therefore could not be eligible to receive Social Security benefits but suffered a disability that resulted in the stockholder’s discharge from military service under conditions that were other than dishonorable and, therefore, could be eligible to receive military disability benefits, then the applicable governmental agency would be the Department of Veterans Affairs or the agency charged with the responsibility for administering military disability benefits at that time if other than the Department of Veterans Affairs.

Disability determinations by governmental agencies for purposes other than those listed above, including but not limited to worker’s compensation insurance, administration or enforcement of the Rehabilitation Act or Americans with Disabilities Act, or waiver of insurance premiums would not entitle a stockholder to qualify for an exceptional repurchase. Repurchase requests following an award by the applicable governmental agency of disability benefits would have to be accompanied by: (1) the investor’s initial application for disability benefits; and (2) a Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Department of Veterans Affairs record of disability-related discharge or such other documentation issued by the applicable governmental agency that we would deem acceptable and would demonstrate an award of the disability benefits.

We understand that the following disabilities do not entitle a worker to Social Security disability benefits:

•disabilities occurring after the legal retirement age; and

•disabilities that do not render a worker incapable of performing substantial gainful activity.

Therefore, such disabilities would not entitle a stockholder to qualify for an exceptional repurchase, except in the limited circumstances when the stockholder would be awarded disability benefits by the other applicable governmental agencies described above.

General.  To request repurchase, the stockholder must submit a repurchase request, the form of which is available on our website, www.mackenzierealty.com.  Repurchases of shares of our common stock will be made quarterly upon written request to us at least 15 days prior to the end of the applicable quarter. Repurchase requests will be honored approximately 30 days following the end of the applicable quarter, which end of the applicable quarter we refer to as the “repurchase date.” Stockholders may withdraw their repurchase request at any time up to three business days prior to the repurchase date. We cannot guarantee that the funds set aside for the share repurchase plan will be sufficient to accommodate all repurchase requests made in any quarter.  The request must state the name of the person/entity who owns the shares and the number of shares to be repurchased, and must be properly executed.  In the case of a request for an exceptional repurchase upon the death of a stockholder, the request also must include evidence of the death of the stockholder (which includes the date of death).  In the case of a request for an exceptional repurchase upon a disability, the request also must include both the stockholder’s initial application for disability benefits and documentation issued by the governmental agency demonstrating an award of the disability benefits.  The stockholder must notify us in writing if the stockholder wishes to withdraw a pending request to have shares repurchased. We will not repurchase that stockholder’s shares so long as we receive the written request to withdraw at least three days prior to the repurchase date.  We will effect all repurchases on the last business day of the calendar quarter or any other business day that may be established by the board. Following the repurchase, we will send the requesting party the cash proceeds of the repurchase.

All shares requested to be repurchased must be beneficially owned by the stockholder of record making the request, or the party presenting the shares must be authorized to do so by the owner of record of the shares or as otherwise described herein, and must be fully transferable and not subject to any liens or encumbrances. In certain cases, we may ask the requesting party to provide evidence satisfactory to us that the shares requested for repurchase are not subject to any liens or encumbrances. If we determine that a lien exists against the shares, we will not be obligated to repurchase any shares subject to the lien.

The share repurchase plan will immediately terminate if our shares are listed on any national securities exchange.  In addition, our board of directors, in its sole discretion, may amend, suspend (in whole or in part), or terminate our share repurchase plan upon 30 days’ notice.  In the event that we amend, suspend or terminate the share repurchase plan, however, we will disclose the change in a report filed with the SEC on either Form 8-K, Form 10-Q or Form 10-K, as appropriate.  Further, our board reserves the right in its sole discretion at any time and from time to time to reject any requests for repurchases.

Shares we purchase under the share repurchase plan will be canceled, and will have the status of authorized but unissued shares. The repurchased shares will not be reissued unless they are first registered with the Securities and Exchange Commission under the Securities Act and under appropriate state securities laws or otherwise issued in compliance with exemptions from the registration provisions contained in these laws.

We may appoint a repurchase agent to effect all repurchases of shares and to disburse funds to the stockholders in accordance with the share repurchase plan. The repurchase agent will perform all recordkeeping and administrative functions involved in the plan, and we will bear all costs involved in organizing, administering and maintaining the plan.  No fees will be paid to the Adviser, our directors or any of their affiliates in connection with the repurchase of shares by us pursuant to the share repurchase plan.

EX-10.1

LIMITED LIABILITY COMPANY AGREEMENT

OF

HOLLYWOOD HILLVIEW OWNER, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Hollywood Hillview Owner, LLC (the “Company”), is entered into effective as of October 4, 2021 (“Effective Date”), for good and valuable consideration, by True USA, LLC, the Manager and Class A Member, and MacKenzie Realty Operating Partnership, LP, a Delaware limited partnership, as the sole Class B Member of the Company.

RECITALS

A.The Members desire to form a limited liability company under the Act (as hereinafter defined) and operate the Company in accordance with the terms of this Agreement.

B.The Members enter into this Operating Agreement in order to form and provide for the governance of the Company and the conduct of its business and to specify their relative rights and obligations.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, and in consideration of the foregoing recitals and of the mutual promises, covenants and conditions herein contained, the receipt and sufficiency of which are hereby acknowledged, the Members and the Manager, each by its execution of this Agreement, hereby agrees to operate the Company as a limited liability company, in accordance with the Act, and the Manager and Members agree the Company and their respective rights and obligations with respect to the Company will be governed by this Agreement:

ARTICLE 1

Definitions

Whenever used in this Agreement the following terms will have the meanings set forth below:

(A)“Act” means the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time (or any corresponding provisions of succeeding law).

(B)“Affiliate” means, with respect to any Person (as hereinafter defined), any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person.

(C)“Bankruptcy” means, with respect to any Person, if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (vii) if 120 days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within 90 days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay, the appointment is not vacated.  The foregoing definition of “Bankruptcy” is intended to replace and will supersede and replace the definition of “Bankruptcy” set forth in Sections 18‑101(1) and 18‑304 of the Act.

(D)“Budget” means the initial budget for the operation of the Property attached hereto as Exhibit D, as may be revised from time to time in accordance with this Agreement.

(E)“Capital Contributions” is defined in Section 3.1.1 below.

(F)“Class A Member” means the True USA, LLC.

(G)“Class B Member” means MacKenzie Realty Operating Partnership, LP, a Delaware limited partnership.

(H)“Class A Membership Interest” means a Class A limited liability company interest in the Company (including, without limitation, rights to distributions (liquidating or otherwise), allocations, and information), the percentage of which is set forth after the Class A Member’s name on the Membership Schedule (as hereinafter defined), as amended from time to time to reflect any transfers permitted under this Agreement.  Each Class A Membership Interest in the Company will be personal property for all purposes.

(I)“Class B Membership Interest” means a Class B limited liability company interest in the Company (including, without limitation, rights to distributions (liquidating or otherwise), allocations, and information), the percentage of which is set forth after the Class B Member’s name on the Membership Schedule (as hereinafter defined), as amended from time to time to reflect any transfers permitted under this Agreement.  Each Class B Membership Interest in the Company will be personal property for all purposes.

(J)“Code” means the Internal Revenue Code of 1986, enacted by Congress in Title 26 of the United States Code, as may be amended from time to time.

(K)"Distributable Cash"means the amount of cash which Manager determines or approves as being available for distribution (after repayment of all Deficit Loans, including interest accrued thereon), taking into account the future operating needs, capital requirements of the Company (and its subsidiaries) and any restrictions under the Loan Documents.

(L)“Guarantor” refers to MacKenzie Realty Capital, Inc., a Maryland corporation, which will be providing certain guaranties to Lender in connection with the Loan on or about the Effective Date hereof.

(M)“Lender” means Ladder Capital Finance, LLC, and its successors and/or assigns.

(N)“Loan” means that certain loan in the principal amount of $17,500,000, made to the Company by Lender prior to the Effective Date hereof and for which the Property is pledged as security in Lender’s favor.

(O)“Loan Agreement” means that certain Loan Agreement between the Property Owner, as borrower, and Lender, as lender, in connection with the Loan.

(P)“Loan Documents” means, collectively, the Loan Agreement, the Note, the Mortgage, the Assignment of Leases, the Cash Management Agreement, the Clearing Account Agreement, the Environmental Indemnity, the Assignment of Management Agreement, the Guaranty, Assignment of Interest Rate Protection Agreement, the Pledge and Security Agreement (as all such defined terms are defined in the Loan Agreement) and any other documents, agreements, certificates, affidavits and instruments now or hereafter evidencing, securing or delivered to Lender in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

(Q)“Liquidating Event” means an event that causes the dissolution or liquidation of the Company.

(R)“Major Capital Event” means any of the following : (1) the sale of all or any portion of the Property or the Property Owner, or any material item of the personal property of the Company or the Property Owner; (2) the condemnation of all or any part of (i) the Property or the use thereof, or (ii) purchases or processes in lieu thereof, except for temporary easements and the like; (3) receipt of net recoveries of damage awards, termination payments, settlement awards, and insurance proceeds (other than rental interruption insurance proceeds); or (4) receipt of the net proceeds (net of reserves reasonably determined by the Manager) from any mortgages on the Property or any other loans or borrowings of the Company or Property Owner, or loans from any Member.

(S)“Manager” meansTrue USA, LLC or the successor or replacement manager.

(T)“Member” or “Members” refer to Class A or Class B Members as the case may be.

(U)“Membership Schedule” means the membership schedule attached to this Agreement as Exhibit A (as amended from time to time to reflect any transfers permitted under this Agreement), which sets forth the name, address and percentage of Membership Interest for each Member of the Company.

(V)“Operations” shall mean the day to day activities of the Company or the Property Owner.

(W)“Person” means any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof, custodian, nominee and any fiduciary acting in such capacity on behalf of any of the foregoing.

(X)"Preferred Return" means 12% per annum to accrue on each Member’s then existing Unreturned Capital Contributions balance, as such return is calculated from time to time on the basis of the actual number of days in the particular calculation period.

(Y)“Property” means that certain real property, together with the improvements thereon and all appurtenances related thereto, that is an approximately 54-unit multifamily building commonly known as “Hillview Hollywood,” located at 6533 Hollywood Blvd, Hollywood Blvd, CA.  The Property is legally described as set forth on Exhibit B to this Agreement.

(Z)“Property Owner” means PT Hillview GP, LLC, a Delaware limited liability company, the special purpose limited liability company formed to acquire, renovate, and own the Property.

(AA)“Treasury Regulations” means the income tax regulations, including temporary regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

(BB)"Unpaid Preferred Return" means, with respect to a Member, as of any date of calculation, such Member’s then accrued Preferred Return, less all distributions previously made to such Member pursuant to Section 4.1.1.1 and 4.1.2.2.

(CC)"Unreturned Capital Contributions" means, with respect to a Member, as of any date of calculation, the aggregate amount of all Capital Contributions previously made by such Member under this Agreement, less all distributions previously made to such Member pursuant to Section 4.1.2.3.

ARTICLE 2

Formation; Name and Office; Purpose; Partnership Treatment

2.1Company.   The Company has been formed and is continued hereby as a limited liability company pursuant to the Act.  The Members agree that the business and affairs of the Company, the Members’ rights and responsibilities in regard to the Company, and the Members’ interest in the Company, are governed by the terms of this Agreement.  To the extent not provided for in this Agreement, the Company and its Members will be governed by the Act.

2.2Filing.  The Manager is hereby designated as an “authorized person” of the Company within the meaning of the Act, and has executed, delivered, and filed the Certificate of Formation of the Company (the Company’s “Certificate”) with the Secretary of State of the State of Delaware.  The Manager will execute, deliver, and file any other certificates (and any amendments thereto and/or restatements thereof) necessary for the Company to qualify to do business in the State of California and in any other jurisdiction in which the Company may wish to conduct business.

2.3Registered Office and Agent; Office and Principal Place of Business.

2.3.1 Registered Office in Domicile State.  The registered office of the Company in the State of Delaware will be the office of the registered agent named in the Company’s Certificate or such other office as the Manager may designate from time to time in the manner provided by law.  The registered agent of the Company in the State of Delaware will be the registered agent named in the Company’s Certificate or such other Person as the Manager may designate from time to time in the manner provided by law.

2.3.2 Principal Office.  The principal office of the Company in the United States as of the Effective Date is 1301 Dove Street, Suite 960 Newport Beach, CA 92660, or such other place as the Manager may designate from time to time, which need not be in the State of Delaware, and the Company will maintain records there as may be required by the Act.  The Company may have such other offices as the Manager may designate from time to time.

2.4Purpose.  The Company will be permitted to enter into, perform, and carry out contracts and agreements which are necessary, appropriate, or incidental to the accomplishment of the business and purposes of the Company set forth in this Section 2.4, and to perform all acts necessary or appropriate in connection therewith or reasonably related thereto.  The sole purpose of the Company is to own 100% of the membership interests in the Property Owner pursuant to the terms of this Agreement or otherwise deal with all or any part of the Property Owner.  The Company, through its Manager, is authorized to do any and all acts and things necessary, appropriate, advisable, incidental to, or convenient for the furtherance and accomplishment of its purposes, and for the protection and benefit of the Company.

2.5Term and Continuation.  The Company’s existence as a separate legal entity commenced on the date of the filing of the Company’s Certificate and will continue until cancellation of the Company’s Certificate in accordance with this Agreement and the Act.  Subject to all of the provisions of this Agreement, the death, withdrawal, dissolution, resignation, retirement, expulsion, Bankruptcy, insanity or substitution of the Manager will not, in and of itself, dissolve or terminate the Company.

ARTICLE 3

Capital Contributions

3.1Capital Contributions and Loans.

3.1.1 Initial Capital Contributions.  The Members have made or will make the contributions to the capital of the Company (“Capital Contributions”) by virtue of depositing such funds with the escrow agent for the purchase of the Property by Property Owner, as set forth on the Membership Schedule.

3.1.2 Additional Capital Contributions.  The Members will not be required to contribute any additional capital to the Company, and, except as provided by the Act, the Members will not have any personal liability for any obligation of the Company.

3.1.3 Cash Flow Deficits.  The Class A Member shall be obligated to lend funds to the Company to the extent there are any cash flow deficits that the Lender and/or Class B Member have not expressly agreed to fund.  If the Class A Member fails to fund any cash flow deficits (a “Funding Failure”), the Class B Member may elect (in its sole determination) to fund all or any portion of such additional capital and treat such entire amount as a deficit loan (a “Deficit Loan”), and earn an interest rate of 10% per annum (the “Deficit Loan Interest Rate”).

3.2Use of Capital Contributions.   All Capital Contributions will be expended in furtherance of the business of the Company.  No interest will be paid on Capital Contributions.  Except upon dissolution and liquidation of the Company, no Member will have the right to withdraw all or any part of its Capital Contributions.

3.3Capital Account.  An individual capital account will be established on the books of the Company and maintained for the Member.

ARTICLE 4

Distributions and Allocations

4.1Distributions.  Distributions of Distributable Cash will be made to the Members at such times and in such amounts as determined by the Manager.  Notwithstanding any other provision of this Agreement, the Company, and the Manager on behalf of the Company, will not be required to make a distribution to any Member on account of its interest in the Company if such distribution would violate the Act or other applicable law. Distributions of Distributable Cash will be made as follows:

4.1.1Distributable Cash from Operations.  Any distributions of Distributable Cash from Operations (as opposed to Distributable Cash generated by a Major Capital Event or a Liquidating Event) shall be distributed as follows:

4.1.1.1 First Level. First, to the Members, the Members pro rata in proportion to their then existing Unpaid Preferred Return balances, until there shall have been distributed to each Member from all Distributable Cash under this subsection 4.1.1.1 an amount necessary to reduce their respective then existing Unpaid Preferred Return balances to zero; and there shall be no distributions of Distributable Cash under subsections 4.1.1.2, or 4.1.1.3 below at any time when any Member has a positive Unpaid Preferred Return balance.

4.1.1.2 Second Level.  The balance, if any, of Distributable Cash remaining after the distributions pursuant to subsection 4.1.1.1 above (and any distributions under 4.1.2 below) shall be distributed (a) 80% to the Members pro rata in proportion to their then existing Unreturned Capital Contributions balances and (b) 20% to the Class A Member, until such time as the Class B Member has achieved an 18% internal rate of return on its Capital Contributions (using the XIRR function in Microsoft Excel or comparable program or function), and there shall be no distributions of Distributable Cash under subsections 4.1.1.3 below at any time when the Class B Member has not achieved an  18% internal rate of return on its Capital Contributions (using the XIRR function in Microsoft Excel or comparable program or function).

4.1.1.3 Third Level. The balance, if any, of Distributable Cash remaining after the distributions pursuant to subsection 4.1.1.1 and 4.1.1.2 above shall be distributed (a) 70% to the Members pro rata in proportion to their then existing Unreturned Capital Contributions balances and (b) 30% to the Class A Member.

4.1.2Distributions of Major Capital Event or a Liquidating Event.  Upona Major Capital Event or a Liquidating Event, distribution of Distributable Cash shall be made as follows:

4.1.2.1 First Level. All such Distributable Cash shall be distributed first to the Class B Member until the Class B Member receives $1,500,000 of the Distributable Cash, and then to the Class A Member until the Class A Member receives $166,666 of the Distributable Cash; and there shall be no distributions of Distributable Cash under subsections 4.1.2.2, 4.1.2.3, 4.1.2.4, or 4.1.2.5 below at any time when the Class B Member has not received $1,500,000 of the Distributable Cash, and the Class A Member has not received $166,666 of the Distributable Cash;

4.1.2.2 Second Level.  The balance, if any, of Distributable Cash remaining after the distributions pursuant to subsection 4.1.2.1 above, in preference and priority to any other distribution of Distributable Cash, to the Members pro rata in proportion to their then existing Unpaid Preferred Return balances, until there shall have been distributed to each Member from all Distributable Cash under this 4.1.2.1 and 4.1.2.2 an amount necessary to reduce their respective then existing Unpaid Preferred Return balances to zero; and there shall be no distributions of Distributable Cash under subsections 4.1.2.3, 4.1.2.4, or 4.1.2.5 below at any time when any Member has a positive Unpaid Preferred Return balance.

4.1.2.3 Third Level.  The balance, if any, of Distributable Cash remaining after the distributions pursuant to subsection 4.1.2.1 and 4.1.2.2 above shall be distributed to the Members pro rata in proportion to their then existing Unreturned Capital Contributions balances, until there shall have been distributed to each Member from Distributable Cash under this subsection 4.1.2.3 an amount necessary to reduce their respective then existing Unreturned Capital Contributions balances to zero; and there shall be no distributions of Distributable Cash under subsections 4.1.2.4, or 4.1.2.5 below at any time when any Member has a positive Unreturned Capital Contributions balance.

4.1.2.4 Fourth Level.  The balance, if any, of  Distributable Cash remaining after the distributions pursuant to subsections 4.1.2.1, 4.1.2.2 and 4.1.2.3 above shall be distributed to the Members, as follows: (a) 80% to the Members pro rata in accordance with their Percentage Interests, (b) 20% to the Class A Member, until there shall have been distributed to the Class B Member from Distributable Cash under subsections 4.1.1 (and all subsection thereunder), 4.1.2.1, 4.1.2.2 and 4.1.2.3 and this subsection 4.1.2.4, the amount necessary to cause Class B Member to have received an IRR of 18% on its Capital Contributions; and there shall be no distributions of Distributable Cash under subsections 4.1.2.5 below at any time when, as of the date of calculation, Class B Member has not received an IRR of 18% on its Capital Contributions.

4.1.2.5 Fifth Level.  The balance, if any, of such Distributable Cash remaining after the distributions pursuant to subsections 4.1.2.1, 4.1.2.2, 4.1.2.3 and 4.1.2.4 above shall be distributed to the Members, as follows: (a) 70% to the to the Members pro rata in accordance with their Percentage Interests, (b) 30% to Class A Member.

An example of a calculation of the distributions above is attached to this Agreement as Exhibit C.

4.2Allocation of Net Income and Net Losses. All items of Company income, gain, loss, deduction, or credit (“profits and losses”) shall be the same as the amounts which are reportable by the Company for federal income tax purposes, as generally determined in accordance with I.R.C. Sec. 703 et seq.  Profits and losses from Operations shall be determined and allocated at the end of each Company year with respect to that year. Profits and losses from a Major Capital Event and a Liquidating Event shall be determined and allocated as of the date of such Event, without regard to allocations of profit or loss occurring after, or distributions of cash occurring after or with respect to, such event. The Company does not intend to make any special allocations of income, gain or losses and intends to allocate reportable income, and gains consistent with the actual cash distributions to the Partners. Such shall be allocated among the Members according to their Percentage Interests.

4.2.1Allocation of Losses:

4.2.1.1 Elimination of Undistributed Profits.  First, any net loss of the Company shall be allocated among the Members until the Capital Account of each Member is reduced to an amount equal to that Member's aggregate Capital Contributions to the Company.

4.2.1.2 Elimination of Contributed Capital Balance.  Second, any remaining net loss of the Company shall thereafter be allocated among the Members until the Capital Account of each Member is reduced to zero.

4.2.1.3 Allocation of Loss Attributable to Non-Member Debt.  Third, any remaining net loss of the Company shall thereafter be allocated to the Members until the deficit in each Member's Capital Account equals his allocable share of Company debt (not including debt to Members, debts guaranteed by Members, debt secured by a Member's property, or other debts for which a Member has economic risk). It is understood that recourse debt, if any, owed to persons who are not Members will be allocated entirely to the Manager.

4.2.1.4 Allocation of Loss Attributable to Member Debt.  Fourth, any remaining net loss of the Company shall thereafter be allocated to the Members until the deficit in each Member's Capital Account equals, in addition to amounts allocated pursuant to the previous sentence, (a) the amount of the Company's outstanding debts (outstanding principal and accrued unpaid interest) to that Member, and (b) that Member's share of any Company debt that the Member has guaranteed or pledged collateral for, or with respect to which the Member has otherwise assumed the risk of nonpayment.

4.2.1.5 Remaining Net Loss.  Fifth, any remaining net loss of the Company shall be allocated to the Members in accordance with their ownership percentage.

4.2.1.6 Liquidating Event Loss. Notwithstanding the foregoing, losses arising from a Liquidating Event shall be allocated first to those Members with positive Capital Accounts in a manner so as to reduce all positive Capital Accounts to zero, or to equal amounts and as close to zero as the extent of the allocable losses allow. No loss amount shall be allocated to a Member with a negative Capital Account balance so long as any Member has a positive Capital Account balance. No additional losses shall be allocated to a Member's Capital Account to cause the Member's Capital Account to be reduced below zero. Any losses which are not allocated to the Member's Capital Accounts, or to any of them, shall be allocated in accordance with the Members’ ownership percentages.

4.2.2Allocation of Distributable Cash from Operations:

4.2.2.1 Elimination of Accumulated Net Loss.  First, any net income from Operations shall be allocated among the Members in the inverse of the order and in the amounts in which net losses of the Company have previously been allocated, until the Capital Account of each Member equals the amount of the Member's capital contribution to the Company.

4.2.2.2 Preferred Return. Second, any remaining net income from Company Operations shall be allocated 100% to the Members until they have been allocated amounts equal to the full amount of the Preferred Return which has been distributed to them.

4.2.2.3 Remaining Net Income. Third, any remaining net income from Operations shall be allocated to the Class A and B Members, consistent with the distributions made.

4.2.3Net Income and Gain from Liquidating or Capital Events:

4.2.3.1 Elimination of Accumulated Net Loss.  First, any net income or gain from a Liquidating Event or a Capital Event shall be allocated among the Members in the inverse of the order and in the amounts in which net losses of the Company have previously been allocated, until the Capital Account of each Member equals the amount of the Member's Capital Contribution to the Company less the amount of distributions previously made to each Member which reduced that Member's capital account balance.

4.2.3.2 Make up Return.  Second, net income or gain from a Liquidating Event or a Capital Event shall be allocated to the Members in an amount sufficient to ensure that if the Company were to then distribute all of its assets to the Members, the Members would receive total capital distributions, including prior Capital Distributions made, equal to the aggregate of their Capital Contributions.

4.2.3.3 Preferred Return. Third, net income or gain from a Liquidating Event or a Capital Event shall be allocated to the Members in an amount equal to the Preferred Return and Accrued Preferred Return paid to them out of the Liquidating Event or a Capital Event proceeds.

4.2.3.4 Remaining Net Income and Gain. Fourth, any remaining net income or gains from a Liquidating Event or a Capital Event shall be allocated to the Members based upon their Percentage Interests. The intent is that to the extent that a share of profits is received by the Class A Member, a pro-rata share of profits or gain, as the case may be, in that year, shall be allocated to the Class A Member. The amount allocated to the Class A Member in excess of the amount it would receive based on its percentage of Capital Contributions is intended to be treated as a carried interest to the Class A Member. When there is a distribution in liquidation of the Company, or when any Member’s interest is liquidated, all items of income and loss first shall be allocated to the Members’ Capital Accounts under this Article IV, and other credits and deductions to the Members’ Capital Accounts shall be made before the final distribution is made.

4.2.4Allocations Among Members:

4.2.4.1 Amounts allocated to the Members collectively shall be allocated pro rata among the Members per their Percentage Interests. No Member shall be allocated an amount of losses that would reduce his Capital Account below zero or which would require him to contribute additional funds to the Company if it were dissolved. To the extent consistent with Federal tax law, it is intended that allocations of profits shall be made to the Members to the extent of and in accordance with first, prior allocations of loss and second, actual distributions of cash made to them.

4.2.4.2 All allocations of profits and losses from Operations shall be made to the persons who were Members during the fiscal period for which such allocation is made based upon the number of days in such period during which the person was a Member.

4.2.4.3 All allocations of profits and losses from a Major Capital Event or Liquidating Event shall be made to the persons who are Members as of the date of such event.

4.2.4.4 If profits from a Major Capital Event or Liquidating Event allocated to the Members are less than the deficit amounts of the Capital Accounts of all Members whose Capital Accounts are negative, if any, such profits shall be allocated among such Members in the ratio which the deficit amount of each such Member's Capital Account bears to the deficit amounts of the Capital Accounts of all such Members whose Capital Accounts have a deficit balance.

4.2.4.5 If the character of any profit or loss is in part capital and in part ordinary in the hands of the Company or is in part governed by Internal Revenue Code Section 1231 and in part not governed thereby, then all allocations of any such profit or loss shall be made among the Members in a manner such that each Member to whom such profit or loss is allocated, is allocated the same proportion of each such separate class of profit or loss as such Member is allocated to the total amount of such profit or loss.

4.2.4.6 Any recognition of taxable income or loss arising from the recharacterization of the status or treatment of any item, or any recapture of any tax credit on audit or by an amended tax return, shall be allocated in the same manner and ratio as said item or credit was previously allocated to the Members, or as close thereto as the Manager may determine, in its sole discretion on competent advice.

4.2.4.7 For the purposes of the allocations made upon a liquidation or capital event, the balance in a Member's Capital Account shall be determined as if the Company's year had closed immediately prior to the date as of which such allocations are made.

4.2.4.8 To the extent that taxable profits equal cash distributions, profit allocations will correspond with the actual cash distributions made.

4.2.5Allocations for Capital Account Purposes:

4.2.5.1 Capital accounts shall be maintained for each Member. For Federal Income Tax purposes and for the purposes of maintaining the Capital Accounts and in determining the rights of the Members among themselves, each item of income, gain, loss and deduction (computed in accordance with the above) shall be allocated to the Members pro rata in accordance with their respective Percentage Interests, except as otherwise provided in this document or by the Manager to make the allocation equitable.

4.2.5.2 If any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4) through (6), inclusive, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate a deficit in its Capital Account created by such adjustments, allocations or distributions as quickly as possible. This Section 4.2.5.2 is intended to constitute a "qualified income offset" within the meaning of Treasury Regulation Section 1.704-1(d)(3).

4.2.5.3 If, and to the extent that, any Member is deemed to recognize income as a result of any transaction between such Member and the Company pursuant to Sections 1272-1274, Section 7872, Section 483 or Section 482 of the Internal Revenue Code (hereafter referred to as "the Code"), or any similar provision now or hereafter in effect, any corresponding resulting loss or deduction of the Company shall be allocated to the Member who was charged with such income.

4.2.5.4 If any Member's Capital Account has a deficit balance resulting in whole or in part from allocations of loss or deduction attributable to nonrecourse debt which is secured by Company property, which deficit balance exceeds such Member's share of minimum gain (as defined below), then income and gain shall first be allocated to such Member in an amount equal to such excess. For purposes of this 4.2.5.4, "minimum gain" means the excess of the outstanding principal balance of nonrecourse debt which is secured by Company property over the Company's adjusted tax basis of such property. This Section 4.2.5.4 is intended to comply with the requirements of Treasury Regulation Section 1.704-1(b)(4)(iv), and is to be interpreted, if possible, to comply with the requirements of such regulation. The Manager shall have complete discretion to amend the provisions of this Agreement if such amendment would not have a material adverse effect on the Members and if, in the opinion of counsel, such amendment is advisable to reflect or comply with the requirements of Treasury Regulation Section 1.704-1(b)(4)(iv).

4.2.5.5 To the extent of any recapture income resulting from the sale or other taxable disposition of Company assets, the amount of any gain from such disposition allocated to (or recognized by) a Member (or its successor in interest) for federal income tax purposes pursuant to the above provisions shall be deemed to be recapture income to the extent such Member has been allocated or has claimed any deduction directly or indirectly giving rise to the treatment of such gain as recapture income.

4.2.5.6 All items of income, gain, loss, deduction, credit and basis allocation recognized by the Company for federal income tax purposes and allocated to the Members in accordance with the provisions of this Agreement shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, such allocations, once made, shall be adjusted as necessary or appropriate to take into account those adjustments permitted by Sections 734 and 743 of the Code and, where appropriate, to provide only Members recognizing gain on Company distributions covered by Section 734 of the Code with the federal income tax benefits attributable to the increased basis in Company property resulting from any election under Section 754 of the Code.

4.2.5.7 Any item of loss, deduction or Nondeductible Expenditure that is attributable to a Member Nonrecourse Debt shall be allocated to the Member that bears the economic risk of loss for such debt. If more than one Member bears the economic risk of loss for a Member Nonrecourse Debt, any such item attributable to such debt shall be allocated among such Members in accordance with the ratios in which the Members share the economic risk of loss for such debt. The determination of the items of Company loss, deduction and nondeductible expenditure that are attributable to a Member Nonrecourse Debt shall be made in accordance with Regulations Section 1.704-2(i)(2).

4.2.6A Member's allocable share of the Company's items of income, gain, deduction and loss for tax purposes shall be determined under the foregoing provisions except as follows:

4.2.6.1 Contributed Property. Income, gain, loss and deduction, as computed for the purpose of determining taxable income, with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for Federal income tax purposes and its initial Gross Asset Value in accordance with Code Section 704(c) and the Regulations thereunder.

4.2.6.2 Other Property with Gross Asset Value Different from Tax Basis. In the event that the Gross Asset Value of any Company asset is adjusted, subsequent allocations of income, gain, loss and deduction with respect to such asset, as computed for the purpose of determining taxable income, shall take account of any variation between the adjusted basis of such asset for Federal income tax purposes and its Gross Asset Value in the manner provided in Regulations Section 1.704-1(b)(4)(i).

4.2.6.3 Tax Elections; Effects on Capital Accounts. Any elections or other decisions relating to the allocations addressed by this Section shall be made in a manner that reasonably reflects the purposes and intentions of this Agreement. Allocations made pursuant to this Article are solely for purposes of Federal, state and local taxes and shall not affect, or be taken into account in computing, any Member's Capital Account, share of Profits and Losses, or distributions pursuant to any provision of this Agreement.

4.2.6.4 Compliance with Code and Regulations. The provisions of this Agreement that relate to the allocations for Federal income tax purposes of items of Company income (including Exempt Income), gain, loss, deduction and Nondeductible Expenditure (including the allocation of such items with respect to property having a Gross Asset Value different from adjusted Federal income tax basis), that relate to the determination and maintenance of Capital Accounts, and that relate to the distribution of Company property upon the liquidation of the Company or a Member's interest therein, are intended to comply with Regulations Section 1.704-1(b) (to the extent not superseded by Regulations Section 1.704-2) and Regulations Section 1.704-2, and with Code Section 704(c) and the Regulations promulgated thereunder shall be interpreted and applied in a manner consistent with such statutory and regulatory provisions, which statutory and regulatory provisions are expressly incorporated into and made a part of this Agreement. Should such statutory and regulatory provisions be amended, to the extent that such amendments are applicable to this Agreement, the affected provisions of this Agreement shall be interpreted and applied in accordance with such amended provisions.

4.2.6.5 Allocation in Event of Transfer. If interest(s) in the Company are transferred, in accordance with the restrictions of this Agreement, there shall be allocated to each Member who held the transferred interest(s) during the fiscal year of transfer the product of (a) the Company's Profits or Losses allocable to such transferred interest(s) for such fiscal year and (b) a fraction, the numerator of which is the number of days the Member has held the interest(s) and the denominator of which is the total number of days in such fiscal year; provided however, that the Manager may, in its reasonable discretion, allocate such Profits or Losses by closing the books of the Company immediately after the transfer of such interest(s). Such allocation shall be made without regard to the date, amount or recipient of any distributions that may have been made with respect to such transferred interest(s).

4.2.6.6 Section 704 Consistency. It is intended that the allocations prescribed above constitute allocations for federal income tax purposes that are consistent with Section 704 of the Code and comply with any limitations or restrictions therein, to the extent reasonably possible without causing individual percentage interests ("Interests") to lack uniform characteristics for federal income tax purposes. If uniformity of the Interests cannot be preserved by application of the foregoing rules, then the Manager shall have sole discretion to (i) adopt such conventions as the Manager deems appropriate in determining the amount of depreciation and cost recovery deductions; (ii) make special allocations of income or deduction; and (iii) amend the provisions of this Agreement as appropriate (a) to reflect the proposal or promulgation of Treasury Regulations under Section 704(c) of the Code, or (b) otherwise to preserve the uniformity of Interests issued or sold from time to time; provided, however, that the Manager may adopt such conventions, make such allocations and amend this Agreement as provided in this Article only if they would not have a material adverse effect on the  Members and if such allocations are consistent with, and supportable under, the principles of Section 704 of the Code.

ARTICLE 5

Fiscal, Books, Reports

5.1Accounting Basis.  The Company will use the cash method of accounting or such other method as the Manager may determine.

5.2Fiscal Year.  The fiscal year of the Company is the calendar year ending December 31^st of each year, or such other date as the Manager determines.

5.3Books and Records.  The Company will keep or cause to be kept, at its expense, complete and accurate books and records of the Company and supporting documentation of transactions with respect to the conduct of the Company’s business.  The books and records will be kept at the Company’s principal place of business, and at a minimum will include:

5.3.1 The full name and business, residence, or mailing address of the Members;

5.3.2 A copy of the initial Certificate of Formation and all amendments or restatements thereof;

5.3.3 Copies of the Company’s federal, state, and local income tax returns and reports, if any, for the three most recent fiscal years;

5.3.4 Copies of this Agreement and all amendments or restatements hereof, including any prior operating agreements no longer in effect;

5.3.5 Copies of any documents relating to the Members’ obligation to contribute cash, property, or services to the Company;

5.3.6 Copies of any financial statements of the Company for the three most recent fiscal years; and

5.3.7 Copies of minutes of all meetings of the Members and all written consents obtained from the Members for actions taken by the Members without a meeting.

5.1 Quarterly Reports for the Class B Member.  The Class B Member shall be entitled to receive, and the Company and the Manager agrees to furnish to the Class B Member, any information that is available to the Company or the Manager or its agents, within five (5) business days of a written request to the Company by The Class B Member for such information, if such information is reasonably necessary for the Class B Member Entity to determine its compliance with Sections 856-860 of the Code and the Treasury Regulations promulgated thereunder.  The Company will also provide to the Class B Member, on a quarterly basis within fifteen days of the end of each quarter, certain financial information and reports of the Company as may be produced in the regular course for the other Members.  Furthermore, the Class B Member may need to consolidate the financial statements of the Company into its own, or provide summary financial information with its financial reporting, and if such requirements necessitate audited financial statements then the Manager shall cooperate with the Class B Member’s auditors to complete such audits and/or provide the necessary financial information.

ARTICLE 6

Company Property

All property now or hereafter owned by the Company will be owned by the Company as an entity and, insofar as permitted by applicable law, no member will have any ownership interest in any of such company property in its individual name or right.  Title to the assets and properties, real and personal, now or hereafter owned by or leased to the Company, will be held in the name of the Company.

ARTICLE 7

Tax Matters

7.1Tax Treatment.  At any time the Company has only one Member, the Company will be disregarded as an entity separate from its Member for federal and state income tax purposes.  If at any time the Company has more than one Member, it will be treated as a partnership for federal and state income tax purposes.

7.2Tax Allocations.  Except as otherwise required by the Code or applicable Treasury Regulations, during any period in which the Company is treated as a partnership, any taxable income or loss (and any item thereof) of the Company will be allocated to the Members in accordance with their Membership Interests and the Company will maintain capital accounts for each Member in accordance with Treasury Regulations Section 1.704‑1(b)(2).

7.3Designation Of Partnership Representative.

7.3.1The partnership representative of the Company pursuant to Internal Revenue Code Section 6223 (as amended by the Revised Partnership Audit Procedures) (the “Partnership Representative”) shall be the Manager (or any other person or entity designated in the sole discretion of the Manager and who so qualifies under the Revised Partnership Audit Procedures).

7.3.2The Partnership Representative shall keep each Member informed of administrative and judicial proceedings for the adjustment at the Company level of any item required to be taken into account by a Member for income tax purposes (such administrative and judicial proceedings referred to hereinafter as “judicial review”)

7.3.3Any Member who enters into a settlement agreement with respect to any Membership item shall notify the Partnership Representative, as applicable, of such settlement agreement and its terms within thirty (30) days after the date of settlement.  Each Member shall provide the Partnership Representative any information reasonably requested in writing by the Partnership Representative and fully cooperate in any tax audit or similar proceeding of the Partnership so that the Partnership Representative can (i) implement the provisions set forth in 4.2 (including by making any election permitted thereunder) or (ii) otherwise comply with the Code and Treasury Regulations.

7.3.4The Company shall indemnify and reimburse the Partnership Representative for all expenses, including legal and accounting fees, claims, liabilities, losses and damages incurred in connection with any judicial review, tax audit or similar proceeding with respect to the tax liability of the Members.  Neither the Managers nor any Affiliate nor any other Person shall have any obligation to provide funds for such purpose.  The taking of any action and the incurring of any expense by the Partnership Representative in connection with any such proceeding, except to the extent required by law, are matters that are in the sole discretion of the Partnership Representative and the provisions on limitations of liability of the Managers and indemnification set forth in this Agreement shall be fully applicable to the Partnership Representative, as applicable, in its capacity as such.

7.4Authority Of Partnership Representative.

7.4.1The Partnership Representative shall have all the rights, authority and power of a “partnership representative” to the extent provided in the Code and the Treasury Regulations.

7.4.2The Partnership Representative shall have all rights, power and authority for the making of any election and the conduct of, and the decision to initiate (where applicable), any judicial review involving the Company under the Revised Partnership Audit Procedures, including (i) an Internal Revenue Service examination of the Company, (ii) a request for administrative adjustment filed by the Company, (iii) the filing of a petition for readjustment (including choice of judicial forum) with respect to a final notice of partnership adjustment, (iv) the appeal of an adverse judicial decision, (v) the compromise, settlement or dismissal of any such proceedings on such terms as the Partnership Representative, in consultation with the Company’s tax advisors, deems appropriate, taking into account the collective interests of the Member and former Members affected thereby, (vi) if the Company is eligible, electing out of the Revised Partnership Audit Procedures under Code Section 6221(b), and (vii) the making of an election under Code Section 6226(a).  If the consent of agreement of the Members is at any time required in order to make effective any of the foregoing elections, each person or entity that is or has been a Member does hereby give its consent to the making of such election for the duration of the term of the Company.  Members shall take such actions requested by the Partnership Representative consistent with any such elections made and actions requested by the Partnership Representative, including by filing amended tax returns and paying any tax due in accordance with Code Section 6225(c)(2), as amended by the Revised Partnership Audit Procedures.  Each Member, on the Member’s tax return, shall treat each item of income, gain, loss, deduction, or credit attributable to the Company in a manner which is consistent with the treatment of such income, gain, loss, deduction, or credit on the Company’s tax return.

7.4.3The Members further agree that if the Company receives a final partnership adjustment, to the extent permissible under applicable law, the Partnership Representative shall cause the Company to elect under Code Section 6226, as amended by the Revised Partnership Audit Procedures for any adjustments to the Partners’ distributive share of income, gain, loss, deduction or credit to be “pushed-out” to the Partners for the reviewed year through the issuance of adjusted Schedule K-1s.  The Partners covenant to take into account and report to the Internal Revenue Service any adjustment to their items for the reviewed year as notified to them by the Company in a statement furnished to them pursuant to Code Section 6226(a), as amended by the Revised Partnership Audit Procedures, in the manner provided in Code Section 6226(b), as amended by the Revised Partnership Audit Procedures, whether or not any of the Members own any Membership Interest in the year of the Company’s statement.  Any Member which fails to report its share of such adjustments on its tax return for its taxable year including the date of the Company’s statement as described immediately above shall indemnify and hold harmless the Company against any tax, interest and penalties collected by the Internal Revenue Service from the Company as a result of such Partner’s failure.

7.4.4To the extent that the Partnership Representative does not make the election under Code Section 6226, as amended by the Revised Partnership Audit Procedures, with respect to a material imputed underpayment amount (determined in the Partnership Representative’s sole discretion) and the Company pays any imputed adjustment amount (including tax, any penalties, and interest) under Code Section 6225, as amended by the Revised Partnership Audit Procedures, the Company shall allocate such amount among the Company in a manner it determines to be fair and equitable.  To the extent that a portion of the tax liabilities imposed under Code Section 6225, as amended by the Revised Partnership Audit Procedures, for a prior year relates to a former Member, the Partnership Representative may require a former Member to indemnify the Company for its allocable portion of such liability.  The Partnership Representative shall seek payment from each Member (including any former Member) for its allocable amount, and each such Member hereby agrees to pay such amount to the Company (such amount shall not be treated as a Capital Contribution).  Any such amount not paid by a Member (or former Member) at the time requested by the Partnership Representative shall accrue interest at the “Prime Rate” (as set forth from time to time in the “Interest Rates” section of the Wall Street Journal or any successor publication thereto) until paid, and such Member (or former Member) shall also be liable to the Company for any damages resulting from a delay in making such payment beyond the date such payment is requested by the Partnership Representative.  Each Member acknowledges that, notwithstanding the Transfer of all or any portion of its Membership Interest in the Company, pursuant to this Section 7.4.3 it may remain liable for tax liabilities with respect to its allocable share of income and gain of the Company for the Company’s taxable years (or portions thereof) prior to such Transfer or redemption, as applicable, under Code Section 6225, as amended by the Revised Partnership Audit Procedures.  Without reduction in a Member’s (or former Member’s) obligation under the foregoing, any imputed adjustment amount paid by the Company that is attributable to a Member (or former Member), and that is not paid by such Member shall be treated as a distribution to such Member (or former Member).  Expense items attributable to any imputed adjustment amount of the Company shall be specially allocated to each Member in proportion to which such Partner bears the cost of such imputed adjustment amount.

7.4.5The provisions of Section 7.3.4 shall survive indefinitely, and the foregoing covenants and indemnification obligations of each Member shall not terminate, without regard to any Transfer of a Member’s Interest, withdrawal as a Member, or liquidation, dissolution or termination of the Company.

7.4.6Elections.  The Managers may make any tax elections for the Company allowed under the Code or the tax laws of any state or other jurisdiction having taxing jurisdiction over the Company.

ARTICLE 8

Management of the Company; Membership

8.1Rights and Duties of the Manager.

8.1.1Manager.  The ordinary and usual decisions concerning the business affairs of the Company shall be made by the Manager.  The Manager shall have all of the powers to manage and operate the Company that are not expressly reserved for the Members under the Act or in this Agreement. Except as otherwise stated in this Agreement the Manager with the consent of a Class B Member shall also have all rights and powers to the to do the following:

8.1.1.1 The Manager with the consent of a Class B Member shall have the right to cause the Property Owner to sell the Property.

8.1.1.2 The Manager shall have the right with the consent of the Class B Member to cause the Property Owner to refinance the Property at any time.

8.1.2The initial Manager of the Company shall be the Class A Member (referred to in the singular “Manager” for convenience) and shall remain the Manager of the Company until (i) its resignation or (ii) its removal by the Class B Member, subject to the provisions of Section 11.3 below.

8.1.3Term of Manager.  Except as otherwise stated in this Operating Agreement, no Manager shall have any contractual right to such position.  The Manager shall serve until the earliest of:

8.1.3.1 The Resignation of such Manager;

8.1.3.2 Removal of the Manager with or without cause by the Class B Member;

8.1.3.3 Full liquidation of the Company and termination or surrender of its legal charter; or

8.1.3.4 In the case of a Manager who is an individual, the death, bankruptcy or legal incapacity of such individual.

8.1.4No Authority of a Member to Bind the Company.  Only the Manager and agents of the Company authorized by the Manager shall have the authority to bind the Company.  No Member may or shall take any action to bind the Company, unless that Member is identified as the Manager or otherwise authorized as an agent of the Company, in writing. Each Member shall indemnify the Company, the Manager, and the other Members, for any costs or damages incurred by any unauthorized action of such Member attempting to represent the Company or the Property or Project.  Subject to the restrictions specified in this Agreement, the Manager has the power, on behalf of the Company, to do all things necessary or convenient to carry out the business and affairs of the Company.

8.1.5Actions of the Manager.  The Manager has the power to bind the Company as provided in this ARTICLE 8. The act of a Manager for the purpose of apparently carrying on the usual business or affairs of the Company, including the exercise of the authority indicated in this ARTICLE 8, shall bind the Company, and no person dealing with the Company shall have any obligation to inquire into the power or authority of the Manager acting on behalf of the Company.

8.1.6Certain Actions Requiring Member Vote.  Notwithstanding anything to the contrary contained herein, the Manager does not have the authority to cause the Company to do the following activities without first obtaining a vote of the Class B Member.  Either Member may call for a vote of the Class B Member by delivering notice to the other Member.  A Vote of the Class B Member is required in order to take any of the following actions:

8.1.6.1 Authorizing, allowing, or consenting to the sale of the Property by the Property Owner;

8.1.6.2 The incurrence of additional debt (other than the initial loans that make up the Loan or any refinancing thereof) by the Company in excess of $1,000,000 in the aggregate; or

8.1.6.3 Changes to the Budget in excess of ten percent (10%) of any single line item on the Budget or cumulatively in excess of $500,000.  The Budget attached hereto is approved by all Members.

8.1.6.4 The creation of any parent company, subsidiary company or other entity under common control with the Company;

8.1.6.5 Filing a petition or consent to a petition seeking reorganization, arrangement, adjustment, winding-up, dissolution, composition, liquidation or other relief on behalf of the Company of its debts under any federal or state law relating to bankruptcy, insolvency, relief from debts or the protection of debtors;

8.1.6.6 Seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Company or a substantial portion of its Property.

8.1.6.7 Making any assignment for the benefit of the Company’s creditors;

8.1.6.8 Admitting in writing the Company’s inability to pay its debts generally as they become due;

8.1.6.9 The guaranty by the Company of any indebtedness of another;

8.1.6.10 The compromise of the obligation of a Member to make a Capital Contribution; or

8.1.6.11 Taking any action in furtherance of any of the foregoing.

8.1.6.12 Amending this Agreement.

8.1.6.13 Removing the Manager with or without cause.

Any action required or permitted to be taken by the Class B Member under this Agreement may be taken without a Meeting if the Class B Member consents in writing to such action.

8.1.7Compensation.  Except for the fees listed below or other fees expressly provided hereunder, no Member or Manager (or their respective affiliates) shall receive any fee or other compensation in connection with the performance by it or them of its obligations under this Agreement.

8.1.7.1 Each of the Class A Member and the Class B Member shall be paid an acquisition fee equal to 1.25% of the purchase price of the Property, to be paid within 10 days of the closing of the purchase of the Property.

8.1.7.2 Leasing Commissions. The Company shall pay the Class A Member commissions on leases for the retail component of the Property in such amounts and on such terms as are commercially reasonable and standard, as approved by Class B Member is its commercially reasonable discretion, subject to the terms and limitations of the Loan Documents, but only to the extent of the difference between the commission paid to third party brokers and a “market” commission for such transaction.

8.1.8Manager’s Duty of Care.  The duty of care in the discharge of a Manager’s duties to the Company and the other Members shall be that required under the Act.

8.1.9Time Devoted to Company; Other Ventures.  The Manager and the individual members of the Manager shall devote so much time to the business of the Company as in their judgment the conduct of the Company’s business reasonably requires.  The Manager and the individual members of the Manager, provided the following activities do not materially interfere with the performance of  their duties, may engage in business ventures and activities of any nature and description independently or with others, whether or not in competition with the purpose, investments and/or business of the Company and neither the Company nor any of the Members shall have any rights in and to such independent ventures and activities or the income or profits derived from such activities of the Manager and the individual members of the Manager

8.1.10Indemnification and Limitation of Liability.  The Company shall indemnify and hold each Manager, and each of its members, and the Partnership Representative, harmless from any loss or damage (including without limitation environmental indemnification and any other third party or Member claims), including reasonable attorneys’ fees actually and reasonably incurred by it, by reason of any act performed by it on behalf of the Company or in furtherance of the Company’s interests.  The foregoing indemnity shall extend only to acts or omissions performed or omitted by such Manager, its members, or Partnership Representative which does not constitute fraud, bad faith, gross negligence, willful misconduct, or breach of fiduciary duty on the part of such Manager, member, or Partnership Representative. A Member shall not be bound by, or be personally liable for, the expenses, liabilities or obligations of the Company except as otherwise provided in the Act or this Agreement.

8.2Prohibited Transactions.   Notwithstanding anything to the contrary contained in this Agreement, during the time the Class B Member is a Member of the Company, neither the Company, nor the Manager, nor any other Member of the Company, shall take any of the following actions or permit the Property Owner to take any of the following actions:

8.2.1Entering into any lease or permitting any sublease that provides for rent based in whole or in part on the income or profits of any person, excluding for this purpose a lease that provides for rent based in whole or in part on a fixed percentage or percentages of gross receipts or gross sales of any person without reduction for any sublessor costs;

8.2.2Leasing personal property, excluding for this purpose a lease of personal property that is entered into in connection with a lease of real property where the rent attributable to the personal property is less than 15% of the total rent provided for under the lease, determined as set forth in Section 856(d)(1) of the Code;

8.2.3Acquiring or holding debt unless (a) the amount of interest income received or accrued by the Company under such loan does not, directly or indirectly, depend in whole or in part on the income or profits of any person, and (b) the debt is fully secured by mortgages on real property or on interests in real property;

8.2.4Acquiring or holding more than 10% of the outstanding voting securities of any one issuer other than a corporation that has properly elected to be a “taxable REIT subsidiary” of the Class B Member;

8.2.5Acquiring or holding more than 10% of the total value of the outstanding securities (debt or equity) of any one issuer;

8.2.6Making an election or taking any action that would cause the Company to be treated as (i) an entity that is not classified as a partnership for federal income tax purposes or (ii) a publicly traded partnership as defined in Section 7704 of the Code;

8.2.7Entering into any agreement where the Company (or the Property Owner) receives amounts, directly or indirectly, for rendering services to the tenants of the properties that are owned, directly or indirectly, by the Company other than (i) amounts received for services that are customarily furnished or rendered in connection with the rental of real property of a similar class in the geographic areas in which the properties are located where such services are either provided by (a) an Independent Contractor (as defined in Section 856(d)(3) of the Code) who is adequately compensated for such services and from which the Company does not, directly or indirectly, derive revenue or (b) a taxable REIT subsidiary of the Class B Member (as defined in Section 856(1) of the Code) who is adequately compensated for such services or (ii) amounts received for services that are customarily furnished or rendered in connection with the rental of space for occupancy only (as opposed to being rendered primarily for the convenience of the Company’s tenants);

8.2.8Holding cash of the Company for operations or distribution in any manner other than a traditional bank checking or savings account; or

8.2.9Entering into any agreement where income or gain, as applicable, received or accrued by the Company under such agreement, directly or indirectly, (a) does not qualify as “rents from real property” within the meaning of Section 856 of the Code, (b) does not qualify as “interest on obligations secured by mortgages on real property or on interests in real property” within the meaning of Section 856 of the Code or (c) constitutes income from a sale of “inventory” or “stock in trade” of the Company within the meaning of Section 1221(a)(l) of the Code other than a sale that would qualify under the Section 857(b)(6)(C) “safe harbor” with respect to the Class B Member.

8.2.10For so long as the Loan to the Lender is outstanding, the Company (and its Members and Managing Member) shall not breach or violate any of the convenants attached hereto as Exhibit E.

ARTICLE 9

Dissolution, Liquidation and Termination of the Company

9.1Dissolution.

9.1.1 Events of Dissolution.  The Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following:

(i)the termination of the legal existence of the last remaining member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act; or

(ii)the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act.

Upon the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company or that causes the Member to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon (i) an assignment by the Member of all of its limited liability company interest in the Company and the admission of the transferee, or (ii) the resignation of the Member and the admission of an additional member of the Company), to the fullest extent permitted by law, the personal representative of such member is hereby authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of the occurrence of the event that terminated the continued membership of such member in the Company.

9.2Continuation.  Notwithstanding any other provision of this Agreement, the dissolution or resignation of the Member or the Bankruptcy of the Member will not cause the Member, as the case may be, to cease to be a member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.

9.3Distributions and Other Matters.  Promptly upon the dissolution of the Company, the Member will cause the winding up of the affairs of the Company in accordance with the Act, and will liquidate the assets of the Company and apply and distribute the proceeds of such liquidation, or distribute the Company’s assets in kind, as follows and in the following order:

9.3.1 Debts.   First, to payment of the debts and liabilities of the Company, including debts owed to the Members, in the order of priority provided by law; and

9.3.2 Remainder.   Second, the balance will be distributed to the Members in the same proportion as the distributions are made under Section 4.1.2

9.4Winding-Up and Liquidation.  On dissolution of the Company, the Manager will proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Act.  Upon dissolution of the Company, the Company will conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company will be applied in the manner, and in the order of priority, set forth in Section 4.1.2.  The costs of liquidation will be a Company expense.

9.5Termination.  The Company will terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities, and obligations of the Company, will have been distributed to the Members in the manner provided for in this Agreement, and (ii) the Company’s Certificate will have been cancelled in the manner required by the Act.

ARTICLE 10

Miscellaneous

10.1Governing Law/Venue.  This Agreement will be governed by and construed in accordance with the Act and the laws of the State of Delaware (without regard to the conflict of laws principles thereof), with all rights and remedies to be governed by said laws. State and federal courts sitting in New Castle County, Delaware will have jurisdiction over any disputes arising under this Agreement.

10.2Amendment.  This Agreement may only be amended, restated, or revoked by the written consent of the Class B Member; provided that any amendment that affects the rights, privileges, or duties of the Class A Member requires the consent of the Class A Member.

10.3Construction.  Paragraph headings and captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend or described the scope of context thereof.  Whenever required by the context hereof, the singular will include the plural and vice versa, and the masculine gender will include the feminine and neuter genders, and vice versa.  Pronouns such as “he,” “his,” “him,” “it,” or “who” will be deemed to refer also to each such Person who is a woman, a partnership, a joint venture, an association, a corporation, limited liability company, trust or other legal entity.

10.4Severability.  This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations of the jurisdictions in which the Company does business.  If any provision of this Agreement or any application thereof to any Person or circumstances will, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected thereby, but will be enforced to the greatest extent permitted by law.

10.5Organization Expenses.  All legal, filing, recording and related expenses in connection with the formation and qualification of this Company will be considered and treated as Company expenses.

10.6Copies of Signatures.  Facsimile copies and electronic copies (e.g. .PDF file) of executed signatures to the Agreement, as well as electronic signatures made in compliance with the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) (e.g. DocuSign), will be accepted with the same force and effect as original signatures hereto.

10.7Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original of this Agreement and all of which together will constitute one and the same instrument.

10.8Binding Agreement.  Notwithstanding any other provision of this Agreement, the Members and the Manager agree that this Agreement constitutes a legal, valid and binding agreement of the Members and Manager, and is enforceable against the Members and Manager.

ARTICLE 11

TRANSFERS OF MEMBERSHIP INTERESTS

11.1Transfers.  Except as otherwise expressly provided in this Agreement, a Member shall not Transfer any part of the Member’s Membership Interest in the Company, whether now owned or hereafter acquired, unless (1) the Manager approves the transferee’s admission to the Company as a Member upon such Transfer and (2) the Membership Interest to be transferred, when added to the total of all other Membership Interests transferred in the preceding 12 months, will not cause the termination of the Company under the Code and (3) the Membership Interest to be transferred does not cause a transfer tax or property reassessment with respect to the Property.  Any attempted Transfer of a Membership Interest without such approval shall be void.  Any Transfer of a Membership Interest which does not result in a change in the beneficial ownership of such Membership Interest shall not be subject to the restrictions set forth in this Section 11.1, and in such case, notwithstanding anything in this Agreement to the contrary, the transferee of such Membership Interest shall automatically be admitted to the Company as a Member, subject only to such transferee’s executing a counterpart of this Agreement as a party hereto.

11.2Encumbrances.  No Member may Encumber or permit or suffer any Encumbrance of all or any part of the Member’s Membership Interest in the Company unless such Encumbrance has been approved in writing by all the other Members.  Any Encumbrance of a Membership Interest without such approval shall be void.

11.3Purchase of Class A Membership Interests upon Removal of Manager.

11.3.1Upon the removal of the Manager pursuant to Section 8.1.3.2, the Manager may require, at its sole election, the Company and/or the Class B Member to purchase its Class A Membership Interests according to the terms of this Section 11.3.

11.3.2For purposes of establishing the price for the purchase of the Class A Membership Interest in the Company (if the Class A Member determines to do so) under any circumstances other than liquidation, the following procedures shall govern:  Within 15 days of the receipt of a Notice of Removal by the Manager as contemplated by Section 8.1.3.2, the Class B Member or its representative shall appoint a nationally or regionally recognized appraiser or valuation firm qualified to make a valuation of the Property (having no direct or indirect relationship in or with any parties to this Agreement) and the Manager shall appoint a second appraiser (each to notify the other of the same) to determine the net fair market value (the “Fair Market Value”) of the Company  as determined by the following.  In determining the Fair Market Value, the appraisers shall appraise the Property owned by the Property Owner, and determine the corresponding distribution (after paying off any loans, closing costs, commissions, accounts payable, wind-down costs, etc.) that would be made by the Property Owner to the Company upon such a sale at that appraised value.  No value shall be ascribed to goodwill, and all cash, receivables and liabilities shall be valued as stated on the books of the Company.  Each appraiser shall render its opinion within 30 days following their appointment.  The net Fair Market Value of the Class A Member’s Membership Interest shall take into consideration the Unpaid Preferred Return and Unreturned Capital Contributions of such Member.  If the values so determined differ by not more than ten percent of the lower value, the two values shall be averaged with the result being conclusive and binding upon all Members or their representatives.  If the values so determined by the two appraisers differ by more than ten percent of the lower value, the two appraisers shall jointly appoint a third appraiser or firm, which will shall select one of the two opinions of value as the more accurate opinion of value.  The opinion of value selected by the third appraiser or valuation firm as the more accurate opinion of value shall be the final Fair Market Value.  All fees and expenses of each appraiser shall be an expense of the Company after the purchase.  The purchase price shall be paid to the Class A Member within 60 days of determination.

Notwithstanding anything to the contrary contained in this Agreement, in the event the Class B Member removes the Class A Member as Manager prior to the date that is eighteen (18) full calendar months after the Property Owner acquires the Property, then the Fair Market Value shall not be less than 130% of the purchase price paid by the Property Owner for the Property.

11.4Substituted Members.  Any person admitted to the Company as a Substituted Member shall be subject to all provisions of this Agreement.

[Signatures appear on the following pages.]

IN WITNESS WHEREOF, the undersigned parties executed this Amended and Restated Limited Liability Company Agreement of Hollywood Hillview Owner, LLC as of the Effective Date.

MEMBER:

MacKenzie Realty Operating Partnership, LP, a Delaware limited partnership

By: MacKenzie Realty Capital, Inc., a Maryland corporation, its General Partner

By:

Chip Patterson, Chairman and General Counsel

IN WITNESS WHEREOF, the undersigned parties executed this Limited Liability Company Agreement of Hollywood Hillview Owner, LLC as of the Effective Date.

MANAGER:

TRUE USA, LLC,

a Delaware limited liability company

its: manager

By: JCI Development, Inc,

a Colorado corporation

its: manager

By:__________________________

Name:Jeffrey Isenstadt

Title:President

By: Viking Capital LLC,

a Delaware limited liability company

its: manager

By:__________________________

Name:William R. Erickson

Title:Operating Member

By: Asaz LTD,

a Texas limited partnership

its:manager

By: Asaz Interest, Inc.

a Texas corporation

its: general partner

By: __________________________

Name:Ashraful Islam

Title:President

EXHIBIT A

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

HOLLYWOOD HILLVIEW OWNER, LLC

Membership Schedule

Member Name and Address	Type of Membership Interest	Capital Contribution	Voting Interest	Economic Interest
MacKenzie Realty Operating Partnership, LP ATTN: Chip Patterson, General Counsel 89 Davis Road, Suite 100 Orinda, CA  94563	Class B	$7,200,000	100%	90%
True USA, LLC	Class A	$800,000	0%	10%
TOTAL		$8,000,000	100%	100%

EXHIBIT B

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

HOLLYWOOD HILLVIEW OWNER, LLC

Legal description for the Property

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Lot 9 of H. J. Whitley Tract, being a subdivision of Blocks 17 and 18, Hollywood, in the City of Los Angeles, County of Los Angeles, State of California, as shown by map on file in Book 2 Page 90 of Maps, in the office of the County Recorder of said County.

Excepting therefrom that portion thereof lying within the lines of Chester Court, now Hudson Avenue, as widened.

APN: 5547-008-001

EXHIBIT C

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

HOLLYWOOD HILLVIEW OWNER, LLC

Sample Distribution Calculation

EXHIBIT D

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

HOLLYWOOD HILLVIEW OWNER, LLC

Initial Budget

EXHIBIT E

TO

LIMITED LIABILITY COMPANY AGREEMENT

OF

HOLLYWOOD HILLVIEW OWNER, LLC

SPE Provisions

SINGLE PURPOSE ENTITY REQUIREMENTS.  Notwithstanding anything to the contrary in this Agreement, for so long as the Loan exists, the following provisions shall control and and supersede all other provisions of the Agreement.

(a)Definitions.  When used in this Section, the following terms not otherwise defined in the Agreement  shall have the meanings set forth below.  Capitalized terms used but not defined in this Section shall have the meanings defined in the Loan Agreement.

“Single Purpose Entity” means a limited liability company, limited partnership, or corporation which at all times will satisfy each of the following conditions:

(i) It will not engage in any business or activity, other than the ownership, operation and maintenance of the Property and activities incidental thereto.

(ii) It will not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets other than the Property and such Personalty as may be necessary for the operation of the Property and will conduct and operate its business as presently conducted and operated.

(iii) It will preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation or organization and will do all things necessary to observe organizational formalities.

(iv) It will not merge or consolidate with any other Person.

(v) It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted under the Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing.

(vi) It will not, without the prior unanimous written consent of all of the Company’s Members or Managing Members take any of the following actions:

(A) File any insolvency, or reorganization case or proceeding, to institute proceedings to have the Company be adjudicated bankrupt or insolvent.

(B) Institute proceedings under any applicable insolvency law.

(C) Seek any relief under any law relating to relief from debts or the protection of debtors.

(D) Consent to the filing or institution of bankruptcy or insolvency proceedings against the Company.

(E) File a petition seeking, or consent to, reorganization or relief with respect to the Company under any applicable federal or state law relating to bankruptcy or insolvency.

(F) Seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Company or a substantial part of its property.

(G) Make any assignment for the benefit of creditors of the Company.

(H) Admit in writing the Company’s inability to pay its debts generally as they become due.

(I) Take action in furtherance of any of the foregoing.

(vii) It will not amend or restate its organizational documents if such change would cause the provisions set forth in those organizational documents not to comply with the requirements set forth in Section 4.1.15 of the Loan Agreement.

(viii) It will not own any subsidiary or make any investment in, any other Person.

(ix) It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name.

(x) It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the following:

(A) The Indebtedness.

(B) Customary unsecured trade payables incurred in the ordinary course of owning and operating the Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.

(xi) It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person; provided, however, that the Company’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of the Company from such Affiliate and to indicate that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) such assets will also be listed on the Company’s own separate balance sheet.

(xii) Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, it will only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of the Company or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties.

(xiii) It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person.

(xiv) It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person.

(xv) It will not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the Loan Documents and will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).

(xvi) It will file its own tax returns separate from those of any other Person, except to the extent that (A) Company is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law or (B) is required by applicable law to file consolidated tax returns, and will pay any taxes required to be paid under applicable law.

(xvii) It will hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name, will correct any known misunderstanding regarding its separate identity and will not identify itself or any of its Affiliates as a division or department of any other Person.

(xviii) It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due; provided, however, nothing in this Section will require any member of Company (as defined in the Loan Agreement) to make any equity contribution to Company.

(xix) It will allocate fairly and reasonably shared expenses with Affiliates (including shared office space) and use separate stationery, invoices and checks bearing its own name.

(xx) It will pay (or cause the Property Manager to pay on behalf of Company from Company’s funds) its own liabilities (including salaries of its own employees) from its own funds; provided, however, nothing in this Section will require any member of Company to make any equity contribution to Company.

(xxi) It will not acquire obligations or securities of its partners, members, shareholders, or Affiliates, as applicable.

(xxii) Except as contemplated or permitted by the property management agreement with respect to the Property Manager, it will not permit any Affiliate or constituent party independent access to its bank accounts.

(xxiii) It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds; provided, however, nothing in this Section will require any member of Company to make any equity contribution to Company.

 (xxiv) It will be formed and organized under Delaware law.

 (b)Single Purpose Entity.  In order to preserve and ensure its separate and distinct identity, in addition to the other provisions set forth herein, at all times the Company will remain a Single Purpose Entity.

(c)Transfers.  No Transfer will be permitted under the Agreement  unless such Transfer complies with the terms and conditions of the Loan Documents.

(d)Indemnification Obligations.  Any indemnification obligation of the Company set forth in the Agreement  shall be subject and fully subordinated to any obligations respecting the Property (including, without limitation, the Loan) and, to the fullest extent permitted by law, such indemnification obligation shall not constitute a claim against the Company in the event that the Company’s cash flow in excess of amounts necessary to pay holders of such obligations with respect to the Property is insufficient to pay such indemnity obligations.

EX-10.2

LIMITED LIABILITY COMPANY AGREEMENT
OF
PT HILLVIEW GP, LLC

This Limited Liability Company Agreement (together with the schedules attached hereto, this “Agreement”) of PT HILLVIEW GP, LLC, a Delaware limited liability company (the “Company”), is entered into by HOLLYWOOD HILLVIEW OWNER, LLC, a Delaware limited liability company, as the sole equity member (the “Member”) and C. ANTHONY SHIPPAM (the “Independent Manager”), as the Special Member and Independent Manager (as defined on Schedule A hereto).  Capitalized terms used and not otherwise defined herein have the meanings set forth on Schedule A hereto.

Member, by execution of this Agreement, hereby forms the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. § 18‑101 et seq.), as amended from time to time (the “Act”), and this Agreement, and the Member and the Special Member and the Independent Manager hereby agree as follows:

Section 1.Name.

The name of the limited liability company formed hereby is PT Hillview GP,LLC.

Section 2.Principal Business Office.

The principal business office of the Company shall be located at 1301 Dove Street, Suite 960, Newport Beach, CA 92660 or such other location as may hereafter be determined by the Member.

Section 3.Registered Office.

The address of the registered office of the Company in the State of Delaware is 1201 N. Orange Street, Suite 7044 Wilmington, Delaware.

Section 4.Registered Agent.

The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Sorensen Entity Services LLC, 1201 N. Orange Street, Suite 7044 Wilmington, Delaware.

Section 5.Member.

(a)The mailing address of the Member is set forth on Schedule B attached hereto.  The Member was admitted to the Company as a member of the Company upon its execution of a counterpart signature page to this Agreement.

(b)Subject to Section 9(d), the Member may act by written consent.

(c)The Member shall at all times cause there to be at least one Person bound by this Agreement as an Independent Manager.  Upon the occurrence of any event that causes Member to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon (i) an assignment by Member of all of its limited liability company interest in the Company and the admission of the transferee pursuant to Sections 21 and 23, or (ii) the resignation of Member and the admission of an additional member of the Company pursuant to Sections 22 and 23), each Person acting as an Independent Manager pursuant to Section 10 shall, without any action of any Person and simultaneously with Member ceasing to be a member of the Company, automatically be admitted to the Company as a Special Member and shall preserve and continue the Company without dissolution.  No Special Member may resign from the Company or transfer its rights as Special Member unless (i) a successor Special Member has been admitted to the Company as Special Member by executing a counterpart to this Agreement, and (ii) such successor has also accepted its appointment as an Independent Manager pursuant to Section 10; provided, however, Special Member shall automatically cease to be a member of the Company upon the admission to the Company of a substitute Member.  Each Special Member shall be a member of the Company that has no interest in the profits, losses and capital of the Company and has no right to receive any distributions of Company assets.  Pursuant to Section 18-301 of the Act, a Special Member shall not be required to make any capital contributions to the Company and shall not receive a limited liability company interest in the Company.  A Special Member, in its capacity as Special Member, may not bind the Company.  Except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Company, including, without limitation, the merger, consolidation or conversion of the Company; provided, however, such prohibition shall not limit the obligations of the Special Member, in its capacity as an Independent Manager, to vote on such matters required by this Agreement.  In order to implement the admission to the Company of Special Member, each Person acting as an Independent Manager pursuant to Section 10 shall execute a counterpart to this Agreement.  Prior to its admission to the Company as Special Member, each Person acting as an Independent Manager pursuant to Section 10 shall not be a member of the Company.

Section 6.Certificates.

Chris Sorensen is hereby designated as an “authorized person” within the meaning of the Act, and has executed, delivered and filed the Certificate of Formation of the Company with the Secretary of State of the State of Delaware.  Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an “authorized person” ceased, and Member thereupon became the designated “authorized person” and shall continue as the designated “authorized person” within the meaning of the Act.  Member or an Officer shall execute, deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in California and in any other jurisdiction in which the Company may wish to conduct business.

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

Section 7.Purpose.

(a)The purpose to be conducted or promoted by the Company is to engage in the following activities:

(i) to acquire, own, lease, maintain, manage and operate the Property;

(ii) to enter into and perform its obligations under the Loan Documents;

(iii) to refinance the Property in connection with a permitted repayment of the Loan; and

(iv) to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the laws of the State of Delaware that are related or incidental to and necessary, convenient or advisable for the accomplishment of the above‑mentioned purposes.

(b)The Company is hereby authorized to execute, deliver and perform, and the Member or any Officer on behalf of the Company are hereby authorized to execute and deliver, the Basic Documents and all documents, agreements, certificates, or financing statements contemplated thereby or related thereto, all without any further act, vote or approval of any Member, Officer or other Person notwithstanding any other provision of this Agreement, the Act or applicable law, rule or regulation.  The foregoing authorization shall not be deemed a restriction on the powers of Member or any Officer to enter into other agreements on behalf of the Company.

Section 8.Powers.

Subject to Section 9(d), the Company, and Member and the Officers on behalf of the Company, (i) shall have and exercise all powers necessary, convenient or incidental to accomplish its purposes as set forth in Section 7 and (ii) shall have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act.

Section 9.Management.

(a)Subject to Section 9(d), the business and affairs of the Company shall be managed by or under the direction of Member.  Subject to Section 10, the Member may determine at any time in its sole and absolute discretion the number of Independent Managers.  The initial number of Independent Managers shall be one.  The initial Independent Manager designated by the Member is C. Anthony Shippam.

(b)Powers.  Subject to Section 9(d), Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise.  Subject to Sections 7 and 9, Member has the authority to bind the Company.

(c)Member as Agent.  To the extent of its powers set forth in this Agreement and subject to Section 9(d), Member is an agent of the Company for the purpose of the Company’s business, and the actions of Member taken in accordance with such powers set forth in this Agreement shall bind the Company.

(d)Limitations on the Company’s Activities.

(i) This Section 9(d) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity.

(ii) Member shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definition of “Independent Manager” or Sections 5(c), 7, 8, 9, 10, 16, 20, 21, 22, 23, 24, 25, 26, 29, 31, 35, 36 or 37 or Schedule A of this Agreement without the unanimous written consent of Member, Independent Manger and Lender.  Subject to this Section 9(d), Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 31.

(iii) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, any Officer or any other Person, so long as any Obligation is outstanding, neither Member nor any Officer nor any other Person shall be authorized or empowered, nor shall they permit the Company to, and the Company shall not, without the prior written consent of the Member and the Independent Manager, take any Material Action; provided, however, that, so long as any Obligation is outstanding, the Member shall not authorize the taking of any Material Action unless there is at least one Independent Manager then serving in such capacity and such Independent Manager consents thereto.

(iv) Member shall cause the Company to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises.  The Company represents, warrants and covenants that the Company:

(A) maintain its own separate books and records and bank accounts;

(B) at all times hold itself out to the public and all other Persons as a legal entity separate from Member and any other Person;

(C) file its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law;

(D) except as contemplated by the Basic Documents, not commingle its assets with assets of any other Person;

(E) conduct its business in its own name and strictly comply with all organizational formalities to maintain its separate existence;

(F) maintain separate financial statements;

(G) pay its own liabilities only out of its own funds;

(H) maintain an arm’s length relationship with its Affiliates and Member;

(I) pay the salaries of its own employees, if any;

(J) not hold out its credit or assets as being available to satisfy the obligations of others;

(K) allocate fairly and reasonably any overhead for shared office space;

(L) use separate stationery, invoices and checks;

(M) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person;

(N) correct any known misunderstanding regarding its separate identity;

(O) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities;

(P) not acquire any securities of Member;

(Q) cause the Officers, agents and other representatives of the Company to act at all times with respect to the Company consistently and in furtherance of the foregoing and in the best interests of the Company; and;

(R) otherwise comply with the provisions set forth in Section 3.1.24, Section 4.1.15 and Schedule III of the Loan Agreement.

Failure of the Company, or Member on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of Member.

(v) So long as any Obligation is outstanding, Member shall not cause or permit the Company to:

(A) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate;

(B) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 9(d);

(C) incur, create or assume any indebtedness other than as expressly permitted under the Basic Documents;

(D) make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions;

(E) (1) to the fullest extent permitted by law, divide, dissolve, merge, liquidate, consolidate; (2) sell, transfer, dispose, or encumber (except in accordance with the Loan Documents) all or substantially all of its assets or properties or acquire all or substantially all of the assets or properties of any other Person; or (3) engage in any other business activity, or amend this Agreement or any of the Company’s other organizational or governing documents with respect to any of the matters set forth in Section 3.1.24, Section 4.1.15 and Schedule III of the Loan Agreement, without the prior consent of Lender; or

(F) form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Section 10.Independent Manager.

As long as any Obligation is outstanding, the Member shall cause the Company at all times to have at least one Independent Manager who will be appointed by the Member.  To the fullest extent permitted by law, including Section 18-1101(c) of the Act, and notwithstanding any duty otherwise existing at law or in equity, the Independent Manager shall consider only the interests of the Company, including its creditors, in acting or otherwise voting on the matters referred to in Sections 9(d)(ii) and Section 9(d)(iii).  Except for duties to the Company as set forth in the immediately preceding sentence (including duties to the Member and the Company’s creditors solely to the extent of their respective economic interests in the Company but excluding (i) all other interests of the Member, (ii) the interests of other Affiliates of the Company, and (iii) the interests of any group of Affiliates of which the Company is a part), the Independent Manager shall not have any fiduciary duties to the Member, any Officer or any other Person bound by this Agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.  To the fullest extent permitted by law, including Section 18-1101(e) of the Act, an Independent Manager shall not be liable to the Company, the Member or any other Person bound by this Agreement for breach of contract or breach of duties (including fiduciary duties), unless the Independent Manager acted in bad faith or engaged in willful misconduct.  No resignation or removal of an Independent Manager, and no appointment of a successor Independent Manager, shall be effective until such successor (i) shall have accepted his or her appointment as an Independent Manager by a written instrument, which may be a counterpart signature page to this Agreement, and (ii) shall have executed a counterpart to this Agreement as required by Section 5(c).  In the event of a vacancy in the position of Independent Manager, the Member shall, as soon as practicable, appoint a successor Independent Manager.  Notwithstanding anything to the contrary contained in this Agreement, no Independent Manager shall be removed or replaced, nor shall any such removal or replacement become effective, unless the Company provides the Lender with no less than three (3) business days’ prior written notice of (a) any proposed removal of such Independent Manager, together with a statement as to the reasons for such removal, and (b) the identity of the proposed replacement Independent Manager, together with a certification that such replacement satisfies the requirements for an Independent Manager set forth in this Agreement.  All right, power and authority of the Independent Manager shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this Agreement.  No Independent Manager shall at any time serve as trustee in bankruptcy for any Affiliate of the Company.  An Independent Manager is hereby designated as a “manager” within the meaning of Section 18-101(12) of the Act.

Section 11.Officers.

Member may, from time to time as it deems advisable, appoint officers of the Company (the “Officers”) and assign in writing titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person.  Unless Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office.  Any delegation pursuant to this Section 11 may be revoked at any time by Member.  The initial Officers are listed on Schedule C attached hereto.  Member may revise Schedule C in its sole discretion at any time.

Section 12.Limited Liability.

Except as otherwise expressly provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company, and none of the Member, the Special Member, the Independent Manager, and any Officer shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member, Special Member, Independent Manager or Officer of the Company.

Section 13.Capital Contributions.

Member has contributed to the Company property of an agreed value as listed on Schedule B attached hereto.  In accordance with Section 5(c), the Special Member shall not be required to make any capital contributions to the Company.

Section 14.Additional Contributions.

Member is not required to make any additional capital contribution to the Company. However, Member may make additional capital contributions to the Company at any time upon the written consent of such Member.  To the extent that Member makes an additional capital contribution to the Company, Member shall revise Schedule B of this Agreement.  The provisions of this Agreement, including this Section 14, are intended to benefit Member and Special Member and, to the fullest extent permitted by law, except as expressly set forth in Section 26(b) of this Agreement, shall not be construed as conferring any benefit upon any creditor of the Company (other than a Covered Person) (and no such creditor of the Company shall be a third-party beneficiary of this Agreement) and Member and Special Member shall not have any duty or obligation to any creditor of the Company to make any contribution to the Company or to issue any call for capital pursuant to this Agreement.

Section 15.Allocation of Profits and Losses.

The Company’s profits and losses shall be allocated to Member.

Section 16.Distributions.

Distributions shall be made to Member at the times and in the aggregate amounts determined by Member.  Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to Member on account of its interest in the Company if such distribution would violate the Act or any other applicable law or any Basic Document.

Section 17.Books and Records.

Member shall keep or cause to be kept complete and accurate books of account and records with respect to the Company’s business.  Member and its duly authorized representatives shall have the right to examine the Company books, records and documents during normal business hours.  The Company’s books of account shall be kept using the method of accounting determined by Member.  The Company’s independent auditor, if any, shall be an independent public accounting firm selected by Member.

Section 18.Intentionally Omitted.

Section 19.Other Business.

Notwithstanding any duty otherwise existing at law or in equity, the Member, the Special Member, the Independent Manager, and any Officer and any Affiliate of the Member or the Special Member, the Independent Manager or any Officer may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others.  The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

Section 20.Exculpation and Indemnification.

(a)To the fullest extent permitted by applicable law, neither the Member nor the Special Member nor the Independent Manager nor any Officer, director, employee, agent of the Company nor any employee, representative, agent or Affiliate of Member, Special Member, Independent Manager or any Officer (collectively, the “Covered Persons”) shall, to the fullest extent permitted by law, be liable to the Company or any other Person that is a party to or is otherwise bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence (or, in the case of the Independent Manager, bad faith) or willful misconduct.

(b)To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence (or, in the case of the Independent Manager, bad faith) or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 20 by the Company shall be provided out of and to the extent of Company assets only, and the Member and the Special Member and the Independent Manager and any Officer shall not have personal liability on account thereof; and provided further, that so long as any Obligation is outstanding, no indemnity payment from funds of the Company (as distinct from funds from other sources, such as insurance) of any indemnity under this Section 20 shall be payable from amounts allocable to any other Person pursuant to the Basic Documents.

(c)To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Section 20.

(d)A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to Member might properly be paid.

(e)To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement or any approval or authorization granted by the Company or any other Covered Person.  The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person to the Company or its members otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person.

(f)Notwithstanding anything in this Agreement to the contrary, unless Lender (for so long as any Obligation is outstanding) agrees in writing otherwise, any indemnity of any Covered Person under this Section 20 or otherwise shall be fully subordinated to any Obligations, shall not constitute a claim against the Company in the event that the Company’s cash flow is insufficient to pay such Obligations and shall not be paid whenever any amount is past due under the Loan Documents.

(g)The foregoing provisions of this Section 20 shall survive any termination of this Agreement.

Section 21.Assignments.

Member may assign in whole or in part its limited liability company interest in the Company.  Subject to Section 23, the transferee of a limited liability company interest in the Company shall be admitted to the Company as a member of the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement, which instrument may be a counterpart signature page to this Agreement.  If Member transfers all of its limited liability company interest in the Company pursuant to this Section 21, such admission shall be deemed effective immediately prior to the transfer and, immediately following such admission, the transferor Member shall cease to be a member of the Company.  Notwithstanding anything in this Agreement to the contrary, any successor to Member by merger or consolidation in compliance with the Basic Documents shall, without further act, be Member hereunder, and such merger or consolidation shall not constitute an assignment for purposes of this Agreement and the Company shall continue without dissolution.

Section 22.Resignation.

Notwithstanding anything in this Agreement to the contrary, so long as any Obligation is outstanding, Member may not resign, except as permitted under the Basic Documents and if the Rating Agency Condition is satisfied.  If Member is permitted to resign pursuant to this Section 22, an additional member of the Company shall be admitted to the Company, subject to Section 23, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement, which instrument may be a counterpart signature page to this Agreement.  Such admission shall be deemed effective immediately prior to the resignation and, immediately following such admission, the resigning Member shall cease to be a member of the Company.

Section 23.Admission of Additional Members.

One or more additional Members of the Company may be admitted to the Company with the written consent of Member; provided, however, that, notwithstanding the foregoing, so long as any Obligation remains outstanding, no additional Member may be admitted to the Company, other than pursuant to Section 24(a), unless the Rating Agency Condition is satisfied.

Section 24.Dissolution.

(a)Subject to Section 9(d), the Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following:  (i) the termination of the legal existence of the last remaining member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act or (ii) the entry of a decree of judicial dissolution of the Company under Section 18‑802 of the Act.  Upon the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company or that causes Member to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon (i) an assignment by Member of all of its limited liability company interest in the Company and the admission of the transferee pursuant to Sections 21 and 23, or (ii) the resignation of Member and the admission of an additional member of the Company pursuant to Sections 22 and 23), to the fullest extent permitted by law, the personal representative of such member is hereby authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the existence of the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining member of the Company or Member in the Company.

(b)Notwithstanding any other provision of this Agreement, the Bankruptcy of Member or a Special Member shall not cause Member or Special Member, respectively, to cease to be a member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.

(c)Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law, each of Member and Special Member waives any right or power that it might have to cause the Company or any of its assets or properties to be partitioned, to cause the appointment of a receiver for all or any portion of the assets or property of the Company, to compel any sale of all or any portion of the assets or property of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company.

(d)In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets and property of the Company in an orderly manner), and the assets and property of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18‑804 of the Act.

(e)The Company shall terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company shall have been distributed to Member in the manner provided for in this Agreement and (ii) the Certificate of Formation shall have been canceled in the manner required by the Act.

Section 25.Waiver of Partition; Nature of Interest.

Except as otherwise expressly provided in this Agreement, to the fullest extent permitted by law, each of Member, Special Member and Independent Managerhereby irrevocably waives any right or power that such Person might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company.  Member shall not have any interest in any specific assets of the Company, and Member shall not have the status of a creditor with respect to any distribution pursuant to Section 16 hereof.  The interest of Member in the Company is personal property.

Section 26.Benefits of Agreement; No Third‑Party Rights.

(a)Except as expressly set forth in clause (b) below, none of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or by any creditor of Member or a Special Member.  Except as expressly set forth in clause (b) below, nothing in this Agreement shall be deemed to create any right in any Person (other than Covered Persons) not a party hereto, and this Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third Person (except as provided in Section 29).

(b)The parties acknowledge that Lender is an intended third-party beneficiary of this Agreement.

Section 27.Severability of Provisions.

Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

Section 28.Entire Agreement.

This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

Section 29.Binding Agreement.

Notwithstanding any other provision of this Agreement, Member agrees that this Agreement, including, without limitation, Sections 7, 8, 9, 10, 20, 21, 22, 23, 24, 26, 29, 31 and 35, constitutes a legal, valid and binding agreement of Member, and is enforceable against Member by the Independent Manager in accordance with its terms. In addition, the Independent Managers shall be intended beneficiaries of this Agreement

Section 30.Governing Law.

This Agreement shall be governed by and construed under the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.

Section 31.Amendments.

Subject to Section 9(d), this Agreement may be modified, altered, supplemented or amended pursuant to a written agreement executed and delivered by Member.  Notwithstanding anything to the contrary in this Agreement, so long as any Obligation is outstanding, this Agreement may not be modified, altered, supplemented or amended unless the Rating Agency Condition is satisfied and Lender has provided its prior written consent to such modification, alteration, supplement or amendment.

Section 32.Counterparts.

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

Section 33.Notices.

Any notices required to be delivered hereunder shall be in writing and personally delivered, mailed or sent by telecopy, electronic mail or other similar form of rapid transmission, and shall be deemed to have been duly given upon receipt (a) in the case of the Company, to the Company at its address in Section 2, (b) in the case of Member, to Member at its address as listed on Schedule B attached hereto and (c) in the case of either of the foregoing, at such other address as may be designated by written notice to the other party.

Section 34.Effectiveness.

Pursuant to Section 18‑201(d) of the Act, this Agreement shall be effective as of the time of the filing of the Certificate of Formation with the Office of the Delaware Secretary of State on July 19, 2021.

Section 35.Certificated Limited Liability Company Interests.

(a)Each limited liability company interest in the Company shall constitute a “security” within the meaning of, and be governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995 and the Company hereby “opts-in” to such provisions for the purpose of the Uniform Commercial Code.  The Company shall maintain books for the purpose of registering the transfer of limited liability company interests, and, upon any transfer of limited liability company interests in the Company, the Company shall notify the registered owner of any applicable restrictions on the transfer of limited liability company interests.

(b)The limited liability company interest in the Company shall be evidenced by certificates in the form of Exhibit 1 hereto.  Each such certificate shall be executed by manual or facsimile signature of an Officer on behalf of the Company.  The Company shall maintain books for the purpose of registering the transfer of limited liability company interests.  In connection with a transfer in accordance with this Agreement of any limited liability company interest in the Company, the certificate(s) evidencing the limited liability company interests shall be delivered to the Company for cancellation, and the Company shall thereupon issue a new certificate to the transferee evidencing the limited liability company interests that were transferred and, if applicable, the Company shall issue a new certificate to the transferor evidencing any limited liability company interests registered in the name of the transferor that were not transferred.

(c)Notwithstanding any other provisions of this Agreement to the contrary, for so long as the Total Loan remains outstanding, no certificates (other than the certificate and any new certificate issued in accordance with the foregoing subsection (b)) shall be issued by the Company without the prior written consent of Lender (and Lender may condition any such consent upon the compliance by the Person to which such certificate is issued with such restrictions as Lender may reasonably request).

Section 36.Additional Limited Liability Company Interests Provisions.

Notwithstanding any other provision of this Agreement, as long as the Loan remains outstanding:

(a)Upon a foreclosure, sale or other transfer of all of the limited liability company interests in the Company pursuant to the Pledge and Security Agreement by Member in favor of Lender (any such foreclosure, sale or other transfer, a “Foreclosure Sale”), the holder of such limited liability company interests (the “Holder”) shall automatically be admitted as a member of Company with all the rights and obligations of a Member hereunder upon the execution of a counterpart signature page to this Agreement.  Such admission shall be deemed effective immediately prior to such transfer and, immediately following such admission, the transferor Member shall cease to be a member of the Company.  To the fullest extent permitted by law, the pledge of the limited liability company interests in the Company made by Member in connection with the Pledge and Security Agreement shall be a pledge not only of profits and losses of the Company, but also a pledge of all rights and obligations of Member.  Upon a Foreclosure Sale and the admission of the Holder as a member of the Company in accordance with this Section 36, such Holder may transfer its limited liability company interests in the Company;

(b)To the fullest extent permitted by applicable law, Member shall be permitted to pledge and transfer to Lender its rights and power to manage and control the affairs of the Company pursuant to the terms of the Pledge and Security Agreement and this Agreement.  Upon the admission of the Holder as a member of the Company in accordance with subsection (a) hereof, such Holder shall have, among its other powers as Member of the Company pursuant to this Agreement and the Act, the right to substitute Member.

Section 37.Division.

Member agrees that the Company shall not have the power to divide as set forth in Section 217(k) of the Act. In furtherance of the foregoing, the Company shall not enter into a “plan of division” or file a “certificate of division”, and the company may not become a “dividing company” or effect a “division” (as such terms are defined in Section 217 of the Act).

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Limited Liability Company Agreement as of the fourth day of October, 2021.

MEMBER:

HOLLYWOOD HILLVIEW OWNER, LLC,

a Delaware limited liability company

By: True USA, LLC,

a Delaware limited liability company

Its: Manager

By: JCI Development, Inc,

a Colorado corporation

its: manager

By:__________________________

Name:Jeffrey Isenstadt

Title:President

By: Viking Capital LLC,

a California limited liability company

its: manager

By:__________________________

Name:William R. Erickson

Title:Operating Member

By: Asaz LTD,

a Texas limited partnership

its:manager

By: Asaz Interest, Inc.

a Texas corporation

its: general partner

By: __________________________

Name:Ashraful Islam

Title:President

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Limited Liability Company Agreement as of the fourth day of October, 2021.

SPECIAL MEMBER / INDEPENDENT MANAGER:

___________________________________
Name: C. Anthony Shippam

SCHEDULE A

Definitions

A.Definitions

When used in this Agreement, the following terms not otherwise defined herein have the following meanings:

“Act” has the meaning set forth in the preamble to this Agreement.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person.

“Agreement” means this Limited Liability Company Agreement of the Company, together with the schedules attached hereto, as amended, restated or supplemented or otherwise modified from time to time.

“Bankruptcy” means, with respect to any Person, (A) if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, or (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (B) if 120 days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within 90 days after the appointment without such Person's consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay, the appointment is not vacated.  The foregoing definition of "Bankruptcy" is intended to replace and shall supersede and replace the definition of "Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the Act.

“Basic Documents” means this Agreement, the Loan Documents and all other documents and certificates contemplated thereby or delivered in connection therewith.

“Certificate of Formation” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on July, 19 2021, as amended or amended and restated from time to time.

“Company” means PT Hillview, GP LLC, a Delaware limited liability company.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or general partnership or managing member interests, by contract or otherwise. "Controlling" and "Controlled" shall have correlative meanings. Without limiting the generality of the foregoing, a Person shall be deemed to Control any other Person in which it owns, directly or indirectly, a majority of the ownership interests.

“Covered Persons” has the meaning set forth in Section 20(a).

“Foreclosure Sale” has the meaning set forth in Section 36(a).

“Holder” has the meaning set forth in Section 36(a).

“Independent Manager” shall mean an individual who (i) has at least three (3) years prior employment experience and continues to be employed as an Independent Manager, independent manager or independent member by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Managers, independent managers and independent members, another nationally-recognized company that provides such services and which is reasonably approved by Lender; (ii) is not an Independent Manager or independent manager of more than two (2) Affiliates of the Company and is not the Independent Manager or independent director of the Member; and (iii) is not, and has never been, and will not, while serving as an Independent Manager be, any of the following:

(A)a stockholder, director, manager (other than as an Independent Manager), manager, officer, employee, partner, member, attorney or counsel of the Company, any Affiliate of the Company or any direct or indirect equity holder of any of them;

(B)a creditor, customer, supplier, service provider (including provider of professional services) or other Person who derives any of its purchases or revenues from its activities with the Company or any Affiliate of the Company (other than a nationally-recognized company that routinely provides professional Independent Managers, independent managers or independent members and other corporate services to the Company or any Affiliate of the Company in the ordinary course of its business);

(C)a member of the immediate family of any such stockholder, director, manager, officer, employee, partner, member, creditor, customer, supplier, service provider or other Person; or

(D)a Person Controlling or under common Control with any of (A), (B) or (C) above.

A natural person who satisfies the foregoing definition shall not be disqualified as a result of clause (A) by reason of (I) being, having been or becoming an Independent Manager of an Affiliate of the Company that is not in the direct chain of ownership of the Company or the Member and that is required by a creditor to be a "single purpose entity"; provided that such Independent Manager is, was or will be employed by a company that routinely provides professional Independent Managers, independent managers or independent members, or (II) being, having been or becoming a member of the Company pursuant to an express provision in this Agreement providing for the appointment of such Independent Manager as a member of the Company upon the occurrence of any event pursuant to which Member ceases to be a member of the Company (including the withdrawal, resignation or dissolution of Member). A natural person who satisfies the foregoing definition shall not be disqualified as a result of clause (A) or (B) by reason of being, having been or becoming an Independent Manager of a "single purpose entity" affiliated with the Company; provided that the fees or other compensation that such individual earns by serving as an Independent Manager of one or more Affiliates of the Company in any given year constitute, in the aggregate, less than five percent (5%) of Such individual's income for such year. As used in this definition, the term "single purpose entity" shall mean a Person whose organizational or governing documents contain, and who covenants that such Person shall comply or cause compliance with, provisions substantially similar to the foregoing.

“Lender” means Ladder Capital Finance LLC, a Delaware limited liability company, and its successors and/or assigns.

“Loan” has the meaning assigned to that term in the Loan Agreement.

“Loan Agreement” means that certain Loan Agreement, dated as of October 4, 2021, executed by and between the Company and Lender, as amended, restated, supplemented or otherwise modified from time to time.

“Loan Documents” has the meaning assigned to that term in the Loan Agreement.

“Material Action” means to (A) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, (B) seek or consent to the appointment of a receiver, liquidator or any similar official for such entity or a substantial portion of its assets or properties, (C) take any action that might cause such entity to become insolvent, (D) make an assignment for the benefit of creditors, (E) admit in writing such entity's inability to pay its debts generally as they become due, (F) declare or effectuate a moratorium on the payment of any obligations, or (G) take any action in furtherance of any of the foregoing.

“Member” means Hollywood Hillview Owner, LLC, a Delaware limited liability company, as the initial member of the Company, and includes any Person admitted as an additional member of the Company or a substitute member of the Company pursuant to the provisions of this Agreement, each in its capacity as a member of the Company; provided, however, the term “Member” shall not include Special Member.

“Obligation” shall mean the indebtedness, liabilities and obligations of the Company under or in connection with this Agreement, the other Basic Documents or any related document in effect as of any date of determination.

“Officer” means an officer of the Company as described in Section 11.

“Person” means any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, joint stock company, trust, unincorporated organization, or other organization, whether or not a legal entity, and any governmental authority.

“Pledge and Security Agreement” means that certain Pledge and Security Agreement dated as even date with the Loan Agreement executed by Member in favor of Lender.

“Property” has the meaning assigned to that term in the Loan Agreement.

“Rating Agency” has the meaning assigned to that term in the Basic Documents.

“Rating Agency Condition” means (i) with respect to any action taken at any time before the loan evidenced and secured by the Basic Documents has been sold or assigned to a securitization trust, that the lender thereunder has consented in writing to such action, and (ii) with respect to any action taken at any time after such loan has been sold or assigned to a securitization trust, that each Rating Agency shall have been given ten days prior notice thereof and that each of the Rating Agencies shall have notified the Company in writing that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any of securities issued by such securitization trust.

“Special Member” means, upon such person’s admission to the Company as a member of the Company pursuant to Section 5(c), a person acting as Independent Manager, in such person’s capacity as a member of the Company.  A Special Member shall only have the rights and duties expressly set forth in this Agreement.

B.Rules of Construction

Definitions in this Agreement apply equally to both the singular and plural forms of the defined terms.  The words “include” and “including” shall be deemed to be followed by the phrase “without limitation.”  The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, paragraph or subdivision.  The Section titles appear as a matter of convenience only and shall not affect the interpretation of this Agreement.  All Section, paragraph, clause, Exhibit or Schedule references not attributed to a particular document shall be references to such parts of this Agreement.

SCHEDULE B

Member

Name	Mailing Address	Agreed Value of Capital Contribution	Limited Liability Company Interest
HOLLYWOOD HILLVIEW OWNER, LLC	1301 Dove Street, Suite 960, Newport Beach, CA 92660	$______________	100%

SCHEDULE C

Officers

NONE

EXHIBIT 1

Form of Certificate

CERTIFICATE FOR LIMITED LIABILITY COMPANY INTERESTS IN

PT HILLVIEW GP, LLC

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OR BLUE SKY LAWS OF ANY STATE.  THE HOLDER OF THIS CERTIFICATE, BY ITS ACCEPTANCE HEREOF, REPRESENTS THAT IT IS ACQUIRING THIS SECURITY FOR INVESTMENT AND NOT WITH A VIEW TO ANY SALE OR DISTRIBUTION HEREOF.  ANY TRANSFER OF THIS CERTIFICATE OR ANY LIMITED LIABILITY COMPANY INTEREST REPRESENTED HEREBY IS SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT (AS DEFINED BELOW).

Certificate Number 001100% Percentage Interest

PT HILLVIEW GP, LLC, a Delaware limited liability company (the “Company”), hereby certifies that HOLLYWOOD HILLVIEW OWNER, LLC, a Delaware limited liability company (the “Holder”) is the registered owner of one hundred percent (100%) of the limited liability company interests in the Company.  The rights, powers, preferences, restrictions and limitations of such limited liability company interests in the Company are set forth in, and this Certificate and the limited liability company interests in the Company represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Limited Liability Company Agreement of the Company dated as of October 4, 2021, as the same may be further amended or restated from time to time (the “Limited Liability Company Agreement”).  By acceptance of this Certificate, and as a condition to being entitled to any rights and/or benefits with respect to the limited liability company interests evidenced hereby, the Holder is deemed to have agreed to comply with and be bound by all the terms and conditions of the Limited Liability Company Agreement.  The Company will furnish a copy of the Limited Liability Company Agreement to the Holder without charge upon written request to the Company at its principal place of business.  Transfer of any or all of the limited liability company interests in the Company evidenced by this Certificate is subject to certain restrictions in the Limited Liability Company Agreement and can be effected only after compliance with all of those restrictions and the presentation to the Company of this Certificate, accompanied by an assignment in the form appearing on the reverse side of this Certificate, duly completed and executed by and on behalf of the transferor in such Transfer, and an application for transfer in the form appearing on the reverse side of this Certificate, duly completed and executed by and on behalf of the transferee in such Transfer.

Each limited liability company interest in the Company shall constitute a “security” within the meaning of, and governed by Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, Article 8 of the Uniform Commercial Code as in effect in the State of New York (the “Code”) and Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

This Certificate and the limited liability company interests evidenced hereby shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws.

Dated: [_______________], 202[__].

PT HILLVIEW GP, LLC,

a Delaware limited liability company

By:__________________________

Name:

Title:

REVERSE SIDE OF CERTIFICATE

REPRESENTED INTERESTS OF

PT HILLVIEW GP, LLC

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________________________ (print or typewrite name of transferee), __________________ (insert Social Security or other taxpayer identification number of transferee), the following specified percentage of limited liability company interests in the Company: ______________ (identify the percentage interest being transferred) effective as of the date specified in the Application for Transfer of Interests below, and irrevocably constitutes and appoints __________________________ and its authorized officers, as attorney-in-fact, to transfer the same on the books and records of the Company, with full power of substitution in the premises.

Dated: [_______________], 202[__].

HOLLYWOOD HILLVIEW OWNER, LLC,

a Delaware limited liability company

By:__________________________

Name:

Title:

APPLICATION FOR TRANSFER OF INTERESTS

The undersigned applicant (the “Applicant”) hereby (a) applies for a transfer of the percentage of limited liability company interests in the Company described above (the “Transfer”) and applies to be admitted to the Company as a substitute member of the Company, (b) agrees to comply with and be bound by all of the terms and provisions of the Limited Liability Company Agreement, (c) represents that the Transfer complies with the terms and conditions of the Limited Liability Company Agreement, (d) represents that the Transfer does not violate any applicable laws and regulations, and (e) agrees to execute and acknowledge such instruments (including, without limitation, a counterpart of the Limited Liability Company Agreement), in form and substance satisfactory to the Company, as the Company reasonably deems necessary or desirable to effect the Applicant’s admission to the Company as a substitute member of the Company and to confirm the agreement of the Applicant to be bound by all the terms and provisions of the Limited Liability Company Agreement with respect to the limited liability company interests in the Company described above.  Initially capitalized terms used herein and not otherwise defined herein are used as defined in the Limited Liability Company Agreement.

The Applicant directs that the foregoing Transfer and the Applicant’s admission to the Company as a Substitute Member shall be effective as of ______________________________.

Name of Transferee (Print)

____________________________________

Dated: _______________Signature:________________________

(Transferee)

Address: ________________________________________________________

The Company (a) has determined that the Transfer described above is permitted by the Limited Liability Company Agreement, (b) hereby agrees to effect such Transfer and the admission of the Applicant as a substitute member of the Company effective as of the date and time directed above, and (c) agrees to record, as promptly as possible, in the books and records of the Company the admission of the Applicant as a substitute member.

PT HILLVIEW GP, LLC,

a Delaware limited liability company

By:__________________________

Name:

Title: