EFTA02435864.pdf

LIMITED LIABILITY COMPANY AGREEMENT OF C3 ACQUISITION CO. LLC EFTA_R1_01508099 EFTA02435864  TABLE OF CONTENTS Page ARTICLE I GENERAL PROVISIONS Section 1.1 Formation 1 Section 1.2 Name 1 Section 1.3 Agent for Service and Registered Office 1 Section 1.4 Purpose Section 1.5 Place of Business 12 Section 1.6 Nature of Relationship 42 ARTICLE II DEFINITIONS; COMMITMENTS; CLOSING; CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS Section 2.1 Definitions 12 Section 2.2 Commitments; Closing; Capital Contributions Section 2.3 Capital Accounts Section 2.4 Distributions in Kind 4-2 ARTICLE III DISTRIBUTIONS; COMPANY ACTIVITIES; PRE-EMPTIVE RIGHTS Section 3.1 Distribution Priority +2 Section 3.2 Company Activities; Island Commitments -1-J2 Section 3.3 Pre-emptive Rights 4-11 ARTICLE IV EXPENSES Section 4.1 Expenses 4-jj ARTICLE V MANAGING MEMBER Section 5.1 Management Authority; No Removal -1-jj Section 5.2 No Transfer of Interest; No Withdrawal or Loans -1-12 Section 5.3 No Liability to Members 412 Section 5.4 Indemnification of Indemnified Parties -1-11 EFTA_R1_01508100 EFTA02435865 Section 5.5 No Waiver ARTICLE VI MEMBERS Section 6.1 Admission of Members 414 Section 6.2 Limited Liability 41,4 Section 6.3 Transfer of Interests 4-IA Section 6.4 No Withdrawal 4-1¢ Section 6.5 No Dissolution 4-1Q Section 6.6 Indemnification and Reimbursement for Payments on Behalf of a Member 4-1,Q Section 6.7 Confidentiality -112 Section 6.8 Representations and Warranties 412 Section 6.9 Covenants 412 ARTICLE VII DURATION AND TERMINATION Section 7.1 Duration 4.12 Section 7.2 Termination and Liquidation of Company Interests 4-2Q ARTICLE VIII VALUATION OF COMPANY ASSETS Section 8.1 Valuation 421 ARTICLE IX ALLOCATIONS Section 9.1 Allocation of Net Profits and Net Losses 421 Section 9.2 Regulatory Allocations 422 Section 9.3 Tax Allocations 4-22 ARTICLE X BOOKS AND RECORDS; MEETINGS Section 10.1 Books and Records; Inspection 4-24 Section 10.2 Fiscal Year 4-24 Section 10.3 Financial Records 424 Section 10.4 Accounting Methods 424 Section 10.5 Tax Controversies 424 Section 10.6 Certain Tax Elections 424 11 EFTA_R1_01508101 EFTA02435866 Section 10.7 Withholding ARTICLE XI POWER OF ATTORNEY Section 11.1 Power of Attorney 4-21 ARTICLE XII MISCELLANEOUS Section 12.1 Amendments -1-25. Section 12.2 Involvement of the Company in Certain Proceedings -1-2¢ Section 12.3 Successors 42¢ Section 12.4 No Third Party Rights -1-2.§ Section 12.5 Governing Law; Severability 42¢ Section 12.6 Notices -1-2,¢ Section 12.7 Side Letters 122 Section 12.8 Miscellaneous 42/ iii EFTA_R1_01508102 EFTA02435867  LIMITED LIABILITY COMPANY AGREEMENT OF C3 ACQUISITION CO. LLC THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is entered into as of {Bete}; 2009, by and among C3 Directives LLC as Managing Member and the persons who agree from time to time to be bound by this Agreement as Members. Capitalized terms used but not defined elsewhere herein have the meanings given to them in Section 2.1. ARTICLE I GENERAL PROVISIONS Section 1.1 Formation. C3 Acquisition Co. LLC (the "Company") was formed as a limited liability company under and pursuant to the LLC Act on IDATEI 2009 upon the filing of the Certificate with the Secretary of State of the State of Delaware in accordance with the LLC Act. The rights and liabilities of the Members shall be as provided in the LLC Act, except as otherwise expressly provided herein. The Managing Member shall execute, acknowledge and file any amendments to the Certificate as may be required by the LLC Act and any other instruments, documents and certificates which, in the opinion of the Company's legal counsel, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Company shall determine to do business, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Company. Section 1.2 Name. The name of the Company will be "C3 Acquisition Co. LLC" or such other name or names as the Managing Member may from time to time designate. The Managing Member will notify Members in writing of any change to the name of the Company. Section 1.3 Agent for Service and Registered Office. The registered office and registered agent of the Company in the State of Delaware shall be the initial registered office and initial registered agent as designated in the Certificate, or such other registered office or registered agent located in Delaware as the Managing Member may designate from time to time with reasonable advance notice to the Members. Section 1.4 Purpose. The purpose of the Company is to fund pre-acquisition overhead and expense costs incurred and to be incurred by Island or its Affiliates on and after May 1, 2009 in connection with evaluating and pursuing an acquisition of Centerline or all or a portion of its assets, liabilities and business operations, in accordance with the provisions of the Authorization Agreement, and to transact any and all lawful business for which a limited liability company may be organized under the LLC Act that is incidental, necessary or appropriate to accomplish the foregoing. In furtherance of such purpose, the Company shall have the power to enter into, make, execute, deliver and perform all contracts, agreements and other undertakings, and engage in all activities and transactions, as may in the opinion of the Managing Member be EFTA_R1_01508103 EFTA02435868 necessary or advisable to carry out such purpose, including, without limitation, contracting for necessary or desirable services of professionals and others. Section 1.5 Place of Business. The Company will maintain its office and principal place of business a New York, NY, 10022, or at such other place or places as the Managing Member may from time to time designate; provided, however, that if the Managing Member designates different places of business, it shall promptly notify the Members in writing. Section 1.6 Nature of Relationship. The relationship between the Members shall be limited to carrying on the purpose of the Company as described in Section 1.4, in accordance with the terms of this Agreement. Such relationship shall be construed and deemed to be a limited liability company for the sole and limited purpose of carrying on the purpose of the Company as described in Section 1.4. Except as otherwise provided for, or contemplated in, this Agreement, nothing herein shall be construed to create a partnership or any other relationship between the Members or to authorize any Member to act as an agent for any other Member. The Managing Member, the Members and their respective Affiliates shall be entitled to and may have business interests and engage in activities in addition to those relating to the Company, including business interests and activities similar in nature to and/or in direct competition with the Company and the entities and assets in which the Company directly and indirectly invests, and no Member shall have any rights by virtue of this Agreement in any such other business interest or activity of the Managing Member or any other Member, nor shall the Managing Member or any other Member have any obligation (fiduciary, contractual or otherwise) to account to the Company or to any other Member for any profits or other benefits derived from such other business interest or activity. For the avoidance of doubt, except as provided in this Agreement, no Member shall have the right to invest in the Centerline Transaction if consummated, nor shall this Agreement or the Company provide any assurance that the Company will invest in the Centerline Transaction, or that the Centerline Transaction will be consummated. ARTICLE II DEFINITIONS; COMMITMENTS; CLOSING; CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS Section 2.1 Definitions. (a) For purposes of this Agreement the following capitalized terms shall have the meanings set forth below: "Accounting Period" means the calendar year and such other fiscal period(s) as the Managing Member determines in its discretion. "Acquisition Entity" means Island or any Affiliate of island or ICG, when and as such entity acquires or otherwise succeeds to Centerline or substantially all or a portion of the assets, liabilities and business operations of Centerline. "Adjusted Capital Account Deficit" means, with respect to a Member's Capital Account, if such Capital Account, determined for this purpose by reducing the Capital Account by the items described in Treas. Reg. Section 1.704-1(bX2)(iiXdX4), (5), or (6) and by increasing 2 EFTA_R1_01508104 EFTA02435869 the Capital Account by the amount described in Treas. Reg. Section 1.704-1(b)(2)(ii)(c) that the Member is obligated to restore, is a negative amount. "Affiliate" means, with respect to any person or entity, any other person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such person or entity, whether by ownership of voting rights, by contract, or otherwise. "Agreement" has the meaning set forth in the introduction. "Anti-Terrorism Law" means any law relating to terrorism or money-laundering, including, without limitation, (i) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 and relating to Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, (ii) the U.S. Patriot Act, (iii) the International Emergency Economic Power Act, 50 U.S.C. § 1701 et seq., (iv) the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. and (v) any related rules and regulations of the U.S. Treasury Department's Office of Foreign Assets Control or any other governmental authority, in each case as the same may be amended, supplemented, modified, replaced or otherwise in effect from time to time. "Authorization Agreement" means the Authorization Agreement, dated July 4, 2009, between Island and Centerline, as amended and supplemented from time to time. "Book Basis" shall mean, with respect to any asset, such asset's adjusted basis for federal income tax purposes, except as follows: (i) the initial Book Basis of any asset contributed by a Member to the Company shall be the Fair Market Value of such asset; (ii) the Book Basis of any Company asset distributed to any Member shall be the Fair Market Value of such asset on the date of distribution; and (iii) the Book Basis of all Company assets shall be adjusted to equal their respective Fair Market Values, as determined by the Managing Member, as of the following times: (a) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for such Member's Interest; and (b) the liquidation of the Company within the meaning of Treas. Reg. Section 1.704-1(bX2Xii)(g); provided, however, that adjustments pursuant to clause (a) of this paragraph shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company; and (iv) if the Book Basis of an asset has been determined or adjusted pursuant to Paragraph (i) or Paragraph (ii) above, such Book Basis shall thereafter be adjusted by the Depreciation taken into account 3 EFTA_R1_01508105 EFTA02435870  with respect to such asset for purposes of computing Net Profits and Net Losses. "Business Day" means any day on which the New York Stock Exchange is open for business. "Capital Account" has the meaning set forth in Section 2.3. "Capital Contribution" means the amount contributed by a Member to the Company as a contribution to capital. "Carried Interest" means the Managing Member's 50% interest in the Company's distributions specified in Section 3.1(ii). "Cash Reserves Account" means the cash reserves bank account established by the Company and into which all Capital Contributions shall be deposited. "Centerline Transaction" means any transaction or series of transactions whereby Island, ICG or any of their Affiliates acquire or otherwise succeed to Centerline or substantially all or a portion of the assets, liabilities and business operations of Centerline. "Centerline" means Centerline Holding Company, a Delaware statutory trust. "Certificate" means the Company's Certificate of Formation. "Closing" means the closing for the sale of Interests. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Commitment" with respect to each person executing the signature page hereto, means the aggregate amount such person agrees to contribute to the Company as a Capital Contribution according to the terms of this Agreement. "Company" has the meaning set forth in Section 1.1. "Confidential Information" means (i) information or materials relating to the Company, the Authorization Agreement, Island, Centerline or the Centerline Transaction that are not generally known to the public (including but not limited to products or services, pricing structures, accounting and business methods, inventions, devices, new developments, methods and processes, names of investors, customers and clients and customer or client lists, copyrightable works and all technology, trade secrets and other proprietary information), (ii) information or materials the disclosure of which the Managing Member in good faith believes is not in the best interests of the Company or Island, and (iii) any other information or materials which the Managing Member, the Company or Island is required by law or agreement to keep confidential. "Covered Person" has the meaning set forth in Section 5.3. 4 EFTA_R1_01508106 EFTA02435871  "Depreciation" means, for each period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such period or other period; provided, however, that if the Book Basis of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such period, Depreciation shall be an amount that bears the same ratio to such beginning Book Basis as the federal income tax depreciation, amortization or other cost recovery deduction with respect to such asset for such period bears to such beginning adjusted tax basis; and provided further, that if the federal income tax depreciation, amortization or other cost recovery deduction for such period is zero, Depreciation shall be determined with reference to such beginning Book Basis using any reasonable method selected by the Managing Member. "Embargoed Person" means a person (i) identified on the Specially Designated Nationals and Blocked Persons List maintained by the United States Treasury Department Office of Foreign Assets Control and/or any similar list maintained pursuant to any authorizing statute, executive order or regulation and/or (ii) subject to trade restrictions under United States law, including, without limitation, the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated under any such laws. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "Expenses" means the out-of-pocket expenses incurred by the Company, including, without limitation, all costs directly related to the formation or the operations of the Company, including expenses of custodians and trustees, administrators, outside counsel and accountants, auditors and tax return preparers, errors and omissions and directors and officers liability insurance or litigation expenses and any taxes, fees or other governmental charges levied against the Company and amounts payable to any other purchasers, agents, lenders or other persons, including, but not limited to, interest expense, commitment and renewal fees, legal fees, rating agency fees and custodial fees. "Fair Market Value" means: (a) with respect to any property other than cash, cash equivalents or Marketable Securities, the fair market value of such property, as reasonably determined by the Managing Member; and (b) with respect to Marketable Securities, the average closing price of such securities as reported by the principal exchange or trading market on which such securities are publicly traded or listed during the ten (10) trading days immediately preceding the applicable date of determination. "GAAP" means U.S. generally accepted accounting principles as in effect from time to time. "jr„Q" means Island Capital Group LLC, a Delaware limited liability company. "Indemnifiable Losses" has the meaning set forth in Section 5.4. "Indemnified Party" has the meaning set forth in Section 5.4. "Indemnifying Member" has the meaning set forth in Section 6.6(a). 5 EFTA_R1_01508107 EFTA02435872  "interest" means the limited liability company interest of a Member in the Company. "Investment Company Act" means the Investment Company Act of 1940, as amended. "Investment Percentage" means, with respect to any Member as of any date of determination, the ratio (expressed as a percentage) of (x) the total amount of Capital Contributions of such Member as of such date, to (y) the total amount of Capital Contributions of all Members as of such date. "Island" means Island C-III Holdings LLC, a Delaware limited liability company. "LLC Act" means the Delaware Limited Liability Company Act, Title 6, §§18-101 to 18-1109, as in effect on the date hereof, and as amended from time to time, or any successor law. "Majority in Interest of the Members" means such Members holding in the aggregate more than 50% of the sum of the Capital Contributions of all Members, excluding those of the Managing Member. "Managing Member" means C3 Directives LLC, a Delaware limited liability company, and any other person or entity admitted as an additional or substitute Managing Member of the Company, pursuant to the provisions of this Agreement, each in its capacity as a Managing Member of the Company. "Marketable Securities" means securities that (a) are listed or quoted on a United States national securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated Quotation System, (b) are eligible for sale by the distributee assuming that the distributee is not an Affiliate of the issuer of such securities pursuant to a registration statement effective under the Securities Act permitting the Company and the Members to sell thereunder or pursuant to Rule 144(k) of the Securities Act or any similar provision then in force without any limitation with respect to volume of sales, (c) are not subject to any lock-up or other contractual restrictions on disposition or transfer and (d) arc eligible for sale immediately. "Member" means each person or entity admitted to the Company as a member in accordance with the terms of this Agreement (including the Managing Member and each person or entity who is admitted to the Company as a substitute Member pursuant to Section 6.3), for so long as each such person or entity continues to be a Member of the Company hereunder, each in its capacity as a member of the Company. "Net Profits" and "Net Losses" means, for any period, the taxable income or loss, respectively, of the Company for such period, in each case, as determined for U.S. federal income tax purposes, but computed with the following adjustments: (v) items of income, gain, loss and deduction (including, without limitation, gain or loss on the disposition of any Company asset and depreciation or other cost recovery deduction or expense) shall be 6 EFTA_R1_01508108 EFTA02435873  computed based upon the Book Basis of the Company's assets rather than upon such assets' adjusted bases for U.S. federal income tax purposes; (vi) any tax-exempt income received by the Company shall be deemed for these purposes only to be an item of gross income; (vii) any expenditure of the Company described in Section 705(a)(2XB) of the Code (or treated as described therein pursuant to Treasury Regulations under Section 704(b) of the Code) shall be treated as a deductible expense; (viii) there shall be taken into account any separately stated items under Section 702(a) of the Code; (ix) if the Book Basis of any Company asset is adjusted pursuant to clauses (ii) or (iv) of the definition thereof, or pursuant to clause (iii) of the definition thereof (but only to the extent the adjustment is attributable to a distribution not in liquidation of a Member's Interest), the amount of such adjustment shall be taken into account in the period of adjustment as gain or loss from the disposition or deemed disposition of such asset for purposes of computing Net Profits and Net Losses; and (x) items of income, gain, loss, or deduction or credit allocated pursuant to Section 9.2 shall not be taken into account. "Overhead Expense Allowance" has the meaning set forth in Section 3.2(a) "Prime Rate" means a varying rate of interest as reported from time to time in the "Money Rates" section of The Wall Street Journal, as published and distributed in New York, New York, or, in the event that The Wall Street Journal is no longer published, the equivalent rate as published in any other nationally recognized daily newspaper as determined by the Managing Member in its reasonable discretion. "Reimbursable Expenses" has the meaning set forth in Section 3.2(a) "Securities Act" means the Securities Act of 1933, as amended. "Short-Term Investments" means investments in (a) cash, (b) obligations of, or fully guaranteed as to timely payment of principal and interest by, the United States of America and with a maturity date not in excess of 12 months from the date of purchase by the Company, (c) interest-bearing accounts and/or certificates of deposit of any U.S. bank with capital and surplus in excess of $500 million and whose debt securities are rated not lower than P-1 by Moody's Investor Services, Inc. or A-1 by Standard & Poor's Corporation, (d) repurchase agreements of any U.S. bank with capital and surplus in excess of $500 million and whose debt securities are rated not lower than P-1 by Moody's Investor Services, Inc. or A- I by Standard & Poor's Corporation, and (e) money market mutual funds with assets of not less than $500 million. 7 EFTA_R1_01508109 EFTA02435874  "Two-Thirds in Interest of the Members" means such Members holding in the aggregate more than two-thirds of the sum of the Capital Contributions of all Members, excluding those of the Managing Member. Section 2.2 Commitments: Closing: Capital Contributions. Each person wishing to become a Member shall sign the signature page hereto and indicate the amount of such person's Commitment. Each person signing the signature page hereto irrevocably agrees to purchase an Interest and to make an aggregate Capital Contribution in the amount of the accepted Commitment. The Managing Member shall, in its sole discretion, accept some, all or none of each person's Commitment, and shall countersign the signature page hereto, indicating the amount of the accepted Commitment. The Managing Member shall send a countersigned signature page to this Agreement, in accordance with Section 12.6 below, to each person whose Commitment is fully or partially accepted, indicating the accepted amount of such person's Commitment. Except as specified below, or as otherwise agreed in writing by the Managing Member, payment in full of each Commitment in the amount accepted by the Managing Member and indicated on the signature page hereto will be required at the time of the Closing, which shall be 2 Business Days from the date that the countersigned signature page to this Agreement is deemed given in accordance with Section 12.6. Any person failing to make a Capital Contribution when due acknowledges and agrees that the Company shall have all remedies available under applicable law to enforce the collection from such person of any unpaid Capital Contributions, whether a Commitment or otherwise, as well as all interest and costs of collection (including attorneys' fees). All such remedies shall be cumulative. Each Capital Contribution shall be made in cash, either by delivery to the Company of a certified check or wire transfer of immediately available funds to an account designated by the Managing Member. Each such Capital Contribution shall be used by the Company in furtherance of the purpose of the Company described in Section 1.4, and specifically in accordance with Section 3.2. Section 2.3 Capital Accounts. (a) A capital account (each, a "Capital Account") shall be maintained for each Member in accordance with Section 704(b) of the Code and Treasury Regulations Sections 1.704-1(b) and 1.704-2. On the Closing, the initial Capital Account balance of: (a) the Managing Member shall be equal to the amount of the Capital Contribution made by the Managing Member at the Closing; and (b) each Member shall be equal to the amount of the Capital Contribution made by such Member at the Closing. (b) The Capital Account of each Member shall be increased by (i) the amount of any Capital Contribution of such Member following the Closing, (ii) such Member's share of Net Profits and any gross income and gain allocated to such Member pursuant to Article iX. (c) The Capital Account of each Member shall be decreased by (i) the amount of all cash distributions to such Member, (ii) the Book Basis of any property distributed to such Member by the Company (net of liabilities secured by such distributed property that the Member is considered to assume, or take such property subject to), (iii) such Member's share of Net Losses and any gross deductions and loss allocated to such Member pursuant to Article IX. (d) No Member shall be required to restore any negative balance in its Capital Account except as otherwise provided herein. 8 EFTA_R1_01508110 EFTA02435875  (e) In the event that all or a portion of an Interest in the Company is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest. (f) The Capital Account of each Member shall be adjusted to reflect any adjustment to the Book Basis of the Company's assets attributable to the application of Sections 734 or 743 of the Code in respect of a distribution in liquidation of such Member's Interest to the extent required pursuant to Treasury Regulations Section 1.704-1(bX2)(ivXm). (g) Except as otherwise provided in this Agreement, whenever it is necessary to determine the Capital Account balance of any Member, the Capital Account balance of such Member shall be determined after giving effect to all allocations pursuant to Article IX and all contributions and distributions made prior to the time as of which such determination is to be made. (h) The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event that there is a change in the federal income tax law, or the allocations provided for in this Agreement do not comply with the substantial economic effect and capital account rules set forth under Code Section 704 and the Treasury Regulations thereunder or otherwise properly reflect the economic interests of the Members, the Managing Member shall make such modifications to the allocation provisions of this Agreement necessary to preserve the underlying economic objectives of the Members and to comply with such provisions of the Code and the Treasury Regulations. Section 2.4 Distributions in Kind. (a) If any securities are to be distributed in kind to the Members as provided in Article III, such securities will first be written up or down to their value, as determined in accordance with Article VIII hereof, as of the date of such distribution. (b) Securities distributed in kind shall be valued by prorating the value of the entire investment of which the securities being distributed comprise a portion. ARTICLE III DISTRIBUTIONS; COMPANY ACTIVITIES; PRE-EMPTIVE RIGHTS Section 3.1 Distribution Priority. Subject to the LLC Act and applicable law, all amounts which the Managing Member has determined to distribute shall be distributed as follows: First, 100% to the Members, pro rata in accordance with their respective Investment Percentages, until the cumulative amount distributed to the Members pursuant to this paragraph (i) equals the sum of (x) the total Capital Contributions made by the Members plus (y) 100% of the total amount withdrawn by the Company from the Cash Reserves Account for any purpose other than the distribution of cash to Members; and 9 EFTA_R1_01508111 EFTA02435876  Second, thereafter (A) 50% to the Members, pro rata in accordance with their respective Investment Percentages and (B) 50% to the Managing Member, as a profits interest. In the discretion of the Managing Member, Carried Interest may be waived with respect to the investment of Affiliates of the Managing Member or their employees. The amounts apportioned to the Managing Member and the Members shall be distributed as promptly as practicable following the termination of the Authorization Agreement or the completion of the Centerline Transaction. Section 3.2 Company Activities: Island Commitments. (a) The Company shall: (i) pay directly, or reimburse Island, ICG and their Affiliates for all third-party costs and expenses that any of them deems reasonable, in its sole discretion, incurred by Island, ICG or any of their Affiliates in connection with pursuing the Centerline Transaction from and after May 1, 2009, including without limitation legal, accounting, tax and other professional fees and expenses ("Reimbursable Expenses")- and (ii) pay to ICG, as compensation for the extensive resources committed by ICG and its Affiliates to pursuing the Centerline Transaction, a non-accountable overhead expense allowance of $750,000 per month from and after May 1, 2009, payable in advance on the first day of each month (an "Overhead Expense Allowance"). Such payment and reimbursement obligations shall cease to accrue on the earlier to occur of (x) the closing date of the Centerline Transaction or (y) the termination by Island of its pursuit of the Centerline Transaction. Island shall repay to the Company any amounts received in respect of periods during which such amounts were no longer payable pursuant to this Section 3.2. (b) Any amounts payable by the Company under Section 3.2(a) with respect to any period prior to the Closing shall be payable to Island, ICG and their Affiliates out of Capital Contributions funded by the Members at the Closing. (c) If the Centerline Transaction is consummated, the Acquisition Entity shall: (i) pay (or cause to be paid) to the Company an amount equal to 100% of all Reimbursable Expenses AO Overhead Expense Allowance amounts previously paid by the Company, without interest, and (ii) issue to the Company, for no additional consideration, 5% of the total issued and outstanding equity of the Acquisition Entity as of the closing of the Centerline Transaction, which equity will be non-voting and subject to such other terms and rights as the Acquisition Entity reasonably determines with the approval of ICG. (d) If the Authorization Agreement is terminated for any reason without the Centerline Transaction being consummated by Island, ICG, or any of their Affiliates, and if Island or any of its Affiliates receives any Reimbursement and/or any Restructuring Fees (as such terms are defined in the Authorization Agreement) pursuant to the Authorization Agreement, then Island shall remit to the Company, in each case promptly after its receipt thereof (x) 100% of any Reimbursement and (y1100% of each Restructuring Fee payment until the total amount of Reimbursement payments and Restructuring Fees remitted to the Company by Island equals the total amount of Reimbursable Expenses and Overhead Expense Allowance amounts paid or reimbursed by the Company: and thereafter 50% of any Restructuring Fees-and-(y)400%-ef-any- Reimbursement. If the Centerline Transaction subsequently is consummated following the termination of the Authorization Agreement, any amounts paid to the Company pursuant to this 10 EFTA_R1_01508112 EFTA02435877 Section 3.2(d) shall offset and reduce any amounts otherwise payable to the Company pursuant to Section 3.2(cXi). Section 3.3 Pre-emptive Rights. (a) If the Centerline Transaction is consummated on or prior to June 30, 2010, Island shall provide each Member a non-transferable right to purchase, on such economic and other terms and pursuant to such procedures as are reasonably established by the sponsors of such issuing entities and approved by ICG, such Member's pro rata share based on such Member's Investment Percentage or such lesser percentage that such Member may elect, of an aggregate of 45% for all Members of the non- sponsor equity (i.e., excluding any profits interests or "promote" granted to Island, ICG or any of their Affiliates) in the Acquisition Entity. (b) If the Authorization Agreement is terminated for any reason without the Centerline Transaction being consummated by Island, ICG, or any of their Affiliates, then each Member shall have a non-transferable right to purchase, for a period of one year following such termination, such Member's pro rata share based on such Member's Investment Percentage (or such lesser percentage that such Member may elect), of the non-sponsor equity interests (i.e.. excluding any profits interests or "promote" granted to Island, ICG or any of their Affiliates) in any entity sponsored by ICG (or an Affiliate thereof) that is formed during such one-year period for a substantially identical purpose as the Company (he., to fund pre-acquisition or pre- transaction expenses) with respect to a potential acquisition of a commercial real estate operating business/platform other than the Centerline Transaction, upon such economic and other terms and pursuant to such procedures as are reasonably established by ICG. (c) Any right to purchase any equity interest in any entity pursuant to this Section 3.3 is subject to the satisfaction of applicable investor suitability requirements in the sole discretion of the Acquisition Entity or sponsor, as the case may be. ARTICLE IV EXPENSES Section 4.1 Expenses. Expenses shall be borne by the Company, and may be accrued and paid out of income in the Managing Member's discretion. The Company shall reimburse Island, ICG and their Affiliates for any Expenses paid by any of them. ARTICLE V MANAGING MEMBER Section 5.1 Management Authority: No Removal. (a) The Managing Member will have full control over the business and affairs of the Company. The Managing Member will have the power on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings which, in its sole discretion, are necessary or advisable or incidental thereto, including the power to acquire or dispose of any security. The Company, and the Managing Member on behalfof the Company, may enter into and perform any agreements II EFTA_R1_01508113 EFTA02435878 (and any amendments thereto) in furtherance of the Company's purpose, without any further act, vote or approval of any person or entity, including any Member, notwithstanding any other provision of this Agreement. Except as provided in Section 7.1(i), no Member or Members shall have the right to remove or replace the Managing Member. (b) Except to the extent otherwise provided in this Agreement, all matters concerning (i) allocations pursuant to Section 2.3, and distributions pursuant to Section 3.1 and (ii) accounting procedures and determinations shall be determined by the Managing Member in accordance with its reasonable interpretation of the provisions of this Agreement made in good faith, whose determination, absent manifest error, shall be final and conclusive as to all the Members. (c) Any assets of the Company that have not been paid out pursuant to Section 3.2(a) may be invested by the Managing Member, in its sole discretion, in Short-Term Investments. (d) Except as otherwise permitted or contemplated by this Agreement, the Company shall not transact business with Affiliates of ICG without approval of a Majority in Interest of the Members. Section 5.2 No Transfer of Interest: No Withdrawal or Loans. The Managing Member will not sell, assign, pledge, mortgage or otherwise dispose of its Interest in the Company without the consent of a Majority in Interest of the Members, provided that the Managing Member may transfer all of its Interest to a controlled Affiliate of Andrew L. Farkas without consent. The Managing Member will not voluntarily withdraw from the Company. In the event that the Managing Member assigns its entire interest in the Company in accordance with this Agreement, such transferee shall be deemed admitted to the Company as a Managing Member immediately prior to such assignment upon execution of this Agreement and such transferee shall continue the business of the Company without dissolution. Section 5.3 No Liability to Members. No Member, including the Managing Member, and no member, officer, employee, or other agent of the Company (including a person having more than one such capacity) (each, a "Covered Person") shall be liable to the Company or any Member for any loss, liability, 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, except for any such act or omission by such Covered Person that constitutes fraud, gross negligence or willful misconduct or a willful breach of this Agreement. Whenever any Covered Person acts in accordance with the standard set forth in the immediately preceding sentence, such Person shall not be subject to any other or different standard imposed by this Agreement or any relevant provisions of law or in equity or otherwise. 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 person's professional or expert competence. The provisions of this Agreement, to the extent they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity in the absence of this Agreement, are agreed by the Members to replace such other duties and liabilities of such Covered Person. 12 EFTA_R1_01508114 EFTA02435879  Section 5.4 Indemnification of Indemnified Parties. (a) Any person who was or is a Member, including the Managing Member, or a member, officer, employee, or other agent of the Company, or was or is serving at the request of the Company as an officer, employee, or other agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise (each, an "Indemnified Party", and collectively, the "Indemnified Parties") shall, in accordance with this Section 5.4, be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, expenses (including reasonable legal and other professional fees and disbursements)