Common use of The Budget and Operating Plan Clause in Contracts

The Budget and Operating Plan. (a) The Managing Member shall, within thirty (30) days after the acquisition of the Initial Company Property, prepare and submit to GAP for GAP’s approval a budget and strategic operating plan (as approved, the “Initial Budget and Operating Plan”) for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets forth all anticipated revenue, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections previously provided to the Members by Managing Member. Thereafter, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by Managing Member to the Members for approval at least forty-five (45) calendar days prior to the end of each fiscal year with respect to the following fiscal year, together with three (3) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall develop (for approval by the Members) proposed strategies regarding (i) plans for development, leasing, financing and sale of any real property and proposed reductions of Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals). The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The Managing Member shall provide the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Budget and Operating Plan, together with proposals for improving performance, no less frequently than quarterly.

The Budget and Operating Plan. (a) The No later than the Closing Date, the Administrative Member shall have prepared and submitted to the Managing Member shallfor approval (and the Managing Member shall have Approved) a preliminary estimated Budget for the period through December 31, within thirty 2009 and Operating Plan for the Company for the period from the Closing Date through December 31, 2010 (30) days after the acquisition of the Initial Company Property, prepare and submit to GAP for GAP’s approval a budget and strategic operating plan (as approved, the “Initial Budget and Operating Plan”) for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018), which sets shall include projected costs to foreclose or otherwise acquire title to the Property, grant a mortgage lien on the Property to the Acquisition Lender and capital expenditures to be set forth therein to be made in the budget period following acquisition of title to the Property. To the extent required by the Managing Member, the Administrative Member shall revise and update the Initial Budget and Operating Plan from time to time which will set forth all anticipated revenueincome, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected quarterly/annual capital contributions/contributions and capital returns and IRR’s to each Memberand, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Propertyin any event, and all of which shall be consistent with any preliminary projections figures previously provided to the Members Managing Member by Managing the Administrative Member. Thereafter, commencing for the 2011 fiscal year, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by Managing the Administrative Member to the Members Managing Member for approval at least forty-five sixty (4560) calendar days prior to the end of each the current fiscal year (so that the Administrative Member will submit a Budget and Operating Plan for the 2011 fiscal year no later than November 1, 2010 to the Managing Member for its Approval) with respect to the following fiscal year, together with three five (35) year forward projections (provided if the Managing Administrative Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP the Managing Member shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Administrative Member shall will develop (for approval Approval by the MembersManaging Member) proposed strategies regarding (i) plans for developmentrenovation, leasing, financing financing, sale and sale rehabilitation of the Property and any other real property and proposed reductions of to Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals)Plan. The Managing Administrative Member will also consider and make recommendations to the extent it deems the same appropriate regarding the amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The Managing Member shall provide may review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Initial Budget and Operating Plan, together with proposals Plan and make such amendments or modifications thereto as the Managing Member shall determine appropriate or necessary in its discretion based on the actual operating results for improving performance, no less frequently than quarterlythe Company Property.

The Budget and Operating Plan. (a) The No later than the Closing Date, the Managing Member shallshall have prepared and submitted to BH for Approval (and BH shall have Approved) a preliminary estimated Budget for the period through December 31, within thirty (30) days after 2010 and Operating Plan for the Company for the period from the Closing Date through December 31, 2010, which shall include projected costs to operate the Company and make tenant improvements, leasing conversions and capital expenditures to be set forth therein to be made in the budget period following acquisition of the Initial Company Property, prepare Property and submit to GAP for GAP’s approval a budget shall be in the form agreed by BH and strategic operating plan the AW Manager (as approved, the “Initial Approved Budget and Operating Plan”) ). Thereafter, commencing for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets forth all anticipated revenue, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections previously provided to the Members by Managing Member. Thereafter2011 fiscal year, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by the Managing Member to the Members BH for approval Approval at least forty-five sixty (4560) calendar days prior to the end of each the current fiscal year (so that the Managing Member will submit a Budget and Operating Plan for the 2011 fiscal year no later than October 1, 2010 to BH for its Approval) with respect to the following fiscal year, together with three five (35) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP BH shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall will develop (for approval Approval by the MembersBH) proposed strategies regarding (i) plans for developmentrenovation, leasing, financing financing, sale and sale rehabilitation of the Property and any other real property and proposed reductions of to Operating Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Approved Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals)Plan. The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the financing, amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The BH and the Managing Member shall provide may from time to time review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Approved Budget and Operating Plan, together with proposals for improving performance, no less frequently than quarterlyPlan and make such amendments or modifications thereto as they shall jointly determine to be appropriate or necessary.

The Budget and Operating Plan. (a) The No later than the Closing Date, the Managing Member shallshall have prepared and submitted to BH for Approval (and BH shall have Approved) a preliminary estimated Budget for the period through December 31, within thirty (30) days after 2011 and Operating Plan for the Company for the period from the Closing Date through December 31, 2011, which shall include projected costs to operate the Company and make tenant improvements, leasing conversions and capital expenditures to be set forth therein to be made in the budget period following acquisition of the Initial Company Property, prepare Property and submit to GAP for GAP’s approval a budget and strategic operating plan shall be in the form attached as Appendix B hereto (as approved, the “Initial Approved Budget and Operating Plan”) ). Thereafter, commencing for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets forth all anticipated revenue, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections previously provided to the Members by Managing Member. Thereafter2012 fiscal year, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by the Managing Member to the Members BH for approval Approval at least forty-five sixty (4560) calendar days prior to the end of each the current fiscal year (so that the Managing Member will submit a Budget and Operating Plan for the 2012 fiscal year no later than November 1, 2011 to BH for its Approval) with respect to the following fiscal year, together with three five (35) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP BH shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall will develop (for approval Approval by the MembersBH) proposed strategies regarding (i) plans for developmentrenovation, leasing, financing financing, sale and sale rehabilitation of the Property and any other real property and proposed reductions of to Operating Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Approved Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals)Plan. The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the financing, amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The BH and the Managing Member shall provide may from time to time review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Approved Budget and Operating Plan, together with proposals for improving performance, no less frequently than quarterlyPlan and make such amendments or modifications thereto as they shall jointly determine to be appropriate or necessary.

The Budget and Operating Plan. (a) The Managing Member shallManager shall be responsible for preparing and submitting to the Executive Committee for its approval a proposed budget and strategic operating plan with regard to the Class B Properties and/or the Class B Property Subsidiaries on a consolidated basis along with operations of the Company, the GP and the OP for each fiscal year. As soon as reasonably practical, but in any event within thirty (30) days after the acquisition date of this Agreement, the Initial Company Property, Manager shall prepare and submit to GAP the Executive Committee, for GAP’s approval a budget its approval, (i) an initial Budget for the Company, the GP, the OP and strategic operating plan the Class B Property Subsidiaries (as approvedapproved by the Executive Committee, the “Initial Budget”) and (ii) the initial proposed strategic operating plan for the Company, the GP, the OP and the Class B Property Subsidiaries (as approved by the Executive Committee, the “Initial Operating Plan”). In the absence of an approved Operating Plan (including in the absence of an approved Initial Operating Plan), no Member or Manager shall have any authority, with regard thereto, other than as provided in Section 7.03(c) hereof (if applicable), to authorize or approve or to take any action, expend any sum, make any decision or incur any obligation on behalf of the Company, the GP, the OP or any Class B Property Subsidiary with respect to any matter which by the express terms of this Agreement was contemplated to be included in the approved Operating Plan, without the consent or approval of the Executive Committee. Further, in the absence of an approved Budget (including in the absence of an approved Initial Budget), no Manager shall have any authority, with regard thereto, other than as provided in Section 7.03(c), hereof (if applicable), to authorize or approve or to take any action, expend any sum, make any decision or incur any obligation on behalf of the Company, the GP, the OP or any Class B Property Subsidiary, without the consent or approval of the Executive Committee. Each Budget and Operating Plan (including the Initial Budget and Initial Operating Plan”) for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets shall set forth all anticipated revenueconstruction costs for any improvements or developments to be constructed on the Class B Properties and shall set forth on an annual basis all anticipated income, operating expenses, proposed and/or actual debt service terms and payments and capital expenditures and other costs and expenses of the Class B Properties for the Company, together with an exit valuation/strategy the GP, the OP and each Class B Property Subsidiary (including, without limitation, a projected 12-month expense budget, a 12-month capital contributions/returns plan and IRR’s to each Membera 60-month strategic operating plan), all of which is will be based on the strategic and comprehensive business plan designed to maximize the net operating income of the Company and the Company’s returns on the Class B Properties. The Executive Committee will review the Initial Company Property, Budget and all Initial Operating Plan and each subsequent Budget and Operating Plan for the Class B Properties after six months of which actual operating results and make such amendments or modifications thereto as the Executive Committee shall be consistent with preliminary projections previously provided to the Members by Managing Memberdetermine appropriate or necessary in its reasonable judgment. ThereafterFor each year thereafter, the Budget and Operating Plan shall be prepared in proposed form by the Manager and submitted annually by Managing Member the Manager to the Members for approval at least forty-five Executive Committee in draft form within thirty (4530) calendar days prior to after the end of each of the fiscal year of the Company. The Budget and Operating Plan will include a comprehensive update of the initial projections with respect regard to the following Class B Properties, the Company, the GP, the OP and each Class B Property Subsidiary. Until such time as the Budget and Operating Plan for any fiscal yearyear has been approved by the Executive Committee, together with three the Manager shall have no authority or power to enter into any contract or lease on behalf of the Company, the GP, the OP or any Class B Property Subsidiary or expend Company, GP, OP or Class B Property Subsidiary funds, other than to the extent approved by the Executive Committee or as expressly provided in this Agreement. Once the Budget and Operating Plan (3) year forward projections (provided if including the Managing Member should fail to timely prepare and submit in proposed form any such Initial Budget and Operating Plan) has been approved by the Executive Committee, GAP the manager shall be authorized to prepare responsible for the day-to-day operations of the Company, the GP and the OP in accordance with such Budget and Operating Plan). plans. (b) In formulating the comprehensive Budget Operating Plan for the Company, the GP, the OP and Operating Planall Class B Property Subsidiaries, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall Manager will develop (for approval by the MembersExecutive Committee) proposed strategies regarding (i) plans for development, leasing, financing and sale construction or rehabilitation of any real property and proposed reductions of Expenses and other Company costs and expenses and increases in revenuesthe Class B Properties, (ii) preparation and release of all promotional promotion and advertising material and development related plans relating to, and a marketing plan for, to the Company Property Class B Properties or concerning the CompanyCompany and/or the Class B Property Subsidiaries, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Propertythe Class B Properties, and (iv) selection of contractors, construction or other managers, legal counsel, accountants, structural and environmental engineers, appraisers and other consultants for the Company Company, the GP, the OP or any of the Class B Property Subsidiaries to efficiently implement the current Budget and Operating Plan Plan. (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals). c) The Managing Member Manager will also consider and make recommendations recommendations, to the extent it deems the same appropriate appropriate, regarding the amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage or mezzanine loan presently or hereafter affecting any Company the Class B Property, and procurement of title insurance and other insurance for the Company, the GP, the OP or decrease any Class B Property Subsidiary or vary any decrease, increase or other variance with regard to the insurance carried by or on behalf of the Company or any Class B Property Subsidiary. Prior to closing the sale of the Class B Properties, the Manager will consider and any other matters affecting make recommendations regarding the Company’s business. The Managing Member shall provide amendment, modification, alteration and change of the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the existing Budget and Operating PlanPlan to take into account the sale of the Class B Property. No amendment, together modification, alteration or change of any Budget and Operating Plan will be effective until the same has been approved by the Executive Committee. (d) In conjunction with proposals the formulation of the Operating Plan for improving performancethe Class B Properties, no less frequently than quarterlythe Manager will also develop (for approval by the Executive Committee) proposed leasing and other operating guidelines for the Class B Properties for the upcoming fiscal year, which leasing and other operating guidelines shall include, to the extent reasonably feasible at the time of preparation thereof, (i) any changes to the standard form or forms of lease to be offered to prospective tenants, (ii) a rent schedule setting forth proposed terms and rentals for the current and upcoming fiscal year, (iii) a description of any proposed tenant inducements, concessions, improvements or allowance to be offered prospective tenants, (iv) a schedule of existing leases affecting the Class B Properties (including their termination dates), including and specifying those spaces which remain unleased and leases which are scheduled to expire during the current and upcoming fiscal year, (v) a proposed budget for the cost to be incurred for the balance of the projected development and/or lease-up period, (vi) a schedule of spaces that require significant remodeling, repairing or rehabilitation and a proposed budget for the cost to be incurred for the balance of the fiscal year with respect thereto and (vii) a summary of the proposed general content and methodology of presenting the advertising program to be implemented with respect to the Class B Properties. In addition, the Manager will include in each proposed Operating Plan for approval by the Executive Committee a schedule of the employees, if any, to be employed “on site” in the direct management of the Class B Properties and all job titles whose salaries or wages may from time-to-time be charged to the Company, GP, the OP or any Class B Property Subsidiary. Such schedules shall be updated from time-to-time but at least annually. The schedules shall include the name of such employees, their job description and title, their office address and their salary.

The Budget and Operating Plan. NY 77646119v1 (a) The Managing Member shallAdministrator, within thirty or such other Person as shall be approved by the Executive Committee for such purpose, shall deliver at least sixty (3060) days after prior to the acquisition end of the Initial Company Property, prepare and submit to GAP for GAP’s approval each fiscal year a proposed budget and strategic operating plan (upon approval and as approvedapproved by the Executive Committee, the “Initial Budget and Operating Plan”) for the Company monthly through December 31the end of the following fiscal year, 2015 with annual quarterly projections from January 1, 2016 through December 31, 2018the next five (5) years, which sets forth all anticipated revenueincome, operating expenses, entitlement and development and capital expenditures and other costs and expenses of the Company, together with an exit valuation/strategy and projected quarterly/annual capital contributions/contributions and returns and IRRaggregate lRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company PropertyPartner, and all of which shall be consistent with preliminary projections previously provided provide for the development and improvement (to the Members by Managing Member. Thereafter, extent feasible given entitlements and land availability) of the Budget and Operating Plan shall be prepared in proposed form and submitted annually by Managing Member to the Members for approval at least forty-five (45) calendar days prior to the end of each fiscal year with respect to the following fiscal year, together with three (3) year forward projections Company Property (provided if the Managing Member Administrator should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP the Executive Committee shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall Administrator, or such other Person as may be appointed for such purpose by the Executive Committee, will develop (for approval by the MembersExecutive Committee) proposed strategies regarding (i) plans for developmententitlement, leasing, financing development and sale rehabilitation of any real property and proposed reductions of to Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals)Plan. The Managing Member Administrator, or such other Person as may be appointed for such purpose by the Executive Committee, will also consider and make recommendations to the extent it deems the same appropriate regarding the amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company Company, and any other matters affecting the Company’s business. The Managing Member shall provide Executive Committee may review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Initial Budget and Operating Plan and make such amendments or modifications thereto as the Executive Committee shall determine appropriate or necessary in its reasonable discretion based on the actual operating results for the Company Property. (b) In conjunction with the formulation of the Operating Plan, together with proposals to the extent applicable to the Company Property, the Administrator, or such other Person as may be appointed for improving performancesuch purpose by the Executive Committee, no less frequently than quarterlywill also develop (for approval by the Executive Committee) proposed operating guidelines for such property for the upcoming fiscal year.

The Budget and Operating Plan. (a) The Managing Member shall, within thirty (30) days after the acquisition of the Initial Company Propertyno later than December 15, 2015, prepare and submit to GAP MN Retail for GAPMN Retail’s approval a budget and strategic operating plan (as approved, the “Initial Budget and Operating Plan”) for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets forth all anticipated revenue, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections previously provided to the Members by Managing Member. Prior to the approval by MN Retail of the Initial Budget and Operating Plan, the Managing Member shall operate the Company in accordance with a budget otherwise approved by MN Retail (based on approved Argus models). Thereafter, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by Managing Member to the Members for approval at least forty-five (45) calendar days prior to the end of each fiscal year with respect to the following fiscal year, together with three (3) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP MN Retail shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall develop (for approval by the Members) proposed strategies regarding (i) plans for development, leasing, financing and sale of any real property and proposed reductions of Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Budget and Operating Plan (those professionals identified on Exhibit “B” B attached hereto are hereby approved, subject to GAPMN Retail’s right to withdraw such approval for poor performance by such professionals). The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The Managing Member shall provide the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Budget and Operating Plan, together with proposals for improving performance, no less frequently than quarterly.

The Budget and Operating Plan. (a) The Managing Member shallBudget and Operating Plan attached hereto as Appendix B is a preliminary estimated Budget for the period through December 31, within thirty (30) days after 2012 and Operating Plan for the Company for the period from the Closing Date through December 31, 2012, which include projected costs to operate the Company and make Property improvements and capital expenditures to be set forth therein to be made in the budget period following acquisition of the Initial Company Property, prepare and submit to GAP for GAP’s approval a budget and strategic operating plan Property (as approved, the “Initial Approved Budget and Operating Plan”) ), which have been Approved by BH. Thereafter, commencing for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets forth all anticipated revenue, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections previously provided to the Members by Managing Member. Thereafter2013 fiscal year, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by the Managing Member to the Members BH for approval Approval at least forty-five sixty (4560) calendar days prior to the end of each the current fiscal year (so that the Managing Member will submit a Budget and Operating Plan for the 2013 fiscal year no later than November 1, 2012 to BH for its Approval) with respect to the following fiscal year, together with three five (35) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP BH shall be authorized to prepare such Budget and Operating PlanPlan and submit it to the Managing Member for informational purposes and for use by the Managing Member in carrying out its duties under this Agreement). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall will develop (for approval Approval by the MembersBH) proposed strategies regarding (i) plans for developmentrenovation, leasing, financing financing, sale and sale rehabilitation of the Property and any other real property and proposed reductions of to Operating Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Approved Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals)Plan. The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the financing, amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The BH and the Managing Member shall provide may from time to time review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Approved Budget and Operating Plan, together with proposals for improving performance, no less frequently than quarterlyPlan and make such amendments or modifications thereto as they shall jointly determine to be appropriate or necessary.

The Budget and Operating Plan. (a) The Managing Administrative Member shall, within thirty (30) days after the acquisition of the Initial Company Propertydate hereof, prepare and submit to GAP the Executive Committee for GAPsuch committee’s approval a budget and strategic operating plan plan, or shall prepare and submit the same to the Executive Committee for the Executive Committee’s approval (as approved or to be approved, the “Initial Budget and Operating Plan”) for the Company monthly through December 31, 2015 2011, with annual quarterly projections from January 1, 2016 through December 31, 2018the Project Sell-Out, which sets forth a construction budget, including all hard and soft construction costs, all anticipated revenueincome, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected quarterly/annual capital contributions/returns contributions and capital returns, and aggregate IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections figures previously provided to the Members Executive Committee by Managing the Administrative Member. Thereafter, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by Managing the Administrative Member to the Members Executive Committee for approval at least forty-five sixty (4560) calendar days prior to the end of each fiscal year with respect to the following fiscal year, together with three (3) year forward projections through Project Sell-Out (provided if the Managing Administrative Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP the Executive Committee shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Administrative Member shall will develop (for approval by the MembersExecutive Committee) proposed strategies regarding (i) plans for developmentconstruction, leasingfinancing, financing sale and sale rehabilitation of any real property and proposed reductions of to Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are Plan. It is acknowledged that Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP is counsel for SunBrook, Xxxxxxxxx, XXXX and Affiliates of Xxxxxxxxx and WREF, and is hereby approvedapproved as legal counsel for the Company for all matters that the Executive Committee or Managing Member determines is appropriate and the Members waive any conflict of interest associated with such representation of SunBrook, subject to GAP’s right to withdraw Xxxxxxxxx, XXXX, their Affiliates and the Company. It is also acknowledged that Xxxxx, Xxxxx & Xxxxxxxx is counsel for Sponsor and Affiliates of Sponsor, and is hereby approved as legal counsel for the Company for all matters that the Executive Committee determines is appropriate and the Members waive any conflict of interest associated with such approval for poor performance by such professionals)representation of Sponsor and its Affiliates. The Managing Administrative Member will also consider and make recommendations to the extent it deems the same appropriate regarding the amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The Managing Member shall provide Executive Committee may review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Initial Budget and Operating Plan and make such amendments or modifications thereto as the Executive Committee shall determine appropriate or necessary in its discretion based on the actual operating results for the Company Property. (b) In conjunction with the formulation of the Operating Plan, together with proposals to the extent applicable to the Company Property and not otherwise prepared pursuant to the Construction Management Agreement, the Administrative Member will also develop (for improving performanceapproval by the Executive Committee) proposed sales and operating guidelines for each such property for the upcoming fiscal year, no less frequently than quarterlywhich sales and operating guidelines shall include to the extent reasonably feasible at the time of preparation thereof (i) a proposed standard form or forms of purchase and sale agreement be offered to prospective buyers of single family homes in the Project, (ii) a schedule setting forth proposed sale prices and terms for each unsold single family home in the Project, (iii) a description of any proposed sales inducements, concessions, improvements or allowances to be offered prospective buyers, and (iv) proposed submittals to the California Department of Real Estate, including homeowner association budgets for common areas and proposed master covenants, conditions and restrictions and other homeowners’ association documentation.

The Budget and Operating Plan. The Members have approved the Budget and Operating Plan (a) The Managing Member shall, within thirty (30) days after the acquisition of the Initial Company Property, prepare and submit to GAP for GAP’s approval a budget and strategic operating plan (as approved, the “Initial Interim Budget and Operating Plan”) for the Company monthly Pinnacle 1 Property through December 31, 2015 with annual projections from January 12012 attached hereto as Exhibit J. Within thirty (30) days following the date hereof, 2016 the Members shall agree upon a final budget and operating plan for the Pinnacle 1 Property through December 31, 20182013 , which sets forth all anticipated revenue, operating expenses, all reasonable reserves relating to the Company Property anticipated to be required during the subject period and capital expenditures of for the CompanyPinnacle 1 Property, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Memberreturns, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Pinnacle 1 Property, and all of which shall be consistent with preliminary projections previously provided to Xxxxxx by Sponsor (such budget and operating plan, once approved, shall thereafter become the “Initial Budget and Operating Plan” for the Company). In the event the Members by Managing Member. Thereaftercannot agree upon an Initial Budget and Operating Plan, then the terms of this Agreement shall apply with respect to resolution of such dispute, and the ability of Administrative Member to incur certain costs and expenses as expressly set forth in this Agreement until such time as the Initial Budget and Operating Plan is approved. At least thirty (30) days prior to the Company’s acquisition (directly or indirectly) of any Project (including, without limitation, the Pinnacle 2 Property) in accordance with this Agreement, Administrative Member shall be prepared in proposed form prepare and submitted submit an independent Budget and Operating Plan for such Project to the Members for approval. Administrative Member shall prepare and submit a revised Budget and Operating Plan for each Project annually by Managing Member to the Members for approval at least forty-five sixty (4560) calendar days prior to the end of each fiscal year with respect to the following fiscal year, together with three (3) year forward projections (provided if the Managing Administrative Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP the Executive Committee shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall develop (for approval by the Members) Each proposed strategies regarding (i) plans for development, leasing, financing and sale of any real property and proposed reductions of Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the revised independent Budget and Operating Plan for a Project submitted to the Members for approval shall include all anticipated revenue, operating expenses, all reasonable reserves relating to the Company Property anticipated to be required during the subject period and capital expenditures for the Project. The Members may review any Budget and Operating Plan and make such amendments or modifications thereto as the Members shall determine appropriate or necessary in its reasonable discretion. Without limiting Administrative Member’s rights under Section 7.03(b), until an updated Budget for any Project for any applicable fiscal year has been approved by the Members, the Budget for such Project for the preceding fiscal year shall continue to be operative (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals). The Managing Member will also consider and make recommendations increase equal to the extent it deems greater of (1) 3.5% or (2) the same appropriate regarding increase in the amendmentCPI over the CPI as of January 1 of the previous fiscal year ) after giving effect to any applicable adjustment for CPI; provided, modificationhowever, alteration, change, cancellation, or prepayment of all non-recurring capital expenditures shall be deemed removed from such Budget (unless the work with respect to any indebtedness evidenced by such capital items is in process in which event any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance amount remaining in the line item from such Budget for the Companyprevious year shall be included in the operative Budget); provided, further, however, that Administrative Member and/or Property Manager may incur and pay non-capital recurring expenses after giving effect to any non-discretionary increases thereto, but without adjustment for CPI, relating to taxes, insurance, utilities, vendors under existing contracts or decrease emergencies in excess of amounts allocated to such amounts in the approved Budget for any Project for the previous calendar year. Additionally, without limitation of the rights set forth in Section 7.03(b), Administrative Member may incur any cost or vary the insurance carried expense by or on behalf of the Company and any other matters affecting (i) in excess of the Company’s business. The Managing Member shall provide the Company with detailed analyses comparing actual performance to the goals amount set forth on Exhibit D and a monthly basis or on an annual basis in the Budget for such expenditure on a line item basis by less than 10% of the line item or 5% of the applicable Budget, whichever is less, for such period, or (ii) that is an Emergency Expenditure; provided, however, that the Administrative Member shall notify the Executive Committee of any such expenditure as soon as reasonably practical after incurring the same (and Operating Plan, together with proposals for improving performance, no less frequently than quarterlyin all events within two (2) Business Days thereafter).

The Budget and Operating Plan. (a) The No later than the Closing Date, the Managing Member shallshall have prepared and submitted to BH for Approval (and BH shall have Approved) a preliminary estimated Budget for the period through December 31, within thirty (30) days after 2010 and Operating Plan for the Company for the period from the Closing Date through December 31, 2010, which shall include projected costs to operate the Company and make tenant improvements, leasing conversions and capital expenditures to be set forth therein to be made in the budget period following acquisition of the Initial Company Property, prepare Property and submit to GAP for GAP’s approval a budget and strategic operating plan shall be in the form attached as Appendix B hereto (as approved, the “Initial Approved Budget and Operating Plan”) ). Thereafter, commencing for the Company monthly through December 31, 2015 with annual projections from January 1, 2016 through December 31, 2018, which sets forth all anticipated revenue, operating expenses, and capital expenditures of the Company, together with an exit valuation/strategy and projected capital contributions/returns and IRR’s to each Member, all of which is based on the strategic and comprehensive business plan designed to maximize the Company’s returns on the Initial Company Property, and all of which shall be consistent with preliminary projections previously provided to the Members by Managing Member. Thereafter2011 fiscal year, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by the Managing Member to the Members BH for approval Approval at least forty-five sixty (4560) calendar days prior to the end of each the current fiscal year (so that the Managing Member will submit a Budget and Operating Plan for the 2011 fiscal year no later than November 1, 2010 to BH for its Approval) with respect to the following fiscal year, together with three five (35) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, GAP BH shall be authorized to prepare such Budget and Operating Plan). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member shall will develop (for approval Approval by the MembersBH) proposed strategies regarding (i) plans for developmentrenovation, leasing, financing financing, sale and sale rehabilitation of the Property and any other real property and proposed reductions of to Operating Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material and development related plans relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Approved Budget and Operating Plan (those professionals identified on Exhibit “B” attached hereto are hereby approved, subject to GAP’s right to withdraw such approval for poor performance by such professionals)Plan. The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the financing, amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any mortgage loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. The BH and the Managing Member shall provide may from time to time review the Company with detailed analyses comparing actual performance to the goals set forth on Exhibit D and the Approved Budget and Operating Plan, together with proposals for improving performance, no less frequently than quarterlyPlan and make such amendments or modifications thereto as they shall jointly determine to be appropriate or necessary.