TRUST AGREEMENT OF GK DST – RIVER FOREST GROCERY A DELAWARE STATUTORY TRUST
Exhibit 6(k)
OF
GK DST – RIVER FOREST GROCERY
A DELAWARE
STATUTORY TRUST
This
TRUST AGREEMENT of GK DST – RIVER FOREST GROCERY, a Delaware
statutory trust (the “Trust”), dated as of June
10, 2021, is made between ▇▇▇▇▇▇▇▇ Entity Services LLC, as
co-trustee (the “Delaware Trustee”) and
River Forest Grocery – GK Services LLC, a Delaware limited
liability company, as co-trustee (the “Signatory Trustee,” and
together with the Delaware Trustee, the “Trustees”), and RF
Grocery, LLC, an Illinois limited liability company (the
“Depositor”) of the Trust,
and any other person who subsequently signs this agreement (the
“Trust
Agreement”) and becomes a party to it.
WHEREAS, the Trust will acquire certain
real property and associated assets known as Fresh Thyme, a retail
property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the “Real
Estate”), as more particularly described in
Exhibit B;
and
WHEREAS, the Real Estate will be subject
to the Lease (as hereinafter defined); and
WHEREAS, the Depositor and the Trustees
have agreed to create this Trust as a “statutory trust”
in accordance with Chapter 38 of Title 12 of the Delaware Code (the
“Act”),
and intend that this Trust Agreement constitute the
“governing instrument” of the Trust (as such term is
defined in Section 3801(c) of the Act); and
WHEREAS, the Depositor shall contribute
Real Property as a capital contribution to the Trust in exchange
for all of the Beneficial Interests in the Trust; and
WHEREAS, concurrently with the
Depositor’s contribution of the Real Estate, the Trust will
assume that certain lease agreement with Lakes Venture, LLC, a
Delaware limited liability company, or any successor thereto (the
“Tenant”), together with
all amendments, supplements and modifications thereto (the
“Lease”), pursuant to
which the Tenant will lease the Real Estate from the Trust and pay
rent to the Trust; and
WHEREAS, from and after closing on the
Real Estate, the Trust will hold the Real Estate, which will be
subject to the Lease; and
WHEREAS, it is anticipated that certain
Persons will acquire Interests in the Trust in exchange for payment
of money to the Trust (which includes a pro rata allocation of
borrowed monies from a lender) and will become Investors (as
hereinafter defined) pursuant to the Private Placement Memorandum
(as hereinafter defined) (the transactions in which such Interests
are initially acquired by Investors other than the Depositor, the
“Investor
Closing” and the period during which the Trust sells
all of the Interests pursuant to the Private Placement Memorandum,
the “Initial
Capitalization”), and such proceeds shall be used to
pay the cost to acquire the Real Estate, reduce the Beneficial
Interest held by the Depositor in the Trust and for other payments
and expenses as set forth in the Private Placement
Memorandum.
NOW, THEREFORE, in consideration of the
promises and the mutual agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
For all
purposes of this Trust Agreement, the capitalized terms set forth
below shall have the following meanings:
“Affiliate” shall mean,
with respect to any specified Person, any other Person owning
beneficially, directly or indirectly, any ownership interest in
such specified Person or directly or indirectly controlling or
controlled by or under direct or indirect common control with such
specified Person.
“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to
time.
“Control” shall mean
(whether capitalized or not), with respect to any specified Person,
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
“controlling” and “controlled” shall have
meanings correlative to the foregoing. Without limiting the
generality of the foregoing, a Person shall be deemed to Control
any other Person in which it owns, directly or indirectly, fifty
percent (50%) or more of the ownership interests.
“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended
from time to time.
“Initial Capitalization”
has the meaning given to such term in the recitals of this Trust
Agreement.
“Interest” shall mean,
with respect to the Investor, the Investor’s beneficial
ownership interest in the Trust Property, which is reflected on
Exhibit A. All
Interests shall be of a single class.
“Investor” shall mean
those owners of beneficial interests in GK DST – River Forest
Grocery.
“Lease” shall mean that
certain Lease entered into by and between the Trust as
“Landlord” and Lakes
Venture, LLC as “Tenant” with respect to
the Real Estate.
“Lender” shall mean
Barrington Bank & Trust Company, N.A., a third party lender,
and its successors and assigns with respect to the
Loan.
“Loan” shall mean that
certain loan from Lender to the Trust in the original principal
amount of $5,190,000 for the acquisition of the Real Estate as
evidenced and secured by the Loan Documents.
“Loan Documents” shall
mean any and all documents evidencing or securing the Loan or any
assumption thereof including, without limitation, any promissory
note (individually, a “Note” and collectively,
“Notes”), mortgage, deed
of trust, assignment of leases and rents, indemnity agreement,
guaranty certificate, escrow agreement, consent or subordination
agreement or the functional equivalent of any of the
aforementioned, and any and all other documents related to the
Loan.
“Percentage” shall mean,
with respect to a particular Investor, the percentage indirect
beneficial ownership interest in the Trust Property as reflected on
Exhibit A, as it
may from time to time be updated in accordance with this Trust
Agreement, and the rights, obligations, benefits and burdens
associated with such indirect beneficial ownership
interest.
“Person” shall mean a
natural person, corporation, limited partnership, general
partnership, limited liability company, joint stock company, joint
venture, association, company, trust, bank trust company, land
trust, business trust, statutory trust or other organization,
whether or not a legal entity, and a government or agency or
political subdivision thereof.
“Plan Asset Rules” shall
mean 29 Code of Federal Regulations § 2510.3-101, as
amended from time to time.
“Private Placement
Memorandum” shall mean the confidential offering
memorandum and incorporated documents distributed to qualified
prospective investors that provide such persons with information
relating to an investment in the beneficial interests of the Trust,
including all supplements thereto.
“Real Estate” shall have
the meaning set forth in the recitals of this Trust
Agreement.
“Regulations” shall mean
U.S. Treasury Regulations promulgated under the Code.
“Section” shall mean a
section in this Trust Agreement, unless otherwise
modified.
“Single Purpose Entity”
shall have the meaning set forth in Section 2.05(a).
“Special Purpose
Provisions” shall have the meaning set forth in
Section 2.05(b).
“Sponsor” shall mean GK
Development, Inc., an Illinois corporation, d/b/a GK Real Estate,
and the sole member and Manager of the Signatory
Trustee.
“Tenant” shall mean Lakes
Venture, LLC, a Delaware limited liability company.
“Transaction Documents”
shall mean the Trust Agreement, the Lease and the Loan Documents,
together with any other documents to be executed in furtherance of
the investment activities of the Trust.
“Trust Property” shall
mean all the right, title and interest of the Trust in and to any
property contributed to the Trust by the Depositor, or otherwise
owned by the Trust, including the Real Estate, and certain
incidental additional assets associated with the Real
Estate.
ARTICLE II
FORMATION OF TRUST
Section
2.01 Name.
The trust created hereby shall be known as GK DST – River
Forest Grocery.
Section
2.02 Principal
Place of Business. The principal place of business of the
Trust shall be at such place as the Signatory Trustee shall
designate from time to time by notice to the Investors, which need
not be in the State of Delaware. The initial principal place of
business of the Trust shall be ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Section
2.03 Purposes.
The purposes of the Trust are to engage in the following
activities: (i) to acquire, own, conserve, protect, manage,
hold and operate the Real Estate; (ii) to enter into, and/or
assume the Loan and comply with the terms of the Loan Documents and
the Lease, and to comply with the terms of the underlying leases on
the Real Estate and any other Transaction Documents; (iii) to
dispose of the Real Estate; and (iv) to take such other actions as
the Trustees deem necessary or advisable to carry out the
foregoing. The Trust shall hold the Trust Property for investment
purposes (and not for the active conduct of a trade or business)
and only engage in activities which are customary services in
connection with the Trust’s maintenance and repair of the
Real Estate. Neither the Trustees nor their agents shall provide
non-customary services in such manner or by such method as might
create unrelated business taxable income under Code Section 512,
impermissible tenant service income under Code Section 856 or would
render a co-ownership to be a partnership for tax purposes as
discussed in Rev. Rul. 75-374. The Trust shall conduct no business
other than as specifically set forth in this Section
2.03.
Section
2.04 Declaration
of Trust by Trustees. The Trustees hereby declare that they
will hold the Trust Property upon the terms and conditions herein
for the benefit of the Investors, subject to the obligations of the
Trust under the Transaction Documents. It is the intention of the
parties hereto that the Trust constitute a “statutory
trust” under Chapter 38 of Title 12 of the Act. No later than
the date hereof, the Trustees shall have caused the filing of a
Certificate of Trust (the “Certificate of Trust”)
with the Secretary of State of the State of Delaware (the
“Secretary of
State”) pursuant to Section 3810 of Title 12 of the
Act. It is the intention of the parties hereto that the Trust shall
not constitute an agency, partnership, association or a trust for
federal income tax purposes. Instead, each Investor shall be
treated for federal income tax purposes as if it holds a direct
ownership interest in the Trust Property. Each Investor agrees to
report its interest in the Trust in a manner consistent with the
foregoing and otherwise not to take any action that would be
inconsistent with the foregoing.
Section
2.05 Limitation
on Certain Activities.
(a) The
Trust shall, as long as the Loan remains outstanding, govern itself
as a Single Purpose Entity. For purposes of satisfying the
requirements of a Single Purpose Entity, the Trust
shall:
(i)
exist solely for
the purpose of holding a direct or indirect interest in, and
operating, the Trust Property,
(ii)
conduct business
only in its own name or, in connection with the operation of the
Trust Property, in the name of the facility,
(iii)
not engage in any
business other than the ownership, management, leasing, financing,
operation and sale of the Trust Property,
(iv)
not hold, directly
or indirectly, any ownership interest (legal or equitable) in any
entity or any real or personal property other than the interest
which it owns or holds in the Trust Property,
(v)
not have any assets
other than those related to its interest in the Trust Property and
shall not have any debt other than as permitted by the Loan
Documents and shall not guarantee or otherwise obligate itself with
respect to the debts of any other Person or entity, other than as
set forth in or permitted by the Loan Documents,
(vi)
have its own
separate books, records, accounts, financial statements and tax
returns (with no commingling of funds or assets), provided,
however, that if the Trust does not separately file tax returns due
to its status as a disregarded entity, all such tax returns shall
be filed by its owners,
(vii)
hold itself out as
being an entity separate and apart from any other
entity,
(viii)
observe all
applicable entity formalities, as the case may be, independent of
any other entity.
(b) Notwithstanding
any other provision of this Trust Agreement and any provision of
law that otherwise so empowers the Trust, so long as any obligation
evidenced or secured by any of the Loan Documents remains
outstanding, the provisions of Sections 2.01, 2.03, 2.05, 5.02,
5.05, Article VIII, Article IX, Section 11.01, and Article I (to
the extent that terms defined in Article I are used in any of the
foregoing provisions) (collectively the “Special Purpose
Provisions”) may not be amended without the prior
written consent of the Lender.
(c) Notwithstanding
any other provision of this Trust Agreement and any provision of
law that otherwise so empowers the Trust, so long as any obligation
evidenced or secured by any of the Loan Documents remains
outstanding, neither the Trust, the Trustees, nor any other Person
shall be authorized or empowered, nor shall they permit the Trust,
to the fullest extent permitted by law, to take any action that
might cause the Trust to become insolvent, or to file a voluntary
petition or otherwise initiate proceedings to be adjudicated
bankrupt or insolvent, or to consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or to file
a petition seeking or consenting to reorganization or relief of the
Trust as debtor under any applicable federal or state law relating
to bankruptcy, insolvency, or other relief for debtors with respect
to the Trust; or to seek or consent to the appointment of any
trustee, receiver, conservator, assignee, sequestrator, custodian,
liquidator (or other similar official) of the Trust or of all or
any substantial part of the properties and assets of the Trust, or
to make any general assignment for the benefit of creditors of the
Trust, or to admit in writing the inability of the Trust to pay its
debts generally as they become due or to declare or effect a
moratorium on the Trust debt or to take any action in furtherance
of any such action. So
long as any obligation evidenced or secured by any of the Loan
Documents remains outstanding, the Trust may not vote on, or
authorize the taking of, any action described in this Section
2.05(c).
Section
2.06 Ownership
of Interests by the Depositor. The Depositor shall
contribute the Real Estate to the Trust in exchange for 100% of the
Interests.
Section
2.07 Interests
Not Certificated. Notwithstanding anything in this Trust
Agreement to the contrary, no Interest shall be certificated, and
no Trustee shall take such action to permit the Interests to become
certificated or to opt into Article 8 of the Uniform Commercial
Code (as amended).
Section
2.08 Limit
on Number of Beneficial Owners. Notwithstanding anything to the contrary
in this Trust Agreement, at no
time shall the number of beneficial owners of Interests in
the Trust exceed the number of
Persons constituting the threshold for registration under Section
12(g) of the Securities Exchange Act of 1934 or any successor
provision. Any transfer that results in a violation of the
preceding sentence shall, to the fullest extent permitted by law,
be null, void and of no effect whatsoever.
ARTICLE III
TRANSFER OF INTERESTS
Section
3.01 Restrictions
on Transfer. Subject to compliance with applicable
securities laws and any transfer restrictions set forth in the Loan
Documents and this Trust Agreement, and provided that such transfer
does not result in the Trust being required to register as an
investment company or require the Trust or any Trustee to register
as an investment advisor under the Investment Company Act of 1940,
as amended, all or any portion of an Interest may be assigned or
transferred to a single beneficiary without the prior consent of
the Signatory Trustee or the Investors, provided, that the holder
of such Interest, at such holder’s expense, submits an
opinion of counsel (or other evidence), satisfactory to the
Signatory Trustee, that the registration of the Interest is not
required under the Securities Act of 1933 or any other applicable
federal or state securities laws, and provided that such opinion
shall not be required for the assignment or transfer by the
Depositor or by any lender to the Trust (or any affiliate, assignee
or successor of such lender); provided, however, that no portion of
an Interest shall be assigned or transferred, without the prior
written consent of the Signatory Trustee, to a “benefit plan
investor” (as defined in the Plan Asset Rules, and which
includes, but is not limited to, tax-exempt “401k” and
“▇▇▇” plans, as well as entities substantially owned by
such tax-exempt plans). Notwithstanding the foregoing, the consent
of the Signatory Trustee shall not be required for the assignment
or transfer by the Depositor or by the lender to the Trust (or any
affiliate, assignee or successor of such lender). All expenses of
any such transfer hereunder shall be paid by the transferor. Any
transfer or assignment of an Interest not in accordance with the
terms of this Trust Agreement shall be void ab initio.
Section
3.02 Conditions
to Admission of Investors. Investors and any assignee or
transferee of a beneficial owner of an Interest shall only become
an Investor upon written acceptance and adoption of this Trust
Agreement, and in the sole discretion of the Signatory
Trustee.
ARTICLE IV
DISTRIBUTIONS
Section
4.01 Payments
From Trust Property Only. All payments to be made by the
Trustees under this Trust Agreement shall be from the Trust
Property.
Section
4.02 Distributions
in General. Except as otherwise provided herein and in the
Lease, the Signatory Trustee shall distribute to the Investors, in
accordance with each Investor’s Percentage, on a monthly
basis, (i) the net operating cash flow of the Trust and (ii) the
net proceeds from any sale, exchange or financing of the Real
Estate, in each case after (x) payment of debt service pursuant to
the Loan Documents, (y) payment or reimbursement to the Trustees
for any fees or expenses paid by the Trustees on behalf of the
Trust, and (z) retention of amounts necessary to pay anticipated
ordinary current and future expenses of the Trust and required
reserves (“Reserves”). Amounts of
cash retained for Reserves shall only be invested in short-term
obligations of (or guaranteed by) the United States, or any agency
or instrumentality thereof and in certificates of deposit or
interest-bearing bank accounts of any bank or trust company having
a minimum stated capital and surplus of $50,000,000. All such
obligations must mature prior to the next distribution date, and be
held to maturity. All amounts distributable to the Investors
pursuant to this Trust Agreement shall be paid by check or in
immediately available funds by transfer to a banking institution
with bank wire transfer facilities for the account of the Investor,
as instructed from time to time by the Investor. Notwithstanding
any provision to the contrary contained herein, the Signatory
Trustee shall not make a distribution if such distribution would
violate applicable law or constitute a default under the Loan
Documents.
Section
4.03 Distributions
to Depositor and Other Payments at Investor Closing.
Notwithstanding anything in the Trust Agreement to the contrary,
any funds received by the Trust in connection with the Investor
Closing and during the period of the Initial Capitalization shall
be paid by the Trust first to the Depositor as such funds are
received to reduce its Interest in the Trust, and then may be used
for other payments and expenses and reserves as set forth in the
Private Placement Memorandum.
Section
4.04 Distribution
Upon Dissolution. In the event of the Trust’s
dissolution in accordance with Article IX hereof, all of the Trust
Property as may then exist after the winding up of its affairs in
accordance with the Statutory Trust Act (including without
limitation subsections (d) and (e) of Section 3808 of the Statutory
Trust Act and providing for all costs and expenses, including any
income or transfer taxes which may be assessed against the Trust,
whether or not by reason of the dissolution of the Trust), shall,
subject to Section 9.03, be distributed to those Persons who are
then Investors in their respective Percentage Shares.
Section
4.05 Certain
Sponsor Fees. Upon the acquisition by the Trust of the Real
Estate, the Trust shall pay, and the Signatory Trustee is hereby
authorized to pay, to the Sponsor, or its Affiliate, (i) an
acquisition fee equal to $215,570 in connection with its assistance
in the Trust’s acquisition of the Real Estate and (ii) a
financing arrangement fee equal to $103,800 in connection with its
assistance in arranging financing for the Trust’s acquisition
of the Real Estate. Upon the disposition by the Trust of the Real
Estate, the Trust shall pay, and the Signatory Trustee is hereby
authorized to pay, to the Sponsor, or its Affiliate, a disposition
fee equal to one percent (1%) of the gross proceeds from the
disposition of the Real Estate in connection with its assistance in
the Trust’s sale of the Real Estate; provided, however that
no such disposition fee shall be payable upon any sale or transfer
of the Real Estate to the Sponsor or any of its Affiliates. The
Trust shall also pay to the Sponsor (i) an asset management fee in
an amount equal to 1.50% per annum of the net operating income of
the Real Estate and (ii) a property management fee in an amount
equal to 3.0% per annum of the rent collected under the
Lease.
Section
4.06 Reimbursement
of Expenses to the Sponsor or its Affiliates. The Trust
shall pay directly, or reimburse the Sponsor or its Affiliates, as
the case may be for all of the Trust’s operating costs and
expenses, an allocated amount that may exceed total actual
expenses, including, but not limited to the costs of services that
could be performed directly for the Trust by independent parties
such as legal, accounting, secretarial or clerical, reporting, loan
origination, transfer agent, data processing and duplicating
services but which are in fact performed by the Sponsor or its
Affiliates. Such amounts shall be paid from operating
revenue.
ARTICLE V
RIGHTS AND OBLIGATIONS OF OWNERS
Section
5.01 Status
of Relationship.
(a) This Trust
Agreement shall not be interpreted to impose a partnership or joint
venture relationship on the Investors either in law or in equity.
Accordingly, no Investor shall have any liability for the debts or
obligations incurred by any other Investor, with respect to the
Trust Property or otherwise, and no Investor shall have any
authority, other than as specifically provided herein, to act on
behalf of any other Investor or to impose any obligation with
respect to the Trust Property.
(b) Prior to the
closing of a subscription for Interests by a third-party investor,
the sole owner of Interests in the Trust shall be the Depositor. As
such, until another Person becomes an Investor, the Trust will be
characterized as a disregarded entity and any Trust Property held
will be treated for federal income tax purposes as the property of
the Depositor.
(c) The
Trust shall not constitute a “business trust” within
the meaning of Regulations Section 301.7701-4(b) or any other
business entity for federal income tax purposes, but shall instead
constitute an “investment trust” within the meaning of
Regulations Section 301.7701-4(c) and a grantor trust under Subpart
E of Part 1, Subchapter J of the Code (Code Sections 671 and
following).
Section
5.02 No
Legal Title to Trust Property in the Investors, Etc. Legal
title to the Trust Property shall be held by the Trust, and the
Investors shall have legal title to the Trust Property. Neither the
bankruptcy, death or other incapacity of any Investor, nor the
transfer, by operation of law or otherwise, of any right, title or
interest of the Investors in and to the Trust Property or hereunder
shall terminate this Trust Agreement. Except as expressly set forth
herein, the Investors shall not be liable for any liabilities or
obligations of the Trust, the Trustees or for the performance of
this Trust Agreement.
Section
5.03 Sale
of Trust Property by Trustees Is Binding. Any sale or other
conveyance of the Trust Property or any part thereof by the
Signatory Trustee made pursuant to the terms of this Trust
Agreement shall bind the Trust and the Investors, and be effective
to transfer or convey all rights, title and interest of the
Trustees, the Investors in and to the Trust Property. The Signatory
Trustee shall not be bound by the opinions of the Investors with
respect to any sale or other conveyance of the Trust Property or
any part thereof, and the decision to undertake any transaction or
not rests solely with the Signatory Trustee.
Section
5.04 Form
of Disposition of Real Estate. The Signatory Trustee is not
subject to any limitation regarding the form that a sale or other
conveyance may take. By way of illustration and not limitation, the
Real Estate may be sold or transferred to the Tenant, a real estate
investment trust, partnership, limited liability company or other
entity (including such entities that are Affiliates of the
Signatory Trustee) in exchange for cash and/or interests in the
transferee entity.
Section
5.05 In-Kind
Distributions. No Investor shall have any right to demand
and receive from the Trust an in-kind distribution of, or otherwise
divide or partition, the Trust Property.
ARTICLE VI
TRUSTEES IN GENERAL
Section
6.01 Acceptance
of Trust and Duties. The
Trustees accept the Trust hereby created and agree to perform their
duties as provided in this Trust Agreement, including receiving and
disbursing all money received by them constituting part of the
Trust Property, subject to the Loan Documents, the Lease and other
relevant agreements.
Section
6.02 Limitation
on Fiduciary Duties of Trustees. Consistent
with Section 3806(c) of the Act, the Trustees shall have no
fiduciary duties to the Trustees or the
Investors.
Section
6.03 Limitation
of Trustee’s Liability.
The Trustees shall not be individually answerable or
accountable for their omissions or actions on behalf of the Trust,
except: (i) for their own willful misconduct or gross
negligence, (ii) for the inaccuracy of any of their
representations or warranties contained in Section 6.07
hereof, (iii) for their failure to comply with Section 7.03,
(iv) for their own income taxes based on fees, commissions or
compensation received as a trustee, or (v) for the failure to
use ordinary care to disburse money received by them in accordance
with the terms hereof.
Section
6.04 Conflicts
of Interest. The Investors hereby acknowledge and agree that
the Trustees engage in business activities other than acting as
Trustees hereunder, and hereby waive any claim or cause of action
against any Trustee as result of any potential or actual conflict
of interest arising as a result of any such business activity. Such
business activities include, but are not limited to:
(i) receiving fees related to the acquisition of the Real
Estate, (ii) owning an interest in and receiving distributions
of income from the Tenant and/or any property manager for the Real
Estate, (iii) engaging directly or indirectly in business
activities that may relate to the Real Estate, (iv) acquiring,
or sponsoring the acquisition of interests by investors in, parcels
of real property that may compete with the Real Estate, and
(v) undertaking obligations (including obligations as
trustees) to entities other than the Trust.
Section
6.05 Not
Acting in Individual Capacity. Except as otherwise provided
in this Article VI, the Trustees act solely as Trustees hereunder
and not in their individual capacities, and all Persons other than
the Investors having any claim against the Trustees by reason of
the transactions contemplated hereby shall look only to the Trust
Property for payment or satisfaction thereof, but subject to the
liens and other obligations created pursuant to the Loan
Documents.
Section
6.06 Authority
of Trustees. The Trustees shall manage, control, dispose of
or otherwise deal with the Trust Property consistent with their
duties to conserve and protect the Trust Property, subject to any
restrictions required by the Loan Documents, or otherwise provided
in this Trust Agreement.
Section
6.07 Representations
or Warranties as to Real Estate or Documents. The Trustees
make no representation or warranty as to (i) the title, value,
condition or operation of the Real Estate held by the Trust, and
(ii) the validity or enforceability of any Transaction Document or
as to the correctness of any statement contained in any thereof,
except as expressly made by the Trustees in their individual
capacities. The Trustees represent and warrant to the Investors
that this Trust Agreement has been authorized, executed and
delivered by each Trustee respectively.
Section
6.08 Reliance.
The Trustees shall not be liable to anyone for relying on any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper
believed by them to be genuine and signed by the proper parties.
The Trustees may accept a copy of a resolution of the board of
directors or other governing body of any corporate party, certified
by the secretary or a senior officer thereof, as conclusive
evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect. As to any fact or
matter, the manner of ascertainment of which is not specifically
prescribed herein, the Trustees may for all purposes hereof rely on
an officer’s certificate of the relevant Person (if not an
individual) as to such fact or matter, and such certificate shall
constitute full protection to the Trustees for any action taken,
suffered or omitted by it in good faith in reliance
thereon.
Section
6.09 Advice
of Counsel. In the administration and interpretation of the
Trust, the Trustees may perform any of their powers and duties,
directly or through agents or attorneys and may consult with
counsel, accountants and other skilled Persons selected and
employed by them. The Trustees shall not be liable for anything
done or omitted in good faith in accordance with the advice or
opinion within the scope of competence of any such counsel,
accountant or other skilled Persons selected with due
care.
Section
6.10 Compensation
and Expenses. The Delaware Trustee shall receive as
compensation for its services an initial fee, annual fees and
document execution fees as agreed to by the Sponsor and the
Delaware Trustee in one or more separate agreement(s). The
Signatory Trustee shall receive an annual amount of $6,000
beginning in year one and increasing by 2.0% per annum for each
year thereafter, which amount may be waived or deferred by the
Signatory Trustee in its sole discretion, with such amount paid at
a later date but not later than the sale of the interest of the
Trust in the Property. The Trustees shall be entitled to be
reimbursed by the Trust for their reasonable expenses
hereunder.
ARTICLE VII
DUTIES OF TRUSTEES
Section
7.01 Duties
of the Trustees in General.
(a) The Trustees shall
only have the duties and obligations expressly provided in this
Trust Agreement. Except to the extent specifically provided in
Sections 7.01(b) to the effect that specific duties and
obligations are those of the Delaware Trustee, and notwithstanding
any other provision of this Trust Agreement, all the duties and
obligations of the Trustees or of any of them under this Agreement
shall be solely the duties and obligations of the Signatory
Trustee.
(b) The Delaware
Trustee is appointed to serve as the trustee of the Trust in the
State of Delaware for the purpose of satisfying the requirement of
Section 3807(a) of the Delaware Statutory Trust Act that the Trust
have at least one trustee with a principal place of business in
Delaware. It is understood and agreed by the parties hereto that
the Delaware Trustee shall have none of the duties or liabilities
of the Signatory Trustee. The duties of the Delaware Trustee shall
be limited to (i) accepting legal process served on the Trust in
the State of Delaware, (ii) the execution of any certificates
required to be filed with the Delaware Secretary of State which the
Delaware Trustee is required to execute under Section 3811 of the
Delaware Statutory Trust Act, and (iii) any other duties
specifically allocated to the Delaware Trustee in the Trust
Agreement. To the extent that, at law or in equity, the Delaware
Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or the Investors, it is hereby
understood and agreed by the other parties hereto that such duties
and liabilities are replaced by the duties and liabilities of the
Delaware Trustee expressly set forth in this Trust Agreement.
Notwithstanding anything herein to the contrary:
(i) the
Delaware Trustee shall not be liable for the acts or omissions of
the Signatory Trustee, nor shall the Delaware Trustee be liable for
supervising or monitoring the performance and the duties and
obligations of the Signatory Trustee under this Trust Agreement.
The Delaware Trustee shall not be personally liable under any
circumstances, except for its own willful misconduct, fraud or
gross negligence. In particular, but not by way of limitation: the
Delaware Trustee shall not be personally liable for any error of
judgment made in good faith, except to the extent such error of
judgment constitutes gross negligence on its part;
(ii) no
provision of this Trust Agreement shall require the Delaware
Trustee to expend or risk its personal funds or otherwise incur any
financial liability in the performance of its rights or powers
hereunder, if the Delaware Trustee shall have reasonable grounds
for believing that the payment of such funds or adequate indemnity
against such risk or liability is not reasonably assured or
provided to it;
(iii) under
no circumstances shall the Delaware Trustee be personally liable
for any representation, warranty, covenant, agreement, or
indebtedness of the Trust;
(iv) the
Delaware Trustee shall not be personally responsible for or in
respect of the validity or sufficiency of this Trust Agreement or
for the due execution hereof by any other party; and
(v)
the Delaware Trustee shall not be liable for punitive, exemplary,
consequential, special or other similar damages for a breach of
this Trust Agreement under any circumstances.
(c)
Except
as provided in Sections 7.01(b) above, the Signatory Trustee
is hereby authorized and directed to enter into any agreement
permitted or directed by this Trust Agreement without the consent
or signature of the Delaware Trustee including, without limitation,
the Transaction Documents. The Delaware Trustee is authorized and directed to enter
into such other documents and take such other actions as any
Signatory Trustee shall specifically direct in written instructions
delivered to the Delaware Trustee; provided, however, that the Delaware Trustee will
take such action merely in a ministerial nondiscretionary capacity,
as directed by the Signatory Trustee, and any such action shall not
subject the Delaware Trustee to any liability, and provided further, however, that the
Delaware Trustee shall not be required to take any action if such
Trustee shall determine, or shall be advised by counsel, that such
action is likely to result in personal liability or is contrary to
applicable law or any agreement to which such Trustee is a party.
For the avoidance of doubt, this Section 7.01(c) does not
limit or condition the duties of the Delaware Trustee set forth in
Section 7.01(b).
(d) The
Signatory Trustee has also been appointed hereunder to satisfy such
legal or administrative requirements as may be necessary or prudent
to carry out the duties of the Trust with respect to the
Transaction Documents or any Trust Property to the extent that the
Delaware Trustee is not required to do so under applicable law.
Notwithstanding any provisions of this Trust Agreement, so long as
any obligation evidenced or secured by any of the Loan Documents
remains outstanding and not discharged in full and the lien of the
Loan Documents has not been released, the Signatory Trustee or any
replacement signatory trustee shall be an entity that complies with
the special purpose entity requirements set forth in the Loan
Documents.
Section
7.02 Actions
of Signatory Trustee. The Signatory Trustee is hereby
authorized and directed to take any and all necessary actions to
conserve and protect the Trust Property, including, but not limited
to:
(a) acquiring, owning,
conserving, protecting, operating and disposing of the Trust
Property in accordance with the Trust Agreement;
(b) entering into
and/or assuming and complying with the terms of the Lease, the
leases on the underlying Real Estate (in the event of a Tenant
bankruptcy or insolvency), the Loan Documents and any other
Transaction Documents to which the Trust is a party;
(c)
collecting rents and making distributions in accordance with
Article IV;
(d)
entering into any agreement for purposes of completing tax-free
exchanges of real property with a Qualified Intermediary as defined
in Section 1031 of the Code;
(e)
notifying the relevant parties of any default by them under the
Transaction Documents;
(f)
solely in the event of a bankruptcy, insolvency or like default by
the Tenant (or any subsequent tenant) of an underlying parcel of
Real Estate, renegotiating existing lease(s) and entering into new
lease(s) with respect to the Real Estate, or renegotiating or
refinancing any debt secured by the Real Estate; and
(g)
taking all actions with respect to a transfer of Trust Property as
permitted under this Trust Agreement; and
(h)
taking any action which, in the reasoned opinion of tax counsel to
the Trust, should not have any adverse impact on the treatment of
the Trust as a “fixed investment trust” or as a
“grantor trust” for federal income tax
purposes.
Section
7.03 Prohibited
Actions.
(a)
For so
long as the Depositor is the sole Beneficial Owner of the Trust,
the rights of the Depositor with respect to the assets and property
held by the Trust are such that the Trust will be characterized at
such time as a “business entity” within the meaning of
Regulation Section 301.7701-3. Because the Depositor will be the
sole Beneficial Owner, the Trust will be characterized as a
disregarded entity, and all assets and property of the Trust shall
be treated for and only for federal income tax purposes as assets
and property of the Depositor.
(b) Notwithstanding
any other provision in this Trust Agreement, at such time when the
Depositor is no longer the sole Beneficial Owner of the Trust, the
Trustees shall not, in any capacity, take any of the following
actions, if the effect would be that such action or actions would
constitute a power under the Trust Agreement to “vary the
investment of the certificate holders” as defined by
Regulation Section 301.7701-4(c)(1): (a) dispose of the Real
Estate, or reinvest any monies of the Trust, except in accordance
with Section 4.02; (b) renegotiate the terms of the Loan,
enter into new financing, renegotiate the Lease, or enter into new
leases except in the case of the Tenant’s bankruptcy or
insolvency; (c) make other than minor non-structural
modifications to the Real Estate, other than as required by law;
(d) accept any capital from the Investors or new investors
except as provided for in the Private Placement Memorandum,
(e) acquire any parcel of real estate other than the Real
Estate, (f) acquire any parcel of Real Estate more than ninety (90)
days after the first issuance of Interests to Investors pursuant to
the Private Placement Memorandum; (g) except as provided in (f)
above, take any willful action to fail to close the acquisition of
the Real Estate, or (h) take any other action that would in
the opinion of tax counsel to the Trust cause the Trust to be
treated as a “business entity” for federal income tax
purposes.
Section
7.04 Books
and Records. The Signatory Trustee shall keep customary and
appropriate books and records relating to the Trust and the Trust
Property and shall certify reports regarding the same to the
Lender, if required by the Loan Documents. The Signatory Trustee
shall maintain separate books and records for each Investor’s
Interest and shall provide reports of income and expenses to each
Investor as necessary for such Investor to prepare his/her income
tax returns regarding the Trust Property. These books and records
will be kept at the Trust’s principal place of business and
will be available to the Investors during reasonable business
hours.
Section
7.05 Furnishing
of Documents. The Signatory Trustee will promptly furnish to
the Investors copies of all reports, notices, requests, demands,
certificates, financial statements and any other writings pursuant
to the Transaction Documents that the Investors have not otherwise
received and shall further promptly furnish to the Lender those
documents as required by the Loan Documents.
Section
7.06 Duty
to Act.
(a) The Trustees shall
not be required to act or refrain from acting under this Trust
Agreement or the Loan Documents (other than the actions prohibited
in Section 7.03) if the Trustees reasonably determine, or have been
advised by legal counsel, that such actions may result in personal
liability, unless the Trustees are indemnified by the Trust against
any liability and costs (including reasonable legal fees and
expenses) which may result in a manner and form reasonably
satisfactory to the Trustees. However, the Trust shall not be
required to indemnify the Trustees with respect to any of the
matters described in Section 6.03(i) through 6.03(v).
(b) The
Delaware Trustee shall not have any duty (i) except as provided in
Section 7.01(b) with respect to the Delaware Trustee, to file,
record or deposit any document or to maintain any such filing,
recording or deposit or to refile, rerecord or redeposit any such
document, (ii) to obtain or maintain any insurance on the Real
Estate, (iii) to maintain the Real Estate, (iv) to pay or discharge
any tax levied against any part of the Trust Property, or (v) to
confirm, verify, investigate or inquire into the failure to receive
any reports or financial statements from any party obligated under
the Loan Documents to provide such reports or financial statements,
or (vi) to inspect the Real Estate at any time or to ascertain or
inquire as to the performance or observance of any requirements
associated therewith under the Loan Documents or
otherwise.
Section
7.07 ERISA
Matters. The Signatory Trustee shall use reasonable best
efforts to conduct the affairs of the Trust so that the Trust
Property does not become “plan assets” (as defined in
the Plan Asset Rules) subject to the fiduciary standards of
Part 4 of Subtitle B of Title I of ERISA and Code
Section 4975.
ARTICLE VIII
INDEMNIFICATION AND PAYMENT OF THE TRUSTEES
The
Trust agrees to indemnify the Trustees, in their individual
capacities, from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions, suits, costs, expenses and
disbursements including reasonable legal fees and expenses which
may be imposed on, incurred by or asserted at any time against the
Trustees, in their individual capacities (and not indemnified
against by other Persons) which relate to or arise out of the Trust
Property, or the Transaction Documents. Notwithstanding the above,
the Trust shall not be required to indemnify any Trustee with
respect to any of the matters described in Sections 6.03(i) through
6.03(v) to the extent any such section is adjudged to apply to such
Trustee. The indemnities contained in this Article VIII shall apply
to any permitted successors or assigns of the Trust. So long as any
obligation evidenced or secured by the Loan Documents is
outstanding, no indemnity payment from funds of the Trust (as
distinct from funds from other sources, such as insurance) of any
indemnity pursuant to this Article VIII shall be payable from
amounts allocable to the Lender pursuant to the Loan Documents. Any
indemnification set forth in this Agreement shall be fully
subordinated to the Loan and shall not constitute a claim against
the Trust in the event its cash flow is insufficient to pay its
obligations.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section
9.01 Termination
in General. The Trust shall dissolve and wind up in
accordance with Section 3808 of the Act and each Investor’s
share of the Trust Property shall, subject to Article IV hereof, be
distributed to the Investors at the earlier of (a) termination of
the Lease, or (b) after the sale or other disposition of the Real
Estate; provided, however, that, except pursuant to Section 9.02
and 9.03, no such dissolution or winding up will occur so long as
any obligation evidenced or secured by any of the Loan Documents
remains outstanding and not discharged in full.
Section
9.02 Termination
on Loan Default. Subject to the terms and conditions of the
Loan Documents, notwithstanding Section 9.01, if an Event of
Default under the Loan has occurred or in the event the Loan is
still outstanding as of the date that is 90 days prior to the Loan
maturity date and the Signatory Trustee is prohibited from acting
pursuant to Section 7.03 hereof, or if, pursuant to the Lender's
exercise of its rights under the Loan Documents following the
occurrence of an Event of Default thereunder, the Lender directs
the Signatory Trustee in writing to terminate the Trust Agreement,
the Signatory Trustee shall, in compliance with such conditions
precedent and other requirements as may be set forth in the Loan
Documents, terminate the Trust and distribute the Trust Property to
Investors in the manner provided in Section 9.04.
Section
9.03 Termination
to Preserve and Protect the Trust Property.
(a) Subject
to the terms and conditions of the Loan Documents, if the Signatory
Trustee determines that (a) the Tenant has failed to timely pay
rent due under the Lease after the expiration of any applicable
notice and cure provisions in the Lease, if any, (b) the Trust
Property is in jeopardy of being lost due to a default on the Loan,
and the Signatory Trustee is prohibited from acting pursuant to
Section 7.03 hereof, (c) the Tenant files for bankruptcy, seeks
appointment of a receiver, makes an assignment for the benefit of
its creditors or there occurs any similar event, (d) the Trust is
otherwise in violation of Section 7.03, and if the Signatory
Trustee determines in writing that dissolution of the Trust is
necessary and appropriate to preserve and protect the Trust
Property for the benefit of the Investors, then, in either case,
the Signatory Trustee shall, in compliance with such conditions
precedent and other requirements as may be set forth in the Loan
Documents, terminate the Trust and distribute the Trust Property in
the manner provided in this Section 9.03. It is the express intent
of this Trust Agreement that no distribution be made under this
Section 9.03 except in the rare and unexpected situations in which
(w) such distribution is necessary to prevent the loss of the Trust
Property due to the imminent risk of a default on the Loan (or
Lender’s exercise of remedies in connection therewith), (x)
the Loan must otherwise be refinanced in order to preserve or
protect the Trust Property, (y) the Master Lease is in imminent
danger of being in material default or (z) the Signatory Trustee
anticipates undertaking some other action in order to preserve the
Trust Property that would, in the Signatory Trustee’s
reasonable discretion, result in the Trust no longer being treated
as an investment trust in accordance with Section 5.01(c) of this
Trust Agreement. To the fullest extent permitted by applicable law,
the Signatory Trustee shall be fully protected in any
determinations made under this Section 9.03 made in good faith, and
shall have no liability to any Person, including without limitation
the Investors, with respect thereto.
(b) Except
as provided in Section 9.03(c), the Signatory Trustee shall
terminate the Trust pursuant to this Section 9.03 by dissolving and
winding up the Trust in accordance with Section 3808 of the Act and
distributing to the Investors, subject to Article IV hereof, the
Trust Property.
(c) Notwithstanding
Section 9.03(a), if any obligation evidenced or secured by the Loan
Documents remains outstanding and has not been satisfied in full at
the time the Trust is to be terminated pursuant to Section 9.02,
and if the Loan Documents prohibit a direct distribution of the
Trust Property to the Investor, the Signatory Trustee
may:
(i) terminate
the Trust pursuant to Section 9.02 by converting it pursuant to
Section 3821 of the Act into a Delaware limited liability company
(an “LLC”) (such conversion, a
“Transfer
Distribution”), the operating agreement for which will
be substantially similar in form to the LLC operating agreement set
forth as Exhibit C hereto (the “LLC Agreement”) (or in
lieu of such conversion, as determined in the sole discretion of
the Signatory Trustee, by transferring or contributing the Trust
Property to, or by merging the Trust into, such LLC), which LLC
shall acquire, by operation of law, contract, or otherwise, the
Trust Property subject to the then-outstanding obligations of the
Trust under the Loan Documents and the Master Lease, and which LLC
shall assume by operation of law, contract, or otherwise, the
obligations of the Trust under the Loan Documents and the Master
Lease, which assumption shall be evidenced by documents in writing
by the Lender;
(ii) effect
the conversion or exchange of the Investor’s Interests in the
Trust into equivalent membership interests in the LLC;
(iii) cause
the Signatory Trustee to be designated as the Manager (as such term
is defined in the LLC Agreement) of the LLC and to execute all
necessary documents, including the LLC Agreement on behalf of the
members of the LLC; and
(iv) take
all other actions necessary to complete the termination and winding
up of the Trust and the formation of the LLC in accordance with the
Act and the Delaware Limited Liability Company Act.
For
federal income tax purposes, a conversion of the Trust to an LLC
effectuated pursuant to this Section 9.03(c) shall be
characterized as: (1) a distribution of the Trust Property by
the Trust to the Investors in termination of the Trust, followed by
(2) a contribution by the Investors of the Trust Property to
the LLC in exchange for membership interests in the
LLC.
Section
9.04 Sale
of the Trust Property. The Trust shall sell the Trust
Property at any time upon receipt of a notice from the Signatory
Trustee. Any sale shall be in the Signatory Trustee’s sole
and absolute discretion, including (i) determining sales price of
the Trust Property, (ii) providing notice to the Trust of the sale,
and (iii) conducting the sale of the Trust Property. The Trust
shall distribute the proceeds (net of any fee due to the Signatory
Trustee) to the Investors. The Signatory Trustee and the Delaware
Trustee are expressly instructed to permit each Investors to
undertake its portion of the sale as a like-kind exchange within
the meaning of Section 1031 of the Code. Any sale of the Trust
Property shall be on an “as is, where is” basis and
without any representations or warranties by the Delaware Trustee
or the Signatory Trustee (other than as to ownership of the Trust
Property and authority to enter into the sale or other matters as
determined by Signatory Trustee in its sole and absolute
discretion). Costs of sale shall be allocated between the Trust and
the purchaser of the Trust Property as may be determined by the
Signatory Trustee in its sole discretion. "Sole and absolute
discretion" means that notwithstanding any other provision of this
Trust Agreement or otherwise applicable provision of law or equity
(including any law relating to fiduciary duties), the Signatory
Trustee (i) shall be entitled to consider only such interests and
factors as it desires, including its own interests or its
Affiliates' interests, (ii) shall be entitled to act or not act in
a manner that is adverse, including materially adverse, to the
Trust, the Trustees, the Investors and any other Person bound by
this Trust Agreement, and (iii) shall, to the fullest extent
permitted by applicable law, have no duty or obligation to give any
consideration to any interest of or factors affecting the Trust,
the Trustees, the Investors or any other Person bound by this Trust
Agreement. Notwithstanding any other provision of this Agreement or
any other provision of law or equity (including any law relating to
fiduciary duties), to the fullest extent permitted by the Act and
other applicable law, in connection with actions taken or not taken
pursuant to this Trust Agreement, a Signatory Trustee Indemnified
Person shall owe no duties hereunder or at law or in equity
(including fiduciary duties) to the Trust, the Trustees, the
Investors or any other Person bound by this Trust Agreement. The
Trust, the Trustees, the Investors and any other Person bound by
this Trust Agreement each therefore waives, to the fullest extent
permitted by law, any claim or cause of action against a Signatory
Trustee Indemnified Person asserting, in connection with the
determination of any and all matters presented to such Signatory
Trustee Indemnified Person for action, breach of fiduciary duty,
duty of care or any other duty, breach of the Act or breach of any
duty created by special circumstances arising out of this Trust
Agreement or the Trust. Without limitation, any Signatory Trustee
Indemnified Person may engage in or possess an interest in other
profit-seeking or business ventures of any kind, nature or
description, independently or with others, similar or dissimilar to
the business of the Trust, whether now existing or hereafter
acquired or initiated, whether or not such ventures are competitive
with the Trust, and the doctrine of corporate opportunity, or any
analogous doctrine, shall not apply to any Signatory Trustee
Indemnified Person. No Signatory Trustee Indemnified Person who
acquires knowledge of a potential transaction, agreement,
arrangement or other matter that may be an opportunity for the
Trust shall have any duty to communicate or offer such opportunity
to the Trust, and such Signatory Trustee Indemnified Person shall
not be liable to the Trust or to any other Person bound by this
Trust Agreement for breach of any fiduciary or other duty existing
at law, in equity or otherwise by reason of the fact that such
Person pursues or acquires for, or directs such opportunity to,
another Person or does not communicate such opportunity or
information to the Trust. Neither the Trust nor any Investor nor
any Trustee shall have any rights or obligations by virtue of this
Trust Agreement or the relationship created hereby in or to such
independent ventures or the income or profits or losses derived
therefrom, and the pursuit of such ventures, even if competitive
with the activities of the Trust, shall not be deemed wrongful,
improper or the breach of any duty to the Trust, any Trustee or any
Investor existing at law, in equity or otherwise.
Section
9.05 Certificate
of Cancellation. Upon the completion of the dissolution and
winding up of the Trust, the Trustees shall cause a Certificate of
Cancellation to be filed with the Delaware Secretary of State and
thereupon the Trust, and this Trust Agreement shall
terminate.
ARTICLE X
SUCCESSOR TRUSTEES
Section
10.1 Resignation
and Removal; Appointment of Successor Trustee. A Trustee or
any successor may resign at any time by giving at least sixty (60)
days’ prior written notice to the Investors. The Investors
holding a majority of the Interests may at any time remove a
Trustee for cause by written notice to such Trustee. Cause shall
only mean the fraud, willful misconduct or gross negligence of the
Trustee with respect to the Trust, and only as determined upon
final order by a court of competent jurisdiction. Notwithstanding
anything herein to the contrary, no resignation or removal of a
Trustee shall be effective until a successor trustee has been
appointed and such successor trustee has accepted its
responsibilities, all as hereinafter provided. In case of the
resignation, death, liquidation or removal of a Trustee, Investors
holding a majority of the Interests may appoint a successor by
written instrument. The Trust shall not be terminated solely due to
the death, liquidation, resignation or removal of any Trustee. If a
successor trustee shall not have been appointed within sixty (60)
days after the giving of such notice, a Trustee or the Investors
may apply to any court of competent jurisdiction in the United
States to appoint a successor trustee to act until such time, if
any, as a successor shall have been appointed as provided above.
Any successor so appointed by such court shall immediately and
without further act be superseded by any successor appointed as
provided above within one year from the date of the appointment by
such court. Any successor, however appointed, shall execute and
deliver to its predecessor trustee (the Delaware Trustee, Signatory
Trustee or a successor trustee, as the case may be) an instrument
accepting such appointment, and thereupon such successor, without
further act, shall become vested with all the estates, properties,
rights, powers, duties and trusts of the predecessor trustee in the
trusts hereunder with like effect as if originally named a Delaware
Trustee or Signatory Trustee herein; but upon the written request
of such successor, such predecessor shall execute and deliver an
instrument transferring to such successor, upon the trusts herein
expressed, all the estates, properties, rights, powers, duties and
trusts of such predecessor, and such predecessor shall duly assign,
transfer, deliver and pay over to such successor all monies or
other property then held by such predecessor upon the trusts herein
expressed. Any right of the Investors against the predecessor
trustee, in its, his or her individual capacity, shall not be
prejudiced by the appointment of any successor trustee and shall
survive the termination of the trusts created hereby.
Section
10.2 Successor
Delaware Trustee. Any successor Delaware Trustee, however
appointed, shall be a bank or trust company with its principal
place of business in the State of Delaware and either (a) having a
combined capital and surplus of at least $50,000,000, or (b) having
the performance of its obligations hereunder guaranteed by such a
bank or trust company having a combined capital and surplus of at
least $50,000,000, if there is such an institution willing, able
and legally qualified to perform the duties of trustee hereunder
upon reasonable or customary terms. Any corporation into which the
Delaware Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Delaware Trustee shall be
a party, or any corporation to which substantially all the
corporate trust business of the Delaware Trustee may be
transferred, shall, subject to the preceding sentence, be the
Delaware Trustee under this Trust Agreement without further act.
Any successor Delaware Trustee, however appointed, shall be
competent and qualified to (i) serve as a trustee of a statutory
trust formed pursuant to Chapter 38 of Title 12 of the Act, (ii)
own, buy, sell, lease and mortgage land in the state where the Real
Estate is located, and (iii) take all actions required by the
Delaware Trustee pursuant to the Trust Agreement and the Loan
Documents under the Act.
ARTICLE XI
MISCELLANEOUS
Section
11.01 Limitations
on Rights of Others. Nothing in this Trust Agreement,
whether express or implied, shall give to any Person other than the
Depositor, the Trustees, the Investors and the Trust any legal or
equitable right, remedy or claim hereunder provided, however, that
the Lender shall be an intended third party beneficiary of the
Special Purpose Provisions of this Trust Agreement.
Section
11.02 Notices,
Etc. All notices, requests, demands, consents and other
communications (“Notices”) required or
contemplated by the provisions hereof shall refer on their face to
this Trust Agreement (although failure to do so shall not make such
Notice ineffective), shall, unless otherwise stated herein, be in
writing and shall be (i) personally delivered, (ii) sent
by reputable overnight courier service, (iii) sent by
certified or registered mail, postage prepaid and return receipt
requested, or (iv) transmitted by telephone facsimile with
electronic confirmation of receipt, in each case, as
follows:
if to
the Delaware Trustee:
▇▇▇▇▇▇▇▇ Entity
Services LLC
▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
if to
the Signatory Trustee or the Trust:
River
Forest Grocery – GK Services LLC/
GK DST
– River Forest Grocery
c/o GK
Development, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
E-mail:
▇▇▇▇@▇▇-▇▇.▇▇▇
or at
such other address and telephone facsimile number as shall be
designated, respectively, by the Trustees or the Trust in a written
notice to the other Persons receiving Notices pursuant to this
Section. Notices given pursuant to this Section shall be deemed
received upon the earliest of the following to occur: (i) upon
personal delivery, (ii) on the fifth day following the day sent, if
sent by registered or certified mail, (iii) on the next business
day following the day sent, if sent by reputable overnight courier,
and (iv) if transmitted by telephone facsimile, on the day sent if
such day is a business day of the addressee and the telephone
facsimile is received by the addressee by 5:00 p.m. local time of
the addressee on such day and otherwise on the first business day
of the addressee after the day that the telephone facsimile is
sent.
Section
11.03 Severability.
Any provision of this Trust Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Section
11.04 Separate
Counterparts. This Trust Agreement may be executed by the
parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
Section
11.05 Successors
and Assigns. All covenants and agreements contained herein
shall be binding upon and inure to the benefit of the Trustees and
their successors and assigns and the Investors and their successors
and assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other writing or action by the
Investors shall bind each of their successors and
assigns.
Section
11.06 Usage
of Terms. With respect to all terms in this Trust Agreement,
the singular includes the plural and the plural includes the
singular; words importing any gender include the other gender;
references to “writing” include printing, typing,
lithography and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into
in accordance with their respective terms and not prohibited by
this Trust Agreement; references to Persons include their
successors and permitted assigns; and the term
“including” means including without
limitation.
Section
11.07 Headings.
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of
the terms or provisions hereof.
Section
11.08 Governing
Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
applicable to contracts to be performed entirely within such state,
including all matters of construction, validity and performance.
Each party to this Trust Agreement agrees to only bring suit in a
court of competent jurisdiction located in the County of ▇▇▇▇,
State of Illinois and consents to personal jurisdiction therein.
IN ANY SUCH PROCEEDING, EACH PARTY
TO THIS TRUST AGREEMENT WILL BE DEEMED TO HAVE WAIVED ITS RIGHT TO
A TRIAL BY JURY.
Section
11.09 Amendments.
(a) Subject to Section
2.05(b), this Trust Agreement may be supplemented or amended by
agreement of the Signatory Trustee and the Delaware Trustee to
correct scrivener’s errors, to clarify any ambiguities in the
Trust Agreement or to reflect any changes to or otherwise comply
with securities and tax law.
(b) Notwithstanding
Section 11.09(a), no amendment or supplement shall be made if its
effect would be that it would constitute a power under the Trust
Agreement to “vary the investment” of the Investors
within the meaning of Treasury Regulation Section
301.7701-4(c)(1).
IN WITNESS WHEREOF, the parties hereto
have caused this Trust Agreement to be duly executed by their
respective officers as of the day and year first above
written.
DELAWARE
TRUSTEE:
▇▇▇▇▇▇▇▇ ENTITY
SERVICES LLC
By:
__________________________________
Name:
__________________________________
Its:
__________________________________
SIGNATORY
TRUSTEE:
RIVER
FOREST GROCERY – GK SERVICES LLC,
a
Delaware limited liability company
By:
GK Development,
Inc.,
an
Illinois corporation, d/b/a GK Real Estate
Its:
Manager
By:
__________________________________
Name:
▇▇▇▇
▇▇▇▇▇▇▇▇▇
Its:
President and Sole
Director
TRUST:
GK DST
– RIVER FOREST GROCERY,
a
Delaware statutory trust
By:
RIVER FOREST
GROCERY – GK SERVICES LLC,
a
Delaware limited liability company
Its:
Signatory
Trustee
By:
GK Development,
Inc.,
an
Illinois corporation, d/b/a GK Real Estate
Its:
Manager
By:
By:
__________________________________
Name:
▇▇▇▇
▇▇▇▇▇▇▇▇▇
Its:
President and Sole
Director
[Signature
Page to Trust Agreement of GK DST – River Forest
Grocery]
EXHIBIT A
THE INVESTORS AND THEIR INTERESTS
|
Investor
|
Interest
|
|
RF
Grocery, LLC
|
100.00%
|
|
Total:
|
100.00%
|
EXHIBIT B
DESCRIPTION OF REAL ESTATE
▇▇▇▇ ▇, ▇, ▇, ▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ 3 IN ▇. ▇. ▇▇▇▇▇▇'▇ SUBDIVISION OF
THE EAST 1/2 OF THE WEST 1/2 OF THE NORTHEAST 1/4 OF SECTION 1,
TOWNSHIP 39 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,
IN ▇▇▇▇ COUNTY, ILLINOIS,
ALSO
▇▇▇▇ ▇, ▇, ▇, ▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ 1 IN ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇
SUBDIVISION OF THE WEST 1/2 OF
THE WEST 1/2 OF THE NORTHEAST 1/4 OF SECTION 1, TOWNSHIP 39 NORTH,
RANGE 12, EAST
OF THE THIRD PRINCIPAL MERIDIAN, IN ▇▇▇▇ COUNTY,
ILLINOIS.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
EXHIBIT C
THE LLC AGREEMENT
FORM OF OPERATING AGREEMENT FOR LLC CREATED PURSUANT
TO
SECTION 9.04(b) OF THE TRUST AGREEMENT
OPERATING AGREEMENT
OF
GK DST – RIVER FOREST GROCERY, LLC
THIS
OPERATING AGREEMENT (this “Operating Agreement”) of GK DST –
River Forest Grocery, LLC, a Delaware limited liability company
(the “Operating
Company”), is made and
entered into as of ________________, 20___ (the “Effective Date”), by and among GK
DST – River Forest Grocery, a Delaware statutory trust (the
“Trust”), River
Forest Grocery – GK Services LLC, a Delaware limited
liability company, and the persons whose names are set forth on
Exhibit A of this
Agreement (the “Members”) and ___________________
(“Springing Member
1”) and __________________ (“Springing Member 2”), as the
Springing Members (as defined in Section 9.1 below).
RECITALS:
WHEREAS, pursuant
to the Trust Agreement of the Trust (the “Trust Agreement”), River Forest
Grocery – GK Services LLC is the signatory trustee of the
Trust (the “Signatory
Trustee”) and the Members collectively own all of the
beneficial interests in the Trust (the Members, in such capacity,
the “Owners”).
WHEREAS, Trust owns
that certain real property and associated assets known as Fresh
Thyme, a retail property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Real Estate”), and certain
incidental additional assets associated with the Real Estate (the
Real Estate and all such additional assets, collectively, the
“Trust
Property”), which property is subject to the
Lease.
WHEREAS, pursuant
to Section 9.03 of the Trust Agreement, the Signatory Trustee,
having due authority and having been so directed by the Lender on
the Trust Property, may terminate the Trust as provided in Section
9.03 of the Trust Agreement.
WHEREAS, pursuant
to Section 9.03(c) of the Trust Agreement, (a) the Signatory
Trustee shall transfer or contribute the Trust Property to the
Operating Company, (b) the Signatory Trustee shall become the
manager of the Operating Company; (c) the Owners shall become
Members of the Operating Company; (d) the Operating Company shall
become the owner of the Trust Property (such property in the hands
of the Operating Company, the “Company Property”), which shall
remain subject to the Lease, and (e) the Trust shall be
terminated.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
herein, the parties agree as follows:
ARTICLE
I
Formation of Operating Company
1.1 Authority. The Operating
Company has been formed in accordance with the requirements of the
Delaware Limited Liability Company Act (the “Act”), and the Signatory Trustee
has been designated the manager of the Operating Company (the
“Manager”). The
Manager shall have the authority to perform such other filings,
recordings and actions and will comply with all formation
requirements under the Act and the laws of such other states in
which the Operating Company elects to do business.
1.2 Membership; Rights and
Obligations. Upon the consummation of the transactions
described in the Recitals, the Members will be members of the
Operating Company. The rights and obligations of the Operating
Company and the Members will, except as otherwise provided herein,
be governed by the Act.
1.3 Name. The name of the Operating
Company is “GK DST –
RIVER FOREST GROCERY, LLC” and its affairs will be
conducted under the Operating Company name or such other name(s) as
the Manager may select. The Manager will execute and file with the
proper offices any and all certificates required by the fictitious
name or assumed name statutes of the states in which the Operating
Company elects to do business. The Operating Company will have the
exclusive ownership of and right to use the Operating Company
name.
1.4 Purposes of the Operating
Company. The purposes of the Operating Company are: (i) to
own, manage, hold and ultimately dispose of the Real Estate; and
(ii) to engage in such other activities, enterprises, ventures and
undertakings permitted under this Agreement and/or the Act that are
necessary or appropriate to the foregoing purposes (including
without limitation enter into or modify any lease of the Real
Estate and finance (and refinance) the Real Estate). The Operating
Company shall conduct no business other than as specifically set
forth in this Section 1.4.
1.5 Characterization. It is the
intention of the Manager and the Members that the Operating Company
constitute a partnership for federal, state and local income tax
purposes. Each Member will report its Membership Interest in a
manner consistent with the foregoing, and neither the Manager nor
any Member will take any action inconsistent with the
foregoing.
1.6 Principal Office of the Operating
Company. The principal office of the Operating Company is [
], or at such other
place as the Manager may designate. The Operating Company may have
other offices in such place or places as selected by the
Manager.
1.7 Registered Office and Registered
Agent. The registered agent of the Operating Company in the
State of Delaware is ▇▇▇▇▇▇▇▇ Entity Services LLC, and the
registered office of the registered agent is ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇. The Manager may from time
to time in accordance with the Act change any of the Operating
Company’s registered agents and/or registered offices and
designate a registered agent and registered office in each state
the Operating Company is required to maintain or appoint
one.
1.8 Term of Existence of the Operating
Company. The term of the Operating Company commenced upon
the filing of its Articles of Organization with the Secretary of
State of Delaware and will be perpetual unless sooner terminated as
provided in Article VIII.
1.9 Limitation
on Certain Activities. The Operating Company shall, as long
as the Loan remains outstanding, govern itself as a Single Purpose
Entity. For purposes of satisfying the requirements of a Single
Purpose Entity, the Operating Company shall:
(i) exist
solely for the purpose of holding a direct or indirect interest in,
and operating, the Company Property,
(ii)
conduct
business only in its own name or, in connection with the operation
of the Company Property, in the name of the facility,
(iii) not
engage in any business other than the ownership, management,
leasing, financing, operation and sale of the Company
Property,
(iv) not
hold, directly or indirectly, any ownership interest (legal or
equitable) in any entity or any real or personal property other
than the interest which it owns or holds in the Company
Property,
(v) not
have any assets other than those related to its interest in the
Company Property and shall not have any debt other than as
permitted by the Loan Documents and shall not guarantee or
otherwise obligate itself with respect to the debts of any other
Person or entity, other than as set forth in or permitted by the
Loan Documents,
(vi) have
its own separate books, records, accounts, financial statements and
tax returns (with no commingling of funds or assets), provided,
however, that if the Operating Company does not separately file tax
returns due to its status as a disregarded entity, all such tax
returns shall be filed by its owners,
(vii) hold
itself out as being an entity separate and apart from any other
entity, and
(viii) observe
all applicable entity formalities, as the case may be, independent
of any other entity.
ARTICLE
II
Membership Interests; Capital Contributions
2.1 Membership Interest. Each
Member’s percentage ownership interest in the Operating
Company shall be equal to such Member’s beneficial ownership
interest in Trust immediately prior to the transactions described
in the Recitals, subject to any adjustments in Membership Interest
pursuant to Section 2.2(b). The amount of each Member’s
percentage ownership interest in the Operating Company
(“Membership
Interest”) is set forth opposite such Member’s
name on Exhibit A
hereto.
2.2 Capital
Contributions.
(a) Each Member will be
credited with an initial capital contribution (“Capital Contribution”) in the
amount set forth opposite such Member’s name on Exhibit A hereto.
(b) The Manager may
request at any time that the Members make additional Capital
Contributions to the Operating Company on a pro rata basis in
proportion to each Member’s Membership Interest. The Members
are not required to comply with any such request. The Manager shall
adjust the Members’ Capital Contributions and Membership
Interests set forth on Exhibit A hereto to equitably
reflect any additional capital contributions made by
Members.
2.3 Subordination to Loan
Documents. While the Loan Documents remain in effect, any
and all rights of Members pursuant to the terms of this Agreement
are subordinated to the rights of the Lender under the Loan
Documents.
ARTICLE
III
Accounting, Allocations and Distributions
3.1 Books of Account.
(a) The Manager shall
maintain the books of account of the Operating
Company.
(b) The books of
account will be closed promptly after the end of each calendar
year, which will be the Operating Company’s fiscal year
(“Fiscal Year”).
Promptly after the close of the Fiscal Year, the Operating Company
will cause to be prepared such partnership income tax and other
returns required under applicable law and regulation, including any
and all statements necessary to advise all Members promptly about
their investment in the Operating Company for federal income tax
reporting purposes. The Manager will be responsible for the prompt
filing and delivery of all such returns and statements. All
elections and options available to the Operating Company for tax
purposes will be taken or rejected by the Operating Company in the
sole discretion of the Manager.
3.2 Capital Accounts. A separate
capital account (“Capital
Account”) will be maintained for each Member. Each
Member’s initial Capital Account shall be equal to the amount
set forth opposite such Member’s name on Exhibit A hereto. Thereafter,
each Member’s Capital Account will, inter alia, be increased by
(i) the amount of money contributed by such Member to the
Operating Company, (ii) the fair market value of property
contributed by such Member to the Operating Company (net of
liabilities secured by such contributed property that the Operating
Company is considered to assume or take subject to under Code
Section 752) and (iii) allocations to such Member of Operating
Company income and gain (or items thereof), including income and
gain exempt from tax; and decreased by (iv) the amount of
money distributed to such Member (as a Member) by the Operating
Company, (v) the fair market value of property distributed to
such Member (as a Member) by the Operating Company (net of
liabilities secured by such distributed property that such Member
is considered to assume or take subject to under Code Section 752),
(vi) allocations to such Member of expenditures of the
Operating Company described in Code Section 705(a)(2)(B) and
(vii) allocations to such Member of Operating Company loss and
deduction (or items thereof).
3.3 Profit and Loss Allocations.
Except as otherwise required by Code Section 704 and the Treasury
Regulations thereunder, net profit or net loss of the Operating
Company, determined for income tax purposes, will be allocated to
the Members pro rata with their Membership Interests.
3.4 Special Tax Allocations. In
accordance with Code Sections 704(b) and 704(c) and the
Treasury Regulations thereunder, income, gain, loss and deduction
with respect to any asset contributed to the capital of the
Operating Company will, solely for tax purposes, be allocated among
the Members so as to take account of any variation between the
adjusted basis of such property to the Operating Company for
federal income tax purposes and its fair market value at the time
of contribution to the Operating Company.
3.5 Distributions.
(a) Operating Company
“Cash Flow” for
any Fiscal Year will consist of all cash received by the Operating
Company (other than as a capital contribution) less cash expenditures for
Operating Company debts, expenses, capital expenditures and
reasonable reserves as determined by the Manager in its sole
discretion.
(b) Operating Company
Cash Flow for any Fiscal Year will be distributed to the Members in
proportion to their Membership Interests.
(c) No Member has the
right to partition, or otherwise demand an in-kind distribution of,
the Company Property. If the Operating Company distributes Company
Property to the Members, the fair market value of such property at
the time of such distribution will be determined by the Manager in
its sole discretion, and any such distribution will be made to the
Members in proportion to their Membership Interests.
(d) No distribution
shall be made to any Members, if such distribution would violate
applicable law or constitute a default under the Loan
Documents.
ARTICLE
IV
Rights, Duties, Liabilities and Restrictions of the
Manager
4.1 The Manager.
(a) Except solely as
provided in Section 4.1(b) with respect to Major Decisions (as
defined therein), the Manager will have the sole and exclusive
right to manage, control and conduct the affairs of the Operating
Company and to manage the Company Property.
(b)
Notwithstanding the
foregoing, the following actions (the “Major Decisions”) will require the
consent of Members holding a majority of the Membership Interests:
(i) entering into any agreement for the sale, transfer, or
exchange of all or any substantial portion of the Real Estate;
(ii) entering into, modifying, extending, renewing or
canceling the Lease or any other lease with respect to the Real
Estate or any portion thereof; (iii) entering into, modifying,
extending, renewing or canceling any agreement pertaining to any
indebtedness to be secured in whole or in part by any mortgage,
deed of trust, pledge, lien or other encumbrance upon the Real
Estate; (iv) admitting new Members to the Operating Company in
exchange for Capital Contributions by such Persons to the Operating
Company; (v) dissolving and winding up the Operating Company;
or (vi) amending this Agreement. The consent of the Members to any
Major Decision shall be determined as provided in Section
5.1(b).
4.2 Duties
and Responsibilities of the Manager. The Manager will
diligently, faithfully and competently perform its duties and
responsibilities, and will devote such time to the Operating
Company’s business as, in the judgment of the Manager, is
reasonably required. The Manager shall use reasonable best efforts
to conduct the affairs of the Operating Company so that the Company
Property does not become “plan assets” (as defined in
the Plan Asset Rules) subject to the fiduciary standards of
Part 4 of Subtitle B of Title I of ERISA and Code
Section 4975. No fee shall be payable to the Manager for
management of the affairs of the Operating Company.
4.3 Officers
of the Operating Company. The Manager may appoint one or
more persons to serve as officers of the Operating Company, in such
capacities and with such delegated rights and powers as the Manager
may approve; provided, however, that no such officer will have any
different or greater rights and powers than the Manager. The
Manager may provide that compensation be paid to persons who
provide services to the Operating Company as officers.
4.4 Expenditures
by Manager. The Operating Company will reimburse the Manager
and its Affiliates for any costs and expenses reasonably incurred
by them on behalf of the Operating Company.
4.7 Potential
Conflicts. The Operating Company may purchase goods or
services from the Manager or its Affiliates, provided that any such
transaction will be conducted on commercially reasonable terms. The
Manager may engage in business ventures of any nature and
description independently or with others, including, but not
limited to, the business or businesses engaged in by the Operating
Company, and neither the Operating Company nor any of the other
Members will have any rights in or to such independent ventures or
the profits derived therefrom.
4.8 Liability
of Manager. The Manager will not be liable to any Member or
the Operating Company for honest mistakes of judgment, or for
action or inaction, taken reasonably and in good faith for a
purpose that was reasonably believed to be in the best interests of
the Operating Company, or for losses due to such mistakes, action
or inaction, or for the negligence, dishonesty or bad faith of any
employee, broker or other agent of the Operating Company. The
Manager may consult with counsel and accountants in respect of
Operating Company affairs and be fully protected and justified in
any action or inaction that is taken in accordance with the advice
or opinion of such counsel or accountants, provided that they will
have been selected with reasonable care. The Members will look
solely to the Company Property for the return of their capital and,
if the assets of the Operating Company remaining after payment or
discharge of the debts and liabilities of the Operating Company are
insufficient to return such capital, they will have no recourse
against the Manager for such return of capital. Notwithstanding any
of the foregoing to the contrary, the provisions of this Section
will not relieve the Manager of any liability by reason of gross
negligence, willful misconduct or fraud or to the extent (but only
to the extent) that such liability may not be waived, modified or
limited under applicable law, but will be construed so as to
effectuate the provisions of this Section to the fullest extent
permitted by law.
4.9 Indemnification.
The Operating Company shall indemnify the Manager in its individual
capacity, from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions, suits, costs, expenses and
disbursements including reasonable legal fees and expenses which
may be imposed on, incurred by or asserted at any time against
them, in their individual capacities (and not indemnified against
by any other Persons) which relate to or arise out of the Company
Property. The indemnities contained in this Section 4.9 shall
survive the termination of this Agreement. So long as any
obligation evidenced or secured by the Loan Documents is
outstanding, no indemnity payment from funds of the Operating
Company (as distinct from funds from other sources, such as
insurance) of any indemnity pursuant to this Section 4.9 shall be payable
from amounts allocable to the Lender pursuant to the Loan
Documents. Any indemnification set forth in this Agreement shall be
fully subordinate to the Loan and shall not constitute a claim
against the Operating Company in the event its cash flow is
insufficient to pay its obligations, nor shall it constitute a
claim against any owner of an interest in the Operating
Company.
4.10 Successor
to Manager. If the Manager resigns, a successor manager will
be selected by Members holding a majority of the Membership
Interests.
4.11 Tax
Matters Member. The Manager will be the Operating
Company’s Tax Matters Partner as defined in Code Section
6231(a)(7) (the “TMP”). The TMP will have the right
to resign as such by giving 30 days written notice to the Members.
Upon the resignation of the TMP, a successor TMP will be selected
by the Manager. The TMP will employ experienced tax counsel to
represent the Operating Company in connection with any audit or
investigation of the Operating Company by the Internal Revenue
Service (the “Service”) and in connection with
all subsequent administrative and judicial proceedings arising out
of such audit. The Operating Company will not be obligated to pay
any compensation to the TMP in his capacity as such; provided,
however, that all reasonable expenses incurred by the TMP in
serving as the TMP will be Operating Company expenses and the TMP
will be reimbursed by the Operating Company in accordance with
Section 4.6 above. The TMP will keep the Members informed of all
administrative and judicial proceedings, as required by Code
Section 6223(g), and will furnish to each Member who so requests in
writing a copy of each notice or other communication received by
the TMP from the Service, except such notices or communications as
are sent directly to such Member by the Service.
ARTICLE
V
Members
5.1 Powers of the
Members.
(a) Except as provided
in Section 5.1(c), the Members have the right to propose that the
Operating Company and/or the Manager take certain actions with
respect to the Operating Company’s business or the Operating
Company Assets, including, but not limited to, Major Decisions in
accordance with the procedure described in Section
5.1(b).
(b)
Whenever an action
is proposed by any Member pursuant to Section 5.1(a), or by the
Manager with respect to any Major Decision, the Manager shall first
send to all Members written notice (the “Proposed Action Notice”) setting
forth the particulars of the proposed action (the
“Proposed
Action”). The Proposed Action Notice shall include a
ballot on which the Member may ▇▇▇▇ its vote for or against the
Proposed Action. Consistent with the provisions of Section 9.2, the
Members shall respond to the Proposed Action Notice by returning
the marked ballot to the Manager within fourteen (14) days of the
receipt of the Proposed Action Notice. A Member not returning the
ballot within the prescribed period shall be deemed to have voted
for the Proposed Action. The Manager shall promptly notify all
Members of the results of the vote. Subject to Section 4.3, the
Manager shall be authorized to take action with respect to such
Proposed Action if such Proposed Action has been approved by
Members holding a majority of the Membership
Interests.
5.2 Liability. No Member will be
personally liable for any of the debts of the Operating Company or
any of the losses thereof beyond the amount of such Member’s
Capital Contribution to the Operating Company.
5.3 Meetings of the Members. A
meeting of the Members may be called at any time by the Manager or
by Members holding more than 25 percent (25%) of the Membership
Interests. The meetings will be held at the Operating
Company’s principal place of business or any other place
designated by the Manager. The Manager will give the Members at
least ten days prior written notice stating the time, place and
purpose of the meeting. At a meeting of the Members, the presence
of Members holding more than 50 percent (50%) of the Membership
Interests, in person or by proxy, will constitute a quorum. A
Member may vote either in person or by written proxy signed by the
Member or by his, her or its duly authorized attorney in fact.
Persons present by telephone will be deemed to be present “in
person” for purposes hereof.
5.4 Removal of Manager.
Notwithstanding any other provision of this Agreement, a Manager
can be removed and its successor chosen by Members holding at least
75 percent (75%) of the Membership Interests, and only if the
Manager engaged in willful misconduct, fraud or gross negligence
with respect to the Operating Company.
5.5 Springing Members.
(a) Upon the occurrence
of any event that causes the last remaining Member to cease to be a
member of the Operating Company (other than upon an assignment by
the Member of all of its limited liability company interest in the
Operating Company and the admission of the transferee pursuant to
Article VI) (a “Member
Cessation Event”), Springing Member 1 shall, without
any action of any Person and simultaneously with the Member
Cessation Event, automatically be admitted to the Operating Company
as a Special Member and shall continue the Operating Company
without dissolution. If, however, at the time of a Member Cessation
Event, Springing Member 1 has died or is otherwise no longer able
to step into the role of Special Member, then in such event,
Springing Member 2 shall, concurrently with the Member Cessation
Event, and without any action of any Person and simultaneously with
the Member Cessation Event, automatically be admitted to the
Operating Company as Special Member and shall continue the
Operating Company without dissolution. It is the intent of these
provisions that the Operating Company never have more than one
Special Member at any particular point in time. No Special Member
may resign from the Operating Company or transfer its rights as
Special Member unless a successor Special Member has been admitted
to the Operating Company as Special Member by executing a
counterpart to this Agreement. The Special Member shall
automatically cease to be a member of the Operating Company upon
the admission to the Operating Company of a substitute Member. The
Special Member shall be a member of the Operating Company that has
no interest in the profits, losses and capital of the Operating
Company and has no right to receive any distributions of Operating
Company assets. Pursuant to Section 18-301 of the Act, a Special
Member shall not be required to make any capital contributions to
the Operating Company and shall not receive a limited liability
company interest in the Operating Company. A Special Member, in its
capacity as Special Member, may not bind the Operating Company.
Except as required by any mandatory provision of the Act, a Special
Member, in its capacity as Special Member, shall have no right to
vote on, approve or otherwise consent to any action by, or matter
relating to, the Operating Company, including, without limitation,
the merger, consolidation or conversion of the Operating Company.
In order to implement the admission to the Operating Company of the
Special Member, each of Springing Member 1 and Springing Member 2
shall execute a counterpart to this Agreement. Prior to its
admission to the Operating Company as Special Member, each person
acting as a Springing Member 1 or Springing Member 2 shall not be a
member of the Operating Company.
(b) In the event of a
vacancy in the position of Springing Member 1 or Springing Member
2, the Manager shall, as soon as practicable, appoint a successor
Springing Member to fill such vacancy. By signing this Agreement, a
Springing Member agrees that, should such Springing Member become a
Special Member, such Springing Member will be subject to and bound
by the provisions of this Agreement applicable to a Special
Member.
ARTICLE
VI
Assignment Provisions
6.1 Transfers by
Members.
(a) Subject to
Section 6.2, a Member may Transfer some or all of its
Membership Interests in the Operating Company. For purposes hereof,
“Transfer”
means, when used as a noun, any sale, hypothecation, pledge,
assignment, gift, or other transfer, be it voluntary or
involuntary, to any person, inter vivo, testamentary, by operation
of laws of devise and descent or other laws, and, when used as a
verb, to sell, hypothecate, pledge, assign, gift, or otherwise
transfer to any person, be it voluntarily or involuntarily, inter
vivo, testamentary, by operation of the laws of devise or descent
or any other laws.
(b) Notwithstanding
anything contained herein to the contrary, no Transfer of any
Membership Interest will be permitted if such Transfer would: (i)
result in a termination of the Operating Company for federal income
tax purposes that would have a material adverse effect on the
Operating Company or any of the Members; (ii) result in the
Operating Company not qualifying for an exemption from the
registration requirements of any applicable federal or state
securities laws; (iii) result in any violation of any applicable
federal or state securities laws; (iv) result in the Operating
Company having to register as an investment company under the
Investment Company Act of 1940, as amended; (v) require the
Operating Company, the Manager or any Affiliate to register as an
investment advisor under the Investment Advisers Act of 1940, as
amended; or (vi) result in such Membership Interest being
transferred to a “benefit plan investor”.
“Benefit plan investor” is defined in the Plan Asset
Rules, and includes, but is not limited to, tax-exempt
“401k” and “▇▇▇” plans, as well as entities
substantially owned by such tax-exempt plans.
6.2 General Provisions. The
following rules will apply to the Transfer of interests in the
Operating Company:
(a) no person will be
admitted as an assignee or transferee hereunder unless and until:
(i) the assignment is made in writing, signed by the assignor and
accepted in writing by the assignee, and a duplicate original of
the assignment is delivered to and accepted by the Manager; (ii)
the prospective assignee executes and delivers to the Operating
Company a written agreement, in form and substance satisfactory to
the Manager, pursuant to which said person agrees to be bound by
this Agreement; and (iii) an appropriate amendment hereto is
executed and, if required, filed of record;
(b) the effective date
of such assignment or admission will be no earlier than the date
that the documents specified in subsection (a) above are delivered
to and accepted by the Manager;
(c) the Operating
Company and the Manager will treat the assignor of the assigned
interest as the absolute owner thereof and will incur no liability
for distributions made in good faith to such assignor prior to such
time as the documents specified in subsection (a) above have been
delivered to and accepted by the Manager;
(d) unless admitted as
a Member to the Operating Company by the Manager pursuant to the
provisions of Article VII, the assignee or transferee of an
interest in the Operating Company hereunder will not be entitled to
become or exercise any rights of a Member, but will, to the extent
of the interest acquired, be entitled only to the predecessor
Member’s Membership Interest in the Operating Company. No
person, including the legal representatives, heirs or legatees of a
deceased Member, will have any rights or obligations greater than
those set forth herein and no person will acquire an interest in
the Operating Company or become a Member except as permitted
hereby;
(e) the costs incurred
by the Operating Company in processing an assignment (including
attorney’s fees) will be borne by the assignee, and will be
payable prior to and as a condition of admission to the Operating
Company;
(f) Intentionally
deleted; and
(g) upon the Transfer
of a Membership Interest which satisfies Section 6.2, Exhibit A to this Agreement
will be revised to reflect such Transfer.
ARTICLE
VII
Admission of Additional Members; Resignations and
Withdrawals
7.1 Admission of Additional
Members.
(a) Subject to
compliance with applicable securities laws and this Agreement, the
Manager, in its sole discretion, may admit new Members in exchange
for Capital Contributions by such persons to the Operating Company.
The Members hereby grant the Manager the power of attorney to amend
the Operating Company’s Articles of Organization and this
Agreement to affect any issuance of Membership Interests pursuant
this subsection. Upon the admission of any new Members to the
Operating Company, the Manager shall adjust the Members’
Membership Interests set forth on Exhibit A hereto to equitably
reflect the Capital Contributions made by new Members.
(b) Additional Members
admitted pursuant to Section 7.1(a) will be entitled to all of the
rights and privileges of the original Members hereunder and will be
subject to all of the obligations and restrictions hereunder, and
in all other respects their admission will be subject to all of the
terms and provisions hereof.
(c) No Member shall
have any preemptive or similar rights to increase or maintain such
Member’s Membership Interest in the Operating
Company.
7.2 Resignations and Withdrawals. A
Member who withdraws from the Operating Company will forfeit all
Membership Interests and rights as a Member, including his right to
receive any distributions from the Operating Company and the right
to vote. Upon the withdrawal of a Member, the Operating Company
will not have any obligation to purchase such Member’s
Membership Interests or any part thereof. The Manager shall adjust
the Members’ Membership Interests set forth on Exhibit A
hereto to equitably reflect the withdrawal of a
Member.
ARTICLE
VIII
Termination and Winding Up
8.1 Termination.
(a) The Operating
Company will terminate upon the earliest to occur of the
following:
(i) The Manager and
Members holding a majority of the Membership Interests vote to
terminate the Operating Company or convert it into a different
legal entity pursuant to Delaware Law; or
(ii) The
Operating Company’s sale, exchange or other disposition of
the Real Estate.
(b) This Agreement
generally and Article VIII in particular will govern the conduct of
the parties during the winding up of the Operating
Company.
8.2 Liquidation Procedures. Upon
termination of the Operating Company, the Operating Company’s
affairs will be wound up and the Operating Company will be
dissolved. A proper accounting will be made of the profit or loss
of the Operating Company from the date of the last previous
accounting to the date of termination.
8.3 Liquidating Trustee. Upon the
winding up of the Operating Company, the Manager will act as the
liquidating trustee or will appoint a liquidating trustee. The
liquidating trustee will have full power to sell, assign and
encumber the Company Property. All certificates or notices thereof
required by law will be filed on behalf of the Operating Company by
the liquidating trustee.
8.4 Distribution on Winding Up. The
proceeds of liquidation will be applied by the end of the taxable
year in which the liquidation occurs or, if later, within 90 days
after the date of such liquidation, in the following
order:
(a) first, to the
creditors of the Operating Company, in the priority and to the
extent provided by law; and
(b) thereafter, to the
Members in proportion to their Membership Interests.
Notwithstanding the
foregoing, or any other provision of this Agreement to the
contrary, for so long as the Operating Company’s obligations
under the Loan Documents remain outstanding, the Operating Company
may not be terminated without the prior written consent of the
Lender.
8.5 No Dissolutions. The
bankruptcy, death, dissolution, liquidation, termination or
adjudication of incompetency of a Member shall not cause the
termination or dissolution of the Operating Company and the
business of the Operating Company shall continue. Upon any such
occurrence, the trustee, receiver, executor, administrator,
committee, guardian or conservator of such Member (an
“assignee”) shall have all the rights of such Member
for the purpose of settling or managing its estate or property,
subject to satisfying conditions precedent to the admission of such
assignee as a substitute Member. The transfer by such trustee,
receiver, executor, administrator, committee, guardian or
conservator of any Membership Interest shall be subject to all of
the restrictions, hereunder to which such transfer would have been
subject if such transfer had been made by such bankrupt, deceased,
dissolved, liquidated, terminated or incompetent
Member.
ARTICLE
IX
General Provisions
9.1 Definitions. The following
terms not otherwise defined herein will have the meanings ascribed
to them below:
(a) “Affiliate” (whether or not such
term is capitalized) shall mean, with respect to any specified
Person any other Person owning beneficially, directly or
indirectly, any ownership interest in such specified Person or
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes
of this definition, “control,” when used with respect
to any specified Person, shall mean the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the
foregoing.
(b) “Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time.
(c) “Control” (whether or not such term
is capitalized) when used with respect to any specified Person,
shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” shall have
meanings correlative to the foregoing. Without limiting the
generality of the foregoing, a Person shall be deemed to Control
any other Person in which it owns, directly or indirectly, 50
percent or more of the ownership interests.
(d) “ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended from time
to time.
(e) “Lease” shall mean that certain
lease agreement entered into by and between the Trust as
“Landlord” and Lakes Venture, LLC, as
“Tenant,” with respect to the Real Estate.
(f) “Lender” shall mean Barrington Bank
& Trust Company, N.A., a third-party lender, and its successors
and assigns with respect to the Loan.
(g) “Loan” shall mean that certain loan
from Lender to the Trust in the original principal amount of
$5,190,000 for the acquisition of the Real Estate, as evidenced and
secured by the Loan Documents.
(h) “Loan Documents” shall mean any and all
documents evidencing or securing the Loan or any assumption thereof
including, without limitation, any promissory note (individually, a
“Note” and
collectively, “Notes”), mortgage, deed of trust,
assignment of leases and rents, indemnity agreement, guaranty
certificate, escrow agreement, consent or subordination agreement
or the functional equivalent of any of the aforementioned, and any
and all other documents related to the Loan.
(i) “Tenant” shall mean Lakes Venture,
LLC, a Delaware limited liability company and a wholly-owned
subsidiary of the Sponsor.
(j) “Person”
(whether or not such term is capitalized) shall mean a natural
person, corporation, limited partnership, general partnership,
limited liability company, joint stock company, joint venture,
association, company, trust, bank trust company, land trust,
business trust, statutory trust or other organization, whether or
not a legal entity, and a government or agency or political
subdivision thereof.
(k) “Plan Asset Rules” shall mean 29
Code of Federal Regulations § 2510.3-101, as amended from
time to time.
(l) “Section” shall mean a section in
this Agreement unless the context clearly indicates
otherwise.
(m) “Special Member” shall mean, upon
such Person’s admission to the Operating Company as a Member
of the Operating Company pursuant to Section 5.5(a), a person
acting as either Springing Member 1 or Springing Member 2, in such
person’s capacity as a member of the Operating Company. A
Special Member shall only have the rights and duties expressly set
forth in this Agreement.
(n) “Single Purpose Entity” shall have
the meaning given it in Section 1.9
hereof.
(o) “Sponsor” shall mean GK
Development, Inc., an Illinois corporation, d/b/a GK Real Estate
and sole member and Manager of the Signatory Trustee.
(p) “Springing Member” shall mean a
Person who is not a member of the Operating Company but who has
signed this Agreement in order that, upon the conditions described
in Section 5.5(a), such Person can become the Special Member
without any delay in order that at all times the Operating Company
shall have at least one member.
(q) “Treasury Regulations” shall mean
U.S. Treasury Regulations promulgated under the Code.
9.2 Notices. All notices, offers or
other communications required or permitted to be given pursuant to
this Agreement will be in writing and will be considered as
properly given or made upon personal delivery or on the third
business day following mailing from within the United States by
first class United States mail, postage prepaid, certified mail
return receipt requested, and addressed to the address of the
Operating Company set forth in Section 1.6, if to the Operating
Company, and to the address beneath a Member’s name on the
signature pages hereto, if to a Member. Any Member may change its
address by giving fifteen (15) days advance written notice stating
its new address to the Manager. Commencing with the giving of such
notice, such newly designated address will be such Member’s
address for purposes of all notices or other communications
required or permitted to be given pursuant to this
Agreement.
9.3 Third Party Reliance. Third
parties dealing with the Operating Company shall be entitled to
conclusively rely on the signature of the Manager and/or any
officer of the Operating Company to bind the Operating
Company.
9.4 Successors. This Agreement and
all the terms and provisions hereof will be binding upon and will
inure to the benefit of all Members and their legal
representatives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
9.5 Governing Law. This Agreement
will be construed in conformity with the laws of the State of
Delaware, without regard to conflicts of law provisions. The
Operating Company and each Member agree that any dispute among or
between them concerning the Operating Company or this Agreement
will be litigated in a court of competent jurisdiction located in
County of ▇▇▇▇, State of Illinois. In any such proceeding, the
Operating Company and each Member will be deemed to have waived its
right to a trial by jury.
9.6 Counterparts. This Agreement
may be executed in counterparts, each of which will be an original,
but all of which will constitute one and the same
instrument.
9.7 Pronouns and Headings. As used
herein, all pronouns will include the masculine, feminine, neuter,
singular and plural thereof wherever the context and facts require
such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in
any construction of the provisions hereof.
9.8 Members Not Agents. Nothing
contained herein will be construed to constitute any Member the
agent of another Member, except as specifically provided herein, or
in any manner to limit the Members in the carrying on of their own
respective businesses or activities.
9.9 Entire Understanding. This
Agreement constitutes the entire understanding among the Members
and supersedes any prior understanding and/or written or oral
agreements among them with respect to the Operating
Company.
9.10 Severability.
If any provision of this Agreement, or the application of such
provision to any person or circumstance, will be held invalid by a
court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances
other than those to which it is held invalid by such court, will
not be affected thereby.
9.11 Further
Assurances. Each of the Members will hereafter execute and
deliver such further instruments and do such further acts and
things as may be required or useful to carry out the intent and
purpose of this Agreement and as are not inconsistent with the
terms hereof. Recognizing that each Member may find it necessary
from time to time to establish to third parties, such as
accountants, banks, mortgagees or the like, the then current status
of performance hereunder, each Member agrees, upon the written
request of another Member (including the Manager, for and on behalf
of the Operating Company), from time to time, to furnish promptly a
written statement of the status of any matter pertaining to this
Agreement or the Operating Company to the best of the knowledge and
belief of the Member making such statements.
9.12 Benefits
of Agreement. No Third Party Rights. None of the provisions
of this Agreement shall be for the benefit of or enforceable by any
creditor of the Operating Company or by any creditor of any Member
or a Special Member, and nothing in this Agreement shall be deemed
to create any right in any Person (other than the Manager with
respect to indemnity under Section 4.9) not a party hereto, and
this Agreement shall not be construed in any respect to be a
contract in whole or in part for the benefit of any third Person,
except as provided in this Section 9.12.
9.13 Waiver
of Partition; Nature of Interest. To the fullest extent
permitted by law, each of the Member, the Special Member, the
Springing Members, and any additional member admitted to the
Operating Company hereby irrevocably waives any right or power that
such Person might have to cause the Operating Company or any of its
assets to be partitioned, to cause the appointment of a receiver
for all or any portion of the assets of the Operating Company, to
compel any sale of all or any portion of the assets of the
Operating Company pursuant to any applicable law or to file a
complaint or to institute any proceeding at law or in equity to
cause the dissolution, liquidation, winding up or termination of
the Operating Company. No Member shall have any interest in any
specific assets of the Operating Company, and no Member shall have
the status of a creditor with respect to any distribution pursuant
to Section 3.5 hereof. The interest of each Member in the Operating
Company is personal property.
[EXECUTION PAGE FOLLOWS]
COUNTERPART SIGNATURE PAGE
OPERATING AGREEMENT
OF
GK DST – RIVER FOREST GROCERY LLC
IN
WITNESS WHEREOF, the undersigned has executed this Operating
Agreement this ____ day of ______________, 20___.
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MANAGER: |
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RIVER FOREST
GROCERY – GK SERVICES LLC,
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a Delaware limited
liability company
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By:
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Manager |
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MEMBER: |
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Signature
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Print Name
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Address
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City, State & Zip Code
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SPRINGING MEMBER 1: |
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SPRINGING MEMBER
2:
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EXHIBIT A
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NAME OF
MEMBER
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CAPITAL
CONTRIBUTION
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CAPITAL
ACCOUNT
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MEMBERSHIP
INTEREST
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