EXHIBIT 10.41
LIMITED LIABILITY COMPANY AGREEMENT
OF
RAMCO/SHENANDOAH LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT is made and entered into as of
the ____ day of November, 2001, by and between (i) RAMCO-▇▇▇▇▇▇▇▇▇▇ PROPERTIES,
L.P., a Delaware limited partnership, with offices located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Ramco") and (ii) TOWN REALTY
CO., LLC, a New York limited liability company, with offices located at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇
("Investor"). All capitalized terms used in this Agreement are defined in
Article X of this Agreement.
R E C I T A L S:
A. Ramco and Investor desire to form a limited liability company (the
"Company") under the Delaware Limited Liability Company Act, Delaware Code
Annotated, Title 18, ss.ss.101 to 1107 (the "Act") for the purposes and term set
forth in this Agreement.
B. Ramco and Investor desire to evidence their agreements with respect
to the Company by entering into this Agreement.
Accordingly, the parties agree as follows:
ARTICLE 1
FORMATION, NAME, PURPOSES,
PRINCIPAL OFFICE, TERM OF THE COMPANY
AND RELATED MATTERS
1.01 FORMATION
As soon as practicable after the date hereof, the Members shall execute
a Certificate of Formation with respect to the Company (the "Certificate"), and
Ramco shall immediately thereafter cause the Certificate to be filed with the
office of the Secretary of State for the State of Delaware. The Company shall be
formed on the date the Certificate is filed with the office of the Secretary of
State for the State of Delaware ("Formation Date"). The relationship of the
Members, with respect to the Company, shall be governed by this Agreement.
1.02 NAME
The name of the Company shall be Ramco/Shenandoah LLC. The Company may
also conduct its business under such assumed name or names as shall be selected
by both Ramco and Investor at any time and from time to time.
1.03 PURPOSES
a. The Company is being formed, and the purposes of the Company are, to
(i) acquire certain property in the City of Davie, Broward County, Florida,
described on Schedule 1 attached hereto and made a part hereof, upon which
property is located a certain shopping center commonly known as "Shenandoah
Shopping Center" (the "Project"); (ii) acquire certain
property adjacent to the Project to be identified at later date if deemed
appropriate by Manager, (iii) own, manage, operate, lease, sell, finance,
refinance, develop, redevelop and dispose of the Project and such additional
property, if any, including leasing and selling all or portions of the Project
and such additional property (hereinafter the term "Project" shall include such
additional property, if and when acquired); and (iv) engage in any and all
activities related or incidental to the foregoing.
b. The Company shall have all the powers necessary or appropriate for
the accomplishment of the Company's purposes.
1.04 PRINCIPAL OFFICE, REGISTERED OFFICES AND RESIDENT AGENT
a. The principal office of the Company shall be located at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Company shall
have an office at such other address(es) as may be designated from time to time
by Ramco, including such offices as may be required by each jurisdiction in
which the Company transacts business, or expects to transact business. The
address of the office of the Company in the State of Delaware required to be
maintained pursuant to the Act is c/o The Corporation Trust Company, Corporation
Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other
address as may be designated from time to time by Ramco.
b. The name and address of the registered agent for service of process
on the Company in the State of Delaware is The Corporation Trust Company, whose
address is Corporation Trust Center ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or such other agent and address as may be designated from time to time by
Ramco. In addition, Ramco shall appoint such other registered agents for service
of process on the Company, as may be required by those jurisdictions in which
the Company transacts business, or expects to transact business.
1.05 TERM
a. The term of the Company shall commence on the Formation Date.
b. The term of the Company shall end and the Company shall dissolve on
December 31, 2051 (the "Termination Date"); however, if any of the following
events shall occur prior to the Termination Date, the Company shall dissolve on
the first to occur of such events:
(1) The sale or other disposition of all or substantially all
the assets of the Company and the satisfaction of all purchase money
debt, if any, retained by the Company in connection with such sale or
other disposition;
(2) The decision of Ramco and Investor to terminate the
Company; or
(3) Any other event which, under this Agreement or the Act,
results in the dissolution of the Company.
1.06 TREATMENT OF THE COMPANY
The Members agree to continue the Company as a limited liability
company under and pursuant to the Act. The Members specifically intend and agree
that the Company not be a partnership (including, a limited partnership) or any
other venture, but a limited liability company
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under and pursuant to the Act. No Member shall be construed to be a partner in
the Company or a partner of any entity or Member. The Certificate and this
Agreement and the relationships created thereby and arising therefrom shall not
be construed to suggest otherwise. Notwithstanding the foregoing, the Members
intend that the Company be treated as a partnership for federal income tax
purposes.
1.07 SPE PROVISIONS
If required by the lender in connection with the first mortgage
financing of the Project, the Manager is hereby authorized to amend this
Agreement (and the Certificate, if applicable) to include such single purpose
entity or "SPE" provisions as are typically required in a conduit lending
framework.
ARTICLE 2
CAPITAL AND RELATED MATTERS
2.01 INITIAL CAPITAL CONTRIBUTIONS
Following the execution of this Agreement but in no event later than
the date such monies are required in order to consummate the acquisition of the
Project, each Member shall initially contribute to the capital of the Company
cash in an amount equal to the Applicable Percentage set forth opposite its
respective name in column (3) on Exhibit A attached hereto multiplied by (a) the
total cash purchase price to be paid by the Company to acquire the Project, (b)
the acquisition fee and Ramco's associated costs and expenses as described in
Section 4.16 below, and (c) any other costs incurred by or on behalf of the
Company in connection with the Project acquisition. When such amounts are known,
they shall be entered in column (2) on Exhibit A attached hereto next to the
respective Member's names. Investor acknowledges that it has received notice
that its initial capital contribution is due by November 12, 2001.
2.02 ADDITIONAL CAPITAL CONTRIBUTIONS
a. If, at any time and from time to time, during the term of the
Company, the Manager determines that the Company needs additional funds to
accomplish any of the purposes of the Company, including, but not limited to,
capital improvements, tenant improvements, operating deficits, brokerage
commissions to be paid and debt service obligations to be met, or acquisition of
any additional property as provided in Section 1.03 a. hereof, the Manager shall
so inform the Investment Committee, whereupon the Investment Committee may
decide to send a Capital Call Notice (as hereinafter defined) to the Members
pursuant to the provisions of Section 2.02 b. hereof. If the Investment
Committee sends such Capital Call Notice, the Members shall be required to make
such additional capital contributions hereunder pursuant to the provisions of
such Capital Call Notice. Nothing in this Section 2.02 a. shall be construed as
prohibiting the Investment Committee from deciding to borrow the required
additional capital needed hereunder instead of requiring additional capital
contributions from the Members.
b. The Investment Committee, once it has unanimously decided to require
additional capital contributions from the Members pursuant to Section 2.02 a.
hereof, shall cause the Manager to send a written notice to each of the Members
(the "Capital Call Notice"). The Capital Call Notice shall state (i) the total
amount of cash required, (ii) each Member's
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share of such required cash (which shall be based on each Member's respective
Applicable Percentage), and (iii) the date by which each Member is obligated to
contribute its share of such required cash (which shall not be earlier than
twenty (20) days from the date the Capital Call Notice was sent).
c. The obligations of the Members to make additional capital
contributions under this Agreement shall only be enforceable by the Members and
not by creditors of any Member or by any third party. In the event any creditor
of a Member or of the Company succeeds to all or a portion of the Membership
Interest of a Member, the other Member shall thereupon be released from all
further obligations under this Section 2.02.
2.03 FAILURE TO CONTRIBUTE ADDITIONAL CAPITAL
If either Ramco or Investor does not pay the Company, when due, any
amount that each such Member is obligated to contribute to the Company under the
provisions of Sections 2.01 or 2.02 a. hereof (such Member being hereinafter
referred to as the "Defaulting Member" and such amount being hereinafter
referred to as the "Omitted Contribution"), and the other Member has paid to the
Company, when due, all amounts that it is then, and was prior thereto, obligated
to contribute to the Company under such Section (a "Nondefaulting Member"), the
Investment Committee may, if it so elects, give notice of such nonpayment to the
Defaulting Member. For purposes of this Section 2.03, the member of the
Investment Committee who has been appointed by the Defaulting Member shall not
participate in any decisions made by the Investment Committee in connection with
the matters set forth in this Section 2.03. Therefore, any references in this
Section 2.03 to decisions made by the Investment Committee means decisions made
by the member of the Investment Committee who is appointed by the Nondefaulting
Member. If the Defaulting Member does not make such payment within twenty (20)
days after the giving of such notice (plus such additional period of time, if
any, as the Investment Committee, in its sole and absolute discretion, grants
the Defaulting Member in such notice), the failure to make such payment during
such period shall constitute an Event of Default, whereupon (i) the Defaulting
Member shall cease to have the right to cure its default, except as otherwise
provided below in this Section 2.03, (ii) except as otherwise provided below in
this Section 2.03, the Defaulting Member shall cease to have the right to
receive any distributions from the Company, (iii) at the election of the
Investment Committee, the Defaulting Member shall have no right to participate
in the management of the business of the Company, and any Affiliate of the
Defaulting Member who is a member of the Investment Committee shall become an
inactive member of the Investment Committee, and (iv), the Investment Committee
and the Nondefaulting Member, for and on behalf of themselves and the Company,
shall have as its sole remedy, the following remedy:
The Nondefaulting Member shall have the right to advance an amount
equal to the Omitted Contribution. The amount so advanced shall constitute (i) a
loan from the Nondefaulting Member to the Defaulting Member, and (ii) a capital
contribution by the Defaulting Member to the Company. Such a loan shall (i) bear
interest at the greater of the LIBOR Reference Rate and sixteen percent (16%)
per annum, (ii) be payable on demand, (iii) be secured by the Defaulting
Member's Membership Interest, and (iv) at the election of the Nondefaulting
Member, be evidenced by a promissory note, containing such terms and provisions,
not inconsistent with the provisions of this Section 2.03a.(2), as shall be
specified by the Nondefaulting Member. Upon not less than fifteen (15) days
prior request, the Defaulting Member shall execute and deliver to the
Nondefaulting Member such promissory note, and all related documents (including,
but not limited to, a Uniform Commercial Code Financing
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Statement to perfect the aforementioned security interest) specified by the
Nondefaulting Member, and if the Defaulting Member shall fail or refuse to
execute any of such documents, the Nondefaulting Member shall be the Defaulting
Member's true and lawful attorney-in-fact, with full power of substitution, in
its name and on its behalf, to execute and deliver such promissory note and
related documents. If the Nondefaulting Member shall make such an advance, (-1-)
the portion of all Company distributions otherwise payable to the Defaulting
Member shall, instead of being paid to the Defaulting Member, be paid to the
Nondefaulting Member and applied against the loan resulting from such an
advance, and (-2-) the Defaulting Member shall not, as a result of the making of
any such advance, be treated as having cured its default and it shall continue
to be a Defaulting Member until the principal of, and all accrued interest on,
the loan resulting from such an advance has been paid in full, whereupon the
Defaulting Member shall resume the right to receive distributions from the
Company.
2.04 LOANS BY A MEMBER IN LIEU OF CAPITAL CALL
In the event that the Manager determines that additional funds are
needed for an investment for the long-term benefit, or the protection and
preservation of the physical assets of, the Project, the Manager shall request
the Investment Committee to approve a Capital Call for such purpose; provided,
however, that if the Investment Committee does not unanimously consent to a
Capital Call with respect thereto, but in the Manager's discretion the Manager
continues to believe that such funds are needed for any of such purposes, then
the Manager (or its Affiliate) shall have the right to lend to the Company the
amount so required, which loan shall bear interest at the LIBOR Reference Rate
and shall be repaid in the manner set forth in Sections 3.02 a. and 3.03 a.
hereof.
2.05 RETURN OF CAPITAL CONTRIBUTIONS
Except as otherwise provided in this Agreement, no Member shall have
the right to withdraw its capital contributions or to demand or receive the
return of its capital contributions or any part thereof.
2.06 LIMITED LIABILITY OF MEMBERS
Unless otherwise provided by law, the Members shall not be liable for
the acts, debts or obligations of the Company.
ARTICLE 3
ALLOCATIONS AND DISTRIBUTIONS
3.01 ALLOCATIONS OF PROFIT AND LOSS
a. After giving effect to the special allocations set forth in Section
3.01 b. hereof and the curative allocations set forth in Section 3.01 c. hereof,
Profit and Loss for any fiscal year shall be allocated between the Members as
follows:
(1) Profits shall be allocated as follows:
(a) First, to the Members to the extent of and in
proportion to the remainder if any of (i) the cumulative
Losses previously allocated under Section
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3.01(a)(2)(d), over (ii) the cumulative Profits allocated
under this Section 3.01(a)(1)(a) for all prior periods;
(b) Second, to the Members to the extent of and in
proportion to the remainder if any of (i) the cumulative
Losses previously allocated under Section 3.01(a)(2)(c), over
(ii) the cumulative Profits allocated under this Section
3.01(a)(1)(b) for all prior periods;
(c) Third, to the Members pro rata, based on their
respective Applicable Percentages, to the extent of their
Preferred Return; and
(d) Fourth, the balance shall be allocated 50% to
Ramco and 50% to Investor.
(2) Losses shall be allocated as follows:
(a) First, to the Members to the extent of and in
proportion to the remainder if any of (i) the cumulative
Profits previously allocated under Section 3.01(a)(1)(d), over
(ii) the cumulative Losses allocated under this Section
3.01(a)(2)(a) for all prior periods;
(b) Second, to the Members to the extent of and in
proportion to the remainder if any of (i) the cumulative
Profits previously allocated under Section 3.01(a)(1)(c), over
(ii) the cumulative Losses allocated under this Section
3.01(a)(2)(b) for all prior periods; and
(c) Third, to the Members pro rata, based on their
respective Applicable Percentages.
(d) Notwithstanding the foregoing no loss shall be
allocated to any Member for any fiscal year to the extent that
such Loss would create or increase a deficit in such Member's
Adjusted Capital Account. Any Losses that cannot be allocated
by reason of this clause (d) shall be reallocated to the other
Member or Members on a pro rata basis.
b. The following special allocations shall be made in the
following order:
(1) Except as otherwise provided in Section 1.704-2(f) of the
Regulations, if there is a net decrease in "partnership minimum gain"
during any fiscal year, each Member shall be specially allocated items
of income and gain for such fiscal year (and, if necessary, subsequent
fiscal years) in an amount equal to such Member's share of the net
decrease in "partnership minimum gain," determined in accordance with
Section 1.704-2(g) of the Regulations. Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. This Section
3.01 b. (1) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(2) Except as otherwise provided in Section 1.704-2(i)(4) of
the Regulations, if there is a net decrease in "partner nonrecourse
debt minimum gain" attributable to a "partner nonrecourse debt" during
any fiscal year, each Member who has a "share of
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partner nonrecourse debt minimum gain" attributable to such "partner
nonrecourse debt," determined in accordance with Section 1.704-2(i)(5)
of the Regulations, shall be specially allocated items of income and
gain for such fiscal year (and, if necessary, for subsequent fiscal
years) in an amount equal to such Member's share of the net decrease in
"partner nonrecourse debt minimum gain" attributable to such "partner
nonrecourse debt," determined in accordance with Section 1.704-2(i)(4)
of the Regulations. Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be
allocated to each Member pursuant thereto. This Section 3.01b.(2) is
intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(i)(4) of the Regulations and shall be interpreted
consistently therewith.
(3) In the event any Member unexpectedly receives any
adjustments, allocations or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5) or Section
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of income and gain
shall be specially allocated to such Member in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, any
deficit in the Adjusted Capital Account of such Member as quickly as
possible, provided that an allocation pursuant to this Section 3.01
b.(3) shall be made only if and to the extent that such Member would
have such a deficit after all other allocations provided for in this
Section 3.01 have been tentatively determined as if this Section
3.01b.(3) were not in the Agreement.
(4) Any "nonrecourse deductions" for any fiscal year shall be
specially allocated between the Members pro rata, in accordance with
their Applicable Percentages.
(5) Any "partner nonrecourse deductions" for any fiscal year
shall be specially allocated to the Member who bears the economic risk
of loss with respect to the "partner nonrecourse debt" to which such
"partner nonrecourse deductions" are attributable in accordance with
Section 1.704-2(i)(1) of the Regulations.
c. The provisions of Section 3.01b. hereof (collectively, the
"Regulatory Provisions") are intended to comply with certain requirements of the
Regulations. It is the intent of the Members that, subject to the Regulatory
Provisions, all allocations pursuant to the Regulatory Provisions shall be
offset either with other allocations pursuant to the Regulatory Provisions or,
if necessary, with curative allocations of other items of income, gain, loss or
deduction pursuant to this Section 3.01 c. Therefore, notwithstanding any
provision of this Agreement other than the Regulatory Provisions, allocations
pursuant to the Regulatory Provisions shall be taken into account in allocating
other items of income, gain, expense or loss between the Members so that, to the
extent possible, the net amount of such allocations of other items and the
allocations pursuant to the Regulatory Provisions to each Member are equal to
the net amount that would have been allocated to such Member if the Regulatory
Provisions were not part of this Agreement. In applying this Section 3.01 c.,
there shall be taken into account future allocations under Sections 3.01 b.(1)
and 3.01 b.(2) hereof that, although not yet made, are likely to offset other
allocations previously made under Sections 3.01 b.(4) and 3.01 b.(5) hereof.
d. For purposes of this Agreement:
(1) "Adjusted Capital Account" means, with respect to any
Member, such Member's Capital Account (i) reduced by those anticipated
allocations, adjustments and
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distributions described in Section 1.704-l(b)(2)(ii)(d)(4)-(6) of the
Regulations, and (ii) increased by such Member's "share of partnership
minimum gain," such Member's "share of partner nonrecourse debt minimum
gain" and the amount of any deficit in such Member's Capital Account
that such Member is deemed obligated to restore under Section
1.704-1(b)(2)(ii)(c) of the Regulations.
(2) "Profit" and "Loss" each means, for each fiscal year of
the Company or other period, the Company's profit or loss as computed
for federal income tax purposes but without taking into account any
items of income, gain, expense or loss allocated pursuant to Sections
3.01 b. or 3.01 c. hereof.
(3) "Regulations" means the regulations promulgated by the
U.S. Department of Treasury under the Code.
(4) All items set off in quotation marks and not otherwise
defined shall have the meanings ascribed to them in the Regulations.
3.02 DISTRIBUTION OF CASH FLOW
a. The Distributable Cash Flow (as defined in Section 3.02 b.
below) of the Company, with respect to each fiscal year of the Company shall be
distributed monthly to, and allocated between, the Members in the following
order of priority:
(1) First, to repay any loans due and owing any Member or any
Affiliate of any Member;
(2) Next, to the Members pro rata, based on their respective
Applicable Percentages, to the extent of their Preferred Return;
(3) The balance, if any, 50% to Ramco and 50% to Investor.
The Members hereby acknowledge that it is their intention to distribute
the maximum Distributable Cash Flow annually.
b. As used in this Agreement, "Distributable Cash Flow" means,
with respect to each fiscal year of the Company, the excess of Cash Receipts
with respect to each such fiscal year over Cash Disbursements for such fiscal
year. For this purpose:
(1) "Cash Receipts" means the sum of:
(a) The revenues of the Project generated by its
operations received in cash during such fiscal year (not
including Net Sale or Refinancing Proceeds [defined below]);
(b) Any amounts previously set aside as reserves by
the Company in a prior fiscal year (including any interest
earned on such reserves), to the extent that the Investment
Committee determines that they are no longer necessary to be
held as reserves;
(c) All cash contributed to the capital of the
Company during such fiscal year;
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(d) All proceeds received by the Company during such
fiscal year from any and all loans, including, but not limited
to, any loans made to the Company by any Member or Affiliate
of any Member; provided, however, Net Sale or Refinancing
Proceeds shall not be included in this definition; and
(e) All cash received by the Company during such
fiscal year from any other source, except Net Sale or
Refinancing Proceeds.
(2) "Cash Disbursements" means the sum of:
(a) The operating expenses of the Project paid in
cash during fiscal year (except to the extent any such
expenses are paid out of amounts set aside as reserves in a
prior fiscal year);
(b) Interest on any and all Company indebtedness and
obligations paid in cash during such fiscal year;
(c) The aggregate of all payments made during such
fiscal year with respect to the discharge of any Company
indebtedness and obligations (including those obligations of
the Company due and owing to any Member or any Affiliate of
any Member other than repayment of loans made to the Company
by such Members or their Affiliates) except if any such
payments are made out of Net Sale or Refinancing Proceeds;
(d) The aggregate of all payments made during such
fiscal year with respect to capital improvements, repairs,
equipment purchases and any other item relating to the
business of the Company that is not properly characterized as
a current operating expense under Section 3.02b.(2)(a) hereof;
(e) The aggregate of all amounts that the Investment
Committee elects to deduct from Cash Receipts with respect to
such fiscal year and to set aside, use and/or pay (i) for
working capital, (ii) as reserves (-1-) for contingencies,
(-2-) for the replacement or preservation, during the current
or any future fiscal year, of the Project property or assets,
(-3-) to provide for accrued liabilities, (-4-) for the
payment or satisfaction of current or future Project debts or
obligations, and/or (-5-) for any other Project purposes;
(iii) as escrow(s) to provide for the payment or satisfaction
of current or future Project debts or obligations (for
example, real estate tax or insurance escrow payments), or
(iv) as collateral (or to acquire collateral) for any present
or future Project debt or obligation; and
(f) All disbursements made by the Company during such
fiscal year for any other purpose except for (a) disbursements
made out of the proceeds of any Net Sale or Refinancing
Proceeds (b) repayment of loans due and owing to any Member or
any Affiliate of any Member, and (c) distributions made by the
Company to the Members.
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3.03 DISTRIBUTION OF NET SALE OR REFINANCING PROCEEDS:
a. Net Sale or Refinancing Proceeds received by the Company, to
the extent, and only to the extent, that the Investment Committee determines, in
its discretion, that such Net Sale or Refinancing Proceeds of the Company are
not otherwise required for Company purposes, shall be distributed to, and
allocated between, the Members as follows:
(1) First, to repay any loans due and owing any Member or any
Affiliate of any Member;
(2) Next, to the Members pro rata, based on their respective
Applicable Percentages, to the extent of their Preferred Return;
(3) Next, to the Members pro rata based on their unreturned
capital contributions until all capital contributions to the Company by
the Members have been returned; and
(4) The balance, if any, 50% to Ramco and 50% to Investor.
b. As used in this Agreement, "Net Sale or Refinancing Proceeds"
means the proceeds of:
(1) the sale or other disposition of all or a portion of the
property or assets of the Company, less the expenses of such sale or
disposition and less the portion of such proceeds utilized to discharge
any indebtedness secured by such property or assets;
(2) the refinancing of any mortgage loan secured by any
property or asset of the Company, or the refinancing of any other
indebtedness of the Company, less the expenses of such refinancing and
less the portion of such proceeds utilized to discharge any
indebtedness of the Company; and
(3) any policy or policies of fire and extended coverage
insurance covering the Project or any other property or asset of the
Company, less the portion of such proceeds utilized to discharge any
indebtedness secured by the Project or such property or assets and less
the portion of such proceeds utilized or reserved for the repair,
replacement or reconstruction of the Project or such property or asset
or related improvements.
(4) any condemnation proceeding not used to restore the
Project.
provided, however, "Net Sale or Refinancing Proceeds" shall not include any such
proceeds which, because of the relatively minor amount involved (an amount not
in excess of $100,000), or for other reasons the Investment Committee determines
are more properly treated as "Cash Receipts" (as defined above) than "Net Sale
or Refinancing Proceeds".
c. The Members hereby acknowledge that it is their intention upon
receipt of Net Sale or Refinancing Proceeds to distribute the maximum amount of
such Net Sale or Refinancing Proceeds.
d. The provisions of this Section 3.03 are subject in all respects to
the provisions of Article 8 hereof. To the extent that any of the provisions of
this Section 3.03 are inconsistent
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with any of the provisions of Article 8 hereof, the provisions of Article 8
hereof shall apply and govern and control. More specifically, distributions of
proceeds of liquidation of the Company shall be made in accordance with Section
8.01 notwithstanding any contrary provision of this Article 3.
ARTICLE 4
MEETINGS OF MEMBERS AND RELATED MATTERS
4.01 ANNUAL MEETINGS
An annual meeting of the Members for the election of members to the
Investment Committee and for the transaction of such other business as may
properly come before such meeting shall be held at such place, either within or
without the State of Michigan, and at such time and date as the Members, by
resolution, shall determine. If such a time and date is not so determined, the
annual meeting of the Members shall be held at a mutually convenient date and
place during the month of December of each year. If such annual meeting is not
held as herein provided for, it may be held as soon hereafter as may be
convenient. Such subsequent meeting shall be called in the same manner as
hereinafter provided for special meetings of Members.
4.02 SPECIAL MEETINGS
A special meeting of the Members may be called at any time by any
Member. The time of such special meeting shall be fixed by such Member in such
request, and shall be stated in the notice of the special meeting, provided that
the time so fixed shall permit the giving of notice as provided in Section 4.04
hereof, unless such notice is waived. Such request shall state the purposes of
the proposed meeting.
4.03 PLACE OF MEETINGS
Meetings of the Members shall be held at such place as may be fixed
from time to time by the Members, or as shall be specified in the notice or
waiver of notice of any such meeting.
4.04 NOTICE OF MEETINGS
Written notice of the time, place and purposes of each meeting of the
Members shall be given by a person designated by the Members and shall be served
personally or by first class mail on each Member not less than twenty (20) nor
more than sixty (60) days before the meeting. If mailed, such notice shall be
directed to each such Member at the address as it appears in this Agreement
unless such Member shall have filed with the Manager a written request that such
notices be mailed to some other address, in which case it shall be mailed to the
address designated in such request. Business transacted at any special meeting
of Members shall be limited to the purpose or purposes stated in the notice
unless all of the Members consent thereto.
4.05 VOTING
Unless otherwise provided in this Agreement, any action to be taken,
decision to be made, consent to be given or matter to be resolved by the Members
pursuant to this Agreement shall be taken, made, given or resolved by and in
accordance with the affirmative vote of both Investor and Ramco.
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4.06 QUORUM
At all meetings of the Members, the presence, in person or by proxy, of
the holders of record of each of the Membership Interests, and entitled to vote
thereof, shall be necessary and sufficient to constitute a quorum for the
transaction of business. In the absence of a quorum, an officer entitled to
preside at, or act as secretary of, such meeting, without notice other than by
announcement at the meeting, may adjourn from time to time, but not for a period
of more than thirty (30) days at any one time, until a quorum shall attend. At
any such adjourned meeting at which a quorum shall be present in person or by
proxy, any business may be transacted that might have been transacted at the
meeting as originally called.
4.07 PARTICIPATION IN A MEETING BY CONFERENCE TELEPHONE
Any Member may participate in a meeting of the Members by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other.
4.08 MINUTES
Such person as is designated by the Members shall prepare written
minutes of proceedings of all meetings of the Members, including all actions
taken, and promptly mail such minutes of proceedings to the Members.
4.09 WRITTEN CONSENT IN LIEU OF MEETING
Any action which may be taken at any annual or special meeting of
Members may be taken without a meeting, without prior notice and without a vote,
if a consent in writing, setting forth the action so taken, shall be signed by
both of the Members.
4.10 EXECUTION OF DOCUMENTS ON BEHALF OF THE COMPANY
All instruments, agreements and/or documents to be executed on behalf
of the Company shall be deemed to be duly executed and binding upon the Company
upon execution and delivery by any person designated by Manager or any other
person designated by the Investment Committee.
4.11 DESIGNATED REPRESENTATIVES
a. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be the designated representative of Investor,
with the right to designate a proxy, who initially is to be ▇▇▇▇ ▇▇▇▇▇▇▇. Such
designated representative shall have the right, power and authority to act for
and on behalf of, and to bind, Investor with respect to all matters relating to
the Company and the business thereof. If Investor elects to change its
designated representative, such change shall not be binding upon Ramco until
Investor has notified Ramco of such change.
b. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall be the designated representative of Ramco.
Such designated representative shall have the right, power and authority to act
for and on behalf of, and to bind, Ramco with respect to all matters relating to
the Company and the business thereof. If Ramco elects to change its designated
representative, such change shall not be binding upon Investor until Ramco has
notified Investor of such change.
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c. The Members and their respective designated representatives agree to
and accept the appointment of such designated representatives. They also agree
that no further or subsequent authorization, consent or ratification shall be
required with respect to the exercise of any of the rights, powers or authority,
or the doing of any act by such designated representatives, and that such
designated representatives have the right, power or authority to act as set
forth under the provisions of Sections 4.11a. and 4.11b. hereof. Each Member
hereby acknowledges and agrees that it shall be bound by any action taken on its
behalf by its designated representative.
d. In each case under this Article 4 where the "presence" or
"participation" of a Member is referred to, the "presence" or "participation" of
a Member shall also refer to the presence or participation of such Member's
designated representative under this Section 4.11 hereof.
4.12 REIMBURSEMENT FOR COSTS AND EXPENSES
The Members hereby agree that each Member and Affiliate of each Member
shall be reimbursed by the Company for all reasonable, reasonably documented
costs and expenses incurred by them for or on behalf of the Company.
4.13 NON EXCLUSIVITY
Each Member shall devote such time and attention to the business of the
Company as each shall determine, in the exercise of its reasonable judgement, to
be necessary for the effective operation and conduct of the Company business.
The Members acknowledge that each of them have and will have interests in other
present or future ventures, including ventures that are or may be competitive
with the Project, and that notwithstanding its status as a Member of the
Company, a Member and its Affiliates shall be entitled to obtain and/or continue
their respective individual participation in all such ventures without (i)
accounting to the Company or the other Members for any profits or other economic
gain with respect thereto, (ii) any obligation to advise the other Member of
business opportunities for the Company which may come to its or its Affiliate's
attention as a result of its or its Affiliate's participation in such other
ventures or in the Company, and (iii) being subject to any claims of any nature
whatsoever on account of such participation.
4.14 MANAGEMENT OF THE PROJECT
The Investment Committee, on behalf of and at the expense of the
Company, shall retain Ramco-▇▇▇▇▇▇▇▇▇▇, Inc., an Affiliate of Ramco ("RGI"), as
the exclusive management and administrative agent of the Project. In furtherance
thereof, the Company shall enter into a management and leasing agreement in the
form attached hereto as Exhibit B covering RGI's activities under this Section
4.14 and Section 4.15 below, which agreement shall have a term of ten (10)
years. For services rendered in connection with the management of the Project,
RGI shall receive a management fee equal to four (4%) percent of the gross
receipts of the Project, as more particularly set forth in such agreement. In
addition, (i) all fees earned by RGI in its management of the Project and any
and all reasonable, reasonably documented third party costs and expenses of RGI
(excluding salaries and benefits of employees of RGI and RGI general
office/administrative overhead unless and to the extent of any such amounts that
are chargeable to Project tenants), including, without limitation, reasonable,
reasonably documented travel, business expenses, the amount of any commissions
required to be paid to outside
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brokers, legal fees and all fees for consultants who perform any services in
connection with the management of the Project, shall be direct obligations of
the Company. The management fee and reimbursements shall be paid monthly.
4.15 LEASING AND TENANT CONSTRUCTION ACTIVITIES
a. The Investment Committee, on behalf of and at the expense of the
Company, shall retain RGI as the exclusive leasing agent for the Project and in
connection therewith, shall cause the Company to enter into a leasing agreement
with RGI, as included in the management and leasing agreement in the form
attached hereto as Exhibit B. RGI shall receive leasing commissions for services
rendered with respect to the leasing of space in the Project. With respect to
(i) new leases (i.e., leases to any tenant other than the then occupant of the
space, except that the case of an occupant previously operating under a license
or month-to-month tenancy (for a tenant which was not previously a term tenant)
which converts to a lease for a term of years shall also be treated as a new
lease), or the expansion of space by the then tenant or relation of such tenant,
such leasing commission shall be in an amount equal to five percent (5%) of the
aggregate minimum rent over the term of the lease (payable 50% at lease
execution and 50% upon the opening of such tenant for business); provided,
however, such leasing commissions shall be reduced to the extent that the
Company pays or incurs leasing commissions with respect to any new lease (as
defined above) to any third party, but in no event shall the leasing commission
to be paid to RGI with respect to any new lease be reduced to an amount less
than two percent (2%) of the aggregate minimum rent over the term of the lease;
and (ii) renewals of then existing leases in the same tenant space, such leasing
commission shall be in an amount equal to two percent (2%) of the aggregate
minimum rent over the term of the lease renewed; (provided, however, no leasing
commission shall be paid in respect of leases renewed pursuant to the exercise
of an option to renew such lease contained in the then existing leases). In
addition, all third party expenses incurred by RGI in connection with such
leasing activities (excluding salaries and benefits of employees of RGI and
general office/administrative overhead unless and to the extent of any such
amounts that are chargeable to Project tenants), including, without limitation,
reasonable, reasonably documented travel, business expenses, the amount of any
commissions required to be paid to outside brokers (provided that the leasing
commission payable to RGI shall be reduced by such amount, subject to RGI's
minimum assured commission as provided in the managing and leasing agreement),
legal fees, and all other fees for consultants who perform any services in
connection with such leasing activities at the Project shall be a direct
obligation of the Company. All fees shall be paid at such times as are set forth
in the managing and leasing agreement.
b. The Investment Committee, on behalf of and at the expense of the
Company, shall retain RGI to act as the exclusive construction coordinator with
respect to construction activities engaged in or carried out by the Company on
behalf of a tenant by tenants of the Project and for other capital construction
activities by RGI. In connection therewith, RGI shall enter into a construction
management contract with RGI as part of the management and leasing agreement in
the form attached hereto as Exhibit B. Such agreement shall have a term of ten
(10) years. For services rendered in this regard, RGI shall receive, (1) in the
case of capital construction projects or tenant improvements carried out or
coordinated by RGI, a fee equal to five percent (5%) of the construction hard
costs; and (2) in the case of tenant improvements where RGI's involvement is
limited to plan review and obtaining governmental approvals, a flat fee of
$1,500.00 per tenant project. In addition, all third party expenses incurred by
RGI in connection with such work (excluding salaries and benefits of employees
of RGI and RGI general office/administrative overhead), including, without
limitation, reasonable, reasonably
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documented travel, business expenses, legal fees and all fees for consultants
who perform any services in connection with construction activities of tenants
of the Project shall be a direct obligation of the Company.
4.16 ACQUISITION FEE
The Company shall pay to Ramco or an Affiliate designated by Ramco an
acquisition fee for services rendered in connection with the Company's
acquisition of the Project. Such fee shall be in an amount equal to one percent
(1%) of the aggregate costs incurred by the Company (including, but not limited
to, the gross purchase price paid by the Company) in connection with the
acquisition of the Project. In addition to such fee, all expenses incurred by
Ramco (or its Affiliate) in connection with such acquisition activities,
including, without limitation, reasonable, reasonably documented travel,
business expenses, the amount of any fees paid to outside brokers, legal fees
and all other consultants who perform or consult with respect to such
acquisition activity shall be a direct obligation of the Company. To the extent
that any part of such expenses were incurred for travel or related activities by
Ramco or Affiliate employees and not third parties, the total amount of such
employee expenses reimbursable by the Company shall not exceed Five Thousand
Dollars ($5,000.00). All such amounts shall be paid at the time of the closing
of the acquisition of the Project.
4.17 DISPOSITION FEE
a. Subject to Subsection 4.17b. hereof, the Company shall pay Ramco or
any Affiliate of Ramco a disposition fee in the amount of one percent (1%) of
the gross sales price of the Project. Such a disposition fee will be paid in
consideration for services rendered by Ramco or its Affiliate with respect to
the sale of the Project; provided, however, no such fee shall be paid to Ramco
or its designated Affiliate if Ramco or one of its Affiliates is the purchaser.
Furthermore, such fee shall be reduced by the amount of any commission paid to a
third party broker in connection with any such sale, but in no event shall such
fee be reduced to below one half percent (1/2%). In addition, all expenses
incurred by Ramco or any of its Affiliates in connection with such disposition
activities, including, without limitation, reasonable, reasonably documented
travel, business expenses, the amount of any fees paid to outside brokers, legal
fees and all other consultants who perform or consult with respect to such
disposition activities shall be a direct obligation of Company. Such fees shall
be paid at the time of the closing of the sale of the Project.
b. The right to receive the disposition fee hereunder shall be
subordinated to the respective rights of the Members, such that each of the
Members shall be entitled to have received from the proceeds of such
disposition, pursuant to Section 3.03(a) hereof, a sum of money equal to its
then unreturned capital contribution plus a minimum of a ten percent (10%)
cumulative Preferred Return before any payment by the Company of the disposition
fee.
4.18 LIMITS ON REFINANCING; REFINANCING FEE
a. The Company shall not cause or permit the Project to be financed or
refinanced as part of a pool, or multi-property securitized, cross-defaulted or
cross-collateralized transaction, but only on a single property, stand-alone
basis.
b. The Company shall pay Ramco or any affiliate of Ramco a refinancing
fee in the amount of one quarter percent (1/4%) of the amount of refinancing
proceeds obtained upon a
15
refinancing of the debt currently secured by the Project. Such a refinancing fee
shall be paid in consideration for services rendered by Ramco with respect to
obtaining such a refinancing and negotiating the documentation with respect
thereto. In addition, all expenses incurred by Ramco or any of its Affiliates in
connection with such refinancing activities, including, without limitation,
reasonable, reasonably documented travel, business expenses, the amount of any
fees paid to outside brokers, legal fees and all other consultants who perform
or consult with respect to such refinancing activities shall be a direct
obligation of the Company. Such fees shall be paid at the time of the closing of
any such refinancing.
4.19 THE MEMBERS' BUY-SELL OPTIONS
a. For and in consideration of the willingness of each Member to enter
into this Agreement, each Member hereby grants to the other Member a "Buy-Sell
Option" to purchase the other Member's Membership Interest, or to sell its
Member's Membership Interest to the other Member, as the case may be, in
accordance with the terms and conditions hereinafter described. The Buy-Sell
Option shall be exercisable at any time after the first to occur of (-1-) a
Triggering Control Change and (-2-) the seventh (7th) anniversary of the
Acquisition Date (the "Option Exercise Date").
b. At any time beginning on the Option Exercise Date, either Member, as
the "Offeror," may, deliver a written notice (a "Buy-Sell Notice") to the other
Member (the "Offeree") that the Offeror desires to exercise its rights under
this Section 4.19. No Buy-Sell Notice may be given if the Company is in
dissolution pursuant to Article 8 below. In order to calculate the applicable
"Buy Price" or "Sell Price" (hereinafter defined), the Buy-Sell Notice shall
specify a price at which the Offeror would be willing to permit the Project to
be sold to a third party in an arms length transaction (the "Offer Price") and
shall contain an offer both (i) to buy the Offeree's Membership Interest for an
amount (the "Buy Price") equal to the cash amount that such Offeree would
receive were the Project contemporaneously sold to a third party for the Offer
Price and all Net Sale or Refinancing Proceeds were determined and distributed
in accordance with Section 3.03 hereof (the "Buy Option") and (ii) to sell to
such Offeree the Membership Interest of the Offeror for an amount (the "Sell
Price") equal to the cash amount that such Offeror would receive were the
Project contemporaneously sold to a third party for the Offer Price and all Net
Sale or Refinancing Proceeds were determined and distributed in accordance with
Section 3.03 hereof (the "Sell Option"). The Buy-Sell Notice shall also include
a certification that the Offerer is not aware of any facts or circumstances
which would be likely to materially affect the value of the Property for the
purpose of establishing the Offer Price but which have not been disclosed to
Offerer.
c. In the event a Buy-Sell Notice is given to an Offeree, the Offeree
shall have a period of up to sixty (60) days after such notice in which to
exercise, by written notice to the Offeror, the Buy Option or the Sell Option.
If written notice of such election is not given to the Offeror within such sixty
(60) day period, it shall be conclusively deemed that the Offeree has elected to
accept the Buy Option. If either a Buy Option or a Sell Option is properly
exercised as set forth herein, the Offeror and the Offeree shall each buy and
sell, as the case may be, the entire Membership Interest in the Company of the
Offeror or the Offeree, as the case may be, such interest to be conveyed on or
before the sixtieth (60th) day after the delivery of the Exercise Notice or the
deemed election, whichever is applicable. At the closing, the Buy Price or Sell
Price, as applicable, shall be paid by the purchasing Member by official bank
check or by bank wire transfer of immediately available funds, subject to
appropriate adjustment or reconciliation for cash on hand or other assets or
liabilities of the Company not subsumed within the
16
calculation of the Offer Price. The terms of the purchase and sale shall be
unconditional, except that (i) the Member whose interest is being sold shall be
deemed to represent and warrant to the purchasing Member that its entire
interest in the Company is owned by the selling Member free and clear of all
liens and encumbrances and is subject to no legal or equitable claims, and (ii)
the purchasing Member shall be deemed to have assumed all obligations and
liabilities relating to the purchased interest arising from transactions or
events first occurring after the date of such sale. Upon demand, each Member
shall deliver to the other appropriate documentation evidencing the sale,
assignment, representation and assumption set forth herein.
d. If any Member defaults in its obligation to sell its Membership
Interest or purchase the Membership Interest of the other Member, as applicable,
the non-defaulting Member may enforce its rights under this Section 4.19 by
bringing suit for specific performance, damages or any other available legal or
equitable remedy.
ARTICLE 5
MANAGEMENT
5.01 MANAGEMENT VESTED IN A MANAGER
a. Except as otherwise provided in this Agreement, including, but not
limited to, the provisions of Section 5.02 hereof, the Company shall appoint
Ramco as its manager (hereinafter, in such capacity, the "Manager"). The Manager
shall carry out the purposes of the Company pursuant to the decisions and
directives of the Investment Committee and shall have in respect of its
management of the Company all of the powers of the Company (except pursuant to,
and as limited in accordance with the powers of the Investment Committee over
decisions affecting the Company as provided in Section 5.02 below) and shall
devote such time and attention to the Company as is reasonably necessary for the
proper management of the Company and its properties. All actions, decisions,
determinations, designations, directions, appointments, consents, approvals,
selections, and the like to be taken, made, or given by and/or with respect to
the Company, its business and its properties as well as management of all
Company affairs, shall in each and every case be made by the Manager, subject to
the terms and conditions of this Agreement (including, but not limited to
Section 5.02 hereof) with respect to the same, if any, and all such actions,
decisions, determinations, designations, directions, appointments, consents,
approvals, selections, and the like shall be controlling and binding upon the
Company.
b. The Manager shall have the full and exclusive right, power and
authority, on behalf of and in the name of the Company and pursuant to the
direction provided by, and those decisions within the authority of, the
Investment Committee, to carry out any and all objectives and purposes of the
Company and to perform all acts and enter into and perform all contracts and
other undertakings which it may deem necessary or advisable or incidental
thereto. Accordingly, the Manager, except as otherwise provided in this
Agreement (including, but not limited to, the provisions of Section 5.02.
hereof), shall have the exclusive right, power and authority, on behalf of the
Company, without limitation (except as provided in this Section 5.01 or in
Section 5.02 below) but subject to carrying out the purposes of the Company, to
(i) oversee the property management and leasing activities of the Project, (ii)
compile monthly, quarterly or annual reports for submission to the Investment
Committee, as it so requires, (iii) prepare for submission to the Investment
Committee, annual budgets and business plans, entity tax returns
17
and related items, (iv) negotiate, enter into, perform, amend, and take all
actions in respect of any and all agreements, instruments, and documents
(including, but not limited to, leases, easements, and service contracts
affecting the Project), and (v) perform all acts that a Manager may legally do
pursuant to the Act that are consistent with the terms of this Agreement and are
designed to carry out the purposes and business of the Company.
5.02 INVESTMENT COMMITTEE
a. The Company shall have an investment committee, (the "Investment
Committee") which shall have the exclusive right, power and authority, to make
the following decisions ("Major Business Decisions") on behalf of the Company:
(1) adopt and finalize an operating budget with respect to
each fiscal year of the Company. Ramco, no later than November 15 of
each fiscal year, shall prepare, or cause to have prepared, and
delivered to the Investment Committee a proposed operating budget for
the Company with respect to the next succeeding fiscal year, which
budgets, at a minimum, shall reflect projected revenues and expenses on
a monthly basis. The Investment Committee shall approve such operating
budgets for the next succeeding fiscal year no later than December 15
of the current fiscal year; provided, however, (i) if the budget
reflects increases in expenses which do not in the aggregate exceed ten
percent (10%) of the aggregate expenses in the previous year's budget,
then the proposed budget shall be deemed automatically approved, and
(ii) if in any other case both members of the Investment Committee
cannot agree on an approved budget, the approved budget shall be the
budget for the previous year with expenses increased by ten percent
(10%); which budget shall govern and control for the fiscal year in
question, it being acknowledged that Ramco shall have the right to
allocate such increase among expense items in such budget as Ramco may
determine. Ramco shall prepare, or cause to be prepared, monthly
revenue and expenditure statements (including year to date and a
quarterly modified forecast for the entire year) reflecting, among
other things, budget variances, and shall have same delivered to the
Investment Committee by the last day of the month following the month
to which such statement relates;
(2) enter into a lease with respect to the Project not in
accordance with the Leasing Guidelines involving the rental of more
than 10,000 square feet;
(3) undertake any capital expenditure at the Project that
either individually, or in the aggregate, exceeds the approved budget
by more than $100,000 or for which the Investment Committee has not
previously decided to issue a Capital Call for the necessary funds;
provided, however that notwithstanding anything in this Section 5.02
a.(3) to the contrary, if any capital expenditure is required to remedy
a condition that would jeopardize the physical integrity of the
Project, and such an expenditure requires the consent of the Investment
Committee, then either any member of the Investment Committee can
demand that the Company obtain a report from a nationally recognized
structural engineering firm stating whether such condition jeopardizes
the physical integrity of the Project. If the report provides that the
condition jeopardizes the physical integrity of the Project, then the
Investment Committee shall authorize such expenditure;
(4) sell the Project or any interest in the Project other than
a sale pursuant to any provision of Section 4.19 hereof.
18
(5) approve and review any change not reflected in the
approved Operating Budget to the management and leasing agreement in
the form attached hereto as Exhibit B, which is entered into with Ramco
or one of its Affiliates;
(6) determine the amount of reserves to be held by the Company
prior to making distributions of Distributable Cash Flow or Net Sale or
Refinancing Proceeds; and
(7) appoint and change any key service providers to the
Company (including legal counsel to the Company).
(8) acquire any other asset besides the Project (other than in
the ordinary course of business), and enter into, negotiate and include
agreements with respect thereto;
(9) borrow money, incur any other debts or obligations or
grant any liens outside of the Company's ordinary course of business,
other than those approved within a capital expenditure budget;
(10) change the amount of, amend, modify or change the
material terms of, extend the time for the payment of, or retire,
discharge or refinance any indebtedness or obligation of the Company
referred to in (9) above; or change the amount or value of, modify or
change the nature or type of, or make any other material modifications
or changes with respect to, any security granted or collateral given
for any Company indebtedness or obligations referred to in (9) above;
or amend, modify or change the material terms of any agreement,
instrument or document with respect to any such security or collateral;
(11) enter into any agreement or arrangement with, engage in
any transaction with, or pay any fees or other amounts to, any
Affiliate of Investor, except either (i) to the extent expressly
authorized under this Agreement, or (ii) with respect to agreements,
arrangements or transactions that are at customary market rates based
on similar fees or other amounts and other terms for comparable
transactions negotiated on an arms-length bases;
(12) extend the term of the Company;
(13) require additional capital contributions from the Members
pursuant to Section 2.02 a. hereof;
(14) change the purposes for which the Company has been
formed;
(15) take any actions outside the ordinary course of the
Company's business; and
(16) engage in any activity inconsistent with the purposes of
the Company.
The authority of the Investment Committee as set forth above shall be
utilized in its sole discretion.
19
SECTION 5.03 NUMBER; ELECTION; TERM OF OFFICE; AND QUALIFICATIONS
The number of members of the Investment Company shall be two (2),
consisting of one (1) member appointed by Investor and one (1) member appointed
by Ramco. Each member of the Investment Committee shall continue in office until
any successor shall have been appointed and shall qualify, or until his earlier
death or resignation as provided in Section 5.04 hereof. No member of the
Investment Committee need be a Member.
SECTION 5.04 RESIGNATION
Any member of the Investment Committee may resign at any time by giving
written notice to any Member of the Company. Unless otherwise specified therein,
such resignation shall take effect on the date of receipt thereof.
SECTION 5.05 VACANCIES
If any vacancy shall occur in the Investment Committee by reason of
death, resignation or otherwise, such vacancy may be filled by an appointment
made by the Member that appointed the person previously holding such vacant
position. In the event that the resignation of any member of the Investment
Committee shall specify that it shall take effect at a future date, the vacancy
resulting from such resignation may be filled prospectively in the same manner
as provided in the first sentence of this Section 5.05.
5.06 ANNUAL AND REGULAR MEETINGS
Regular quarterly meetings of the Investment Committee shall be held
for the transaction of business as may properly come before the Investment
Committee, the first such meeting each year to occur concurrently with the
annual meeting of the Members. The time, place and purposes of such meeting
shall be stated as set forth in Section 5.07 hereof, unless such notice is
waived. Any scheduled meeting may be waived by unanimous decision of the
Investment Committee.
5.07 SPECIAL MEETINGS
A special meeting of the Investment Committee may be called at any time
on the written request of at least one (1) member of the Investment Committee
then in office, and shall be held at such time and place, within or without the
State of Michigan, as may be fixed by such members of the Investment Committee
in such request, provided that the time so fixed shall permit the giving of
notice as provided in Section 5.07 hereof.
5.08 NOTICE OF MEETINGS
Notice of the time, place and purposes of each meeting of the
Investment Committee shall be sent to each member of the Investment Committee by
mail, addressed to such member at the address as it appears on the records of
the Company, or telephoned or delivered to him personally, at least thirty (30)
days before the meeting is to be held. Any notice may be waived or provided in
this Article 5.
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5.09 QUORUM
At all meetings of the Investment Committee, the presence of both
members shall be necessary and sufficient to constitute a quorum for the
transaction of business. If a quorum shall be present, any action may be taken
by the Investment Committee so long as such action shall have been approved by
both members of the Investment Committee. In the absence of a quorum, the member
of the Investment Committee present may adjourn the meeting from time to time,
for a period of not more than thirty (30) days at any one time, until a quorum
shall be present.
5.10 REIMBURSEMENT
The members of the Investment Committee shall not receive any
compensation, for their services, or allowances for expenses. Rather, the
members of the Investment Committee shall only be reimbursed for reasonable,
reasonably documented expenses incurred in serving in such capacity.
5.11 PARTICIPATION IN A MEETING BY CONFERENCE TELEPHONE
The members of the Investment Committee may participate in meetings of
the Investment Committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this Section
5.11 shall constitute presence in person at such meeting within the meaning of
Section 5.09 hereof, or for any other purpose.
5.12 WRITTEN CONSENT IN LIEU OF MEETING
Any action required or permitted to be taken at any meeting of the
Investment Committee may be taken without a meeting if a written consent thereto
shall be signed by each member of the Investment Committee, and such written
consent or consents shall be filed with the minutes or proceedings of the
Investment Committee.
5.13 MINUTES
Such person as is designated by the Investment Committee shall prepare
written minutes or proceedings of all Investment Committee meetings, including
all actions taken, and promptly mail such minutes or proceedings to the members
of the Investment Committee.
ARTICLE 6
BOOKS, RECORDS AND ACCOUNTING
6.01 FISCAL YEAR ACCOUNTING
The Company shall operate on a calendar fiscal year. The Company shall
use the accrual method of accounting, or such other fiscal year or method of
accounting, as may be selected by the Manager.
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6.02 BOOKS AND RECORDS
a. The Company shall at all times maintain all documentary materials
required by the Act and proper and complete and accurate books and records of
the Company's business and affairs, as well as such other books and records as
the Manager deems appropriate. Such books and records shall be kept at the
Company's principal office.
b. All such materials shall be available for inspection and copying, at
a Member's expense, by each Member or its designated representatives, during
ordinary business hours.
6.03 TAX MATTERS PARTNER
The Manager shall be the Tax Matters Partner and shall continue to act
as such unless and until it resigns or is removed by the terms of this
Agreement. "Tax Matters Partner" has the meaning set forth in Section 6231 (a)
(7) of the Code. The Tax Matters Partner shall have all rights and
responsibilities of that position described in Sections 6221 through 6234 of the
Code. Notwithstanding the foregoing, unless the Tax Matters Partner has obtained
the prior approval of Investor, the Tax Matters Partners shall not have the
power or authority to (i) choose any judicial, administrative or other forum in
which to contest or litigate any position or action taken by any taxing
authority against or with respect to the Company (or any Member with respect to
the Company), or (ii) agree to any extension of any period within which any
taxing authority must take action against or with respect to the Company (or any
Member with respect to the Company). The Tax Matters Partner shall give prompt
notice to the Members of any notices with respect to the Company received by the
Tax Matters Partner from any taxing authority. Each Member agrees that, upon
receipt of such notice from the Tax Matters Partner, it shall respond promptly
so the Tax Matters Partner may act accordingly with respect to the issue at
hand.
6.04 TAX INFORMATION AND FINANCIAL STATEMENTS
Ramco shall, at the Company's expense, prepare, or cause to be
prepared, and distributed to the Members, (i) within fifty (50) days after the
end of each calendar quarter, quarterly unaudited financial statements,
including an income statement, cash flow statement and balance sheet, with
respect to the preceding calendar month, and (ii within one hundred (100) days
after the end of each calendar year, the Company's tax return with respect to
such calendar year, and all information relating to the Company that is
necessary for the preparation of the Member's federal and state income tax
returns with respect to such calendar year. In the event either Member desires
to have any statement provided for in this Section 6.04 audited, then and in
that event, such Member shall have the right to cause such statement to be
audited, provided that the sole expense of such audit is borne by the Member
making such a request.
ARTICLE 7
ASSIGNMENT OF MEMBERSHIP INTERESTS,
WITHDRAWAL OF A MEMBER AND RELATED MATTERS
7.01 ASSIGNMENT
a. Except as otherwise expressly permitted herein, no Member shall have
the right to assign its Membership Interest, or any portion thereof, or to have
an assignee of its
22
Membership Interest or any portion thereof, admitted to the Company as a member
in respect thereof, without the prior written consent of the other Member.
Notwithstanding anything contained in this Section 7.01 to the contrary, each
Member shall have the right, without obtaining the prior written consent of the
other Member, to assign its entire Membership Interest, and to have such
assignee of such entire Membership Interest admitted to the Company as a Member
in respect thereof, as follows: (i) Ramco may assign all or any portion of its
Membership Interest to any entity that is Controlled By Ramco, and (ii) Investor
may assign all or any portion of its Membership Interest to any entity that is
Controlled By the Town Realty -- Pashcow Group.
b. For purposes hereof, the term (i) "assignment" means any sale,
conveyance, transfer, assignment, mortgage, pledge, encumbrance, hypothecation
or other alienation or disposition of any type or kind, (ii) "assign" means the
making of an assignment, (iii) "assignor" means a person who makes an assignment
and (iv) "assignee" means a person to whom or for whose benefit an assignment is
made.
7.02 SUBSTITUTION OF MEMBERS
If there is an assignment of a Member's Membership Interest that
complies with the provisions of Section 7.01a. hereof, the assignee shall only
be admitted to the Company as a Member (in addition to the consent requirement
for such admission as Member pursuant to Section 7.01a. hereof), and the
assignor shall cease to be a Member in respect of such Membership Interest or
portion thereof, if and when all of the following requirements have been
satisfied:
(i) such instruments as may be required by the Act or other
applicable law or to effect the continuation of the Company and the
Company's ownership of its properties are executed and delivered and/or
filed;
(ii) the instrument of assignment binds the assignee to all of
the terms and conditions of this Agreement as if the assignee were a
signatory party hereto and does not release the assignor from any
liability or obligation, accruing prior to the date of the assignment,
of or in respect of the Membership Interest which is the subject of the
assignment;
(iii) the instrument of assignment is manually signed by the
assignee and assignor and is otherwise reasonably acceptable in form
and substance to the other Member, and such Member has consented to
such assignment (which consent may be given or withheld in the exercise
of its sole discretion);
(iv) such assignment shall not be prohibited by, or cause a
breach of, or cause events unrelated to the identity of the assignee
but not the nature of the assignee (e.g., tax-exempt status) that are
unacceptable to the other Member in the exercise of its reasonable
discretion to occur pursuant to, any agreement or understanding by
which the assignor or the assignee or any properties of the Company or
the Company itself is bound or affected.
An assignee of a Membership Interest pursuant to an assignment
permitted in this Agreement may, subject to the provisions of this Article 7, be
admitted as a Member in the Company in the place and stead of the assignor
Member in respect of the Membership Interest
23
acquired from the assignor Member and shall have all of the rights, powers,
obligations, and liabilities, and shall be subject to all of the restrictions,
of the assignor Member, including, without limitation, but without release of
the assignor Member, the liability of the assignor Member for any existing
unperformed obligations of the assignor Member. Each of the Members, on behalf
of itself and its permitted successors and assigns, hereby agrees and consents
to the admission of any such assignee as a Member as herein provided.
7.03 TRANSFERS OF INTERESTS IN MEMBERS
Each Member shall have the right, without the consent of the other
Member, to assign, transfer, convey, or create new interests in such Member; or
to participate in a merger or other similar transaction. In the event of a
transfer of substantially all of the interests in a Member to an unaffiliated
entity, or in the event of a merger, the surviving entity shall have all of the
rights and obligations of its predecessor as a Member of the Company, and such
successor shall have the right, if it so elects, to appoint a member of the
Investment Committee to replace the member of the Investment Committee appointed
by its predecessor.
7.04 REFERENCES TO "MEMBER" AND "MEMBERS" IN THE EVENT OF SUCCESSORS
In the event that either Ramco or Investor's Interest is held by a
successor to such Member, references in this Agreement to "Member" and "Members"
shall refer, as applicable and except as otherwise provided herein, to the
Membership Interest of the successor to the Membership Interest of Ramco or
Investor, as the case may be.
7.05 PROHIBITION ON WITHDRAWAL
a. Except in connection with an assignment of its entire Membership
Interest in the Company and the admission of the assignee to the Company
pursuant to, and in accordance with the provisions of this Agreement, no Member
may withdraw from the Company prior to dissolution and winding up. If either
Member shall withdraw from the Company in violation of the preceding sentence,
then:
(1) Unless the remaining Member elects otherwise, the
remaining Member shall, either alone or with others, continue the
business of the Company;
(2) The withdrawn Member shall be liable to the remaining
Member and to the Company for all damages resulting from the withdrawn
Member's withdrawal;
(3) The withdrawn Member shall cease to be a member of the
Company and shall cease to have any interest in, or any rights with
respect to, the Company, the Project and any other property or asset of
the Company or the business of the Company, and anything contained in
this Agreement to the contrary notwithstanding, the withdrawn Member
shall have no right to receive any distributions or other amounts from
the Company or the remaining Member under any Section of this
Agreement; however, the withdrawn Member shall nevertheless remain
liable for all of its existing unperformed obligations to, or with
respect to, the Company and/or the remaining Member and for its share
of all existing liabilities of the company to third parties (to the
extent, if at all, such Member was so liable); and
24
(4) The withdrawn Member shall be deemed to have renounced its
Membership Interest and to have waived any right that it would
otherwise have under this Agreement, the Act or otherwise to demand or
receive any amounts from the Company or the remaining Member in respect
of the value of its Membership Interest or otherwise, or to be
indemnified against present or future Company liabilities, and the
Company and the remaining Member shall have no obligation whatsoever to
pay the withdrawn Member the value of its Membership Interest or any
other amount or to indemnify it against any present or future
Membership liabilities.
b. If (and only if) the remaining Member elects not to continue the
business of the Company, the Company shall be wound up and liquidated pursuant
to the provisions of Article 8 hereof.
7.06 OCCURRENCE OF A DISABILITY EVENT WITH RESPECT TO A MEMBER
In the event of the occurrence of a Disability Event with respect to a
Member, the Company shall dissolve; unless, within ninety (90) days thereafter,
the remaining Member agrees to continue the business and affairs of the Company
with the representative of the Disabled Member or Successor. If the remaining
Member elects to continue the business and affairs of the Company pursuant to
the provisions of this Section 7.06, then the representative of the Disabled
Member or Successor, upon compliance with the provisions of Section 7.02 hereof,
shall be admitted as a member in the Company and shall have all of the rights of
the Disabled Member as a member in the Company to the extent of the Disabled
Member's Membership Interest, subject to the terms, provisions and conditions of
this Agreement.
7.07 SUCCESSION BY INDIVIDUALS TO MEMBERSHIP INTERESTS OF MEMBERS
In the event that any individual succeeds to the interest of any Member
in accordance with the terms of this Agreement, then the interest of such
individual Member in the Company, subject to the provisions of Section 7.02
hereof, may be:
(i) Assigned or disposed of by will or intestacy to or for the
benefit of any member or members of the deceased Member's Immediate
Family; or
(ii) Assigned during his lifetime or at his death to a Family
Trust for such individual.
ARTICLE 8
DISSOLUTION AND WINDING UP
8.01 WINDING UP AND LIQUIDATION OF THE COMPANY
Upon dissolution, the Company shall cease carrying on its business and
affairs and shall commence the winding up of the Company's business and affairs
and the liquidation of its assets (subject, in all respects, to the provisions
of Section 4.19 hereof). Upon the winding up of the Company, the assets of the
Company shall be distributed first to creditors to the extent permitted by law,
in satisfaction of the Company's debts, liabilities and obligations and then to
Members in accordance with the Members' Capital Accounts, determined after the
allocation of all Profits, Losses, and items of income, gain, expense or loss.
Such proceeds shall be paid to such Members within ninety (90) days after the
date of winding up.
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8.02 CERTIFICATE OF DISSOLUTION
After the affairs of the Company have been wound up and the Company
terminated, a certificate of dissolution shall be executed and filed in the
office of the Secretary of State for the State of Delaware.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.01 INDEMNIFICATION
a. No Member nor any Designated Representative (each an "Indemnified
Person") shall be liable, responsible or accountable in damages or otherwise to
the Company or to any other Indemnified Person for (a) any act performed within
the scope of the authority conferred on such Indemnified Person by this
Agreement except for the gross negligence or willful misconduct of such
Indemnified Person in carrying out its obligations hereunder, (b) the
Indemnified Person's failure or refusal to perform any act, except those
expressly required by or pursuant to the terms of this Agreement, (c) the
Indemnified Person's performance of, or failure to perform, any act on the
reasonable reliance on advice of legal counsel to the Company, (d) the
negligence, dishonesty or bad faith of any agent, consultant or broker of the
Company selected, engaged, retained and monitored with reasonable care, or (e)
actions taken or omitted in bad faith by such Indemnified Person.
b. In any threatened, pending or completed action, suit or proceeding,
each Indemnified Person shall be fully protected and indemnified and held
harmless by the Company against all liabilities, obligations, claims, losses,
damages, penalties, actions, judgments, suits, proceedings, costs expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
reasonable attorneys' fees, costs of investigation, fines, judgments and amounts
paid in settlement, actually incurred by the Indemnified Person in connection
with such action, suit or proceeding) by virtue of its status as a Member or
Designated Representative, as the case may be, or with respect to any action or
omission taken or suffered that conforms to the standards for indemnity set
forth in Section 9.01a. The indemnification provided by this Section 9.01b.
shall be recoverable only out of the assets of the Company, and no Member shall
have any personal liability on account thereof or be required to make any
Capital Contributions for the sole purpose of satisfying such indemnification
obligation. The Investment Committee shall have the right to cause the Company
to obtain insurance to provide for coverage for an Indemnified Person to the
extent that such coverage is permitted under this Section 9.01.
9.02 NOTICES
a. Any notice, election, demand, request, consent, approval,
concurrence or other communication given or made under any provision of this
Agreement shall be deemed to have been sufficiently given or made for all
purposes if it is in writing and it is (i) delivered personally (or sent by
facsimile) to the party to whom it is directed at the address set forth in the
introductory paragraph of this Agreement or (ii) sent by first class mail,
certified mail, return receipt requested, addressed to the party to whom it is
directed, at its address set forth in the introductory
26
paragraph of this Agreement, or (iii) sent by receipted overnight package
delivery service, addressed to the party to whom it is directed, at its address
set forth in the introductory paragraph to this Agreement. A Member may change
its address for purposes of this Agreement by giving the other Member notice of
such change in the manner herein before provided for the giving of notices.
Copies of any notice, election, demand, request, consent, approval, concurrence
or other communication given or made in accordance with this Section 9.02 a.
shall be addressed and sent to:
If to Ramco, to: c/o Ramco-▇▇▇▇▇▇▇▇▇▇ Properties Trust
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Investor, to: Town Realty Co., LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇
b. Except as otherwise expressly provided in this Agreement, any such
notice, election, demand, request, consent, approval, concurrence or other
communication (i) given or made in the manner indicated in clause (i) of Section
9.02 a. hereof, shall be deemed to be given or made on the day on which it is
delivered, (ii) given or made in the manner indicated in clause (ii) of Section
9.02 a. hereof, shall be deemed to be given or made on the fifth business day
after the day on which it was deposited in a regularly maintained receptacle for
the deposit of the United States' mail and (iii) given or made in the manner
indicated by clause (iii) of Section 9.02 a. hereof, shall be deemed to be given
or made on the second day after which it was delivered to the carrier.
9.03 TERMS
Nouns and pronouns will be deemed to refer to the masculine, feminine,
neuter, singular and plural, as the identity of the person or persons, firm or
corporation may in the context require.
9.04 ARTICLE AND SECTION HEADINGS
The article and section headings in this Agreement are for
identification only; they are not intended to interpret the intent of any of the
provisions of this Agreement.
9.05 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties
hereto and contains all of the agreements among said parties with respect to the
subject matter hereof.
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9.06 SEVERABILITY
If any provision hereof shall be judicially determined to be illegal,
or if the application thereof to any person or in any circumstance shall, to any
extent, be judicially determined to be invalid or unenforceable, the remainder
of this Agreement, or the application of such provision to persons or in
circumstances other than those to which it has been judicially determined to be
invalid or unenforceable, shall not be affected thereby, and each provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
9.07 AMENDMENT
This Agreement may be amended or revoked at any time by a written
agreement executed by both Members. No change or modification to this Agreement
shall be valid unless in writing and signed by both Members.
9.08 BINDING EFFECT
Subject to the provisions of this Agreement relating to
transferability, this Agreement will be binding upon and shall inure to the
benefit of the parties hereto, and their respective distributees, heirs,
successors and assigns.
9.09 GOVERNING LAW
This Agreement shall be governed by, construed and enforced in
accordance with, the laws of the State of Delaware.
9.10 COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
will be deemed an original but all of which will constitute one and the same
document.
9.11 NO THIRD PARTY RIGHTS CREATED HEREBY
The provisions of this Agreement are solely for the purpose of defining
the interests of the Members, inter se; and no other individual, firm or entity
(i.e., a party who is not a signatory hereto or a permitted successor to such
signatory hereto) shall have any right, power, title, or interest by way of
subrogation or otherwise, in and to the rights, powers, titles, and provisions
of this Agreement.
9.12 ADDITIONAL ACTS AND INSTRUMENTS
Each Member hereby agrees to do such further acts and things and to
execute any and all instruments necessary or desirable and as reasonably
required in the future to carry out the full intent and purpose of this
Agreement.
9.13 DATE OF AGREEMENT
For all purposes hereof, the date of execution of this Agreement shall
be the last date on which this Agreement has been signed by the Members (which
date shall be inserted by the last signatory in the first paragraph of this
Agreement).
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ARTICLE 10
DEFINITIONS
10.01 DEFINITIONS
For purposes of this Agreement, the following terms have the following
respective meanings, unless the context clearly indicates a different meaning:
a. "Act" has the meaning specified in Recital A. of this
Agreement.
b. "Adjusted Capital Account" has the meaning specified in
Section 3.01d.(1) hereof.
c. "Adjusted Capital Contributions" means, with respect to
each Member for each fiscal year of the Company, the sum of (i) and
(ii), where (i) is the aggregate amount of cash actually contributed to
the capital of the Company by such Member through and including the
last day of the preceding fiscal year, and (ii) is the amount obtained
by multiplying the aggregate amount of cash actually contributed to the
capital of the Company by such Member during such fiscal year by a
fraction, the numerator of which is the number of days remaining in
such fiscal year when such cash was contributed to the Company
denominator of which is the total number of days in such fiscal year.
d. "Adjusted Capital Distributions" means, with respect to
each Member for each fiscal year of the Company, the sum of (i) and
(ii), where (i) is the aggregate amount of cash actually distributed by
the Company to such Member (except distributions pursuant to Sections
3.02 a.(1), 3.02 a.(2), 3.03 a. (1) or 3.03 a. (2) hereof) prior to the
first day of such fiscal year, and (ii) is the amount obtained by
multiplying the aggregate amount of cash actually distributed by the
Company to such Member (except distributions pursuant to Sections 3.02
a.(1), 3.02 a.(2), 3.03 a.(1) or 3.03 a.(2) hereof) during such fiscal
year by a fraction, the numerator of which is the number of days
remaining in such fiscal year on the date that such cash was
distributed by the Company and the denominator of which is the total
number of days in such fiscal year.
e. "Affiliate" means, with respect to any Member, any person
(individual or entity, as the case may be) that, either directly or
indirectly through one or more intermediaries, Controls, or is
Controlled By or is under common Control with the person specified.
f. "Agreement" means this Limited Liability Company Agreement
of Ramco/Shenandoah LLC, as the same may be amended from time to time.
g. "Applicable Percentage" means, with respect to each Member,
the percentage set forth opposite such Member's name in column (3) on
Exhibit A attached hereto.
h. "Assignment", "assign", "assignor", and "assignee", as used
in Article VI hereof, shall have the respective meanings specified in
Section 7.01 b. hereof.
i. "Buy Option" has the meaning specified in Section 4.19 b.
hereof.
29
j. "Buy-Sell Option" has the meaning specified in Section 4.19
a. hereof.
k. "Buy Price" has the meaning specified in Section 4.19 b.
hereof.
l. "Capital Account" means a bookkeeping account maintained by
the Company with respect to each Member, which shall be:
(1) credited with the amount of such Member's capital
contributions to the Company, such Member's distributive share
of Profits, any items of income or gain that are allocated to
such Member pursuant to Section 3.01 hereof, and the amount of
any Company liabilities that are assumed by such Member or
that are secured by any Company property distributed to such
Member, and
(2) debited with the amount of cash, and the fair
market value of any Company property, distributed to such
Member pursuant to any provision of this Agreement, such
Member's distributive share of Losses, any items of expense or
loss that are allocated to such Member pursuant to Section
3.01 hereof, and the amount of any liabilities of such Member
that are assumed by the Company or that are secured by any
property contributed by such Member to the Company.
In the event that a Member's Membership Interest or a portion
thereof is transferred in accordance with the provisions of this
Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent that it relates to the Membership Interest or
portion thereof so transferred.
In the event that an asset of the Company is distributed to
the Members in kind, the Capital Accounts of all Members shall be
adjusted as if the Company were to have sold such asset for fair market
value (recognizing a gain or loss) and distributed to each Member a
share of the proceeds equal to be fair market value of the interest in
such asset distributed to such Member.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended
to comply with Section 1.704-1(b) of the Treasury Regulations, and
shall be interpreted and applied in a manner consistent with such
Regulations.
n. "Capital Call Notice" has the meaning specified in Section
2.02 c. hereof.
o. "Capitalization Rate" has the meaning specified in Section
4.19 c. hereof.
p. "Cash Disbursements" has the meaning specified in Section
3.02 b.(2)(b) hereof.
q. "Cash Receipts" has the meaning specified in Section 3.02
b.(2)(a) hereof.
r. "Certificate" has the meaning specified in Section 1.01
hereof.
s. "Code" means the Internal Revenue Code of 1986, as amended.
t. "Company" has the meaning specified in Recital A. to this
Agreement.
30
u. "Consideration Period" has the meaning specified in Section
4.13 c. hereof.
v. "Control(s)" (and its correlative terms "Controlled By",
"Under Common Control With" and "Controlling") means with respect to
any Member, or other entity, possession by the applicable individual or
individuals or entity or entities of the power, acting alone (or,
solely among such individuals or entities, acting together), to
designate and direct or cause the designation and direction of the
management and policies thereof whether through the ownership of voting
securities, by contract or otherwise.
w. "Defaulting Member" has the meaning specified in Section
2.03. hereof.
x. "Disability Event" means, with respect to each Member, the
dissolution, termination, cessation of existence, bankruptcy or
insolvency of such Member.
y. "Disabled Member" means any Member with respect to whom a
Disability Event has occurred.
z. "Distributable Cash Flow" has the meaning specified in
Section 3.02 b. hereof.
aa. "Due Diligence Period" has the meaning specified in
Section 4.13 f. hereof
bb. "Event of Default" has the meaning specified in Section
2.03 a. hereof.
cc. "Family Trust" means with respect to an individual, a
trust for the benefit solely of such individual or for the benefit of
any member or members of his Immediate Family or for the benefit of
such individual and any member or members of such individual's
Immediate Family (for the purpose of determining whether or not a trust
is a Family Trust, the fact that one or more of the beneficiaries (but
not the sole beneficiary) of the trust includes a person or persons,
other than a member of such individual's Immediate Family, entitled to
a principal distribution if he, she, it, or they shall have survived
the settlor of such trust, which distributions to be made of something
other than a Membership Interest and/or includes an organization or
organizations exempt from federal income tax pursuant to the provisions
of Section 501(a) of the Code and described in Section 501(c)(3) of the
Code shall be disregarded); provided, however, that in respect of
transfers by way of testamentary or inter vivos trust, the trustee or
trustees shall be solely such individual, a member or members of such
individual's Immediate Family, a responsible financial institution, an
attorney that is a member of the Bar of any State in the United States,
or an individual or individuals approved by that Member or those
Members than holding an aggregate Applicable Percentage of at least
eighty percent (80%).
dd "Formation Date" has the meaning specified in Section 1.01
hereof.
ee "Immediate Family" means with respect to any individual,
such individual's spouse (past or current), descendants (natural or
adoptive), grandparents, parents, siblings of the whole or half blood,
and descendents of parents of such individual's spouse (past or
present).
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ff "Inactive Member" has the meaning specified in Section 2.03
d. hereof.
gg "Indemnified Person" has the meaning specified in Section
9.01 a. hereof.
hh "Initial Acquisition Properties" means (to be decided by
the parties).
ii "Investment Committee" has the meaning specified in Section
5.02 a. hereof.
jj. "Investor" has the meaning specified in the introductory
paragraph to this Agreement.
kk. "LIBOR Rate" shall mean the rate per annum (rounded
upwards, if necessary, to the nearest 1/32nd of one percent) as
determined on the basis of the offered rates for deposits in Dollars,
for the period of time comparable to such Interest Period which appears
on the Telerate page 3750 as of 11:00 a.m. London time on the day that
is two (2) LIBOR Business Days (i.e., any day(s) on which commercial
banks are open for international business (including dealings in Dollar
deposits) in London) preceding the first day of such Interest Period;
provided, however, if the rated described above does not appear on the
Telerate System on any applicable interest determination date, the
LIBOR Rate shall be the rate (rounded upwards as described above, if
necessary) for deposits in Dollars for a period substantially equal to
the Interest Period on the Reuters Page "LIBO" (or such other page as
may replace the LIBO Page on that service for the purpose of displaying
such rates), as of 11 a.m. (London Time), on the day that is two (2)
LIBOR Business Days prior to the beginning of such Interest Period. If
both the Telerate and Reuters systems are unavailable, then the rate
for that date will be determined on the basis of the offered rates for
deposits in Dollars for a period of time comparable to such Interest
Period which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two
(2) LIBOR Business Days preceding the first day of such Interest Period
as selected by Manager. The principal London office of each of the four
major London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided, the rate for the
date will be determined on the basis of the rates quoted for loans in
Dollars to leading European banks for a period of time comparable to
such Interest Period offered by major banks in New York City at
approximately 11:00 a.m. (New York City time), on the day that is two
(2) LIBOR Business Days preceding the first day of such Interest
Period. In the event the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to LIBOR deposits
of Agent, then for any period during which such Reserve Percentage
shall apply, the LIBOR Rate shall be equal to the amount determined
above divided by an amount equal to 1 minus the Reserve Percentage.
ll. "LIBOR Reference Rate" shall mean the LIBOR Rate at any
time applicable plus 450 basis points.
mm. "Major Business Decisions" has the meaning specified in
Section 5.02 a. hereof.
nn. "Manager" has the meaning specified in Section 5.01 a.
hereof.
32
oo. "Maximum Required Aggregate Contribution" has the meaning
specified in Section 2.02 a. hereof.
pp. "Member" shall refer to any person designated as a member
of the Company on Exhibit A attached hereto, or any successor in
interest admitted as a member pursuant to the provisions of this
Agreement, and "Members" shall refer to both Members collectively.
qq.
rr. "Membership Interest" means, with respect to each Member,
(i) such Member's entire interest in the Company, and the property,
assets and capital thereof, and (ii) the share of the Profits, Losses,
items of income, gain, expense or loss and distributions of the Company
allocable to such Member under the provisions of this Agreement.
ss. "Net Adjusted Capital Contributions" means, with respect
to each Member for each fiscal year of the Company, the Adjusted
Capital Contributions with respect to such Member for such fiscal year
less the Adjusted Capital Distributions with respect to such Member for
such fiscal year, but not less than zero.
tt. "Net Operating Income" has the meaning specified in
Section 4.19 c. hereof.
uu. "Net Sale or Refinancing Proceeds" has the meaning
specified in Section 3.03b. hereof.
vv. "Nondefaulting Member" has the meaning specified in
Section 2.03 a. hereof.
ww. "Offeree" has the meaning specified in Section 4.19 b.
hereof.
xx. "Offer Price" has the meaning specified in Section 4.19 b.
hereof.
yy. "Offeror" has the meaning specified in Section 4.19 b.
hereof.
zz. "Omitted Contribution" has the meaning specified in
Section 2.03 a. hereof.
aaa. "Option Exercise Date" has the meaning specified in
Section 4.19 a. hereof.
bbb. "Preliminary Investment Opportunity Notice" has the
meaning specified in Section 4.13 e. hereof.
ccc. "Profit" and "Loss" each has the meaning specified in
Section 3.01d.(2) hereof.
I'ddd. "Project" has the meaning specified in Section 1.03
hereof.
33
eee. "Preferred Return" means, with respect to each Member for
each fiscal year of the Company, an amount of Cash Flow with respect to
such fiscal year equal to sixteen (16%) percent (adjusted in an
appropriate manner, as determined by the Investment Committee, with
respect to any short fiscal year) of the Net Adjusted Capital
Contributions of such Member with respect to such fiscal year. The
Preferred Return shall not be compounded. The Preferred Return shall be
cumulative, such that if the Cash Flow or Net Sale or Refinancing
Proceeds with respect to any fiscal year of the Company shall be
insufficient to cover the full amount of the Preferred Return with
respect to such Member for such fiscal year together with the unpaid
portion of the Preferred Return with respect to such Member for each
prior fiscal year of the Company, then the unpaid portion of the
Preferred Return with respect to such Member for such fiscal year and
each prior fiscal year of the Company shall be carried forward to the
succeeding fiscal year, and from fiscal year to fiscal year, and shall
be paid out of, and to the extent of, the first available Cash Flow or
Net Sale or Refinancing Proceeds, as provided in this Section 10.01
aaa., and in Section 3.02 a. (2) and Section 3.03 a. (2) hereof, as the
case may be.
fff. "Ramco Member" shall mean the entity specified in the
introductory paragraph to this Agreement.
ggg. "Regulations" has the meaning specified in Section
3.01d.(3) hereof.
hhh. "Regulatory Provisions" has the meaning specified in
Section 3.01 c. hereof.
iii. "RGI" has the meaning specified in Section 4.15 a.
hereof.
jjj. "Sell Option" has the meaning specified in Section 4.19
b. hereof.
kkk. "Sell Price" has the meaning specified in Section 4.19 b.
hereof.
lll. "Successor" means, with respect to a Disabled Member,
such Disabled Member's successor(s) in interest, personal
representative(s) heirs at law, legatee(s), or estate.
mmm. "Tax Matters Partner" has the meaning specified in
Section 6.03 hereof.
nnn. "Termination Date" has the meaning specified in Section
1.05 b. hereof.
ooo. "Town Realty -- Pashcow Group" means the children and
grandchildren or other relatives who are limited partners or
beneficiaries of the respective family partnerships organized by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the beneficiaries of the member
trusts of Nassau Capital LLC, and any persons who are trustees or
controlling persons of any such trusts or family partnerships.
ppp. "Triggering Control Change" means any event the result of
which is either (i)(-1-) that Ramco (or its Affiliate) no longer owns
or Controls its Membership Interest in the Company or (-2-) that none
of the current Controlling persons (or any Affiliate thereof) of
Ramco's general partner any longer Controls such general partner, or
(ii) (-1-) that Town Realty Co., LLC no longer owns or controls its
Membership Interest in the
34
Company or (-2-) that the Town Realty - Pashcow Group no longer
Controls Town Realty Co., LLC.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives effective as of the date first
above written.
"INVESTOR"
TOWN REALTY CO., LLC,
a New York limited liability company
By:
---------------------------------------------
Its:
----------------------------------------
"RAMCO"
RAMCO-▇▇▇▇▇▇▇▇▇▇ PROPERTIES, L.P.,
a Delaware limited partnership
By: Ramco-▇▇▇▇▇▇▇▇▇▇ Properties Trust,
a Maryland real estate investment trust
Its general partner
By:
-----------------------------------------
Its:
----------------------------------------
35
ACCEPTANCE BY DESIGNATED REPRESENTATIVES
The undersigned, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, hereby accepts the appointment as the
designated representative of Investor pursuant to Section 4.11a hereof and
acknowledge and agree that he may only resign as the designated representative
of Investor in accordance with the procedures set forth in Section 4.11a hereof.
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
The undersigned, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, hereby accepts the appointment as
the designated representative of Ramco pursuant to Section 4.11b hereof and
acknowledge and agree that he may only resign as the designated representative
of Investor in accordance with the procedures set forth in Section 4.11b hereof.
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
36
EXHIBIT A
INITIAL CAPITAL CONTRIBUTIONS
AND PERCENTAGE INTEREST
(1) (2) (3)
Member Initial Capital Contribution Applicable Percentages
------ ---------------------------- ----------------------
1. Investor $2,570,000 60%
2. Ramco $1,713,333 40%
EXHIBIT B
MANAGEMENT AND LEASING AGREEMENT