Exhibit 10.169
OPERATING AGREEMENT
OF
AMERICAN FINANCIAL EXCHANGE L.L.C.
THIS OPERATING AGREEMENT (this "Agreement") of AMERICAN FINANCIAL
EXCHANGE L.L.C. (the "Company") is dated as of May 20, 1998, and is entered into
by and between M-C HARSIMUS PARTNERS L.P. ("MCHP") and COLUMBIA DEVELOPMENT
COMPANY, L.L.C. ("Columbia") as members (each a "Member" and collectively, the
"Members").
PRELIMINARY STATEMENTS
MCHP and Columbia desire to jointly acquire, own, develop, manage,
lease, operate, encumber and/or sell certain real property, as more particularly
described in SCHEDULE "A" attached hereto, located in Jersey City, New Jersey,
and commonly known as Harsimus Cove (the "Real Property");
Columbia has executed that certain Agreement for Sale and Purchase of
Land, dated July 2, 1996; as amended by that certain First Amendment to
Agreement for Sale and Purchase of Land, dated as of July 2, 1996; as amended by
that certain Second Amendment to Agreement for Sale and Purchase of Land, dated
as of March 17, 1997; as amended by that certain Third Amendment to Agreement
for Sale and Purchase of Land, dated as of June, 1997; and as amended by that
certain Fourth Amendment to Agreement for Sale and Purchase of Land, dated as of
September 15, 1997 (collectively, the "Acquisition Contract") by and between
National Bulk Carriers, Inc. (the "Seller") and Columbia (the "Buyer"), with
respect to the Real Property; as well as a License Agreement, dated as of
September 15, 1997 (the "License Agreement"), permitting access to the Real
Property prior to closing of title for the purposes described therein;
MCHP's predecessor-in-interest and Columbia entered into a Development
Agreement, dated January 13, 1997 (the "Development Agreement") in order to
jointly undertake certain development of the Real Property under the terms set
forth therein;
Columbia has entered into a parking agreement with Port Imperial Ferry
Corp. ("PIFC"), dated April 3, 1998 (the "Parking Agreement"), which agreement
provides for the operation of a parking facility on the Real Property;
MCHP's affiliate, Cali Harborside (Fee) Associates L.P. ("CHFA"), is
the current owner of certain real property in Jersey City, New Jersey adjacent
to the Real Property and commonly known as Harborside Center ("Harborside").
CHFA has entered into a ferry agreement, dated as of April 30, 1998 (the "Ferry
Agreement"), with PIFC for the provision of ferry service by PIFC to and from
Harborside, servicing midtown Manhattan and downtown Manhattan for the benefit
of the Real Property; and
The Members desire to form a limited liability company under the New
Jersey Limited Liability Company Act, N.J.S.A. 42:2B-1,
ET SEQ., as amended from time to time (the "Act") to more specifically provide
for the future development of the Real Property, as more specifically set forth
below.
Accordingly, in consideration of ten dollars ($10.00), the mutual
promises made herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
The following terms shall have the following meanings:
"Accountant" shall mean ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Co.,
LLC, Price Waterhouse, or the successors and assigns of either, as selected by
MCHP in its sole discretion, or, if such firms shall cease to exist, such other
accounting firm as shall be acceptable to MCHP in its sole discretion.
"Additional Capital Contribution" means each Member's pro rata share
of any Additional Funds as determined pursuant to
SECTION 4.1 and
SECTION 4.4.
"Additional Funds" means the amount of additional funds required by
the Company in excess of the Members' initial Capital Contributions pursuant to
SECTION 4.1(A).
"Additional Member" means any person or entity who acquires an
Interest in the Company pursuant to the terms of this Agreement, other than the
parties hereto.
"Adjusted Capital Account" means with respect to any Member, such
Member's Capital Account as adjusted by the items described in Sections
1.704-2(g)(1), 1.704-2(i)(5) and 1.704-1(b)(2)(ii)(d)(4),(5) and (6) of the
Treasury Regulations.
"Affiliate" means with respect to any Member (i) any corporation,
partnership or other entity directly or indirectly controlling, controlled by or
under common control with such Member, or (ii) any officer, director or trustee
of any corporation, partnership or other entity directly or indirectly
controlling, controlled by or under common control with such Member. For
purposes hereof, the terms "control", "controlling" or "controlled by" mean the
direct or indirect ownership of more than 20% of the voting or beneficial
interest in such entity.
"Agreement" means this Operating Agreement as originally executed and
as amended, modified, supplemented or restated from time to time, as the context
requires.
"Capital Account" shall means the accounts maintained for each Member
as set forth in SECTION 4.8.
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"Capital Contribution" means any contribution to the capital of the
Company in cash or property by a Member, or Members, as the case may be pursuant
to the provisions of SECTION 4.1.
"Capital Transaction" means (i) any transaction by the Company (other
than receipt of Capital Contributions) not in the ordinary course of the
Company's business, including without limitation, sales of the Property (or any
part thereof), damage recoveries (to the extent not applied to restoration),
insurance proceeds (to the extent not applied to restoration), casualty or
condemnation proceeds (to the extent not applied to restoration) or other
similar transactions and (ii) any financing or re-financing of the Property (or
any part thereof).
"Certificate of Formation" of the Company means the Certificate of
Formation filed with the Secretary of State, State of New Jersey, pursuant to
the Act to form the Company, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"Code" means the Internal Revenue Code of 1986, as amended.
"Dissociation" means the events described in Section 7.2.
"Depreciation Deductions" means the depreciation deductions allowed
by the Code with respect to the Property.
"Default Loan" means the loan described in
SECTION 4.5 made on behalf of a Noncontributing Member.
"Gain from a Capital Transaction" means the gain recognized by the
Company attributable to a Capital Transaction, determined in accordance with the
method of accounting used by the Company for federal income tax purposes. In
the event there is a revaluation of the Property and the Capital Accounts are
adjusted pursuant to SECTION 4.8(C), Gain from a Capital Transaction shall be
computed by reference to the "book items" and not the corresponding "tax items".
"Interest" means a Member's interest in the Company as described in
SECTION 4.2.
"Involuntary Withdrawal" means, with respect to any Member, the
occurrence of any of the events of Dissociation, set forth in SECTION 7.2.
"Loss from a Capital Transaction" means the loss recognized by the
Company attributable to a Capital Transaction, determined in accordance with the
method of accounting used by the Company for federal income tax purposes. In
the event there is a revaluation of the Property and the Capital Accounts are
adjusted pursuant to SECTION 4.8(C), Loss from a Capital Transaction shall be
computed by reference to the "book items" and not the corresponding "tax items".
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"Member" means each of the parties that have executed this Agreement
and each of the parties that may hereafter become Substitute Members pursuant to
this Agreement.
"Member's Representative" means that person or entity which shall
have the authority, on behalf of the applicable Member, to bind such member with
respect to matters arising under this Agreement.
"Net Cash Flow" means the gross receipts and other miscellaneous
revenue derived from Company operations (excluding Net Proceeds) less all cash
operating expenses of the Company including, without limitation, (i) debt
service on any Company loans (excluding the payment of interest and outstanding
principal on Default Loans), (ii) taxes and other fees incurred in connection
with the operation of the Company, and (iii) increases, if any, in reserves
established by the Members from time to time for working capital and other
purposes.
"Net Proceeds" means the net proceeds available to the Company from a
Capital Transaction after deducting all costs and expenses incurred in
connection therewith (including brokerage fees and commissions).
"Net Profit" and "Net Loss" means the net income (including income
exempt from tax) and net loss (including expenditures that can neither be
capitalized nor deducted), respectively, of the Company, determined in
accordance with the method of accounting used by the Company for federal income
tax purposes but excluding any Gain or Loss from a Capital Transaction.
"Property" means all real, personal and mixed properties, cash,
assets, interests and rights of any type owned by the Company (directly or
indirectly), including, without limitation, the Real Property. All assets
acquired with Company funds or in exchange for the Property shall constitute the
Property.
"Substitute Member" means each of those people or entities admitted
to the Company as Members, as permitted by Article VIII of this Agreement.
"Transfer" means, when used as a noun, any voluntary sale,
hypothecation, pledge, assignment, attachment, exchange or other relinquishment,
and, when used as a verb, means voluntarily to sell, hypothecate, pledge,
assign, attach, exchange or otherwise relinquish.
"Treasury Regulations" means the regulations promulgated under the
Code.
"Unanimous Consent of the Members" shall mean the consent of the
Members holding 95% of the Interest in the Company.
"Unpaid Preferred Return" means for any period an amount equal to the
amount of interest that would accrue, cumulative and compounded, on MCHP's
Unrecovered Capital Contributions, computed at an interest rate of nine (9%)
percent per annum, reduced (but not below zero) by the amount of any
distributions made to MCHP pursuant to SECTIONS 6.2(A)(I) AND 6.3(B).
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"Unrecovered Capital Contribution" means for MCHP an amount equal to
the aggregate amount of its capital contribution(s) made pursuant to this
Agreement reduced by the aggregate amount of distributions theretofore made to
MCHP pursuant to
SECTION 6.3(C).
"Voluntary Withdrawal" means a Member's Dissociation from the Company
by means other than a Transfer or Involuntary Withdrawal.
ARTICLE II
ORGANIZATION AND TERM
2.1 FORMATION. The Members do hereby agree to form the Company under
the name of American Financial Exchange L.L.C. for the purpose and scope set
forth herein. Pursuant to the provisions of the Act, the formation of the
Company shall be effective upon the execution hereof and the filing of the
Certificate of Formation.
In order to maintain the Company as a limited liability company under
the laws of the State of New Jersey, the Company shall from time to time take
appropriate action, including the preparation and filing of such amendments to
the Certificate of Formation and such other assumed name certificates,
documents, instruments and publications as may be required by law, including,
without limitation, action to reflect:
(i) a change in the Company name;
(ii) a correction of a defectively or erroneously executed
Certificate of Formation;
(iii) a correction of false or erroneous statements in the
Certificate of Formation or the desire of the Members to make a change in any
statement therein in order that it shall accurately represent the agreement
among the Members; or
(iv) a change in the time for dissolution of the Company as stated
in the Certificate of Formation and in this Agreement.
2.2 TERM. The term of the Company shall commence upon filing the
Articles of Organization and shall continue in perpetuity, unless dissolved
following an event set forth in
SECTION 9.1 hereof.
2.3 REGISTERED AGENT AND OFFICE. The registered office of the
Company in the State of New Jersey is c/o ▇▇▇▇-▇▇▇▇ Realty, L.P., ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. The name and
address of the registered agent of the Company for service of process on the
Company in the State of New Jersey is ▇▇▇▇-▇▇▇▇ Realty, L.P., ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the Company may
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designate another registered agent and/or office by amending the Certificate of
Formation pursuant to the Act.
2.4 PRINCIPAL PLACE OF BUSINESS. The principal place of business
of the Company shall be c/o ▇▇▇▇-▇▇▇▇ Realty, L.P., ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the Company may change the location of its
principal place of business and may establish additional offices.
2.5 OTHER INSTRUMENTS. Each Member hereby agrees to execute and
deliver to the Company within ten (10) days after receipt of a written request
therefor, such other and further documents and instruments, statements of
interest and holdings, designations, powers of attorney and other instruments
and to take such other action as the Company reasonably deems necessary, useful
or appropriate to comply with any laws, rules or regulations as may be necessary
to enable the Company to fulfill its responsibilities under this Agreement.
ARTICLE III
PURPOSES AND POWERS OF THE COMPANY
3.1 PURPOSES OF THE COMPANY.
(a) The purposes of the Company's business are to acquire, own,
develop, manage, operate, maintain, encumber and sell the Real Property and to
conduct such other activities as may be necessary, appropriate and incidental to
the foregoing purposes in connection therewith, and to engage in any other
business permitted under the Act as unanimously approved by the Members.
(b)
DEVELOPMENT OF THE REAL PROPERTY. Columbia and MCHP have completed the
construction of certain bulkhead improvements for the Real Property, pursuant to
(i) the Army Corp. of Engineer Permit No. 14767, dated March 22, 1988, as
amended by letter dated July 26, 1989, as further amended by letter dated March
23, 1991, as further amended by letter dated February 25, 1994, and as further
amended by letter dated April 23, 1996 (the "Army Corps Permit"); and (ii) the
New Jersey Department of Environmental Protection Waterfront Development Permit
No. 0906-92-0005.2, issued December 23, 1997 (the "Waterfront Development
Permit", and together with the Army Corps Permit, the "Waterfront Permits").
The Company shall, promptly following the execution of this Agreement, complete
parking lot improvements and a waterfront walkway at the Real Property, as more
fully set forth in the Waterfront Permits (collectively, the "Improvements") in
accordance with (i) those certain plans and specifications approved by the
Members, attached hereto as EXHIBIT "D" (the "Plans and Specifications"); (ii)
that certain budget approved by MCHP attached hereto as EXHIBIT "E" (the
"Budget"); (iii) the Parking Agreement; and (iv) all applicable legal
requirements. Columbia acknowledges that the Ferry Agreement will be contingent
upon the availability of and access to sufficient parking on the Real Property
for PIFC's ferry passengers. At closing of title for the Real Property, MCHP
shall make a Capital Contribution to the Company sufficient to allow the
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Company to reimburse Columbia for those costs actually incurred by Columbia
through the date hereof with respect to the construction of the Improvements
(the "Development Costs"), which Development Costs are more particularly set
forth in EXHIBIT "F" attached hereto; PROVIDED, HOWEVER, that MCHP's Capital
Contribution pursuant to this paragraph shall constitute an Unrecovered Capital
Contribution, and shall be entitled to an Unpaid Preferred Return, recoverable
by MCHP as provided in this Agreement.
3.2 POWERS OF THE COMPANY. In furtherance of the purpose of the
Company as set forth in SECTION 3.1, the Company shall have the power and
authority to take in its name all actions necessary, useful or appropriate in
the Members' discretion to accomplish its purpose and take all actions
necessary, useful or appropriate in connection therewith. In addition, the
Company shall take all actions that are or may become necessary to insure that
▇▇▇▇-▇▇▇▇ Realty Corporation maintains its status as a real estate investment
trust under Section 856 of the Code and applicable Treasury Regulations,
provided that such actions shall not materially and adversely affect Columbia.
ARTICLE IV
MEMBER'S CAPITAL CONTRIBUTIONS AND INTERESTS
4.1 CAPITAL CONTRIBUTIONS.
(a) Upon execution hereof, each Member shall be obligated to
contribute to the capital of the Company, in cash or property, as its initial
Capital Contribution the amount set forth opposite its name on
EXHIBIT "A" attached hereto.
(b) Upon the execution of this Agreement, Columbia shall assign to
the Company all of Columbia's right, title and interest under:
(i) The Acquisition Contract, including, without limitation, the right to
receive a warranty deed to Seller's fee estate in the Real Property;
(ii) The License Agreement;
(iii) That certain parking agreement with PIFC;
(iv) A certain Leasing Representation Agreement, dated June 10, 1997, with
Insignia/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Co., Inc.;
(v) Any and all other agreements, entered into by Columbia to effectuate
the development of the Real Property, including, without limitation,
agreements with engineers, architects, environmental experts and
attorneys; and
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(vi) All municipal, state and federal approvals and permits relating to the
ownership, development and operation of the Property.
Columbia represents to MCHP (i) that Columbia has full right and authority to
assign the foregoing to the Company and that Columbia is not in default under
any of the foregoing agreements, rights or permits; (ii) that, to the best of
Columbia's knowledge, no event, fact or circumstance then exists that, with the
giving of notice or the expiration of any applicable cure period, would
constitute a default hereunder or under any of the agreements, rights or permits
referenced herein; (iii) that Columbia has not entered into any other agreements
with respect to or affecting the Property; (iv) that Columbia has not created or
suffered to exist any encumbrance or other obligation affecting the Property
except those set forth on
EXHIBIT "B" attached hereto and as indicated in Title Commitment No's.
97-TA-0524 (Block 15, Lot 36) and 97-TA-0504 (Block 15, Lot 35) issued by
Chicago Title Insurance Company, each dated August 31, 1996.
(c) MCHP shall, on behalf of the Company, remit the sum of
$7,990,700.00 (the "Purchase Price"), in cash, to Seller for the purchase of the
Property, as required by the Acquisition Contract. The Purchase Price funds
advanced by MCHP shall be considered a Capital Contribution, and shall
constitute an Unrecovered Capital Contribution entitled to an Unpaid Preferred
Return, recoverable by MCHP as set forth in this Agreement.
(d) MCHP shall make Capital Contributions to the Company to the
extent required by the terms of SECTION 3.1(B) and SECTION 4.1(C). In the event
that any Member determines that the Company requires additional funds (i) to
make any payments due under any third party loan to the Company (other than a
balloon payment of principal at maturity) the failure of which would give the
lender thereunder the right to accelerate the loan; (ii) to make payments on
account of real estate taxes and other municipal charges and levies so that same
may be paid prior to the delinquency thereof; (iii) to make payments on account
of any insurance policies insuring the Company assets; or (iv) to make payments
on account of legal services rendered to the Company, such Member shall notify
the other Members in writing of the total cost of such charges (the "Required
Amount") and each Member's share of the amount required to pay such costs.
Within fifteen (15) days of such notice, any Member may, but is not obligated
to, make a Capital Contribution in the amount of its share of the Required
Amount. Pending the receipt by the Company of the Required Amount, any Member
shall be entitled to advance to the Company the entire Required Amount (and to
receive a Nine Percent (9.0%) return thereon until repaid) if such Member shall
determine in good faith that the Company may incur any liability or additional
expense if the matter giving rise to the need for the Capital Contribution is
not timely satisfied. No Member shall have an obligation to make any Capital
Contribution except as expressly set forth herein.
4.2 INTERESTS. A Member's Interest in the Company shall be
represented by the percentage interest held by such Member, as set forth on
EXHIBIT "C" attached hereto.
4.3 NO REQUIREMENT OF ADDITIONAL FUNDS. Except as expressly
provided in this Agreement or as required by law, no Member shall be required to
make any Capital
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Contributions to the capital of the Company. Without limiting the foregoing, no
Member shall be required to contribute to the capital of the Company to restore
a deficit in the Member's Capital Account existing at any time. No Member will
be bound by, or be personally liable for, the expenses, liabilities or
obligations of the Company. No Member shall be responsible for any liabilities
or obligations of any other Member.
4.4 ADDITIONAL FUNDS.
If the Members in their sole discretion determine that the
Company requires additional funds in excess of the Capital Contributions made by
the Members pursuant to this Agreement (the "Additional Funds") and the Company
is unable to borrow the required funds on commercially reasonable terms and
conditions, then the Members shall advise each Member of the amount of its pro
rata share of the Additional Funds in accordance with each Member's Interest in
the Company pursuant to SECTION 4.2. Within fifteen (15) days of such notice,
each Member may, but is not obligated to, make a Capital Contribution to the
Company in the amount of its pro rata share of the Additional Funds in
accordance with its Interest in the Company pursuant to SECTION 4.2.
4.5 DEFAULT LOANS.
(a) If any Member fails to make (in whole or in part) its Capital
Contribution pursuant to SECTION 4.1(D) and/or SECTION 4.4 (any such Member is
herein referred to as a "Noncontributing Member"), then any Member that has made
its Capital Contribution (any such Member is herein referred to as a
"Contributing Member") shall have the option to make a Default Loan to the
Company on behalf of the Noncontributing Member equal to the Capital
Contribution not made by the Noncontributing Member (a "Default Loan"), on the
terms and conditions set forth in SECTION 4.5(B) below. In the event that more
than one Contributing Member desires to make a Default Loan on account of the
Noncontributing Member, such Contributing Members shall be permitted to
participate in proportion to their respective Interests exclusive of the
Interest of the Non-Contributing Member.
(b) A Default Loan (which for all purposes of this Agreement shall
include all accrued and unpaid interest thereon) made on behalf of a Member due
to its failure to make its Capital Contribution shall bear interest from the
date such Capital Contribution is due at an annual rate equal to the rate
announced from time to time in The Wall Street Journal as the "prime rate" plus
four (4) percentage points, and shall mature upon the liquidation of the Company
if not otherwise paid in full pursuant to the terms of this Agreement. In the
event that The Wall Street Journal shall no longer be published, then the Member
entitled to payments of interest shall be entitled to select, in its reasonable
discretion, an alternative publication or institutional "prime" or "base" rate
(and, if there is more than one such Member, then the Member with the greatest
Interest shall be entitled to make such selection). Any Default Loan and
interest thereon shall be required to be repaid by the Noncontributing Member
only to the extent distributions are made to such Member as set forth in
SECTION 6.2 and SECTION 6.3, and no Noncontributing Member shall have any
personal liability for the repayment of same or any interest thereon. In the
event that there shall be more than one Default Loan during the term of
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this Agreement, then the application of the various rights set forth in this
SECTION 4.5 shall be applied separately to each such Default Loan.
4.6 WITHDRAWALS AND INTEREST. No Member shall have the right to
withdraw from the Company or receive any return or interest on any portion of
its Capital Contribution except as otherwise provided herein.
4.7 RETURN OF CAPITAL. No Member shall be entitled to the return of
all or any part of its Capital Contribution except in accordance with the
provisions of this Agreement.
4.8 CAPITAL ACCOUNTS. The Company shall determine and maintain
"Capital Accounts" for each member throughout the full term of the Company in
accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv),
as such regulation may be amended from time to time. To the extent not
inconsistent with such rules, the following shall apply:
(a) The Capital Account of each Member shall be credited with (1)
an amount equal to such Member's cash contributions including, without
limitation, Purchase Price and Development Costs to the extent set forth in this
Agreement, and the agreed fair market value of property contributed to the
Company by such Member (net of liabilities securing such contributed property
that the Company is considered to assume or take subject to under Section 752 of
the Code) and (2) such Member's share of the Company's Net Profits (or items
thereof) and Gain from a Capital Transaction. The Capital Account of each
Member shall be debited by (1) the amount of cash distributions to such Member
and the agreed fair market value of property distributed to such Member (net of
liabilities assumed by such Member and liabilities to which such distributed
property is subject) and (2) such Member's share of the Company's Net Losses (or
items thereof) and Loss from a Capital Transaction.
(b) Upon the transfer of an Interest in the Company after the date
of this Agreement, (x) if such transfer does not cause a termination of the
Company within the meaning of Section 708(b)(1)(B) of the Code, the Capital
Account of the transferor Member that is attributable to the transferred
Interest will be carried over to the transferee Member but, if the Company has a
Section 754 election in effect, the Capital Account will not be adjusted to
reflect any adjustment under Section 743 of the Code, or (y) if such transfer
causes a termination of the Company within the meaning of Section 708(b)(1)(B)
of the Code, the income tax consequences of the deemed distribution of the
Property and of the deemed immediate contribution of the Property to a new
company (which for all other purposes continues to be the Company) shall be
governed by the relevant provisions of Subchapter K of Chapter 1 of the Code and
the regulations promulgated thereunder, and the initial Capital Accounts of the
Members in the new company shall be determined in accordance with Treasury
Regulation Sections 1.704-1(b)(2)(iv)(d), (e), (f), (g) and (1), and thereafter
in accordance with
SECTION 4.8(A).
(c) Upon (i) the "liquidation of the Company" (as hereinafter
defined), (ii) the "liquidation of a Member's interest in the Company" (as
hereinafter defined), (iii) the distribution of money or property to a Member as
consideration for an Interest in the Company, or (iv) the contribution of money
or (if permitted pursuant to (a) above) property to the Company by a new
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or existing Member as consideration for an Interest in the Company, or upon any
transfer causing a termination of the Company for tax purposes within the
meaning of Section 708(b)(1)(B) of the Code, then adjustments shall be made to
the Members' Capital Accounts in the following manner: all Property of the
Company which is not sold in connection with such event shall be valued at its
then "agreed value". Such agreed value shall be used to determine both the
amount of gain or loss which would have been recognized by the Company if the
Property had been sold for its agreed value (subject to any debt secured by the
Property) at such time, and the amount of Net Cash Flow or Net Proceeds, as the
case may be, which would have been distributable by the Company pursuant to
SECTION 6.2 if the Property had been sold at such time for said value, less the
amount of any debt secured by the Property. The Capital Accounts of the Members
shall be adjusted to reflect the deemed allocation of such hypothetical gain or
loss in accordance with SECTION 6.1. The Capital Accounts of the Members (or of
a transferee of a Member) shall thereafter be adjusted to reflect "book items"
and not tax items in accordance with Treasury Regulation Sections
1.704-1(b)(2)(iv)(G) and 1.704-1(b)(4)(i).
(d) For purposes of this SECTION 4.8, (i) the term "liquidation of
the Company" shall mean (A) a termination of the Company effected in accordance
with this Agreement, which shall be deemed to occur, for purposes of this
ARTICLE IV, on the date upon which the Company ceases to be a going concern and
is continued in existence solely to wind-up its affairs, or (B) a termination of
the Company pursuant to Section 708(b)(1) of the Code; (ii) the term
"liquidation of a Member's interest in the Company" shall mean the termination
of the Member's entire interest in the Company effected by a distribution, or a
series of distributions, by the Company to the Member; and (iii) the term
"agreed value" shall mean, with respect to the Property, such value as is
determined by the Members.
4.9 LIABILITY. No Member shall be liable under a judgment, decree or
order of a court, or in any other manner for a debt, obligation or liability of
the Company. Additionally, no Member shall be required to lend any funds to the
Company or to pay any contributions, assessments or payments to the Company
except the initial Capital Contributions set forth in EXHIBIT "A" and the
Capital Contributions provided for in SECTION 4.1.
ARTICLE V
RIGHTS AND DUTIES OF THE MEMBERS
5.1 MANAGEMENT.
(a) MANAGEMENT OF THE COMPANY. The day-to-day business and
affairs of the Company shall be managed by the Members, who, acting unanimously,
shall have the exclusive power and authority, on behalf of the Company, to take
any action of any kind not inconsistent with the provision of this Agreement and
to do anything and everything they deem necessary or appropriate to carry on the
business and purposes of the Company. There shall not be a "manager" (within
the meaning of the Act) of the Company. The Members are, to the extent of their
rights and powers set forth in this Agreement, agents of the Company for the
purpose of the Company's business, and the actions of the Members taken in
accordance with such rights and
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powers shall bind the Company. Day-to-day decisions with respect to the
construction of the Improvements, as defined in SECTION 3.1(B), the Real
Property parking agreement and/or the acquisition of the Real Property shall be
made only with the Unanimous Consent of the Members. Additionally, any choice
with respect to the following major decisions shall be made only with the
Unanimous Consent of the Members: (i) sale or other transfer of all or
substantially all of the Company's assets; (ii) any indebtedness secured or to
be secured by the Property or with recourse to the Members; (iii) sale of the
Property; (iv) merger, liquidation, dissolution, reorganization or voluntary
filing for bankruptcy by the Company; (v) leasing of the Property; or (vi)
development of the Property (collectively, "Major Decisions").
(b) The Members shall carry on, manage and conduct the Company
business and shall devote so much of their time thereto as shall be reasonably
necessary. The Members shall not be obligated to devote all of their time and
effort to the Company and its affairs.
(c) All deeds, bills of sale, mortgages, leases, contracts of
sale, bonds, notes, or other contracts, documents, agreements, instruments or
writings binding the Company shall bind the Company and be effective for all
uses and purposes if signed on behalf of the Company by all of the Members.
5.2 NO MANAGEMENT POWERS OF THE MEMBERS. The Members in such
capacity shall have no voice or participation in the management of the Company
business, and no power to bind the Company or to act on behalf of the Company in
any manner whatsoever, except as specifically provided in this Agreement.
5.3 MANAGER'S FEES AND REIMBURSEMENT OF EXPENSES. The Members
shall receive no compensation for acting as managers of the Company. All bona
fide costs and expenses actually incurred in connection with the organization of
the Company and the ongoing operation or management of the business of the
Company shall be borne by the Company, provided that they have been approved in
advance, in writing, by the Members. The Company, promptly upon receipt of a
written request for reimbursement, accompanied by reasonably acceptable evidence
that the bona fide costs and expenses have been incurred by the requesting
Member, shall reimburse such Member for all bona fide out-of-pocket costs and
expenses incurred by it in connection with the organization and business of the
Company.
5.4 MEETINGS. Meetings of the Members shall not be held unless
the Members, in their sole discretion, decide to call a meeting of the Members
for any purpose.
5.5 BANK ACCOUNTS. The Company shall establish and maintain
accounts in financial institutions (including, without limitation, national or
state banks, trust companies or savings and loan institutions) in such amounts
as the Members may deem necessary from time to time. The funds and income of
the Company, including, without limitation, rental income from the operation of
the Property, shall be collected by the TMM (as hereinafter defined) and
deposited in such accounts, and shall not be commingled with the funds of the
Members or any Affiliates thereof. All Company disbursements must be approved
by the Members, however, Company checks, after approval by the Members, may be
signed by any Member of the
12
Company or by any individual authorized by the Members to sign checks on behalf
of the Company.
5.6 INDEMNITY. The Company (but not the Members) shall indemnify
and hold harmless the Members and their respective directors, officers, agents
and employees from any claims, cost, loss damage or expense (including
reasonable attorney's fees and costs), liability, judgments or causes of action
(collectively, "Losses") incurred by them by reason of any acts or omissions
performed or omitted by them for or on behalf of the Company, unless such Losses
were caused by (i) the applicable Member's fraud, gross negligence or willful
misconduct; or (ii) the Member's violation of law. Notwithstanding any language
to the contrary contained in this Agreement, a Member shall have personal
liability for the Company's indemnity in the event that the Losses are directly
caused by the gross negligence or willful misconduct of such Member.
5.7 RELIANCE ON AUTHORITY OF MEMBERS. Any Person dealing with the
Company, other than another Member, may rely on the authority of the Members
without inquiry into the provisions of this Agreement or compliance herewith,
regardless of whether that action actually is taken in accordance with the
provisions of this Agreement.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1 ALLOCATIONS OF PROFITS AND LOSSES AND GAIN OR LOSS ON SALE.
(a) NET PROFITS. The Net Profits of the Company, for each fiscal
year of the Company, shall be allocated among the Members as follows:
(i) First, to the Members in an amount equal to, and in
proportion to, the aggregate amount of Net Losses
theretofore allocated to each Member;
(ii) Second, pro rata among the Members until the aggregate
amount of Net Profits allocated pursuant to this subsection
(a)(ii) for the current and all prior years equals the
aggregate amount of distributions theretofore made to such
Members pursuant to SECTION 6.2(A)(I); and
(iii) Thereafter in proportion to their respective Interests
in the Company.
Any credit available for income tax purposes shall be
allocated among the Members in proportion to their respective Interests in the
Company.
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(b) GAIN ON SALE. Gain from a Capital Transaction shall be
allocated in the following order:
(i) There shall first be allocated to those Members, if
any, who have deficit balances in their Capital Accounts immediately prior to
such transaction, an amount of such gain equal to the aggregate amount of such
deficit balances, which amount shall be allocated in the same proportion as such
deficit balances.
(ii) There shall next be allocated to each of the Members
gain equal to the amount by which (x) the aggregate cash proceeds derived from
such transaction distributable to each Member in accordance with the provisions
of SECTION 6.2(B), assuming such amounts are distributable, exceeds (y) the
positive balance, if any, in such Member's Capital Account after such Member's
Capital Account has been adjusted to reflect the gain allocated to such Member
pursuant to paragraph (i) above; provided, however, that if there shall be an
insufficient amount of gain determined by this paragraph, then the gain shall be
allocated to the Members in proportion to the respective amounts determined
pursuant to this paragraph.
(iii) Any remaining gain shall be allocated among the Members
in proportion to their respective Interests in the Company.
(iv) If the Company shall realize, upon such transaction,
gain which is treated as ordinary income under Section 1245 or 1250 of the Code,
such ordinary income shall be allocated to the Members who receive the
allocation of the depreciation or cost recovery deduction that generated the
ordinary income, which amount shall be allocated in the same proportions as such
deductions.
(v) Notwithstanding the foregoing, any cash payments made
to a Member pursuant to SECTIONS 6.2(A) AND 6.3(A) for interest and in repayment
of the principal on any Default Loan shall not be treated as an amount that
reduces the Capital Account of the Member receiving such amount.
(c) NET LOSSES. Net Losses of the Company shall be allocated
among the Members as follows:
(i) First, Depreciation Deductions shall be allocated among
the Members in proportion to their initial Capital
Contributions made pursuant to SECTION 4.1(A);
(ii) Second, to those Members, if any, that have positive
balances in their Capital Accounts, an amount of such loss
equal to the aggregate amount of such positive Capital
Account balances which amount shall be allocated in the same
proportion as such positive balances; and
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(iii) Thereafter to the Members in proportion to their
respective Interests in the Company.
(d) LOSS ON SALE. Loss from a Capital Transaction from the sale
or other disposition of all or substantially all of the Property shall be
allocated in the following order:
(i) There shall first be allocated to those Members, if
any, who have positive balances in their Capital Accounts,
an amount of such loss equal to the aggregate amount of such
positive balances, which amount shall be allocated in the
same proportion as such positive balances; and
(ii) The balance of such loss shall be allocated to the
Members in proportion to their respective Interests in the
Company.
(e) SPECIAL RULES REGARDING ALLOCATIONS.
Notwithstanding the foregoing provisions of SECTION 6.1:
(i) In accordance with sections 704(b) and (c) of the Code
and the Treasury Regulations thereunder, income, gain, loss and deduction with
respect to any Property contributed to the capital of the Company (including all
or part of any deemed capital contribution under section 708 of the Code) shall,
solely for tax purposes, be allocated among the Members so as to take account of
any variation between the adjusted basis of such Property to the Company and its
agreed value. In the event that Capital Accounts are ever adjusted pursuant to
Treasury Regulation section 1.704-1(b)(2) to reflect the fair market value of
any of the Property, subsequent allocations of income, gain, loss and deduction
with respect to such asset shall, solely for tax purposes, take account of any
variation between the adjusted basis of such asset and its value as adjusted in
the same manner as required under section 704(c) of the Code and the Treasury
Regulations thereunder.
(ii) At no time shall any allocation of losses be made to a
Member if such allocation would cause the deficit in the Member's Capital
Account, if any, to exceed his "Company minimum gain" or "Member non-recourse
debt minimum gain" (as defined in Treasury Regulation Sections 1.704-2(b)(2) and
(g)(1) and (i)(2) and (5), respectively), and any losses not allocated to a
Member by reason of this clause (ii) shall be allocated to each Member whose
deficit, if any, in the Member's Capital Account of such Member shall not exceed
his allocable share of such minimum gain by reason of such allocation, or to the
Members who bear the economic risk of loss attributable to such losses, and
subsequent profits shall be allocated to Members to the extent losses have
previously been allocated to them pursuant to this SECTION 6.1(C)(II).
(iii) Non-recourse deductions, as defined in Treasury
Regulations Section 1.704-2(b), shall be allocated among the Members in
proportion to their Interests. Member non-recourse deductions shall be
allocated among the Members in the proportion to which they share
15
the economic risk of loss with respect to the Member non-recourse debt to which
such deductions are attributable in accordance with Treasury Regulations Section
1.704-2(i).
(iv) If there is a net decrease in the Company minimum gain
(within the meaning of Treasury Regulation Section 1.704-2(g)(2)) for a Company
taxable year, then, before any allocations are made for such year other than
those pursuant to clause (ii) above, each Member with a share of the Company
minimum gain at the beginning of the year shall be allocated items of Company
income and gain for such year (and, if necessary for subsequent years) in an
amount equal to each Member's share of the net decrease in Company minimum gain
as determined in accordance with Treasury Regulation Section 1.704-2(f) in a
manner so as to satisfy the requirements of said Treasury Regulation.
(v) If, during any taxable year, there is a net decrease in
Member non-recourse debt minimum gain, then, before any other allocations are
made for such year other than those pursuant to clause (ii) above, each Member
with a share of the Member non-recourse debt minimum gain at the beginning of
the year shall be allocated items of Company income and gain for such year (and,
if necessary, for subsequent years) in an amount equal to each Member's share of
the net decrease in Member non-recourse debt minimum gain as determined in
accordance with Treasury Regulation Section 1.704-2(i)(4) in a manner so as to
satisfy the requirements of said Treasury Regulation.
(vi) If, during any taxable year, a Member unexpectedly
receives, or, as of the end of such year, is reasonably expected to receive, an
adjustment, allocation or distribution described in paragraph (4), (5) or (6) of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d), and if such adjustment,
allocation or distribution would cause at the end of the taxable year a deficit
balance in such Member's Capital Account in excess of his allocable share of
minimum gain as described above, then such Member shall be allocated items of
income and gain for such taxable year (and, if necessary, subsequent taxable
years) in an amount and in a manner sufficient to eliminate such excess balance
as quickly as possible before any other allocation is made for such year, other
than pursuant to clause (ii) and (iii) above, so as to satisfy the requirements
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) (qualified income offset).
(vii) In the event any Member has a deficit balance in his
Capital Account at the end of the fiscal year which is in excess of the sum of
(A) the amount such Member is obligated to restore pursuant to any provision of
this Agreement, if any, and (B) the amount of such Member is deemed to be
obligated to restore pursuant to the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each Member shall be
specially allocated items of Company income and gain in the amount of such
excess as quickly as possible.
6.2 DISTRIBUTIONS OF NET CASH FLOW.
(a) The Company shall distribute Net Cash Flow to the
Members at such times as the Members shall determine (but not less often than
quarterly), in the following order of priority:
16
(i) First, to MCHP in an amount equal to its Unpaid Preferred
Return;
(ii) Second, to the Members in proportion to their Unrecovered
Capital Contributions (excluding MCHP's Capital Contribution
in the amount of the Purchase Price) until their Unrecovered
Capital Contributions (excluding MCHP's Capital Contribution
in the amount of the Purchase Price) have been reduced to
zero; and
(iii) Third, the balance shall be distributed to the Members in
proportion to their respective Interests.
(b) Notwithstanding any provision in this Agreement to the
contrary, all payments of principal and interest on any Default Loan made on
behalf of a Noncontributing Member shall, except as permitted below, be made by
the Company to the Contributing Member out of the first distributions of Net
Cash Flow otherwise due to the Noncontributing Member pursuant to
SECTION 6.2(A) and shall be treated for all purposes of this Agreement as
amounts distributed to the Noncontributing Member and paid by such Member to the
Contributing Member on account of the Default Loan.
6.3 DISTRIBUTIONS OF NET PROCEEDS.
(a) The Company shall distribute Net Proceeds to the
Members as soon as practicable after the occurrence of the event giving rise to
the Net Proceeds, in the following order of priority:
(i) First, to MCHP in an amount equal to its Unpaid
Preferred Return;
(ii) Second, to the Members in proportion to their
Unrecovered Capital Contributions (including MCHP's
Capital Contribution in the amount of the Purchase
Price) until their Unrecovered Capital Contributions
(including MCHP's Capital Contribution in the amount of
the Purchase Price) have been reduced to zero; and
(iii) Third, the balance shall be distributed to the Members
in proportion to their respective Interests.
(b) Notwithstanding any provision in this Agreement to the
contrary, all payments of principal and interest on any Default Loan made on
behalf of a Noncontributing Member shall, except as permitted below, be made by
the Company to the Contributing Member out of the first distributions of Net
Proceeds otherwise due to the Noncontributing Member
17
pursuant to SECTION 6.3(A) and shall be treated for all purposes of this
Agreement as amounts distributed to the Noncontributing Member and paid by such
Member to the Contributing Member in full or partial satisfaction of the Default
Loan.
6.4 SPECIAL RULES REGARDING DISTRIBUTIONS.
(a) No distribution shall be declared and paid if, after
the distribution is made: (i) the Company would be unable to pay its debts as
they become due in the usual course of business, or (ii) the fair market value
of the Company's assets would be less than the sum of its liabilities.
(b) All amounts withheld pursuant to the Code or any
provisions of state and local tax law with respect to any payment or
distribution to the Members from the Company shall be treated as amounts
distributed to the relevant Member or Members pursuant to
SECTION 6.2 or SECTION 6.3.
ARTICLE VII
TRANSFERABILITY
7.1 RESTRICTIONS ON TRANSFERABILITY.
(a) No Member may Transfer all, or any portion, of its
Interest except as specifically provided herein and except by operation of law
as a result of the Involuntary Withdrawal of such Member.
(b) Intentionally Deleted.
(c) Notwithstanding anything to the contrary set forth
herein, and without inferring or implying any restriction on the Transfer of the
membership rights of the members of Columbia's members, upon prior written
notice to the other Members, the members of Columbia may freely Transfer or
provide an option to Transfer their interests in Columbia to a corporation,
partnership, limited liability company or other person or entity; PROVIDED,
HOWEVER, that following any of such Transfers (including, without limitation,
Transfers of the membership rights of the members of Columbia's members), the
controlling interest in Columbia is held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, who shall continue to act jointly as the Member's Representative for
Columbia. The term "controlling interest" shall be defined to be such interest
that would allow ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ jointly to absolutely
govern, oversee, supervise, operate, direct and manage Columbia, whether
directly or indirectly, without the consent, authorization or approval of any
other person or entity.
(d) Notwithstanding anything to the contrary set forth
herein, upon prior written notice to the other Members, MCHP shall have the
right at any time and from time to time to transfer its Interest to (i) an
Affiliate of MCHP, or (ii) any person or entity which acquires all or any
substantial portion of the assets of MCHP or ▇▇▇▇-▇▇▇▇ Realty, L.P., whether
18
by an asset or stock sale and purchase, merger or other transaction, without the
consent of the other Members.
(e) Each Member hereby acknowledges the reasonableness of the prohibitions
contained in this SECTION 7 in view of the purposes of the Company and the
relationship of the Members. The Transfer of any Interest in violation of the
prohibitions contained in this SECTION 7 shall be deemed invalid, null and void,
and of no force or effect ab initio, and shall not bind or be recognized by the
Company. Any Person to whom an Interest is attempted to be transferred in
violation of this SECTION 7 shall not be entitled to vote on matters coming
before the Members, participate in the management of the Company, act as an
agent of the Company, receive distributions from the Company, or have any other
rights in or with respect to the Company.
(f) No Member shall have the right or power to Voluntarily Withdraw from
the Company.
(g) Upon the occurrence of an Involuntary Withdrawal, the successor of the
withdrawn Member shall only be entitled to receive any distributions that
otherwise would have been distributable to the withdrawn Member. No such
successor shall have no right to exercise any other rights of a Member under
this Agreement, including, without limitation, (i) voting or management rights
in the Company; (ii) the right to demand that distributions be made by the
Company; or (iii) the right to demand a dissolution or liquidation of the
Company.
(h) In the event any Member (the "Departing Member") ceases to be a member
at any time prior to the expiration of the term of this Company, and the Company
or its business is continued without the Departing Member, all documents and
records of the Company including, without limitation, all financial records,
vouchers, canceled checks and bank statements, up to the date of the termination
of the Departing Member's interest, shall belong to the Members which continue
as Members (the "Surviving Members"), and shall be delivered to the Surviving
Members.
(i) Intentionally Deleted.
(j) Any transferee of all or any portion of a Member's Interest shall be
entitled to receive allocations and distributions attributable to the Interest
acquired by reason of such Transfer from and after the effective date of the
Transfer; HOWEVER, anything to the contrary herein notwithstanding, the Company
shall be entitled to treat the transferor of such Interest as the absolute owner
of the transferred Interest in all respects, and shall incur no liability for
allocations of net income, net losses, or gain or loss of the Property, or
transmittal of reports and notices required to be given to the Members hereunder
which are made in good faith to such transferor until such time as the written
Transfer has been received by the Company, approved and recorded on its books
and the effective date of the Transfer has passed. Provided that the Company
has actual notice of any Transfer of the Interest of the Member, the effective
date of such Transfer on which the transferee shall be deemed a transferee of
record shall be the date set forth on the written instrument of the Transfer.
19
7.2 DISSOCIATION. "Dissociation" means, with respect to any
Member, the Involuntary Withdrawal of such Member from the Company due to
occurrence of any of the following events:
(A) the Member is deemed to have automatically withdrawn
from the Company due to the fact that the Member:
(1) becomes a debtor in bankruptcy;
(2) executes an assignment for the benefit of creditors;
(3) seeks, consents to or acquiesces in the appointment of
a trustee, receiver or liquidator of the Member or of all or substantially all
of the Member's properties;
(4) fails, within 90 days after the appointment, without
the Member's consent or acquiescence, of a trustee, receiver or liquidator of
the Member or of all or substantially all of the Member's properties, to have
the appointment vacated or stayed, or fails within 90 days after the expiration
of a stay to have the appointment vacated; or
(5) is dissolved or is having its business affairs wound
up.
(B) In the event that there are more than two Members, the
Members (other than the applicable Member) unanimously vote to expel the
applicable Member on the basis that:
(1) it is unlawful to carry on the business of the Company
with the Member;
(2) there has been an attempted Transfer of that Member's
Interest not expressly permitted under this Agreement, or a court order charging
the Member's Interest; or
(3) the Member is a corporation and 90 days have transpired
since the filing of a certificate of dissolution, the revocation of its charter
or the suspension of its right to conduct business by the jurisdiction of its
formation, and there has been no revocation of the certificate of dissolution or
no reinstatement of its charter or its right to conduct business.
(C) An order of a court of competent jurisdiction, upon the
application of the Company or any Member, requiring the Member's withdrawal.
20
ARTICLE VIII
ADMISSION OF SUBSTITUTE MEMBERS
8.1 ADMISSION OF SUBSTITUTE MEMBERS.
(a) No Transfer of all or any part of a Member's Interest
permitted to be made under this Agreement shall be binding upon the Company
unless and until a duplicate original of such assignment or instrument of
transfer, duly executed and acknowledged by the assignor and the
assignee/transferee, has been delivered to the Company.
(b) As a condition to the admission of any Substitute Member, as
provided in this Article, the entity or person so to be admitted shall execute
and acknowledge such instruments, in form and substance reasonably acceptable to
the Members, as the Members may deem necessary or desirable, to effectuate such
admission and to confirm the agreement of the person to be admitted as such
Member and to be bound by all of the covenants, terms and conditions of this
Agreement, as the same may be amended.
(c) Any person to be admitted as a Substitute Member pursuant to
the terms of this Agreement shall, as a condition of admission as a Member, pay
all reasonable expenses in connection with such admission as a Member,
including, but not limited to, the cost of the preparation, filing and
publication of any amendment to this Agreement and/or the Articles of
Organization of the Company which the Members deem necessary or desirable in
connection with such admission.
8.2 BANKRUPTCY OF A MEMBER. Notwithstanding the provisions of
SECTION 7.2 to the contrary, in the event of the bankruptcy of a Member, the
successor in interest of such Member may be admitted to the Company as a
Substitute Member in the place and stead of the bankrupt Member in accordance
with this Article upon the written consent of the Members, which consent may be
withheld or delayed in the Members' sole discretion. No such successor in
interest shall be deemed to be a Substitute Member unless so admitted.
8.3 ALLOCATIONS TO SUBSTITUTED MEMBERS. The other Members may, at
their option, at the time a Substitute Member is admitted, close the Company
books (as though the Company's tax year had ended) or make pro-rata allocations
of loss, income and expense deductions to a Substitute Member for that portion
of the Company's tax year in which a Substitute Member was admitted, in
accordance with the provisions of Section 706(d) of the Code and the Treasury
Regulations promulgated thereunder.
8.4 FURTHER CONDITIONS. Notwithstanding anything to the contrary
contained in this Agreement, no sale or exchange of an interest in the Company
may be made if the interest sought to be sold or exchanged, when added to the
total of all other interests sold or exchanged within the period of twelve (12)
consecutive months prior thereto, results in the termination of the Company
under the provisions of Section 708 of the Code without the prior written
Unanimous Consent of the Members, which consent may be withheld or delayed in
their sole discretion.
21
ARTICLE IX
DISSOLUTION AND TERMINATION
9.1 DISSOLUTION. The Company shall be dissolved upon the
occurrence of any of the following events:
(a) the written Unanimous Consent of Members;
(b) the entry of a decree of judicial dissolution under Section
702 of the Act; or
(c) upon the sale of all of the Property.
9.2 DISTRIBUTION OF ASSETS UPON DISSOLUTION. In settling accounts
after dissolution, the liabilities of the Company shall be entitled to payment
in the following order:
(a) liabilities to creditors including Members who are creditors
to the extent otherwise permitted by law, other than liabilities for
distributions to Members;
(b) reasonable reserves as determined by the Members; and
(c) liabilities to Members of the Company in accordance with
Section 6.2 provided, however, that no Member shall receive distributions in
excess of such Member's positive Capital Account balance after its Capital
Account has been adjusted to reflect all allocations of income, gain, loss and
deductions attributable to the Dissolution Event pursuant to Section 9.1.
9.3 WINDING UP. Except as provided by law, upon dissolution, each
Member shall look solely to the assets of the Company for the return of its
Capital Contribution. If the Property remaining after the payment or discharge
of the debts and liabilities of the Company is insufficient to return the
Capital Contribution of each Member, such Member shall have no recourse against
any other Member. The winding up of the affairs of the Company and the
distribution of its assets shall be conducted exclusively by the Members, who
are hereby authorized to take all actions necessary to accomplish such
distribution including, without limitation, selling any Company assets the
Members deem necessary or appropriate to sell.
9.4 CERTIFICATE OF CANCELLATION. Within ninety (90) days
following the dissolution and commencement of winding up of the Company, or at
any time there are no Members, Certificate of Cancellation shall be executed and
filed pursuant to Section 42:2B-15 of the Act, and shall contain the information
required by Section 42:2B-14 of the Act.
22
ARTICLE X
FINANCIAL STATEMENTS, BOOKS, RECORDS, TAX RETURNS, ETC.
10.1 BOOKS OF ACCOUNT. The Members, at the expense of the Company,
shall maintain, at the principal office of the Company, complete books of
account, in which there shall be entered, fully and accurately, every
transaction of the Company and shall include the following:
(a) A current list of the full name and last known business
address of each Member;
(b) A copy of the Certificate of Formation of the Company and all
amendments thereto;
(c) Copies of the Company's federal, state, and local income tax
returns and reports, if any, for the three most recent years; and
(d) Copies of the Company's currently effective written Agreement
and copies of any financial statements of the Company for the three most recent
years. The fiscal year of the Company shall be the calendar year. The books of
account of the Company shall be kept on a tax accounting basis applied in a
consistent manner. All determinations by the TMM (defined in Section 10.5
below) with respect to the treatment of any item or its allocation for Federal,
state, or local tax purposes shall be binding upon all of the Members. Any
Member shall have the right, from time to time, at its own expense, to cause its
accountants and representatives to examine and audit the books and records of
the Company, and the Members upon not less than five days' written notice shall
make such books and records available for such examinations and audits at
reasonable hours during business days.
10.2 FINANCIAL STATEMENTS AND REPORTS. The Company shall cause the
Accountants to furnish each Member with a balance sheet and an annual statement
of the Company's income and expenses for such year, and the Capital Account of
each Member as of the end of such year, no later than one-hundred twenty (120)
days after the close of the fiscal year of the Company. The report shall
contain a balance sheet as of the end of the fiscal year, an income statement
and a statement of Members' equity and changes in financial position for the
fiscal year. The Company shall send to each Member such information and reports
as are reasonably requested by such Member in order to enable them to more
effectively manage their respective Interests and be fully informed about the
affairs of the Company.
10.3 RETURNS AND OTHER ELECTIONS. The Members shall at the expense
of the Company cause the Accountant to prepare and timely file all tax returns
required to be filed by the Company pursuant to the Code and all other tax
returns deemed necessary and required in each jurisdiction in which the Company
does business. Copies of such returns, or pertinent information therefrom,
shall be furnished to the Members within a reasonable time after the end of the
Company's fiscal year.
23
10.4 ELECTION UNDER SECTION 754 OF THE CODE. In the event of any
transaction described in Section 743(b) of the Code and permitted by the
provisions of this Agreement, the Company shall, upon the timely written request
of the person succeeding to an Interest in the Company in such transaction, make
the election provided for in Section 754 of the Code or a similar provision
enacted in lieu thereof, to adjust the basis of the Property of the Company.
The Member requesting said election shall pay all costs and expenses incurred by
the Company in connection therewith.
10.5 TAX MATTERS MEMBER. MCHP is hereby designated the Tax Matters
Member (the "TMM") of the Company for purposes of Chapter 63 of the Code and the
Treasury Regulations thereunder.
(a) Each Member shall furnish the TMM with such information as the
TMM may reasonably request to permit it to provide the Internal Revenue Service
with sufficient information to allow proper notice to the parties in accordance
with Section 6223 of the Code.
(b) No Member shall file, pursuant to Section 6227 of the Code, a
request for an administrative adjustment of company items for any Company
taxable year without first notifying the other Members. If the other Members
agree with the requested adjustment, the TMM shall file the request for
administrative adjustment on behalf of the Company. If the Members do not reach
agreement within 30 days or within the period required to timely file the
request for administrative adjustment, if such period is shorter, any Member may
file a request for administrative adjustment on its own behalf. If, under
Section 6227 of the Code, a request for administrative adjustment which is to be
made by the TMM must be filed on behalf of the Company, the TMM shall also file
such a request on behalf of the Company under the circumstances set forth in the
preceding sentence.
(c) If any Member intends to file a petition under Section 6226 or
6228 of the Code with respect to any company item or other tax matter involving
the Company, the Member so intending shall notify the other Members of such
intention and the nature of the contemplated proceeding. Such notice shall be
given in a reasonable time to allow the other Members to participate in the
choosing of the forum in which such petition will be filed. If the Members do
not agree on the appropriate forum, the petition shall be filed with the United
States Tax Court. If any Member intends to seek review of any court decision
rendered as a result of the proceeding instituted under the preceding part of
this subsection, such party shall notify the others of such intended action.
(d) The TMM shall not bind the other Members to a settlement
agreement without the approval of a majority in interest of the Members. If any
Member enters into a settlement agreement with the Secretary of the Treasury
with respect to any Company items, as defined by Section 6231(a)(3) of the Code,
it shall notify the other Members of such settlement agreement and its terms
within thirty days from the date of settlement.
24
ARTICLE XI
INSURANCE
11.1 MINIMUM INSURANCE REQUIREMENTS.
(a) The Company shall carry and maintain in force the following
insurance, the premium for which shall be a cost and expense of the Company:
(i) Worker's Compensation Insurance (including Employee's
Liability Insurance for an amount not less than $500,000) covering all employees
of the Company, if any, employed in, on or about the Property of the Company to
provide statutory benefits as required by the laws of the State of New York;
(ii) Comprehensive General Liability Insurance (including
protective liability coverage on operations of independent contractors engaged
in construction and also blanket contractual liability insurance) for the
benefit of the Company and the Members as named insureds against claims for
"personal injury" liability including, without limitation, bodily injury, death
or property damage liability with a limit of not less than $10,000,000 in the
event of "personal injury" to any number of person or of damages to property
arising out of any one occurrence; such insurance may be furnished under a
"primary" policy and an "umbrella" policy.
(iii) Except to the extent provided by a contractor and provided
that the Company is listed as an additional insured, all Risks Builder's Risk
Insurance on any new construction, including coverage against collapse, written
on a completed value basis in an amount not less than the total value of the
improvements under construction (less the value of such of the Improvements as
are uninsurable under the policy, i.e., site preparation, grading, paving,
parking lots, excepting, however, foundations and other under-surface
installations subject to collapse or damage by other insured perils) including,
if applicable, the coverage available under the so-called Installation Floater,
all in form and amount as may from time to time be required by any mortgagee of
any improvements under construction;
(iv) To the extent not provided by tenants that occupy the
Property and provided that the Company is named as an additional insured, Fire,
Extended Coverage and Vandalism and Malicious Mischief Insurance on the
completed improvements in an amount not less than the balance of any
institutional mortgages on the Property or such other amount (at no time,
however, less than the principal balance secured by said mortgages) as may be
required to prevent the Company and the Members from becoming co-insurer under
the terms of the applicable policy, but in any event, in an amount not less than
90% of the then actual replacement cost of the improvements (exclusive of
excavation and foundation costs and costs of underground tanks, conduits,
pilings and other similar underground items) without deduction for physical
depreciation thereof; such insurance on the completed improvements shall contain
the "Replacement Cost Endorsement";
(v) To the extent not provided by the tenants who occupy
the and provided that the Company is named an additional insured, in the event
that such equipment is
25
installed in the improvements, boiler and machinery equipment insurance in the
amount of $200,000 or such greater amount as approved by the Members covering
boilers, pressure vessels, pressure piping, all major components and of any
central air-conditioning or heating system and such additional equipment as
Approved by the Members at any time;
(vi) If the improvements are situated in an area now or
subsequently designated as having special flood hazards as defined by the Flood
Disaster Production Act of 1973, as amended from time to time, flood insurance
in an amount equal to the replacement cost of the improvements or the maximum
amount of flood insurance available, whichever is the lesser; and
(vii) Such other insurance or such additional coverage,
including, but not limited to, insurance on rental income, as may be Approved by
the Members or required by the holder of any mortgage covering the improvements
or any governmental authorities.
(b) All such policies of insurance shall be delivered to the
Company and shall name the Company as named insureds as their respective
interests may appear. Any such insurance may be effected under blanket
policies, and as to any such insurance so effected certificates of such
insurance may be delivered to the Company in place of policies thereof. All
such insurance shall be effected under policies issued by insurers Approved by
the Members, shall be in forms and for amounts approved by the Members, and
shall be in compliance with applicable laws and loan documents.
ARTICLE XII
BUY-SELL
12.1 BUY-SELL.
(a) In the event that the Members, despite good faith efforts, cannot
agree with respect to any Major Decision, either Member may deliver a written
notice to the other (the "Impasse Notice"), which Impasse Notice shall specify
the matter upon which the Members cannot agree and shall summarize the position
of the Member delivering the Impasse Notice with respect thereto. No less than
thirty (30) days following delivery of the Impasse Notice, in the event that the
Members continue to be unable to agree as to the matter set forth in the Impasse
Notice, either Member, so long as it is not then in default hereunder (the
"Initiating Member"), may give the other Member (the "Responding Member") a
written notice (the "Buy-Sell Notice") setting forth the all-cash price (the
"Price") which the Initiating Member would be willing to pay for the Property
and all other Company assets, which Price shall be based upon bona fide written
evidence (the "Buy-Sell Backup"), such as a fully executed letter of intent, of
the verifiable terms and conditions of an arms-length transaction with a bona
fide third party. No Member may deliver a Buy-Sell Notice unless such Buy-Sell
Notice shall also (i) contain a statement of the amount of cash (the "Interest
Price") which would be received by each Member if the Property and all other
Company assets were sold at the Price and on such other terms and conditions as
are set forth in the Buy-Sell Notice and the Net Proceeds (calculated assuming
that it is necessary to
26
repay all Company indebtedness) of such sale were distributed to the Members
pursuant to this Agreement; and (ii) be accompanied by the Buy-Sell Backup upon
which the Price and the Interest Price set forth in the Buy-Sell Notice are
based. The Responding Member will be required no later than 120 days after the
receipt of the Buy-Sell Notice (the "120-day Period") either to elect to
purchase the Initiating Member's Interest at the Interest Price of the
Initiating Member, or to sell its own Interest to the Initiating Member at the
Interest Price of the Initiating Member. Failure by the Responding Member to
deliver written notice of such election within the 120-day Period shall
constitute an election by the Responding Member to sell its Interest in the
Company to the Initiating Member; PROVIDED, HOWEVER, that the 120-day Period
shall be tolled for a period not to exceed the earlier to occur of (a) the
issuance of the Independent Appraiser's (as defined below) report or (b) sixty
(60) days, in the event that the Responding Member properly exercises its right
to seek an appraisal pursuant to SECTION 12.1(E). Notwithstanding the
foregoing, in the event that the impasse over a Major Decision is caused by
Columbia's disapproval of the equity contribution required from the Company
pursuant to the transaction proposed by MCHP, then Columbia, within thirty (30)
days from its receipt of an Impasse Notice from MCHP, shall have the right to
deliver to MCHP a written notice of Columbia's disapproval of such equity
contribution requirements (the "Disapproval Notice"). MCHP, upon receipt of
such Disapproval Notice within the requisite thirty (30) day period, shall, for
a period of sixty (60) days from MCHP's receipt of the Disapproval Notice, and
prior to delivering a Buy-Sell Notice to Columbia, use good faith efforts to
assist Columbia in obtaining market rate financing for Columbia's portion of the
equity contribution required from the Company pursuant to the transaction
proposed by MCHP; PROVIDED, HOWEVER, that MCHP's failure to obtain such
financing on behalf of Columbia shall not limit MCHP in the timely exercise of
its rights as set forth herein.
(b) Upon the making (or deemed making) of the election to buy or
sell by the Responding Member, the Members shall be deemed to have entered into
a binding agreement for the sale and purchase of the Property and the selling
Member's Interest in the Company. Within ten (10) days of the Initiating
Member's receipt of the Responding Member's election notice (or after the
expiration of the 120-day Period if no election notice was given), the Members
shall select a mutually acceptable closing date, which shall be a date not more
than thirty (30) days thereafter.
(c) At the closing, the selling Member shall execute such
instruments and documents in form and substance as are reasonably acceptable to
counsel to the purchasing Member and as are necessary or appropriate to transfer
the interest of the selling Member in the Company to the purchasing Member (or
its designee) free and clear of all liens, claims and encumbrances (other than
those created thereon in order to secure any indebtedness of the Company), and
to withdraw from the Company, against receipt by the selling Member, in good
funds, of the Interest Price of the selling Member and releases and/or
indemnifications provided below, and the selling Member shall thereafter have no
further right, title or interest in the Company, the Real Property, or any other
assets of the Company.
(d) Intentionally Deleted.
27
(e) In the event that the Responding Member disagrees with the
Initiating Member's calculation of the Price and/or the Interest Price, the
Responding Member shall have the right within thirty (30) days after its receipt
of the Initiating Member's Buy-Sell Notice, to demand in writing that the Price
and/or the Interest Price be determined by three (3) disinterested independent
appraisers. One such appraiser shall be chosen by the Initiating Member who
shall bear the cost of such appraiser. The second appraiser shall selected by
the Responding Member who shall bear the cost of such appraiser. The third
appraiser (the "Independent Appraiser") shall be chosen by the two appraisers
previously chosen by the parties and the cost of such Independent Appraiser
shall be shared equally by the parties. The calculation of the Independent
Appraiser shall be based solely upon the information set forth in the Buy-Sell
Backup; and shall be binding upon the Members unless (i) the Independent
Appraiser's calculation of the Price and/or the Interest Price differs from the
Initiating Member's calculation by less than two percent (2.0%), or (ii) the
Independent Appraiser's written report is not delivered to the Members within
sixty (60) days from the date the Responding Member demands that the Price
and/or the Interest Price be determined by the appraisal method set forth above,
in either of which events the Initiating Member shall have the right to select
the Price and/or Interest Price to be used herein.
(f) In the event that the Responding Member disputes only the
Initiating Member's calculation of the Interest Prices, then such dispute shall
be resolved by a single arbitrator, which shall be one of the "big 6" accounting
firms, pursuant to binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.
(g) A Member's failure to close as set forth above shall
constitute a default under this Agreement, which default shall entitle the
non-defaulting Member to any and all remedies available at law or in equity,
including, without limitation, specific performance.
(h) Notwithstanding anything herein to the contrary, in the event
that MCHP is the Initiating Member at any time during the first three (3) years
from the date hereof, Columbia shall have the right, within seventy-five (75)
days from receipt of MCHP's Buy-Sell Notice, to remit to MCHP all Capital
Contributions made by MCHP, in which event MCHP shall immediately withdraw from
the Company and shall be released from any and all Losses arising under or
relating to this Agreement from and after the date of such withdrawal.
ARTICLE XIII
MISCELLANEOUS
13.1 NOTICES. Any notice, demand, election or other communication
(hereinafter called a "notice") that, under the terms of this Assignment or
under any statute, must be or may be given by the parties hereto shall be in
writing and shall be given by mailing the same by
28
certified or registered mail, return receipt requested, postage-prepaid, by hand
delivery or by reputable overnight courier, addressed as follows:
To MCHP:
c/o ▇▇▇▇-▇▇▇▇ Realty Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
with separate notices to:
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Chief Executive Officer,
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., General Counsel
and Executive Vice President
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Pryor, Cashman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Columbia:
Columbia Development Company, LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, Hanlon, Doherty, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
All copies of notices to be sent to any party hereunder shall be sent
in the same manner as required for notices. Either party may designate, by
notice in writing to the other, a
29
new or other address to which notices shall thereafter be given. Any notice
given hereunder (other than a notice of a new address or additional address for
notice purposes) shall be deemed given (i) when hand delivered, upon receipt;
(ii) when mailed, four (4) business days after being deposited with the United
States Postal Service; (iii) when overnighted, one (1) business day after being
deposited with an overnight courier service as hereinabove provided. Any notice
of a new or additional address for notice purposes shall be deemed given on the
date upon which the same is received by the addressee thereof. Counsel for any
Member shall be authorized to send notices on behalf of such Member.
13.2 COMPLETE AGREEMENT; INTEGRATION. This Agreement fully sets
forth all of the agreements and understandings of the parties with respect to
the Company and supersedes any prior agreements of the parties. There are no
representations, agreements, arrangements or understandings, oral or written,
among the parties relating to the subject matter of this Agreement which are not
expressly set forth herein.
13.3 OTHER INTERESTS OF THE MEMBERS. Any Member, as well as any of
its Affiliates, may engage in and possess an interest in other business ventures
of every nature and description, independently or with others, including the
real estate business in all its aspects, and neither the Company nor any other
Member shall have any rights in and to such independent ventures or the profits,
losses, income or distributions derived therefrom, including, without
limitation, the development of a multi-tower office, retail hotel and/or
residential complex on the Harborside site by CHFA or its designee.
13.4 LIMITATION ON MEMBER LIABILITY. The Members shall not have
any liability for the obligations or liabilities of the Company except to the
extent expressly provided in the Act.
13.5 AMENDMENTS. This Agreement may be amended only upon the
Unanimous Consent of the Members.
13.6 SEVERABILITY. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, the applicable laws,
ordinances, rules and regulations of the jurisdictions in which the Company
engages in business. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall, for any reason and to any extent,
be held to be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected, but rather shall be enforced to the full extent permitted by law.
13.7 RATIFICATION. Each person who becomes a Member in the Company
after the execution and delivery of this Agreement shall, by becoming a Member,
be deemed thereby to ratify and agree to all prior actions taken by the Company
and the Members.
13.8 BINDING UPON SUCCESSORS. This Agreement shall be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns, and shall inure to the benefit of the parties hereto and
their respective heirs, executors, administrators,
30
successors and permitted assigns. This Agreement shall become effective upon
its execution and delivery by the Members.
13.9 RIGHTS OF THIRD PARTIES. None of the provisions of this
Agreement shall be construed as having been made for the benefit of any creditor
of either the Company or any of the Members, nor shall any of such provisions be
enforceable (except as otherwise required by law) by any person not a party
hereto.
13.10 GOVERNING LAW. Irrespective of the place of execution or
performance, the validity and construction of this Agreement shall be governed
by the laws of New Jersey.
13.11 CAPTIONS. The captions, headings and titles contained in this
Agreement are solely for convenience of reference and shall not affect the
interpretation of this Agreement or of any provision hereof.
13.12 AFFILIATE TRANSACTIONS. The Members shall not cause or permit
the Company to enter into any agreement or arrangement with a Member or any
Affiliate thereof, other than on commercially reasonable arms-length terms
acceptable to the Members, which shall be entitled to prior notice of such
agreements or arrangements and a copy of the applicable contract for review.
13.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one instrument.
13,14 SENSE AND GENDER OF WORDS. All terms and words used in this
Agreement, regardless of the sense or gender in which they are used, shall be
deemed to include each other sense and gender unless the context requires
otherwise.
13.15 VENUE AND JURISDICTION. The Members agree to be subject to
the juris-diction of the courts of New Jersey and the Federal District Court for
the State of New Jersey.
13.16 MEMBER'S REPRESENTATIVES. For the purposes of this Agreement,
both ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ jointly shall be the Member's
Representatives authorized to make decisions on behalf of Columbia and its
transferees, successors and assigns, such that MCHP and its agents and employees
shall be entitled to rely on decisions jointly made by ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ as binding upon Columbia, its transferees, successors and assigns.
For the purposes of this Agreement, any duly elected officer or director of MCHP
shall be the Member's Representative authorized to make decisions on behalf of
MCHP, such that Columbia and its agents and employees shall be entitled to rely
on decisions made by such officer or director as binding upon MCHP, it
successors and assigns.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
31
IN WITNESS WHEREOF, the parties hereto have executed and acknowledged
this Agreement as of the date first above written.
M-C HARSIMUS PARTNERS L.P.
BY: ▇▇▇▇-▇▇▇▇ REALTY, L.P., ITS GENERAL PARTNER
By: ▇▇▇▇-▇▇▇▇ Realty Corporation, its General
Partner
By:
----------------------------
Name:
Title:
COLUMBIA DEVELOPMENT COMPANY, L.L.C.
BY: COLUMBIA CHARTER GROUP, L.L.C.
By:
----------------------------
Name:
Title: Member
BY: ATLANTIS CHARTER COMPANY, L.L.C.
By:
----------------------------
Name:
Title: Member
32
EXHIBIT A
MEMBERS' INITIAL CAPITAL CONTRIBUTIONS
Each of MCHP and Columbia, shall make the following contributions as their
initial Capital Contributions to the Company:
MCHP $ 1,000.00
Columbia 1,000.00
----------
Total $ 2,000.00
==========
33
EXHIBIT B
SCHEDULE OF ENCUMBRANCES
34
EXHIBIT C
MEMBERS' INTERESTS IN THE COMPANY PURSUANT TO SECTION 4.2
MCHP 50%
Columbia 50%
-----
Total 100%
=====
35