SECOND AMENDMENT TO OPERATING AGREEMENT
OF RED CANYON AT PALOMINO PARK LLC
THIS SECOND AMENDMENT TO OPERATING AGREEMENT OF RED CANYON AT PALOMINO PARK
LLC (this "Second Amendment") is made as of the 16th day of November, 1998, by
and between XX XXXX, an individual ("Xxxx"), and WELLSFORD PARK HIGHLANDS CORP.,
a Colorado corporation ("WPHC").
RECITALS
X. Xxxx and WPHC constitute all of the members (collectively, the
"Members") of Red Canyon at Palomino Park LLC, a Colorado limited liability
company (the "Company"), which is governed by that certain Operating Agreement
of Red Canyon at Palomino Park LLC dated as of April 17, 1996, as amended by
that certain First Amendment to Operating Agreement dated May 19, 1997, between
Xxxx and WPHC (collectively, the "Operating Agreement").
B. The Members now desire to further amend the Operating Agreement as set
forth herein.
C. Capitalized terms not otherwise defined herein shall have the
definitions set forth in the Operating Agreement.
NOW, THEREFORE, for and in consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Xxxx and WPHC hereby agree follows:
1. The second sentence of Section 1(bk) of the Operating Agreement, with
respect to the definition of Net Operating Income, is hereby amended to read in
its entirety as follows:
Notwithstanding the foregoing, in connection with the calculation of the
Completion Fee and the Incentive Fee, Net Operating Income shall be determined
on an accrual basis for the relevant period with the following additional
adjustments: if property taxes do not fully reflect the completion of the
Project, then the property taxes shall be increased to the amount of property
taxes that would have been assessed had the Project been completed and included
in the calculation of the property taxes. With respect to calculating the
Completion Fee only, such fully-assessed tax estimate shall be applied on a
per-building basis beginning only upon receipt of a certificate of occupancy for
each building.
2. 7.6 of the Operating Agreement is hereby renumbered as Section 7.7 and
the following is hereby inserted as a new Section 7.6:
7.6 Completion Fee. The Company shall pay Xxxx at Final Closing a fee (the
"Completion Fee") equal to 100% of Net Operating Income for the period ending
with Substantial Completion, less an amount equal to all interest accrued or
paid on the Construction Loan from and after the earlier of (i) the date on
which Budgeted Construction Loan Interest is exhausted, or (ii) the Date of
Substantial Completion; provided, however, that in no event shall the Completion
Fee exceed $500,000.
3. Headings and Captions. The headings and captions of this Second
Amendment are inserted for convenience only and are in no way intended to
describe, interpret, define, or limit the scope, extent or intent of this Second
Amendment, the First Amendment, the Operating Agreement, or any provisions
thereof.
4. Full Force and Effect. The Operating Agreement, as specifically amended
herein, is hereby ratified by the Members and shall remain in full force and
effect.
5. Counterparts. This Second Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which,
when taken together, shall constitute one agreement binding on the parties
hereto, notwithstanding that all the parties may not have signed the same
counterpart. Signature pages from one counterpart may be removed and attached to
another counterpart to create one fully-executed document.
(Remainder of this page intentionally left blank)
IN WITNESS WHEREOF, the parties hereto, being all of the Members of the
Company, have executed this Second Amendment as of the date first written above.
/s/ Xx Xxxx
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Xx Xxxx
WELLSFORD PARK HIGHLANDS CORP., a Colorado corporation
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice President
