OPERATING AGREEMENT
OF
INLAND REAL ESTATE COLUMN I, L.L.C.
Dated October 19, 1998
By and Between
INLAND REAL ESTATE COLUMN I, L.L.C. an Illinois limited liability company,
and
INLAND REAL ESTATE CORPORATION, a Maryland corporation
INDEX
PAGE
RECITALS 4
ARTICLE I DEFINITIONS 4
ARTICLE II FORMATION 7
2.1 Formation 7
2.2 Agreement 7
2.3 Name 7
2.4 Term 7
2.5 Registered Agent and Office 8
2.6 Principal Office 8
2.7 Qualifications 8
ARTICLE III NATURE OF BUSINESS 8
ARTICLE IV LIMITATIONS 8
ARTICLE V TITLE TO COMPANY PROPERTY 9
ARTICLE VI SEPARATENESS PROVISIONS 9
ARTICLE VII MANAGEMENT OF THE COMPANY 10
ARTICLE VIII AMENDMENTS TO ARTICLES OF ORGANIZATION 10
ARTICLE IX ALLOCATIONS AND DISTRIBUTIONS 10
9.1 General Rules 11
9.2 Distribution Net Cash Flow 11
9.3 Allocation of Profit and Loss 11
9.4 Maintenance of Capital Accounts 11
9.5 Restricted Use of Company Property 11
ARTICLE X TAXES 11
10.1 Elections 11
10.2 Tax Matters Partner 11
10.3 Method of Accounting 11
ARTICLE XI DISSOLUTION AND WINDING UP 12
11.1 Dissolution 12
11.2 Effect of Dissolution 12
11.3 Distribution of Assets upon Dissolution 12
11.4 Winding Up and Articles of Dissolution 12
ARTICLE XII MISCELLANEOUS PROVISIONS 12
12.1 Entire Agreement 12
12.2 Construction 12
12.3 Headings 13
12.4 Application of Illinois Law 13
12.5 Severability 13
12.6 Benefit 13
EXHIBIT A 14
EXHIBIT B 15
OPERATING AGREEMENT
of
INLAND REAL ESTATE COLUMN I, L.L.C.
(an Illinois limited liability company)
THIS OPERATING AGREEMENT of INLAND REAL ESTATE COLUMN I, L.L.C., an Illinois
limited liability company (the "Company"), is entered into pursuant to the
Illinois Limited Liability Company Act (the "Act"), and shall be effective as
of the 19th day of October, 1998, by and between the Company and the entity
executing this Agreement as its Sole Member.
RECITALS
A. The Company has been formed for the sole purpose of acquiring, owning,
operating, managing and selling those certain parcels of real estate described
on Exhibit B and for such activities as are necessary, incidental or
appropriate in connection therewith and the acquisition, ownership, operation,
and management and sale of any shopping center acquired for the purpose of
substituting debt on any of the parcels.
B. The Company was formed by filing the Certificate of Formation of the
Company with the Secretary of State on the date first set forth above.
C. The parties hereto agree that the terms of this Agreement not
inconsistent with the laws of the State of Illinois or the Certificate shall
govern, regulate and manage the affairs of the Company.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise specified herein, the following terms shall have the following
meanings:
"Act" shall mean the Illinois Limited Liability Company Act, 805 ILCS 180/1-1
et seq., and all amendments thereto, including the Amendatory Act of 1997.
"Agreement" shall mean this Operating Agreement including all amendments to
this Agreement which are adopted in accordance with this Agreement and the Act.
"Business Day" shall mean any day other than Saturday, Sunday or any legal
holiday observed in the State.
"Capital Contribution" shall mean the amount of money and the fair market value
of any Property other than money (determined on the date of contribution)
contributed to the Company with respect to the Membership Interest held by the
Sole Member at any time. Schedule "A" attached hereto and made a part hereof
sets forth the initial Capital Contribution by, and the initial Membership
Interests of, the Sole Member.
"Certificate" shall mean the Articles of Organization of the Company as
properly adopted, amended and restated from time to time and filed with the
Secretary of State.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
"Company" shall mean Inland Real Estate Column I, L.L.C., a limited liability
company formed under the laws of Illinois, and any successor limited liability
company.
"Company Property" shall mean any Property owned by the Company.
"Distribution" shall mean a transfer of Property to the Sole Member on account
of a Membership Interest.
"Dissolution Event" shall mean an event, the occurrence of which will result in
the dissolution of the Company.
"Membership Interest(s)" shall mean the limited liability company interests of
the Sole Member, including the right to any and all benefits to which such
Member may be entitled in accordance with this Agreement, and the obligations
as provided in this Agreement and the Act.
"Net Cash Flow" shall mean for each Fiscal Year or other period, the sum of all
cash received by the Company during such period (excluding Capital
Contributions and proceeds), plus any undistributed Net Cash Flow from all
prior periods, less the sum of: (i) all expenses paid by the Company during
such period (excluding depreciation and other non-cash expenses and
Distributions); (ii) amortization of principal of loans during such period;
(iii) capital expenditures made in the ordinary course of the Company's
business (except to the extent paid with proceeds of loans); and (iv)
allowances for reserves.
"Notice" shall be in writing. Any Notice shall be considered given on the date
of service if served personally on the Person to whom notice is to be given by
commercial messenger delivery service with signature verification of delivery
or by other verified means of personal delivery, on the next Business Day if
delivered by overnight courier service and on the third Business Day if
delivered by United States mail, certified or registered mail, postage prepaid,
return receipt requested. Any Notice to the Company shall be addressed to the
Sole Member at the address of the Principal Office.
"Organization" shall mean a Person other than a natural person. Organization
includes, without limitation, corporations (both non-profit and other
corporations), partnerships (both limited and general), joint ventures, limited
liability companies, trusts and unincorporated associations, but the term does
not include joint tenancies and tenancies by the entirety.
"Person" shall mean any natural person or business entity.
"Principal Office" shall mean the principal office as described in Article II
hereof.
"Proceeding" shall mean any judicial or administrative trial, hearing or other
activity, civil, criminal or investigative, the result of which may be that a
court, arbitrator or governmental agency may enter a judgment, order, decree or
other determination which, if not appealed and reversed, would be binding upon
the Company, the Sole Member or other Person subject to the jurisdiction of
such court, arbitrator or governmental agency.
"Proceeds" shall mean all cash received by the Company in the ordinary course
of its business, excluding Capital Contributions and proceeds of loans.
"Profits" and "Losses" shall mean, for each fiscal year or other period, an
amount equal to the Company's taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separated pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(i) any income of the Company that is exempt from federal income tax and
not otherwise taken into account in computing Profits or Losses pursuant
to this definition shall be added to such taxable income or loss; and
(ii) any expenditure of the Company described in Code Section 705(a)(2)(B)
or treated as a Code Section 705(a)(2)(B) expenditure pursuant to
Treasury Regulations Section 1.704-1 (b)(2)(iv)(i), and not otherwise taken
into account in computing Profits or Losses pursuant to this definition shall
be subtracted from such taxable income or loss.
"Property" shall mean any property, real or personal, tangible or intangible,
including money and any legal or equitable interest in such property, but
excluding services and promises to perform services in the future.
"Resignation" shall mean the act by which a Sole Member voluntarily ceases to
be a Sole Member pursuant to Section 4.8 hereof.
"Secretary of State" shall mean the Secretary of State of Illinois.
"Sole Member" shall mean Inland Real Estate Corporation, a Maryland
corporation.
"State" shall mean the State of Illinois.
"Taxable Year" shall mean the taxable year of the Company as determined
pursuant to Code Section 706. The Taxable Year of the Company begins January 1
and ends December 31.
ARTICLE II
FORMATION
2.1 Formation. The Certificate has been filed with the Secretary of State,
organizing the Company as a limited liability company pursuant to the Act.
2.2 Agreement. For and in consideration of the mutual covenants contained
herein, the Company and the Sole Member hereby agree to the terms and
conditions of this Agreement, as it may from time to time be amended according
to its terms. It is the express intention of the Company and the Sole Member
that this Agreement shall be the sole source of agreement of the parties and,
except to the extent a provision of this Agreement expressly incorporates
federal income tax rules by reference to sections of the Code or Treasury
Regulations or is expressly prohibited or ineffective under the Act, this
Agreement shall govern, even when inconsistent with, or different than, the
provisions of the Act or any other law or rule. To the extent any provision of
this Agreement is prohibited or ineffective under the Act, this Agreement shall
be considered amended to the smallest degree possible in order to make this
Agreement effective under the Act. In the event the Act is subsequently
amended or interpreted in such a way to make any provision of this Agreement
that was formerly invalid valid, such provision shall be considered to be valid
from the effective date of such interpretation or amendment.
2.3 Name. The name of the Company is "Inland Real Estate Column I, L.L.C."
and all business of the Company shall be conducted under that name or under any
other name adopted as an assumed name, but in any case, only to the extent
permitted by applicable law.
2.4 Term. The Company shall be dissolved and its affairs wound up in
accordance with the Act and the Certificate except as may otherwise be provided
herein but in no event later than September 30, 2050.
2.5 Registered Agent and Office. The registered agent for the service of
process and the registered office shall be that Person and location reflected
in the Certificate as filed in the office of the Secretary of State. The Sole
Member, may, from time to time, change the registered agent or office through
appropriate filings with the Secretary of State. In the event the registered
agent ceases to act as such for any reason or the registered office shall
change, the Sole Member shall promptly designate a replacement registered agent
or file a notice of change of address, as the case may be. If the Sole Member
shall fail to designate a replacement registered agent or change of address of
the registered office, the Members may designate a replacement registered agent
or file a notice of change of address.
2.6 Principal Office. The Principal Office of the Company shall be located at
0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx, XX 00000 or at such other location as the
Sole Member shall determine.
2.7 Qualifications. The Company may qualify to do business in any states
which recognize limited liability companies.
ARTICLE III
NATURE OF BUSINESS
The Company may engage in any lawful business permitted by the Act or the laws
of any jurisdiction in which the Company may do business and specified in the
Certificate. The Company shall have the authority to do all things necessary
or convenient to accomplish its purpose and operate its business as described
in the Certificate and this Agreement. The Company exists only for the purpose
specified in the Certificate and this Agreement and may not conduct any other
business without the consent of its Member.
ARTICLE IV
LIMITATIONS
Notwithstanding any other provision of this Agreement and any provision of law
that otherwise so empowers the Company, the Company shall not, without the
prior written consent of Column Financial, Inc., or its successors or assigns,
as long as the Loan (herein defined) is outstanding, take any action or do any
of the following except as otherwise provided in the documents evidencing the
Loan:
(a) engage in any business or activity other than those set forth in Article
III;
(b) do any act which would make it impossible to carry on the ordinary
business of the Company, except as otherwise provided in this Agreement and the
Certificate;
(c) borrow money or incur any indebtedness or assume or guaranty any
indebtedness of any other entity, other than normal trade accounts and lease
obligations incurred in the ordinary course of business, or grant consensual
liens on the Company's property; except, however, the Sole Member is hereby
authorized to secure financing (the "Loan") for the Company from Column
Financial, Inc. in such amount and on such terms as such Sole Member may elect,
and to grant a mortgage, deed of trust, lien or liens on the Company's property
to secure such Loan, as well as incur other indebtedness to the extent
expressly authorized pursuant to the documents further evidencing the Loan;
(d) dissolve or liquidate, in whole or in part;
(e) consolidate or merge with or into any other entity or convey or transfer
or lease its property and assets substantially as an entirety to any entity;
(f) institute proceedings to be adjudicated bankrupt or insolvent, or consent
to the institution or bankruptcy or insolvency proceedings against it, or file
a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or a substantial part of property of the
Company, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or take
company action in furtherance of any such action; or
(g) amend the Articles of Organization or this Agreement of the Company.
ARTICLE V
TITLE TO COMPANY PROPERTY
All Company Property shall be owned by the Company as an entity and, insofar as
permitted by applicable law, the Sole Member shall not have any ownership
interest in any Company Property in its individual name or right and, the
membership or other ownership interest in the Company shall be personal
property for all purposes.
ARTICLE VI
SEPARATENESS PROVISIONS
The Company shall:
(a) maintain books and records and bank accounts separate from those of any
other person;
(b) maintain its assets in such a manner that it is not costly or difficult to
segregate, identify or ascertain such assets;
(c) hold itself out to creditors and the public as a legal entity separate and
distinct from any other entity;
(d) hold regular manager and member meetings, as appropriate, to conduct the
business of the Company, and observe all other legal formalities;
(e) prepare separate financial statements and as part of a consolidated group
it will be shown as a separate member of such group on the consolidated group's
tax return;
(f) allocate and charge fairly and reasonably any common employee or overhead
shared with affiliates;
(g) transact all business with affiliates on an arm's-length basis and
pursuant to enforceable agreements;
(h) conduct business in its own name, and use separate stationery, invoices
and checks;
(i) not commingle its assets or funds with those of any other person; and
(j) not assume, guaranty or pay the debts or obligations of any other person.
ARTICLE VII
MANAGEMENT OF THE COMPANY
The business and affairs of the Company shall be managed by or under the
direction of the Sole Member.
ARTICLE VIII
AMENDMENTS TO ARTICLES OF ORGANIZATION
The Company may amend its Articles of Organization at any time to add a new
provision or to change or remove an existing provision, provided that the
Articles of Organization as amended contains only provisions that are required
or permitted in the original Articles of Organization at the time of amendment.
ARTICLE IX
ALLOCATIONS AND DISTRIBUTIONS
9.1 General Rules. Except as otherwise required pursuant to this Agreement,
in its sole discretion, the Sole Member may, from time to time, make
Distributions or return Capital Contributions subject to any restriction in the
Certificate, provided that, if the Company has creditors, no Distribution or
return of Capital Contributions may be made if, after giving effect to the
Distribution, all liabilities of the Company, other than liabilities to the
Sole Member on account of its Membership Interests and liabilities for which
the recourse of creditors is limited to specified Company Property ("Non-
Recourse Liabilities"), exceed the fair value of the assets of the Company,
except that the fair value of Company Property that is subject to a Non-
Recourse Liability shall be included in the assets of the Company only to the
extent that the fair value of that Company Property exceeds that liability.
9.2 Distribution Net Cash Flow. Net Cash Flow for any fiscal year of the
Company, if distributed in the sole discretion of the Sole Member, shall be
distributed entirely to the Sole Member.
9.3 Allocation of Profit and Loss. All Profits and Losses shall be allocated
entirely to the Sole Member.
9.4 Maintenance of Capital Accounts. The Company shall establish and maintain
Capital Accounts in accordance with 704(b) of the Code and the Treasury
Regulations thereunder for each Holder at Company expense.
9.5 Restricted Use of Company Property. The Company Property cannot be used
to pay or satisfy the debts or obligations of the Sole Member without the
written consent of all secured creditors of such assets.
ARTICLE X
TAXES
10.1 Elections. The Sole Member may make any tax elections for the Company
allowed under the code or the tax laws of any state or other jurisdiction
having taxing jurisdiction over the Company, including but not limited to an
election under Section 754 of the Code.
10.2 Tax Matters Partner. The Sole Member shall, from time to time, elect a
tax matters partner who shall act as the tax matters partner of the company
pursuant to Section 6231(a)(7) of the Code and shall take such action as may be
necessary to cause each other Holder to become a notice partner within the
meaning of Section 6223 of the Code.
10.3 Method of Accounting. The records of the company shall be maintained on
either (a) a cash receipts and disbursements method of accounting, or (b) an
accrual method of accounting, as the Sole Member may determine.
ARTICLE XI
DISSOLUTION AND WINDING UP
11.1 Dissolution. The Company shall be dissolved and its affairs wound up,
whenever deemed appropriate, in the sole discretion of the Sole Member.
11.2 Effect of Dissolution. Upon dissolution, the Company shall cease
carrying on business, as distinguished from the winding up of the Company
business, but the Company is not terminated, and continues until the winding up
of the affairs of the Company is completed and the articles of dissolution have
been issued by the Secretary of State.
11.3 Distribution of Assets upon Dissolution. Upon the winding up of the
Company, the Company Property shall be distributed:
(a) first, to creditors, including the Sole Member if it is a creditor, to the
extent permitted by law, in satisfaction of the Company's liabilities,
(except Non-Recourse Liabilities in excess of the fair value of the Company
Property which is secured by such Non-Recourse Liabilities), including the
expenses of liquidation and for the creation of reserves for contingencies
which the Sole Member considers necessary; and
(b) thereafter, to the Sole Member.
11.4 Winding Up and Articles of Dissolution. The winding up of the Company
shall be completed when all debts, liabilities and obligations of the Company
(except as provided in Section 6.3(a) hereof as to Non-Recourse Liabilities)
have been paid and discharged or reasonably adequate provision therefor has
been made, and all of the remaining property and assets of the Company have
been distributed. Upon the completion of winding up of the Company, the
articles of dissolution shall be delivered to the Secretary of State for
filing. The articles of dissolution shall set forth the information required
by the Act.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Entire Agreement. The Agreement, including the Recitals which are hereby
incorporated by this reference, represents the entire agreement between the
Sole Member and the Company.
12.2 Construction. Whenever the singular number is used in this Agreement and
when required by the context, the same shall include the plural and vice-versa.
Whenever, the masculine gender is used in this Agreement and when required by
the context, the same shall include the feminine and neuter genders.
12.3 Headings. The headings in this Agreement are inserted for convenience
only and are in no way intended to describe, interpret, define or limit the
scope, extent or intent of this Agreement or any provision hereof.
12.4 Application of Illinois Law. This Agreement and its interpretation shall
be governed exclusively by its terms and by the laws of the State of Illinois,
and specifically the Act.
12.5 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law
but, if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. If any part of any covenant or
other provision in this Agreement is determined by a court of law to be overly
broad thereby making the covenant unenforceable, the parties hereto agree, and
it is their desire, that the court shall substitute a judicially enforceable
limitation in its place, and that as so modified the covenant shall be binding
upon the parties as if originally set forth herein.
12.6 Benefit. This Agreement shall be binding upon, and inure to the benefit
of, and shall be enforceable by, the heirs, successors, legal representatives
and permitted assignees of the Sole Member and the successors, assignees and
transferees of the Company.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on the
date set forth above.
Sole Member:
Inland Real Estate Corporation, a Maryland corporation
By: /s/Xxxxxxx X. Xxxxxx
Its: Vice President
EXHIBIT A
INLAND REAL ESTATE COLUMN I, L.L.C.
THE SOLE MEMBER'S NAME, CAPITAL CONTRIBUTIONS
AND MEMBERSHIP INTERESTS
MEMBER NAME AND ADDRESS CAPITAL CONTRIBUTIONS MEMBERSHIP INTERESTS
Inland Real Estate Corporation Assets and Liabilities 100%
0000 Xxxxxxxxxxx Xxxx set forth on Exhibit X
Xxx Xxxxx, XX 00000 for the Real Property
legally described on
Exhibit B
EXHIBIT B
ASSETS AND LIABILITIES OF THE REAL ESTATE COMMONLY KNOWN AS:
1. Berwyn Plaza Shopping Center, 0000 X. Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxx and
legally described on Exhibit B-1
2. Rivertree Court Shopping Center, Southeast corner of IL Route 60
(Townline Road) and IL Xxxxx 00 (Xxxxxxxxx Xxxxxx), Xxxxxx Xxxxx, Xxxxxxxx
and legally described on Exhibit B-2
3. Walgreens Store, 000 Xxxxx Xxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx and
legally described on Exhibit B-3
4. Winnetka Commons Shopping Center, Winnetka Avenue and 00xx Xxxxxx Xxxxx,
Xxx Xxxx, Xxxxxxxxx and legally described on Exhibit B-4
5. Woodland Heights Shopping Center, 116-139 and 000-000 Xxxxxx Xxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx and legally described on Exhibit B-5
Exhibits B-1 to B-5, which contains legal descriptions, have been intentionally
omitted.