AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
OTAY LAND COMPANY, LLC
Limited Liability Company Agreement of OTAY LAND COMPANY,LLC (the
"LLC") dated as of March 31, 1999 among HOMEFED CORPORATION ("HFC") and LEUCADIA
NATIONAL CORPORATION ("LUK," and collectively, the "Members").
W I T N E S E T H :
WHEREAS, the Members desire to enter into this amended and restated
Agreement (the "LLC Agreement") to establish their respective rights and
obligations with respect to the LLC;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and provisions hereinafter contained, the Members hereby agree as
follows:
ARTICLE I
ORGANIZATIONAL AND OTHER MATTERS
SECTION 1.01. Formation; Admission. The LLC has been organized under
the provisions of the Limited Liability Company Act of the State of Delaware
(the "LLCA") by filing a Certificate of Formation with the Secretary of State of
the State of Delaware. Each of HFC and LUK has been admitted to the LLC as a
Member. All Members are required to hold an interest in the LLC; any failure to
hold such an interest shall result in immediate termination of one's membership
in the LLC.
SECTION 1.02. Name. The name of the LLC shall be
OTAY LAND COMPANY, LLC and the business of the LLC shall be
conducted under such name.
SECTION 1.03. Principal Office. The principal
office of the LLC shall be at 000 Xxxx Xxxxx Xxxxxx, Xxxx
XXXX00...:\00\00000\0000\000\XXX0000X.00X
Xxxx Xxxx, Xxxx 00000, or such other place as may from time to time be
determined.
SECTION 1.04. Term. The LLC shall commence on the date of filing of
the Certificate of Formation and shall continue until terminated as provided in
this Agreement or in the Certificate of Formation, as each such document may be
amended from time to time.
SECTION 1.05. Limited Liability. Except as otherwise provided by the
LLCA, the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be the debts, obligations and liabilities
solely of the LLC, and the Members shall not be obligated personally for any of
such debts, obligations or liabilities solely by reason of being a Member.
ARTICLE II
PURPOSE AND POWERS
SECTION 2.01. Purpose of the LLC. Except as may be restricted by
this Agreement, the LLC may carry on any lawful business, purpose or activity
permitted by the LLCA.
SECTION 2.02. Powers of the LLC. The LLC shall have the power to do
any and all acts reasonably necessary, appropriate, proper, advisable,
incidental or convenient to or for the furtherance of the purpose and business
described herein and for the protection and benefit of the LLC.
ARTICLE III
FUNDING CONTRIBUTIONS
SECTION 3.01. Funding Contributions. An initial investment of
$10,000,000 in the LLC has been made by HFC ("Capital"). Any additional
investments in the LLC to be made by HFC shall be treated as additional Capital.
An initial investment of $1,000 in the LLC has been made by LUK ("Preferred
Capital"). Any additional investments in the LLC to be made by LUK shall be
treated as additional Preferred Capital. Preferred Capital contributed by LUK
shall be entitled to receive a preferred return pursuant to Article IV hereof.
SECTION 3.02. Capital Accounts. The LLC shall maintain for each
Member a separate Capital Account.
2
SECTION 3.03. No Interest. Except as otherwise expressly provided in
this Agreement, no interest shall be paid by the LLC on contributions of either
Capital or Preferred Capital, balances in the Members' Capital Accounts or any
other funds contributed to the LLC or distributed or distributable by the LLC
under this Agreement.
SECTION 3.04. No Withdrawal; Return of Contributions. No Member
shall have the right to withdraw any portion of such Member's Capital Account
without the consent of LUK. Except as required by the LLCA, no Member shall be
personally liable to any other Member for the return of any capital or any
additions thereto, it being agreed that any return of capital as may be made
from time to time shall be made soley from the assets of the LLC and only in
accordance with the terms hereof.
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS
SECTION 4.01. Distribution of Profits. All proceeds received by the
LLC and available for distribution shall be distributed as follows, in the
following order of priority:
(i) to pay LUK an annual minimum cumulative preferred return of 10%
on all Preferred Capital provided by LUK;
(ii) to pay LUK an annual minimum cumulative preferred return of 2%
on all Preferred Capital provided by LUK; provided that this 2% return
shall be payable by the LLC only out of and to the extent of profits;
(iii) to repay all Preferred Capital provided by LUK, it being
understood that upon payment in full of the preferred returns pursuant to
(i) and (ii) above and repayment in full of all Preferred Capital the
interest in the LLC represented by such Preferred Capital shall be
extinguished; and
(iv) any remaining funds will be distributed to the remaining Member
or Members in accordance with their capital accounts.
SECTION 4.02. Allocation of Profits and Losses. Profits and losses
of the LLC shall be allocated among the Members in accordance with applicable
federal tax laws.
3
ARTICLE V
MANAGEMENT OF THE LLC
SECTION 5.01. Management. Subject to Sections 5.02 and 5.03 hereof,
the management of the business and affairs of the LLC shall be vested in the
"Manager" who shall be selected by the majority vote of the Members. However,
the Manager may be removed by any Member for cause. The initial Manager of the
LLC shall be HFC. The Manager shall have the power to do any and all acts
necessary or convenient for the furtherance of the purpose of the LLC described
in this Agreement, including all powers, statutory or otherwise, possessed by
members of a limited liability company under the LLCA. Xxxxxx X. Xxxxxxx is
hereby designated as an authorized person, within the meaning of the LLCA, to
execute, deliver and file the Certificate of Formation and any amendments and/or
restatements thereof required by law.
SECTION 5.02. Authorized Officers. The Members may elect by a
majority vote officers with such titles as the Members deem appropriate. The
initial officers of the LLC shall be:
Xxxx Xxxxxx President
Xxxx Xxxx Treasurer and Secretary
Xxxxxxx Bienvenue Vice President
Xxxxxx X. Orlando Vice President
Xxxx Xxxxxx Vice President
The foregoing officers shall serve in such office until removed and replaced by
the majority vote of the Members.
SECTION 5.03. Limitations on Management. Notwithstanding anything
else to the contrary contained in this Agreement, the unanimous vote of all
Members shall be required to authorize (i) any borrowing by the LLC and (ii) the
encumbrance of any assets of the LLC.
SECTION 5.04. Liability of Members; Indemnification.
(a) To the fullest extent permitted by the laws of Delaware, the LLC
(i) shall indemnify and hold harmless LUK and its respective officers, directors
and shareholders for so long as LUK holds a preferred capital interest in the
LLC, and (ii) may indemnify and hold harmless each Member and its respective
officers, directors, shareholders, members or partners, and each officer of the
LLC (each of
4
the parties listed in (i) and (ii), an "Indemnitee"), from and against any and
all losses, claims, demands, costs, damages, liabilities (joint or several),
expenses of any nature (including reasonable attorneys' fees and disbursements),
judgments, fines, settlements and other amounts ("Damages") arising from any and
all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which an Indemnitee may be involved, or
threatened to be involved, as a party or otherwise, arising out of or incidental
to the business of the LLC, regardless of whether an Indemnitee continues to be
a Member or an officer, director, shareholder, member or partner of such Member
at the time any such liability or expense is paid or incurred, except for any
Damages based upon, arising from or in connection with any act or omission of an
Indemnitee committed without authority granted pursuant to this Agreement or in
bad faith or otherwise constituting willful misconduct.
(b) Expenses (including reasonable attorneys' fees and
disbursements) incurred in defending any claim, demand, action, suit or
proceeding, whether civil, criminal, administrative or investigative, subject to
Section 5.04(a) hereof, may be paid (or caused to be paid) by the LLC in advance
of the final disposition of such claim, demand, action, suit or proceeding upon
receipt of an undertaking by or on behalf of the Indemnitee to repay such amount
if it shall ultimately be determined, by a court of competent jurisdiction from
which no further appeal may be taken or the time for any appeal has lapsed (or
otherwise, as the case may be), that the Indemnitee is not entitled to be
indemnified by the LLC as authorized hereunder or is not entitled to such
expense reimbursement.
(c) The indemnification provided by Section 5.04(a) hereof shall be
in addition to any other rights to which an Indemnitee may be entitled under any
agreement or unanimous vote of the Members, as a matter of law or otherwise,
both (i) as to action in the Indemnitee's capacity as a Member or as an officer,
director, shareholder, member or partner of a Member, and (ii) as to action in
another capacity, and shall continue as to an Indemnitee who has ceased to serve
in such capacity and shall inure to the benefit of the heirs, successors,
assigns, administrators and personal representatives of the Indemnitee.
(d) Any indemnification hereunder shall be satisfied only out of the
assets of the LLC, and the Members shall not be subject to personal liability by
reason of these indemnification provisions.
5
(e) An Indemnitee shall not be denied indemnification in whole or in
part under Section 5.04(a) hereof because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(f) No Member shall be liable, in damages or otherwise, to the LLC
or any other Member for nay act or omission performed or omitted to be performed
by it in good faith pursuant to the authority granted to such Member this
Agreement of the LLCA.
ARTICLE VI
TRANSFER OF MEMBERSHIP INTERESTS
Transfer Restrictions. No transfer, except with the unanimous
consent of the Members, of all or any portion of a Member's interest in the LLC
shall be permitted; provided that LUK may transfer its interest in the LLC to
any subsidiary of LUK.
ARTICLE VII
DISSOLUTION AND LIQUIDATION
SECTION 7.01. Bankruptcy. The LLC shall be dissolved and its affairs
shall be wound up upon the Bankruptcy (as defined below) of the LLC or any
Member; provided, however, that upon the occurrence of any such event, a
majority in interest of the Members may, within 90 days thereafter, agree to
continue the business of the LLC, upon all of the terms and provisions of this
Agreement. For purposes of this Agreement, "Bankruptcy" means (i) the filing of
a voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of debts under title 11 of the United States Code, as
amended (the "Bankruptcy Code") (or corresponding provisions of future laws) or
any other federal, state or foreign insolvency law, or the filing of an answer
consenting to or acquiescing in any such petition; (ii) the making of any
assignment for the benefit of creditors or the admission in writing of the
inability to pay debts as they mature; or (iii) the expiration of 60 days after
the filing of an involuntary petition under the Bankruptcy Code (or
corresponding provisions of future laws) seeking an application for the
appointment of a receiver, or an involuntary petition seeking liquidation,
reorganization,
6
arrangement or readjustment of debts under any other federal, state or foreign
insolvency law, unless the same shall have been vacated, set aside or stayed
within such 60-day period.
SECTION 7.02. Effect of Dissolution. Upon dissolution, subject to
the Members' right to elect to continue the business of the LLC pursuant to
Section 7.01 hereof, the LLC shall cease carrying on its business but shall not
terminate until the winding up of the affairs of the LLC is completed, the
assets of the LLC shall have been distributed as provided below and a
Certificate of Cancellation of the LLC under the LLCA has been filed with the
Secretary of State of the State of Delaware.
SECTION 7.03. Liquidation Upon Dissolution. Upon the dissolution of
the LLC, subject to the Members' right to elect to continue the business of the
LLC pursuant to Section 7.01 hereof, sole and plenary authority to effectuate
the liquidation of the assets of the LLC shall be vested (a) in LUK for so long
as LUK's Preferred Capital interest in the LLC shall remain outstanding, and if
such Preferred Capital interest shall have been extinguished, (b) in HFC, which
party shall have full power and authority to sell, assign and encumber any and
all of the LLC's assets and to wind up and liquidate the affairs of the LLC in
an orderly and business-like manner. The proceeds of liquidation of the assets
of the LLC distributable upon a dissolution and winding up of the LLC shall be
applied in the following order of priority:
(i) first, to the creditors of the LLC, including creditors
who are Members, in the order of priority provided by law, in satisfaction
of all liabilities and obligations of the LLC (of any nature whatsoever,
including, without limitation, fixed or contingent, matured or unmatured,
legal or equitable, secured or unsecured), whether by payment or the
making of reasonable provision for payment thereof; and
(ii) thereafter, in accordance with the provisions of Article
IV hereof.
SECTION 7.04. Winding Up and Certificate of Cancellation. The
winding up of the LLC shall be completed when all of its debts, liabilities, and
obligations have been paid and discharged or reasonably adequate provision
therefor has been made, and all of the remaining property and assets of the LLC
have been distributed to the Members. Upon the completion of the winding up of
the LLC, a
7
Certificate of Cancellation of the LLC shall be filed with the Secretary of
State of the State of Delaware.
ARTICLE VIII
AMENDMENT
Amendment Procedures. This Agreement may be amended or modified only
by a written instrument executed by each Member. In addition, the terms or
conditions hereof may be waived by a written instrument executed by the party
waiving compliance.
ARTICLE IX
MISCELLANEOUS
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first written above.
HOMEFED CORPORATION
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: President
LEUCADIA NATIONAL CORPORATION
By: /s/ Xxxxxx X. Orlando
----------------------------------
Name: Xxxxxx X. Orlando
Title: Vice President
9
