Exhibit 10.339
TOLLGATE MARKETPLACE
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "AGREEMENT"), dated as of July 19, 2004,
is made by and between CORDISH BEL AIR SQUARE LLC, a Maryland limited liability
company ("HOLDING COMPANY") AND INLAND BEL AIR HC, L.L.C., a Delaware limited
liability company ("INLAND AFFILIATE").
RECITALS
A. Holding Company owns a fifty percent (50%) equity interest in Bel Air
Square Joint Venture, a Maryland general partnership ("SUBSIDIARY"). Subsidiary
is the owner of the following (collectively, the "PROPERTY"): (a) Tollgate
Marketplace, a retail shopping center containing approximately 390,000 square
feet of gross leasable area on approximately 34,678 acres of land located at the
intersection of Maryland Route 24 and U.S. 1, in the Town of Bel Air, County of
Harford, State of Maryland, (b) all of the right, title and interest in and to
the "landlord's interest" in and to all Leases (as defined in Section 4.9.2
below); (c) all improvements located upon the Property (excluding improvements
owned by tenants or providers of utilities); (d) all personal property, if any,
used in connection with the operation of the Property (excluding personal
property owned by tenants or providers of utilities); (e) all shrubs, trees,
plants and other landscaping located upon the Property; (f) all easements,
rights of way, and other rights appurtenant to the Property; and (g) all of the
right, title and interest, if any, in and to the name "Tollgate Marketplace." A
legal description of the parcel of land that is included in the Property (the
"LAND") is set forth on EXHIBIT "A" hereto. The Property serves as collateral
for the loan described on EXHIBIT "B" (the "EXISTING LOAN"). The balance of the
equity interest in Subsidiary is owned by L.I. Development/Armecon Limited
Partnership, a Maryland limited partnership ("WITHDRAWING MEMBER").
B. Simultaneously with the execution of this Agreement, Holding Company
and Withdrawing Member have executed and delivered each other an Agreement to
Reorganize and Retire (the "WITHDRAWING MEMBER AGREEMENT") that is substantially
in the form attached hereto as EXHIBIT "6.1.5".
C. Inland Affiliate is wholly owned by Inland Western Retail Real Estate
Trust, Inc., a Maryland corporation ("INLAND"). On the CLOSING DATE (as that
term is defined in Section 1.7), simultaneously with the Closing, Inland
Affiliate and a Maryland limited liability company to be formed on the Closing
Date by the existing members of Holding Company and to be named Cordish
Tollgate, LLC ("CORDISH AFFILIATE") shall enter into a certain Amended and
Restated Limited Liability Company Agreement attached hereto as EXHIBIT "C" (the
"OPERATING AGREEMENT") concerning Holding Company. Pursuant to and subject to
the terms and conditions of this Agreement, Inland Affiliate will pay and make
the CAPITAL CONTRIBUTION (as that term is defined in Section 1.1 hereof) in
exchange for which Inland Affiliate will become a MEMBER (as defined in the
Operating Agreement) in Holding Company and will receive the Percentage Interest
in Holding Company specified in SCHEDULE A of the Operating Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, and agreements herein contained, and for
Ten and 00/100 Dollars ($10.00) and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Holding Company and
Inland Affiliate agree as follows:
ARTICLE I
CAPITAL CONTRIBUTION
1.1. CAPITAL CONTRIBUTION. On the Closing Date (as that term is defined
in Section 1.7 hereof), in consideration for its admission to Holding Company,
Inland Affiliate shall pay the sum of Seventy Two Million Three Hundred Thousand
and 00/100 Dollars ($72,300,000.00), as increased or decreased by the
adjustments provided for in Section 1.2 hereof (the "CAPITAL CONTRIBUTION") in
accordance with the provisions of this Section 1.1 and Sections 1.3 and 1.5
hereof. The Capital Contribution shall be paid in cash at Closing (as that term
is defined in Section 1.7 hereof.) Escrowee shall be reimbursed equally by the
parties hereto for all of its out-of-pocket expenses.
1.1.1 Notwithstanding any provision or inference herein to the
contrary, each party hereto hereby acknowledges and agrees that Inland Affiliate
intends to fund a portion of the Capital Contribution by causing the Subsidiary,
simultaneously with the CLOSING (as defined below), to borrow funds from an
unrelated third party lender. The proceeds of any such loan shall be deemed to
constitute a portion of the "CAPITAL CONTRIBUTION" for all purposes of this
Agreement and the proceeds of any such loan shall be aggregated with the
proceeds of the Capital Contribution directly paid by Inland Affiliate for all
purposes of this Agreement (including, but not limited to, the provisions of
Section 1.5 hereof and EXHIBIT "1.5" attached hereto). Such borrowing, however,
shall not be a condition to the Closing.
1.2. ADJUSTMENTS TO CAPITAL CONTRIBUTION. The following items shall be
prorated and adjusted between Holding Company and Inland Affiliate as of the
Closing Date and shall constitute either additions to or reductions of the
Capital Contribution:
1.2.1. RESERVED
1.2.2. REAL PROPERTY TAXES.
1.2.2.1. Real estate property taxes and assessments due
and payable prior to the Closing Date have been paid in full. As a result of
such payment, a portion of the real estate property taxes and assessments
accrued, assessed, and billed against the Property for the fiscal year July 1,
2004 through June 30, 2005 have been paid in advance by Subsidiary (the "TAXES
PAID IN ADVANCE"). At the Closing, the Capital Contribution shall be increased
by an amount calculated as follows: (i) divide the Taxes Paid in Advance by 365,
and (ii) multiply the quotient obtained thereby
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by the number of days from and including the Closing Date through June 30, 2005
(the "POST CONTRIBUTION TAX PERIOD"), and (iii) from the product obtained
thereby, subtract all payments made to Subsidiary by tenants under Leases (and
any other party) attributable to the Post Contribution Tax Period. After the
Closing Date, if Subsidiary or Holding Company receives payments from tenants
under Leases (or any other party) attributable to pre-Closing Date real estate
tax contributions, such amounts shall be remitted to Holding Company. The
Holding Company shall immediately deposit seventy-five percent (75%) of such
amounts in the "OPERATIONS RESERVE" (as that term is defined in Section 6.4 of
the Operating Agreement) and pay twenty-five percent (25%) of the remaining
balance of such amount to Withdrawing Member pursuant to the wire instructions
of Euram, Inc. as set forth on EXHIBIT "1.5" hereto.
1.2.2.2. If any general or special assessments (as contrasted to
ad valorem taxes) are payable in installments, Inland Affiliate shall cause
Subsidiary to continue to pay all such future installments and Holding Company's
only obligation shall be as to installments due prior to the Closing Date with
no obligation to prepay such gross amount and without any reduction in the
Capital Contribution.
1.2.3. RENT. Rent, percentage rent and reimbursements for common
area maintenance charges, insurance premiums and other lease charges (other than
real estate taxes and assessments, which shall be accounted for and prorated as
provided in Section 1.2.2)(collectively, "RENTS") shall be accounted for and
prorated as follows: except as otherwise provided in this Agreement, Inland
Affiliate shall be entitled to all Rents accruing from (including)and after the
Closing Date, regardless of when paid or collected, and all such items, if any,
accruing prior to the Closing Date, regardless of when paid or collected, shall
be deposited and paid as follows: seventy-five percent (75%) of such amount
shall be deposited to the Operations Reserve and the balance shall be paid to
Withdrawing Member (pursuant to the wire instructions of Euram, Inc. as set
forth on EXHIBIT "1.5" hereto) contained in the Escrow Agreement. Thus if the
Closing Date is September 15, 2004, one-half of the minimum rent collected for
the month of September, 2004 will be credited to Inland Affiliate and the
balance shall be deposited into the Operations Reserve and paid to the
Withdrawing Member, as provided above. The parties further agree that percentage
rent for each tenant shall be prorated post closing based upon the pre-and post
Closing allocations described above. There shall be no credit with respect to
any unpaid accrued Rents owing from tenants of the Property as of the Closing
Date. Holding Company shall not retain in the Operations Reserve any security
deposits or prepaid rent to offset any unpaid accrued rent or other unpaid
amounts. With respect to any such unpaid amounts (x) Subsidiary, acting
exclusively by and through Cordish Affiliate shall retain the right to xxx the
applicable tenant for collection of any such unpaid amounts (provided the costs
of suit are funded exclusively from the Operations Reserve) and, to the extent
the applicable lease permits, collection costs and interest (and, in such
regard, Inland Affiliate agrees to cooperate reasonably with any efforts to
collect the aforesaid unpaid amounts; provided, however, Cordish Affiliate shall
not be entitled to xxx for possession or terminate any Lease), and provided
further that Inland Affiliate shall be reimbursed for any reasonable cost or
expense incurred by Inland Affiliate in connection with such cooperation, and
Subsidiary, acting exclusively by and through Cordish Affiliate, shall have the
right and power to prosecute and settle such suits, and (y) if any
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such unpaid amounts are collected, such amounts shall be promptly deposited into
the Operations Reserve (and in such regard, if any amount is received from a
tenant as to which such tenant specifically informs Subsidiary in writing to
which lease obligation such payment is to be applied, such payment shall be so
applied; if such tenant does not so inform Subsidiary as to how a particular
payment is to be applied, such payment shall be applied first, on account of
amounts owed subsequent to the Closing Date; second, on account of past due
amounts owed prior to the Closing Date. Any balance remaining in any tenant's
common area maintenance escrow account shall be part of the reconciliation and
adjustments between the parties as of the Closing Date. Holding Company and
Subsidiary shall promptly deliver to Inland Affiliate all Rents received from
tenants under Leases, which are attributable to ownership periods beginning on
(and including) and after the Closing Date, except to the extent already
included as a credit.
1.2.4. UTILITIES. Except insofar as the same constitute expenses
pro ratable elsewhere under this Section 1.2, utility charges and deposits,
fuels and all other items of expense customarily prorated on the transfer of
properties similar to the Property shall be prorated on an accrual basis as of
the Closing Date on the basis of the most recent ascertainable bills or on other
reliable information with respect to each item of expense.
1.2.5. OTHER. All other income and expenses of the Property.
1.2.6. CLOSING COSTS. Inland Affiliate shall pay for, and the
Capital Contribution shall not be reduced by, the costs of title search and
insurance and surveys of the Property.
1.2.7. For purposes of calculating pro rations and adjustments,
Inland Affiliate shall be deemed to be in title to the Property, and therefore
entitled to income therefrom and responsible for the expenses thereof, for the
entire day on which the Closing Date occurs. Except as otherwise described, all
pro rations and adjustments shall be final, except that, in the event of any
computational mistake or error is discovered on or before the first anniversary
of the Closing Date, the parties shall make an appropriate adjustment(s) in cash
between them to correct such mistake or error promptly after the discovery
thereof.
1.2.8. The obligations set forth in Subsection 1.2.3 shall
survive the Closing for three (3) years following the Closing Date and the
balance of the obligations set forth in this Section 1.2 shall survive the
closing hereunder for one (1) year following the Closing Date.
1.3. LIQUIDITY AMOUNT.
1.3.1. (a) RESERVED
(b) On the Closing Date, Subsidiary (acting by and
through Holding Company), Cordish Affiliate and Escrowee shall each execute and
deliver to each other that certain Liquidity Amount Escrow Agreement (the
"LIQUIDITY AMOUNT ESCROW AGREEMENT") that is in the form attached hereto as
EXHIBIT "1.3 (b)". At the Closing, the Holding Company, subject to the
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approval of Inland Affiliate, which approval shall not be unreasonably withhold,
shall complete the blanks in the Liquidity Amount Escrow Agreement in accordance
with the provisions of this Section 1.3.
1.3.2. On the Closing Date Inland Affiliate shall, by wire
transfer of immediately available funds to the account designated by Escrowee,
deposit with Escrowee a portion of the Capital Contribution equal to the
LIQUIDITY AMOUNT (as that term is defined in Section 1.3.3 (b) hereof.) Escrowee
shall invest, hold and disburse the Liquidity Amount in accordance with the
terms of the Liquidity Amount Escrow Agreement.
1.3.3. (a) RESERVED
(b) The term "LIQUIDITY AMOUNT" means an amount equal to
ten percent (10%) of the Capital Contribution made by Inland Affiliate on the
Closing Date.
1.3.4. RESERVED
1.4. RESERVED
1.5. METHOD OF CONTRIBUTION AND DISTRIBUTION. On the Closing Date,
Inland Affiliate shall: (a) deposit the Capital Contribution (exclusive of the
Liquidity Amount), adjusted pursuant to Section 1.2, with Escrowee by wire
transfer of immediately available funds; (b) RESERVED; and (c) deposit the
Liquidity Amount with Escrowee by wire transfer of immediately available funds.
Escrowee shall cause the Capital Contribution (including the the Liquidity
Amount) to be distributed or retained in accordance with EXHIBIT "1.5".
1.6. POST CLOSING DATE ADJUSTMENTS AND RELEASE OF LETTERS OF CREDIT.
1.6.1. On the Closing Date, Holding Company shall cause the
Existing Loan to be paid in full or fully defeased, pursuant to EXHIBIT "1.5".
All funds paid to Subsidiary on and after the Closing Date in connection with
the Existing Loan, such as the release of any escrows for real estate taxes and
insurance, capital improvements and leasing expenses shall be paid to Cordish
Affiliate. In addition, Holding Company exclusively acting by and through
Cordish Affiliate shall have the right to cause Subsidiary to close all bank
accounts and checking accounts of Subsidiary and/or Holding Company that exist
prior to the Closing Date and retain such amounts. By execution of this
Agreement, Inland Affiliate and Holding Company agree and acknowledge and
confirm that all such accounts have been and are irrevocably assigned to the
exclusive control of Cordish Affiliate.
1.6.2. RESERVED
1.6.3. The provisions of this Section 1.6 shall survive Closing.
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1.6.4. All sums received by Cordish Affiliate in accordance with
this Section 1.6 and Section 1.2 shall be held by Cordish Affiliate and
disbursed by and among Cordish Affiliate and Withdrawing Member (but only to
Euram, Inc.) as provided in the Withdrawing Member Agreement.
1.7. CLOSING; CLOSING DATE. Upon the terms and subject to the conditions
of this Agreement, the transactions contemplated by this Agreement shall take
place at a closing (the "CLOSING") to be held at the offices of The Cordish
Company, 000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m.,
Baltimore time, or at such other location in Baltimore, Maryland selected by
Holding Company, on the second Business Day following the satisfaction or waiver
of all of the conditions to the obligations of the parties set forth in ARTICLE
VI. The day on which the Closing takes place is referred to herein as the
"CLOSING DATE."
ARTICLE II
EVENTS OCCURRING AT THE CLOSING
2.1. DELIVERIES BY INLAND AFFILIATE. At the Closing, in addition to the
Capital Contribution paid by Inland Affiliate to Escrowee in accordance with the
provisions of Article I hereof, Inland Affiliate will unconditionally deliver to
Cordish Affiliate the following:
2.1.1. A copy of resolutions of Inland Affiliate and Inland,
certified by its Secretary, in the case of Inland, or the Secretary of its sole
member, in the case of Inland Affiliate, authorizing or ratifying its execution
and delivery of this Agreement and the Other Agreements, and the consummation of
the transactions contemplated hereby and thereby.
2.1.2. The Other Agreements, which shall be duly executed by
Subsidiary, Inland Affiliate and/or Inland, as appropriate.
2.1.3. A copy of the organizational documents of Inland
Affiliate and Inland, certified as of a date within five (5) days of the Closing
Date by the Secretary of State of the state of organization.
2.1.4. A certificate of its Secretary, in the case of Inland,
and the Secretary of its sole member, in the case of Inland Affiliate, attaching
thereto a true and complete copy of its Bylaws (in the case of Inland) and
Operating Agreement (in the case of Inland Affiliate) as in effect on the
Closing Date for Inland Affiliate and Inland
2.1.5. A certificate of the Secretary of its sole member stating
that, to the best of his information and belief, the representations and
warranties contained herein of Inland Affiliate are true, complete, and accurate
in all material respects at and as of the Closing Date.
2.1.6. The opinion of counsel for Subsidiary, Inland Affiliate
and Inland in form and substance similar to EXHIBIT "2.1.6", dated the Closing
Date.
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2.1.7. A copy of the owner's title insurance policy, with all
instruments, documents and plats referenced to therein, for the Property and the
survey of the Property prepared for Inland Affiliate or the Subsidiary in
connection with this Agreement.
2.1.8. Such other documents and instruments as reasonably may be
required by Holding Company, exclusively acting by and through Cordish
Affiliate, and the title company issuing the new owner's policy for Subsidiary
on the Closing Date (the "TITLE COMPANY") and
which may be necessary to consummate this transaction and otherwise to effect
the agreements of the parties hereto.
2.1.9. The mutual waiver and release in the form attached hereto
as EXHIBIT "2.2.9" executed by Inland Affiliate pertaining to Inland Affiliate's
alleged breach of that certain Confidentiality Agreement between Inland Real
Estate Acquisition, Inc. and The Cordish Company, dated as February 27, 2004 to
the extent that such alleged breach concerned the Property and Subsidiary. (Such
release shall also contain a standstill agreement by The Cordish Company not to
pursue any claims under any similar agreements concerning any other property
owned by an entity that is partially owned by any affiliate of The Cordish
Company as long as such property is subject to a valid and binding contribution
agreement that is similar to this agreement between such affiliate of The
Cordish Company and an affiliate of Inland Affiliate.)
2.2. DELIVERIES BY HOLDING COMPANY. At the Closing, Holding Company,
acting by and through Cordish Affiliate, will deliver to Inland Affiliate the
following:
2.2.1. A copy of the authorization of its managing member
authorizing or ratifying its execution and delivery of this Agreement and the
Other Agreements, and the consummation of the transactions contemplated hereby
and thereby by Holding Company and Cordish Affiliate, respectively.
2.2.2. The Other Agreements, which shall be duly executed by
Cordish Affiliate or its affiliates as appropriate.
2.2.3. A copy of its Articles of Organization (and a copy of the
Articles of Organization of Subsidiary) certified as of a date within five (5)
days of the Closing Date by the Secretary of State (or equivalent official) of
its state (or jurisdiction) of organization.
2.2.4. A certificate from the Secretary of State (or equivalent
official) of the state (or jurisdiction) of organization as to its good standing
in such state (or jurisdiction), certified as of a date within five (5) days of
the Closing Date (and such a certificate for Subsidiary).
2.2.5. A certificate from Cordish Affiliate stating that, to the
best of its information and belief, the representations and warranties contained
in ARTICLE IV are true, complete, and accurate in all material respects at and
as of the Closing Date.
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2.2.6. The opinion of counsel for Holding Company, Cordish
Affiliate and Subsidiary in form and substance similar to EXHIBIT "2.2.6", dated
the Closing Date.
2.2.7. The affidavits for the Title Company in the form attached
hereto as EXHIBIT "2.2.7" from the persons or entities identified on such
exhibit.
2.2.8. A letter to each tenant of the Property in the form
attached hereto as EXHIBIT "2.2.8" notifying each tenant of the change of notice
address of Subsidiary.
2.2.9. The mutual waiver and release in the form attached hereto
as EXHIBIT "2.2.9" executed by The Cordish Company and Cordish Affiliate,
pertaining to Inland Affiliate's alleged breach of that certain Confidentiality
Agreement between Inland Real Estate Acquisition, Inc. and The Cordish Company,
dated as February 27, 2004 to the extent that such alleged breach concerned the
Property and Subsidiary. (Such release shall also contain a standstill agreement
by The Cordish Company not to pursue any claims under any similar agreements
concerning any other property owned by an entity that is partially owned by any
affiliate of The Cordish Company as long as such property is subject to a valid
and binding contribution agreement that is similar to this agreement between
such affiliate of The Cordish Company and an affiliate of Inland Affiliate.)
2.2.10. The books and records of Subsidiary relating to the
operation of the Property, then in the possession of Subsidiary or Cordish
Affiliate, to the extent requested by Inland Affiliate.
2.2.11. An amount equal to the SECURITY DEPOSITS (as that term is
defined in Section 4.9.6 hereof). Such delivery shall be accomplished by wire
transfer of immediately available funds to an account designated by Inland
Affiliate at Closing.
2.2.12. Such other documents and instruments as reasonably may be
required by Inland Affiliate and the Title Company (exclusive of affidavits) and
which may be necessary to consummate this transaction and otherwise to effect
the agreements of the parties hereto.
2.3. EFFECT OF CONTRIBUTIONS. In exchange for the Capital Contribution:
(i) Inland Affiliate and Cordish Affiliate shall execute, seal and deliver to
the other the Operating Agreement, (ii) Inland Affiliate will become a member of
Holding Company pursuant to the terms of the Operating Agreement, (iii) Inland
Affiliate will receive the Percentage Interest set forth beside its name on
SCHEDULE A of the Operating Agreement, and (iv) the Capital Account of Inland
Affiliate will be credited with such amount set forth beside its name on
SCHEDULE A of the Operating Agreement. Such Capital Account shall be adjusted
hereafter with respect to any adjustments to the Capital Contribution as set
forth in Article I of this Agreement that occur after the Closing.
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ARTICLE III
RELATED TRANSACTIONS
At the Closing, Inland, Cordish Affiliate, Subsidiary, Inland Affiliate,
and/or Xxxxx X. Xxxxxxx shall enter into the following agreements (collectively,
the "OTHER AGREEMENTS"):
3.1. RESERVED
3.2. OPERATING AGREEMENT. The Operating Agreement in the form attached
hereto as EXHIBIT "C." The Operating Agreement shall be executed by Inland
Affiliate and Cordish Affiliate and delivered to each other at the Closing.
3.3. INDEMNIFICATION AND GUARANTY AGREEMENT. The Indemnification and
Guaranty Agreement attached hereto as EXHIBIT "3.3", which: (i) Cordish
Affiliate and Inland Affiliate shall execute and deliver to each other at the
Closing; (ii) Cordish Affiliate shall cause Xxxxx X. Xxxxxxx to execute and
deliver to Inland Affiliate at the Closing; and (iii) Inland Affiliate shall
cause Inland to execute and deliver to Cordish Affiliate at the Closing (the
"INDEMNITY AGREEMENT").
3.4. RESERVED
3.5. AUDIT LETTER. Within ten (10) Business Days after receipt of a
written request from the Subsidiary's independent auditor, Cordish Affiliate
shall cause the representation letter attached hereto as EXHIBIT "3.5" to be
executed and delivered to such auditor. This covenant shall survive the Closing.
3.6. LIQUIDITY AMOUNT ESCROW AGREEMENT. Inland Affiliate shall cause
Escrowee to execute and deliver the Liquidity Amount Escrow Agreement to
Subsidiary and Cordish Affiliate. The Liquidity Amount Escrow Agreement shall
also be executed and delivered by Cordish Affiliate and Subsidiary to each other
and Escrowee at the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDING COMPANY
Holding Company hereby represents and warrants to Inland Affiliate as
follows:
4.1. OWNERSHIP OF HOLDING COMPANY AND SUBSIDIARY.
4.1.1 From August 12, 1994 until the date that Subsidiary was
converted into a Maryland limited liability company, the sole general partners
of Subsidiary were Holding Company and Withdrawing Member. From the date of the
conversion of Subsidiary into a Maryland limited liability company until the
date hereof, the sole members of Subsidiary have been Holding Company, holding a
50% equity interest in Subsidiary, and Withdrawing Member, holding a 50% equity
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interest in Subsidiary. All of the outstanding equity interests in Subsidiary
have been duly authorized and are validly issued. Holding Company has good and
marketable title to its interest in, and after consummating the transactions
contemplated herein will be the sole equity owner of, Subsidiary.
4.1.2 From the date of its formation until the date hereof, the
sole members of Holding Company were Xxxxx X. Xxxxxxx or Cordish Family I, LLC,
Cordish Enterprises Limited Partnership or Cordish Enterprises, LLLP, Xxxxxxx X.
Xxxxxx or Xxxxxx Family Investments, LLC, Xxxxx X. Xxxxxxxx and Xxxxxx X.
Xxxxxxxx All of the outstanding equity interests in Holding Company have been
duly authorized and are validly issued. Simultaneously with the consummation of
the transactions contemplated herein, Cordish Affiliate shall have good and
marketable title to its interest in Holding Company.
4.1.3 From August 12,1994 until the Closing Date Holding
Company's ownership interest in Subsidiary has not been changed and with the
exception of changes made for estate planning purposes, there has been no change
in the ownership structure of Holding Company.
4.1.4 There are no outstanding (i) options, warrants or other
rights to acquire any of the equity interests in Subsidiary or Holding Company,
(ii) securities convertible into or exchangeable for limited liability company
membership interests in Subsidiary or Holding Company or any other interests in
Subsidiary or Holding Company, or (iii) other commitments of any kind for the
issuance of additional equity interests, options, warrants or other securities
in Subsidiary or Holding Company.
4.2. ORGANIZATION.
4.2.1. On the Closing Date, each of Holding Company, Subsidiary
and, Cordish Affiliate, will be a limited liability company that is duly
organized, validly existing, and in good standing under the laws of its
respective state of organization, with the limited liability company power and
authority to own, lease, and operate its properties and to carry on its business
as now being conducted. Prior to the reorganization of Subsidiary, Subsidiary
had been a general partnership, duly organized, validly existing, and in good
standing under the laws of the state of Maryland, with the power and authority
to own, lease, and operate its properties and to carry on its business as now
being conducted. On the date hereof Cordish Affiliate does not exist. Cordish
Affiliate will be created on the Closing Date.
4.2.2. The copies of the organizational documents and all
amendments thereto of Holding Company, Cordish Affiliate and Subsidiary, as
delivered to Inland Affiliate, are true, complete, and correct copies of the
organizational documents, as amended and presently in effect, of Holding
Company, Cordish Affiliate and Subsidiary.
4.3. QUALIFICATION. On the Closing Date, Holding Company, Subsidiary and
Cordish Affiliate will each be licensed or qualified to do business as foreign
entities and will be in good standing in the jurisdictions in which they conduct
business.
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4.4. AUTHORITY. Holding Company has the limited liability company power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by Holding Company
of this Agreement has been duly authorized as of the date hereof. No other
proceedings on the part of Holding Company or any other person or entity are
necessary to authorize Holding Company to enter into this Agreement or to
consummate the transactions contemplated hereby; and this Agreement is he legal,
valid, and binding obligations of the Holding Company.
4.5. NO VIOLATIONS. To Cordish Affiliate's Knowledge, except as set
forth in EXHIBIT "4.5", neither the execution nor delivery of this Agreement,
nor the consummation of the transactions contemplated hereby or thereby:
4.5.1. Requires any filing or registration with, or consent,
authorization, approval, or Permit of, any governmental or regulatory authority
on the part of Holding Company,;
4.5.2. Violates or will violate (i) any order, writ, injunction,
judgment, decree, or award of any court or governmental or regulatory authority
or (ii) any "LAW," as defined in Section 4.7 of this Agreement, of any
governmental or regulatory authority to which Holding Company, or any of their
respective properties or assets are subject; or
4.5.3. (i) violates or breaches or constitutes a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or gives rise to a right to terminate, any mortgage, contract, agreement,
partnership agreement, limited liability company operating agreement (or
like-agreement), deed of trust, license, lease, or other instrument,
arrangement, commitment, obligation, understanding, or restriction of any kind
to which Holding Company or Subsidiary is a party or by which its properties
(including the Property) may be bound, or (ii) will cause, or give any person
grounds to cause, to be accelerated (with notice or lapse of time or both) the
maturity of, or will increase, any liability or obligation of Holding Company or
Subsidiary which violation, breach, default, liability, or obligation,
individually or in the aggregate, is or would negatively impact the business or
financial condition of Holding Company, or Subsidiary.
4.6. LITIGATION. From the date that is three (3) years prior to the date
hereof until the date hereof, except as set forth in EXHIBIT "4.6", there have
been and are no claims, actions, suits, arbitration's, proceedings or
investigations pending before any governmental authority or otherwise, or, to
Cordish Affiliate' Knowledge, threatened against Cordish, Holding Company and/or
Subsidiary that have not been resolved and any judgments against any such
entities paid in full. Cordish Affiliate, Holding Company and Subsidiary are not
subject to any order, writ, judgment, injunction, decree, determination or
award. From the date that is three (3) years prior to the date hereof until the
date hereof, to Cordish Affiliate's Knowledge there have been no unresolved
disputes or disagreement between any Cordish Affiliate entity or Affiliate and
any other member (or partner) of Subsidiary.
11
4.7. COMPLIANCE WITH APPLICABLE LAW; ADVERSE RESTRICTIONS. As used
herein, all laws (statutory or otherwise), ordinances, rules, regulations,
bylaws, and codes of all governmental and regulatory authorities, whether
federal, state, or local are referred to singularly as a "LAW" and collectively,
as the "LAWS." Except as and to the extent set forth in EXHIBIT "4.7", neither
Holding Company nor Subsidiary nor Cordish Affiliate has received any written
notification during the last three (3) years of any asserted failure to comply
with any Law.
4.8. ASSETS.
4.8.1. From the time of its formation and organization until the
date hereof, Holding Company has not owned or leased any asset other than its
interest in Subsidiary, and cash distributed from Subsidiary. Holding Company
has not engaged in any business other than the ownership of its interest in
Subsidiary. From the time of its formation and organization until the
date hereof, Holding Company has not held an interest in any entity other than
Subsidiary.
4.8.2. From August 12, 1994, until the date hereof, Subsidiary
has not owned or leased any material asset other than the Property (and assets
necessary to the operation of the Property) and has not engaged in any business
other than the ownership, development, and operation of the Property.
4.9. THE PROPERTY.
4.9.1. Except as set forth on EXHIBIT "4.9.1", neither Cordish
Affiliate nor Subsidiary has received during the last three (3) years: (i)
building code violation notices (other than notices of violations which have
been removed or corrected); and (ii) notices of any action or governmental
proceeding in eminent domain, or for a zoning change, or affecting the
environmental (including wetlands) condition of the Property.
4.9.2. There are no leases or rental agreements affecting the
Property other than the leases described on EXHIBIT "4.9.2", copies of which
have been supplied to Inland Affiliate (the "LEASES"). EXHIBIT "4.9.2" also
contains, as of the date of the rent roll, a complete, correct and current rent
roll for the Property. Except for matters disclosed in tenant estoppel
certificates delivered to Inland Affiliate or an affiliate of Inland Affiliate
or the counsel of Inland Affiliate in connection with this transaction and/or
routine tenants matters which have been settled, dismissed, or as set forth in
EXHIBIT "4.9.2", neither Holding Company nor Subsidiary has received any claim
during the last three (3) years from any tenant under the Leases alleging any
type of default by the landlord under the Leases or demanding any work or
payment from landlord that has not been resolved. All leasing commissions, and
tenant improvement allowances, and post-Closing rental abatements arising in
connection with any Lease entered into prior to the Closing Date shall be fully-
paid, discharged or credited to Inland Affiliate at Closing.
4.9.3. Except as set forth on EXHIBIT "4.9.3", (a) there are no
management, leasing services or employment contracts affecting the Property that
will be in effect on the Closing Date
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unless such are terminable without penalty; (b) there are no persons employed by
Holding Company or Subsidiary or Cordish Affiliate in connection with the
operation of the Property, and (c) to Cordish Affiliate's Knowledge there are
no maintenance, advertising or service contracts affecting the Property that
will be in effect on the Closing Date unless such are terminable without
penalty.
4.9.4. Except as set forth in the Leases or EXHIBIT "4.9.4": (a)
Subsidiary owns fee simple title to the Property, (b) to Cordish Affiliate's
Knowledge prior to August 12,1994, no third party acquired any right to purchase
all or any part of the Property; and (c) subsequent to August 12, 1994, no third
party acquired any right to purchase all or any part of the Property.
4.9.5. Except as set forth in EXHIBIT "4.9.5", there exists no
obligation on the part of Holding Company or Subsidiary for any leasing and/or
broker commissions or like payments for any period subsequent to the Closing
Date, in connection with any Lease executed prior to the Closing Date, except
for those arising out of renewal, expansion or other similar options exercised
by tenants under any Lease.
4.9.6. EXHIBIT "4.9.6" contains a true, accurate and complete
list of each Lease under which a tenant has paid Subsidiary a security deposit,
and the amount of such security deposit, which security deposit Subsidiary may
have an obligation to return upon the expiration of such Lease (each a "SECURITY
DEPOSIT").
4.9.7. Except as set forth in the Leases or in an instrument or
agreement that is recorded among the appropriate land records, Subsidiary has
not granted a tenant or occupant of the Property an exclusive right to use the
Property for any particular purposes.
4.10. TAXES.
4.10.1. All returns, declarations, reports, claims for refunds,
or information returns or statements or other forms relating to all fees
(including without limitation documentation, recording, license, and
registration fees), taxes (including without limitation net income, alternative,
unitary, alternative minimum, minimum franchise, value added, ad valorem,
income, receipts, capital, excise, sales, use, leasing, fuel, excess profits,
turnover, occupational, property (personal and real, tangible and intangible),
transfer, recording and stamp taxes, levies, imposts, duties, charges, fees
assessments, or withholdings of any nature whatsoever, general or special,
ordinary or extraordinary, and any transaction privilege or similar taxes)
imposed by or on behalf of a governmental authority, together with any and all
penalties, fines, additions to tax and interest thereon (the "TAXES"), including
any schedule or attachment thereto, and including any amendment thereof (the
"TAX RETURNS") required to be filed by Holding Company and Subsidiary have, to
the Knowledge of Cordish Affiliate, been accurately prepared in all material
respects and timely filed.
4.10.2. All Taxes for which Holding Company or Subsidiary may be
held liable (whether or not appearing on such Tax Returns and other than the
Taxes referred to in the next sentence), have been paid or accrued within the
prescribed period or any extension thereof. All Taxes
13
required to be withheld by Holding Company or Subsidiary, including, but not
limited to, Taxes arising as a result of payments or distributions (or amounts
allocable) to foreign partners or foreign persons or to employees of Holding
Company or Subsidiary, have been collected and withheld, and have been either
paid to the respective governmental agencies, set aside in accounts for such
purpose, or accrued, reserved against, and entered upon the books and records of
the employer.
4.10.3. To Cordish Affiliate's Knowledge, there are no Tax liens
upon the Property, except for liens for current Taxes not yet due and payable.
4.10.4. Both Holding Company and Subsidiary qualify (and has
since August 12, 1994 qualified) and, giving effect to the terms of the
Operating Agreement, will qualify immediately after the Closing Date, to be
treated as a partnership or disregarded entity for federal income tax purposes.
No taxing authority has taken a position inconsistent with such
treatment. Neither Cordish Affiliate nor any other member of Holding Company or
Subsidiary has taken any action, or failed to take any action, that would cause
Holding Company or Subsidiary to be treated as an association taxable as a
corporation for income tax purposes since August 12,1994.
4.10.5 Neither Subsidiary, Holding Company, nor Cordish
Affiliate has received from any governmental authority any written notice of
proposed adjustment, deficiency or underpayment of any Taxes pertaining to the
ownership or operation of the Property, which notice has not been satisfied by
payment or been withdrawn, and to Cordish Affiliate's Knowledge, there are no
claims with respect thereto that have been asserted or threatened against
Subsidiary, Holding Company or Cordish Affiliate.
4.10.6 There are no agreements for the extension of time for the
assessment of any Taxes of Holding Company or Subsidiary.
4.10.7 Except as set forth on EXHIBIT "4.10.7", there are no
pending appeals of any Taxes of Holding Company or Subsidiary.
4.11. INSURANCE. To Cordish Affiliate's Knowledge insurance policies or
binders of insurance in the types and amounts set forth on EXHIBIT "4.11" are
valid and currently in effect. Subsidiary has paid, or caused to be paid, all
premiums due under such policies, and to Cordish Affiliate's Knowledge
Subsidiary is not in default with respect to its obligations under any such
policies.
4.12. CONTRACTS.
4.12.1. EXHIBIT "4.12.1" lists each material contract and
agreement of Subsidiary with respect to the Property, other than those set forth
on EXHIBIT "4.9.3" (the "CONTRACTS"). To Cordish Affiliate's Knowledge, there
are no material contracts or agreements of Subsidiary that will be in effect
after the Closing Date except for the Contracts and the Leases.
14
4.12.2. A true and complete copy of each material Contract has
been made available to Inland Affiliate. Except as disclosed in EXHIBIT
"4.12.2":
4.12.2.1. To the Knowledge of Cordish Affiliate, each
Contract and Lease is valid and binding on the respective parties thereto and is
in full force and effect.
4.12.2.2. To the Knowledge of Cordish Affiliate, after
the Closing, each Contract and Lease shall continue in full force and effect
throughout its effective term, except in the event that a party thereto has
breached such Contract and Lease and as result of such breach, the Contract or
Lease is terminated, or unless an event has occurred that is described therein
that gives rise to a right of termination, which is effectuated or in the event
a party thereto seeks bankruptcy or reorganization protection and has the right,
as a result thereof, to terminate the Contract or Lease and does so.
Notwithstanding the preceding sentence, it is agreed by all of the parties that
all existing management arrangements or contracts (whether oral or written) will
be terminated as of the Closing.
4.12.2.3. To the Knowledge of Cordish Affiliate,
Subsidiary has neither received nor delivered a written notice of default with
respect to any Contract or Lease within the past three years that is presently
unresolved.
4.12.2.4. To the Knowledge of Cordish Affiliate,
Subsidiary has not delivered a written notice of default to any other party to a
Contract or Lease that is presently unresolved.
4.12.2.5 To the Knowledge of Holding Company there are
no material defaults existing with respect to any Lease or material Contract
that has or is likely to have a material adverse effect on Subsidiary or the
Property.
4.13. "KNOWLEDGE." For purposes of this Agreement, "KNOWLEDGE" means the
actual knowledge of the individuals whose names are set forth on EXHIBIT "4.13",
without any obligation of investigation or inquiry by such individuals. For the
avoidance of doubt, the parties agree that the term "KNOWLEDGE" as used in this
Agreement with an initial lower case "k" shall have the same meaning as the
defined term, "KNOWLEDGE" with an initial uppercase "K".
4.14. BROKERS' FEES. Neither Holding Company, Subsidiary nor Cordish
Affiliate has incurred any liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.
4.15 INSOLVENCY. Since August 12,1994, neither Holding Company nor
Subsidiary have (i) made a general assignment for the benefit of its creditors,
(ii) instituted, or been the subject of, any proceeding to be adjudicated
bankrupt or insolvent or consented to the institution of bankruptcy or
insolvency proceedings against it, (iii) filed a petition, answer or consent
seeking reorganization or relief under any applicable federal or state
bankruptcy law or consented to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar
15
official of it or of any part of its property, or (iv) admitted in writing its
inability to pay its debts generally as they become due.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INLAND AFFILIATE
Inland Affiliate hereby represents and warrants to Holding Company as
follows:
5.1. ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Inland Affiliate
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified to
conduct business and is in corporate and tax good standing under the laws of
each jurisdiction in which the nature of its businesses or the ownership or
leasing of its properties requires such qualification. Inland Affiliate has all
requisite power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.
5.2. AUTHORIZATION OF TRANSACTION. Inland Affiliate has all requisite
power and authority to execute and deliver this Agreement and the Other
Agreements, and to perform its obligations hereunder and thereunder. The
execution and delivery by Inland Affiliate of this Agreement and the Other
Agreements, and the consummation by Inland Affiliate of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
necessary action on the part of Inland Affiliate. This Agreement has been duly
and validly executed and delivered by Inland Affiliate and constitutes a valid
and binding obligation of Inland Affiliate, enforceable against it in accordance
with its terms.
5.3. NONCONTRAVENTION. Neither the execution and delivery by Inland
Affiliate of this Agreement or the Other Agreements, nor the consummation by
Inland Affiliate of the transactions contemplated hereby and thereby, will (a)
conflict with of violate any provision of the organizational documents of Inland
Affiliate, (b) require on the part of Inland Affiliate any filing with, or
permit, authorization, consent or approval of, any third party, (c) conflict
with, result in breach of, constitute (with or without due notice or lapse of
time or both) a default under, result in the acceleration of obligations under,
create in any party any right to terminate, modify or cancel, or require any
notice, consent or waiver under, any contract or instrument to which Inland
Affiliate is a party or by which it is bound or to which its assets are subject,
or (d) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Inland Affiliate or any of its properties or assets.
5.4. SECURITIES LAW COMPLIANCE. Inland Affiliate acknowledges that the
offering and issuance to it of an equity interest in Holding Company (the
"INTEREST") is intended to be exempted from registration under the Securities
Act of 1933, as amended (the "SECURITIES ACT"). Inland Affiliate understands and
agrees that it will sell or otherwise transfer the Interest (or any portion
thereof) only in accordance with the provisions of the Securities Act, pursuant
to registration under the Securities Act or pursuant to an available exemption
from registration thereunder and otherwise in a manner that does not violate the
securities laws of any state of the United States. Inland Affiliate understands
that Holding Company is under no obligation to register the Interest on behalf
of Inland
16
Affiliate or to assist Inland Affiliate in complying with any exemption from
registration under the Securities Act or under any other applicable securities
laws. Inland Affiliate also understands that sales or transfers of the Interest
are further restricted by the provisions of the Operating Agreement and the
securities laws of the states of the United States.
5.5. PURCHASE FOR INLAND. Inland Affiliate is acquiring the Interest for
its own account as principal, for investment and not with a view to, or for the
resale, distribution, or fractionalization thereof, in whole or in part, and no
other person has any direct or indirect beneficial interest in the Interest.
5.6. ACCREDITED INVESTOR, ETC. Inland Affiliate is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act. Inland Affiliate has such knowledge and experience in financial, tax, and
business matters that it is capable of evaluating the merits and risks of its
acquisition of the Interest.
5.7. DUE DILIGENCE. Inland Affiliate acknowledges that, except for the
matters that are expressly covered by the provisions of this Agreement, the
Indemnity Agreement or the Operating Agreement, Inland Affiliate is relying on
its own investigation and analysis in entering into the transactions
contemplated by this Agreement. Inland Affiliate acknowledges that it is
acquiring its membership rights in and to Holding Company without any
representation or warranty, express or implied, by Cordish Affiliate, Holding
Company or Subsidiary, except as expressly set forth herein. With respect to any
projection or forecast delivered by or on behalf of Holding Company to Inland
Affiliate, Inland Affiliate acknowledges that (i) there are uncertainties
inherent in attempting to make such projections and forecasts, (ii) the accuracy
and correctness of such projections and forecasts may be affected by information
which may become available after the date of such projections and forecasts, and
(iii) Inland Affiliate is familiar with each of the foregoing. Inland Affiliate
has no knowledge of any facts and/or circumstances that would make any of the
representations and warranties contained in Article IV untrue or misleading.
5.8. BROKERS' FEES. Neither Inland Affiliate nor any affiliate thereof
has any liability or obligation to pay any fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this Agreement.
5.9. COOPERATION ON TAX MATTERS. Inland Affiliate will cooperate fully,
as and to the extent reasonably requested by Holding Company or Cordish
Affiliate, in connection with any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon the
other party's request) the provision of records and information that are
reasonably relevant to any such audit, litigation, or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Holding Company
and Inland Affiliate agree (a) to retain all books and records that are relevant
to the determination of the Tax liabilities pertinent to Holding Company and
Subsidiary relating to any prior Tax period until the expiration of the
applicable statute of limitations and to abide by all record retention
agreements entered into with any Taxing Authority and (b) to give the
17
other party reasonable written notice prior to destroying or discarding any such
books and records and, if the other party so requests, Holding Company or Inland
Affiliate, as the case may be, shall allow the other party to take possession of
such books and records.
ARTICLE VI
CONDITIONS TO CLOSING
6.1. CONDITIONS TO OBLIGATIONS OF HOLDING COMPANY. The obligation of
Holding Company to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing Date, of each of
the following conditions, unless waived in writing by Holding Company:
6.1.1. REPRESENTATIONS AND WARRANTIES. Each representation and
warranty of Inland Affiliate contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date.
6.1.2. PERFORMANCE OF AGREEMENTS. Inland Affiliate shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
6.1.3. NO PROCEEDING OR LITIGATION. (i) No action shall have
been commenced by any governmental authority against Cordish Affiliate,
Subsidiary, Holding Company or Inland Affiliate seeking to restrain or
materially and adversely alter the transactions contemplated by this Agreement
and (ii) no injunction or order of any governmental authority or any Law shall
be in effect which, in the case of each of (i) and (ii), in the reasonable, good
faith determination of Holding Company, is likely to render it impossible or
unlawful to consummate such transactions.
6.1.4. INLAND AFFILIATE'S DELIVERIES. Inland Affiliate shall
have delivered to Holding Company and Escrowee at or before the Closing the
items specified in Section 2.1.
6.1.5. REORGANIZATIONS. Withdrawing Member shall have executed
and delivered to Holding Company an Agreement to Reorganize and Retire that is
substantially in the form attached hereto as EXHIBIT "6.1.5", and the
transactions contemplated therein (other than the retirement of Withdrawing
Member, which shall occur simultaneously with the distribution of the Capital
Contribution as described in EXHIBIT "1.5" hereof) shall have been consummated.
6.1.6. OTHER TRANSACTIONS. Inland Affiliate shall have
consummated the transactions contemplated by the Contribution Agreements it has
entered into of even date with respect to the limited liability companies set
forth on EXHIBIT "6.1.6".
6.2. CONDITIONS TO OBLIGATIONS OF INLAND AFFILIATE. The obligation of
Inland Affiliate to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or
18
prior to the Closing Date, of each of the following conditions, unless waived in
writing by Inland Affiliate:
6.2.1. REPRESENTATIONS AND WARRANTIES. Each representation and
warranty of Holding Company and Cordish Affiliate contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date.
6.2.2. PERFORMANCE OF AGREEMENTS. Holding Company shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
6.2.3. NO PROCEEDING OR LITIGATION. (i) No action shall have
been commenced by any governmental authority against Cordish Affiliate,
Subsidiary, Holding Company or Inland Affiliate seeking to restrain or
materially and adversely alter the transactions contemplated hereby and (ii) no
injunction or order of any governmental authority or Law shall be in effect,
which, in the case of each of (i) and (ii), in the reasonable, good faith
determination of Inland Affiliate is likely to render it impossible or unlawful
to consummate the transactions contemplated by this Agreement.
6.2.4. HOLDING COMPANY'S DELIVERIES. Holding Company shall have
delivered to Inland Affiliate and Escrowee at the Closing the items specified in
Section 2.2.
6.2.5. REORGANIZATIONS. Withdrawing Member shall have executed,
sealed; and delivered to Cordish Affiliate the Agreement to Reorganize and
Retire attached hereto as EXHIBIT "6.1.5", and the transactions contemplated
therein (other then the retirement of Withdrawing Member, which shall occur
simultaneously with the distribution of the Capital Contribution as described in
EXHIBIT "1.5" hereof) shall have been consummated.
6.2.6. LEASES. There shall not be a material default under: (a)
any Lease at the Property described on EXHIBIT "6.2.6" hereof (the "ANCHOR
LEASES"); or (b) Leases, exclusive of the Anchor Leases, representing more than
five (5%) percent of the gross leasable area of the Property.
6.2.7. ESTOPPEL CERTIFICATES. Inland Affiliate shall have
received the estoppel certificates from those tenants under Leases and others
forth on EXHIBIT "6.2.7".
6.2.8. CASUALTY OR CONDEMNATION. If prior to the Closing all or
any part of the Property is destroyed or damaged or is taken by condemnation,
eminent domain or other governmental acquisition provisions, then the following
procedures shall apply:
6.2.8.1. (a) If the reasonable estimated cost of repair
or replacement to be incurred by Subsidiary or the value of the governmental
taking is Ten Million and no/100 Dollars ($10,000,000.00) or less (the
"THRESHOLD"), AND, (b) if as a result of such damage or taking Leases for at
least ninety percent (90%) of the gross leasable area of the Property are: (i)
not terminable on account thereof (assuming any necessary repairs, replacements
or alterations required under the
19
Leases are diligently pursued by the landlord thereunder), and/or (ii) if so
terminable, the tenant or tenants under such Lease or Leases has or have waived
its or their termination rights AND, (c) to the extent abatement of rent occurs
as a result of the damage, destruction or condemnation that continues after the
Closing Date with regard to Leases for ten percent (10%) or more of the gross
leasable area of the Property, such abatement of rent is covered and paid for by
insurance coverage of Subsidiary which payments continue after the Closing Date
(or other alternative payment arrangements are implemented by Cordish Affiliate
at no cost and expense to Subsidiary which are reasonably acceptable by Inland
Affiliate), THEN this condition to the Closing shall be deemed waived by Inland
Affiliate, and Inland Affiliate shall proceed to the Closing, with the exception
of a credit thereto for any applicable deductible, the Capital Contribution
shall not be reduced, and Inland Affiliate shall retain the sole benefit,
through Subsidiary, of all casualty insurance and condemnation proceeds due with
respect to such destruction, damage or taking, as well as the proceeds and
benefits under any rent loss or business interruption policies attributable to
the period following the Closing.
6.2.8.2. (a) If any material point of ingress or egress
to or from the Property is either taken (or threatened to be taken) and cannot
be replaced or relocated with a suitable alternative, OR (b) if five percent
(5%) or more of any parking located upon the Property is either taken (or
threatened to be taken), OR (c) if the cost of reasonable cost of repair or
replacement to be incurred by Subsidiary or the value of the casualty or
governmental taking is greater than the Threshold, OR (d) Leases representing
more than ten percent (10%) of the gross leasable area of the Property are
terminable on account thereof (notwithstanding any necessary repairs,
replacements or alterations required under the Leases are diligently pursued by
the landlord thereunder) and the tenant or tenants under such Leases have not
waived their termination rights OR, (e) to the extent abatement of rent occurs
as a result of the damage, destruction or condemnation that continues after the
Closing Date with regard to Leases and such abatement of rent for Leases
representing ten percent (10%) or more of the gross leasable area of the
Property is not covered and paid for by insurance coverage of Subsidiary which
payments continue after the Closing Date (or other alternative payment
arrangements are not implemented by Cordish Affiliate at no cost and expense to
Subsidiary which are reasonably acceptable by Inland Affiliate), THEN Inland
Affiliate, at its sole option, may elect either to (x) terminate this Agreement
by written notice to Holding Company and neither party shall have any further
liability to the other hereunder; or (y) accept Subsidiary's rights to all
casualty insurance and condemnation proceeds with respect thereto with no
reduction in the Capital Contribution (except for the amount of any deductible
under existing insurance policies), it being understood and agreed that, in such
event, Cordish Affiliate shall cooperate with Inland Affiliate in the adjustment
and settlement of the insurance or condemnation claim.
6.2.8.3. If there is a dispute between Inland Affiliate
and Holding Company with respect to the cost of repair, restoration or
replacement with respect to the matters set forth in this Section 6.2.8, an
engineer designated by Holding Company and an engineer designated by Inland
Affiliate shall select an independent engineer licensed to practice in the
jurisdiction where the Property is located who shall resolve such dispute. All
fees, costs and expenses of this third engineer shall be shared equally by
Inland Affiliate and Holding Company.
20
6.2.9. The Title Company, which has delivered to Inland
Affiliate the commitment to issue an owner's title insurance policy attached
hereto as EXHIBIT "6.2.9" (the "TITLE COMMITMENT"), upon compliance by the
parties hereto of their respective obligations hereunder, is prepared to issue a
title insurance policy in form and substance materially similar to the Title
Commitment.
ARTICLE VII
TERMINATION AND WAIVER
7.1. TERMINATION. This Agreement may be terminated at any time prior to
the Closing only as follows:
7.1.1. By Inland Affiliate if, on or prior to the Closing Date:
(i) any representation or warranty of Holding Company or Cordish Affiliate set
forth in this Agreement shall not have been true and correct in all material
respects when made or ceases to be true and correct in all material respects at
any time subsequent to the date hereof and Holding Company shall have failed to
cure any material misstatement or omission subsequent to the date hereof
promptly after notice by Inland Affiliate; (ii) Holding Company shall not have
complied in all material respects with each covenant or agreement imposed by
this Agreement to be complied with or performed on or prior to the Closing Date
and Holding Company shall have failed to cure any material breach of a covenant
or agreement promptly after notice by Inland Affiliate; or (iii) either Holding
Company or Subsidiary makes a general assignment for the benefit of creditors,
or any proceeding shall be instituted by or against either Holding Company or
Subsidiary seeking to adjudicate either bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement, adjustment, protection,
relief or composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization.
7.1.2. By Holding Company or Inland Affiliate if the Closing
shall not have occurred on or prior to the first anniversary of the date hereof.
7.1.3. By Inland Affiliate or Holding Company if any
governmental authority shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable. This provision shall not apply to
any governmental authority that is acting in its capacity as "landlord" under
any ground lease between such governmental authority and Subsidiary.
7.1.4. By the mutual written consent of Holding Company and
Inland Affiliate.
7.1.5. By Holding Company if, between the date hereof and the
time scheduled for the Closing: (i) any representation or warranty of Inland
Affiliate set forth in this Agreement shall not have been true and correct in
all material respects when made or ceases to be true and correct in all material
respects at any time subsequent to the date hereof and Inland Affiliate shall
have failed to cure any material misstatement or omission subsequent to the date
hereof promptly after notice by
21
Holding Company; (ii) Inland Affiliate shall not have complied in all material
respects with each covenant or agreement imposed by this Agreement to be
complied with or performed on or prior to the Closing Date and Inland Affiliate
shall have failed to cure any material breach of a covenant or agreement
promptly after notice by Holding Company or (iii) Inland Affiliate makes a
general assignment for the benefit of creditors, or any proceeding shall be
instituted by or against Inland Affiliate seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization.
7.2. EFFECT OF TERMINATION. If this Agreement is terminated as provided
in Section 7.1, this Agreement shall forthwith be canceled and rendered null and
void in its entirety, except that no such termination shall serve to relieve any
breaching party of any liability under this Agreement. In the event this
Agreement is terminated by Inland Affiliate pursuant to the provisions of
Section 7.1, the provisions of that certain letter agreement dated April 24,
2004, between an affiliate of Inland Affiliate and The Cordish Company shall
apply concerning the reimbursement of certain costs incurred by Inland Affiliate
in connection with this Agreement.
7.3. WAIVER. Holding Company (and after the Closing Date, Holding
Company acting exclusively by and through Cordish Affiliate) on the one hand and
Inland Affiliate on the other hand may (a) extend the time for the performance
of any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered by such other party pursuant hereto, or (c)
waive compliance with any of the agreements or conditions of the other party
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby. Any waiver
of any term or condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or a waiver of any
other term or condition, of this Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of any of such rights.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified
or supplemented only by written agreement of the parties hereto.
8.2. FURTHER ASSURANCES. From time to time, at the request of Inland
Affiliate or Holding Company (exclusively acting by and through Cordish
Affiliate on and after the Closing Date) and without further consideration, each
party, at its own expense, will execute and deliver such other documents, and
take such other action, as Inland Affiliate or Holding Company (exclusively
acting by and through Cordish Affiliate on and after the Closing Date) may
reasonably request in order to consummate more effectively the transactions
contemplated hereby and to vest in Holding Company good and marketable title to
Subsidiary.
22
8.3. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland (without regard to its
conflicts of law doctrines).
8.4. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and shall become a binding
Agreement when one or more of the counterparts have been signed by each of the
parties and delivered to the other party.
8.5. PUBLICITY. Neither of the parties will make any disclosure of the
transactions contemplated by this Agreement, or any discussions in connection
therewith or issue a press release concerning the closing of any such
transaction, or make any public announcement concerning the closing of any such
transaction, without the prior written consent of each of the other parties. The
preceding sentence shall not apply to: (a) any disclosure required to be made by
Law or the regulations of any stock exchange(s), or the Securities and Exchange
Commission, or Blue Sky Laws, as reasonably determined by counsel to the party
determining that such disclosure is required; or (b) a disclosure following
Closing made in the ordinary course of operations of Inland or Cordish
Affiliate; provided any such disclosure made pursuant to clause (a) or (b) of
this sentence is not inconsistent with the form of the transactions as described
in this Agreement. This provision shall survive Closing.
8.6. NOTICES. All notices, demands, consents, approvals, requests or
other communications which any of the parties to this Agreement may desire or be
required to give hereunder (collectively, "NOTICES") shall be in writing and
shall be given by personal delivery, nationally recognized next day delivery
service (delivery charges prepaid, return receipt requested) or United States
registered or certified mail (postage prepaid, return receipt requested)
addressed as hereinafter provided. Except as otherwise specified herein, the
effective date of any Notice (I.E., the date a party shall be deemed to have
received such Notice), shall be the earliest to occur of: (a) if by personal
delivery, the date of receipt, or attempted delivery, if such communication is
refused; (b) if by nationally recognized next day delivery service (as
aforesaid), the next Business Day after delivery to such service; and (c) if
sent by mail (as aforesaid), three (3) Business Days after posting. Until
further notice, notices and other communications under this Agreement shall be
addressed to the parties listed below as follows:
If to Inland Affiliate: c/o Inland Western Retail Real Estate Trust, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: c/o The Inland Real Estate Group, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
23
with a copy to: Xxxx X. Xxxxxxxx III, Esquire
Xxxx Xxxxx, LLP
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to Holding Company: c/o The Cordish Company
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
With a copy to: c/o The Cordish Company
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Any party hereto may designate another addressee (and/or change its address) for
Notices hereunder by a Notice given pursuant to this Section to each of the
other parties hereto. On and after the Closing Date, all notices from Inland
Affiliate to Holding Company in connection with this Agreement shall be sent to
Holding Company, care of Cordish Affiliate at the above addresses for Holding
Company.
8.7. ARBITRATION. Except as otherwise provided in Section 1.1.1.3
hereof, in the event that any dispute shall arise between Inland Affiliate and
Holding Company with respect to the application of any of the provisions of this
Agreement, and such dispute is not resolved to the satisfaction of Inland
Affiliate and Holding Company within twenty (20) days after Inland Affiliate or
Holding Company shall notify the other in writing of its desire to arbitrate the
dispute (the "ARBITRATION NOTICE"), then the dispute shall be resolved in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then pertaining. The decision of the arbitrator shall be binding,
final and conclusive on the parties. Unless the parties otherwise agree, such
arbitration proceedings shall be conducted in Baltimore City, Maryland, The
arbitrator shall be selected by the American Arbitration Association in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The fees of the arbitrator and the expenses incident to the
proceedings shall be borne by the losing party. The reasonable fees of
respective counsel engaged by the parties, and the fees of expert witnesses and
other witnesses called for the parties, shall also be paid by the losing party.
The decision of the arbitrator shall be rendered within thirty (30) days after
the conclusion of the arbitration. A judgment of a court of competent
jurisdiction may be entered upon the award of the arbitrator in accordance with
the rules and statutes applicable thereto then obtaining. The parties hereto
agree that the arbitrator may order and compel specific performance.
24
8.8. ATTORNEY FEES. Subject to the provisions of Section 8.7, if either
Inland Affiliate or Holding Company brings suit or other legal proceedings to
enforce the provisions of this Agreement against the other, then the party
prevailing in such suit or proceeding shall be reimbursed by the other for all
reasonable attorneys' fees and litigation costs and expenses incurred by the
prevailing party in connection with such suit or proceeding.
8.9. VENUE. Any lawsuit, action, or proceeding arising under this
Agreement that is not subject to arbitration shall, to the extent there is
federal jurisdiction over the parties and subject matter, be brought exclusively
in the Northern Division of the United States District Court for the District of
Maryland. In the event federal jurisdiction does not exist, such lawsuit, action
or proceeding shall be brought in the Circuit Court for Baltimore County,
Maryland.
8.10 WAIVER OF JURY TRIAL. Subject to the provisions of Section 8.7,
Inland Affiliate and Holding Company do hereby waive trial by jury in any
action, suit, proceeding, and/or counterclaim brought by either of the parties
hereto against the other on any matters whatsoever arising out of or in any way
connected with this Agreement any claim of injury or damage, and/or statutory
remedy.
8.11. HEADINGS. The article and section headings contained in this
Agreement, including the Exhibits attached hereto, are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
8.12 ENTIRE AGREEMENT. This Agreement, together with the Other
Agreements, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
8.13. SEVERABILITY. If any one or more provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
8.14. INCONSISTENCY OR CONFLICT. In the event of any inconsistency or
conflict between any provision of this Agreement and any provision of any of the
Other Agreements, the provisions of this Agreement shall govern.
8.15. EXHIBITS, SCHEDULES AND RECITALS INCORPORATED INTO AGREEMENT. All
exhibits, schedules and recitals form a part of this Agreement.
8.16. CONSTRUCTION. The construction of this Agreement shall not take
into consideration the party who drafted or whose representative drafted any
portion of this Agreement, and no xxxxxx of construction shall be applied that
resolves ambiguities against the drafter of a document. The parties acknowledge
that they were advised by competent counsel that each has chosen to represent
25
such party and each party has had a full opportunity to comment upon and
negotiate the terms of this Agreement.
8.17. DUTY OF COOPERATION. Each of the parties hereto shall cooperate
with the other party generally, and in particular will make available, as the
other party reasonably requests, management decisions, liaison personnel,
information, approvals and acceptances so that the other party may properly
perform its obligations under this Agreement. The provisions of this Section
8.17 shall survive Closing.
8.18. FAIR DEALING. The parties recognize and intend that portions of
this Agreement are very general in nature, and the parties acknowledge that they
intend to operate in good faith and deal fairly with one another when
interpreting their respective obligations hereunder.
8.19. TIME OF THE ESSENCE. Time is of the essence in the performance of
the obligations of Holding Company and Inland Affiliate under this Agreement.
8.20. INTERPRETATION. Except as otherwise expressly provided herein, the
following rules of interpretation apply to this Agreement: (i) the singular
includes the plural and the plural includes me singular except when the context
otherwise requires; (ii) "include" and "including" are not limiting; (iii) a
reference to any agreement or contract includes exhibits, schedules, and
permitted supplements and amendments thereto; (iv) a reference to a Law includes
any amendment or modification to such law and any rules or regulations issued
thereunder, and (v) a reference to a person includes such person's permitted
successors and assigns.
8.21. BUSINESS DAY. The term "BUSINESS DAY" means any day other than
Saturday, Sunday or any other day on which commercial banks or savings and loan
associations are required or authorized by law to close in New York City.
SIGNATURES ON NEXT PAGE
26
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
under seal, as of the date first above written.
WITNESS/ATTEST: HOLDING COMPANY:
CORDISH BEL AIR SQUARE LLC, a Maryland
limited liability company
[ILLEGIBLE] By: /s/ Xxxxxxx X. Xxxxxx
---------------------- ------------------------------------ (SEAL)
Xxxxxxx X. Xxxxxx
Authorized Person
INLAND AFFILIATE:
INLAND BEL AIR HC, L.L.C., a Delaware
limited liability company,
By: Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
[ILLEGIBLE] By: /s/ [ILLEGIBLE]
---------------------- ------------------------------------ (SEAL)
Name: [ILLEGIBLE]
-----------------------------------
As Its: [ILLEGIBLE]
--------------------------------
CHICAGO TITLE INSURANCE COMPANY, a New York corporation, for good and
valuable consideration, the receipt and adequacy of which it hereby
acknowledges, executes this Contribution Agreement under seal as of the date
first above written, to acknowledge its receipt of an original copy of this
Agreement as executed by Holding Company, and Inland Affiliate and to
acknowledge its agreement to act as Escrowee in accordance with the terms and
conditions set forth in Section 1.1 hereof and to comply with the provisions of
Section 1.5 hereof.
WITNESS/ATTEST ESCROWEE:
CHICAGO TITLE INSURANCE
COMPANY, a New York corporation,
By:
---------------------- ------------------------------ (SEAL)
Name:
----------------------------
Title:
------------------------------
27
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation
("INLAND"), for Ten and 00/100 Dollars ($10.00) and other good and valuable
consideration, the receipt and adequacy of which it hereby acknowledges, hereby
guarantees to Holding Company the prompt payment by Inland Affiliate of all
amounts, costs and expenses that Inland Affiliate may be obligated to pay or
deposit pursuant to Sections 1.1., 8.7 and 8.8, above including any and all
costs and expenses of Holding Company that Inland Affiliate may be obligated to
pay Holding Company pursuant to the provisions of Sections 1.1, 8.7 and 8.8
above. Such guaranty shall be primary and not secondary and Inland shall be
deemed jointly and severally liable with Inland Affiliate in connection with the
obligation to pay any such amount, cost or expense. In addition, Inland hereby
agrees to be bound by the provisions of Sections 1.1, 8.7, 8.8, 8.9 and 8.10
above. Notices by Holding Company to Inland shall be deemed properly given if
addressed to Inland, care of Inland in accordance with the provisions of Section
8.6 above. Inland has executed this Agreement under seal as of the date first
above written.
WITNESS/ATTEST: INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC, a Maryland corporation
[ILLEGIBLE] By: /s/ Xxxxxx X. Xxxxxxx
---------------------- ------------------------------ (Seal)
Name: Xxxxxx X. Xxxxxxx
----------------------------
As Its: [ILLEGIBLE]
------------------------------
28
CONTRIBUTION AGREEMENT
TOLLGATE MARKETPLACE
EXHIBIT A
A LEGAL DESCRIPTION OF THE PARCEL OF LAND THAT IS INCLUDED IN THE PROPERTY (THE
"LAND") IS SET FORTH ON EXHIBIT "A" HERETO.
METES AND BOUNDS DESCRIPTION
TOLLGATE MARKETPLACE
PLAT BOOK 100 PAGE 88
PLAT BOOK 86 PAGE 00
XXX XXX XXXXXX JOINT VENTURE
LIBER 1123 FOLIO 418,
LIBER 2029 FOLIO 195
AND LIBER 0000 XXXXX 000
0XX XXXXXXXX XXXXXXXX
XXXXXXX XXXXXX, XXXXXXXX
BEGINNING AT A RAILROAD SPIKE FOUND MARKING THE NORTH-EAST CORNER OF XXX
0, XXXXXXXX XXXXXXXXXXX (X.X. 00 PG. 88 AND X.X. 000 XX. 00), XXXX XXXXX OF
BEGINNING MARKING THE INTERSECTION OF THE SOUTHERLY RIGHT-OF-WAY LIMITS OF BEL
AIR ROAD, U.S. ROUTE 1 (A VARIABLE WIDTH RIGHT-OF-WAY), WITH THE WESTERLY
RIGHT-OF-WAY LIMITS OF MARYLAND ROUTE 24 (A VARIABLE WIDTH RIGHT-OF-WAY) AND
RUNNING THENCE WITH THE WESTERLY RIGHT-OF-WAY LIMITS OF MARYLAND ROUTE 24, THE
FOLLOWING NINE COURSES AND DISTANCES;
1. NORTH 86 DEGREES - 52 MINUTES - 49 SECONDS EAST, 100-26 FEET TO AN IRON
BAR WITH CAP FOUND, THENCE;
2. CONTINUING SOUTH 54 DEGREES - 11 MINUTES - 32 SECONDS EAST, 572.00 FEET TO
AN REBAR SET, THENCE;
3. CONTINUING SOUTH 45 DEGREES - 52 MINUTES - 00 SECONDS EAST, 82.87 FEET TO
A REBAR SET, THENCE;
4. CONTINUING SOUTH 51 DEGREES - 20 MINUTES - 39 SECONDS EAST, 70.77 FEET TO
A REBAR SET, THENCE;
5. CONTINUING SOUTH 51 DEGREES - 20 MINUTES - 36 SECONDS EAST, 129.85 FEET TO
A REBAR SET, THENCE;
6. CONTINUING SOUTH 63 DEGREES - 03 MINUTES - 28 SECONDS EAST, 123.47 FEET TO
A REBAR SET, THENCE;
7. CONTINUING SOUTH 59 DEGREES - 54 MINUTES - 59 SECONDS EAST, 231.15 FEET
TOA REBAR SET, THENCE;
8. CONTINUING SOUTH 54 DEGREES - 12 MINUTES - 21 SECONDS EAST, 113.58 FEET TO
A REBAR SET, THENCE;
9. CONTINUING SOUTH 46 DEGREES - 14 MINUTES - 07 SECONDS EAST, 16.38 FEET TO
A IRON BAR WITH CAP FOUND MARKING THE INTERSECTION OF SAID WESTERLY
RIGHT-OF-WAY LIMITS OF MARYLAND ROUTE 24, WITH THE NORTHERLY RIGHT-OF-WAY
LIMITS OF MARKETPLACE DRIVE (A 60-FOOT WIDE RIGHT-OF-WAY), ALSO KNOWN AS
TOLLGATE MALL ROAD (A VARIABLE WIDTH RIGHT-OF-WAY), THENCE WITH SAID
NORTHERLY RIGHT-OF-WAY LIMITS OF MARKETPLACE DRIVE, THE FOLLOWING SIX
COURSES AND DISTANCES;
10. SOUTH 05 DEGREES - 13 MINUTES - 14 SECONDS EAST, 37.73 FEET A POINT OF
CURVATURE, THENCE;
11. CONTINUING 211.49 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A
RADIUS OF 712.00 FEET, A CENTRAL ANGLE OF 17 DEGREES - 01 MINUTES - 07
SECONDS AND A CHORD BEARING AND DISTANCE OF SOUTH 27 DEGREES - 17 MINUTES
- 11 SECONDS WEST, 210.71 FEET TO A REBAR FOUND AT A POINT OF TANGENCY,
THENCE;
12. CONTINUING SOUTH 18 DEGREES - 46 MINUTES - 37 SECONDS WEST, 528.39 FEET TO
A NAIL SET AT A REBAR FOUND AT A POINT OF CURVATURE, THENCE;
13. CONTINUING 299.87 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A
RADIUS OF 367.20 FEET, A CENTRAL ANGLE OF 46 DEGREES - 47 MINUTES - 26
SECONDS AND A CHORD BEARING AND DISTANCE OF SOUTH 42 DEGREES - 10 MINUTES
- 18 SECONDS WEST, 291.61 FEET TO A REBAR SET AT A POINT OF TANGENCY,
THENCE;
14. CONTINUING SOUTH 65 DEGREES - 34 MINUTES - 00 SECONDS WEST, 28.85 FEET TO
A POINT, THENCE;
15. CONTINUING 161.02 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A
RADIUS OF 115.00 FEET, A CENTRAL ANGLE OF 80 DEGREES -13 MINUTES - 20
SECONDS AND A CHORD BEARING AND DISTANCE OF SOUTH 74 DEGREES - 19 MINUTES
- 20 SECONDS EAST, 148.18 FEET TO A REBAR SET IN THE EASTERLY RIGHT-OF-
WAY LIMITS OF TOLLGATE ROAD, THENCE WITH SAID EASTERLY RIGHT-OF-WAY
LIMITS, THE FOLLOWING FIVE COURSES AN DISTANCES;;
16. 220.04 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A RADIUS OF
803.16 FEET, A CENTRAL ANGLE OF 15 DEGREES - 41 MINUTES - 48 SECONDS AND A
CHORD BEARING AND DISTANCE OF NORTH 42 DEGREES - 03 MINUTES - 34 SECONDS
WEST, 219.35 FEET TO A REBAR SET MARKING THE POINT OF COMPOUND CURVATURE,
THENCE;
17. CONTINUING 35.14 FEET ALONG THE ARC OF CURVE TO THE LEFT, HAVING A RADIUS
OF 775.89 FEET, A CENTRAL ANGLE OF 02 DEGREES - 35 MINUTES - 45 SECONDS
AND A CHORD BEARING AND DISTANCE OF NORTH 51 DEGREES - 14 MINUTES - 16
WEST, 35.14 FEET TO A POINT OF TANGENCY, THENCE;
18. CONTINUING NORTH 52 DEGREES - 32 MINUTES - 21 SECONDS WEST, 602.18 FEET TO
A POINT OF CURVATURE, THENCE;
19. CONTINUING 94.59 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A
RADIUS OF 5,030.00 FEET A CENTRAL ANGLE OF 01 DEGREES - 04 MINUTES - 39
SECONDS AND A CHORD BEARING AND DISTANCE OF NORTH 53 DEGREES - 04 MINUTES
- 41 SECONDS WEST, 94.59 FEET TO A REBAR SET AT A POINT OF TANGENCY,
THENCE;
20. CONTINUING NORTH 53 DEGREES - 37 MINUTES - 00 SECONDS WEST, 88.54 FEET TO
A NAIL SET MARKING THE INTERSECTION OF THE EASTERLY RIGHT-OF-WAY LIMITS OF
TOLLGATE ROAD, WITH THE DIVISION LINE BETWEEN XXX 0, XXXXXXXX XXXXXXXXXXX
(X.X. 00 PG. 88 AND P.B. 100 PG. 88), ON THE SOUTH, EAST AND NORTH AND THE
LANDS OF THE BEL AIR TOLLGATE PARTNERSHIP (LIBER 909 FOLIO 108), ON THE
NORTH, WEST AND SOUTH, THENCE WITH SAID DIVISION LINE, THE FOLLOWING THREE
COURSES AND DISTANCES;
21. NORTH 35 DEGREES - 53 MINUTES - 54 SECONDS EAST, 253.60 FEET TO A NAIL
SET, THENCE;
22. CONTINUING NORTH 52 DEGREES - 44 MINUTES - 43 SECONDS WEST, 230.11 FEET TO
A NAIL SET, THENCE;
23. CONTINUING SOUTH 37 DEGREES - 15 MINUTES - 18 SECONDS WEST, 39.00 FEET TO
A CONCRETE MONUMENT FOUND MARKING THE DIVISION LINE BETWEEN SAID XXX 0,
XXXXXXXX XXXXXXXXXXX (X.X. 00 PG. 88 AND P.B. 100 PG. 88), ON THE EAST
AND THE LANDS OF AMOCO OIL COMPANY (LIBER 1165 FOLIO 632 AND LIBER 1167
FOLIO 855), ON THE WEST, THENCE WITH SAID DIVISION LINE;
24. NORTH 53 DEGREES - 07 MINUTES - 42 SECONDS WEST, 184.00 FEET, PASSING AN
IRON PIPE FOUND AT 159.02 FEET TO A POINT IN SAID SOUTHERLY RIGHT-OF-WAY
LIMITS OF BEL AIR ROAD, U.S. ROUTE 1, THENCE WITH SAID SOUTHERLY RIGHT-
OF-WAY LIMITS, THE FOLLOWING THREE COURSES AND DISTANCES;
25. NORTH 37 DEGREES - 15 MINUTES - 18 SECONDS EAST, 180.03 FEET TO A POINT OF
CURVATURE, THENCE;
26. CONTINUING 434.92 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A
RADIUS OF 17,218.74 FEET, A CENTRAL ANGLE OF 01 DEGREE - 26 MINUTES - 50
SECONDS AND A CHORD BEARING AND DISTANCE OF NORTH 36 DEGREES - 31 MINUTES
- 53 SECONDS EAST, 434.91 FEET TO A POINT OF TANGENCY, THENCE;
27. CONTINUING NORTH 35 DEGREES - 48 MINUTES - 28 SECONDS EAST, 120.48 FEET TO
THE PLACE OF BEGINNING.
CONTAINING 1,510,434 SQUARE FEET OR 34.6748 ACRES OF LAND, MORE OR LESS.
BEING KNOWN AND DESIGNATED AS XXX 0, XXX 0 XXX XXX 0 XX XXXXX XX A PLAT
ENTITLED "FINAL PLAT, XXXXXXXX XXXXXXXXXXX, X.X. XXXXX 0 AND MARYLAND XXXXX
00, XXXX XX XXX XXX, 0XX ELECTION DISTRICT, HARFORD COUNTY, MARYLAND" AS
RECORDED IN PLAT BOOK 86, FOLIO 88 AND ALSO KNOWN AS XXX 0, XXX 0, XXX XXX
0 XX XXXXX XX A PLAT ENTITLED "REVISED FINAL PLAT, XXXXXXXX XXXXXXXXXXX,
X.X. XXXXX 0 AND MARYLAND XXXXX 00, XXXX XX XXX XXX, 0XX ELECTION DISTRICT,
HARFORD COUNTY, MARYLAND", AS RECORDED IN PLAT BOOK 100 FOLIO 88, AFORESAID
PLATS BEING RECORDED AMONG THE LAND RECORDS OF HARFORD COUNTY, MARYLAND;
TOGETHER WITH THE NON-EXCLUSIVE, RECIPROCAL EASEMENTS AS ARE CONTAINED IN
THAT CERTAIN DEED AND DECLARATION OF RECIPROCAL EASEMENTS DATED FEBRUARY
27, 1978 BY AND AMONG BEL AIR SQUIRE, A MARYLAND JOINT VENTURE CONSISTING
OF BEL AIR TOLLGATE PARTNERSHIP, A MARYLAND LIMITED PARTNERSHIP, AND
MONUMENTAL PROPERTIES TRUST, A MARYLAND TRUST, AS JOINT VENTURES; THE
EQUITABLE TRUST COMPANY, A MARYLAND BANKING CORPORATION, MORTGAGEE, AND
XXXXXX X. XXXXXX AND XXXXXXXXX X. XXXXXXXXXXX, TRUSTEES FOR THE BENEFIT OF
MORTGAGEE, AND RECORDED AMONG THE LAND RECORDS OF HARFORD COUNTY IN LIBER
1087, FOLIO 348.
TOGETHER WITH THE NON-EXCLUSIVE RECIPROCAL EASEMENTS AS ARE CONTAINED IN
THAT CERTAIN DECLARATION OF RECIPROCAL EASEMENTS AND RESTRICTIONS DATED
AUGUST 12, 1994 BY BEL AIR SQUARE JOINT VENTURE, A MARYLAND GENERAL
PARTNERSHIP, DECLARANT, AND RECORDED AMONG THE LAND RECORDS OF HARFORD
COUNTY IN LIBER 2168, FOLIO 483.
BEING THE SAME PROPERTY DESCRIBED IN A TITLE COMMITMENT REPORT, PROVIDED BY
CHICAGO TITLE INSURANCE COMPANY, COMMITMENT NO. 4504-43700, WITH AN
EFFECTIVE DATE OF DECEMBER 8, 2003.
THE PROPERTY IS SUBJECT TO RESTRICTIONS, COVENANTS AND/OR EASEMENTS, AS
CONTAINED IN A TITLE COMMITMENT REPORT PREPARED BY CHICAGO TITLE INSURANCE
COMPANY, COMMITMENT NUMBER 4504-43700 WITH AN EFFECTIVE DATE OF DECEMBER 8,
2003.
CONTRIBUTION AGREEMENT
TOLLGATE MARKETPLACE
EXHIBIT B
THE PROPERTY SERVES AS COLLATERAL FOR THE LOAN DESCRIBED ON EXHIBIT "B"
(THE "EXISTING LOAN").
Loan in the amount of $23,000,000.00(1) evidenced by a Promissory Note, dated as
of June 29, 1995, from Cordish Bel Air Square LC to The Lincoln National Life
Insurance Company as increased by that certain Promissory Note in the amount of
$4,000,000.00 dated as of July 11, 2000 from Cordish Bel Air Square LC to The
Lincoln National Life Insurance Company and that certain Promissory Note in the
amount of $2,000,000.00 dated as of July 11, 2000 from Cordish Bel Air Square LC
to First Penn-Pacific Life Insurance Company(2) and secured by an Indemnity Deed
of Trust and Security Agreement, and Assignment of Leases, Rents, and Profits
dated as of June 29, 1995, as amended by that certain First Amendment of
Indemnity Deed of Trust and Security Agreement and Assignment of Leases, Rents,
and Profits dated as of July 11, 2000 made by Bel Air Square Joint Venture to
Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx, as Trustees, for the benefit of
The Lincoln Financial Life Insurance Company, its successors and assigns,
individually and as agent for First Penn-Pacific Life Insurance Company and
recorded among the Land Records of Harford County, Maryland in Liber 3296, folio
0388 ET. SEQ.
NOTE THAT ON 7/10/04 AN ADDITIONAL PAYMENT FOR THE MORTGAGE WILL BE DEDUCTED
FROM OUR ACCOUNT. SO IF WE CLOSE LATER THAN THAT THE PRINCIPAL BALANCES WILL
CHANGE.
----------
(1) Current principal balance as of June 10, 2004: $18,349,403.76
(2) Current aggregate principal balance as of June 10, 2004 on combined $2
Million and $4 Million note is $5,674,061.19.
CONTRIBUTION AGREEMENT
TOLLGATE MARKETPLACE
EXHIBIT 1.3.1(b)
ON THE CLOSING DATE, SUBSIDIARY (ACTING BY AND THROUGH HOLDING COMPANY), CORDISH
AND ESCROWEE SHALL EACH EXECUTE AND DELIVER TO EACH OTHER THAT CERTAIN LIQUIDITY
AMOUNT ESCROW AGREEMENT (THE "LIQUIDITY AMOUNT ESCROW AGREEMENT") THAT IS IN THE
FORM ATTACHED HERETO as EXHIBIT "1.3.1 (b)".
EXHIBIT "1.3.1 (b)"
TOLLGATE MARKETPLACE
LIQUIDITY AMOUNT ESCROW AGREEMENT
THIS LIQUIDITY AMOUNT ESCROW AGREEMENT (this "AGREEMENT"), is made and
entered into as of the 19th, day of July, 2004, by and among CORDISH TOLLGATE,
LLC, a Maryland limited liability company ("CORDISH AFFILIATE"), BEL AIR SQUARE,
LLC, a Maryland limited liability company, ("SUBSIDIARY"), and CHICAGO TITLE
INSURANCE COMPANY, a New York corporation ("ESCROWEE").
W I T N E S S E T H:
WHEREAS, immediately prior to the execution of this Agreement, L.I.
Development/Armecon Limited Partnership, a Maryland limited partnership
("WITHDRAWING MEMBER") and Tollgate Marketplace Holding Company, LLC, a Delaware
limited liability company, formerly known as Cordish Bel Air Square, LLC
("HOLDING COMPANY"), owned all of the membership interests in Subsidiary, which
owns and operates Tollgate Marketplace (the "PROPERTY"), which is located at the
intersection of U.S. 1 and Xxxxx 00, xx Xxx Xxx, Xxxxxxxx.
WHEREAS, Holding Company and Inland Bel Air HC, L.L.C., a Delaware limited
liability company ("INLAND AFFILIATE") have entered into a Contribution
Agreement, dated July 19th, 2004 (the "CONTRIBUTION AGREEMENT"), pursuant to
which, among other things: (i) Holding Company was to be reorganized as a
Delaware limited liability company and its name was to be changed from Cordish
Bel Air Square, LLC to Tollgate Marketplace Holding Company, LLC prior to the
CLOSING (as that term is defined in the Contribution Agreement); (ii) Inland
Affiliate was to be admitted to Holding Company as a member at the Closing; and
(iii) the original members of Holding Company were to contribute their
respective membership interests in the Holding Company to Cordish Affiliate for
membership interests in Cordish Affiliate at the Closing. As a condition
precedent to Closing, Withdrawing Member was to withdraw from the Subsidiary in
consideration for a distribution to the Withdrawing Member of a portion of the
CAPITAL CONTRIBUTION (as that term is defined in the Contribution Agreement).
Capitalized terms used in this Agreement without definition shall have the
respective meanings given to them in the Contribution Agreement.
WHEREAS, Closing under the Contribution Agreement has occurred on the date
hereof, and, in connection with the Closing, Holding Company has been so
reorganized and so renamed and, on the date hereof, Inland Affiliate has been so
admitted and has made the Capital Contribution, the original members of Holding
Company made such contribution of membership interests in Holding Company to
Cordish Affiliate for membership interests in Cordish Affiliate and the
Withdrawing Member have so withdrawn from the Subsidiary in consideration for
such distribution.
WHEREAS, pursuant to the terms of the Contribution Agreement, Inland
Affiliate has agreed, on behalf of Holding Company, to deposit, by wire transfer
of immediately available funds, a portion of the Capital Contribution with
Escrowee at the Closing, in an amount equal to the sum of Seven Million Two
Hundred Thirty Thousand and 00/100 Dollars ($7,230,000.00) in order to provide
for the LIQUIDITY AMOUNT (as defined in Section 1 hereof).
WHEREAS, Escrowee is willing to accept the Liquidity Amount and hold and
disburse it in accordance with the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the premises hereto, the
covenants and agreements hereinafter made, and for Ten Dollars ($10.00) in hand
paid to Escrowee, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. DEPOSIT AND ACCEPTANCE OF LIQUIDITY AMOUNT. Inland Affiliate, on
behalf of Holding Company, hereby deposits with Escrowee, and Escrowee hereby
acknowledges receipt of ten percent (10%) of the Capital Contribution, being the
sum of Seven Million Two Hundred Thirty Thousand and 00/100 Dollars
($7,230,000.00) as the "LIQUIDITY AMOUNT." Escrowee hereby agrees to deposit the
Liquidity Amount into an interest bearing account with a bank, savings and loan
institution, money market account, or other depository reasonably satisfactory
to Subsidiary, Cordish Affiliate and Escrowee with interest accruing for the
benefit of Holding Company, except as otherwise provided herein. All interest
earned on the Liquidity Amount shall be deemed part of the Liquidity Amount. The
federal taxpayer identification of Holding Company is as follows: 00-0000000.
2. RETENTION AND DISBURSEMENT OF LIQUIDITY AMOUNT. Escrowee shall retain
the Liquidity Amount in the account, and shall cause the same to be disbursed
therefrom as follows:
(a) At any time after the first anniversary of the date hereof,
Cordish Affiliate shall have the right and power to send a written notice to
Escrowee, Withdrawing Member and Subsidiary instructing Escrowee to disburse, by
wire transfer pursuant to Section 4 hereof, seventy-five percent (75%) of the
Phase 1 Liquidity Amount to the Operations Reserve and to disburse twenty five
percent (25%) of the Phase 1 Liquidity Amount to the Withdrawing Member (but
only to Euram Inc.). Unless Subsidiary provides Cordish Affiliate, Withdrawing
Member and Escrowee with a written objection in accordance with the provisions
of Section 2(c) hereof to such distribution within ten (10) Business Days of the
effective date of such notice from Cordish Affiliate to Escrowee, Escrowee shall
comply with such instructions of Cordish Affiliate on the fifteenth (15th)
Business Day following the effective date of such notice from Cordish Affiliate
to Escrowee. For the purposes of this Section 2.1(a), the term "PHASE 1
LIQUIDITY AMOUNT" shall mean the greater of (A) the excess, if any, of (i) the
then outstanding balance of the Liquidity Amount (including all of the interest
that accrued on the Liquidity Amount and decreased to the extent required under
the terms of Section 2.1(c) hereof) over (ii) fifty percent (50%) of the initial
amount of the Liquidity Amount as of the date hereof, and (B) zero.
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(b) At any time after the second anniversary of the date hereof,
Cordish Affiliate shall have the right and power to send a written notice to
Escrowee, Withdrawing Member and Subsidiary instructing Escrowee to disburse, by
wire transfer pursuant to Section 4 hereof, seventy-five percent (75%) of the
then outstanding balance of the Liquidity Amount (including all of the interest
that accrued on the Liquidity Amount) to the Operations Reserve and to disburse
the then outstanding balance of the Liquidity Amount (including all of the
interest that accrued on the Liquidity Amount) to the Withdrawing Member (but
only to Euram, Inc.). Unless Subsidiary provides Cordish Affiliate, Withdrawing
Member and Escrowee with a written objection in accordance with the provisions
of Section 2 (c) hereof to such distribution within ten (10) Business Days of
the effective date of such notice from Cordish Affiliate to Escrowee, Escrowee
shall comply with such instructions of Cordish Affiliate on the fifteenth (15th)
Business Day following the effective date of such notice from Cordish Affiliate
to Escrowee.
(c) If, at any time prior to the date that is ten (10) Business
Days after the date that Cordish Affiliate provides Escrowee, Withdrawing Member
and Subsidiary with the written instructions to the Escrowee described in
Sections 2 (a) or (b) hereof a timely and BONA FIDE demand by Inland Affiliate
for indemnification in connection with "DAMAGES" (as that term is defined in
that certain Indemnification and Guaranty Agreement, of even date herewith, (the
"INDEMNIFICATION AGREEMENT") among, Cordish Affiliate, Xxxxx X. Xxxxxxx, Inland
Affiliate and Inland Western Retail Real Estate Trust, Inc.) suffered by any of
the INLAND INDEMNIFIED PARTIES (as that term is defined in the Indemnification
Agreement) has been made on Cordish Affiliate under the provisions of Sections
3.1, 3.2, 3.3, 3.4, 3.8 and/or 7 of the Indemnification Agreement (the
"LIQUIDITY AMOUNT DAMAGES"), and such demand has not been paid or otherwise
resolved, then Subsidiary shall have the right and power to provide Escrowee,
Withdrawing Member and Cordish Affiliate with a notice hereunder instructing
Escrowee not to honor such written instructions of Cordish Affiliate and
stating the reason or reasons for Subsidiary's instructions and containing a
BONA FIDE estimate of the aggregate dollar amount of such claim. If Escrowee
receives such notice from Subsidiary within ten (10) Business Days of the
effective date of the notice from Cordish Affiliate described above Escrowee
shall comply with said instructions of Cordish Affiliate and distribute same
within fifteen (15) Business Days of the request of Cordish Affiliate, but shall
treat the size of the Liquidity Amount, for purposes of determining the amount
of the requested distributions, as equaling the actual Liquidity Amount LESS
Subsidiary's BONA FIDE estimate of the aggregate dollar amount its claim, shall
retain the balance of the Liquidity Amount in accordance with the provisions of
this Agreement and shall immediately provide Cordish Affiliate and Withdrawing
Member with a copy of such notice from Subsidiary and the amount.
(d) Notwithstanding anything to the contrary contained in this
Section 2.3, Cordish Affiliate shall have the right to utilize the Liquidity
Amount to pay Liquidity Amount Damages. If at any time Cordish Affiliate is
obligated to pay Liquidity Amount Damages, Cordish Affiliate may direct the
Escrowee by written notice to Escrowee, Withdrawing Member and Subsidiary, to
pay such Liquidity Amount Damages from the Liquidity Amount. Unless Subsidiary
provides Cordish Affiliate, Withdrawing Member and Escrowee with a written
objection to such payment, which objection shall state the reason or reasons for
such
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objection, within ten (10) Business Days of the effective date of the notice
from Cordish Affiliate to Escrowee, Escrowee shall comply with such instructions
of Cordish Affiliate on the fifteenth (15th) Business Day following the
effective date of such notice from Cordish Affiliate to Escrowee. However, if
Escrowee receives such notice from Subsidiary within ten (10) days of the
effective date of the notice from Cordish Affiliate described above, Escrowee
shall not comply with said instructions of Cordish Affiliate and shall
immediately provide Cordish Affiliate and Withdrawing Member with a copy of such
notice from Subsidiary.
(e) At the joint request and instructions of Cordish Affiliate,
Withdrawing Member (but acting solely through Euram Inc.) and Subsidiary,
Escrowee shall distribute the Liquidity Amount in accordance with such
instructions, accept, in lieu thereof alternative collateral, such as a letter
of credit or a portfolio of pledged bonds, and enter into an amendment to this
Agreement that governs the disbursement of such alternative collateral, which
amendment shall be reasonably acceptable to Cordish Affiliate, Withdrawing
Member (but acting solely through Euram Inc.), Subsidiary and Escrowee.
(f) From time to time, Subsidiary may give notice (a "DEMAND
NOTICE") to Cordish Affiliate, Withdrawing Member and Escrowee specifying in
reasonable detail the nature and dollar amount of any claim against Cordish
Affiliate for Liquidity Amount Damages accompanied by documentary evidence that
such claim has been reduced to a final, non-appealable judgment by a court of
competent jurisdiction (or a final, non-appealable arbitrators' finding) and
that such claim has been unsatisfied for a period in excess of forty-five (45)
days (a "CLAIM"). Among other things, such documentary evidence shall include,
but shall be not be limited to a true copy of the order of a court of competent
jurisdiction (or final arbitrators' finding) and an opinion by independent
counsel for Subsidiary to the effect that the order (or arbitrators finding) is
final, non-appealable and unsatisfied for a period in excess of forty-five (45)
days from the date of finality of the judgment or finding.
(g) If Cordish Affiliate gives notice to Subsidiary, Withdrawing
Member and Escrowee disputing any of the material factual statements with
respect to a Claim as set forth in a Demand Notice (a "COUNTER NOTICE") within
thirty (30) days following receipt by Escrowee of the Demand Notice regarding
such Claim, such Claim shall be resolved as provided in Section 3 hereof. Upon
receipt of a Counter Notice, Escrowee shall immediately provide Subsidiary and
Withdrawing Member with a copy of the Counter Notice.
(h) If a Counter Notice is not received by Escrowee within such
thirty (30) day period, then the dollar amount of Liquidity Amount Damages set
forth in the Demand Notice shall be deemed established for purposes of this
Agreement and, during the period that begins on the fortieth (40th) day
following the date Escrowee received the Demand Notice and ends on at the
forty-fifth (45th) day following the date Escrowee received the Demand Notice,
Escrowee shall pay to Subsidiary the dollar amount claimed in the Demand Notice
from (and only to the extent of) the Liquidity Amount and shall promptly notify
Cordish Affiliate and Withdrawing Member of such payment.
(i) If a Counter Notice is given with respect to a Claim,
Escrowee shall make payment with respect thereto only in accordance with: (A)
joint written instructions of
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Subsidiary, Withdrawing Member and Cordish Affiliate; or (B) the dispute
resolution procedures set forth in Section 3 hereof.
3. DISPUTE - ESCROWEE RIGHTS. In the event either party objects to the
disbursement of all or any part of the Liquidity Amount as provided above,
Escrowee shall notify Subsidiary, Cordish Affiliate and Withdrawing Member
(acting solely by and through Euram Inc.) of such dispute and shall hold the
Liquidity Amount in escrow pending resolution of such objection by mutual
agreement of the parties or by arbitration of same pursuant to the provisions of
Section 6 hereof. After the disbursement of the full amount of the Liquidity
Amount under the terms of this Agreement, Escrowee's duties and obligations
hereunder shall cease. In the event of any dispute regarding disbursement of the
Liquidity Amount, the party ultimately receiving the Liquidity Amount after
resolution of such dispute shall be entitled to receive from the other party all
the prevailing party's costs and expenses incurred in connection with the
resolution of such dispute including, without limitation, all arbitration, court
costs and reasonable attorney's fees.
4. WIRE INSTRUCTIONS. Any part of the Liquidity Amount to be disbursed
into the Operations Reserve shall be disbursed by wire transfer of immediately
available funds in accordance with the wire instructions attached hereto as
EXHIBIT "A." Any part of the Liquidity Amount to be disbursed into the
Withdrawing Member, care of Euram Inc., shall be disbursed by wire transfer of
immediately available funds in accordance with the wire instructions attached
hereto as EXHIBIT "B." Any part of the Liquidity Amount to be disbursed to
Subsidiary shall be disbursed by wire transfer of immediately available funds in
accordance with the wire instructions attached hereto as EXHIBIT "C." To the
extent that any of the attached wiring instructions require Escrowee to notify a
person or party by telephone or fax of such wire, the amount of such wire, the
date and time of the sending of such wire and the Fed Reference Number for such
wire, Escrowee shall comply with such instructions. Cordish Affiliate shall have
the right, from time to time, to change the wire instructions applicable for
disbursements into the Operations Reserve by Notice to the other parties hereto.
Withdrawing Member, acting solely through Euram Inc., shall have the right, from
time to time, to change the wire instructions applicable for disbursements to
Withdrawing Member by Notice to the other parties hereto. Subsidiary shall have
the right, from time to time, to change the wire instructions applicable for
disbursements to Subsidiary by Notice to the other parties hereto. Any such
change of wire instructions by a party hereto or Withdrawing Member, acting
solely through Euram Inc., shall become effective five (5) Business Days after
the effective date of such Notice to Escrowee.
5. REPRESENTATIONS AND WARRANTIES.
5.1. Cordish Affiliate hereby represents and warrants to Subsidiary
and Escrowee as follows:
(a) Cordish Affiliate is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Maryland. Cordish Affiliate has all requisite power and authority to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.
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(b) Cordish Affiliate has all requisite power and authority to
execute and deliver this Agreement, and to perform its obligations hereunder and
thereunder. The execution and delivery by Cordish Affiliate of this Agreement
and the consummation by Cordish Affiliate of the transactions contemplated
hereby have been duly and validly authorized by all necessary action on the part
of Cordish Affiliate. This Agreement has been duly and validly executed and
delivered by Cordish Affiliate and constitutes a valid and binding obligation of
Cordish Affiliate, enforceable against it in accordance with its terms.
(c) Neither the execution and delivery by Cordish Affiliate of
this Agreement nor the consummation by Cordish Affiliate of the transactions
contemplated hereby and thereby, will; (i) conflict with or violate any
provision of the organizational documents of Cordish Affiliate, (ii) require on
the part of Cordish Affiliate any filing with, or permit, authorization, consent
or approval of, any third party, (iii) conflict with, result in breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party any
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any contract or instrument to which Cordish Affiliate is a party or by
which it is bound or to which its assets are subject, or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Cordish
Affiliate or any of its properties or assets.
5.2. Subsidiary hereby represents and warrants to Cordish Affiliate
and Escrowee as follows:
(a) Subsidiary is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Maryland
and is duly qualified to conduct business and is in corporate and tax good
standing under the laws of each jurisdiction in which the nature of its
businesses or the ownership or leasing of its properties requires such
qualification. Subsidiary has all requisite power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it.
(b) Subsidiary has all requisite power and authority to execute
and deliver this Agreement, and to perform its obligations hereunder and
thereunder. The execution and delivery by Subsidiary of this Agreement and the
consummation by Subsidiary of the transactions contemplated hereby have been
duly and validly authorized by all necessary action on the part of Subsidiary.
This Agreement has been duly and validly executed and delivered by Subsidiary
and constitutes a valid and binding obligation of Subsidiary, enforceable
against it in accordance with its terms.
(c) Neither the execution and delivery by Subsidiary of this
Agreement nor the consummation by Subsidiary of the transactions contemplated
hereby and thereby, will: (i) conflict with or violate any provision of the
organizational documents of Subsidiary, (ii) require on the part of Subsidiary
any filing with, or permit, authorization, consent or approval of, any third
party, (iii) conflict with, result in breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of
obligations under, create in any party any right to terminate, modify or cancel,
or require any notice, consent or waiver under, any contract or instrument to
which Subsidiary is a party or by
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which it is bound or to which its assets are subject, or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Subsidiary
or any of its properties or assets.
5.3. Escrowee hereby represents and warrants to Cordish Affiliate
and Subsidiary as follows:
(a) Escrowee is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York and is duly
qualified to conduct business and is in corporate and tax good standing under
the laws of each jurisdiction in which the nature of its businesses requires
such qualification. Escrowee has all requisite power and authority to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.
(b) Escrowee has all requisite power and authority to execute
and deliver this Agreement, and to perform its obligations hereunder and
thereunder. The execution and delivery by Escrowee of this Agreement and the
consummation by Escrowee of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of Escrowee. This
Agreement has been duly and validly executed and delivered by Escrowee and
constitutes a valid and binding obligation of Escrowee, enforceable against it
in accordance with its terms.
(c) Neither the execution and delivery by Escrowee of this
Agreement nor the consummation by Escrowee of the transactions contemplated
hereby and thereby, will: (i) conflict with or violate any provision of the
organizational documents of Escrowee, (ii) require on the part of Escrowee any
filing with, or permit, authorization, consent or approval of, any third party,
(iii) conflict with, result in breach of, constitute (with or without due notice
or lapse of time or both) a default under, result in the acceleration of
obligations under, create in any party any right to terminate, modify or cancel,
or require any notice, consent or waiver under, any contract or instrument to
which Escrowee is a party or by which it is bound or to which its assets are
subject, or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Escrowee or any of its properties or assets.
6. ARBITRATION. In the event that any dispute shall arise between or
among the parties hereto with respect to the application of any of the
provisions of this Agreement, and such dispute is not resolved to the
satisfaction of the parties hereto within twenty (20) days after the a party
hereto shall notify the other parties hereto in writing of its desire to
arbitrate the dispute (the "ARBITRATION NOTICE"), then the dispute shall be
resolved in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then pertaining. The decision of the arbitrator shall be
binding, final and conclusive on the parties. Unless the parties otherwise
agree, such arbitration proceedings shall be conducted in Baltimore, Maryland.
The arbitrator shall be selected by the American Arbitration Association in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The fees of the arbitrator and the expenses incident to the
proceedings shall be borne by the losing party. The decision of the arbitrator
shall be rendered within thirty (30) days after the conclusion of the
arbitration. A judgment of a court of competent jurisdiction may be entered upon
the award of the arbitrator in accordance with the rules and statutes applicable
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thereto then obtaining. The parties hereto agree that the arbitrator may order
and compel specific performance.
7. VENUE. Any lawsuit, action, or proceeding arising under this Agreement
that is not subject to arbitration shall, to the extent there is federal
jurisdiction over the parties and subject matter, be brought exclusively in the
Northern Division of the United States District Court for the District of
Maryland. In the event federal jurisdiction does not exist, such lawsuit, action
or proceeding shall be brought in the Circuit Court for Baltimore County,
Maryland.
8. COOPERATION/CONFLICT WITH CONTRIBUTION AGREEMENT/. Subsidiary shall
reasonably cooperate with the efforts of Cordish Affiliate to satisfy the
conditions of the disbursement of the Liquidity Amount and shall not
unreasonably withhold any approval or issuance of any distribution direction
requested by Cordish Affiliate hereunder. In the event of a conflict between the
provisions of the Contribution Agreement and the provisions of this Agreement,
the provisions of this Agreement shall control. To the extent Subsidiary is
obligated to pay any cost and expense in connection with this Agreement, such
cost and expense shall not be paid or reimbursed from the Operations Reserve.
9. COSTS OF ADMINISTRATION AND SUCCESSORS AND ASSIGNS. The costs of
administration of this Agreement by Escrowee shall be shared equally by Cordish
Affiliate and Subsidiary. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, principals, successors
and assigns and shall be governed and construed in accordance with the laws of
the State of Illinois.
10. NOTICES. All notices, demands, consents, approvals, requests or other
communications which any of the parties to this Agreement or Withdrawing Member
may desire or be required to give hereunder (collectively, "NOTICES") shall be
in writing and shall be given by personal delivery, nationally recognized next
day delivery service (delivery charges prepaid, return receipt requested) or
United States registered or certified mail (postage prepaid, return receipt
requested) addressed as hereinafter provided. Except as otherwise specified
herein, the effective date of any Notice (I.E., the date a party shall be deemed
to have received such Notice), shall be the earliest to occur of: (a) if by
personal delivery, the date of receipt, or attempted delivery, if such
communication is refused; (b) if by nationally recognized next Business Day
delivery service (as aforesaid), the next Business Day after delivery to such
service; and (c) if sent by mail (as aforesaid), five (5) Business Days after
posting. Until further notice, notices and other communications under this
Agreement shall be addressed to the parties and Withdrawing Member listed below
as follows:
If to Cordish Affiliate: Cordish Tollgate, LLC
c/o The Cordish Company
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
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with a copy to: Cordish Tollgate, LLC
c/o The Cordish Company
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
If to Subsidiary: Tollgate Marketplace Holding, LLC
c/o Inland Western Retail Real Estate Trust, Inc.
0000 Xxxxxxxxxxx Xxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxxxxxxx Xxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
If to Escrowee: Chicago Title Insurance Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
If to Withdrawing Member: Euram Inc.
00 Xxxxxxx Xxxxxx, X.X.
Xxxxx 000-X
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Maarten Kuik
with a copy to: L.I. Development Armecon Limited Partnership
c/x Xxxxxxxx Enterprises
000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
with a copy to: Xxxxxxx Xxxxxx, Esquire
Polimeni Enterprises
000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
with a copy to: Xxx X. Xxxxx, Esquire
Xxxxxxx, LLP
0 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
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Any party hereto or Withdrawing Member may designate another addressee (and/or
change its address) for Notices hereunder by a Notice given pursuant to this
Section to each of the other parties hereto and Withdrawing Member.
11. HEADINGS. The captions and section headings contained in this
Agreement are for convenience of reference only and shall not be considered in
any interpretation of the provisions of this Agreement.
12. REPORTING. Escrowee agrees to deliver to Subsidiary and Cordish
Affiliate, on a monthly basis, a copy of the bank statement of account of the
Liquidity Amount. Such monthly statements shall be delivered to Cordish
Affiliate at its notice address and to Subsidiary: Inland Western Retail Real
Estate Trust, Inc., 0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx Xxxxxxxx 00000, attention
Xxxxxx Xxxxxx, CFO (telephone: 000-000-0000; facsimile: 630-218- 4900).
13. AMENDMENTS/THIRD PARTY BENEFICIARY. EXCEPT AS OTHERWISE HEREIN
PROVIDED, ANY AND ALL AMENDMENTS, MODIFICATIONS, ADDITIONS OR DELETIONS TO THIS
AGREEMENT SHALL BE NULL AND VOID UNLESS APPROVED IN ADVANCE BY THE PARTIES
HERETO IN WRITING. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT CORDISH
AFFILIATE MAY NOT ENTER INTO OR CONSENT TO ANY AMENDMENTS, MODIFICATION,
ADDITIONS OR DELETIONS TO THIS AGREEMENT UNLESS IT OBTAINS THE PRIOR WRITTEN
CONSENT THERETO FROM WITHDRAWING MEMBER. WITHDRAWING MEMBER (ACTING SOLELY BY,
THROUGH AND FOR THE BENEFIT OF EURAM, INC.) IS A THIRD PARTY BENEFICIARY OF THIS
AGREEMENT. In the event that any party hereto fails to comply with any of the
terms and provisions of this Agreement, Withdrawing Member shall have the right
to initiate and prosecute an arbitration proceeding against such party to
enforce the provisions of this Agreement (including court actions to enforce or
challenge any findings) solely to the extent that such provisions directly
effect the economic rights and interests of Withdrawing Member. The provisions
of Sections 6, 7, 15, 17 and 18 shall apply to such proceeding as if Withdrawing
Member was a party to this Agreement.
14. INTEGRATION. With the exception of the Contribution Agreement and the
Indemnity Agreement and the ESCROW AGREEMENT, THE LEASING AGREEMENT and the
OPERATING AGREEMENT (as those terms are defined in the Contribution Agreement)
and any and all agreements executed in connection with any such agreement, this
Agreement encompasses, replaces, integrates and supercedes any and all other
negotiations, discussions, offers, promises, arrangements and agreements between
the parties hereto relating to the Property.
15. INVALID PROVISIONS. This Agreement shall be construed, as to
execution, interpretation and enforcement, in accordance with the laws of the
State of Maryland. If any term, condition or provision of this Agreement shall
be declared invalid or unenforceable, the remainder of this Agreement shall not
be affected thereby and shall remain in full force and effect and shall be valid
and enforceable to the fullest extent permitted by law.
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16. ATTRIBUTION OF DRAFTING. This Agreement shall be deemed to have been
drafted jointly by the parties and any uncertainty or ambiguity shall not be
construed for or against either party as an attribution of drafting of either
party.
17. ATTORNEY FEES. Subject to the provisions of Section 6 hereof, if
either Subsidiary or Cordish Affiliate brings suit or other legal proceedings to
enforce the provisions of this Agreement against the other, then the party
prevailing in such suit or proceeding shall be reimbursed by the other for all
reasonable attorneys' fees and litigation costs and expenses incurred by the
prevailing party in connection with such suit or proceeding.
18. WAIVER OF JURY TRIAL. Subject to the provisions of Section 6 hereof,
Subsidiary and Cordish Affiliate do hereby waive trial by jury in any action,
suit, proceeding, and/or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of or in any way
connected with this Agreement any claim of injury or damage, and/or statutory
remedy.
19. GOOD FAITH AND FAIR DEALING. The parties covenant and agree each to
the other that its conduct under this Agreement, and the interpretation and
enforcement of the provisions hereof, shall be characterized by good faith and
fair dealings so that the objectives of each party as set forth in this
Agreement may be achieved.
20. COUNTERPARTS. This Agreement may be executed in counterparts and shall
constitute an agreement binding on all parties notwithstanding that all parties
are not signatories of the original or the same counterpart. Furthermore, the
signatures from one counterpart may be attached to another to constitute a fully
executed original. The Agreement may be executed by facsimile.
21. TIME OF THE ESSENCE. Time is of the essence with regard to the parties
obligations under this Agreement.
22. SURVIVAL PERIOD IN CONTRIBUTION AGREEMENT. Section 2 of the
Indemnification Agreement provides that the representations, warranties,
covenants or agreements made in the Contribution Agreement shall survive the
Closing Date for the periods provided therein. Nothing in this Agreement shall
be interpreted as modifying the survival period of such representations,
warranties, covenants or agreements.
23. BUSINESS DAY, The term "BUSINESS DAY" means any day other than
Saturday, Sunday or any other day on which commercial banks or savings and loan
associations are required or authorized by law to close in New York City.
SIGNATURES ON NEXT PAGE
11
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed and delivered, under seal, as of the day and year first
above written.
WITNESS/ATTEST: CORDISH AFFILIATE:
CORDISH TOLLGATE, LLC,
a Maryland limited liability company
[ILLEGIBLE] By: /s/ Xxxxxxx X. Xxxxxx
----------------------- ------------------------------------- (SEAL)
Xxxxxxx X. Xxxxxx, Authorized Person
SUBSIDIARY:
BEL AIR SQUARE, LLC, a Maryland limited
liability company
[ILLEGIBLE] By: /s/ [ILLEGIBLE]
----------------------- ------------------------------------- (SEAL)
Name: [ILLEGIBLE]
-------------------------
Title: [ILLEGIBLE]
------------------------
ESCROWEE:
CHICAGO TITLE INSURANCE
COMPANY, a New York corporation
By:
---------------------- ------------------------------------ (SEAL)
Title:
------------------------------------
Name:
------------------------------
12
CONTRIBUTION AGREEMENT
TOLLGATE MARKETPLACE
EXHIBIT C
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT ATTACHED HERETO AS
EXHIBIT "C" (THE "OPERATING AGREEMENT")
================================================================================
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
--------------------------------
DATED AS OF JULY 19, 2004
--------------------------------
================================================================================
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINED TERMS............................................................................... 2
ARTICLE II CONTINUATION; NAME; PRINCIPAL OFFICE; PURPOSE; TERM.........................................12
SECTION 2.1. Continuation................................................................................12
SECTION 2.2. Name, Registered Office, and Resident Agent; Principal Place of Business....................12
SECTION 2.3. Purpose.....................................................................................13
SECTION 2.4. Term........................................................................................14
SECTION 2.5. Classification of the Company for Tax Purposes..............................................14
SECTION 2.6. Liability of the Members....................................................................14
SECTION 2.7. Ownership and Waiver of Partition and Valuation.............................................14
SECTION 2.8. Waiver of Right to Judicial Dissolution.....................................................15
ARTICLE III MEMBERS; COMPANY CAPITAL; PERCENTAGE INTERESTS..............................................15
SECTION 3.1. Members.....................................................................................15
SECTION 3.2. Initial Capital Contributions...............................................................16
SECTION 3.3. Additional Capital Contributions............................................................16
SECTION 3.4. Funding of Additional Cash Requirements.....................................................17
SECTION 3.5. Loans.......................................................................................18
SECTION 3.6. No Third Party Beneficiaries................................................................19
SECTION 3.7. Capital Accounts............................................................................19
SECTION 3.8. Return of Capital...........................................................................20
ARTICLE IV DISTRIBUTIONS; PAYMENTS TO WITHDRAWING
MEMBER AND REPAYMENT OF EXISTING DEBT.......................................................20
SECTION 4.1. Payments to Withdrawing Member and Repayment of Existing Debt...............................20
SECTION 4.2. Distributions of Net Cash Flow..............................................................21
SECTION 4.3. Net Proceeds of a Capital Transaction.......................................................21
SECTION 4.4 Net Proceeds of a Financing.................................................................22
SECTION 4.5. Other Distribution Rules....................................................................22
SECTION 4.6. Withholding.................................................................................23
ARTICLE V ALLOCATION OF PROFITS AND LOSSES............................................................24
SECTION 5.1. Profits and Losses..........................................................................24
SECTION 5.2. Regulatory and Special Allocations..........................................................26
SECTION 5.3. Other Allocation Rules......................................................................26
SECTION 5.4. Tax Allocations: Code Section 704(c)........................................................26
ARTICLE VI GOVERNANCE AND ADMINISTRATIVE PROVISIONS....................................................27
- i -
SECTION 6.1. Management of Business and Affairs..........................................................27
SECTION 6.2. Delegation of Authority Regarding Specific Matters..........................................32
SECTION 6.3. Duties and Conflicts........................................................................35
SECTION 6.4. Operations Reserve..........................................................................36
SECTION 6.5 Acquisition of Additional Properties........................................................36
SECTION 6.6 Compliance with Certain Requirements........................................................39
SECTION 6.7 Exculpation and Indemnification.............................................................39
ARTICLE VII BOOKS AND RECORDS; RESERVES.................................................................41
SECTION 7.1. Bank Accounts...............................................................................41
SECTION 7.2. Books of Account............................................................................41
SECTION 7.3. Operating Statements........................................................................42
SECTION 7.4. The Accountant..............................................................................43
SECTION 7.5. Tax Matters Member..........................................................................43
ARTICLE VIII TRANSFER OF LLC INTERESTS...................................................................46
SECTION 8.1. No Transfer.................................................................................46
SECTION 8.2. Permitted Transfers.........................................................................46
SECTION 8.3. Succession by Operation of Law..............................................................47
SECTION 8.4. Additional Restrictions on Transfers........................................................47
ARTICLE IX DISSOLUTION AND TERMINATION OF THE COMPANY..................................................48
SECTION 9.1. Dissolution.................................................................................48
SECTION 9.2. Termination.................................................................................48
SECTION 9.3. Liquidating Member..........................................................................48
SECTION 9.4 Termination Rights..........................................................................49
SECTION 9.5. Closing.....................................................................................50
SECTION 9.6. Purchase Price on Redemption of Cordish LLC Interests.......................................51
ARTICLE X MISCELLANEOUS...............................................................................52
SECTION 10.1. Further Assurances..........................................................................52
SECTION 10.2. Notices.....................................................................................52
SECTION 10.3. Independent Representation..................................................................53
SECTION 10.4. Governing Law...............................................................................54
SECTION 10.5. Captions....................................................................................54
SECTION 10.6. Pronouns....................................................................................54
SECTION 10.7. Successors and Assigns......................................................................54
SECTION 10.8. Extension Not a Waiver......................................................................54
SECTION 10.9. Construction................................................................................54
SECTION 10.10.Severability................................................................................55
SECTION 10.11.Consents....................................................................................55
SECTION 10.12.Entire Agreement............................................................................55
SECTION 10.13.Rules of Construction.......................................................................55
SECTION 10.14.Counterparts................................................................................56
SECTION 10.15. Expenses...................................................................................56
SECTION 10.16. Arbitration................................................................................56
SECTION 10.17. General Indemnity/Liability................................................................57
- ii -
SCHEDULES
Schedule A List of Members
Schedule 5.2 Regulatory and Special Allocations
EXHIBITS
Exhibit A Description of Existing Property and Owner Entity
Exhibit B Approved Financing of Properties
Exhibit C Form of REIT Declaration of Trust
Exhibit D Form of Promissory Note
Exhibit E Calculations Exhibit
- iii-
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"AGREEMENT") dated as of July 19, 2004 is made by and between CORDISH TOLLGATE
LLC, a Maryland limited liability company (collectively "CORDISH"), and INLAND
BEL AIR HC L.L.C., a Delaware limited liability company ("INLAND").
PRELIMINARY STATEMENTS
Cordish Bel Air Square, LLC (the "COMPANY") was reorganized as a limited
liability company under the Delaware Limited Liability Company Act pursuant to
the filing of a Certificate of Formation of the Company and an Agreement and
Certificate of Merger with the Office of the Secretary of State of the State of
Delaware on July 16, 2004, and a Limited Liability Company Agreement dated July
19, 2004 (the "ORIGINAL AGREEMENT"), In connection with such reorganization, the
Company changed its name to "Tollgate Marketplace Holding Company LLC."
The Company is a member of Bel Air Square, LLC, a Maryland limited
liability company (the "OWNER ENTITY") which owns and operates Tollgate
Marketplace (the "EXISTING PROPERTY").
Pursuant to the terms of a Contribution Agreement dated July 19, 0000,
Xxxxxx has agreed to make certain cash contributions to the Company in exchange
for a membership interest in the Company. In connection with the investment by
Inland in the Company, the Company shall contribute certain funds to the Owner
Entity and the membership interest of the Withdrawing Member in the Owner Entity
shall be purchased and redeemed by the Owner Entity in accordance with the terms
hereof so that immediately after the admission of Inland and the closing under
the Contribution Agreement, the Company shall own one hundred percent (100%) of
the membership interests in the Owner Entity.
Immediately prior to the date hereof, the sole members of the Company were
Cordish Enterprises, LLLP, The Cordish Family I, LLC, Xxxxx L, Xxxxxxxx,
Xxxxxx X. Xxxxxxxx and Xxxxxx Family Investments, LLC (collectively, the
"ORIGINAL MEMBERS"). Pursuant to the terms of an Assignment and Contribution of
Membership Interest Agreement, effective as of the date hereof, each of the
Original Members has assigned and contributed its entire membership interest in
the Company to Cordish and has withdrawn as a Member of the Company, so that
effective immediately following the admission of Inland as a Member of the
Company under the terms of the Contribution Agreement and this Agreement, the
sole Members of the Company shall be Inland and Cordish.
The parties hereto now desire to enter into this Amended and Restated
Limited Liability Company Agreement in order to (i) reflect the withdrawal of
the Original Members as Members of the Company, (ii) reflect the admission of
Cordish and Inland as Members of the Company and (iii) establish the manner in
which the business and affairs of the Company shall be managed
and to determine the respective rights, duties and obligations of the Members
with respect to the Company and each other.
NOW THEREFORE, the parties hereto, in consideration of the foregoing
premises and the mutual covenants and agreements contained herein, hereby agree
as follows:
ARTICLE I
DEFINED TERMS
The following terms shall have the following meanings when used herein:
ADDITIONAL CAPITAL CONTRIBUTIONS: The Capital Contributions made by a
Member, if any, to fund the acquisition and/or ownership by the Company,
directly or indirectly, of a Property.
ADDITIONAL PROPERTY: Each direct or indirect ownership interest which the
Company acquires in a property in accordance with the terms of Section 6.5
hereof, together with all related assets and properties, whether, real, personal
or mixed, tangible or intangible, used in connection therewith. Subject to the
terms of Section 6.2.D hereof, an Additional Property may include an equity
interest in an entity that owns a property, including, but not limited to, an
equity interest in an Affiliate of a Member, The Existing Property shall not
constitute an Additional Property. Each Additional Property shall be acquired
and owned in a separate Additional Property Owner Entity.
ADDITIONAL PROPERTY OWNER ENTITY: Each of the limited liability companies
that is the owner of an Additional Property. Each Additional Property Owner
Entity shall be wholly-owned by the Company.
ADJUSTED CAPITAL ACCOUNT DEFICIT: With respect to any Member, the deficit
balance, if any, in such Member's Capital Account as of the end of the relevant
Allocation Year, after giving effect to the following adjustments: (i) credit to
such Capital Account any amount that such Member is obligated to restore
pursuant to any provision of this Agreement, is otherwise treated as being
obligated to restore under Treasury Regulation Section 1.704-1(b)(2)(ii)(c), or
is deemed to be obligated to restore pursuant to the penultimate sentences of
Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and (ii) debit to
such Capital Account the items described in Treasury Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted
Capital Account Deficit is intended to comply with the provisions of Treasury
Regulation Section 1.704-l(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
ADJUSTED CAPITAL BALANCE; With respect to (a) Inland, an amount equal to
$72.3 million, less the amount of all distributions made to Inland pursuant to
the provisions of Sections 4.3(iv) and 4.4(ii) and (b) Cordish, the amount set
forth opposite Cordish's name on Schedule A attached hereto, (i) less the amount
of all distributions made to Cordish pursuant to Sections 4.3(ii) and 4.4(iv),
and (ii) increased from time to time in accordance with the provisions of
Section 3.2.B hereof.
ADDITIONAL PROPERTY OWNER ENTITY AGREEMENT: The Operating Agreement of each
Additional Property Owner Entity, as the same may be amended or modified from
time to time.
- 2 -
AFFILIATE: With respect to any Person, (i) any Person directly or
indirectly controlled by, controlling or under common control with such Person,
(ii) any officer, director, general partner or manager of such Person, or (iii)
any Person which owns, directly or indirectly, ten percent (10%) or more of any
class of voting securities of such Person or which exercises control over the
management of such Person. For the purposes of this Agreement, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities or other beneficial interests, by contract or
otherwise; and the term "controls", "controlling" and "controlled" have the
meanings correlative to the foregoing.
ALLOCATION YEAR: Means (i) the period commencing on the Closing Date and
ending on December 31, 2004, (ii) any subsequent period commencing on January 1
and ending on the following December 31, or (iii) any portion of the period
described in clause (ii) for which the Company is required to allocate Profits,
Losses and other items of Company income, gain, loss or deduction pursuant to
Article V.
APPROVED FINANCING: Means any financing or refinancing of a Property on the
terms set forth on EXHIBIT B hereto.
BUSINESS DAY: Any day other than Saturday, Sunday or any other day on which
commercial banks or savings and loan associations are required or authorized by
law to close in New York City.
CAPITAL ACCOUNT: The Capital Account maintained for each Member pursuant to
Section 3.7.
CAPITAL CONTRIBUTION: With respect to any Member, the amount of money and
the initial Gross Asset Value of any property contributed by or credited to such
Member, to the Company (net of any liabilities secured by such property or to
which such property is otherwise subject, determined taking into account Code
Section 752(c) and the Treasury Regulations thereunder, and any other applicable
provisions of the Code and the Regulations).
CAPITAL EXPENDITURES: For any period, the amount expended for items
capitalized under generally accepted accounting principles, consistently
applied, except for such items as are otherwise classified under this Agreement.
CAPITAL TRANSACTION: Any of the following; (a) a sale, exchange, transfer,
assignment or other disposition of all or a portion of any Company Asset other
than tangible personal property that is not sold or transferred in connection
with the sale or transfer of real property or a leasehold interest in real
property; (b) any condemnation or deeding in lieu of condemnation of all or a
portion of any Company Asset; (c) any fire or other casualty to the Property or
any other Company Asset; and (d) the financing or refinancing of any Additional
Property.
CASH SHORTFALL: For any period and, to the extent applicable, with respect
to the Owner Entity and each Additional Property Owner Entity, the excess, if
any, of (a) Operating Expenses over (b) Gross Receipts (determined, to the
extent applicable, for each of the Company, the Owner Entity and each Additional
Property Owner Entity).
- 3 -
CASH SHORTFALL LOAN: A loan made by a Member (or Affiliate or other Person
designated by a Member) to the Owner Entity or an Additional Property Owner
Entity pursuant to Section 3.4.A or 3.4.B hereof, on the terms set forth in
Section 3.4.C and Section 3.4.E hereof.
CERTIFICATE: The Certificate of Formation for the Company filed with the
Secretary of State, pursuant to Section 18-201 of the LLC Act, as the same may
be amended and restated from time to time.
CLOSING DATE: Means the date of this Agreement.
CODE: The Internal Revenue Code of 1986, as amended, or any corresponding
provision or provisions of prior or succeeding law.
COMPANY: Cordish Bel Air Square, LLC, which has been renamed and
reorganized as Tollgate Marketplace Holding Company LLC, a limited liability
company formed under the laws of the State of Delaware, and any successor
limited liability company.
COMPANY ASSET: Any of the assets and property, whether tangible or
intangible and whether real, personal, or mixed, at any time owned by or held
for the benefit of the Company or any Owner Entity or Additional Property Owner
Entity and all membership or beneficial interests in each Owner Entity and
Additional Property Owner Entity.
COMPANY MINIMUM GAIN: Has the meaning given to the term "partnership
minimum gain" set forth in Treasury Regulations Section 1.704-2(d).
CONTRIBUTION AGREEMENT: The Contribution Agreement between the Company and
Inland, dated as of the date hereof.
CORDISH: Cordish Tollgate LLC, a Maryland limited liability company.
CORDISH LLC INTEREST (OR LLC INTEREST OF CORDISH): The entire LLC Interest
in the Company held directly or indirectly by Cordish, any Cordish Affiliate and
any and all successors and permitted assignees of Cordish and/or any Cordish
Affiliate.
CORDISH PREFERRED RETURN: A per annum rate equal to 6.0% per annum on
Cordish's Adjusted Capital Balance as adjusted from time to time, provided,
however, that such rate shall be pro rated for each Fiscal Year of the Company
which is less than twelve (12) full months.
DECLARATION OF TRUST: is defined in section 6.2.D and set forth in
EXHIBIT C.
DEFAULT LOAN: A loan defined herein as a "Default Loan" pursuant to
Sections 3.4.A, 3.4.B and/or 6.5.F.
DEPRECIATION: For each Allocation Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Allocation Year, except that if the Gross Asset
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Allocation Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income
- 4 -
tax depreciation, amortization, or other cost recovery deduction for such
Allocation Year bears to such beginning adjusted tax basis. If any asset shall
have a zero adjusted basis for federal income tax purposes, Depreciation shall
be determined utilizing any reasonable method selected by Cordish and the
Manager.
DEVELOPMENT PLAN: With respect to any Additional Property a plan prepared
by Cordish and submitted to Inland setting forth the overall plan for the
acquisition and development or redevelopment of an Additional Property,
including the following items, as applicable: purchase price for the Additional
Property, environmental studies, conceptual plans, leasing plan, a development
budget, material terms of anticipated project financing and such other material
information respecting the acquisition, development or redevelopment of such
Additional Property as determined by Cordish.
80% OWNED AFFILIATE: With respect to any Person, an Affiliate of such
Person 80% or more of the capital stock (or its equivalent in the case of
Persons other than corporations) of which is owned beneficially by such Person
directly, or indirectly through one or more 80% Owned Affiliates, or by a Person
who, directly or indirectly, owns beneficially 80% or more of the equity
interest (or its equivalent in the case of Persons other than corporations) of
such Person; provided that, for purposes of determining the ownership of the
equity interests of any Person, DE MINIMIS amounts of stock held by directors,
nominees and similar Persons pursuant to statutory or regulatory requirements
shall not be taken into account.
EVENT OF BANKRUPTCY: With respect to any Member, if such Member (i) makes
an assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it
an order for relief, in any bankruptcy or insolvency proceeding, (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, (v) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against it in
any proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Member or of all or any
substantial part of its properties, or (vii) 120 days after the commencement of
any proceeding against the Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Member's consent or
acquiescence of a trustee, receiver or liquidator of such Member or of all or
any substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the appointment
is not vacated. With respect to a Member, the foregoing definition of "Event of
Bankruptcy" is intended to replace and shall supersede and replace the
definition of "Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the LLC
Act.
EXISTING PROPERTY: Tollgate Marketplace, Bel Air, Maryland, as further
described on EXHIBIT A.
FISCAL YEAR. Means (i) the period commencing on the date hereof and ending
on December 31, 2004, and (ii) any subsequent period commencing on January 1 and
ending on the earlier to occur of (A) the following December 31, or (B) the date
on which all Company Assets are distributed pursuant to Section 9.2 and the
Certificate has been cancelled pursuant to the Act.
- 5 -
GROSS ASSET VALUE: With respect to any asset, the asset's adjusted basis
for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by or
credited to a Member to the Company shall be the gross fair market value of
such asset, as determined by the Manager;
(b) The Gross Asset Values of all Company Assets shall be adjusted
to equal their respective gross fair market values, as determined by the
Manager, as of the following times: (i) the acquisition of an interest or
an additional interest in the Company by any new or existing Member in
exchange for more than a de minimis Capital Contribution; (ii) the
distribution by the Company to a Member of more than a de minimis amount of
property or money as consideration for an interest in the Company; (iii)
the liquidation of the Company within the meaning of Treasury Regulations
Section 1.704-l(b)(2)(ii)(g); and (iv) whenever otherwise permitted under
Treasury Regulations Section 1.704- l(b)(2)(iv)(f); provided, however, that
adjustments pursuant to clause (i) above shall be made only if the Manager
determines that such adjustments are necessary or appropriate to reflect
the relative economic interests of the Members;
(c) The Gross Asset Value of any Company Asset distributed to a
Member shall be the gross fair market value of such asset on the date of
distribution as determined in accordance with the provisions hereof;
(d) The Gross Asset Values of Company Assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-l(b)(2)(iv)(m) and
subparagraph (vi) of the definition of Profit and Losses; PROVIDED,
HOWEVER, that Gross Asset Values shall not be adjusted pursuant to this
paragraph (d) to the extent the Manager determines that an adjustment
pursuant to paragraph (b) hereof is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment pursuant to
this paragraph (d); and
(e) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to paragraphs (a), (b), or (d), such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing Profits and Losses.
(f) The Members agree that, as of the date hereof, the Gross Asset
Value of the Existing Property is $ 72.3 million.
GROSS RECEIPTS: For any period and with respect to each Property, all cash
receipts and revenues of the Company and the associated Owner Entity or
Additional Property Owner Entity, as applicable, of any kind calculated on a
cash basis (other than distributions received by the Company from any of the
Owner Entity or Additional Property Owner Entity, as applicable), including,
without duplication (i) all Rents received by such Owner Entity or Additional
Property Owner Entity, as applicable, (ii) all payments received by such Owner
Entity or Additional
- 6 -
Property Owner Entity, as applicable, from the operators of any licensed
facilities or concessions, (iii) all other forms of rent, revenue, income,
proceeds, royalties, profits and other benefits paid to such Owner Entity or
Additional Property Owner Entity, as applicable, from using, leasing, licensing,
processing, operating from or in, or otherwise enjoying all or any portion of
the Property, (iv) all payments under business interruption insurance policies
or proceeds payable under any policy of insurance covering loss of Rents, (v)
any utility or other deposits returned to such Owner Entity or Additional
Property Owner Entity, as applicable, or other refunds accruing to such Owner
Entity or Additional Property Owner Entity, as applicable, (vi) any interest
earned on security deposits held by such Owner Entity or Additional Property
Owner Entity, as applicable, to the extent retained by such Owner Entity or
Additional Property Owner Entity, as applicable, and interest earned on
operating and other accounts of such Owner Entity or Additional Property Owner
Entity, as applicable, (vii) all amounts received by such Owner Entity or
Additional Property Owner Entity, as applicable, from tenants at the Property in
connection with the surrender of such tenant's lease and (viii) all refunds,
rebates and other recoveries of items previously charged as Operating Expenses,
but excluding, (a) Capital Contributions to such Owner Entity or Additional
Property Owner Entity, as applicable, or the Company, (b) Net Proceeds of a
Capital Transaction and Net Proceeds of a Financing with respect to such Owner
Entity or Additional Property Owner Entity, as applicable, or the Company, (c)
sums held by such Owner Entity or Additional Property Owner Entity, as
applicable, as security deposits under leases for space at the Property unless
and until applied to the satisfaction of tenants' obligations under such leases
(to the extent permitted under applicable leases and law) and (d) non-cash
charges accruing to the Company or such Owner Entity or Additional Property
Owner Entity, as applicable, in the nature of depreciation and amortization of
the Property.
IMPOSITIONS: With respect to any Property, all taxes (including sales and
use taxes), assessments (including all assessments for public improvements or
benefits, whether or not commenced or completed prior to the date hereof),
water, sewer or other rents, rates and charges, excises, levies, license fees,
permit fees, inspection fees and other authorization fees and other charges, in
each case whether general or special, ordinary or extraordinary, of every
character (including all interest and penalties thereon), which at any time may
be assessed, levied, confirmed or imposed by any governmental or
quasi-governmental authority having jurisdiction over the Property on or in
respect of or be a lien upon (i) the Property or any estate or interest therein,
(ii) any occupancy, use or possession of, or activity conducted on, the
Property, or (iii) the Rents from the Property or the use or occupancy thereof.
INDEMNIFICATION AGREEMENT: That certain Indemnification and Guaranty
Agreement, dated as of the date hereof, by and between Xxxxx X. Xxxxxxx,
Cordish, Inland Western Retail Real Estate Trust, Inc. and Inland.
INITIAL CAPITAL CONTRIBUTION: The Capital Contribution made by Inland as
set forth in Section 3.2.A.
INLAND PREFERRED RETURN: A per annum rate equal to 18% per annum on
Inland's Adjusted Capital Balance as adjusted from time to time, provided,
however, that such rate shall be pro rated for each Fiscal Year of the Company
which is less than twelve (12) full months.
- 7 -
LIQUIDITY ESCROW AGREEMENT: Means that certain Liquidity Amount Escrow
Agreement executed concurrently herewith, by and among Cordish, the Owner Entity
and Chicago Title Insurance Company, as escrowee.
LLC INTEREST: As to any Member, all of the interest of that Member in the
Company including, without limitation, such Member's (i) right to a distributive
share of the Profits and Losses and cash flow of the Company, (ii) right to a
distributive share of Company Assets and (iii) right to participate in the
management of the business and affairs of the Company, as provided in this
Agreement.
MANAGER. Means the Person in whom the management of the Company is vested
to the extent so provided in this Agreement. The Manager must be a Member of the
Company. The Manager is Inland.
MEMBER: At any time, any Person admitted and remaining as a member of the
Company pursuant to the terms of this Agreement. As of the date of this
Agreement, the Members of the Company are Cordish and Inland.
MEMBER NONRECOURSE DEBT: Has the meaning given to the term "partner
nonrecourse debt" set forth in Treasury Regulations Section 1.704-2(b)(4).
MEMBER NONRECOURSE DEBT MINIMUM GAIN: An amount, with respect to each
Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if
such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined
in accordance with Treasury Regulations Section 1.704-2(i)(2) and (3).
MEMBER NONRECOURSE DEDUCTIONS: Has the meaning given to the term "partner
nonrecourse deductions" set forth in Treasury Regulations Section 1.704-2(i)(2).
For any Allocation Year, the amount of Member Nonrecourse Deductions with
respect to a Member Nonrecourse Debt equals the excess, if any, of the net
increase, if any, in the amount of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt over the aggregate amount of any
distributions during such Allocation Year to the Member that bears the economic
risk of loss for such Member Nonrecourse Debt to the extent such distributions
are from proceeds of such Member Nonrecourse Debt and are allocable to an
increase in Member Nonrecourse Debt Minimum Gain, determined according to the
provisions of Treasury Regulations Section 1.704-2(i)(2).
NET CASH FLOW: For any period, the excess of (a) Gross Receipts plus any
amount, as reasonably determined by the Manager, taken out of any general
reserve account (other than the Operations Reserve which is governed by Section
6.4 hereof) established by the Company or any Owner Entity or Additional
Property Owner Entity, over (b) Operating Expenses plus any amount, as
reasonably determined by the Manager, added during such period to any such
general reserve account (other than from the Operations Reserve).
NET PROCEEDS OF A CAPITAL TRANSACTION: With respect to any Property,
Additional Property, Owner Entity or Additional Property Owner Entity, the net
cash proceeds from a Capital Transaction less any portion thereof used to (i)
establish reserves as reasonably determined by the Manager, (ii) repay any debts
or other obligations of the Company or the
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Owner Entity or Additional Property Owner Entity, as applicable (including Cash
Shortfall Loans and Development Loans), or (iii) restore the Property following
a casualty or condemnation. "Net Proceeds of a Capital Transaction" shall
INCLUDE all principal, interest and other payments as and when received with
respect to any note or other obligation received by the Company, an Owner Entity
or Additional Property Owner Entity, as applicable in connection with a Capital
Transaction.
NET PROCEEDS OF A FINANCING: With respect to the Existing Property, the net
cash proceeds from an Approved Financing (or otherwise with the consent of the
Members) less any portion thereof used to (i) establish reserves as reasonably
determined by the Manager, or (ii) repay any debts or other obligations of the
Owner Entity (including Cash Shortfall Loans to the Owner Entity).
NONRECOURSE DEDUCTIONS: Has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for an Allocation
Year equals the excess, if any, of the net increase, if any, in the amount of
Company Minimum Gain during that Allocation Year, over the aggregate amount of
any distributions during that Allocation Year of proceeds of a Nonrecourse
Liability that are allocable to an increase in Company Minimum Gain, determined
according to the provisions of Treasury Regulations Section 1.704-2(c).
NONRECOURSE LIABILITY: Has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(3).
OPERATING EXPENSES: For any period and with respect to each Property, all
expenses incurred by the Company and/or the Owner Entity (or Additional Property
Owner Entity, as applicable) during such period, calculated on a cash basis,
including, without duplication (subject to the exclusions described below): (i)
current operating expenses and taxes incurred by an Owner Entity (or Additional
Property Owner Entity, as applicable) or the Company including (without
duplication) utility charges, costs of materials, normal repair and maintenance
costs, Impositions and other business taxes applicable to any Property (except
as excluded below), license fees, costs of complying with any encumbrance upon
any Property, premiums for insurance, fees of the Company's counsel, the
accounting fees, the costs of any audits and appraisals performed by the Company
and any other reasonable costs which are paid for by the Company, (ii) the
management fee and leasing commissions paid to a property manager by any Owner
Entity (or Additional Property Owner Entity, as applicable) pursuant to a
management agreement or leasing commission agreement, (iii) Capital Expenditures
incurred in accordance with the provisions hereof or as mandated by law or
necessitated by an emergency for improvements to space at any Property leased to
tenants, inducements granted to such tenants and leasing expenses (including
leasing commissions) (notwithstanding the foregoing, Capital Expenditures and
other costs and expenses incurred in connection with the acquisition,
development, redevelopment, improvement, construction and/or leasing of the
Additional Properties, or any of them, including costs for improvements to space
at any Additional Property leased to tenants and inducements granted to such
tenants shall not constitute Operating Expenses), and (iv) payments of fees,
interest and scheduled amortization of principal on any financing affecting the
Property or the Company Assets, but excluding without duplication: (A)
expenditures paid or to be paid from insurance proceeds or condemnation awards
available for restoration of a Property; (B) any non-cash charges from
depreciation or amortization of
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property; (C) any expenses or costs incurred in connection with a Capital
Transaction that would not have been incurred but for such Capital Transaction;
and (D) any payments on Cash Shortfall Loans and Development Loans.
OPERATIONS RESERVE: The reserve established and maintained by the Company
in accordance with Section 6.4 hereof.
OWNER ENTITY: Bel Air Square LLC, a Maryland limited liability company, as
identified on EXHIBIT A. The term "Owner Entity" shall also include any
borrowing entity formed and utilized by an Owner Entity in connection with an
Approved Financing as set forth on EXHIBIT B.
OWNER ENTITY AGREEMENT: The Operating Agreement of the Owner Entity, as the
same may be amended or modified from time to time.
PERCENTAGE INTEREST: As to any Member, the Percentage Interest of such
Member specified in Section 3.1.
PERSON: Any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization.
PROFITS and LOSSES: For any Allocation Year, the taxable income or loss of
the Company for federal income tax purposes for such Allocation Year, as
determined by the Accountant after consultation with the Members, in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss or
deduction required to be separately stated 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
hereunder shall be added to such taxable income or loss;
(ii) Any expenditures of the Company described in Code Section
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures pursuant
to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise
taken into account in computing Profits or Losses hereunder shall be
subtracted from such taxable income or loss.
(iii) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to the provisions of this Agreement, the amount of such
adjustment shall be taken into account as gain or loss from the disposition
of such asset for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed with reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Allocation
Year;
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(vi) To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Code Section 734(b) is required pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into
account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Member's LLC Interest, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of the asset and shall be taken into
account for purposes of computing Profits and Losses; and
(vii) Notwithstanding any other provisions of the foregoing
provisions of this definition, any items which are specially allocated to a
Member hereunder shall not be taken into account in computing Profits or
Losses.
The amount of the items of Company income, gain, loss or deduction available to
be specially allocated pursuant to Section 5.2 hereof shall be determined by
applying rules analogous to those set forth in subparagraphs (i) through (vi)
above.
PROPERTY: In the singular, each of the Existing Property and Additional
Properties, and in the plural, any two or more of the Existing Property and/or
Additional Properties.
RENTS: Collectively, all fixed, base, minimum, guaranteed, additional,
retroactive, percentage, participation or escalation rents, operating cost
pass-throughs, utility charges, common area maintenance or management charges,
administrative charges, parking, maintenance, tax and insurance contributions
payable under any lease for space at the Property, deficiency rents and
liquidated damages following default by any tenant at the Property, premiums
payable by any tenant at the Property upon the exercise of a cancellation
privilege originally provided in any lease for space at the Property, and any
rights and claims of any kind which the Company may have against any tenant at
the Property.
REORGANIZATION AGREEMENT: means that certain Agreement to Reorganize and
Retire dated July 19, 2004 by and among the Company, the Owner Entity and the
Withdrawing Member.
TAX MATTERS MEMBER. Has the meaning set forth in Section 7.5.
TRANSFER: Any sale, assignment, gift, pledge, hypothecation or other
transfer, direct or indirect, by operation of law or otherwise, of a Member's
LLC Interest.
TREASURY REGULATIONS: The Income Tax Regulations promulgated under the Code
as such regulations may be amended from time to time (including Temporary
Regulations).
UNPAID CORDISH PREFERRED RETURN: As of any given date, the Cordish
Preferred Return accrued to such date less distributions made by the Company to
Cordish pursuant to the provisions of Sections 4.2(i), 4.3(i) and 4.4(iii)
hereof as of such date.
UNPAID INLAND PREFERRED RETURN: As of any given date, the Inland Preferred
Return accrued to such date less distributions made by the Company to Inland
pursuant to the provisions of Sections 4.2(ii), 4.3(iii) and 4.4(i) hereof as of
such date.
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WITHDRAWING MEMBER: means L.I. Development Armecon Limited Partnership, a
Maryland limited partnership, whose interest in the Owner Entity is being
purchased and redeemed pursuant to the terms of the Reorganization Agreement and
this Agreement.
ARTICLE II
CONTINUATION; NAME; PRINCIPAL OFFICE; PURPOSE; TERM
SECTION 2.1. CONTINUATION.
A. The Company has previously been reorganized as a limited liability
company pursuant to the provisions of the Delaware Limited Liability Company
Act, Title 6 of the Delaware Code, Section 18-101 et seq. (the "LLC ACT"). This
Agreement amends, restates and replaces the Original Agreement. To the extent
permitted by the LLC Act, the provisions of this Agreement shall override the
provisions of the LLC Act in the event of any inconsistency between them.
B. In order to maintain the Company as a limited liability company under
the laws of the State of Delaware, the Manager shall, from time to time, take
appropriate action, including the preparation and filing of such amendments to
the Certificate and such other assumed name certificates, documents, instruments
and publications as may be required by or desirable under law, including,
without limitation, action to reflect:
(i) any change in the Company name; or
(ii) any correction of false or erroneous statements in the
Certificate 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.
C. Each necessary Member shall further execute, and the Company shall
file and record (or cause to be filed and recorded) and shall publish, if
required by law, such other and further certificates, statements or other
instruments as may be necessary or desirable under the laws of the State of
Delaware or the state in which any Property is located in connection with the
formation of the Company and the commencement and carrying on of its business.
SECTION 2.2. NAME, REGISTERED OFFICE, AND RESIDENT AGENT; PRINCIPAL PLACE
OF BUSINESS.
A. The name of the Company shall continue to be "Tollgate Marketplace
Holding Company LLC."
B. The principal place of business and office of the Company shall be
located at c/o Inland Western Retail Real Estate Trust, Inc., 0000 Xxxxxxxxxxx
Xxxx Xxx Xxxxx, Xxxxxxxx 00000 or at such other places or within the county in
which the Property is located as the Manager may from time to time designate.
The Company may have such additional offices and places of business as may be
established at such other locations as may be determined from time to time by
the Manager.
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C. The present address of the registered office of the Company in the
State of Delaware and its resident agent for service of process in the State of
Delaware are as set forth in the Certificate.
SECTION 2.3. PURPOSE.
A. The purpose and business of the Company are solely to:
(i) Acquire all the ownership interests in and exercise all the
rights of the sole member of the Owner Entity and the Additional Property
Owner Entities;
(ii) Indirectly through the Owner Entity, to acquire, own, finance
(using special purpose entities or otherwise), develop, redevelop, operate,
lease, manage, control, sell, transfer, exchange or otherwise dispose of
the Existing Property;
(iii) Subject to the further provisions hereof and indirectly through
the Additional Property Owner Entities, to acquire, own, finance, develop,
redevelop, operate, lease, manage, control, sell, transfer, exchange or
otherwise dispose of Additional Properties; and
(iv) To do and perform all acts necessary or desirable to carry out
any of the foregoing purposes.
B. The Company shall not own any direct interest in real property or any
other business venture, and shall not incur any debt, obligation or liability
with respect to such assets. Instead, the Company shall only invest in qualified
REIT real estate assets, which assets shall generate qualified REIT income and
be owned separately by each of the Owner Entity and Additional Property Owner
Entities, and any debts and liabilities shall be incurred only by such Entities.
C. Nothing in this Agreement shall be deemed to create a mutual agency
between the Members with respect to any activities of the Company or the Members
whatsoever. Except as expressly provided herein, no Member shall be deemed to be
the agent of any other Member for any purposes and no Member shall have any
authority to bind any other Member.
D. Without the unanimous approval of the Members, the Company, the Owner
Entity and the Additional Property Owner Entities shall not engage in any other
business or activity.
E. The Company intends that the Existing Property will be owned by the
Owner Entity and all Additional Properties will be owned by Additional Property
Owner Entities, through which the Company's business will be conducted. The
terms of the organizational documents relating to the formation of the Owner
Entity have been reviewed by the Members and are hereby approved by the Members,
and the terms of the organizational documents related to the formation of any
Additional Property Owner Entity, as applicable, will be approved by the Members
provided that such approval shall not be unreasonably withheld or delayed;
provided, however, that the organizational documents of the Owner Entity may be
amended by Inland if the amendments do not materially adversely affect Cordish;
and provided further, however, that, subject to the provisions of Section 6.2.D
hereof, the organization documents of any Additional
- 13 -
Property Owner Entity may be amended by Cordish if the amendments do not
adversely affect the Company or Inland. Notwithstanding the foregoing, each
Member hereby acknowledges and agrees that simultaneously with the withdrawal of
the Withdrawing Member as a member of the Owner Entity, and effective
simultaneously with the effective time of this Agreement, Inland shall cause the
organizational documents of the Owner Entity to be amended and restated in their
entirety to reflect the fact that the Company shall be the sole member, and that
Inland shall be appointed as the sole manager, of the Owner Entity from and
after the date hereof.
SECTION 2.4. TERM.
The Company shall have perpetual existence beginning on the date that the
Certificate was filed with the Office of the Secretary of State of the State of
Delaware; PROVIDED THAT the Company may be dissolved in accordance with Section
9.1 hereof.
SECTION 2.5. CLASSIFICATION OF THE COMPANY FOR TAX PURPOSES.
The Members hereby acknowledge their intention that the Company be
classified, for federal and state income tax purposes, as a partnership and not
as an association taxable as a corporation pursuant to Section 7701(a)(2) of the
Code and the Regulations promulgated thereunder, and hereby agree that the
provisions of this Agreement shall be applied and construed in a manner to give
full effect to such intent. Accordingly, each Member, by its execution or
acceptance of this Agreement, covenants and agrees that (i) it will not cause
the Company, the Owner Entity, or any Additional Property Owner Entity to make
an election under Regulations Section 301.7701-3(b) to be taxed as a corporation
for federal income tax purposes (ii) it will file its own federal and state
income tax returns in a manner that is consistent with tax classification of the
Company as a partnership and (iii) it will not take any action which is
inconsistent with such classification.
SECTION 2.6. LIABILITY OF THE MEMBERS.
No Member shall be liable under a judgment, decree or order of a court, or
in any other manner for the debts or any other obligations or liabilities of the
Company, an Owner Entity or an Additional Property Owner Entity solely by reason
of being a Member of the Company. A Member shall be liable only to make the
contributions described in Section 3.2, on the terms therein described, and
except as provided in Section 3.4 or 6.5.F, shall not be required to lend any
funds to the Company, any Owner Entity or Additional Property Owner Entity, or
to make any other contributions, assessments or payments to the Company;
provided that a Member may be required to repay distributions made to it as
provided in Section 18-607 of the LLC Act. No Member shall have any personal
liability for any repayment of any Capital Contribution of any Member. The terms
of this Section 2.6 shall not limit or diminish in any way the obligations of
the Members (and the other parties thereto) under this Agreement, the
Indemnification Agreement and the Contribution Agreement.
SECTION 2.7. OWNERSHIP AND WAIVER OF PARTITION AND VALUATION.
The LLC Interests of each Member in the Company shall be personal property
for all purposes. All property and interests in property, real or personal,
owned (directly or indirectly) by the Company shall be deemed owned (directly or
indirectly) by the Company as an entity, and
- 14 -
no Member, individually, shall have any ownership of or interest in such
property or interest owned (directly or indirectly) by the Company except as a
member of the Company. To avoid irreparable damage to the Company, each Member,
on behalf of itself and its successors, representatives, heirs, and assigns
hereby irrevocably, unconditionally and completely waives, renounces and
releases each and all of the following rights that it has or may have, if any,
by virtue of holding LLC Interests in the Company: (i) any right of partition or
any right to take any other action that otherwise might be available to such
Member for the purpose of severing its relationship with the Company or such
Member's interest in the assets held by the Company from the interest of the
other Members; and (ii) any right to valuation and payment with respect to such
Member's LLC Interests or any portion thereof, except to the extent specifically
set forth herein. Notwithstanding any provision herein to the contrary, each
Member hereby acknowledges and agrees that, pursuant to the provisions of
Section 9.4.E(iii) hereof, in the event that Cordish seeks, or attempts to seek,
to take any action in violation or inconsistent with the foregoing, Inland shall
be permitted at any time, in its sole and absolute discretion, to deliver a
Redemption Notice to Cordish and to thereupon immediately cause the Company to
purchase the Cordish LLC Interest pursuant to the terms of Sections 9.4, 9.5 and
9.6 hereof.
SECTION 2.8. WAIVER OF RIGHT TO JUDICIAL DISSOLUTION.
The Members agree that irreparable damage would be done to the good will
and reputation of the Company if any Member should bring an action in court to
dissolve the Company. Accordingly, to avoid irreparable damage to the Company
each Member hereby irrevocably, unconditionally and completely waives, renounces
and releases its right to seek a court decree of dissolution or to seek the
appointment by a court of a liquidator for the Company. Notwithstanding any
provision herein to the contrary, each Member hereby acknowledges and agrees
that, pursuant to the provisions of Section 9.4.E(iii) hereof, in the event that
Cordish seeks, or attempts to seek, to take any action in violation or
inconsistent with the foregoing, Inland shall be permitted at any time, in its
sole and absolute discretion, to deliver a Redemption Notice to Cordish and to
thereupon immediately cause the Company to purchase the Cordish LLC Interest
pursuant to the terms of Sections 9.4, 9.5 and 9.6 hereof.
ARTICLE III
MEMBERS; COMPANY CAPITAL; PERCENTAGE INTERESTS
SECTION 3.1. MEMBERS.
A. In accordance with the terms of the Contribution Agreement, Inland and
Cordish are hereby admitted as Members in the Company and the Original Members
are hereby withdrawn from the Company. The respective names, business addresses
and Percentage Interests of the Members are as set forth on SCHEDULE A and the
Members identified on SCHEDULE A are, as of this date, the only members in the
Company. SCHEDULE A shall be amended from time to time to reflect any changes of
address, the admission of any additional or substitute Members or any changes to
the information set forth thereon. The respective Percentage Interests of the
Members set forth on SCHEDULE A shall not change or otherwise be modified or
amended as a result of Capital Contributions made by the Members.
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B. One or more Persons may be admitted to the Company as additional
Members from time to time only with the unanimous written consent of the
Members, provided, however, that the admission of transferees permitted pursuant
to Article VIII hereof shall not require the consent of the Manager or the
Members.
C. In addition to any other requirements set forth in this Agreement, no
Person shall be admitted to the Company as an additional or substitute Member
unless and until such Person has accepted and agreed to all the provisions of
this Agreement by executing a counterpart signature page hereto or an amendment
to this Agreement.
SECTION 3.2. INITIAL CAPITAL CONTRIBUTIONS.
A. In accordance with the terms of the Contribution Agreement, upon the
execution of this Agreement, Inland has contributed to the Company cash in the
amount set forth next to its name on SCHEDULE A attached hereto and made a part
hereof (the "INITIAL CAPITAL CONTRIBUTION"). Inland's Initial Capital Account
balance shall be equal to Inland's Initial Capital Contribution set forth in the
preceding sentence.
B. The Members hereby agree that, upon the admission of Inland as a
Member of the Company, Cordish's Capital Account shall be increased to equal the
amount set forth next to its name on SCHEDULE A, which reflects the agreed-upon
Gross Asset Value of the Existing Property as of the date hereof, reduced by (i)
the amount of the Existing Debt as of the date hereof, (ii) the amount required
to be contributed to the Owner Entity and then distributed to the Withdrawing
Member under Section 4.1. A hereof, and (iii) the aggregate amount deposited in
escrow pursuant to Section 1 of the Liquidity Escrow Agreement. Cordish's
Capital Account (and Adjusted Capital Balance) shall be increased from time to
time, without duplication, as and when funds are (a) released and deposited into
the Operations Reserve pursuant to Section 2 of the Liquidity Escrow Agreement,
and (b) deposited into the Operations Reserve pursuant to the terms of the
Article I of the Contribution Agreement.
C. The initial Adjusted Capital Balance of each Member shall be set forth
opposite such Member's name on SCHEDULE A attached hereto and shall be adjusted
from time to time in accordance with the terms of this Agreement.
D. The manner in which the Capital Contributions, Adjusted Capital
Balances, Capital Accounts, payments to the Withdrawing Member and the
Operations Reserve balance shall be determined and adjusted (under the terms and
conditions of this Section 3.2 and this Agreement) is illustrated on EXHIBIT E
attached hereto, which Exhibit is based on estimated figures and may not
therefore reflect the actual figures applied under the terms of this Agreement.
SECTION 3.3. ADDITIONAL CAPITAL CONTRIBUTIONS.
A. Other than the Capital Contributions of the Members required under
Section 3.2, and as otherwise provided in this Agreement, no Member shall (i) be
required or entitled to make any further Capital Contributions or (ii) be
required or entitled to lend any funds to the Company.
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B. No Member shall have any obligation to make additional Capital
Contributions to restore a deficit balance in its Capital Account.
Notwithstanding the foregoing, any Member may, by delivery of written notice to
the other Member delivered on or before December 31 of any year, but subject to
the reasonable approval of the Manager, voluntarily elect to incur an
unconditional obligation to restore a deficit balance in its Capital Account.
Any such election, if made, shall be effective only for such period indicated in
the written notice, and may, in the sole and absolute discretion of the electing
Member but subject to the reasonable approval of the Manager, be limited to a
specified dollar amount and/or a specific period of time. This Section 3.3.B and
any election made hereunder shall be interpreted and applied consistently with
the provisions Treasury Regulation Section 1.704-1(b)(2)(ii)(c).
SECTION 3.4. FUNDING OF ADDITIONAL CASH REQUIREMENTS.
A. If the Company or the Owner Entity, other than an Additional Property
Owner Entity (which is addressed by Section 3.4.B), experiences a Cash Shortfall
(other than to the extent that the Company's Cash Shortfall is attributable
solely to an Additional Property Owner Entity, which is addressed in Section
3.4.B), the Manager shall have the right to provide written notice of such Cash
Shortfall to the Members (a "CASH SHORTFALL NOTICE"). Upon receipt of the Cash
Shortfall Notice, the Members may upon mutual consent elect to (a) make an
Additional Capital Contribution in proportion to their respective Percentage
Interests to cover the Cash Shortfall, or (b) make Cash Shortfall Loans to the
Owner Entity in the amount of the Cash Shortfall and in proportion to the
Member's respective Percentage Interests on the terms provided in Section 3.4.C.
If the Members do not agree to make such Additional Capital Contributions or
Cash Shortfall Loans, Inland shall promptly make (or cause an Affiliate or other
Person selected by it to make) a Cash Shortfall Loan to the Owner Entity in the
amount of the Cash Shortfall on the terms provided in Section 3.4.C. If Inland
does not promptly make or cause an Affiliate or other Person selected by it to
make a Cash Shortfall Loan pursuant to this Section 3.4.A, Cordish shall have
the right, but not the obligation, to fund the amount of such loan (a "DEFAULT
LOAN"), which shall constitute a loan by Cordish to Inland, which shall be a
recourse demand obligation of Inland and which shall bear interest at the rate
of 20% per annum, compounded monthly. All distributions of Net Cash Flow or Net
Proceeds of a Capital Transaction or repayments by the Company of any Cash
Shortfall Loans otherwise payable to Inland shall be made instead to Cordish
until all Default Loans (including accrued and unpaid interest) made by Cordish
have been repaid in full. For the avoidance of doubt, any distributions or
payments that would have otherwise been distributed or paid to Inland but are
paid to Cordish in accordance with any Default Loan made pursuant to this
Section 3.4A shall, for all other purposes of this Agreement, be deemed to have
been distributed or paid to Inland.
B. If any Additional Property Owner Entity experiences a Cash Shortfall,
or to the extent the Company experiences a Cash Shortfall attributable solely to
one or more Additional Property Owner Entities, either Member shall have the
right to provide written notice of such Cash Shortfall to the Members (a "CASH
SHORTFALL NOTICE"). Upon receipt of the Cash Shortfall Notice, the Members may
upon mutual consent elect to (a) make an Additional Capital Contribution in
proportion to their respective Percentage Interests to cover the Cash Shortfall,
or (b) make Cash Shortfall Loans to the Additional Property Owner Entity in the
amount of the Cash Shortfall and in proportion to the Member's respective
Percentage Interests on the terms provided in Section 3.4.C. If the Members do
not agree to make such Additional Capital
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Contributions or Cash Shortfall Loans, Cordish shall promptly make (or cause an
Affiliate or other Person selected by it to make) a Cash Shortfall Loan to the
Additional Property Owner Entity in the amount of the Cash Shortfall on the
terms provided in Section 3.4.C. If Cordish does not promptly make or cause an
Affiliate or other Person selected by it to make a Cash Shortfall Loan pursuant
to this Section 3.4.B, Inland shall have the right, but not the obligation, to
fund the amount of such loan (a "DEFAULT LOAN"), which shall constitute a loan
by Inland to Cordish, which shall be a recourse demand obligation of Cordish and
which shall bear interest at the rate of 20% per annum, compounded monthly. All
distributions of Net Cash Flow or Net Proceeds of a Capital Transaction or
repayment by the Company of any Cash Shortfall Loans otherwise payable to
Cordish shall be made instead to Inland until all Default Loans (including
accrued and unpaid interest) made by Inland have been repaid in full. In
addition, if all Default Loans made by Inland are not repaid in full within six
(6) months, Cordish shall have no management and/or voting rights (including,
but not limited to, those provided in Section 6.1.D) with respect to any
Existing Property or Owner Entity pursuant to the provisions hereof until all
Default Loans made by Inland have been repaid in full. For the avoidance of
doubt, any distributions or payments that would have otherwise been distributed
or paid to Cordish but are paid to Inland in accordance with any Default Loan
made pursuant to this Section 3.4.B shall, for all other purposes of this
Agreement, be deemed to have been distributed or paid to Cordish.
C. Cash Shortfall Loans, if any, made pursuant to this Section 3.4 shall:
(i) be evidenced by a written promissory note containing customary terms and
conditions in a form attached hereto as EXHIBIT D, (ii) bear interest at the
rate of 12% per annum, shall compound monthly and shall accrue until maturity
and (iii) mature on the earlier of the date that is five (5) years after the
initial funding of such loan or the occurrence of a Capital Transaction with
respect to the Owner Entity or Additional Property Owner Entity that is the
obligor on such Cash Shortfall Loan.
D. If, at any time or from time to time, the Company or the Owner Entity
requires additional funds, the Manager may cause the Owner Entity to borrow the
required additional funds from any Person or Persons, provided that such
borrowing is an Approved Financing.
E. The Members hereby covenant and agree to structure any Cash Shortfall
Loans made pursuant to the terms of this Agreement so that such loans satisfy
the "Straight Debt Safe Harbor" under Code Section 856(c)(7) and the Treasury
Regulations promulgated thereunder.
SECTION 3.5. LOANS.
A. The Members intend that the Company will not own any real estate
directly, but will only own interests in the Owner Entities and Additional
Property Owner Entities. Accordingly, unless all Members agree, the Manager
shall not incur any loans or borrowings on behalf of the Company.
B. If any Member shall lend any money to any Owner Entity or Additional
Property Owner Entity, the amount of any such loan shall not be considered a
Capital Contribution to the Company, increase its Capital Account or affect in
any way its share of the Profits, Losses, other items of income, gain, loss or
deduction or distributions of the Company but shall be a debt due from the Owner
Entity or the Additional Property Owner Entity, as applicable.
- 18 -
C. The proceeds of Cash Shortfall Loans, Default Loans and Development
Loans made pursuant to the provisions of this Agreement and the proceeds of any
financing obtained by Cordish pursuant to Section 6.2.B(i) with respect to any
Additional Property will only be advanced as and to the extent that costs and
expenses to be funded pursuant to the provisions hereof by such Cash Shortfall
Loans, Default Loans, Development Loans and/or such other financing are actually
incurred.
SECTION 3.6. NO THIRD PARTY BENEFICIARIES.
The obligations of Inland or Cordish to fund Cash Shortfall Loans hereunder
shall not confer upon any creditor or other third party having dealings with the
Company or any Owner Entity any right, claim or other benefit, including the
right to require any such Cash Shortfall Loans.
SECTION 3.7. CAPITAL ACCOUNTS.
A. The Company shall establish and maintain a separate Capital Account
for each Member in accordance with the provisions of this Section 3.7. To each
Member's Capital Account there shall be credited such Member's Capital
Contributions, such Member's allocable share of Profits, and any items in the
nature of income or gain that are specially allocated to such Member under this
Agreement.
B. To each Member's Capital Account there shall be debited the amount of
cash and the Gross Asset Value of any Company property distributed to such
Member pursuant to any provision of this Agreement (net of liabilities secured
by such distributed property that such Member is considered to assume or take
subject to under Code Section 752), such Member's allocable share of Losses, and
any items in the nature of expenses or losses that are specially allocated to
such Member under this Agreement.
C. In the event any interest in the Company is transferred in accordance
with the terms of this Agreement (i.e., Article VIII hereof), the transferee
shall succeed to the Capital Account of the transferor to the extent it relates
to the transferred interest. In the case of a sale or exchange of an interest in
the Company at a time when an election under Code Section 754 is in effect, the
Capital Account of the transferee Member shall not be adjusted to reflect the
adjustments to the adjusted tax bases of Company property required under Code
Sections 754 and 743, except as otherwise permitted by Treasury Regulations
Section 1.704-1(b)(2)(iv)(m).
D. In determining the amount of any liability for purposes of Section
3.7.B above, there shall be taken into account Code Section 752(c) and the
Treasury Regulations promulgated thereunder, and any other applicable provisions
of the Code and Regulations.
E. The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations Section 1.704-1(b) and 1.704-2, and shall be interpreted
and applied in a manner consistent with such Regulations.
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SECTION 3.8. RETURN OF CAPITAL.
Except as provided in Article IX or as otherwise agreed by the Members, no
Member shall have the right to withdraw or receive any return of its Capital
Contributions. Except as provided in Article IX or as otherwise agreed by the
Members, no Member shall have any right to demand or receive property (other
than cash) in return of its Capital Contributions.
ARTICLE IV
DISTRIBUTIONS; PAYMENTS TO WITHDRAWING MEMBER AND REPAYMENT
OF EXISTING DEBT
SECTION 4.1. PAYMENTS TO WITHDRAWING MEMBER AND REPAYMENT OF EXISTING
DEBT.
A. In accordance with the terms of the Reorganization Agreement,
immediately after the execution and delivery of this Agreement and the closing
under the Contribution Agreement, the Company shall contribute sufficient cash
(the "CASH PAYMENT") to the Owner Entity in the amount of $10,638,500 and the
Company shall cause the Owner Entity to purchase and redeem in full the interest
of the Withdrawing Member in the Owner Entity in exchange for cash payments to
be made to the Withdrawing Member under the terms of the Reorganization
Agreement. The Members hereby acknowledge and agree that this contribution of
cash to the Owner Entity and the distribution of cash to the Withdrawing Member
will result in the Owner Entity becoming a disregarded entity for federal and
state income tax purposes and will be treated for federal and state income tax
purposes as a purchase by the Company of a 25% undivided interest in the assets
of the Owner Entity for a purchase price equal to the Cash Payment plus the
Withdrawing Member's share of indebtedness in the Owner Entity (which, in
addition to the portion of the assets of the Owner Entity held indirectly by the
Company, will result in the Company directly holding 100% of the assets of the
Owner Entity for federal and state income tax purposes). The Members acknowledge
and agree that the Company shall not be deemed to have purchased any other
interest in the Existing Property or the Owner Entity for federal and state
income tax purposes. The Company shall reflect the purchase price for such
assets in the Company's tax basis of the assets held by the Owner Entity in a
manner, and based upon the allocation, determined by the Manager. The Tax
Matters Member shall be bound by the treatment of such transactions by the
Manager. The Members also recognize and agree that additional payments may be
made to the Withdrawing Member pursuant to Section 2 of the Liquidity Escrow
Agreement, and Article I of the Contribution Agreement, which shall, when made,
increase the purchase price for the assets purchased by the Cash Payment.
B. Immediately after the execution and delivery of this Agreement and the
Closing under the Contribution Agreement, the Company shall cause the Owner
Entity to repay and satisfy in full the Existing Debt (as such term is defined
in the Contribution Agreement). The repayment of the Existing Debt and the other
payments and distributions described in this Section 4.1 shall be made in the
manner and to the extent set forth in this Section 4.1, notwithstanding any
other provision contained in this Article IV. No repayment of the Existing Debt
pursuant to this Section 4.1.B shall reduce Cordish's Adjusted Capital Balance
or Capital Account. Each party hereto hereby acknowledges and agrees that it is
the intention of the
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Manager to cause the Owner Entity, simultaneously with the execution of this
Agreement, to borrow funds from an unrelated third party lender (which
transaction shall constitute an Approved Financing under the terms of EXHIBIT B
attached hereto). Notwithstanding any inference herein to the contrary, the
repayment of the Existing Debt, the Cash Payment and the other payments and
distributions described in this Section 4.1 shall be funded, in whole or in
part, in the Manager's sole and absolute discretion, from the proceeds of such
third party loan to the Owner Entity.
C. Upon the Closing of the Contribution Agreement, the Company shall
utilize a portion of Inland's Initial Capital Contribution to pay certain
expenses of Closing, as agreed to by Inland and Cordish, which amount shall
reduce the contributions into the Operations Reserve.
SECTION 4.2. DISTRIBUTIONS OF NET CASH FLOW.
Subject to the provisions of Section 6.4 hereof and prior to the
dissolution and termination of the Company, and subject to Section 18-607 of the
LLC Act, Net Cash Flow of the Company for any Fiscal Year shall be distributed
monthly (if and to the extent available) by the Company in the following order
of priority:
(i) FIRST, to Cordish, until such time as the Unpaid Cordish
Preferred Return has been reduced to zero.
(ii) SECOND, in the sole and absolute discretion of the Manager, to
Inland, until such time as the Unpaid Inland Preferred Return has been
reduced to zero.
(iii) THIRD, in the sole and absolute discretion of the Manager, the
balance, to the Members, in proportion to their respective Percentage
Interests in the Company.
SECTION 4.3. NET PROCEEDS OF A CAPITAL TRANSACTION.
Subject to the provisions of Section 6.4 hereof and prior to the
dissolution and termination of the Company, Net Proceeds of a Capital
Transaction may be distributed by the Company from time to time in the sole and
absolute discretion of the Manager in the following order of priority:
(i) FIRST, to Cordish, until such time as the Unpaid Cordish
Preferred Return has been reduced to zero.
(ii) SECOND, to Cordish, until such time as the Adjusted Capital
Balance of Cordish has been reduced to zero.
(iii) THIRD, to Inland, until such time as the Unpaid Inland
Preferred Return has been reduced to zero.
(iv) FOURTH, to Inland, until such time as the Adjusted Capital
Balance of Inland has been reduced to zero.
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(v) FIFTH, the balance, to the Members in proportion to their
respective Percentage Interests in the Company.
SECTION 4.4 NET PROCEEDS OF A FINANCING.
Subject to the provisions of Section 6.4 hereof, the Net Proceeds of a
Financing may be distributed by the Company from time to time in the sole and
absolute discretion of the Manager:
(i) FIRST, to Inland, until such time as the Unpaid Inland
Preferred Return has been reduced to zero
(ii) SECOND, to Inland, until such time as the Adjusted Capital
Balance of Inland has been reduced to zero.
(iii) THIRD, to Cordish, until such time as the Unpaid Cordish
Preferred Return has been reduced to zero.
(iv) FOURTH, to Cordish, until such time as the Adjusted Capital
Balance of Cordish has been reduced to zero.
(v) FIFTH, the balance, to the Members in proportion to their
respective Percentage Interests in the Company.
SECTION 4.5. OTHER DISTRIBUTION RULES.
A. For purposes of Sections 4.2, 4.3 and 4.4:
(i) Distributions of Net Cash Flow of the Company for any calendar
month will be considered distributed before the Net Proceeds of a Capital
Transaction and Net Proceeds of a Financing occurring during the same
calendar month.
(ii) Whenever possible, Net Cash Flow of the Company for any
calendar month will be distributed before the Net Proceeds of a Capital
Transaction and Net Proceeds of a Financing are distributed if the Net
Proceeds of a Capital Transaction arise from a Capital Transaction or the
Net Proceeds of a Financing arise from an Approved Financing that occurred
within such calendar month or within the first ten (10) days of the
immediately following calendar month.
(iii) The Manager shall adopt other reasonable ordering conventions
as may be necessary to prevent any duplication of amounts that are
distributable under both of such Sections.
B. Subject to the provisions of Section 3.4 and Section 6.5.F relating to
Default Loans, distributions in respect of an LLC Interest shall be made only to
the Person or Persons that, according to the Company's books and records, are
the holders of record of the LLC Interests in respect of which such
distributions are made on the actual date of distribution. Neither the Company
nor the Manager shall incur any liability for making distributions in accordance
with the provisions of the preceding sentence, whether or not the Company or the
- 22 -
Manager has knowledge or notice of any Transfer or purported Transfer of
ownership of any LLC Interest. Except with respect to Default Loans, the Manager
shall have no right or authority to set off any debts or obligations of Cordish
against any distributions due to Cordish hereunder, including distributions
under Section 9.6 hereof.
SECTION 4.6. WITHHOLDING.
A. The Members hereby authorize the Company to withhold from or pay on
behalf of or with respect to such Member any amount of federal, state, local, or
foreign taxes that the Manager reasonably determines that the Company is
required to withhold or pay with respect to any amount distributable or
allocable to the Members pursuant to this Agreement, including any taxes
required to be withheld or paid by the Company pursuant to Section 1441, 1442,
1445 or 1446 of the Code. The Manager shall give prompt notice to the Members
with respect to which withholding is effected in accordance with this Section
4.6.A and shall provide such Member with a written explanation of the basis for
its determination so to withhold or pay (a "WITHHOLDING NOTICE"). Any amount
paid on behalf of or with respect to a Member pursuant to the provisions hereof
shall constitute a loan by the Company to such Member, which loan shall be
repaid by such Member within 15 days after notice from the Manager that such
payment must be made, unless the Company withheld such payment from a
distribution which would otherwise be made to such Member in accordance with the
provision hereof. Any amounts so withheld shall be treated as having been
distributed to such Member and shall be promptly paid, solely out of funds from
the Company, by the Manager to the appropriate taxing authority. In the event
that a Member fails to pay any amounts owed to the Company pursuant to this
Section 4.6.A when due, the Manager may, in its sole and absolute discretion,
elect to make the payment to the Company on behalf of such defaulting Member,
and in such event shall be deemed to have loaned such amount to such defaulting
Member, which shall be treated in the same manner as a Default Loan made to such
defaulting Member. For the avoidance of doubt, any distributions which would
have otherwise been distributed to a Member, but are retained by the Company in
accordance with this Section 4.6.A, shall, for all other purposes of this
Agreement, be deemed to have been distributed to such Member.
B. If any Member determines that the Manager has improperly caused the
Company to withhold or to advance funds with respect to such Member in
accordance with the foregoing, then such Member shall provide written notice of
its objection to such withholding or advance to the Manager, (an "OBJECTION
NOTICE") within thirty (30) days after its receipt of the Withholding Notice,
stating its rationale for such objection. If the objecting Member and the
Manager do not reach an agreement on the contested matter within thirty (30)
days following the delivery by the objecting Member of the Objection Notice,
then the Manager shall not have the right to exercise any rights pursuant to
Section 4.6.A and the matter shall be submitted promptly by either party to
binding arbitration pursuant to Section 10.16 of this Agreement. After such
arbitration proceeding has been completed, the Manager shall then have the right
to exercise its rights pursuant to Section 4.6.A hereof only in compliance with
the determination of the arbitration proceeding. Failure of a Member to deliver
an Objection Notice within thirty (30) days after its receipt of a Withholding
Notice shall be deemed to constitute the recipient Member's acceptance of and
agreement to the withholding and/or payment and the Manager shall be entitled to
proceed pursuant to the provisions of this Section 4.6.
- 23 -
C. If the Manager improperly proceeds pursuant to this Section 4.6, then
the Company shall be required to pay to the objecting Member the amount of any
distributions that would otherwise have been made to the objecting Member in
accordance with the provisions of this Agreement but for the Manager's
improperly proceeding pursuant to Section 4.6, together with all out-of-pocket
expenses properly and reasonably attributable to the dispute referenced in
Section 4.6.B hereof, and the Company shall be required to pay interest at the
rate of twenty percent (20%) on all such amounts to the objecting Member.
ARTICLE V
ALLOCATION OF PROFITS AND LOSSES
SECTION 5.1. PROFITS AND LOSSES.
A. PROFITS. After giving effect to the allocations under Section 5.2
hereof, Profits for any Allocation Year shall be allocated to the Members in the
following order of priority:
(i) Profits other than from a Capital Transaction (and except as
otherwise provided under Section 5.1.A(iii) hereof):
(a) FIRST, to Cordish, in the amount necessary to cause the
aggregate amount of Profits allocated to Cordish under this Section
5.1.A(i)(a) from the current Fiscal Year and all prior Fiscal Years to
equal the actual amounts distributed to Cordish pursuant to Section
4.2(i) for the current Fiscal Year and all prior Fiscal Years; and
(b) SECOND, to Inland, in the amount necessary to cause the
aggregate amount of Profits allocated to Inland under this Section
5.l.A(i)(b) from the current Fiscal Year and all prior Fiscal Years to
equal the amounts distributable to Inland pursuant to Section 4.2(ii)
for the current Fiscal Year and all prior Fiscal Years; and
(c) THIRD, the balance, to the Members, in proportion to their
respective Percentage Interests in the Company.
(ii) Profits from a Capital Transaction (except as otherwise
provided under Section 5.l.A(iii) hereof):
(a) FIRST, to each Member in an amount equal to the amount
necessary to increase each such Member's Capital Account to the amount
distributable to such Member pursuant to Section 4.3 hereof; and
(b) SECOND, the balance, to the Members, in proportion to
their respective Percentage Interests in the Company.
(iii) Profits arising from any Capital Transaction (including a
hypothetical sale in connection with an in-kind distribution upon
liquidation of the Company) occurring
- 24 -
upon or resulting in the liquidation (within the meaning of Treasury
Regulations Section 1.704-l(b)(2)(ii)(g)) of the Company:
(a) FIRST, to Cordish, until the Capital Account balance of
Cordish equals the sum of (1) the Unpaid Cordish Preferred Return plus
(2) the Adjusted Capital Balance of Cordish;
(b) SECOND, to Inland, until the Capital Account balance of
Inland equals the sum of (1) the Unpaid Inland Preferred Return plus
(2) the Adjusted Capital Balance of Inland; and
(c) THIRD, the balance, to the Members, in proportion to their
respective Percentage Interests in the Company.
B. LOSSES. After giving effect to the allocations under Section 5.2
hereof, Loss for any Allocation Year shall be allocated to the Members in the
following order of priority:
(i) Losses other than as provided in Section 5.1.B(ii) hereof:
(a) FIRST, to Inland, to the extent of Losses attributable to
the Existing Property, but in an amount without causing Inland to have
an Adjusted Capital Account Deficit;
(b) SECOND, to Cordish, to the extent of Losses attributable
to all Additional Properties, but in an amount without causing Cordish
to have an Adjusted Capital Account Deficit;
(c) THIRD, to the Members, pro rata in accordance with their
Capital Account balances, the maximum that can be allocated without
causing a Member to have an Adjusted Capital Account Deficit; and
(d) FOURTH, the balance, to the Members, in proportion to
their respective Percentage Interests in the Company.
(ii) Losses arising from any Capital Transaction (including a
hypothetical sale in connection with an in-kind distribution upon
liquidation of the Company) occurring upon or resulting in the liquidation
(within the meaning of Treasury Regulations Section 1.704-l(b)(2)(ii)(g))
of the Company:
(a) FIRST, to Cordish, until the Capital Account balance of
Cordish equals the sum of (1) the Unpaid Cordish Preferred Return plus
(2) the Adjusted Capital Balance of Cordish;
(b) SECOND, to Inland, the maximum amount that can be
allocated without causing Inland to have an Adjusted Capital Account
Deficit;
(c) THIRD, to Cordish, in the maximum amount that can be
allocated without causing Cordish to have an Adjusted Capital Account
Deficit; and
- 25 -
(d) FOURTH, the balance, to the Members, in proportion to
their respective Percentage Interests in the Company.
SECTION 5.2. REGULATORY AND SPECIAL ALLOCATIONS.
A. Notwithstanding any other provisions of this Article V, the special
allocations provisions set forth on SCHEDULE 5.2, which are hereby incorporated
into this Section 5.2.A by this reference as if set forth in their entirety,
shall apply prior to any other allocations of Profits and Losses (and any items
of income, gain, loss or deduction).
SECTION 5.3. OTHER ALLOCATION RULES.
A. For purposes of determining the Profits, Losses, or any other items
allocable to any period, Profits, Losses, and any such other items shall be
determined on a daily, monthly, or other basis, as reasonably determined by the
Manager using any permissible method under Code Section 706 and the Treasury
Regulations thereunder.
B. Except as otherwise provided in this Agreement, all items of Company
income, gain, loss, deduction, and any other allocations not otherwise provided
for shall be divided among the Members for tax purposes in the same proportions
as they share Profits or Losses, as the case may be, for the Allocation Year.
C. The Members are aware of the income tax consequences of the
allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Company income and
loss for income tax purposes.
D. The Members agree that Cordish shall be allocated an amount of
nonrecourse liabilities of the Company in an amount which is at least equal to
$2,500,000, in accordance with Treasury Regulations Section 1.752-3(a)(2). Any
non-recourse liabilities not allocated pursuant to the preceding sentence shall
be allocated to the Members, in proportion to their Percentage Interests in the
Company, subject to paragraph (v) of EXHIBIT B.
E. Profits, Losses and any other items of income, gain, loss or deduction
shall be allocated to the Members pursuant to this Article V as of the last day
of each Fiscal Year, provided that Profits, Losses and such other items shall
also be allocated at such times as the Gross Asset Values of Company Assets are
adjusted pursuant to subparagraph (b) of the definition of "Gross Asset Value"
in Article I.
SECTION 5.4. TAX ALLOCATIONS: CODE SECTION 704(C).
A. In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to the Existing
Property, and any other property contributed to the capital of the Company
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 for federal income tax purposes and its initial Gross Asset Value. The
Members hereby irrevocably agree that the Company shall elect to use the
"traditional method" as described in Treasury Regulations Section 1.704-3(d)
with respect to allocations relating to the Existing Property (the "TRADITIONAL
METHOD").
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B. In the event the Gross Asset Value of any Company property is adjusted
pursuant to paragraph (b) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss, and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Treasury Regulations thereunder, based on the
Traditional Method.
C. Any elections or other decisions relating to such allocations shall be
made by the Manager, in any manner that reasonably reflects the purpose and
intention of this Agreement.
ARTICLE VI
GOVERNANCE AND ADMINISTRATIVE PROVISIONS
SECTION 6.1. MANAGEMENT OF BUSINESS AND AFFAIRS.
A. Except as otherwise expressly provided in this Agreement, the business
and affairs of the Company (including the business and affairs of the Company
with respect to the Owner Entity and each Additional Property Owner Entity)
shall be exclusively and solely vested in the Manager. Except as otherwise
expressly provided in this Agreement, no Member, other than the Manager, shall
be an agent of the Company or have any authority to bind or take action on
behalf of the Company.
B. The Members hereby designate and appoint Inland to serve as the
Manager of the Company and the Members hereby cause the Company to designate and
appoint Inland to serve as the Manager of the Owner Entity. Subject to the
approval of the Members for Major Decisions (and other limitations set forth in
this Agreement), as well as the delegation of certain obligations and
responsibilities by the Manager pursuant to this Agreement, the management of
the Existing Property and the Additional Properties shall rest with and remain
the sole and absolute right, and responsibility of the Manager. Cordish agrees
to cooperate with Inland by executing any consents or certificates of the
Company necessary to demonstrate to a lender, tenant or other service provider
to the Owner Entity that Inland has the power and authority set forth in this
Section 6.1. Without limiting the generality of the foregoing, but subject to
the express provisions of this Agreement to the contrary, including, but not
limited to, Section 6.2, the Manager shall have the full power and authority to
do all things deemed necessary or desirable by it in its sole and absolute
discretion to conduct the business of the Company and to effectuate the purposes
set forth in Section 2.3 hereof, including, without limitation:
(i) the making of any expenditures, the lending or borrowing of
money, the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness (including securing of same by deed to secure debt, mortgage,
deed of trust or other lien or encumbrance of the Company's assets) and
incurring of any obligations that it deems necessary for the conduct of the
activities of the Company;
(ii) the acquisition, sale, transfer, exchange or other disposition
of any assets of the Company (including, but not limited to, the exercise
or grant of any conversion,
- 27 -
option, privilege, or subscription right or any other right available in
connection with any assets at any time held by the Company);
(iii) the mortgage, pledge, encumbrance or hypothecation of any
assets of the Company (including, without limitation, the Existing
Property), the use of the assets of the Company (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement which the Manager believes will directly benefit the Company and
on any terms that the Manager sees fit, the lending of funds to other
Persons and the repayment of obligations of the Company;
(iv) the management, operation, leasing (including the amendment
and/or termination of any lease), landscaping, repair, alteration,
demolition, replacement or improvement of any Property;
(v) the negotiation, execution and performance of any contracts,
leases, conveyances or other instruments that the Manager considers useful
or necessary to the conduct of the Company's operations or the
implementation of the Manager's powers under this Agreement, including
contracting with property managers, contractors, developers, consultants,
accountants, legal counsel, other professional advisors and other agents
(including Affiliates of Inland) and the payment of their expenses and
compensation out of the Company's assets;
(vi) the distribution of Company cash and other Company assets in
accordance with this Agreement and the holding, management, investment, and
reinvestment of cash and other assets of the Company;
(vii) the selection and dismissal of employees of the Company
(including, without limitation, employees having the title or holding the
office of "president," "vice president," "secretary" or "treasurer"), and
agents, outside attorneys, accountants, consultants and contractors of the
Company and the determination of their compensation and other terms of
employment or hiring;
(viii) the maintenance of such insurance for the benefit of the
Company and the Members as it deems necessary or appropriate including
casualty, liability and other insurance on the Properties of the Company,
which insurance may be obtained by a blanket insurance policy obtained by
an Affiliate of Inland;
(ix) the control of any matters affecting the rights and obligations
of the Company, including the settlement, compromise, submission to
arbitration or any other form of dispute resolution, or abandonment of any
claim, cause of action, liability, debt or damages due or owing to or from
the Company, the commencement or defense of suits, legal proceedings,
administrative proceedings, arbitrations or other forms of dispute
resolutions, and the representation of the Company in all suits or legal
proceedings, administrative proceedings, arbitrations or other forms of
dispute resolutions, the incurring of legal expenses and the
indemnification of any Person against liabilities and contingencies to the
extent permitted by law;
- 28 -
(x) holding, managing, investing and reinvesting cash and other
assets of the Company;
(xi) the collection and receipt of rents, revenues and income of the
Company;
(xii) in addition to working capital and/or reserves required to be
maintained under this Agreement, the maintenance of working capital and
other reserves in such amounts as the Manager deems appropriate and
reasonable from time to time;
(xiii) the making, execution and delivery of any and all deeds,
leases, notes, deeds to secure debt, mortgages, deeds of trust, security
agreements, conveyances, contracts, guarantees, warranties, indemnities,
waivers, releases or legal instruments or agreements in writing necessary
or appropriate in the judgment of the Manager for the accomplishment of any
of the powers of the Manager enumerated in this Agreement;
(xiv) causing the Owner Entity or any of the Additional Property
Owner Entities to take any of the foregoing actions or the undertaking of
any of the foregoing actions in connection with or with respect to the
Owner Entity or any of the Additional Property Owner Entities (including
without limitation, contributing or loaning Company funds to, incurring
indebtedness on behalf of, or guaranteeing the obligations of the Owner
Entity or any Additional Property Owner Entity); or
(xv) causing the Owner Entity to make any decision or take any
action under the provisions of the Liquidity Escrow Agreement, in its sole
and absolute discretion.
C. The Manager shall keep the Members informed as to all matters of
concern to the Company and the Members. In addition to and without limiting the
duties and obligations of the Manager as set forth above, but subject to the
provisions of Sections 6.2 and 6.6, the Manager shall use commercially
reasonable efforts to:
(i) cause the Company and each Owner Entity and Additional Property
Owner Entity, directly or through its agents, at all times to perform and
comply with the provisions of any loan commitment, agreement, mortgage,
deed of trust, lease, construction contract or other contract, instrument
or agreement to which the Company or any Owner Entity or Additional
Property Owner Entity is a party or which affects the Property or the
operation thereof;
(ii) keep and maintain at least such insurance coverage as may be
required by the holder of any mortgage or deed of trust encumbering all or
any portion of any Property;
(iii) deliver to the Members promptly upon the receipt or sending
thereof copies of all notices, reports and communications (a) between the
Company or any Owner Entity or Additional Property Owner Entity and any
holder of a mortgage or deed of trust affecting all or any portion of the
Property which relate to any existing or pending default thereunder or to
any financial or operational information required by such holder and (b)
regarding material violations affecting the Property;
- 29 -
(iv) open and maintain bank accounts for funds of the Company and
each Owner Entity;
(v) employ contractors for the ordinary maintenance and repair of
the Property, including installation of tenant improvements as required by
leases on the Property;
(vi) retain or engage real estate brokers licensed to do business in
the states in which the Property, or any part thereof, is located;
(vii) use reasonable efforts to enter into leases of space and other
occupancy agreements on market terms and conditions, and in accordance with
the requirements of any applicable loan;
(viii) employ such managing or other agents necessary for the
operation, management and leasing of each Property including, without
limitation, a property manager (which may be an Affiliate of Inland or of
Cordish);
(ix) retain or engage attorneys and accountants, to the extent such
professional services are required during the term of the Company; and
(x) do any act which is necessary or desirable to carry out any of
the foregoing.
D. Notwithstanding the provisions of Section 6.1.B and 6.1.C, except as
may otherwise be provided in Sections 6.2 or 6.6 or elsewhere in this Agreement,
neither the Manager nor any other Member shall have any authority, in the name
of or on behalf of the Company or any Owner Entity or Additional Property Owner
Entity, to take any of the following actions or make any of the following
decisions without the prior written consent or approval of Cordish (each, a
"MAJOR DECISION"):
(i) allow the Company (as opposed to the Owner Entity or any
Additional Property Owner Entity) to incur debt, liabilities, guarantees,
or borrowings;
(ii) except with respect to or in connection with an Approved
Financing, allow the Owner Entity or any Additional Property Owner Entity
to incur any debt or borrowing, or otherwise, refinance, recast, extend,
compromise, or prepay (except in connection with condemnation or casualty)
any debt encumbering one or more of the Properties;
(iii) prior to December 31, 2009 and except as provided in Article IX
hereof and except with respect to a tax free exchange under Section 1031 of
the Code or a reinvestment under Section 1033 of the Code, or other
transaction in which the Company recognizes no gain or a DE MINIMIS (I.E.,
less than 1% of the selling price) gain, sell, transfer, assign, convey,
exchange or otherwise dispose of or transfer all or any portion of any
Property or the Company Assets (other than personal property of the
Properties which may be disposed of or replaced due to wear and tear or
obsolescence);
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(iv) except as provided in Article VIII, admit any Person as an
additional Member of the Company;
(v) assign the property or assets of the entire Company in trust
for creditors or file on behalf of the entire Company a voluntary petition
for relief under the bankruptcy laws or similar voluntary petition under
state laws;
(vi) cause the Company to become a party to any merger,
consolidation or share exchange with any other entity or person, or
dissolve or terminate the Company if any such transaction would have a
material adverse effect on Cordish;
(vii) other than in connection with an Approved Financing, pledge,
assign or encumber any equity interest in any Owner Entity;
(viii) pledge, assign or encumber any equity interest in any
Additional Property Owner Entity;
(ix) cause any Owner Entity or Additional Property Owner Entity to
take any of the foregoing actions; and
(x) fail to maintain at least $2.5 million of Approved Financing on
the Existing Property which is allocable to Cordish for purposes of section
752 of the Code.
E. Inland shall cause the Owner Entity to arrange and maintain property,
casualty and liability insurance with respect to the Existing Property in
amounts and on terms that are consistent with the customary practices of Inland
and its Affiliates with respect to similar properties and taking into account
all relevant factors including the nature and location of the Existing Property;
PROVIDED, HOWEVER, Inland shall cause (i) any improvements on the Existing
Property to be insured against damage by fire and the other hazards covered by a
standard extended coverage and all-risk insurance policy or a builders risk
insurance policy, as applicable, for the full insurable value thereof (without
reduction for depreciation or co-insurance) and with a reasonable deductible,
(ii) the Existing Property with completed improvements to be covered by use and
occupancy insurance covering, as applicable, rental income or business
interruption, with coverage in an amount not less than twelve (12)-months
anticipated gross rental income or gross business earnings, as applicable,
attributable to the Existing Property; and (ii) each Owner Entity to maintain
commercial general liability and umbrella liability insurance with respect to
the Existing Property providing for combined limits of liability of not less
than $25 million for both injury to or death of a person and for property damage
per occurrence. The Company, Cordish and the Additional Property Owner Entities
shall be named as additional insureds. Upon the request of Cordish, Inland shall
deliver to Cordish copies of such insurance policies and other documents and
information necessary in order to verify its compliance with the provisions of
this Section 6.1.E.
F. Whenever a Member ("REQUESTING MEMBER") requests that the other
Member (the "REQUESTED MEMBER") consent to any action required of the Requested
Member under the provisions of this Agreement, notice shall be delivered by the
Requesting Member to the Requested Member pursuant to the provisions of Section
10.2 hereof, which notice shall be in writing and shall include (a) a summary of
the terms and conditions of the actions requested to
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be taken by the Requesting Member, (b) a copy of any proposed documentation,
including any document to be executed by the Company or the Requested Member in
connection therewith, and (c) a notice that conspicuously states that "THIS
NOTICE IS BEING PROVIDED TO YOU IN ACCORDANCE WITH THE TERMS OF THE AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF TOLLGATE MARKETPLACE HOLDING
COMPANY LLC. IF YOU DO NOT GIVE YOUR APPROVAL OR DISAPPROVAL OF THE ACTION
PROPOSED IN THIS NOTICE TO BE TAKEN WITHIN TEN (10) BUSINESS DAYS AFTER YOU
RECEIVE THIS REQUEST FOR APPROVAL, YOUR APPROVAL OF THE PROPOSED ACTION WILL BE
DEEMED GIVEN." If the Requested Member does not respond to the Requesting Member
within ten (10) business days of receipt of such notice, the Requested Member
shall be deemed to have approved the action requested by the Requesting Member.
Notwithstanding the inference from the foregoing provisions to the contrary, the
foregoing provisions of this Section 6.1.F shall not be deemed to reduce any
specific time periods for notice otherwise expressly set forth in this
Agreement. In furtherance of the foregoing, in the event that any provision of
this Agreement sets forth a specific time period for notice which is other than
ten (10) business days, the provisions of this Section 6.1.F (including the
notice to be delivered hereunder) shall be modified to reflect such specific
time period.
SECTION 6.2. DELEGATION OF AUTHORITY REGARDING SPECIFIC MATTERS.
A. The Manager hereby delegates to Cordish the specific and exclusive
authority to arrange for, negotiate and acquire in the manner provided in
Section 6.5 hereof, one or more Additional Properties. However, except as
provided in Section 6.2.C below, Cordish shall not manage or bind the Company
with respect to the Existing Property. Subject to the terms of this Section 6.2
and Section 6.5 hereof, the signature of Cordish alone shall be both necessary
and sufficient to: (i) acquire any Additional Property; (ii) organize any
Additional Property Owner Entity; (iii) execute any promissory notes, deeds of
trust, mortgages, or other instruments of hypothecation with respect to the
financing or re-financing of any Additional Property; or (iv) enter into any
partnership, operating or other agreements with respect to an Additional
Property Owner Entity, or any entity in which any Additional Property Owner
Entity holds an equity interest. All of the Members agree that a copy of this
Agreement may be furnished to appropriate third parties in order to confirm the
matters set forth in the immediately preceding sentence. Inland agrees to
cooperate with Cordish by executing any consents or certificates of the Company
necessary to demonstrate to a lender, tenant or other service provider to an
Additional Property Owner Entity that Cordish has the power and authority set
forth in this Section 6.2.A.
B. In addition, notwithstanding any provision of Section 6.1 to the
contrary, but subject in all respects to the provisions of this Section 6.2 and
Section 6.5 hereof, the Manager hereby delegates to Cordish the specific and
exclusive authority to direct the management of the business and affairs of any
Additional Property Owner Entity and the Additional Properties. In connection
therewith, Cordish is authorized, in the name of and on behalf of the Company,
to cause any Additional Property Owner Entity to take any and all actions
whatsoever, including but not limited to the following actions;
(i) To negotiate, in the name of and on behalf of the Additional
Property Owner Entity, financing for the acquisition, construction,
development, redevelopment,
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or improvement of the Additional Property, which may be secured by the
Additional Property (but which shall be nonrecourse in all respects to the
Company and Inland and shall be secured solely by the Additional Property
to which such financing relates, together with any guaranty or credit
enhancement given by Cordish or any Cordish Affiliate) and to take any and
all actions necessary or convenient to cause the Additional Property Owner
Entity to close on any such financing, PROVIDED, HOWEVER, that (a) prior to
such Additional Property Owner Entity executing any binding agreement
regarding such financing, Cordish shall consult with Inland regarding the
terms of the financing and shall provide Inland with the opportunity to
review any material documents to be executed by the Additional Property
Owner Entity in connection therewith, although so long as the financing is
consistent with and satisfies the guidelines set forth above in this
subsection 6.2.B(i), or so long as the Additional Property Owner Entity
owns a minority equity interest in another entity (and does not own a
direct real property interest) and does not incur such financing directly,
Inland's consent to such execution shall not be required, (b) payment and
performance of any recourse financing secured by an Additional Property
from a third-party lender unaffiliated with Cordish shall be guaranteed by
Cordish (or an Affiliate thereof or any other Person other than the
Company) and (c) such financing shall be an "Approved Financing" under the
terms and conditions of EXHIBIT B attached hereto. No guaranty or credit
enhancement (or payment thereunder) provided by Cordish shall increase
Cordish's Capital Account or Cordish's Adjusted Capital Balance; instead
any such payment shall be treated as a Development Loan (subject to the
terms of Section 6.5.F hereof) to the Additional Property Owner Entity.
(ii) To direct the Additional Property Owner Entity with respect to
the entering into, modifying, extending, making any decisions required or
permitted to be made under, enforcing any of an Additional Property Owner
Entity's rights under or terminating the management agreement for the
Additional Property.
(iii) To take any action enumerated under Sections 6.1.B and 6.1.C,
but solely with respect to the Additional Property and in the name of the
Additional Property Owner Entity, provided however that, notwithstanding
any provision hereof to the contrary (other than as provided in Section
9.6), the disposition by the Company of an interest in an Additional
Property Owner Entity and/or the disposition by an Additional Property
Owner Entity of any Additional Property, any part thereof or any interest
therein, shall require the consent of Inland.
(iv) Subject to the provisions of this Agreement, to take any other
action associated with the construction, improvement, development and/or
redevelopment of the Additional Property, including the negotiation and
execution of any and all contracts or agreements in connection therewith.
(v) To take any other action and make any other decision pertaining
to the conduct of the business and affairs of the Additional Property Owner
Entity and the Additional Property.
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Notwithstanding any provision of this Section 6.2, the actions described in
Sections 6.1.D shall constitute Major Decisions as they relate to the Additional
Properties which Cordish shall not have the right to take pursuant to the
provisions of this Section 6.2 and/or Section 6.5 without the prior written
consent of Inland;
C. [Intentionally omitted.]
D. Notwithstanding any provision of this Agreement to the contrary, if
Inland reasonably determines that the Company, any Owner Entity or any
Additional Property Owner Entity has taken or expects to take an action that
would jeopardize Inland's status as a REIT, Inland shall have absolute authority
to take any and all actions that Inland reasonably determines is necessary to
preserve the continued qualification of Inland as a REIT or to avoid the
imposition of additional taxes under the REIT Rules on Inland; provided that,
such action by Inland shall not alter or diminish the distributions to Cordish
under Article IV and Article IX of this Agreement. In furtherance of the
foregoing, Cordish hereby covenants and agrees that it shall timely deliver to
Inland monthly reports, and such other documents and information as Inland shall
reasonably request, regarding the operations relating to the Additional
Properties in order to enable Inland to comply with the REIT Rules and
applicable REIT reporting and compliance requirements and in order to enable
Inland to preserve the continued qualification of Inland as a REIT and to avoid
the imposition of additional taxes under the REIT Rules on Inland. Without
limiting in any way its obligations under this Section 6.2.D, in connection with
its obligations under this Section 6.2.D, Cordish hereby covenants and agrees to
(i) cooperate with and provide accurate information to Inland to the extent
necessary for Inland to comply with the REIT Rules and applicable REIT reporting
and compliance requirements (which require that Inland satisfies certain income
and asset tests which could be impacted by the operations of the Additional
Properties), (ii) notify Inland in writing prior to Cordish adding services not
currently provided to tenants or others (to verify that any such services do not
cause any amounts of gross income that would otherwise qualify under Section
856(c)(3) of the Code to fail to qualify under such Code provision as a result
of the provision of such services), (iii) provide Inland with quarterly asset
and income statements, within twenty (20) days after the end of each calendar
quarter, in a form to be provided to Cordish by Inland, (iv) timely and
accurately complete and respond in full to any and all annual questionnaires
delivered by Inland, to the extent reasonably related to Inland's qualification
or taxation as a REIT, (v) notify Inland in writing prior to the acquisition of
any securities and prior to having any tenant issue promissory notes or other
securities in lieu of, or in addition to, such tenant's obligations to pay rent
under any sublease and (vi) cause each Additional Property Owner Entity to
derive solely gross income from operations that is described from time to time
by Inland in written guidance delivered to Cordish or is otherwise permitted
under the REIT Rules. Notwithstanding anything in this Agreement to the
contrary, Cordish shall not be required independently to determine whether any
transaction or arrangement could jeopardize Inland's ability to qualify as a
REIT or would result in the imposition of additional taxes on Inland under the
REIT Rules; PROVIDED, HOWEVER, that if Cordish has actual knowledge or believes,
or is otherwise informed by Inland in the exercise of Inland's reasonable
judgment, that a transaction or arrangement involving an Additional Property, a
potential Additional Property or an Additional Property Owner Entity would
jeopardize Inland's ability to qualify as a REIT or result in Inland's payment
of additional taxes under the REIT Rules, Cordish and the Additional Property
Owner Entity shall take such actions (or refrain from taking such actions) as
are required to protect Inland's REIT status or to avoid
- 34 -
the imposition of such taxes (as the case may be); PROVIDED, FURTHER, that if
(a) Cordish or any Additional Property Owner Entity is required under this
Agreement to take actions (or refrain from taking such actions) to protect
Inland's REIT status or to avoid such additional taxes, (b) such action is not
otherwise contemplated by this Agreement, and (c) such action (or inaction)
causes Cordish or the Additional Property Owner Entity to incur costs or
damages, Inland shall reimburse Cordish or the Additional Property Owner Entity
(as applicable) for the amount of the reasonable costs and damages so incurred.
In addition to the foregoing, the Members have consented and agreed to enter
into that certain Declaration of Trust and related agreements as set forth on
EXHIBIT C attached hereto as of the date hereof; provided, however, that Inland
shall reimburse any Additional Property Owner for any loss, cost, expense and
damage as a result of the transfer of any Additional Property to such Trust.
Cordish hereby covenants and agrees to have its representatives meet from time
to time (at least quarterly) with representatives of Inland, at the reasonable
request of Inland, to review the current status of the REIT Rules and applicable
compliance and reporting obligations as they pertain to the operation of the
Additional Properties.
SECTION 6.3. DUTIES AND CONFLICTS.
A. The Members, in connection with their respective duties and
responsibilities hereunder, shall at all times act in good faith and, except as
expressly set forth herein, any decision or exercise of right of approval,
consent, disapproval or deferral of approval by a Member (including the Manager)
is to be made by such Member pursuant to the terms of this Agreement in good
faith, but recognizing that each Member may act in its own economic self
interest and in accordance with such tax and business objectives as it deems
appropriate or desirable for such Member. Except as otherwise agreed to in
writing by the Members, no Member (including the Manager) or any partner,
officer, shareholder or employee of any Member shall receive any salary or other
remuneration for its services rendered pursuant to this Agreement.
Notwithstanding the foregoing, an Affiliate of Inland may manage the Existing
Property pursuant to a separate management agreement the execution by the
Company of which shall expressly not require the consent of Cordish.
B. Each Member recognizes that the other Members (including the Manager)
have or may have other business interests, activities and investments, some of
which may be in conflict or competition with the business of the Company and
that such other Member (including the Manager) is entitled to carry on such
other business interests, activities and investments. No Member (including the
Manager) shall be obligated to devote all or any particular part of its time and
effort to the Company and its affairs.
C. The Manager shall not be liable to the Company or any other Member for
any error in judgment, mistake or law or fact or for any other act or thing
which it may do or refrain from doing in connection with the business and
affairs of the Company, except in the case of an intentional breach of any
provision of this Agreement (after written notice to the Manager and a
reasonable time to cure) or its willful misconduct, gross negligence or bad
faith.
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SECTION 6.4. OPERATIONS RESERVE.
A. The Company shall establish, from the Initial Capital Contributions of
Inland, a reserve (the "OPERATIONS RESERVE") of all cash remaining after the
application of funds in accordance with Section 4.1 hereof and other payments
required to be made by the Company in connection with the transactions
contemplated by the Contribution Agreement. The Operations Reserve shall be
deposited in an interest-bearing account in a bank designated by Cordish and
acceptable to Inland. Interest earned, if any, on the Operations Reserve shall
be released from the Operations Reserve and included in Gross Receipts. The
balance of the Operations Reserve shall be increased from time to time without
duplication (i) as and when funds are released from the escrow account(s) and
designated to be deposited in the Operations Reserve in accordance with the
terms of Section 2 of the Liquidity Escrow Agreement and (ii) as and when funds
are deposited in the Operations Reserve pursuant to the terms of Article 1 of
the Contribution Agreement. The balance of the Operations Reserve shall be
decreased from time to time as and when funds are withdrawn from such account
and applied in the manner set forth in this Agreement. Notwithstanding any
provision of Article IV hereof to the contrary, all amounts payable to Cordish
as a Cordish Preferred Return or as an Unpaid Cordish Preferred Return shall be
paid solely from (x) the Operations Reserve, and shall reduce dollar for dollar
the balance of the Operations Reserve; (y) Net Cash Flow received by the Company
to the extent derived solely from the activities of any Additional Property
Owner Entity and/or (z) Development Loans made pursuant to Section 6.5.F hereof.
X. Xxxxxxx shall be permitted to cause the Company to withdraw and use
funds in the Operations Reserve, without the consent of Inland, within the
authority granted to Cordish to direct the acquisition, development and
operations of Additional Properties (through an Additional Property Owner
Entity), as well as to pay any claim owed by Cordish under the Indemnification
Agreement. Inland, acting in its capacity as Manager, shall be permitted to
cause the Company to withdraw and use funds in the Operations Reserve for any
other Company purpose, but only to the extent the revenues of the Company are
insufficient to accomplish such purposes and Inland obtains the prior written
consent of Cordish to such withdrawal and use, which consent may be withheld in
Cordish's sole and absolute discretion.
SECTION 6.5 ACQUISITION OF ADDITIONAL PROPERTIES.
A. The Members anticipate expanding the business of the Company by
acquiring one or more Additional Properties (through Additional Property Owner
Entities) and causing the Additional Properties to be developed, redeveloped or
refurbished. Either Member may identify potential Additional Properties for
acquisition and development by the Company and shall notify the other Member of
any such identification and provide the other Member with the opportunity to
comment thereon. Cordish shall have the right and authority, subject to the
provisions of Section 6.x.X applicable to Cordish pursuant to Section 6.2
hereof, to supervise and coordinate all aspects of the acquisition, financing,
development and/or redevelopment of each Additional Property, shall keep Manager
informed with respect to all such activity and shall have the duties and
obligations set forth in Section 6.1.C and elsewhere in this Agreement with
respect to the Additional Properties, to the extent applicable; PROVIDED,
HOWEVER, that any such Additional Property may only be acquired by an Additional
Property Owner Entity and only if (i) such Additional Property and the related
Development Plan for such Additional Property has been
- 36 -
approved by Cordish, (ii) all available environmental reports and similar
reports for such Additional Property have been submitted to the Manager and the
Manager has approved the environmental and similar condition of such Additional
Property, (iii) the Manager determines that the acquisition of such Additional
Properties would not impose additional liabilities or obligations on the Company
(other than to the extent that such liabilities or obligations would remain
liabilities and obligations solely of the applicable Additional Property Owner
Entity) and (iv) the Manager determines that the acquisition of such Additional
Properties would not adversely affect the continued qualification of Inland as a
REIT and would not cause the imposition of additional taxes under the REIT Rules
on Inland.
B. Unless otherwise agreed by the Members in writing, each Additional
Property shall be acquired by an Additional Property Owner Entity which shall be
a single-purpose limited liability company similar in form and structure to the
Owner Entity. Each Additional Property Owner Entity shall be owned solely by the
Company.
C. Unless otherwise agreed by the Members in writing, Cordish may utilize
cash then held in the Operations Reserve to fund the costs relating to any
Additional Property in addition to incurring (or causing an Additional Property
Owner Entity to incur) financing for the acquisition, development and/or
redevelopment of the Additional Property (subject to the limitations set forth
in this Agreement). Unless otherwise agreed by the Members in writing, and
notwithstanding any authority granted to Cordish under this Agreement
(specifically including, but not limited to, Section 6.2 hereof), the Company
shall not utilize any Company cash other than the cash in the Operations Reserve
in connection with the acquisition of, financing of, operation of, and other
costs relating to, the Additional Properties and the Additional Property Owner
Entities.
X. Xxxxxxx shall cause the Additional Property Owner Entity to arrange
and maintain property, casualty and liability insurance with respect to the
Additional Properties in amounts and on terms that are consistent with the
customary practices of Cordish and its Affiliates with respect to similar
properties and taking into account all relevant factors including the nature and
location of the Additional Properties; PROVIDED, HOWEVER, Cordish shall cause
(i) any improvements on the Additional Properties to be insured against damage
by fire and the other hazards covered by a standard extended coverage and
all-risk insurance policy or a builders risk insurance policy, as applicable,
for the full insurable value thereof (without reduction for depreciation or
co-insurance) and with a reasonable deductible, (ii) each Additional Property
with completed improvements to be covered by use and occupancy insurance
covering, as applicable, rental income or business interruption, with coverage
in an amount not less than twelve (12)-months anticipated gross rental income or
gross business earnings, as applicable, attributable to such Additional
Property; and (iii) each Additional Property Owner Entity to maintain commercial
general liability and umbrella liability insurance with respect to each
Additional Property providing for combined limits of liability of not less than
$25 million for both injury to or death of a person and for property damage per
occurrence; The Company, Inland, and the Owner Entity shall be named as
additional insureds. Upon the request of Inland, Cordish shall deliver to Inland
copies of such insurance policies and other documents and information necessary
in order to verify its compliance with the provisions of this Section 6.5.D.
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E. Subject to the terms of Section 6.2.B(i) hereof, Cordish shall have
the right and authority to arrange the original financing for each Additional
Property on behalf of the Additional Property Owner Entity in accordance with
Section 6.2.B(i) without the need to obtain the consent or approval of the
Manager, and to utilize the funds (including interest thereon) in the Operations
Reserve in connection with the acquisition, development and/or redevelopment of
Additional Properties.
F. If any Additional Property Owner Entity has a need for funds in
connection with the acquisition, development and/or redevelopment of an
Additional Property, or if the Company requires additional funds in connection
with the acquisition of an equity interest in an Additional Property Owner
Entity, or if an Additional Property Owner Entity does not have sufficient cash
flow to fund the Cordish Preferred Return that year to the Company, and in
either case such amount exceeds the amount available from the Operations Reserve
and the proceeds of any financing arranged by Cordish pursuant to Section 6.5.E
hereof, then Cordish shall have the right to provide written notice of the need
for such funds ("REQUIRED DEVELOPMENT FUNDS") to the Members (a "DEVELOPMENT
FUNDS NOTICE"). Upon receipt of the Development Funds Notice, the Members may
upon mutual consent (in their sole and absolute discretion) elect to (a) make an
Additional Capital Contribution in proportion to their respective Percentage
Interests, or (b) make loans ("DEVELOPMENT LOANS") to the Additional Property
Owner Entity in the amount of the Required Development Funds described in the
Development Funds Notice in proportion to the Members' respective Percentage
Interests on the same terms as a Cash Shortfall Loan made with respect to the
Additional Property as set forth in Section 3.4.C hereof. The Members hereby
covenant and agree to structure any Development Loans made pursuant to the terms
hereof so that such loans satisfy the "Straight Debt Safe Harbor" under Code
Section 856(c)(7) and the Treasury Regulations promulgated thereunder. If the
Members do not agree to make such Additional Capital Contributions or
Development Loans, Cordish shall promptly make (or cause an Affiliate or other
Person selected by it to make) a Development Loan to the Additional Property
Owner Entity in the amount of the Required Development Funds in accordance with
Section 6.2.B(i) and on the same terms and form applicable to a Cash Shortfall
Loan made with respect to the Additional Property as set forth in Section 3.4.C
hereof. If Cordish does not promptly make or cause an Affiliate or other Person
selected by it to make a Development Loan pursuant to this Section 6.5.F, Inland
shall have the right, but not the obligation, in its sole and absolute
discretion, to fund the amount of such Development Loan, which shall constitute
a Default Loan by Inland to Cordish in the same manner as set forth in Section
3.4.B hereof. If Inland does not elect (in its sole discretion and with no duty
or obligation to do so) to make such a Development Loan or Default Loan and if
such Additional Property Owner Entity will become insolvent or will be in
default under any of its financing obligations then Inland shall have the
unilateral right at any time to cause the Company to distribute the entire
ownership interest in such Additional Property Owner Entity to Cordish
(notwithstanding any other provisions of this Agreement to the contrary) on the
terms provided in Section 9.6.B and the Adjusted Capital Balance of Cordish
shall be reduced by an amount equal to the portion of the Operations Reserve
theretofore contributed to such Additional Property Owner Entity.
G. Notwithstanding anything to the contrary otherwise contained herein
and in addition to the obligations and conditions set forth herein, in the event
Cordish desires that an Additional Property Owner Entity acquire a direct
interest in real property (as opposed to an indirect interest, such as a
partnership interest or limited liability company interest in another
- 38 -
entity that owns real property), before such Additional Property Owner Entity
acquires title to such Additional Property, Cordish shall provide Inland with a
copy of a Phase I environmental report that does not recommend that any further
studies, tests or remediation be conducted with respect to such property.
H. Prior to the acquisition of an Additional Property and in addition to
the obligations and conditions set forth herein, Cordish shall deliver to the
Manager a proposed Development Plan for such Additional Property. The Manager
shall have the right to review and comment on each Development Plan so submitted
by Cordish. Within ten (10) business days after the delivery of the proposed
Development Plan for an Additional Property, the Manager shall provide Cordish
with its comments thereon (including whether or not the Manager believes at such
time that the Additional Property will comply with the requirements in Section
6.6 below, provided, however, that the Manager's initial belief as set forth in
this sentence shall not be deemed to be a waiver of the Manager's or Inland's
rights hereunder), if any, which Cordish shall take into consideration.
X. Xxxxxxx shall cause the development, redevelopment, construction and
improvement of each Additional Property to be completed substantially in
accordance with the Development Plan therefor.
SECTION 6.6 COMPLIANCE WITH CERTAIN REQUIREMENTS.
Notwithstanding any other provision of this Agreement or any other document
governing the management and operation of the Property, Inland shall have the
right to cause the Company, each Owner Entity and any Additional Property Owner
Entity to take any reasonable action or to refrain from taking any action
(including but not limited to using a protective trust to own assets) to (i)
preserve the continued qualification of Inland as a real estate investment trust
under Section 856 of the Code (a "REIT"), (ii) preserve the continued
qualification of any Affiliates of Inland as taxable REIT subsidiaries and (iii)
avoid the imposition of additional taxes on Inland under Section 857 of the Code
or Section 4981 of the Code and the Treasury Regulations promulgated thereunder
(collectively the "REIT RULES"). The Members agree that in the event that Inland
proposes to take any action (or cause the Company or any Owner to take any
action) to ensure the continued qualification of Inland as a REIT or to avoid
the imposition of additional taxes under the REIT Rules on Inland, Inland shall
(x) notify and consult with Cordish regarding, and prior to taking, such
proposed action and (y) except as provided in Section 6.2.D, not have liability
to any other Member for monetary damages or otherwise for losses sustained or
liabilities incurred in connection with such actions provided that Inland acts
in good faith to determine and implement a course of action that preserves
Inland's REIT status or avoids the imposition of additional taxes on Inland in a
manner which minimizes the adverse effects on any other Member's rights and
obligations hereunder. In no event, however, shall the distributions to Cordish
under Article IV and Article IX of this Agreement be altered or affected by any
action so taken by Inland.
SECTION 6.7 EXCULPATION AND INDEMNIFICATION.
A. Neither the Manager nor any employee, representative, agent or
Affiliate of the Manager (collectively, the "COVERED PERSONS") shall be liable
to the Members,
- 39 -
the Company or any other Person who has an interest in or claim against the
Company or any Additional Property Owner Entity or Owner Entity for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Covered Person in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of the authority conferred on such
Covered Person by this Agreement, except that a Covered Person shall be liable
for any such loss, damage or claim incurred by reason of such Covered Person's
gross negligence or willful misconduct.
B. To the fullest extent permitted by applicable law, a Covered
Person shall be entitled to indemnification from the Company for any loss,
damage or claim incurred by such Covered Person by reason of any act or omission
performed or omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement, except that no
Covered Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Covered Person by reason of such Covered
Person's gross negligence or willful misconduct with respect to such acts or
omissions; PROVIDED, HOWEVER, that any indemnity under this Section 6.7 by the
Company shall be provided out of and to the extent of Company assets only, and
the Members shall not have personal liability on account thereof.
C. To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Covered Person defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the Company
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Company of an undertaking by or on behalf of the Covered
Person to repay such amount if it shall be determined that the Covered Person is
not entitled to be indemnified as authorized in this Section 6.7
D. A Covered Person shall be fully protected in relying in good
faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Covered Person reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable care by or on
behalf of the Company, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, or any other facts pertinent
to the existence and amount of assets from which distributions to the Member
might properly be paid.
E. To the extent that, at law or in equity, a Covered Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any other Covered Person, a Covered Person acting under this
Agreement shall not be liable to the Company or to any other Covered Person for
its good faith reliance on the provisions of this Agreement or any approval or
authorization granted by the Company or any other Covered Person. The provisions
of this Agreement, to the extent that they restrict the duties and liabilities
of a Covered Person otherwise existing at law or in equity, are agreed by the
Members to replace such other duties and liabilities of such Covered Person.
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F. The foregoing provisions of this Section 6.7 shall survive any
termination of this Agreement.
G. Notwithstanding any provisions herein to the contrary, the
provisions of this Agreement, specifically including, but not limited to, the
provisions of this Section 6.7, shall not in any way be construed to limit or
affect the terms and conditions of the Indemnification Agreement.
ARTICLE VII
BOOKS AND RECORDS; RESERVES
SECTION 7.1. BANK ACCOUNTS.
The Manager shall have authority to open bank accounts and designate
signatories with respect thereto on behalf of the Company and the Owner Entity
and may authorize property managers to open such bank accounts as it shall deem
necessary or desirable for the management and operation of the Property and the
conduct of Company business (including the business of the Owner Entity).
Cordish shall open and be the sole signatory on all bank accounts and keep all
banking and accounting records with respect to the Additional Properties,
Additional Property Owner Entities and Operations Reserve, PROVIDED, HOWEVER,
that Cordish shall make all information regarding the Additional Properties, the
Additional Property Owner Entities and the Operations Reserve available to
Inland for its review, as required under the terms of this Article VII.
SECTION 7.2. BOOKS OF ACCOUNT.
The Company and each Owner Entity and Additional Property Owner Entity
shall keep accurate and complete books of account and records showing the assets
and liabilities, operations, transactions and financial condition of the
Company, each Owner Entity and Additional Property Owner Entity and each
Property. All such books of account and records may be inspected by any Member,
its designees or representatives from time to time and upon reasonable prior
notice at the office of the Company or other person maintaining the same. With
respect to any Additional Properties managed by Cordish pursuant to the
provisions hereof, Cordish shall open all bank accounts and keep all bank and
accounting records and shall supply, promptly upon request, them to the Manager
for incorporation into the books and records of the Company. Cordish hereby
acknowledges and agrees that pursuant to the terms of the Contribution
Agreement, Cordish has agreed to deliver to Inland prior to the date hereof any
and all of the books and records, organizational documents, banking records and
statements and other financial statements (including ancillary documents
relating thereto) of the Company and the Owner Entity covering all periods from
the date of their formation until the date hereof. Cordish hereby covenants and
agrees to cooperate with the Manager, and in particular will make available, as
the Manager reasonably requests, management decisions, liaison personnel,
information, approvals and acceptances so that the Manager may properly perform
its obligations under this Agreement.
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SECTION 7.3. OPERATING STATEMENTS.
A. As and when prepared or received by the Manager, the Manager shall
promptly provide each Member with copies of all reports, studies, operating
statements, budgets and other material documents received by the Owner Entity
and the Additional Property Owner Entities. The Manager shall at least once
every Fiscal Year have the Company's books and records reviewed at Company
expense by the Accountant. A copy of the reviewed audited financial statements
shall be submitted promptly after completion to all Members, and not later than
ninety (90) days after the end of each Fiscal Year. Cordish shall provide the
Manager with any and all reports and information regarding the Additional
Property and the Additional Property Owner Entity that the Manager requires in
order to comply with its obligations under this Section 7.3.
B. Upon the request of any Member and solely to the extent that such
information and reports are available to, and have been prepared or received by,
the Manager, the Manager shall promptly provide such requesting Member with (i)
a Net Cash Flow statement, (ii) unaudited financial statements of the Company,
including a balance sheet, statements of changes in Members' capital accounts
during such quarter, statements of profit and loss for such quarter, all
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, (iii) a revised projection of income and expenses of the
Company for the remainder of the current Fiscal Year, (iv) in the event a
Capital Transaction has occurred, a statement of the Net Proceeds of a Capital
Transaction for such Capital Transaction. Upon the request of any Member and as
promptly as practical after the end of each calendar year, the Manager shall
forward to such requesting Member the same statements described in the preceding
sentence for the preceding calendar year. Cordish shall be responsible for the
prompt preparation and delivery to the Manager of all such reports with respect
to any Additional Property and any Additional Property Owner Entity, including,
but not limited to, the reports and information required to be delivered to
Inland under the terms of Section 6.2.D hereof.
C. As soon as practicable, but within seventy-five (75) days after the
end of the Fiscal Year, and only after the written approval thereof by the
Manager, the Tax Matters Member shall, as a Company expense, furnish the Members
with all necessary tax reporting information required by the Members for the
preparation of their respective federal, state and local income tax returns,
including each Member's pro rata share of income, gain, loss, deductions and
credits for such Fiscal Year. The Tax Matters Member hereby covenants and agrees
that no tax return of the Company, the Owner Entity or any Additional Property
Owner Entity shall be filed with any governmental authority without the prior
written consent of both Members.
D. As soon as practicable, but in no event later than seventy-five (75)
days after the end of the Fiscal Year, and only after the written approval by
the Manager, the Tax Matters Member shall, subject to the terms of Section 7.5.G
hereof as a Company expense, furnish each Member with copies of the Company's
federal partnership Return of Income and other income tax returns, together with
each Member's Schedule K-1 or analogous schedule, which returns shall be signed
by the Tax Matters Member on behalf of the Company and co-signed by the
Accountant as preparer.
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E. Except as otherwise provided in this Agreement, all decisions as to
accounting principles, whether for the Company's books or for income tax
purposes (and such decisions may be different for each such purpose) and all
elections available to the Company under applicable tax law shall be made by the
Manager. The Company shall use reasonable efforts to cause all federal, state
and local income and other tax returns to be timely filed by the Company,
provided that such returns shall be subject to prior review and approval by the
Members.
F. Each Member shall promptly provide the Manager and/or the Tax Matters
Member, as applicable, with the information necessary in order to enable the
Manager and/or the Tax Matters Member to furnish the information, reports and/or
statements called for pursuant to this Section 7.3. The Manager's and/or the Tax
Matters Member's obligations to provide reports, information and filings, shall
be contingent upon the receipt of the relevant information from the Members.
SECTION 7.4. THE ACCOUNTANT.
Xxxxx X. Xxxxxx & Associates shall be retained as the initial accountant
for the Company (the "ACCOUNTANT") for the Fiscal Year ending December 31, 2004
and shall prepare the 2004 tax return of the Company subject to the review and
written approval of the Tax Matters Member and the Manager. Except as provided
in Section 7.5.G hereof, the fees and expenses of the Accountant shall be a
Company expense. Upon reasonable advance notice to the Manager, any Member may,
in its discretion and at such Member's expense, cause a nationally recognized
accounting firm selected by such Member in its reasonable discretion to conduct
an annual audit of the books, records and accounts of the Company, any Owner
Entity or Additional Property Owner Entity (in addition to any audit conducted
by the Accountant). In the event the Manager shall desire to terminate the
employment of the Accountant after 2004, and to substitute another accountant
therefor, the Manager shall designate another nationally recognized accounting
firm. In such event, the Members shall take all actions necessary to cause the
then-existing Accountant to fully cooperate in such transition and to provide
all workpapers and other books and records to the new Accountant.
SECTION 7.5. TAX MATTERS MEMBER.
X. Xxxxxxx is hereby designated to act as the "Tax Matters Member" under
Code section 6231(a)(7) for the Fiscal Year ending December 31, 2004 and Inland
shall be the Tax Matters Member for all other Fiscal Years. To the extent
provided in Code Sections 6221 through 6231 and subject to the provisions
hereof, the Tax Matters Member shall represent the Company and the Members in
their capacities as Members before taxing authorities or courts of competent
jurisdiction in tax matters affecting the Company or the Members in their
capacities as Members, and, subject to the limitations set forth in this
Agreement, shall file any tax returns and execute any agreements or other
documents on behalf of the Company. To the extent the Company meets the criteria
set forth in Section 6231(a)(1)(B)(i) of the Code, the Company shall not elect
to be subject to the unified partnership audit procedures under Section
6231(a)(1)(B)(ii) of the Code. The Tax Matters Member shall cause the Accountant
to report the Reorganization and the transactions contemplated in the
Contribution Agreement and herein with respect to the admission of Inland and
the Cash Payment (including the purchase by the Owner Entity of the interest of
the Withdrawing Member therein) as set forth in Section 4.1.A hereof and only
with
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the written approval of the Manager. The Tax Matters Member hereby covenants and
agrees to allocate the basis step-up attributable to the Existing Property
resulting from the Reorganization and admission, in the manner required by the
Manager in its sole and absolute discretion.
B. Subject to the limitations set forth in this Agreement, the Tax
Matters Member is authorized to make any and all elections for federal, state,
and local tax purposes, including, without limitation, any election, if
permitted by applicable law: (i) to adjust the basis of Company Assets pursuant
to Code sections 754, 734(b), and 743(b), or comparable provisions of state or
local income tax law, in connection with Transfers of LLC Interests and Company
distributions; (ii) to treat the Company as a partnership for income tax
purposes (or the functional equivalent thereof under applicable state and/or
local income tax law) and (iii) to treat the Owner Entity as a disregarded
entity for all tax purposes. Notwithstanding the foregoing, the Company shall
not make an election under Section 754 of the Code prior to the Closing under
Section 9.5 hereof without the prior written consent of Cordish, provided,
however, and for the avoidance of doubt, that the Manager shall be permitted, in
its sole and absolute discretion, to cause the Company to make a Section 754
election effective for the year in which the Closing under Section 9.5 occurs.
C. To the extent that such matters would have a material adverse effect
on any Member, the Tax Matters Member shall obtain the consent of the other
Members before it can (i) extend the statute of limitations for assessment of
tax deficiencies against the Members with respect to adjustments to the
Company's federal, state, or local income tax returns, or (ii) execute any
settlement agreement that binds the Members or otherwise affects the rights of
the Company and the Members.
D. Prior to the taking of any action and/or the making of any election by
the Tax Matters Member (including all such actions and/or elections specifically
referred to in this Agreement) which has a material adverse effect on the other
Member, the Tax Matters Member shall provide prompt written notice of such
intended action and/or election to the other Member. If the other Member sends
the Tax Matters Member a written objection within thirty (30) business days of
receiving the notice (or such shorter time as may be required to take such
action or to make such election), the Tax Matters Member and the other Member
shall confer about the intended action or election, as applicable. If agreement
cannot be reached within sixty (60) business days after the receipt by the Tax
Matters Member of the other Member's written objection (or such shorter time as
may be required to take such action or to make such election), the Tax Matters
Member shall take the action or make the election, as applicable as originally
proposed unless the other Member provides an opinion from the other Member's
regular outside legal tax counsel, or, at the option of the other Member,
another nationally recognized law firm that is reasonably acceptable to the Tax
Matters Member, in either case at the other Member's sole expense, that the
action or election, as applicable as proposed would more likely than not have an
adverse tax consequence to the other Member. In making such determination, the
other Member's counsel (or such other law firm selected by it in accordance with
the foregoing) shall be instructed to give effect to the provisions of Articles
III and IV hereof. Any dispute regarding any action to be taken under this
Section 7.5.D shall be submitted to arbitration in accordance with the
provisions of Section 7.5.F hereof.
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E. Within five business days of its receipt, the Tax Matters Member shall
give written notice to the other Member of the receipt of any written notice
relating to a controversy or related proceeding which has a material adverse
effect on the other Member with the Internal Revenue Service or any state or
local taxing authority, including, without limitation, (A) written notice that
the Internal Revenue Service or any state or local taxing authority intends to
examine the Company's income tax returns for any year; (B) written notice of
commencement of an administrative proceeding at the Company level related to the
Company under section 6223 of the Code; (C) written notice of any final Company
administrative adjustment relating to the Company pursuant to a proceeding under
section 6223 of the Code; (D) any request from the Internal Revenue Service or
any comparable state or local taxing agency for waiver of any applicable statute
of limitations with respect to the filing of any tax return by the Company; (E)
any information document requests from the Internal Revenue Service or any other
taxing authority, and (F) any Form 5701 or comparable state or local audit
adjustment notices. Within ninety (90) days after receipt of notice of a final
Company administrative adjustment, the Tax Matters Member shall notify each
Member if it does not intend to file for judicial review with respect to such
adjustment.
F. The Tax Matters Member shall keep the other Member fully and promptly
informed about the status of any tax controversy or related proceeding involving
the Company which could have a material adverse effect on the other member. If,
as a result of a notice provided by the Tax Matters Member under Section 7.5.E
or otherwise, the other Member believes, based upon the nature of the government
inquiry, that the government could be considering an adjustment that would have
an adverse effect upon the other Member, then other Member shall have the right
to hire and retain counsel of its choice, reasonably acceptable to the Tax
Matters Member, to represent the Company in connection with such issue, shall
have the right to control the contest of such issue, and shall participate in
such contest to the maximum extent allowable by law, but shall keep the Tax
Matters Member fully informed. If the Tax Matters Member does not agree that the
government could be considering an adjustment that would have an adverse effect
upon the other Member, then this dispute shall be promptly submitted to a senior
tax partner at a nationally recognized law firm (other than the other Member's
regular outside tax counsel) selected by the other Member and reasonably
acceptable to the Tax Matters Member (the "ARBITRATOR"). The Arbitrator so
selected shall be instructed to give effect to the provisions of this Agreement
in determining whether the adjustment could have an adverse effect on the other
Member. The Arbitrator's determination shall be final and binding on the parties
and if the determination is that the adjustment could have an adverse effect on
the other Member, then the other Member shall have the rights set forth in this
Section 7.5.F. All information provided to the Arbitrator by the Company or
either Member shall be kept strictly confidential by the Arbitrator.
G. All expenses incurred by Cordish as the Tax Matters Member (or
incurred by the Company as a result of actions taken on behalf of the Company by
Cordish as the Tax Matters Member) for the 2004 taxable year (including, but not
limited to, the costs and expenses incurred by the Company and/or Cordish for
the preparation of the 2004 tax returns of the Company and the Owner Entity and
the expenses of counsel retained by either Member to represent the Company under
section 7.5.F in connection with any tax controversy or related proceeding of
the Company) shall be borne solely by Cordish; PROVIDED, HOWEVER, that if
Cordish does not otherwise make such payments in a timely fashion, such payments
shall be paid from the
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Operations Reserve. All expenses incurred by Inland as the Tax Matters Member
(including the expenses of counsel retained by the other Member to represent the
Company under section 7.5.F) in connection with any tax controversy or related
proceeding of the Company will be borne equally by Inland and Cordish; PROVIDED,
HOWEVER, that if Cordish does not otherwise make its portion of such payments in
a timely fashion, such portion of such payments shall be paid from the
Operations Reserve. Nothing herein shall be construed to restrict Inland, during
the periods that Inland is the Tax Matters Member, from engaging an accounting
or law firm to assist the Tax Matters Member in discharging its duties
hereunder, so long as the compensation paid by the Company for such services is
customary.
ARTICLE VIII
TRANSFER OF LLC INTERESTS
SECTION 8.1. NO TRANSFER.
A. Except as provided in this Article VIII, no Member may Transfer any
LLC Interest, except as hereinafter set forth in this Article VIII or upon prior
written consent of all of the other Members, which consent may be granted or
withheld in the sole and absolute discretion of the other Members. Any Transfer
of an LLC Interest in contravention of this Article VIII shall be null and void
and shall be deemed a material breach of, and a default under, this Agreement,
and the other Members shall have all the rights and remedies available under
this Agreement.
B. For the purposes of this Article VIII the rules applicable to the
Transfer of an LLC Interest shall apply in the same manner to transfers of
interest in the Members; PROVIDED, HOWEVER, that the following transfers shall
not be subject to this Section 8.1: (i) transfers of an interest in Inland to a
Person who, as of the date hereof, is a member of such entity, or (ii) transfers
of an interest in Inland if an Affiliate of Inland retains at least a 20%
interest, or (iii) transfers of an interest in Inland in connection with a sale
or transfer by Inland Western Retail Real Estate Trust, Inc., or any of its
Affiliates, of all or substantially all of their assets, or (iv) transfers of an
interest in Cordish as long as Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxx and/or
Xxxxxxxx Xxxxxxx retains control of the business and activities of Cordish.
SECTION 8.2. PERMITTED TRANSFERS.
A. The restrictions on Transfers under Section 8.1 shall not apply to any
(i) Transfer (for any consideration or no consideration) by Inland or Cordish of
all or any part of its LLC Interest to any 80% Owned Affiliate of the transferor
Member (provided that counsel to the non-Transferring Member reasonably
determines that such Transfer would not have any adverse tax effect (directly or
indirectly) on the non-Transferring Member), or (ii) Transfer to any other
Member.
B. A permitted transferee of a Member pursuant to Section 8.1.A or 8.2.A
hereof that acquires the LLC Interest of a Member shall not be recognized by the
Company as a Member and shall have only the rights of an assignee of the
transferor Member's LLC Interest, except upon compliance with the terms of
Section 8.2.C. A Member who assigns all of its LLC Interest to a permitted
transferee (other than the other Member) in accordance with the provisions of
this Agreement shall nevertheless remain a Member of the Company subject to all
the duties and
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obligations imposed on it under this Agreement until such time as the transferee
of such LLC Interest is admitted to the Company as a substitute Member in
accordance with Section 8.2.C. Upon any permitted assignment of an LLC Interest
pursuant to Section 8.2, the transferor and transferee shall file with the
Company an executed or authenticated copy of the written instrument of
assignment or transfer.
C. No transferee of the whole or a portion of a Member's LLC Interest
shall have the right to become a substituted Member in place of its transferor
unless and until all of the following conditions are satisfied:
(i) the transferor and transferee have executed and acknowledged
such instruments as the other Members may reasonably deem necessary or
desirable to effect such Transfer;
(ii) a duly executed and acknowledged written instrument of transfer
has been filed with the Company setting forth the intention of the
transferor that the transferee become a substituted Member in its place;
(iii) the transferee accepts and agrees to be bound by all the
provisions of this Agreement by executing and delivering a counterpart
signature page hereto; and
(iv) the transfer would not materially and adversely affect the
treatment of the Company for tax purposes under the Code or the tax laws of
any state in which the Company does business.
SECTION 8.3. SUCCESSION BY OPERATION OF LAW.
A. In the event of an Event of Bankruptcy with respect to a Member or the
merger, consolidation, dissolution or liquidation of the Member, all of such
Member's rights to distributions and allocations by the Company, shall pass to
such Member's legal successor, but such legal successor shall not become a
Member of the Company without the prior written consent of the other Members,
which consent may be granted or withheld in all of the sole and absolute
discretion of such other Members.
B. Upon occurrence of an Event of Bankruptcy of a Member, or any other
event that causes a Member to cease to be a member of the Company, the business
of the Company shall continue without dissolution. Notwithstanding any other
provision of this Agreement, each Member waives any right that it might have
under Section 18-801(b) of the Act to agree in writing to dissolve the Company
upon the occurrence an Event of Bankruptcy or any other such event.
SECTION 8.4. ADDITIONAL RESTRICTIONS ON TRANSFERS.
The LLC Interests described in this Agreement have not been registered
under the Securities Act of 1933, as amended (the "1933 ACT") or under the
securities laws of the State of Delaware or any other jurisdiction (the "STATE
ACTS"). Consequently, in addition to any and all other restrictions on
transferability set forth herein, the LLC Interests may not be sold, assigned,
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pledged, hypothecated or otherwise disposed of or Transferred, except in
accordance with the provisions of the 1933 Act and the State Acts.
ARTICLE IX
DISSOLUTION AND TERMINATION OF THE COMPANY
SECTION 9.1. DISSOLUTION.
The Company shall be dissolved and commence winding up and liquidating only
upon the first to occur of any of the following:
A. The sale, condemnation or other disposition of all or substantially
all of the Properties and the receipt of all consideration therefor;
B. At any time that there are no Members; or
C. The written election of all the Members to dissolve, wind up and
liquidate the Company.
SECTION 9.2. TERMINATION.
Notwithstanding any other provision of this Agreement, in all cases of
valid, voluntary dissolution of the Company (the parties acknowledging that the
right of a Member to cause an involuntary dissolution of the Company or a
partition of the Company has been expressly waived, renounced and released under
Sections 2.7 and 2.8 hereof), the business of the Company shall be wound up and
the Company terminated as promptly as practicable thereafter, and each of the
following shall be accomplished;
A. The Manager shall cause to be prepared a statement setting forth the
assets and liabilities of the Company as of the date of dissolution, a copy of
which statement shall be furnished to all of the Members.
B. The property and assets of the Company shall be liquidated by the
Manager as promptly as possible, but in an orderly and businesslike and
commercially reasonable manner. The Manager may, in the exercise of its business
judgment and if commercially reasonable, determine to defer the sale of all or
any portion of the property and assets of the Company if deemed necessary or
appropriate to realize the fair market value of any such property or assets. In
lieu of a sale of assets and a dissolution of the Company, the Manager shall be
authorized in its sole and absolute discretion to cause the Company to purchase
and redeem the Cordish LLC Interest in full pursuant to the provisions of
Sections 9.4, 9.5 and 9.6 (without regard to the time limitations therein).
SECTION 9.3. LIQUIDATING MEMBER.
Upon the dissolution of the Company, Inland shall act as the liquidating
member (in such capacity, the "LIQUIDATING MEMBER"). The Liquidating Member
shall, upon the dissolution and upon completion of the winding up of the affairs
of the Company, file appropriate certificate(s)
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to such effect in the proper governmental office or offices under the LLC Act as
then in effect. Notwithstanding the foregoing, each Member, upon the request of
the Liquidating Member, shall promptly execute, acknowledge and deliver all such
documents, certificates and other instruments as the Liquidating Member shall
reasonably request to effectuate the proper dissolution and termination of the
Company, including the winding up of the business of the Company. Any tax
matters that are continuing as of the time of such liquidation and dissolution
and/or that arise after such liquidation and dissolution (if such liquidation
and dissolution should ever occur) shall be governed by the provisions of
Section 7.5 hereof, and the provisions of this sentence shall survive any such
liquidation and/or dissolution of the Company.
SECTION 9.4 TERMINATION RIGHTS.
X. Xxxxxxx shall have the right, but not the obligation, to require the
Company to purchase and redeem all, but not less than all, of the Cordish LLC
Interests for the Cordish Liquidation Amount (as such term is defined in Section
9.6.A hereof and subject to Section 9.6.B hereof) if a Redemption Notice (as
defined in Section 9.4.C below) is delivered by Cordish at any time during the
period beginning on the date that is 30 calendar months from the date hereof and
ending on the date that is 36 calendar months from the date hereof.
B. Inland shall have the right, but not the obligation, to require the
Company to purchase and redeem all, but not less than all, and Cordish shall be
required to assign all, of the Cordish LLC Interests for the Cordish Liquidation
Amount (subject to Section 9.6.B hereof), if (except as provided in Section
9.4.E hereof) a Redemption Notice is delivered by Inland at any time during the
period beginning on the date that is 36 calendar months from the date hereof and
ending on the date that is 40 calendar months from the date hereof.;
C. In order to exercise the rights to require the Company to purchase and
completely redeem the Cordish LLC Interests under this Section 9.4, Cordish or
Inland, as appropriate (the "EXERCISING MEMBER"), shall deliver to the other
Member and to the Company written notice (the "REDEMPTION NOTICE") of the
exercise of such right, which notice shall state the Exercising Member's
computation of the Cordish Liquidation Amount. The delivery of the Redemption
Notice by the Exercising Member shall constitute an irrevocable commitment by
Cordish to transfer and deliver, and the Company to purchase and redeem, all of
the Cordish LLC Interests for the Cordish Liquidation Amount. Closing on the
purchase and redemption of the Cordish LLC Interests shall take place in
accordance with Section 9.5 hereof. Any purchase and redemption of all of the
Cordish LLC Interests under this Section 9.4 shall require the simultaneous
repayment (at Closing) of all Default Loans made pursuant to the provisions of
this Agreement. All Cash Shortfall Loans and Development Loans made by Cordish
with respect to the Additional Properties shall be repaid in full at the Closing
except that if an interest in an Additional Property Owner Entity is distributed
to Cordish, then all Cash Shortfall Loans and Development Loans made to such
entity shall remain outstanding and any distribution of Additional Property
Owner Entity Interests to Cordish pursuant to the provisions hereof shall be
made subject to such Cash Shortfall Loans and Development Loans.
D. Upon the delivery of the Redemption Notice by the Exercising Member,
Cordish shall thereupon only be entitled to receive the Cordish Liquidation
Amount and Inland shall have sole authority to act on behalf of the Company to
obtain at Closing the funds required to
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completely redeem the Cordish LLC Interests, including borrowing money from
third-party lenders, Members or Affiliates and seeking Capital Contributions
from additional Members to be admitted to the Company.
E. Notwithstanding any provision of this Section 9.4 and this Article IX
to the contrary, and specifically notwithstanding the time period during which
Inland is permitted to deliver a Redemption Notice under Section 9.4.B hereof,
Inland shall have the right, but not the obligation, in its sole and absolute
discretion, to deliver a Redemption Notice to Cordish and to cause the purchase
and redemption of all of the Cordish LLC Interests pursuant to the terms of this
Article IX, at any time following the occurrence of one or more of the following
events:
(i) if, there are any unpaid indemnification obligations of Cordish
and/or Xxxxx X. Xxxxxxx to any "Inland Indemnified Party" pursuant to the
terms and conditions of the Indemnification Agreement, which
indemnification obligations have been unpaid for sixty (60) days following
the date that such obligations have been either (A) liquidated and agreed
to by the parties hereto or (B) determined by an arbitrator in accordance
with the terms of Section 13.12 of the Indemnification Agreement;
(ii) if, (a) Inland suffers an Indemnified Loss pursuant to Section
10.17.B hereof and (b) an arbitration conducted under Section 10.16 hereof
determines that Cordish owes or has failed to pay such Indemnified Loss
within sixty (60) days of the receipt of such notice by Cordish from
Inland; or
(iii) if Cordish breaches any of the provisions of Sections 2.7, 2.8
or 9.1 hereof.
SECTION 9.5. CLOSING.
A. The closing of the redemption of the Cordish LLC Interests by the
Company pursuant to Section 9.4 (the "CLOSING") shall be held at the principal
offices of the Company and, subject to any other specific time periods for
Closing stated in this Agreement, shall occur on the date specified in the
Redemption Notice, which date shall be no sooner than 30 days and no later than
120 days following the delivery of the Redemption Notice to Cordish or Inland,
as applicable, and the Company.
B. At the Closing, Cordish shall transfer and assign the Cordish LLC
Interests to the Company free and clear of any liens, encumbrances or any
interests of any third party and shall execute or cause to be executed any and
all documents required to transfer fully good and clear title to the LLC
Interests being transferred, including, but not limited to, any and all
documents necessary to evidence such transfer. In the event that Cordish does
not timely execute any and all documents necessary to evidence and effect such
transfer of all of the Cordish LLC Interests and to reflect the complete and
absolute withdrawal of Cordish and its Affiliates from the Company at the
Closing, then the Manager is hereby appointed the attorney-in-fact of, and is
hereby authorized on behalf of, Cordish, to execute, acknowledge and deliver all
such documents and take all such other actions as may be required to evidence
and effect such transfer of all of the Cordish LLC Interests. Such appointment
and authorization are coupled with an interest and
- 50 -
shall be irrevocable. The failure by Cordish to execute any document shall not
delay the Closing or cause the Closing to be ineffective.
C. At the Closing, Inland shall cause the Company to distribute to
Cordish the Cordish Liquidation Amount and each party shall repay the Default
Loans as applicable. If ownership interests in the Additional Property Owner
Entities are distributed to Cordish as provided herein, the parties shall
execute and/or cause to be executed any and all documents required to transfer
title to the applicable ownership interests being transferred, including, but
not limited to, any and all documents necessary to evidence such transfer;
PROVIDED, HOWEVER, that the Company and Inland shall only be obligated to
deliver an assignment of such ownership interests on an "as is" basis and
without recourse to the Company or Inland. Cordish shall pay and be solely
responsible for (a) any pre-prepayment or due-on-sale penalties and (b) any
transfer, recordation, sales and excise taxes as a result of any in-kind
distributions to Cordish or otherwise as a result of the transactions
contemplated in this Article IX of this Agreement.
D. If any consents from lenders or otherwise are required in order to
carry out any provision of this Agreement, the parties hereby agree to cooperate
in good faith and will proceed promptly and diligently to obtain all such
consents; PROVIDED, HOWEVER, that the failure to obtain any such consent may be
waived by Inland in its sole and absolute discretion.
SECTION 9.6. PURCHASE PRICE ON REDEMPTION OF CORDISH LLC INTERESTS.
A. The entire purchase price payable by the Company to Cordish (or its
Affiliates) for the Cordish LLC Interest (the "CORDISH LIQUIDATION AMOUNT")
shall be an amount equal to the sum of the following:
(i) the Cordish Preferred Return and the Unpaid Cordish Preferred
Return as of the date of the Closing as reasonably determined by the
Company's Accountant, plus
(ii) The Cordish Adjusted Capital Balance as of the date of the
Closing.
The parties agree that for purposes of making the foregoing determinations, the
books of the Company shall be closed as of the Closing.
B. Notwithstanding anything in this Section 9.6 to the contrary, Inland
may elect on behalf of the Company, by delivery of written notice to Cordish, to
require Cordish to accept as full and complete payment and consideration for the
transfer and complete redemption of the Cordish LLC Interests in the Company, in
lieu of the cash payment of the Cordish Liquidation Amount, an "as is" in-kind
assignment and distribution to Cordish without recourse to the Company or Inland
of all (100%) of the ownership interests in the Additional Property Owner
Entities, together with all assets in the Additional Properties Trust Estate, as
defined in the Declaration of Trust.
C. If Inland does not intend to make an in-kind redemption election under
Section 9.6.B, Cordish may, by delivering written notice to Inland, elect to
require the Company to effect the complete redemption of Cordish's LLC Interests
in exchange for an in-kind distribution of all (100%) of the ownership interests
in the Additional Property Owner Entities by way of an "as is" assignment
without recourse to the Company and Inland of 100% of the ownership interests in
- 51 -
the Additional Property Owner Entities, together with all assets in the
Additional Properties Trust Estate, as defined in the Declaration of Trust. Such
assignment shall be the full and complete payment and consideration for the
Cordish LLC Interests, shall be in lieu of any obligation of the Company to make
a payment of the Cordish Liquidation Amount and Cordish shall have no right to
receive or demand any payment of all or any portion of the Cordish Liquidation
Amount.
D. Each party hereby covenants and agrees that following the payment of
the Cordish Liquidation Amount or following the execution of the assignment of
the ownership interests in the Additional Property Owner Entities under the
terms of Sections 9.6.B and 9.6.C of this Agreement, neither Cordish nor any
Affiliate of Cordish shall have any rights with respect to the Company, the
Owner Entity, the assets of the Company or the assets of the Owner Entity either
as owner, lender or otherwise and neither Cordish nor any Affiliate of Cordish
shall have any right to receive any further payments or distributions from the
Company or the Owner Entity under the terms of this Agreement or otherwise,
specifically including, but not limited to, the Cordish Preferred Return, if
any, the Unpaid Cordish Preferred Return, if any, Cordish's Capital Account and
Cordish's Adjusted Capital Balance.
E. Upon the redemption of the Cordish LLC Interests, the books and
records of the Company and the Additional Property Owner Entities shall be
closed.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. FURTHER ASSURANCES.
Each Member agrees to execute, acknowledge, deliver, file, record and
publish such further certificates, amendments to certificates, instruments and
documents, and do all such other acts and things as may be required by law, or
as may be required to carry out the intent and purposes of this Agreement.
SECTION 10.2. NOTICES.
All notices, demands, consents, approvals, requests or other communications
which any of the parties to this Agreement may desire or be required to give
hereunder (collectively, "NOTICES") shall be in writing, shall comply with
Section 6.1.F hereof and shall be given by personal delivery, by overnight
delivery service or by United States registered or certified mail (postage
prepaid, return receipt requested) addressed as hereinafter provided. Except as
otherwise specified herein, the time period in which a response to any notice or
other communication must be made, if any, shall commence to run on the earliest
to occur of (a) if by personal delivery, the date of receipt, or attempted
delivery, if such communication is refused; (b) if given by overnight delivery
service, the first business day after the day of delivery to the overnight
carrier; and (c) if sent by mail (as aforesaid), the date of receipt or
attempted delivery, if such mailing is refused. Until further notice, notices
and other communications under this Agreement shall be addressed to the parties
listed below as follows:
(i) If to the Company or Cordish, to:
- 52 -
Cordish Tollgate, LLC
The Cordish Company
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
With a copy (which shall be for informational purposes only) to:
c/o The Cordish Company
000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
(ii) If to the Company or Inland, to:
x/x Xxxxxx Xxxxxxx Xxxxxx Xxxx Xxxxxx Trust, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
and with copies (which shall be for informational purposes only) to:
c/o The Inland Real Estate Group, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
and to:
Xxxx X. Xxxxxxxx III, Esquire
Xxxx Xxxxx, LLP
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Any Member may designate another addressee (and/or change its address) for
Notices hereunder by a Notice given pursuant to this Section.
SECTION 10.3. INDEPENDENT REPRESENTATION.
Inland hereby acknowledges and agrees that it has consulted its independent
counsel with respect to the tax and non-tax consequences of its investment in
the Company, and that neither Cordish nor any Cordish Affiliate shall have any
liability to Inland or its Affiliates(except as otherwise provided herein, in
the Contribution Agreement or in the Indemnification Agreement) as a result of
any adverse consequences to Inland, direct or indirect partner (or other equity
owner) of Inland as a result of Inland's investment in the Company or Inland's
ownership of an LLC Interest in the Company. Cordish hereby acknowledges and
agrees that it has consulted its independent counsel with respect to the tax and
non-tax consequences of its investment in the Company, and that neither Inland
nor any Inland Affiliate shall have any liability to Cordish or
- 53 -
any Cordish Affiliate (except as otherwise provided herein, in the Contribution
Agreement or in the Indemnification Agreement) as a result of any adverse
consequences to Cordish or any Cordish Affiliate as a result of Cordish's
investment in the Company, Cordish's ownership of an LLC Interest in the Company
or Cordish's possible withdrawal from the Company. The foregoing provision is
not intended to and shall not operate to diminish or limit the liability of
either Member resulting from such Member's breach of or default under any
provision of this Agreement or under the Contribution Agreement, nor shall it
diminish or limit the liability of any party to the Indemnification Agreement.
SECTION 10.4. GOVERNING LAW.
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto shall be governed by and construed in
accordance with the laws of the State of Delaware (but not including the choice
of law rules thereof).
SECTION 10.5. CAPTIONS.
All titles or captions contained in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, extend, or
describe the scope of this Agreement or the intent of any provision hereof.
SECTION 10.6. PRONOUNS.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, and neuter, singular and plural, as the identity of the
party or parties may require.
SECTION 10.7. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective executors, administrators, legal representatives, heirs, successors
and permitted assigns, and shall inure to the benefit of the parties hereto and,
except as otherwise provided herein, their respective executors, administrators,
legal representatives, heirs, successors and permitted assigns.
SECTION 10.8. EXTENSION NOT A WAIVER.
No delay or omission in the exercise of any power, remedy or right herein
provided or otherwise available to a Member or the Company shall impair or
affect the right of such Member or the Company thereafter to exercise the same.
Any extension of time or other indulgence granted to a Member hereunder shall
not otherwise alter or affect any power, remedy or right of any other Member or
of the Company, or the obligations of the Member to whom such extension or
indulgence is granted.
SECTION 10.9. CONSTRUCTION.
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Company or any third party. No Member shall
be obligated personally for any debt, obligation or liability of the Company
solely by being a Member of the Company.
- 54 -
SECTION 10.10. SEVERABILITY.
In case any one or more of the provisions contained in this Agreement or
any application thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and other application thereof shall not in any way be effected
or impaired thereby.
SECTION 10.11. CONSENTS.
Any consent or approval to any act or matter required under this Agreement
must be in writing and shall apply only with respect to the particular act or
matter to which such consent or approval is given, and shall not relieve any
Member from the obligation to obtain the consent or approval, as applicable,
wherever required under this Agreement to any other act or matter.
SECTION 10.12. ENTIRE AGREEMENT.
This Agreement, together with the Contribution Agreement, the Liquidity
Escrow Agreement, the Indemnification Agreement and any other agreement
ancillary or related hereto or thereto, contains the entire agreement between
the parties relating to the subject matter hereof and all prior agreements
relative hereto which are not contained herein are terminated. Amendments,
variations, modifications or changes herein may be made effective and binding
upon the parties by, and only by, the setting forth of same in a document duly
executed by each party, and any alleged amendment, variation, modification or
change herein which is not so documented shall not be effective as to any party.
SECTION 10.13. RULES OF CONSTRUCTION.
Unless the context clearly indicates to the contrary, the following rules
apply to the construction of this Agreement:
(i) Words importing the singular number include the plural number
and words importing the plural number include the singular number.
(ii) Words of the masculine gender include correlative words of the
feminine and neuter genders.
(iii) The table of contents and the headings or captions used in this
Agreement are for convenience of reference and do not constitute a part of
this Agreement, nor affect its meaning, construction, or effect.
(iv) Words importing persons include any individual, corporation,
partnership, limited liability company, joint venture, association, joint
stock company, trust, unincorporated organization or government or agency
or political subdivision thereof.
(v) Any reference in this Agreement to a particular "Article,"
"Section" or other subdivision shall be to such Article, Section or
subdivision of this Agreement unless the context shall otherwise require.
- 55 -
(vi) Each reference in this Agreement to an agreement or contract
shall include all amendments, modifications, and supplements to such
agreement or contract unless the context shall otherwise require.
(vii) When any reference is made in this document or any of the
schedules or exhibits attached hereto to the Agreement, it shall mean this
Agreement, together with all other schedules and exhibits attached hereto,
as though one document.
SECTION 10.14. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each such
counterpart will for all purposes be deemed an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 10.15. EXPENSES
Subject to the terms of this Agreement and the Indemnification Agreement to
the contrary, each of Cordish and Inland hereby covenants and agrees that any
and all costs and expenses (including, but not limited to, attorney's fees and
other professional fees) incurred by each of Cordish, Inland, and their
respective Affiliates in connection with the negotiation and documentation of,
and the transactions contemplated by, this Agreement, the Contribution
Agreement, the Indemnification Agreement and the Reorganization Agreement, shall
be borne solely by the party incurring such costs and expenses and its Affiliate
and shall not be borne by the Company, the Owner Entity and any unrelated
parties. In addition to the foregoing, Cordish hereby covenants and agrees that
any and all costs and expenses (including, but not limited to, attomey's fees
and other professional fees) incurred by it on behalf of the Company and the
Owner Entity in connection with the negotiation and documentation of, and the
transactions contemplated by, this Agreement, the Contribution Agreement, the
Indemnification Agreement and the Reorganization Agreement, shall be borne
solely by Cordish and shall not be funded out of the accounts or funds of the
Company and/or the Owner Entity other than Inland's Initial Capital Contribution
and/or the Operations Reserve.
SECTION 10.16. ARBITRATION
A. In the event that any dispute shall arise between the Company and any
Member or between the Members, with respect to the application of any of the
provisions of this Agreement, and such dispute is not resolved to the
satisfaction of such parties within twenty (20) days after either party shall
notify the other in writing of its desire to arbitrate the dispute (the
"ARBITRATION NOTICE"), then the dispute shall be resolved in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then
pertaining. The decision of the arbitrator shall be binding, final and
conclusive on the parties. Unless the parties otherwise agree, such arbitration
proceedings shall be conducted in Baltimore City, Maryland. The arbitrator shall
be selected by the American Arbitration Association in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The fees
of the arbitrator and the expenses incident to the proceedings shall be borne by
the losing party. The reasonable fees of respective counsel engaged by the
parties, and the fees of expert witnesses and other witnesses called for by the
parties, shall also be paid by the losing party. The decision of
- 56 -
the arbitrator shall be rendered within thirty (30) days after the conclusion of
the arbitration. A judgment of a court of competent jurisdiction may be entered
upon the award of the arbitrator in accordance with the rules and statutes
applicable thereto then obtaining. At the request of the Company or any Member,
the arbitrator may order and compel specific performance.
B. Subject to the provisions of Section 10.16.A, if the Company or any
Member brings suit or other legal proceedings to enforce the provisions of this
Agreement against the other, then the party prevailing in such suit or
proceeding shall be reimbursed by the other for all reasonable attorneys' fees
and litigation costs and expenses incurred by the prevailing party in connection
with such suit or proceeding.
C. Any lawsuit, action, or proceeding arising under this Agreement that
is not subject to arbitration shall, to the extent there is federal jurisdiction
over the parties and subject matter, be brought exclusively in the Northern
Division of the United States District Court for the District of Maryland. In
the event federal jurisdiction does not exist, such lawsuit, action or
proceeding shall be brought in the Circuit Court for Baltimore County, Maryland.
D. Subject to the provisions of Section 10.16.A, the Company and each
Member do hereby waive trial by jury in any action, suit, proceeding, and/or
counterclaim brought by either of the parties hereto against the other on any
matters whatsoever arising out of or in any way connected with this Agreement or
any claim of injury or damage, and/or statutory remedy.
SECTION 10.17. GENERAL INDEMNITY/LIABILITY
A. The Members acknowledge and agree that the terms and conditions of
this Section 10.17 shall not limit or vitiate in any manner whatsoever, the
indemnification obligations of the Members and/or their Affiliates under the
Indemnification Agreement.
B. Each Member hereby covenants and agrees to indemnify and hold harmless
the Company, the other Members and their Affiliates from and against any and all
expenses (including reasonable attorneys' fees), losses, damages, liabilities,
charges and claims of any kind or nature whatsoever (collectively "INDEMNIFIED
LOSSES") arising out of or resulting from any fraudulent act, negligence,
willful misconduct or breach or default of the covenants and provisions of this
Agreement, by such Member.
C. If any third party shall notify any party hereto, or such party's
Affiliate (the "INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY
CLAIM") which may give rise to a claim for indemnification against any other
party hereto (the "INDEMNIFYING PARTY") under this Section 10.17, then the
Indemnified Party shall promptly (and in any event within five (5) Business Days
after receiving notice of the Third Party Claim) notify each Indemnifying Party
thereof in writing; PROVIDED, HOWEVER, that the failure to so notify the
Indemnifying Party shall not affect the rights to indemnification hereunder
except to the extent that the Indemnifying Party is actually prejudiced by such
failure.
D. Any Indemnifying Party will have the right at any time to assume and
thereafter conduct the defense of the Third Party Claim with counsel of his or
its choice reasonably satisfactory to the Indemnified Party; PROVIDED, HOWEVER,
that the Indemnifying Party will not
- 57 -
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld or delayed unreasonably) unless the judgment or
proposed settlement involves only the payment of money damages and does not
impose an injunction or other equitable relief upon the Indemnified Party;
PROVIDED, FURTHER, that the Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
unless and until the Indemnifying Party obtains for the benefit of the
Indemnified Party, as part of such judgment or settlement, a complete and
absolute release of any liabilities from the third party making such Third Party
Claim.
E. Unless and until an Indemnifying Party assumes the defense of the
Third Party Claim as provided in Section 10.17.D hereof, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate; PROVIDED, HOWEVER, that any cost and expense
incurred by the Indemnified Party in connection with such defense shall be paid
for and advanced directly by the Indemnifying Party in immediately available
funds.
F. In no event will the Indemnified Party consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of each of the Indemnifying Parties (not to be
withheld or delayed unreasonably).
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amended
and Restated Limited Liability Company Agreement of TOLLGATE MARKETPLACE HOLDING
COMPANY LLC under seal as of the day and year first above written.
CORDISH TOLLGATE LLC
BY: [ILLEGIBLE] (Seal)
------------------------------
[ILLEGIBLE] authorized person
INLAND BEL AIR HC L.L.C.
By: Inland Western Retail Real Estate Trust,
Inc., sole member
By: [ILLEGIBLE] (Seal)
--------------------------
[ILLEGIBLE]
[ILLEGIBLE]
- 59 -
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
Names, Addresses, Initial Capital Account Balances and Percentage
Interests of Members
SCHEDULE A
INITIAL ADJUSTED INITIAL CAPITAL
CAPITAL ACCOUNT PERCENTAGE
NAME AND ADDRESS BALANCE BALANCE INTEREST
---------------------------------------------------------------------------------------
Cordish Tollgate, LLC 601 $ 22,006,035 $ 22,006,035 5%
Xxxx Xxxxx Xxxxxx Xxxxx 000
Xxxxxxxxx, XX 00000
Inland Bel Air HC L.L.C. c/o Inland $ 72,300,000 $ 72,300,000 95%
Western Retail Real Estate Trust, Inc.
0000 Xxxxxxxxxxx Xxxx Xxx Xxxxx,
Xxxxxxxx 00000
---------------- --------------- -------
TOTALS $ 94,306,035 $ 94,306,035 100.000%
================ =============== =======
- 60 -
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
Regulatory Allocations
SCHEDULE 5.2
1. DEFINITIONS.
The defined terms used in this SCHEDULE 5.2 shall have meanings specified
in the Limited Liability Company Agreement to which this SCHEDULE 5.2 is
attached:
2. REGULATORY ALLOCATIONS.
A. Prior to any other allocations under Article V, the following special
allocations shall be made in the following order:
1. MINIMUM GAIN CHARGEBACK. Except as otherwise provided in Section
1.704-2(f) of the Treasury Regulations, notwithstanding any other provision
of Section 5.2, if there is a net decrease in Company Minimum Gain during
any fiscal year, each Member shall be specially allocated items of Company
income and gain for such fiscal year (and, if necessary, subsequent fiscal
years) in an amount equal to such Member's share of the net decrease in
Company Minimum Gain, determined in accordance with Treasury Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated to
each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with sections 1.704-2(f)(6) and 1.704-2(j)(2) of
the Treasury Regulations. This Paragraph A.1 is intended to comply with the
minimum gain charge back requirement in Section 1.704-2(f) of the Treasury
Regulations and shall be interpreted consistently therewith.
2. MEMBER MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(i)(4) of the Treasury Regulations, notwithstanding any
other provision of Section 5.2, if there is a net decrease in Member
Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt
during any fiscal year, each Member who has a share of the Member
Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt,
determined in accordance with Section 1.704-2(i)(5) of the Treasury
Regulations, shall be specially allocated items of Company income and gain
for such fiscal year (and, if necessary, subsequent fiscal years) in an
amount equal to such Member's share of the net decrease in Member
Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i) (4). Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be allocated to
each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of
the Treasury Regulations. This Paragraph A.2 is intended to comply with the
minimum gain charge
- 61 -
back requirement in Section 1.704-2(i)(4) of the Treasury Regulations and
shall be interpreted consistently therewith.
3. QUALIFIED INCOME OFFSET. Any Member who unexpectedly receives any
adjustment, allocation, or distribution described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(5) or (6) shall be specially allocated
items of income and gain (consisting of a PRO RATA portion of each item of
Company income, including gross income and gain for such year) in an amount
and manner sufficient to eliminate any deficit balance in such Member's
Capital Account resulting therefrom, as quickly as possible, such
allocations to be made in accordance with the "qualified income offset"
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(3).
4. GROSS INCOME ALLOCATION. In the event any member has a deficit
Capital Account at the end of any fiscal year which is in excess of the
amount such Member is obligated to restore pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
each such Member shall be specifically allocated items of Company income
and gain in the amount of such excess as quickly as possible, provided that
an allocation pursuant to this Paragraph A.4 shall be made only if and to
the extent that such Member would have a deficit Capital Account in excess
of such amount after all other allocations provided for in Article V have
been made as if this Paragraph A.4 were not in the Agreement.
5. MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse Deductions
for any fiscal year shall be specially allocated to the Member who bears
the economic risk of loss with respect to the Member Nonrecourse Debt to
which such Member Nonrecourse Deductions are attributable in accordance
with Treasury Regulations Section 1.704-2(i)(1).
B. SECTION 754 ADJUSTMENTS. To the extent an adjustment to the adjusted
tax basis of any Company asset, pursuant to Code Section 734(b) or Code Section
743(b) is required, pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in
complete liquidation of such Member's interest in the Company, the amount of
such adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Members in accordance with their interests in the Company in the event Treasury
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom
such distribution was made in the event Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
- 62 -
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
DESCRIPTION OF EXISTING PROPERTY
AND OWNER ENTITY
EXHIBIT A
A. OWNER ENTITY: Bel Air Square LLC, a Maryland limited liability company
(formerly known as Bel Air Square Joint Venture)
B. DESCRIPTION OF EXISTING PROPERTY: (See Attached).
A-1
PROPERTY DESCRIPTION
TOLLGATE MARKETPLACE
METES AND BOUNDS DESCRIPTION
TOLLGATE MARKETPLACE
PLAT BOOK 100 PAGE 88
PLAT BOOK 86 PAGE 00
XXX XXX XXXXXX JOINT VENTURE
LIBER 1123 POLIO 418,
LIBER 2029 FOLIO 195
AND LIBER 0000 XXXXX 000
0XX XXXXXXXX XXXXXXXX
XXXXXXX XXXXXX, XXXXXXXX
BEGINNING AT A RAILROAD SPIKE FOUND MARKING THE NORTH-EAST CORNER OF
XXX 0, XXXXXXXX XXXXXXXXXXX (X.X. 00 PG. 88 AND X.X. 000 XX. 00), XXXX
XXXXX OF BEGINNING MARKING THE INTERSECTION OF THE SOUTHERLY RIGHT-OF-WAY
LIMITS OF BEL AIR ROAD, U.S. ROUTE 1 (A VARIABLE WIDTH RIGHT-OF-WAY), WITH
THE WESTERLY RIGHT-OF-WAY LIMITS OF MARYLAND ROUTE 24 (A VARIABLE WIDTH
RIGHT-OF-WAY) AND RUNNING THENCE WITH THE WESTERLY RIGHT-OF-WAY LIMITS OF
MARYLAND ROUTE 24, THE FOLLOWING NINE COURSES AND DISTANCES;
1. NORTH 86 DEGREES - 52 MINUTES - 49 SECONDS EAST, 100.26 FEET TO AN IRON BAR
WITH CAP FOUND, THENCE;
2. CONTINUING SOUTH 54 DEGREES - 11 MINUTES - 32 SECONDS EAST, 572.00 FEET TO
AN REBAR SET, THENCE;
3. CONTINUING SOUTH 45 DEGREES - 52 MINUTES - 00 SECONDS EAST, 82.87 FEET TO A
REBAR SET, THENCE;
4. CONTINUING SOUTH 51 DEGREES - 20 MINUTES - 39 SECONDS EAST, 70.77 FEET TO A
REBAR SET, THENCE;
5. CONTINUING SOUTH 51 DEGREES - 20 MINUTES - 36 SECONDS EAST, 129.85 FEET TO
A REBAR SET, THENCE;
6. CONTINUING SOUTH 63 DEGREES - 03 MINUTES - 28 SECONDS EAST, 123.47 FEET TO
A REBAR SET, THENCE;
7. CONTINUING SOUTH 59 DEGREES - 54 MINUTES - 59 SECONDS EAST, 231.15 FEET TO
A REBAR SET, THENCE;
8. CONTINUING SOUTH 54 DEGREES - 12 MINUTES - 21 SECONDS EAST, 113.58 FEET TO
A REBAR SET, THENCE;
9. CONTINUING SOUTH 46 DEGREES - 14 MINUTES - 07 SECONDS EAST, 16.38 FEET TO A
IRON BAR WITH CAP FOUND MARKING THE INTERSECTION OF SAID WESTERLY
RIGHT-OF-WAY LIMITS OF MARYLAND ROUTE 24, WITH THE NORTHERLY RIGHT-OF-WAY
LIMITS OF MARKETPLACE DRIVE (A 60-FOOT WIDE RIGHT-OF-WAY), ALSO KNOWN AS
TOLLGATE MALL ROAD (A VARIABLE WIDTH RIGHT-OF-WAY), THENCE WITH SAID
NORTHERLY RIGHT-OF-WAY LIMITS OF MARKETPLACE DRIVE, THE FOLLOWING SIX
COURSES AND DISTANCES;
1
10. SOUTH 05 DEGREES - 13 MINUTES - 14 SECONDS EAST, 37.73 FEET A POINT OF
CURVATURE, THENCE;
11. CONTINUING 211.49 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A
RADIUS OF 712.00 FEET, A CENTRAL ANGLE OF 17 DEGREES - 01 MINUTES - 07
SECONDS AND A CHORD BEARING AND DISTANCE OF SOUTH 27 DEGREES - 17 MINUTES -
11 SECONDS WEST, 210.71 FEET TO A REBAR FOUND AT A POINT OF TANGENCY,
THENCE;
12. CONTINUING SOUTH 18 DEGREES - 46 MINUTES - 37 SECONDS WEST, 528.39 FEET TO
A NAIL SET AT A REBAR FOUND AT A POINT OF CURVATURE, THENCE;
13. CONTINUING 259.87 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A
RADIUS OF 367.20 FEET, A CENTRAL ANGLE OF 46 DEGREES - 47 MINUTES - 26
SECONDS AND A CHORD BEARING AND DISTANCE OF SOUTH 42 DEGREES - 10 MINUTES -
18 SECONDS WEST, 291.61 FEET TO A REBAR SET AT A POINT OF TANGENCY, THENCE;
14. CONTINUING SOUTH 65 DEGREES - 34 MINUTES - 00 SECONDS WEST, 28.85 FEET TO A
POINT, THENCE;
15. CONTINUING 161.02 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A
RADIUS OF 115.00 FEET, A CENTRAL ANGLE OF 80 DEGREES -13 MINUTES - 20
SECONDS AND A CHORD BEARING AND DISTANCE OF SOUTH 74 DEGREES - 19 MINUTES -
20 SECONDS EAST, 148.18 FEET TO A REBAR SET IN THE EASTERLY RIGHT-OF-WAY
LIMITS OF TOLLGATE ROAD, THENCE WITH SAID EASTERLY RIGHT-OF-WAY LIMITS, THE
FOLLOWING FIVE COURSES AN DISTANCES;;
16. 220.04 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A RADIUS OF 803.18
FEET, A CENTRAL ANGLE OF 15 DEGREES - 41 MINUTES - 48 SECONDS AND A CHORD
BEARING AND DISTANCE OF NORTH 42 DEGREES - 03 MINUTES - 34 SECONDS WEST,
219.35 FEET TO A REBAR SET MARKING THE POINT OF COMPOUND CURVATURE,
THENCE;
17. CONTINUING 35.14 FEET ALONG THE ARC OF CURVE TO THE LEFT, HAVING A RADIUS
OF 775.89 FEET, A CENTRAL ANGLE OF 02 DEGREES - 35 MINUTES - 45 SECONDS
AND A CHORD BEARING AND DISTANCE OF NORTH 51 DEGREES - 14 MINUTES - 16
WEST, 35.14 FEET TO A POINT OF TANGENCY, THENCE;
18. CONTINUING NORTH 52 DEGREES - 32 MINUTES - 21 SECONDS WEST, 602.18 FEET TO
A POINT OF CURVATURE, THENCE;
19. CONTINUING 94.59 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A RADIUS
OF 5,030.00 FEET A CENTRAL ANGLE OF 01 DEGREES - 04 MINUTES - 39 SECONDS
AND A CHORD BEARING AND DISTANCE OF NORTH 53 DEGREES - 04 MINUTES - 41
SECONDS WEST, 94.59 FEET TO A REBAR SET AT A POINT OF TANGENCY, THENCE;
20. CONTINUING NORTH 53 DEGREES - 37 MINUTES - 00 SECONDS WEST, 88.54 FEET TO A
NAIL SET MARKING THE INTERSECTION OF THE EASTERLY RIGHT-OF-WAY LIMITS OF
TOLLGATE ROAD, WITH THE DIVISION LINE BETWEEN XXX 0, XXXXXXXX XXXXXXXXXXX
(X.X. 00 PG. 88 AND P.B. 100 PG. 88), ON THE SOUTH, EAST AND NORTH AND
THE LANDS OF THE BEL AIR TOLLGATE PARTNERSHIP (LIBER 909 FOLIO 108), ON
THE NORTH, WEST AND SOUTH, THENCE WITH SAID DIVISION LINE, THE FOLLOWING
THREE COURSES AND DISTANCES;
21. NORTH 35 DEGREES - 53 MINUTES - 54 SECONDS EAST, 253.60 FEET TO A NAIL SET,
THENCE;
2
22. CONTINUING NORTH 52 DEGREES - 44 MINUTES - 43 SECONDS WEST, 230.11 FEET TO
A NAIL SET, THENCE;
23. CONTINUING SOUTH 37 DEGREES - 15 MINUTES - 18 SECONDS WEST, 39.00 FEET TO A
CONCRETE MONUMENT POUND MARKING THE DIVISION LINE BETWEEN SAID XXX 0,
XXXXXXXX XXXXXXXXXXX (X.X. 00 PG. 88 AND P.B. 100 PG. 88), ON THE EAST AND
THE LANDS OF AMOCO OIL COMPANY (LIBER 1165 FOLIO 632 AND LIBER 1167 FOLIO
855), ON THE WEST, THENCE WITH SAID DIVISION LINE;
24. NORTH 53 DEGREES - 07 MINUTES - 42 SECONDS WEST, 184.00 FEET, PASSING AN
IRON PIPE FOUND AT 159.02 FEET TO A POINT IN SAID SOUTHERLY RIGHT-OF-WAY
LIMITS OF BEL AIR ROAD, U.S. ROUTE 1, THENCE WITH SAID SOUTHERLY RIGHT-
OF-WAY LIMITS, THE FOLLOWING THREE COURSES AND DISTANCES;
25. NORTH 37 DEGREES - 15 MINUTES - 18 SECONDS EAST, 180.03 FEET TO A POINT OF
CURVATURE, THENCE;
26. CONTINUING 434.92 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A
RADIUS OF 17,218.74 FEET, A CENTRAL ANGLE OF 01 DEGREE - 26 MINUTES - 50
SECONDS AND A CHORD BEARING AND DISTANCE OF NORTH 35 DEGREES - 31 MINUTES -
53 SECONDS EAST, 434.91 FEET TO A POINT OF TANGENCY, THENCE;
27. CONTINUING NORTH 35 DEGREES - 48 MINUTES - 28 SECONDS EAST, 120.48 FEET TO
THE PLACE OF BEGINNING.
CONTAINING 1,510,434 SQUARE FEET OR 34.6748 ACRES OF LAND, MORE OR LESS.
BEING KNOWN AND DESIGNATED AS XXX 0, XXX 0 XXX XXX 0 XX XXXXX XX A PLAT
ENTITLED "FINAL PLAT, XXXXXXXX XXXXXXXXXXX, X.X. XXXXX 0 AND MARYLAND XXXXX
00, XXXX XX XXX XXX, 0XX ELECTION DISTRICT, HARFORD COUNTY, MARYLAND" AS
RECORDED IN PLAT BOOK 86, FOLIO 88 AND ALSO KNOWN AS XXX 0, XXX 0, XXX XXX
0 XX XXXXX XX A PLAT ENTITLED "REVISED FINAL PLAT, XXXXXXXX XXXXXXXXXXX,
X.X. XXXXX 0 AND MARYLAND XXXXX 00, XXXX XX XXX XXX, 0XX ELECTION DISTRICT,
HARFORD COUNTY, MARYLAND", AS RECORDED IN PLAT BOOK 100 POLIO 88, AFORESAID
PLATS BEING RECORDED AMONG THE LAND RECORDS OF HARFORD COUNTY, MARYLAND;
TOGETHER WITH THE NON-EXCLUSIVE, RECIPROCAL EASEMENTS AS ARE CONTAINED IN
THAT CERTAIN DEED AND DECLARATION OF RECIPROCAL EASEMENTS DATED FEBRUARY
27, 1978 BY AND AMONG BEL AIR SQUIRE, A MARYLAND JOINT VENTURE CONSISTING
OF BEL AIR TOLLGATE PARTNERSHIP, A MARYLAND LIMITED PARTNERSHIP, AND
MONUMENTAL PROPERTIES TRUST, A MARYLAND TRUST, AS JOINT VENTURES, THE
EQUITABLE TRUST COMPANY, A MARYLAND BANKING CORPORATION, MORTGAGEE, AND
XXXXXX X. XXXXXX AND XXXXXXXXX X. XXXXXXXXXXX, TRUSTEES FOR THE BENEFIT OF
MORTGAGEE, AND RECORDED AMONG THE LAND RECORDS OF HARFORD COUNTY IN LIBER
1087, FOLIO 348.
TOGETHER WITH THE NON-EXCLUSIVE RECIPROCAL EASEMENTS AS ARE CONTAINED IN
THAT CERTAIN DECLARATION OF RECIPROCAL EASEMENTS AND RESTRICTIONS DATED
AUGUST 12, 1994 BY BEL AIR SQUARE JOINT VENTURE, A MARYLAND GENERAL
PARTNERSHIP, DECLARANT, AND RECORDED AMONG THE LAND RECORDS OF HARFORD
COUNTY IN LIBER 2168, FOLIO 483.
BEING THE SAME PROPERTY DESCRIBED IN A TITLE COMMITMENT REPORT, PROVIDED BY
CHICAGO TITLE INSURANCE COMPANY, COMMITMENT NO. 4504-43700, WITH AN
EFFECTIVE DATE OF DECEMBER 8, 2003.
3
THE PROPERTY IS SUBJECT TO RESTRICTIONS, COVENANTS AND/OR EASEMENTS, AS
CONTAINED IN A TITLE COMMITMENT REPORT PREPARED BY CHICAGO TITLE INSURANCE
COMPANY, COMMITMENT NUMBER 4504-43700 WITH AN EFFECTIVE DATE OF DECEMBER 8,
2003.
4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
TERMS OF APPROVED FINANCING
EXHIBIT B
The following restrictions and limitations will be in place for financing
secured by a Property:
(i) Any Approved Financing must be nonrecourse to the Company (other than
typical carve-outs provided by any person other than the Company;
(ii) Any Approved Financing with respect to the Existing Property must be
arms length and on commercially reasonably terms;
(iii) No portion of Approved Financing may, with respect to the Existing
Property, be cross defaulted or cross collateralized with any other properties.
(iv) Unless Inland or Cordish otherwise agree to bear any such cost or
expense, the Approved Financing documents must permit (direct or indirect)
transfers of the property encumbered by such Approved Financing to any one or
more Persons who are Members of the Company as of the date hereof;
(v) The Approved Financing on the Existing Property shall, at all times,
be comprised of at least $2.5 million of debt classified as nonrecourse
indebtedness under Section 752 of the Code;
(vi) If securitized financing is to be obtained, the Owner Entity or
Additional Property Owner Entity, as applicable, shall form a "single purpose"
limited liability company ("SPE") which shall be owned 100% by the Owner Entity
or Additional Property Owner Entity, as the case may be, and which SPE may act
as the borrower of such Approved Financing. In such event, the SPE shall be
considered to be part of the definition of Owner Entity or Additional Property
Owner Entity, as the case may be, for all purposes of this Agreement; and
(vii) The total amount of the Approved Financing secured by an Existing
Property shall not exceed $45.0 million in the aggregate on the Existing
Property.
B-1
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
FORM OF REIT DECLARATION OF TRUST
EXHIBIT C
THE TOLLGATE MARKETPLACE HOLDING COMPANY
PROTECTIVE TRUST
THIS DECLARATION OF TRUST (this "DECLARATION") is made and entered
into on July __, 2004, by TOLLGATE MARKETPLACE HOLDING COMPANY LLC, a Delaware
limited liability company, its successors or assigns, as Grantor (the
"GRANTOR"), Inland Bel Air HC L.L.C. (the "TRUSTEE") and Cordish Tollgate LLC
(the "ADDITIONAL PROPERTIES TRUSTEE").
W I T N E S S E T H:
WHEREAS, the Grantor desires to establish a trust (the "TRUST") for
the benefit of [The Inland Western Retail Real Estate Protective Trust, Inc.]
(the "BENEFICIARY"); and
WHEREAS, the Grantor hereby declares that henceforth the Trustee shall
hold the property described in Schedule A, Part I annexed hereto and
incorporated herein, and the Grantor hereby declares that as of July __, 2004,
and as of 11:59:59 p.m. eastern standard time of each day preceding the last day
of any calendar quarter in which the Grantor and/or any Controlled Partnership
Subsidiary (as defined in Schedule A, Part II) owns property described in
Schedule A, Part II and Part III, the (i) Trustee will hold, the property
described in Schedule A, Part II annexed hereto and incorporated herein,
together with any additional property which may be added to the Trust from time
to time by the Grantor or otherwise, and all investments and reinvestments
thereof (the "TRUST ESTATE") and (ii) the Additional Properties Trustee will
hold, the property described in Schedule A, Part III annexed hereto and
incorporated herein, together with any additional property which may be added to
the Trust from time to time by the Grantor or otherwise, and all investments and
reinvestments thereof (the "ADDITIONAL PROPERTIES TRUST ESTATE"), IN TRUST, for
the uses and purposes and with the powers and authority and upon the terms and
conditions herein contained.
C-1
ARTICLE I
DISTRIBUTION OF INCOME AND PRINCIPAL; TERMINATION
1. DISTRIBUTION OF INCOME. The Trustee shall hold, manage, invest
and reinvest the Trust Estate and shall collect the income therefrom in
accordance with the terms of this Declaration. The Trustee shall not distribute
any of the income or proceeds of the Trust Estate to the Beneficiary other than
as provided in Section 2 of this Article I hereof. The Additional Properties
Trustee shall hold, manage, invest and reinvest the Additional Properties Trust
Estate, and shall collect the income therefrom in accordance with the terms of
this Declaration. The Additional Properties Trustee shall not distribute any of
the income or proceeds of the Additional Properties Trust Estate to the
Beneficiary other than as provided in Section 2 of this Article I hereof.
2. DISTRIBUTION OF PRINCIPAL; TERMINATION. The Trustee shall not
transfer all or any part of the Trust Estate, and/or any income accrued or
accumulated thereon, to the Beneficiary (or to any designated assignee of such
Beneficiary), unless and until approved by the Trustee or unless as otherwise
provided in the Amended and Restated Limited Liability Company Agreement of
Grantor dated as of July __, 2004 (the "LLC AGREEMENT"). The Additional
Properties Trustee shall not transfer all or any part of the Additional
Properties Trust Estate, and/or any income accrued or accumulated thereon, to
the Beneficiary (or to any designated assignee of such Beneficiary), unless and
until approved by the Additional Properties Trustee or unless as otherwise
provided in the LLC Agreement. The Trust hereunder shall terminate upon the
earlier of (i) the distribution of the entire remaining Trust Estate and
Additional Properties Trust Estate to the Beneficiary or (ii) the date that is
twenty-one (21) years from the date hereof.
ARTICLE II
GRANTOR NOT TREATED AS BENEFICIARY OR OWNER OF TRUST ESTATE OR
ADDITIONAL PROPERTIES TRUST ESTATE
The Grantor intends that it not be treated as a beneficiary of the
Trust for any purposes or as the owner of any part of the Trust Estate or
Additional Properties Trust Estate for federal income tax purposes pursuant to
Subtitle A, Chapter 1J, Part 1E of the Internal Revenue Code of 1986, as
amended, (the "Code") or any successor provisions thereto, and all provisions of
this Declaration shall be construed so as to effectuate this intent.
ARTICLE III
POWERS OF TRUSTEE
1. CONSTRUCTION. The Trustee shall have the following powers with
respect to the Trust Estate and the Additional Properties Trustee shall have the
following powers with respect to the Additional Properties Trust Estate. The
term "Trustee" for purposes of this Article III shall mean either the Trustee or
the Additional Properties Trustee as is appropriate and the
C-2
term "Trust Estate" shall mean the Trust Estate or the Additional Properties
Trust Estate as is appropriate.
2. GENERAL POWERS. Subject to Paragraph 7, the Grantor hereby gives
to the Trustee, its substitutes or successors, in addition to, and not by way of
limitation on, any and all powers and authority conferred upon it by law, the
following powers and authority which may be exercised by it under this
Declaration at any time and from time to time for any purpose without the
necessity of giving notice to, or of obtaining authorization or confirmation
with respect thereto from, any court or from the Grantor (except as otherwise
set forth in the following subsections):
a. To hold and retain all or any part of the Trust Estate in
the form in which the same may be at the time of receipt thereof by it
as long as it deems advisable, to purchase or acquire for investment,
by liquidation of any such asset or otherwise, any additional property
of any kind or nature (including, without limitation, any real
property or any interest in real property, any stocks, whether common,
preferred or otherwise, participation in any discretionary common
trust fund or other investment fund administered by any fiduciary
hereunder, bonds, secured or unsecured, debentures, obligations,
mortgages, or other securities) and to invest and reinvest the same as
part of the Trust Estate, even though such holding, purchase,
acquisition, investment or reinvestment, at any time or from time to
time, may be non-income producing or underproductive, or otherwise
would not be permitted by law for the investment of trust funds or
would not be considered appropriate for retention by a trustee;
PROVIDED THAT any disposition of all or any part of the Trust Estate
and/or any investment or reinvestment of any proceeds of any
disposition of any portion of the Trust Estate should require the
written consent of each Trustee and the Beneficiary.
b. To sell, exchange, give options upon, partition or otherwise
alter any property at any time forming part of the Trust Estate, at
public or private sale, for such purposes, and upon such terms, in
such manner and at such prices as it determines to be advisable, and
to make, execute and deliver any and all stock powers, deeds,
conveyances, bills of sale, leases, mortgages and other instruments
necessary thereto, PROVIDED THAT any such action shall require the
written consent of each Trustee and the Beneficiary.
c. To renew or extend the time of payment of any obligation,
including taxes, whether such obligation is secured or unsecured or
payable to or by it, for as long a period or periods of time and upon
such terms as it determines; and to pay, adjust, settle, compromise,
arbitrate or contest any claim or demand, including a claim or demand
for taxes, in favor of or against it, upon such terms as it deems
advisable.
C-3
d. To borrow money from any person for such periods of time and
upon such commercially reasonable terms and conditions for any purpose
connected with the protection, preservation or administration of this
Trust and the Trust Estate, whenever in its judgment the same is
considered advisable; to execute promissory notes or other obligations
for amounts so borrowed; and to secure the payments of any amounts so
borrowed by pledge, deed of trust or mortgage of any property forming
a part of the Trust Estate, PROVIDED THAT any such action shall
require the written consent of each Trustee and the Beneficiary.
e. To vote or assign the right to vote, in person or by general
or limited proxy, any shares of stock or other securities held by the
Trust at any and all meetings of stockholders for any and all purposes
without any limitation whatsoever; and to refrain from voting with
respect thereto, PROVIDED THAT any such action shall require the
written consent of each Trustee and the Beneficiary.
f. To exercise all options, rights and privileges; to convert
stocks, bonds, notes, mortgages, or other property into stocks, bonds,
notes, mortgages, or other property; to grant or receive put and call
options, engage in hedging transactions, and acquire derivatives with
respect to all or any part of the Trust Estate; to subscribe for
additional or other stocks, bonds, notes, mortgages, or other
property, and to make such conversions and subscriptions and to make
payments therefor; and to hold such stocks, bonds, notes, mortgages,
or other property so acquired as investments, PROVIDED THAT any such
action shall require the written consent of each Trustee and the
Beneficiary.
g. To consent, directly or through a committee or other agent,
to the reorganization, consolidation, merger, dissolution or
liquidation, foreclosure or lease or sale of assets, incorporation or
reincorporation, or readjustment of the capital or financial structure
of any corporation or other entity in which the Trust may have any
interest; to serve as a member of any stockholders' or bondholders'
protective committee; to deposit any such stock or other securities in
accordance with any such transaction; to pay any assessments, expenses
and sums of money which may be required for the protection or
furtherance of the interests of the Trust with reference thereto; and
to receive and retain as investments of the Trust any new securities
issued as a result of the execution of any such transaction, whether
or not they otherwise would be permitted by law for the investment of
Trust funds or would be considered appropriate for retention by a
trustee; and to make any payment and
C-4
to take any steps which may be necessary or proper to enable the Trust
to obtain the benefit of any such transaction; PROVIDED THAT any
matter that requires the vote of the holders of shares of stock that
are held as part of the Trust Estate shall require the written consent
of each Trustee and the Beneficiary.
h. To employ any person or persons to handle the management or
maintenance of any property forming a part of the Trust Estate,
including receipt and payment of money, without being liable for loss
incurred thereby; and to employ such investment or legal counsel,
financial advisors, accountants, bookkeepers, agents, custodians,
experts, clerks or other persons as the Trustee deems advisable in the
administration of the Trust Estate, and to compensate them in such
amounts as the Trustee deems reasonable, and to charge the expenses
thereof to income or principal or both as the Trustee determines, and
to rely on information or advice furnished by such persons and to
delegate to them any discretions which the Trustee deems proper.
i. To register any property in the name of its nominee or
nominees, without qualification or description, or to hold the same
unregistered or in such other form that title shall pass by delivery,
or, in the case of a fiduciary, in its own name without qualification
or description.
j. To maintain and keep the Trust Estate, or any portion
thereof, at any place in the United States or elsewhere, or with a
depository or custodian at any such place, as the Trustee determines.
k. To carry insurance against such hazards and in such amounts,
with either stock companies or mutual companies, as it deems
advisable.
l. To exercise all powers and authority conferred upon the
Trustee under law or by this Declaration with respect to all
accumulations of income held hereunder.
m. To exercise all powers and authority, including any
discretion conferred upon the Trustee in this Declaration, after the
termination of the Trust until the Trust Estate is fully distributed.
n. To execute and deliver agreements, assignments, bills of
sale, contracts, deeds, notes, powers of attorney, stock powers,
proxies, receipts, and other instruments in writing which in the
Trustee's judgment are necessary or desirable for the proper
management, investment and discharge of the Trust and the Trust
C-5
Estate or for the exercise of any power or authority conferred upon
the Trustee in this Declaration, PROVIDED THAT the written consent of
each Trustee and the Beneficiary shall be required as to any matter
for which such consent is required under any other subparagraph of
this paragraph 2.
3. COMPREHENSIVENESS OF POWERS AND CONCLUSIVENESS OF EXERCISE OF
DISCRETION. The powers and authority herein granted to the Trustee may be
exercised in whole or in part at any time and from time to time and shall be
deemed to be supplementary to and not exclusive of the general powers of a
trustee pursuant to law and shall include all powers necessary to carry the same
into effect. The enumeration of specific powers herein shall not be construed in
any way to limit or affect the general powers herein granted. In the exercise of
each such power, whether specific or general, the Trustee shall be required to
use the degree of judgment and care that a reasonable, prudent investor would
use if it were the owner of the assets of the Trust Estate, having due regard
for the preservation of the assets and the value thereof. Within the scope of
the discretion allowed to the Trustee, the Trustee's judgment as to the
advisability and mode of exercising any such power or authority shall be final
and conclusive upon all persons interested or who may become interested in the
Trust Estate or any Trust created hereunder.
4. AUTHORITY TO ACCEPT ADDITIONAL PROPERTY. The Trustee is
authorized and empowered to receive additional property from any other person as
additions to the Trust created hereunder, and to hold the same in trust and to
administer it as an integral part thereof pursuant to the terms and provisions
hereof.
5. LIMITATIONS ON LIABILITY. The Trustee shall not be liable for the
acts, omissions, or defaults of any agent appointed with due care, or of any
other Trustee. The Trustee shall not be obliged to examine the accounts, records
or acts of a previous Trustee or any allocation of such Trustee. The Trustee
shall not be liable for failure to demand or contest an accounting of any other
Trustee, or of any predecessor, or otherwise to compel any Trustee to redress a
breach of trust, unless so requested in writing by the other Trustee and the
Beneficiary.
6. NON-JUDICIAL ACCOUNTINGS. In order to avoid the expense and delay
incident to a judicial settlement of its accounts, the Trustee from time to time
during the term of any Trust hereunder, in the Trustee's sole and absolute
discretion, may render an accounting of its proceedings as Trustee to the
Grantor, who shall have full power to settle finally any such accounting and on
the basis of such settlement to release the Trustee from all liability for its
acts or omissions as Trustee. Such settlement and release shall be binding upon
all persons interested or who may become interested in the Trust Estate or any
trust created hereunder (including creditors), including those who may be under
legal disability or not yet in being, and shall have the force and effect of a
final decree, judgment or order of a court of competent jurisdiction rendered in
an appropriate action or proceeding for an accounting in which jurisdiction was
duly obtained over all necessary and proper parties. The foregoing provisions,
however, shall not preclude the Trustee from having its accounts judicially
settled if it shall so desire.
C-6
7. LIMITATION ON TRUSTEE'S POWERS. At any time that the Grantor is
serving as Trustee, the Grantor shall exercise the powers granted hereunder only
in its fiduciary capacity and for the sole and exclusive benefit of the
Beneficiary. None of the powers granted to the Trustee hereunder shall enable
any person to (i) buy, exchange, or otherwise deal with the Trust Estate or any
income accrued thereon for less than adequate and full consideration in money or
money's worth, other than by a distribution to the Beneficiary pursuant to
Article I hereof; (ii) borrow the principal of the Trust, directly or
indirectly, without adequate interest or security; (iii) require the Trustee to
exchange all or any part of the Trust Estate by substituting other property of
equal value; or (iv) require the Trustee to vote any corporate stock or other
securities held as a part of the Trust Estate other than in the exercise of the
Trustee's fiduciary duties to the Beneficiary.
8. EXONERATION FROM BOND. Neither the Trustee nor any successor
Trustee hereunder shall be required to give or file any bond or other security
for the faithful performance of the duties of such office.
ARTICLE IV
SUCCESSOR TRUSTEES
1. APPOINTMENT OF SUCCESSOR. If the Trustee named herein shall
resign or otherwise cease to act as a Trustee hereunder, the Beneficiary shall
appoint a qualified individual or entity to serve as replacement and successor
Trustee. Any such appointment shall be in writing and delivered to the
individual or entity being appointed. If the Additional Properties Trustee named
herein shall resign or otherwise cease to act as Additional Properties Trustee
hereunder, the Beneficiary shall appoint a qualified individual or entity to
serve as replacement and successor Additional Properties Trustee. Any such
appointment shall be in writing and delivered to the individual or entity being
appointed.
2. MEANING OF TERM WITH SUCCESSOR TRUSTEE. The term "Trustee" and
"Additional Properties Trustee" as used herein shall be deemed to include any
successor Trustee whenever the same shall be acting in such capacity hereunder.
ARTICLE V
MEANING OF TERMS
As used in this Declaration, the masculine, feminine or neuter genders
shall be deemed to include all genders and the singular shall be deemed to
include the plural and vice versa, except where any such construction would be
unreasonable.
C-7
ARTICLE VI
CHOICE OF LAW
All questions, whether of administration, validity or effect, arising
under or with respect to this Declaration or the Trust hereby created, and all
and several of the respective rights, duties, benefits and liabilities of the
parties hereto or any other persons interested or who may become interested in
the Trust Estate, the Additional Properties Trust Estate or any Trust created
hereunder, shall be governed by and determined under and in accordance with the
laws of the State of Maryland.
ARTICLE VII
BINDING ON SUCCESSORS
This Declaration shall extend to and be binding upon the executors,
administrators, legal representatives, successors and assigns of the parties
hereto.
ARTICLE VIII
IRREVOCABILITY
The Grantor has been fully advised as to the legal effect of the
execution of this instrument and informed of the character and amount of the
property being made subject hereto and declares that this Trust shall be
irrevocable and that there shall hereafter be no power at any time to revoke,
change or annul any of the provisions herein contained; except that other
properties may hereafter be brought within the operation of this Trust. The
Grantor shall execute such further instruments as shall be necessary to vest the
Trustee and the Additional Properties Trustee with full title to the property
hereby transferred.
ARTICLE IX
Each of the Trustee and the Additional Properties Trustee, by joining
in the execution of this Declaration, signifies its acceptance of this Trust on
and subject to the terms and conditions hereof and hereby acknowledges its
receipt of the Trust Estate and the Additional Properties Trust Estate.
ARTICLE IX
This Declaration may be executed in any number of counterparts, and
each such counterpart will for all purposes be deemed an original, and all such
counterparts shall constitute one and the same instrument.
END OF PAGE
[SIGNATURES APPEAR ON FOLLOWING PAGE]
C-8
IN WITNESS WHEREOF, the undersigned has executed this Declaration as
of the date first above mentioned.
GRANTOR:
TOLLGATE MARKETPLACE HOLDING
COMPANY LLC
By:
-----------------------------
Its:
------------------------------
Witness:
------------------------------
TRUSTEE:
INLAND BEL AIR HC L.L.C.
By:
-----------------------------
Its:
------------------------------
Witness:
------------------------------
ADDITIONAL PROPERTIES TRUSTEE:
CORDISH TOLLGATE LLC
By:
-----------------------------
Its:
------------------------------
Witness:
------------------------------
C-9
SCHEDULE A, PART I
TRUST ESTATE
$100.00
C-10
SCHEDULE A, PART II
TRUST ESTATE
1. Any and all equity securities, within the meaning of Section 856(c) of
the Code, owned directly or indirectly by the Grantor and/or any Controlled
Partnership Subsidiary(1) which are not owned, directly or indirectly, by an
"Additional Properties Owner Entity," as such term is defined in the LLC
Agreement, and issued by any entity treated as a corporation for federal income
tax purposes under Section 7701 of the Code, other than by a "taxable REIT
subsidiary" under Section 856(1) of the Code, if Inland Western Retail Real
Estate Trust, Inc., a Maryland corporation (the "REIT"), an indirect "partner"
in Grantor, otherwise would be considered for purposes of Section
856(c)(4)(B)(iii)(III) to hold more than 10 percent of the total value of the
outstanding securities of the issuer as of 11:59:59 pm eastern standard time of
the day preceding the last day of the end of any calendar quarter, unless such
equity securities are otherwise considered "real estate assets" within the
meaning of Section 856(c)(5) of the Code; PROVIDED, HOWEVER, that the securities
of any issuer includible in the Trust Estate pursuant to this paragraph 1, shall
be only the portion of such securities sufficient to reduce the REIT's ownership
(as determined for purposes of Section 856 of the Code) of such securities to
less than 10 percent of the total value of the outstanding securities of such
issuer.
2. Any and all debt securities, within the meaning of Section 856(c) of
the Code, owned directly or indirectly by the Grantor and/or any Controlled
Partnership Subsidiary, which are not owned, directly or indirectly, by an
Additional Properties Owner Entity, and issued by any corporation, partnership,
limited liability company, or other person or entity other than by:
(a) a "taxable REIT subsidiary" under Section 856(1) of the Code or a
"qualified REIT subsidiary" under Section 856(i) of the Code;
(b) a corporation (or other entity treated as a corporation for
federal income tax purposes under Section 7701 of the Code),
partnership (or other entity treated as a partnership for federal
income tax purposes pursuant to Section 7701 of the Code), or
limited liability company in which neither the REIT nor any
"taxable REIT subsidiary" of the REIT owns (directly or
indirectly) an interest other than such debt securities or by an
individual provided that such debt securities qualify as
"straight debt" within the meaning of Section 856(c)(7) of the
Code; or
(c) a partnership or other entity treated as a partnership for
federal income tax purposes pursuant to Section 7701 of the Code
in which the REIT owns (directly or indirectly) a profits
interest of at least 20 percent, provided that such debt
----------
(1) For purposes of this Schedule A, a "Controlled Partnership Subsidiary" is
any partnership, business trust, joint venture or limited liability company
in which the Grantor, the REIT, any qualified REIT subsidiary of REIT, or
any other Controlled Partnership Subsidiary is a general partner, a joint
venturer, or a managing member, as applicable.
C-11
securities qualify as "straight debt" within the meaning of
Section 856(c)(7) of the Code;
if the REIT otherwise would be considered for purposes of Section
856(c)(4)(B)(iii)(III) to hold more than 10 percent of the total value of the
outstanding securities of the issuer as of 11:59:59 pm eastern standard time of
the day preceding the end of any calendar quarter, unless such debt securities
are otherwise considered "real estate assets" within the meaning of Section
856(c)(5) of the Code; PROVIDED, HOWEVER, that the debt securities of any issuer
includible in the Trust Estate pursuant to this paragraph 2, shall be only the
portion of such securities sufficient to reduce the REIT's ownership (as
determined for purposes of Section 856 of the Code) of such securities to less
than 10 percent of the total value of the outstanding securities of such issuer.
3. If the Grantor and/or any Controlled Partnership Subsidiary owns both
(a) securities of an issuer that would be includible in the Trust Estate
pursuant to paragraph 1 of this Schedule A, Part II and (b) securities of such
issuer that would be includible in the Trust Estate pursuant to paragraph 2 of
this Schedule A, Part II, the Trust Estate shall include securities of such
issuer in the following priority: first, securities of such issuer includible
pursuant to paragraph 1 of this Schedule A, Part II and, second, securities of
such issuer includible pursuant to paragraph 2 of this Schedule A, Part II, to
the extent necessary to reduce the REIT's ownership (as determined for purposes
of Section 856 of the Code) of the securities of such issuer to less than 10% of
the total outstanding securities of such issuer.
C-12
SCHEDULE A, PART III
ADDITIONAL PROPERTIES TRUST ESTATE
1. Any and all equity securities, within the meaning of Section 856(c) of
the Code, owned directly or indirectly by an "Additional Properties Owner
Entity" of Grantor (as such term is defined in the LLC Agreement) and/or any
Controlled Partnership Subsidiary(2) which is owned by an Additional Properties
Owner Entity and which are issued by any entity treated as a corporation for
federal income tax purposes under Section 7701 of the Code, other than by a
"taxable REIT subsidiary" under Section 856(1) of the Code, if Inland Western
Retail Real Estate Trust, Inc., a Maryland corporation (the "REIT"), an indirect
"partner" in Grantor, otherwise would be considered for purposes of Section
856(c)(4)(B)(iii)(III) to hold more than 10 percent of the total value of the
outstanding securities of the issuer as of 11:59:59 pm eastern standard time of
the day preceding the end of any calendar quarter, unless such equity securities
are otherwise considered "real estate assets" within the meaning of Section
856(c)(5) of the Code; PROVIDED, HOWEVER, that the securities of any issuer
includible in the Additional Properties Trust Estate pursuant to this paragraph
1, shall be only the portion of such securities sufficient to reduce the REIT's
ownership (as determined for purposes of Section 856 of the Code) of such
securities to less than 10 percent of the total value of the outstanding
securities of such issuer.
2. Any and all debt securities, within the meaning of Section 856(c) of
the Code, owned directly or indirectly by the Grantor and/or any Controlled
Partnership Subsidiary, which are owned by an Additional Properties Owner Entity
and issued by any corporation, partnership, limited liability company, or other
person or entity other than by:
(a) a "taxable REIT subsidiary" under Section 856(1) of the Code or a
"qualified REIT subsidiary" under Section 856(i) of the Code;
(b) a corporation (or other entity treated as a corporation for
federal income tax purposes under Section 7701 of the Code),
partnership (or other entity treated as a partnership for federal
income tax purposes pursuant to Section 7701 of the Code), or
limited liability company in which neither the REIT nor any
"taxable REIT subsidiary" of the REIT owns (directly or
indirectly) an interest other than such debt securities or by an
individual provided that such debt securities qualify as
"straight debt" within the meaning of Section 856(c)(7) of the
Code; or
(c) a partnership or other entity treated as a partnership for
federal income tax purposes pursuant to Section 7701 of the Code
in which the REIT owns (directly or indirectly) a profits
interest of at least 20 percent, provided that such debt
----------
(2) For purposes of this Schedule A, a "Controlled Partnership Subsidiary" is
any partnership, business trust, joint venture or limited liability company
in which an Additional Properties Owner Entity of the Grantor, the REIT,
any qualified REIT subsidiary of REIT, or any other Controlled Partnership
Subsidiary is a general partner, a joint venturer, or a managing member, as
applicable.
C-13
securities qualify as "straight debt" within the meaning of
Section 856(c)(7) of the Code;
if the REIT otherwise would be considered for purposes of Section
856(c)(4)(B)(iii)(III) to hold more than 10 percent of the total value of the
outstanding securities of the issuer as of 11:59:59 pm eastern standard time of
the day preceding the end of any calendar quarter, unless such debt securities
are otherwise considered "real estate assets" within the meaning of Section
856(c)(5) of the Code; PROVIDED, HOWEVER, that the debt securities of any issuer
includible in the Additional Properties Trust Estate pursuant to this paragraph
2, shall be only the portion of such securities sufficient to reduce the REIT's
ownership (as determined for purposes of Section 856 of the Code) of such
securities to less than 10 percent of the total value of the outstanding
securities of such issuer.
3. If the Grantor and/or any Controlled Partnership Subsidiary owns
through an Additional Properties Subsidiary both (a) securities of an issuer
that would be includible in the Additional Properties Trust Estate pursuant to
paragraph 1 of this Schedule A, Part III and (b) securities of such issuer that
would be includible in the Additional Properties Trust Estate pursuant to
paragraph 2 of this Schedule A, Part III, the Additional Properties Trust Estate
shall include securities of such issuer in the following priority: first,
securities of such issuer includible pursuant to paragraph 1 of this Schedule A,
Part III and, second, securities of such issuer includible pursuant to paragraph
2 of this Schedule A, Part III, to the extent necessary to reduce the REIT's
ownership (as determined for purposes of Section 856 of the Code) of the
securities of such issuer to less than 10% of the total outstanding securities
of such issuer.
C-14
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
FORM OF PROMISSORY NOTE
EXHIBIT D
FORM OF CASH SHORTFALL LOAN
PROMISSORY NOTE
$__________________ _________________________,______________ ___________,
Maryland
FOR VALUE RECEIVED, the undersigned, [a subsidiary LLC of TOLLGATE
MARKETPLACE HOLDING COMPANY LLC] (the "MAKER"), promises to pay to the order of
_________________________________________________ (the "LENDER"), at
________________________ or at such other place as the holder hereof may from
time to time designate in writing, the principal sum of ______________________
Dollars ($__________), plus interest on the principal balance thereof from time
to time outstanding at an annual rate ("RATE") of twelve percent (12%) per
annum. The entire principal balance of this Note, all accrued and unpaid
interest thereon, and all other applicable fees, costs and charges, if any,
shall be due and payable in accordance with Section 3.4 of that certain Amended
and Restated Limited Liability Company Agreement of Tollgate Marketplace Holding
Company LLC dated as of July __, 2004.
All payments hereunder shall be made in lawful money of the United States
and in immediately available funds.
This Note may be prepaid, in whole or in part, at any time without penalty.
Any partial prepayments shall not, however, relieve the Maker of the obligation
to pay periodic installments of principal and/or interest hereunder as and when
the same would otherwise fall due.
THE LENDER, THE MAKER AND ANY OTHER PARTY LIABLE HEREON IN ANY CAPACITY,
WHETHER AS ENDORSER, SURETY, GUARANTOR, OR OTHERWISE, EACH WAIVES TRIAL BY JURY
WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING
OUT OF THE LOAN EVIDENCED HEREBY AND/OR THE CONDUCT OF THE RELATIONSHIP BETWEEN
THE LENDER, THE MAKER AND/OR ANY OTHER PARTY LIABLE HEREON IN ANY CAPACITY,
WHETHER AS ENDORSER, SURETY, GUARANTOR, OR OTHERWISE.
The Maker promises to pay all costs of collection, including reasonable
attorneys' fees, upon default in the payment of the principal of this Note or
interest hereon when due, whether at
D-1
maturity, as herein provided, or by reason of acceleration of maturity under the
terms hereof, whether suit be brought or not.
In the event any one or more of the provisions contained in this Note shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Note, but this Note shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
This Note may not be changed orally, but only by an agreement in writing
signed by the parties against whom enforcement of any waiver, change,
modification or discharge is sought.
The Maker warrants and represents that the loan evidenced hereby is being
made for business or investment purposes.
It is the intention of the Maker and the Lender to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law, then notwithstanding anything to the
contrary in this Note or the Maker's Limited Liability Company Agreement, the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, charged or received under this Note shall under no
circumstances exceed the maximum amount of interest allowed by applicable law,
and any excess shall be credited on the Note by the Lender, or, if this Note
shall have been paid in full, refunded to the Maker.
This Note shall be governed in all respects by the laws of the State of
Delaware (without regard to its conflicts of laws provisions) and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and assigns.
[a subsidiary LLC of Tollgate Marketplace Holding
Company LLC]
BY:
------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
D-2
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
TOLLGATE MARKETPLACE HOLDING COMPANY LLC
CALCULATIONS EXHIBIT
EXHIBIT E
This example is intended to illustrate the manner in which the Capital
Contributions, Capital Account balances, Adjusted Capital Balances and
Operations Reserve balance will be calculated under the terms of the Amended and
Restated Limited Liability Company Agreement of Tollgate Marketplace Holding
Company LLC to which this example is attached. The figures in this example are
intended solely for illustrative purposes and may not reflect actual figures.
ASSUMPTIONS:
- Gross Proceeds under Contribution Agreement - $72,300,000
- Existing Debt (includes defeasance costs) - $32,425,465
- Amount Deposited in Escrow upon Closing - $7,230,000
- Initial Distribution to Withdrawing Member - $10,638,500
DETERMINATION OF INITIAL ADJUSTED CAPITAL BALANCE (DETERMINED UNDER DEFINITION
OF "ADJUSTED CAPITAL BALANCE"):
- Inland - Gross Asset Value = $72,300,000 (This amount includes the
amount of any financing entered into by the Owner Entity
simultaneously with the execution of the Agreement to which this
Exhibit is attached.)
- Xxxxxxx - Xxxxx Asset Value ($72,300,000) MINUS Existing Debt
($32,425,465) MINUS distribution to Withdrawing Member ($10,638,500)
MINUS Escrow Amount ($7,230,000) = $22,006,035
- The Cordish Adjusted Capital Balance will be further reduced by
expenses paid upon closing or when incurred (i.e., transaction
expenses (estimated at $125,000)).
DETERMINATION OF INITIAL CAPITAL ACCOUNT (DETERMINED UNDER SECTION 3.2):
- Inland - Initial Capital Contribution (amount contributed upon Closing
including Escrow Amount) = $72,300,000 (This amount will be reduced by
the amount of any financing entered into by the Owner Entity
simultaneously with the execution of the Agreement to which this
Exhibit is attached.)
- Xxxxxxx - Xxxxx Asset Value ($72,300,000) MINUS Existing Debt
($32,425,465) MINUS distribution to Withdrawing Member ($10,638,500)
MINUS Escrow Amount ($7,230,000) = $22,006,035
E-l
- The Cordish Capital Account Balance will be further reduced by
expenses paid upon closing or when incurred (i.e., transaction
expenses (estimated at $125,000)).
DETERMINATION OF INITIAL BALANCE OF OPERATIONS RESERVE:
Gross Proceeds ($72,300,000) MINUS Existing Debt ($32,425,465) MINUS
distribution to Withdrawing Member ($10,638,500) MINUS Escrow Amount
($7,230,000) = $22,006,035; which amount shall be further reduced by fees paid
upon closing or when incurred (i.e., transaction expenses (estimated at
$125,000)).
EFFECT OF PAYMENT OF INDEMNITY TO INLAND (ASSUMES PAYMENT OF $1,000.000):
Assumption $1,000,000 paid from Liquidity Escrow to Inland
- Inland Capital Account: Decreased by $1,000,000
- Inland Adjusted Capital Balance: Decreased by $1,000,000
- Cordish Capital Account: No change
- Cordish Adjusted Capital Balance: No change
- Operations Reserve Balance: No change
Assumption $1,000,000 paid from Operations Reserve (i.e., from an indemnity
obligation under the LLC Agreement)
- Inland Capital Account: Decreased by $1,000,000
- Inland Adjusted Capital Balance: Decreased by $1,000,000
- Cordish Capital Account: Decreased by $1,000,000
- Cordish Adjusted Capital Balance: Decreased by $1,000,000
- Operations Reserve Balance: Decreased by $1,000,000
E-2
