Exhibit 10.24.1
MASTER TRANSACTION AGREEMENT
by and among
REJ REALTY LLC, a Delaware limited liability company,
JG REALTY INVESTORS CORP., an Ohio corporation,
JG MANAGER LLC, an Ohio limited liability company,
JG NORTH RALEIGH L.L.C., an Ohio limited liability company,
JG TRIANGLE PERIPHERAL SOUTH LLC, an Ohio limited liability company,
CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership,
Effective October 24, 2005
TABLE OF CONTENTS
ARTICLE 1 MEMBER NEWCO LLC AGREEMENT AND CLOSING........................................2
1.1 Member Newco LLC Agreement..................................................2
1.2 Acknowledgments.............................................................2
1.3 Closing Date................................................................2
1.4 Closing Transactions........................................................3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF EACH OF THE PARTIES.........................3
2.1 Corporate Status; Authorization.............................................4
2.2 Noncontravention............................................................4
2.3 Consents and Approvals......................................................4
2.4 No Actions or Suits.........................................................4
ARTICLE 3 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE JG MEMBERS...................5
3.1 Real Estate Matters.........................................................5
ARTICLE 4 ADDITIONAL AGREEMENTS.........................................................6
4.1 Access to Information.......................................................6
4.2 Further Actions.............................................................6
4.3 CBL Member Parent Guarantee.................................................6
4.4 Project Employees...........................................................8
4.5 Release of JG Member and Affiliates from Existing Guarantees, etc...........8
4.6 Procedures in the event of a Shortfall......................................9
4.7 Service Contracts and Other Contracts......................................10
4.8 New Encumbrances on the Real Estate........................................10
ARTICLE 5 CONDITIONS TO CLOSING........................................................10
5.1 Conditions Precedent to Obligations of All Parties.........................10
5.2 Conditions Precedent to Obligations of CBL Member Parent...................11
5.3 Conditions Precedent to Obligations of the JG Parties......................11
ARTICLE 6 TERMINATION AND WAIVER.......................................................12
6.1 General....................................................................12
6.2 Effect of Termination......................................................13
ARTICLE 7 MISCELLANEOUS................................................................13
7.1 Notices....................................................................13
7.2 Governing Law..............................................................15
7.3 Entire Agreement; Amendment................................................15
7.4 Section Headings...........................................................15
7.5 Severability...............................................................15
7.6 Successors; No Third-Party Beneficiaries...................................15
7.7 Expenses...................................................................15
7.8 Confidentiality; Public Announcements......................................16
7.9 Survival...................................................................16
7.10 Counterparts...............................................................16
MASTER TRANSACTION AGREEMENT
This MASTER TRANSACTION AGREEMENT (the "Agreement") is made as of
October 24, 2005, by and among: REJ REALTY LLC, a Delaware limited liability
company ("REJ Realty"), JG REALTY INVESTORS CORP., an Ohio corporation ("JGRI"),
JG MANAGER LLC, an Ohio limited liability company ("JG Manager"; together with
REJ Realty and JGRI, the "JG Members"), JG NORTH RALEIGH L.L.C., an Ohio limited
liability company (the "JG North Raleigh"), JG TRIANGLE PERIPHERAL SOUTH LLC, an
Ohio limited liability company ("JG Triangle South"), and CBL & ASSOCIATES
LIMITED PARTNERSHIP, a Delaware limited partnership ("CBL Member Parent").
RECITALS
WHEREAS, JG North Raleigh owns and operates the two-level regional
enclosed mall shopping center known as Triangle Town Center and the Commons,
located on approximately 43.328 acres of land near the I-540 - US 1 interchange
in Raleigh, North Carolina (together, "Triangle Town Center"); and
WHEREAS, JG Triangle South owns and operates the power center know as
Triangle Town Place, located on approximately 15.749 acres of land and adjacent
to Triangle Town Center ( "Triangle Town Place"); and
WHEREAS, as of the date of this Agreement, REJ Realty and JGRI
collectively own one hundred percent (100%) of the member interests in JG North
Raleigh; and
WHEREAS, as of the date of this Agreement, REJ Realty and JG Manager
collectively own one hundred percent (100%) of the member interests in JG
Triangle South; and
WHEREAS, the JG Members intend to cause the formation of a new limited
liability company, to be known as Triangle Town Member LLC ("Member Newco") and,
on the terms and subject to the conditions set forth in this Agreement, to
contribute all of their respective member interests in JG North Raleigh and JG
Triangle South to Member Newco in exchange for member interests in Member Newco;
and
WHEREAS, the JG Members intend to cause the formation of another new
limited liability company, to be known as Triangle Town Center LLC (the
"Company") and, on the terms and subject to the conditions set forth in this
Agreement, to cause JG North Raleigh and JG Triangle South to contribute
Triangle Town Center and Triangle Town Place to the Company by limited warranty
deed; and
WHEREAS, CBL Member Parent intends to cause the formation of a new
limited liability company in which CBL Member Parent will own one hundred
percent (100%) of the member interests ("CBL Member"); and
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WHEREAS, on the terms and subject to the conditions set forth in this
Agreement, CBL Member Parent and the JG Members intend that CBL Member will be
admitted as a member in Member Newco; and
WHEREAS, the parties hereto desire to make provision for the other
agreements and transactions contemplated by this Agreement; and
WHEREAS, the definitions of capitalized terms used in this Agreement
and not otherwise defined herein are set forth on Appendix A attached hereto and
made a part hereof, and if not defined in Appendix A, shall be as set forth in
the Member Newco LLC Agreement. NOW, THEREFORE, in consideration of the
foregoing premises and other good, valid, and binding consideration, the receipt
and sufficiency of which is hereby acknowledged and intending to be legally
bound, the Parties agree as follows:
ARTICLE 1
MEMBER NEWCO LLC AGREEMENT AND CLOSING
1.1 Member Newco LLC Agreement. For the purposes of this Agreement, the term
Member Newco LLC Agreement shall have the meaning set forth in Appendix A and
shall include the agreements, exhibits, schedules and other documents set forth
in such definition.
1.2 Acknowledgments. The Parties acknowledge that:
(a) As of the date hereof, and before giving effect to the
transactions contemplated by this Agreement to take place on the
Closing Date, the aggregate net equity of the JG Members in JG
North Raleigh and JG Triangle South is approximately One Hundred
Sixty-Two Million Five Hundred Thousand Dollars
($162,500,000.00), of which approximately One Hundred Fifty-Seven
Million Three Hundred Fifty Thousand Dollars ($157,350,000.00) is
attributable to JG North Raleigh and approximately Five Million
One Hundred Fifty Thousand ($5,150,000.00) is attributable to JG
Triangle South, given the current principal amount of mortgage
indebtedness of JG North Raleigh and JG Triangle South of
approximately $106 million and approximately $15 million,
respectively, subject to adjustment by mutual agreement of the JG
Members and CBL Member Parent to reflect the principal amounts of
such mortgage indebtedness immediately prior to the Closing (the
"Pre-Closing Project Net Equity").
(b) After giving effect to the transactions contemplated by this
Agreement to take place on the Closing Date, the aggregate amount
of the JG Members' Capital Account will be equal to the JG
Members Initial Contribution, and the amount of CBL Member's
Capital Account will be zero, except as otherwise provided in
Section 4.6 below.
1.3 Closing Date. Subject to the prior satisfaction or waiver of all of the
conditions set forth in Article 5, the closing of the transactions contemplated
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by this Agreement (the "Closing") shall be held at a location that is agreeable
to all of the Parties no later than the fifth (5th) Day following the date as of
which all of the conditions precedent set forth in Article 5 have been satisfied
or waived by the Party entitled to the benefit of such condition(s), or on such
other date as may be agreed to in writing by the Parties (the "Closing Date").
1.4 Closing Transactions. On the Closing Date, subject to the satisfaction or
waiver of the conditions precedent set forth in Article 5, the following
transactions shall take place in the order set forth below (and as further
reflect in the charts attached as Exhibit C hereto (the "Transaction Chart"):
(a) The JG Members shall contribute all of their respective member
interests in JG North Raleigh and JG Triangle South to Member Newco in
exchange for all of the member interests in Member Newco;
(b) JG North Raleigh and JG Triangle South shall respectively contribute
Triangle Town Center and Triangle Town Place to the Company, by limited
warranty deed, in exchange for all of the member interests in the
Company;
(c) JG North Raleigh and JG Triangle South shall distribute all of the
member interests in the Company to Member Newco;
(d) the JG Members shall execute and deliver the Member Newco LLC
Agreement;
(e) CBL Member Parent shall cause CBL Member to execute and deliver the
Member Newco LLC Agreement;
(f) CBL Member Parent shall cause CBL Member and the other parties thereto
to execute and deliver the Company LLC Agreement;
(g) CBL Member Parent shall cause Property Manager to execute and deliver
the Property Management Agreement;
(h) CBL Member shall cause Member Newco to cause the Company to execute and
deliver the Property Management Agreement;
(i) CBL Member shall cause Member Newco to cause the Company to enter into
the Initial JV Financing; and
(j) The Company shall distribute the Net Proceeds of the Initial JV
Financing to Member Newco, which shall distribute the Net Proceeds to
the JG Members pro rata by wire transfer of immediately available funds
to the account designated by the JG Members.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF EACH OF THE PARTIES
Except as otherwise set forth below, each of the Parties hereby
represents and warrants to each other Party, as of the date hereof and the
Closing Date, as follows:
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2.1 Corporate Status; Authorization. Such Party is duly organized, validly
existing and in good standing under and by virtue of the laws of the state of
its organization. The Person(s) executing this Agreement on such Party's behalf
are duly elected, qualified and acting as its officer(s), manager(s) or
member(s) (as the case may be). All actions and resolutions, whether
partnership, corporate or otherwise, necessary to authorize such Party to enter
into this Agreement have been taken and adopted. Such Party has, and the Persons
executing this Agreement on its behalf have, all requisite power and authority
and has (have) been duly authorized to enter into this Agreement. This Agreement
has been duly executed on behalf of such Party. Such Party has full right and
lawful authority to enter into and perform its covenants and obligations under
this Agreement for the full term hereof, and has full right and lawful authority
to make its representations and warranties hereunder. Upon execution of this
Agreement by each Party hereto, this Agreement will constitute the legal, valid
and binding obligation of such Party and will be enforceable against it and its
successors and assigns in accordance with its terms, except as such enforcement
may be limited by (a) bankruptcy, insolvency, moratorium, or other similar laws
affecting a creditor's rights and remedies or the relief of debtors generally at
the time in effect, (b) the discretion of the court before which any proceeding
involving the same may be brought, and (c) equitable principles at the time in
effect limiting the remedy of specific performance.
2.2 Noncontravention. Neither the execution, delivery or performance by such
Party of this Agreement or the transactions contemplated hereby will conflict
with, or will result in a breach of, or will constitute a default under, (a) any
agreement or instrument by which such Party or any of its Affiliates may be
bound or (b) any judgment, statute, rule, law, order, decree, writ or injunction
of any court or Governmental Agency, as defined below, applicable to such Party
or any of their Affiliates and/or their respective property and assets for which
consent has not been obtained.
2.3 Consents and Approvals. All consents by third Persons which such Party is,
by the terms of its agreements, if any, with any such third Persons, required to
obtain prior to its execution of this Agreement have been so obtained by them.
2.4 No Actions or Suits. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of such Party, threatened against
such Party, any of its Affiliates, or any of their respective properties,
assets, or businesses in any court or before or by any federal, state,
provincial, or other governmental department or agency, whether of the United
States, of any of its states, possessions or territories, or of any foreign
nation (a "Governmental Agency") or any arbitrator that could, if adversely
determined, reasonably be expected to materially impair such Party's ability to
perform its obligations under this Agreement or any Affiliate's ability to
perform its obligations under the Member Newco LLC Agreement. Neither such Party
nor any of its Affiliates has received any currently effective notice of any
default, and neither such Party nor any of its Affiliates is in default, under
any applicable order, writ, injunction, decree, or award of any court, any
Governmental Agency, or any arbitrator, in each case, that could reasonably be
expected to materially impair such Party's ability to perform its obligations
under this Agreement or any Affiliate's ability to perform its obligations under
the Member Newco LLC Agreement.
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ARTICLE 3
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE JG MEMBERS
3.1 Real Estate Matters. To the best knowledge of the JG Members:
(a) There are no violations of any restrictive covenants affecting the Real
Estate;
(b) There are no uncured notices, suits, orders, decrees or judgments
relating to violations of any laws, ordinances, codes, regulations or
other requirements of any Governmental Agency having jurisdiction over
the Real Estate or any part thereof which would have a materially
adverse effect upon the development or operation of the Real Estate or
the Project, including, but not limited to, any eminent domain
proceedings;
(c) There are no suits, actions or proceedings pending or threatened
against or affecting the JG Parties and/or the Real Estate before any
court or Governmental Agency that, if adversely determined, would have
a materially adverse effect upon the development or operation of the
Real Estate or the Project, including, but not limited to, any eminent
domain proceedings;
(d) None of the JG Parties is in default with respect to, nor has notice of
violation of, any judgment, order, writ, injunction, rule or regulation
of any court or Governmental Agency to which any of the JG Parties is
subject in any way affecting the Real Estate that would have a
materially adverse effect upon the development or operation of the Real
Estate or the Project, including, but not limited to, any eminent
domain proceedings;
(e) There are no material agreements to which any of the JG Parties or any
of their Affiliates is a party affecting any of JG North Raleigh, JG
Triangle South and/or the Real Estate or any use of the Real Estate
that have not been disclosed to CBL Member Parent or its Affiliates;
(f) Except as disclosed in the environmental reports and studies identified
on Exhibit B attached hereto (the "Environmental Reports"), there are
no Hazardous Substances on, under, in or about the Real Estate. For the
purposes of this Agreement, "Hazardous Substances" shall mean and
include, but shall not be limited to, materials which are included
under or regulated by any local, state or federal law, rule or
regulation pertaining to environmental regulation, contamination, clean
up or disclosure;
(g) Except as disclosed in writing to CBL Member Parent and/or its
Affiliates prior to the date hereof, there are no tenancies,
occupancies or licenses in or to the Real Estate under agreements
entered into by any of the JG Parties or any of their Affiliates: and
(h) The JG Parties have made a good-faith, reasonable effort to provide CBL
Member Parent with all of the facts within the knowledge and possession
of the JG Parties concerning JG North Raleigh, JG Triangle South, the
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Real Estate and the Project that, in their reasonable judgment, could
be expected to be material to CBL Member Parent's due diligence
evaluation of JG North Raleigh, JG Triangle South, the Real Estate and
the Project.
ARTICLE 4
ADDITIONAL AGREEMENTS
4.1 Access to Information. Each Party agrees that, from and after the date
hereof and until the first to occur of the Closing and the termination of this
Agreement in accordance with Article 6, each other Party and their respective
authorized representatives will have reasonable access during normal business
hours to the premises, properties, books and records of JG North Raleigh, JG
Triangle South and, from and after their formation, Member Newco and the
Company, as such other Parties may reasonably request; provided, in each case,
that such access does not disrupt the normal business activities of JG North
Raleigh, JG Triangle South, Member Newco and/or the Company and shall be at the
expense of the Party requesting such access.
4.2 Further Actions. Subject to the terms and conditions hereof, each Party
agrees to act reasonably and in good faith and to use its commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper, or advisable to consummate and
make effective the transactions contemplated hereunder and under the Member
Newco LLC Agreement to be entered into by it or its Affiliates, except that no
Party shall be required to waive or cause to be waived or cause its Affiliates
to waive or cause to be waived any of the conditions to closing set forth in
Article 5. Each Party shall furnish to each other Party all information and
assistance that such other Party may reasonably request in connection with the
foregoing.
4.3 CBL Member Parent Guarantee. Subject to the limitations set forth in this
Section 4.3, CBL Member Parent hereby irrevocably and unconditionally guarantees
to the JG Members the full and prompt performance of each obligation of CBL
Member in connection with the Project, including without limitation CBL Member's
obligations under the Member Newco LLC Agreement (the "CBL Member Guaranteed
Obligations"), and CBL Member Parent shall indemnify and hold harmless the
Company, Member Newco, and the JG Members from and against any and all
liability, obligation, loss, costs, damage, or expense (including, without
limitation, reasonable and documented attorneys' fees and the costs of
investigation) howsoever arising from the failure of CBL Member to perform such
obligations. This Section 4.3 is a guarantee of performance and not of payment
alone, and neither the JG Members, Member Newco nor the Company shall be under
any obligation to take any action against CBL Member with respect to any of the
CBL Member Guaranteed Obligations if such CBL Member Guaranteed Obligations are
due and have not been performed. The liability of CBL Member Parent under this
Section 4.3 shall not be reduced or discharged by (a) any forbearance or
indulgence granted to CBL Member and/or CBL Member Parent, whether as to
payment, time, performance, or otherwise, (b) the fact that CBL Member ceases to
be a Member of the Company or (c) the fact that CBL Member and/or CBL Member
Parent makes an assignment for the benefit of its creditors, a receiver of CBL
Member and/or CBL Member Parent is appointed or applied for, or a petition under
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▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy), as from time to time amended, is
filed by or against CBL Member and/or CBL Member Parent. Notwithstanding the
foregoing provisions of this Section 4.3:
(a) CBL Member Parent's obligations under this Section 4.3 shall
terminate, and this Section 4.3 shall thereafter be null and void
and of no further force or effect (except with respect to claims,
if any, made under this Section 4.3 prior to such termination,
which shall survive until such claims are resolved), when none of
the JG Members nor any of their respective permitted assignees
under clauses (i), (ii), (iii) or (iv) of Section 16.03(a) of the
Member Newco LLC Agreement, nor any permitted assignees under
such clauses of any such permitted assignees, owns any Membership
Interest or any other direct or indirect member interest in the
Company; and
(b) CBL Member Parent's aggregate liability under the guarantees and
indemnities provided in this Section 4.3 shall be limited to
Fifty Million Dollars ($50,000,000), reduced on a
dollar-for-dollar basis by the aggregate amount of Mandatory
Contributions or additional Non-Required Contributions, if any,
made by CBL Member to the Company for any purpose, and, following
such reduction, then increased on a dollar-for-dollar basis (but
not in excess of $50,000,000) by the aggregate amount of the
distributions made by the Company to the CBL Member that
constitute a return of Mandatory Contributions described in
Section 11.01(b)(iii)(A) of the Member Newco LLC Agreement made
by CBL Member (i.e., to fund capital improvements to the Project
(including allowances for tenant improvements)). Distributions
received by the CBL Member that constitute the return of any
Non-Required Contributions or Mandatory Contributions made by CBL
Member other than Mandatory Contributions described in Section
11.01(b)(iii)(A) of the Member Newco LLC Agreement shall not be
deemed to result in any increases as referenced above. For the
avoidance of doubt, the following examples illustrate the
operation of this Section 4.3(b) (Examples 1 and 2 below assume
that CBL Member Parent has not previously incurred any liability
under this Section 4.3 at the time of the example):
(i) Example 1. If CBL Member had made $5,000,000 in unreturned
Mandatory Contributions described in Section 11.01(b)(iii)(A) of
the Member Newco LLC Agreement to fund capital improvements to
the Project and $25,000,000 in other Mandatory Contributions and
Non-Required Contributions, then CBL Member Parent's aggregate
liability under the guarantees and indemnities provided in this
Section 4.3 would be limited to $20,000,000;
(ii) Example 2. If, after Example 1, the Company returned to CBL
Member all of the $5,000,000 in Mandatory Contributions described
in Section 11.01(b)(iii)(A) of the Member Newco LLC Agreement
made by CBL Member in Example 1 and returned $7,000,000 of the
$25,000,000 in other Mandatory Contributions and Non-Required
Contributions made by CBL Member in Example 1, then CBL Member
Parent's aggregate liability under the guarantees and indemnities
provided in this Section 4.3 would be limited to $25,000,000,
i.e., CBL Member Parent's aggregate liability in Example 1 plus
the amount of Mandatory Contributions described in Section
11.01(b)(iii)(A) of the Member Newco LLC Agreement made by CBL
Member in Example 1 and returned to CBL Member in this Example 2;
and
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(iii) Example 3. If, after Example 1 but before Example 2, CBL Member
Parent paid a liability of $20,000,000 under the guarantees and
indemnities provided in this Section 4.3, then CBL Member Parent
would have no further liability under the guarantees and
indemnities provided in this Section 4.3 unless and until the
Company returned to CBL Member all or a portion of the $5,000,000
in Mandatory Contributions described in Section 11.01(b)(iii)(A)
of the Member Newco LLC Agreement made by CBL Member in Example
1; if the Company subsequently returned CBL Member's Mandatory
Contributions and Non-Required Contributions as described in
Example 2, CBL Member Parent's aggregate liability under the
guarantees and indemnities provided in this Section 4.3 would be
limited to $5,000,000, i.e., the amount of Mandatory
Contributions to fund capital improvements described in Section
11.01(b)(iii)(A) of the Member Newco LLC Agreement made by CBL
Member in Example 1 and returned to CBL Member in Example 2.
4.4 Project Employees. At and effective as of the Closing, REJ Realty shall
cause the appropriate Affiliate(s) of REJ Realty to terminate all shopping
center managers and other employees of Affiliates of REJ Realty located at the
Project (such persons, the "Project Employees") and to pay all severance
payments, if any, due in connection with such terminations of the Project
Employees. At the Closing, CBL Member Parent shall cause the appropriate
Affiliate(s) of CBL Member Parent (including, as to janitorial staff and
maintenance and security personnel, ERMC, which shall, for purposes of this
Section 4.4, be deemed to be an Affiliate of CBL Member Parent) to offer
employment at the Project to substantially all of the Project Employees for base
salaries and benefits substantially comparable in the aggregate to the base
salaries being earned by and benefits being offered to persons currently
employed by Affiliates of CBL Member Parent in comparable positions at regional
malls owned directly or indirectly by Affiliates of CBL Member Parent in a
market comparable to the market in which the Project is located. The foregoing
covenant is made to and solely for the benefit of REJ Realty, and no Project
Employee is entitled or shall be deemed to be entitled to make any claim against
CBL Member Parent or any Affiliate of CBL Member Parent, or any other Person,
based on this Section 4.5 or any other provision of this Agreement. In addition
to the foregoing, unless Affiliates of the CBL Member Parent specifically agree
otherwise with a particular Project Employee or group of Project Employees, all
such Project Employees that become employees of Affiliates of CBL Member Parent
shall be "employees-at-will" and no written employment contract shall be
required.
4.5 Release of JG Member and Affiliates from Existing Guarantees, etc. Promptly
after the Closing, CBL Member and CBL Member Parent will use their commercially
reasonable efforts to obtain the release of the JG Members and their respective
Affiliates from any guarantees of existing financing for the Project, letters of
credit securing obligations to anchors, other tenants or other parties, and
other credit enhancements for the benefit of the JG North Raleigh and/or JG
Triangle South heretofore made or provided by any of the JG Members or their
respective Affiliates. For the purposes of this Section 4.5, "commercially
reasonable efforts" shall include but not be limited to substituting CBL Member
Parent and/or its Affiliates as the obligor under such credit enhancements
and/or replacing such credit enhancements with other credit enhancements
satisfactory to the obligee. In the event that CBL Member and CBL Member Parent
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are unable to obtain any such release, CBL Member Parent shall indemnify the JG
Members and their respective Affiliates against and hold them harmless from any
and all cost, loss and liability with respect to such credit enhancements.
4.6 Procedures in the event of a Shortfall.
(a) Obtaining the Initial JV Financing. Following the execution of
this letter, CBL Member Parent will use its commercially
reasonable efforts to obtain the Initial JV Financing. Without
limiting the generality of the immediately preceding sentence,
CBL Member Parent, an Affiliate of CBL Member Parent, or the
Company (whichever shall be acceptable to the lender) will
provide to the lender of the Initial JV Financing, if the
applicable tenant estoppels are not otherwise obtained,
certificates for up to ten percent (10%) of the "Non-Majors", as
contemplated by the UBS Real Estate Investments Inc. term sheet,
dated October [ ], 2005, a copy of which CBL Member Parent has
heretofore provided to the JG Members. The JG Parties will extend
to CBL Member Parent commercially reasonable cooperation in CBL
Member Parent's efforts to obtain the Initial JV Financing. The
Net Proceeds of the Initial JV Financing shall be not less than
50% of the Pre-Closing Project Net Equity (the "50% Distribution
Amount"). The 50% Distribution Amount will be adjusted to reflect
any adjustments in the Pre-Closing Project Net Equity, as
provided in Section 1.2(a) above.
(b) Inability to Obtain Initial JV Financing. If CBL Member Parent is
unable to obtain the Initial JV Financing by November 15, 2005
(the "Contemplated Closing Date"), or if the Net Proceeds of the
Initial JV Financing are anticipated to be less than the 50%
Distribution Amount (determined by reference to term sheets,
commitment letters or other written proposals for the Initial JV
Financing that CBL Member Parent has received from prospective
lenders for the JV Financing and that are under active
negotiation as of the Contemplated Closing Date), the JG Members,
in their sole discretion, may either (i) terminate this Agreement
as provided in Section 6.1(e) below; (ii) extend the Contemplated
Closing Date for such additional period of time as the JG Members
may elect (not to exceed sixty (60) additional days), so as to
afford CBL Member Parent additional time to obtain the Initial JV
Financing that will provide Net Proceeds at least equal to the
50% Distribution Amount; or (iii), subject to the satisfaction or
waiver by the appropriate party of the other conditions to
closing stated in this Agreement, elect to proceed with the
Closing. The amount by which the 50% Distribution Amount exceeds
the Net Proceeds of the Initial JV Financing, if any, is
hereinafter referred to as the "Shortfall."
(c) Election by JG Members to Proceed with Closing. If the JG Members
make the election described in clause (iii) of Section 4.6(b)
above, at the Closing: (i) the entire Net Proceeds of the Initial
JV Financing, if any, shall be distributed to the JG Members as
provided in Section 1.4(j) above; (ii) CBL Member shall make a
capital contribution to Member Newco, which shall in turn make a
corresponding capital contribution to the Company, in an amount
equal to the Shortfall, up to a maximum of $3 million (the
"Shortfall Initial Contribution"), and (iii) the Company will
immediately distribute to Member Newco, and Member Newco shall
thereupon immediately distribute pro rata to the JG Members an
amount equal to the Shortfall Initial Contribution. The Shortfall
Initial Contribution, if any, shall be deemed to be CBL Member's
Initial Contribution. The amount, if any, by which the Shortfall
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exceeds the Shortfall Initial Contribution (the "Remaining
Shortfall"), shall be a part of the JG Members Initial
Contribution and shall carry a preferred return equal the rate of
interest from time to time on the outstanding principal amount of
the Initial JV Financing, except that, if the amount of the
Interest/Return on the Remaining Shortfall exceeds (the "Excess
Amount") the amount computed using the "safe harbor" interest
rate set forth in Treasury Regulation Section 1.707-4(a)(3)(ii)
(the "Safe Harbor Amount"), then the amount of the preferred
return paid each year shall be the Safe Harbor Amount until the
expiration of a two year period ending after the Closing at which
time the Excess Amount will be paid at the next cash distribution
date. The unpaid Excess Amount, if any, will not bear interest or
carry a preferred return. The Remaining Shortfall and the
preferred return shall have a priority over all other
distributions to members of Member Newco, other than tax
distributions, until the JG Members have received the Remaining
Shortfall in its entirety. The form of Member Newco LLC Agreement
shall be revised as appropriate to reflect the provisions of this
Section 4.6(c) in the event that the provisions of this Section
4.6(c) become operable.
4.7 Service Contracts and Other Contracts. The JG Parties have delivered or
caused to be delivered to CBL Member any and all service contracts, maintenance
agreements and other agreements relating to the performance by third parties of
services for the Company, JG Triangle South, the Real Estate and/or the Project
that are not cancelable on 30 days or less notice.
4.8 New Encumbrances on the Real Estate. From and after the date hereof and
until the first to occur of the Closing and the termination of this Agreement in
accordance with Article 6, the JG Members shall cause JG North Raleigh and JG
Triangle South to use their respective commercially reasonable efforts to ensure
that none of the Real Estate becomes subject to any liens, encumbrances,
mortgages, security interests or other adverse rights not in existence as of the
date of this Agreement, other than (a) liens for current real and personal
property taxes and assessments and other similar taxes and assessments not yet
due and payable; (b) easements, licenses, covenants, rights-of-way and other
similar restrictions (including building and zoning restrictions) that could not
reasonably be expected to materially and adversely affect the use or operation
of the Project as currently used and operated; and (c) leases, licenses and
other occupancy rights entered into or modified in the ordinary course of
business of the Project (collectively, "Permitted Encumbrances")
ARTICLE 5
CONDITIONS TO CLOSING
5.1 Conditions Precedent to Obligations of All Parties. The respective
obligations of each Party to consummate the transactions contemplated by this
Agreement are subject to the satisfaction or waiver on or before the Closing
Date of each of the following:
(a) No Injunctions. No court or Governmental Agency of competent
jurisdiction shall have enacted, issued, promulgated, enforced, or
entered any statute, rule, regulation, non-appealable judgment, decree,
injunction, or other order that is in effect on the Closing Date and
that enjoins, restrains, restricts, makes unlawful, or prohibits this
Agreement or the Member Newco LLC Agreement or the consummation of any
of the transactions contemplated hereby or thereby.
10
(b) No Pending or Threatened Actions. There shall not be pending or
threatened any material action or proceeding seeking to enjoin or
restrain consummation of the transactions contemplated by this
Agreement or seeking material damages in connection with such
transactions.
(c) Revisions to Member Newco LLC Agreement. The JG Members and CBL Member
shall have agreed to revisions to the form of Member Newco LLC
Agreement as contemplated by the definition of Member Newco LLC
Agreement.
(d) Company LLC Agreement. The JG Members and CBL Member shall have agreed
to a form of limited liability company agreement for the Company (the
"Company LLC Agreement").
5.2 Conditions Precedent to Obligations of CBL Member Parent. The obligations of
CBL Member Parent to consummate the transactions contemplated by this Agreement
are subject to the satisfaction or waiver on or before the Closing Date of each
of the following:
(a) Accuracy of Representations and Warranties. The representations and
warranties of each of the JG Parties contained herein that are
qualified by materiality shall be true and correct on and as of the
Closing Date, and the representations and warranties that are not so
qualified shall be true and complete in all material respects on and as
of the Closing Date, in each case as if made on and as of such date,
and the JG Parties shall have executed and delivered to CBL Member
Parent a certificate, dated as of the Closing Date, to such effect.
(b) Covenants. The covenants and agreements of each of the JG Parties to be
performed on or prior to the Closing shall have been duly performed in
all material respects, and the JG Parties shall have executed and
delivered to CBL Member Parent a certificate, dated as of the Closing
Date, to such effect.
(c) No New Encumbrances. None of the Real Estate shall have become subject
to any liens, encumbrances, mortgages, security interests or other
adverse rights not in existence as of the date of this Agreement, other
than the Permitted Encumbrances.
5.3 Conditions Precedent to Obligations of the JG Parties. The obligations of
the JG Parties to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver on or before the Closing Date of each of
the following:
(a) Accuracy of Representations and Warranties. The representations and
warranties of CBL Member Parent contained herein that are qualified by
materiality shall be true and correct on and as of the Closing Date,
and the representations and warranties that are not so qualified shall
be true and complete in all material respects on and as of the Closing
Date, in each case as if made on and as of such date, and CBL Member
11
Parent shall have executed and delivered to the JG Parties a
certificate, dated as of the Closing Date, to such effect.
(b) Covenants. The covenants and agreements of CBL Member Parent to be
performed on or prior to the Closing shall have been duly performed in
all material respects, and CBL Member Parent shall have executed and
delivered to the JG Parties a certificate, dated as of the Closing
Date, to such effect.
(c) Initial JV Financing Closing. Unless the JG Members have elected to
proceed under Section 4.6(b)(iii), CBL Member Parent has (i) obtained
the Initial JV Financing and (ii) the Net Proceeds of the JV Financing
are not anticipated to be less than the 50% Distribution Amount.
ARTICLE 6
TERMINATION AND WAIVER
6.1 General. At any time prior to the Closing, this Agreement may be
terminated and the transactions contemplated herein may be voided only as
follows:
(a) by written agreement of each of the Parties;
(b) by the JG Members, on one hand, and by CBL Member Parent, on the other
hand, if a material breach of any provision of this Agreement (i) has
been committed by the other or by one of the other's Affiliates that is
a Party and such breach has not been cured and cannot reasonably be
expected to be cured within thirty (30) Days after all other conditions
to Closing set forth in Section 5.1 have been satisfied or (ii) has not
otherwise been waived;
(c) by any Party, by giving written notice of such termination to the other
Party, if the Closing shall not have occurred on or prior to the later
of (i) November 30, 2005 and (ii) the date to which the JG Members
extend the Contemplated Closing Date pursuant to Section 4.6(b)(ii)
above, if the JG Members exercise their rights under such Section
4.6(b)(ii), unless the failure of such occurrence shall be due to the
delay or failure of the Party seeking to terminate this Agreement under
this clause (c), or its Affiliates, to perform in all material respects
each of its or their obligations under this Agreement required to be
performed by it at or prior to the Closing;
(d) by either Party, if there shall be in effect any law or regulation that
prohibits the consummation of the Closing or if consummation of the
Closing would violate any non-appealable final order, decree,
injunction, or judgment of any Governmental Agency having competent
jurisdiction; and
(e) by the JG Members, if CBL Member Parent has not obtained the Initial JV
Financing by the Contemplated Closing Date.
12
6.2 Effect of Termination. In the event of the termination of this Agreement in
accordance with this Article 6, this Agreement shall thereafter become null and
void and of no further force or effect, and neither Party hereto shall have any
liability to the other Party hereto or its Affiliates, directors, officers, or
employees; except that this Section 6.2 and Sections 7.1, 7.2, 7.3, 7.4, 7.5,
7.6, 7.7, 7.9 and 7.10 shall survive such termination; and except that nothing
herein will relieve either Party from liability for any breach of this Agreement
prior to such termination. The rights of termination provided in Section 6.1 may
only be exercised prior to the Closing in accordance with their respective
terms.
ARTICLE 7
MISCELLANEOUS
7.1 Notices. Any notices or other communications required or permitted to be
given by this Agreement shall be given in writing and either (a) personally
hand-delivered, (b) mailed by prepaid certified or registered mail, with return
receipt requested, (c) sent by generally recognized overnight delivery service
to the party to whom such notice or communication is directed with delivery fee
prepaid, or (d) sent via fax transmission. If personally delivered, notices or
other communications shall be effective when received as evidenced by affidavit
of the Person making such delivery; if sent by overnight courier delivery
service, notices or other communications shall be deemed to have been received
by the addressee on the next Day following the date so sent that is not a
Saturday, Sunday or a day upon which national banks located in Chattanooga,
Tennessee or Cleveland, Ohio are permitted to be closed; if mailed, notices or
other communications shall be deemed to have been received by the addressee on
the date received, as evidenced by the return receipt; and if sent via fax
transmission, notices or other communications shall be deemed to have been
received upon actual receipt by the Party to which such notices or other
communications are addressed. The inability to make delivery because of changed
address of which no notice was given or by reason of rejection or refusal to
accept delivery of any notice shall be deemed to be receipt of the notice as of
the date of such inability to deliver or rejection or refusal to accept. Any
such notices shall be sent to the address of such Party as follows, or to such
other address or facsimile number as such Party may designate by written notice
in accordance with the provisions of this Section 7.1:
If to the JG Parties, to:
JG North Raleigh L.L.C.
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
JG Triangle Peripheral South LLC
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
13
REJ Realty LLC
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
JG Realty Investors Corp.
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
JG Manager LLC
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
with a copy (as to each of the JG Parties) to:
General Counsel
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
If to CBL Member Parent, to:
CBL & Associates Limited Partnership
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇ Center
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Shumacker ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
2030 ▇▇▇▇▇▇▇▇ Place Blvd.
Suite 210, CBL Center
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
14
7.2 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Ohio, including all
matters of construction, validity, and performance but excluding all other
choice of law and conflicts of law rules.
7.3 Entire Agreement; Amendment. Except as provided in Section 7.8 below, this
Agreement, together with all Exhibits hereto, is the Parties' entire agreement
with respect to the subject matter hereof and supersedes all prior or
contemporaneous oral or written communications, proposals, and representations
with respect to the subject matter hereof. No modification to this Agreement
will be binding unless in writing and signed by a duly authorized representative
of each Party.
7.4 Section Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.5 Severability. If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void, or unenforceable, that provision shall be of no force and effect,
but the illegality or non-enforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
7.6 Successors; No Third-Party Beneficiaries. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their respective
successors and permitted assigns, and shall not confer any rights or remedies
upon any other third party other than such successors and permitted assigns.
This Agreement and the respective Parties' rights and obligations hereunder may
not be assigned or transferred by any Party, directly or indirectly, or by
operation of law, without the prior written consent of the other Parties hereto.
7.7 Expenses. Each Party shall pay its own legal fees and other expenses in
connection with the negotiation and execution of this Agreement, except that
(a) the JG Members (in the aggregate) and CBL Member will each bear
one-half of the cost of any transfer and similar taxes, if any, payable
in connection with the transactions contemplated by this Agreement;
(b) if this Agreement is terminated under Section 6.1 above (other than
under Section 6.1(b)), REJ Realty and CBL Member Parent shall each pay
one-half of the expenses of and fees payable to UBS Real Estate
Investments Inc., the proposed lender of the Initial JV Financing, that
the Company, CBL Member Parent or its Affiliates are obligated to pay,
including without limitation fees and expenses of lender's counsel
(capped at $75,000 in the aggregate), any fixed or per diem rate lock
and/or hedge loss fees, and the good faith deposit in the amount of
$100,000 (collectively, the "Lender Fees and Expenses");
15
(c) if this Agreement is terminated by CBL Member Parent under Section
6.1(b) above by reason of a breach of this Agreement by one or more of
the JG Parties, REJ Realty shall pay or reimburse CBL Member Parent for
all of the Lender Fees and Expenses; and
(d) if this Agreement is terminated by the JG Members under Section 6.1(b)
above by reason of a breach of this Agreement by CBL Member Parent,
none of the JG Parties nor any of their respective Affiliates shall
have any obligation to pay or reimburse CBL Member Parent or its
Affiliates for all or any part of the Lender Fees and Expenses, all of
which shall be paid by CBL Member Parent or its Affiliates.
7.8 Confidentiality; Public Announcements. From the date hereof until the first
to occur of the Closing and the termination of this Agreement in accordance with
Article 6, the Parties will be bound by the provisions of Part VI of the Letter
Agreement to the same extent as if it were rewritten in its entirety herein.
7.9 Survival. The representations and warranties contained in Article 2 shall
survive the Closing until the expiration or earlier termination of the Member
Newco LLC Agreement. The representations and warranties contained in Article 3
shall survive for a period of one (1) year after the Closing. Subject to Section
6.2, the provisions of Section 4.2 and Article 7 shall survive the Closing until
the termination of the Member Newco LLC Agreement, and the provisions of
Sections 4.3 and 4.5 shall survive without limitation as to time.
7.10 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
[Signatures on following page]
16
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the day and year first above written.
REJ REALTY LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
JG NORTH RALEIGH L.L.C
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
JG TRIANGLE PERIPHERAL SOUTH LLC
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
JG MANAGER LLC
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
JG REALTY INVESTORS CORP.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
CBL & ASSOCIATES LIMITED PARTNERSHIP
By: CBL Holdings I, Inc., its sole general partner
By:/s/ ▇▇▇▇ ▇. ▇▇▇
▇▇▇▇ ▇. ▇▇▇
Vice Chairman and Chief Financial Officer
17
APPENDIX A
DEFINITIONS
"Affiliate" means, with respect to any Person, (i) any Person, which directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such Person and/or (ii) any Person, ten percent
(10%) or more of the equity or beneficial interests of which are owned by such
Person or owned by an Affiliate of such Person that is an Affiliate pursuant to
clause (i) of this paragraph. Notwithstanding the definition of Affiliate set
forth above, (A) EMJ Corporation, a Tennessee corporation, shall not be deemed
an Affiliate of CBL Member Parent for purposes of this Agreement, (B) REJ Realty
and its Affiliates shall not be deemed Affiliates of CBL Member Parent for
purposes of this Agreement and (C) CBL Member Parent and its Affiliates shall
not be deemed Affiliates of REJ Realty for purposes of this Agreement.
"Agreement" has the meaning set forth in the Preamble to this Agreement.
"CBL Member" has the meaning set forth in the Preamble to this Agreement.
"CBL Member Parent" has the meaning set forth in the Preamble to this Agreement.
"CBL Member Guaranteed Obligations" has the meaning set forth in Section 4.3 of
this Agreement.
"Closing" has the meaning set forth in Section 1.3 of this Agreement.
"Closing Date" has the meaning set forth in Section 1.3 of this Agreement.
"Company" has the meaning set forth in the Preamble to this Agreement.
"Company LLC Agreement" has the meaning set forth in Section 5.1(d) of this
Agreement.
"Contemplated Closing Date" has the meaning set forth in Section 4.6(b) of this
Agreement.
"Control" or "Controlled by" means the power, directly or indirectly, to direct
the actions, operation or management of another Person or business entity by
contract, the ownership of voting rights or otherwise.
"Entity" means any general partnership, limited partnership, limited liability
company, corporation, joint venture, trust, business trust, cooperative or
association or any foreign trust or foreign business organization.
"Environmental Reports" has the meaning set forth in Section 3.1(f) of this
Agreement.
"Excess Amount" has the meaning set forth in Section 4.6(c) of this Agreement.
"50% Distribution Amount" has the meaning set forth in Section 4.6(a) of this
Agreement.
"Governmental Agency" has the meaning set forth in Section 2.4 of this
Agreement.
A-1
18
"Hazardous Substances" has the meaning set forth in Section 3.1(f) of this
Agreement.
"Initial JV Financing" means the financing to be obtained by CBL Member Parent,
on terms and conditions satisfactory to CBL Member Parent and the JG Members, by
the Closing Date for purposes of refinancing the existing mortgage indebtedness
of JG North Raleigh and JG Triangle South and providing funds for the
distribution of the 50% Distribution Amount to the JG Members
"JG Manager" has the meaning set forth in the Preamble to this Agreement.
"JG Members" has the meaning set forth in the Preamble to this Agreement.
"JG Members Initial Contribution" means the sum equal to one-half of the
Pre-Closing Project Net Equity plus the Remaining Shortfall, if any.
"JG Parties" means the JG Members, JG Triangle South, and JG North Raleigh
"JGRI" has the meaning set forth in the Preamble to this Agreement.
"JG Triangle South" has the meaning set forth in the Preamble to this Agreement.
"Lender Fees and Expenses" has the meaning set forth in Section 7.7 of this
Agreement.
"Letter Agreement" means that certain letter agreement, dated September 14,
2005, and effective as of September 15, 2005, by and between The ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Group, Inc. and CBL & Associates Properties, Inc.
"Member Newco" has the meaning set forth in the Preamble to this Agreement.
"Member Newco LLC Agreement" means that certain Limited Liability Agreement of
Member Newco, to be entered into as of the Closing Date, by and among the JG
Members and CBL Member, and the other exhibits and schedules attached to and
incorporated therein, substantially in the form of Exhibit A attached hereto and
made a part hereof, with technical corrections, exhibits completed, blanks
appropriately filled and questions indicated by brackets resolved and with such
further revisions as shall be necessary or appropriate to conform said Exhibit A
to the Transaction Chart, e.g., to reflect that Member Newco will be the sole
Member of the Company and not the direct owner of the Project. References in
this Agreement to specific numbered sections of the Member Newco LLC Agreement
shall, from and after the Closing, be deemed, without the need for any amendment
to this Agreement, to refer to the sections in the executed version of the
Member Newco LLC Agreement that correspond to the sections referenced in this
Agreement, after giving effect to any changes in the numbering or wording of
such sections as a result of the revisions to the Member Newco LLC Agreement
contemplated by the immediately preceding sentence.
"Net Proceeds" means the entire gross proceeds of the Initial JV Financing,
minus the principal amount of and accrued and unpaid interest on the existing
indebtedness of JG North Raleigh and JG Triangle South that is refinanced by the
Initial JV Financing and closing costs
A-2
19
"Parties" means JG Triangle South, JG Manager, JGRI, REJ Realty, and CBL Member
Parent, and "Party" means any one of them.
"Permitted Encumbrances" has the meaning set forth in Section 4.8 of this
Agreement.
"Person" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such "Person",
where the context so permits.
"Pre-Closing Project Net Equity" has the meaning set forth in Section 1.2(a) of
this Agreement.
"Project" means the retail shopping center heretofore developed on the Real
Estate, including Triangle Town Center and Triangle Town Place, together with
any and all additional development/redevelopment or expansion of any phase or
portion of such shopping center and/or Real Estate from and after the Closing
Date.
"Project Employees" has the meaning set forth in Section 4.4 of this Agreement.
"Property Management Agreement" means that certain Property Management
Agreement, to be entered into as of the Closing Date, by and among CBL Manager
and the Company, in the form of Exhibit G to the form of the Member Newco LLC
Agreement.
"Real Estate" means the approximately 43.328 acres of land owned by JG North
Raleigh and the approximately 15.749 acres of land owned by JG Triangle South,
in both cases near the I-540 - US 1 interchange in Raleigh, North Carolina, and
any other real estate acquired by the Company from and after the Closing Date.
"REJ Realty" has the meaning set forth in the Preamble to this Agreement.
"Remaining Shortfall" has the meaning set forth in Section 4.6(c) of this
Agreement,
"Shortfall" has the meaning set forth in Section 4.6(b) of this Agreement.
"Shortfall Initial Contribution" has the meaning set forth in Section 4.6(c) of
this Agreement.
"Transaction Chart" has the meaning set forth in Section 1.4 of this Agreement.
"Triangle Town Center" has the meaning set forth in the Preamble to this
Agreement.
"Triangle Town Place" has the meaning set forth in the Preamble to this
Agreement.
A-3
20
EXHIBIT A
EXHIBIT A
The Member Newco LLC Agreement
21
LIMITED LIABILITY COMPANY AGREEMENT
OF
[TRIANGLE TOWN MEMBER LLC]
BY AND AMONG
[CBL TRIANGLE TOWN MEMBER], LLC
a [North Carolina] limited liability company
and
REJ REALTY LLC, a Delaware limited liability company,
JG REALTY INVESTORS CORP., an Ohio corporation, and
JG MANAGER LLC, an Ohio limited liability company
Effective Date: October __, 2005
22
TABLE OF CONTENTS OF
LIMITED LIABILITY COMPANY AGREEMENT OF
[TRIANGLE TOWN MEMBER LLC]
BY AND AMONG [CBL TRIANGLE TOWN MEMBER], LLC
AND REJ REALTY LLC, JG REALTY INVESTORS CORP. AND
JG MANAGER LLC
(EFFECTIVE DATE OCTOBER [ ], 2005
ARTICLE I DEFINITIONS......2
---------------------
1.01 Definitions...........................................................................................2
---- ------------
1.02 Other Definitional Provisions........................................................................15
---- ------------------------------
1.03 Statement as to Member's Approval/Voting Rights......................................................15
---- ------------------------------------------------
ARTICLE II FORMATION.......15
--------------------
2.01 Formation............................................................................................16
---- ----------
2.02 Name.................................................................................................16
---- -----
2.03 Principal Place of Business..........................................................................16
---- ----------------------------
2.04 Statutory Agent......................................................................................16
---- ----------------
2.05 Term.................................................................................................16
---- -----
ARTICLE III PURPOSE OF COMPANY; ADMISSION OF MEMBERS; 16
-----------------------------------------------------
3.01 General Business Purpose of Member Newco.............................................................16
---- -----------------------------------------
3.02 Admission of Members; Distribution of Initial JV Financing Proceeds .................................16
---- ---------------------------------------------------------------------
3.03 Capital Accounts.....................................................................................16
---- -----------------
3.04 Financing............................................................................................17
---- ----------
3.05 Outparcel Venture....................................................................................24
---- ------------------
ARTICLE IV NAMES AND ADDRESSES OF MEMBERS 25
-----------------------------------------
ARTICLE V GOVERNANCE.......25
--------------------
5.01 General Powers.......................................................................................25
---- ---------------
5.02 Standard of Conduct..................................................................................25
---- --------------------
5.03 Governance; Unanimous Approval Items.................................................................25
---- -------------------------------------
ARTICLE VI SPECIFIC DUTIES OF MEMBERS 29
-------------------------------------
6.01 Managing Member......................................................................................29
---- ----------------
6.02 Managing Member; Managing Member's Specific Duties...................................................29
---- ---------------------------------------------------
6.03 Construction Contract................................................................................34
---- ----------------------
6.04 Removal and Resignation..............................................................................35
---- ------------------------
6.05 Compensation.........................................................................................35
---- -------------
ARTICLE VII CONFLICT OF INTEREST TRANSACTIONS 35
---------------------------------------------
ARTICLE VIII INDEMNIFICATION 36
----------------------------
8.01 Indemnification......................................................................................36
---- ----------------
8.02 Expenses.............................................................................................36
---- ---------
8.03 Insurance............................................................................................37
---- ----------
ARTICLE IX LIMITATION OF LIABILITY OF MEMBERS; MEMBER LISTS 37
-----------------------------------------------------------
23
9.01 Limitation on Liability..............................................................................37
---- ------------------------
9.02 No Liability for Company Obligations.................................................................37
---- -------------------------------------
9.03 List of Members......................................................................................37
---- ----------------
ARTICLE X LIABILITY, PROPERTY AND CASUALTY INSURANCE 37
----------------------------------------------------
ARTICLE XI CAPITAL CONTRIBUTIONS TO MEMBER NEWCO 37
------------------------------------------------
11.01 Members' Required Member Funding.....................................................................37
----- ---------------------------------
11.02 Additional Non-Required Contributions................................................................40
----- --------------------------------------
11.03 No Third-Party Rights................................................................................41
----- ----------------------
11.04 Member Construction Loans not Member Funding.........................................................41
----- ---------------------------------------------
11.05 No Further Assessments on Membership Interests.......................................................41
----- -----------------------------------------------
ARTICLE XII DISTRIBUTIONS TO MEMBERS 41
------------------------------------
12.01 Distributions of Distributable Cash..................................................................41
----- ------------------------------------
12.02 Capital Events Distributions.........................................................................42
----- -----------------------------
12.03 Distribution of Incoming Equalizing Contribution to CBL Member.......................................42
----- --------------------------------------------------------------
12.04 Limitation Upon Distributions........................................................................43
----- ------------------------------
ARTICLE XIII ALLOCATIONS OF NET PROFITS AND NET LOSSES 43
------------------------------------------------------
13.01 Net Profits..........................................................................................43
----- ------------
13.02 Net Losses...........................................................................................44
----- -----------
13.03 2005 Fiscal Year.....................................................................................44
----- -----------------
ARTICLE XIV BOOKS AND RECORDS.......44
-----------------------------
14.01 Accounting Period....................................................................................44
----- ------------------
14.02 Records and Reports..................................................................................44
----- --------------------
14.03 Inspection of Records by Members.....................................................................45
----- ---------------------------------
14.04 Tax Returns..........................................................................................45
----- ------------
14.05 Financial Statements.................................................................................45
----- ---------------------
ARTICLE XV TERMINATION OF MEMBERSHIP INTEREST 46
---------------------------------------------
15.01 Termination of Interest..............................................................................46
----- ------------------------
15.02 Withdrawal...........................................................................................46
----- -----------
15.03 Effect of Termination of Membership..................................................................46
----- ------------------------------------
ARTICLE XVI TRANSFERS OF MEMBERSHIP INTERESTS AND RESTRICTIONS ON TRANSFERS; IMPASSE PROVISIONS; PLEDGE OF
-----------------------------------------------------------------------------------------------------------
MEMBERSHIP INTERESTS 46
--------------------
16.01 Definition of "Assignment"...........................................................................46
----- ---------------------------
16.02 Restriction on Assignment............................................................................47
----- --------------------------
16.03 Exempt Assignments...................................................................................47
----- -------------------
16.04 Mandatory Buy/Sell on Impasse........................................................................49
----- ------------------------------
16.05 Right of First Refusal; Buy/Sell.....................................................................52
----- ---------------------------------
16.06 Conditions of Assignments............................................................................55
----- --------------------------
16.07 Lender Approval......................................................................................56
----- ----------------
16.08 Pledge of Membership Interests.......................................................................56
----- -------------------------------
16.09 Mutually Exclusive Rights............................................................................57
----- --------------------------
ARTICLE XVII DISSOLUTION, TERMINATION AND WINDING-UP 57
----------------------------------------------------
17.01 Events Causing Dissolution...........................................................................57
----- ---------------------------
17.02 Continuation.........................................................................................57
----- -------------
17.03 Effect of Dissolution................................................................................57
----- ----------------------
17.04 Winding-Up, Liquidation and Distribution of Assets...................................................57
----- ---------------------------------------------------
17.05 Articles of Termination..............................................................................58
----- ------------------------
17.06 Return of Contribution Nonrecourse to Other Members..................................................59
----- ----------------------------------------------------
ARTICLE XVIII MISCELLANEOUS PROVISIONS 59
--------------------------------------
18.01 Applicable Law.......................................................................................59
----- ---------------
18.02 No Action or Partition...............................................................................59
----- -----------------------
18.03 Execution of Additional Instruments..................................................................59
----- ------------------------------------
24
18.04 Waivers..............................................................................................59
----- --------
18.05 Rights and Remedies Cumulative.......................................................................59
----- -------------------------------
18.06 Heirs, Successors and Assigns........................................................................59
----- ------------------------------
18.07 Creditors............................................................................................59
----- ----------
18.08 Counterparts.........................................................................................59
----- -------------
18.09 Federal Income Tax Elections; Tax Matters Member.....................................................60
----- -------------------------------------------------
18.10 Notices..............................................................................................60
----- --------
18.11 Amendments...........................................................................................61
----- -----------
18.12 Enforceability.......................................................................................61
----- ---------------
18.13 Drafting.............................................................................................61
----- ---------
18.14 Further Assurances...................................................................................61
----- -------------------
18.15 Time.................................................................................................61
----- -----
18.16 Integration..........................................................................................61
----- ------------
18.17 Termination of Letter Agreement......................................................................61
----- --------------------------------
18.18 Public Announcements; Precedence in Publicity........................................................61
----- ----------------------------------------------
18.19 Estoppel Certificates................................................................................62
----- ----------------------
18.20 Legal Counsel........................................................................................62
----- --------------
ARTICLE XIX REPRESENTATIONS AND WARRANTIES 63
------------------------------------------
19.01 Representations of the JG Members....................................................................63
----- ----------------------------------
19.02 Representations of CBL Member........................................................................64
----- ------------------------------
19.03 Survival of Representations and Warranties...........................................................65
----- -------------------------------------------
ARTICLE XX DEFAULT PROVISIONS.......65
-----------------------------
20.01 Events of Default....................................................................................65
----- ------------------
20.02 Remedies Upon Default................................................................................67
----- ----------------------
20.03 Purchase Upon Default................................................................................68
----- ----------------------
20.04 Default Approval Rights; Loss of Approval Rights on Defaults.........................................70
----- -------------------------------------------------------------
20.05 Attorney's Fees......................................................................................70
----- ----------------
20.06 Closing..............................................................................................71
----- --------
ARTICLE XXI APPOINTMENT OF MANAGING MEMBER AS ATTORNEY-IN-FACT 73
--------------------------------------------------------------
21.01 Appointment..........................................................................................73
----- ------------
21.02 Survival.............................................................................................73
----- ---------
25
LIST OF EXHIBITS TO
LIMITED LIABILITY COMPANY AGREEMENT OF
[TRIANGLE TOWN MEMBER LLC]
BY AND AMONG [CBL TRIANGLE TOWN MEMBER], LLC
AND REJ REALTY LLC, JG REALTY INVESTORS CORP. AND
JG MANAGER LLC,
(EFFECTIVE DATE OCTOBER [ ], 2005
Exhibit A ........Description of the Real Estate
Exhibit B.........Membership Interests
Exhibit C.........Fees to Members
Exhibit D.........Appraisal Procedure
Exhibit E.........Site Plan
Exhibit F.........Property Management Agreement
Exhibit G.........2006 Operating Budget
Exhibit H.........Tax Matters
26
LIMITED LIABILITY COMPANY AGREEMENT
OF
[TRIANGLE TOWN MEMBER LLC]
THIS LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement") of [TRIANGLE
TOWN MEMBER LLC], an [Ohio] limited liability company ("Member Newco"), is made
and entered into as of the [ ]th day of October, 2005, by and among [CBL
TRIANGLE TOWN MEMBER], LLC, a [North Carolina] limited liability company (
herein referred to as "CBL Member"), and REJ REALTY LLC, a Delaware limited
liability company ("REJ Realty"), JG REALTY INVESTORS CORP., an Ohio corporation
("JGRI"), and JG MANAGER LLC, an Ohio limited liability company (("JG Manager";
with REJ Realty and JGRI, each, a "JG Member" and, collectively, the "JG
Members")).
W I T N E S S E T H:
WHEREAS, Member Newco was formed by filing Articles of Organization with
the Secretary of State of Ohio on October [ ], 2005;
WHEREAS, Member Newco owns all of the member interests in Triangle Town
Center LLC, a North Carolina limited liability company (the "Company"); and
WHEREAS, the Company owns certain real property located in Raleigh, North
Carolina, consisting of approximately 59.077 acres of land (said real property
being more particularly described on Exhibit A attached hereto and is herein
referred to, together with any other real property from time to time hereafter
acquired by the Company, as the "Real Estate") which Real Estate is the site of
retail shopping centers known as Triangle Town Center and Triangle Town Place
(together with the result of any Future Development Activities, the "Project");
WHEREAS, upon execution of this Agreement and in consideration of its
covenants and agreements set forth herein, CBL Member has been admitted to
Member Newco as a member;
WHEREAS, upon CBL Member's admission to Member Newco and after giving
effect to the transactions occurring as of the date hereof, CBL Member and the
JG Members own the respective Capital Interests and Profits Interests set forth
on Exhibit B attached hereto;
WHEREAS, the Members desire to enter into this Agreement to set forth the
rules, regulations, and provisions regarding the management of the business of
Member Newco, the regulation of the affairs of Member Newco, the governance of
Member Newco, the conduct of Member Newco's business and the rights and
privileges of the Members.
27
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
The operating agreement or limited liability company agreement governing
Member Newco and its Members shall be as set forth herein.
o
DEFINITIONS
7.11 Definitions. For purposes of this Agreement, unless the context
otherwise requires, the following terms shall have the following meanings:
"Accountants" shall mean Deloitte & Touche LLP or such other national
accounting firm as selected by the Members.
"Act" shall mean the Ohio Limited Liability Company Law, Chapter 1705 of
the Ohio Revised Code, as the same exists or may hereafter be amended.
"Active Right" shall have the meaning assigned to that term in Section
16.09.
"Affiliate" shall mean, with respect to any Person (i) any Person, which
directly or indirectly, through one or more intermediaries, Controls (as
hereinafter defined), is Controlled by, or is under common Control with, such
Person and/or (ii) any Person, ten percent (10%) or more of the equity or
beneficial interests of which are owned by a Member or owned by an Affiliate of
a Member that is an Affiliate pursuant to clause (i) of this paragraph.
Notwithstanding the definition of Affiliate set forth above, (A) EMJ
Corporation, a Tennessee corporation ("EMJ"), shall not be deemed an Affiliate
of CBL Member for purposes of this Agreement, (B) the JG Members and their
respective Affiliates shall not be deemed Affiliates of CBL Member for purposes
of this Agreement and (C) CBL Member and its Affiliates shall not be deemed
Affiliates of the JG Members for purposes of this Agreement.
"Affiliate Loan Guarantee(s)" shall have the meaning assigned to that term
in Section 3.04(c).
"Agreement" shall mean this Agreement as originally executed and as may be
modified or amended from time to time, and shall include all Exhibits attached
hereto and incorporated herein, each as originally executed and as may be
modified or amended from time to time.
"Anchor" shall mean any department store or other tenant or occupant of the
Project whose leased or owned floor space is greater than 70,000 square feet.
"Appraisal Procedure" shall mean the procedure set forth on Exhibit D
attached hereto for determining the fair market value of the Project in the
event such is called for pursuant to this Agreement.
2
28
"Appraised Value" shall have the meaning assigned to that term in Exhibit D
attached hereto.
"Articles of Organization" shall mean the Articles of Organization of
Member Newco as filed with the Secretary of State of Ohio, as the same exists or
may hereafter be amended as set forth in this Agreement.
"Buy/Sell Initiator" shall have the meaning assigned to that term in
Section 16.05(b).
"Buy/Sell Initiator Offer Price" shall have the meaning assigned to that
term in Section 16.05(b).
"Buy/Sell Offer Notice" shall have the meaning assigned to that term in
Section 16.05(b).
"Buy/Sell Project Value" shall have the meaning assigned to that term in
Section 16.05(b).
"Buy/Sell Respondent" shall have the meaning assigned to that term in
Section 16.05(b).
"Buy/Sell Respondent Purchase Price" shall have the meaning assigned to
that term in Section 16.05(b).
"Capital Account" shall have the meaning assigned to that term in Section
3.03(a).
"Capital Events" shall mean the following events:
(a) Any financing or refinancing of Company indebtedness that
produces a surplus of funds available for distribution to the
Members after deduction for (A) all transaction costs, (B)
repayment of any refinanced indebtedness (but not Member Funding
made by a Member or its Affiliate in the form of a loan to Member
Newco), and (C) the establishment of any Reserves; and
(b) Any sale of all or any of the assets of Member Newco that
produces a surplus of funds available for distribution to the
Members after deduction for (A) all transaction costs, (B)
repayment of any underlying indebtedness (but not Member Funding
made by a Member or its Affiliate in the form of a loan to Member
Newco), and (C) the establishment of any Reserves.
"Capital Events Distribution" shall mean any distribution of cash arising
from the occurrence of a Capital Event in the order as set forth in Section
12.01 below.
"Capital Interest" shall mean that portion of the Membership Interest of a
Member that represents such Member's interest in the capital of Member Newco.
3
29
"CBL Member" shall have the meaning assigned to that term in the Preamble
above.
"CBL Member Construction Loan Guarantee Share" shall have the meaning
assigned to that term in Section 3.04(a).
"CBL Member Construction Loan Response Notice" shall have the meaning
assigned to that term in Section 3.04(a).
"CBL Member Mandatory Contributions" shall have the meaning assigned to
that term in Section 11.01(b).
"CBL Member Permanent Financing/Refinancing Guarantee Share" shall have the
meaning assigned to that term in Section 3.04(b).
"CBL Member Parent" shall mean CBL & Associates Limited Partnership, a
Delaware limited partnership.
"Code" shall mean the Internal Revenue Code of 1986, as the same exists or
may hereafter be amended.
"Company" shall have the meaning assigned to that term in the Preamble
above.
"Construction Contract(s)" shall mean the contract(s) for the construction
of the phases of the Project as further described in Section 6.03 below.
"Construction Funds" shall have the meaning assigned to that term in
Section 11.01(b).
"Construction Loan(s)" shall mean the loan(s) obtained by Member Newco on
behalf of the Company from a lender of the funds necessary to (i) proceed with
construction of the Project or any Future Development Activity and (ii) to fund
any interim or bridge loan required in order to secure public financing for on
or off-site improvements, including but not limited to tax incremental financing
or transportation development districts or similar governmental/public financing
programs in connection with the development of the Project. A Member may act as
the lender of a Construction Loan as provided in Section 3.04(a), and subject to
Section 5.03(g), below. Member Funding made by a Member or its Affiliate in the
form of a loan to Member Newco shall not be considered to be Construction
Loan(s) for purposes of this definition.
"Construction Loan Unavailability Notice" shall have the meaning assigned
to that term in Section 3.04(a).
"Construction Period(s)" shall mean, as to any Future Development Activity,
the period from the date on which construction of the improvements or
developments constituting such Future Development Activity shall commence
4
30
(including pre-construction activity with respect thereto) to the opening for
business to the general public of improvements or development constituting such
Future Development Activity.
"Control" or "Controlled by" shall mean the power, directly or indirectly,
to direct the actions, operation or management of another Person by contract,
the ownership of voting rights or otherwise, except that (i) CBL Member shall
not be deemed to be Controlled by CBL Member Parent, for the purposes of Section
16.03(c), unless CBL Member Parent has the power, directly or indirectly, to
vote or exercise consent or approval rights with respect to more than fifty
percent (50%) of the equity interests of CBL Member; (ii) the JG Members shall
not be deemed to be Controlled by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, for the purposes of Section
16.03(c), unless ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, any JG Member, and ▇▇▇▇▇▇ Realty Investors
Limited Partnership, or any of them, in the aggregate, has the power, directly
or indirectly, to vote or exercise consent or approval rights with respect to
more than fifty percent (50%) of the equity interests of the JG Members; and
(iii) an entity shall not be deemed to be Controlled by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the
JG Members, or ▇▇▇▇▇▇ Realty Investors Limited Partnership, for the purposes of
Section 16.03(a)(iii)(A) unless ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, any JG Member, and ▇▇▇▇▇▇
Realty Investors Limited Partnership, or any of them, in the aggregate, directly
or indirectly control or own a majority of the capital, income and loss and
voting interests or is the sole general partner, sole managing member or sole
manager of such entity.
"Day" or "Days" (whether or not set forth in initial capital letters) shall
mean a calendar day or days unless specifically stated otherwise.
"Default" shall have the meaning assigned to that term in Section 20.01.
"Default Approval Rights" shall have the meaning assigned to that term in
Section 20.04.
"Default Formula Price" shall have the meaning assigned to that term in
Section 20.03(b).
"Default Purchase Closing Date" shall have the meaning assigned to that
term in Section 20.06(c).
"Default Purchase Price" shall have the meaning assigned to that term in
Section 20.03(b).
"Defaulting Member" shall have the meaning assigned to that term in Section
20.01.
"Development Fee" shall have the meaning assigned to that term in Exhibit
C.
"Development Schedule(s)" shall mean the schedule for development and
construction of the Project or any Future Development Activity. The Development
Schedule may be revised by the Members as set forth in this Agreement.
"Distributable Cash" shall mean, as to any period for which Distributable
Cash is to be calculated, all cash received by Member Newco during such period
5
31
from Company operations but not from Capital Events, plus any cash that becomes
available as the result of the reversal of previously established Reserves, less
the sum of the following, to the extent paid or set aside by Member Newco during
such period: (i) all principal and interest payments on indebtedness of Member
Newco and all other sums paid to lenders (but excluding payments of principal of
and Interest/Return on Member Funding made by a Member or its Affiliate in the
form of a loan to Member Newco); (ii) all cash expenditures incurred in the
operation of Member Newco's business and/or maintaining Member Newco's status
and qualification as a limited liability company including the fees listed on
Exhibit C due and payable during such period; and (iii) Reserves (to the extent
not expended or reversed during such period).
"EMJ" shall mean EMJ Corporation, a Tennessee corporation.
"Entity" shall mean any general partnership, limited partnership, limited
liability company, corporation, joint venture, trust, business trust,
cooperative or association or any foreign trust or foreign business
organization.
"Events of Dissolution" shall have the meaning assigned to that term in
Section 17.01.
"Exercise Notice" shall have the meaning assigned to that term in Section
20.03(b).
"Expedited Impasse Event" shall have the meaning assigned to that term in
Section 16.04(a).
"Fiscal Year" shall mean Member Newco's Fiscal Year, which shall be the
calendar year.
"Future Development Activity" or "Future Development Activities" shall mean
any and all additional development/redevelopment or expansion of any portion of
the Project or the Real Estate from and after the date of this Agreement
"GAAP" shall mean generally accepted accounting principles consistently
applied. GAAP is a combination of authoritative accounting standards established
by policy boards in the accounting profession or overseeing the accounting
profession. As to any matter involving Member Newco's books and records,
financial statements and/or accounting procedures, the determination of whether
such complies with GAAP shall be made by the Accountants.
"Governmental Authority" shall mean any federal, state, local, provincial
or other governmental department, agency, court or other authority or
instrumentality, whether of the United States, or of any of its states,
possessions, or territories, or of any foreign nation, or of any subdivision of
any of the foregoing
"HVAC" shall mean heating, ventilation and air conditioning.
"Impasse" shall have the meaning assigned to that term in Section 16.04(a).
6
32
"Impasse Initiator" shall have the meaning assigned to that term in Section
16.04(b).
"Impasse Initiator Offer Price" shall have the meaning assigned to that
term in Section 16.04(b).
"Impasse Notice Sender" shall have the meaning assigned to that term in
Section 16.04(a).
"Impasse Notice Recipient" shall have the meaning assigned to that term in
Section 16.04(a).
"Impasse Offer Notice" shall have the meaning assigned to that term in
Section 16.04(b).
"Impasse Project Value" shall have the meaning assigned to that term in
Section 16.04(b).
"Impasse Respondent" shall have the meaning assigned to that term in
Section 16.04(b).
"Impasse Respondent Purchase Price" shall have the meaning assigned to that
term in Section 16.04(b).
"Incoming Equalizing Contribution" shall have the meaning assigned to that
term in Section 16.06(f).
"Indemnitee" shall have the meaning assigned to that term in Section 8.01.
"Initial Contribution" shall mean the initial contribution to the capital
of Member Newco made by a Member pursuant to this Agreement as set forth in
Section 11.01(a).
"Initial Impasse Notice" shall have the meaning assigned to that term in
Section 16.04(a).
"Initial JV Financing" shall mean the refinancing of the existing
indebtedness of Member Newco pursuant to that certain [Credit Agreement] by and
between Member Newco and [Lender], dated as of the date of this Agreement.
"Initial Operating Agreement" shall have the meaning assigned to that term
in the Whereas clauses above.
"Interest/Return" shall have the meaning assigned to that term in Section
3.03(d).
"JG Manager" shall have the meaning assigned to that term in the Preamble
to this Agreement.
7
33
"JG Members Construction Loan Guarantee Share" shall have the meaning
assigned to that term in Section 3.04(a).
"JG Members Construction Loan Response Notice" shall have the meaning
assigned to that term in Section 3.04(a).
"JG Members Exit Event" shall have the meaning assigned to that term in
Section 16.06(f).
"JG Member" and "JG Members" shall have the meaning assigned to those terms
in the Preamble above. References to the JG Members shall be deemed to refer to
each of the JG Members, individually, and all of the JG Members, collectively.
"JG Members Permanent Financing/Refinancing Guarantee Share" shall have the
meaning assigned to that term in Section 3.04(b).
"JG Members Substituted Default Contribution" shall have the meaning
assigned to that term in Section 11.01(b).
"JG Members Substitute Member" shall have the meaning assigned to that term
in Section 16.06(f).
"JGRI" shall have the meaning assigned to that term in the Preamble to this
Agreement.
"Key Construction Loan Terms" shall mean the following terms of any
proposed Construction Loan for the Company, as embodied in a written term sheet,
commitment letter or similar document provided by a potential financing source,
and such following terms shall be subject to unanimous approval of the Members
as set forth in Section 5.03 below:
(i) The amount of the Construction Loan, unless the amount of the proposed
Construction Loan is as set forth in the approved Pro Forma, and the equity
requirements of the Construction Loan, unless the amount of equity is as set
forth in the approved Pro Forma;
(ii) The rate(s) of interest and whether such rate(s) of interest is/are
fixed or variable;
(iii) The cross defaulting of the Construction Loan with any other
financing of CBL Member, CBL Member Parent or any Affiliates of CBL Member or
CBL Member Parent;
(iv) Any provision calling for the personal guarantee of or indemnification
or contribution by any of the JG Members or their respective Affiliates;
(v) Representations warranties or undertakings that may create personal
liability of the Members beyond their interest in Member Newco, other than
representations or warranties that are made by the Managing Member and/or its
Affiliates;
8
34
(vi) The term, if less than one (1) year beyond the projected end of the
Construction Period for the Future Development Activity to which the
Construction Loan relates; and
(vii) Any document evidencing or securing the Construction Loan that does
not permit the transfer of Membership Interests that would otherwise be
permitted under Article XVI of this Agreement; except that any provision in any
such document that provides that prior notice must be given to the lender of the
Construction Loan of a transfer of Membership Interests shall not be deemed to
be a Key Construction Loan Term if such lender has no rights to prohibit or
restrict such transfers otherwise permitted under Article XVI of this Agreement.
Once the Members have unanimously approved the Key Construction Loan Terms,
any change or modification to such terms as approved by the Members (other than
non-substantive wording changes or typographical errors) shall require the
unanimous re-approval of the Members pursuant to Section 5.03 below.
"Key Permanent Loan Terms" shall mean the following terms of any proposed
Permanent Financing/Refinancing for the Company, as embodied in a written term
sheet, commitment letter or similar document provided by a potential financing
source, and such following terms shall be subject to unanimous approval as set
forth in Section 5.03 below:
(i) The amount of the Permanent Loan, unless the amount of the proposed
Permanent Financing/Refinancing is as set forth in the approved Pro Forma;
(ii) The rate(s) of interest and whether such rate(s) of interest is/are
fixed or variable;
(iii) The cross defaulting of the Permanent Financing/Refinancing with any
other financing of CBL Member, CBL Member Parent or any Affiliates of CBL Member
or CBL Member Parent;
(iv) Any provision calling for the personal guarantee of or indemnification
or contribution by any Member or its Affiliates other than the Managing Member
and/or its Affiliates;
(v) Representations, warranties or undertakings that may create personal
liability of the Members beyond their interest in Member Newco, other than
representations or warranties that are made by the Managing Member and/or its
Affiliates and other than personal liability for standard recourse carve out
provisions customary in the industry relating to (i) fraud, (ii) willful
misrepresentation; (iii) waste, (iv) retention or diversion of rent or other
revenue after an event of default; (v) retention or diversion of tenant security
deposits; (vi) misapplication of insurance proceeds; and (vii) misapplication of
condemnation awards;
(vi) The term, if less than a period of five (5) years; and
(vii) Any document evidencing or securing the Permanent
Financing/Refinancing that does not permit the transfer of Membership Interests
that would otherwise be permitted under Article XVI of this Agreement; except
that any provision in any such document that provides that prior notice must be
9
35
given to the lender of the Permanent Financing/Refinancing of a transfer of
Membership Interests shall not be deemed to be a Key Permanent Loan Term if such
lender has no rights to prohibit or restrict such transfers otherwise permitted
under Article XVI of this Agreement.
Once the Members have unanimously approved the Key Permanent Loan Terms, any
change or modification to such terms as approved by the Members (other than
non-substantive wording changes or typographical errors) shall require the
unanimous re-approval of the Members pursuant to Section 5.03 below.
"Letter Agreement" shall mean that certain letter agreement dated September
14, 2005 and effective as of September 15, 2005 entered into by and between (i)
CBL Member or its Affiliate and (ii) the JG Members or their Affiliate with
respect to the entering into of this Agreement.
"Losses" shall have the meaning assigned to that term in Section 8.01.
"Majority Vote" shall mean the vote or written consent of Members holding a
majority (i.e., in excess of fifty percent (50%)) of the Voting Interests held
by all Members.
"Management Fee" shall have the meaning assigned to that term on Exhibit C.
"Managing Member" shall mean CBL Member, unless and until replaced pursuant
to the terms of this Agreement and, upon such replacement, shall mean the Member
who has assumed such position.
"Mandatory Contribution(s)" shall have the meaning assigned to that term in
Section 11.01(b).
"Material Development Deviation" shall have the meaning assigned to that
term in Section 6.02(c).
"Material Operating Deviation" shall have the meaning assigned to that term
in Section 6.02(b).
"Maximum Required Funding" shall have the meaning assigned to that term in
Section 11.01(b).
"Member" shall mean any Person reflected in the required records of Member
Newco as the owner of a Membership Interest.
"Member Construction Loan" shall have the meaning assigned to that term in
Section 3.04(a).
"Member Funding" shall mean any funding provided by a Member to Member
Newco in cash or property (including Initial Contributions, Mandatory
Contributions and Non-Required Contributions), whether made in the form of a
contribution to capital or a loan, but excluding any Member Construction Loan.
10
36
"Member Lender" shall have the meaning set forth in Section 3.04(c).
"Member Newco" shall have the meaning assigned to that term in the Preamble
above.
"Membership Interest" shall mean a Member's entire interest in Member
Newco, consisting of such Member's rights to any distributions of Distributable
Cash or property of Member Newco, a Member's Voting Interests, a Member's rights
to otherwise participate in the management of the affairs of Member Newco and
any rights of a Member to assign all or any portion of such Member's interest in
Member Newco. The term Membership Interest shall include a Member's Capital
Interest and such Member's Profits Interest.
"Merger" shall have the meaning assigned to that term in Section 17.01.
"Net Proceeds" shall mean, as to any financing or refinancing with respect
to Member Newco, the entire gross proceeds of such financing/refinancing minus
the principal amount of and accrued and unpaid interest on the existing
indebtedness of Member Newco that is refinanced by such financing/refinancing
and closing costs.
"Net Profits" and "Net Losses" shall mean, with respect to any Fiscal Year,
Member Newco's taxable income or loss determined in accordance with Section
703(a) of the Code for such Fiscal Year (for this purpose, all items of income,
gain, loss, deduction or credit required to be stated separately pursuant to
Section 703(a)(1) of the Code will be included in taxable income or loss);
provided, such Net Profits and Net Losses will be computed as if items of
tax-exempt income and nondeductible, non-capital expenditures (under Sections
705(a)(1)(B) and 705(a)(2)(B) of the Code) were included in the computation of
taxable income or loss. If any Member contributes property to Member Newco with
an initial book value to Member Newco different from its adjusted tax basis for
federal income tax purposes to Member Newco, or if Company property is revalued
pursuant to Section 1.704-1(b)(2)(iv)(f) of the Regulations or as otherwise
required by the Regulations, Net Profits and Net Losses will be computed as if
the initial adjusted tax basis for federal income tax purposes to Member Newco
of such contributed or revalued property equaled its initial book value to
Member Newco as of the date of contribution or revaluation. Credits or debits to
Capital Accounts due to a revaluation of Company assets in accordance with
Section 1.704-1(b)(2)(iv)(f) of the Regulations, or due to a distribution of
non-cash assets, will be taken into account as gain or loss from the disposition
of such assets for purposes of Article XIII hereof. Interest/Return on Member
Funding made by a Member or its Affiliate in the form of a loan to Member Newco
will not be deductible for purposes of computing Net Profits and Net Losses.
"Non-Affiliated Members" shall have the meaning assigned to that term in
Section 20.03(a).
"Non-Defaulting Member(s)" shall have the meaning assigned to that term in
Section 20.01.
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"Non-Required Contribution(s)" shall mean any contribution to the capital
of Member Newco or loan to Member Newco by a Member that is not a Mandatory
Contribution, as further defined in and pursuant to Section 11.02 below.
"Non-Transferring Member" shall have the meaning assigned to that term in
Section 16.05(a).
"Operating Budget" shall have the meaning assigned to that term in Section
6.02(b).
"Operating Deficits" shall mean the amount by which the sum of:
(i) the expenditures and costs incurred by the Company in the operation of
the Project from and after the date of this Agreement;
(ii) as to any Future Development Activity for which the applicable
Construction Period ends after the date of this Agreement, the expenditures and
costs incurred by the Company from and after the end of the Construction Period
for such Future Development Activity; and
(iii) deferred maintenance obligations (other than deferred maintenance
obligations of a capital nature) in the year in which the cash expense
corresponding to such deferred maintenance obligations is paid (each of (i),
(ii) and (iii) shall include, without limitation, current debt service (other
than principal of and accrued and unpaid Interest/Return on Member Funding made
by a Member or its Affiliate in the form of a loan to Member Newco))
exceeds the cash receipts generated from the ordinary day-to-day operations of
the business of the Company from all sources available to the Company without
deduction of depreciation, cost recovery, and other non-cash charges.
"Outparcel" shall mean any parcel identified as an outlot or outparcel on
any Site Plan.
"Outparcel Venture" shall have the meaning set forth in Section 3.05.
"Outparcel Venture Agreement" shall have the meaning set forth in Section
3.05.
"Payment Amount" shall have the meaning assigned to that term in Section
20.06(i).
"Permanent Financing/Refinancing" shall mean any loan or financing obtained
by Member Newco on behalf of the Company to refinance/replace any Construction
Loan, or to refinance, replace or substitute for the Initial JV Financing or any
other subsequent financings of the Company, that provides the permanent
financing for the operation of the Project and the Company's business. Member
Funding made by a Member or its Affiliate in the form of a loan to Member Newco
shall not be considered to be Permanent Financing/Refinancing for purposes of
this definition. Neither CBL Member nor any of its Affiliates shall act as the
lender of the Permanent Financing/Refinancing.
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"Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such "Person"
where the context so permits.
"Proceeding" shall have the meaning assigned to that term in Section 8.01.
"Profits Interest" shall mean that portion of the Membership Interest of a
Member that represents such Member's interest in the Net Profits and Net Losses
of Member Newco for each Fiscal Year, as allocated under Article XIII below and
as set forth on Exhibit B.
"Pro Forma" shall mean a pro forma budget(s) for the development and
construction of the Project or any Future Development Activity, as unanimously
approved by the Members pursuant to Section 5.03 below in accordance with the
procedures set forth in Article VI. There shall be a Pro Forma for each Future
Development Activity.
"Project" shall have the meaning assigned to that term in the Preamble to
this Agreement.
"Property Management Agreement" shall mean the Property Management
Agreement, dated as of the date hereof, to be entered into between the Company
and the Property Manager, substantially in the form of Exhibit F attached
hereto.
"Property Manager" shall mean CBL Member or its Affiliate in its capacity
as "Manager" under the Property Management Agreement, and any successor or
replacement "Manager" as provided therein, and any successor or replacement
property manager under any subsequent agreement superseding or replacing the
Property Management Agreement..
"Purchasing Member" shall have the meaning assigned to that term in Section
20.06(a).
"Real Estate" shall mean the real property described in the Whereas clauses
above.
"REJ Realty" shall have the meaning assigned to that term in the Preamble
to this Agreement.
"Representative" shall have the meaning assigned to that term in Section
6.02(f) below.
"Reserves" shall mean, with respect to any fiscal period or any Capital
Event, funds set aside and held in reserve by the Company at the direction of
Member Newco (i) in an Operating Budget or Pro Forma as amounts allocated for
(A) normal and customary reserves for working capital; (B) capital expenditures;
(C) to pay taxes, insurance and/or debt service as reflected in an Operating
Budget or Pro Forma (other than debt service on Member Funding made by a Member
or its Affiliate in the form of a loan to Member Newco); (D) to pay any other
costs or expenses incident to the ownership or operation of the Company's
business, including, but not limited to, reserves established for contingent
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liabilities arising out of claims or lawsuits; and/or (ii) from proceeds from a
Capital Event, with the unanimous approval of the Members pursuant to Section
5.03 below, for any purpose determined by the Managing Member. Reserves shall
also include amounts required to be held in reserve by the lender on any
financing or refinancing of any Company indebtedness.
"RoFR Notice" shall have the meaning assigned to that term in Section
16.05(a).
"RoFR Period" shall have the meaning assigned to that term in Section
16.05(a).
"Selling Member" shall have the meaning assigned to that term in Section
20.06(a).
"Site Plan" shall mean the site plan for the Project, including any
revisions or modifications to the site plan, subject to any unanimous approval
rights set forth in Section 5.03 below. The existing Site Plan for the Project
is set forth on Exhibit E attached hereto.
"SWGW" shall have the meaning assigned to that term in Section 18.20.
"Tax Distribution" shall have the meaning assigned to that term in Section
12.01.
"TH" shall have the meaning assigned to that term in Section 18.20.
"Third-Party Purchaser" shall have the meaning assigned to that term in
Section 16.05.
"TMM" shall have the meaning assigned to that term in Section 18.09.
"Transferring Member" shall have the meaning assigned to that term in
Section 16.05.
"Treasury Regulations" or "Regulations" shall mean the federal income tax
final regulations or temporary regulations, promulgated under the Code, as such
regulations exist or may hereafter be amended from time to time (including
corresponding provisions of succeeding regulations).
"Triangle Town Center" shall mean the two-level regional enclosed mall
shopping center known as Triangle Town Center and the Commons, located on
approximately 43.328 acres of land near the I-540 - US 1 interchange in Raleigh,
North Carolina, together with the improvements and/or development resulting from
any Future Development Activity with respect thereto.
"Triangle Town Place" shall mean the power center know as Triangle Town
Place, located on approximately 15.749 acres of land and adjacent to Triangle
Town Center, together with the improvements and/or development resulting from
any Future Development Activity with respect thereto.
"Voting Interests" shall mean each Member's rights to vote or approve any
matter set forth in this Agreement requiring a Member's vote or requiring
unanimous approval of the Members. The Voting Interests of the Members shall be
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the JG Members (in the aggregate) - fifty percent (50%) and CBL Member - fifty
percent (50%). Any reference in this Agreement to approvals of the Members or
voting of Members shall be deemed to refer to each Member's Voting Interest. A
Member's Voting Interest shall not change with fluctuations, if any, in such
Member's Capital Interest and/or such Member's Profits Interest.
7.12 Other Definitional Provisions.
(a) All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement, and all references
in this Agreement to Articles, Sections, Exhibits or Schedules shall refer to
the corresponding Article or Section of, or Exhibit or Schedule attached to,
this Agreement, unless specific reference is made to the articles, sections or
other subdivisions of, or Exhibits or Schedules to, another document or
instrument. All Exhibits or Schedules attached hereto are by this reference made
a part hereof. All references to any instrument, document or agreement shall,
unless the context otherwise requires, refer to such instrument, document or
agreement as the same may be, from time to time, amended, modified,
supplemented, renewed, extended, replaced or restated.
(b) Terms not otherwise defined in this Agreement shall have the meanings
set forth in the Act.
7.13 Statement as to Member's Approval/Voting Rights. Notwithstanding any
provision in this Agreement to the contrary, the Members hereby agree that in
any decision calling for a vote or approval of the Members, the following
Members shall be solely authorized to make such decision, vote or approval and,
once made, such decision shall be binding on the Affiliates of such Member who
are currently Members of Member Newco or who may be in the future admitted as
Members of Member Newco:
(a) As to any vote, approval or decision by CBL Member and/or any of
its Affiliates who may be admitted as Members of Member Newco -
CBL Member shall be solely authorized to cast such vote, exercise
such approval or make such decision; and
(b) As to any vote, approval or decision by the JG Members and/or any
of its Affiliates who may be admitted as Members of Member Newco
- [JG Manager] shall be solely authorized to cast such vote,
exercise such approval or make such decision.
FORMATION
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7.14 Formation. Member Newco was formed as an Ohio limited liability
company by the filing of the Articles of Organization with the Secretary of
State of Ohio in accordance with the provisions of the Act on [ ], 2005.
7.15 Name. The name of Member Newco is [Triangle Town Member LLC].
7.16 Principal Place of Business. The principal place of business of Member
Newco shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. Member Newco may locate its places of business at
any other place or places as the Members may from time to time deem advisable.
7.17 Statutory Agent. Member Newco's statutory agent for service of process
is TH&F Statutory Agent Corp., One Columbus, ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. The statutory agent may be changed from time to time
pursuant to the Act and the applicable rules promulgated thereunder.
7.18 Term. The term of Member Newco commenced on the date the Articles of
Organization were filed with the Secretary of State of Ohio and shall continue
until Member Newco is dissolved and its affairs wound up in accordance with the
provisions of this Agreement or the Act. Member Newco shall have a perpetual
existence unless terminated as stated above.
PURPOSE OF COMPANY; ADMISSION OF MEMBERS;
CAPITAL ACCOUNTS AND INTEREST/RETURN; FINANCING
7.19 General Business Purpose of Member Newco. The business of Member Newco
shall be to engage in any lawful activity related to its activities of owning
member interests in and acting as manager of the Company, which is the owner of
the Project on the Real Estate. In furtherance thereof, Member Newco may
exercise all powers necessary to or reasonably connected with Member Newco's
business which may be legally exercised by limited liability companies under the
Act, and may engage in all activities necessary, customary, convenient, or
incident to any of the foregoing.
7.20 Admission of Members; Distribution of Initial JV Financing Proceeds .
As of the date of this Agreement, CBL Member has been admitted to Member Newco
as a Member having the Capital Interest (initially zero) and the Profits
Interest set forth on Exhibit B, and Member Newco received from the Company the
Net Proceeds of the Initial JV Financing. Member Newco then distributed the Net
Proceeds of the Initial JV Financing to the JG Members, in part as a
reimbursement for preformation expenditures under Treas. Reg. 1.707-4(d) to the
extent available, reducing (diluting) the JG Members' Capital Interest and
Profits Interest to the amounts and percentages set forth on Exhibit B.
7.21 Capital Accounts.
(a) An individual capital account shall be maintained for each Member in
accordance with Exhibit H attached hereto (a "Capital Account").
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(b) The provisions of Exhibit H and any other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations Section 1.704-1(b)(2)(iv), and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
Managing Member shall determine that it is prudent to modify the manner in which
Capital Accounts, or any debits or credits thereto (including, without
limitation, any debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by Member Newco or the
Members) are computed in order to comply with such Regulations, the Managing
Member may make such modification, provided, that such modification would not
reasonably be expected to have a material adverse effect on the amount
distributable to any Member pursuant to the provisions of this Agreement upon
the dissolution and liquidation of Member Newco. The Managing Member also shall
make any appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Treasury Regulations Section
1.704-1(b).
(c) The Capital Accounts of the Members as of the date of this Agreement
following CBL Member's admission as a Member are as follows:
the JG Members (in the aggregate) - $[81,250,000.00]
CBL Member - ..... $0.00
(d) Interest/Return. Except as set forth below, the Members agree that
interest/return shall accrue on any and all Member Funding by Members at the
rate of eleven percent (11%) per annum (simple, not compounded) interest/return
(the "Interest/Return") until fully repaid or returned; except that the Members
also agree that in the event one Member or its Affiliates shall make a
Construction Loan, the interest rate on such Construction Loan may not be at a
rate equivalent to the Interest/Return but such interest rate shall be on market
rate terms and except that no Interest/Return shall accrue on the JG Members'
Initial Contribution.
7.22 Financing.
(a) Construction Loan.
(a) Subject to the unanimous approval rights of the Members and
the procedures set forth in Section 5.03(g) below, the
Managing Member shall cause Member Newco to cause the
Company to enter into Construction Loan(s) to fund the
construction of any Future Development Activity to be
constructed from and after the date of this Agreement. The
Managing Member shall use its reasonable efforts to cause
Member Newco obtain such Construction Loans on arm's length
terms that are the most favorable market-rate terms to the
Company as reasonably possible from an institutional lender
that is not an Affiliate of or Controlled by any Member.
(b) If CBL Member determines in its reasonable judgment that it
is not possible to obtain a Construction Loan on
commercially reasonable terms from an institutional lender
that is not an Affiliate of or Controlled by any Member, CBL
Member shall provide written notice of such determination
(the "Construction Loan Unavailability Notice") to the JG
Members, specifying in reasonable detail the basis of such
determination and specifying the Key Construction Loan
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Terms, if any, upon which CBL Member would be willing to be
the lender of such Construction Loan (any Construction Loan
made by a Member being hereinafter referred to as a "Member
Construction Loan") and otherwise complying in form and
content with the requirements of Section 5.03(g) below. The
Key Construction Loan Terms and the other terms and
conditions of all Member Construction Loans shall be on such
arm's length and market rate terms (defined by reference to
third-party unaffiliated loans for the most nearly
comparable projects for which third-party unaffiliated loans
are commercially available) as referenced above and as set
forth in the definition of Construction Loan set forth in
Section 1.01 above and shall include notice and cure periods
for all defaults, including, but not limited to, payment
defaults.
(c) the JG Members shall, by written notice to CBL Member given
within fourteen (14) days of the JG Members' receipt of the
Construction Loan Unavailability Notice, respond to CBL
Member in writing (the "JG Members Construction Loan
Response Notice") and shall in the JG Members Construction
Loan Response Notice either (A) approve the Key Construction
Loan Terms, if any, proposed for the Member Construction
Loan by CBL Member in the Construction Loan Unavailability
Notice and elect to participate in the Member Construction
Loan with CBL Member, on an equal basis with CBL Member, in
which case each of the JG Members and CBL Member shall act
as lender to Member Newco for their proportionate share of
the Member Construction Loan, on the terms and conditions
specified in the Construction Loan Unavailability Notice;
(B) approve the Key Construction Loan Terms, if any,
proposed for the Member Construction Loan by CBL Member in
the Construction Loan Unavailability Notice and elect not to
participate in the Member Construction Loan, in which case
CBL Member shall act as lender to Member Newco of the entire
Member Construction Loan, on the terms and conditions, if
any, specified in the Construction Loan Unavailability
Notice; (C) specify the Key Construction Loan Terms, if any,
which shall in the aggregate be superior to the terms, if
any, offered by CBL Member in the Construction Loan
Unavailability Notice, upon which the JG Members would be
willing to be the lender of the entire Member Construction
Loan; or (D) disapprove the Key Construction Loan Terms, if
any, proposed for the Member Construction Loan by CBL Member
in the Construction Loan Unavailability Notice.
(d) If the JG Members elect to respond under clause (C) of the
immediately preceding paragraph (iii) of this Section
3.04(a), CBL Member shall, by written notice to the JG
Members given within fourteen (14) days of CBL Member's
receipt of the JG Members Construction Loan Response Notice,
respond to the JG Members in writing (the "CBL Member
Construction Loan Response Notice") and shall in the CBL
Member Construction Loan Response Notice either (A) approve
the Key Construction Loan Terms for the Member Construction
Loan proposed by the JG Members in the JG Members
Construction Loan Response Notice and elect to participate
in the Member Construction Loan with the JG Members, on an
equal basis with the JG Members, in which case each of the
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JG Members and CBL Member shall act as lender to Member
Newco for their proportionate share of the Member
Construction Loan, on the terms and conditions specified in
the JG Members Construction Loan Response Notice; (B)
approve the Key Construction Loan Terms for the Member
Construction Loan proposed by the JG Members in the JG
Members Construction Loan Response Notice and elect not to
participate in the Member Construction Loan, in which case
the JG Members shall act as lender to Member Newco of the
entire Member Construction Loan, on the terms and conditions
specified in the JG Members Construction Loan Response
Notice; or (C) disapprove the Key Construction Loan Terms
for the Member Construction Loan proposed by the JG Members
in the JG Members Construction Loan Response Notice.
(e) the JG Members' approval of the Key Construction Loan Terms
for the Member Construction Loan under either clause (A) or
clause (B) of paragraph (iii) of this Section 3.04(a) shall
be deemed to be the JG Members' approval of such Key
Construction Loan Terms for purposes of Section 5.03(g)
below. The JG Members' disapproval of the Key Construction
Loan Terms for the Member Construction Loan under clause (D)
of paragraph (iii) of this Section 3.04(a) shall be deemed
to be the JG Members' disapproval of such Key Construction
Loan Terms for purposes of Section 5.03(g) below. CBL
Member, by reason of having given the Construction Loan
Unavailability Notice, shall be deemed to have approved the
Key Construction Loan Terms, if any, for the Member
Construction Loan proposed by CBL Member in the Construction
Loan Unavailability Notice, whether or not the JG Members
elect to act as lender with respect to its proportionate
share of such Member Construction Loan.
(f) CBL Member's approval of the Key Construction Loan Terms for
the Member Construction Loan under either clause (A) or
clause (B) of paragraph (iv) of this Section 3.04(a) shall
be deemed to be CBL Member's approval of such Key
Construction Loan Terms for purposes of Section 5.03(g)
below. CBL Member's disapproval of the Key Construction Loan
Terms for the Member Construction Loan under clause (C) of
paragraph (iv) of this Section 3.04(a) shall be deemed to be
CBL Member's disapproval of such Key Construction Loan Terms
for purposes of Section 5.03(g) below. The JG Members, by
reason of having given the JG Members Construction Loan
Response Notice, shall be deemed to have approved the Key
Construction Loan Terms, if any, for the Member Construction
Loan proposed by the JG Members in the JG Members
Construction Loan Response Notice, whether or not CBL Member
elects to act as lender with respect to its proportionate
share of such Member Construction Loan.
(g) CBL Member shall provide an Affiliate Loan Guarantee of CBL
Member Parent for all Member Construction Loans. To the
extent the lender of the Construction Loan shall require
additional personal guarantees for any Construction Loan,
CBL Member shall provide such guarantees (or shall provide
Affiliate Loan Guarantees), except as otherwise provided in
this clause (vii), and neither the JG Members nor their
respective Affiliates shall have any obligation to provide
such guarantees. If CBL Member intends to guarantee or
provide an Affiliate Loan Guarantee of any Construction
Loan, CBL Member will provide to the JG Members an
opportunity, exercisable in the JG Members' sole and
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absolute discretion within thirty (30) days from the receipt
of the notice from CBL Member, for the JG Members or their
Affiliate to provide a guarantee on the same terms as the
guarantee to be provided by CBL Member or its Affiliate
(except that the JG Members may elect, in its sole and
absolute discretion, to cap the JG Members' or its
Affiliate's guarantee obligation at an amount determined by
the JG Members (the "JG Members Construction Loan Guarantee
Share"), which may be less than fifty percent (50%) of the
Construction Loan and less than the amount of the
Construction Loan to be guaranteed by CBL Member and its
Affiliate (the "CBL Member Construction Loan Guarantee
Share"). In the event the JG Members or their Affiliate
elects to provide a guarantee, CBL Member will use its
commercially reasonable efforts to cause the lender to
accept "several" guarantees from CBL Member or its Affiliate
guaranteeing the CBL Member Construction Loan Guarantee
Share and the JG Members or their Affiliate guaranteeing the
JG Members Construction Loan Guarantee Share, but the lender
may require "joint and several" guarantees and, in such
event, CBL Member and the JG Members (or their Affiliates)
will provide the guarantees on a joint and several basis,
but, as between CBL Member and the JG Members (or their
Affiliates), CBL Member's and its Affiliate's liability on
such guarantees shall be limited to the CBL Member
Construction Loan Guarantee Share, and the JG Members' and
its Affiliate's liability on such guarantees shall be
limited to the JG Members Construction Loan Guarantee Share,
and each guarantor will have a right of contribution and
indemnity against the co-guarantor for any payments on such
guarantees in excess of the JG Members Construction Loan
Guarantee Share (as to the JG Members and its Affiliate) or
the CBL Member Construction Loan Guarantee Share (as to CBL
Member and its Affiliate). Notwithstanding the foregoing,
from and after a JG Members Exit Event, to the extent that
the lender of any Construction Loan shall require additional
personal guarantees for such Construction Loan, if the
lender will accept several guarantees, CBL Member or its
Affiliate and the JG Members Substitute Member or its
Affiliate shall provide such guarantees on a several basis
pro rata based on their respective Capital Interests and, if
the lender requires joint and several guarantees, CBL Member
or its Affiliate and the JG Members Substitute Member or its
Affiliate will provide the guarantees on a joint and several
basis, but, as between CBL Member and the JG Members
Substitute Member (or their Affiliates), CBL Member's and
its Affiliate's liability on such guarantees and the JG
Members Substitute Member's and its Affiliate's liability on
such guarantee shall be pro rata in the same proportion as
their respective Capital Interests, and each guarantor will
have a right of contribution and indemnity against the
co-guarantor for any payments on such guarantees in excess
of such guarantor's pro rata share. Notwithstanding anything
in this Section 3.04(a)(vii) or Section 5.03, any guarantor
shall be indemnified by the co-guarantor against any and all
claims, losses, liability or damages incurred by such
guarantor arising out of such guarantee (including, without
limitation, such guarantor's pro rata share of the
liability, if any, on such guarantee) that results from the
gross negligence or willful misconduct of the co-guarantor
or its Affiliates.
(b) Permanent Financing/Refinancing.
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(a) At or prior to the maturity of each Construction Loan, and
subject to the unanimous approval rights of the Members and
procedures set forth in Section 5.03(h) below, the Managing
Member shall cause Member Newco to cause the Company to
enter into the Permanent Financing/Refinancing. The Managing
Member shall use its reasonable efforts to cause Member
Newco to obtain the Permanent Financing/Refinancing on arm's
length terms that are the most favorable market-rate terms
to the Company as reasonably possible. The Managing Member
may also cause Member Newco to cause the Company to enter
into one or more subsequent Permanent
Financings/Refinancings to replace the Initial JV Financing
or a then-existing Permanent Financing/Refinancing under the
same parameters as set forth herein and subject to the
unanimous approval rights and procedures set forth in
Section 5.03(h) below. To the extent the lender of the
Permanent Financing/Refinancing shall require personal
guarantees for such loan, CBL Member shall provide such
guarantees (or shall provide Affiliate Loan Guarantees),
together with all indemnifications, including, without
limitation, environmental indemnifications, and neither the
JG Members nor their respective Affiliates shall have any
obligation to provide such guarantees or indemnifications,
except as provided in the balance of this paragraph.
(b) To the extent the lender of the Permanent
Financing/Refinancing shall require personal guarantees for
such loan, CBL Member shall provide such guarantees (or
shall provide Affiliate Loan Guarantees), except as
otherwise provided in this clause (ii), and neither the JG
Members nor their respective Affiliates shall have any
obligation to provide such guarantees. If CBL Member intends
to guarantee or provide an Affiliate Loan Guarantee of any
nonrecourse Permanent Financing/Refinancing, CBL Member will
provide to the JG Members an opportunity, exercisable in the
JG Members' sole and absolute discretion within thirty (30)
days from the receipt of the notice from CBL Member, for the
JG Members or their Affiliate to provide a guarantee on the
same terms as the guarantee to be provided by CBL Member or
its Affiliate (except that the JG Members may elect, in its
sole and absolute discretion, to cap the JG Members' or its
Affiliate's guarantee obligation at an amount determined by
the JG Members (the "JG Members Permanent
Financing/Refinancing Guarantee Share"), which may be less
than fifty percent (50%) of the Permanent
Financing/Refinancing and less than the amount of the
Permanent Financing/Refinancing to be guaranteed by CBL
Member and its Affiliate (the "CBL Member Permanent
Financing/Refinancing Guarantee Share"). In the event the JG
Members or their Affiliate elects to provide a guarantee,
CBL Member will use its commercially reasonable efforts to
cause the lender to accept "several" guarantees from CBL
Member or its Affiliate guaranteeing the CBL Member
Permanent Financing/Refinancing Guarantee Share and the JG
Members or their Affiliate guaranteeing the JG Members
Permanent Financing/Refinancing Guarantee Share, but the
lender may require "joint and several" guarantees and, in
such event, CBL Member and the JG Members (or their
Affiliates) will provide the guarantees on a joint and
several basis, but, as between CBL Member and the JG Members
(or their Affiliates), CBL Member's and its Affiliate's
liability on such guarantees shall be limited to the CBL
Member Permanent Financing/Refinancing Guarantee Share, and
the JG Members' and its Affiliate's liability on such
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guarantees shall be limited to the JG Members Permanent
Financing/Refinancing Guarantee Share, and each guarantor
will have a right of contribution and indemnity against the
co-guarantor for any payments on such guarantees in excess
of the JG Members Permanent Financing/Refinancing Guarantee
Share (as to the JG Members and its Affiliate) or the CBL
Member Permanent Financing/Refinancing Guarantee Share (as
to CBL Member and its Affiliate). Notwithstanding the
foregoing, from and after a JG Members Exit Event, to the
extent that the lender of any Permanent
Financing/Refinancing shall require additional personal
guarantees for such Permanent Financing/Refinancing, if the
lender will accept several guarantees, CBL Member or its
Affiliate and the JG Members Substitute Member or its
Affiliate shall provide such guarantees on a several basis
pro rata based on their respective Capital Interests and, if
the lender requires joint and several guarantees, CBL Member
or its Affiliate and the JG Members Substitute Member or its
Affiliate will provide the guarantees on a joint and several
basis, but, as between CBL Member and the JG Members
Substitute Member (or their Affiliates), CBL Member's and
its Affiliate's liability on such guarantees and the JG
Members Substitute Member's and its Affiliate's liability on
such guarantee shall be pro rata in the same proportion as
their respective Capital Interests, and each guarantor will
have a right of contribution and indemnity against the
co-guarantor for any payments on such guarantees in excess
of such guarantor's pro rata share. Notwithstanding anything
in this Section 3.04(b)(ii) or Section 5.03, any guarantor
shall be indemnified by the co-guarantor against any and all
claims, losses, liability or damages incurred by such
guarantor arising out of such guarantee (including, without
limitation, such guarantor's pro rata share of the
liability, if any, on such guarantee) that results from the
gross negligence or willful misconduct of the co-guarantor
or its Affiliates.
(c) Affiliate Loan Guarantees; Rights of Guarantors and Member
Lenders.
(a) As set forth in Sections 3.04(a) and (b) above, the
lender(s) of the Construction Loan and/or the Permanent
Financing/Refinancing may require the personal guarantees of
CBL Member or Affiliates of CBL Member (the "Affiliate Loan
Guarantees"). If such a lender requires an Affiliate Loan
Guarantee other than or in addition to CBL Member's
Affiliate Loan Guarantee, CBL Member shall cause CBL Member
Parent (or such other Affiliate(s) as may be acceptable to
the lender) to provide an Affiliate Loan Guarantee.
(b) If CBL Member or CBL Member Parent or any other Member or
Affiliate of a Member extends credit to or for the benefit
of the Company by providing an Affiliate Loan Guarantee or
other guarantee for the Construction Loan and/or the
Permanent Financing/Refinancing, the guarantor parties shall
have the right to request and receive indemnification from
Member Newco and/or the Company (but not from Member Newco's
Members) against any and all loss, cost and expense incurred
in connection therewith (except to the extent that such
loss, cost or expense results from to the gross negligence
or willful misconduct of the guarantor or its Affiliates)
and such guarantor shall be entitled to step into the shoes
of the lender upon payment under such guarantee. As
guarantor, the guarantor party(ies) shall have certain
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rights in the event of any default under financing
guaranteed, i.e., indemnity rights from Member Newco and/or
the Company (but not from Member Newco's Members), to step
into the primary lender's position on default and other
similar rights. The Members acknowledge that upon the
occurrence of such event, the guarantor party(ies) may be
deemed to have a conflict of interest with respect to Member
Newco, the Company and the other Members. The Members
acknowledge this potential conflict of interest and hereby
agree that it shall not be deemed a breach of any fiduciary
duty that the guarantor party(ies) or Affiliates of the
guarantor party(ies) may have to another Member or to Member
Newco or the Company if the guarantor party(ies) exercise
the rights and remedies of the lender or rights under any
indemnity agreement or similar agreement when called upon or
required to pay under a guaranty, and the guarantor
party(ies) shall have the right to exercise such rights and
remedies, except that in exercising such rights and remedies
the guarantor shall have no right to take or cause Member
Newco to take any action that would create or increase the
personal liability of any other Member beyond such other
Member's personal liability, if any, as set forth in the
applicable loan document. The provisions of Section 5.03
below shall not apply to the exercise by the guarantor of
such rights and remedies. Notwithstanding the foregoing
provisions of this Section 3.04(c)(ii), if the guarantor is
CBL Member or an Affiliate of CBL Member and if the default
giving rise to the right to exercise such rights is a
default curable by the payment of money or a non-monetary
default caused by CBL Member or an Affiliate of CBL Member,
the guarantor shall have no right to exercise such rights
and remedies at any time when the sum of (i) the aggregate
unreturned amount of Mandatory Contributions made by CBL
Member to fund capital improvements to the Project and (ii)
the aggregate amount of Mandatory Contributions made by CBL
Member for all purposes other than funding capital
improvements to the Project, whether returned or unreturned,
is less than the Maximum Required Funding.
(c) In the event a Member or its Affiliates serve as the lender
on any Member Construction Loan (the "Member Lender")
pursuant to the provisions of this Agreement, the other
Members acknowledge that the Member Lender may be deemed to
have a conflict of interest with respect to Member Newco,
the Company and the other Members. The other Members
acknowledge this potential conflict of interest and hereby
agree that it shall not be deemed a breach of any fiduciary
duty that the Member Lender may have to another Member or to
Member Newco or the Company if the Member Lender or the
Member Lender's Affiliate who has provided the Member
Construction Loan exercises the rights and remedies of the
lender or lender's rights under the loan documents with
respect to such financing, except that in exercising such
rights and remedies the Member Lender or the Member Lender's
Affiliate shall have no right to take or cause Member Newco
to take any action that would create or increase the
personal liability of the Members beyond the Members'
personal liability, if any, as set forth in the applicable
loan documents. The provisions of Section 5.03 below shall
not apply to the exercise by the Member Lender or the Member
Lender's Affiliate of such rights and remedies. The Members
also agree that in the situation where (i) the Member Lender
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has provided a Member Construction Loan on a particular
phase of the Project and (ii) a third-party lender has
provided a Construction Loan and/or Permanent
Financing/Refinancing on another phase of the Project and
(iii) there is a default on the third-party lender's
financing, then in such events, the foreclosure by the
third-party lender shall not be deemed to extinguish or
otherwise foreclose any equity or rights of the Member
Lender as to any phase of the Project or asset of the
Company other than the assets specifically pledged to secure
the third-party lender's loan. Notwithstanding the foregoing
provisions of this Section 3.04(c)(iii), if the Member
Lender is CBL Member or an Affiliate of CBL Member, the
Member Lender shall have no right to exercise such rights
and remedies at any time when the sum of (i) the aggregate
unreturned amount of Mandatory Contributions made by CBL
Member to fund capital improvements to the Project and (ii)
the aggregate amount of Mandatory Contributions made by CBL
Member for all purposes other than funding capital
improvements to the Project, whether returned or unreturned,
is less than the Maximum Required Funding and, if a Member
Lender or its Affiliates is in default pursuant to Article
XX of this Agreement, then such Member Lender shall be
prohibited from exercising its rights under this Section
3.04(c)(iii) while such default is continuing.
(d) No third-party, non-Member lender to Member Newco or the
Company or creditor of any Member or of any Affiliate of any
Member shall be a third-party beneficiary of the provisions
of this Section 3.04(c) or any other provision of this
Agreement.
(d) Consultation with Other Members. Upon request of any Member and
upon reasonable notice, the Managing Member shall advise the
requesting Member of the status of the Managing Member's efforts
to obtain Construction Loans and/or Permanent
Financing/Refinancing and the material terms of financing
proposals then under negotiation.
7.23 Outparcel Venture.
The Members acknowledge that the Company owns the entirety of the Real Estate in
the name of the Company. The Members may cause Member Newco to cause the Company
to designate certain portions of the Real Estate as Outparcels. Upon such
designation, CBL Member may elect to require Member Newco to cause the Company
to transfer the Outparcels to a new entity (the "Outparcel Venture") which shall
be in the form of a limited liability company and whose members shall be the
Members of this Company or their Affiliates and the capital interests, profits
interests and voting interests of the members of the Outparcel Venture shall be
in the same proportions as their or their Affiliates' Capital Interests, Profits
Interests and Voting Interests in Member Newco. The rights, duties, obligations,
privileges, remedies, transfer restrictions, buy-sell provisions and other
provisions of this Agreement shall be part of a definitive limited liability
company agreement for the Outparcel Venture (the "Outparcel Venture Agreement").
CBL Member shall prepare a draft of the Outparcel Venture Agreement and shall
deliver it to the JG Members for its review and approval. Each Member shall be
entitled to designate its member to be included in the Outparcel Venture but
such designation shall only be allowed as to the Member itself or an Affiliate
of such Member. The Outparcel Venture Agreement shall contain distribution
provisions that will coordinate with the distribution provisions of this
Agreement as to return of capital and other matters. The Outparcel Venture
Agreement will provide for cross-defaults and cross buy-sell provisions such
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that the acquisition by one Member of the interests of another non-Affiliated
Member under this Agreement shall likewise entail the acquisition of such
non-Affiliated Member's interests in the Outparcel Venture.
o
NAMES AND ADDRESSES OF MEMBERS
The names and addresses of the Members are set out on Exhibit B.
GOVERNANCE
7.24 General Powers. Subject to the terms of this Agreement, the business
and affairs of Member Newco shall be managed by CBL Member, and CBL Member shall
be the Managing Member of Member Newco. A Member shall not have the authority to
act as an agent of Member Newco or legally bind Member Newco, unless such Person
is: (a) the Managing Member; or (b) a Person designated in writing by action of
the Members as being so authorized.
7.25 Standard of Conduct. A Member shall discharge such Member's duties as
a Member in good faith, in a manner the Member reasonably believes to be in the
best interest of Member Newco, and with the care an ordinarily prudent Person in
a like position would exercise under similar circumstances. Each Member shall be
entitled to rely on information, opinions, reports or statements, including
financial statements and other financial data, if prepared or presented by: (a)
one (1) or more employees of Member Newco or one (1) or more employees of one of
Member Newco's Members, in either case, whom the Member reasonably believes to
be reliable and competent in the matters presented; or (b) legal counsel, public
accountants or other Persons as to matters the Member reasonably believes are
within such Person's professional or expert competence. A Member shall not be
liable for any action taken as a Member, or any failure to take any action, if
the Member performed the duties of the position as a Member in compliance with
this Section 5.02. Except as specifically set forth in this Agreement or in the
Act, no Member shall be personally liable to Member Newco, any Member or any
third party for any action taken as a Member or for any failure to take any
action as a Member other than due to the gross negligence or willful misconduct
of such Member.
7.26 Governance; Unanimous Approval Items. The day-to-day operational
decisions of Member Newco shall be made by the Managing Member unless
specifically set forth in this Agreement to the contrary. Subject to the
provisions of Section 1.03, the following decisions shall require the unanimous
approval of the Members, and, neither the JG Members, pursuant to the JG
Members' responsibilities set forth herein, nor CBL Member, as Managing Member
and/or pursuant to CBL Member's responsibilities set forth herein, shall be
authorized to take or to cause Member Newco to cause the Company to take the
following actions unless such approval has been obtained:
(a) The sale, lease or other disposition of all or any portion of the
Project or all or any of the Real Estate either in one transaction or in a
series of interrelated transactions (including, without limitation, the sale or
ground lease of any of the Real Estate to an Anchor or other third-party and all
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Anchor leases), except (A) as set forth in Article XVI and Article XVII; (B) as
reflected in an approved Pro Forma and/or Operating Budget; (C) for the leasing
of the space in the Project to individual non-Anchor tenants in the course of
the Company's business; (D) sales or ground leases of Outparcels to occupants
that are consistent with a first-class shopping center; and (E) for normal and
customary easements and access rights granted in the course of development of
the Project. If Member approval is required under this Section 5.03(a), the
sale, lease or other disposition of all or a portion of the Project shall be
submitted to the Members for approval at the time that the Managing Member has
received a purchase agreement, term sheet, letter of intent or other evidence of
interest on terms the Managing Member determines to be reasonably satisfactory;
(b) The approval of the Site Plan for any expansions or additional
development/redevelopment of the Project and any material and/or substantial
modifications or amendments to the existing or any future Site Plan, the
approval of expansions or additional development/redevelopment of the Project,
the approval of any future Development Schedules for the Project;
(c) The approval of the Pro Forma for any Future Development Activities and
construction of the Project, the approval of any modifications or adjustment(s)
to a previously approved Pro Forma that constitute Material Development
Deviations;
(d) The approval of the Operating Budget for the Project for the 2007 and
subsequent Fiscal Years and the incurrence of expenditures or obligations that
constitute a Material Operating Deviation;
(e) Unless set forth in this Agreement, in an approved Pro Forma or in an
approved Operating Budget, the incurring or payment of any fees to a Member or
to an Affiliate of a Member or the entering into any agreement or contract with
any Member or an Affiliate of a Member; except that Member Newco may enter into
or cause the Company to enter into a contract for the
maintenance/janitorial/security for the Project with ERMC II, LP or its
affiliates without further approvals provided the terms of such contracts are on
terms that are competitive in the market and within an approved Pro Forma and/or
Operating Budget; and except that Member Construction Loans shall be subject to
Section 5.03(g) below and shall not be subject to this Section 5.03(e).
(f) Except for required funding set forth in this Agreement, the required
funding by Members of any obligation, capital expenditure, cost or other
expense, and the entering into any contract or agreement, including guarantees
or indemnities, that creates personal liability of the Members, other than CBL
Member, beyond their Member Funding to Member Newco or that requires the
personal guarantees or indemnities of the Members or their Affiliates, other
than CBL Member or its Affiliates. If a Member, other than CBL Member, fails to
approve such funding or such entering into of a contract or agreement, such
failure shall not be an Impasse, and Section 16.04 shall not apply to such
failure;
(g) The approval of the Key Construction Loan Terms on the procedures set
forth in this clause (g) or, as to Member Construction Loans, the procedures set
forth in Section 3.04(a). CBL Member shall notify the JG Members, in writing,
prior to the placement of the Construction Loan, which notice shall include a
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written term sheet for the proposed Construction Loan and identify the Key
Construction Loan Terms and the proposed lender(s). The JG Members shall either
approve or disapprove said terms by written notice delivered and received by CBL
Member within fourteen (14) Days of the date on which the JG Members shall
receive CBL Member's notice. In the event the JG Members do not respond within
said fourteen (14) Day period, such failure to respond shall be deemed an
approval of terms of the Construction Loan as set forth in CBL Member's notice;
(h) The approval of the Key Permanent Loan Terms on the procedures set
forth in this clause (h). CBL Member shall notify the JG Members, in writing,
prior to the placement of the Permanent Financing/Refinancing, which notice
shall include a written term sheet for the proposed Permanent
Financing/Refinancing and identify the Key Permanent Loan Terms and the proposed
lenders(s). The JG Members shall either approve or disapprove said terms by
written notice delivered and received by CBL Member within fourteen (14) Days of
the date on which the JG Members shall receive CBL Member's notice. In the event
the JG Members do not respond within said fourteen (14) Day period, such failure
to respond shall be deemed an approval of the Permanent Financing/Refinancing as
set forth in CBL Member's notice;
(i) The approval of the architects and engineers for any Future Development
Activities (except that the Members agree that they may establish, by the same
unanimous approval as would be required to approve an architect or engineer
under this clause, an approved list of architects and engineers that then may be
engaged without further approval by the Members) and the approval of any fees
payable to such architects and engineers collectively with respect to any Future
Development Activities where the aggregate of such fees will exceed four and
one-half percent (4.5%) of the total construction costs for such Future
Development Activities;
(j) The selection of the general contractor for construction of any Future
Development Activities (it being agreed that EMJ shall be entitled to bid on the
construction contract for any such Future Development Activities) and the
entering into of a Construction Contract by Member Newco or the Company that
does not meet the parameters set forth in Section 6.03 below;
(k) Any employment agreement through which Member Newco shall, or shall
cause the Company to, hire, retain or employ any individual as an "employee" of
Member Newco or the Company. For these purposes, the Members acknowledge that it
is their initial intention that Member Newco and the Company shall not have any
"employees";
(l) The establishment of any Reserve described in clause (ii) of the
definition of such term in Section 1.01 above;
(m) The filing of bankruptcy or the filing for the appointment of a
receiver for the assets of Member Newco or the Company;
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(n) In the event of any default under any financing secured by assets of
Member Newco or the Company, the decision as to whether to allow foreclosure by
the creditor or provide a deed in lieu of foreclosure;
(o) The dissolution or termination of Member Newco or the Company;
(p) The payment to the JG Members or any Affiliate of any compensation for
the performance of the JG Members' obligations pursuant to Article VI of this
Agreement or for any other services to Member Newco or the Company other than as
set forth on Exhibit C of this Agreement. The failure to approve such payment
shall not constitute an Impasse, and Section 16.04 shall not apply to such
failure;
(q) The payment to CBL Member or any Affiliate of any compensation for the
performance of CBL Member's obligations as Managing Member of Member Newco, or
Member Newco's obligations as manager of the Company, or for any other services
to Member Newco or the Company pursuant to Article VI of this Agreement other
than as set forth on Exhibit C of this Agreement and/or in the Property
Management Agreement. The failure to approve such payment shall not constitute
an Impasse, and Section 16.04 shall not apply to such failure;
(r) The entering into any agreement or contract between Member Newco or the
Company and a Member or any Affiliate of a Member other than as referenced or
authorized in this Agreement. The failure to approve such entering into of a
contract or agreement shall not constitute an Impasse, and Section 16.04 shall
not apply to such failure. The Members acknowledge that CBL Member or its
Affiliates shall enter into the Property Management Agreement as referenced
herein and serve as the Property Manager in accordance with the terms and
conditions of the Property Management Agreement;
(s) Except as provided in the Property Management Agreement, any
replacement of the Property Manager and any amendment to the Property Management
Agreement;
(t) The removal of the Managing Member as contemplated by Section 6.04
below (other than upon Default of the Managing Member under Section 20.01
below);
(u) Any distribution to the Members of Distributable Cash or any other
funds or assets of Member Newco other than as set forth in a Pro Forma, an
Operating Budget or as otherwise specifically provided in this Agreement;
(v) The termination of or any amendment or modification of this Agreement,
other than the exercise of the authority of the Managing Member to the limited
extent required to revise Exhibit B to reflect any assignment of a Membership
Interest, receipt of an additional Member Funding, or distribution to a Member,
in each case as permitted under this Agreement, the Members likewise
acknowledging that the authority of the Managing Member to make such revisions
to Exhibit B is may only be exercised if the circumstance giving rise to such
revision is otherwise in accordance with the applicable provisions of this
Agreement;
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(w) The admission of any new Member, other than pursuant to an assignment
expressly permitted by Article XVI or the admission of any new member to the
Company; and
(x) Any amendment to the Articles of Organization or the articles of
organization of the Company.
o
SPECIFIC DUTIES OF MEMBERS
7.27 Managing Member. Member Newco shall not have managers but shall have a
Managing Member as set forth above. Member Newco shall be a "member-managed"
limited liability company.
7.28 Managing Member; Managing Member's Specific Duties. CBL Member shall
be the Managing Member of Member Newco. CBL Member shall serve as the Managing
Member until its successor shall have been duly elected and shall have qualified
or until its termination, dissolution, resignation or removal pursuant to this
Agreement.
(a) Authority of the Managing Member. Subject to the terms of this
Agreement and the matters requiring unanimous Member approval as set forth in
Section 5.03 above, CBL Member, as the Managing Member, shall in general
supervise and administer all the business and affairs of the operation of Member
Newco as a limited liability company. The Managing Member shall be responsible
for the maintenance of Member Newco's books and records and shall have authority
to collect all rents and other amounts due to Member Newco from third parties.
The Managing Member shall have financial oversight of Member Newco and shall
deal directly with the Accountants in the preparation of financial statements
and tax returns for Member Newco, consistent with this Agreement. The Managing
Member, shall preside at all meetings of the Members. The Managing Member,
shall, if necessary, see that all orders and resolutions of the Members are
carried into effect. The Managing Member, shall sign and deliver in the name of
Member Newco any deeds, leases, mortgages, bonds, contracts or other instruments
pertaining to the business of Member Newco, except in cases in which the
authority to sign and deliver is required by law to be exercised by another
Person or is expressly delegated or governed by the Articles of Organization,
this Agreement or by the Members; and in general shall perform all duties
incident to the office of the Managing Member. The Managing Member shall, at all
times, maintain Member Newco's assets, bank and investment accounts titled to
and in Member Newco's name.
(b) Authority of the Managing Member as to the Operation of Member Newco
and as to the Operating Budget. Subject to the provisions of this Section
6.02(b), the Managing Member shall prepare or cause to be prepared an annual
operating budget (including separate sub-budgets for Triangle Town Center and
Triangle Town Place) setting forth the projected expenditures, costs and
revenues for the phases or portions of the Project for which construction has
been completed or will be completed and that are open and operating or will be
open and operating for the upcoming Fiscal Year (such operating budget, when
approved as provided in this Section 6.02(b) and as required pursuant to Section
5.03, the "Operating Budget"; for purposes of this Agreement, the "Operating
Budget" for the 2006 Fiscal Year shall be as set forth on Exhibit G attached
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hereto, and the Members shall be deemed to have approved such 2006 Operating
Budget for the purposes of this Section 6.02(b) and Section 5.03 above). Except
as otherwise provided in this Section 6.02(b), each Operating Budget shall be
subject to the prior unanimous written approval of the Members pursuant to
Section 5.03 above, which shall not be unreasonably withheld or delayed.
(a) Not later than December 1 of each Fiscal Year commencing with
2006, the Managing Member shall prepare and deliver a preliminary
Operating Budget to the Members for Member Newco's next
succeeding Fiscal Year. The Members shall have thirty (30) Days
in which to review and approve or disapprove (and, if
disapproving, such disapproval to specify the line items
disapproved) each such Operating Budget, during which period the
Members shall meet, if necessary, to discuss said proposed
Operating Budget and revisions thereto and if the Members do not
respond with any suggested changes or revisions within such
thirty- (30) Day period, such shall be deemed an approval of the
proposed Operating Budget as submitted by the Managing Member by
the Member failing to respond. The Managing Member shall
thereafter revise such Operating Budget as may be necessary in
accordance with the agreements reached by the Members and deliver
same in final form to all Members not later than December 15 of
each year. If any proposed Operating Budget is not approved or
not deemed approved by the Members as and when provided for
herein, the Operating Budget that has been most recently approved
by the Members as required hereunder shall remain in effect, and
the Managing Member shall cause Member Newco to operate the
Project pursuant to said most recently approved Operating Budget,
until a new Operating Budget is approved in accordance with the
provisions hereof, except that the Managing Member shall be
entitled to use as the Operating Budget for the fiscal year in
question the line items in the preliminary Operating Budget to
which no Member objected within such 30-Day period (instead of
the corresponding line items in the most recently approved
Operating Budget), and except that the following-described annual
costs contained in the most recently approved Operating Budget
that has been approved by the Members as required herein shall be
increased on January 1 by the actual amount (if greater than the
amount otherwise permitted under this Section 6.02(b)) of any
annual increase in said costs to Member Newco or the Company
during the then-current Fiscal Year, it being recognized that any
increases in said costs are generally beyond the control of the
Members and that the goods and services relative thereto are
necessary for the proper functioning of the Project:
(i) ad valorem taxes;
(ii) utility expenses, including but not limited to water, sewer,
electricity, natural gas and telephone;
(iii) property and casualty insurance premiums;
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(iv) maintenance costs relative to (x) the furnishing of HVAC
service as required by leases for occupancy of the Project
and (y) landscaping;
(v) debt service (interest and principal, if any) due with
respect to mortgage financing encumbering the Project that
has been incurred in accordance with the provisions of this
Agreement;
(vi) compensation, fees, costs and expenses of Member Newco's and
the Company's Accountants, attorneys, architects, engineers
and other professionals; and
(vii) postage.
(b) The Managing Member shall be authorized to make those expenditures and
to incur those obligations provided for in the then current Operating Budget.
Except as set forth in Section 6.02(b)(iii) below, the Managing Member shall not
exceed the expenditure limits set forth in said Operating Budget without the
prior unanimous written approval of the Members required under Section 5.03
above.
(c) The Managing Member shall cause Member Newco to endeavor to operate the
Project within the Operating Budget in effect from time to time, as same may be
revised from time to time in accordance with the provisions of this Agreement.
The Managing Member's authority shall be limited to the authority to cause
Member Newco to cause the Company to (A) expend up to the respective amounts for
the respective purposes set forth in the Operating Budget (as same may be
increased pursuant to and in accordance with the provisions of this Agreement),
and (B) operate the Project in accordance with the provisions of this Agreement
and the parameters set forth in the Operating Budget. The Managing Member shall
secure the Members' prior unanimous written approval, as required under Section
5.03 above, for any expenditures that will result in cost overruns of the
Operating Budget that exceed, individually or in the aggregate, five percent
(5%) of the aggregate annual budgeted expense amount set forth in the Operating
Budget then in effect (any expenditure resulting in an overrun in excess of the
aforesaid limits is herein referred to as a "Material Operating Deviation"), and
the Operating Budget, as revised, shall become the Operating Budget for all
purposes under this Agreement for the remainder of such Fiscal Year. During each
Fiscal Year, the Managing Member shall promptly inform the Members of any
increases in costs and expenses that were not foreseen during the budget
preparation period and thus were not reflected in the Operating Budget then in
effect that could, individually or in the aggregate, be reasonably expected to
constitute a Material Operating Deviation. In the event a Material Operating
Deviation from any Operating Budget becomes necessary prior to the annual review
of an Operating Budget as set forth in Section 6.02(b)(i) above, CBL Member may
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revise said Operating Budget, but only after receiving any unanimous approval of
the Members required under Section 5.03 above (for purposes of this clause (iii)
and Section 5.03 above, CBL Member shall be conclusively deemed to have approved
any such Material Operating Deviation).
(c) Authority of Managing Member as to the Development and Construction of
the Project.
(a) Development and Construction Responsibilities. From the
effective date of this Agreement and subject to the terms of
this Agreement and the matters requiring unanimous approval
as set forth in Section 5.03 above, the Managing Member
shall have primary responsibility for all development and
construction activities relating to the Future Development
Activities and construction of the Project in accordance
with the applicable approved Site Plan(s) and Pro Forma(s),
including but not limited to the procuring and/or amending
all rights, entitlements and appurtenances necessary or
desirable in connection with the Future Development
Activities, planning, procuring traffic and roadway studies
and improvements, securing governmental approvals,
performing soils and hazardous waste investigations, and
procuring conservation, environmental and utility studies
and approvals.
(b) Pro Formas; Development Schedule.
(i) The Members agree that all Pro Forma(s) shall be
subject to the unanimous approval of the Members,
except as otherwise set forth in this Section
6.02(c)(ii). The "projected net project cost" category
in a pro forma represents the anticipated hard and soft
costs to construct the particular Future Development
Activity and is sometimes referred to in the industry
as the capital expense budget.
(ii) The Managing Member shall cause Member Newco to cause
the Company to develop/redevelop or expand the Project
according to the applicable approved Site Plan(s) and
shall use its commercially reasonable efforts to do so
within the projected net project cost parameters set
forth in the approved Pro Forma(s). The Managing Member
shall use its commercially reasonable efforts to cause
Member Newco to cause the Company to meet the
applicable approved Development Schedule(s).
Notwithstanding the foregoing but subject to the
approval rights of the Members set forth in Section
5.03 as to Material Development Deviations, the
Managing Member shall cause Member Newco to cause the
Company to expend, the amounts required to complete any
Future Development Activities subject to and in
accordance with the provisions of this Agreement and
the Pro Formas for such Future Development Activities.
In the event a Material Development Deviation from a
Pro Forma becomes necessary, the Managing Member may
revise such Pro Forma but only after securing the
unanimous approval of the Members pursuant to and in
accordance with Section 5.03 above (for purposes of
this clause (B) and Section 5.03 above, the Managing
Member shall be conclusively deemed to have approved
any such Material Development Deviation).
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(iii) During any Future Development Activities, the Managing
Member shall review the applicable Development Schedule
to determine whether specific items set forth therein
can be accomplished within the time parameters set
forth therein and advise the JG Members if it
determines that a modification of the Development
Schedule is necessary or appropriate, and the Managing
Member shall review the Pro Formas periodically to
determine whether such Future Development Activities
may be completed within the projected net project cost
parameters set forth therein. If the Managing Member
determines that a Material Development Deviation to a
Pro Forma is necessary, the Managing Member shall
notify the JG Members of the necessary revisions and
shall request the unanimous approval of said revisions
pursuant to Section 5.03 above. The JG Members shall
approve or disapprove the requested revisions, by
written notice given to the Managing Member, within
twenty (20) Days of the date upon which it receives the
requested revisions to a Pro Forma and, if the JG
Members disapprove the requested revision, shall
include in such notice an explanation of the reasons
therefor. The failure of the JG Members to respond
within the twenty- (20) Day period shall be construed
as an approval of the requested revisions by the JG
Members. In the event the JG Members approve the
requested revisions or the revisions do not rise to the
level of a Material Development Deviation, the Managing
Member shall revise the Pro Forma to make the approved
revisions and the Pro Forma, as revised, shall become
the Pro Forma for all purposes under this Agreement
with respect to such Future Development Activities. For
purposes of this clause (C) and Section 5.03 above, the
Managing Member shall be conclusively deemed to have
approved any such Material Development Deviation.
For purposes of this Agreement and except as may be specifically set forth
above, a "Material Development Deviation" requiring the approvals set forth in
Section 5.03 above shall mean, as relates to any Pro Forma, any incurrence of
expenditures or costs (whether the subject of change orders or otherwise) that
will result in cost overruns of such Pro Forma that exceed individually or in
the aggregate, more than ten percent (10%) of the aggregate projected
construction cost set forth on the approved Pro Forma at issue.
(d) Other Specific Duties of CBL Member. In addition to the authorities,
duties and responsibilities of CBL Member as set forth above, CBL Member shall,
subject to the provisions of the Property Management Agreement, be responsible
for and authorized to cause Member Newco to cause the Company to carry out the
following items:
(a) Negotiating and entering into leases or other occupancy agreements and
similar transactions with Anchors, small shop, big box and other
tenants and occupants to be entered into after the date of this
Agreement;
(b) Tenant inducement/tenant allowance coordination and lease
coordination; and
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(c) The negotiation and documentation of any governmental financing,
governmental funding or entitlements to provide funding for
infrastructure or any other portion of the Project.
(e) Consultation with Other Members. Upon request of any Member and upon
reasonable notice, the Managing Member shall provide the requesting
Member with such information concerning the Managing Member's
activities in such capacity and the business and financial condition
of Member Newco and the Company as the requesting Member may
reasonably request for any purpose reasonably related to the Member's
Membership Interest in Member Newco; except that, the Managing Member
shall not be obligated to provide any such information at any
unreasonable time or place.
(f) Attendance at Meetings; Access to Project Site. Any Member shall have
the right, upon reasonable notice to the Managing Member, to attend
meetings concerning the Project between the Managing Member and/or its
Affiliates and third parties that are not Affiliates of the Managing
Member, except that the Managing Member shall have no obligation to
permit such attendance if the meeting is an internal meeting of the
Managing Member, its Affiliates, its or its Affiliates' officers,
employees or agents and/or its or its Affiliates' attorneys,
accountants and/or other advisors or service providers. Without
limiting the generality of the foregoing, the JG Members or their
respective Affiliates shall be entitled, at the JG Members' or its
Affiliates' cost, to have a representative (the "Representative") on
site at the Project during the Construction Period for any Future
Development Activity. Such Representative shall be entitled to (i)
reasonable access, upon request, to the Project and to CBL Member's or
its Affiliates' personnel involved in the construction of the Project,
(ii) request and receive information concerning the development and
construction of the particular phase of the Project from CBL Member or
its Affiliates; and (iii) attend construction progress meetings.
(g) Limitations on Managing Member's Authority. The Managing Member, shall
not have the authority to take the following actions:
(a) Any action set forth in Section 5.03 above unless the requisite
unanimous approval of the Members as set forth in Section 5.03
has been obtained and any action otherwise set forth in this
Agreement as requiring the approval of all Members unless such
approval shall have been obtained;
(b) Any action directly in contravention to the terms of this
Agreement, the Articles of Organization or the Act; and/or
(c) Any action, except those specifically authorized hereunder, which
would make it impossible to carry out the business of Member
Newco.
7.29 Construction Contract. A Construction Contract for construction of any
phase of the Project must contain the following terms:
(a) The cost of the Construction Contract must provide no more than a one
and three-quarters percent (1.75%) fee to the general contractor; and
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(b) Major subcontracts must be competitively bid to at least three
qualified subcontractors.
7.30 Removal and Resignation. The Managing Member may be removed by the
vote of the Members required under Section 5.03 above, whenever, in their
judgment, the best interests of Member Newco would be served thereby or upon
default of the Managing Member as provided in Section 20.01 below, but such
removal shall be without prejudice to the contract rights, if any, of the Person
so removed. Election of a Person as the Managing Member does not, of itself,
create contract rights beyond the rights of the Managing Member specified in
this Agreement. Unless otherwise provided in an employment contract or an
agreement with Member Newco, a Managing Member may resign at any time, provided
the Managing Member gives at least thirty (30) days prior written notice. Such
resignation shall be in writing and shall take effect upon delivery to Member
Newco and to each Member, unless a later effective date is specified in the
notice. The acceptance of a resignation shall not be necessary in order to make
it effective, unless so specified therein. Such resignation or removal shall not
affect the Managing Member's status as a Member. If CBL Member resigns or is
removed as the Managing Member, the JG Members shall thereupon become the
Managing Member and shall thereafter have all of the rights and powers of the
Managing Member, including, but not limited to, CBL Member's rights under
Section 6.02 above. The Members agree that in the event an Affiliate of CBL
Member is no longer the Property Manager and CBL Member or its Affiliates are
still Members of Member Newco at such time, then, regardless of any provision
herein to the contrary, the replacement Property Management Agreement must
contain a provision or provisions (acceptable to CBL Member) that restricts
leasing activities and other operations in a manner so as to ensure that the
status of CBL Member's Affiliate as a "Real Estate Investment Trust" under the
Code is not jeopardized.
7.31 Compensation. The JG Members shall be entitled to the fees as so
designated and listed on Exhibit C and CBL Member shall be entitled to the fees
as so designated and listed on Exhibit C. No other fees or compensation shall be
paid to a Member or its Affiliates except as may be set forth herein or as may
be approved by the Members in accordance with Section 5.03 above.
CONFLICT OF INTEREST TRANSACTIONS
A transaction with Member Newco in which a Member has a direct or indirect
interest is not voidable by Member Newco solely because of the Member's interest
in the transaction if the material facts of the transaction and the Member's
interest were disclosed or known to the Members entitled to vote and they
unanimously authorized, approved or ratified the transaction pursuant to Section
5.03 above. As set forth in Section 3.04(c) above, the Members acknowledge and
waive any potential conflict of interest that a Member may have if such Member
or its Affiliate is called upon or required to pay under any Affiliate Loan
Guarantee or other guarantee. The Members also acknowledge that a Member or its
Affiliate that may loan funds to Member Newco may be deemed to have a conflict
of interest with respect to Member Newco and the other Members. The Members
acknowledge this potential conflict of interest and hereby agree that it shall
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not be deemed a breach of any fiduciary duty that a Member may have to another
Member or to Member Newco if the Member or an Affiliate of a Member who has
loaned funds to Member Newco, as permitted under this Agreement, exercises its
rights and remedies as a lender pursuant to any such loan and the terms of the
promissory note for such loan by a Member or its Affiliate to Member Newco, and
such Member or its Affiliate shall have the right to exercise such rights and
remedies, except that in exercising such rights and remedies such Member or its
Affiliate shall have no right to take, or cause Member Newco to take, any action
that would create or increase the personal liability of any other Member beyond
such other Member's personal liability, if any, as set forth in the applicable
loan documents. The provisions of Section 5.03 above shall not apply to the
exercise by such Member or its Affiliate of such rights and remedies.
INDEMNIFICATION
7.32 Indemnification. Each Member or other Person who was named, is named,
or is threatened to be a named a defendant or respondent to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether formal or informal (hereinafter a
"proceeding"), by reason of the fact that it, he or she, or a Person of whom it,
he or she is the legal representative or Affiliate, is or was a Member, officer,
employee or agent of Member Newco, or is or was serving at the request of Member
Newco as a director, officer, governor, manager, partner, trustee, employee or
agent of any other Person or employee benefit plan (hereinafter, an
"Indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a Member, director, officer, governor, manager, partner,
trustee, employee or agent, or in any other capacity while serving as a Member,
director, officer, governor, manager, partner, trustee, employee or agent, shall
be indemnified and held harmless by Member Newco to the fullest extent
authorized by the Act against any obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), and reasonable expenses (including counsel fees) (hereinafter,
"Losses") incurred by the Indemnitee in connection therewith and such
indemnification shall continue as to a Person who has ceased to be a Member,
director, governor, officer, manager, partner, trustee, employee or agent and
shall inure to the benefit of its, his or her heirs, executors and
administrators or successors and assigns. Notwithstanding the above statements,
no indemnity shall be provided by Member Newco to any Indemnitee for any acts of
gross negligence or willful misconduct of such Person nor for any Losses arising
out of acts or omissions of any Indemnitee taking place, or events or
circumstances occurring, prior to the date of this Agreement.
7.33 Expenses. The right to indemnification conferred in this Article VIII
shall be a contract right and shall include the right to be reimbursed by Member
Newco for the reasonable expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that if the Act requires,
payment of such expenses incurred by Indemnitee shall be made only upon (a) the
receipt of a written affirmation by the Indemnitee that the Indemnitee has met
the required standard of conduct; (b) the receipt of a written undertaking,
executed by or on behalf of the Indemnitee, to repay the advance if it is
ultimately determined that it, he or she is not entitled to indemnification by
Member Newco; and (c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under this Article
VIII.
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7.34 Insurance. As further described in Article X below, Member Newco shall
maintain insurance, at its expense, to protect itself and any Indemnitee(s)
against any Losses, whether or not Member Newco would have the power to
indemnify the Indemnitee against such Losses under the Act.
LIMITATION OF LIABILITY OF MEMBERS; MEMBER LISTS
7.35 Limitation on Liability. Except as set forth in this Agreement, each
Member's liability shall be limited as set forth in the Act.
7.36 No Liability for Company Obligations. Except as set forth in this
Agreement, no Member will have any personal liability for any debts or losses of
Member Newco.
7.37 List of Members. Upon written request of any Member, Member Newco
shall provide a list showing the names, addresses and Membership Interest of all
Members and the other information required by the Act and maintained pursuant to
Section 14.02.
LIABILITY, PROPERTY AND CASUALTY INSURANCE
In addition to the insurance to be provided with respect to matters set forth in
Section 8.03 above, Member Newco shall maintain property and casualty insurance
to provide adequate and necessary coverage for the assets of Member Newco and
the Members with respect to their interests in Member Newco and the assets of
Member Newco and the liabilities resulting therefrom and shall also cause the
Company to maintain property and casualty insurance to provide adequate and
necessary coverage for (i) the Project, the Real Estate and the assets of the
Company and (ii) Member Newco with respect to its interests in the Project, the
Real Estate, the Company and the assets of the Company and liabilities resulting
therefrom. All insurance contracts to be entered into by Member Newco or the
Company shall be negotiated by CBL Member, as the Managing Member, and shall be
upon such terms of coverage and with such insurance carriers as CBL Member shall
reasonably determine. In CBL Member's discretion, all or any such insurance
contracts may be included as part of CBL Member's overall blanket policy or
program. The Members agree that Member Newco and the Company shall not
self-insure except for deductibles and self-insured retentions that are
equivalent to or less than the levels of deductibles and/or self-insured
retentions that are part of CBL Member's overall blanket policy or program.
CAPITAL CONTRIBUTIONS TO MEMBER NEWCO
7.38 Members' Required Member Funding.
(a) Initial Contributions. As of the date of this Agreement, the unreturned
Member Funding of each Member are as set forth opposite such Member's name on
Exhibit B as such Member's Initial Contribution ("Initial Contributions").
Notwithstanding any provision in this Agreement to the contrary, neither the JG
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Members nor their respective Affiliates shall have any obligation under this
Agreement to make any additional Member Funding to Member Newco beyond the JG
Members' Initial Contribution. [For purposes of this Agreement, any Incoming
Equalizing Contribution made by the JG Members Substitute Member in connection
with a JG Members Exit Event pursuant to Section 16.06(f) shall, from and after
the date upon which such Incoming Equalizing Contribution is made, be treated
for all purposes as an Initial Contribution by the JG Members Substitute
Member.]
(b) Mandatory Contributions. Subject to the provisions of this Agreement:
(a) Except as otherwise provided in this Section 11.01(b), CBL Member
shall contribute as additional Member Funding (A) any and all
necessary equity funding that is set forth in an approved Pro
Forma as equity contributions from Members/owners to fund any and
all construction in connection with Future Development
Activities; (B) any and all costs in excess of such amounts of
necessary equity funding from Members/owners that do not rise to
the level of a Material Development Deviation; and (C) any and
all costs in excess of such equity funding necessary to complete
such construction (construction cost overruns) that rise to the
level of Material Development Deviations and for which the
approvals required in Section 5.03 have been obtained (for
purposes of this clause (i) and Section 5.03 above, CBL Member
and its Affiliates shall be conclusively deemed to have approved
any such costs with respect to Future Development Activities)
(the funding referenced in subparagraphs (A), (B) and (C) hereof
being collectively referred to herein as the "Construction
Funds"). Such contributions of Construction Funds shall be in the
form of cash or cash equivalents and such contributions may be
contributed in installments when and as needed in CBL Member's
reasonable judgment consistent with the applicable Pro Forma(s)
and Development Schedule(s), Member Newco's lender's requirements
and the needs of the Project. Notwithstanding the foregoing, from
and after a JG Members Exit Event, any additional Member Funding
of Construction Funds that CBL Member would thereafter, but for
the operation of this sentence, have been required to make shall
instead be made by CBL Member and the JG Members Substitute
Member pro rata on the basis of their respective Capital
Interests.
(b) Except as provided in this Section 11.01(b), CBL Member shall
contribute as additional Member Funding any and all amounts in
order to fund Operating Deficits of Member Newco. Such
contributions of funds to cover Operating Deficits shall be in
the form of cash or cash equivalents and such contributions may
be contributed in installments when and as needed in CBL Member's
reasonable judgment consistent with the Pro Forma(s), the
Development Schedule(s), the Operating Budget(s) and Member
Newco's lender's requirements and the needs of the Project.
Notwithstanding the foregoing, from and after a JG Members Exit
Event, any additional Member Funding to fund Operating Deficits
that CBL Member would thereafter, but for the operation of this
sentence, have been required to make shall instead be made by CBL
Member and the JG Members Substitute Member pro rata on the basis
of their respective Capital Interests.
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(c) In the event that at any time from and after the date of this
Agreement the sum of (A) the aggregate unreturned amount of
Mandatory Contributions made by CBL Member to fund capital
improvements to the Project (including allowances for tenant
improvements) and (B) the aggregate amount of Mandatory
Contributions made by CBL Member for all purposes other than
funding capital improvements to the Project, whether returned or
unreturned, equals or exceeds $30,000,000.00 (the "Maximum
Required Funding"), CBL Member shall thereafter have no further
obligation to make Mandatory Contributions for any purpose, until
such time, if ever, that the sum of the amounts described in
clause (A) and clause (B) of this paragraph is less than the
Maximum Required Funding, and then only to the extent that such
sum is less than the Maximum Required Funding. For the avoidance
of doubt, the following examples illustrate the operation of this
Section 4.3(b) (Examples 1 and 2 below assume that CBL Member
Parent has not previously incurred any liability under this
Section 4.3 at the time of the example):
(1) Example 1. If CBL Member had made $5,000,000 in
unreturned Mandatory Contributions described in Section
11.01(b)(iii)(A) of this Agreement to fund capital
improvements to the Project and $25,000,000 in other
Mandatory Contributions and Non-Required Contributions,
then CBL Member would have no further obligation to
make Mandatory Contributions unless and until Member
Newco returned to CBL Member all or a portion of the
$5,000,000 in Mandatory Contributions described in
Section 11.01(b)(iii)(A) of this Agreement made by CBL
Member in this Example 1;
(2) Example 2. If, after Example 1, Member Newco returned
to CBL Member all of the $5,000,000 in Mandatory
Contributions described in Section 11.01(b)(iii)(A) of
this Agreement made by CBL Member in Example 1 and
returned $7,000,000 of the $25,000,000 in other
Mandatory Contributions and Non-Required Contributions
made by CBL Member in Example 1, then CBL Member's
obligation to make additional Mandatory Contributions
would be limited to $5,000,000, i.e., the amount of
Mandatory Contributions described in Section
11.01(b)(iii)(A) of this Agreement made by CBL Member
in Example 1 and returned to CBL Member in this Example
2;
(3) Example 3. If, after Example 2, CBL Member made
$5,000,000 in Mandatory Contributions described in
Section 11.01(b)(iii)(B), CBL Member would have no
further obligation to make any Mandatory Contributions
of any kind, whether or not Member Newco thereafter
returned to CBL Member any Mandatory Contributions of
any kind that CBL Member had previously made.
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(d) In the event that CBL Member or its Affiliate and/or any of the
JG Members or their respective Affiliates are required to pay any
amounts to the lender of any Construction Loan or Permanent
Financing/Refinancing on account of any guarantee provided to
such lender, the amount of any such payments (after adjusting as
between the Members for any contribution received from or made to
the other Member or the other Member's Affiliates, as
contemplated by Section 3.04 above) shall be credited as
Mandatory Contributions to the Capital Account of the Member who
made or whose Affiliate made such payments to such lender.
(e) The additional Member Funding of CBL Member described in clauses
(i) and (ii) of this Section 11.01(b) are hereinafter referred to
as "CBL Member Mandatory Contributions". If CBL Member defaults
in its obligation to make any CBL Member Mandatory Contribution
when and as required by this Section 11.01(b), the JG Members
shall have the right, but not the obligation, in the JG Members'
sole and absolute discretion, and without limiting the JG
Members' other rights and remedies under Article XX below, upon
ten (10) days' prior written notice to CBL Member, to make a
Member Funding to Member Newco in an amount equal to the amount
of the CBL Member Mandatory Contribution that CBL Member has
failed to make (such Member Funding by the JG Members, a "JG
Members Substituted Default Contribution"), if, by the end of
such ten (10)-day period, CBL Member has not contributed the
defaulted CBL Member Mandatory Contribution to Member Newco.
(f) All additional Member Funding required to be made by CBL Member
and/or the JG Members Substitute Member hereunder and all JG
Members Substituted Default Contributions that the JG Members
elect to make hereunder may be made in the form of a capital
contribution to Member Newco or a loan to Member Newco. All
additional Member Funding required to be made by CBL Member
and/or the JG Members Substitute Member under this Section 11.01
and all JG Members Substituted Default Contributions, if any,
elected to be made by the JG Members under this Section 11.01 are
collectively referred to herein as the "Mandatory Contributions".
Any loan may be made by an Affiliate of a Member but only if such
Affiliate is a wholly-owned subsidiary or wholly-owned entity of
the Member. Any Mandatory Contributions made in the form of a
capital contribution shall be credited to the Capital Account of
the Member making such Mandatory Contribution and shall be
entitled to a return equal to the Interest/Return, but shall not
affect or modify the respective Profits Interests of any of the
Members. Any Mandatory Contributions made in the form of a loan
to Member Newco shall be unsecured, shall be evidenced by a
non-negotiable promissory note, shall bear interest at a rate
equal to the Interest/Return and shall be repaid only from
Distributable Cash or Capital Events Distributions as set forth
below.
7.39 Additional Non-Required Contributions. Except for the CBL Member
Mandatory Contributions, and, from and after a JG Members Exit Event, the
Mandatory Contributions of the JG Members Substitute Member, as set forth in
Section 11.01, no Member shall be required to make any Member Funding or loans
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to Member Newco. To the extent requested by the Managing Member, from time to
time, one (1) or more Members may be permitted to make additional Member Funding
or loans if and to the extent they so desire. In such event, the Members shall
have the opportunity (but not the obligation) to participate in such Member
Funding or loans on a pro rata basis in accordance with their Profits Interests.
Any such additional contributions of capital or loans are referred to herein as
the "Non-Required Contributions". If any Member shall decline to make such
Non-Required Contributions, such declining Member shall not be deemed to be in
default under this Agreement, and the other Members may make such Non-Required
Contributions on behalf of the declining Members, but there shall be no change
in any Member's Profits Interest. If a Member elects to make such Non-Required
Contributions, however, such Member shall be entitled to either loan or
contribute such funds to Member Newco. Any Non-Required Contributions made in
the form of a capital contribution shall be credited to the contributing
Member's Capital Account and shall be entitled to a return equal to the
Interest/Return, but shall not affect or modify the respective Profits Interests
of any of the Members. Any Non-Required Contributions made in the form of a loan
to Member Newco shall be unsecured, shall be evidenced by a non-negotiable
promissory note, shall bear interest at a rate equal to the Interest/Return and
shall be repaid from Distributable Cash or Capital Events Distributions as set
forth below.
7.40 No Third-Party Rights. This Agreement is not intended to create and/or
confer, and shall not be construed to create and/or confer (directly,
indirectly, contingent or otherwise), any rights or benefits (including but not
limited to any right to require any additional contributions or loans to Member
Newco by the Members, and/or any so-called third-party beneficiary rights) on
any Person who is not a Member or Affiliate of a Member.
7.41 Member Construction Loans not Member Funding. Member Constructions
Loans and accrued and unpaid interest thereon shall not be deemed to be either
Initial Contributions, Mandatory Contributions, or Non-Required Contributions.
7.42 No Further Assessments on Membership Interests. Except as set forth in
this Agreement, the Members are not subject to any further assessments of their
Membership Interests. All Membership Interests of the Members, when first issued
and paid for as described herein, shall be fully paid and nonassessable, subject
to the provisions of this Article XI.
DISTRIBUTIONS TO MEMBERS
7.43 Distributions of Distributable Cash. Subject to the provisions of
Article XI above, all Distributable Cash shall be distributed to the Members on
a periodic basis but not less frequently than quarterly in the following amounts
and in the following order of priority:
(a) To the Members, as an advance on distributions, if any, described in
clauses (b) through (i) of this Section 12.01, until each Member has received an
amount of Distributable Cash that is equal to (i) forty percent (40%) of the
amount of net taxable income (other than long term capital gains) allocated to
such Member for the previous taxable year of Member Newco and (ii) twenty
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percent (20%) of any long term capital gains allocated to such Member for the
previous taxable year of Member Newco (such distribution to the Members for a
given period being collectively referred to herein as the "Tax Distribution").
[For purposes of this Agreement, there shall be no Tax Distribution for Member
Newco's 2005 taxable year and Tax Distribution shall commence with Member
Newco's 2006 taxable year and the first of such Tax Distributions shall equal
forty percent (40%) of the amount of net taxable income allocated to such for
Member Newco's 2005 taxable year but only for the period from the date of this
Agreement to the end of Member Newco's 2005 taxable year and allocations of net
taxable income of Member Newco that relate to the period from January 1, 2005 to
the date of this Agreement shall be disregarded hereunder];
(b) The balance, if any, to the respective Members, in proportion to each
Member's pro rata share of the accrued and unpaid Interest/Return on the
aggregate unreturned Mandatory Contributions of all of the Members, to the
extent of any accrued and unpaid Interest/Return on unreturned Mandatory
Contributions;
(c) The balance, if any, to the respective Members, in proportion to each
Member's pro rata share of the aggregate unreturned Mandatory Contributions of
all of the Members, to the extent of any unreturned Mandatory Contributions;
(d) The balance, if any, to the respective Members, in proportion to each
Member's pro rata share of the accrued and unpaid Interest/Return on the
aggregate unreturned Non-Required Contributions of all of the Members, to the
extent of any accrued and unpaid Interest/Return on unreturned Non-Required
Contributions;
(e) The balance, if any, to the respective Members, in proportion to each
Member's pro rata share of the aggregate unreturned Non-Required Contributions
of all of the Members, to the extent of any unreturned Non-Required
Contributions;
(f) The balance, if any, to CBL Member, to the extent of any accrued and
unpaid Interest/Return on any unreturned Initial Contribution of CBL Member;
(g) The balance, if any, to CBL Member, to the extent of any unreturned
Initial Contribution of CBL Member;
(h) The balance, if any, to the JG Members, pro rata, to the extent of any
unreturned Initial Contribution of the JG Members; and
(i) The balance, if any, to the Members, as follows:
the JG Members (pro rata, in the aggregate)
fifty percent (50%) CBL Member fifty percent
(50%)
7.44 Capital Events Distributions. Subject to the provisions of Article XI
and Section 12.01 above, all Capital Events Distributions shall be made to the
Members in the same manner as set forth in Section 12.01 above.
7.45 Distribution of Incoming Equalizing Contribution to CBL Member. The
entire amount of any Incoming Equalizing Contribution shall be distributed by
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Member Newco to CBL Member and shall be applied to reduce (as to CBL Member
only) the unpaid and/or unreturned amounts described in clauses (b) through (g)
of Section 12.01 in reverse order.
7.46 Limitation Upon Distributions. No distributions shall be made to
Members if prohibited by the Act.
ALLOCATIONS OF NET PROFITS AND NET LOSSES
7.47 Net Profits. Member Newco will elect the traditional method with
curative allocations on sale for purposes of allocation of gain under Section
704(c) of the Code. The JG Members and CBL Member will agree upon the amounts to
be allocated to land and depreciable property. Net Profits shall be allocated
for each Fiscal Year to the Members as follows, except as otherwise required by
the relevant provisions of the Code including but not limited to Subchapter K
and the Treasury Regulations applicable thereto:
(a) First, to each Member in an amount of the "unrecovered" Net Losses
allocated to such Member under Section 13.02(a) and Section 13.02(b) below, pro
rata in reverse order according to the amount of such "unrecovered" Net Losses
as between the Members;
(b) The balance, if any, to the respective Members, in proportion to each
Member's pro rata share of the Interest/Returns on the aggregate unreturned
Mandatory Contributions of all of the Members, to the extent of any
Interest/Return on such unreturned Mandatory Contributions distributed pursuant
to Section 12.01(b);
(c) The balance, if any, to the respective Members, in proportion to each
Member's pro rata share of the Interest/Returns on the aggregate unreturned
Non-Required Contributions of all of the Members, to the extent of any
Interest/Return on such unreturned Non-Required Contributions distributed
pursuant to Section 12.01(d);
(d) The balance, if any, to CBL Member, to the extent of any
Interest/Return on any unreturned Initial Contributions of CBL Member
distributed pursuant to Section 12.02(f); and
(e) The balance, if any, to the Members, as follows:
the JG Members (pro rata, in the aggregate)
fifty percent (50%) CBL Member fifty percent
(50%)
For purposes hereof, the term "unrecovered" Net Losses means Net Losses
allocated to a Member for a Fiscal Year for which such Member has not received a
corresponding Net Profits allocation in a subsequent Fiscal Year. Once such
allocation of Net Profits is made to a Member equivalent to all or any portion
of previously allocated Net Losses, such amounts of Net Losses shall no longer
be deemed "unrecovered".
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7.48 Net Losses. Subject to Section 13.03 below, Net Losses shall be
allocated for each Fiscal Year to the Members as follows, except as otherwise
required by the relevant provisions of the Code including but not limited to
Subchapter K and the Treasury Regulations applicable thereto:
(a) First, to each Member until the aggregate Net Losses allocated pursuant
to this Section 13.02(a) for the current Fiscal Year and all previous Fiscal
Years is equal to the aggregate amount of Net Profits allocated pursuant to
Sections 13.01(b)-(e) in reverse order;
(b) Second, to each Member until the aggregate Net Losses allocated
pursuant to this Section 13.02(b) for the current Fiscal Year and all previous
Fiscal Years is equal to the amount of the unreturned Mandatory Contributions,
Non-Required Contributions, and Initial Contributions credited to each Member's
Capital Account in the same proportion that each Member's respective
contribution bears to the total of all Member's contributions to each category
of Member Funding in reverse order; and
(c) The balance, if any, to the Members, as follows:
the JG Members (pro rata, in the aggregate) fifty percent (50%)
CBL Member fifty percent (50%)
7.49 2005 Fiscal Year.
For Member Newco's 2005 Fiscal Year, Net Profits and Net Losses from and
including January 1, 2005 to and including the date of this Agreement shall be
allocated one hundred percent (100%) to the JG Members, pro rata, and Net
Profits and Net Losses after the date of this Agreement through and including
December 31, 2005 shall be allocated as set forth in Sections 13.01 and 13.02,
respectively.
BOOKS AND RECORDS
7.50 Accounting Period. Member Newco's accounting period shall be the
Fiscal Year.
7.51 Records and Reports. Member Newco shall keep at its principal place of
business and at the Project the following records:
(a) A current list of the full name and last-known address of each Member;
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(b) A current list of the full name and last-known address of each assignee
of any Member's rights to Distributable Cash or other property of Member Newco
and a description of the rights assigned;
(c) A copy of the Articles of Organization;
(d) Copies of this Agreement and any agreements concerning classes or
series of Membership Interests;
(e) Copy of Member Newco's federal, state and local income tax returns and
reports, if any, for the three (3) most recent Fiscal Years;
(f) Copies of Member Newco's financial statements for all Fiscal Years from
Member Newco's inception, which statements must include a balance sheet as of
the end of such year and an income statement for such year, and accounting
records of Member Newco;
(g) Records of all proceedings of Members, if any;
(h) Any written consents obtained from Members under the Act;
(i) A statement of all contributions accepted by and all Member loans made
to Member Newco, the identity of the contribution and the agreed value of the
contribution and the amount of all such Member loans; and
(j) A copy of all contribution agreements and loan agreements and/or
promissory notes or similar instruments executed by Member Newco in favor of any
Member.
7.52 Inspection of Records by Members. A Member shall have the right to
inspect and copy, during regular business hours at Member Newco's principal
executive office, the books and records described in Section 14.02 upon the
Member giving Member Newco written notice not less than five (5) Days prior to
the date the Member wishes to inspect and copy.
7.53 Tax Returns. The Managing Member shall cause the Accountants to
prepare and timely file all tax returns required to be filed by Member Newco
pursuant to the Code and all other tax returns deemed necessary and required in
each jurisdiction in which Member Newco does business. Prior to filing such
returns, the Managing Member shall provide drafts of such returns, or pertinent
information therefrom, to the Members on or prior to March 1 of each Fiscal Year
for review by such Members. The Members shall provide comments to Member Newco
on such draft returns within seven (7) Days after receiving them. CBL Member
shall use its reasonable good faith efforts to cause a delivery of K-1 forms to
the Members by March 15 of each Fiscal Year. CBL Member shall provide each
Member with CBL Member's reasonable good faith estimate of the projected taxable
income and projected debt allocation to each Member for the next Fiscal Year by
December 1 of each Fiscal Year.
7.54 Financial Statements. The Managing Member, shall deliver to the
Members copies of unaudited internal annual financial statements as soon as
available and in any event within thirty (30) Days after the close of each
Fiscal Year of Member Newco and copies of audited annual financial statements as
soon as available and in any event within ninety (90) Days after the close of
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the Fiscal Year of Member Newco, including in each case a balance sheet as of
the end of such Fiscal Year and the related statement of income for such Fiscal
Year, in each case setting forth in comparative form the figures for the
preceding Fiscal Year and each prepared according to GAAP.
TERMINATION OF MEMBERSHIP INTEREST
7.55 Termination of Interest. Subject to Article XX of this Agreement, a
Member's continued membership in Member Newco shall terminate upon the: (a)
acquisition of the Member's complete Membership Interest by Member Newco; (b)
bankruptcy of the Member; (c) dissolution of the Member; (d) a merger in which
Member Newco is not the surviving entity; (e) an attempt by the Member to
withdraw or retire from being a Member in violation of Section 15.02 below; or
(f) the occurrence of any other event under the Act or applicable law that
terminates the continued membership of the Member in Member Newco.
7.56 Withdrawal. Notwithstanding the foregoing, a Member shall not have the
right under this Agreement to withdraw or retire from being a Member, to assign
all or any portion of the Member's Membership Interest except as provided in
Article XVI and Article XX hereof, to voluntarily become bankrupt, to
voluntarily dissolve, or to otherwise voluntarily terminate the Member's
Membership Interest, each of which is an Event of Default under Article XX of
this Agreement. Nothing in this Section 15.02 shall prejudice the rights or
remedies of the Members under Article XX.
7.57 Effect of Termination of Membership. If for any reason the continued
membership of a Member is terminated, then, if such termination causes an Event
of Dissolution, but the business of Member Newco is continued as provided in
Section 17.02 of this Agreement, unless otherwise approved by the Members (other
than the Member whose membership has been terminated) by a Majority Vote, a
Member whose status as a Member is terminated, regardless of whether or not such
termination was a result of a voluntary act by such Member, shall have only the
right to receive distributions of Distributable Cash or Capital Events
Distributions and shall thereafter no longer be or be deemed to be a Member.
Additionally, if for any reason the continued membership of a Member is
terminated, then (i) if such Member whose Membership Interest is terminated is
the Managing Member, the Member shall immediately cease being the Managing
Member, and (ii) such Member's voting rights shall terminate, subject to the
provisions of Section 20.04 below.
TRANSFERS OF MEMBERSHIP INTERESTS AND RESTRICTIONS ON
TRANSFERS; IMPASSE PROVISIONS; PLEDGE OF MEMBERSHIP INTERESTS
7.58 Definition of "Assignment". For purposes of this Article, the words
"assign" or "assignment" when used in the context of the assignment of all or
any portion of a Member's Membership Interest, shall mean and include any
transfer, alienation, sale, assignment, pledge, grant of security interest, lien
or encumbrance, or other disposition, whether voluntarily or by operation of
law.
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7.59 Restriction on Assignment. Except as expressly permitted in this
Article XVI, no Member shall assign all or any part of its Membership Interest
in Member Newco. Any attempted assignment of all or any portion of a Membership
Interest other than as permitted in this Article XVI shall be null and void and
shall have no effect whatsoever.
7.60 Exempt Assignments.
(a) Subject to the provisions of Sections 16.06 and 16.07 which shall be
applicable to all assignments of Membership Interests, the prohibition on
assignments set forth in Section 16.02 above shall not apply to an assignment of
all or any part of a Membership Interest of any Member:
(a) to any of the other Members or a wholly-owned Affiliate of a
Member;
(b) to family partnerships, family trusts, family limited liability
companies or similar family entities so long as such Member or
its principals continue to Control such Membership Interests and
either the proposed transferee has sufficient net worth to cover
any funding obligations of the transferring Member or the
transferring Member agrees to and does guarantee the funding
obligations of the proposed transferee;
(c) With respect to the JG Members, to (A) any entity Controlled by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, any JG Member, or ▇▇▇▇▇▇ Realty Investors
Limited Partnership; or (B) to a trust Controlled by the
transferor or a trust benefiting any one or more Persons who bear
the following family relationship to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇: (1)
children (natural and adopted) and their natural and adopted
descendants; (2) stepchildren and their natural and adopted
descendants; (3) siblings and their natural and adopted
descendants; or (4) a spouse of any Person described in subclause
(1), (2) or (3);
(d) where such assignments are part of a merger, consolidation or
sale of all or substantially all of the assets or stock of the JG
Members and/or its Affiliates or of CBL Member and/or Affiliates;
(e) where such assignments are pursuant to the admission of an
additional member(s) to Member Newco in accordance with this
Agreement; and/or
(f) where such assignments are pursuant to transfers set forth in
Sections 16.04, 16.05, Article XVII and/or Section 20.03 below.
In the event of any assignment permitted hereunder, the transferring Member
shall provide written notice of such assignment to all of the Members and, if
required, Member Newco's lender and shall take commercially reasonable steps so
as to minimize, if practical, the possibility of termination under Section 708
of the Code.
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(b) For purposes of clauses (ii), (iii) and (iv) of Section 16.03(a) above:
(a) any Person having a right to revoke the trust in whole or in part
shall be regarded as the beneficiary of the portion of the trust
such Person has the right to revoke;
(b) to the extent that more than one trustee is acting for a single
trust, such trustees shall deliver to the Managing Member a
written designation of one of them as their representative to
Member Newco;
(c) if, in case of clause (ii), the trustees fail to so designate a
representative, their representative shall be such one of them as
the Managing Member shall designate by written designation
delivered to all of them from time to time;
(d) all acts permitted to be taken by and all communications to be
given to the owner of a Membership Interest in Member Newco shall
be taken by or given to such representative with respect to the
Membership Interest in Member Newco owned by the trust of which
such representative is a trustee; and
(e) any action taken by such a representative shall be deemed to be
the act of and shall be binding upon each trust owning a
Membership Interest in Member Newco for which such representative
is trustee or is designated to act.
(c) The restrictions on assignments set forth in this Article XVI shall
apply to assignments of equity interests in a Member, provided that:
(a) any assignment of equity interests in a Member to a Person
described in clauses (i), (ii) or (iii) of Section 16.03(a) that
would be permitted if such assignment were an assignment of all
or any part of the Membership Interest of a Member shall also be
permitted hereunder, as long as, after giving effect to such
assignment, CBL Member Parent continues to Control CBL Member (in
the case of an assignment of equity interests in CBL Member) and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ continues to Control the JG Member during his
lifetime (in the case of an assignment of equity interests in any
JG Member);
(b) the restrictions on assignments set forth in this Article XVI
shall not apply to any assignment of not more than fifteen
percent (15%) of the equity interests in any JG Member to a third
party or third parties who is not a Person described in clause
(i) of this Section 16.03(c), as long as ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
continues to Control the JG Member during his lifetime;
(c) the restrictions on assignments set forth in this Article XVI
shall not apply to any assignment of not more than fifteen
percent (15%) of the equity interests in CBL Member to a third
party or third parties who is not a Person described in clause
(i) of this Section 16.03(c), as long as CBL Member Parent,
continues to Control CBL Member; and
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(d) the restrictions on assignments set forth in this Article XVI
shall not apply to the sale or issuance of equity interests of
CBL Member Parent or any Person that Controls CBL Member Parent
or to any merger, consolidation or sale of all of the assets or
partnership interests of CBL Member Parent or any Person that
Controls CBL Member Parent.
The parties hereto agree that neither party may transfer or issue or allow the
transfer or issuance of equity interests in such Member in such manner as to
violate the purposes of the transfer restrictions under this Article XVI. Upon
the assignment of a Membership Interest of any Member to such Member's successor
in an assignment permitted under this Article XVI, and the assumption by such
successor of the assigning Member's obligations under this Agreement with
respect to the Membership Interest so assigned, and the delivery to the other
Members of a true and complete copy of the assignment and assumption
agreement(s), such successor shall, upon such assignment and assumption, be
considered a Member and may exercise all of such Member's rights.
7.61 Mandatory Buy/Sell on Impasse.
(a) Impasse. Except as otherwise set forth in this Agreement, any dispute
or disagreement arising between the Members in connection with any decision set
forth in this Agreement that requires the unanimous approval of the Members
under Section 5.03, which is not settled to the mutual satisfaction of CBL
Member and the JG Members shall constitute an "Impasse," except that no dispute
or disagreement arising between CBL Member and the JG Members with respect to
matters referred to in Section 5.03(a) shall be an Impasse for purposes of this
Section 16.04 before the January 1, 200[ ]. Either Member (the "Impasse Notice
Sender") may notify the other Member (the "Impasse Notice Recipient") that an
Impasse exists (the "Initial Impasse Notice") and that, unless the Impasse
Notice Recipient shall provide its approval of the item in question, the Impasse
Notice Sender may invoke the provisions of this Section 16.04. The Impasse
Notice Recipient shall have (i) thirty (30) Days in the event of all matters
other than an Impasse with respect to matters described in Sections 5.03(b),
(c), (g), or (h) above (each, an "Expedited Impasse Event"), as set forth in
subclause (ii) of this sentence; or (ii) ten (10) Days in the case of an
Expedited Impasse Event, within which to either (x) note its continuing
disapproval of the item in question, or (y) provide its consent to, approval of
or agreement with the position of Impasse Notice Sender as to the decision or
matter creating the Impasse. In the event the Impasse Notice Recipient does not
respond to the Initial Impasse Notice within such 30-Day period or 10-Day
period, as the case may be, the Impasse Notice Recipient shall be deemed to have
consented to or approved of the decision or matter creating the Impasse in
accord with the Impasse Notice Sender. If the Impasse Notice Recipient shall
respond within such 30-Day or 10-Day period, as the case may be, by notifying
the Impasse Notice Sender that the Impasse Notice Recipient continues to
disapprove of the item in question, then either Member may thereupon give the
other Member an Impasse Offer Notice as referenced below. If a Member gives the
Initial Impasse Notice as provided in this Section 16.04, the other Member shall
no longer have any right to give an Initial Impasse Notice with respect to the
same Impasse.
(b) Put/Call on Impasse. In the event that an Impasse occurs and the
Initial Impasse Notice has been sent to the Impasse Notice Recipient and the
Impasse Notice Recipient has responded within the applicable time parameters set
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forth above with a response setting forth its continued disapproval of the item
in question, then either Member (the "Impasse Initiator") may give written
notice (the "Impasse Offer Notice") to the other Member (the "Impasse
Respondent"), setting forth the Impasse Initiator's estimation of the aggregate
asset value of the Project (net of any outstanding Constructions Loans and/or
Permanent Financing/Refinancing) (the "Impasse Project Value") and stating the
Impasse Initiator's intent to buy all, but not less than all, of the Impasse
Respondent's and its Affiliates', if any, Membership Interest, whereupon the
provisions set forth in this Section 16.04(b) and Section 16.04(c) shall apply.
Notwithstanding the foregoing, if both CBL Member and the JG Members, or
Affiliates of each of CBL Member and the JG Members, are also members or other
equity holders in the Outparcel Venture or any other Entity that directly or
indirectly owns or leases any real property that is contiguous with the Project,
no Impasse Offer Notice shall be effective unless a contemporaneous notice is
given under any comparable provision of any operating, partnership or similar
agreement with respect to such real property between CBL Member and the JG
Members, or their respective Affiliates, as the case may be.
(a) Purchase Price. The Impasse Project Value shall provide the basis
for determining the cash purchase price at which the Impasse
Initiator would be willing to purchase the Membership Interests
of the Impasse Respondent and its Affiliates (the "Impasse
Initiator Offer Price") and the cash purchase price at which the
Impasse Respondent may elect to acquire the Membership Interests
of the Impasse Initiator and its Affiliates (the "Impasse
Respondent Purchase Price") as follows:
(i) The Impasse Initiator Offer Price shall be an amount equal
to the amount that would be distributed to the Impasse
Respondent upon a Capital Events Distribution in an amount
equal to the Impasse Project Value
(ii) The Impasse Respondent Purchase Price shall be an amount
equal to the amount that would be distributed to the Impasse
Initiator upon a Capital Events Distribution in an amount
equal to the Impasse Project Value.
(b) Exercise of Impasse Put/Call. Upon receipt of the Impasse Offer
Notice, the Impasse Respondent and its Affiliates, if any, shall
then be obligated either :
To sell to the Impasse Initiator for cash the entire
Membership Interest of the Impasse Respondent and its
Affiliates, if any, in Member Newco for the Impasse
Initiator Offer Price, as described above and subject to
adjustments as provided in Section 16.04(c) below;
(Y) To purchase the entire Membership Interest of the
Impasse Initiator and its Affiliates, if any, in Member
Newco for the Impasse Respondent Purchase Price, as
described above and subject to adjustments as provided in
Section 16.04(c) below; or
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(Z) To consent to, approve of or agree with the position of
the Impasse Initiator as to the decision or matter creating
the Impasse.
(c) The Impasse Respondent shall notify the Impasse Initiator of its
election within (x) thirty (30) Days after the date of receipt of
the Impasse Offer Notice as to any Impasse that occurs with
respect to any matter other than an Expedited Impasse Event, or
(y) ten (10) Days after the date of receipt of the Impasse Offer
Notice as to any Impasse that occurs relating to an Expedited
Impasse Event. Failure of a Impasse Respondent to give the
Impasse Initiator notice that such Impasse Respondent has elected
to proceed under Section 16.04(b)(ii)(Y) or Section
16.04(b)(ii)(Z) above shall be conclusively deemed to be an
election under Section 16.04(b)(ii)(X) (i.e., to sell).
(d) If the Impasse Respondent timely notifies the Impasse Initiator
that such Impasse Respondent has elected to proceed under Section
16.04(b)(ii)(Z), the Impasse shall be deemed resolved, and
neither Member shall be required or entitled to purchase the
other Member's Membership Interest or sell its own Membership
Interest pursuant to this Section 16.04 with respect to the
resolved Impasse. If the Impasse Respondent timely notifies the
Impasse Initiator that such Impasse Respondent has elected to
proceed under Section 16.04(b)(ii)(X) or Section 16.04(b)(ii)(Y),
or if the Impasse Respondent is deemed to have elected to proceed
under Section 16.04(b)(ii)(X), then the Impasse Initiator shall
have a further fifteen (15) Days after receipt of such notice or
the effective date of such deemed election to notify the Impasse
Respondent that the Impasse Initiator consents to, approves of or
agrees with the position of the Impasse Respondent as to the
decision or matter creating the Impasse. If the Impasse Initiator
timely so notifies the Impasse Respondent, the Impasse shall be
deemed resolved, and neither Member shall be required or entitled
to purchase the other Member's Membership Interest or sell its
own Membership Interest pursuant to this Section 16.04 with
respect to the resolved Impasse. If the Impasse Initiator does
not timely so notify the Impasse Respondent, the parties shall
proceed pursuant to the foregoing election or deemed election of
the Impasse Respondent.
(c) Closings.
(a) Location and Time Periods. The closing of any sale of a
Membership Interest in Member Newco pursuant to this Section
16.04 shall be held at the principal offices of Member Newco,
unless otherwise mutually agreed, on a mutually acceptable date
not more than ninety (90) Days after (A) the receipt by the
Impasse Initiator of the written notice of election by the
Impasse Respondent, or (B) after the expiration of the time
within which the Impasse Respondent must so elect, as provided in
Section 16.04(b)(iii).
(b) Closing Adjustments. At the closing, any closing adjustments as
set forth in the Impasse Offer Notice (and if not so designated
in the Impasse Offer Notice then those adjustments which are then
usual and customary in Raleigh, North Carolina) shall be made
between the purchasing party and the selling party as of the date
of closing. Any Member transferring its Membership Interest shall
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transfer such Membership Interest 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
fully transfer such Membership Interest to the acquiring Member
including, but not limited to, any documents necessary to
evidence such transfer, and all documents required to release the
interest of any other party who may claim an interest in such
Member's Membership Interest. Any monetary default or obligation
of the selling Member must be cured out of the proceeds from such
sale at the closing. Following the date of closing, the selling
Member shall have no further rights to any distributions of
Distributable Cash or Capital Events Distributions, and all such
rights shall vest in the selling Member's transferee.
7.62 Right of First Refusal; Buy/Sell.
(a) Right of First Refusal. No transfer of any Membership Interests shall
be permitted under this Section 16.05(a) before January 1, 20[ ]. If, at any
time after December 31, 20[ ], a Member shall desire to transfer all (and not
less than all) of its Membership Interest (which shall include its Affiliates'
Membership Interest, if any) to any Person and such transfer is not an exempt
assignment pursuant to Section 16.03 above nor a transfer otherwise permitted
under this Article XVI, then, in such event and subject to the rights of the
Non-Transferring Members set forth in this Section 16.05(a), said Member (the
"Transferring Member", which term shall include said Member's Affiliates holding
a Membership Interest) may transfer its Membership Interest to such third party
(the "Third-Party Purchaser") only after compliance with the procedures of this
Section 16.05(a). The Transferring Member shall give written notice (the "RoFR
Notice") to the other Members (the "Non-Transferring Members") of its intent to
transfer its Membership Interest and the Third-Party Purchaser to whom it
desires or intends to transfer same, the terms of such proposed purchase
including the price to be paid, method of payment and any contingencies or other
material provisions of such proposed purchase, and the time parameters within
which said transfer is to take place. Notwithstanding the foregoing, if both CBL
Member and the JG Members, or Affiliates of each of CBL Member and the JG
Members, are also members or other equity holders in the Outparcel Venture or
any other Entity that directly or indirectly owns or leases any real property
that is contiguous with the Project, no RoFR Notice shall be effective unless a
contemporaneous notice is given under any comparable provision of any operating,
partnership or similar agreement with respect to such real property between CBL
Member and the JG Members, or their respective Affiliates, as the case may be.
The Non-Transferring Members shall have sixty (60) Days from the date of their
receipt of the RoFR Notice (the "RoFR Period") to elect to purchase all and not
less than all of the Transferring Member's Membership Interest for the price
upon which said Third-Party Purchaser is willing to pay for said Membership
Interest. In the event the Non-Transferring Members either elect not to purchase
the Transferring Member's Membership Interest or do not notify the Transferring
Member in writing of their decision by the end of the RoFR Period referred to
above, then the Transferring Member may, for a period of one-hundred twenty
(120) Days after the end of the RoFR Period referred to above, transfer the
referenced Membership Interest to the Third-Party Purchaser but only upon such
terms as are substantially similar to the terms at which said Membership
Interest was offered to the Non-Transferring Members. If the Transferring Member
shall not have closed on the transfer of the referenced Membership Interest to
said Third-Party Purchaser within said 120-Day period, said transfer shall once
again become subject to the terms and conditions of this Section 16.05(a), the
Transferring Member shall be required to once again to comply with the
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procedures set forth in this Section 16.05(a), and the Transferring Member shall
be precluded from giving another RoFR Notice under this Section 16.05(a) for a
period of six (6) months following the expiration of said 120-Day period. In the
event the Non-Transferring Member(s) exercise their right to purchase the
Membership Interest of the Transferring Member, the closing of said transaction
shall occur no later than one-hundred twenty (120) Days from the end of the RoFR
Period referenced above. Notwithstanding the provision of this Section 16.05(a),
in the event that during the RoFR Period the Third-Party Purchaser shall revoke
its offer to purchase or the Transferring Member shall determine to not accept
the offer of the Third-Party Purchaser, then the Transferring Member shall be
entitled to revoke, in writing, the RoFR Notice and the Non-Transferring Members
shall not have the right to purchase the Transferring Member's Membership
Interest on the terms of such RoFR Notice.
(b) Buy/Sell.
(a) No transfer of any Membership Interests shall be permitted
under this Section 16.05(b) before January 1, 20[ ]. At any
time after December 31, 20[ ], a Member (the "Buy/Sell
Initiator") may give written notice (the "Buy/Sell Offer
Notice") to the other Member (the "Buy/Sell Respondent"),
setting forth the Buy/Sell Initiator's intent to buy all,
but not less than all, of the Membership Interests of the
Buy/Sell Respondent and its Affiliates, if any, whereupon
the provisions set forth in this Section 16.05(b) shall
apply. Notwithstanding the foregoing, if both CBL Member and
the JG Members, or Affiliates of each of CBL Member and the
JG Members, are also members or other equity holders in the
Outparcel Venture or any other Entity that directly or
indirectly owns or leases any real property that is
contiguous with the Project, no Buy/Sell Offer Notice shall
be effective unless a contemporaneous notice is given under
any comparable provision of any operating, partnership or
similar agreement with respect to such real property between
CBL Member and the JG Members, or their respective
Affiliates, as the case may be. If a Member gives a Buy/Sell
Offer Notice as provided in this paragraph, the other Member
shall no longer have any right to give its own Buy/Sell
Offer Notice under this paragraph while a sale or purchase
of a Membership Interest under this Section 16.05(b)
pursuant to such Buy/Sell Offer Notice is pending.
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(i) Purchase Price. The Buy/Sell Initiator shall specify in its
Buy/Sell Offer Notice the Buy/Sell Initiator's estimation of
the aggregate asset value of the Project (net of any
outstanding Constructions Loans and/or Permanent
Financing/Refinancing) (the "Buy/Sell Project Value"). The
Buy/Sell Project Value shall provide the basis for
determining the cash purchase price at which the Buy/Sell
Initiator would be willing to purchase the Membership
Interests of the Buy/Sell Respondent and its Affiliates (the
"Buy/Sell Initiator Offer Price") and the cash purchase
price at which the Buy/Sell Respondent may elect to acquire
the Membership Interests of the Buy/Sell Initiator and its
Affiliates (the "Buy/Sell Respondent Purchase Price") as
follows:
(I) The Buy/Sell Initiator Offer Price shall be an amount
equal to the amount that would be distributed to the
Buy/Sell Respondent upon a Capital Events Distribution
in an amount equal to the Buy/Sell Project Value.
(II) The Buy/Sell Respondent Purchase Price shall be an
amount equal to the amount that would be distributed to
the Buy/Sell Initiator upon a Capital Events
Distribution in an amount equal to the Buy/Sell Project
Value.
(ii) Exercise of Buy/Sell. Upon receipt of the Buy/Sell Offer
Notice, the Buy/Sell Respondent shall then be obligated
either:
(I) To sell to the Buy/Sell Initiator for cash the entire
Membership Interest of the Buy/Sell Respondent and its
Affiliates, if any, in Member Newco for the Buy/Sell
Initiator Offer Price, as described above and subject
to adjustments as provided in Section 16.05(b)(ii)(B)
below; or
(II) To purchase the entire Membership Interest of the
Buy/Sell Initiator and its Affiliates, if any, in
Member Newco for the Buy/Sell Respondent Purchase
Price, as described above and subject to adjustments as
provided in Section 16.05(b)(ii)(B) below.
(iii) The Buy/Sell Respondents shall notify the Buy/Sell
Initiator of their election within thirty (30) Days after
the date of receipt of the Buy/Sell Offer Notice. Failure of
Buy/Sell Respondents to give the Buy/Sell Initiator notice
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that such Buy/Sell Respondents have elected to proceed under
Section 16.05(b)(i)(B)(II) above shall be conclusively
deemed to be an election under Section 16.05(b)(i)(B)(I)
(i.e., to sell).
(b) Closings.
(i) Location and Time Periods. The closing of any sale of a
Membership Interest in Member Newco pursuant to this Section
16.05(b) shall be held at the principal offices of Member
Newco, unless otherwise mutually agreed, on a mutually
acceptable date not more than ninety (90) Days after (1) the
receipt by the Buy/Sell Initiator of the written notice of
election by the Buy/Sell Respondent, or (2) after the
expiration of the time within which the Buy/Sell Respondents
must so elect, as provided in Section 16.05(b)(i)(C).
(ii) Closing Adjustments. At the closing, any closing adjustments
as set forth in the Buy/Sell Offer Notice (and if not so
designated in the Buy/Sell Offer Notice then those
adjustments which are then usual and customary in Raleigh,
North Carolina) shall be made between the purchasing party
and the selling party as of the date of closing. Any Member
transferring its Membership Interest shall transfer such
Membership Interest 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 fully transfer such Membership Interest to the
acquiring Member including, but not limited to, any
documents necessary to evidence such transfer, and all
documents required to release the interest of any other
party who may claim an interest in such Member's Membership
Interest. Any monetary default or obligation of the selling
Member must be cured out of the proceeds from such sale at
the closing. Following the date of closing, the selling
Member shall have no further rights to any distributions of
Distributable Cash or Capital Event Distributions, and all
such rights shall vest in the selling Member's transferee.
7.63 Conditions of Assignments. Prior to any assignee of a Membership
Interest becoming a Member, the following conditions must have been satisfied:
(a) The assignor, his legal representative or authorized agent must have
executed a written instrument of assignment of such Membership Interest in form
and substance reasonably satisfactory to the Members;
(b) The assignee must have executed a written agreement, in form and
substance reasonably satisfactory to the Members, to assume all of the duties
and obligations of the assignor under this Agreement with respect to the
assigned Membership Interest and to be bound by and subject to all of the terms
and conditions of this Agreement;
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(c) The assignor, his legal representative or authorized agent, and the
assignee must have executed a written agreement, in form and substance
reasonably satisfactory to the Members, to indemnify and hold Member Newco and
the Members harmless from and against any loss or liability arising out of the
assignment;
(d) The assignee must have executed such other documents and instruments as
the Members may deem necessary to effect the admission of the assignee as a
Member; and
(e) The assignee (if not previously a Member of Member Newco) or the
assignor must have paid the expenses incurred by Member Newco in connection with
the admission of the assignee to Member Newco.
(f) In the case of an assignment to a Third-Party Purchaser pursuant to
Section 16.05(a) in which the JG Members are the Transferring Member (a "JG
Members Exit Event"), (i) such Third-Party Purchaser (the "JG Members Substitute
Member") shall have made a Member Funding to Member Newco (a "Incoming
Equalizing Contribution") (which Incoming Equalizing Contribution Member Newco
shall thereupon immediately distribute to CBL Member) in an amount such that,
after giving effect to the distribution of the Incoming Equalizing Contribution
to CBL Member, the JG Members Substitute Member's Capital Interest (expressed as
a percentage) shall be equal to the JG Members Substitute Member's Profits
Interest and (ii) the JG Members Substitute Member or its Affiliates shall
provide CBL Member and its Affiliates, if any, and/or third-party lenders to
Member Newco, as the case may be, with such additional agreements or
undertakings as CBL Member or such lenders may reasonably require to replace or
hold CBL Member and its Affiliates harmless from any liability, loss, cost or
expense arising out of that portion of any then-outstanding loans (other than
loans that are Mandatory Contributions or Non-Required Contributions) and/or
Affiliate Loan Guarantees theretofore provided by CBL Member or its Affiliates
that corresponds to the JG Members Substitute Member's Capital Interest
(expressed as a percentage).
7.64 Lender Approval. In the event that, pursuant to the terms of any loan
agreement, security agreement, deed of trust or other agreement existing at any
time between Member Newco and any lender, the approval of such lender is
required prior to the time that any transfer or assignment of any Membership
Interest in Member Newco may occur, then, notwithstanding any provision of this
Article XVI to the contrary, no transfer or assignment of any Membership
Interest in Member Newco shall occur until all required approvals and/or
consents of any such lender have been obtained. Notwithstanding anything herein
to the contrary, if the required lender's approval has not been obtained within
the time period set forth in Section 16.04(b)(iii) or the RoFR Period, then such
period will be extended to a date that is three (3) Days after all Members have
received written notice of lender's consent, but in no event shall such
extension be longer than thirty (30) Days.
7.65 Pledge of Membership Interests. Except as relates to any pledge of
Membership Interests required by any financing by Member Newco or any collateral
assignment of a Member's rights to receive distributions in respect of such
Member's Membership Interest, no Member may pledge, mortgage, hypothecate,
assign as security, create a security interest in or charge against or other
encumbrance of all or any part of its Membership Interest, whether directly or
indirectly, voluntarily or involuntarily or by operation of law. Notwithstanding
the foregoing, no Member shall be obligated to pledge its Membership Interests
in connection with any such financing. Failure of a Member to agree to pledge
its Membership Interests in connection with any such financing shall not
constitute an Impasse, and Section 16.04 shall not apply to such failure. The JG
Members and CBL Member agree that each of them will, upon request of a lender to
Member Newco or the Company, collaterally assign for the benefit of the lender,
their respective rights to receive distributions in respect of their Membership
Interests.
7.66 Mutually Exclusive Rights. The rights of the Members described in
Section 16.04, Section 16.05(a), and Section 16.05(b) in this Article XVI and in
Section 20.03 are mutually exclusive, meaning that, if the exercise, or the
right to exercise, one of such rights is pending or in process (the "Active
Right"), neither of the other rights can be initiated, and no assignment that
would be subject to either of the other rights can be initiated or completed,
until the Active Right closes, lapses, or is otherwise terminated.
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DISSOLUTION, TERMINATION AND WINDING-UP
7.67 Events Causing Dissolution. Member Newco shall be dissolved upon the
occurrence of any of the following events (collectively, "Events of
Dissolution"): (a) when the period, if any, fixed for the duration of Member
Newco shall expire pursuant to Section 2.05 of this Agreement; (b) by action of
the Members pursuant to the Act; (c) by action of and at the option of the
remaining Members in the event of (i) the termination of any Member as provided
in Section 15.01 of this Agreement; (ii) the acquisition by Member Newco of the
complete Membership Interest of any Member; or (iii) the occurrence of any other
event that terminates the continued membership of any Member; or (d) a merger in
which Member Newco is not the surviving organization ("Merger").
7.68 Continuation. Notwithstanding Section 17.01(c), Member Newco is not
dissolved and is not required to be wound up by reason of any Event of
Dissolution arising out of the termination of the continued Membership of a
Member if there is at least one (1) remaining Member and the existence and
business of Member Newco are continued by the remaining Member or by the
affirmative Majority Vote of the Members if there is more than one remaining
Member other than the Member as to whom the Event of Dissolution occurred,
obtained no later than ninety (90) Days after the occurrence of the Event of
Dissolution.
7.69 Effect of Dissolution. Upon dissolution of Member Newco, Member Newco
shall cease to carry on its business, except to the extent necessary (or
appropriate) for the winding-up of the business of Member Newco. Upon the
occurrence of an Event of Dissolution (other than by reason of a Merger), the
Managing Member shall file with the Secretary of State of Ohio a notice of
dissolution pursuant to the Act.
7.70 Winding-Up, Liquidation and Distribution of Assets.
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(a) Upon the occurrence of an Event of Dissolution, other than as a result
of a Merger, an accounting shall be made by the Accountants of the accounts of
Member Newco and Member Newco's assets, liabilities and operations, from the
date of the last previous accounting until the date of the occurrence of such
Event of Dissolution. The Managing Member shall immediately proceed to wind-up
the affairs of Member Newco.
(b) If Member Newco is dissolved and its affairs are to be wound-up, the
Managing Member shall:
(a) Sell or otherwise liquidate all of Member Newco's assets as
promptly as practicable (except to the extent the Members may
determine to distribute any assets to the Members in kind);
(b) Allocate any Net Profit or Net Loss resulting from such sales to
the Members in accordance with Article XIII hereof;
(c) Discharge all liabilities of Member Newco, including liabilities
to Members who are creditors, to the extent otherwise permitted
by law, other than liabilities to Members for distributions, and
establish such Reserves as may be reasonably necessary to provide
for contingent or other liabilities of Member Newco;
(d) Distribute the remaining assets to the Members, either in cash or
in kind, in accordance with the positive balance (if any) in the
Capital Account of each Member (as determined after taking into
account all Capital Account adjustments for Member Newco's Fiscal
Year during which the liquidation occurs), with any balance in
excess thereof being distributed in proportion to the Members'
respective Profits Interests. Any such distributions in respect
of Capital Accounts shall, to the extent practicable, be made in
accordance with the time requirements set forth in Section
1.704-1(b)(2)(ii)(b)(2) of the Treasury Regulations; and
(e) If any assets of Member Newco are to be distributed in kind, the
net fair market value of such assets shall be determined. Such
assets shall be deemed to have been sold as of the date of
dissolution for their fair market value, and the Capital Accounts
of the Members shall be adjusted pursuant to the provisions of
this Agreement to reflect such deemed sale.
(c) Notwithstanding anything to the contrary in this Agreement, upon a
liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury
Regulations, if any Member has a deficit Capital Account (after giving effect to
all contributions, distributions, allocations and other Capital Account
adjustments for all taxable years, including the year during which such
liquidation occurs), such Member shall have no obligation to make any Member
Funding to reduce or eliminate the negative balance of the Capital Account of
such Member.
7.71 Articles of Termination. Upon the dissolution and the completion of
winding-up of Member Newco, the Managing Member or such other Member as may be
designated by the Members, shall execute articles of termination of Member Newco
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and file same with the Secretary of State of Ohio and execute and file with the
Secretary of State of North Carolina such filings as are required to withdraw
Member Newco from North Carolina. Upon such filing, the existence of Member
Newco shall be terminated.
7.72 Return of Contribution Nonrecourse to Other Members. Except as
provided by law or as expressly provided in this Agreement, upon dissolution,
each Member shall look solely to the assets of Member Newco for the return of
the Capital Account of the Member. If Member Newco property remaining after the
payment or discharge of the debts and liabilities of Member Newco is
insufficient to return the Capital Account of one or more Members, including,
without limitation, all or any part of that Capital Account attributable to
Member Funding, then such Member or Members shall have no recourse against any
other Member.
MISCELLANEOUS PROVISIONS
7.73 Applicable Law. This Agreement, and the application or interpretation
hereof, shall be governed exclusively by its terms and by the laws of the State
of Ohio, and specifically the Act.
7.74 No Action or Partition. No Member has any right to maintain any action
for partition with respect to the property of Member Newco.
7.75 Execution of Additional Instruments. Each Member hereby agrees to
execute such other and further statements of interest and holdings,
designations, powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.
7.76 Waivers. The failure of any party to seek redress for violation of or
to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
7.77 Rights and Remedies Cumulative. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other remedies.
Such rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
7.78 Heirs, Successors and Assigns. Each and all of the covenants, terms,
provisions and agreements herein contained shall be binding upon and inure to
the benefit of the parties hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors and
assigns.
7.79 Creditors. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of Member Newco or by any Person not
a party hereto.
7.80 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
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7.81 Federal Income Tax Elections; Tax Matters Member. All elections
required or permitted to be made by Member Newco under the Code shall be made by
the unanimous consent of the JG Members and CBL Member, except that the Tax
Matters Member (the "TMM") shall make an election under Sections 108/1017 or
Section 754 of the Code upon request of any Member. The TMM shall be responsible
for all administrative and judicial proceedings for the assessment and
collection of tax deficiencies or the refund of tax overpayments arising out of
a Member's distributive share of items of income, gain, deduction and/or credit
of any other Company item (as that term is defined in the Code or in the
Treasury Regulations) allocated to the Members affecting any Member's tax
liability. The Members hereby appoint CBL Member as the initial TMM. The TMM
shall promptly give notice to all Members of any administrative or judicial
proceeding pending before the Internal Revenue Service involving any Company
item and the progress of any such proceeding. Such notice shall be in compliance
with such regulations as are issued by the Internal Revenue Service, except
that, if such notice is not required by such regulations to be given to the
Members, the TMM shall nevertheless give such notice to all of the Members. The
TMM shall have all the powers provided to a tax matters partner in Sections 6221
through 6233 of the Code, including the power to select the forum to litigate
any tax issue or liability arising from Company items, except that the TMM shall
not settle any tax controversy without the consent of all of the Members or
extend the statute of limitations with respect to any matter which is
attributable to any Company item or affecting any item pending before the
Internal Revenue Service. The provisions on limitations of liability of the
Members and indemnification set forth in Article VIII shall be fully applicable
to the TMM in its, his or her capacity as such. The TMM may resign at any time
by giving written notice to Member Newco and each of the other Members. If CBL
Member resigns as TMM, [JG Manager] shall immediately become the successor TMM.
If [JG Manager] thereafter resigns as the TMM, then CBL Member shall immediately
become the successor TMM, unless CBL Member elects not to become the successor
TMM, in which event a new TMM shall be elected from among the Members by a
Majority Vote. Additionally, if CBL Member is serving as the TMM at any time,
but neither CBL Member nor any of its Affiliates is then a Member, CBL Member
shall thereupon be deemed to have resigned as the TMM, and, if any JG Member is
serving as the TMM at any time, but no JG Member nor any Affiliate of a JG
Member is then a Member, such JG Member shall thereupon be deemed to have
resigned as TMM.
7.82 Notices. Unless oral notice is expressly permitted by this Agreement,
any notices or other communications required or permitted to be given by this
Agreement must be given in writing and either (i) personally hand-delivered,
(ii) mailed by prepaid certified or registered mail, with return receipt
requested, (iii) sent by generally recognized overnight delivery service to the
party to whom such notice or communication is directed with delivery fee
prepaid, or (iv) sent via telefax transmission, and, in the case of notices sent
by any medium other than as set forth in (ii) above, the burden of proof of
receipt of such notice shall be on the sender thereof. Any such notices shall be
sent to the address of such party as follows:
If to Member Newco, to:
[Triangle Town Member LLC]
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇ Member Center
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
If to any of the Members, to:
The address of such Member
as set forth on Exhibit B.
Any party may change such party's address for purposes of this Agreement by
giving notice of such change to the other parties pursuant to this Section
18.10.
7.83 Amendments. This Agreement may be amended, modified or supplemented
only by a writing executed by each of the Members; provided, however, that CBL
Member is hereby authorized and directed to amend Exhibit B to reflect changes
in the information set forth on Exhibit B.
7.84 Enforceability. Wherever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
7.85 Drafting. The Members acknowledge that each has participated
substantially in the negotiation and drafting of this Agreement and agree that
this Agreement shall not be construed more favorably toward one Member than
another due to the fact that this Agreement may have been physically drafted by
one Member or its counsel.
7.86 Further Assurances. The Members each agree to cooperate, and to
execute and deliver in a timely fashion any and all additional documents to
effectuate the purposes of Member Newco and this Agreement.
7.87 Time. Time is of the essence of this Agreement, and to any payments,
allocations and distributions provided for under this Agreement.
7.88 Integration. This Agreement and the Master Transaction Agreement,
dated as of October [ ], 2005, by and among the JG Members, JG North Raleigh
L.L.C., an Ohio limited liability company, JG Triangle Peripheral South LLC, an
Ohio limited liability company, and CBL Member Parent, and the exhibits hereto
and thereto, embody the entire agreement and understanding among the Members and
supersede all prior agreements and understandings, if any, among and between the
Members relating to the subject matter hereof and thereof.
7.89 Termination of Letter Agreement. As set forth in Section 18.16 above,
the Letter Agreement is hereby terminated and of no further force and effect.
7.90 Public Announcements; Precedence in Publicity. Any release to the
public of information with respect to the Project, Member Newco or any of Member
Newco's assets or activities contemplated herein or any matters set forth in
this Agreement will be made only after CBL's approval and only in the form
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approved by CBL and its counsel; except that, in any advertising or promotional
materials or communications relating to Member Newco and/or the Project, in any
form and in any media, including without limitation print, outdoor advertising,
broadcast or online, The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. or its designated
Affiliate shall receive "first billing" in relation to any reference to CBL or
any Affiliate and in no less prominent typeface or positioning within the
material or communication, and any reference to CBL or any Affiliate shall be
accompanied by a reference to The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. or its
designated Affiliate that meets the foregoing requirements. The provisions of
the immediately preceding sentence shall no longer apply if ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
ceases to Control The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc., but thereafter, so long as
any Affiliate of The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. is a Member, The ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Group, Inc. or its designated Affiliate shall receive at least "equal
billing" in relation to any reference to CBL or any Affiliate and in no less
prominent typeface or positioning within the material or communication, and any
reference to CBL or any Affiliate shall be accompanied by a reference to The
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. or its designated Affiliate that meets the
foregoing requirements.
7.91 Estoppel Certificates. Each Member shall, at any time and from time to
time upon not less than fifteen (15) Days' prior written request by another
Member, execute and deliver to the Member making such request a written
certificate stating whether: (i) this Agreement is in full force and effect;
(ii) this Agreement has been modified or amended and, if so, identifying and
describing each and every such modification or amendment; and (iii) to the best
knowledge of the Member executing said certificate, whether: (A) any facts or
circumstances exist that, with the passage of time, the giving of any required
notices, or both, would constitute a default hereunder, or (B) any uncured
default then exists on the part of any Member under this Agreement and, if so,
specifying the nature and extent of such facts, circumstances, or default (as
the case may be), including those which may give rise to offsets, defenses and
counterclaims. The obligations set forth in this Section 18.19 shall apply only
to matters known to the certifying Member. Any such certificate may be relied
upon by the Member requesting same, but only to the extent that such Member is
without knowledge to the contrary. A Member who executes such a certificate
shall not be liable for any erroneous statements contained therein, provided
that such statements shall have been made in good faith and that any such errors
were unintentional.
7.92 Legal Counsel. The parties hereto acknowledge that the law firm of
Shumacker ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. ("SWGW"), legal counsel to CBL Member,
may act as legal counsel to Member Newco following the execution of this
Agreement and with respect to matters concerning Member Newco and CBL Member as
a Member, and with respect to the Project. Likewise, the parties agree that
▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP ("TH"), legal counsel to the JG Members, may serve as legal
counsel to Member Newco following the execution of this Agreement and with
respect to matters concerning Member Newco and the JG Members as Members, and
with respect to the Project. Each Member does hereby waive any conflict of
interest that such counsel may have or be deemed to have when representing
Member Newco, CBL Member or the JG Members as to any matter that does not
involve a dispute between the Members. In any such dispute between the Members,
the Members acknowledge that SWGW may represent CBL Member and TH may represent
the JG Members unless applicable ethics rules prevent SWGW and/or TH from acting
in such capacities and each Member does hereby waive any conflict of interest
that such counsel may have or be deemed to have as the result of that
representation. Each Member may from time to time designate additional or
alternative counsel to such Member for the purposes of this Section 18.20, and
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the foregoing waivers, subject to the foregoing limitations and exceptions,
shall also apply as to such additional or alternative counsel.
o
REPRESENTATIONS AND WARRANTIES
7.93 Representations of the JG Members. Each of the JG Members hereby
represents to CBL Member and to Member Newco as of the date hereof that:
(a) Organization.
(a) such JG Member is a limited liability company or (as to
JGRI) corporation, existing and in full force and effect or
(as to JGRI) in good standing under and by virtue of the
laws of its state of organization or incorporation;
(b) That the Persons executing this Agreement on behalf of such
JG Member are duly elected, qualified and acting as its
officers or members, as the case may be.
(b) Authority.
(a) That all actions and resolutions, whether partnership,
corporate or otherwise, necessary to authorize such JG
Member to enter into this Agreement have been taken and
adopted;
(b) That all consents by third Persons which such JG Member is
by the terms of its agreements, if any, with any such third
Persons, required to obtain prior to its execution of this
Agreement have been so obtained by such JG Member;
(c) That such JG Member has, and the Persons executing this
Agreement on their behalf have, all requisite power and
authority and has (have) been duly authorized to enter into
this Agreement;
(d) That this Agreement has been duly executed on such JG
Member's behalf;
(e) That such JG Member has full right and lawful authority to
enter into and perform its covenants and obligations under
this Agreement for the full term hereof, and has full right
and lawful authority to make its representations and
warranties hereunder; and
(f) That upon execution of this Agreement by each party hereto,
this Agreement will constitute the legal, valid and binding
obligation of such JG Member and will be enforceable against
it and its successors and assigns in accordance with its
terms, except as such enforcement may be limited by (A)
bankruptcy, insolvency, moratorium, or other similar laws
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affecting a creditor's rights and remedies or the relief of
debtors generally at the time in effect, (B) the discretion
of the court before which any proceeding involving the same
may be brought, and (C) equitable principles at the time in
effect limiting the remedy of specific performance.
(c) Conflict. Neither the execution, delivery or performance by such
JG Member of this Agreement or the transactions contemplated
hereby will conflict with, or will result in a breach of, or will
constitute a default under, (i) any agreement or instrument by
which such JG Member or any of its Affiliates may be bound or
(ii) any judgment, statute, rule, law, order, decree, writ or
injunction of any court or Governmental Authority applicable to
such JG Member or any of its Affiliates and/or its or their
respective property and assets for which consent has not been
obtained.
7.94 Representations of CBL Member. CBL Member hereby represents to the JG
Members and to Member Newco as of the date hereof that:
(a) Organization.
(a) CBL Member is a limited liability company, organized,
existing and in good standing under and by virtue of the
laws of the State of [North Carolina];
(b) That the Person(s) executing this Agreement on CBL Member's
behalf are duly elected, qualified and acting as its
officer(s), manager(s) or member(s) (as the case may be).
(b) Authority.
(a) That all actions and resolutions, whether partnership,
corporate or otherwise, necessary to authorize CBL Member to
enter into this Agreement have been taken and adopted;
(b) That all consents by third Persons which CBL Member is, by
the terms of their agreements, if any, with any such third
Persons, required to obtain prior to their execution of this
Agreement have been so obtained by CBL Member;
(c) That CBL Member has, and the Persons executing this
Agreement on its behalf have, all requisite power and
authority and has (have) been duly authorized to enter into
this Agreement;
(d) That this Agreement has been duly executed on behalf of CBL
Member;
(e) That CBL Member has full right and lawful authority to enter
into and perform its covenants and obligations under this
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Agreement for the full term hereof, and has full right and
lawful authority to make CBL Member's representations and
warranties hereunder; and
(f) That upon execution of this Agreement by each party hereto,
this Agreement will constitute the legal, valid and binding
obligation of CBL Member and will be enforceable against CBL
Member and its successors and assigns in accordance with its
terms, except as such enforcement may be limited by (A)
bankruptcy, insolvency, moratorium, or other similar laws
affecting a creditor's rights and remedies or the relief of
debtors generally at the time in effect, (B) the discretion
of the court before which any proceeding involving the same
may be brought, and (C) equitable principles at the time in
effect limiting the remedy of specific performance.
(c) Conflict. Neither the execution, delivery or performance by CBL
Member of this Agreement or the transactions contemplated hereby
will conflict with, or will result in a breach of, or will
constitute a default under, (i) any agreement or instrument by
which CBL Member or any of its Affiliates may be bound or (ii)
any judgment, statute, rule, law, order, decree, writ or other
judgment, statute, rule, law, order, decree, writ or injunction
of any court or Governmental Authority applicable to CBL Member
or any of its Affiliates and/or their respective property and
assets for which consent has not been obtained.
7.95 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement will be effective on the date of this
Agreement and shall survive until the termination of this Agreement in
accordance with its terms.
DEFAULT PROVISIONS
7.96 Events of Default. A Member is in default or breach (each a "Default")
hereunder if:
(a) Monetary Defaults. CBL Member or its Affiliates fails to make a CBL
Member Mandatory Contribution within the time parameters, including applicable
cure periods, set forth in Section 11.01;
(b) Bankruptcy. Such Member or any Affiliate of such Member that has
provided an Affiliate Loan Guarantee shall (i) voluntarily commence any
proceeding or file any petition for liquidation (a liquidating Chapter 11
bankruptcy) or a petition for a Chapter 7 bankruptcy, (ii) consent to the
institution of, or fail to contravene in a timely and appropriate manner, any
such proceeding or the filing of such petition, (iii) apply for or consent to
the appointment of a receiver, custodian, sequestrator or similar official for
such Member or Affiliate or for a substantial part of any of its property or
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its inability, or
fail generally to pay its debts as they become due, or (vii) take corporate or
partnership action for the purpose of effecting any of the foregoing;
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(c) Insolvency. Any involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction, and in
either case shall continue undismissed for one-hundred eighty (180) Days or an
order or decree approving or ordering any of the following shall continue
unstayed and in effect for one-hundred eighty (180) Days, seeking (i) relief in
respect of such Member or any Affiliate of such Member that has provided an
Affiliate Loan Guarantee or of a substantial part of any of its property or
assets, (ii) the appointment of a receiver, trustee, custodian, sequestrator or
similar official for such Member or Affiliate, or for a substantial part of any
of its property or assets or (iii) the winding-up or liquidation of such Member
or Affiliate;
(d) Seizure of Assets. All or substantially all of such Member's assets, or
the assets of an Affiliate of such Member that has provided an Affiliate Loan
Guarantee, or such Member's Membership Interest, or any part of such Member's
Membership Interest is assigned following their attachment, execution or other
judicial seizure thereof, excluding any such attachment, execution or other
judicial seizure that results from a lender to Member Newco exercising its
rights under a guaranty;
(e) Transfers. Either: (i) an assignment prohibited by Article XVI occurs
with respect to such Member and such assignment or other transaction is not
rescinded within ninety (90) Days after the non-assigning Member gives written
notice to the assigning Member specifying such default; or (ii) an indirect
transfer of a Member's equity interests occurs other than as permitted in
Article XVI and such assignment is not rescinded within ninety (90) Days after
the non-assigning Member gives written notice to the Member whose equity
interests were assigned specifying such default; or (iii) an assignment
otherwise permitted by Article XVI occurs or is attempted with respect to such
Member but such assignment or the assignee thereof fails to comply with or
violates the provisions of Article XVI with respect to such assignment, i.e.,
the failure to observe the requirements set forth in Section 16.07 above, and
such failure or violation is not corrected within ninety (90) Days after a
non-assigning Member gives written notice to such assigning Member specifying
such default;
(f) Dissolution. A Member dissolves or causes itself to be dissolved
(unless prior to or simultaneous with such dissolution, a successor acquires
such Member's entire Membership Interest in an assignment permitted under
Article XVI) or a court of competent jurisdiction determines that a Member is
completely and totally unable to perform its duties and obligations under this
Agreement;
(g) Breach of Representation or Warranty. Any material breach by a Member
of any representation or warranty set forth in Article XIX above and such breach
is not corrected within ninety (90) Days after the Non-Defaulting Member
delivers to the Defaulting Member a written notice specifying the breach of
representation or warranty; and
(h) Other Material Default. Except as to specific defaults or breaches set
forth in this Section 20.01 other than in this Section 20.01(h), a breach of or
default under any other material provision of this Agreement which is to be
observed or performed by such Member, or by an Affiliate of such Member under
any Affiliate Loan Guarantee, occurs and remains uncured for more than thirty
(30) Days after Member Newco or, if such default or breach is by the Managing
Member or its Affiliates, after any other Member gives written notice to the
Defaulting Member specifying such default; except that, if the breach or default
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being claimed is a breach or default by an Affiliate of a Member in the
performance of its duties under any Affiliate Loan Guarantee, the other
Member(s) must give written notice to the Defaulting Member claiming such breach
or default, and the Defaulting Member shall have thirty (30) Days within which
to either cure or cause its Affiliate to cure the breach or default or contest
the breach or default; and except that, if the breach or default being claimed
is a breach or default by a Member in the performance of its duties as a Member,
the other Member(s) (excluding Affiliates of the Member who is claimed to be in
breach or default) must give written notice to the Defaulting Member claiming
such breach or default and the Defaulting Member shall have one-hundred twenty
(120) Days within which to either cure the breach or default or contest the
breach or default; and except that, if the breach or default being claimed is a
breach or default by the Managing Member under Section 6.02 above, the other
Member(s) must give written notice to the Defaulting Member claiming such breach
or default, and the Defaulting Member shall have sixty (60) Days (thirty (30)
Days in the case of a breach or default under Section 6.02) above within which
to either cure the breach or default or contest the breach or default; and,
except that if the breach or default being claimed is a breach or default under
the Property Management Agreement by the Managing Member in its capacity as the
Property Manager or by an Affiliate of the Managing Member in its capacity as
the Property Manager, the provisions of this Article XX shall not apply to such
breach or default, and the provisions of the Property Management Agreement shall
control.
A Member in Default hereunder is referred to as the "Defaulting Member".
The Member(s) who are not in Default and who are not Affiliates of the Member
who is in Default are herein sometimes referred to as the "Non-Defaulting
Member(s)." For purposes hereof, a "Default" shall not be deemed to occur so as
to trigger the remedies set forth below until the expiration of any applicable
notice, grace and cure periods.
7.97 Remedies Upon Default. In the event of the occurrence of a Default,
the Defaulting Member shall, pursuant to Section 20.04 below, cease to have any
approval rights with respect to Member Newco, except for the Default Approval
Rights defined in Section 20.04, until the Default has been cured by the
Defaulting Member, and the Non-Defaulting Member(s) shall have the right to
exercise the following remedies as their exclusive remedies for the particular
type of Default:
(a) For Defaults described in Section 20.01(a), the exclusive remedies to
the Non-Defaulting Members shall be an action for injunctive relief and/or
monetary damages and/or the remedy set forth in Section 20.03;
(b) For Defaults described in Sections 20.01(b), (c), (d) and/or (f), the
exclusive remedy to the Non-Defaulting Member(s) shall be as set forth in
Section 20.03;
(c) For Defaults described in Section 20.01(e), the exclusive remedies to
the Non-Defaulting Member(s) shall be an action for injunctive relief and/or
money damages;
(d) For Defaults described in Section 20.01(g), the exclusive remedy to the
Non-Defaulting Member(s) shall be an action for money damages;
(e) For Defaults described in Section 20.01(h) involving any claim of
breach or default by the Managing Member in its capacity as the Managing Member
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in the performance of its duties, the exclusive remedy to the Non-Defaulting
Members shall be to replace the Managing Member, after the notice and cure
periods and other procedures set forth in Section 20.01(h) have expired and/or a
claim has been made that the Managing Member has failed to perform its duties as
the Managing Member and the Managing Member has not contested such claim), and
in the event of any such replacement, [JG Manager} automatically, if the
Managing Member to be replaced is CBL Member, and, otherwise, another Member
elected by a Majority Vote, shall thereupon, without any other action taken by
the Members, become the Managing Member, the replaced Managing Member shall
thereafter have only the rights of a Member with respect to the management of
the affairs of Member Newco, and the replaced Managing Member or any Affiliate
of the replaced Managing Member then serving as the Property Manager shall
thereupon automatically be removed as the Property Manager pursuant to the
Property Management Agreement; and
(f) For Defaults described in Section 20.01(h) involving any claim of
breach or default by a Member, other than the Managing Member in its capacity as
the Managing Member, in the performance of its duties, the exclusive remedy to
the Non-Defaulting Member(s) shall be that the Defaulting Member shall lose all
approval rights except Default Approval Rights as set forth in Section 20.04
after the notice and cure periods and other procedures set forth in Section
20.01(h) have expired and/or a claim has been made that such Defaulting Member
has failed to perform its duties as a Member and such Defaulting Member has not
contested such claim and any duties or responsibilities of such Defaulting
Member may be undertaken by the Non-Defaulting Members.
7.98 Purchase Upon Default.
(a) Reasons for Granting Option to Purchase. To more fully protect the
Members against certain Defaults of other Members as set forth in Section 20.02
above where such Defaults provide for the remedy set forth in this Section
20.03, each Member hereby grants to the other Members that are not its Affiliate
(which grantee shall be the JG Members if CBL Member were the Defaulting Member,
and which grantee shall be CBL Member if any JG Member were the Defaulting
Member, and which grantee would include any other Affiliates of such JG Member
or CBL Member, respectively, if either of such JG Member or CBL Member had
transferred all or a portion of its Membership Interests to Affiliates pursuant
to exempt transfers under Section 16.03 above) (the "Non-Affiliated Members")
and are not in default hereunder the right and option to purchase the entire
Membership Interest of the Defaulting Member and its Affiliates, if any, upon
the occurrence of a Default by the Defaulting Member and/or its Affiliate(s) and
the failure of the Defaulting Member to cure the Default within the applicable
cure period, if any, provided in Section 20.01 above on and subject to the terms
and conditions set forth in this Section 20.03. Once said option has been
exercised, the Non-Affiliated Members shall have the right to complete the
purchase pursuant to its exercise of said option regardless of any potential or
actual detriment that exercising such option may cause the Defaulting Member;
provided, however, that the Defaulting Member may cure the Default that gave
rise to said option to purchase and pay all of the Non-Affiliated Members'
costs, expenses and reasonable attorney's fees incurred in connection therewith,
at any time prior to the required date of closing, in which event the
Non-Defaulting Member shall not have the right to purchase the Membership
Interests of the Defaulting Member and its Affiliates, if any, pursuant to this
Section 20.03 with respect to such Default.
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(b) Exercise of Option. If the Non-Affiliated Members shall at any time
desire to purchase the entire Membership Interest of a Defaulting Member and its
Affiliates, if any, when allowed so to do as the result of circumstances
triggering the use of this Section 20.03, they may exercise said right and
option to purchase a Defaulting Member and its Affiliates' entire Membership
Interest by giving written notice to all Members unequivocally stating that they
are exercising such right and option (said notice is hereinafter referred to as
the "Exercise Notice"). Except as provided in the immediately following sentence
of this Section 20.03(b), the purchase price for said Defaulting Member and its
Affiliates' entire Membership Interest (said amount being hereinafter referred
to as the "Default Purchase Price") shall be an amount equivalent to
seventy-five percent (75%) of the value of the Defaulting Member and its
Affiliates' Membership Interest computed by utilization of the Appraisal
Procedure set forth on Exhibit D, with such Appraisal Procedure being used to
determine the Appraised Value of the Project and the resulting value of a
Member's Membership Interest as set forth on Exhibit D (the "Default Formula
Price"). If the Appraised Value of the Project as so determined, net of any
outstanding Constructions Loans and/or Permanent Financing/Refinancing, is less
than the sum of all unreturned Initial Contributions, Mandatory Contributions
and Non-Required Contributions of the Members and accrued and unpaid
Interest/Return thereon, the Default Purchase Price shall be the greater of (i)
the Default Formula Price and (ii) an amount equal to the amount that would be
distributed to the Defaulting Member and its Affiliates upon a Capital Events
Distribution in an amount equal to the Appraised Value of the Project as so
determined, net of any outstanding Constructions Loans and/or Permanent
Financing/Refinancing. The Default Purchase Price, as determined under the two
immediately preceding sentences, shall be adjusted pursuant to the provisions of
Section 20.06 below. Said purchase shall be on the terms and pursuant to the
procedures set forth herein and the closing of said transaction shall take place
in accordance with the provisions of Section 20.06 below. If Non-Affiliated
Members do not exercise said right and option in the manner and within the time
aforesaid, the Non-Affiliated Members shall be deemed to have waived said right
and option to purchase, but only as to the specific default giving rise to said
right and option to purchase, and not others, and the Non-Affiliated Members
shall continue to have and enjoy the right and option to so purchase created
under and by virtue of this Article XX in all other, further and/or subsequent
cases to which this Section 20.03 applies. As between the Non-Affiliated
Members, they shall have the right to purchase the Defaulting Member and its
Affiliates' entire Membership Interest in proportion to their Profits Interests
but without the inclusion of the Defaulting Member and its Affiliates' Profits
Interests and if one or less than all Non-Affiliated Members do not desire to
purchase the Defaulting Member and its Affiliates' Membership Interest, the
Non-Affiliated Members so desiring to purchase shall have the right to purchase
the entire (but no fractional portion of the) Membership Interest of the
Defaulting Member.
(c) Expenses. All reasonable fees, costs and expenses of the appraisers and
otherwise associated with the Appraisal Procedure and the purchase of the
Defaulting Member and its Affiliates' Membership Interest shall be the
responsibility of and shall be paid by the Defaulting Member.
(d) Membership Interest Will be Acquired by Non-Affiliated Members for the
Default Purchase Price. It is the intention and express agreement of the Members
that if a default shall occur hereunder to which this Section 20.03 applies, the
Non-Affiliated Members shall have the right to purchase the Membership Interest
of a Defaulting Member and its Affiliates, if any, for the Default ▇▇▇▇▇▇▇▇
▇▇
▇▇
Price and shall not (directly, indirectly, contingent or otherwise) be obligated
to pay more than the Default Purchase Price, as determined in accordance with
this Agreement, in order to acquire the Membership Interest of the Defaulting
Member and its Affiliates, if any, regardless of whether the aggregate amount of
the indebtedness, obligations and/or liabilities secured by any liens or
encumbrances on such Membership Interest exceeds the Default Purchase Price
determined under this Agreement.
7.99 Default Approval Rights; Loss of Approval Rights on Defaults.
The Members agree that a Defaulting Member shall forfeit its rights to
approve Company decisions and activities during the pendency of a Default until
such time as the Default is cured but subject to the provisions of this Section
20.04. Notwithstanding any provision in this Section 20.04 to the contrary, a
Member shall retain its rights (herein, the "Default Approval Rights") under
this Agreement to approve the following actions regardless of any default by
such Member:
(a) The filing of bankruptcy by Member Newco or the filing by Member
Newco for the appointment of a receiver for the assets of Member
Newco;
(b) Dissolution or termination of Member Newco;
(c) Except as set forth in a Pro Forma and/or an Operating Budget as
required funding from the Members, the entering into any contract
or agreement, including guarantees, that creates liability of the
Defaulting Member beyond its Member Funding or that requires the
guarantees of the Defaulting Member or its Affiliates; or
(d) Except for typographical errors or corrections or the amendment
of Exhibit B to reflect changes to the information set forth
thereon in accordance with this Agreement, the amendment or
modification of this Agreement.
7.100 Attorney's Fees. Except as otherwise provided herein, if (i) any
party fails to perform any of its obligations under this Agreement, or (ii) any
litigation is commenced between the parties concerning any provision of this
Agreement or any rights or duties of any person relative thereto, or (iii) any
party institutes any proceeding in any bankruptcy or similar court which has
jurisdiction over any party (or any or all of its property or assets), the
non-defaulting party or party prevailing in such litigation, or the non-bankrupt
party (as the case may be) shall be entitled, in addition to damages and such
other and further relief as may be granted, to all costs incurred in enforcing
and defending its rights and remedies under this Agreement, including but not
limited to reasonable attorney's fees, out-of-pocket costs and expenses, and
court costs, together with interest on the foregoing from the date same are
incurred until fully repaid at a rate equal to the Interest/Return, or such
lesser rate of interest as may from time to time be the maximum rate of interest
which may, under the circumstances, be charged under applicable law. If neither
party is the sole prevailing party or each party prevails on its claims against
the other party, then each party shall be responsible for its own attorney's
fees, out-of-pocket expenses and costs and court costs.
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7.101 Closing.
(a) Closing Terms. This Section 20.06 sets forth and will govern the
procedures, terms and conditions pursuant to which a Member selling its
Membership Interest (the "Selling Member") will be transferred to a Member
purchasing the Selling Member's Membership Interest (the "Purchasing Member")
pursuant to Section 20.03.
(b) Purchase Price. As used herein, the term purchase price shall mean in
the case of a transfer pursuant to Section 20.03, the Default Purchase Price, as
the same may be increased or decreased pursuant to the provisions of this
Section 20.06.
(c) Default Purchase Closing Date and Place. The closing of the
purchase/sale of a Member's Membership Interest pursuant to Section 20.03 and
this Section 20.06 shall be held at the principal office of Member Newco on a
business Day that is determined by the Purchasing Member, but in any event
unless the closing is delayed through no fault of the Purchasing Member, no
later than thirty (30) Days following the date of the Exercise Notice; provided,
however, in the event that the closing of such purchase/sale has not occurred by
the date that is one-hundred eighty (180) Days following the date of such
Exercise Notice and such delay or failure to close is not the result of any
action or inaction of the Selling Member and the Selling Member is otherwise
ready and willing to close and/or the delay or failure to close is not the
result of any court action or inaction or restraining order or injunction, then
such failure to close within such time parameter shall be deemed a waiver of the
Purchasing Member's rights to purchase the Selling Member's Membership Interest
by reason of the Default that triggered the Purchasing Member's rights under
Section 20.03 above. Such waiver shall not, however, be deemed to be a waiver of
any other Default that may exist at the time or that may occur thereafter. The
date determined in accordance with the foregoing provisions for closing of any
transaction to which this Section 20.06 is applicable is hereinafter referred to
as the "Default Purchase Closing Date".
(d) Payment; Escrow. On the Default Purchase Closing Date, the Default
Purchase Price may be deposited in good federal funds that are immediately
available at the place of closing in escrow with the title company involved with
the transaction or with either Purchasing Member's or Selling Member's counsel.
(e) Title. Title to the Selling Member's Membership Interest shall be
transferred free and clear of all liens and encumbrances (and the possibility
thereof) of every nature and description whatsoever.
(f) Selling Member's Default. If a Selling Member shall fail or refuse to
complete a transfer after the Purchasing Member becomes obligated to purchase
pursuant to Section 20.03, as the case may be, the Purchasing Member may, at its
option, elect to pursue any and all rights and remedies under this Agreement, at
law, in equity, or otherwise against the Selling Member. Furthermore, each
Member takes cognizance of the fact that a breach of the Selling Member's
obligations under Section 20.03, as the case may be, may cause irreparable
injury to the business and property of the Purchasing Member, and that there are
inadequate remedies available at law to redress such injury. Consequently, the
Purchasing Member shall have the right to seek and obtain specific performance
of the obligations of the Selling Member that arise under this Article XX (as
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well as any collateral obligations under other provisions of this Agreement, at
law, in equity, or otherwise). The foregoing provisions shall not be construed
to preclude, restrict or limit any other or further rights or remedies that the
Purchasing Member may have under this Agreement, at law, in equity, or
otherwise.
(g) Adjustments. On the Default Purchase Closing Date, the following
adjustments shall be made to the Default Purchase Price and the following
disbursements shall be made from the escrow by the escrow holder:
(a) the aggregate amount of all amounts owed by the Selling Member
and its Affiliates to Member Newco, including accrued and unpaid
interest thereon, shall be subtracted from the Default Purchase
Price; and
(b) the aggregate amount of all liens of a definite and ascertainable
amount upon the Membership Interest of the Selling Member shall
be deducted in determining the Default Purchase Price.
(h) Costs. In the event of a transfer pursuant to the provisions of Section
20.03, all title charges, recording fees, transfer taxes, and other fees, costs
and expenses of the purchase, sale and transfer of the Membership Interest shall
be charged to and paid in cash by the Selling Member through the escrow on the
Default Purchase Closing Date.
(i) Payment. On the Default Purchase Closing Date, that portion of the
Default Purchase Price that is held in escrow after the adjustments, payments
and disbursements that are described in Section 20.06(g) and (h) (hereinafter
referred to as the "Payment Amount") shall be disbursed to the Selling Member in
immediately available Federal funds through the escrow, except that if the
Payment Amount is a negative amount, the Selling Member shall pay such amount to
the Purchasing Member in immediately available Federal funds through the escrow
on the Default Purchase Closing Date. If the Selling Member fails to pay such
amount, the Purchasing Member may elect to complete its purchase of the Selling
Member's Membership Interest and the amount owed by the Selling Member shall
accrue interest from the date of transfer until all principal and accrued
interest is paid in full at a rate equal to the Interest/Return plus five
percent (5%) but not in excess of the maximum amount allowable under applicable
law.
(j) Transfer of Title. On the Default Purchase Closing Date:
(a) the Selling Member shall, simultaneously with the payment of the
Payment Amount (or if a negative number, at the time same would
be payable if it was a positive number) sell, assign and transfer
the Selling Member and its Affiliates' entire Membership Interest
to the Purchasing Member by written assignment containing (A) a
warranty of the Selling Member's authority, (B) a special or
limited warranty of title against the Selling Member's own acts,
and (C) confirmation of the provisions set forth in Section
20.06(i);
(b) the Purchasing Member shall, simultaneously with its receipt of
the assignment referred to in this Section 20.06(j), execute an
agreement whereby it accepts such assignment and assumes the
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obligations of the Selling Member under this Agreement with
respect to the Membership Interest of the Selling Member that the
Purchasing Member is acquiring; and
(c) all other Members shall simultaneously with the events described
in Sections 20.06(j)(i) and (ii), agree in writing to and shall
consent to such assignment and the transactions effected thereby.
All such documents of assignment, acceptance, assumption, consent and
confirmation shall be in form and substance reasonably satisfactory to the
Purchasing Member, and shall be duly executed by all Members required to execute
same in recordable form.
APPOINTMENT OF MANAGING MEMBER AS ATTORNEY-IN-FACT
7.102 Appointment. Each Member hereby irrevocably constitutes and appoints
the Managing Member as such Member's true and lawful attorney-in-fact with full
power and authority in said Member's name, place and stead for the limited
purposes of executing, acknowledging, delivering, swearing to, filing and
recording at the appropriate public office such documents as may be necessary or
appropriate to carry out the provisions of this Agreement, as follows:
(a) All certificates and other instruments (including counterparts of
this Agreement), and any amendment thereof, which the Managing
Member deems appropriate to qualify or continue Member Newco as a
limited liability company in any jurisdiction in which Member
Newco may conduct business;
(b) All instruments which the Managing Member deems appropriate to
reflect a change or modification of this Agreement approved by
the Members in accordance with the terms of this Agreement; and
(c) All instruments, documents, consents and agreements, financing
statements, security agreements, and continuation statements
which the Managing Member deems appropriate or necessary to
effect and consummate any decision that the Managing Member is
authorized to make under this Agreement and any decision
unanimously approved or deemed unanimously approved by the
Members if such approval is necessary pursuant this Agreement.
7.103 Survival. The appointment by all Members of the Managing Member as
their attorney-in-fact shall be deemed to be a power coupled with an interest,
in recognition of the fact that each of the Members under this Agreement will be
relying upon the power of the Managing Member to act as contemplated by this
Agreement in any filing and other action on behalf of Member Newco and shall
survive the bankruptcy, death, dissolution, disability or incompetence of any
Member hereby giving such power or the transfer or assignment of all or any part
of the Membership Interest of such Member; provided, however, that in the event
of the transfer by a Member of all or any part of said Member's Membership
Interest, the foregoing power of attorney of a transferor Member shall survive
such transfer only until such time as the transferee shall have been admitted to
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Member Newco as a Member and has, among other things contained herein, agreed to
appoint the Managing Member as its attorney-in-fact as provided in this Article
XXI, and all required documents and instruments shall have been duly executed,
filed and recorded to effect such substitution.
[Signatures on next page]
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IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
of the date and year first written above.
[CBL TRIANGLE TOWN MEMBER], LLC
By:
--------------------------------------------
REJ REALTY LLC
By: _______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
JG REALTY INVESTORS CORP.
By: _______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
JG MANAGER LLC
By: _______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
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Attached to and made a part of that certain Limited Liability Company
Agreement of [Triangle Town Member LLC], dated as of the date first above
written.
EXHIBIT A
Description of the Real Estate
102
Attached to and made a part of that certain Limited Liability Company
Agreement of [Triangle Town Member LLC], dated as of the date first above
written.
EXHIBIT B
Members
Profits Initial Capital
Name, Address Interest Contribution
------------- -------- ------------
REJ Realty LLC
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. [ ]% $[ ]
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
JG Realty Investors Corp.
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. [ ]% $[ ]
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
JG Manager LLC
c/o The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. [ ]% $[ ]
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
with a copy (as to each JG Member) to:
General Counsel
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
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[CBL Triangle Town Member], LLC..... 50% $0.00
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▇▇▇▇▇ ▇▇▇, ▇▇▇ Member Center
Chattanooga, Tennessee 37421.......
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
with a copy to:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Shumacker ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇, ▇▇▇ Member Center
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
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Attached to and made a part of that certain Limited Liability Company
Agreement of [Triangle Town Member LLC], dated as of the date first above
written.
EXHIBIT C
FEES TO MEMBERS
The following fees shall be paid by Member Newco to the JG Members (pro rata)
and CBL Member or their Affiliates, as so designated:
Construction Management Fee - for services of CBL Member and/or its Affiliates
in the construction management of the Project with respect to Future Development
Activities a Construction Management Fee of three-and-one-quarter percent
(3.25%) of the construction costs of the Project with respect to such Future
Development Activities, as set forth in the approved Pro Forma, plus, as to
Future Development Activities for which EMJ serves as general contractor, a
further fee to be paid to EMJ to be set forth in the approved Pro Forma for with
respect to such Future Development Activities. The referenced Construction
Management Fees shall be paid as set forth in the applicable approved Pro Forma.
Development Fee - for services of CBL Member and/or its Affiliates and the JG
Members and/or their Affiliates in Future Development Activities, a Development
Fee in an amount to be agreed by the Members prior to the commencement of Future
Development Activities. The Development Fee shall be paid in equal monthly
increments over the Construction Period of the Project with respect to such
Future Development Activities.
Management Fee - for services of CBL Member or its Affiliate pursuant to CBL
Member's asset/financial management responsibility for the Project, CBL Member
or its Affiliate shall receive an amount equal to three percent (3%) of the
"Project Income" as hereinafter defined, from the date of this Agreement until
the earlier of the termination of this Agreement or the termination of CBL
Member or its Affiliate as the Property Manager pursuant to the Property
Management Agreement. The entitlement of CBL Member or its Affiliate to the
Management Fee described herein shall be further outlined and subject to the
terms of the Property Management Agreement.
Leasing Fees - for services of CBL Member or its Affiliate pursuant to CBL
Member's leasing responsibility for the Project, CBL Member or its Affiliate
shall receive the following:
A. With respect to each tenant who executes a renewal lease after the
expiration of its initial lease, including the expiration of any options to
extend such lease, which renewal lease has a term of at least three (3) years,
an amount equal to Two Dollars ($2.00) per square foot of said tenant's space,
payable upon the date the such tenant is open and paying rent;
B. With respect to the replacement of any tenant (other than an Anchor)
with another tenant, an amount equal to Four Dollars ($4.00) per square foot of
said tenant's space, payable upon the date the such tenant is open and paying
rent;
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C. With respect to the replacement of an Anchor with another Anchor or
replacement tenant(s) and/or upon the addition of an Anchor to the Project, an
amount equal to Two Dollars ($2.00) per square foot of said Anchor's or
replacement tenant(s)' space in the Project, payable (i) for leases, upon the
date the such Anchor or replacement tenant(s) is/are open and paying rent and
(ii) for non-lease transactions where the Anchor owns its space, upon the date
such Anchor is open;
D. With respect to each temporary tenant in the Project who executes an
occupancy agreement, as defined below, an amount equal to ten percent (10%) of
the rent generated from said occupancy agreement, payable on full execution of
the license agreement with such licensee. The term "occupancy agreement" shall
mean a lease or license to occupy space in the Project that has a term of one
year or less and the term "rent" shall mean only the minimum annual rent and
percentage rent paid by the tenant; and
E. With respect to each sponsorship or co-branding transaction at or
relating to the Project (other than such sponsorship(s) with the Coca Cola
company or other soft-drink companies and their respective affiliates and/or
affiliated or unaffiliated bottlers regarding the placement of vending machines
in the common areas of the Project, for which the Members agree no sponsorship
fee shall be paid by Member Newco), an amount equal to five percent (5%) of the
gross revenues generated by such sponsorship or co-branding transaction, payable
on full execution of the sponsorship or co-branding agreement (as to the portion
of such gross revenues paid upon such execution) and monthly as to gross
revenues paid during the term of such sponsorship or co-branding agreement.
The entitlement of CBL Member or its Affiliate to the Leasing Fees described
herein shall be further outlined and subject to the terms of the Property
Management Agreement
Outparcel and Pad Sales/Lease Fees - for services of CBL Member in selling or
ground leasing Outparcels and pads, a fee of five percent (5%) of the sales
price on a sale of an Outparcel or pad, payable on the closing of such sale, or
five percent (5%) of the ground lease value on any ground lease of an Outparcel
or pad, payable one-half (1/2) on the full execution of the ground lease and
one-half (1/2) on the date the ground lessee is open and paying rent. The
"ground lease value" shall be the sum of the annual rent to be paid over the
greater of (i) ten years or (ii) term of the ground lease (but in no event more
than twenty years).
Financing Fee - for services of CBL Member in the placement of Permanent
Financing/Refinancing on behalf of Member Newco, CBL Member shall receive a fee
equal to twenty-five hundredths percent (.25%) of the amount of such Permanent
Financing/Refinancing. The Financing Fee shall be paid at the closing of such
Permanent Financing/Refinancing.
DEFINITIONS
"Project Income"- subject to the exceptions noted below, shall mean (i) all
revenue derived from the Project on a cash basis, including without limitation,
(A) all minimum rents, (B) percentage rents, if any, (C) license fees paid by
licensees and ninety-five percent of sponsorship income, (D) receipts from
public telephones, storage lockers, vending machines, (E) stroller and other
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equipment rentals, (F) advertising revenues, (G) gift card or gift certificate
sales revenues, and (H) interest on tenant security deposits unless such
interest is required to be paid to such tenants; and (ii) payments by tenants
for utilities, insurance, real estate taxes, common area maintenance and
operating expenses but, with respect to such payments referred to in this clause
(ii), only to the extent that there is a profit (i.e., an excess of such
payments over the actual costs paid/recovered) generated therefrom to Member
Newco. Project Income shall not include proceeds from the Construction Loan and
Permanent Financing/Refinancing; proceeds from settlement of fire/casualty
losses (except for such proceeds from loss of rents insurance), condemnation
proceeds, sales of outparcels and other peripheral property, or items of a
similar nature.
ADDITIONAL FEES, LIMITATIONS AND CERTAIN THIRD-PARTY FEES
The Members may be entitled to other fees pursuant to the terms of the
Property Management Agreement and any consulting agreements or other agreements
that may be entered into between Member Newco and such Member or its Affiliates,
subject to the provisions of Section 5.03 of this Agreement. In addition, Member
Newco will pay a fee to the JG Members (pro rata) and CBL Member in an amount
equal to the applicable hourly rates charged by the JG Members and CBL Member,
respectively, and approved by the Members, for in-house legal services provided
for the benefit of Member Newco in connection with the development, financing,
leasing or operation of the Project and will reimburse each Member for
third-party costs incurred by such Member for such services.
The Members agree that, except as may be provided in an approved Pro
Forma, there shall be no Leasing Fees or leasing expenses for the initial
lease-up of particular phases or portions of the Project. Likewise, any in-house
costs a Member may incur during a Construction Period for any particular Future
Development Activity, including but not limited to travel costs and personnel
costs, shall not be reimbursed by Member Newco to such Member. The Members shall
bear their own legal fees and other costs for the negotiation and entering into
of this Agreement and Member Newco shall not reimburse any Member for any costs
or expenses incurred by such Member or its Affiliates prior to the date of this
Agreement. No fee or compensation shall be paid by Member Newco to any Member or
its Affiliates on the placement of any Construction Loan. Except for the
Construction Management Fee to be paid to CBL Member as set forth above, no
additional fees or compensation shall be paid by Member Newco to any Member or
its Affiliates for the performance of construction management services.
3
107
Attached to and made a part of that certain Limited Liability Company Agreement
of [Triangle Town Member LLC], dated as of the date first above written.
EXHIBIT D
APPRAISAL PROCEDURE
Procedure for Appraisals. For purposes of determining the appraised
value of the Project pursuant to this Agreement, the following procedure (the
"Appraisal Procedure") shall be followed:
(a) The Member initiating this Appraisal Procedure shall, in a written
notice to the other Members, set forth the name, business address and phone
number of an appraiser having the qualifications set forth in Section (b) below
who has accepted said Member's appointment and agreed to act as said Member's
appraiser hereunder in accordance with this Appraisal Procedure. The other
Members shall, in a written notice to the initiating Member given not less than
fifteen (15) Days after receipt of the said notice from the initiating Member,
set forth the name, business address and telephone number of an appraiser having
the qualifications set forth in Section (b) below who has accepted said
Member's(s') appointment and agreed to act as the second appraiser hereunder in
accordance with this Appraisal Procedure. The two appraisers so appointed shall
appoint, and give each of the Members written notice of the name, business
address and telephone number of, a third appraiser having the qualifications set
forth in Section (b) below.
(b) Each appraiser shall, in all events, be independent and
disinterested. All appraisers shall be members in good standing of the American
Institute of Real Estate Appraisers ("AIREA") and shall have at least five years
experience in appraising first class shopping centers that are similar to the
Project and that are in the same general geographic area as the Project. Each
appraiser shall appraise the Project on an "as is" basis.
(c) (i) The Managing Member and the Accountants shall, promptly upon
request of any appraiser appointed pursuant to the provisions of this Section,
furnish all such appraisers with any financial or other information in their
possession relative to the Project that is reasonably requested by such
appraiser.
(ii) Each of the three appraisers, acting independently of
each other, shall, within sixty (60) Days after appointment of the last required
appraiser, submit to the Members a written appraisal report that has been
prepared in accordance with the provisions hereof stating his or her opinion as
to the fair market value of the Project as of the relevant date. After all three
appraisers have submitted written appraisal reports as aforesaid, they shall
meet and reevaluate their appraisals and, if they agree on a single appraised
fair market value within seventy-five (75) Days after appointment of the last
required appraiser, such single appraised fair market value shall be the
Appraised fair market value of the Project and is hereinafter referred to as the
"Appraised Value." If the appraisers are unable to agree on a single appraised
fair market value within such seventy-five (75) Day period, then the "Appraised
Value" shall be deemed to be the arithmetic average of the three appraised fair
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market values originally submitted, provided, however, that, if any of the
appraised fair market values are more than five percent (5%) greater or less
than the median value of the three appraised fair market values, such appraised
fair market values shall be disregarded, and the Appraised Value shall be deemed
to be the arithmetic average of the remaining two fair market values originally
submitted, and, if two of the three appraised fair market values are five
percent (5%) greater or less than the median value of the three appraised fair
market values, both shall be disregarded and the appraised fair market value
that is not so disregarded shall be taken as the Appraised Value. If the
Appraisal Procedure is being utilized for purposes of establishing the value of
a Member's Membership Interest, the Appraisal Procedure shall be utilized to
establish the Appraised Value of the Project, and fifty percent (50%) of the
Appraised Value of the Project shall be deemed the value of the Membership
Interests of the JG Members (pro rata, in the aggregate) and fifty percent (50%)
of the Appraised Value of the Project shall be deemed to be the value of the
Membership Interests of the CBL Member (collectively if applicable, i.e., if any
JG Member or CBL Member has assigned a portion of its Membership Interest to
Affiliates pursuant to transfers permitted by Article XVI).
(iii) Any determination of appraised fair market value and
Appraised Value pursuant to this procedure shall, in the absence of fraud, bad
faith, or collusion, be binding and conclusive upon all Members.
(d) All reasonable costs, expenses and fees relative to the Appraisal
Procedure shall, in all cases, be the responsibility of and paid by the
Defaulting Member in the event the Appraisal Procedure is implemented pursuant
to a Default and in all other cases, shall be the responsibility of Member
Newco.
109
Attached to and made a part of that certain Limited Liability Company Agreement
of [Triangle Town Member LLC], dated as of the date first above written.
EXHIBIT E
SITE PLAN
110
Attached to and made a part of that certain Limited Liability Company Agreement
of [Triangle Town Member LLC], dated as of the date first above written.
EXHIBIT F
PROPERTY MANAGEMENT AGREEMENT
111
Attached to and made a part of that certain Limited Liability Company Agreement
of [Triangle Town Member LLC], dated as of the date first above written.
EXHIBIT G
2006 OPERATING BUDGET
112
Attached to and made a part of that certain Limited Liability Company Agreement
of [Triangle Town Member LLC], dated as of the date first above written.
EXHIBIT H
TAX MATTERS
This Exhibit is attached to and is a part of the Limited Liability Company
Agreement (the "Agreement") of Member Newco. The provisions of this Exhibit are
intended to comply with the requirements of Treas. Reg. 1.704-1(b)(2) and Treas.
Reg. 1.704-2 with respect to partnership allocations and maintenance of capital
accounts, and shall be interpreted and applied accordingly.
ARTICLE I
Definitions
1.01 Definitions. For purposes of this Exhibit, the capitalized terms
listed below shall have the meanings indicated.
"Adjusted Fair Market Value" of an item of Member Newco property means the
greater of (i) the fair market value of such property or (ii) the amount of any
nonrecourse indebtedness to which such property is subject within the meaning of
Section 7701(g) of the Code.
"Applicable Federal Rate" means the applicable Federal rate within the meaning
of Section 1[ ]4(d) of the Code.
"Capital Account" means the capital account of a Member maintained in accordance
with ARTICLE II of this Exhibit to the Agreement.
"Code" means the Internal Revenue Code of 1986, as amended. References to
specific sections of the Code shall be deemed to include references to
corresponding provisions of succeeding Internal Revenue law.
"Member Newco Minimum Gain" means partnership minimum gain determined pursuant
to Treas. Reg. 1.704-2(d).
"Excess Nonrecourse Liabilities" means the excess of (i) Member Newco's
aggregate Nonrecourse Liabilities over (ii) the aggregate amount of such
Nonrecourse Liabilities allocable to the Members pursuant to Treas. Reg.
1.752-3(a)(1) (relating to the Members' shares of Member Newco Minimum Gain) and
Treas. Reg. 1.752-3(a)(2) (relating to allocations of taxable gain under Section
4.02 of this Exhibit).
"Investment Credit" means the investment credit determined under Section 46(a)
of the Code.
"Member" has the meaning set forth in the Agreement.
113
"Minimum Gain" means, collectively, Member Newco Minimum Gain and Member
Nonrecourse Debt Minimum Gain.
"Nonrecourse Distribution" means a distribution to a Member that is allocable to
a net increase in Member Newco Minimum Gain pursuant to Treas. Reg. 1.704-2(h)
or to a net increase in such Member's share of Member Nonrecourse Debt Minimum
Gain pursuant to Treas. Reg. 1.704-2(i)(5) and (6).
"Nonrecourse Liability" means any Member Newco liability (or portion thereof)
which is a nonrecourse liability within the meaning of Treas. Reg.
1.704-2(b)(3).
"Nontradable Note" means a promissory note that is not readily tradable on an
established securities market.
"Partner Nonrecourse Debt" means any nonrecourse debt of the Member within the
meaning of Treas. Reg. 1.704-2(b)(4).
"Partner Nonrecourse Deduction" means any item of Book loss or deduction that is
attributable to a Partner Nonrecourse Debt pursuant to Treas. Reg. 1.704-2(i)(1)
and 1.704-2(i)(2).
"Partner Nonrecourse Debt Minimum Gain" means minimum gain attributable to
Partner Nonrecourse Debt pursuant to Treas. Reg. 1.704-2(i).
"Recourse Debt" means any recourse liability of Member Newco within the meaning
of Treas. Reg. 1.752-1(a)(1).
"Revaluation Event" means (i) a liquidation of Member Newco (within the meaning
of Treas. Reg. 1.704-1(b)(2)(ii)(g), (ii) a contribution of more than a de
minimis amount of money or other property to Member Newco by a new or existing
Member, or (iii) a distribution of more than a de minimis amount of money or
other property to a retiring or continuing Member, in each case as consideration
for an interest in Member Newco.
"Treasury Regulation" or "Treas. Reg." means the temporary or final
regulation(s) promulgated pursuant to the Code by U.S. Department of the
Treasury, as amended, and any successor regulation(s).
ARTICLE II
CAPITAL ACCOUNTS
2.01 Maintenance. A single Capital Account shall be maintained for each
Member in the manner set forth in this Article II.
2.02 Net Profits and Net Losses.
(a) The Net Profits and Net Losses of Member Newco for purposes of
determining allocations to the Capital Accounts of the Members shall be
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determined in the same manner as set forth in the definition of "Net Profits"
and "Net Losses" in Section 1.01 of the Agreement. (b) For purposes of Section
2.02(a), in the event that the book value of any item of Member Newco property
differs from its tax adjusted basis, the amount of book depreciation, depletion,
or amortization for a period with respect to such property shall be computed so
as to bear the same relationship to the book value of such property as the
depreciation, depletion, or amortization computed for tax purposes with respect
to such property for such period bears to the adjusted tax basis of such
property. If the adjusted tax basis of such property is zero, the depreciation,
depletion, or amortization with respect to such property shall be computed by
using any reasonable method selected by Member Newco.
2.03 Positive Adjustments. Each Member's Capital Account shall from time to
time be increased by:
the amount of money contributed by such Member to Member Newco (including
the amount of any Member Newco liabilities which the Member assumes (within the
meaning of Treas. Reg. 1.704-1(b)(2)(iv)(c)) but excluding liabilities assumed
in connection with the distribution of Member Newco property and excluding
increases in such Member's share of Member Newco liabilities pursuant to Section
752 of the Code);
(c) except as otherwise provided by Section 2.07 of this Exhibit, the fair
market value of property contributed by such Member to Member Newco (net of any
liabilities secured by such property that Member Newco is considered to assume
or take subject to under Section 752 of the Code);
(d) allocations to such Member of Member Newco Net Profits (or items
thereof);
(e) upon the occurrence of a Revaluation Event, the Net Profits (or items
thereof), if any, that would have been allocated to each Member if all Member
Newco property had been sold at its Adjusted Fair Market Value immediately prior
to the Revaluation Event, but only to the extent not already reflected in
Capital Accounts; and
(f) upon the distribution of Member Newco property to a Member under
circumstances not constituting a Revaluation Event, the Net Profits (or items
thereof), if any, that would have been allocated to such Member if such Member
Newco property had been sold at its Adjusted Fair Market Value immediately prior
to the distribution, but only to the extent not already reflected in Capital
Accounts.
2.04 Negative Adjustments. Each Member's Capital Account shall from time to
time be reduced by:
the amount of money distributed to such Member by Member Newco (including
the amount of such Member's individual liabilities for which Member Newco
becomes personally and primarily liable but excluding liabilities assumed in
connection with the contribution of property to Member Newco and excluding
decreases in such Member's share of Member Newco liabilities pursuant to Section
752 of the Code);
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(g) except as otherwise provided by Section 2.07 of this Exhibit, the fair
market value of property distributed to such Member by Member Newco (net of any
liabilities secured by such property that such Member is considered to assume or
take subject to under Section 752 of the Code);
(h) allocations to such Member of non-deductible expenditures of Member
Newco that are described in Section 705(a)(2)(B) of the Code, and of
organization and syndication expenditures and disallowed losses to the extent
that such expenditures or losses are treated as Section 705(a)(2)(B)
expenditures pursuant to Treas. Reg. 1.704-1(b)(2)(iv)(i);
(i) allocations to such Member of Member Newco Net Losses (or items
thereof);
(j) upon the occurrence of a Revaluation Event, the Net Losses (or items
thereof), if any, that would have been allocated to such Member if all Member
Newco property had been sold at its Adjusted Fair Market Value immediately prior
to the Revaluation Event, but only to the extent not already reflected in
Capital Accounts; and
(k) upon the distribution of Member Newco property under circumstances not
constituting a Revaluation Event, the Net Losses (or items thereof), if any,
that would have been allocated to such Member if such Member Newco property had
been sold at its Adjusted Fair Market Value immediately prior to the
distribution, but only to the extent not already reflected in Capital Accounts.
2.05 Determination of Balances. Except as otherwise provided in this
Exhibit, whenever it is necessary to determine the Capital Account of any
Member, the Capital Account of that Member shall be determined after giving
effect to all allocations of Net Profits and Net Losses of Member Newco for the
current year (including a portion thereof) as well as all distributions for such
year in respect of transactions effected prior to the date such determination is
to be made.
2.06 Revaluation of Member Newco Property.
Upon the occurrence of a Revaluation Event, Member Newco property (whether
tangible or intangible) shall be revalued, and the Capital Accounts of the
Members shall be adjusted in accordance with Sections 2.03(d) and 2.04(e) of
this Exhibit, to reflect the Adjusted Fair Market Value of Member Newco property
immediately prior to the Revaluation Event.
(l) Upon the distribution of Member Newco property to a Member under
circumstances not constituting a Revaluation Event, such property shall be
revalued, and the Capital Account of each Member shall be adjusted in accordance
with Sections 2.03(e) and 2.04(f) of this Exhibit, to reflect the Adjusted Fair
Market Value of such property immediately prior to such distribution. The
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Capital Account of the Member receiving such distribution shall then be adjusted
in accordance with Section 2.04(b) of this Exhibit to reflect such distribution.
(m) In the event that the adjusted tax basis of Member Newco property is
increased or decreased under Section 732, 734, or 743 of the Code, a
corresponding adjustment shall be made to the value of Member Newco assets to
the extent that such increase or decrease is reflected in Capital Accounts
pursuant to Section 2.09 of this Exhibit.
2.07 Promissory Notes.
In the event that a Member contributes to Member Newco a Nontradable Note
of which such Member is the maker, such note shall not be treated as contributed
property for purposes of Section 2.03(b) of this Exhibit. Such Member's Capital
Account will be increased with respect to such note only when there is a taxable
disposition of such note by Member Newco or when such Member makes principal
payments on such note.
(n) In the event that Member Newco distributes to a Member a Nontradable
Note of which Member Newco is the maker, then except as otherwise provided in
Section 2.07(c) or (d) of this Exhibit, such note shall not be treated as
distributed property for purposes of Section 2.04(b) of this Exhibit. Such
Member's Capital Account will be decreased with respect to such note only when
there is a taxable disposition of such note by such Member or when Member Newco
makes principal payments on such note.
(o) Section 2.07(b) of this Exhibit shall not apply to any negotiable note
(of which Member Newco is the maker) distributed by Member Newco to a Member in
liquidation of Member Newco or of such Member's interest in Member Newco if such
distribution is made not later than the later of (i) the end of the taxable year
in which such liquidation occurs, or (ii) a date which is ninety (90) Days after
the date of such liquidation. If such note bears interest at no less than the
Applicable Federal Rate at the time of distribution, such Member's Capital
Account shall be reduced by the outstanding principal amount of such note;
otherwise such Member's Capital Account shall be reduced by the fair market
value of such note at the time of distribution.
(p) In the event that Member Newco distributes to a Member a negotiable
note to which Section 2.07(b) of this Exhibit applies, and Member Newco or such
Member's interest in Member Newco is subsequently liquidated at a time when all
or a portion of such note remains unsatisfied, then such Member's Capital
Account shall be reduced as follows: if such note bears interest at no less than
the Applicable Federal Rate at the time of such liquidation, such Member's
Capital Account shall be reduced by the outstanding principal balance of such
note; otherwise such Member's Capital Account shall be reduced by the fair
market value of such note at the time of such liquidation.
2.08 Adjustments for Investment Credit Property. In the event that the
adjusted tax basis for federal income tax purposes of Member Newco Investment
Credit property is reduced or increased, the Capital Accounts of the Members
shall be adjusted in the manner set forth in Treas. Reg. 1.704-1(b)(2)(iv)(i).
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2.09 Section 754 Elective Adjustments. In the event that the adjusted tax
basis of Member Newco property is adjusted under Section 732, 734, or 743 of the
Code, the Capital Accounts of the Members shall be adjusted to the extent
required by Treas. Reg. 1.704-1(b)(2)(iv)(m).
2.10 Additional Capital Account Adjustments. Member Newco shall make any
further adjustments to Capital Accounts that may be necessary in order to comply
with the rules set forth in Treas. Reg. 1.704-1(b)(2)(iv) as it may be amended
from time to time. If the provisions of this Exhibit and the rules of Treas.
Reg. 1.704-1(b)(2)(iv) fail to provide guidance as to how the Capital Accounts
of the Members should be adjusted to reflect particular items, the Capital
Accounts of the Members shall be adjusted in a manner that (i) maintains
equality between the aggregate Capital Accounts of the Members and the amount of
Member Newco capital reflected on Member Newco's balance sheet, (ii) is
consistent with the underlying economic arrangement of the Members, and (iii) is
based, wherever practicable, on Federal income tax accounting principles.
2.11 Transfers of Membership Interests.
Upon the transfer of a Member's entire membership interest, the Capital
Account of such Member shall carry over to the transferee.
(q) Upon the transfer of a portion of a Member's membership interest, the
portion of such Member's Capital Account attributable to the transferred portion
shall carry over to the transferee.
ARTICLE III
ALLOCATION OF NET PROFITS AND NET LOSSES
3.01 In General. Allocations to the Capital Accounts of the Members shall
be based on the Net Profits and Net Losses of Member Newco as determined
pursuant to Section 2.02 of this Exhibit. Such allocations shall be made as
provided in the Agreement except to the extent modified by the provisions of
this Article III.
3.02 Limitations on Allocation of Net Losses and Deductions. Subject to
Section 3.03 of this Exhibit, but notwithstanding any other provisions of the
Agreement:
Partner Nonrecourse Deductions. Any item of Partner Nonrecourse Deduction
with respect to a Partner Nonrecourse Debt shall be allocated to the Member or
Members who bear the economic risk loss for such Partner Nonrecourse Debt in
accordance with Treas. Reg. 1.704-2(i).
(r) Excess Deficit Balances. Subject to paragraph (a) immediately
preceding, no Net Losses or deduction shall be allocated to any Member to the
extent that such allocation would cause or increase an Excess Deficit Balance in
the Capital Account of such Member. Such Net Losses or deduction shall be
reallocated away from such Member and to the other Members in accordance with
the Agreement, but only to the extent that such reallocation would not cause or
increase Excess Deficit Balances in the Capital Accounts of such other Members.
118
3.03 Chargebacks of Net Profits. Notwithstanding any other provisions of
the Agreement:
Member Newco Minimum Gain. In the event that there is a net decrease in
Member Newco Minimum Gain for a taxable year of Member Newco, then before any
other allocations are made for such taxable year, each Member shall be allocated
items of Net Profits (or items thereof) for such year equal to that Member's
share of the net decrease in Member Newco Minimum Gain within the meaning of
Treas. Reg. 1.704-2(g)(2). The allocation required by the preceding sentence
(the "Minimum Gain Chargeback Requirement") shall not apply to a Member to the
extent that:
(a) the Member's share of the net decrease in Member Newco Minimum
Gain is caused by a guarantee, refinancing, or other change in
the debt instrument causing it to become partially or wholly
Recourse Debt or Partner Nonrecourse Debt, and the Member bears
the economic risk of loss (within the meaning of Treas. Reg.
1.752-2) for the newly guaranteed, refinanced, or otherwise
changed liability, or
(b) the Member contributes capital to Member Newco that is used to
repay the Nonrecourse Liability, and the Member's share of the
net decrease in Member Newco Minimum Gain results from the
repayment.
If in any taxable year of Member Newco, Member Newco has a net decrease in
Partnership Minimum Gain and the Minimum Gain Chargeback Requirement causes a
distortion in the economic arrangement among the Members and it is not expected
that Member Newco will have sufficient other income to correct the distortion,
the Managing Member with the unanimous consent of the other members may seek a
waiver from the Internal Revenue Service of the Minimum Gain Chargeback
Requirement as permitted by Treas. Reg. 1.704-2(f)(4). Any Minimum Gain
Chargeback required for a taxable year of Member Newco shall consist first of
gains recognized from the disposition of Member Newco property subject to one or
more Nonrecourse Liabilities of Member Newco and then if necessary shall consist
of a pro rata portion of Member Newco's other items of income and gain for the
taxable year of Member Newco. If the amount of the Minimum Gain Chargeback
Requirement exceeds Member Newco's income and gains for the taxable year, the
excess carries over to the succeeding taxable year. See Treas. Reg.
1.704-2(j)(2)(i) and (iii).
(s) Partner Nonrecourse Debt Minimum Gain. In the event that there is a net
decrease in Partner Nonrecourse Debt Minimum Gain for a taxable year of Member
Newco, then after taking into account allocations pursuant to paragraph (a)
immediately preceding, but before any other allocations are made for such
taxable year, each Member with a share of Partner Nonrecourse Debt Minimum Gain
(determined under Treas. Reg. 1.704-2(i)(5)) as of the beginning of such year
shall be allocated items of Net Profits for such year (and, if necessary, for
succeeding years) equal to such Member's share of such net decrease in the
Partner Nonrecourse Debt Minimum Gain (the "Nonrecourse Debt Minimum Gain
Chargeback Requirement"). A Member's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain shall be determined in a manner consistent with
the provisions of Treas. Reg. 1.704-2(g)(2). A Member shall not be subject to
119
the Nonrecourse Debt Minimum Gain Chargeback Requirement to the extent the net
decrease in Partner Nonrecourse Debt Minimum Gain arises because the liability
ceases to be a Partner Nonrecourse Debt due to a conversion, refinancing, or
other change in the debt instrument that causes it to become partially or wholly
a Nonrecourse Liability. The amount that would otherwise be subject to the
Nonrecourse Debt Minimum Gain Chargeback Requirement shall be added to the
Member's share of Member Newco Minimum Gain under paragraph (a) immediately
preceding. In addition, the allocation required by the first sentence of this
paragraph (b) shall not apply to a Member to the extent that:
(a) the Member's share of the net decrease in Member Newco
Nonrecourse Debt Minimum Gain is caused by a guarantee,
refinancing, or other change in the debt instrument causing it to
become partially or wholly Recourse Debt or Partner Recourse
Debt, and the Member bears the economic risk of loss (within the
meaning of Treas. Reg. 1.752-2) for the newly guaranteed,
refinanced, or otherwise changed liability, or
(b) the Member contributes capital to Member Newco that is used to
repay the Nonrecourse Liability, and the Member's share of the
net decrease in Member Newco Minimum Nonrecourse Debt Gain
results from the repayment.
If in any taxable year of Member Newco, Member Newco has a net decrease in
Member Newco Minimum Nonrecourse Debt Gain and the Nonrecourse Debt Minimum Gain
Chargeback Requirement causes a distortion in the economic arrangement among the
Members and it is not expected that Member Newco will have sufficient other
income to correct the distortion, the Manager(s) will seek a waiver from the
Internal Revenue Service of the Nonrecourse Debt Minimum Gain Chargeback
Requirement as permitted by Treas. Reg. 1.704-2(i)(4). Any Nonrecourse Debt
Minimum Gain Chargeback required for a taxable year of Member Newco shall
consist first of gains recognized from the disposition of Member Newco property
subject to one or more Partner Nonrecourse Liabilities of Member Newco and then
if necessary shall consist of a pro rata portion of Member Newco's other items
of income and gain for the taxable year of Member Newco. If the amount of the
Nonrecourse Debt Minimum Gain Chargeback Requirement exceeds Member Newco's
income and gains for the taxable year, the excess carries over to the succeeding
taxable year. See Treas. Reg. 1.704-2(j)(2)(ii) and (iii).
(t) Qualified Income Offset. If, at the end of any taxable year, the
Capital Accounts of any Members have Excess Deficit Balances after taking into
account all other allocations and adjustments under this Agreement, then items
of Net Profits for such year (and, if necessary, for subsequent years) will be
reallocated to such Members in the amount and in the proportions needed to
eliminate such Excess Deficit Balances as quickly as possible.
3.04 Offsetting Allocations. Subject to the provisions of Sections 3.02 and
3.03 of this Exhibit, but notwithstanding any other provision of this Agreement,
in the event that any allocation or reallocation is made pursuant to Section
3.02 or 3.03 of this Exhibit (a "Regulatory Allocation"), then offsetting
allocations of remaining Net Profits or Net Losses, or items thereof, for such
year (and, if necessary, items of Net Profits or Net Losses for subsequent
120
years) shall be made in such amounts and proportions as are appropriate to
restore the Capital Accounts of the Members to the position in which such
Capital Accounts would have been if such Regulatory Allocation had not been
made.
ARTICLE IV
ALLOCATION OF TAX ITEMS
4.01 In General. Except as otherwise provided in this Article IV, all items
of income, gain, loss, and deduction shall be allocated among the Members for
federal income tax purposes in the same manner as the corresponding allocation
for Net Profits and Net Losses.
4.02 Section 704(c) Allocations. In the event that the value of an item of
Member Newco property differs from its adjusted tax basis, allocations of
depreciation, depletion, amortization, gain, and loss with respect to such
property will be made for federal income tax purposes in a manner that takes
account of the variation between the adjusted tax basis and value of such
property in accordance with Section 704(c) of the Code and Treas. Reg.
1.704-1(b)(2)(iv)(f)(4).
4.03 Tax Credits.
Any tax credit that is attributable to an expenditure that gives rise to an
allocation of loss or deduction (or other downward Capital Account adjustment)
shall be allocated among the Members in the same proportion as such Member's
distributive shares of such loss or deduction (or other adjustment).
(u) Any tax credit whose allocation is not otherwise specified in this
Section 4.03 shall be allocated among the Members in accordance with Treas. Reg.
1.704-1(b)(4)(ii).
ARTICLE V
OTHER TAX MATTERS
5.01 Minimum Gain. Partnership Minimum Gain shall be allocated among the
Members in accordance with Treas. Reg. 1.704-2(g). Partner Nonrecourse Debt
Minimum Gain shall be allocated among the Members in accordance with Treas. Reg.
1.704-2(i)(5).
5.02 Excess Nonrecourse Liabilities. The Members' shares of Member Newco's
Excess Nonrecourse Liabilities pursuant to Treas. Reg. 1.752-3(a) shall be
determined in accordance with Section 18.09 of the Agreement requiring unanimous
consent for tax elections.
5.03 Withholding.
Member Newco shall withhold any amounts required to be withheld pursuant to
any applicable provisions of the Code, including without limitation Sections
1441 through 1446 of the Code, or pursuant to any applicable provisions of state
or local law.
121
(v) Any amounts withheld with respect to a Member's distributive share of
Member Newco income (whether or not distributed) shall be treated by Member
Newco and by such Member for all purposes as amounts distributed to such Member.
Any amounts withheld with respect to any payment to a Member shall be treated by
Member Newco and by such Member for all purposes as amounts paid to such Member.
Amounts so treated as distributed or paid to any Member shall reduce the amount
otherwise distributable or payable to such Member.
(w) In the event that Member Newco withholds with respect to a Member's
distributive share of Member Newco income for a taxable year, and such
distributive share exceeds the amount distributed to such Member in such taxable
year, then subsequent distributions to such Member shall be deemed to be made
first from income with respect to which Member Newco has already withheld.
122
EXHIBIT B
Environmental Reports
123
EXHIBIT C
Transaction Chart
124
Exhibit C
TRANSACTION STEPS
Existing Structure:
____________ ______ ____________ ____________
| REJ Realty | | JGRI | | REJ Realty | | JG Manager |
|____________| |______| |____________| |____________|
| | | |
| | | |
|_____________| |_________________|
| |
| |
__________________ ____________________
| JG North Raleigh | | JG Triangle South |
|__________________| |____________________|
Step 1:
-------
|
____________ ______ | ____________ ____________
| REJ Realty | | JGRI | | | REJ Realty | | JG Manager |
|____________| |______| | |____________| |____________|
Member ^ | Member ^ |JG North |Member ^ | Member ^ |
Newco | | Newco | |Raleigh |Newco | | Newco | |
Interest | | JG North Interest | |Interest |Interest | |JG Triangle Interest | |JG Triangle
| | Raleigh | | | | |South | |South
| | Interest | | | | |Interest | |Interest
| v | v | v | v
| | | |
| | | |
__________________________________________________________________________________
| Member Newco |
| |
__________________________________________________________________________________
Result of Sept 1:
----------------
_____________ ___________ ______________
| REJ Realty | | JGRI | | JG Manager |
|_____________| |_____|_____| |______________|
| | |
| | |
|________________________|________________________|
|
|
|
____________|______________
| Member | Newco |
|____________|______________|
|
|
|
___________________________________
| |
| |
_________________________ _____________________________
| JG North Raleigh | | JG Triangle South |
|_________________________| |_____________________________|
Step 2:
-------
_______________________ ______________________
| JG North Raleigh | | JG Triangle South |
|_______________________| |______________________|
^ | ^ |
| | | |
Company | |Real Company | |Real
Interest | |Property Interest | |Property
| | | |
| | | |
| v | v
________________________________________________
| Company |
|________________________________________________|
Result of Step 2:
-----------------
_____________ ___________ ______________
| REJ Realty | | JGRI | | JG Manager |
|_____________| |_____|_____| |______________|
| | |
| | |
|________________________|________________________|
|
|
|
____________|______________
| Member | Newco |
|____________|______________|
|
|
|
___________________________________
| |
| |
_________________________ _____________________________
| JG North Raleigh | | JG Triangle South |
|_________________________| |_____________________________|
| |
|___________________________________|
|
|
___________________________________________________________
| Company |
| (Owner of Triangle Town Center and Triangle Town Place) |
|___________________________________________________________|
Step 3:
-------
_________________________
| Member Newco |
|_________________________|
^ ^
| |
Distribution of | | Distribution of
Company Interest | | Company Interest
| |
| |
_____________________ _____________________
| JG North Raleigh | | JG Triangle South |
|_____________________| |_____________________|
Result of Step 3:
-----------------
_____________ ___________ ______________
| REJ Realty | | JGRI | | JG Manager |
|_____________| |_____|_____| |______________|
| | |
| | |
|________________________|________________________|
|
|
|
____________|______________
| Member | Newco |
|____________|______________|
|
|
|
________________________
| Company |
|________________________|
Step 4:
-------
___________________________________________________________
| CBL Member admitted as Member in |
| Member Newco |
|___________________________________________________________|
^
| 50%
| Member Newco
| Interest
|
____________________________________
| Member Newco |
|____________________________________|
Result of Step 4:
-----------------
_____________ ___________ ______________ ______________
| REJ Realty | | JGRI | | JG Manager | | CBL Member |
|_____________| |_____|_____| |______________| |______________|
| | | |
| | | |
|____________________|____________________|____________________|
|
|
|
____________|______________
| Member | Newco |
|____________|______________|
|
|
|
__________|__________
| Comp|any |
|__________|__________|