AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
OTAY LAND COMPANY, LLC
Limited Liability Company Agreement of OTAY LAND
COMPANY,LLC (the "LLC") dated as of October 14, 1998 among
HOMEFED CORPORATION ("HFC") and LEUCADIA NATIONAL
CORPORATION ("LUK," and collectively, the "Members").
W I T N E S E T H :
WHEREAS, the Members desire to enter into this
amended and restated Agreement (the "LLC Agreement") to
establish their respective rights and obligations with
respect to the LLC;
NOW, THEREFORE, in consideration of the premises
and the mutual covenants and provisions hereinafter
contained, the Members hereby agree as follows:
ARTICLE I
ORGANIZATIONAL AND OTHER MATTERS
SECTION 1.01. Formation; Admission. The LLC has
been organized under the provisions of the Limited Liability
Company Act of the State of Delaware (the "LLCA") by filing
a Certificate of Formation with the Secretary of State of
the State of Delaware. Each of HFC and LUK has been
admitted to the LLC as a Member. All Members are required
to hold an interest in the LLC; any failure to hold such an
interest shall result in immediate termination of one's
membership in the LLC.
SECTION 1.02. Name. The name of the LLC shall be
OTAY LAND COMPANY, LLC and the business of the LLC shall be
conducted under such name.
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SECTION 1.03. Principal Office. The principal
office of the LLC shall be at 000 Xxxx Xxxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, or such other place as may from time
to time be determined.
SECTION 1.04. Term. The LLC shall commence on
the date of filing of the Certificate of Formation and shall
continue until terminated as provided in this Agreement or
in the Certificate of Formation, as each such document may
be amended from time to time.
SECTION 1.05. Limited Liability. Except as
otherwise provided by the LLCA, the debts, obligations and
liabilities of the LLC, whether arising in contract, tort or
otherwise, shall be the debts, obligations and liabilities
solely of the LLC, and the Members shall not be obligated
personally for any of such debts, obligations or liabilities
solely by reason of being a Member.
ARTICLE II
PURPOSE AND POWERS
SECTION 2.01. Purpose of the LLC. Except as may
be restricted by this Agreement, the LLC may carry on any
lawful business, purpose or activity permitted by the LLCA.
SECTION 2.02. Powers of the LLC. The LLC shall
have the power to do any and all acts reasonably necessary,
appropriate, proper, advisable, incidental or convenient to
or for the furtherance of the purpose and business described
herein and for the protection and benefit of the LLC.
ARTICLE III
FUNDING CONTRIBUTIONS
SECTION 3.01. Funding Contributions. An initial
investment of $10,000,000 in the LLC has been made by HFC
("Capital"). Any additional investments in the LLC to be
made by HFC shall be treated as additional Capital. An
initial investment of $1,000 in the LLC has been made by LUK
("Preferred Capital"). Any additional investments in the
LLC to be made by LUK shall be treated as additional
Preferred Capital. Preferred Capital contributed by LUK
shall be entitled to receive a preferred return pursuant to
Article IV hereof.
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SECTION 3.02. Capital Accounts. The LLC shall
maintain for each Member a separate Capital Account.
SECTION 3.03. No Interest. Except as otherwise
expressly provided in this Agreement, no interest shall be
paid by the LLC on contributions of either Capital or
Preferred Capital, balances in the Members' Capital Accounts
or any other funds contributed to the LLC or distributed or
distributable by the LLC under this Agreement.
SECTION 3.04. No Withdrawal; Return of
Contributions. No Member shall have the right to withdraw
any portion of such Member's Capital Account without the
consent of LUK. Except as required by the LLCA, no Member
shall be personally liable to any other Member for the
return of any capital or any additions thereto, it being
agreed that any return of capital as may be made from time
to time shall be made soley from the assets of the LLC and
only in accordance with the terms hereof.
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS
SECTION 4.01. Distribution of Profits. All
proceeds received by the LLC and available for distribution
shall be distributed as follows, in the following order of
priority:
(i) to pay LUK an annual minimum cumulative
preferred return of 10% on all Preferred Capital
provided by LUK;
(ii) to pay LUK an annual minimum cumulative
preferred return of 2% on all Preferred Capital
provided by LUK; provided that this 2% return shall be
payable by the LLC only out of and to the extent of
profits;
(iii) to repay all Preferred Capital provided by
LUK, it being understood that upon payment in full of
the preferred returns pursuant to (i) and (ii) above
and repayment in full of all Preferred Capital the
interest in the LLC represented by such Preferred
Capital shall be extinguished; and
(iv) any remaining funds will be distributed to
the remaining Member or Members in accordance with
their capital accounts.
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SECTION 4.02. Allocation of Profits and Losses.
Profits and losses of the LLC shall be allocated among the
Members in accordance with applicable federal tax laws.
ARTICLE V
MANAGEMENT OF THE LLC
SECTION 5.01. Management. Subject to Sections
5.02 and 5.03 hereof, the management of the business and
affairs of the LLC shall be vested in the "Manager" who
shall be selected by the unanimous vote of all Members;
provided that for so long as an interest in the LLC
represented by Preferred Capital (a "Preferred Capital
Interest") shall be outstanding and held by LUK, LUK shall
select the Manager. The initial Manager of the LLC selected
by LUK shall be HFC. The Manager shall have the power to do
any and all acts necessary or convenient for the furtherance
of the purpose of the LLC described in this Agreement,
including all powers, statutory or otherwise, possessed by
members of a limited liability company under the LLCA. For
so long as LUK shall hold a Preferred Capital Interest in
the LLC, only LUK shall have the power to remove the Manager
of the LLC. Xxxxxx X. Xxxxxxx is hereby designated as an
authorized person, within the meaning of the LLCA, to
execute, deliver and file the Certificate of Formation and
any amendments and/or restatements thereof required by law.
SECTION 5.02. Authorized Officers. The Members
may elect by a unanimous vote officers with such titles as
the Members deem appropriate; provided that for so long as
LUK shall hold a Preferred Capital Interest in the LLC, LUK
shall select the officers of the LLC. The initial officers
of the LLC shall be:
Xxxx Xxxxxx President
Xxxx Xxxx Treasurer and Secretary
Xxxxxxx Bienvenue Vice President
Xxxxxx X. Orlando Vice President
Xxxxxx X. Xxxxxxxx Vice President
The foregoing officers shall serve in such office until
removed and replaced by the unanimous vote of all Members.
SECTION 5.03. Limitations on Management.
Notwithstanding anything else to the contrary contained in
this Agreement, the unanimous vote of all Members shall be
required to authorize (i) any borrowing by the LLC and (ii)
the encumbrance of any assets of the LLC.
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SECTION 5.04. Liability of Members;
Indemnification.
(a) To the fullest extent permitted by the laws
of Delaware, the LLC (i) shall indemnify and hold harmless
LUK and its respective officers, directors and shareholders
for so long as LUK holds a preferred capital interest in the
LLC, and (ii) may indemnify and hold harmless each Member
and its respective officers, directors, shareholders,
members or partners, and each officer of the LLC (each of
the parties listed in (i) and (ii), an "Indemnitee"), from
and against any and all losses, claims, demands, costs,
damages, liabilities (joint or several), expenses of any
nature (including reasonable attorneys' fees and
disbursements), judgments, fines, settlements and other
amounts ("Damages") arising from any and all claims,
demands, actions, suits or proceedings, whether civil,
criminal, administrative or investigative, in which an
Indemnitee may be involved, or threatened to be involved, as
a party or otherwise, arising out of or incidental to the
business of the LLC, regardless of whether an Indemnitee
continues to be a Member or an officer, director, share-
holder, member or partner of such Member at the time any
such liability or expense is paid or incurred, except for
any Damages based upon, arising from or in connection with
any act or omission of an Indemnitee committed without
authority granted pursuant to this Agreement or in bad faith
or otherwise constituting willful misconduct.
(b) Expenses (including reasonable attorneys'
fees and disbursements) incurred in defending any claim,
demand, action, suit or proceeding, whether civil, criminal,
administrative or investigative, subject to Section 5.04(a)
hereof, may be paid (or caused to be paid) by the LLC in
advance of the final disposition of such claim, demand,
action, suit or proceeding upon receipt of an undertaking by
or on behalf of the Indemnitee to repay such amount if it
shall ultimately be determined, by a court of competent
jurisdiction from which no further appeal may be taken or
the time for any appeal has lapsed (or otherwise, as the
case may be), that the Indemnitee is not entitled to be
indemnified by the LLC as authorized hereunder or is not
entitled to such expense reimbursement.
(c) The indemnification provided by Section
5.04(a) hereof shall be in addition to any other rights to
which an Indemnitee may be entitled under any agreement or
unanimous vote of the Members, as a matter of law or
otherwise, both (i) as to action in the Indemnitee's
capacity as a Member or as an officer, director,
shareholder, member or partner of a Member, and (ii) as to
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action in another capacity, and shall continue as to an
Indemnitee who has ceased to serve in such capacity and
shall inure to the benefit of the heirs, successors,
assigns, administrators and personal representatives of the
Indemnitee.
(d) Any indemnification hereunder shall be
satisfied only out of the assets of the LLC, and the Members
shall not be subject to personal liability by reason of
these indemnification provisions.
(e) An Indemnitee shall not be denied indemni-
fication in whole or in part under Section 5.04(a) hereof
because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this
Agreement.
(f) No Member shall be liable, in damages or
otherwise, to the LLC or any other Member for nay act or
omission performed or omitted to be performed by it in good
faith pursuant to the authority granted to such Member this
Agreement of the LLCA.
ARTICLE VI
TRANSFER OF MEMBERSHIP INTERESTS
Transfer Restrictions. No transfer, except with
the unanimous consent of the Members, of all or any portion
of a Member's interest in the LLC shall be permitted;
provided that LUK may transfer its interest in the LLC to
any subsidiary of LUK.
ARTICLE VII
DISSOLUTION AND LIQUIDATION
SECTION 7.01. Bankruptcy. The LLC shall be
dissolved and its affairs shall be wound up upon the
Bankruptcy (as defined below) of the LLC or any Member;
provided, however, that upon the occurrence of any such
event, a majority in interest of the Members may, within 90
days thereafter, agree to continue the business of the LLC,
upon all of the terms and provisions of this Agreement. For
purposes of this Agreement, "Bankruptcy" means (i) the
filing of a voluntary petition seeking liquidation,
reorganization, arrangement or readjustment, in any form, of
debts under title 11 of the United States Code, as amended
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(the "Bankruptcy Code") (or corresponding provisions of
future laws) or any other federal, state or foreign
insolvency law, or the filing of an answer consenting to or
acquiescing in any such petition; (ii) the making of any
assignment for the benefit of creditors or the admission in
writing of the inability to pay debts as they mature; or
(iii) the expiration of 60 days after the filing of an
involuntary petition under the Bankruptcy Code (or
corresponding provisions of future laws) seeking an
application for the appointment of a receiver, or an
involuntary petition seeking liquidation, reorganization,
arrangement or readjustment of debts under any other
federal, state or foreign insolvency law, unless the same
shall have been vacated, set aside or stayed within such
60-day period.
SECTION 7.02. Effect of Dissolution. Upon
dissolution, subject to the Members' right to elect to
continue the business of the LLC pursuant to Section 7.01
hereof, the LLC shall cease carrying on its business but
shall not terminate until the winding up of the affairs of
the LLC is completed, the assets of the LLC shall have been
distributed as provided below and a Certificate of
Cancellation of the LLC under the LLCA has been filed with
the Secretary of State of the State of Delaware.
SECTION 7.03. Liquidation Upon Dissolution. Upon
the dissolution of the LLC, subject to the Members' right to
elect to continue the business of the LLC pursuant to
Section 7.01 hereof, sole and plenary authority to
effectuate the liquidation of the assets of the LLC shall be
vested (a) in LUK for so long as LUK's Preferred Capital
interest in the LLC shall remain outstanding, and if such
Preferred Capital interest shall have been extinguished, (b)
in HFC, which party shall have full power and authority to
sell, assign and encumber any and all of the LLC's assets
and to wind up and liquidate the affairs of the LLC in an
orderly and business-like manner. The proceeds of
liquidation of the assets of the LLC distributable upon a
dissolution and winding up of the LLC shall be applied in
the following order of priority:
(i) first, to the creditors of the LLC,
including creditors who are Members, in the order of
priority provided by law, in satisfaction of all
liabilities and obligations of the LLC (of any nature
whatsoever, including, without limitation, fixed or
contingent, matured or unmatured, legal or equitable,
secured or unsecured), whether by payment or the making
of reasonable provision for payment thereof; and
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(ii) thereafter, in accordance with the
provisions of Article IV hereof.
SECTION 7.04. Winding Up and Certificate of
Cancellation. The winding up of the LLC shall be completed
when all of its debts, liabilities, and obligations have
been paid and discharged or reasonably adequate provision
therefor has been made, and all of the remaining property
and assets of the LLC have been distributed to the Members.
Upon the completion of the winding up of the LLC, a
Certificate of Cancellation of the LLC shall be filed with
the Secretary of State of the State of Delaware.
ARTICLE VIII
AMENDMENT
Amendment Procedures. This Agreement may be
amended or modified only by a written instrument executed by
each Member. In addition, the terms or conditions hereof
may be waived by a written instrument executed by the party
waiving compliance.
ARTICLE IX
MISCELLANEOUS
Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to
be an original, but all of which shall constitute one and
the same agreement.
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IN WITNESS WHEREOF, the parties hereto have
entered into this Agreement as of the date first written
above.
HOMEFED CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: President
LEUCADIA NATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
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