Exhibit 10.6A
RECKSON STRATEGIC VENTURE PARTNERS, LLC
OPERATING AGREEMENT
THIS OPERATING AGREEMENT is made as of the 5th day of March, 1998,
by and among RSVP HOLDINGS, LLC, a Delaware limited liability company, as
Managing Member (such person and its successors and assigns hereunder in such
capacity being hereinafter referred to as the "MANAGING MEMBER"), and XXXXX
XXXXXX REAL ESTATE SECURITIES INC., a Delaware corporation, as the Non-
Managing Member (such person and its successors and assigns hereunder in such
capacity, together with any members admitted to the Company in accordance
with the terms hereof other than a Managing Member being hereinafter referred
to individually as a "NON-MANAGING MEMBER" and collectively as the "NON-
MANAGING MEMBERS") (The Managing Member and the Non-Managing Member are
hereinafter referred to severally as a "MEMBER" and collectively as the
"MEMBERS"). Each capitalized term utilized herein shall have the meaning
ascribed to such term in Article II hereof.
RECITALS
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A. Reckson Strategic Venture Partners, LLC (the "COMPANY") has
been formed as a limited liability company under the Delaware Limited
Liability Company Act (as amended from time to time, the "ACT") on
January 23, 1998.
B. The Managing Member and the Non-Managing Member wish to set out
fully their respective rights, obligations and duties regarding the Company
and its assets and liabilities.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE I
FORMATION
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1.01. Formation. The Company has been formed by the filing of
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its Certificate of Formation with the Delaware Secretary of State pursuant to
the Act. The Managing Member shall appoint such agents and attorneys for
service of process as may be necessary or appropriate in connection with the
formation and continuation of the Company under the laws of the State of
Delaware. The Managing Member shall take all other necessary action required
by law to
perfect and maintain the Company as a limited liability company under the Act
and in all other jurisdictions in which the Company may elect to conduct
business.
1.02. Name. The name of the Company shall be, and the business
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of the Company shall be conducted under the name of, "Reckson Strategic
Venture Partners, LLC" or such other name as the Managing Member from time to
time shall elect; provided, however, that in no event shall the Company
conduct business under any name that is similar to, or incorporates any
reference to, the name under which any Non-Managing Member or any Affiliate
of any Non-Managing Member conducts business without the prior written
Consent of such Non-Managing Member, which Consent shall be in the sole
discretion of such Non-Managing Member.
1.03. Place of Business. The principal office and place of
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business of the Company is located at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx
Xxxx 00000. The Managing Member may change the location of the principal
office and may establish such additional offices of the Company as it may
from time to time determine upon Notice to the Non-Managing Members of such
change or addition of location.
1.04. Registered Office; Principal Office. The address of the
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registered office of the Company in the State of Delaware is c/o The
Corporation Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000, and the registered agent for
service of process on the Company in the State of Delaware at such registered
office is The Corporation Trust Company.
1.05. Term. The Company shall continue in full force and
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effect from the date of this Agreement until the Articles of Termination are
filed. The Company shall be dissolved and its affairs wound up in accordance
with Article XI hereof.
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ARTICLE II
DEFINITIONS
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The following terms have the definitions hereinafter indicated
whenever used in this Agreement with initial capital letters:
"ACM": Asbestos-containing materials.
"ACM REQUIREMENTS": All present and future federal, state and
local legal requirements applicable to any ACMs located within any of the
Improvements, including the regulations promulgated by the federal
Occupational Safety and Health Xxxxxxxxxxxxxx, 00 XXX Parts 1910, 1915 and
1926; the National Emission Standards for Hazardous Air Pollutants for
asbestos, 40 CFR Section 61, Subpart M; and the Asbestos Hazard Emergency
Response Act regulations, 40 CFR Section 763 Subpart E.
"ACQUISITION COST": With respect to any Investment, the actual
purchase price paid by the Company for such Investment plus reasonable
transaction costs, including without limitation brokers' fees and expenses,
attorneys fees' and disbursements and travel expenses, incurred in connection
with such Investment plus, as of the date of acquisition thereof, (a) the
outstanding principal balance (and any accrued but unpaid interest thereon)
of any debt (i) of an Investment Entity in which the Investment is made, to
the extent allocable to such Investment, assumed by the Company in connection
with such Investment or (ii) secured by a lien on such Investment and (b) any
par or stated amount of outstanding preferred equity issued by any such
Investment Entity, and allocable to such Investment.
"ACQUISITION PLAN": Shall have the meaning ascribed to such term
in Section 16.02(E).
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"ACT": The Delaware Limited Liability Company Act, as it may be
amended from time to time or any successor statute.
"ADDITIONAL YIELD": Six percent (6%) per annum; provided that
during the continuance of Management Authority under Section 16.03, the
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Additional Yield shall be eleven percent (11%) per annum, and provided
further that, so long as no Management Authority under Section 16.03 shall
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be continuing, during the continuance of a default by any Class A Member
under Section 4.03 hereof, the Additional Yield shall be one percent (1%) per
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annum.
"ADJUSTMENT AMOUNTS": Shall have the meaning ascribed to such term
in clause (iii) of the definition of Sweep Event set forth in this
Article II.
"ADVISORY COMMITTEE": The committee described in Article XVI
hereof.
"AFFILIATE": When used with reference to a specified Person, (a)
any Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with the specified
Person, (b) any Person who, from time to time, is (i) an officer or director
of a specified Person or (ii) a spouse or immediate family relative of a
specified Person, and (C) any Person which, directly or indirectly, is the
beneficial owner of 25% or more of any class of equity securities of the
specified Person or of which the specified Person is directly or indirectly
the owner of 25% or more of any class of equity securities; provided,
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however, that for purposes of this Agreement, each of Reckson, Reckson
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Services and their respective Affiliates shall be deemed to be Affiliates of
each other. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under
common control with") when used with respect to any Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGREEMENT": This Operating Agreement, as it may be amended from
time to time.
"ALLOCATED ACCRUED CLASS A ADDITIONAL RETURN": Shall have the
meaning ascribed to such term in Section 6.01(C).
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"ALLOCATED ACCRUED CLASS A BASIC RETURN": Shall have the meaning
ascribed to such term in Section 6.01(C).
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"ALLOCATED ACCRUED CLASS B BASIC RETURN": Shall have the meaning
ascribed to such term in Section 6.01(C).
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"ALLOCATED ADDITIONAL RETURN SHORTFALL": In connection with the
distribution of any Capital Event Proceeds, the unpaid amount of Allocated
Accrued Class A Additional Return of such Investment remaining after
application of such Capital Event Proceeds pursuant to Section 6.01(B).
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"ALLOCATED NET ADJUSTED CAPITAL CONTRIBUTION": Shall have the
meaning ascribed to such term in Section 6.01(C).
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"ASBESTOS CONSULTANT": An industrial hygienist certified by the
American Board of Industrial Hygiene, who has successfully completed
appropriate OSHA/EPA asbestos training courses, who has all certifications,
accreditations, licenses and permits required by any Governmental Authority
having jurisdiction over any Related Property, and who is experienced with
required and appropriate health and safety standards related to ACMs, and
experienced in preparing O&M Programs.
"BANKRUPTCY": For purposes of this Agreement, with respect to any
Person, the institution by such Person of a voluntary case in bankruptcy, or
the voluntary taking advantage by such Person of any bankruptcy or insolvency
law, or the entry of an order, judgment or decree by a court of competent
jurisdiction which continues in effect and unstayed for 60 days of such
Person as bankrupt or insolvent, or the filing by such Person of any petition
or answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, or the filing by such Person of any answer
admitting (or the failure by such Person to make a required responsive
pleading to) the material allegations of a petition filed against such Person
in any such proceeding or the seeking or consenting to or acquiescence in the
judicial appointment of any trustee, fiscal agent, receiver or liquidator of
such Person or of all or any substantial part of its properties or, if within
90 days after the commencement of an involuntary case or action against such
Person seeking any bankruptcy, reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, the failure of such case or action to have
been dismissed or all orders in proceedings thereunder affecting the
operations or the business of such Person stayed, or if the stay of any such
order or proceeding thereafter shall be set aside, or, if within 90 days
after the judicial appointment
without the consent or acquiescence of such Person of any trustee, fiscal
agent, receiver or liquidator of such Person or of all or any substantial
part of its properties or the insolvency of such Person, such appointment
shall not have been vacated, such insolvency being deemed to occur when such
Person shall make an assignment for the benefit of creditors or shall admit
in writing that its assets are insufficient to pay its liabilities as they
come due.
"BANKRUPTCY CODE": Shall have the meaning ascribed to such term in
Section 7.11(N)(b).
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"BASIC YIELD": Ten percent (10%) per annum.
"BOOK CAPITALIZATION": With respect to Reckson Services and as at
any date of determination, shall mean the greater of
(i) the sum of (a) the trailing 12-month EBITDA of Reckson Services
solely from its service business(es) and its executive centers
business(es) (and not from the Company or any other rents from real
property), adjusted for normalized 12-month historical operations,
multiplied by seven (7), plus (b) the then outstanding Capital
Contribution of the Managing Member hereunder, or
(ii) the then Equity Capitalization of Reckson Services plus the then
outstanding Capital Contribution of the Managing Member to the extent
funded from draws on the ROP Line.
"BUILDING SERVICES": The offering to owners and /or developers and
/or occupants of office and industrial properties and other property types of
services with respect to the ownership, operation, leasing and management of
such properties or of services used by these owners or occupants.
"BUSINESS DAY": Any day on which banks located in New York, New
York are not required or authorized to close.
"CAPITAL ACCOUNT": The account maintained by the Company for each
Member as provided in Section 5.01 of this Agreement.
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"CAPITAL COMMITMENT": With respect to each Member, the amount set
forth on Schedule A opposite its name, as may be amended from time to time
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pursuant to the terms hereof.
"CAPITAL CONTRIBUTION": The total amount of money contributed by
each Member to the Company pursuant to the terms of this Agreement. The
aggregate Capital Contributions shall not exceed $300,000,000.00.
"CAPITAL EVENTS PROCEEDS": For any Investment, (a) the proceeds
from the sale, transfer, disposition, conveyance or refinancing, directly or
indirectly, of all or any portion of such Investment or any of the assets of
such Investment net of (i) any actual, out-of-pocket costs and expenses paid
or payable in respect of the sale, transfer, disposition, conveyance or
refinancing of such Investment and (ii) any pre-existing debt in respect of
such Investment that is satisfied in connection with such sale, transfer,
disposition, conveyance or refinancing and (b) Casualty Insurance Proceeds
and Condemnation Proceeds.
"CAPITAL EXPENSES": For any Related Property, costs of capital
improvements, deferred maintenance or Tenant Capital Expenses with respect to
such Related Property.
"CASUALTY": Any damage to, or loss or destruction of, all or any
part of any Related Property, whether or not such damage, loss or destruction
is insured or insurable.
"CASUALTY INSURANCE PROCEEDS": Insurance proceeds paid or payable
in respect of a Casualty.
"CAUSE": A failure by the Managing Member to carry out its
obligations hereunder which constitutes (i) fraud, wilful misconduct or bad
faith, (ii) a breach of Section 8.01 hereof, (iii) a material breach of this
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Agreement by the Managing Member which material breach does, or could
reasonably be expected to, result in a Company Material Adverse Effect, and
which material breach continues for a period of forty-five (45) days after
Notice of such material breach has been provided to the Managing Member (or,
if the material breach can be cured but is not capable of being cured within
such forty-five (45) day period, such longer period of time as is necessary
to cure such material breach, provided that Managing Member promptly
commences all necessary action to cure such breach and thereafter diligently
prosecutes all such action to completion), or (iv) a material breach of this
Agreement by the Managing Member which material breach reasonably could be
expected to result in a Platform Material Adverse Effect, and which material
breach continues for a period of forty-five (45) days after Notice of such
material breach has been provided to the Managing Member (or, if the material
breach can be cured but is not capable of being cured within such forty-five
(45) day period, such longer period of time as is necessary to cure such
material breach; provided that Managing Member promptly commences all
necessary action to cure such breach and thereafter diligently prosecutes all
such action to completion).
"CHANGE OF CONTROL EVENT": A change of control or ownership of the
Company or a merger of the Company such that management control of the
Company is not exercised by at least fifty percent (50%) of the individuals
identified on Schedule 2.22 hereto without the prior written approval of the
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Class A Member (which approval may be withheld in the Class A Member's sole
and absolute discretion); provided, however, that PWRES, in its sole and
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absolute discretion, may, by written notice to the Managing Member prior to
the occurrence of a Change of Control Event, waive any remedies otherwise
available hereunder with respect to such Change of Control Event; it being
understood that any such waiver shall be effective only with respect to a
specific Change of Control Event as disclosed to PWRES, and no such waiver
shall be deemed to waive the remedies of the Class A Member with respect to
any other Change of Control Event.
"CLASS A ADDITIONAL RETURN": For each Class A Member, a cash
return equal to (i) the Additional Yield, compounded monthly, on the amounts
of such Class A Member's funded Net Adjusted Capital Contributions from time
to time (including compounded but unpaid Basic Yield and Additional Yield on
such allocated Net Adjusted Capital Contributions), plus (ii) the Basic
Yield, compounded monthly, on all amounts of compounded and unpaid Additional
Yield, commencing on the date of funding of each such Capital Contribution
until such Capital Contribution and the accrued and unpaid Basic Yield and
Additional Yield thereon (including any such accrued and unpaid Basic Yield
or Additional Yield on any unpaid and compounded Basic Yield or Additional
Yield, respectively) is repaid to such Class A Member pursuant to this
Agreement.
"CLASS A BASIC RETURN": For each Class A Member, a cash return
equal to the Basic Yield, compounded monthly, on the amounts of such Class A
Member's funded Net Adjusted Capital Contributions from time to time
(including compounded but unpaid Basic Yield on such allocated Net Adjusted
Capital Contributions), commencing on the date of funding of each such
Capital Contribution until such Capital Contribution and the accrued and
unpaid Basic Yield thereon (including any such accrued and unpaid Basic
Yield on any unpaid and compounded Basic Yield) is repaid to such Class A
Member pursuant to this Agreement.
"CLASS A MEMBER": Any Member(s) admitted to the Company as a Class
A Member.
"CLASS A MEMBER'S RELEASED PERSONS": Shall have the meaning
ascribed to such term in Section 11.04.
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"CLASS B BASIC RETURN": For each Class B Member, a cash return
equal to the Basic Yield, compounded monthly, on the amounts of such Class B
Member's funded Net Adjusted Capital Contributions from time to time
(including compounded but unpaid Basic Yield on such allocated Net Adjusted
Capital Contributions), commencing on the date of funding of each such
Capital Contribution until such Capital Contribution and the accrued and
unpaid Basic Yield thereon (including any such accrued and unpaid Basic Yield
on any unpaid and compounded Basic Yield) is repaid to such Class B Member
pursuant to this Agreement.
"CLASS B MEMBER": Any Member(s) admitted to the Company as a Class
B Member, including the Managing Member.
"CLOSING": The date on which a Capital Commitment is made by any
Member pursuant to the terms hereof.
"CODE": The Internal Revenue Code of 1986, as amended, and any
successor statutory provisions.
"CO-INVESTMENT VEHICLES": Shall have the meaning ascribed to such
term in Section 3.05 hereof.
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"COMPANY": The limited liability company referred to herein, as
said limited liability company may from time to time be constituted.
"COMPANY COMPETITOR": Any pooled investment fund, other than the
Company, with a primary purpose similar to that of the Company as set forth
in Section 3.01 hereof.
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"COMPANY MATERIAL ADVERSE EFFECT": Any circumstance, act,
condition or event of whatever nature (including any adverse determination in
any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, or circumstance or circumstances, whether or not
related, that does, or could reasonably be expected to, result in a
materially adverse change in or have a materially adverse effect upon the
business, operations, condition (financial or otherwise) or prospects of the
Company in the aggregate.
"CONDEMNATION": Any actual or threatened taking, condemnation,
eminent domain or other similar proceeding relating to all or any portion of
any Related Property.
"CONDEMNATION PROCEEDS": Any and all award proceeds and other
compensation payable in respect of a Condemnation.
"CONSENT": Either the written consent of a Person, or the
affirmative vote of such Person at a meeting duly called and held pursuant to
this Agreement, as the case may be, to do the act or thing for which the
Consent is solicited, or the act of granting such Consent, as the context may
require. Subject to Section 15.03(C), reference to the Consent of a stated
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percentage of the Percentage Interest of the Non-Managing Members means the
Consent of a number of the Non-Managing Members not then in default whose
combined Percentage Interests represent at least such stated percentage of
the total Percentage Interests of the Non-Managing Members not then in
default, or such higher percentage as is required by applicable law.
"CONTROL": With respect to any Investment Entity, the Company's
power to direct the management of such Investment Entity, directly or
indirectly, whether by the ownership of voting securities, by contract or by
any other means.
"CUMULATIVE PRIORITY RETURN": For any period, (a) for any Class A
Member, such Class A Member's Class A Basic Return and Class A Additional
Return for such period, and (b) for any Class B Member, such Class B Member's
Class B Basic Return for such period.
"CURE AMOUNT": Shall have the meaning ascribed to such term in
Section 6.05.
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"DEEMED VALUE": With respect to any Investment, initially, the
Acquisition Cost of such Investment. From and after the Class A Member's
election pursuant to Section 3.06 to require a revaluation of an Investment
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at the time that the Adjustment Amounts for such Investment are initially
included for purposes of the Financial Tests, the "DEEMED VALUE" of such
Investment shall mean the Gross Fair Value of such Investment at such time,
as determined in accordance with Section 3.06, and from and after the
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occurrence of any Revaluation Event with respect to an Investment from time
to time, the "DEEMED VALUE" of such Investment as of any date of
determination shall mean the Gross Fair Value of such Investment as of the
time of the then most recent Revaluation Event for such Investment, as
determined in accordance with Section 3.06.
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"DERIVATIVES": A financial instrument, product or index which is
not a direct investment, but instead derives its economic characteristics
from the economic characteristics of one or more direct or derivative
financial instruments, products or indexes.
"DOBIE CENTER INVESTMENT": The acquisition by the Company of an
equity interest in a dormitory and residence hall occupied by students at the
University of Texas at Austin and in the parking garage and retail mall
adjacent thereto commonly known as Dobie Center.
"EBITDA": Earnings before interest, tax, depreciation and
amortization as determined in accordance with GAAP on a consistent basis.
"ELECTION PERIOD": Shall have the meaning ascribed to such term in
clause (iii) of the definition of Sweep Event set forth in this Article II.
"ENVIRONMENTAL LAWS": All laws, statutes, ordinances, orders,
rules, codes, regulations, guidance documents, policies, binding decrees and
judgments and any binding judicial or administrative interpretations thereof
relating to health, safety, industrial hygiene, protection of the
environment, or the protection of human, plant or animal health or welfare
from injury as a result of exposure to Hazardous Materials or loss of
ecological resources, including those relating to fines, orders, injunctions,
penalties, damages, contribution, cost recovery compensation, removal,
cleanup or remedial action, losses or injuries resulting from Hazardous
Material Activity or threatened Hazardous Material Activity, in any manner
applicable to any Investment Entity, any Related Property or any part
thereof, or the ownership, use, occupancy or operation thereof, including
CERCLA, the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et
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seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
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seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et
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seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
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Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
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Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.),
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the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.), the
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Residential Lead-Based Paint Act (42 U.S.C. Section 4856 et seq.) and the
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Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001
et seq.), each as heretofore or hereafter amended or supplemented from
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time to time, and any analogous future or present applicable local, state and
federal statutes and regulations promulgated pursuant thereto, each as in
effect as of the date of determination.
"ENVIRONMENTAL REPORT": With respect to any Related Property, a
written environmental site assessment, prepared by an independent qualified
environmental professional.
"EQUIPMENT": The meaning specified in the UCC.
"EQUITY CAPITALIZATION": With respect to Reckson Services, as at
any date of determination, shall mean the then total paid-in equity capital
of Reckson Services.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"EXPERT": An independent, nationally recognized investment banking
firm or other appropriate, independent valuation expert, other than PWRES or
an Affiliate thereof, selected by the Class A Member with the reasonable
approval of the Managing Member.
"FAIR VALUE": As of any date of determination, the fair value of
any Interest, Investment, Related Property or other Company asset as of such
date, as determined pursuant to and in accordance with Section 3.06(d)
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"FINANCIAL TEST INCLUSION EVENT": For any Investment, the initial
inclusion of the Adjustment Amounts for such Investment for purposes of the
Financial Tests.
"FINANCIAL TESTS": Shall mean those calculations described in
clause (y) of the definition of "Sweep Event" and in Sections 3.04, 11.01(F)
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and 16.03(A).
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"FISCAL YEAR": The taxable year of the Company which, except in
the case of a short taxable year or such other taxable year as may be
required under the Code, shall be the calendar year.
"GAAP": Generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
"GOVERNMENTAL AUTHORITY": Any legislative body, court, board,
agency, commission, office or authority of any nature whatsoever of or for
any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or
otherwise) whether now or hereafter in existence.
"GROSS FAIR VALUE": As of any date of determination, the Fair
Value of any Interest, Investment, Related Property or other Company asset as
of such date, determined on the basis of the gross anticipated cash flows
without reduction for any debt or preferred equity payments, dividends or
distributions prior to the interest of the Company or the applicable Member,
as the case may be.
"HAZARDOUS MATERIAL": (i) Any chemical, material or substance at
any time defined as or included in the definition of "hazardous wastes,"
"hazardous materials," "hazardous substance," "extremely hazardous
substance," "extremely hazardous waste", "pollutants," "restricted hazardous
waste," "infectious waste" or "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws or publications
promulgated pursuant thereto; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable substances
or explosives; (v) any radioactive materials; (vi) asbestos in any form;
(vii) urea formaldehyde foam insulation; (viii) electrical equipment
containing any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; (ix) pesticides; (x) radon;
and (xi) any other chemical, material or substance, exposure to which is at
the time of determination prohibited, limited or regulated by any
Governmental Authority or which is likely to pose a hazard to health or
safety.
"HAZARDOUS MATERIAL ACTIVITY": Any storage, holding, existence,
release, spill, leaking, pumping, pouring, injection, escaping, deposit,
disposal, dispersal, leaching, migration, use, treatment, emission,
discharge, dumping, generation, processing, abatement, removal, disposition,
handling or transportation of any Hazardous Material from, under, into or on
a Related Property or surrounding property, including the discharge of any
Hazardous Material emanating from any Related Property through the air, soil,
surface water, groundwater or property and also including the abandonment or
disposal of any barrels, containers and other closed receptacles containing
any Hazardous Material from or on any such individual Related Property, in
each case whether sudden or non-sudden, accidental or non-accidental.
"IMPOSITIONS": All real estate and personal property taxes, water,
sewer and vault charges and all other taxes, levies, assessments and other
similar charges, general and special, ordinary and extraordinary, foreseen
and unforeseen, of every kind and nature whatsoever, which at any time prior
to, at or after the execution hereof may be assessed, levied or imposed by a
Governmental Authority upon or with respect to any Related Property or the
revenues in respect of such Related Property or the ownership, use, occupancy
or enjoyment thereof, and any interest, costs or penalties with respect to
any of the foregoing.
"INCORRECT VALUE DETERMINATION": Shall have the meaning ascribed to
such term in Section 3.06(iii).
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"INDEMNIFIED PARTIES": Shall have the meaning ascribed to such
term in Section 7.05(A) hereof.
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"INITIAL INVESTMENT DEADLINE": Shall have the meaning ascribed to
such term in Section 4.03(A)(a) hereof.
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"INTEREST": The ownership interest of a Member in the Company at
any particular time, including the right of such Member to any and all
benefits to which such Member may be entitled as provided in this Agreement
and in the Act, together with the obligations of such Member to comply with
all the terms and provisions of this Agreement and of the Act.
"INVESTMENT": Any acquisition, made with the proceeds of one or
more Capital Contributions, of an interest, whether in the form of debt or
equity, in a corporation, partnership, trust, limited liability company or
other entity, or a group of assets or entities purchased in a single
transaction or group of related transactions, or any other asset, including
short-term investments of cash, and subsequent to such acquisition, the asset
so acquired. It is understood and agreed that the Company shall make no
acquisitions of any such interests other than with the proceeds of one or
more Capital Contributions.
"INVESTMENT COMPANY ACT": The Investment Company Act of 1940, as
amended.
"INVESTMENT ENTITY": Any Person in which the Company, either
directly or indirectly, has made an Investment pursuant to Section 3.01
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hereof.
"INVESTMENT EXPENSES": The sum of (i) Unconsummated Deal Costs,
(ii) Organizational Expenses and (ii) Operating Expenses.
"INVESTMENT PARAMETERS": Shall have the meaning ascribed to such
term in Section 3.01(A) hereof.
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"INVESTMENT PERIOD": The period ending on the third anniversary of
the date of this Agreement, unless (a) (i) in the opinion of counsel selected
by the Managing Member, changes in applicable law after the date hereof have
materially adversely affected the ability of the Company to pursue its
investment objectives, (ii) the Managing Member determines, in its reasonable
discretion, that there are insufficient business opportunities consistent
with the investment objectives of the Company or (iii) at least ninety
percent (90%) of the aggregate Capital Commitments have been invested or
committed for investment, in any of which events the Managing Member may
terminate the Investment Period prior to the third anniversary of the date of
this Agreement, or (b) the Investment Period is earlier terminated as
otherwise provided in this Agreement.
"INVESTMENT REVENUES": With respect to all of the Company's
Investments, the sum of (i) all receipts of the Company relating to such
Investments (other than Capital Contributions and Capital Events Proceeds),
including, without limitation, rents and other operating revenues, dividends
and interest, (ii) any financing, break-up and other fees, reimbursements or
other sums payable by third parties to the Company, the Managing Member or
their Affiliates (other than any asset management, property management or
similar fees
payable by any Investment Entity to any of the Managing Member Members or
their Affiliates pursuant to a transaction entered into in accordance with
the requirements of Section 7.04) in respect of such Investments and
------------
(iii) any reserves previously set aside from items (i) and (ii) pursuant to
clause (v) of the definition of Net Investment Revenues which are deemed
available for distribution by the Managing Member or Liquidator.
"LEASE": With respect to any Investment Entity, any lease or
ground lease, or, to the extent of the interest therein of such Investment
Entity, any sublease or license, concession or other agreement (whether writ-
ten or oral and whether now or hereafter in effect) pursuant to which any
person is granted a possessory interest in, or right to use or occupy all or
any portion of any Related Property (including any use or occupancy
arrangement created pursuant to Section 365(d) of the Bankruptcy Code or
--------------
otherwise in connection with any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar proceedings, or any
assignment for the benefit of creditors, in respect of any tenant or occupant
of any portion of such Related Property), and every modification, amendment
or other agreement relating to such lease, ground lease, sublease, sub-
sublease, license, concession or other agreement entered into in connection
therewith, and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the
other party or parties thereto.
"LEGAL REQUIREMENTS": All federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of any Governmental Authority (including
Environmental Laws) affecting any Related Property or any part thereof or the
construction, ownership, use, alteration, maintenance, management, occupancy
or operation thereof, or any part thereof, whether now or hereafter enacted
and in force, and all permits, licenses, authorizations and regulations
relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments at any time in force affecting any
Related Property or any part thereof, including any of the foregoing which
may (i) require repairs, modifications or alterations in or to such Related
Property or any part thereof, or (ii) in any way limit the use and enjoyment
thereof.
"LEVERAGE EXCEPTED INVESTMENTS": (i) So long as the Company has
obtained non-recourse, tax exempt financing with respect thereto, the Dobie
Center Investment, and (ii) any other Investment acquired by the Company from
time to time with respect to which the Company has obtained non-recourse,
tax-exempt financing if, but only if, at the time such Investment (or, if
later, the non-recourse, tax-exempt financing on such Investment) is acquired
by the Company, the aggregate Deemed Value of such other Investment together
with the Dobie Center Investment and all other Leverage Excepted Investments
is not greater than twenty percent (20%) of the aggregate Deemed Value of all
of the Company's Investments.
"LEVERAGE RATIO": For any Investment, the ratio of (i) the sum of
(a) all indebtedness of the Company or of any related Investment Entity
(except for any indebtedness of the Managing Member or any Person directly or
indirectly holding an interest in Managing Member) secured, directly or
indirectly, by such Investment or by all or part of the assets of any
such Investment Entity, directly or indirectly, or payable, directly or
indirectly, from the revenues of such Investment or such assets, plus (b) the
amount of any preferred equity (other than any Capital Contribution made by
any Class A Member pursuant to the terms hereof) issued by any Investment
Entity in which such Investment is held, directly or indirectly, plus (c) the
aggregate Class A Capital Contributions allocated to such Investment to (ii)
the Gross Fair Value of such Investment.
"LIEN": Any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, security title, or any other encumbrance,
charge or collateral transfer of, on or affecting the relevant property (real
or personal, tangible or intangible, as the context may require) or any
portion thereof or any interest therein, including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic's, materialmen's and other similar liens and
encumbrances.
"LIQUIDATOR": The Managing Member, or if (i) the Managing Member's
withdrawal or Bankruptcy caused the dissolution of the Company or (ii) the
Company is dissolved pursuant to Section 7.08(B) or 7.09(B) or 11.01(F)
--------------- ------- --------
hereof or during the continuance of Management Authority, such other Person
who may be appointed by a majority of the Percentage Interests of the Class A
Members, who shall be responsible for taking all action necessary or
appropriate to wind up the affairs of, and distribute the assets of, the
Company upon its dissolution.
"LOCK-OUT PERIOD": As defined in Section 3.03(a)(J).
------------------
"MANAGING MEMBER": RSVP Holdings, LLC, or any other Person who
becomes a successor Managing Member pursuant to the terms hereof.
"MANAGING MEMBER MEMBER": A member of the Managing Member.
"MANAGEMENT AUTHORITY": Shall have the meaning ascribed to such
term in Section 16.03.
-------------
"MARKETABLE SECURITIES": Securities which are traded on a national
securities exchange in the United States, reported through the National
Association of Securities Dealers, Inc. Automated Quotation System or
otherwise actively traded over-the-counter in the United States, and are not
subject to restrictions on transfer as a result of applicable contract
provisions or the provisions of the Securities Act other than the volume and
method-of-sale restrictions of Rule 144 promulgated thereunder or any
successor thereto.
"MATERIAL ADVERSE EFFECT": With respect to any Investment Entity,
any circumstance, act, condition or event of whatever nature (including any
adverse determination in any litigation, arbitration, or governmental
investigation or proceeding), whether singly or in conjunction with any other
event or events, act or acts, condition or conditions, or circumstance
or circumstances, whether or not related, that does, or could reasonably be
expected to, result in a materially adverse change in or have a materially
adverse effect upon the business, operations, condition (financial or
otherwise) or prospects of such Investment Entity or any Related Property.
"MEMBER": As the context may require, any of the Managing Member
and the Non-Managing Member(s).
"MINIMUM BOOK CAPITALIZATION": With respect to Reckson Services, a
Book Capitalization equal to the lesser of (a) $25,000,000 or (b) if PWRES
shall have elected to make its initial Capital Contribution (excluding, for
purposes hereof, the Capital Contribution described in the first sentence of
Section 4.03 (A)) on a date when Reckson Service's Book Capitalization is
----------------
less than $25,000,000 as provided in the second sentence of Section 4.03(E),
---------------
the amount of Reckson Service's Book Capitalization on the date PWRES makes
such Capital Contribution.
"MINIMUM OVERHEAD EXPENSES": For any period, the actual Operating
Expenses of the Company for such period, provided that such amount shall not
exceed (a) $5,000,000 on an annualized basis, so long as no Sweep Event has
occurred and is continuing, or (b) during the continuance of a Sweep Event,
$4,250,000 on an annualized basis.
"MITIGATION PROGRAM": The meaning specified in Section 7.11(P)(b).
------------------
"NET ACQUISITION COST": With respect to any Investment, as of any
date of determination, (i) the Acquisition Cost of such Investment, less (ii)
any amounts described in clauses (a) or (b) of the definition of "Acquisition
Costs" set forth herein, plus (iii) the sum of all Capital Contributions to
the Company to the extent used for capital improvements to or other expenses
of such Investment, less (iv) all returns of Allocated Net Adjusted Capital
Contributions of any Member for such Investment pursuant to Section
-------
6.01(B)(ii) or (iv).
---------- ----
"NET ADJUSTED CAPITAL CONTRIBUTION": With respect to each Member,
as of any time, the aggregate Capital Contributions of such Member as of such
time, less the sum of (a) any distributions in return of such Capital
Contributions previously made to such Member pursuant to Section 6.01(A) or
---------------
Section 6.01(B) of this Agreement, and (b) any refunds of Capital
---------------
Contributions made pursuant to Section 4.03(A) hereof.
---------------
"NET INVESTMENT REVENUES": For any period and with respect to all
of the Company's Investments, the excess of Investment Revenues less the
following, without duplication, and only to the extent that the following are
not funded from Capital Contributions: (i) all non-capitalized accrued
expenditures and costs relating to the organization, acquisition, lease,
management, ownership, improvement, operation and disposition of such
Investments, including any fees payable in respect of such Investments, (ii)
amounts paid in respect of any loan or other indebtedness related to such
Investments, (iii) extraordinary expenses (including non-ordinary repairs,
maintenance, improvements and replacements) not previously deducted
from Investment Revenues relating to such Investments, (iv) capital
expenditures for such Investments (other than to acquire any such
Investments) (v) reserves funded during such period to meet anticipated
operating expenditures of the Company attributable to such Investments and
(vi) Minimum Overhead Expenses and Unconsummated Deal Costs.
"NON-MANAGING MEMBER": Any Member of the Company, other than the
Managing Member.
"NON-MANAGING MEMBER'S INTEREST": A membership interest in the
Company held by a Non-Managing Member.
"NON-PUBLIC INFORMATION": Shall have the meaning ascribed to such
term in Section 17.15 hereof.
-------------
"NOTICE": A writing containing the information required by this
Agreement to be communicated to a Person and personally delivered to such
Person or sent by facsimile or similar electronic means, overnight courier or
registered or certified mail, postage prepaid, return receipt requested, to
such Person at the last known address of such Person as shown on the books of
the Company. A Notice shall be deemed effectively given and received (i)
upon personal delivery, (ii) if sent by facsimile or similar electronic
means, when confirmation of transmission is received or, if such confirmation
is received on a day other than a Business Day, on the next Business Day,
(iii) if delivered by overnight courier, on the next Business Day after
delivery to the overnight courier service and (iv) if sent by registered or
certified mail, three (3) Business Days after delivery to the United States
postal service; provided, however, that any written communication containing
-------- -------
such information actually received by a Person shall constitute Notice for
all purposes of this Agreement.
"O&M PROGRAM": For each applicable Related Property, the operation
and maintenance program for ACMs at such Related Property prepared by an
Asbestos Consultant satisfactory to the Managing Member and consistent with
all applicable recommendations in the Environmental Protection Agency's
"Managing Asbestos in Place, A Building Owner's Guide to Operations and
Maintenance Programs for Asbestos-Containing Materials" and including the
following program elements: (i) notification (a program to tell workers,
tenants and building occupants as appropriate, where ACM is located, and how
and why to avoid disturbing the ACMs); (ii) surveillance (regular ACM
surveillance to note, assess and document changes in the ACM's condition);
(iii) controls (work control/permit system to control activities which might
disturb ACMs); (iv) work practices (O&M work practices to avoid or minimize
fiber release during activities affecting ACM); (v) record keeping (to
document O&M activities); (vi) worker protection (medical and respiratory
protection programs, as applicable); (vii) training (asbestos program manager
and custodial and maintenance staff training); and (viii) a plan for
complying with all ACM Requirements.
"OFFICER'S CERTIFICATE": A certificate delivered by an Investment
Entity which is signed by an authorized officer of such Investment Entity.
"OPERATING EXPENSES": All miscellaneous costs and expenses of
operation of the Company, determined on a cash basis, including, without
limitation, salaries, rent, taxes, insurance, administrative fees and audit
costs but specifically excluding, Unconsummated Deal Costs.
"ORGANIZATIONAL DOCUMENTS": With respect to any Person, (a) if
such Person is a limited partnership, the limited partnership agreement of
such Person and the certificate of limited partnership of such person, in
each case, as amended, restated, supplemented or otherwise modified from time
to time, (b) if such Person is a corporation, the certificate or articles of
incorporation of such Person and the by-laws of such Person, in each case, as
amended, restated, supplemented or otherwise modified from time to time, and
(c) if such Person is a limited liability company, the articles of
organization and operating agreement of such Person, as amended, restated,
supplemented or otherwise modified from time to time.
"ORGANIZATIONAL EXPENSES": (a) All costs, expenses and fees
(including, but not limited to attorneys' fees and disbursements) incurred by
the initial Managing Member and the initial Class A Member on or prior to the
date hereof with respect to the preparation, negotiation and review of the
Company's Organizational Documents and any related documents, agreements,
certificates and opinions and (b) any fee payable by the Company to PWRES in
connection with the organization of the Company.
"PERCENTAGE INTEREST": As of any given time, as to any Member, a
fraction, expressed as a percentage, equal to the amount of the Capital
Commitment of such Member divided by the total Capital Commitments of all
Members, as may be adjusted from time to time in accordance with the
provisions hereof.
"PERSON": Any individual, corporation, general partnership,
limited partnership, limited liability company, limited liability
partnership, joint venture, estate, trust, unincorporated association, or
other organization, whether or not a legal entity, any federal, state, county
or municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.
"PLATFORM": A specific business sector, defined by property type
and use, within the general category of debt or equity Investments relating
to the ownership of real property or the operation thereof, as determined for
each Investment pursuant to Section 3.02(b). Examples of certain types of
---------------
Platforms include, but are not limited to the following, student housing
companies and related assets, assisted living companies and related assets,
limited service hotel companies and related assets, and real estate finance
and credit companies and related assets.
"PLATFORM DISTRIBUTION ACCOUNT": As defined in Section 6.04
------------
hereof.
"PLATFORM MATERIAL ADVERSE EFFECT": With respect to any Platform,
any circumstance, act, condition or event of whatever nature (including any
adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, or circumstance or circumstances, whether or not
related, that does, or could reasonably be expected to result in a materially
adverse change in or have a materially adverse effect upon the business,
operations, condition (financial or otherwise) or prospects of all of the
Investment Entities and their Related Properties pertaining to such Platform.
"PLATFORM SWEEP EVENT": Any of the following events, (i) a
material breach of the obligations set forth in Section 7.11 and Section 7.12
------------ ------------
hereof which may result in a Platform Material Adverse Effect and which
breach continues for fifteen (15) days after Notice of such material breach
has been provided to the Managing Member (or if the breach can be cured but
is not capable of being cured within such fifteen (15) day period, such
longer period of time as is necessary to cure such breach, provided that such
cure is diligently pursued within and after such fifteen (15) day period), or
(ii) acts or omissions of Managing Member that constitute Cause pursuant to
clause (iv) of the definition thereof.
"PORTFOLIO SHARE": Shall have the meaning ascribed to such term in
Section 6.01(C).
---------------
"PRIME RATE": The rate of interest publicly announced as its
"prime rate" from time to time by Citibank, N.A., New York, New York, or its
successor or any other financial institution, as the Managing Member and
PWRES may agree, or its successor.
"PROJECT": Shall have the meaning ascribed to such term in Section
-------
16.01(E)(a).
-----------
"PROPERTY": Any real estate parcel or parcels and any improvements
thereon owned by an Investment Entity in fee simple or pursuant to a
leasehold interest, together with all rights pertaining to such property and
improvements.
"PROPERTY MANAGER": For each Related Property, the property
manager engaged by the applicable Investment Entity for the purpose of
managing such Related Property and any other such property manager engaged by
such Investment Entity for such purpose from time to time.
"PROPOSED TRANSFEREE": As defined in Section 10.01.
-------------
"PWRES": Xxxxx Xxxxxx Real Estate Securities Inc., a Delaware
corporation and/or any of its Affiliates, including, for purposes hereof
(other than with respect to Section 4.04(A)), Stratum Realty Fund, L.P. and
---------------
Stratum Realty Fund II, L.P. (to be formed).
"RECKSON": Reckson Associates Realty Corp., a Maryland
corporation.
"RECKSON COMPETITOR": Any Person, other than Reckson or Reckson
Operating Partnership, engaged in the business of owning, developing or
operating suburban office and industrial properties in the New York
metropolitan tri-state area.
"RECKSON INVESTMENT OPPORTUNITY": The right of Reckson Operating
Partnership to make a direct investment with the Company as provided in
Section 3.05 of this Agreement.
------------
"RECKSON OPERATING PARTNERSHIP": Reckson Operating Partnership,
L.P., a Delaware limited partnership.
"RECKSON SERVICES": Reckson Services Industries, Inc., a Delaware
corporation.
"RECKSON SERVICES COMPETITOR": Any Person, other than Reckson
Services, engaged, as of the relevant date of determination, in the same
business of providing services primarily directed towards occupants of
office, industrial and other property types that Reckson may not be permitted
to provide under Federal tax laws applicable to a real estate investment
trust or that Reckson has traditionally not performed.
"REDETERMINATION EVENT": Shall have the meaning ascribed to such
term in Section 3.06(a).
---------------
"RELATED PROPERTY": With respect to an Investment and the
applicable Investment Entity, the Property owned by such Investment Entity.
"RELATED PROPERTY MANAGER": With respect to any Related Property,
the Property Manager therefor.
"REMAINING CAPITAL COMMITMENT": With respect to each Member at any
given time, such Member's Capital Commitment adjusted as follows: (i)
reduced by such Member's Capital Contributions; and (ii) increased by any
refunds of unused Capital Contributions made in accordance with Section
-------
4.03(A) hereof.
-------
"RENT ROLL": For each Related Property, a rent roll for such
Property specifying with respect to each Lease (i) the name of the tenant,
(ii) the rentable square feet of the premises, (iii) the lease term
commencement date, (iv) the lease term termination date, (v) the current
monthly base rent, (vi) the current annual rent per square foot, (vii) the
effective dates of rent adjustments, (viii) any free rent period, (ix) any
CPI adjustments or expense stop increases, and (x) any security deposit.
"ROP LINE": Shall mean a credit facility, in the maximum principal
amount of $100,000,000.00, to be provided to Reckson Services by Reckson
Operating Partnership solely for the purposes of funding the Capital
Commitment of the Managing Member hereunder, the capital commitment of
Reckson Operating Partnership in any Co-Investment Vehicle and funding
indemnification obligations of Managing Member and Reckson Services under
Section 7.05 hereof.
------------
"SECURITIES ACT": The Securities Act of 1933, as amended, and all
rules, rulings and regulations thereunder.
"SERVICE": The Internal Revenue Service, a branch of the United
States Treasury Department.
"SUBSIDIARY": With respect to any Person, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the securities or other ownership interests having by their terms
ordinary voting power to elect a majority of the board of directors or other
individuals performing similar functions of such corporation, partnership,
limited liability company or other entity (irrespective of whether or not at
the time securities or other ownership interests of any other class or
classes of such corporation, partnership, limited liability company or other
entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person and/or one or more Subsidiaries of such Person, and any
partnership or limited liability company in which such Person or any such
Subsidiary is a general partner or managing member.
"SUBSTITUTE NON-MANAGING MEMBER": Any Person admitted to the
Company as a Non-Managing Member pursuant to Section 10.02 hereof.
-------------
"SUCCESSOR COMPANY": A limited liability company which shall
continue the business of the Company following its dissolution and
reconstitution in accordance with the provisions of Article XI.
----------
"SWEEP EVENT": Any of the following events: (i) a material breach
of the obligations set forth in Section 7.11, Section 7.12 or Section 7.13
------------ ------------ ------------
hereof which may result in a Company Material Adverse Effect and which breach
continues for ninety (90) days after Notice of such material breach has been
provided to the Managing Member, (ii) a material breach of the obligations
set forth in Section 7.09(A) hereof which breach continues for thirty (30)
----------------
days after Notice of such material breach has been provided to the Managing
Member (or, if the breach can be cured pursuant to Section 7.09(B) but is not
---------------
capable of being cured within such thirty (30) day period, such longer
period of time, not to exceed sixty (60) days, as is necessary to cure such
breach pursuant to Section 7.09(B), provided that such cure is diligently
---------------
pursued during and after such thirty (30) day period), (iii) in the event the
Class A Basic Return shall not be paid in full for each of 18 consecutive
calendar months or for each of 21 calendar months in the aggregate at any
time (provided, however, that (a) for purposes of determining whether such
--------- -------
21-month test has been satisfied, any month in respect of which the Class A
Basic Return shall have later been paid in full in accordance with the terms
hereof shall not be considered, and (b) for purposes of determining whether
either such 18-month or 21-month test has been satisfied, the following shall
not be considered: (x) for the initial 24 months following the date of this
Agreement; and (y) for the initial 12 months following the acquisition of any
Investment (the "ELECTION PERIOD" for such Investment), (1) the amount of the
Class A Member's Capital Commitment allocated to such Investment and (2) any
cash flow from operations of such Investment distributed to the Class A
Member pursuant to the terms hereof (collectively, the "ADJUSTMENT AMOUNTS")
for such Investment, provided that the Managing Member may at any time within
--------
such Election Period and upon prior Notice to
the Class A Member, elect to include the Adjustment Amounts for such
Investment for purposes of determining whether such 18-month or 21-month test
has been satisfied and provided, further, that if the Managing Member so
-------- -------
elects to include the Adjustment Amounts for such purposes, it may not
subsequently elect to exclude the Adjustment Amounts for such purposes) or
until the earlier of (a) such time as all prior accrued but unpaid Class A
Basic Return shall have been paid in full, not less than 75% from cash flow
from operations of the Investments, or (b) such date as all prior accrued but
unpaid Class A Basic Return shall have been paid in full, and the Class A
Basic Return shall have been paid in full for three consecutive months
thereafter from cash flows from operations of the Investments, (iv) subject
to Section 3.01(B), in the event the Company makes an Investment outside the
---------------
scope of the Investment Parameters and any Class A Member on the Advisory
Committee shall have objected to such Investment on such grounds when each
Investment shall have been proposed to the Advisory Committee until such time
as all Investments are within the scope of the Investment Parameters, (v) a
breach of any of the obligations set forth in Section 3.03(a)(K), until the
------------------
requirements of Section 3.03(a)(K) have been satisfied, (vi) a Change of
------------------
Control Event, or (vii) acts or omissions of the Managing Member that
constitute Cause (other than pursuant to clause (iv) of the definition
thereof).
"TAX DISTRIBUTIONS": Shall have the meaning ascribed to such term
in Section 6.06.
------------
"TENANT SERVICES": The offering to tenants occupying space in
office and industrial properties and other property types of services
relating to the occupancy of such premises.
"TENANT CAPITAL EXPENSES": With respect to any Investment Entity,
costs incurred by such Investment Entity in respect of (i) tenant
improvements, and reasonable and customary tenant concessions, under and
pursuant to Leases and (ii) leasing and brokerage commissions in connection
with Leases.
"TERMINATION DATE": As defined in Section 6.05(b).
---------------
"TMP": Shall have the meaning ascribed to such term in Section
-------
13.02.
-----
"TRANSFER": A sale, assignment, transfer or other disposition of,
or pledge, hypothecation or other encumbrance of an Interest and (a) with
respect to the Managing Member, any direct or indirect sale, assignment,
transfer or other disposition of, or pledge, hypothecation or other
encumbrance of, a controlling interest in the Managing Member, other than (i)
any such disposition occurring in connection with a public offering of
securities registered under the Securities Act of 1933, or (ii) any such
disposition taking place on a
nationally recognized stock exchange, or (iii) provided that prior Notice has
been given to the Class A Member, any such disposition taking place in
connection with the issuance by the Managing Member of equity interests in
the Managing Member to any officers of the Managing Member as additional
compensation to such officers for their employment by the Managing Member,
and (b) with respect to the Class A Member, any direct or indirect sale,
assignment, transfer or other disposition of, or pledge, hypothecation or
other encumbrance of, a controlling interest in the Class A Member, other
than (i) any such disposition occurring in connection with a public offering
of securities registered under the Securities Act of 1933, (ii) any such
disposition taking place on a nationally recognized stock exchange, or (iii)
any such disposition to any of its Affiliates, including for purposes hereof
Stratum Realty Fund, L.P. and Stratum Realty Fund II, L.P. (to be formed).
"TREASURY REGULATIONS": The federal income tax and procedure and
administration regulations as promulgated by the U.S. Treasury Department, as
such regulations may be in effect from time to time. All references in this
Agreement to provisions of the Treasury Regulations shall be deemed to refer
to successor regulatory provisions to the extent appropriate in light of the
context herein in which such Treasury Regulations references are used.
"UCC" or "UNIFORM COMMERCIAL CODE": The Uniform Commercial Code as
in effect in the relevant jurisdiction.
"UNCONSUMMATED DEAL COSTS": Fees and expenses paid by or on behalf
of the Company to third parties for services rendered in connection with an
unconsummated transaction.
ARTICLE III
PURPOSE AND BUSINESS
--------------------
3.01. Business.
--------
(A) The primary purpose of the Company is (i) the acquisition,
ownership, management and sale of debt and equity interests in real estate
and in operating companies primarily engaged in, or fundamentally related to,
the real estate industry, such as student housing companies, assisted living
companies, limited service hotel companies, real estate finance and credit
companies and companies which provide property management, leasing or other
similar services to real estate companies, including, but without limitation,
(A) the purchasing of mortgage and property portfolios owned by banks,
thrifts, insurance companies and government agencies, (B) the acquisition or
recapitalization of operating companies with significant real estate assets,
(C) the acquisition of single or multiple real-estate or real-estate-related
assets and (D) subject to Section 3.03(a)(F) hereof, investments in land and
------------------
development projects, (ii) the acquisition, improvement, holding,
maintenance, management, operation,
leasing, restructuring, selling, disposing of and otherwise exercising
rights, remedies and claims with respect to the assets underlying any such
Investment described in clause (i) above, and (iii) the financing, lending,
mortgaging, making of bridge loans, long and short term loans, convertible
loans and any other type of loan, and the foreclosing upon and other
restructuring of such loans, in connection with an Investment described in
clause (i) above (the foregoing being hereinafter referred to as the
"INVESTMENT PARAMETERS"). The Company may engage in open market purchases,
privately-negotiated transactions or other means of pursuing an Investment,
and may engage in the making or holding of Investments, directly or
indirectly, through subsidiaries, partnership interests, joint ventures or
otherwise.
(B) Notwithstanding anything to the contrary in Section 3.01(A),
---------------
the Company may invest up to 25% of the aggregate Capital Commitments of all
Members in Investments outside the scope of the Investment Parameters,
provided that all such Investments outside the scope of the Investment
--------
Parameters are in real estate or real-estate-related assets or businesses.
(C) The Company may engage in any other activities permitted by
law and related or incidental to those referred to in this Section 3.01,
------------
including making temporary investments pursuant to Section 3.02(L) hereof.
---------------
3.02. Authorized Activities. (a) In carrying out the purposes
---------------------
of this Agreement, but subject to all other provisions of this Agreement,
including without limitation Section 3.03, and applicable law, the Company
------------
is empowered and authorized:
(A) to acquire, invest in, lease, hold, mortgage, option, pledge,
manage, operate or otherwise deal in or with the Investments and any real or
personal property which may be necessary, convenient or incidental to the
accomplishment of the purposes of the Company, whether directly or
indirectly, through subsidiaries, partnership interests, securities, joint
ventures or otherwise, and to sell, transfer or otherwise dispose of the
Investments;
(B) to construct, operate, develop, maintain, option, finance,
lend, refinance, improve, own, sell, convey, assign, mortgage, lease or
foreclose upon any real estate and any personal property necessary,
convenient or incidental to the accomplishment of the purposes of the
Company;
(C) to borrow money and issue evidences of indebtedness with
respect to an Investment, in all cases on a basis that is non-recourse
(except for customary non-recourse exceptions for matters such as fraud,
misappropriation of funds and other customary carve-outs) to the Company or
any of its other assets, to finance or refinance such Investment and to
secure any such evidences of indebtedness by mortgages, pledges or other
liens, but only on the specific assets of such Investment so that such
evidences of indebtedness and documents securing the same, if any, shall
effectively provide in substance and legal effect for recourse only to the
specific assets of such Investment; provided, however, that the Company may
-------- -------
borrow money or issue evidences of indebtedness with respect to an Investment
on a basis that is recourse to the Company and its other assets, so long as
the aggregate amount of outstanding recourse
indebtedness with respect to all of the Company's Investments does not exceed
$10,000,000, and provided further that the foregoing shall not limit the
amount of recourse indebtedness a particular Investment Entity may have as
long as such indebtedness is without recourse to the Company or any of its
other assets as provided above;
(D) to enter into, perform and carry out contracts of any kind
necessary or incidental to the accomplishment of the purposes of the Company,
including, without limitation, contracts with Affiliates of the Managing
Member pursuant to Section 7.04;
------------
(E) to bring, xxx, prosecute, defend, settle or comprise actions
at law or in equity related to the purposes of the Company;
(F) to purchase, cancel or otherwise retire or dispose of the
Interest of any Member pursuant to the express provisions of this Agreement;
(G) to execute and deliver all documents in connection with the
sale of Non-Managing Member Interests;
(H) to lease those Investments in the form of real properties and
collect all rents and other income and to pay therefrom expenses of the
Company, including, without limitation, expenses relating to such
Investments;
(I) to prepay in whole or in part, refinance, recast, assume,
increase, reduce, modify, extend, foreclose or transfer any mortgages
constituting or affecting any of the Investments, and in connection therewith
to execute any extensions, renewals, assumptions or modifications of any
mortgage or deed of trust constituting or affecting any of the Investments;
(J) to sell, exchange, transfer or otherwise dispose of all or any
portion of an Investment, including but not limited to a transfer of all or
any portion of the Investments to a publicly traded company;
(K) (Reserved.)
(L) to hold all or part of the assets, property or funds of the
Company in cash or cash equivalents and to make interim investments in U.S.
government obligations, short-term debt obligations with the highest rating
issued by a nationally recognized rating agency, fully insured bank time
deposits, repurchase agreements with a counterparty whose short-term debt
obligations have been rated with the highest rating issued by a nationally
recognized rating agency, money market funds investing solely in U.S.
government obligations and/or commercial paper rated not lower than P-1,
commercial paper rated not lower than P-1, certificates of deposit and
bankers acceptances, in each case, issued by a bank, the short-term debt
obligations of which have been rated with the highest rating issued by a
nationally recognized rating agency;
(M) to make debt or equity investments, including the acquisition
of Marketable Securities, in operating companies with real estate or real
estate related assets;
(N) to engage in any kind of lawful activity, and perform and
carry out contracts of any kind, necessary or advisable in connection with
the accomplishment of the purposes of the Company; and
(O) to make investments with Reckson Operating Partnership in
connection with a Reckson Investment Opportunity.
(b) (i) The Managing Member shall, in connection with the
acquisition of each Investment by the Company, by Notice to the Class A
Member(s) given on or prior to the date of acquisition of such Investment,
specify, on a reasonable basis, the Platform to which each Investment
pertains.
(ii) The establishment of any Platform, to the extent
such Platform is substantially similar to any existing Platform in respect of
the proposed types and uses of properties, shall be subject to the prior
Consent of PWRES.
3.03. Prohibited Activities. (a) Notwithstanding any other
---------------------
provision of this Agreement, the Company and the Managing Member shall not,
without the Consent of the Class A Member which Consent shall be in its sole
and absolute discretion, be empowered or authorized as follows:
(A) to invest more than twenty-five percent (25%) of the aggregate
Capital Commitments of all Members (not including additional direct
investments by Reckson) in (i) any one Investment or (ii) any one Platform
(as determined by Managing Member and the Class A Member pursuant to Section
-------
3.02(b));
--------
(B) (i) with respect to any Investment (other than a Leverage
Excepted Investment), to incur indebtedness or cause or permit any applicable
Investment Entity to issue any preferred equity which, together with
indebtedness incurred and preferred equity issued in connection with all
other Investments of the Company (other than a Leverage Excepted Investment),
exceeds seventy-five (75%) (calculated as of the date of incurrence of such
indebtedness or issuance of such preferred equity, as the case may be) of the
Deemed Value of such Investments, and (ii) with respect to any Investment
(other than a Leverage Excepted Investment), to incur indebtedness or cause
or permit any applicable Investment Entity to issue any preferred equity
which in the aggregate with existing indebtedness and outstanding preferred
equity relating to such Investment exceeds eighty-five percent (85%)
(calculated as of the date of incurrence of such indebtedness or issuance of
such preferred equity, as the case may be) of the Deemed Value of such
Investment as of such date;
(C) to pay any expenses or to reimburse the Managing Member for
any of its expenses incurred in connection with any potential investment for
the Company not purchased by the Company if such investment is thereafter
purchased by the Managing Member, any party advised by the Managing Member or
any of their respective Affiliates;
(D) except as specifically provided herein, to borrow money or
enter into credit facilities or to guaranty the indebtedness of any other
Person;
(E) to take any actions in violation of the Securities Act or
applicable state securities laws;
(F) to invest (i) except as Consented to in advance and in writing
by the Class A Members, more than five percent (5%) of the aggregate Capital
Commitments of all Members in Investments in which the principal value of the
Investment is attributable to non-income producing raw land purchased, or
(ii) in Investments, the Related Properties of which, except for a de
--
minimis portion, are located outside of the United States or Canada;
-------
(G) purchase from or sell assets to any Person who is an Affiliate
of the Managing Member or Reckson without the approval of the Advisory
Committee, or enter into any other transaction with any such Affiliate except
in accordance with Section 7.04;
------------
(H) make any Investments in suburban office and industrial
properties inside the New York metropolitan tri-state area without Reckson's
prior written Consent;
(I) make any Investment in suburban office and industrial
properties outside the New York metropolitan tri-state area without providing
Reckson an opportunity to make such Investment on the same terms and
conditions on which the Company proposed to make such Investment, and Reckson
must respond within 10 Business Days from the date the Company provides
Reckson with Notice of such Investment as to whether it will exercise its
right to pursue such Investment (and the failure to respond within such time
period will result in the loss of such right);
(J) return capital to any Class A Member at any time prior to the
later of (a) the fourth (4th) anniversary of the date of this Agreement or
(b) the third (3rd) anniversary of the date on which capital calls
aggregating not less than $100,000,000 shall have been made on the Class A
Members in accordance with the terms hereof (the "LOCK-OUT PERIOD"),
provided, however, that the forgoing prohibition with respect to returns of
capital shall not apply to such returns from (i) cash flows generated by the
operations of an Investment, (ii) the sale or refinancing of an Investment,
or (iii) proceeds of casualty insurance or condemnation proceeds received in
connection with an Investment;
(K) to make, finance or refinance any Investment, or make any
capital improvement or capital improvements constituting a single expenditure
or related group of expenditures in excess of $1.5 million with respect to
any particular Platform or $5 million with
respect to all Platforms in the aggregate, if, on the date of acquisition,
financing or refinancing or making of such capital improvement, the weighted
average Leverage Ratios of all Investments of the Company (other than the
Leverage Excepted Investments) would exceed 90.625%, or if the Leverage Ratio
for such Investment (other than the Leverage Excepted Investments) would
exceed 95%; provided, however, that the Company may make capital improvements
-------- -------
in excess of the foregoing limitations provided that the financing for such
excess is made solely by Capital Contributions of the Managing Member;
(L) purchase Derivatives other than typical hedging instruments
such as interest rate caps and collars and other financial instruments
relating to an Investment designed to protect the Company against adverse
movements in currency and/or interest rates, but not intended to speculate on
an uncovered basis with respect to the foregoing or to trade in the
foregoing; provided, however, that the Company shall not be prohibited from
acquiring warrants to obtain common equity in any Investment Entity in which
the Company has made an Investment, as additional consideration for making
such Investment;
(M) to make any Investments in operating companies primarily
engaged in the business of operating executive office suites;
(N) to invest more than 25% of the aggregate Capital Commitments
of all Members in Investments of a type other than those described in Section
-------
3.01(A) hereof, or to acquire any Investments other than as permitted under
--------
Section 3.01(A) or 3.01(B) hereof, all of which are subject to the provisions
--------------- -------
of this Section 3.03; and
------------
(O) to hold any short-term investments, other than as described in
Section 3.02(a)(L) hereof.
------------------
3.04. EBITDA. For any consecutive twelve-month period
------
(excluding the first twenty-four (24) months after the date of this
Agreement), the Managing Member shall cause there to be sufficient EBIDTA
derived from all of the Company's Investments to cover the Class A Basic
Return required to be distributed in respect of such period; provided,
--------
however, that with respect to the twelve-month period immediately following
-------
the Company's acquisition of an Investment, such Investment and the amount of
the Class A Member's Capital Commitment allocated to such Investment shall
be excluded for purposes of determining the above calculation; provided, the
Managing Member may, at any time during the Election Period for
--------
such Investment and upon prior Notice to the Class A Member, elect to include
the Adjustment Amounts for such Investment in making such calculation, and
provided, further, that if the Managing Member so elects to include such
-------- -------
Adjustment Amounts, it may not subsequently elect to make such calculation
without reference to such Adjustment Amounts.
3.05. Co-Investment Opportunities. (a) Managing Member shall
---------------------------
have the right to permit Reckson Operating Partnership to satisfy Managing
Member's obligation to make Capital Contributions with respect to any
Investments Managing Member deems appropriate and which are eligible for
ownership by Reckson Operating Partnership as the operating partnership
of a qualified real estate investment trust or an Affiliate thereof (a
"RECKSON INVESTMENT OPPORTUNITY"). If Managing Member agrees to transfer its
obligation and Reckson Operating Partnership or an Affiliate thereof agrees
to make such cash investments, the Managing Member is hereby authorized to
make the Investment in whole or in part through special purpose entities
(which may be partnerships, limited liability companies, corporations or
other types of entities) in which the Company and Reckson Operating
Partnership hold interests (a "CO-INVESTMENT VEHICLE"). Any common equity
capital contribution that would otherwise have been provided by Managing
Member in accordance with the terms hereof as if the Investment were to be
acquired directly by the Company shall be provided to a Co-Investment Vehicle
in respect of a Reckson Investment Opportunity by Reckson Operating
Partnership, and any preferred equity capital contribution to be provided to
a Co-Investment Vehicle in respect of a Reckson Investment Opportunity shall
be provided by the Company solely from Capital Contributions made by the
Class A Member. It is understood that any Reckson Investment Opportunity
will be structured to preserve in all material respects the overall economic
and legal relationship of the Members (for purposes of such determination,
all rights and obligations of the Reckson Operating Partnership with respect
to any Co-Investment Vehicle being deemed to be rights and obligations of the
Managing Member hereunder), including with respect to all terms, covenants
and conditions of this Agreement, except that distributions which would have
been made to Managing Member had it made the Capital Contribution instead of
transferring it to Reckson Operating Partnership will be made to Reckson
Operating Partnership. Without limiting the generality of the foregoing,
each Co-Investment Vehicle shall be structured such that the Class A Member
shall (i) receive distributions in respect of such Reckson Investment
Opportunity and (ii) have available to it remedies of the type set forth in
this Agreement, in each case as if the Investment were made directly by the
Company from Capital Contributions made by Managing Member. All fees and
distributions to the Class A Members with respect to a Reckson Investment
Opportunity shall be determined as if Managing Member had made the Capital
Contribution instead of Reckson Operating Partnership. Managing Member's
Capital Commitment will be reduced by the amounts which Reckson Operating
Partnership invests in any Reckson Investment Opportunities.
(b) In the event that an Investment by the Company would cause the
Company to breach the covenant set forth in Section 3.03(a)(A)(ii) hereof,
----------------------
the Company may, without the consent of the Class A Member, afford Reckson
the opportunity to make such Investment on the same terms and conditions
provided to the Company with respect to such Investment.
(c) Unless otherwise Consented to by PWRES, which Consent may be
withheld by PWRES in its sole and absolute discretion, the sole means by
which Reckson shall invest in any Investment held by the Company shall be
pursuant to paragraphs (a) and (b) of this Section 3.05.
------------
3.06. Determination of Fair Value, Gross Fair Value and Deemed
--------------------------------------------------------
Value.
-----
(a) Except as otherwise provided herein, the Fair Value or Gross
Fair Value of any Interest, Investment, Related Property or other Company
asset shall be as reasonably determined by the Managing Member for all
purposes of this Agreement. For purposes of Section 6.03, Section 7.09(B)
------------ ---------------
and Section 8.03, the Fair Value of any Interest, Investment, Related
------------
Property or other Company asset shall be determined by an Expert selected by
PWRES.
(b) The Gross Fair Value of any Investment shall be determined (or
redetermined) in accordance with the requirements of this Section 3.06 upon
------------
the occurrence of any of the following events with respect to such Investment
(each, a "REDETERMINATION EVENT" for such Investment):
(i) any capital improvement or capital improvements constituting a
single expenditure or related group of expenditures in excess of
$1.5 million with respect to a capital project on any Related Property
funded in whole or in part by a Capital Contribution made by the Class A
Member pursuant to the terms hereof, or
(ii) any financing or refinancing of the assets of such Investment.
Within 10 Business Days of the occurrence of any Redetermination Event for
any Investment, the Managing Member shall give Notice to the Class A Members
of the occurrence of such Redetermination Event, and of Managing Member's
determination of the Gross Fair Value of the related Investment.
(c)(i) If the Class A Member reasonably believes that the
Managing Member's determination of the Gross Fair Value of any Investment
made pursuant to Section 3.06(b) exceeds the actual gross fair market value
---------------
of such Investment by at least 7%, or if the Class A Member reasonably
believes that the then Deemed Value of an Investment exceeds the actual gross
fair market value of an Investment by at least 7% at the time the Adjustment
Amounts for such Investment are initially included for purposes of the
Financial Tests, then, notwithstanding any determination or redetermination
by the Managing Member of the Fair Value or Gross Fair Value of an Investment
pursuant to the terms of this Agreement, the Class A Member may require that
the Gross Fair Value of an Investment be determined by an Expert in
accordance with the terms of this Section 3.06(c) by Notice to Managing
---------------
Member given
(x) within thirty (30) days after the Class A Member's receipt of Notice
of the Managing Member's determination of the Gross Fair Value of such
Investment following the occurrence of a Redetermination Event with
respect to such Investment, or
(y) if the Managing Member gives Notice to the Advisory Committee
pursuant to Section 16.02(E)(j) that the Managing Member elects to
-------------------
include the Adjustment Amounts as of the date of acquisition of an Investment
for the purposes of determining the calculations required under the terms of
this Agreement, within ten (10) days after the date of acquisition of such
Investment, or
(z) otherwise, within thirty (30) days after the Adjustment Amounts for
such Investment are initially included for purposes of the Financial
Tests.
In the event that the Class A Member elects to cause the Gross Fair Value of
an Investment to be determined by an Expert in accordance herewith, the Class
A Member shall, as promptly as practicable after giving the Notice to
Managing Member described above, retain an Expert for such purpose and shall
cause such Expert to give the Class A Member and the Managing Member notice
of such Expert's determination of the Gross Fair Value of such Investment
within thirty (30) days after the date of such Notice.
(ii) If the Managing Member disputes the determination of the Gross
Fair Value of an Investment by an Expert selected by PWRES, the Managing
Member may, within ten (10) days after its receipt of Notice of such Expert's
determination, give Notice of such dispute to the Class A Member. Such
dispute shall be referred by the Managing Member to an Expert selected by
the Managing Member and such Expert shall, within thirty days after the date
Notice is given to the Class A Member pursuant to this Section 3.06(c)(iv),
determine the Gross Fair Value of such Investment. The Managing Member shall
give Notice of such Gross Fair Value to both the Class A Member and the
Expert selected by such Class A Member. If the Experts selected by the Class
A Member and the Managing Member, respectively, are unable to agree on a
Gross Fair Value with respect to such Investment, such Experts shall select a
third Expert, which Expert shall, within thirty days after its selection,
determine the Gross Fair Value of such Investment and give Notice of such
determination to the Class A Member and the Managing Member. The
determination of Gross Fair Value made by such third Expert shall be final
and binding on the Company and all of the Members.
(iii) If the Gross Fair Value of any Investment, as initially
determined by the Managing Member, exceeds by 7% or more the Gross Fair Value
as finally determined by an Expert pursuant to this Section 3.06(c), the
---------------
Gross Fadetermined by such Expert, and the Managing Member shall pay to the
Company and the Class A Member any and all costs, fees and expenses incurred
by the Company or the Class A Member in connection with the resolution of
such dispute. If the Gross Fair Value of any such Investment, as initially
determined by the Managing Member, does not exceed by 7% or more the Gross
Fair Value as finally determined by any Expert or Experts commissioned
pursuant to this Section 3.06(c) (an "INCORRECT VALUE DETERMINATION"), the
---------------
Gross Fair Value of such Investment shall continue to be the Gross Fair Value
initially determined by the Managing Member, and the Class A Member shall pay
to the Company and the Managing Member any and all costs, fees and expenses
incurred by the Company or the Managing Member in connection with the
resolution of such dispute; and provided, further, that if (a) five or fewer
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Investments are the subject of a Revaluation Event
or Financial Test Inclusion Event during any twelve (12) month period, and
any Expert or Experts selected by the Class A Member have singly or
collectively made two Incorrect Value Determinations within any such
consecutive twelve (12) month period or (b) more than five Investments are
the subject of a Revaluation Event or Financial Test Inclusion Event during
any twelve (12) month period, and any Expert or Experts selected by the Class
A Member have singly or collectively made Incorrect Value Determinations with
respect to thirty-three and one-third percent (33 1/3rd %) or more of the
Investments of the Company that are the subject of a Revaluation Event or
Financial Test Inclusion Event within such twelve (12) month period, the
Class A Member may not, for a period of nine (9) months commencing on the
date such threshold has been reached, commission an Expert to determine Gross
Fair Value pursuant to this Section 3.06.
------------
(iv) For purposes of this Section 3.06(b) and (c), to the extent
--------------- ---
that a Revaluation Event shall have occurred with respect to fewer than all
of the Related Properties in any Investment, then the revaluation procedures
set forth in Section 3.06(b) and (c) shall apply only with respect to the
--------------- --
affected Related Property or Related Properties, and the Deemed Value of the
other Related Property or Related Properties in such Investment shall not be
subject to such revaluation procedures in connection with such Revaluation
Event.
(d) In determining the Fair Value of any Interest, Investment,
Related Property or any other Company asset, the Managing Member or Expert
shall apply the following: (i) the value to be arrived at should represent
the discounted present value of all anticipated cash flows, including
proceeds from the potential sale of the asset, expected to be derived from
such asset (net of actual and contingent associated liabilities and estimated
costs of sale), without regard to temporary market fluctuations or
aberrations and assuming a plan of orderly disposition of such asset which
does not involve unreasonable delays in cash realization, there being a
presumption that cash flow will be realized over a time period of no more
than the earlier of (a) 5 years or (b) the end of the term of the Company,
but in any event no less than 3 years (with the discount rate determined by
taking into consideration the risk inherent in holding the assets being
valued and the prevailing cost of funds for such assets, among other relevant
factors), unless required by reasonably compelling evidence to the contrary;
(ii) securities which are publicly traded will be valued taking into account
the average of their last sale price on the principal national securities
exchange on which they are traded on each business day during the one-month
period ending immediately prior to the date of the determination or, if no
sales occurred on any such day, the mean between the closing "bid" and
"asked" prices on such day, or if the principal market for such Securities
is, or is deemed to be, in the over-the-counter market, their average closing
"bid" price on each day during such period, as published by the National
Association of Securities Dealers Automated Quotation System or, if such
price is not so published, the mean between their closing "bid" and "asked"
prices, if available, on each day during such period, which prices may be
obtained from any reputable broker or dealer; and (iii) all valuations shall
be made taking into account all factors which might reasonably affect the
sales price of the asset in question, including, without limitation, if and
as appropriate, the existence of a control bloted impact on current market
prices of immediate sale, the lack of a market for such asset, and the impact
on present value of factors such as the length of time
before any such sales may become possible and the cost and complexity of any
such sales. Subject to Section 3.06(c), for all purposes of this Agreement,
all valuations made by the Managing Member or Expert shall be final and
conclusive on the Company and all Members, their successors and assigns,
absent manifest error. In determining the fair value of assets, the Managing
Member or Expert may obtain and rely on information provided by any source or
sources reasonably believed to be accurate and reliable.
ARTICLE IV
COMPANY INTERESTS AND CAPITAL
-----------------------------
4.01. Managing Member.
---------------
(A) The name and address of the Managing Member is RSVP Holdings,
LLC, a Delaware limited liability company, having an address at 000
Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx, 00000.
(B) The Capital Commitment of the Managing Member shall at all
times be equal to $100 million less (i) the amount of Capital Contributions
made by the Managing Member and (ii) the amount of capital contributions made
by Reckson Operating Partnership to a Co-Investment Vehicle pursuant to the
terms of Section 3.05 of this Agreement.
------------
4.02. Non-Managing Members.
--------------------
(A) The initial Capital Commitment of the initial Class A Member
shall be $200 million, and the Capital Commitment of the Class A Members
shall at all times be equal to $200 million less the amount of Capital
Contributions made by the Class A Members pursuant to the terms of this
Agreement.
(B) A Proposed Transferee acquiring a Non-Managing Member Interest
through a Transfer shall become a Substitute Non-Managing Member when the
provisions of Article X of this Agreement have been complied with. The
---------
aggregate Capital Commitments of all Non-Managing Members, together with the
Capital Commitment of the Managing Member, shall be $300 million.
4.03. Capital Contributions.
---------------------
(A) PWRES, as the initial Class A Member, shall make an initial
Capital Contribution to the Company of $5,000,000 within ten (10) days after
the date of this Agreement. The Managing Member may issue calls for Capital
Contributions from the Members at any time during the Investment Period
subject to and in accordance with the terms of this Section 4.03(A). Except
---------------
as otherwise provided herein, the Managing Member may, at its determination,
issue a call for a Capital Contribution, in such amounts as the Managing
Member shall specify, solely from the Class A Members, or solely from the
Class B Members,
or from both the Class A Members and the Class B Members in such amounts as
the Managing Member shall specify; provided, that Notice of any call for
--------
Capital Contributions shall in any event be given to all Members; and
provided, further, that
-------- -------
(a) with respect to any Co-Investment Vehicle, the Managing Member shall
have issued calls for Capital Contributions from the Class A Members in
an amount such that the total Capital Contributions of the Company to
the Co-Investment Vehicle provided solely from Capital Contributions
made by the Class A Members shall be equal to sixty-six and two-thirds
percent (66 2/3rds%) of the aggregate Capital Contributions to such Co-
Investment Vehicle until the initial date on which the sum of (i) the
total Capital Contributions of the Class A Member plus (ii) the total
Capital Contributions of the Managing Member are at least equal to
$50,000,000.00, and
(b) if (i) the Company has acquired Investments with aggregate
acquisition costs of at least $75 million on or prior to December 31,
1998 (the "INITIAL INVESTMENT DEADLINE"), and (ii) Stratum Realty Fund,
L.P. has committed to purchase from PWRES a portion of its Interest
representing at least $50 million of PWRES's Capital Commitment, the
Managing Member shall have issued calls for Capital Contributions from
the Class A Members in an aggregate amount of not less than $50 million
on or prior to the Initial Investment Deadline, provided, however, that
-------- -------
in no event shall the Class A Members make such additional Capital
Contributions if such Capital Contributions would require any Capital
Contributions made by Reckson Operating Partnership or an Affiliate thereof
to a Co-Investment Vehicle to be returned to Reckson Operating Partnership or
such Affiliate, and
(c) if (i) the Company has not acquired Investments with aggregate
acquisition costs of at least $75 million on or prior to the Initial
Investment Deadline and (ii) Stratum Realty Fund, L.P. has committed to
purchase from PWRES a portion of its Interest representing at least $50
million of PWRES's Capital Commitment, then
(1) the Managing Member shall have issued calls for Capital
Contributions from the Class A Members in an amount such that the
total Capital Contributions of the Class A Members shall be not
less than sixty-six and two-thirds percent (66 2/3rds %) of the
aggregate acquisition costs of all Investments of the Company on or
prior to the Initial Investment Deadline, and
(2) the Managing Member shall, by Notice to the Class A Members
given no later than 30 days prior to the Initial Investment
Deadline, offer the Class A Members the opportunity, but not the
obligation, to contribute additional Capital Contributions to the
Company up to such amount as would cause the aggregate Capital
Contributions of the Class A Members as of the Initial Investment
Deadline to be equal to the lesser of $50 million and the aggregate
acquisition costs of all Investments of the Company on or prior to
the Initial Investment Deadline; provided, however, that in no
-------- -------
event shall the Class A Members make
such additional Capital Contributions if such Capital Contributions
would require any Capital Contributions made by Reckson Operating
Partnership or an Affiliate thereof to a Co-Investment Vehicle to
be returned to Reckson Operating Partnership or such Affiliate; it
being understood and agreed that, in the event the total Capital
Contributions of the Company are less than $50,000,000 on the
Initial Investment Deadline, the Class A Members may elect to fund
up to 100% of future calls for Capital Contributions until the
total Capital Contributions of the Company are at least equal to
$50,000,000. If the Class A Members elect to make the additional
Capital Contributions to the Company as described in this clause
(2) or as described in clause (d) below, then
(x) to the extent (and only to the extent) that such
additional Capital Contributions would otherwise result in a
breach of any of the covenants set forth in Sections
--------
3.03(a)(B), 3.03(a)(K) and 3.04 hereof, such breach shall be deemed waived
---------- ---------- ----
by the Class A Members for so long as the aggregate Capital Contributions of
the Class A Members shall exceed sixty-six and two-thirds percent (66 2/3rds
%) of the total Capital Contributions of all Members of the Company for such
reason; and
(y) to the extent that, as a result of such additional Capital
Contributions of the Class A Members, the Book Capitalization
of Reckson Services is reduced below the Minimum Book
Capitalization, then thereafter all calls for Capital
Contributions shall be made solely to the Managing Member
until the Book Capitalization of Reckson Services is at least
equal to the Minimum Book Capitalization; and
(d) at any time prior to the Initial Investment Deadline when (i) the
total outstanding Capital Contributions to the Company are at least
$50,000,000, (ii) PWRES' total outstanding Capital Contribution to the
Company are less than $50,000,000, (iii) Stratum Realty Fund, L.P. has
committed to purchase from PWRES a portion of its Interest representing
at least $50,000,000 of PWRES's Capital Commitment, PWRES may, at its
option, elect, by Notice to the Managing Member, to make an additional
Capital Contribution to the Company sufficient to cause PWRES' total
outstanding Capital Contribution to equal $50,000,000, and in the event
PWRES elects to exercise its rights under this clause (d), the Managing
Member shall have no further obligations under the foregoing clauses
(a), (b) and (c); provided, however, that in no event shall the Class
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A Members make such additional Capital
Contributions if such Capital Contributions would require any Capital
Contributions made by Reckson Operating Partnership or an Affiliate thereof
to a Co-Investment Vehicle to be returned to Reckson Operating Partnership or
such Affiliate;
and provided, further, that, at the end of the Investment Period the Managing
--- -------- -------
Member shall have issued calls for Capital Contributions from the Class A
Members in an aggregate amount of not less than the lesser of $200,000,000 or
sixty-six and two-thirds percent (66 2/3rds %) of the
aggregate acquisition and other costs of all Investments of the Company.
Notwithstanding anything to the contrary herein contained (but subject
nonetheless to the first sentence of Section 4.03 (A) and to the foregoing
----------------
clause (2) and clause (d) of this section), in no event shall the ratio of
the Capital Contributions of the Class A Members to the Capital Contributions
of the Class B Members at any time exceed two to one (2.0:1.0). Within three
(3) calendar days after a call issued from time-to-time by delivery of Notice
to the Non-Managing Members from the Managing Member, the Class A Members
and/or the Class B Members, as shall be specified by the Managing Member in
such Notice, shall, subject to compliance by the Managing Member with the
requirements of Section 16.02(E), but irrespective of whether the Class A
----------------
Member shall have requested additional information subsequent to delivery of
an Acquisition Plan pursuant to and in accordance with Section 16.02(E), make
----------------
cash Capital Contributions to the capital of the Company in the amounts
called from the Class A Members and/or the Class B Members, as the case may
be, pro rata in accordance with the Remaining Capital Commitments of the
Class A Members and/or the Class B Members, as the case may be, as of the
date of such call; provided, however, that with respect to the first
-------- -------
$50,000,000 of Capital Contributions to be made by the Class A Member, such
time period shall be thirteen (13) Business Days. The Managing Member shall
have the right to call Capital Contributions during the Investment Period
from any Member in an amount up to such Member's then Remaining Capital
Commitment if the Managing Member anticipates (i) the consummation of an
Investment by the Company in accordance with the terms of this Agreement,
(ii) the need for additional cash investments for any reason in any
Investment, (iii) the need for additional cash for the Company expenses
(including Investment Expenses), (iv) the need to repay any outstanding
financing of the Company, or (v) the need to make a loan in connection with
proposed Investment. To the extent Capital Contributions for an Investment
have not been used by the Company to acquire such Investment within ninety
(90) days of receipt thereof, the Managing Member shall either deliver a
revised Notice to the Non-Managing Members stating that such Capital
Contributions will be used to fund an Investment which is scheduled to close
pursuant to a binding commitment within thirty (30) days or shall return such
unused Capital Contributions to the Members who contributed the same,
treating such amounts as distributions from a fully realized Investment. All
Capital Contributions shall be made to the Company by wire transfer in same
day funds. All Capital Contributions from Class A Members shall accrue the
Class A Basic Return and the Class A Additional Return from the date
contributed until returned to such Class A Member. All Capital Contributions
from Class B Members shall accrue the Class B Basic Return from the date
contributed until returned to such Class B Member.
(B) Notices provided pursuant to Section 4.03(A) above relating
---------------
to an Investment shall, where applicable, set forth the anticipated closing
date of such Investment, the date by which the Company expects to fund the
Investment and a brief description of the Investment to be made.
(C) Any Investment made by the Company or a Co-Investment Vehicle
pursuant to the terms of this Agreement shall be made with the proceeds of
Capital Contributions made hereunder (or, with respect to a Reckson
Investment Opportunity, cash investments by
Reckson Operating Partnership pursuant to and in accordance with Section
-------
3.05) and not with the proceeds of any retained earnings of the Company or
----
any Co-Investment Vehicle.
(D) The Class A Members shall not be required to make a Capital
Contribution with respect to an Investment pursuant to this Section 4.03
------------
prior to the submission of an Acquisition Plan with respect to such
Investment to the Advisory Committee pursuant to and in accordance with
Section 16.02(E).
----------------
(E) Notwithstanding anything to the contrary herein contained (but
subject nonetheless to the first sentence of Section 4.03(A)), in no event
---------------
shall any Class A Member be obligated to fund a call for its initial Capital
Contribution (other than as contemplated under the first sentence of
Section 4.03(A)), other than solely for purposes of funding a capital
contribution by the Company to the Co-Investment Vehicle, at any time when
the Book Capitalization of Reckson Services shall be less than
$25,000,000.00; provided, however, that, a Class A Member may (with the
-----------------
consent of the Managing Member), but shall have no obligation to, fund a
Capital Contribution at a time when the Book Capitalization of Reckson
Services is less than $25,000,000.00. The Class A Member shall not be
obligated to fund a Capital Contribution under certain other circumstances as
more specifically provided in Section 7.05(F)(v).
------------------
4.04. Default by Members.
------------------
(A) In the event that any Non-Managing Member shall be in default
in its obligation to make any Capital Contribution pursuant to Section 4.03
------------
hereof to the Company and such default shall continue for two (2) Business
Days following Notice from the Managing Member to all of the Non-Managing
Members, in addition to the remedies provided at law or in equity, the
Managing Member may commence legal proceedings to compel the defaulting Non-
Managing Member to make the Capital Contribution. If such default is made by
any Class A Member, other than PWRES, and such default shall continue for two
(2) Business Days following Notice from the Managing Member to all of the
Non-Managing Members, then PWRES shall be deemed to be in default of such
obligation and in addition to the remedies provided at law or in equity, the
Managing Member may commence legal proceedings to compel Xxxxx Xxxxxx Real
Estate Securities Inc. and the defaulting Class A Member to make the Capital
Contribution.
(B) (Intentionally omitted.)
(C) Such defaulting Non-Managing Member (and, to the extent it
does not, pursuant to Section 4.04(A), make the Capital Contribution in lieu
---------------
of such defaulting Class A Member, PWRES) shall not be entitled to (i) make
any further Capital Contributions to the Company, (ii) except as provided
below, receive any further distributions by the Company until the final
liquidation and termination of the Company, (iii) be counted as a Member for
voting purposes with respect to the count of both that Member's vote and the
total number of Members' votes, (iv) participate in any Consent of the Non-
Managing Members, (v) be a member of the
Advisory Committee or (vi) any amounts due under Section 4.11 hereof. No
------------
defaulting Member's Interest shall be counted in connection with the giving
or withholding of any Consent. Each defaulting Member shall remain fully
liable to the creditors of the Company, to the extent provided by law, as if
such default had not occurred.
(D) The remedies set forth in this Section 4.04 shall not be
------------
exclusive of any other remedy which the Company or the Members may have at
law or in equity (including without limitation the right to recover
structuring fees paid by the Company), it being agreed that the Members shall
be personally liable for the making of their Capital Commitments. Each of the
Members agrees to the remedies set forth in this Section 4.04.
------------
4.05. Interest. Interest earned on the Company funds shall
--------
inure to the benefit of the Company.
4.06. (Reserved.)
4.07. Withdrawal of Capital Contributions. Except as otherwise
-----------------------------------
provided in this Agreement or by law, (i) no Member shall have the right to
withdraw or reduce its Capital Contributions or its Capital Commitment, or to
demand and receive property other than property distributed by the Company in
accordance with the terms hereof in return for its Capital Contributions, and
(ii) any return of Capital Contributions to the Non-Managing Members shall be
solely from Company assets, and the Managing Member shall not be personally
liable for any such return.
4.08. Restoration of Negative Capital Accounts. At no time
----------------------------------------
during the term of the Company or upon the dissolution and liquidation of the
Company shall a Member with a negative balance in its Capital Account have
any obligation to the Company or to any other Member to restore such negative
balance, except as may be required by law or in respect of any negative
balance resulting from withdrawal of capital or a distribution in
contravention of this Agreement. Neither the Managing Member nor any other
Member shall be obligated to restore any deficit balance in its Capital
Account or shall be personally liable for the return of the Capital
Contributions of the Non-Managing Members, or any portion thereof, it being
expressly understood that (x) any such return shall be made solely from
Company assets and (y) a deficit in a Member's Capital Account shall not
constitute a Company asset.
4.09. (Reserved.)
4.10. (Reserved.)
4.11. Class A Members' Remaining Capital Commitment Fee. At
-------------------------------------------------
the end of (a) the period from the date of this Agreement to but excluding
the numerically corresponding date in the 18th calendar month following the
calendar month of the date of this Agreement, (b) the period from and
including the date in the 18th calendar month following the calendar month of
the date of this Agreement numerically corresponding to the date of this
Agreement, to but
excluding the numerically corresponding date in the 27th calendar month
following the calendar month of the date of this Agreement, and (c) the
period from and including the date in the 27th calendar month following the
calendar month of the date of this Agreement through the end of the
Investment Period, the Company shall make payments to each Class A Member in
an amount equal to the product of 1%, 1.5% and 2%, respectively, multiplied
by such Class A Member's Remaining Capital Commitment on the last day of such
period.
ARTICLE V
CAPITAL ACCOUNTS, ALLOCATION OF INCOME AND LOSS
-----------------------------------------------
5.01. Capital Accounts. A separate capital account (a "CAPITAL
----------------
ACCOUNT") shall be maintained for each Member in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv), and this Section 5.01 shall be
------------------------- ------------
interpreted and applied in a manner consistent with said Section of the
Treasury Regulations. Whenever the Company would be permitted to adjust the
Capital Accounts of the Members
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect
----------------------------
revaluations of Company property, the Company shall so adjust the Capital
Accounts of the Members. In the event that the Capital Accounts of the
Members are so adjusted, (i) the Capital Accounts of the Members shall be
adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g)
----------------------------
for allocations of depreciation, depletion, amortization and gain or loss, as
computed for book purposes, with respect to such property and (ii) the
Members' distributive shares of depreciation, depletion, amortization and
gain or loss, as computed for tax purposes, with respect to such property
shall be determined so as to take account of the variation between the
adjusted tax basis and book value of such property in the same manner as
under Code Section 704(c). In the event that Code Section 704(c) applies to
-------------- --------------
Company property, the Capital Accounts of the Members shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for
----------------------------
allocations of depreciation, depletion, amortization and gain and loss, as
computed for book purposes, with respect to such property. The Capital
Accounts shall be maintained for the sole purpose of allocating items of
income, gain, loss and deduction among the Members and shall have no effect
on the amount of any distributions to any Members in liquidation or
otherwise. The amount of all distributions to Members shall be determined
pursuant to Article VI.
5.02. Allocation of Profits and Losses. All items of Company
--------------------------------
income, gain, loss and deduction as determined for book purposes shall be
allocated among the Members and credited or debited to their respective
Capital Accounts in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv), so as to ensure to the maximum extent possible
-------------------------
(i) that such allocations satisfy the economic effect equivalence test of
Treasury Regulations Section 1.704-1(b)(2)(ii)(i) (as provided hereinafter)
----------------------------
and (ii) that all allocations of items that cannot have economic effect
(including credits and nonrecourse deductions) are allocated to the Members
in proportion to their respective Capital Contributions unless otherwise
required by Code Section 704(b) and the Treasury Regulations promulgated
--------------
thereunder. To the extent possible, items that can have economic effect
shall be allocated in such a manner that the balance
of each Member's Capital Account at the end of any taxable year (increased by
the sum of (a) such Member's "share of partnership minimum gain" as defined
in Treasury Regulations Section 1.704-2(g)(1) and (b) such Member's
---------------------
share of "partner nonrecourse debt minimum gain" as defined in Treasury
Regulations Section 1.704-2(i)(5)) would be positive to the extent of the
---------------------
amount of cash that such Member would receive (or would be negative to the
extent of the amount of cash that such Member should be required to
contribute to the Company) if the Company sold all of its property for an
amount of cash equal to the book value (as determined pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)) of such property (reduced, but not
-------------------------
below zero, by the amount of nonrecourse debt to which such property is
subject) and all of the cash of the Company remaining after payment of all
liabilities (other than nonrecourse liabilities) of the Company were
distributed in liquidation immediately following the end of such taxable year
in accordance with Section 6.01(B).
---------------
ARTICLE VI
DISTRIBUTIONS
-------------
6.01. Distributions.
-------------
(A) Subject to Section 6.06, Net Investment Revenues for all
------------
Investments (other than Capital Events Proceeds) shall be distributed
quarterly, or in the discretion of the Managing Member more frequently, to
the extent available, in the following priority:
(i) First, to each Class A Member until the Class A Member
shall have received the accrued Class A Basic Return on its outstanding
Net Adjusted Capital Contribution from time to time through the end of
such quarter or other period. Any distribution to the Class A Members
pursuant to this Section 6.01(A)(i) shall be applied to the earliest
------------------
accrued but unpaid Class A Basic Return in proportion to the Class A Members'
respective Net Adjusted Capital Contributions on a per diem basis; provided,
--------
however, that any distribution to a Class A Member under this Section
-------
6.01(A)(i) shall not exceed the amount provided under the preceding sentence.
(ii) Second, to each Class B Member until the Class B Member
shall have received the accrued Class B Basic Return on its outstanding
Net Adjusted Capital Contribution from time to time through the end of
such quarter or other period. Any distribution to the Class B Members
pursuant to this Section 6.01(A)(ii) shall be applied to the earliest
-------------------
accrued but unpaid Class B Basic Return in proportion to the Class B
Members' respective Net Adjusted Capital Contributions on a per diem basis;
provided, however, that any distribution to a Class B Member under this
-------- -------
Section 6.01(A)(ii) shall not exceed the amount provided under the preceding
-------------------
sentence.
(iii) Third, to each Class A Member until the Class A
Member shall have received the accrued Class A Additional Return on its
outstanding Net Adjusted Capital Contribution from time to time through
the end of such quarter or other period. Any distribution to the Class
A Members pursuant to this Section 6.01(A)(iii) shall be applied to the
--------------------
earliest accrued but unpaid Class A Additional Return in proportion to the
Class A Members' respective Net Adjusted Capital Contributions on a per diem
basis; provided, however, that any distribution to a Class A Member under
-------- -------
this Section 6.01(A)(iii) shall not exceed the amount provided under the
--------------------
preceding sentence.
(iv) Fourth, to all Members, in proportion to their respective
Net Adjusted Capital Contributions, as a return of capital until the Net
Adjusted Capital Contributions of each of the Members shall have been
reduced to zero.
(v) Fifth, to each Class B Member in proportion to their
respective total Capital Contributions.
(B) Subject to Section 6.06, Capital Events Proceeds from any
-------------
Investment shall be distributed to the Members by the Company promptly, and
in any event within six (6) Business Days after receipt thereof by the
Company, in the following order of priority:
(i) First, to each Class A Member until the Class A Member
shall have received its Allocated Accrued Class A Basic Return for such
Investment through the date of distribution thereof. Any distribution
to the Class A Members pursuant to this Section 6.01(B)(i) shall be
------------------
applied to the earliest accrued but unpaid Class A Basic Return in proportion
to the Class A Members' respective Capital Contributions on a per diem basis;
provided, however, that any distribution to a Class A Member under this
-------- -------
Section 6.01(B)(i) shall not exceed the amount provided under the preceding
------------------
sentence.
(ii) Second, to each Class A Member as a return of capital in
reduction of its Allocated Net Adjusted Capital Contribution for such
Investment until such Allocated Net Adjusted Capital Contribution has
been reduced to zero.
(iii) Third, to each Class B Member until the Class B
Member shall have received its Allocated Accrued Class B Basic Return
for such Investment through the date of distribution. Any distribution
to the Class B Members pursuant to this Section 6.01(B)(iii) shall be
--------------------
applied to the earliest accrued but unpaid Class B Basic Return in proportion
to the Class B Members' respective Capital Contributions on per diem basis;
provided, however, that any distribution to a Class B Member under this
-------- -------
Section 6.01(B)(iii) shall not exceed the amount provided under the preceding
--------------------
sentence.
(iv) Fourth, to each Class B Member as a return of capital in
reduction of its Allocated Net Adjusted Capital Contribution for such
Investment until such Allocated Net Adjusted Capital Contribution has
been reduced to zero.
(v) Fifth, to each Class A Member until the Class A Member
shall have received its Allocated Accrued Class A Additional Return for
such Investment through the date of distribution. Any distribution to
the Class A Members pursuant to this Section 6.01(B)(v) shall be applied
------------------
to the earliest accrued but unpaid Class A Additional Return in proportion to
the Class A Members' respective Capital Contributions on a per diem basis;
provided, however, that any distribution to a Class A Member under this
-------- -------
Section 6.01(B)(v) shall not exceed the amount provided under the preceding
------------------
sentence.
(vi) Sixth, to each Class A Member until the Class A Member
shall have received its aggregate outstanding Allocated Additional
Return Shortfalls with respect to any Investments. Any distribution to
the Class A Members pursuant to this Section 6.01(B)(vi) shall be
-------------------
applied to the earliest accrued but unpaid Class A Additional Return in
proportion to the Class A Members' respective Capital Contributions on a per
diem basis; provided, however, that any distribution to a Class A Member
-------- -------
under this Section 6.01(B)(vi) shall not exceed the amount provided under the
-------------------
preceding sentence.
(vii) Seventh, to each Class A Member until the Class A
Member shall have received its accrued Class A Basic Return on its
outstanding Net Adjusted Capital Contributions from time to time through
the date of distribution thereof. Any distribution to the Class A
Members pursuant to this Section 6.01(B)(vii) shall be applied to the
--------------------
earliest accrued but unpaid Class A Basic Return in proportion to the Class A
Members' respective Capital Contributions on a per diem basis; provided,
--------
however, that any distribution to a Class A Member under this Section
-------
6.01(B)(vii) shall not exceed the amount provided under the preceding
sentence.
(viii) Eighth, to each Class B Member until the Class B
Member shall have received the Class B Basic Return on its outstanding
Net Adjusted Capital Contributions from time to time through the date of
distribution. Any distribution to the Class B Members pursuant to this
Section 6.01(B)(viii) shall be applied to the earliest accrued but
---------------------
unpaid Class B Basic Return in proportion to the Class B Members' respective
Capital Contributions on per diem basis; provided, however, that any
-------- -------
distribution to a Class B Member under this Section 6.01(B)(viii) shall not
---------------------
exceed the amount provided under the preceding sentence.
(ix) Ninth, to each Class A Member until the Class A Member
shall have received the Class A Additional Return on its outstanding Net
Adjusted Capital Contributions from time to time through the date of
distribution. Any distribution to the Class A Members pursuant to this
Section 6.01(B)(viii) shall be applied to the earliest accrued but
---------------------
unpaid Class A Additional Return in proportion to the Class A Members'
respective Capital Contributions on a per diem basis; provided, however, that
-------- -------
any distribution to a Class A Member under this Section 6.01(B)(viii) shall
---------------------
not exceed the amount provided under the preceding sentence.
(x) Tenth, to all Members, in proportion to their respective
Net Adjusted Capital Contributions, as a return of capital until the
Net Adjusted Capital Contributions of each of the Members shall have
been reduced to zero.
(xi) Eleventh, to each Class B Member in proportion to their
respective Capital Contributions.
(C) For purposes of determining distributions of Capital
Event Proceeds pursuant to Section 6.01(B),
---------------
(i) the "ALLOCATED NET ADJUSTED CAPITAL CONTRIBUTION" of any Member with
respect to any Investment then held by the Company as of any date of
determination shall be an amount equal to (a) a fraction, the numerator
of which is the Net Acquisition Costs of such Investment, and the
denominator of which is the Net Acquisition Costs of all Investments of
the Company at such time (such fraction, the "PORTFOLIO SHARE" of such
Investment on such date), multiplied by (b) the then Net Adjusted
Capital Contribution of such Member;
(ii) the "ALLOCATED ACCRUED CLASS A BASIC RETURN" of any Class A Member
with respect to any Investment then held by the Company as of any date
of determination shall be an amount equal to (a) the Portfolio Share of
such Investment on such date multiplied by (b) the then aggregate
accrued but unpaid Class A Basic Return on the outstanding Net Adjusted
Capital Contributions of such Class A Member from time to time;
(iii) the "ALLOCATED ACCRUED CLASS B BASIC RETURN" of any Class B
Member with respect to any Investment then held by the Company as of any
date of determination shall be an amount equal to (a) the Portfolio
Share of such Investment on such date multiplied by (b) the then
aggregate accrued but unpaid Class B Basic Return on the outstanding Net
Adjusted Capital Contributions of such Class B Member from time to time;
and
(iv) the "ALLOCATED ACCRUED CLASS A ADDITIONAL RETURN" of any Class A
Member with respect to any Investment then held by the Company as of any
date of determination shall be an amount equal to (a) the Portfolio
Share of such Investment on such date multiplied by (b) the then
aggregate accrued but unpaid Class A Additional Return on the
outstanding Net Adjusted Capital Contributions of such Class A Member
from time to time.
6.02. Withholding. Each Member hereby authorizes the Company
-----------
to withhold from or pay on behalf of or with respect to such Member any
amount of federal, state, local, or foreign taxes that the Managing Member
reasonably determines that the Company is or may be required to withhold or
pay with respect to any amount distributable or allocable to such Member
pursuant to this Agreement, including, without limitation, any taxes required
to be withheld or paid by the Company pursuant to Code SectionSection 1441,
1442, 1445, or 1446. Any amount
of such taxes so paid by the Company on behalf of or with respect to a Member
shall constitute a loan by the Company to such Member, which loan shall be
repaid through withholding of subsequent distributions to such Member, and
any such distributions so withheld by the Company shall be treated as having
been distributed to the defaulting Member and immediately paid by the
defaulting Member to the Company in repayment of such loan. Any amounts
payable by a Member hereunder shall bear interest at the lesser of (i)
eighteen percent (18%) or (ii) the maximum lawful rate of interest on such
obligation, such interest to accrue from the date such amount is due (which
shall be fifteen (15) days after demand) until such amount is paid in full.
6.03. Form of Distributions. The Managing Member shall use
---------------------
commercially reasonable efforts to convert the assets of the Company to cash
prior to the distribution thereof. Notwithstanding the foregoing,
distributions of Net Investment Revenues made prior to the dissolution and
liquidation of the Company may take the form of Marketable Securities. For
purposes of determining the allocations of such property, and the
corresponding allocation of Profits or Losses, the Class A Member shall
select an Expert, subject to the reasonable approval of the Managing Member,
and such Expert shall determine the Fair Value of such property. The fees and
expenses of such Expert shall be borne by the Company, and the calculations
of the such Expert shall be final and conclusive on the Company and all of
the Members. Distributions of assets in kind shall be allocated in
accordance with Section 6.01 as if such assets were Net Investment Revenues.
------------
6.04. Distribution Accounts. (a) Upon the acquisition of any
---------------------
Investment in an Investment Entity, the Managing Member shall establish, in
the name of the Company, a separate trust account with respect to each such
Investment Entity (each, a "PLATFORM DISTRIBUTION ACCOUNT") for the purposes
set forth herein. The Managing Member shall cause the Company to irrevocably
direct that any amounts to be distributed to the Company by such Investment
Entity be paid directly to the relevant Platform Distribution Account. Each
Platform Distribution Account shall be in the control of the Company;
provided, however, that upon the establishment of each Platform Distribution
Account, the Managing Member shall cause the depository institution in which
such Platform Distribution Account has been established to deliver to PWRES a
letter from such depository institution in form and substance satisfactory to
PWRES, which letter shall be acknowledged by the Company, stating that during
the occurrence of a Sweep Event or Platform Sweep Event and Notice thereof by
PWRES to such depository institution, (i) the Company's access to such
Platform Distribution Account shall be terminated, and all signing authority
for such Platform Distribution Account by any officer, director or employee
of Managing Member shall immediately terminate, and (ii) such Platform
Distribution Account and all distributions therefrom shall be in the sole and
absolute dominion and control of the Class A Member until such time as the
Class A Member shall notify such depository institution that the Company's
access to such Platform Distribution Account is to be restored, which
notification shall be made by the Class A Member upon the cure (to the extent
such cure is available under the terms of this Agreement) of the event
triggering such Platform Sweep Event or Sweep Event.
(b) Upon the occurrence and during the continuance of (i) a Sweep
Event or (ii) a Platform Sweep Event hereunder, PWRES shall have the right to
apply or disburse funds from time to time on deposit in, with respect to
clause (i) above, all of the Platform Distribution Accounts, and with respect
to clause (ii) above, the applicable Platform Distribution Account, in each
case as follows:
first, to the payment of Minimum Overhead Expenses of the Company,
-----
second, to the Class A Members, in proportion to their respective
------
Capital Contributions, on account of all accrued but unpaid Class A Basic
Return and Class A Additional Return and a return of all capital due to the
Class A Members, and
third, for disbursement in accordance with the terms of Section 6.01(A)
----- ---------------
or Section 6.01(B) of this Agreement, as applicable.
---------------
6.05. Payment of Cure Amount. (a) Subject to Section
----------------------
3.03(a)(J) hereof, upon the exercise of any remedy available to the Class A
Member pursuant to the terms of this Agreement, the Class B Member may
contribute to the Company an amount sufficient to return to the Class A
Members all of the Capital Contributions made by the Class A Members to the
Company, together with an internal rate of return on such Capital
Contributions of 16% per annum (the "CURE AMOUNT"); provided, however, that
payment of the Cure Amount shall not preclude the Class A Members from
receiving, pursuant to the terms of Sections 6.01(A) and 6.01(B), any
---------------- -------
distributions in excess of the Cure Amount. Upon payment by the Company to
the Class A Member of the Cure Amount, any default that triggered such remedy
shall be deemed cured.
(b) Notwithstanding paragraph (a) of this Section 6.05 or
------------
Section 3.03(a)(J) hereof, upon the occurrence of a Change of Control Event
------------------
the Class B Member may contribute to the Company an amount sufficient to
return to the Class A Member (i) the Cure Amount and (ii) an additional
return equal to a 4% per annum return on all Capital Contributions made by
the Class A Member, as calculated for the period from the date of such
prepayment until the expiration of the Lock-Out Period. Upon payment by the
Company to the Class A Member of such amount (the "TERMINATION DATE"), the
Control Event shall be deemed cured and all other rights and obligations, if
any, of the Class A Member under the terms of this Agreement shall terminate.
6.06. Tax Distributions. Notwithstanding Sections 6.01(A) and
----------------- ----------------
6.01(B), the Company shall, prior to any distribution pursuant to such
-------
Sections, make distributions ("TAX DISTRIBUTIONS") to all Members, regardless
of their tax status, in amounts intended to enable the Members to discharge
their United States federal, state and local income tax liabilities arising
from allocations to them of Company taxable income pursuant to Section 5.02.
------------
Each Tax Distribution in respect of a taxable year shall be made to all
members in proportion to the amount of taxable income allocated to each such
member pursuant to Section 5.02, and shall be calculated on the basis of the
------------
maximum combined United States federal, state and local tax rates
applicable to any of the Members on ordinary income and net short-term
capital gain, as applicable, and taking into account the deductibility of
state and local income taxes for United States federal income tax purposes
and the deductibility of local income taxes for state income tax purposes,
where applicable. Amounts distributable to any Member pursuant to Sections
--------
6.01(A) and 6.01(B) shall take into account amounts distributed to such
------- -------
Member pursuant to this Section 6.06.
----
ARTICLE VII
RIGHTS AND OBLIGATIONS OF THE MANAGING MEMBER
---------------------------------------------
7.01. Management. Subject to the provisions of this Agreement,
----------
including, without limitation, those provisions contained in Article XVI with
-----------
respect to the Advisory Committee and in other sections of this Agreement,
the Managing Member has the full, exclusive and complete right, power,
authority, discretion, obligation and responsibility vested in or assumed by
a managing member of a limited liability company under the Act and as
otherwise provided by law, including those necessary to make all decisions
affecting the business of the Company and to take those actions specified in
Section 3.02 hereof. Subject to the other provisions of this Agreement, the
------------
Managing Member is hereby vested with the full, exclusive and complete right,
power and discretion to operate, manage and control the affairs of the
Company to the best of its ability and shall use reasonable efforts to carry
out the business of the Company. The Managing Member shall devote
substantially all of its time to the proper performance of its duties
hereunder.
7.02. Authority.
---------
(A) The Managing Member has authority to bind the Company, by
execution of documents or otherwise, to any obligation not inconsistent with
the provisions of this Agreement. Subject to, and except as otherwise
provided in Sections 7.03 and 7.04, the Managing Member may contract or
------------- ----
otherwise deal with any Person for the transaction of the business of the
Company, which Person may, under supervision of the Managing Member, perform
any acts or services for the Company as the Managing Member may approve and
the Managing Member shall use reasonable care in the selection and retention
of such Persons.
(B) The Managing Member may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
debenture, or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties.
(C) The Managing Member may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers, and
other consultants and advisers selected by it, and any act taken or omitted
to be taken in reasonable reliance upon the opinion
of such Persons as to matters within such Person's professional or expert
competence shall be presumed to have been done or omitted in good faith and
not to constitute willful misconduct.
(D) No Person dealing with the Managing Member shall be required
to determine the Managing Member's authority to enter into any contract,
agreement or undertaking on behalf of the Company or to determine any facts
or circumstances bearing upon the existence of such authority. Any Person
dealing with the Company or the Managing Member may rely upon a certificate
signed by the Managing Member as to:
(i) the identity of any Member;
(ii) the existence or nonexistence of any fact or facts which
constitute a condition precedent to acts by the Managing
Member or are in any other manner germane to the affairs of
the Company;
(iii) the persons who are authorized to execute and
deliver any instrument or document by or on behalf of the
Company; or
(iv) any act or failure to act by the Company or as to any
other matter whatsoever involving the Company or any Member.
7.03. Limitations on the Managing Member.
----------------------------------
(A) Anything contained in any other Section of this Agreement
notwithstanding, the Managing Member and its Affiliates shall not have any
authority or be entitled:
(1) to perform any act in violation of any applicable law or
regulation thereunder, including applicable Federal and state
securities laws;
(2) to perform any act in violation of the Act or this
Agreement;
(3) to sell all or substantially all of the assets of the
Company without the Consent of a majority in Interest of the Non-
Managing Members unless such sale is in accordance with the general
purposes of the Company or in accordance with Section 11.02 hereof;
-------------
(4) the merger or other reorganization of the Company where
the Company is not the surviving entity, without the Consent of a
majority in Interest of the Members;
(5) to perform any other act expressly requiring the Consent
of the Members or the Advisory Committee under this Agreement
without first obtaining such Consent;
(6) to cause the Company to borrow funds from the Managing
Member or its Affiliates except in accordance with Section
-------
7.04(B)(ii) or, in the event PWRES is the Managing Member, Section 17.19 and
----------- -------------
any other applicable provision hereof.
(7) to accept and retain rebates or any other benefit not
available to all Members;
(8) to commingle funds of the Company with funds of any other
Person, except in connection with Investments made with other
parties.
(B) The Managing Member shall endeavor to cause the Company to
maintain cash reserves for operating expenses, capital expenditures, repairs,
replacements, contingencies and related items in such amount as the Managing
Member in its reasonable discretion deems necessary or advisable.
7.04. Business with Affiliates.
------------------------
(A) The Managing Member may permit the Company to enter into any
transaction with the Managing Member or its Affiliates or engage the Managing
Member or its Affiliates to provide property or asset management,
construction or development services or asset disposition services if all of
the following criteria are complied with:
(i) The fees and other terms and conditions under which the
goods or services are to be rendered or the transaction is to be
entered into are embodied in a written contract which precisely
describes the transaction or the goods or services to be rendered
and the compensation, price or fee therefor;
(ii) The terms and conditions of the contract are at least as
favorable to the Company as the terms generally available in
arm's-length transactions with independent third parties;
(iii) The compensation, price, fees, and other benefits to
the Managing Member and its Affiliates and the formula or method by
which they are to be calculated, and the goods, services or other
benefits to be provided therefor, are fully disclosed on an
Investment by Investment basis in a writing filed with the Non-
Managing Members and the Advisory Committee in advance; provided,
however, that if such transaction is not on arms-length and market
terms, such transaction shall also be Consented to in advance and
in writing by the Advisory Committee; and
(iv) Such transaction or contract for services is in the
ordinary course of its business.
(B) The Managing Member shall have the right:
(i) to cause the Company to enter into one or more agreements
other than the type specified in Section 7.04(A) with an Affiliate
---------------
of the Managing Member or Reckson only after receiving the consent of the
Advisory Committee;
(ii) to (a) make short-term advances to the Company to fund
the Company obligations prior to receipt of Capital Contributions
(including, but not limited to, situations whereby the Company must
acquire an Investment prior to the date upon which an Acquisition
Plan for such Investment is delivered to the Advisory Committee
pursuant to Section 16.02(E)), which advances shall accrue interest
-----------------
at the greater of (1) 12% or (2) the Prime Rate plus two percent (2%) and
shall be repaid from Capital Contributions or other Company funds; provided,
however, that the Company shall extend to each Class A Member (other than a
defaulting Class A Member under Section 4.03) the right to participate in the
------------
making of such short-term advances, in proportion to the respective
Percentage Interests of the Members (including for purpose hereof, the
Managing Member) who elect to participate, and (b) assign or cause the
Company to assign contract rights to and from newly formed acquisition
vehicles at cost and be refunded any previously funded amounts together with
interest accrued thereon at the greater of (i) 12% or (ii) the Prime Rate
plus two percent (2%) (provided that in each instance the Managing Member
shall not be entitled to any compensation for amounts advanced or funded
other than the interest provided for herein), in both instances without
complying with the provisions of clauses (i), (ii) or (iv) of Section 7.04(A)
---------------
or clause (iii) of Section 7.04(A) with respect to the rate of interest on
---------------
such advances;
(iii) in the event of a default by the Class A Member of
its obligations under Section 4.03 and the expiration of any
------------
applicable cure period, to be reimbursed by the Company for costs and
expenses incurred by the Managing Member in connection with the making of the
short-term advances referenced in clause (a) above; provided, however, that
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the total amount of reimbursements to be made in respect of each such short-
term advance shall not exceed (1) $5,000 with respect to each such short-term
advance and (2) $50,000 with respect to all such short-term advances in the
aggregate; and
(iv) to participate in a Reckson Investment Opportunity with
Reckson Operating Partnership.
7.05. Liability for Acts and Omissions; Recourse to Reckson
-----------------------------------------------------
Services and to ROP Line.
------------------------
(A) None of the Managing Member, PWRES, any member of the Advisory
Committee or any of their respective Affiliates, members, shareholders,
partners, officers, directors, employees, agents and representatives shall
have any liability, responsibility or accountability in damages or otherwise
to any other Member or the Company for, and the Company agrees to indemnify,
pay, protect and hold harmless the Managing Member, PWRES, each member of the
Advisory Committee and their respective Affiliates, shareholders, partners,
officers, directors, employees, agents and representatives (each, an
"INDEMNIFIED PARTY" and collectively, the "INDEMNIFIED PARTIES") from and
against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, proceedings, costs, expenses and disbursements of
any kind or nature whatsoever (including, without limitation, all reasonable
costs and expenses of attorneys, defense, appeal and settlement of any and
all suits, actions or proceedings instituted or threatened against the
Indemnified Parties or the Company) and all costs of investigation in
connection therewith which may be imposed on, incurred by, or asserted
against the Indemnified Parties or the Company in any way relating to or
arising out of, or alleged to relate to or arise out of, any action or
inaction on the part of the Company, on the part of the Indemnified Parties
when acting on behalf of the Company or on the part of any brokers or agents
when acting on behalf of the Company; provided, that Reckson Services and
--------
Managing Member shall be jointly and severally liable, responsible and
accountable for, and shall indemnify and hold the Company and the Non-
Managing Members harmless against, and the Company shall not be liable to
Managing Member, Reckson Services or any of their respective Affiliates for,
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, proceedings, costs, expenses or disbursements or
any costs, of investigation in connection therewith which result from, the
fraud, willful misconduct or bad faith of Managing Member, Reckson Services
or any of their respective Affiliates. In any action, suit or proceeding
against the Company or any Indemnified Party relating to or arising, or
alleged to relate to or arise, out of any such action or non-action (other
than Managing Members', Reckson Services' or any of their respective
Affiliates' fraud, willful misconduct or bad faith), the Indemnified Parties
shall have the right to jointly employ, at the expense of the Company, of the
Indemnified Parties' choice, which counsel shall be reasonably satisfactory
to the Company, in such action, suit or proceeding, provided that if
retention of joint counsel by the Indemnified Parties would create a conflict
of interest, each group of Indemnified Parties which would not cause such a
conflict shall have the right to employ, at the expense of the Company,
separate counsel of the Indemnified Party's choice, which counsel shall be
reasonably satisfactory to the Company, in such action, suit or proceeding.
The satisfaction of the obligations of the Company under this Section 7.05(A)
---------------
shall be from and limited to the assets of the Company (which, for purposes
hereof, shall be deemed not to include Remaining Capital Commitments) and no
Non-Managing Member shall have any personal liability on account thereof. For
purposes of this Section 7.05(A), Reckson and its Affiliates shall be deemed
---------------
to be deemed to be Affiliates of Reckson Services until such time as less
than a majority of the directors of the board of directors of Reckson
Services are also officers or directors of Reckson.
(B) The provision of advances from Company funds to an Indemnified
Party for legal expenses and other costs incurred as a result of any legal
action or proceeding is permissible if (i) such suit, action or proceeding
relates to or arises out of, or is alleged to relate to or arise out of, any
action or inaction on the part of the Indemnified Party in the performance of
its duties or provision of its services on behalf of the Company; and (ii)
the Indemnified Party undertakes to repay any funds advanced pursuant to this
Section 7.05(B) in cases in which such Indemnified Party would not be
---------------
entitled to indemnification under Section 7.05(A) and, if required by the
---------------
Advisory committees provides security in such a undertaking satisfactory to
the Advisory committee, and (iii) the Company has sufficient available funds
on hand for such advances. If advances are permissible under this Section
-------
7.05(B), the Indemnified Party shall furnish the Company with an undertaking,
-------
and, if required, security as set forth in clause (ii) of this paragraph and
shall thereafter have the right to xxxx the Company for, or otherwise request
the Company to pay, at any time and from time to time after such Indemnified
Party shall become obligated to make payment therefor, any and all reasonable
amounts for which such Indemnified Party believes in good faith that such
Indemnified Party is entitled to indemnification under Section 7.05(A) with
---------------
the approval of the Advisory Committee. The Company shall pay any and all
such bills and honor any and all such requests for payment within 60 days
after such xxxx or request is received by the Managing Member. In the event
that a final determination is made that the Company is not so obligated in
respect of any amount paid by it to a particular Indemnified Party, such
Indemnified Party will refund such amount within 60 days of such final
determination, and in the event that a final determination is made that the
Company is so obligated in respect of any amount Indemnified Party, the
Company will pay such amount to such Indemnified Party within 60 days of such
final determination, in either case together with interest at the Prime Rate
plus 2% from the date paid by such Indemnified Party until actually repaid to
such Indemnified Party or the date such amount was obligated to be paid to
such Indemnified Party until the date actually paid to such Indemnified
Party.
(C) All judgments against the Company or any Indemnified Party
wherein such persons or entities are entitled to indemnification, must first
be satisfied from the Company assets (other than Remaining Capital
commitments).
(D) Except as may be otherwise provided herein, in no event shall
any Member, or any Affiliate of a Member, or any partner, director, officer,
employee, agent, member or shareholder of a Member or any Affiliate of a
Member, be liable for the obligations of the Company, whether for the
consummation of Investments, professional and other services rendered to it,
loans made to it by Members or others, injuries to persons or property,
indemnity to the Indemnified Parties, contractual obligations, guaranties,
endorsements or for other reasons similar or dissimilar to any of the
foregoing, and without regard to the manner in which any liability of any
nature may be incurred by the person to whom it may be owed it being
understood that, all such liabilities shall be liabilities of the Company as
an entity, and shall be paid or otherwise satisfied from the Company assets
as are necessary to satisfy such liabilities.
(E) The Managing Member may cause the Company, at the Company's
expense, to purchase insurance to insure the Indemnified Parties against
liability hereunder,
including, without limitation, for a breach or an alleged breach of their
responsibilities hereunder. The Managing Member shall send Notice to the Non-
Managing Members thereof, describing the insurance policy and the premiums
paid therefor promptly upon the purchase of such insurance. The Company shall
not incur the costs of that portion of any insurance, other than public
liability insurance, which insures any Indemnified Party for any liability as
to which such person is prohibited from being indemnified under Section
-------
7.05(A).
-------
(F) As a material inducement to PWRES to enter into this
Agreement, Reckson Services hereby agrees (i) to use best efforts to enter
into all documentation with Reckson Operating Partnership necessary to
effectuate the ROP Line, and shall deliver to PWRES true and complete copies
of all such documentation, as soon as practicable following the date of this
Agreement; (ii) that such documentation (a) shall permit proceeds of advances
under the ROP Line to be used to fund any indemnification obligations of
Reckson Services or Managing Member under this Section 7.05; (b) shall not
------------
require, as a condition to any such advance, that there be no material
adverse change (or similar provision) with respect to Reckson Services,
Managing Member or the Company (but such advance may be subject to other
types of customary conditions to funding of a loan and may also be subject to
the preservation of the lender's status as a real estate investment trust);
and (c) shall provide in substance that all rights of Reckson Operating
Partnership in respect of advances under the ROP Line shall be subordinated,
on terms and conditions satisfactory to PWRES, to any claims of the Company
and the Non-Managing Members against Reckson Services and Managing Member
under this Section 7.05; (iii) in connection with any claim
------------
by the Company or the Class A Members against Managing Member and/or Reckson
Services under the indemnification set forth in this Section 7.05, Reckson
------------
Services shall, promptly after receipt of a written request from a Class A
Member, request an advance under the ROP Line to fund the total amount of any
reasonably expected liabilities of the Managing Member and/or Reckson
Services in connection with such claim, as reasonably determined by such
Class A Member provided, however, that such funds need not be actually
-------- -------
advanced by Reckson Operating Partnership until such claim has been
determined by final judgment or otherwise, it being understood that the
amount of the advance covered by such request by Reckson Services for such an
advance on the ROP Line shall not be eligible for use for any other purpose
until such claim has been finally determined, and then only such portion of
such advance as shall not be required to satisfy such claim shall be eligible
for use for other purposes; (iv) Reckson Services shall not pay any dividend
to its shareholders that would cause its total paid-in equity capital to be
reduced to less than the lesser of (a) the Minimum Book Capitalization, or
(b) the amount of its paid-in equity capital immediately following the first
issuance of common stock of Reckson Services (up to a maximum of $15 million)
occurring after the spin-off of the shares of Reckson Services to the
shareholders of Reckson; and (v) Reckson Services shall give the Class A
Members prompt Notice of any principal repayment under the ROP Line or
dividends paid from Capital Event Proceeds, and if the Class A Member
reasonably believes that the Book Capitalization of Reckson Services would be
less than the Minimum Book Capitalization upon such principal repayment, then
the Class A Member shall not thereafter be required to make any Capital
Contribution (other than solely for the purpose of funding a capital
contribution by the Company to a Co-Investment Vehicle) until the Class A
Member shall have received evidence reasonably satisfactory to the
Class A Member that the Book Capitalization of Reckson Services would be at
least equal to the Minimum Book Capitalization upon such principal repayment.
7.06. (Reserved.)
7.07. (Reserved.)
7.08. Key Man Provisions.
------------------
(A) So long as RSVP Holdings, LLC is the Managing Member, the
Managing Member shall cause at least fifty percent (50%) of the individuals
identified on Schedule 2.22 hereto to remain actively involved in the Company
-------------
and to devote to the Company such business time and attention as may be
reasonably necessary to carry out the objectives of the Company.
(B) The Non-Managing Members sole remedy with respect to
noncompliance with the foregoing shall be as follows:
(i) The Class A members shall immediately be entitled to
designate by vote of the majority in interest of the Class A
Members, to designate an individual as a member of the Advisory
Committee, and the affirmative vote of such member of the Advisory
Committee shall be required for the Company to (a) issue or redeem
any membership interest, (b) incur any material expenses, (c) make
any new Investment or allocate additional funds to any existing
Investment, (d) finance or refinance any Investment, or restructure
or without financing, (e) sell or otherwise liquidate any
Investment, (f) change the Company's distribution policy, or direct
or Consent to the change in any Investment's distribution policy or
(g) disburse funds on deposit in the Distribution Account.
7.09. Presentation of Opportunities to the Company.
--------------------------------------------
(A) Except as set forth in Section 3.05 hereof, until the earlier
------------
of (i) the expiration of the Investment Period or (ii) the date on which 90%
of the Members' aggregate Capital Commitments have been invested or committed
for investment, none of the Managing Member, the Managing Member Members,
Reckson Services or Reckson shall act as a general partner or managing member
of or otherwise as a source of transactions on behalf of another pooled
investment fund with a primary purpose similar to that of the Company as set
forth in Section 3.01 hereof, and all investment opportunities consistent
------------
with the investment objectives of the Company other than investments by
Reckson and its subsidiaries in investments consistent with the investment
objectives of Reckson and such subsidiaries as of the date hereof coming to
the attention of the Managing Member Members, Reckson Services or Reckson
shall be presented by the Managing Member to the Company, and the Company
shall have the exclusive right to invest in such investment opportunity on
such terms and conditions as the Company shall deem appropriate, for a period
of 30 days (or 90 days in the event that PWRES, in its sole and
absolute discretion, determines that additional due diligence is required to
be performed with respect to such investment opportunity) before any of the
Managing Member Members, Reckson Services, Reckson, or any of their
respective affiliates may invest in such Investments; provided, however, that
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(a) in the event Reckson Services or its Subsidiaries are presented with an
opportunity to make an Investment in (i) an operating company engaged in the
business of providing services, including but not limited to, Tenant Services
or Building Services, which operating company receives less than 25% of its
revenues from owning and operating real property or (ii) an operating company
engaged in the business of executive office suites; or (b) any Non-Managing
Member shall, with respect to a particular Investment, be in default of its
obligation to make a Capital Contribution pursuant to Section 4.03 hereof and
------------
such default shall continue for two (2) Business Days following Notice from
the Managing Member to all of the Non-Managing Members, then solely with
respect to such particular Investments, the terms of this Section 7.09(A)
---------------
shall not apply.
(B) (a) The Managing Member shall promptly provide the Members
with Notice of any breach of the obligations set forth in paragraph (A)
above. In the event of a material breach of the obligations set forth in
paragraph (A) above which breach continues for thirty (30) days (or, if the
breach can be cured but is not capable of being cured within such thirty (30)
day period, such longer period of time, not to exceed sixty (60) days, as is
necessary to cure such breach provided that such cure is diligently pursued
during and after such thirty (30) day period) following Notice from the
Managing Member, the Non-Managing Members shall have the right, by Consent of
sixty percent (60%) of the Percentage Interests of the Non-Managing Members,
(i) to terminate the Investment Period, (ii) to exercise control over, and
disburse funds on deposit in, all of the Platform Distribution Accounts as
provided in Section 6.04(b) hereof, or (iii) to exercise the
---------------
remedies set forth in Section 16.03(D) hereof. To cure a breach of the
----------------
obligations set forth in paragraph (A) above, Managing Member shall, within
the period specified in this Section 7.09(B)(a), (or, if the Managing Member
------------------
disputes, prior to the expiration of such period, the Class A Member's
assertion that a breach of Section 7.09(A) has occurred, within three (3)
---------------
days following final resolution of such dispute pursuant to Section
-------
7.09(B)(b)) cause the Investment made in breach of Section 7.09(A) to be sold
---------- ---------------
to the Company at a price not to exceed the Acquisition Cost of such
Investment; provided, however, that in the event such Investment constitutes
-------- -------
a depleting asset, the sale price shall not exceed the Fair Value of such
Investment.
(b) Notwithstanding anything to the contrary set forth in
this Agreement, in the event a dispute arises among, or between any of, the
Members with respect to whether or not a breach of the obligations set forth
in Section 7.09(A) has occurred, then such Members shall promptly and in good
---------------
faith attempt to resolve such dispute by mutual agreement. In the event the
Members are unable to resolve such dispute by mutual agreement, the matter
shall be resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect. No
Member shall institute any legal or equitable action against another Member
in any court with respect to any dispute in respect of whether or not such a
breach has occurred, except to confirm an arbitrator's award, which award
shall be final and binding. There shall be one arbitrator, to be selected by
mutual agreement of the Members
engaged in the dispute or, failing such agreement, by the president of the
American Arbitration Association. The arbitration shall take place in New
York, New York. The party prevailing in such arbitration shall be entitled
to recover from the other party the reasonable attorneys' fees and
disbursements incurred by such prevailing party in connection with such
arbitration. Except for such issues subject to arbitration as specifically
set forth in this Section 7.09(B)(b), the Members shall have the right to
------------------
enforce the rights and obligations under this Agreement in any action at law
or equity.
7.10. Other Activities. Subject to Sections 7.01, 7.08 and 7.09
---------------- ------------- ---- ----
above, the Members and their Affiliates may engage in or possess an interest
in other business ventures of every nature and description for their own
account, independently or with others, including, without limitation, real
estate business ventures, whether or not such other enterprises shall be in
competition with any activities of the Company; and neither the Company nor
the other Members shall have any right by virtue of this Agreement in and to
such independent ventures or to the income or profits derived therefrom.
7.11. Affirmative Covenants.
---------------------
Subject to Section 7.13 hereof, Managing Member shall:
------------
(A) EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS.
---------------------------------------------
(a) cause to be done all things necessary to preserve, renew
and keep in full force and effect the existence of, and any material rights,
licenses, permits and franchises of, each Investment Entity and comply in all
material respects with all Legal Requirements applicable to each such
Investment Entity or its Related Property, if any, and other material assets,
if any;
(b) at all times cause such Investment Entity to maintain,
preserve and protect all of its material franchises and trade names and
preserve all the remainder of such Investment Entity's property used or
useful in the conduct of such Investment Entity's business and keep its
Related Property in good working order and repair, ordinary wear and tear
excepted, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements
thereto;
(c) cause each Investment Entity to procure insurance from
financially sound and reputable insurers necessary to protect at all times
the business and operations of such Investment Entity and any Related
Property against all liabilities, hazards and risks (including, but not
limited to, environmental liabilities, hazards and risks) which are commonly
insured against in respect of properties similar to any such Related
Properties and entities which have businesses and operations similar to those
of such Investment Entity; and
(d) in the event the Managing Member fails to procure any of
such required insurance, promptly notify the Class A Member of such failure.
(B) IMPOSITIONS AND OTHER CLAIMS.
----------------------------
cause to be paid and discharged all Impositions, as well as
all lawful claims for labor, materials and supplies or otherwise, which could
become a Lien.
(C) LITIGATION.
----------
give prompt written notice to the Class A Member of any
litigation or governmental proceedings pending or threatened against any
Investment Entity which has or could reasonably be expected to have a
Material Adverse Effect.
(D) ACCESS TO PREMISES.
------------------
cause each Investment Entity to permit agents, representatives
and employees of Managing Member and the Class A Member to inspect any
Related Property at reasonable hours upon reasonable advance Notice to such
Investment Entity, subject to the rights of tenants, subtenants and licensees
under any Leases.
(E) NOTICE OF DEFAULT.
-----------------
cause each Investment Entity to promptly advise Managing
Member of any material adverse change in such Investment Entity's condition,
financial or otherwise, or of the occurrence of any default or event of
default under any agreements, instruments and documents to which such
Investment Entity is a party that would result in a Material Adverse Effect.
(F) COOPERATE IN LEGAL PROCEEDINGS.
------------------------------
cause each Investment Entity to cooperate fully with the
Company, any Member or any other Person with respect to any proceedings
before any court, board or other Governmental Authority which may in any way
affect the rights of the Company or any Member hereunder or the value of the
related Investment or Related Property and, in connection therewith, permit
the Company or such Member, at its reasonable election, to participate in any
such proceedings.
(G) PERFORM AGREEMENTS.
------------------
cause each Investment Entity to observe, perform and satisfy
all the terms, provisions, covenants and conditions of, and to pay when due
all costs, fees and expenses to the extent required under any agreements,
instruments and documents to which such Investment Entity is a party.
(H) FURTHER ASSURANCES.
------------------
cause each Investment Entity, to execute and deliver such
documents, instruments, certificates, opinions, assignments and other writ-
ings, and do such other acts necessary or desirable, to evidence, preserve
and/or protect the value of the Investment and any Related Property, as
Managing Member or the Class A Member may reasonably request from time to
time.
(I) MANAGEMENT OF PROPERTY.
----------------------
cause each Investment Entity to cause any Related Property
Manager (and any permitted successor property manager) to enter into a
management agreement with such Investment Entity with respect to the Related
Property on arms-length and market terms and to abide by all of the
applicable terms of such management agreement and any related documents,
instruments, certificates or other writings.
(J) BUSINESS AND OPERATIONS.
-----------------------
(a) cause each Investment Entity to continue to engage in the
businesses presently conducted by it; and
(b) cause each Investment Entity to qualify to do business
and to remain in good standing under the laws of each jurisdiction necessary
for the conduct of its business as presently conducted.
(K) PERFORMANCE BY INVESTMENT ENTITY.
--------------------------------
cause each Investment Entity to in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each
agreement, document or instrument to which it is a party and to not enter
into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any such agreement, document or
instrument to the extent such amendment, waiver, supplement, termination or
other modification would result in a Material Adverse Effect.
(L) INSOLVENCY PROCEEDINGS.
----------------------
(a) not make any bankruptcy or insolvency filing or
proceeding in respect of the Company without the Consent of the unanimous
affirmative vote of all of the Members;
(b) not acquiesce, petition or otherwise invoke or cause any
other Person to invoke the process of the United States of America, any state
or other political subdivision thereof or any other jurisdiction, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case against the Company under Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian,
sequestrator or other similar official of the Company if such action has not
been consented to by a unanimous affirmative vote of all of the Members;
(c) cause each Investment Entity in which the Company has
made an Investment (provided that such Investment is in the form of equity)
not to commence a bankruptcy or insolvency filing or proceeding in respect of
such Investment Entity without the Consent of the Company, and the Company
shall not give any such Consent without the unanimous affirmative vote of all
of the Members; and
(d) cause such Investment Entity not to acquiesce, petition
or otherwise invoke or cause any other Person to invoke the process of the
United States of America, any state or other political subdivision thereof or
any other jurisdiction, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government for the purpose of commencing or sustaining a case against the
Company under Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of Investmof all of the Members.
(M) NO JOINT ASSESSMENT.
-------------------
cause each Investment Entity not to permit a joint
assessment of any Related Property with any other real property constituting
a tax lot separate from such Related Property.
(N) SINGLE PURPOSE COVENANT.
-----------------------
(a) cause the Company and each Investment Entity to (i)
be a duly formed and existing limited partnership, limited liability company
or corporation, as the case may be; (ii) be duly qualified in each
jurisdiction in which such qualification is necessary for the conduct of its
business; (iii) comply with the provisions of its organizational documents
and the laws of its jurisdiction of formation in all respects; (iv) observe
all customary formalities regarding its partnership, limited liability
company or corporate existence, as the case may be; (v) maintain its records
and books of account separate from those of any Investment Entity or the
Company, respectively; (vi) not commingle its assets or funds with those of
any Investment Entity or the Company, respectively; (vii) conduct its own
business in its own name and not in the name of any Investment Entity or the
Company, respectively; (viii) maintain financial statements separate from
those of any Investment Entity or the Company, respectively; (ix) pay its own
liabilities out of its own funds and not from the funds of any Investment
Entity or the Company, respectively; (x) observe all corporate or partnership
formalities, as applicable; (xi) maintain an arms-length relationship with
its Affiliates; (xii) not pay the salaries of any employees of any Investment
Entity or the Company, respectively; (xiii) not guarantee or become obligated
for the debts of any Investment Entity or the Company, respectively, or hold
out its credit as being available to satisfy the obligations of any
Investment Entity or the Company, respectively; (xiv) allocate fairly and
reasonably any overhead for any office space
shared with any Investment Entity or the Company, respectively; (xv) use
stationery, invoices and checks separate from those used by any Investment
Entity or the Company, respectively; (xvi) not pledge its assets for the
benefit of any Investment Entity or the Company, respectively; (xvii) hold
itself out as a separate entity and not view itself as a division or
department of any Investment Entity or the Company, respectively; (xviii)
correct any misunderstanding actually known by it regarding its separate
identity from that of any Investment Entity or the Company, respectively;
(xix) maintain adequate capital in light of its contemplated business
operations and at all times remain solvent and able to pay its debts as they
become due; and (xx) maintain its accounts separate from those of any
Investment Entity or the Company, respectively; and
(b) upon the acquisition of each Investment, deliver to the
Class A Member an opinion, in form and substance reasonably satisfactory to
the Class A Member, of counsel reasonably satisfactory to the Class A Member,
stating that a bankruptcy court should not order the substantive
consolidation of the assets and liabilities of the Company with those of the
related Investment Entity, in the event that such Investment Entity were to
become a debtor under Title 11 of the United States Code (the "BANKRUPTCY
CODE").
(O) DEFERRED MAINTENANCE.
--------------------
cause each Investment Entity to utilize reasonable
efforts to remedy all items of deferred maintenance existing with respect to
any Related Property which the Managing Member may deem reasonably necessary
at the time of acquisition of such Investment.
(P) ACMS; O&M PROGRAM.
-----------------
(a) (i) cause each Investment Entity to comply with all
ACM Requirements in all material respects;
(ii) without limiting the generality of the foregoing,
cause each Investment Entity to discharge in all material respects all
obligations imposed on a building owner (including, without limitation,
requirements relating to notification, recordkeeping, labeling, and
sign-posting) under the ACM Requirements;
(iii) cause each Investment Entity with respect to
any Related Property that was constructed prior to 1981 to use all
diligent efforts to deliver to Managing Member within 60 days after
acquisition of the related Investment, an O&M Program for Managing
Member's review and approval;
(iv) cause each Investment Entity to comply in all
material respects with all elements of its O&M Program as approved by
Managing Member;
(v) cause each Investment Entity to permit Managing
Member to inspect all areas of any Related Property where ACMs are known
or suspected to be present and to audit each such Investment Entity's
operations to determine whether such Investment Entity is in compliance
in all material respects with the O&M Program and with all ACM
Requirements; and
(vi) if Managing Member determines that a potential
adverse health effect may be produced as a result of ACM in the
building, or if any governmental agency, either by regulation, statute,
ordinance, or other authority, requires a program of removal or other
abatement, control, management or monitoring of the ACMs, cause each
Investment Entity to, at its sole cost and expense, comply with such
program.
(b) (i) If any Investment Entity's Related Property has lead in
water, lead in paint, radon or any other condition that would be required to
be covered by a written monitoring and sampling, and if applicable,
mitigation and management program in accordance with safe and sound
environmental management standards, as indicated in any related Environmental
Report (each such program, a "MITIGATION PROGRAM"), cause such Investment
Entity to comply in all material respects with all applicable Environmental
Laws with respect thereto and to deliver to Managing Member on or prior to
the acquisition of the related Investment, an appropriate written Mitigation
Program with respect thereto for Managing Member's review and approval;
(ii) cause such Investment Entity to comply in all
material respects with each such Mitigation Program as approved by
Managing Member;
(iii) without limiting the generality of the
foregoing, cause such Investment Entity to discharge all obligations
imposed on a building owner (including requirements relating to
notification, recordkeeping, labeling, and sign-posting) under
applicable Environmental Laws;
(iv) cause each Investment Entity to permit Managing
Member to inspect all areas of the Related Property where lead in water,
lead in paint, radon or any other such condition are known or suspected
to be present and to audit such Investment Entity's operations to
determine whether such Investment Entity is in compliance in all
material respects with the applicable Mitigation Program delivered to
Managing Member and with all applicable Environmental Laws; and
(v) if Managing Member determines that a potential
adverse health effect may be produced as a result of lead in water, lead
in paint, radon or any other such condition in the building, or if any
governmental agency, either by regulation, statute, ordinance, or other
authority, requires a program of removal or other abatement, control,
management or monitoring of the lead in water, lead in paint, radon or
any other such condition, cause such Investment Entity to, at its sole
cost and expense, comply with such program.
(Q) ENVIRONMENTAL REMEDIATION. (a) cause each Investment
-------------------------
Entity to utilize diligent efforts to remediate the environmental conditions
existing with respect to each Related Property;
(b) in the event that the existence of any environmental
conditions existing with respect to any Related Property either at the time
of acquisition of the related Investment or subsequent thereto, may result in
a Material Adverse Effect, cause such Related Property to be held by a
separate Single Purpose entity; and
(c) cause each Investment Entity to deliver to the
Managing Member copies of any Environmental Report with respect to any
Related Properties and any other information, documents, instruments,
certificates and opinions with respect to such Environmental Report and
Related Properties reasonably requested by the Class A Member.
(R) CASH FLOW DISTRIBUTIONS.
-----------------------
to the extent possible, cause each Investment Entity to
distribute to the Company all available cash flow from the related Investment
(other than funds being retained by such Investment Entity for working
capital or other reasonable business purposes) not less frequently than
quarterly.
7.12. Negative Covenants.
------------------
Subject to Section 7.13 hereof (and Section 3.01(B) with respect
------------ ---------------
to clause (B) of this Section 7.12), Managing Member shall:
------------
(A) MANAGEMENT OF PROPERTY.
cause each Investment Entity not to, (i) without the
prior Consent of the Class A Member, which Consent shall not be unreasonably
withheld, terminate any Related Property management agreement or otherwise
replace a Related Property Manager or (ii) without the prior Consent of the
Class A Members, enter into any other management agreement with respect to
the Related Property that is not on arms-length and market terms.
(B) CHANGE IN BUSINESS.
------------------
cause each Investment Entity not to make any material
change in the scope or nature of its business objectives, purposes or
operations that would substantially deviate from the Investment Parameters.
(C) RELATED DOCUMENTS. (a) cause each Investment Entity not
-----------------
to enter into, acquiesce in, suffer or permit any amendment, restatement or
other modification of any of its Organizational Documents without the prior
written consent of the Class A Member if (i) such
amendment, restatement or modification could reasonably be expected to have a
material adverse effect upon the value of any Related Property or its
intended use, or (ii) such amendment, restatement or modification violates
(or would cause the violation of) any term hereof;
(b) whether or not the Class A Member's Consent is
required in respect of the modification of any Organizational Documents as
aforesaid, cause each Investment Entity to give Managing Member and the Class
A Member prompt Notice (and copies) of any amendment, restatement or other
modification of any Organizational Documents relating to such Investment
Entity;
(c) cause each Investment Entity not to enter into,
acquiesce in, suffer or permit the creation of, or the amendment, restatement
or modification of, any Property Agreement without the prior written consent
of the Class A Member if (A) such creation, amendment, restatement or
modification could reasonably be expected to have a Material Adverse Effect
upon the value of the Related Property or (B) such amendment, restatement or
modification violates (or would cause the violation of) any term hereof; and
(d) whether or not Managing Member's consent is required
in respect of the creation or modification of any Property Agreement as
aforesaid, cause each Investment Entity to give prompt Notice (and copies)
thereof to Managing Member and the Class A Member.
(D) DISSEMINATION OF INFORMATION.
----------------------------
not and shall cause the Company and each Investment
Entity not to disseminate a press release upon the execution of this
Agreement or upon the closing of the acquisition of any Investment if (i)
such press release mentions PWRES or, (ii) to the knowledge of the Person
disseminating such press release, the contents of such press release are or
may be adverse to the interests of PWRES or any of its Investments, unless
the Managing Member, the Company or such Investment Entity has obtained the
prior Consent of PWRES.
(E) NO SOLICITATION OF PWRES EMPLOYEES.
----------------------------------
not, and shall cause the Company and each Investment
Entity not to, for a period of twenty-four (24) months following the date of
this Agreement, engage any officer, director or employee of the PWRES or any
Affiliate of the PWRES who directly or indirectly reports to Xxxx X. Xxxxxx
or Xxxxxxxx X. Xxxxxxx as an officer, director, member or employee of the
Managing Member or the Company or any Affiliate thereof, and shall not, and
shall cause the Company and each Investment Entity not to, induce or solicit
the resignation of any such officer, director or employee of the PWRES or
any Affiliate of the PWRES.
7.13. Compliance with Affirmative and Negative Covenants.
--------------------------------------------------
(a) Notwithstanding paragraph (b) below, with respect to
any Investment Entity that is not an Affiliate of Reckson, Reckson Services
or any of their respective Affiliates and whose common stock is traded on a
national or foreign securities exchange or is listed for quotation on a
recognized national or foreign over-the-counter market, Managing Member shall
not be obligated to comply with the covenants set forth in Section 7.11 and
Section 7.12.
------------
(b) With respect to an Investment Entity over which the
Company does not exercise Control, the Company shall use commercially
reasonable efforts to comply with the covenants set forth in Section 7.11 and
------------
Section 7.12.
------------
ARTICLE VIII
ASSIGNMENTS, WITHDRAWAL AND REMOVAL OF THE MANAGING MEMBERS
-----------------------------------------------------------
8.01. Assignment or Withdrawal by the Managing Member. The
-----------------------------------------------
Managing Member may not Transfer its Interest as Managing Member, in whole or
in part, or withdraw from the Company, except as permitted by this Article.
8.02. Voluntary Assignment or Withdrawal of the Managing
--------------------------------------------------
Member. The Managing Member may not Transfer its Interest as Managing Member,
------
except to an Affiliate (provided (a) it gives prompt Notice of such Transfer
to all the Non-Managing Members, (b) such Affiliate has a Book Capitalization
not less than the Minimum Book Capitalization, (c) management control of such
Affiliate is exercised by no fewer than fifty percent (50%) of the
individuals named on Schedule 2.22 hereto, (d) such Affiliate shall have
-------------
access to the proceeds of the ROP Line or to an equally reliable source of
capital for funding its Capital Commitment as Managing Member hereunder, and
(e) such Transfer does not cause an acceleration of any the Company
indebtedness or default under any loan or other agreement to which the
Company is a party), nor voluntarily withdraw from the Company at any time.
In the event that the Managing Member intends to Transfer its Interest to an
Affiliate in accordance with the terms of this Agreement, such Affiliate
shall be admitted as a successor Managing Member immediately prior to the
effective time of the Transfer and such successor Managing Member shall
continue the business of the Company without dissolution.
8.03. Bankruptcy of the Managing Member. Upon the Bankruptcy
---------------------------------
or dissolution of the Managing Member, (a) the Managing Member or its legal
representative shall give Notice to the Non-Managing Members of such event
and shall automatically, with or without delivery of such Notice, become a
special Non-Managing Member with no power, authority or responsibility to
bind the Company or to make decisions concerning, or manage or control, the
affairs of the Company, and the recorded certificate of the Company shall be
amended to reflect such fact, and (b) such Person as may be selected by a
majority of the Percentage Interests of the Non-Managing Members within
ninety (90) days of the date of the event that caused the
Managing Member to become a special Non-Managing Member shall be admitted to
the Company as a successor Managing Member (effective as of the date of the
bankruptcy or dissolution of the prior Managing Member) and such successor
shall continue the business of the Company without dissolution, in which case
the Investment Period shall terminate. If a successor Managing Member
selected by a majority of the Percentage Interests of the Non-Managing
Members is not admitted to the Company within such ninety (90) day period,
the Company shall dissolve in accordance with Article XI. In the case of a
----------
conversion of the Managing Member to a special Non-Managing Member and
continuance of the Company without dissolution, each of the special Non-
Managing Member and the Advisory Committee shall select one Expert, and such
Experts shall jointly select a third Expert, which jointly selected Expert
shall determine the Fair Value of the special Non-Managing Member's Interest
as of the effective date it became a special Non-Managing Member, taking into
account all profits, losses, gains, deductions, distributions and other
credits and charges (other than fees) to which the special Non-Managing
Member was and would be entitled under this Agreement if all Investments of
the Company were sold on the effective date of creation of the special Non-
Managing Member for their Fair Value and the proceeds were distributed on
such date pursuant to this Agreement. Thereafter, the special Non-Managing
Member shall be entitled to a percentage of all future profits, losses,
gains, deductions, distributions and other credits and charges of the Company
equal to the quotient of (x) the Fair Value of the special Non-Managing
Member's Interest as of the date it was created divided by (y) the amounts
which would be available to all Members as of such date as determined by the
Expert using the same assumptions as were used by the Expert in determining
the Fair Value of the special Non-Managing Member's Interest, but the special
Non-Managing Member shall not be obligated to make any further deposits in
the Reserve Account. The Fair Value as determined by the jointly selected
Expert shall be final and conclusive on the parties. The fees and expenses of
all Experts retained pursuant to this Section 8.03 shall be borne by the
------------
Company.
8.04. (Reserved.)
8.05. Obligations of a Prior Managing Member. In the event that
--------------------------------------
the Managing Member Transfers its Interest in accordance with Section 8.02
------------
or 8.04 or has its Interest converted to that of a special Non-Managing
-----
Member pursuant to Section 8.03 or 8.04, it shall have no further obligation
------------ ----
or liability as a Managing Member to the Company pursuant to this Agreement
in connection with any obligations or liabilities arising from and after such
Transfer, and all such future obligations and liabilities shall automatically
cease and terminate and be of no further force or effect; provided, however,
-------- -------
that nothing contained herein shall be deemed to relieve the Managing Member
of any obligations or liabilities (i) arising prior to such transfer or (ii)
resulting from a dissolution of the Company caused by the act of the Managing
Member where liability is imposed upon the Managing Member by law or by the
provisions of this Agreement.
8.06. Successor Managing Member. A Person shall be admitted as
-------------------------
a Managing Member only if the following terms and conditions are satisfied:
(A) if such Person is not an Affiliate of Managing Member, the
admission of such Person shall have been Consented to by a majority of the
Percentage Interests of the Non-Managing Members;
(B) the Person shall have accepted and agreed to be bound by all
the terms and provisions of this Agreement by executing a counterpart hereof
and such other documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a Managing Member;
(C) a certificate evidencing the admission of such Person as a
Managing Member shall have been filed for recordation;
(D) if the successor Managing Member is a corporation, it shall
have provided counsel for the Company with a certified copy of a resolution
of its Board of Directors and, if required, the Consent of the shareholders,
authorizing it to become a Managing Member;
(E) if the successor Managing Member is a partnership or limited
liability company it shall provide counsel for the Company with a certified
copy of its agreement of partnership or limited partnership or operating
agreement together with certified copies of any partnership or limited
liability company actions authorizing it to become a Managing Member; and
(F) counsel for the Company shall have rendered an opinion that
none of the actions taken in connection with such Transfer or admission will
have an adverse tax effect upon the Company, which adverse tax effect can be
waived by the Consent of a majority of the Percentage Interests of the Non-
Managing Members.
The former Managing Member shall reasonably cooperate to facilitate
the substitution of the successor Managing Member, even where the Managing
Member was removed for Cause, and shall be reimbursed for its reasonable
costs and expenses relating thereto.
ARTICLE IX
RIGHTS AND OBLIGATIONS OF NON-MANAGING MEMBERS
----------------------------------------------
9.01. Management of the Company. Without limiting a Non
-------------------------
Managing Member's participation on the Advisory Committee or the Management
Committee as set forth in this Agreement, and except as may be otherwise
expressly provided herein, no Non-Managing Member shall take part in the
management or control of the business of the Company or transact any business
in the name of the Company. Except as may be otherwise expressly provided
herein, no Non-Managing Member shall have the power or authority to bind the
Company or to sign any agreement or document in the name of the Company.
Except as may be otherwise
provided herein, no Non-Managing Member shall have any power or authority
with respect to the Company, except as provided in the Act and insofar as the
Consent of the Non-Managing Members shall be expressly required by this
Agreement. The exercise of any of the rights and powers of the Non-Managing
Members pursuant to the Act or the terms of this Agreement shall not be
deemed taking part in the day-to-day affairs of the Company or the exercise
of control over Company affairs.
9.02. Limitation on Liability.
-----------------------
(A) No Non-Managing Member shall have any liability to contribute
money to the Company, nor shall any Non-Managing Member be personally liable
for any obligations of the Company, except to the extent of its Remaining
Capital Commitment as of the date any Capital Contribution is required and as
otherwise provided in Sections 4.03, 4.09, 6.03 and 9.02(B) hereof. No
------------- ---- ---- -------
Non-Managing Member shall be obligated to make loans to the Company or to
repay to the Company, any Member or any creditor of the Company all or any
fraction of any amounts distributed to such Member, except as specifically
required pursuant to Section 9.02(B) hereof.
---------------
(B) In accordance with state law, members of a limited liability
company may, under certain circumstances, be required to return to the
company for the benefit of company creditors amounts previously distributed
to it as a return of capital. It is the intent of the Members that a
distribution to any Member be deemed a compromise within the meaning of
Section 17-502(b) of the Act and not a return or withdrawal of capital, even
-----------------
if such distribution represents, for federal income tax purposes or otherwise
(in full or in part), a distribution of capital, and no Non-Managing Member
shall be obligated to pay any such amount to or for the account of the
Company or any creditor of the Company, except as provided in this Section
-------
9.02. However, if any court of competent jurisdiction holds that,
----
notwithstanding the provisions of this Agreement, any Non-Managing Member is
obligated to make any such payment, such obligation shall be the obligation
of such Non-Managing Member and not of the Managing Member.
ARTICLE X
TRANSFER OF NON-MANAGING MEMBER
INTERESTS
-----------------------------------------
10.01. Transfers by Non-Managing Members.
---------------------------------
(A) A Non-Managing Member may not Transfer its Interest in the
Company or any part thereof to any Person (a "PROPOSED TRANSFEREE") except
(i) as provided in Section 4.03(A)(b)(ii), or (ii) as permitted in this
----------------------
Article X, and any such Transfer in violation of this Article X shall be null
--------- ---------
and void ab initio as against the Company, except as otherwise provided by
law. In connection with any transfer of an Interest in accordance with the
terms of this Agreement, the transferee of such Interest and the other
Members shall enter into a supplemental
agreement memorializing such transfer, which supplemental agreement shall
specify, among other things, the amount of such transferee's Capital
Commitment and Net Adjusted Capital Contributions as of the date of such
transfer, and the method of allocations of distributions to Class A Members
under Section 6.01.
------------
(B) (a) Subject to Section 10.01(B)(b), a Non-Managing Member may
-------------------
Transfer its Interest in the Company, in whole or in part, by an executed and
acknowledged written instrument only if all of the following conditions are
satisfied:
(1) the transferor and Proposed Transferee file a Notice of
Transfer with the Managing Member which contains the information
reasonably required by the Managing Member, including (a) the
address and social security or taxpayer identification number of
the Proposed Transferee, (b) the circumstances under which the
proposed Transfer is to be made, including whether the proposed
Transfer would constitute a disregarded transfer for purposes of
Treasury Regulation Section 1.7704-1(e), and that the proposed
-------------------
Transfer is not being made
on an established securities market or a secondary market (or the substantial
equivalent thereof) for purposes of Section 7704 of the Code, and (c) the
------------
Interests to be Transferred, and which Notice shall be signed and certified
by the Non-Managing Member;
(2) any reasonable out-of-pocket costs incurred by the
Company in connection with the Transfer are paid by the transferor
Non-Managing Member to the Company;
(3) the Interest being transferred represents an initial
Capital Commitment of at least Five Million Dollars ($5,000,000);
(4) PWRES and/or its Affiliates, including for purposes
hereof Stratum Realty Fund, L.P. and Stratum Realty Fund II, L.P.
(to be formed), shall retain not less than (i) 25% beneficial
ownership of all Class A Member Interests and (ii) decision-making
and voting control (including the right to appoint members of the
Advisory Committee pursuant to Section 16.01) and capital
-------------
obligations with respect to all Class A Member Interests;
(5) in addition to PWRES and/or its Affiliates, including for
purposes hereof Stratum Realty Fund, L.P. and Stratum Realty Fund
II, L.P. (to be formed), there shall be no more than ten (10) other
Class A Members at any time, and there shall be no more than twelve
(12) Class A Members at any time in the aggregate;
(6) the Proposed Transferee shall be neither a direct Reckson
Competitor nor a direct Reckson Services Competitor; provided,
--------
however, that a Non-Managing Member may Transfer its Interest in the Company
-------
to a Proposed
Transferee that is a pooled investment fund or financial
institution, notwithstanding the fact that such pooled investment
fund or financial institution is or has invested in a Reckson
Competitor or a Reckson Services Competitor, so long as, to the
best knowledge of such Non-Managing Member, such pooled investment
fund or financial institution is not acquiring such Interest in the
Company for purposes which are or may reasonably be expected to be
detrimental or adverse to the Company.
The Managing Member shall have the right, with respect to not more than two
(2) proposed transfers, to object, by Notice to the transferring Non-Managing
Member within 10 Business Days after the Managing Member's receipt of the
Notice of Transfer with respect to such proposed transfer pursuant to clause
(1) above, to a proposed transfer of a Non-Managing Member Interest in the
Company on the grounds that, in the reasonable determination of the Managing
Member, the Proposed Transferee is a Reckson Competitor, a Reckson Services
Competitor or a Company Competitor, or that such Proposed Transferee is
acquiring such Interest in the Company for purposes which are or may
reasonably be expected to be detrimental or adverse to Reckson, Reckson
Services or the Company. In the event that the Managing Member gives such
Notice of objection to a proposed transfer as provided in the preceding
sentence, then the transferring Non-Managing Member may nonetheless transfer
its Interest as described in the applicable Notice of Transfer to such
Proposed Transferee; however, (x) the Managing Member shall not be obligated
(A) to permit such Proposed Transferee to have a representative on the
Advisory Committee, nor (B) to provide such Proposed Transferee with any
confidential information (including without limitation all non-public
financial information) regarding the Company or any of its Investments, and
(y) no other Member shall provide to such Proposed Transferee any such
confidential information (including without limitation all non-public
financial information) regarding the Company or any of its Investments.
(b) (i) Prior to any Transfer by a Class A Member of its
Interest to any Proposed Transferee (other than a Transfer by PWRES of its
Interest, in whole or in part, to any of its Affiliates, including for
purposes hereof Stratum Realty Fund, L.P. and Stratum Realty Fund II, L.P.
(to be formed)), such Class A Member shall offer the Company all of its
Interest proposed to be Transferred. Each such offer shall (1) be in
writing; (2) be at a price and upon terms identical or more favorable to the
Company than the price at and terms upon which such Class A Member desires to
Transfer its Interest to such Proposed Transferee; and (3) specify the price
and terms of the proposed Transfer to such Proposed Transferee.
(ii) The Company shall have thirty (30) Business Days
from its receipt of the offer made pursuant to clause (i) above within which
it may, pursuant to Notice to such Class A Member, accept such offer.
Transfer of the Class A Member's Interest to the Company shall occur within
sixty (60) days of the Company's acceptance of such offer. If the Company
does not accept such Class A Member's offer in accordance with the terms of
this Section 10.01(B)(b)(ii), the Class A Member may thereafter Transfer such
-----------------------
Interest to the Proposed Transferee, at a price producing a yield to the
purchaser (assuming a 16% per annum return on the Class A Member's Interest
under the terms of this Agreement) not greater than
fifty basis points (i.e., 0.50 % per annum) greater than the yield that would
have been so produced on the price specified in the offer described in
Section 10.01(B)(b)(i); provided, however, that such Transfer shall occur
---------------------- -------- -------
during the period of one-hundred and eighty (180) days following the last day
upon which the Company could have accepted such offer.
(C) Upon satisfaction of the conditions set forth in Section
-------
10.01(B), any such Transfer shall be recognized by the Company as being
--------
effective on the first day of the calendar month following either receipt by
the Company of such Notice of the proposed Transfer or the satisfaction of
said conditions, whichever occurs later.
(D) If a Proposed Transferee of a Non-Managing Member does not
become a Substitute Non-Managing Member pursuant to Section 10.02, such
-------------
Proposed Transferee shall become a mere assignee and shall not have any
non-economic rights of a Non-Managing Member of the Company, including,
without limitation, the right to require any information on account of the
Company's business, inspect the Company's books or vote on the Company
matters.
(E) The Managing Member and the Company shall cooperate reasonably
and in good faith in connection with any proposed Transfer by a Class A
Member of its Interest. Such cooperation shall include, without limitation,
affording such Class A Member and/or any Proposed Transferee of all or part
of its Interest access to Investment sites, on reasonable prior notice and
with reasonable frequency, and to all agreements, documents, studies, reports
or other materials in the possession of the Company or the Managing Member
relating to the Company and/or its Investments. Any reasonable, third-party
costs and expenses incurred by the Managing Member or the Company in
connection with such cooperation shall be paid by such Class A Member.
10.02. Substitute Non-Managing Member. A Proposed Transferee of
------------------------------
the whole or any portion of an Interest in the Company pursuant to Section
-------
10.01 shall have the right to become a Substitute Non-Managing Member in
-----
place of its transferor only if all of the following conditions are
satisfied:
(A) the fully executed and acknowledged written instrument of
Transfer has been filed with the Company;
(B) the Proposed Transferee executes, adopts and acknowledges this
Agreement;
(C) any reasonable costs of Transfer incurred by the Company are
paid to the Company; and
(D) to the extent required pursuant to Section 10.01(A)(4), the
-------------------
Managing Member shall have Consented to the Transfer.
10.03. Involuntary Withdrawal by Non-Managing Members.
----------------------------------------------
(A) If an individual Non-Managing Member does not, by written
instrument, designate a Person to become a transferee of his Interest upon
his death, then his personal representative shall have all of the rights of a
Non-Managing Member for the purpose of settling or managing his estate, and
such power as the decedent possessed to Transfer his Interest in the Company
to a transferee and to join with such transferee in making application to
substitute such transferee as a Substitute Non-Managing Member.
(B) Upon the Bankruptcy, dissolution or other cessation of
existence of a Non-Managing Member which is a trust, corporation, partnership
or other entity, the authorized representative of such entity shall have all
the rights of a Non-Managing Member for the purpose of effecting the orderly
winding up and disposition of the business of such entity and such power as
such entity possessed to designate a successor as a transferee of its
Interest and to join with such transferee in making application to substitute
such transferee as a Substitute Non-Managing Member.
(C) The death, Bankruptcy, dissolution, disability or legal
incapacity of a Non-Managing Member shall not dissolve or terminate the
Company.
10.04. Transfers by Class B Members. A Class B Member may
----------------------------
Transfer its Interest in the Company, in whole or in part, only with the
Consent of a majority of the Percentage Interests of the Class A Members.
Notwithstanding the foregoing, a Class B Member may Transfer its Interest to
an Affiliate of Reckson and without the Consent of the Managing Member or the
Class A Members.
ARTICLE XI
DISSOLUTION AND LIQUIDATION; RECONSTITUTION
-------------------------------------------
11.01. Dissolution. The Company shall be dissolved upon the
-----------
first to occur of any one of the following:
(A) an election to dissolve the Company is made by the Managing
Member with the Consent of a majority of the Percentage Interests of the
Class A Members;
(B) after the end of the Investment Period, the reduction to cash
or Marketable Securities of all or substantially all of the Investments
(which Investments shall include purchase money security interests) of the
Company;
(C) subject to the provisions of Article VIII and Section 11.03,
------------ -------------
the Bankruptcy, dissolution, removal or other withdrawal of the Managing
Member or the sale, transfer or assignment by the Managing Member of its
Interest in the Company;
(D) upon the seventh anniversary of the date of this Agreement,
unless extended by the Managing Member in its reasonable discretion for up to
two additional one-year periods with the Consent of the majority in Interest
of the Non-Managing Members;
(E) as provided in Section 7.08(B) or 7.09(B) hereof;
--------------- -------
(F) the failure of the Company to pay the Class A Basic Return in
full for each of 24 consecutive calendar months or for each of 27 calendar
months in the aggregate at any time (provided, however, that (a) for
--------- -------
purposes of determining whether such 27-month test has been satisfied, any
month in respect of which the Class A Basic Return shall have later been paid
in full in accordance with the terms hereof shall not be considered; and (b)
for purposes of determining whether either such 24-month or such 27-month
test has been satisfied, (i)the initial 24 months following the date of this
Agreement shall not be considered; and (ii) with respect to the Election
Period for any Investment, the Adjustment Amounts for such Investment, shall
not be considered provided that the Managing Member, may at any time within
--------
such Election Period and upon prior Notice to the Class A Member, elect to
include the Adjustment Amounts for such Investment for purposes of
determining whether such 24-month or 27-month test has been satisfied and
provided, further, that if the Managing Member so elects to include the
-------- -------
Adjustment Amounts for such purposes, it may not subsequently elect to
exclude the Adjustment Amounts for such purposes); or
(G) any other event causing dissolution of the Company under the
Act.
11.02. Liquidation.
-----------
(A) Upon dissolution of the Company, the Liquidator shall wind up
the affairs of the Company as expeditiously as business circumstances allow
and proceed within a reasonable period of time to sell or otherwise liquidate
the assets of the Company and, after paying or making due provision by the
setting up of reserves for all liabilities to creditors of the Company,
distribute the assets among the Members in accordance with the provisions for
the making of Distributions set forth in this Article XI. Notwithstanding the
----------
foregoing, in the event that the Liquidator shall, in its absolute
discretion, determine that a sale or other disposition of part or all of the
Investments would cause undue loss to the Members or otherwise be
impractical, the Liquidator may either defer liquidation of any such
Investments and withhold distributions relating thereto for a reasonable
time, or distribute part or all of such Investments to the Members in kind
(utilizing the principles of Section 6.04 and the valuation procedures
------------
described herein).
(B) No Member shall be liable for the return of the Capital
Contributions of other Members, provided that this provision shall not
relieve any Member of any other duty or liability it may have under this
Agreement.
(C) Upon liquidation of the Company, all of the assets of the
Company, or the proceeds therefrom, shall be distributed or used as follows
and in the following order of priority:
(i) for the payment of the debts and liabilities of the
Company and the expenses of liquidation;
(ii) to the setting up of any reserves which the Liquidator
may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Company; and
(iii) to the Members in accordance with Section 6.01(B)
---------------
hereof.
(D) When the Liquidator has complied with the foregoing
liquidation plan, the Members shall execute, acknowledge and cause to be
filed an instrument evidencing the cancellation of the certificate of
formation of the Company, at which time the Company shall be terminated.
11.03. Continuation of the Company. Notwithstanding the
---------------------------
provisions of Section 11.01(C), the occurrence of an event of withdrawal of
----------------
a Managing Member shall not cause a dissolution of the Company if the
Company, in such circumstance, is continued pursuant to the provisions of
Article VIII hereof or if, within ninety (90) days after the withdrawal, a
------------
majority of the Percentage Interests of the Non-Managing Members admit a
successor Managing Member to the Company (effective as of the date of the
withdrawal of the prior Managing Member), in which case the business of the
Company shall be continued without dissolution.
11.04. Release. On the earlier of (i) the Termination Date or
-------
(ii) the dissolution of the Company pursuant to this Article XI, the Company
shall execute and deliver to the Class A Member a release (in form and
substance reasonably acceptable to the Class A Member) pursuant to which the
Company shall forever release, discharge and forgive the Class A Member and
any of its predecessors, parents, subsidiaries, affiliates, and each of its
present and former directors, officers, employees, general partners,
successors, agents, accountants, advisors, consultants, assigns and all
others on its behalf liable (the "CLASS A MEMBER'S RELEASED PERSONS"), for
and from any and all liabilities, actions, suits, claims, demands, damages,
injuries and causes of action of whatever kind and nature (including any
claims for attorneys' fees), whether known or unknown, whether contingent,
liquidated or otherwise, whether accrued or to accrue, whether asserted by
way of claim, counterclaim, cross-claim, third party action, action for
indemnity, contribution or breach of contract or otherwise that the Company
has or may have against any or all of the Class A Member's Released Persons
that arose prior to the Termination Date or the dissolution of the Company,
as the case may be, or that may arise subsequent thereto.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
------------------------------
OF THE MEMBERS
--------------
12.01. Representations and Warranties of the Non-Managing
--------------------------------------------------
Members. Each Non-Managing Member is fully aware that the Company and the
-------
Managing Member are relying upon the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended (the "SECURITIES
------------
ACT"), and the exemption provided by Section 3(c)(1) of the Investment
---------------
Company Act of 1940, as amended, and upon the truth and accuracy of the
following representations by each of the Non-Managing Members. Each of the
Non-Managing Members hereby represents and warrants that (i) it has been
given the opportunity to ask the Managing Member questions relating to the
Company and has had access to such financial and other information concerning
the Company as it has considered necessary to make a decision to invest in
the Company and has availed itself of that opportunity to the full extent
desired; (ii) it is able (x) to bear the economic risk of its investment in
the Company, and (y) to afford a full loss of its Capital Commitment; and
(iii) if any portion of its Capital Contributions consist, or will consist,
of assets of an employee benefit plan as defined in Section 3(3) of ERISA,
------------
whether or not such plan is subject to Title I of ERISA or a plan subject to
Section 4975 of the Code, determined after giving effect to applicable
------------
regulations, rulings, and exemptions thereunder, it has so notified the
Managing Member in writing.
12.02. Representations and Warranties of the Managing Member.
-----------------------------------------------------
The Managing Member represents, warrants and covenants to each other Member
that:
(A) The Company is a duly formed and validly existing limited
liability company under the laws of the State of Delaware with full power and
authority to conduct its business as contemplated in this Agreement.
(B) The Managing Member is a duly formed and validly existing
limited liability company under the laws of the State of Delaware, with full
power and authority to perform its obligations herein.
(C) All action required to be taken by the Managing Member and The
Company as a condition to the issuance and sale of the Non-Managing Member
Interests being purchased by the Non-Managing Members has been taken; the
Interest of each Non-Managing Member represents a duly and validly issued
membership interest in the Company; and each Non-Managing Member is entitled
to all the benefits of a Non-Managing Member under this Agreement and the
Act.
(D) This Agreement has been duly authorized, executed and
delivered by the Managing Member and, upon due authorization, execution and
delivery by each Non-Managing
Member, will constitute the valid and legally binding agreement of the
Managing Member enforceable in accordance with its terms against the Managing
Member.
(E) The Managing Member has not engaged any Person in such a
manner as to give rise to a valid claim against the Company or any Non-
Managing Member for any placement fee or similar compensation in connection
with the organization of the Company.
(F) The Company is not required to register as an investment
company under the Investment Company Act of 1940, as amended as of the date
hereof.
(G) So long as RSVP Holdings, LLC is the Managing Member, the
existing Managing Member Members shall not Transfer their interests in the
Managing Member without the Consent of a majority of the Percentage Interests
of the Class A Members (except to another existing Managing Member Member or
an Affiliate of an existing Managing Member Member).
ARTICLE XIII
ACCOUNTING AND REPORTS
-----------------------
13.01. Books and Records. The Managing Member shall maintain at
-----------------
such office it deems appropriate full and accurate books of the Company
(which at all times shall remain the property of the Company), in the name of
the Company and separate and apart from the books of the Managing Member and
its Affiliates, showing all receipts and expenditures, assets and
liabilities, profits and losses, and all other books, records and information
required by the Act or necessary for recording the Company's business and
affairs. The Company's books and records shall be maintained in accordance
with generally accepted accounting principles (or such other accounting basis
reasonably acceptable to the Class A Member). The Company shall initially
retain Ernst & Young LLP as its independent certified public accountant.
Each Non-Managing Member shall be afforded full and complete
access, as provided by the Act, to all records and books of account during
reasonable business hours or such other times as required by legislative
authority and, at such hours, shall have the right of inspection and copying
of such records and books of account, at its expense. Each Non-Managing
Member shall have the right to audit such records and books of account by an
accountant of its choice at its expense. The Managing Member shall reasonably
cooperate with any Non-Managing Member or its agents in connection with any
review or audit of the Company or its records and books. The Managing Member
shall retain all records and books relating to the Company for a period of at
least six years after the termination of the Company and shall thereafter
destroy such records and books only after giving at least 30 days' advance
written Notice to the Non-Managing Members.
13.02. Tax Matters Member. The Managing Member is hereby
------------------
designated the tax matters partner (in this Section called the "TMP") as
defined in Section 6231(a)(7) of
------------------
the Code with respect to operations conducted by the Members pursuant to this
Agreement. The TMP shall comply with the requirements of Sections 6221
-------------
through 6232 of the Code and regulations promulgated thereunder, and the
----
Members further agree as follows:
(A) The TMP shall have a continuing obligation to provide the
Internal Revenue Service with sufficient information so that proper notice
can be mailed to all Members as provided in Section 6223 of the Code, and the
------------
Members shall have a continuing obligation to furnish the TMP with such
information (including information specified in Section 6230(e) of the Code)
---------------
as the TMP may reasonably request for such purposes.
(B) The TMP shall keep each Member informed of all administrative
and/or judicial proceedings for the adjustment of partnership items (as
defined in Section 6231(a)(3) of the Code and regulations promulgated
------------------
thereunder) at the Company level. Without limiting the generality of the
foregoing sentence, within 15 days of receiving any written or oral notice of
the time and place of a meeting or other proceeding from the Internal Revenue
Service regarding a Company proceeding (and in any event, within a reasonable
time prior to such meeting or proceeding), the TMP shall furnish a copy of
such written communication or notice, or inform the Members in writing of the
substance of any such oral communication.
(C) If any administrative proceeding contemplated under Section
-------
6223 of the Code has begun, the Members shall, upon request by the TMP,
----
notify the TMP of their treatment of any Company item on their federal income
tax return which is or may be inconsistent with the treatment of that item on
the Company's return.
(D) Any Member who enters into a settlement agreement with the
Internal Revenue Service with respect to Company items shall notify the other
Members of such settlement agreement and its terms within 30 days after the
date of such settlement.
(E) If the TMP elects not to file suit concerning an
administrative adjustment or request for administrative adjustment and
another Member elects to file such a suit, such other Member shall notify all
Members of such intention and the forum or forums in which such suit shall be
filed.
(F) The TMP shall be authorized to extend the statute of
limitations, file a request for administrative adjustment, file suit
concerning any tax refund or deficiency relating to any Company
administrative adjustment or enter into any settlement agreement relating to
any Company item of income, gain, loss, deduction or credit for any Fiscal
Year of the Company, provided that the TMP shall promptly send Notice to the
Non-Managing Members upon taking any of the foregoing actions.
(G) The obligations imposed on the TMP and the participation
rights afforded the Non-Managing Members under this Section 13.02 and
-------------
Sections 6221 through 6232 of the Code may not be restricted or limited in
------------- ----
any fashion by the TMP or any Member or Members without the Consent of all
the Members.
(H) The Company shall indemnify and reimburse the TMP for all
expenses, including legal and accounting fees, claims, liabilities, losses
and damages incurred in connection with any administrative or judicial
proceeding with respect to the tax liability of the Members or in connection
with any audit of the Company's income tax returns, except to the extent such
expenses, claims, liabilities, losses and damages are attributable to the bad
faith or wilful misconduct of the TMP. The payment of all such expenses to
which the indemnification applies shall be made before any distributions
pursuant to Section 6.02. Neither the Managing Member, nor any of its
------------
Affiliates, nor any other Person shall have any obligation to provide funds
for such purpose. The taking of any action and the incurring of any expense
by the TMP in connection with any such proceeding, except to the extent
required by law, is a matter in the reasonable discretion of the TMP and the
provisions on limitations of liability of the Managing Member and
indemnification set forth in Section 7.05 of this Agreement shall be fully
------------
applicable to the TMP in its capacity as such.
13.03. Reports to Members.
------------------
(A) The Managing Member shall use reasonable efforts to cause to
be prepared and furnished to each Non-Managing Member within ninety (90)
days, and the Managing Member shall in any event cause to be prepared and
furnished to each Non-Managing Member within one-hundred and twenty (120)
days, after the close of each Fiscal Year of the Company and at the Company's
expense the following information with respect to such Fiscal Year (provided,
--------
however, that with respect to the information required to be delivered
-------
pursuant to clause (a) below, the Managing Member shall use reasonable
efforts to cause the preparation and furnishing of such information within
one-hundred and twenty (120) days, but in no event longer than the statutory
filing requirements, including extensions):
(a) the information necessary for the preparation by such
Non-Managing Member of its Federal, state and other income tax
returns;
(b) an audited consolidated balance sheet, consolidated
statement of cash flows, consolidated income statement (with
reconciliation to cash) and statement of Members' Capital Accounts
and an unaudited consolidating balance sheet, consolidating
statement of cash flows and consolidating income statement (with
reconciliation to cash) with respect to all of the Company's
Investments and related Investment Entities, all of which shall be
prepared in accordance with generally accepted accounting
principles (or such other accounting basis as shall be reasonably
acceptable to the Class A Members);
(c) a copy of management's letter to the auditors;
(d) to the extent available, any accounting audits and
accounting firm reports with respect to any Investment; and
(e) such other information as the Managing Member deems
reasonably necessary for the Non-Managing Members to be advised of
the current status of the Company and its business.
(B) No later than sixty (60) days after the last day of each
fiscal quarter other than the Company's last fiscal quarter, the Managing
Member shall cause to be prepared and furnished to each Non-Managing Member
an unaudited report prepared in accordance with generally accepted accounting
principles (or such other accounting basis as shall be reasonably acceptable
to the Class A Member), accompanied by a certificate of the senior officer of
the Company responsible for the preparation of the Company's financial
statements certifying that such financial statements fairly present in all
material respects (subject to exceptions to specific line items in such
reports as shall be specified in reasonably sufficient detail by such senior
officer), which report shall include for such fiscal quarter and year-to-date
the following information:
(a) a consolidated balance sheet, consolidated statement of
cash flows and consolidated income statement (with reconciliation
to cash) and a consolidating balance sheet, consolidating statement
of cash flows and consolidating income statement (with
reconciliation to cash);
(b) a statement of operations;
(c) a statement as to the then Deemed Value of each
Investment and all secured debt and other liabilities accrued with
respect to each Investment or otherwise payable by the Company;
(d) a statement showing the computation of fees and
distributions to the Managing Member and its Affiliates which
statement shall separately reflect each transaction with or service
provided by the Managing Member and its Affiliates, the amount paid
with respect thereto, and the method or formula used for
calculating such payment;
(e) a statement of each Member's Capital Account; and
(f) a Member's Capital Account transactions report which
shows the details of all Company transactions which flow through a
Member's Capital Account and have occurred since the end of the
preceding quarter and preceding Fiscal Year, including, but not
limited to, the date, nature, and amount of all capital calls, cash
flows and/or capital distributions, and their effects at the time
on each Member's Cumulative Priority Return and overall yield on
Investments.
(g) to the extent available, any accounting audits and
accounting firm reports with respect to an Investment.
(C) No later than one-hundred and twenty (120) days after the end
of each Fiscal Year, the Managing Member shall provide each Non-Managing
Member with:
(a) a statement reflecting any transactions with the Managing
Member or any of its Affiliates with respect to the Company; and
(b) a summary of any material regulatory or material legal
proceedings, if any, against the Managing Member or any of its
officers or directors.
(D) The Managing Member shall cause to be prepared and furnished
to each Non-Managing Member a statement describing any monetary or material
non-monetary uncured event of default under any loans to which the Company or
any Investment Entity is subject, within three (3) days after the Managing
Member has knowledge thereof.
(E) The Managing Member shall provide such other reports or
information as any Non-Managing Member may reasonably request relating to the
Managing Member's reasonable projections as to the Company's unrelated
business taxable income.
(F) Managing Member shall cause to be prepared and furnished to
PWRES Notice of any uncured default under any of the terms, covenants or
conditions of this Agreement (including any of the terms, covenants or
conditions that, by their terms, impose obligations with respect to any
Investment Entity or its Related Properties, whether or not such obligations
are within the control of Managing Member), within two (2) days after
Managing Member has knowledge thereof.
(G) Managing Member shall provide to PWRES copies of such reports,
statements, materials, documents, instruments, opinions, certificates or
information required to be provided to Managing Member by or on behalf of any
Investment Entity pursuant to the terms hereof. Managing Member shall
further provide to PWRES such other reports, statements, materials,
documents, instruments, opinions, certificates or information relating to any
Investment Entity or its Related Properties as PWRES may reasonably request.
13.04. Company Funds. The Managing Member shall have fiduciary
-------------
responsibility for the safekeeping and use of all funds and assets of the
Company and the Managing Member shall not employ such funds in any manner
except for the benefit of the Company. All funds of the Company not otherwise
invested shall be deposited in one or more accounts maintained in such
banking institutions, as the Managing Member shall determine in the name of
the Company and not in the name of the Managing Member. All withdrawals from
the Company's accounts shall be made upon checks or instructions signed by
the Managing Member. Company funds shall not be commingled with the funds of
any other Person nor shall such funds be employed by the Managing Member as
compensating balances other than in respect of Company borrowing.
ARTICLE XIV
(Reserved.)
ARTICLE XV
AMENDMENTS AND MEETINGS
-----------------------
15.01. Amendment Procedure. The amendment procedure is as
-------------------
follows:
(A) Amendments to this Agreement may be proposed by the Managing
Member or by 25% of the Percentage Interests of the Non-Managing Members.
(B) A proposed amendment will be adopted and effective only if it
receives the Consent of the Managing Member and the Consent of a majority of
the Percentage Interests of the Non-Managing Members.
(C) In addition to any amendments otherwise authorized herein, and
notwithstanding anything to the contrary in Sections 15.01 and the
--------------
appropriate portion of Section 15.02(B), the Managing Member, without the
----------------
consent of any of the Non-Managing Members, may amend the provisions of this
Agreement relating to the allocations of Profits or Losses or items thereof
(including, without limitation, non-taxable receipts or non-deductible
expenditures) or credits among the Members if the Company is advised at any
time by the Company's independent certified public accountants or legal
counsel that in their opinion it is likely that such allocations would not be
respected for Federal income tax purposes or if necessary so as to cause the
Capital Accounts of the Members at the time of liquidation of the Company to
be in proportion to the amounts which would be distributed if liquidating
proceeds available to be distributed to Members were distributed in
accordance with Section 6.01 rather than Section 11.02(C); provided, however,
------------ ---------------- -------- -------
that no such amendments shall affect the Capital Contribution, cash
distribution or fee provisions of this Agreement and provided further that
the Managing Member is empowered to amend such provisions only to the extent
it is necessary to give such provisions a basis on which such allocations
would in the opinion of such accountants or legal counsel likely be respected
in accordance with the advice of such accountants or legal counsel, so that
any such amendment will have the least possible effect on such provisions set
forth in this Agreement. Any such amendment made by the Managing Member in
reliance upon the advice of the accountants or legal counsel described above
shall be deemed to be made in compliance with the fiduciary obligation of the
Managing Member to the Company and the Non-Managing Members, and no such
amendment shall give rise to any claim or cause of action by any Non-Managing
Member.
(D) Except to the extent already delivered pursuant to clause (B)
of this Section 15.01, the Managing Member shall furnish each Non-Managing
-------------
Member with a copy of each amendment to this Agreement promptly after its
adoption.
15.02. Exceptions. Notwithstanding the provisions of Section
----------
15.01, no Amendment without the Consent of all Members shall:
(A) alter the purposes of the Company or amend Sections 3.03(a)(A)
-------------------
or 15.01 hereof;
-----
(B) increase the liability or change the Capital Contributions
required by a Member, or change, except to the extent permitted pursuant to
Section 15.01(C) hereof, the rights and interests of a Member in the Profits,
----------------
Losses, fees or Net Investment Revenues of the Company, the voting rights of
a Member or the rights of a Member respecting reconstitution or liquidation
of The Company;
(C) directly or indirectly affect or jeopardize the status of the
Company as a partnership for Federal income tax purposes; or
(D) amend this Section 15.02 or Section 7.05 hereof.
------------- ------------
15.03. Meetings and Voting.
-------------------
(A) Meetings of Members may be called by the Managing Member for
any purpose permitted by this Agreement. The Managing Member shall give all
Members Notice of the purpose of such proposed meeting not less than 15 nor
more than 60 days before the meeting. Meetings shall be held in New York
County, New York at a time reasonably selected by the Managing Member.
(B) The Managing Member may solicit required Consents of the Non-
Managing Members under this Agreement at a meeting held pursuant to Section
-------
15.03(A) or by written ballot. If Consents are solicited by written ballot,
--------
the Non-Managing Members shall return said ballots to the Managing Member
within 30 days after receipt.
(C) For any matter on which the Non-Managing Members vote, in
determining whether the requisite Percentage Interests of the Non-Managing
Members has been obtained, the Percentage Interests of any Non-Managing
Members who are Affiliates of the Managing Member shall not be included.
ARTICLE XVI
ADVISORY COMMITTEE
------------------
16.01. Selection of the Advisory Committee.
-----------------------------------
(A) The Managing Member shall select an "ADVISORY COMMITTEE" which
shall be a committee consisting of (i) two representatives designated by the
Managing Member, (ii) any non-voting members appointed by the Managing Member
and (iii) representatives of Class A Members selected pursuant to the next
two sentences. PWRES may, to the extent it holds an Interest, designate to
the Advisory Committee a representative selected by PWRES. Subject to the
Consent of the Managing Member, which Consent shall not be unreasonably
withheld, each Class A Member, other than PWRES, who has made a Capital
Commitment of at least $50 million may designate to the Advisory Committee a
representative selected by such Class A Member; provided, however, that the
-------- -------
Class A Members, in the aggregate, shall be entitled to no more than three
(3) seats on the Advisory Committee, provided that if in the event such three
(3) seats are occupied and in connection with the sale by any Class A Member
of an Interest in the Company of at least $50 million, the Proposed
Transferee so requests, such Proposed Transferee, subject to the reasonable
Consent of the Managing Member, shall be given a seat on the Advisory
Committee. In addition, the Managing Member, in its sole discretion, may
select representatives of Class A Members to sit on the Advisory Committee.
There shall be at least one representative of the Class A Member on the
Advisory Committee at all times.
(B) Any member of the Advisory Committee may resign by giving the
Managing Member thirty (30) days' prior written notice. Additionally, the
Managing Member may, except as provided below, remove and replace members of
the Advisory Committee from time to time. Notwithstanding the foregoing, a
representative designated by a Class A Member shall not be removed without
the consent of the Class A Member. Any vacancy in the Advisory Committee
shall be promptly filled by the Managing Member in accordance with Section
-------
16.01(A).
--------
(C) The members of the Advisory Committee shall not receive any
compensation in connection with their membership on the Advisory Committee;
provided, however, that the members of the Advisory Committee shall be
-------- -------
reimbursed for the reasonable out-of-pocket expenses they incur in connection
with the activities of the Advisory Committee.
16.02. Meetings of and Action by the Advisory Committee.
------------------------------------------------
(A) The Advisory Committee shall meet from time to time with the
Managing Member to consult on various matters, including investment strategy,
financing strategy, disposition strategy, third-party relationships, related
party transactions, asset valuation and reporting format and frequency of
reports.
(B) The presence of a majority of the members of the Advisory
Committee shall constitute a quorum. Members may participate by conference
call provided that all parties can hear and speak with each other. Except as
provided herein, in all instances where an approval is required by the
Advisory Committee, the Advisory Committee shall act by affirmative vote of a
majority of its members, which affirmative vote shall include the affirmative
vote of a majority of the members of the Advisory Committee appointed by
Class A Members. Except where approval of the Advisory Committee is required,
the
recommendations of the Advisory Committee shall be advisory only and shall
not obligate the Managing Member to act in accordance therewith. The Managing
Member or its designated representative shall be entitled to be present at
all meetings of the Advisory Committee although the Managing Member shall not
be entitled to vote on matters requiring the vote of the Advisory Committee.
(C) The Advisory Committee shall have the following powers and
duties:
(i) The Advisory Committee shall, with respect to any
transactions that are not on market and arms-length terms,
promptly review and approve or disapprove in advance any
transactions between the Company and the Managing Member or
its respective Affiliates as provided in Sections 3.03(a)(G)
-------------------
and 7.04(B)(i); provided, however, that the Advisory Committee shall not have
---------- -------- -------
the right to approve a Reckson Investment Opportunity;
(ii) Pursuant to Section 8.02, the approval of the
------------
Advisory Committee shall be required prior to certain Transfers by the
Managing Member of its Interest, which approval shall not be unreasonably
withheld; and
(iii) The Advisory Committee shall have the right to
select an Expert in connection with the matters contemplated
by Section 8.03.
------------
(D) To the extent such information has not previously been
delivered to the Advisory Committee, then no later than thirty (30) days
after each occurrence thereof, the Managing Member shall provide the Advisory
Committee with:
(a) a statement reflecting any transactions with the Managing
Member or any of its Affiliates with respect to the Company; and
(b) a summary of any regulatory or legal proceedings against
the Managing Member or any of its officers or directors.
(E) To the extent that the Company desires to pursue the
acquisition of an Investment, the Managing Member shall prepare and deliver
to the Advisory Committee an acquisition plan (an "ACQUISITION PLAN").
Managing Member shall exercise its good faith efforts to prepare and deliver
to the Advisory Committee such Acquisition Plan within ten (10) days prior to
such acquisition, provided, however, that in no event shall such
-------- -------
Acquisition Plan be prepared and delivered to the Advisory Committee later
than five (5) days prior to such acquisition. Any proposed Acquisition Plan
shall, to the extent applicable, include the following information:
(a) a description in reasonable detail of the Investment, the
related Investment Entity and its Related Properties, if any, and
any proposed improvements to any of such Related Properties (the
"PROJECT");
(b) whether the Investment Entity will be a limited
partnership, limited liability company, corporation or other
entity;
(c) the identity of any third party partners, if any, in the
Investment Entity and the proposed form of Investment Entity
limited partnership agreement or limited liability company
agreement to be entered into with such third party partner(s);
(d) the estimated cost and timing of acquisition and estimated
cost of construction of any then proposed improvements, including a
description of the nature and amount of any fees which would be
payable in connection with the acquisition of the Investment to a
Member or an Affiliate of a Member;
(e) a rent roll, if applicable, the major tenant(s) for the
Project, and the proposed leasing strategy, if developed;
(f) the terms and conditions of the financing contemplated for
the Project.
(g) the capital and guaranty requirements of the Company, all
Members and their Affiliates;
(h) the estimated initial cash on cash returns for such
Investment;
(i) the Platform to which such Investment pertains;
(j) the Acquisition Cost of the Investment;
(k) Notice as to whether the Managing Member elects to include
the Adjustment Amounts for such Investment as of the acquisition date of such
Investment for purposes of the Financial Tests (it being understood that if
Managing Member elects not to so include such Adjustment Amounts as of such
date, Managing Member may thereafter so elect as provided in clause (y) of
the definition of "Sweep Event"); and
(l) such other information with respect to such Investment as
has been provided to Reckson Strategic's investment committee.
16.03. Advisory Committee Management Authority in Certain
--------------------------------------------------
Events. As used herein, "MANAGEMENT AUTHORITY" of the Advisory Committee
------
shall mean that the Company shall make no new Investment, nor shall the
Company sell, transfer, finance, refinance, contribute additional capital to,
or otherwise dispose of or recapitalize any existing
Investment, or Consent to any of the foregoing, nor shall the Company make
any changes to its distribution policies or the distribution policies of the
Investments or consent to any changes in the distribution policies of the
Investments without the affirmative vote of a majority of the Advisory
Committee, which affirmative vote must include the affirmative vote of the
Class A Members on the Advisory Committee. Management Authority shall occur
upon any of the following events:
(A) If the Class A Basic Return shall not be paid in full for
each of 12 consecutive calendar months or for each of 15 calendar months in
the aggregate at any time, then, subject to Section 6.05 hereof, the Advisory
------------
Committee shall have Management Authority until the earlier of (i) such time
as all prior accrued but unpaid Class A Basic return shall have been paid in
full, not less than 75% from cash flows from operations of the Investments,
or (ii) such date as all prior accrued but unpaid Class A Basic Return shall
have been paid in full, and the Class A Basic return shall have been paid in
full for three consecutive months thereafter from cash flows from operations
of the Investments; provided, however, that (a) for purposes of determining
-------- -------
whether such 15-month test has been satisfied, any month in respect of which
the Class A Basic Return shall have later been paid in full in accordance
with the terms hereof shall not be considered and (b) for purposes of
determining whether either such 12-month or 15-month test has been satisfied,
(i) the initial 24 months following the date of this Agreement shall not be
considered; and (iii) with respect to the Election Period for any Investment,
the Adjustment Amounts for such Investment shall not be considered, provided
that the Managing Member may, at any time within such Election Period and
upon prior Notice to the Class A Member, elect to include the Adjustment
Amounts for such Investment for purposes of determining whether such 12-month
or 15-month test has been satisfied. If the Managing Member so elects to
include the Adjustment Amounts for such purposes, it may not subsequently
elect to exclude the Adjustment Amounts for such purposes.
(B) Upon the occurrence of a Change of Control Event, the Advisory
Committee shall immediately have Management Authority until the Company shall
have been fully liquidated and dissolved.
(C) Subject to Section 3.01(B), in the event the Company makes an
---------------
Investment outside the scope of the Investment Parameters and any Class A
Member on the Advisory Committee shall have objected to such Investment on
such grounds when such Investment shall have been proposed to the Advisory
Committee, the Advisory Committee shall immediately have Management Authority
until the Company shall have been fully liquidated and dissolved.
(D) In the event of a breach of the obligations set forth in
Section 7.09(A) hereof which breach is not cured pursuant to the terms of
---------------
Section 7.09(B), the Advisory Committee shall immediately have Management
---------------
Authority until the Company shall have been fully liquidated and dissolved.
(E) In the event of a material breach of the obligations set forth
in Section 7.11 and Section 7.12 hereof which continues for fifteen (15) days
------------ ------------
and which may result in a
Company Material Adverse Effect (or, if the default can be cured but is not
capable of being cured within such fifteen (15) day period, such longer
period of time as is necessary to cure such default provided that such cure
is diligently pursued within and after such fifteen (15) day period)
following Notice from PWRES, the Advisory Committee shall immediately have
Management Authority with respect to all of the Investments of the Company
until such default shall be fully cured.
(F) In the event of a material breach of the obligations set forth
in Section 7.11 and Section 7.12 hereof which continues for fifteen (15) days
------------ ------------
and which may result in a Platform Material Adverse Effect (or, if the
default can be cured but is not capable of being cured within such fifteen
(15) day period, such longer period of time as is necessary to cure such
default provided that such cure is diligently pursued during and after such
fifteen (15) day period) following Notice from PWRES, the Advisory Committee
shall immediately have Management Authority with respect to all of the
Investments pertaining to the applicable Platform until such default shall be
fully cured.
ARTICLE XVII
MISCELLANEOUS
-------------
17.01. Title to Company Property. All property owned by the
-------------------------
Company, whether real or personal, tangible or intangible, shall be deemed to
be owned by the Company as an entity, and no Member, individually, shall have
any ownership of such property. The Company may hold any of its assets in its
own name or in the name of a nominee, which nominee may be one or more
individuals, corporations, partnerships, trusts, limited liability companies
or other entities; provided, however, such nominee shall be at the direction
-------- -------
of the Company.
17.02. Validity. Each provision of this Agreement shall be
--------
considered separate and, if for any reason, any provision(s) which is not
essential to the effectuation of the basic purposes of this Agreement is
determined to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not impair the operation of or affect
those provisions of this Agreement which are otherwise valid. To the extent
legally permissible, the parties shall substitute for the invalid, illegal or
unenforceable provision a provision with a substantially similar economic
effect and intent.
17.03. Applicable Law. This Agreement, and the application or
--------------
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Delaware, excluding the conflict of laws provisions
thereof.
17.04. Binding Agreement. This Agreement and all terms,
-----------------
provisions and conditions hereof shall be binding upon the parties hereto,
and shall inure to the benefit of the
parties hereto and, except as otherwise provided herein, to their respective
heirs, executors, personal representatives, successors and lawful assigns.
17.05. Waiver of Action for Partition. Each of the parties
------------------------------
hereto irrevocably waives during the term of the Company any right that it
may have to maintain any action for partition with respect to any property of
the Company.
17.06. Record of Non-Managing Members. The Managing Member shall
------------------------------
maintain at the office of the Company a record showing the names and
addresses of all the Non-Managing Members. All Members and their duly
authorized representatives shall have the right to inspect such record.
17.07. Headings. All section headings in this Agreement are for
--------
convenience of reference only and are not intended to qualify the meaning of
any section.
17.08. Terminology. 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 vice
versa, as the context may require.
17.09. Counterparts. This Agreement may be executed in several
------------
counterparts, and all so executed shall constitute one Agreement, binding on
all of the parties hereto, notwithstanding that all the parties are not
signatories to the original or the same counterpart.
17.10. Entire Agreement. This Agreement contains the entire
----------------
understanding among the parties hereto and supersedes all prior written or
oral agreements among them respecting the within subject matter, unless
otherwise provided herein.
17.11. Disclaimer. The provisions of this Agreement are not
----------
intended for the benefit of any creditor or other Person (other than a Member
in such Member's capacity as such) to whom any debts, liabilities or
obligations are owed by or who otherwise has any claim against the Company or
any of the Members.
17.12. No Third Party Rights. This Agreement is intended solely
---------------------
for the benefit of the parties hereto and, except as expressly provided to
the contrary in this Agreement, is not intended to confer any benefits upon,
or create any rights in favor of, any person other than the parties hereto;
provided, however, that Reckson shall be deemed to be a third-party
-------- -------
beneficiary of this Agreement for the purposes of Section 3.03(a)(H) and
------------------
Section 3.03(a)(I) only.
------------------
17.13. Attorneys' Fees. In the event of any litigation,
---------------
arbitration or other dispute resolution proceedings between the parties
hereto arising out of or relating to this Agreement or the transactions
contemplated hereby, the party prevailing in such litigation, arbitration or
proceeding shall be entitled to recover from the other party the reasonable
attorneys' fees and disbursements incurred by such prevailing party in
connection with such litigation, arbitration or proceeding.
17.14. Services to the Company. The parties hereto hereby
-----------------------
acknowledge and recognize that the Company has retained, and may in the
future retain, the services of various persons, entities and professionals,
including legal counsel, accountants, architects and engineers, for the
purposes of representing and providing services to the Company in connection
with the investigation, consummation and operation of the Investments or
otherwise. The parties hereby acknowledge that such persons, entities and
professionals may have in the past represented and performed and currently
and in the future may represent or perform services for the Managing Member
or its Affiliates or the initial Class A Member or its Affiliates.
Accordingly, each party hereto Consents to the representation or provision of
services by such persons, entities and professionals to The Company and
waives any right to claim a conflict of interest based thereon. Nothing
contained herein shall relieve the Managing Member of any duty or liability,
including without limitation the duty to monitor and direct such persons,
entities and professionals for the best interests of the Company. Further,
this Section shall not apply where there is an actual or potential conflict
between the Managing Member or any of its Affiliates and the Company or the
initial Class A Members or any of its Affiliates and the Company.
17.15. Confidentiality. Each Non-Managing Member shall maintain
---------------
the confidentiality of (i) "Non-Public Information," (ii) any information
subject to a confidentiality agreement binding upon the Managing Member or
the Company of which such Non-Managing Member has Written Notice and (iii)
the identity of other Non-Managing Members and their Affiliates so long as
such information has not become otherwise publicly available unless, after
reasonable notice to the Company by the Non-Managing Member, otherwise
compelled by court order or other legal process or in response to other
governmentally imposed reporting or disclosure obligations including, without
limitation, any act regarding the freedom of information to which it may be
subject; provided that each Non-Managing Member may disclose Non-Public
--------
Information to its Affiliates, officers, employees, agents, professional
consultants and proposed Substitute Non-Managing Member upon notification to
such Affiliate, officer, employee, agent, consultant or proposed Substitute
Non-Managing Member that such disclosure is made in confidence and shall be
kept in confidence. As used in this Section 17.14, "NON-PUBLIC INFORMATION"
-------------
means information regarding the Company (including information regarding any
Person in which the Company holds, or contemplates acquiring, any Investment)
or the Managing Member received by such Non-Managing Member pursuant to this
Agreement, but does not include information that (i) was publicly known at
the time such Non-Managing Member receives such information pursuant to this
Agreement, (ii) subsequently becomes publicly known through no act or
omission by such Non-Managing Member or (iii) is communicated to such Non-
Managing Member by a third party free of any obligation of confidence known
to such Non-Managing Member. The Managing Member may not disclose the
identities of the Non-Managing Members, except on a confidential basis to
prospective and other Non-Managing Members in the Company. The Managing
Member may, subject to Section 7.12(D), upon the execution of this Agreement
---------------
and the closing of the acquisition of any Investment, disseminate a press
release with respect thereto.
17.16. Member's Discretion. Whenever pursuant to this
-------------------
Agreement, a Member exercises any right given to it to approve, disapprove,
make a determination, exercise discretion or Consent, or any arrangement or
term is to be satisfactory to such Member, the decision of such Member to
approve, disapprove, make a determination, exercise discretion or Consent, or
to decide whether arrangements or terms are satisfactory or not satisfactory
shall (except as otherwise specifically herein) be in the sole and absolute
discretion of such Member and shall be final and conclusive.
17.17. Modification, Waiver in Writing. No modification,
-------------------------------
amendment, extension, discharge, termination or waiver of any provision of
this Agreement, nor Consent to any departure by any Member therefrom, shall
in any event be effective unless the same shall be in a writing signed by the
party against whom enforcement is sought, and then such waiver or Consent
shall be effective only in the specific instance, and for the purpose, for
which given.
17.18. (Intentionally Omitted).
17.19. PWRES Right of First Offer.
--------------------------
(a) PWRES shall have the exclusive right of first offer to act as
lender, lead manager or lead underwriter for any debt transaction directly or
indirectly involving the Company's assets, on the terms and conditions set
forth in this Section 17.19(a). Prior to making any offers to or soliciting
----------------
any offers from any other Person to act as lender, lead manager or lead
underwriter for any debt transaction directly or indirectly involving the
Company's assets, the Managing Member shall give PWRES a Notice specifying
all of the material business terms for such transaction, including the
principal amount, term, interest rate, amortization, and fees and identifying
all collateral for such debt. If PWRES notifies the Managing Member within
six (6) Business Days that PWRES elects to act as lender, lead manager or
lead underwriter for such transaction, on such terms, then thereafter PWRES
and the Managing Member shall negotiate diligently and in good faith to
consummate such transaction on such terms. If PWRES declines such offer to
act as lender, lead manager or lead underwriter, the Company may engage
another Person to act as lender, lead manager or lead underwriter for such
debt transaction, so long as
(i) the commitment and/or structuring fees in respect of such
transaction are less than or equal to the commitment and/or structuring
fees offered to PWRES;
(ii) the interest rate spread in respect of such transaction does not
exceed the interest rate spread offered to PWRES by more than
(x) fifteen (15) basis points, in the case of floating rate
financing or fixed rate financing with a term of less than ten
years, or
(y) in the case of fixed rate financing with a term of ten years or
more, such difference as would result in a difference in net
present value to the lender of more than (1/2)of one percent of the
principal amount of the financing, such net present value to be
calculated on the basis of the incremental difference in cash flows
generated over the term of the financing due to the difference in
interest rate from the rate offered to PWRES, such incremental
cash flows to be discounted to present value at a discount rate
equal to the rate which, when compounded monthly, is the equivalent
to the yield calculated by the linear interpolation of the yield of
the two U.S. Treasury constant maturities with a maturity date (one
longer and one shorter) nearest to the maturity date of the
financing, compounded semi-annually;
(iii) the principal amount of the loan is less than or equal to the
principal amount proposed to PWRES;
(iv) all other terms and conditions of such transaction are
substantially similar to the terms offered to PWRES;
(v) the Company and such other Person shall have executed a letter of
intent with respect to such transaction within forty-five (45) days of
the date PWRES declines the Company's offer to act as lender, lead
manager or lead underwriter for such transaction;
(vi) the Company and the Managing Member thereafter diligently prosecute
all actions necessary to consummate such transaction subsequent to the
execution of such letter of intent; and
(vii) the transaction as ultimately entered into by the parties is
without change in economics or material business terms from the term
sheet.
Notwithstanding the forgoing, with respect to transactions involving up to
30% in the aggregate of the assets of the Company (as determined at the end
of the Investment Period) for which mortgage financing or refinancing will be
obtained during the term of this Agreement (as such amount may be determined
at the end of the Investment Period), the Company shall not be obligated to
provide PWRES with such exclusive right of first offer; provided, however,
that with respect to assets of the type similar to those -------- -------
described on Schedule 3.03(B) hereof that are financed or refinanced by tax
----------------
exempt debt financing or similarly advantaged financing during the term of
this Agreement, only 50% of the par amount of such debt shall be taken into
account for purposes of determining whether such 30% threshold has been
reached and provided further, that the Company may exceed such 30% threshold
-------- -------
if, on or prior to the closing date of such financing, the Company pays to
PWRES a fee equal to 2% of the amount by which any mortgage financing or
refinancing exceeds such threshold. Such payment shall be made by wire
transfer of immediately available funds to an account designated by PWRES for
such purpose. PWRES' rights under this Section 17.19(a) shall be on the
----------------
express condition that at least two of Xxxx X. Xxxxxx, Xxxxxx Xxxxxx and
Xxxxxx Xxxx shall be with PWRES or such other entity
as shall then be the Class A Member in accordance with the terms hereof at
the time of such transaction.
(b) PWRES shall have the exclusive right of first offer to act as
lead manager or underwriter for any equity transaction directly or indirectly
involving the Company's assets on the terms and conditions set forth in this
Section 17.19(b). Prior to making any offer or soliciting any offer from any
----------------
other person to act as lead manager or lead underwriter in any equity
transaction directly or indirectly involving the Company's assets the
Managing Member shall give PWRES a Notice specifying all of the material
business terms for such transaction including, but not limited to the
underwriters' spread. If PWRES notifies the Managing Member within ten six
(6) Business Days that PWRES elects to act as lead manager or lead
underwriter for such transaction, on such terms then thereafter PWRES and the
Managing Member shall negotiate diligently and in good faith to consummate
such transaction on such terms; provided, however, that if the Company
-------- -------
reasonably determines that the engagement of another lead manager or
underwriter for any such equity trans act as co-manager of such equity
transaction on terms, including underwriters' spread and allocation, not less
favorable than those of (i) any other co-manager of such transaction, if
there are other co-managers, or (ii) the lead manager of such transaction, if
there are no other co-managers; provided, that with respect to transactions
involving up to 30% in the aggregate of the assets of the Company with
respect to which financing will be obtained by means of equity transactions
during the term of this Agreement (to be determined at the end of the
Investment Period), the Company shall not be obligated to permit PWRES to so
act as co-manager to the extent there are no co-managers of the transaction.
PWRES' rights under this Section 17.19(b) shall be on the
----------------
express condition that at least two of Xxxx X. Xxxxxx, Xxxxxx Xxxxxx and
Xxxxxx Xxxx shall be with PWRES or such other entity as shall then be the
holder of the Preferred in accordance with the terms hereof at the time of
such transaction.
(c) Notwithstanding anything to the contrary herein contained,
PWRES' Right of First Offer with respect to debt and equity transactions
shall terminate and be of no further force or effect after PWRES shall have
acted as lender, lead manager or lead underwriter for any such debt or equity
transactions totaling at least $450 million in the aggregate; provided,
--------
however, that any such debt or equity transactions in respect of Investments
-------
introduced to the Company by PWRES shall not be taken into account for
purposes of determining whether or not such $450 million threshold has been
reached.
(The remainder of this page has been intentionally left blank.)
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
MANAGING MEMBER:
---------------
RSVP HOLDINGS, LLC
By: RSI Fund Management, LLC,
its managing member
By: Reckson Services Industries, Inc.,
its managing member
By:_________________________________
Name:
Title:
CLASS A MEMBER:
--------------
XXXXX XXXXXX REAL ESTATE SECURITIES INC.
By:_________________________________
Name:
Title:
For Purposes of Section 7.05(A) and (F) Only:
--------------------------------------------
RECKSON SERVICES INDUSTRIES, INC.
By:_________________________________
Name:
Title:
SCHEDULE A
MEMBERS' CAPITAL COMMITMENTS
Class A Member Amount Class B Member Amount
PWRES $200,000,000 RSVP Holdings, LLC $100,000,000
SCHEDULE 2.22
COMPANY MANAGEMENT PERSONNEL
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
------- -----------
1.01. Formation . . . . . . . . . . . . . . . . . . . . . . . . . 1
---------
1.02. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----
1.03. Place of Business . . . . . . . . . . . . . . . . . . . . . 2
-----------------
1.04. Registered Office; Principal Office . . . . . . . . . . . . 2
-----------------------------------
1.05. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------- -- -----------
ARTICLE III PURPOSE AND BUSINESS . . . . . . . . . . . . . . . . . . . . . 23
------- --- -------------------
3.01. Business . . . . . . . . . . . . . . . . . . . . . . . . . 23
--------
3.02. Authorized Activities . . . . . . . . . . . . . . . . . . 24
---------------------
3.03. Prohibited Activities . . . . . . . . . . . . . . . . . . 26
---------------------
3.04. EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . 28
------
3.05. Co-Investment Opportunities . . . . . . . . . . . . . . . 28
---------------------------
3.06. Determination of Fair Value, Gross Fair Value and Deemed
--------------------------------------------------------
Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
-----
ARTICLE IV COMPANY INTERESTS AND CAPITAL . . . . . . . . . . . . . . . . . 33
------- -- -----------------------------
4.01. Managing Member . . . . . . . . . . . . . . . . . . . . . 33
---------------
4.02. Non-Managing Members . . . . . . . . . . . . . . . . . . . 33
--------------------
4.03. Capital Contributions . . . . . . . . . . . . . . . . . . 33
---------------------
4.04. Default by Members . . . . . . . . . . . . . . . . . . . . 37
------------------
4.05. Interest . . . . . . . . . . . . . . . . . . . . . . . . . 38
--------
4.06. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 38
4.07. Withdrawal of Capital Contributions . . . . . . . . . . . 38
-----------------------------------
4.08. Restoration of Negative Capital Accounts . . . . . . . . . 38
----------------------------------------
4.09. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 38
4.10. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 38
4.11. Class A Members' Remaining Capital Commitment Fee . . . . 38
-------------------------------------------------
ARTICLE V CAPITAL ACCOUNTS, ALLOCATION OF INCOME AND LOSS . . . . . . . . 39
------- - -----------------------------------------------
5.01. Capital Accounts. . . . . . . . . . . . . . . . . . . . . 39
----------------
5.02. Allocation of Profits and Losses. . . . . . . . . . . . . 39
--------------------------------
ARTICLE VI DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 40
------- -- -------------
6.01. Distributions. . . . . . . . . . . . . . . . . . . . . . . 40
-------------
6.02. Withholding . . . . . . . . . . . . . . . . . . . . . . . 44
-----------
6.03. Form of Distributions. . . . . . . . . . . . . . . . . . . 44
---------------------
6.04. Distribution Accounts . . . . . . . . . . . . . . . . . . 44
---------------------
6.05. Payment of Cure Amount . . . . . . . . . . . . . . . . . . 45
----------------------
6.06. Tax Distributions . . . . . . . . . . . . . . . . . . . . 46
-----------------
ARTICLE VII RIGHTS AND OBLIGATIONS OF THE MANAGING MEMBER . . . . . . . . 46
------- --- ---------------------------------------------
7.01. Management. . . . . . . . . . . . . . . . . . . . . . . . 46
----------
7.02. Authority. . . . . . . . . . . . . . . . . . . . . . . . . 46
---------
7.03. Limitations on the Managing Member . . . . . . . . . . . . 47
----------------------------------
7.04. Business with Affiliates. . . . . . . . . . . . . . . . . 48
------------------------
7.05. Liability for Acts and Omissions; Recourse to Reckson Services
--------------------------------------------------------------
and to ROP Line. 50
---------------
7.06. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 53
7.07. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 53
7.08. Key Man Provisions. . . . . . . . . . . . . . . . . . . . 53
------------------
7.09. Presentation of Opportunities to the Company . . . . . . . 54
--------------------------------------------
7.10. Other Activities . . . . . . . . . . . . . . . . . . . . . 55
----------------
7.11. Affirmative Covenants . . . . . . . . . . . . . . . . . . 55
---------------------
7.12. Negative Covenants . . . . . . . . . . . . . . . . . . . . 62
------------------
7.13. Compliance with Affirmative and Negative Covenants . . . . 63
--------------------------------------------------
ARTICLE VIII ASSIGNMENTS, WITHDRAWAL AND REMOVAL OF THE MANAGING MEMBERS . 64
------- ---- -----------------------------------------------------------
8.01. Assignment or Withdrawal by the Managing Member . . . . . 64
-----------------------------------------------
8.02. Voluntary Assignment or Withdrawal of the Managing Member. 64
---------------------------------------------------------
8.03. Bankruptcy of the Managing Member. . . . . . . . . . . . 64
---------------------------------
8.04. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 65
8.05. Obligations of a Prior Managing Member. . . . . . . . . . 65
--------------------------------------
8.06. Successor Managing Member. . . . . . . . . . . . . . . . 65
-------------------------
ARTICLE IX RIGHTS AND OBLIGATIONS OF NON-MANAGING MEMBERS . . . . . . . . 66
------- -- ----------------------------------------------
9.01. Management of the Company. . . . . . . . . . . . . . . . 66
-------------------------
9.02. Limitation on Liability. . . . . . . . . . . . . . . . . . 66
-----------------------
ARTICLE X TRANSFER OF NON-MANAGING MEMBER INTERESTS . . . . . . . . . . . 67
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10.01. Transfers by Non-Managing Members. . . . . . . . . . . . 67
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10.02. Substitute Non-Managing Member. . . . . . . . . . . . . . 70
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10.03. Involuntary Withdrawal by Non-Managing Members. . . . . . 70
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10.04. Transfers by Class B Members. . . . . . . . . . . . . . . 71
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ARTICLE XI DISSOLUTION AND LIQUIDATION; RECONSTITUTION . . . . . . . . . . 71
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11.01. Dissolution. . . . . . . . . . . . . . . . . . . . . . . 71
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11.02. Liquidation. . . . . . . . . . . . . . . . . . . . . . . . 72
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11.03. Continuation of the Company. . . . . . . . . . . . . . . 73
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11.04. Release. . . . . . . . . . . . . . . . . . . . . . . . . . 73
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ARTICLE XII REPRESENTATIONS AND WARRANTIESOF THE MEMBERS . . . . . . . . . 73
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12.01. Representations and Warranties of the Non-Managing Members. 73
12.02. Representations and Warranties of the Managing Member. . 74
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ARTICLE XIII ACCOUNTING AND REPORTS . . . . . . . . . . . . . . . . . . . 75
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13.01. Books and Records. . . . . . . . . . . . . . . . . . . . 75
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13.02. Tax Matters Member . . . . . . . . . . . . . . . . . . . . 75
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13.03. Reports to Members. . . . . . . . . . . . . . . . . . . . 77
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13.04. Company Funds. . . . . . . . . . . . . . . . . . . . . . . 79
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ARTICLE XIV (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . . . 80
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ARTICLE XV AMENDMENTS AND MEETINGS . . . . . . . . . . . . . . . . . . . . 80
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15.01. Amendment Procedure. . . . . . . . . . . . . . . . . . . . 80
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15.02. Exceptions. . . . . . . . . . . . . . . . . . . . . . . 81
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15.03. Meetings and Voting. . . . . . . . . . . . . . . . . . . . 81
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ARTICLE XVI ADVISORY COMMITTEE . . . . . . . . . . . . . . . . . . . . . . 82
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16.01. Selection of the Advisory Committee. . . . . . . . . . . . 82
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16.02. Meetings of and Action by the Advisory Committee. . . . . 82
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16.03. Advisory Committee Management Authority in Certain Events. 85
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ARTICLE XVII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 86
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17.01. Title to Company Property. . . . . . . . . . . . . . . . . 86
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17.02. Validity. . . . . . . . . . . . . . . . . . . . . . . . . 86
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17.03. Applicable Law. . . . . . . . . . . . . . . . . . . . . . 87
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17.04. Binding Agreement. . . . . . . . . . . . . . . . . . . . . 87
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17.05. Waiver of Action for Partition. . . . . . . . . . . . . . 87
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17.06. Record of Non-Managing Members. . . . . . . . . . . . . . 87
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17.07. Headings. . . . . . . . . . . . . . . . . . . . . . . . . 87
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17.08. Terminology. . . . . . . . . . . . . . . . . . . . . . . . 87
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17.09. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 87
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17.10. Entire Agreement. . . . . . . . . . . . . . . . . . . . . 87
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17.11. Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . 87
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17.12. No Third Party Rights. . . . . . . . . . . . . . . . . . . 87
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17.13. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . 88
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17.14. Services to the Company. . . . . . . . . . . . . . . . . . 88
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17.15. Confidentiality. . . . . . . . . . . . . . . . . . . . . . 88
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17.16. Member's Discretion . . . . . . . . . . . . . . . . . . . 89
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17.17. Modification, Waiver in Writing . . . . . . . . . . . . . 89
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17.18. (Intentionally Omitted) . . . . . . . . . . . . . . . . . 89
17.19. PWRES Right of First Offer. . . . . . . . . . . . . . . . 89
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SCHEDULES
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Schedule A Members' Capital Commitments
Schedule 2.22 Company Management Personnel
RECKSON STRATEGIC VENTURE PARTNERS, LLC
OPERATING AGREEMENT
