EXHIBIT 10.4
LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXX REIT OPERATING PARTNERSHIP II GP, LLC
This Limited Liability Company Agreement (together with the
schedules attached hereto, this "Agreement") of Xxxxxxx REIT Operating
Partnership II GP, LLC (the "LLC"), is entered into by Xxxxxxx REIT Operating
Partnership, L.P., ("Xxxxxxx REIT"), as the sole equity member of the Company,
and Xxxxxxx X. Xxxxxxxxx, as the Independent Director (as defined on Schedule A
hereto). Capitalized terms used and not otherwise defined herein have the
meanings set forth on Schedule A hereto.
WHEREAS, Xxxxxxx REIT desires to form a limited liability company
pursuant to the Delaware Limited Liability Company Act, 6 Del. C. Section 8-101,
et seq., as amended from time to time (the "Act"), by filing a Certificate of
Formation of the Company with the office of the Secretary of State of the State
of Delaware and entering into this Agreement.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), and intending to be
legally bound, the parties hereto hereby agree as follows:
Section 1. Name.
The name of the limited liability company formed hereby is
Xxxxxxx REIT Operating Partnership II GP, LLC.
Section 2. Principal Business Office.
The principal business office of the Company shall be located at
such location as may hereafter be determined by the Board of Directors.
Section 3. Registered Office.
The address of the registered office of the Company in the State
of Delaware is c/o The Cor0poration Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
Section 4. Registered Agent.
The name and address of the registered agent of the Company for
service of process on the Company in the State of Delaware is The Corporation
Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx
00000.
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Section 5. Members.
(a) The mailing address of the Member is set forth on Schedule B attached
hereto. The Member was admitted to the Company as a member of the Company upon
its execution of a counterpart signature page to this Agreement.
(b) Subject to Section 9(j), the Member may act by written consent.
(c) Notwithstanding any provision in this Agreement to the contrary,
upon the occurrence of any event that causes the Member to cease to be a member
of the Company (other than (i) upon an assignment by the Member of all of its
limited liability company interest in the Company and the admission of the
transferee pursuant to Sections 21 and 23, or (ii) the resignation of the Member
and the admission of an additional member of the Company pursuant to Sections 22
and 23), (a) the Person acting as an Independent Director pursuant to Section 10
shall, without any action of any Person and simultaneously with the Member
ceasing to be a member of the Company, automatically be admitted to the Company
as a Special Member and shall continue the Company without dissolution, and (b)
the personal representative of such Member is hereby authorized to, and shall,
to the fullest extent permitted by law, within 90 days after the occurrence of
the event that terminated the continued membership of such Member in the
Company, appoint a Person as a substitute Member. No Special Member may resign
from the Company or transfer its rights as Special Member unless (i) a successor
Special Member has been admitted to the Company as Special Member by executing a
counterpart to this Agreement, and (ii) such successor has also accepted its
appointment as the Independent Director pursuant to Section 10; provided,
however, the Special Members shall automatically cease to be members of the
Company upon the admission to the Company of a substitute Member but shall not
thereby cease to be an Independent Director. Each Special Member shall be a
member of the Company that has no interest in the profits, losses and capital of
the Company and has no right to receive any distributions of Company assets.
Pursuant to Section 18-301 of the Act, a Special Member shall not be required to
make any capital contributions to the Company and shall not receive a limited
liability company interest in the Company. A Special Member, in its capacity as
Special Member, may not bind the Company. Except as required by any mandatory
provision of the Act, each Special Member, in its capacity as Special Member,
shall have no right to vote on, approve or otherwise consent to any action by,
or matter relating to, the Company, including, without limitation, the merger,
consolidation or conversion of the Company. In order to implement the future,
contingent admission to the Company of each Special Member, the Person acting as
an Independent Director pursuant to Section 10 shall execute a counterpart to
this Agreement. Prior to its admission to the Company as Special Member, the
Person acting as an Independent Director pursuant to Section 10 shall not be a
member of the Company.
Section 6. Certificates.
Xxxxx X. Xxxxxxx is hereby designated as an "authorized person"
within the meaning of the Act, and is hereby authorized and directed to execute,
deliver and file the Certificate of Formation of the Company with the Secretary
of State of the State of
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Delaware. Upon the filing of the Certificate of Formation with the Secretary of
State of the State of Delaware, his powers as an "authorized person" shall
cease, and the Member, each Director and each Officer shall be designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member, any Director or any Officer, as an
authorized person, within the meaning of the Act, shall execute, deliver and
file, or cause the execution, delivery and filing of, all certificates (and any
amendments and/or restatements thereof) required or permitted by the Act to be
filed in with the Secretary of State of the State of Delaware. The Member, any
Director or any Officer shall execute, deliver and file, or cause the execution,
delivery and filing of any certificates (and any amendments and/or restatements
thereof) necessary for the Company to qualify to do business in any other
jurisdiction in which the Company may wish to conduct business.
The existence of the Company as a separate legal entity shall
continue until cancellation of the Certificate of Formation as provided in the
Act. Upon the cancellation of the Certificate of Formation in accordance with
the Act, this Agreement and the Company shall terminate.
Section 7. Purposes. The purpose to be conducted or promoted by the Company is
to engage in the following activities:
(a) (i) to act as the sole general partner of Xxxxxxx REIT Operating
Partnership II, LP., a Texas limited partnership (the "Partnership"), and in
such capacity cause the Partnership to: (A) acquire from various entities those
certain tracts or parcels of land more particularly described in Schedule A of
that certain Commitment of Title Insurance issued by Houston Title Company under
GF Number 02010048, (the "Property"), and (B) own, hold, sell, assign, transfer,
operate, lease, mortgage, pledge and otherwise deal with the Property; and (ii)
to engage in any lawful act or activity and to exercise any powers permitted to
limited liability companies organized under the laws of the State of Delaware
that are related or incidental to and necessary, convenient or advisable for the
accomplishment of the above-mentioned purposes.
(b) The Company, and the Member, or any Director or Officer on behalf of
the Company, may cause the Company in its own capacity and, in its capacity as
general partner of the Partnership, cause the Partnership, as the case may be,
to enter into and perform the Basic Documents to which it is a party and all
documents, agreements, certificates, or financing statements contemplated
thereby or related thereto, all without any further act, vote or approval of any
Member, Director, Officer or other Person notwithstanding any other provision of
this Agreement. The foregoing authorization shall not be deemed a restriction on
the powers of the Member or any Director or Officer to enter into other
agreements on behalf of the Company in accordance with this Agreement.
Section 8. Powers.
Subject to Section 9(j), the Company, and the Board of Directors
and the Officers of the Company on behalf of the Company, (i) shall have and
exercise all powers
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necessary, convenient or incidental to accomplish its purposes as set forth in
Section 7 and (ii) shall have and exercise all of the powers and rights
conferred upon limited liability companies formed pursuant to the Act.
Section 9. Management.
(a) Board of Directors. Subject to Section 9(j), the business and affairs
of the Company shall be managed by or under the direction of a Board of one or
more Directors designated by the Member. Subject to Section 10, the Member may
determine at any time in its sole and absolute discretion the number of
Directors to constitute the Board. The authorized number of Directors may be
increased or decreased by the Member at any time in its sole and absolute
discretion, upon notice to all Directors, and subject in all cases to Section
10. The initial number of Directors shall be three, one of which shall be the
Independent Director pursuant to Section 10. Each Director elected, designated
or appointed by the Member shall hold office until a successor is elected and
qualified or until such Director's earlier death, resignation, expulsion or
removal. Each Director shall execute and deliver the Management Agreement.
Directors need not be a Member. The initial Directors designated by the Member
are listed on Schedule D hereto.
(b) Powers. Subject to Section 9(j), the Board of Directors shall have the
power to do any and all acts necessary, convenient or incidental to or for the
furtherance of the purposes described herein, including all powers, statutory or
otherwise. Subject to Section 7, the Board of Directors has the authority to
bind the Company.
(c) Meeting of the Board of Directors. The Board of Directors of the
Company may hold meetings, both regular and special, within or outside the State
of Delaware. Regular meetings of the Board may be held without notice at such
time and at such place as shall from time to time be determined by the Board.
Special meetings of the Board may be called by the President on not less than
one day's notice to each Director by telephone, facsimile, mail, telegram or any
other means of communication, and special meetings shall be called by the
President or Secretary in like manner and with like notice upon the written
request of anyone or more of the Directors.
(d) Quorum: Acts of the Board. At all meetings of the Board, a majority of
the Directors shall constitute a quorum for the transaction of business and,
except as otherwise provided in any other provision of this Agreement, the act
of a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board. If a quorum shall not be present at any meeting
of the Board, the Directors present at such meeting may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present. Any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken without a meeting
and without prior notice if all members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee, as the case may be.
(e) Electronic Communications. Members of the Board, or any committee
designated by the Board, may participate in meetings of the Board, or any
committee, by
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means of telephone conference or similar communications equipment that allows
all Persons participating in the meeting to hear each other, and such
participation in a meeting shall constitute presence in Person at the meeting.
If all the participants are participating by telephone conference or similar
communications equipment, the meeting shall be deemed to be held at the
principal place of business of the Company.
(f) Committees of Directors.
(i) The Board may, by resolution passed by a majority of the
whole Board, designate one or more committees, each
committee to consist of one or more of the Directors of the
Company. The Board may designate one or more Directors as
alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the
committee.
(ii) In the absence or disqualification of a member of a
committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
such members constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in the
place of any such absent or disqualified member.
(iii) Any such committee, to the extent provided in the resolution
of the Board, and subject to, in all cases, Sections 9(j)
and 10, shall have and may exercise all the powers and
authority of the Board in the management of the business and
affairs of the Company. Such committee or committees shall
have such name or names as may be determined from time to
time by resolution adopted by the Board. Each committee
shall keep regular minutes of its meetings and report the
same to the Board when required.
(g) Compensation of Directors: Expenses. The Board shall have the authority
to fix the compensation of Directors. The Directors may be paid their expenses,
if any, of attendance at meetings of the Board, which may be a fixed sum for
attendance at each meeting of the Board or a stated salary as Director. No such
payment shall preclude any Director from serving the Company in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
(h) Removal of Directors. Unless otherwise restricted by law and subject to
Section 10, any Director or the entire Board of Directors may be removed or
expelled, with or without cause, at any time by the Member, and any vacancy
caused by any such removal or expulsion may be filled by action of the Member.
(i) Directors as Agents. To the extent of their powers set forth in this
Agreement and subject to Section 9(j), the Directors are agents of the Company
for the purpose of the Company's business, and the actions of the Directors
taken in accordance with such
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powers set forth in this Agreement shall bind the Company. Notwithstanding the
last sentence of Section 18-402 of the Act, except as provided in this Agreement
or in a resolution of the Directors, a Director may not bind the Company.
(j) Limitations on the Company's Activities.
(i) This Section 9(j) is being adopted in order to comply with
certain provisions required in order to qualify the Company
as a "special purpose" entity.
(ii) The Member shall not, so long as any Obligation is
outstanding, amend, alter, change or repeal the definition
of "Independent Director" or Sections 5(c) 7, 8, 9, 10, 16,
20, 21, 22, 23, 24, 25, 26 or 31 or Schedule A of this
Agreement without the unanimous written consent of the Board
(including the Independent Director) and the Lender. Subject
to this Section 9(j), the Member reserves the right to
amend, alter, change or repeal any provisions contained in
this Agreement in accordance with Section 31.
(iii) Notwithstanding any other provision of this Agreement and
any provision of law that otherwise so empowers the Company,
the Member, the Board, any Officer or any other Person,
neither the Member nor the Board nor any Officer nor any
other Person shall be authorized or empowered, nor shall
they permit the Company, without the prior unanimous written
consent of the Member and the Board (including the
Independent Director), to take any Material Action,
provided, however, that, so long as any Obligation is
outstanding, the Board may not vote on, or authorize the
taking of, any Material Action, unless there is at least one
Independent Director then serving in such capacity.
(iv) The Board and the Member shall cause the Company to do or
cause to be done all things necessary to preserve and keep
in full force and effect its existence, rights (charter and
statutory) and franchises. The Board also shall cause the
Company to:
(A) maintain its own accounts, books and records separate
from any other Person;
(B) at all times hold itself out and identify itself as a
separate and distinct entity under its own name and
not as a division or part of any other Person and
correct any misunderstanding as to its separateness
or distinction from any other Person;
(C) have a Board of Directors separate from that of the
Member and any other Person;
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(D) file its own tax returns, if any, as may be required
under applicable law, to the extent (1) not part of a
consolidated group filing a consolidated return or
returns or (2) not treated as a division for tax
purposes of another taxpayer, and pay any taxes so
required to be paid under applicable law;
(E) except as contemplated by the Basic Documents, not
commingle its assets or funds with those of any other
Person;
(F) conduct its business in its own name and strictly
comply with all organizational formalities to
maintain its separate existence;
(G) maintain financial statements, accounting records and
other entity documents separate from any other
Person;
(H) pay its own liabilities only out of its own funds and
assets;
(I) not enter into or be a party to, any transactions
with its members, managers or its Affiliates except
in the ordinary course of its business and on terms
which are intrinsically fair and not less favorable
to it than would be obtained in a comparable arm's
length transaction with an unrelated third party;
(J) pay the salaries of its own employees from its own
funds;
(K) not assume or guarantee or become obligated for the
debts of any other Person or hold out its credit or
assets as being available to satisfy the obligations
of others, except as expressly permitted by the Basic
Documents;
(L) allocate fairly and reasonably any overhead for
shared expenses, including, without limitation,
shared office space;
(M) use separate stationery, invoices and checks;
(N) except as contemplated by the Basic Documents, not
pledge its assets for the benefit of any other
Person;
(O) correct any known misunderstanding regarding its
separate identity;
(P) maintain adequate capital in light of its
contemplated business operations;
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(Q) observe all Delaware limited liability company
formalities;
(R) not acquire any securities of the Member;
(S) cause the Directors, Officers, agents and other
representatives of the Company to act at all times
with respect to the Company consistently and in
furtherance of the foregoing;
(T) maintain its books, records, resolutions and
agreements as official records;
(U) hold all its assets in its own name;
(V) not acquire obligations or securities of its members
or managers;
(W) not make any loans to any Person;
(X) not identify any of its members or managers or any
Affiliates of any of them as a division or part of
it;
(Y) maintain an arm's length relationship with its
Affiliates;
(Z) at all times cause the Partnership to comply with
each of the covenants, terms and provisions contained
in Section 4.3(a) of the Deed of Trust; and
(AA) comply with each of the covenants, terms and
provisions contained in Section 4.3(a) of the Deed of
Trust as if such representation, warranty or covenant
was made directly by the Company.
Failure of the Company, or the Member or Board on behalf of the Company, to
comply with any of the foregoing covenants or any other covenants contained in
this Agreement shall not affect the status of the Company as a separate legal
entity or the limited liability of the Member, the Special Members or the
Directors.
(v) So long as any Obligation is outstanding, the Board shall
not cause or permit the Company to:
(A) except as contemplated by the Basic Documents,
guarantee any obligation of any Person, including any
Affiliate;
(B) engage, directly or indirectly, in any business other
than the actions required or permitted to be
performed under Section 7, the Basic Documents or
this Section 9(j);
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(C) incur, create or assume any indebtedness other than
as expressly permitted under the Basic Documents;
(D) make or permit to remain outstanding any loan or
advance to, or own or acquire any stock or securities
of, any Person, except that the Company may invest in
those investments permitted under the Basic Documents
and may make any loan or advance required or
expressly permitted to be made pursuant to any
provisions of the Basic Documents and permit the same
to remain outstanding in accordance with such
provisions;
(E) merge into or consolidate with any Person or, to the
fullest extent permitted by law, dissolve, terminate
or liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its
assets or change its legal structure, without in each
case the Lender's consent;
(F) other than the Partnership, form, acquire or hold any
subsidiary (whether corporate, partnership, limited
liability company or other), or make any other
investment in any Person, without the Lender's
consent;
(G) acquire or own any material assets other than its
interest in the Partnership and such incidental
personal property as may be necessary for its
operation as general partner of the Partnership;
(H) fail to preserve its existence as an limited
liability company duly formed, validly existing and
in good standing un the laws of Delaware;
(I) without the prior written consent of the Lender,
amend, modify, terminate or fail to comply with
provisions of this Agreement or the Certificate of
Formation, as the same may be further amended or
supplemented, if such amendment, modification,
termination or failure to comply would adversely
affect the ability of the Company (or the
Partnership) to perform its obligations hereunder, or
under the Basic Documents;
Section 10. Independent Director.
As long as any Obligation is outstanding, the Member shall cause
the Company at all times to have at least one Independent Director who will be
appointed by the Member. To the fullest extent permitted by law, including
Section 18-1101(c) of the Act, the Independent Director shall consider only the
interests of the Company, including its respective creditors, in acting or
otherwise voting on the matters referred to in Section
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9(j)(iii). The Independent Director may resign upon notice to the Board and the
Member and may be removed, with or without cause, at any time by the Member;
provided, however, that for so long as any Obligation is outstanding, no
resignation or removal of the Independent Director, and no appointment of a
successor Independent Director, shall be effective until such successor (i)
shall have accepted his appointment as the Independent Director by a written
instrument, which may be a counterpart signature page to the Management
Agreement, and (ii) shall have executed a counterpart to this Agreement as
required by Section 5(c). In the event of a vacancy in the position of
Independent Director, the Member shall, as soon as practicable, appoint a
successor Independent Director. All right, power and authority of the
Independent Director shall be limited to the extent necessary to exercise those
rights and perform those duties specifically set forth in this Agreement. Except
as provided in the second sentence of this Section 10, in exercising his rights
and performing his duties under this Agreement, any Independent Director shall
have a fiduciary duty of loyalty and care similar to that of a director of a
business corporation organized under the General Corporation Law of the State of
Delaware. The Independent Director shall not at any time serve as trustee in
bankruptcy for any Affiliate of the Company.
Section 11. Officers.
(a) Officers. The initial Officers of the Company shall be designated by
the Member. The additional or successor Officers of the Company shall be chosen
by the Board and may consist of a President, a Secretary and a Treasurer. The
Board of Directors may also choose one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Any number of offices may be held by the
same person. The Board may appoint such other Officers and agents as it shall
deem necessary or advisable who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board. The salaries of all Officers and agents of the
Company shall be fixed by or in the manner prescribed by the Board. The Officers
of the Company shall hold office until their successors are chosen and
qualified. Any Officer may be removed at any time, with or without cause, by the
affirmative vote of a majority of the Board. Any vacancy occurring in any office
of the Company shall be filled by the Board. The initial Officers of the Company
designated by the Member are listed on Schedule E hereto.
(b) President. The President shall be the chief executive officer of the
Company, shall preside at all meetings of the Board, shall be responsible for
the general and active management of the business of the Company and shall see
that all orders and resolutions of the Board are carried into effect. The
President or any other Officer authorized by the President or the Board shall
execute all bonds, mortgages and other contracts, except: (i) where required or
permitted by law or this Agreement to be otherwise signed and executed,
including Section 7(b); (ii) where signing and execution thereof shall be
expressly delegated by the Board to some other Officer or agent of the Company,
and (iii) as otherwise permitted in Section 11(c).
(c) Vice President. In the absence of the President or in the event of the
President's inability to act, the Vice President, if any (or in the event there
be more than
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one Vice President, the Vice Presidents in the order designated by the
Directors, or in the absence of any designation, then in the order of their
election), shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents, if any, shall perform such other duties and have
such other powers as the Board may from time to time prescribe.
(d) Secretary and Assistant Secretary. The Secretary shall be responsible
for filing legal documents and maintaining records for the Company. The
Secretary shall attend all meetings of the Board and record all the proceedings
of the meetings of the Company and of the Board in a book to be kept for that
purpose and shall perform like duties for the standing committees when required.
The Secretary shall give, or shall cause to be given, notice of all meetings of
the Member, if any, and special meetings of the Board, and shall perform such
other duties as may be prescribed by the Board or the President, under whose
supervision the Secretary shall serve. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the Board
(or if there be no such determination, then in order of their election), shall,
in the absence of the Secretary or in the event of the Secretary's inability to
act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board may from time
to time prescribe.
(e) Treasurer and Assistant Treasurer. The Treasurer shall have the custody
of the Company funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board. The Treasurer
shall disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and to
the Board, at its regular meetings or when the Board so requires, an account of
all of the Treasurer's transactions and of the financial condition of the
Company. The Assistant Treasurer, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board (or if there be no
such determination, then in the order of their election), shall, in the absence
of the Treasurer or in the event of the Treasurer's inability to act, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board may from time to time prescribe.
(f) Officers as Agents. The Officers, to the extent of their powers set
forth in this Agreement or otherwise vested in them by action of the Board not
inconsistent with this Agreement, are agents of the Company for the purpose of
the Company's business and, subject to Section 9(j), the actions of the Officers
taken in accordance with such powers shall bind the Company.
(g) Duties of Board and Officers. Except to the extent otherwise modified
herein, each Director and Officer shall have a fiduciary duty of loyalty and
care similar to that of directors and officers of business corporations
organized under the General Corporation Law of the State of Delaware.
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Section 12. Limited Liability.
Except as otherwise expressly provided by the Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be the debts, obligations and liabilities solely of the
Company, and neither the Member nor the Special Members nor any Director shall
be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Member, Special Member or Director of the
Company.
Section 13. Capital Contributions.
The Member has contributed to the Company property of an agreed
value as listed on Schedule B attached hereto. In accordance with Section 5(c),
the Special Members shall not be required to make any capital contributions to
the Company.
Section 14. Additional Contributions.
The Member is not required to make any additional capital
contribution to the Company. However, the Member may make additional capital
contributions to the Company at any time upon the written consent of such
Member. To the extent that the Member makes an additional capital contribution
to the Company, the Member shall revise Schedule B of this Agreement. The
provisions of this Agreement, including this Section 14, are intended to benefit
the Member and the Special Members and, to the fullest extent permitted by law,
shall not be construed as conferring any benefit upon any creditor of the
Company (and no such creditor of the Company shall be a third-party beneficiary
of this Agreement) and the Member and the Special Members shall not have any
duty or obligation to any creditor of the Company to make any contribution to
the Company or to issue any call for capital pursuant to this Agreement.
Section 15. Allocation of Profits and Losses.
The Company's profits and losses shall be allocated to the
Member.
Section 16. Distributions.
Distributions shall be made to the Member at the times and in the
aggregate amounts determined by the Board. Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not be required to make
a distribution to the Member on account of its interest in the Company if such
distribution would violate the Act or any other applicable law or any Basic
Document.
Section 17. Books and Records.
The Board shall keep or cause to be kept complete and accurate
books of account and records with respect to the Company's business. The books
of the Company shall at all times be maintained by the Board. The Member and its
duly authorized representatives shall have the right to examine the Company
books, records and documents during normal business hours. The Company, and the
Board on behalf of the
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Company, shall not have the right to keep confidential :trom the Member any
information that the Board would otherwise be permitted to keep confidential
from the Member pursuant to Section 18-305(c) of the Act. The Company's books of
account shall be kept using the method of accounting determined by the Member.
The Company's independent auditor, if any, shall be an independent public
accounting firm selected by the Member.
Section 18. Reports.
The Board shall, after the end of each fiscal year, use
reasonable efforts to cause the Company's independent accountants, if any, to
prepare and transmit to the Member as promptly as possible any such tax
information as may be reasonably necessary to enable the Member to prepare its
federal, state and local income tax returns relating to such fiscal year.
Section 19. Other Business.
The Member, the Special Members and any Officer, Director,
employee or agent of the Company and any Affiliate of the Member or the Special
Members may engage in or possess an interest in other business ventures
(unconnected with the Company) of every kind and description, independently or
with others. The Company shall not have any rights in or to such independent
ventures or the income or profits therefrom by virtue of this Agreement.
Section 20. Exculpation and Indemnification.
(a) Neither the Member nor the Special Members nor any Officer, Director,
employee or agent of the Company nor any employee, representative, agent or
Affiliate of the Member or the Special Members (collectively, the "Covered
Persons") shall be liable to the Company or any other Person who is bound by
this Agreement for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Covered Person in good faith on behalf of
the Company and in a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement, except that a
Covered Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person's gross negligence or willful misconduct.
(b) To the fullest extent permitted by applicable law, a Covered Person
shall be entitled to indemnification from the Company for any loss, damage or
claim incurred by such Covered Person by reason of any act or omission performed
or omitted by such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the authority conferred
on such Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Covered Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions; provided, however,
that any indemnity under this Section 20 by the Company shall be provided out of
and to the extent of Company assets only, and the Member and the Special Members
shall not have personal liability on account thereof; and provided
13
further, that so long as any Obligation is outstanding, no indemnity payment
from funds of the Company (as distinct from funds from other sources, such as
insurance) of any indemnity under this Section 20 shall be payable from amounts
allocable to any other Person pursuant to the Basic Documents.
(c) To the fullest extent permitted by applicable law, expenses (including
reasonable legal fees) incurred by a Covered Person defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the Company
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Company of an undertaking by or on behalf of the Covered
Person to repay such amount if it shall be determined that the Covered Person is
not entitled to be indemnified as authorized in this Section 20.
(d) A Covered Person shall be fully protected in relying in good faith upon
the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, or any other facts pertinent to the
existence and amount of assets from which distributions to the Member might
properly be paid.
(e) To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Company or
to any other Covered Person, a Covered Person acting under this Agreement shall
not be liable to the Company or to any other Covered Person who is bound by this
Agreement for its good faith reliance on the provisions of this Agreement or any
approval or authorization granted by the Company or any other Covered Person.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Member and the Special Members to replace such other duties and
liabilities of such Covered Person.
(f) The foregoing provisions of this Section 20 shall survive any
termination of this Agreement.
Section 21. Assignments.
The Member may assign in whole or in part its limited liability
company interest in the Company. Subject to Section 23, if the Member transfers
all of its limited liability company interest in the Company pursuant to this
Section 21, the transferee shall be admitted to the Company as a member of the
Company upon its execution of an instrument signifying its agreement to be bound
by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of the Company.
Notwithstanding anything in this Agreement to the contrary, any successor to the
Member by merger or consolidation in compliance with the Basic
14
Documents shall, without further act, be the Member hereunder, and such merger
or consolidation shall not constitute an assignment for purposes of this
Agreement and the Company shall continue without dissolution.
Section 22. Resignation.
So long as any Obligation is outstanding, the Member may not
resign, except as permitted under the Basic Documents and if the Rating Agency
Condition is satisfied. If the Member is permitted to resign pursuant to this
Section 22, an additional member of the Company shall be admitted to the
Company, subject to Section 23, upon its execution of an instrument signifying
its agreement to be bound by the terms and conditions of this Agreement, which
instrument may be a counterpart signature page to this Agreement. Such admission
shall be deemed effective immediately prior to the resignation and, immediately
following such admission, the resigning Member shall cease to be a member of the
Company.
Section 23. Admission of Additional Members.
One or more additional members of the Company may be admitted to
the Company with the written consent of the Member; provided, however, that,
notwithstanding the foregoing, so long as any Obligation remains outstanding,
except as expressly provided by this Agreement, no additional Member may be
admitted to the Company other than pursuant to Sections 5(c) or 24 unless the
Rating Agency Condition is satisfied.
Section 24. Dissolution.
(a) The Company shall be dissolved, and its affairs shall be wound up upon
the first to occur of the following: (i) the termination of the legal existence
of the last remaining Member of the Company or the occurrence of any other event
which terminates the continued membership of the last remaining Member of the
Company in the Company unless the Company is continued without dissolution in a
manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act. Upon the occurrence of any
event that causes the last remaining Member of the Company to cease to be a
member of the Company, to the fullest extent permitted by law, the personal
representative of such Member is hereby authorized to, and shall, within 90 days
after the occurrence of the event that terminated the continued membership of
such Member in the Company, agree in writing (i) to continue the Company and
(ii) to the admission of the personal representative or its nominee or designee,
as the case may be, as a substitute Member of the Company, effective as of the
occurrence of the event that terminated the continued membership of the last
remaining Member of the Company in the Company.
(b) Notwithstanding any other provision of this Agreement, the Bankruptcy
of the Member or the Special Member shall not cause the Member or the Special
Member, respectively, to cease to be a member of the Company and upon the
occurrence of such an event, the Company shall continue without dissolution.
15
(c) In the event of dissolution, the Company shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of the Company in an orderly manner), and the assets of the Company shall
be applied in the manner, and in the order of priority, set forth in Section
18-804 of the Act.
(d) The Company shall terminate when (i) all of the assets of the Company,
after payment of or due provision for all debts, liabilities and obligations of
the Company, shall have been distributed to the Member in the manner provided
for in this Agreement and (ii) the Certificate of Formation shall have been
canceled in the manner required by the Act.
Section 25. Waiver of Partition; Nature of Interest.
Except as otherwise expressly provided in this Agreement, to the
fullest extent permitted by law, each of the Member and the Special Member
hereby irrevocably waives any right or power that such Person might have to
cause the Company or any of its assets to be partitioned, to cause the
appointment of a receiver for all or any portion of the assets of the Company,
to compel any sale of all or any portion of the assets of the Company pursuant
to any applicable law or to file a complaint or to institute any proceeding at
law or in equity to cause the dissolution, liquidation, winding up or
termination of the Company. The Member shall not have any interest in any
specific assets of the Company, and the Member shall not have the status of a
creditor with respect to any distribution pursuant to Section 16 hereof. The
interest of the Member in the Company is personal property.
Section 26. Benefits of Agreement;_ No Third-Party Rights.
None of the provisions of this Agreement shall be for the benefit
of or enforceable by any creditor of the Company or by any creditor of the
Member or the Special Member. Nothing in this Agreement shall be deemed to
create any right in any Person (other than Covered Persons) not a party hereto,
and this Agreement shall not be construed in any respect to be a contract in
whole or in part for the benefit of any third Person (except as provided in
Section 29).
Section 27. Severability of Provisions.
Each provision of this Agreement shall be considered severable
and if for any reason any provision or provisions herein are determined to be
invalid, unenforceable or illegal under any existing or future law, such
invalidity, unenforceability or illegality shall not impair the operation of or
affect those portions of this Agreement which are valid, enforceable and legal.
Section 28. Entire Agreement.
This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof.
16
Section 29. Binding Agreement.
Notwithstanding any other provision of this Agreement, the Member
agrees that this Agreement, including, without limitation, Sections 7, 8, 9, 10,
20, 21, 22, 23, 24, 26, 29 and n, constitutes a legal, valid and binding
agreement of the Member, and is enforceable against the Member by the
Independent Director, in accordance with its terms. In addition, the Independent
Director shall be an intended beneficiary of this Agreement.
Section 30. Governing Law.
This Agreement shall be governed by and construed under the laws
of the State of Delaware (without regard to conflict of laws principles), all
rights and remedies being governed by said laws.
Section 31. Amendments.
Subject to Section 9(i), this Agreement may be modified, altered,
supplemented or amended pursuant to a written agreement executed and delivered
by the Member. Notwithstanding anything to the contrary in this Agreement, so
long as any Obligation is outstanding, this Agreement may not be modified,
altered, supplemented or amended unless the Rating Agency Condition is satisfied
except: (i) to cure any ambiguity or (ii) to convert or supplement any provision
in a manner consistent with the intent of this Agreement and the other Basic
Documents.
Section 32. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original of this Agreement and all of which
together shall constitute one and the same instrument.
Section 33. Notices.
Any notices required to be delivered hereunder shall be in
writing and personally delivered, mailed or sent by telecopy, electronic mail or
other similar form of rapid transmission, and shall be deemed to have been duly
given upon receipt (a) in the case of the Company, to the Company at its address
in Section 2, (b) in the case of the Member, to the Member at its address as
listed on Schedule B attached hereto and (c) in the case of either of the
foregoing, at such other address as may be designated by written notice to the
other party.
Section 34. Effectiveness.
Pursuant to Section 18-201 (d) of the Act, this Agreement shall
be effective as of the time of the filing of the Certificate of Formation with
the Office of the Delaware Secretary of State on November 12, 2002.
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, has duly executed this Limited Liability Company Agreement as of
the 26th day of November, 2002.
MEMBER:
XXXXXXX REIT OPERATING PARTNERSHIP, L.P.
By: Xxxxxxx Commercial Properties REIT, its
general partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
INDEPENDENT DIRECTOR:
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
S-1
SCHEDULE A
Definitions
A. Definitions
When used in this Agreement, the following terms not otherwise
defined herein have the following meanings:
"Act" has the meaning set forth in the preamble to this
Agreement.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly Controlling or Controlled by or under direct or indirect
common Control with such Person.
"Agreement" means this Limited Liability Company Agreement of the
Company, together with the schedules attached hereto, as amended, restated or
supplemented or otherwise modified from time to time.
"Bankruptcy" means, with respect to any Person, if (A) such
Person (i) makes an assignment for the benefit of creditors, (ii) files a
voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or
has entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against it in any proceeding of this nature, or (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the Person
or of all or any substantial part of its properties, or (B) (i) 120 days after
the commencement of any proceeding against the Person seeking reorganization,
arrangement, composition, readjustment, liquidation or similar relief under any
statute, law or regulation, the proceeding has not been dismissed, or (ii)
within 90 days after the appointment without such Person's consent or
acquiescence of a trustee, receiver or liquidator of such Person or of all or
any substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the appointment
is not vacated. The foregoing definition of "Bankruptcy" is intended to replace
and shall supersede and replace the definition of "Bankruptcy" set forth in
Sections 18-101(1) and 18-304 of the Act.
"Basic Documents" means the Agreement of Limited Partnership of
the Partnership, the Deed of Trust, Promissory Note, Financing Statement,
Assignment of Licenses, Permits and Contracts, Borrower's Certification,
Required Repair Reserve Agreement, Guaranty of Recourse Obligations, Assignment
of Leases and Rents, Environmental Indemnity Agreement, Assignment of Management
Agreement and Subordination of Management Fees, Replacement Reserve Agreement,
Tenant Improvement and Leasing Commission Reserve Agreement, Asbestos Containing
Materials Acknowledgement, Side Letter Regarding Reporting Requirements (as to
the First Loan), Future Funding Agreement, Promissory Note, Second Deed of Trust
and Security Agreement, Financing Statement, Assignment of Leases and Rents,
A-1
Environmental Indemnity Agreement, Assignment of Management Agreement and
Subordination of Management Fees, Assignment of Licenses, Permits and Contracts,
Required Repair Reserve Agreement, Tenant Improvement and Leasing Commission
Reserve Agreement, Asbestos Containing Materials Acknowledgement, Borrower's
Certification, Lease Certification (as to Second Loan) and all documents and
certificates contemplated thereby or delivered in connection therewith.
"Board" or "Board of Directors" means the Board of Directors of
the Company.
"Certificate of Formation" means the Certificate of Formation of
the Company filed with the Secretary of State of the State of Delaware on
November -, 2002, as amended or amended and restated from time to time.
"Company" means Xxxxxxx REIT Operating Partnership II GP, LLC, a
Delaware limited liability company.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities or general
partnership or managing member interests, by contract or otherwise.
"Controlling" and "Controlled" shall have correlative meanings. Without limiting
the generality of the foregoing, a Person shall be deemed to Control any other
Person in which it owns, directly or indirectly, a majority of the ownership
interests.
"Covered Persons" has the meaning set forth in Section 20(a).
"Deed of Trust" has the meaning set forth in the Loan Documents.
"Directors" means the Persons elected/appointed to the Board of
Directors from time to time in accordance with this Agreement, including the
Independent Director, in his capacity as a manager of the Company. A Director is
hereby designated as a "manager" of the Company within the meaning of Section
18-101(10) of the Act.
"Independent Director" means a natural person who, for the
five-year period prior to his appointment as Independent Director has not been,
and during the continuation of his service as Independent Director is not: (i)
an employee, director, stockholder, partner, member, manager or officer of the
Company, the Partnership or any of their respective Affiliates, partners,
members, stockholders or subsidiaries (other than his service as an Independent
Director of the Company); (ii) a customer or supplier of the Company, the
Partnership or any of their respective Affiliates, partners, members,
stockholders or subsidiaries; (iii) a Person controlling or under common control
with any such employee, director, stockholder, partner, member, manager,
officer, customer, supplier of the Company, the Partnership or their respective
Affiliates or (iv) any member of the immediate family of a person described in
(i), (ii) or (iii).
"Lender" means GMAC Commercial Mortgage Corporation, and its
successors and assigns to its interests under the Loan Documents.
A-2
"Loan Documents" means the documents, instruments and agreements
executed in connection with the financing transaction between the Partnership
and the Lender on or about November 19, 2002, and secured by the Property.
"Management Agreement" means the management agreement
substantially in the form attached hereto as Schedule C. The Management
Agreement shall be deemed incorporated into, and a part of, this Agreement.
"Material Action" means to consolidate or merge the Company with
or into any Person, or sell all or substantially all of the assets of the
Company, or to institute proceedings to have the Company be adjudicated bankrupt
or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Company or file a petition seeking, or consent to,
reorganization or relief with respect to the Company under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or a substantial part of its property, or make any
assignment for the benefit of creditors of the Company, or admit in writing the
Company's inability to pay its debts generally as they become due, or take
action in furtherance of any such action, or, to the fullest extent permitted by
law, dissolve or liquidate the Company.
"Member" means Xxxxxxx REIT Operating Partnership LP., as the
initial member of the Company, and includes any Person admitted as an additional
member of the Company or a substitute member of the Company pursuant to the
provisions of this Agreement, each in its capacity as a member of the Company;
provided, however, the term "Member" shall not include the Special Members.
"Obligations" means the indebtedness, liabilities and obligations
of the Company under or in connection with the Basic Documents as of any date of
determination.
"Officer" means an officer of the Company described in Section
11.
"Officer's Certificate" means a certificate signed by any Officer
of the Company who is authorized to act for the Company in matters relating to
the Company.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, limited liability partnership, association,
joint stock company, trust, unincorporated organization, or other organization,
whether or not a legal entity, and any governmental authority.
"Rating Agency" has the meaning assigned to that term in the
Basic Documents.
"Rating Agency Condition" means (i) with respect to any action
taken at any time before the loan evidenced and secured by the Basic Documents
has been sold or assigned to a securitization trust, that the lender thereunder
has consented in writing to such action, and (ii) with respect to any action
taken at any time after such loan has been sold or assigned to a securitization
trust, that each Rating Agency shall have been given
A-3
ten days prior notice thereof and that each of the Rating Agencies shall have
notified the Company in writing that such action will not result in a reduction
or withdrawal of the then current rating by such Rating Agency of any of
securities issued by such securitization trust.
"Special Member" means, upon such Person's admission to the
Company as a member of the Company pursuant to Section 5(c), a Person acting as
an Independent Director, in such Person's capacity as a member of the Company. A
Special Member shall only have the rights and duties expressly set forth in this
Agreement.
B. Rules of Construction
Definitions in this Agreement apply equally to both the singular
and plural forms of the defined terms. The words "include" and "including" shall
be deemed to be followed by the phrase "without limitation." The terms "herein,"
"hereof' and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section, paragraph or
subdivision. The Section titles appear as a matter of convenience only and shall
not affect the interpretation of this Agreement. All Section, paragraph, clause,
Exhibit or Schedule references not attributed to a particular document shall be
references to such parts of this Agreement.
A-4
SCHEDULE B
Member
Agreed Value of Limited Liability
Name Mailing Address Capital Contribution Company Interest
---------------------- --------------- -------------------- -----------------
Xxxxxxx REIT Operating
Partnership, L.P. $ 100 100%
B-1
SCHEDULE C
Management Agreement
November ____, 2002
Xxxxxxx REIT Operating Partnership II GP, LLC
0000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Re: Management Agreement -- Xxxxxxx REIT Operating Partnership II GP, LLC
Ladies and Gentlemen:
For good and valuable consideration, each of the undersigned
Persons, who have been designated as directors of Xxxxxxx REIT Operating
Partnership II GP, LLC, a Delaware limited liability company (the "Company"), in
accordance with the Limited Liability Company Agreement of the Company, dated as
of November __,2002, as it may be amended or restated from time to time (the
"LLC Agreement"), hereby agree as follows:
1. Each of the undersigned accepts such Person's rights and
authority as a Director under the LLC Agreement and agrees to perform and
discharge such Person's duties and obligations as a Director under the LLC
Agreement, and further agrees that such rights, authorities, duties and
obligations under the LLC Agreement shall continue until such Person's successor
as a Director is designated or until such Person's resignation or removal as a
Director in accordance with the LLC Agreement. Each of the undersigned agrees
and acknowledges that it has been designated as a "manager" of the Company
within the meaning of the Delaware Limited Liability Company Act.
2. So long as any Obligation is outstanding, each of the
undersigned agrees, solely in its capacity as a creditor of the Company on
account of any indemnification or other payment owing to the undersigned by the
Company, not to acquiesce, petition or otherwise invoke or cause the Company to
invoke the process of any court or governmental authority for the purpose of
commencing or sustaining an involuntary case against the Company under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Company or any substantial part of the property of the Company, or, to
the fullest extent permitted by law, ordering the winding up or liquidation of
the affairs of the Company.
3. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND
REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.
C-1
Initially capitalized terms used and not otherwise defined herein
have the meanings set forth in the LLC Agreement.
This Management Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this Management
Agreement and all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
C-2
IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.
/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx
C-3
SCHEDULE D
DIRECTORS
1. Xxxxx X. Xxxxxxx
2. Xxxxxx X. Xxxxx
3. Xxxxxxx X. Xxxxxxxxx
D-1
SCHEDULE E
OFFICERS TITLE
---------------- -----------------------
Xxxxx X. Xxxxxxx President
Xxx Xxxxx Treasurer and Secretary
E-1
