LIMITED LIABILITY COMPANY AGREEMENT
OF
JMB 000 Xxxx Xxxxxx Xxxxxxx Company, LLC
a Delaware limited liability company
Dated as of November 12, 1996
Table of Contents
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SECTION 1. Formation of Limited Liability Company . . . . . . . 1
SECTION 2. Name . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. Definitions. . . . . . . . . . . . . . . . . . . . . 1
SECTION 4. Business of the Company. . . . . . . . . . . . . . . 4
SECTION 5. Term . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 6. Principal Place of Business. . . . . . . . . . . . . 4
SECTION 7. Registered Agent; Registered Office. . . . . . . . . 4
SECTION 8. Capital Contributions; No Withdrawal or
Resignation. . . . . . . . . . . . . . . . . . . . . 5
(a) Initial Capital Contributions . . . . . . . 5
(b) Additional Contributions; Interest . . . . 5
(c) Withdrawal and Resignation; Return of
Capital Contribution. . . . . . . . . . . . 5
SECTION 9. Distributions; Operating Covenants.. . . . . . . . . 5
SECTION 10. Allocation of Income and Losses . . . . . . . . . . 6
(a) Allocations . . . . . . . . . . . . . . . . 6
(b) Change in Membership Interests. . . . . . . 6
(c) Special Rules . . . . . . . . . . . . . . . 6
SECTION 11. Withholding. . . . . . . . . . . . . . . . . . . . . 6
SECTION 12. Books, Records and Accounting. . . . . . . . . . . . 6
(a) Books and Records . . . . . . . . . . . . . 6
(b) Fiscal Year; Accounting . . . . . . . . . . 6
(c) Reports . . . . . . . . . . . . . . . . . . 7
(d) Expenses. . . . . . . . . . . . . . . . . . 7
SECTION 13. Company Funds. . . . . . . . . . . . . . . . . . . . 7
SECTION 14. Management . . . . . . . . . . . . . . . . . . . . . 7
(a) The Manager . . . . . . . . . . . . . . . . 7
(b) Resignation . . . . . . . . . . . . . . . . 7
(c) Limitations on Powers . . . . . . . . . . . 7
(d) Reimbursement . . . . . . . . . . . . . . . 7
SECTION 15. Meetings . . . . . . . . . . . . . . . . . . . . . . 7
(a) Meetings of Members . . . . . . . . . . . . 8
(b) Consent of Members. . . . . . . . . . . . . 8
SECTION 16. Voting . . . . . . . . . . . . . . . . . . . . . . 8
(a) Members . . . . . . . . . . . . . . . . . . 8
(b) Voting. . . . . . . . . . . . . . . . . . . 8
(c) Actions Requiring Unanimous Member
Approval. . . . . . . . . . . . . . . . . . 8
SECTION 17. Limitation of Liability and Indemnification. . . . . 8
(a) Limitation of Liability . . . . . . . . . . 8
(b) Indemnification . . . . . . . . . . . . . . 9
(c) Expenses. . . . . . . . . . . . . . . . . . 9
(d) Not Exclusive . . . . . . . . . . . . . . . 9
(e) Insurance . . . . . . . . . . . . . . . . . 9
(f) Reimbursement . . . . . . . . . . . . . . . 10
SECTION 18. Assignment of Membership Interests and
New Members . . . . . . . . . . . . . . . . . . . 10
(a) Assignment. . . . . . . . . . . . . . . . . 10
(b) Limitations on Assignment . . . . . . . . . 10
(c) New Members . . . . . . . . . . . . . . . . 10
SECTION 19. Dissolution. . . . . . . . . . . . . . . . . . . . . 10
SECTION 20. Winding Up and Distribution of Assets. . . . . . . . 11
(a) Winding Up. . . . . . . . . . . . . . . . . 11
(b) Distribution of Assets. . . . . . . . . . . 11
SECTION 21. Conflict of Interest. . . . . . . . . . . . . . . . 11
SECTION 22. Taxation . . . . . . . . . . . . . . . . . . . . . . 12
(a) Status of the Company . . . . . . . . . . . 12
(b) Tax Elections . . . . . . . . . . . . . . . 12
(c) Company Tax Returns . . . . . . . . . . . . 12
(d) Tax Audits. . . . . . . . . . . . . . . . . 13
SECTION 23. JMB's Rights . . . . . . . . . . . . . . . . . . . . 14
SECTION 24. Miscellaneous. . . . . . . . . . . . . . . . . . . . 14
(a) Governing Law . . . . . . . . . . . . . . . 14
(b) Binding Effect. . . . . . . . . . . . . . . 14
(c) Pronouns and Number . . . . . . . . . . . . 14
(d) Captions. . . . . . . . . . . . . . . . . . 14
(e) Enforceability. . . . . . . . . . . . . . . 15
(f) Counterparts. . . . . . . . . . . . . . . . 15
(g) Notices . . . . . . . . . . . . . . . . . . 15
(h) Entire Agreement; Amendment . . . . . . . . 16
(i) Further Assurances. . . . . . . . . . . . . 16
(j) Third Parties . . . . . . . . . . . . . . . 16
(k) Facsimile Signatures. . . . . . . . . . . . 16
(l) Reliance upon Books, Reports and Records. . 16
(m) Time Periods. . . . . . . . . . . . . . . . 16
(n) Waiver. . . . . . . . . . . . . . . . . . . 17
SCHEDULE I . . . . . . . . . . . . . . . . . . . . . . 1
LIMITED LIABILITY COMPANY AGREEMENT
OF
JMB 245 PARK AVENUE HOLDING COMPANY, LLC
This Limited Liability Company Agreement of JMB 000 Xxxx Xxxxxx
Xxxxxxx Company, LLC (the "Company") is made and entered into as of the
12th day of November, 1996 by and among the Members listed on Schedule I
attached hereto.
WHEREAS, subsequent to the adoption of the Reorganization Plan,
the parties hereto have decided to organize the Company as a limited
liability company rather than as a limited partnership; and
WHEREAS, the parties hereto desire to adopt and approve this
Agreement for the Company.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. FORMATION OF LIMITED LIABILITY COMPANY. The Members
agree to the formation of a limited liability company pursuant to the
Act and for that purpose have caused a Certificate of Formation to be
filed with the Secretary. The rights and duties of the Members shall be
as provided in the Act, except as modified by this Agreement. For and
in consideration of the mutual covenants herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Members executing this Agreement hereby agree
to the terms and conditions of this Agreement, as it may from time to
time be amended according to its terms. To the extent any provision of
this Agreement is prohibited or ineffective under the Act, this
Agreement shall be considered amended to the smallest degree possible in
order to make this Agreement effective under the Act. In the event the
Act is subsequently amended or interpreted in such a way as to make any
provision of this Agreement that was formerly invalid valid, such
provision shall be considered to be valid from the effective date
of such interpretation or amendment.
SECTION 2. NAME. The business of the Company shall be
conducted under the name "JMB 000 Xxxx Xxxxxx Xxxxxxx Company, LLC."
SECTION 3. DEFINITIONS.
For purposes of this Agreement, unless the context clearly
indicates otherwise, the following terms shall have the following
meanings:
(a) "Act" means the Delaware Limited Liability Company Act,
Delaware Code Title 6, Sections 18.101 et seq., as amended from time to
time.
(b) "Affiliate" means, with reference to any Person, any other
Person that Controls, is Controlled by or is under common Control with
such Person.
(c) "Agreement" means this Limited Liability Company Agreement,
as amended, modified or supplemented from time to time.
(d) "Capital Account" means, with respect to each Member, the
account established on the books and records of the Company for such
Member. Each Member's Capital Account shall initially equal the value
of the Capital Contribution to the Company made by the Member as set
forth on Schedule I attached hereto. During the term of the Company,
each Member's Capital Account shall be (i) increased by the amount of
(w) income and gain allocated to the Member and (x) any cash or property
(net of any liability secured by such property that the Company is
considered to assume or take subject to) subsequently contributed by the
Member to the Company, and (ii) decreased by the amount of (y) loss and
deduction allocated to the Member and (z) all cash and property (net of
any liability secured by such property that the Member is considered to
assume or take subject to) distributed to the Member, and shall
otherwise be kept in accordance with applicable United States Treasury
Regulations promulgated under Section 704(b) of the Code.
(e) "Capital Contribution" means a contribution of cash or other
property to the Company. Contributed property shall be valued at fair
market value, net of any liabilities assumed to which the contributed
property is subject.
(f) "Code" means the United States Internal Revenue Code of
1986, as amended, modified or rescinded from time to time, or any
similar provision of succeeding law.
(g) "Control, Controlling, Controlled" means as to any Person,
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether
through ownership of voting securities or partnership interests, by
contract or otherwise.
(h) "IRS" means the United States Internal Revenue Service or
any successor entity.
(i) "JMB" means XXX/000 Xxxx Xxxxxx Associates, Ltd. and its
successors and assigns.
(j) "JMB Agreement" means the JMB Transaction Agreement, dated
as of November 21, 1996, pursuant to which, among other things, World
Financial Properties, L.P. provides to JMB and the Company the rights
contemplated in Sections 15.8 and 18.13 of the Reorganization Plan,
attached hereto as Exhibit A.
(k) "Limited Partnership Agreement" means the Amended and
Restated Agreement of Limited Partnership of World Financial Properties,
L.P., dated as of November 21, 1996, by and among the parties thereto,
attached hereto as Exhibit B.
(l) "Majority Interest" means more than 50% of all Membership
Interests outstanding from time to time.
(m) "Manager" means any Person selected to manage the Company in
accordance with Section 14.
(n) "Member" means any Person with a Membership Interest in the
Company.
(o) "Membership Interest" means the percentage interest in the
Company of a Member as set forth opposite such Member's name on Schedule
I attached hereto as amended, modified or supplemented from time to
time.
(p) "Net Cash Flow" means for any period the amount, computed on
a cash basis, equal to:
(i) the sum of (A) all investment income of the Company
and all other cash received by the Company, all without double
counting and (B) any amounts released from Reserves;
decreased by:
(ii) the sum of (A) disbursements of the Company for
expenses and (B) any increase in Reserves.
(q) "Person" means any natural person, corporation, partnership,
association, limited liability company, trust, estate or other
enterprise or entity.
(r) "Reorganization Plan" means the Third Amended Plan of
Reorganization of Olympia & York Realty, Corp., et al., Chapter 11 case
number 92B42698(JLG) (jointly administered), dated September 12, 1996,
as confirmed by the United States Bankruptcy Court for the Southern
District of New York, as such Reorganization Plan may be amended from
time to time.
(s) "Reserves" means the reasonable reserves established and
maintained from time to time in amounts reasonably determined by the
Manager to be adequate and sufficient for current and future expenses
and to pay for taxes, insurance, or other costs and expenses incident to
the Company's business or otherwise to provide for the long term goals
of the Company or any other purpose, including reserves for unforeseen
or contingent liabilities, debts or obligations; provided, however, that
prior to the Manager establishing any Reserve in excess of two hundred
thousand dollars ($200,000), the Manager shall be required to obtain the
consent of O&Y (U.S.) Development General Partner Corp. (which consent
shall not be unreasonably withheld).
(t) "Secretary" means the Secretary of State of Delaware.
(u) "Treasury Regulations" means the income tax regulations,
including any temporary regulations, from time to time promulgated under
the Code.
(v) "245 Park Avenue" means that certain parcel of real property
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, together with the office
building and other improvements existing thereon.
SECTION 4. BUSINESS OF THE COMPANY. The sole purpose of the
Company is to receive, own, hold and dispose of, in accordance with all
applicable provisions of this Agreement, (i) Class A Units of World
Financial Properties, L.P. representing on the date of consummation of
the Reorganization Plan ___% of the total of all Class A Units, (ii)
such Class B Units of World Financial Properties, L.P. (and the Class A
Units into which they may be converted) to be issued to the Company
pursuant to the provisions of Section 2 of the JMB Agreement, (iii) the
rights and benefits evidenced by the provisions of the JMB Agreement (to
the extent such provisions apply to the Company) and (iv) cash
distributions in respect of the Class A Units and any cash proceeds of
the JMB Agreement (to the extent such provisions apply to the Company).
So long as O&Y (U.S.) Development General Partner Corp. shall remain a
Member, the Company shall not acquire any assets in addition to those
specified in clauses (i) through (iv) above and shall not transact any
business other than the business of owning, holding and disposing (in
accordance with all other applicable provisions hereof) of such assets.
SECTION 5. TERM. The term of the Company shall begin upon the
filing of a Certificate of Formation with the Secretary and shall
continue until the earlier of (a) December 31, 2040 or (b) the date as
of which the Company is dissolved in accordance with this Agreement or
by law.
SECTION 6. PRINCIPAL PLACE OF BUSINESS. The principal place of
business of the Company shall be located at 000 Xxxxx Xxxxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000. A Majority Interest of the Members
may change (on notice to O&Y (U.S.) Development General Partner Corp.),
from time to time, the principal place of business of the Company.
SECTION 7. REGISTERED AGENT; REGISTERED OFFICE. The registered
agent for the service of process shall be The Corporation Trust Company.
The registered office shall be 0000 Xxxxxx Xxxxxx in the City of
Wilmington, County of New Castle. A Majority Interest of the Members
may change, from time to time, the registered agent or office through
appropriate filings with
the Secretary.
SECTION 8. CAPITAL CONTRIBUTIONS; NO WITHDRAWAL OR RESIGNATION.
(a) Initial Capital Contributions. Each Member shall make the
Capital Contribution set forth opposite such Member's name on Schedule I
attached hereto and shall receive the Membership Interest set forth
opposite such Member's name on such Schedule.
(b) Additional Contributions; Interest. No Member shall be
obligated to make any additional Capital Contribution. Upon any
additional Capital Contribution made by any Member, the Membership
Interests of the Members shall be adjusted accordingly and shall be set
forth on an amendment to Schedule I attached hereto. No Member has any
obligation to restore a deficit balance in such Member's Capital Account
or to make any contributions to the Company in order to restore such
deficit balance. No Member shall be paid interest on
any Capital Contribution.
(c) Withdrawal and Resignation; Return of Capital Contribution.
No Member shall be entitled to withdraw or resign as a Member or to
receive any part of such Member's Capital Contribution or any
distribution from the Company in connection therewith.
SECTION 9. DISTRIBUTIONS; OPERATING COVENANTS.
(a) The Manager shall cause the Company to promptly distribute to
each of its Members the Net Cash Flow in accordance with their
respective Membership Interests upon any distribution or other payment
the Company receives with respect to the Class A Units.
(b) So long as O&Y (U.S.) Development General Partner Corp. shall
be a Member, the Manager shall not cause or permit the Company, without
the consent of O&Y (U.S.) Development General Partner Corp., to (i) own
any assets except as provided in Section 4, (ii) incur any indebtedness
or other obligations except for obligations as an Additional General
Partner or a Limited Partner of World Financial Properties, LP and
obligations under the JMB Agreement, (iii) grant or suffer the existence
of any lien, security interest or encumbrance of any kind on or with
respect to its assets (other than as provided in the JMB Agreement and
the Limited Partnership Agreement), (iv) merge, consolidate, sell,
transfer or otherwise dispose of any assets, except for distributions
permitted hereunder and under the JMB Agreement and the Limited
Partnership Agreement, (v) issue any additional securities, (vi) have
any employees or agents, or (vii) enter into any agreement to do any of
the foregoing actions specified in clauses (i) through (vi) above.
SECTION 10. ALLOCATION OF INCOME AND LOSSES.
(a) Allocations. Items of income, gain, loss, deduction, credit
and tax preference to be allocated among the Members shall be allocated
in accordance with their respective Membership Interests.
(b) Change in Membership Interests. If there is a change in any
Member's Membership Interest during any year, allocations among the
Members shall be made in accordance with their Membership Interests in
the Company from time to time during such year in accordance with
Section 706 of the Code using the closing-of-the-books method, except
that depreciation, amortization and similar items shall be deemed to
accrue ratably on a daily basis over the entire year during which the
corresponding asset is owned by the Company for the entire year, and
over the portion of a year after such asset is placed in service by the
Company if such asset is placed in service during the year.
(c) Special Rules. Notwithstanding anything to the contrary in
this Agreement, the debt sharing provisions described in Sections 6.02
and 7.11(e) of the Limited Partnership Agreement shall be complied with
by the Company.
SECTION 11. WITHHOLDING. The Company is authorized to withhold
from distributions to be made to a Member, or with respect to
allocations to a Member, and to pay over to a federal, state or local
government, any amounts required to be withheld pursuant to the Code or
any provisions of any other federal, state or local law. Any amounts so
withheld shall be treated as distributed to such Member pursuant to this
Section 11 for all purposes of this Agreement and shall be offset
against the net amounts otherwise distributable to such Member. The
Company may also withhold from distributions that would otherwise be
made to a Member, and apply to the obligations of such Member, any
amounts that such Member owes to the Company. In addition, any tax
imposed upon the Company resulting from the Membership Interest of any
Member shall be treated as a distribution to such Member and
shall reduce future distributions of Net Cash Flow to such Member.
SECTION 12. BOOKS, RECORDS AND ACCOUNTING.
(a) Books and Records. The Company shall maintain complete and
accurate books and records of the Company's business and affairs in
accordance with generally accepted accounting principles, consistently
applied. The books and records shall be maintained at the principal
place of business of the Company and shall be accessible to the Members
in accordance with the Act.
(b) Fiscal Year; Accounting. The Company's fiscal year shall
initially be the calendar year. The accounting methods and principles
to be followed by the Company shall be selected from time to time by the
Manager.
(c) Reports. The Company shall provide to the Members reports
concerning the financial condition and results of operation of the
Company and the Members' Capital Accounts within ninety five (95) days
after the end of each fiscal year.
(d) Expenses. Prior to incurring any material expenses of
maintaining such books and records (other than expenses associated with
the preparation of the Company's tax returns and other expenses
associated with compliance by the Company of all applicable laws, it
being agreed that such expenses shall not exceed the reasonable cost of
such preparation and compliance) the Manager shall obtain the consent of
each Member, whose consent may not be unreasonably withheld.
SECTION 13. COMPANY FUNDS. The funds of the Company shall be
deposited in such bank or other financial institution account or
accounts, or invested in such interest-bearing or non-interest-bearing
investments, as shall be designated by the Manager. Each Member shall
be given notice as to the name and address of each bank or financial
institution where the Company maintains such accounts. All withdrawals
from any such bank accounts shall be made only by the Manager or by
individuals duly appointed by the Manager.
SECTION14. MANAGEMENT. (a) The Manager. The business of the
Company shall be managed by the Manager. The initial Manager shall be
JMB and shall serve until its resignation in accordance with the terms
hereof. So long as O&Y (U.S.) Development General Partner Corp. shall
be a Member, no Person other than JMB or an Affiliate of JMB shall act
as the Manager without the prior written consent of O&Y (U.S.)
Development General Partner Corp., which consent shall not unreasonably
be withheld.
(b) Resignation. The Manager may resign at any time by giving
written notice to all Members.
(c) Limitations on Powers. The Manager shall not have any
power, right or authority to take any action requiring Member approval
as set forth in this Agreement in the absence of the requisite Member
approval.
(d) Reimbursement. The Manager shall be reimbursed by the
Company for any reasonable out-of-pocket expenses (including expenses
permitted under Section 12(d)) incurred by the Manager on behalf of the
Company.
SECTION 15. MEETINGS.
(a) Meetings of Members. Meetings of Members for any proper
purpose may be called at any time by any Member. Members may
participate in any meeting through the use of a conference telephone or
similar communications equipment by means of which all individuals
participating in the meeting can hear each other, and such participation
shall constitute presence in person at the meeting. The Company shall
give written notice of the date, time, place and purpose of any meeting
to all Members at least ten (10) days and not more than sixty (60) days
prior to the date fixed for the meeting. Notice may be waived by any
Member.
(b) Consent of Members. Any action required or permitted to be
taken at any annual or special meeting of Members may be taken by a
written consent without a meeting, without prior notice and without a
vote. The written consent shall set forth the action so taken and shall
be signed by Members having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at
which all Members entitled to vote thereon were present and voting.
Notice of the taking of action by written consent shall be given to all
Members who did not sign the written consent.
SECTION 16. VOTING.
(a) Members. Except as specifically provided in this Agreement
or as provided in Section 16(c), the affirmative vote or written consent
of a Majority Interest shall decide all matters properly brought before
the Members.
(b) Voting. A Member may vote either in person or by written
proxy or consent signed by the Member or by his duly authorized attorney
in fact.
(c) Actions Requiring Unanimous Member Approval.
Notwithstanding any other provision of this Agreement, the affirmative
vote or written consent of all the Members shall be required to approve
the following matters:
(i) The dissolution or winding up of the Company; and
(ii) Amendments to this Agreement.
SECTION 17. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) Limitation of Liability. The debts, obligations and
liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member or Manager shall be obligated personally for any
such debt, obligation or liability of the Company solely by reason of
being a Member or Manager.
(b) Indemnification. The Company shall indemnify, in accordance
with and to the full extent now or hereafter permitted by law, any
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including, without
limitation, an action by or in the right of the Company) by reason of
the fact that such Person is or was a Member, Manager or officer of the
Company against any liabilities, expenses (including, without
limitation, attorneys' fees and expenses and any other costs and
expenses incurred in connection with defending such action, suit or
proceeding), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such Person in connection with such action,
suit or proceeding.
(c) Expenses. Expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by a Member, Manager
or officer of the Company in defending a civil, criminal, administrative
or investigative action, suit or proceeding shall be paid by the Company
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the Member (which
shall be in form and substance reasonably satisfactory to all other
Members) , Manager or officer to repay such amount if it shall
ultimately be determined that such Member, Manager or officer is not
entitled to be indemnified by the Company under this Section 17 or under
any other contract or agreement between such Member, Manager or officer
and the Company. Such expenses (including reasonable attorneys' fees)
incurred by employees or agents of the Company or Persons serving other
entities at the request of the Company may be so paid upon the receipt
of the aforesaid undertaking and such terms and conditions, if any, as
the Manager deems appropriate.
(d) Not Exclusive. The indemnification and advancement of
expenses provided by this Section 17 shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement
of expenses may be entitled under any by-law, agreement, vote of Members
or otherwise, both as to action in such Person's official capacity and
as to action in another capacity while holding such office, and shall
continue as to a Person who has ceased to be a Member, Manager, or
officer and shall inure to the benefit of the successors, assigns,
heirs, executors and administrators of such a Person.
(e) Insurance. The Company may purchase and maintain insurance
on behalf of any Person who is or was a Member, Manager or officer of
the Company, against any liability asserted against such Person and
incurred by such Person in any such capacity, or arising out of such
Person's status as such, whether or not such Person would be entitled to
indemnity against such liability under the provisions of this Section
17.
(f) Reimbursement. Notwithstanding any contrary provision set
forth above, no indemnification shall be provided by the Company in
respect of liabilities or expenses that arise out of (1) any material
breach by a Member of its obligations under this Agreement, (ii) any
grossly negligent acts or omissions by a Member or (iii) any intentional
wrongful acts by a Member.
SECTION 18. ASSIGNMENT OF MEMBERSHIP INTERESTS AND NEW MEMBERS.
(a) Assignment. A Membership Interest shall only be assignable,
in whole or in part, upon compliance with the following provisions of
this Agreement. An assignment of a Membership Interest shall not
entitle the assignee to become or to exercise any rights or powers of a
Member until such assignee is admitted as a Member in accordance with
this Agreement. As a condition to any assignment of a Membership
Interest, the Member must notify the assignee and the Company in writing
of all obligations of such Member for liabilities relating to the
Company and this Agreement, including any obligations to make
contributions to the Company. An assignment shall entitle the assignee
only to receive such distributions, to share in such profits and to
receive such allocations of income, gain, loss, deduction, credit, tax
preference and similar items to which the assignor was entitled to the
extent assigned.
(b) Limitations on Assignment. No Member may assign any
Membership Interest (or any portion thereof or interest therein), and no
Person shall become a Member, unless in the opinion of counsel selected
by or acceptable to the Manager, such action will not subject the
Company to federal income taxation as an association taxable as a
corporation, terminate the Company pursuant to Section 708(b) of the
Code or violate applicable state or federal securities laws. Any
attempted action in contravention of this Section 18(b)
shall be void and of no force or effect.
(c) New Members. A Person, including, without limitation, an
assignee of a Membership Interest, shall be admitted as a Member only
upon (i) the written consent of a Majority Interest of the Members,
which consent may be granted or withheld in the sole and absolute
discretion of each Member whose consent is required hereby and (ii) the
execution by such Person of this Agreement. Until the assignee of a
Membership Interest is admitted as a Member, the assignor, subject to
the last sentence of Section 18(a), shall continue to be a Member.
SECTION 19. DISSOLUTION.
The Company shall be dissolved and terminated upon the happening
of the first to occur of any of the following events:
(a) The expiration of the term of the Company;
(b) The approval or written consent of all of the Members for
the dissolution or winding up of the Company;
(c) The death, retirement, withdrawal, resignation, expulsion,
bankruptcy (as defined in Section 18-304 of the Act) or dissolution of a
Member or Members or the occurrence of any other event that terminates
the continued membership of such Member or Members in the Company,
unless within ninety (90) days of such occurrence the Company is
continued by the written consent of a majority of the remaining
Membership Interests, which consent may be granted or withheld in the
sole and absolute discretion of each Member whose consent is required
hereby, and if there is only one (1) Member remaining, the admission of
one (1) or more additional Members; and
(d) Judicial dissolution pursuant to the Act.
SECTION 20. WINDING UP AND DISTRIBUTION OF ASSETS.
(a) Winding Up. If the Company is dissolved, the Manager shall
wind up the affairs of the Company.
(b) Distribution of Assets. Upon the winding up of the Company,
the Manager shall pay or make reasonable provision to pay all claims and
obligations of the Company, including all costs and expenses of the
liquidation and all contingent, conditional, or unmatured claims and
obligations that are known to the Manager but for which the identity of
the claimant is unknown. If there are sufficient assets, such claims
and obligations shall be paid in full and any such provision shall be
made in full. If there are insufficient assets, such claims and
obligations shall be paid or provided for according to their priority
and, among claims and obligations of equal priority, ratably to the
extent of assets available therefor. Any remaining assets shall be
distributed as follows:
(i) First, to creditors in the order of priority as
provided by law; and
(ii) Second, to Members in accordance with their respective
positive Capital Accounts, after giving effect to all contributions,
distributions and allocations for all periods.
SECTION 21. CONFLICT OF INTEREST. No Member shall be required to
act hereunder as its sole and exclusive business activity, and any
Member may have other business interests and engage in other activities
in addition to those relating to the Company. Neither the Company nor
any Member shall have any right by virtue of this Agreement in or to any
other such business interests or activities or to the income or proceeds
derived therefrom, including, without limitation, the management fees
payable to JMB pursuant to Section 7 of the JMB Agreement. No
transaction between a Member and the Company shall be voidable solely
because a Member has a direct or indirect interest in the transaction if
either the transaction is fair and reasonable to the Company, or the
percentage or number of disinterested Members, as required under this
Agreement or applicable law, authorize, approve or ratify the
transaction. Notwithstanding the preceding sentence, the parties hereto
agree that the transactions contemplated by Section 23 of this Agreement
shall not be voidable and shall be considered fair and reasonable to the
Company.
SECTION 22. TAXATION.
(a) Status of the Company. The Members acknowledge that this
Agreement creates a partnership for federal and state income tax
purposes (and only for such purposes), and hereby agree not to elect to
be excluded from the application of Subchapter K of Chapter 1 of
Subtitle A of the Code or any similar state statute.
(b) Tax Elections. JMB shall have full and exclusive authority
over all Company tax matters, including, without limitation, (i) with
respect to Section 7.11(e) of the Limited Partnership Agreement, the
election by JMB to request that World Financial Properties, L.P. adopt
the "remedial allocation method" under Treasury Regulation Section
1.704-3 with respect to 000 Xxxx Xxxxxx; and (ii) any election under
Section 754 of the Code and the Treasury Regulations thereunder to
adjust the basis of the Company assets under Section 734(b) or 743(b) of
the Code and a corresponding election under the applicable sections of
state and local law. The Tax Matters Member (as defined in Section
22(d)) shall have the authority to make all other Company elections
permitted under the Code, including elections of methods of
depreciation. Notwithstanding anything to the contrary herein, any
other Member shall have the right to confer with the Tax Matters Member
from time to time regarding the tax affairs of the Company and shall be
entitled to reasonable notice of any tax election made by the Company.
(c) Company Tax Returns. The Manager shall cause the necessary
federal income and other tax returns and information returns for the
Company to be prepared. Each Member shall provide such information
about itself, if any, as may be needed by the Company for purposes of
preparing such tax returns and information returns. The Manager shall
deliver to each Member within ninety (90) days after the end of each
fiscal year a copy of the federal income tax returns for the Company as
filed with the appropriate taxing authorities, and upon the written
request of any Member, a copy of any state and local income tax return
as filed.
(d) Tax Audits.
(i) JMB shall be the Company's tax matters partner within
the meaning of Section 6231(a)(7) of the Code (the "Tax Matters Member")
with respect to federal income tax audits. If at any time the Tax
Matters Member cannot or elects not to serve as the Tax Matters Member,
is removed by the Members as the Tax Matters Member or ceases to be a
Member, a Majority Interest of the Members shall select another Member
to be the Tax Matters Member. The Tax Matters Member, as an authorized
representative of the Company, shall direct the defense of any claims
made by the IRS to the extent that such claims relate to the adjustment
of Company items at the Company level. The Tax Matters Member shall
promptly deliver to each Member a copy of any notice of beginning of
administrative proceedings or any report explaining the reasons for a
proposed adjustment received from the IRS relating to or potentially
resulting in an adjustment of Company items. The Tax Matters Member
shall, unless a Majority Interest consents to the contrary, diligently
and in good faith contest any proposed adjustment of a Company item that
principally affects the Members at the administrative and judicial
levels, including, if appropriate or if requested by a Majority
Interest, appealing any adverse judicial decision, and shall consider in
good faith any suggestions made by any Member or its counsel regarding
the conduct of such administrative or judicial proceedings. The Tax
Matters Member shall keep each Member advised of all material
developments with respect to any proposed adjustment that come to its
attention, including, without limitation, the scheduling of all
conferences and substantive telephone calls with the IRS. Each Member
shall be entitled, at its own expense, to attend all meetings with the
IRS and to review in advance any material written information
(including, without limitation, any pleadings, memoranda or similar
items) to be submitted to the IRS. Without first obtaining the consent
of a Majority Interest, the Tax Matters Member shall not, with respect
to any proposed adjustment of a Company item that materially and
adversely affects any Member, a. enter into a settlement agreement that
purports to bind Members other than the Tax Matters Member (including,
without limitation, any stipulation consenting to an entry of decision
by any tax court), or b. enter into an agreement or stipulation
extending the statute of limitations.
(ii) The Company shall promptly deliver to each Member a
copy of all notices, communications, reports or writings of any kind
with respect to income or similar taxes received from any state or local
taxing authority relating to the Company that might materially and
adversely affect each Member, and shall keep such Members advised of all
material developments with respect to any proposed adjustment of Company
items that come to its attention.
(iii) Each Member shall continue to have the rights
described in this Section 22(d) with respect to tax matters relating to
any period during which it was a Member, whether or not it is a Member
at the time of the tax audit or contest.
SECTION 23. JMB'S RIGHTS. Notwithstanding anything to the
contrary in this Agreement, (i) pursuant to Section 9.05 of the Limited
Partnership Agreement, JMB, in its sole and absolute discretion, shall
have the right to cause the Company to distribute to its Members, in
proportion to their respective Membership Interests, the "Class A Units"
(as defined in the Limited Partnership Agreement) owned by the Company,
(ii) JMB, in its sole and absolute discretion, shall have the right to
cause the Company to become a "Tag-Along Partner" (as defined in the
Limited Partnership Agreement) or otherwise make any decision pertaining
to or incidental to any rights granted to the Company under Section 9.08
of the Limited Partnership Agreement; (iii) JMB, in its sole and
absolute discretion, shall have the right to exercise, on behalf of the
Company, any of the rights granted to the Company pursuant to the JMB
Agreement; and (iv) JMB, in its sole and absolute discretion, shall have
the right to exercise, on behalf of the Company, any of the rights
granted to the Company pursuant to the Limited Partnership Agreement.
SECTION 24. MISCELLANEOUS.
(a) Governing Law. This Agreement and any controversies, claims
or arbitration hereunder shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflict of law rules.
(b) Binding Effect. Except as otherwise specifically provided
herein, this Agreement shall be binding upon and inure to the benefit of
the parties and their legal representatives, heirs, administrators,
executors, successors and assigns.
(c) Pronouns and Number. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall include the
masculine, feminine and neuter.
(d) Captions. Captions or section headings contained in this
Agreement are inserted only as a matter of convenience and in no way
define, limit or extend the scope or intent of this Agreement or any
provision hereof.
(e) Enforceability. If any provision of this Agreement, or the
application of the provision to any Person or circumstance shall be held
invalid, the remainder of this Agreement, or the application of that
provision to Persons or circumstances other than those with respect to
which it is held invalid, shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.
(g) Notices. Any notices permitted or required under this
Agreement shall be deemed to have been given when delivered in Person or
by courier or three (3) days after being deposited in the United States
mail, postage prepaid, and addressed to the Company at its principal
place of business and to any Member at the address shown below, or to
such other address of which any party shall notify the other parties
hereto, in accordance with the terms hereof.
If to JMB:
XXX/000 Xxxx Xxxxxx Associates, Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Xxxx Xxxxxxx
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxxx, Esquire
Facsimile: (000) 000-0000
If to O&Y (U.S.) Development General Partner Corp.:
c/o World Financial Properties, L.P.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
Eighty Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(h) Entire Agreement; Amendment. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
set forth herein and supersedes all prior understandings or agreements
between the parties with respect to such matters. This Agreement,
including all schedules hereto, may only be amended, modified or
supplemented by written agreement of all parties to this Agreement. In
addition, amendments may be made to this Agreement in order to enable
all or a portion of the Company to qualify as a partnership for Federal
income tax purposes under applicable regulations on the classification
of entities as partnerships or corporations under the Code adopted as
final regulations after the date hereof, and to the extent that such
regulations eliminate or modify the need therefor, to modify or
eliminate existing provisions of this Agreement.
(i) Further Assurances. The Members shall execute and deliver
such further instruments and do such further acts and things as may be
required to carry out the intent and purposes of this Agreement. Each
Member shall execute all such certificates and other documents and shall
do all such filing, recording, publishing, and other acts as are
required to comply with the requirements of law for the formation and
operation of the Company and to comply with any laws, rules, and
regulations relating to the acquisition, operation, or holding of the
property of the Company.
(j) Third Parties. Nothing in this Agreement, whether express
or implied, shall be construed to give any Person other than a Member or
the Company any legal or beneficial or other equitable right, remedy or
claim under or in respect of this Agreement, any covenant, condition,
provision or agreement contained herein or the property of Company.
(k) Facsimile Signatures. The facsimile signature of any
Manager or Member may be used at all times and for all purposes in place
of an original signature.
(l) Reliance upon Books, Reports and Records. Unless he has
knowledge concerning the matter in question which makes his reliance
unwarranted, each Manager and Member shall, in the performance of his
duties hereunder, be entitled to rely on information, opinions, reports
or statements, including, without limitation, financial statements and
other financial data, if prepared or presented by one or more employees
of the Company or by legal counsel, accountants or other Persons as to
matters such Manager or Member reasonably believes to be within such
Person's professional or expert competence.
(m) Time Periods. In applying any provision of this Agreement
which requires that an act be done in or not done in a specified number
of days prior to an event or that an act be done during a period of a
specified number of days, calendar days shall be used, the day of the
doing of the act shall be excluded, and the day of the event shall be
included.
(n) Waiver. No failure by any Manager or Member to insist upon
the strict performance of any covenant, duty, agreement or condition of
this Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute waiver of any such breach or any other
covenant, duty, agreement or condition.
IN WITNESS WHEREOF, the undersigned Members have executed
this Agreement as of the date first set forth above.
XXX/000 XXXX XXXXXX ASSOCIATES, LTD.
By: JMB PARK AVENUE, INC.,
a general partner
By: ______________________
Name:__________________
Title:_________________
O&Y (U.S.) DEVELOPMENT GENERAL
PARTNER CORP.
By: ___________________________
Name:______________________
Title:_____________________
SCHEDULE I
MEMBERS
MEMBER'S MEMBER'S
CAPITAL MEMBERSHIP
NAME AND ADDRESS CONTRIBUTION INTEREST
JMB/245 Park Avenue
Associates, Ltd. $30,000,000 99%
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
O&Y (U.S.) Development $ 303,030 1%
General Partner Corp.
c/o World Financial
Properties, L.P.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
EXHIBIT A
[JMB AGREEMENT]
EXHIBIT B
[LIMITED PARTNERSHIP AGREEMENT]
