Exhibit 10.6
LIMITED LIABILITY COMPANY AGREEMENT OF
BEHRINGER HARVARD RESIDENCES AT CORDILLERA, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT (“Agreement”) is made and entered into effective as of the 10th day of May 2007, by and between BEHRINGER HARVARD CORDILLERA RESIDENCES, INC., a Delaware corporation (“BH Investor”), and CORDILLERA PARTNERS, LLC, a Delaware limited liability company (“CP Investor”). The BH Investor and the CP Investor, together with any such additional parties as and when admitted to the Company (as defined below) as members shall be individually a “Member” and, collectively, the “Members”.
ARTICLE I.
FORMATION, NAME, PRINCIPAL PLACE OF BUSINESS - AGENT
PURPOSES, TERM AND DEFINITIONS
1.1 Formation. For and in consideration of the mutual covenants herein contained, the Members hereby form a limited liability company (hereinafter the “Company”) under and pursuant to the Delaware Limited Liability Company Act, as amended from time to time (the “Act”). The Company shall be governed by the Act. The Certificate (as hereinafter defined) has been or shall promptly be filed and recorded in such office and places as is required by the Act.
1.2 Name. The business of the Company shall be conducted under the name of “Behringer Harvard Cordillera, LLC.”
1.3 Company Office, Registered Office and Registered Agent. The Company shall maintain its principal office in the State of Texas at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, or at such other place where the BH Investor headquarters is located as the BH Investor may from time to time designate. The Registered Office in the State of Delaware is c/o of the Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the agent for service of process at such address shall be the Corporation Trust Center. The Company may maintain such different or additional offices as the Members may determine.
1.4 Purposes. The nature and business of the Company and the purposes to be conducted and promoted by the Company are to engage solely in the following activities:
(a) To acquire, improve, develop, redevelop, renovate, construct, maintain, operate, manage, finance, lease, refinance, and sell or exchange the Property (as hereinafter defined);
(b) To exercise all powers enumerated in the Act or this Agreement necessary or convenient to the conduct, promotion or attainment of the business or purposes set forth in Section 1.4(a); and
(c) Notwithstanding anything in this Agreement to the contrary, the Company shall not take, or refrain from taking, any action which, in the judgment of BH Investor, in its sole and absolute discretion, (i) could adversely affect the ability of Behringer Harvard Opportunity REIT I, Inc., a Maryland corporation (“BH REIT”) to achieve or maintain qualification as a real estate investment trust, (ii) could subject BH REIT to any additional taxes under Section 857 or Section 4981 of the Code or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over BH REIT or its securities, unless such action (or inaction) shall have been specifically consented to by BH
1
REIT in writing. Any such action or inaction in contravention of Section 1.4 of this Agreement shall be void ab initio, and shall not be given any effect.
1.5 Term. The Company shall continue until December 31, 2057, unless earlier dissolved pursuant to the provisions of this Agreement.
1.6 Definitions. As used in this Agreement, unless the context clearly requires otherwise, the following words and phrases shall have the following meanings:
“Additional Capital Contributions” means all amounts contributed (or deemed to be contributed) to the Company as additional Capital Contributions by the Members under Section 3.3.
“Additional Scheduled Capital Contributions” means all amounts contributed to the Company as additional Scheduled Capital Contributions by the Members under Section 3.2.
“Adjustment Date” means the close of business on the last day of any fiscal year of the Company and any other date as of which Profits and Losses are allocable under this Agreement.
“Affiliate” means, with respect to any Person (a) any other Person, directly or indirectly controlling, controlled by or under common control with such Person; (b) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities of such specified Person; (c) any officer, director, partner, member or trustee of such specified Person; and (d) if any Person who is an Affiliate is an officer, director, partner, member or trustee of another Person, such other Person. The term “control” shall mean the ability, directly or indirectly, to control the management of an entity.
“Agreement” means this Limited Liability Company Agreement.
“Approval by Company Vote” means approval by a Majority in Interest of the Members pursuant to a Company Vote. Any determination made by Approval by Company Vote shall be binding on all Members without further consent and approval.
“Asset Management Fee” has the meaning set forth in Section 4.9(c).
“Assets” means all of the assets of the Company (including, without limitation, the Property).
“Business Plan” means any business plan prepared by the CP Investor and approved by the BH Investor and setting forth the estimated business activities of the Company for the then current or immediately succeeding calendar year and for each month and each calendar quarter of such calendar year, in such detail as determined by the Members.
“Capital Account” means, with respect to each Member, the account established and maintained on the books and records of the Company for each Member pursuant to Section 3.5 below, adjusted as provided for therein.
“Capital Contribution” means the amount of money and the Gross Asset Value of other property or consideration contributed to the capital of the Company (net of liabilities securing such property that the Company has assumed or taken subject to, under Section 752 of the Code) by a Member.
2
“Capital Contribution Balance” means, for the Members, the cumulative Capital Contributions of that Member less the cumulative distributions to that Member in return thereof pursuant to Sections 6.1.
“Capital Transaction” means any transaction pursuant to which (i) the Company sells all or substantially all of the Property; or (ii) the Company obtains permanent mortgage financing with a term of five (5) years or more secured by all or substantially all of the Property. It is expressly agreed that any mezzanine loan financing, any revolving credit loan, line of credit loan, or similar lending arrangement made by the Company shall not be considered a Capital Transaction.
“Cash Needs” has the meaning set forth in Section 3.3(a).
“Certificate” means the Certificate of Formation of the Company.
“Code” means the Internal Revenue Code of 1986 as it may be amended or revised from time to time, or any provision of succeeding law.
“Company” means Behringer Harvard Residences at Cordillera, LLC, a Delaware limited liability company.
“Company Minimum Gain” has the meaning set forth in Section 1.704-2(d) of the Regulations. Subject to the foregoing, Company Minimum Gain shall equal the amount of gain, if any, which would be recognized by the Company with respect to each nonrecourse liability of the Company (or Property owner) if the Company were to Transfer the Company property (or the Property owner were to Transfer the Property owner property) which is subject to such nonrecourse liability in full satisfaction thereof.
“Company Percentage” means initially (a) eighty-five percent (85%) as to BH Investor, and (b) fifteen percent (15%) as to CP Investor, subject to adjustment in accordance with the terms of this Agreement.
“Company Vote” shall mean a vote of the Members. A Company Vote may be conducted at a meeting of the Members, which meeting may take place by means of telephone conference, video conference or similar communications equipment by means of which all Persons participating therein can hear each other. Alternatively, a Company Vote may be conducted by notice sent by one of the Members, which notice shall set forth the matter with respect to which the Company Vote is to be made. If a written consent or consents setting forth the matter to be determined is signed by a Majority in Interest of the Members, Approval by Company Vote shall be deemed to have been obtained with respect to such matter.
“Depreciation” means, with regard to any Company asset for any fiscal year or other period, the depreciation, depletion or amortization, as the case may be, allowed or allowable for federal income tax purposes; provided, however, that if there is a difference between the Gross Asset Value and the adjusted tax basis of such asset, Depreciation shall mean “book depreciation, depletion or amortization” as determined under Section 1.704-1(b)(2)(iv)(g)(3) of the Regulations.
“Developer” means TP Cordillera, LLC a Delaware limited liability company.
“Development Agreements” means the Hotel Development Agreement and the Fractional Development Agreement.
3
“Development Budget” means the budget for construction of the Improvements and the development of the Fractional Land prepared by the CP Investor and approved by the BH Investor and setting forth the estimated capital and operating expenses of the Company for the then current or immediately succeeding calendar year and for each month and each calendar quarter of such calendar year, in such detail as determined by the Members.
“Development Property” means the Fractional Land and the Raw Land.
“Distributable Cash” means all cash, revenues, and funds received by the Company, and any amounts released from Reserves to the extent the Members through approval of the Operating Budgets deem that the amount released is no longer required to be retained in Reserves, less the sum of the following to the extent paid or set aside by the Company: (a) all principal and interest payments on indebtedness of the Company and all other sums paid to lenders; (b) all cash expenditures incurred incident to the normal operation of the Company business; (c) such amounts as may be added to Reserves as the Members through approval of the Operating Budgets deem reasonably necessary to the proper operation of the Company’s business.
“Fractional Development Agreement” means a Development Agreement by and between Behringer Harvard Cordillera, LLC, a Delaware limited liability company, and Developer providing for performance by Developer of development services with respect to the Fractionals as set forth in the Fractional Development Agreement and payment by the Company of a development fee to Developer, to be entered into on behalf of the Company, in accordance with the provisions of Section 4.9(a) hereof.
“Fractional Land” means that certain tract of land of approximately three (3) acres that will be subdivided from the Hotel & Spa land on which fractional units are anticipated to be developed.
“Fractional Management Agreement” means a Sales and Management Agreement between the Company and Fractional Manager of sales and management services with respect to the Fractionals and the Raw Land as set forth in the Fractional Management Agreement and payment by the Company of a sales management fee to Fractional Manager, to be entered into on behalf of the Company, in accordance with the provisions of Section 4.9(b) hereof..
“Fractional Manager” means TP Cordillera, LLC, a Delaware limited liability company.
“Fractionals” means those certain fractional units that are anticipated to be developed on the Fractional Land and potentially on the Raw Land.
“Gross Asset Value” means, except as set forth below, the adjusted basis of an asset for federal income tax purposes:
(a) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset at the time of contribution, as determined by the BH Investor (subject to Approval by Company Vote);
(b) The Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the BH Investor (subject to Approval by Company Vote), as of the following times: (i) the acquisition of an additional interest in the Company by any new or existing Members in exchange for more than a de minimis Capital Contribution and any such other time as the BH Investor reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interest of the Members in the Company; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the
4
Company and any such other time as the BH Investor reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company; and (iii) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(c) The Gross Asset Value of any Company asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution, as determined by the BH Investor (subject to Approval by Company Vote); and
(d) The Gross Asset Values of Company assets shall be increased or decreased to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b) as determined by the BH Investor (subject to Approval by Company Vote), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extent the BH Investor determines that an adjustment pursuant to subsection (b) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant this subsection (d).
(e) After the Gross Asset Value of an asset has been determined or adjusted pursuant to subsections (a), (b), or (d) hereof, Gross Asset Value will be adjusted by the Depreciation taken into account with respect to the asset for purposes of computing Profits or Losses. If the Gross Asset Value of an asset has been determined or adjusted pursuant to subsections (a), (b), (c) or (d) of this provision, such Gross Asset Value shall thereafter be computed in accordance with Section 1.704-1(b)(2)(iv) of the Regulations.
(f) At no time shall the Gross Asset Value of all of the Company Assets exceed the total investment of debt and equity in the Company.
“Hotel” means The Lodge and Spa at Cordillera located at 2205 Cordillera Way, Edwards, Colorado.
“Hotel Development Agreement” means a Development Agreement by and between Behringer Harvard Cordillera, LLC and Developer providing for the performance by Developer of development services with respect to the Hotel as set forth in the Hotel Development Agreement.
“Hotel Management Agreement” means a Management Agreement between the Company and Hotel Manager providing for the performance by Hotel Manager of management services with respect to the Hotel.
“Hotel Manager” means RockResorts International, LLC, a Delaware limited liability company or such other manager approved by the Members.
“Hotel Operating Budget” means an annual budget prepared by the Hotel Manager and approved by the BH Investor and setting forth the estimated capital and operating expenses of the Company for the then current or immediately succeeding calendar year and for each month and each calendar quarter of such calendar year, in such detail as determined by the Members.
“Improvements” means any improvements and related amenities now located or to be constructed on the Property.
“Initial Capital Contributions” means all amounts contributed (or deemed to be contributed) to the Company as a Capital Contribution by the Members under Section 3.1.
5
“IRR” means, as to the Members, the actual internal rate of return on the investment in the Company made by the Members, as calculated by the Members consistent with the example set forth on Exhibit D attached hereto on a compounded monthly basis (calculated on a 30-day month) taking into consideration the timing and amount of the Capital Contributions made by the Members, as well as the timing and amount of all distributions received as a result of such investment. If there is a variance in the result of the calculation between the Members, then the value calculated by BH Investor shall control in the absence of manifest error. For purposes of calculating the IRR, all Property owned by the Company shall be treated as a single investment and the income from the Property owned by the Company shall be treated as from a single source. For purposes of calculating the IRR, the Capital Contributions made by the Members shall be deemed invested on the first day of the month in which made, if made on or before the fifteenth (15th) day of such month, and on the first day of the following month, if made after the fifteenth (15th) day of such month. For purposes of calculating the IRR, all distributions shall be deemed to have been made by the Company on the first day of the month, if paid on or before the fifteenth (15th) day of such month, and on the first day of the following month, if made after the fifteenth (15th) day of such month.
“Land Transfer” means that certain transfer of the Property to the Company by Behringer Harvard Cordillera, LLC, a Delaware limited liability company.
“Landlord” means Behringer Harvard Cordillera, LLC.
“Lease” means the Lease between the Landlord, as lessor, and the Company, as tenant, providing for the lease of the Hotel.
“Major Decision” has the meaning set forth in Section 4.2 of this Agreement.
“Majority in Interest” shall mean Members owning more than fifty percent (50%) of the Company Percentages.
“Management Agreements” means the Hotel Management Agreement and the Fractional Management Agreement.
“Members” means each of BH Investor and CP Investor, and any other Person that is admitted as a member in the Company pursuant to the provisions of Article VIII, and “Members” means collectively all of such Members.
“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability.
“Member Nonrecourse Debt” has the meaning set forth in Section 1.704-2(b)(4) of the Regulations.
“Member Nonrecourse Deductions” has the meaning set forth in Section 1.704-2(i) of the Regulations. Subject to the foregoing, the amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Company fiscal year equals the excess, if any, of the net increase, if any, in the amount of Member Minimum Gain attributable to such Member Nonrecourse Debt during that fiscal year over the aggregate amount of any distribution during that fiscal year to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Minimum Gain
6
attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i) of the Regulations.
“Net Cash Flow” means, for any period, the excess of (i) revenues for such period, over (ii) expenses for such period.
“Nonrecourse Deductions” has the meaning set forth in Sections 1.704-2(b)(1) and 1.704-2(c) of the Regulations. Subject to the preceding sentence, the amount of Nonrecourse Deductions for a Company fiscal year equals the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain during the fiscal year (determined under Section 1.704-2(d) of the Regulations) over the aggregate amount of any distributions during the fiscal year of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain (determined under Section 1.704-2(h) of the Regulations).
“Nonrecourse Liability” has the meaning set forth in Section 1.704-2(b)(3) of the Regulations.
“Operating Budgets” means the Development Budget and the Hotel Operating Budget.
“Operating Expenses” means all the cash expenditures made or required to be made by the Company in connection with the operation of the Company in the ordinary course of business, including without limitation, cash expenditures made or required to be made by the Company in connection with the development, ownership, management, improvement, operation, maintenance, financing and upkeep of the Property, as well as debt service (principal and interest) and capital expenditures of the Company; provided, however, Operating Expenses shall not include (a) any overhead or general administrative costs or expenses of the Members or salaries or other compensation paid to its employees, officers, directors or shareholders (unless specifically provided for in this Agreement); (b) any expenditures paid or payable from cash Reserves of the Company (provided that to the extent any capital expenditures are made in excess of any such Reserves established for such capital expenditures, such excess amounts shall be included as an Operating Expense); and (c) non-cash items such as depreciation and amortization.
“Partially Adjusted Capital Accounts” means, with respect to any Member as of an Adjustment Date, the Capital Account of such Member as of the beginning of the fiscal year ending on such Adjustment Date (where such Capital Account does not reflect such Member’s share of either cumulative Member Minimum Gain or cumulative Company Minimum Gain), after giving effect to all allocations of items of income, gain, loss or deduction not included in Profits and Losses and all Capital Contributions and distributions during such period, but before giving effect to any allocations of Profits or Losses for such period pursuant to Section 7.1 hereof, increased by (a) such Member’s share of Company Minimum Gain as of the end of such fiscal year, and (b) such Member’s share of Member’s Minimum Gain as of the end of such fiscal year.
“Person” means any individual or entity, and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so admits, and, unless the context otherwise requires, the singular shall include the plural, and the masculine gender shall include the feminine and the neuter and vice versa.
“Profits” and “Losses” means, for each fiscal year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately
7
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
(a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits and Losses pursuant to this subsection (a) shall be added to such taxable income or loss;
(b) Any expenditure of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this subsection (b) shall be subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any of the Company assets is adjusted pursuant to subsections (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;
(d) Gain or loss resulting from any disposition of Company assets with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account depreciation computed in accordance with Section 1.704-1(b)(2)(iv)(g) of the Regulations for such fiscal year or other period; and
(f) Notwithstanding anything contained herein to the contrary, any items which are specially allocated pursuant to Sections 7.3(a), 7.3(b), 7.3(c), 7.3(d), 7.3(e) and 7.3(f) shall not be taken into account in computing Profits or Losses.
“Property” means those certain portions of the tracts of land (and all rights and appurtenances incident thereto) described in Exhibit A attached hereto and all Improvements located, or to be constructed, or developed thereon including, but not limited to, the existing 56-room lodge, approximately 20,000 square feet of spa/fitness center space, approximately 3,000 square feet of meeting/banquet space, 2 restaurants, in place entitlements to add 19 units to the existing lodge, a ski in / ski out condo at the Strawberry Park Beaver Creek lift, approximately 90 daily deeded tee times at 3 area country clubs, options to purchase, with the approval of club members, 20 country club memberships that may be fractionalized, and an adjacent undeveloped 23.2-acre tract fully entitled for 45 residential units and 38,000 square feet of commercial office space that will be conveyed to the Company pursuant to the Land Transfer.
“Raw Land” means that certain 23.2-acre tract with entitlements for 45 residential units and 38,000 square feet of commercial office space.
“Regulations” means the federal income tax regulations, including temporary regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“REIT” means a real estate investment trust as such term is defined in Section 856 of the Code.
8
“Reserves” means funds set aside or amounts allocated to reserves for working capital, taxes, insurance, debt service or other costs and expenses incident to the ownership, development and operation of the Property. The amount of funds to be set aside in Reserves shall be determined by the Members pursuant to the approval of the Operating Budgets.
“Target Account” means, with respect to any Member as of any Adjustment Date, a balance (which may be positive or negative) equal to the hypothetical amount that such Member would receive upon the liquidation of the Company, assuming that (a) all assets of the Company were sold for an amount equal to their respective Gross Asset Values, (b) all liabilities of the Company became due and were satisfied in accordance with their terms (limited with respect to each non-recourse liability, to the Gross Asset Value of the asset securing such liability), and (c) all net assets of the Company were distributed pursuant to Section 6.1 hereof, computed after the Capital Contributions have been made for the period ending on such Adjustment Date. The Members (subject to Approval by Company Vote) shall determine Gross Asset Value as of each Adjustment Date.
“Tenant” means that certain Tenant under the Lease dated as of the date of this Agreement between Behringer Harvard Cordillera, LLC as Lessor and the Company as Lessee.
“Transfer” means, with respect to a particular property, right or interest, the assignment, sale, transfer, pledge, disposition, hypothecation, mortgage, pledge or the grant of a lien or security interest in such right or interest (or any part thereof), whether voluntarily, involuntarily or by operation of law, and whether for consideration or no consideration.
ARTICLE II.
MEMBERS
2.1 Members. The names and addresses of the Members are as follows:
Name | | Address |
| | |
Behringer Harvard Cordillera Residences, Inc. | | 15601 Dallas Parkway, Suite 600
Addison, Texas 75001
Attn: Chief Legal Officer |
| | |
Cordillera Partners, LLC | | 260 Townsend Street, 7th Floor
San Francisco, California 94107-1790 |
ARTICLE III.
CAPITAL
3.1 Initial Capital Contributions. The Members shall each make an Initial Capital Contribution to the Company of cash and/or property in the amount set forth on Exhibit B attached hereto and made a part hereof (it being agreed that time is of the essence with respect to the making of such Initial Capital Contributions).
3.2 Additional Scheduled Capital Contributions. After the Initial Capital Contributions are made, the parties agree that additional funds will be necessary pursuant to the Development Budget and the parties agree that each party will make Additional Scheduled Capital Contributions in the
9
amounts set forth in the Development Budget as defined and as set forth in the Fractional Development Agreement.
3.3 Additional Capital Contributions.
(a) If at any time the BH Investor determines (up to an aggregate amount of One Million Dollars ($1,000,000.00) on a pro rata basis according to each Member’s Company Percentage and pursuant to one or more requests) or for any amount over One Million Dollars ($1,000,000.00) in the aggregate the Members determine pursuant to Section 4.2 herein that the Company requires (or will require) additional funds for any purpose (“Cash Needs”), then the BH Investor shall use reasonable efforts to secure third party or Member loans to fulfill such Cash Needs. If such efforts to secure third party or Member loans are unsuccessful, the BH Investor may send the Members written notice (“Additional Capital Notice”) requesting that the Members contribute in cash such amounts as are necessary to satisfy such Cash Needs and describing the purpose for which the funds are needed. If so requested, each Member shall be obligated to make an Additional Capital Contribution equal to the product of its Company Percentage and the amount of the Cash Needs. The time for the payment of any Additional Capital Contribution to the Company shall be determined by the BH Investor, but shall in no event be less than ten (10) days after the delivery of the Additional Capital Notice.
(b) If a Member fails to timely contribute all or any portion of any Additional Capital Contribution required of such Member, then such Member shall be considered a “Delinquent Member.” The Company may, upon notice to a Delinquent Member, exercise the following remedies:
(i) permit the non-Delinquent Member(s) to advance that portion of the Additional Capital Contribution that is in default as a loan (a “Default Loan”) with the following results: (A) the sum thus advanced shall constitute a loan to the Delinquent Member for which the Delinquent Member will pledge its interests in the Company as security for such loan; (B) such loan and all accrued unpaid interest thereon shall be due on demand, or if no demand is made, twelve (12) months after such advance is made; (C) the loan shall bear interest at the lesser of twelve percent (12%) per annum or the highest rate permitted by applicable law, from the date made until the date fully repaid compounding monthly; (D) all Company distributions and other payments that otherwise would be made to the Delinquent Member (whether before or after dissolution of the Company) under this Agreement (including those under Article 6) shall be paid to the non-Delinquent Member until the loan and all interest accrued thereon is paid in full (with all such payments being applied first to accrued and unpaid interest and then to principal and being deemed to be a distribution or payment (as may apply) to the Delinquent Member, and, in turn, a payment by the Delinquent Member with respect to the loan from the non-Delinquent Member); and (E) the non-Delinquent Member may, in addition to the other rights granted herein, take such action as the non-Delinquent Member may deem appropriate to obtain payment of the loan at the expense of the Delinquent Member; or
(ii) permit the non-Delinquent Member to contribute that portion of the Additional Capital Contribution that is in default as an Additional Capital Contribution made by the non-Delinquent Member, in which case the non-Delinquent Member shall have its Company Percentage increased and the Delinquent Member shall have its Company Percentage decreased in the following manner: (A) the Company Percentage of the non-Delinquent Member immediately following such Additional Capital Contributions shall be increased by an amount equal to one hundred fifty percent (150%) x A/B, where ‘A’ equals the amount the non-Delinquent Member contributed in respect of the Delinquent Member’s required Additional Capital Contribution, and ‘B’ equals the sum of all unreturned Capital Contributions previously made to the Company by all Members after giving effect to the amounts advanced under this Section 3.3(b)(ii) on behalf of the Delinquent Member; and (B) the Company Percentage of the Delinquent Member shall be decreased by the increase of the non-Delinquent Member’s
10
Company Percentage. An example of the operation of this Section 3.3(b)(ii) is set forth in Exhibit C attached hereto.
(c) The exercise by the Company of the remedies set forth in Section 3.3(b) above shall be determined by the non-Delinquent Members in their sole discretion and not by any Delinquent Member.
(d) With respect to any efforts by the BH Investor to obtain loans to the Company from a third party or a Member, the financing terms must be substantially similar to (or more favorable than) loans which the Company could obtain on a competitive arms-length basis. If the BH Investor is unable to determine whether the financing terms are competitive on an arms-length basis, the BH Investor may seek and rely upon the advice of an independent expert in financing. If any Member makes any loan or loans to the Company or advances money on its behalf, the amount of any loan or advance shall not be treated as a Capital Contribution but shall be treated as a debt due from the Company to such Member.
Any Default Loan made by a non-Delinquent Member hereunder may be assigned by such non-Delinquent Member to an Affiliate of the non-Delinquent Member and such Affiliate shall have the right to exercise any and all rights granted to the non-Delinquent Member hereunder with respect to such Default Loan. The Partners agree that in the event that the BH Investor shall make a Default Loan hereunder, the BH Investor may structure the loan with such terms (including, if necessary, structuring the Default Loan as a loan to the Company or structuring the Default Loan so that it complies with the requirements of Revenue Procedure 2003-65, I.R.B. 2003-32) as may be required to ensure that BH REIT will not be treated as holding securities having a value of more than ten percent (10%) of the total voting power or the total value of any one issuer for purposes of Code Section 856(c)(4).
3.4 Bridge Financing. BH Investor shall make a loan to Behringer Harvard Cordillera, LLC (the “Acquisition Loan”) in the amount of seventy-five percent (75%) of the acquisition price of the Project as set forth in that certain Agreement of Purchase and Sale and Joint Escrow Instructions by and between Colorado Hotel Holding, LLC, Cordillera Lodge & Spa, LLC, Colorado Hotel Operator, Inc., and Cordillera Land, LLC, and Cordillera Partners, LLC, as amended, at an interest rate of nine percent (9%) to be used solely in connection with the acquisition of the Project which loan shall be secured by the Property. The Members agree that permanent third party financing shall be obtained as soon as is commercially reasonable (which shall be no later than six months after the acquisition of the Property) and the Acquisition Loan shall be repaid to BH Investor along with any accrued interest out of the proceeds of such financing. In connection with such permanent financing, the Members acknowledge that this Agreement may be amended to include customary and reasonable special purpose entity provisions required by lender provided that no such changes will result in a change in the relative economic position between the parties as set forth in this Agreement.
3.5 Capital Accounts. The Company shall establish and maintain on its books and records for each Member a capital account (collectively the “Capital Accounts”) in accordance with Section 1.704-1(b)(2)(iv) of the Regulations. Subject to the foregoing, each Member’s Capital Account generally shall be:
(a) increased by (i) the amount of money contributed by such Member to the Company, including Company liabilities assumed by such Member; (ii) the fair market value of property (net of liabilities securing such property that the Company has assumed, or taken subject to, under Section 752 of the Code), or other consideration contributed by such Member to the Company; and (iii) allocations to such Member of Net Profits (and items thereof, including certain tax exempt income) and income and gain described in Section 1.704-1(b)(2)(iv)(g) of the Regulations; and
11
(b) decreased by (i) the amount of money distributed to such Member by the Company, including such Member’s individual liabilities assumed by the Company; (ii) the fair market value of all property distributed to such Member by the Company (net of liabilities that such Member is considered to assume or take subject to under Section 752 of the Code); and (iii) allocations to such Member of Net Losses and deductions, including expenses described in Section 705(a)(2)(B) of the Code which are not deductible for tax purposes.
3.6 Interest on and Withdrawal of Capital Contributions. The Members shall not be entitled to receive any interest on Capital Contributions, nor shall the Members be entitled to withdraw or otherwise receive a return of their Capital Contributions from the Company, except pursuant to the terms and conditions of this Agreement. No Member shall be required to contribute or lend any cash or property to the Company to enable the Company to return any Member’s Capital Contributions.
3.7 Resignation; Redemption. Except as otherwise expressly permitted by this Agreement, no Member may resign or withdraw from the Company without Approval by Company Vote. A Member’s interest in the Company may not be redeemed or purchased by the Company without prior Approval by Company Vote.
3.8 Transfers. If any interest in the Company is Transferred in accordance with the terms of this Agreement, the Transferee will succeed to the Capital Account of the Transferor to the extent it relates to the Transferred interest.
ARTICLE IV.
MANAGEMENT
4.1 General Powers of the Members. Except as provided in Section 4.2 hereof, the day-to-day administrative management of the Company and the implementation of the policy and decisions of the Company (as approved by Approval by Company Vote) shall rest with the Member holding the Majority in Interest of the Company Percentages, which shall have all the rights and powers as are necessary, advisable or convenient to the management of the business and affairs of the Company, subject to the limitations contained herein, including those matters described in Section 4.2 below. The Members shall exercise sound business judgment in managing the affairs of the Company. Notwithstanding anything set forth to the contrary in this Agreement, the Member holding the Majority in Interest of the Company Percentages shall be the only Member entitled to bind the Company and enter into agreements and sign on the Company’s behalf. Notwithstanding the foregoing, the Member holding the Majority in Interest of the Company Percentages may give express written authorization, in its sole discretion, to the other Member, delegating the authority to sign on the Company’s behalf. In addition, the Member holding the Majority in Interest hereby approves of the delegation of certain administrative rights to CP Investor through the approval process of the Development Budget and Business Plan, as set forth in the Fractional Development Agreement. In addition, subject to the provisions of Section 4.2 below, no Member (other than a Member holding a Majority in Interest of the Company Percentages) may make or implement any decision set forth in this Agreement to be made or implemented by the Members or give any notices required to be given without the written approval of the Member holding the Majority in Interest of the Company Percentages or pursuant to Approval by Company Vote.
4.2 Major Decisions. Except as otherwise provided in Section 4.12(a), the Member Holding the Majority in Interest of the Company Percentages must obtain the approval of the other Member prior to implementing a Major Decision (as hereinafter defined). A “Major Decision” as used in this Agreement means any decision with respect to the following matters:
12
(a) any merger or consolidation of the Company with another entity;
(b) any borrowing by the Company secured by a deed of trust or lien against the Property in excess of Two Million Dollars ($2,000,000);
(c) guarantee of Debt of any other Person;
(d) causing the Company to file a voluntarily bankruptcy petition, seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Company or a substantial portion of its assets, causing the Company to file a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, causing the Company to file 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 to take any action in furtherance of the foregoing;
(e) causing the Company to file any lawsuit involving an amount in dispute in excess of Five Hundred Thousand Dollars ($500,000);
(f) any payment by the Company of any compensation to a Member or an Affiliate of a Member, or any transaction between the Company and any Member or Affiliate of a Member, except to the extent that any payment to, or transaction with, a Member is set forth in an approved Operating Budget or expressly authorized or approved pursuant to the terms of this Agreement;
(g) the dedication of any portion of the Property to any federal, state or local government or political subdivision;
(h) executing or approving any agreement, arrangement or contract that imposes an obligation or liability on the Company in excess of One Million Dollars ($1,000,000);
(i) assigning the Company’s rights in specific Company property for other than Company purposes;
(j) any act which would make it substantially impractical to carry on the ordinary business of the Company, other than a Transfer of all or substantially all of the assets of the Company;
(k) any confession of a judgment against the Company;
(l) making, executing or delivering any assignment for the benefit of creditors of the Company, or signing any bond, confession of judgment, indemnity bond or surety bond by or on behalf of the Company;
(m) any sale or other disposition of any Asset of the Company having a value in excess of One Million Dollars ($1,000,000), with the exception of lots or fractional interests sold pursuant to a sales plan previously approved by BH Investor or its affiliate;
(n) any admission of any new Member to the Company;
(o) the dissolution or termination of the Company
(p) determining whether Additional Capital Contributions are needed to fulfill Cash Needs after $1,000,000 in aggregate Additional Capital Contributions have been made;
13
(q) approving any agreement whereby any service or activity to be performed for the Company is to be performed by an Affiliate of a Member (excluding any agreements with an affiliate of BH Investor in connection with services regarding asset management, financing and disposition as contemplated in this Agreement);
(r) payment of compensation to Officers;
(s) the approval of any tax election that adversely affects a Member; and
(t) any other decision or action which by the provisions of this Agreement is required to be authorized by the Members.
4.3 Mechanism for Major Decision Approvals. All requests for approvals required under Section 4.2 shall be promptly considered and acted upon by the Members. A response shall be given by each Member within ten (10) days of receipt of the written notice of the Major Decision to be approved or disapproved. In the event that a Member fails to expressly approve or disapprove of any item within ten (10) days of receipt of such written notice, such Member shall be deemed to have disapproved such Major Decision.
4.4 Operating Budgets. The Company shall operate under the Operating Budgets which shall be prepared by the CP Investor and Hotel Manager and approved by the BH Investor. After the Operating Budgets have been approved by the BH Investor, the Members shall implement them on behalf of the Company as set forth in the Development Agreement and Hotel Management Agreement and may cause the Company to incur the expenditures and obligations as therein provided.
4.5 Delegated Authority to Management. The Member holding the Majority in Interest of the Company Percentages may delegate certain of its powers and responsibilities to the officers of the Company (the “Officers”), and in such event, the Officers shall have such power and authority specified by the Member holding the Majority in Interest of the Company Percentages. The current officers of the Company are set forth on Schedule 4.5. The Member holding the Majority in Interest of the Company Percentages shall appoint the Officers including any successors. Any Officer appointed by the Member holding the Majority in Interest of the Company Percentages may be removed by the Member holding the Majority in Interest of the Company Percentages whenever it determines. No Officer shall be paid any compensation unless approved by the Members in accordance with Section 4.2 above and such compensation shall be reasonable, at market rates and subject to industry standard for the tasks performed.
4.6 Payment of Costs and Expenses. The Company will be responsible for paying all costs and expenses of forming and continuing the Company, conducting the business of the Company, including, without limitation, accounting costs, legal expenses and office supplies. In the event any such costs and expenses are incurred and paid by the Members on behalf of the Company, then, except as expressly provided to the contrary in this Agreement, such Member shall be entitled to be reimbursed for such payment so long as such cost or expense was reasonably necessary and is reasonable in amount. The Company may use the proceeds of any revenues of the Company to reimburse a Member for any such costs and expenses so paid.
4.7 Transactions with Affiliates. Any agreement whereby any service or activity to be performed for the Company is to be performed by an Affiliate of a Member will be a Major Decision governed by Section 4.2 above. The Members hereby acknowledge and agree that approval by the Members has been obtained with respect to the Fractional Development Agreement.
14
4.8 No Employees. The Company shall have no employees.
4.9 Fees Payable by the Company.
(a) The Company shall assume the Fractional Development Agreement in substantially the form attached hereto as Exhibit E, with Developer to perform development services in respect of the Hotel, pursuant to which the Developer will receive a development fee from the Company, as more specifically set forth in the Development Agreement at the time of the Land Transfer if such agreement has not been terminated pursuant to its terms.
(b) The Company shall, concurrently with the execution of this Agreement, enter into the Fractional Management Agreement in substantially the form attached hereto as Exhibit F, with Fractional Manager to perform sales management services in respect of the Fractionals, pursuant to which the Fractional Manager will receive a sales management fee from the Company, as more specifically set forth in the Fractional Management Agreement.
(c) The Company shall pay to Behringer Harvard Opportunity Advisors LP, an affiliate of BH Investor (“BH Advisors”), an annual asset management fee (the “Asset Management Fee”). Such Asset Management Fee shall be .75% of the total amount invested in the Company as debt and equity as determined on first day of January of each year for the following six months and the first day of July of each year for the following six months. The Asset Management Fee will be payable in monthly installments on the first of the month and shall be payable from cash flow generated by the Property after the payment of all debt service, management fees and FF&E reserve fund deposits. To the extent that Property cash flows are insufficient for the payments of the Asset Management Fee, such fee will accrue and be added to the next installment payable.
(d) Upon the initial loan funding of any project financing, the Company shall pay to BH Advisors a fee equal to one percent (1.0%) of the loan amount.
4.10 Other Compensation. Except as provided in this Agreement, no Member or its Affiliate shall be entitled to any compensation unless Approval by Company Vote is obtained with respect thereto.
4.11 Construction Requirements. The completion or renovation of improvements which are to be constructed on the Property shall be guaranteed at the price contracted either by an adequate completion bond or by other assurances satisfactory to the Members, which assurances shall include one or more (at the discretion of the Members) of the following: (a) a written personal guarantee of one or more of the general contractor’s principals accompanied by the financial statements of such guarantor indicating a substantial net worth; (b) a written fixed price contract with a general contractor that has a substantial net worth; (c) a retention of a reasonable portion of construction costs as a potential offset to such construction costs in the event the general contractor does not perform in accordance with the construction contract; or (d) a program of disbursements control which provides for direct payments to subcontractors and suppliers. The Company shall make no periodic progress or other advance payments to the general contractor or any subcontractor unless the Company has first received an architect’s certification as to the percentage of the improvements which has been completed and as to the dollar amount of the construction then completed.
4.12 Financing.
(a) BH Investor shall be responsible for identifying sources of project financing including both acquisition and construction financing. Such financing will require Approval by Company Vote. BH Investor will use commercially reasonable efforts to obtain non-recourse financing in amounts
15
of up to seventy to seventy-five percent (70-75%) of fair market value of the Project as permanent financing for the Project and in amounts of up to seventy five to eighty percent (75-80%) of fair market value of any construction financing. However, if such non-recourse financing is not available or commercially reasonable, BH Investor and CP Investor shall provide guarantees for their pro-rata portion of the financing. CP Investor, at its option, in writing, may request that BH Investor provide the guarantee for one hundred percent (100%) of the debt incurred and in exchange, CP Investor shall pay to BH Investor an annual fee of one and one-half percent (1.5%) of its pro-rata share of any recourse debt incurred by the Company. Notwithstanding anything contained in this Agreement to the contrary, in the event that CP Investor elects not to guarantee its prorata share of indebtedness of the Partnership pursuant to the preceding sentence, then so long as BH Investor (or any Affiliate) remains the guarantor of such indebtedness: (a) the decisions described in Sections 4.2(b), 4.2(h) and 4.2(m) shall not be Major Decisions requiring the approval of each Member but shall be made by the Member holding the Majority in Interest, provided, however, that at any time that the Member holding the Majority in Interest has the right to decide on certain Major Decisions as set forth herein, any borrowing as set forth in Section 4.2(b) shall be commercially reasonable and consistent with market rate and term financing and, any sale of a Company Asset as set forth in Section 4.2(m) shall be made to a third party and once an offer is received in connection with such sale that is acceptable to the Member holding the Majority in Interest, in its sole discretion, the Member holding the Majority in Interest shall present such offer to CP Investor and CP Investor shall have three days to determine whether it wishes to purchase such Asset on the terms and conditions and at the price set forth in such offer; however, if CP Investor does not give the Member holding the Majority in Interest written notice of its intent to purchase the Asset within the three day period then the Member holding the Majority in Interest may sell the Asset at a price that is at least 90% of the price set forth in the offer; (b) the Member holding the Majority in Interest shall have the sole right to approve any Additional Capital Contributions, without the joinder of any other Member, provided, however that while the Member holding the Majority in Interest has the sole right, it will act in prudent manner, consistent with good business practice in real estate management in requesting such Additional Capital Contributions and such requests will be in amounts and at times reasonably necessary to fund obligations of the Company; and (c) no other Member shall engage in any act or omission that will create or increase the liability of BH Investor (or any Affiliate) under its guaranty.
(b) The Members agree that Realty Financial Resources, Inc. (“RFR”) shall be entitled to a one time fee to be paid by the Company in the amount of one percent (1.0%) of any initial third party financing that is obtained by the Company from any financing offer brought to the Company by RFR from West LB and accepted and closed on by the Company. The Members agree that the Company is under no obligation to accept any financing offer presented by RFR and any financing will be selected by BH Investor subject to Approval by Company Vote. CP Investor agrees that should any claim be made for brokerage commissions or finder’s fees by any broker or finder other than as specifically set forth herein or for any claim by RFR for payment in connection with that certain letter from RFR to Jeff Nelsen dated as of June 22, 2006, or otherwise by RFR, CP Investors will hold BH Investor and the Company free and harmless from and indemnify BH Investor and the Company against any and all loss, liability, cost, damage and expense in connection therewith including attorney fees and BH Investor and the Company shall have no liability in connection with any such claim.
ARTICLE V.
RIGHTS AND POWERS OF MEMBERS
5.1 Limitation of Liability of Members. The Members shall not be bound by, or personally liable for, obligations or liabilities of the Company to outside third parties beyond the amount of their Capital Contributions to the Company, and the Members shall not be required to contribute any capital to
16
the Company for any obligations to third parties in excess of the Capital Contributions actually made under Sections 3.1, 3.2 and 3.3 hereof.
5.2 Indemnification.
(a) The Members (including their members, partners, officers, directors, agents, employees and representatives) shall be indemnified by the Company to the fullest extent permitted by law, against any losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it or any of them in connection with the Company, provided that (1) the Member has determined in good faith that such course of conduct was in, and not opposed to, the best interests of the Company and such liability or loss was not the result of gross negligence or willful misconduct, or a material breach of this Agreement on the part of the Member or such person, and (2) any such indemnification will only be recoverable from the assets of the Company and the Members shall not have any liability on account thereof. All rights to indemnification permitted herein and payment of associated expenses shall not be affected by the dissolution or other cessation of the existence of any Member, or the withdrawal, adjudication of bankruptcy or insolvency of any Member.
(b) Expenses incurred in defending a threatened or pending civil, administrative or criminal action, suit or proceeding against any person who may be entitled to indemnification pursuant to this Section 5.2 may be paid by the Company in advance of the final disposition of such action, suit or proceeding, if (i) the legal action relates to the performance of duties or services by such person on behalf of the Company, (ii) the legal action is initiated by a third party who is not a Member, and (iii) such person undertakes to repay the advanced funds to the Company in cases in which it is not entitled to indemnification under this Section 5.2.
5.3 Other Business Activities. Subject to the other express provisions of this Agreement, each Member and any Affiliate thereof may engage in and possess interests in other business ventures of any and every type and description, independently or with others, including ones in direct or indirect competition with the Company, with no obligation to offer to the Company or any other Member the right to participate therein or to account therefor. Notwithstanding the foregoing, CP Investor and its affiliates (except for Swinerton, Inc.) shall not own an interest in or participate in the acquisition, development or redevelopment of any project similar to any component of the Property in or within thirty (30) miles of Vail, Colorado on their own or with any other party during the term of the Management Agreements or Development Agreements.
5.4 Information. In addition to the other rights specifically set forth in this Agreement, each Member is entitled to the following information: (a) true and full information regarding the status of the business and financial condition of the Company; (b) promptly after becoming available, a copy of the Company’s federal, state and local income tax returns for each year; (c) a current list of the name and last known business, residence or mailing address of each Member; (d) a copy of this Agreement, the Certificate, and all amendments to such documents; and (e) other information regarding the affairs of the Company to which that Member is entitled pursuant to the Act.
5.5 Press Releases. No public announcement, press release or other similar public disclosure of the terms of this Agreement, the activities of the Company, or the plans of the Company will be made unless same is authorized in writing by the BH Investor. However, notwithstanding the preceding sentence, any Member shall have the right, without obtaining the consent of any other Member, to make such disclosures as may, in the reasonable judgment of such Member’s counsel, be required by applicable law. Furthermore, it is agreed that the foregoing provisions of this Section 5.5 shall not prohibit a Member from disclosing such information to the accountants, attorneys, consultants, lenders and vendors of the Company as is necessary to allow such parties to provide services, funds or goods to the Company.
17
Marketing and promotional materials approved as part of the Business Plan shall be excluded from this Section 5.5. The Members have agreed that if a Member breaches the obligation set forth in the first sentence of this Section 5.5 (the “Non-Disclosure Obligation”), the actual damages that will be incurred by the other Members as a result of such breach would be extremely difficult or impracticable to determine. Therefore, the Members agree that if a Member or any Affiliate of a Member breaches the Non-Disclosure Obligation, such Member shall pay to each of the other Members liquidated damages (the “Liquidated Damages”) in the amount of Fifty Thousand Dollars ($50,000) for each such breach, such amount having been agreed upon, after negotiation, as the Members’ reasonable estimate of the damages that will be suffered by reason of a breach of the Non-Disclosure Obligation. Any Liquidated Damages becoming payable pursuant to this Section 5.5 shall be paid within ten (10) days after the breach of the Non-Disclosure Obligation giving rise to the Liquidated Damages. If not paid within such ten (10) day period, the Liquidated Damages shall thereafter bear interest at the lesser of twelve percent (12%) per annum or the highest rate permitted by applicable law. All Company distributions and other payments that otherwise would be made to the Member that is liable for Liquidated Damages shall be paid to the other Members until the Liquidated Damages and all interest accrued thereon are paid in full (with all such payments being applied first to accrued and unpaid interest and then to the Liquidated Damages).
ARTICLE VI.
DISTRIBUTIONS/ALLOCATIONS OF PROFITS AND LOSSES
6.1 Distributions of Distributable Cash from Operations or from a Capital Transaction. Within twenty (20) days following the end of each calendar quarter, the Company shall distribute Distributable Cash (including Distributable Cash arising from a Capital Transaction) in the following order of priority:
(a) First, to BH Investor and CP Investor in proportion to their respective Company Percentages, until they have each received distributions resulting from their respective investment of Additional Scheduled Capital Contributions and Additional Capital Contributions in the Company sufficient to provide an IRR of twenty-five percent (25%) (including the return of their Additional Scheduled Capital Contributions and Additional Capital Contributions);
(b) Second, to BH Investor and CP Investor in proportion to their respective Company Percentages, until they have each received distributions resulting from their respective investment of their Initial Capital Contributions in the Company sufficient to provide an IRR of twenty-five percent (25%) (including the return of their Initial Capital Contributions);
(c) Third, fifty percent (50%) to BH Investor and fifty percent (50%) to CP Investor.
(d) Notwithstanding anything to the contrary set forth above, if any Member’s Company Percentage has been diluted by failure to make an Additional Capital Contribution pursuant to Section 3.3, then the distribution percentage with respect to the Delinquent Member set forth in paragraphs (a), (b) and (c) above shall be reduced in proportion by the same percentage as the Member’s Company Percentage has been reduced as a result of the dilution and the percentage of the non-diluted Member shall be increased by the same amount.
(e) An example of the calculation of the distributions contemplated above is set forth in Exhibit E attached hereto.
18
Exhibit A
LEGAL DESCRIPTION OF PROPERTY
Legal Description of Lodge and Spa Real Property
LOT 1, ACCORDING TO THE “AMENDED FINAL PLAT, LOT 36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING NO. 1, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; AND TRACT X, CORDILLERA SUBDIVISION FILING NO. 3”, RECORDED JANUARY 14, 2003 AT RECEPTION NO. 820221, COUNTY OF EAGLE, STATE OF COLORADO.
Legal Description of Village Center Real Property
TRACT X, “AMENDED FINAL PLAT, LOT 36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING NO. 1, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; AND TRACT X, CORDILLERA SUBDIVISION, FILING NO. 3”, RECORDED JANUARY 14, 2003 AT RECEPTION NO. 820221, COUNTY OF EAGLE, STATE OF COLORADO.
TOGETHER WITH EASEMENTS AND BENEFITS AS DESCRIBED IN AMENDED AND RESTATED DECLARATION OF PROTECTIVE COVENANTS RECORDED MAY 12, 1993 IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT THERETO RECORDED MAY 11, 1998 AT RECEPTION NO. 655728, AFFIDAVIT OF CLARIFICATION RECORDED MAY 10, 1995 IN BOOK 663 AT PAGE 72, COUNTY OF EAGLE, STATE OF COLORADO.
TOGETHER WITH NONEXCLUSIVE INGRESS AND EGRESS EASEMENTS RESERVED PURSUANT TO THE QUITCLAIM DEEDS RECORDED APRIL 21, 2003 AT RECEPTION NO. 830524, 830525, 830526, 830527, 830528, 830529 AND 830530, COUNTY OF EAGLE, STATE OF COLORADO.
1
Legal Description of Cordillera Mountain Club
CONDOMINIUM UNIT 333-C, THE STRAWBERRY PARK CONDOMINIUMS, IN ACCORDANCE WITH AND SUBJECT TO THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF THE STRAWBERRY PARK CONDOMINIUMS, RECORDED APRIL 3, 1989, IN BOOK 503 AT PAGE 354, AND AMENDMENT THERETO RECORDED APRIL 12, 1991 IN BOOK 551 AT PAGE 656, AND SECOND AMENDMENT THERETO RECORDED JUNE 4, 1992 IN BOOK 581 AT PAGE 544, AND RECORDED SEPTEMBER 25, 1992 IN BOOK 590 AT PAGE 185 AND MAP RECORDED ON APRIL 3, 1989 IN BOOK 503 AT PAGE 353.
FIRST STATEMENT OF INTENTION TO ANNEX ADDITIONAL CONDOMINIUM UNITS AND COMMON ELEMENTS AND SUPPLEMENT TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF STRAWBERRY PARK CONDOMINIUMS, RECORDED ON MAY 30, 1989 IN BOOK 507 AT PAGE 220, AND FIRST AMENDMENT THERETO RECORDED MAY 16, 1991 IN BOOK 554 AT PAGE 86, AND THE SUPPLEMENTAL CONDOMINIUM MAP RECORDED MAY 30, 1989 IN BOOK 507 AT PAGE 219, AND SECOND AMENDMENT THERETO RECORDED AUGUST 4, 1992 IN BOOK 586 AT PAGE 212, COUNTY OF EAGLE, STATE OF COLORADO.
TOGETHER WITH PARKING SPACE NOS. 67 AND 68 AS DEPICTED AND DESCRIBED ON THE MAPS REFERENCED ABOVE, WHICH PARKING SPACES SHALL BE LIMITED COMMON ELEMENTS APPURTENANT TO CONDOMINIUM UNIT NO. 333-C, THE STRAWBERRY PARK CONDOMINIUMS.
TOGETHER WITH BENEFITS AS CREATED BY THE BEAVER CREEK DECLARATION RECORDED DECEMBER 27, 1979 IN BOOK 296 AT PAGE 446 AND ANY AND ALL AMENDMENTS THERETO AND TOGETHER WITH BENEFITS AS CREATED BY THE STRAWBERRY PARK CONDOMINIUM DECLARATION RECORDED APRIL 3, 1989 IN BOOK 503 AT PAGE 354 AND ANY AND ALL SUPPLEMENTS AND AMENDMENTS THERETO
Legal Description of Grouse on the Green Real Property
TRACT F, CORDILLERA SUBDIVISION, FILING NO. 16, ACCORDING TO THE CORRECTION PLAT RECORDED NOVEMBER 21, 1994 IN BOOK 655 AT PAGE 562, COUNTY OF EAGLE, STATE OF COLORADO.
2
