CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
W2005 KAPALUA/GENGATE HOTEL HOLDINGS, L.L.C.
This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, dated as of March 28, 2007, by and between the following members of W2005 Kapalua/Gengate Hotel Holdings, L.L.C. (the “Company”): (i) Whitehall Street Global Real Estate Limited Partnership 2005, a Delaware limited partnership (“Whitehall Street”); (ii) Whitehall Street Global Employee Fund 2005, L.P., a Delaware limited partnership (“Whitehall Employee Fund”); (iii) Gengate Kapalua Holdings GP, LLC, a Delaware limited liability company (“GHGP”) (iv) Gengate Kapalua Holdings, LLC, a Delaware limited liability company (“GKH”); and (v) MLP RCK, LLC, a Hawaii limited liability company (“MLPC”).
RECITALS
WHEREAS, the Company was formed as a limited liability company pursuant to the Delaware Limited Liability Company Act (6 Del. C. Section 18-101, et seq.), as amended from time to time (the “Act”), pursuant to a Certificate of Formation of the Company, filed in the Office of the Secretary of State of the State of Delaware on February 9, 2006;
WHEREAS, each of Whitehall Street, Whitehall Employee Fund, GHGP and GKH entered into the Limited Liability Company Agreement of the Company dated as of January 9, 2006 (the “Original LLC Agreement”);
WHEREAS, the Original LLC Agreement was amended, superseded and restated in its entirety by the Amended and Restated Limited Liability Company Agreement of the Company dated as of March 13, 2006 (the “First Amended and Restated LLC Agreement”);
WHEREAS, the Company owns 100% of the limited liability company interests in W2005 Kapalua/Gengate Hotel Mezzanine, L.L.C., a Delaware limited liability company (“Kapalua Mezzanine”);
WHEREAS, Kapalua Mezzanine owns 100% of the limited liability company interests in W2005 Kapalua/Gengate Hotel Senior Mezzanine, L.L.C., a Delaware limited liability company (“Kapalua Senior Mezzanine”);
WHEREAS, Kapalua Senior Mezzanine owns 100% of the limited liability company interests in W2005 Kapalua/Gengate Hotel Realty, L.L.C., a Delaware limited liability company (“Kapalua/Gengate Realty”);
WHEREAS Kapalua/Gengate Realty is a party to that certain Purchase and Sale Agreement, dated as of February 15, 2006, (the “RCK Purchase Agreement”) by and among Kapalua/Gengate Realty, as buyer, and RCK Hawaii, LLC, d/b/a RCK Hawaii – Maui, a Delaware limited liability company, as seller, pursuant to which, Kapalua/Gengate Realty purchased the property commonly known as The Ritz-Carlton Kapalua as more specifically described on Annex A hereto (the “RCK Property”);
WHEREAS Kapalua/Gengate Realty is also a party to that certain Sale, Purchase and Lease Termination Agreement, dated as of the date hereof, by and among Kapalua/Gengate Realty, as purchaser, the Company, and Maui Land & Pineapple Company, Inc., a Hawaii corporation that is the sole member of MLPC (“MLPC Parent”), as seller (the “MLPC Lease Tract Purchase Agreement”) pursuant to which Kapalua/Gengate Realty purchased the real property described on Annex B hereto (the “Lease Tract”);
WHEREAS, the Company is also a party to that certain [*] Agreement, dated as of the date hereof, by and among Kapalua/Gengate Realty, as purchaser, the Company, and MLPC Parent, as seller (the “[*] Agreement”) pursuant to which MLPC Parent granted Kapalua/Gengate Realty (1) an [*] described on Annex C hereto (the “[*] Property”), (2) an [*] described on Annex D hereto (the “[*] Tract”), and (3) a [*] described on Annex E hereto (the “[*] Tract”);
WHEREAS, each of Whitehall Street, Whitehall Employee Fund, GHGP and GKH desire to admit MLPC as a Member and to amend and restate the First Amended and Restated LLC Agreement in its entirety by entering into this Agreement with MLPC;
NOW, THEREFORE, the Members, by execution of this Agreement, do hereby continue the Company as a limited liability company pursuant to the Act, upon the following terms and conditions and hereby amend and restate the First Amended and Restated LLC Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
“Act” shall have the meaning set forth in the Recitals.
“Additional Capital Contributions” shall have the meaning set forth in Section 6.2.
“Adjusted Contribution” shall have the meaning set forth in Section 6.4.
“Administrative Rights” shall mean any right of GHGP described herein to take part in the governance, management, administration, operation or control of the Company, including any right held by, or granted to, GHGP to consent to, vote on or approve or otherwise participate in any action of the Company, or to make any decision for, by or on behalf of the Company.
“Adverse Event” shall mean, with respect to any Person, the occurrence of any Bankruptcy, any indictment or conviction of any crime, any commission of fraud or any designation as a Specially Designated National or Blocked Person.
“Affiliate” shall mean, with respect to any Person: (i) any other Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person; (ii) any other Person owning or controlling ten percent (10%) or more of the outstanding voting securities of, or other ownership interests in, such Person (or any other Person in which such Person owns
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ten percent (10%) or more of the outstanding voting securities or ownership interests); (iii) any officer, director, general partner or managing member of such Person; and (iv) if such Person is an officer, director, general partner or managing member of any Person, the Person for which such Person acts in any such capacity.
“Agreement” shall mean this Second Amended and Restated Limited Liability Company Agreement of the Company, as it may hereafter be amended or modified from time to time.
“Annual Budget” shall mean the annual operating budget and annual capital budget for the Company prepared by GHGP for approval pursuant to Section 3.2(d)(5) and Section 5.3.
“Applicable Dilution Factor” shall mean (i) 1.5, with respect to Additional Capital Contributions to fund (and payable pursuant to) Mandatory Capital Calls and (ii) 1.0, with respect to Additional Capital Contributions requested to be funded pursuant to Discretionary Capital Calls.
“Appointment Date” shall have the meaning set forth in Section 4.9(a)(v).
“Appraised Value” shall mean the dollar value determined by agreement between the Whitehall Group and a Member or, failing such an agreement prior to the Appointment Date, the determination of the value of the Company Assets in accordance with the following procedure:
1. The Appraisers appointed by the Members in accordance with Section 4.9(a)(v) shall each determine the value of the Company Assets (each, a “Valuation”) in accordance with generally accepted professional appraisal standards and deliver such determination in writing within thirty (30) days following the Appointment Date. The Whitehall Group and the Defaulting Member shall each have the right to submit to those Appraisers evidence with respect to value.
2. If the difference between the Valuations is less than an amount equal to five percent (5%) of the lower Valuation, then the average of the Valuations shall be the Appraised Value.
3. If the difference between the Valuations is greater than or equal to an amount equal to five percent (5%) of the lower Valuation, then the Appraisers appointed by the Members in accordance with Section 4.9(a)(5) shall appoint a third Appraiser (the “Third Appraiser”) within ten (10) days after the delivery of their respective Valuations. If the Appraisers appointed by the Members in accordance with Section 4.9(a)(v) cannot agree on a Third Appraiser within such time, then the Whitehall Group and the Defaulting Member shall appoint a Third Appraiser within ten (10) days thereafter. If the Whitehall Group and the Defaulting Member cannot agree on a Third Appraiser within such time, then, upon the application of either party within five (5) days thereafter, the Third Appraiser shall be selected by or on behalf of the President of the Appraisal Institute upon the application of either party, who shall be instructed to select the Third Appraiser within ten (10) days.
4. The Third Appraiser’s Valuation shall be the Appraised Value unless such Valuation is higher than the highest Valuation of the Appraisers appointed by the Members in accordance with Section 4.9(a)(v) or lower than the lowest Valuation of the Appraisers appointed by the Members in accordance with Section 4.9(a)(v), in which case the Appraised Value shall be such highest or lowest Valuation of the Appraisers appointed by the Members in accordance with Section 4.9(a)(v), as applicable.
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5. If any Appraiser appointed by the Members in accordance with Section 4.9(a)(v) or the Third Appraiser becomes unable or unwilling to provide a Valuation, a successor Appraiser shall be appointed in the same manner as the Person who is unwilling or unable to perform.
6. In the event an Appraiser shall not deliver a Valuation within the time required herein, then the Valuation of the Appraiser who delivers a Valuation first shall be the Appraised Value.
“Appraiser” shall mean a certified member of the Appraisal Institute with a national practice who has at least ten (10) years’ standing and established experience in appraising hospitality properties in Hawaii.
“Approved Budget” shall mean the Annual Budget for the Budget Year in question, in each case as approved in accordance with the provisions hereof and as any of the same may be amended from time to time in accordance with the provisions of this Agreement.
“Asset Manager” shall mean Gencom Asset Management Company, L.P., a Texas limited partnership.
“Asset Management Agreement”, any asset management agreement, entered into on or after the date of the First Amended and Restated LLC Agreement, between the Company and/or any Subsidiary, on the one hand, and the Asset Manager or any other Affiliate of either of the Gengate Members or any of the Gengate Principals, on the other.
“Available Capital Event Proceeds” shall mean the proceeds of a Capital Event after deducting reasonable and/or customary expenses the Company or any Subsidiary incurred in connection therewith.
“Available Cash Flow” shall mean, for any specified period, the excess, if any, of
(A) the sum of (i) all cash receipts (other than Available Capital Event Proceeds) of the Company and the Subsidiaries during such period from whatever source, including receipts from the sale of one or more dwelling units and/or residential units from dwelling and/or residential development by the Company or a Subsidiary of the [*] Tract, the [*] Tract or the [*] Site and (ii) any working capital and reserves of the Company and the Subsidiaries existing at the start of such period, less
(B) the sum of (i) all cash amounts paid or payable (without duplication) in such period on account of any expenses of any type whatsoever (including capital expenditures, operating expenses, fees due and payable under the Property Management Agreement, the Asset Management Agreement and this Agreement, taxes, amortization or other payments of principal and interest on any debt of the Company and the Subsidiaries, expenses incurred in connection with the satisfaction of any refinancing of the Property, the [*] Site, the [*] Tract or Company Assets) other than expenses taken into account in determining Available Capital Event Proceeds and (ii) any cash reserves that are required to be funded by the terms of any Property Debt or that the Managing Members (acting pursuant to Section 3.2(d)) reasonably determine may be
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required for the working capital, capital expenditures and future needs of the Company and the Subsidiaries or, if the Managing Members have not yet made that determination for that period, an amount equal to (x) one hundred five percent (105%) of the amounts required for the working capital and capital expenditures of the Company and the Subsidiaries as set forth in the Company’s Approved Budget with respect to such period, or (y) if greater, the amount of reserves for working capital held by the Company and the Subsidiaries on the first day of such period (net, in each case, of the Company’s projected income for the relevant period).
“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of the Property.
“Bankruptcy” shall mean, with respect to the affected party: (i) the entry of an Order for Relief under the Bankruptcy Code; (ii) the admission by such party of its inability to pay its debts as they mature; (iii) the making by it of an assignment for the benefit of creditors; (iv) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy Code or any other applicable federal or state bankruptcy or insolvency statute or any similar law; (v) the expiration of sixty (60) days after the filing of an involuntary petition under the Bankruptcy Code; or an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other federal or state insolvency law, provided that the same shall not have been vacated, set aside or stayed within such (60) sixty-day period; (vi) an application by such party for the appointment of a receiver for the assets of such party; or (viii) the imposition of a judicial or statutory lien on all or a substantial part of its assets unless such lien is discharged or vacated or the enforcement thereof stayed within sixty (60) days after the effective date of such lien. With respect to a Member, the foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Section 18-101(1) and 18-304 of the Act.
“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended.
“Book Value” shall mean, with respect to any Company Asset, its adjusted basis for federal income tax purposes, except that the initial Book Value of any asset contributed by a Member to the Company shall be an amount equal to the agreed gross fair market value of such asset, and such Book Value shall thereafter be adjusted in a manner consistent with Treasury Regulations Section 1.704-l(b)(2)(iv)(g) for revaluations pursuant to Section 7.1(b) and for the Depreciation taken into account with respect to such asset.
“Budget Year” shall mean (i) the period beginning on the Effective Date and ending on December 31, 2006 and (ii) any successive yearly period (beginning January 1 and ending December 31) thereafter.
“Business Day” shall mean a day upon which banks in the City of New York are authorized or required by law to be closed.
“Business Plan” shall mean, with respect to each Budget Year, the Approved Budget for such Budget Year in effect together with the annual strategic plan prepared by GHGP and approved in accordance with Section 3.2(d) of this Agreement for such Budget Year (as the same may be modified in accordance with the terms hereof).
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“Capital Account” shall mean, when used in respect of any Member, the Capital Account maintained for such Member in accordance with Section 7.1, as said Capital Account may be increased or decreased from time to time pursuant to the terms of this Agreement.
“Capital Call” shall mean any Mandatory Capital Call or Discretionary Capital Call, delivered in accordance with Section 6.2 hereof, requesting Additional Capital Contributions, which Mandatory Capital Call or Discretionary Capital Call shall state (x) the total amount of Additional Capital Contributions required to be made by all Members and (y) each Member’s pro rata share of such total Additional Capital Contributions based on such Member’s Percentage Interest.
“Capital Contribution” shall mean, when used with respect to any Member, the aggregate amount of capital contributed or deemed contributed to the Company by such Member in accordance with Article 6 (including such Member’s Initial Capital Contribution and any Additional Capital Contributions made by such Member).
“Capital Event” shall mean (i) a financing or refinancing (in whole or in part, and including any refinancing effected by amendment or modification of an existing financing) by the Company or any of its Subsidiaries of the Property Debt, (ii) a sale or other disposition of the Property or (after acquisition thereof by the Company or a Subsidiary) the [*] Site or [*] Tract, or any portion thereof (other than items of personal property in the ordinary course of business but including, without limitation, a sale in foreclosure) by the Company or any of its Subsidiaries or of the Company’s interests in any of the Subsidiaries or (iii) the receipt by the Company or any of its Subsidiaries of Insurance Proceeds (other than business interruption insurance) or an Award, to the extent not used to rebuild or restore the Property, [*] Site or [*] Tract; provided, however, that (A) a new financing or refinancing of any debt incurred by the Company or one or more of the Subsidiaries for purposes of construction activity at the Property, the [*] Tract, the [*] Tract and/or the [*] Tract shall not constitute a Capital Event and (B) the sale of a dwelling unit and/or residential unit from dwelling and/or residential development by the Company or a Subsidiary of the [*] Tract, the [*] Tract or the [*] Site shall not constitute a Capital Event.
“Capital Improvements Budget” shall mean a detailed budget for the Capital Improvement Program of the Property. Any change, modification or reallocation to or within the Capital Improvement Budget may be made only with the consent of the Capital Members.
“Capital Improvement Program” shall mean the capital improvements, deferred maintenance, environmental remediation, expansion, modification and other work described in more detail in Annex F hereto, as such schedule may be modified from time to time with the consent of the Capital Members.
“Capital Member” shall mean each of Whitehall Street, Whitehall Employee Fund, GKH, MLPC and any transferees of the foregoing permitted hereunder, but only so long as any such Person continues in its capacity as a equity member in the Company; and “Capital Members” shall mean each Person described as a Capital Member, collectively.
“Certificate” shall mean the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on February 9, 2006.
“Closing Period” shall have the meaning set forth in Section 3.6(c).
“Code” shall mean the Internal Revenue Code of 1986, as amended, or any corresponding provision(s) of succeeding law.
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“Company” shall mean W2005 Kapalua/Gengate Hotel Holdings, L.L.C., a Delaware limited liability company, as said Company may from time to time be hereafter constituted.
“Company Assets” shall mean all right, title and interest of the Company in and to all or any portion of the assets of the Company, any property (real, personal, tangible or intangible) or estate acquired in exchange therefor, including specifically 100% of the equity interests in Kapalua Mezzanine.
“Company Loan” shall have the meaning set forth in Section 6.2(c).
“Condemnation” shall mean a temporary or permanent taking by any Governmental Authority, as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof.
“Confidential Information” shall have the meaning set forth in Section 12.15.
“Contributing Member” shall have the meaning set forth in Section 6.3.
“Control” shall mean, when used with respect to any Person, the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or other voting interests, by contract or otherwise, and the terms “controlling” and “controlled” shall have the meanings correlative to the foregoing.
“Credit Enhancement Fee” shall have the meaning set forth in Section 4.4(a).
“Debtor Member” shall have the meaning set forth in Section 8.3.
“Deemed Distribution” shall have the meaning set forth in Section 8.6.
“Default Notice” shall have the meaning set forth in Section 4.8(a).
“Default Purchase Notice” shall have the meaning set forth in Section 4.9(a)(i).
“Default Purchase Price” shall have the meaning set forth in Section 4.9(a)(ii).
“Default Rate” shall mean a rate of interest (compounded monthly) equal to the lesser of (i) the greater of (x) a fluctuating rate of interest at fifteen percent (15%) per annum in excess of the prime rate of interest publicly announced by Citibank, N.A. or its successors from time to time and (y) twenty-five percent (25%) per annum and (ii) the maximum rate permitted by applicable law. Notwithstanding the foregoing, the Default Rate on a Member Loan made to a Member who fails to fund a Discretionary Capital Call or on a Company Loan made in connection with a Discretionary Capital Call shall mean a rate of interest (compounded monthly) equal to the lesser of (i) the greater of (x) a fluctuating rate of interest at five percent (5%) per annum in excess of the prime rate of interest publicly announced by Citibank, N.A. or its successors from time to time and (y) fifteen percent (15%) per annum and (ii) the maximum rate permitted by applicable law.
“Delaware Court” shall have the meaning set forth in Section 12.7.
“Depreciation” shall mean, with respect to any Fiscal Year, all non-cash deductions allowable under the Code, including all deductions attributable to depreciation or cost recovery with respect to Company Assets, including any improvements made thereto and any tangible personal property located
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therein, or amortization of the cost of any intangible property or other assets acquired by the Company, which have a useful life exceeding one year; provided, however, that with respect to any Company Asset whose tax basis differs from its Book Value at the beginning of such Fiscal Year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Book Value as the depreciation, amortization or other cost recovery deduction for such period with respect to such asset for federal income tax purposes bears to its adjusted tax basis as of the beginning of such Fiscal Year; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such Fiscal Year is zero, Depreciation shall be determined using any reasonable method selected by the Managing Members.
“[*] Agreement” shall have the meaning ascribed to it in the MLPC Lease Tract Purchase Agreement.
“Development Management Fee” shall have the meaning set forth in Section 4.10.
“Discretionary Capital Call” shall have the meaning set forth in Section 6.2.
“Dispute Notice” shall have the meaning set forth in Section 4.8(a).
“Effective Date” shall mean the date hereof.
“Electing Non-Triggering Party” shall have the meaning set forth in Section 3.6(d).
“Election Period” shall have the meaning set forth in Section 3.6(b).
“Environmental Guaranty Payment” shall have the meaning set forth in Section 6.2(e).
“ERISA” shall mean the Employee Retirement Income Security Act of 1974 (or any successor legislation thereto), as amended from time to time.
“[*] Sale and Purchase Agreement” shall have the meaning set forth in the [*] Agreement.
“[*] Tract” shall have the meaning ascribed to it in the Recitals.
“[*] Preferred Return” shall mean an amount equal to $[*] of saleable residential space developed by Kapalua/Gengate Realty on the [*] Tract entitled with the [*] and a [*] in excess of [*] of saleable residential space, payable in accordance with Section 8.1 from MLPC Residential Cash flow attributable to dwelling and/or residential development by the Company or a Subsidiary of the [*] Tract. This is not intended to be a guaranteed payment within the meaning of Code § 707.
“Event of Default” shall mean the occurrence of any one or more of the following events:
1. the gross negligence, fraud, defalcation (other than a mere failure to meet an obligation that does not involve the misappropriation of funds) or willful misconduct by the Asset Manager under or in connection with the occurrence, after the expiration, without cure, of any applicable cure period, of any event (other than a sale of the Property ) that would permit the termination by the Company of the Asset Management Agreement;
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2. the gross negligence, fraud, defalcation (other than a mere failure to meet an obligation that does not involve the misappropriation of funds) or willful misconduct by GHGP, GKH or any Gengate Principal in carrying out its duties and obligations under or in connection with, or a material breach by GHGP, GKH or any Gengate Principal of or under, this Agreement;
3. any criminal indictment or conviction with respect to (x) GHGP or GKH, (y) any Gengate Principal or any of the representatives of Gengate listed on Schedule 3.4 or (z) any other officer, director, general partner or managing member of GHGP or GKH or any Affiliate of GHGP or GKH (if such officer, director, general partner or managing member is involved in the management of the Property); provided, however, that in the event that that an Event of Default is triggered pursuant to clause (z) above, if such officer, director, general partner or managing member is terminated within twenty-four (24) hours of the indictment or conviction and the Company is reimbursed within ten (10) business days by GHGP or GKH for any damages the Company has incurred as a result of any actions of such person, such criminal indictment or conviction shall not be deemed an Event of Default;
4. the occurrence of any Bankruptcy with respect to GHGP or GKH; or
5. the failure of GKH to fund any Mandatory Capital Call made pursuant to Section 6.2(a)(i) or Section 6.2(a)(ii).
For purposes of (2) above, except as otherwise specified in this Agreement, to the extent any event or circumstance constitutes a breach of this Agreement, such event or circumstance shall not constitute an “Event of Default” until notice of such event or circumstance shall have been delivered to GHGP or GKH in accordance with Section 12.2 and such event or circumstance shall be unremedied on the date that is: (i) twenty (20) days after delivery of such notice to GHGP or GKH, as applicable, for any non-monetary default (or if such remedy, notwithstanding the exercise of diligent efforts by GHGP or GKH, as applicable, cannot reasonably be effected within such twenty (20)-day period, such longer period as may be required to effect the same with the exercise of diligent, good faith efforts, but in no event longer than the first to occur of: (x) the date ninety (90) days from the initial delivery of notice to GHGP or GKH, and (y) the end of the cure period provided pursuant to the terms of any applicable Loan Agreement or other agreement between the Company and any third party; provided that such longer period shall not be available (and an Event of Default shall be deemed to have occurred on the 20th day) if such non-monetary default has or is reasonably likely to have a material adverse effect on the Company) and (ii) five (5) days after delivery of such notice to GHGP or GKH for any monetary default. Furthermore, with respect to (1) or (2) above, if the Asset Manager, GHGP or GKH take any action or fail to take any action that would otherwise constitute an Event of Default triggered solely by such entity’s gross negligence and if the damages incurred by the Company or any of its Members as a result of the gross negligence can be cured by a monetary payment, the Asset Manager, GHGP and GKH, collectively, shall have the right, not more than twice over the term of the Company, to cure such Event of Default by making, within ten (10) Business Days after the occurrence of such gross negligence, a monetary payment to the party that incurred such damages in an amount equal to such damages; provided, however, that upon the third such occurrence of gross negligence by any of the Asset Manager, GHGP or GKH (or any combination of them) such event shall constitute an Event of Default and shall not be subject to cure.
“Failed Contribution” shall have the meaning set forth in Section 6.3.
“First Amended and Restated LLC Agreement” shall have the meaning set forth in the Recitals.
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“Fiscal Year” shall mean the fiscal year of the Company, which shall be the calendar year; but provided that the first “Fiscal Year” shall be the period from March 13, 2006 until December 31, 2006 and upon termination of the Company, “Fiscal Year” shall mean the period from the end of the last preceding Fiscal Year to the date of such termination.
“Funded Portion” shall have the meaning set forth in Section 6.3(a).
“Gengate Actual Promote” shall mean with respect to each distribution made hereunder, the amount distributed to Gengate Members less the amount that would have been distributed had such distribution been made on a pro rata basis to all Capital Members in accordance with the Members’ Percentage Interests in effect at the time of such distribution.
“Gengate Guarantor” shall mean (i) Karim Alibhai, (ii) Mahmood Khimji, and (iii) each other member of GHGP. For avoidance of doubt, if any Person shall hereafter become a member of GHGP, such Person shall execute this Agreement as a Gengate Guarantor for purposes of Section 8.2.
“Gengate Members” shall mean, collectively, GHGP and GKH; and “Gengate Member” shall mean each of GHGP and GKH.
“Gengate Principals” shall mean, collectively, Karim Alibhai and Mahmood Khimji and such other Persons as may be approved in writing by Whitehall Street or Whitehall Employee Fund (in its discretion) from time to time.
“GHGP” shall have the meaning set forth in the Preamble.
“GKH” shall have the meaning set forth in the Preamble.
“Governmental Authority” shall mean any court, board, agency, commission, office, central bank or other authority of any nature whatsoever for any governmental unit (federal, State, county, district, municipal, city, country or otherwise) or quasi-governmental unit whether now or hereafter in existence.
“Gross Operating Profits” shall have the meaning set forth in the Property Management Agreement.
“Gross Revenues” shall have the meaning set forth in the Property Management Agreement.
“[*] Tract” shall have the meaning ascribed to it in the Recitals.
“[*] Preferred Return” shall mean an amount equal to $[*] of saleable residential space developed by Kapalua/Gengate Realty on the [*] Tract entitled with the [*] and a [*], payable in accordance with Section 8.1 from MLPC Residential Cash flow attributable to dwelling and/or residential development by the Company or a Subsidiary of the [*] Tract. This is not intended to be a guaranteed payment within the meaning of Code § 707.
“Hotel” shall have the meaning given to such term in the MLPC Lease Tract Purchase Agreement.
“Improvement Letter of Credit Reimbursement Agreement” shall mean that reimbursement agreement between one or more Members or Affiliates of the Whitehall Group on one hand, and the bank or banks issuing the Improvement Letter of Credit on the other (which agreement may be a separate agreement relating solely to such letter of credit or a credit facility agreement relating to such letter of credit as well as other extensions of credit).
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“Initial Capital Contribution” shall mean, with respect to any Member, the aggregate initial capital contribution made, deemed made or to be made by such Member as of the Effective Date pursuant to Section 6.1 as shown on Schedule 6.1.
“Insurance Proceeds” shall mean the proceeds of any policy of property or title insurance.
“Interest” shall mean the entire limited liability company interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this Agreement.
“Internal Rate of Return” shall mean, with respect to an investment, the discount rate that would cause the net present value of all cash inflows (i.e., Capital Contributions) relating to such investment and all cash out-flows (i.e., distributions from the Company to the Members making such Capital Contributions on account of such investment (whether from operating cash flow or capital transaction proceeds) to be equal to zero dollars ($0). A Member shall be deemed to have received a specified Internal Rate of Return, with respect to any Capital Contributions, when such Member has received a return of all such Capital Contributions made by such Member plus a cumulative, annually compounded, return on such Capital Contributions at the specified rate per annum calculated commencing on the date such Capital Contributions are made and compounded annually to the extent not paid on a current basis, taking into account the timing and amounts of all previous distributions of Available Cash Flow and Available Capital Event Proceeds made by the Company to such Member and the timing and amounts of all previous Capital Contributions made to the Company by such Member. For purposes of computing such Internal Rate of Return, (i) all cash in-flows and cash out-flows will be discounted to present value using monthly measuring periods, (ii) any distribution of Available Cash Flow and Available Capital Event Proceeds received by a Member, or any Capital Contribution made by a Member, in either case at any time during a particular month, shall be deemed to be received or made (as applicable) by such Member on the first day of such month, (iii) amounts received by a Member on account of a Company Loan made by such Member and Capital Contributions returned to any Member pursuant to Section 6.2(c) hereof shall be disregarded in calculating such Member’s Internal Rate of Return and shall not be deemed to be a distribution, (iv) amounts received by a Lender Member on account of a Member Loan from distributions that otherwise would have been made to the Debtor Member shall be deemed received by the Debtor Member and not the Lender Member for purposes of calculating the Internal Rate of Return and (v) amounts received by a Member or its Affiliates as Credit Enhancement Fees shall be disregarded.
“Investment” shall mean, relative to any Person (i) any loan or advance made by such Person to any other Person (excluding advances made to officers and employees in the ordinary course of business); (ii) the purchase by such Person of any debt obligation of any other Person; (iii) any contingent liability of such Person; and (iv) any ownership or similar interest held by such Person in any other Person.
“IRS” shall mean the Internal Revenue Service and any successor agency or entity thereto.
“Kapalua Mezzanine” shall have the meaning set forth in the Recitals.
“Kapalua/Gengate Realty” shall have the meaning set forth in the Recitals.
“Kapalua Senior Mezzanine” shall have the meaning set forth in the Recitals.
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“Lease Tract” shall have the meaning set forth in the Recitals.
“Lender Member” has the meaning set forth in Section 8.3.
“List” shall mean the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury, and/or on any other similar list maintained by the Office of Foreign Assets Control pursuant to any authorizing statute, executive order or regulation.
“Loan Agreements” shall mean those loan agreements, mortgages, pledges, guaranties and the like secured by the Company Assets, the Property or by which the Company is bound, whether now existing or hereafter entered into.
“Loan Guaranty” shall mean a partial or full guaranty of principal and/or interest in respect of any loan, a guaranty of cost overruns or debt service or any other guaranty or assurance of payment provided by a Member or its Affiliates to a lender. For the avoidance of doubt, any agreement to reimburse a bank that issues a letter of credit to or for the benefit of the lender should be deemed to be a Loan Guaranty, but excluding any guaranty of non-recourse carve-outs.
“Losses” shall have the meaning set forth in Section 7.2.
“Major Decision” shall have the meaning set forth in Section 3.1(a).
“Management Agreements” shall have the meaning set forth in Section 3.3.
“Managing Members” shall mean initially, Whitehall Street, Whitehall Employee Fund and GKH; provided, that if there is an Event of Default, the Managing Members shall mean Whitehall Street and Whitehall Employee Fund.
“Mandatory Capital Call” shall have the meaning set forth in Section 6.2(a).
“Mandatory Capital Call Threshold” shall mean $35,000,000, inclusive of the Capital Contributions funded through the Effective Date; provided, that if the Company or any of its Subsidiaries enters into any future transactions that require the Capital Members to contribute additional capital into the Company or to provide a Loan Guaranty, the “Mandatory Capital Call Threshold” shall be increased by an amount equal to such capital contribution and/or Loan Guaranty.
“Marketing Period” shall have the meaning set forth in Section 3.6(c).
“Material Action” shall have the meaning set forth in Section 13.1(b).
“Material Contract” shall mean any contract pursuant to which the Company is obligated to pay or expend more than $100,000 in any Fiscal Year or more than $250,000 in the aggregate, or to perform, or to engage a third party or an Affiliate of GHGP or GKH to perform, material construction, renovation or remodeling work on the Property.
“Member” shall mean each of Whitehall Street, Whitehall Employee Fund, GHGP, GKH, MLPC and any transferees of the foregoing permitted hereunder, but only so long as any such Person continues in its capacity as a equity member in the Company; and “ Members” shall mean each Person described as a Member, collectively.
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“Member-Funded Debt” shall mean any non-recourse debt of the Company that is loaned or guaranteed by any Member and/or is treated as Member non-recourse debt with respect to a Member under Treasury Regulations Section 1.704-2(b)(4).
“Member Loan” shall have the meaning set forth in Section 6.3(b).
“Minimum Gain” shall mean an amount equal to the excess of the principal amount of debt, for which no Member is liable (“nonrecourse debt”), over the adjusted basis of the Company Assets which represents the minimum taxable gain that would be recognized by the Company if the nonrecourse debt were foreclosed upon and the Company Assets were transferred to the creditor in satisfaction thereof, and which is referred to as “minimum gain” in Treasury Regulations Section 1.704-1(b)(4)(iv). A Member’s share of Minimum Gain shall be determined pursuant to Treasury Regulations Section 1.704-2.
“MLPC” shall have the meaning set forth in the Preamble.
“MLPC Advance Capital Amount” shall mean an amount equal to $4,090,909 minus an amount equal to MLPC’s pro rata portion (based on the Percentage Interest of each Capital Member) of Mandatory Capital Calls made and funded by the Capital Members (other than MLPC) in accordance with Section 6.2 after the Effective Date. For example, if there is a $5,000,000 Mandatory Capital Call after the Effective Date, an amount equal to MLPC’s pro rata portion of that Mandatory Capital Call amount is $1,071,430 and from and after the date such Mandatory Capital Call is funded by all Capital Members (other than MLPC) the MLPC Advance Capital Amount will be $3,019,479 [which is $4,090,909 minus $1,071,430].
“MLPC Advance Capital Amount Return” shall mean the actual interest or other earnings on the MLPC Advance Capital Amount invested by the Company as directed by MLPC in its discretion, during the particular period for which such amount is used in a calculation.
“MLPC Capital Preferred Return” shall mean an amount equal to (i) the MLPC Advance Capital Amount Return, multiplied times (ii) the MLPC Advance Capital Amount as of the Quarterly Payment Date preceding the date on which the MLPC Capital Preferred Return is to be paid; provided, however, that in the case of the first payment of MLPC Capital Preferred Return, the interest rate and the MLPC Advance Capital Amount shall be determined as of the Effective Date.
“MLPC Event of Default” shall mean the occurrence of any one or more of the following events:
6. the gross negligence, fraud, defalcation (other than a mere failure to meet an obligation that does not involve the misappropriation of funds) or willful misconduct by MLPC in carrying out its duties and obligations under or in connection with, or a material breach by MLPC of or under, this Agreement;
7. the occurrence of any Bankruptcy with respect to MLPC or MLPC Parent;
8. the failure of MLPC to fund any Mandatory Capital Call made pursuant to Section 6.2(a)(i) or Section 6.2(a)(ii) which it is obligated to fund; or
9. a default or event of default by MLPC Parent under the MLPC Lease Tract Purchase Agreement, the [*] Agreement or the [*] Sale and Purchase Agreement or [*] Tract Sale and Purchase Agreement.
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For purposes of (1) above, except as otherwise specified in this Agreement, to the extent any event or circumstance constitutes a breach of this Agreement, such event or circumstance shall not constitute a “MLPC Event of Default” until notice of such event or circumstance shall have been delivered to MLPC in accordance with Section 12.2 and such event or circumstance shall be unremedied on the date that is: (i) twenty (20) days after delivery of such notice to MLPC for any non-monetary default (or if such remedy, notwithstanding the exercise of diligent efforts by MLPC cannot reasonably be effected within such twenty (20)-day period, such longer period as may be required to effect the same with the exercise of diligent, good faith efforts, but in no event longer than the first to occur of: (x) the date ninety (90) days from the initial delivery of notice to MLPC, and (y) the end of the cure period provided pursuant to the terms of any applicable Loan Agreement or other agreement between the Company and any third party; provided that such longer period shall not be available (and a MLPC Event of Default shall be deemed to have occurred on the 20th day) if such non-monetary default has or is reasonably likely to have a material adverse effect on the Company) and (ii) five (5) days after delivery of such notice to MLPC for any monetary default. Furthermore, with respect to (1) above, if MLPC takes any action or fails to take any action that would otherwise constitute a MLPC Event of Default triggered solely by such entity’s gross negligence and if the damages incurred by the Company or any of its Members as a result of the gross negligence can be cured by a monetary payment, MLPC shall have the right, not more than twice over the term of the Company, to cure such MLPC Event of Default by making, within ten (10) Business Days after the occurrence of such gross negligence, a monetary payment to each party that incurred such damages in an amount equal to such damages; provided, however, that upon the third such occurrence of gross negligence by MLPC, such event shall constitute a MLPC Event of Default and shall not be subject to cure in accordance with this sentence.
“MLPC Parent” shall mean Maui Land & Pineapple Company, Inc., a Hawaii corporation that is the sole member of MLPC.
“Lease Tract” shall have the meaning set forth in the Recitals.
“MLPC Lease Tract Purchase Agreement” shall have the meaning set forth in the Recitals.
“MLPC Preferred Returns” shall mean the [*] Preferred Return, [*] Preferred Return and the [*] Preferred Return.
“MLPC Residential Development Cash Flow” shall mean Available Cash Flow, Available Capital Event Proceeds, without reduction for MLPC Preferred Returns or [*] Minimum Return (if any), attributable to dwelling and/or residential development by the Company or a Subsidiary of, and calculated separately for, each of (i) the [*] Site, (ii) the [*] Tract, and (iii) the [*] Tract.
“Necessary Expenditures” shall mean all costs, expenditures or amounts required to be expended, whether or not of a recurring nature, that relate to the Property, the [*] Site or the [*] Tract, or to an existing Company Asset and that a Member determines (i) are provided for in an Approved Budget, (ii) are necessary for real estate taxes, insurance payments, costs of restoring the assets of the Company or a Subsidiary after a casualty or condemnation thereof, utility costs, costs of compliance with law, payments with respect to mortgages and other liens, payments on or of operating expenses of the Company or a Subsidiary (including any fees due and payable to the Property Manager pursuant to the Property Management Agreement or any successor property manager pursuant to a successor property management agreement or to the Asset Manager pursuant to the Asset Management Agreement or any successor asset manager pursuant to a successor asset management agreement), and any other items that are of a comparable nature to repair, preserve, maintain or protect the assets of the Company or a Subsidiary or (iii) are necessary to make payments on or of contractual obligations and
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debts of the Company or a Subsidiary (including amounts, if any, owing to any Member or Affiliate thereof to reimburse payments made by such Member or Affiliate on account of the Company’s or a Subsidiary’s debts or on account of guarantees of or relating to such debts).
“New York Court” has the meaning set forth in Section 12.7.
“Non-Contributing Member” shall have the meaning set forth in Section 6.3.
“Non-Managing Members” shall mean all of the Members other than the Managing Members.
“Non-Triggering Party” shall have the meaning set forth Section 3.6(a).
“Objection Notice” shall have the meaning set forth in Section 5.3(b).
“[*] Agreement” shall have the meaning set forth in the Recitals.
“Original LLC Agreement” shall have the meaning set forth in the Recitals.
“Organizational Document” shall mean, with respect to any Person: (i) in the case of a corporation, such Person’s certificate of incorporation and by-laws, and any shareholder agreement, voting trust or similar arrangement applicable to any of such Person’s authorized shares of capital stock; (ii) in the case of a limited partnership, such Person’s certificate of limited partnership, limited partnership agreement, voting trusts or similar arrangements applicable to any of its partnership interests; (iii) in the case of a limited liability company, such Person’s certificate of formation, limited liability company agreement or other document affecting the rights of holders of limited liability company interests; or (iv) in the case of any other legal entity, such Person’s organizational documents and all other documents affecting the rights of holders of equity interests in such Person.
“Percentage Interest” shall mean as of any date with respect to any Member, (i) initially the percentage following such Member’s name in Section 6.1(b) and (ii) thereafter the percentage obtained when such Member’s Capital Contribution (or Adjusted Contribution if there was previously a dilution under Section 6.4) is divided by the aggregate Capital Contributions of all Members, as such percentage interest may be adjusted from time to time pursuant to the terms of Article 6.
“Permitted Gengate Transferee” shall mean (i) any entity at least eighty-five percent (85%) owned and exclusively controlled by Karim Alibhai or Mahmood Khimji, (ii) any members of the immediate family (i.e., spouses, parents, aunts, uncles, brothers, sisters or children) of Karim Alibhai or Mahmood Khimji, (iii) trusts established for the benefit of the individuals identified in clause (ii), or (iv) any combination of the foregoing
“Permitted MLPC Transferee” shall mean a Person with respect to which MLPC Parent shall directly or indirectly own at least 51% of the beneficial interests and voting rights.
“Person” shall mean any individual, partnership, corporation, limited liability company, trust or other legal entity.
“[*] Minimum Return” shall mean Priority Cash Flow Payments from MLPC Residential Cash flow attributable to dwelling and/or residential development by the Company or a Subsidiary of the [*] Site in a cumulative amount of $6,000,000. This is not intended to be a guaranteed payment within the meaning of Code § 707.
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“[*] Site” shall have the meaning ascribed to it in the “[*] Agreement.
“[*] Preferred Return” shall mean an amount equal to $[*] of saleable residential space on the [*] Site entitled with the [*] and the “[*] in excess of [*] of saleable residential space, payable in accordance with Section 8.1 from MLPC Residential Cash flow attributable to dwelling and/or residential development by the Company or a Subsidiary of the [*] Site, after payment of the [*] Minimum Return (it being agreed that the [*] Preferred Return is only the amounts calculated as in this definition over and above the [*] Minimum Return). This is not intended to be a guaranteed payment within the meaning of Code §707.
“Priority Cash Flow Payments” shall have the meaning ascribed to it in Section 8.1(a).
“Profits” shall have the meaning set forth in Section 7.2.
“Property” shall mean, collectively, the RCK Property and the Lease Tract.
“Property Debt” shall mean any debt, whether senior mortgage debt or mezzanine, incurred by the Company or one or more of the Subsidiaries on or prior to the date hereof or any new debt incurred in order to refinance such debt, together with any new (or refinanced) debt relating to construction at any of the Property or (after acquisition thereof by the Company or a Subsidiary) the [*] Tract, the [*] Tract or the [ *] Tract.
“Property Management Agreement” means any property management agreement or any replacement agreement providing for the property management of the Property. Initially the term Property Management Agreement shall mean the Second Amended and Restated Management Agreement, dated as of date hereof, by and between Property Manager and Owner.
“Property Manager” means the entities from time to time engaged to serve as the property manager for the Property. Initially the Property Manager will be The Ritz-Carlton Hotel Company, L.L.C., a Delaware limited liability company. Notwithstanding anything to the contrary contained herein, the “Property Manager” shall not be considered to be a manager of the Company for purposes of the Act.
“Pro Rata Deposit Amount” shall have the meaning set forth in Section 3.6(e).
“Pro Rata Portion” shall have the meaning set forth in Section 3.6(e).
“Proposed Purchase Price” shall have the meaning set forth in Section 3.6(a).
“Proposed Sale Notice” shall have the meaning set forth in Section 3.6(a).
“Proposing Members” shall have the meaning set forth in Section 9.6.
“Purchase Notice” shall have the meaning set forth in Section 3.6(b).
“Purchase Notice Deposit” shall have the meaning set forth in Section 3.6(f).
“Purchasing Entity” shall have the meaning set forth in Section 3.6(e).
“Purchasing Party” shall have the meaning set forth in Section 3.6(f).
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“Quarterly Payment Date,” when used with respect to the MLPC Capital Preferred Return, means the beginning date of every calendar quarter, starting on the date which is the first day of the first full calendar month after ninety (90) days after the Effective Date.
“RCK Purchase Agreement” shall have the meaning set forth in the Recitals.
“RCK Property” shall have the meaning set forth in the Recitals.
“Reimbursed Member” shall have the meaning set forth in Section 6.2(e).
“Residential Liquidation Value” shall have the meaning set forth in Section 4.13.
“Residential Purchase Price” shall have the meaning set forth in Section 4.13.
“Seller” shall have the meaning set forth in the Recitals.
“Specially Designated National or Blocked Person” shall mean (i) a person or entity designated by the U.S. Department of Treasury’s Office of Foreign Assets Control from time to time as a “specially designated national or blocked person” or similar status, (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001, or (iii) a person or entity otherwise identified by government or legal authority as a person with whom the Company or any of its Members are prohibited from transacting business.
“Subsidiaries” shall mean, collectively, Kapalua/Gengate Realty, Kapalua Senior Mezzanine and Kapalua Mezzanine and any new, single purpose entity formed to develop or own any of the [*] Tract, the [*] Tract or the [*] Site.
“Substituted Member” shall mean any Person admitted to the Company as a Member pursuant to the provisions of Section 9.3.
“Tax Matters Member” shall mean the “tax matters partner” as designated by Section 4.7.
“[*] Property” shall have the meaning set forth in the Recitals.
“[*] Sale and Purchase Agreement’ shall have the meaning set forth in the [*] Agreement.
“Third-Party Purchase Price” shall have the meaning set forth in Section 3.6(c).
“Third -Party Purchaser” shall have the meaning set forth in Section 3.6(c).
“Transfer” shall mean (i) with respect to the Whitehall Group or MLPC, any transfer, sale, resignation, pledge, hypothecation, encumbrance, assignment or other disposition of all or any portion of the Interest of such Member or the proceeds thereof (whether voluntarily, involuntarily, by operation of law or otherwise), (ii) in the case of the Gengate Members only, any transfer, sale, resignation, pledge, hypothecation, encumbrance, assignment or other disposition of any stock, partnership interest, beneficial interest or other ownership interest in such Member (whether directly or indirectly and whether voluntarily, involuntarily, by operation of law or otherwise).
“Transferee” shall mean any Person who receives from any Member, via transfer, sale, resignation, pledge, hypothecation, encumbrance, assignment or other disposition, any portion of the Interest of such Member or the proceeds thereof (whether voluntarily, involuntarily, by operation of law or otherwise).
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“Treasury Regulations” shall mean the regulations promulgated under the Code, as such regulations are in effect on the Effective Date.
“Triggering Party” shall have the meaning set forth Section 3.6(a).
“Uniform System” shall mean the Ninth Revised Edition of the Uniform System of Accounts for Hotels, published by the American Hotel and Motel Association, as amended from time to time.
“Whitehall Employee Fund” shall mean Whitehall Street Global Employee Fund 2005, L.P., a Delaware limited partnership.
“Whitehall Group” shall mean, collectively, Whitehall Street and Whitehall Employee Fund and any permitted transferee or assignee of all or any portion of the Interest held by any of the foregoing as of the Effective Date (but only for so long as any such Person continues in its capacity as a Member of the Company).
“Whitehall Notional Distributions” shall mean the distribution of Available Cash Flow and Available Capital Event Proceeds that would have been made to the Whitehall Group pursuant to Section 8.1(b) and Section 8.1(c) if such distributions had been made on a pro rata basis to all Members in accordance with the Members’ Percentage Interests in effect at the time of such distribution.
“Whitehall Street” shall mean Whitehall Street Global Real Estate Limited Partnership 2005, a Delaware limited partnership.
1.2 Rules of Construction. This Agreement is not subject to the principle of construing its meaning against the party that drafted it, and each Member acknowledges that it was represented by its own counsel in connection with its negotiation and drafting. Whenever in this Agreement any of the Members are permitted or required to make a decision or take an action: (i) in its “discretion” or under a grant of similar authority or latitude, such Member shall be entitled to consider only such interest and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or the other Members, or (ii) in its “good faith” or “reasonable discretion” or under another expressed standard, the Member shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or any other agreement contemplated herein or by relevant provisions of law or in equity or otherwise, provided that nothing in this Section 1.2 shall be interpreted to purport to eliminate the duty of good faith and fair dealing inherent in every contract
1.3 Terms Generally. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article (or elsewhere herein) include both the plural and the singular;
(b) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and
(c) the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation.”
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ARTICLE 2
THE COMPANY AND ITS BUSINESS
2.1 Continuation of the Company. The Members have approved this Agreement as the governing agreement of the Company. Each of the Members hereby agrees to continue the business and the Company, in the form of the Company and in accordance with the terms hereof and pursuant to the Act.
2.2 Company Name. The business of the Company shall be conducted under the name of “W2005 Kapalua/Gengate Hotel Holdings, L.L.C.” in the State of Delaware and under such name or such assumed names as the Members deem necessary or appropriate to comply with the requirements of any other jurisdiction in which the Company may be required to qualify as a foreign limited liability company. Legal and beneficial title to any properties, real and personal, which may at any time during the term of the Company be owned or leased by the Company shall be held in the name of the Company.
2.3 Term. The term of the Company commenced on the date the Certificate was filed with the Secretary of State of the State of Delaware and shall continue in full force and effect until terminated following dissolution as hereinafter provided. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate as provided in the Act.
2.4 Filing of Certificate and Amendments. The Certificate was filed with the Secretary of State of the State of Delaware and the Members agree that Alan Kava was the authorized signatory for such purpose in accordance with the meaning of Section 18-204 of the Act. The Members hereby agree to execute and file any required amendments to the Certificate and shall do all other acts requisite for the constitution of the Company as a limited liability company pursuant to the laws of the State of Delaware, or any other applicable law, as well as the qualification of the Company as a foreign limited liability company under the laws of, or the right otherwise to do business in any state in which the Members determine it is necessary or desirable to have such qualification or right to do business. Pursuant to Section 18-201(d) of the Act, this Agreement shall be effective as of the Effective Date.
2.5 Business; Scope of Members’ Authority.
(a) The Company is organized and formed for the purpose of, directly or indirectly, acquiring, owning, dealing with, financing, maintaining, operating, improving, developing, leasing, marketing, refinancing and selling the Property and the Subsidiaries. The Company is empowered to do any and all acts and things necessary, appropriate, incidental to or convenient to accomplish the purposes described herein, and has authority to (i) enter into, perform and carry out contracts of any kind, (ii) incur obligations and liabilities of any kind, (iii) borrow money and issue evidences of indebtedness, whether secured or unsecured, and (iv) acquire, own, manage, improve and transfer any real or personal property (or any interest therein).
(b) Except as otherwise expressly and specifically provided in this Agreement, no Member shall have any authority to bind, to act for, to sign for or to assume any obligation or responsibility on behalf of, any other Member. Neither the Company nor any Member shall, by virtue of executing this Agreement, be responsible or liable for any indebtedness or obligation of any other Member incurred or arising either before or after the Effective Date, except that the Company only (and not any Member) shall have those joint responsibilities, liabilities, indebtedness, or obligations expressly assumed by the Company pursuant hereto as of the Effective Date or incurred after the Effective Date pursuant to and as limited by the terms of this Agreement.
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(c) Each member of the Whitehall Group, Adam Brooks, Elizabeth Burban, Brahm Cramer, Stephen Iorio, Jerome Karr, Alan Kava, Jonathan Langer, Roy Lapidus, Vivian Mandis, Justin Metz, Robert Bloom, Josephine Scesney and Peter Weidman is hereby designated as an “authorized person” within the meaning of the Act. Any one of such authorized persons is hereby authorized and shall execute, deliver and file any other certificates or documents (and any amendments and/or restatements thereof) on behalf of the Company.
2.6 Principal Office; Mailing Address; Registered Agent. The principal office and mailing address of the Company shall be 85 Broad Street, New York, New York 10004, Attention: Chief Financial Officer. The Company may change its place of business and/or mailing address to such location or locations as may at any time or from time to time be determined by GHGP and approved the Whitehall Group. The name and address of the Company’s registered agent is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
2.7 Names and Addresses of the Members. The names and addresses of the Members are as follows:
Whitehall Street Global Real Estate Limited Partnership 2005
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Whitehall Street Global Employee Fund 2005, L.P.
85 Broad Street
New York, New York 10004
Attention: Chief Financial Officer
Gengate Holdings GP, LLC
c/o Gencom Group
801 Brickell Avenue, Penthouse 2
Miami, Florida 33131
Attention: Karim Alibhai
Gengate Kapalua Holdings, LLC
c/o Gencom Group
801 Brickell Avenue, Penthouse 2
Miami, Florida 33131
Attention: Karim Alibhai
MLP RCK, LLC
c/o Maui Land & Pineapple Company, Inc.
120 Kane Street
Kahului, Hawaii 96733-6687
Attention: Mr. Robert Webber
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2.8 Representations by the Members.
(a) Each Member represents, warrants, agrees and acknowledges that:
(1) it is a corporation, limited liability company, or limited partnership, as applicable, duly organized or formed and validly existing and in good standing under the laws of the state of its organization or formation; it has all requisite corporate, company or limited partnership power and authority to enter into this Agreement, to acquire and hold its Interest and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate, company or limited partnership action;
(2) its execution and delivery of this Agreement and the performance of its obligations hereunder will not (i) conflict with, result in a breach of or constitute a default (or any event that, with notice or lapse of time, or both, would constitute a default) or result in the acceleration of any obligation under any of the terms, conditions or provisions of any other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject, (ii) conflict with or violate any of the provisions of its Organizational Documents, or (iii) violate any statute or any order, rule or regulation of any court or governmental or regulatory agency, body or officials;
(3) such Member has obtained any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery and performance by such Member of its obligations hereunder;
(4) there is no action, suit or proceeding pending against such Member or, to its knowledge, threatened in any court or by or before any other governmental agency or instrumentality that would prohibit its entering into, or that could have a material adverse effect on its ability to perform its obligations under this Agreement;
(5) this Agreement is a binding agreement on the part of such Member enforceable against such Member in accordance with its terms;
(6) neither it nor any of its Affiliates has employed any broker or finder, or incurred any liability for any brokerage commission or finder’s fee, in connection with any of the transactions contemplated by this Agreement;
(7) each Member has been advised to engage and has engaged its own counsel (whether in-house or external) and such other advisers as such Member deems necessary and appropriate; by reason of its business or financial experience, or by reason of the business or financial experience of such Member’s own attorneys, accountants and financial advisors who are not Affiliates of the Company or any other Member and who are not compensated, directly or indirectly, by the Company or any other Member or any Affiliate thereof, it is capable of evaluating the risks and merits of an investment in the Interest and of protecting its own interests in connection with this investment (nothing in this Agreement shall be construed to allow any Member to rely upon the counsel acting for another Member or to create an attorney-client relationship between such counsel and such other Member, it being understood and agreed that Sullivan & Cromwell LLP is acting as counsel to the Whitehall Group and not the Company or any other Member);
(8) this Agreement and all agreements, instruments and documents herein provided to be executed or caused to be executed by it are duly authorized, executed and delivered by and are binding upon it;
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(b) Each Member represents, warrants, agrees and acknowledges that:
(1) (x) it and each of its beneficial owners is an “accredited investor” (as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended) and (y) it is acquiring the Interest for investment purposes for its own account only and not with a view to or for sale in connection with any distribution of all or any part of the Interest;
(2) it is financially able to bear the economic risk of an investment in the Interest, including the total loss thereof;
(3) no Person has at any time expressly or impliedly represented, guaranteed, or warranted to it that it may freely transfer the Interest, that a percentage of profit and/or amount or type of consideration will be realized as a result of an investment in the Interest, that cash distributions from Company operations or otherwise will be made to the Members by any specific date or will be made at all, or that any specific tax benefits will accrue as a result of an investment in the Company; and
(4) it has consulted with its own attorneys, accountants and financial advisors regarding all legal, tax and financial matters concerning an investment in the Company and the tax consequences of participating in the Company and it will look solely to, and rely upon, its own advisers with respect to the tax consequences of this investment.
(c) GHGP represents, warrants, agrees and acknowledges that neither it nor any ultimate beneficial interest holder in it that holds through a flow-through entity for tax purposes is a “qualified organization” within the meaning of Section 514(c)(9)(C) of the Code.
(d) GKH represents, warrants, agrees and acknowledges that neither it nor any ultimate beneficial interest holder in it that holds through a flow-through entity for tax purposes is a “qualified organization” within the meaning of Section 514(c)(9)(C) of the Code.
2.9 Control and Ownership of GHGP.
(a) GHGP agrees that it shall at all times cause the Gengate Principals or their respective Permitted Gengate Transferees to maintain exclusive control (which control shall be exercisable without the consent or approval of any other Person) over the business and affairs of GHGP. GHGP represents and warrants that (i) attached hereto as Schedule 2.9(a) are true and complete copies of the Organizational Documents of GHGP, (ii) the ownership of GHGP (as of the Effective Date) is as is set forth on Schedule 2.9(b) and (iii) the Gengate Principals have exclusive control (which control is exercisable without the consent or approval of any other Person) over the business and affairs of GHGP. GHGP hereby represents that the ownership chart attached hereto as part of Schedule 2.9(a) is accurate in all respects. GHGP covenants and agrees that at no time shall the Gengate Principals, together with their respective Permitted Gengate Transferees, own less than ninety-five percent (95%) of the legal and beneficial ownership and economic interests it currently owns in GHGP, as set forth in the ownership chart attached hereto as part of Schedule 2.9(a)
(b) GHGP covenants and agrees that in the event of the occurrence of any Adverse Event with respect to (i) any Gengate Principal or any of the representatives of GHGP listed on Schedule 3.4 or (ii) any other officer, director, general partner or managing member of GHGP or any Affiliate of GHGP (if such officer, director, general partner or managing member is involved in the management or oversight of the Property), GHGP shall take such steps as the Whitehall Group may deem necessary or appropriate to ensure that the individual who is the subject of such Adverse Event shall have no direct or indirect involvement in the business or affairs of the Company or with the Property or any Company Assets;
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(c) GHGP covenants and agrees that in the event of the occurrence of a Transfer by GHGP, GHGP shall notify Whitehall Street and Whitehall Employee Fund of the identity of any owner of a Permitted Gengate Transferee;
(d) the Gengate Principals agree that they shall at all times maintain exclusive control (which control shall be exercisable without the consent or approval of any other Person) over the business affairs of their investment in GHGP; and
(e) any breach of the terms of this Section 2.9(a), (c), or (d), regardless of whether the same is within the control of GHGP or any of its controlling persons, shall be deemed a material breach by GHGP of the terms of this Agreement and shall not be subject to cure or remedy by GHGP.
2.10 Control and Ownership of GKH.
(a) GKH agrees that it shall at all times cause the Gengate Principals or their respective Permitted Gengate Transferees to maintain exclusive control (which control shall be exercisable without the consent or approval of any other Person) over the business and affairs of GKH. GKH represents and warrants that (i) attached hereto as Schedule 2.10(a) are true and complete copies of the Organizational Documents of GKH, (ii) the ownership of GKH (as of the Effective Date) is as is set forth on Schedule 2.10(b) and (iii) the Gengate Principals have exclusive control (which control is exercisable without the consent or approval of any other Person) over the business and affairs of GKH. GKH covenants and agrees that at no time shall the Gengate Principals, together with their respective Permitted Gengate Transferees, own less than ninety-five percent (95%) of the legal and beneficial ownership and economic interests it currently owns in GKH, as set forth in the ownership chart attached hereto as part of Schedule 2.9(a);
(b) GKH covenants and agrees that in the event of the occurrence of any Adverse Event with respect to (i) any Gengate Principal or any of the representatives of GKH listed on Schedule 3.4 or (ii) any other officer, director, general partner or managing member of GKH or any Affiliate of GKH (if such officer, director, general partner or managing member is involved in the management or oversight of the Property), GKH shall take such steps as the Whitehall Group may deem necessary or appropriate to ensure that the individual who is the subject of such Adverse Event shall have no direct or indirect involvement in the business or affairs of the Company or with the Property or any Company Assets;
(c) GKH covenants and agrees that in the event of the occurrence of a Transfer by GKH, GKH shall notify Whitehall Street and Whitehall Employee Fund of the identity of any owner of a Permitted Gengate Transferee;
(d) the Gengate Principals agree that they shall at all times maintain exclusive control (which control shall be exercisable without the consent or approval of any other Person) over the business affairs of their investment in GKH; and
(e) any breach of the terms of this Section 2.10(a), (c), or (d), regardless of whether the same is within the control of GKH or any of its controlling persons, shall be deemed a material breach by GKH of the terms of this Agreement and shall not be subject to cure or remedy by GKH.
2.11 OFAC and Patriot Act Compliance.
(a) Each Member represents and warrants that (i) such Member and each Person owning a ten percent (10%) or greater interest in such Member (A) is not currently identified on the List,
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and (B) is not a Person with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States and (ii) such Member has implemented procedures, and will consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times. This Section 2.11(a) shall not apply to any Person to the extent that such person’s interest in the Member is through either (A) a Person (other than an individual) whose securities are listed on a national securities exchange, or quoted on an automated quotation system, in the United States, or a wholly-owned subsidiary of such a Person or (B) an “employee pension benefit plan” or “pension plan” as defined in Section 3(2) of ERISA.
(b) Each Member shall comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect and shall immediately notify the other Members in writing if any of the forgoing representations, warranties or covenants are no longer true or have been breached or if the Member has a reasonable basis to believe that they may no longer be true or have been breached.
2.12 Indemnification. The representations, warranties and covenants of the Members set forth in Section 2.8, Section 2.9 and Section 2.10 are made as of the Effective Date and shall survive the Effective Date indefinitely. To the fullest extent permitted by law, each Member agrees to indemnify, defend, and hold the Company and the other Members harmless against all claims, demands, actions, obligations, causes of action and losses, including reasonable fees of counsel, suffered or incurred by, or asserted against, any of them relating to or arising from any inaccuracy in or breach of such representation, warranty or covenant.
2.13 Representations by the Company.
(a) The Company hereby represents and warrants to the Capital Members that it has no outstanding liabilities, contingent or otherwise, except in connection with, arising out of or in any way relating to the Property, the transactions set forth in the MLPC Lease Tract Purchase Agreement and the activities and transactions that the Company is permitted by the terms hereof and of the [*] Agreement to undertake and/or the related financings incurred by the Company or its Subsidiaries and/or any instruments delivered in connection with any of the foregoing.
(b) Except as set forth on Schedule 2.13(b), the Company hereby represents and warrants to MLPC that, to the knowledge of the Company, (i) there are no actions, suits, or proceedings pending, or threatened against the Company or the Subsidiaries in existence on the date hereof (collectively, the “Warranting Parties”), or the Property, or affecting any of the Warranting Parties’ rights with respect to the Property, before or by any federal or state governmental agency or instrumentality, including without limitation, any claims of violations of by any agent of employee of any of the Warranting Parties of any labor laws violations or insufficient funding of pension plans of any of the Warranting Parties, (ii) no Warranting Party received any notice of any such actions, suit or proceedings, and (iii) there are no attachments, executions, assignments, or judgments for the benefit of creditors of any of the Warranting Parties relating to the same. As used in this Section 2.13(b) or in Section 2.13(c) or Section 2.13(d), when a representation and warranty is given “to the knowledge of the Company,” it shall mean to the actual knowledge of any of Troy Bennett, Karim Alibhai, or Greg Denton.
(c) The Company hereby represents and warrants to MLPC that, to the knowledge of the Company, (i) the delivered financial statements dated December 31, 2006 for the Hotel fairly present the results of operation of the Hotel for the periods indicated (subject to year-end audit adjustments in the case of unaudited statements), are true, complete and correct in all material respects, and were prepared in accordance with generally accepted accounting principles (as adjusted to conform to the Uniform System
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of Accounts for Hotels, Eighth Revised Edition) applied on a consistent basis, (ii) there has been no material adverse change in the results of the operations of the Hotel, since December 31, 2006, and (iii) all federal, state and local employment taxes, payroll taxes, excise taxes, occupancy or entertainment taxes, ad valorem taxes, liquor taxes, and sales or use taxes due and payable by any of the Warranting Parties as of the date hereof in connection with the ownership or operation of the Hotel have been paid and all returns filed.
(d) To the Company’s knowledge, the Company has made available to MLPC all written materials, instruments, documents, lists, schedules, items and records relating to the Hotel, and copies thereof delivered by the Company to MLPC were true and complete copies of the corresponding document in the Company’s possession.
ARTICLE 3
MANAGEMENT OF COMPANY BUSINESS; MAJOR DECISIONS
3.1 Management and Control by the Managing Members.
(a) Except as otherwise specifically set forth in this Agreement, the Managing Members shall each have the right, authority, discretion and power to conduct, control and manage on behalf of the Company the business and affairs of the Company and to do all things necessary, appropriate or desirable (in the reasonable discretion of the Managing Members) to carry on the business of the Company, and are hereby authorized to execute and deliver on behalf of the Company any and all documents, contracts, certificates, agreements and instruments of any kind, and to take any action of any kind and to do anything and everything the Managing Members deem necessary, desirable or appropriate in accordance with the provisions of this Agreement and applicable law; provided, however, any and all of the actions listed in Section 3.2(d) (each, a “Major Decision”) shall require the approval of the Managing Members as provided in Section 3.2(d). Subject to the provisions of Section 4.8, if any of the Managing Members determine that an Event of Default has occurred, the Whitehall Group shall have the right to limit or eliminate such authority and duties of GHGP and GKH effective upon delivery of written notice to GHGP or GKH. Persons dealing with the Company are entitled to rely conclusively upon the right, power, authority and direction of the Managing Members as herein set forth. The Managing Members may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by the Managing Member, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters within such Person’s professional or expert competence shall be presumed to have been done or omitted in good faith and not to constitute gross negligence or willful misconduct.
(b) Except as otherwise expressly and specifically provided in this Agreement, no Person who is at any time a Non-Managing Member shall have any authority to bind, to act for, to execute any document or instrument on behalf of or to assume any obligation or responsibility on behalf of the Company or any other Member.
(c) For purposes of making any of MLPC Preferred Returns and [*] Minimum Return, included in the authority granted to the Managing Members under Section 3.1(a), the Managing Members shall have the authority to, and shall, determine in their reasonable discretion whether there is any MLPC Residential Development Cash Flow attributable to dwelling and/or residential development by the Company or a Subsidiary of each of (i) the [*] Site, (ii) the [*] Tract, and (iii) the [*] Tract and, if so, the amount thereof. MLPC shall have the right to audit the Managing Members determination of MLPC Residential Development Cash Flow available for payment of the MLPC Preferred Return or [*]
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Minimum Return (as applicable). For the avoidance of doubt, such MLPC Preferred Returns and [*] Minimum Return, if made, shall not be deemed to be distributions to MLPC pursuant to Article 8 hereof.
3.2 Role of GHGP and Limitations on its Authority.
(a) GHGP shall have the right and the duty to manage the day-to-day business of the Company, to perform duties customary for an asset manager of property comparable to the Property, and to implement the decisions made on behalf of the Company by any of the Managing Members in accordance with the terms of this Agreement and applicable laws and regulations, and shall have such other rights and powers as are granted to GHGP hereunder and as Whitehall Street or Whitehall Employee Fund may from time to time expressly delegate to GHGP. GHGP agrees that it (or its Affiliates) shall devote the necessary time and effort to the Company and its business for the purpose of conducting the business of the Company and carrying out GHGP’s responsibilities as set forth herein in a prudent manner and that any breach of the obligation set forth in this sentence shall be deemed a material breach of this Agreement. Without limiting the generality of the foregoing but subject to the other provisions in Article 3, GHGP shall have the right and the duty, to do, accomplish and complete using (and subject to the availability of) the Company’s funds, for and on behalf of the Company with reasonable diligence and in a prompt and businesslike manner, exercising such care and skill as a prudent owner with sophistication and experience in owning, operating and managing properties like the Property would exercise in dealing with its own property, all of the following:
(1) supervise and oversee the Property Manager to confirm their performance in accordance with the Property Management Agreement, as applicable, and promptly reporting deficiencies to the Company in reasonable detail together with proposed actions to be taken in respect thereto;
(2) verify that appropriate insurance is maintained by each contractor performing work on the Property with respect to the Capital Improvement Program;
(3) assisting in obtaining a loan and any and all other necessary financing required to carry out the purposes of the Company;
(4) except to the extent that the Property Manager is required to do the same under its respective property management agreement, demand, receive, acknowledge and, if the approval of the Managing Members has been obtained, institute legal action for recovery of any and all revenues, receipts and considerations due and payable to the Company, in accordance with prudent business practices;
(5) keep all books of account and other records of the Company and deliver in a timely manner all reports in the manner provided in Article 5 below (it being understood that GHGP will be dependent on the Property Manager preparing and delivering property specific information);
(6) to the extent any funds from the Property come into GHGP’s or GKH’s possession, promptly remit such funds to the Company’s bank account in the manner provided in Article 5 below and not commingle such funds with the funds of any other Person;
(7) prepare in a timely manner for approval in accordance with the terms hereof, and implement the Capital Improvement Budget;
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(8) except to the extent that the Property Manager is required to do the same under its the Property Management Agreement, coordinate the defense of any claims, demands, suits or legal proceedings made or instituted against the Company or the Members by other parties, through legal counsel for the Company engaged in accordance with the terms of this Agreement; deliver to the Managing Members prompt notice of the receipt of any material claim or demand or the commencement of any suit or legal proceeding and promptly provide the Managing Members all information relevant or necessary thereto;
(9) except to the extent that the Property Manager is required to do the same under the Property Management Agreement, comply with the terms and provisions of the Loan Agreements or other loan documents assumed or executed by the Company or its Subsidiaries including the terms and conditions of any note, mortgage and/or loan document evidencing the financing of the purchase of the Property (provided, that GHGP acknowledges that it, and not the Property Manager, is primarily responsible for the Capital Improvement Program and ensuring that the Capital Improvement Program does not conflict with the terms of the Loan Agreements and other material agreements);
(10) except to the extent that the Property Manager is required to do the same under the Property Management Agreement, during the term of this Agreement, promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions, boards and officers, the requirements of any insurance policy (or any insurer thereunder) covering the Property (and any improvements thereon), any national or local Board of Fire Underwriters, or any other body exercising functions similar to those of any of the foregoing, which may be applicable to the Property (and any improvements thereon) and the operation and management thereof, and when and to the extent approved by any of Whitehall Street or Whitehall Employee Fund, GHGP shall contest (or shall assist the Members in contesting) the validity or application of any such law, ordinance, order, rule, regulation or requirement (provided, that GHGP acknowledges that it, and not the Property Manager, is primarily responsible for the Capital Improvement Program and ensuring that the Capital Improvement Program does not conflict with any present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions, boards and officers, the requirements of any insurance policy (or any insurer thereunder) covering the Property (and any improvements thereon), any national or local Board of Fire Underwriters, or any other body exercising functions similar to those of any of the foregoing, which may be applicable to the Property);
(11) oversee the Property Manager with respect to the hiring and terminating of the staff at the Property, except in the case of the general manager, whose termination shall require the consent of the Whitehall Group and MLPC;
(12) except to the extent that the Property Manager is required to do the same under its Property Management Agreement, perform or cause to be performed all other services that are reasonably necessary or required for the acquisition, ownership and maintenance, marketing, and operation by the Company of the Property or otherwise required to be performed by GHGP pursuant to this Agreement and not otherwise prohibited hereunder;
(13) supervise the Property Manager with collection of all room charges, rents, income and other amounts payable to the Company, and deposit such funds into the accounts set up pursuant to Section 5.5;
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(14) supervise the promotion of the Property through advertisements in various media and promotional materials, including the production and distribution of all correspondence associated with the promotion and operation of the Property (i.e., newspapers, press releases, invitations, status reports); include specific public relations or advertising campaigns in the Business Plan each applicable Fiscal Year for Managing Members’ approval in accordance with the terms hereof prior to implementation;
(15) except to the extent that the Property Manager is required to do the same under the Property Management Agreement, assist Managing Members in reviewing files, conducting physical inspections of the Property, reviewing and assessing any liens on or other encumbrances to the title of the Property, and securing environmental reports, and making recommendations to Managing Members regarding potential claims with respect to the Property pursuant to any agreement with respect to the Property; provided, that GHGP acknowledges that it, and not the Property Manager, is primarily responsible for these duties in with respect to the Capital Improvement Program;
(16) if the Property is to be sold, assist the Triggering Party in negotiating a sale in accordance with this Agreement, and assist the Triggering Party in effecting a closing of the transaction between Company and the purchaser;
(17) supervise the Property Manager, leasing agents, building contractors working on improvements or other repairs or renovations of existing improvements with respect to the Capital Improvement Program;
(18) proposing building contractors to the Managing Members;
(19) with respect to the Capital Improvement Program, observe and manage the performance of all contractors performing renovations and related work including direct observation during the progress thereof; make final review of the completed work and approving bills for payment; obtain the necessary receipts, releases, waivers, discharges and assurances to keep the Property free from mechanics’ and materialmen’s liens and other claims; and coordinate the review and approval of such work by any lender whose approval is required under any loan to which the Company or any Subsidiary is a party;
(20) performing, or causing the performance of, all other services reasonably necessary or required for the implementation of the Capital Improvement Program by the Company to they extent such services are not otherwise prohibited to be performed, or caused to be performed, by GHGP pursuant to the terms of this Agreement; and
(21) selling dwelling units and/or residential units from dwelling and/or residential development by the Company or a Subsidiary of the [*] Tract, the [*] Tract or the [*] Site, provided that such sales are made for consideration consistent with the Approved Budget.
For the purposes of the foregoing, where GHGP is responsible for “supervising” any person other than the Property Manager, but is unable to terminate such person, GHGP shall not be responsible for the failure of such Person to perform as long as such failure was not caused by the gross negligence of GHGP. For purposes of (11) above, to the extent GHGP has the right pursuant to a Property Management Agreement to approve the hiring and terminating of the staff at the Property, GHGP shall obtain the approval of MLPC before exercising such right.
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(b) Notwithstanding anything to the contrary contained herein, GHGP shall not be construed to be a “manager” of the company for purposes of the Act.
(c) To the fullest extent permitted by law, the Non-Managing Members shall indemnify and hold harmless the Company and each of the Managing Members and their Affiliates from and against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgments and awards, and costs and expenses (including, but not limited to, reasonable attorneys’ fees) arising, directly or indirectly, in whole or in part, out of any breach of the provisions of Section 3.2(d) by such Non-Managing Member or any Affiliate of such Non-Managing Member.
(d) Notwithstanding anything to the contrary set forth in this Agreement, the following actions and decisions may not and shall not be taken, carried out, or implemented by any Member without the prior written direction or consent of (i) either Whitehall Street or Whitehall Employee Fund and (ii) either GKH or MLPC; provided, however, that GKH shall have no consent right under this Section 3.2(d) upon the occurrence and during the continuance of an Event of Default and that MLPC have no consent right under this Section 3.2(d) upon the occurrence and during the continuance of an MLPC Event of Default:
(1) to the extent that an Approved Budget is not yet in effect for the current Budget Year, incur any capital, operating or other expenditures (including, but not limited to, expenditures relating to tenant improvements or any other material construction, renovation or remodeling work) on behalf of the Company in respect of the Property that (x) have not been previously approved in writing by (i) either Whitehall Street or Whitehall Employee Fund and (ii) unless and until an Event of Default occurs, GKH or (y) is not permitted by Section 5.3(b); provided, however, GHGP may (and may direct the Property Manager to) incur such capital or operating expenditures (up to a maximum of $50,000) upon one (1) day prior notice to the Managing Members, in case of an emergency, which in GHGP’s reasonable discretion is necessary in order to avoid immediate loss to the Property, or with such shorter or no prior notice (but subsequent notice as soon as reasonably possible) to the extent that one (1) day’s prior notice would jeopardize the viability of the Property or the health, safety or welfare of persons located thereon; provided further, that such emergency expenses referred to in the preceding proviso shall not exceed $100,000 in the aggregate in any Fiscal Year without the approval of (i) either Whitehall Street or Whitehall Employee Fund, (ii) MLPC, and (iii) unless and until an Event of Default occurs, GKH;
(2) [intentionally omitted];
(3) except as set forth in Section 3.6, Section 4.13 or Section 9.1, sell, transfer, assign, pledge, hypothecate or otherwise dispose of any portion or all of any of the Property, a Company Asset (except that GHGP may (and may direct the Property Manager to) dispose of immaterial items of personal property in the ordinary course of business or as previously approved in the Business Plan and/or the Annual Budget) or the Company (i.e., any of the Whitehall Group may sell the entire Company and “drag-along” the Non-Managing Members), and/or enter into any binding agreement to do any of the foregoing (or enter into any amendment, renegotiation, modification, supplement or extension of any such agreement previously approved by (i) either Whitehall Street or Whitehall Employee Fund, (ii) MLPC, and (iii) unless and until an Event of Default occurs, GKH in accordance with this Agreement);
(4) approve or disapprove of any proposed Business Plan or any material changes or modifications to any Business Plan except as provided in Sections 3.2(d)(1) and (2);
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(5) approve or disapprove of any Annual Budget or any material changes to any Approved Budget except as provided in Sections 3.2(d)(1) and (2);
(6) approve or disapprove the Capital Improvement Program or any material changes or modifications to the Capital Improvement Program;
(7) approve or disapprove the Capital Improvement Budget or any material changes to the Capital Improvement Budget;
(8) enter into any Material Contract other than in accordance with an Approved Budget;
(9) except as set forth in Section 3.7, acquire or lease (whether as lessee or lessor) any land or other real property or interest therein or any other material asset other than in accordance with a Business Plan;
(10) exercise or waive any rights or remedies of the Company under the MLPC Lease Tract Purchase Agreement, the RCK Purchase Agreement, the [*] Agreement, the [*] Agreement, or under any documents or agreements ancillary to any of the foregoing agreements;
(11) take any action in respect of the Property relating to environmental matters other than to obtain environmental studies and reports, conduct (or arrange for) evaluations and analyses thereof and obtain appropriate permits; provided, however, that each of the Members is hereby authorized (upon prior notice to the other Members) to take such action as may be reasonably required to mitigate or eliminate any material environmental condition that poses imminent danger to human health or safety; provided further, that such emergency expenses referred to in the preceding proviso shall not exceed $100,000 in the aggregate in any Fiscal Year without the approval of the (i) either Whitehall Street or Whitehall Employee Fund, (ii) MLPC, and (iii) unless and until an Event of Default occurs, GKH;
(12) to the fullest extent permitted by law, dissolve and wind-up the Company or elect to continue the Company or elect to continue the business of the Company;
(13) either (i) incur, renew, refinance or pay or otherwise discharge indebtedness of the Company ( other than ordinary course trade payables incurred in accordance with the Approved Budget or approved Credit Improvement Budget) or (ii) use Company funds to extend credit, make an Investment, make a loan or become a guarantor or surety for debt of another party;
(14) modify (i) any loan documentation executed by the Company or (ii) any other material agreement the execution of which required the approval of the Managing Members and GKH, except for the purpose of the preceding clause (ii), if such modification is consistent with a Business Plan;
(15) institute proceedings to adjudicate the Company bankrupt, or consent to the filing of a bankruptcy proceeding against the Company, or file a petition or answer or consent seeking reorganization of the Company under the Bankruptcy Code or any other similar applicable federal, state or foreign law, or consent to the filing of any such petition against the Company, or consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or make an assignment for the benefit of creditors of the Company, or admit in writing the Company’s inability to pay its debts generally as they become due;
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