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Exhibit 10.25
FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
LAS VEGAS GOLF CENTER, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER
APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS IN THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT
REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS
FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS THAT ARE SET FORTH
HEREIN.
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TABLE OF CONTENTS
ARTICLE 1 FORMATION OF COMPANY, BASIC INFORMATION........................1
Section 1.1 Formation ........................................1
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Section 1.2 Name .............................................2
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Section 1.3 Term..............................................2
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Section 1.4 Character of Business.............................2
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Section 1.5 Registered Agents ................................2
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Section 1.6 Certain Definition................................2
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Section 1.7 Title to Property ................................7
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ARTICLE II CERTAIN INCORPORATED MATTERS....................................7
Section 2.1 Tax and Accounting................................7
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ARTICLE III CAPITALIZATION AND LOANS BY MEMBERS........................... 8
Section 3.1 (Intentionally Deleted)
Section 3.2 Additional Capital Contributions by the Members.. 8
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Section 3.3 Default; Remedies................................ 9
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Section 3.4 Member Loans..................................... 9
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ARTICLE IV DISTRIBUTIONS..................................................10
Section 4.1 Distributions....................................10
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Section 4.2 Timing of Distributions .........................10
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Section 4.3 Distributions of Capital ........................10
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ARTICLE V POWERS, RIGHTS AND DUTIES OF MEMBERS..........................11
Section 5.1 Authority of Members.............................11
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Section 5.2 Unilateral Sale Rights Upon Deadlock.............14
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Section 5.3 Certain Obligations of Managing Member...........15
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Section 5.4 Other Activities.................................18
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Section 5.5 Liability of Members.............................19
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Section 5.6 Indemnity of Members ...........................19
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Section 5.7 Indemnification by Members.......................19
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Section 5.8 Additional Members...............................20
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Section 5.9 Company Accounts ................................20
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Section 5.10 Compensation of Managing Member ................20
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ARTICLE VI TRANSFER OF COMPANY INTERESTS................................20
Section 6.1 Restrictions on Transfer.........................21
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Section 6.2 Effect of Assignment; Documents..................21
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ARTICLE VII CERTAIN REMEDIES.............................................22
Section 7.1 Security Agreement...............................22
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Section 7.2 Termination of Management Rights.................23
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Section 7.3 Arbitration .....................................24
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Section 7.4 No Partition ....................................26
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Section 7.5 Attorney's Fees .................................26
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Section 7.6 Cumulative Remedies..............................26
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Section 7.7 No Waiver .......................................26
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ARTICLE VIII DISSOLUTION OF THE COMPANY...................................27
Section 8.1 Events Giving Rise to Dissolution ...............27
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Section 8.2 (Intentionally Deleted)
Section 8.3 Procedure .......................................27
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ARTICLE IX MISCELLANEOUS ...............................................28
Section 9.1 Notices..........................................28
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Section 9.2 Acknowledgment by Members .......................29
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Section 9.3 Construction.................................29
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Section 9.4 Time is of the Essence.......................29
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Section 9.5 Entire Agreement.............................29
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Section 9.6 Amendments...................................30
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Section 9.7 Governing Law, Venue.........................30
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Section 9.8 Successors and Assigns ......................30
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Section 9.9 Captions.....................................30
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Section 9.10 Severability.................................30
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Section 9.11 Counterpart..................................30
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Section 9.12 No Third Party Beneficiaries.................30
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Section 9.13 Certain Terminology .........................30
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Section 9.14 Brokers......................................30
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Section 9.15 Survival ....................................31
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Section 9.16 Non-Business Days ...........................31
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Section 9.17 Incorporation of Exhibits ...................31
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Section 9.18 Intent.......................................31
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Section 9.19 Commissions on Sale or Sublease .............31
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FIRST AMENDED AND RESTATED
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LIMITED LIABILITY COMPANY AGREEMENT
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OF LAS VEGAS GOLF CENTER, L.L.C.
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THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is
made and entered into as of the 18th day of December, 1996, by and among THE
RANCHITO COMPANY LLC, a Nevada limited liability company ("Ranchito"), SENIOR
TOUR PLAYERS DEVELOPMENT, INC., a Nevada limited liability company ("STPD"),
PAUL FIREMAN, an individual residing in Massachusetts ("PF").
R E C I T A L S :
- - - - - - - -
WHEREAS, Ranchito, STPD and PF wish to form a limited liability
company pursuant to the Delaware Limited Liability Company Act, 6 Del. C.
[Section]18-010, et. seq., (the "Act") as amended from time to time, by filing a
Certificate of Formation of the Company with the Office of the Secretary of
State of the State of Delaware and entering into this Agreement;
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
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FORMATION OF COMPANY; BASIC INFORMATION
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Section 1.1 FORMATION. The Members hereby agree to form the
Company as a limited liability company under and pursuant to the provisions of
the Act and agree that the rights, duties and liabilities of the Members shall
be as provided in the Act, except as otherwise provided herein. If there is a
conflict between the provisions of this Agreement and the Act, the provisions of
the Act shall control (it being understood that if the Act provides for a
particular rule but allows the members of a limited liability company to provide
to the contrary in their limited liability company agreement, and if the parties
hereto have so provided hereunder, then such provisions shall not be deemed to
constitute a conflict for purposes of the foregoing). The "Managing Member" (as
defined below) shall file a Certificate of Formation of the Company consistent
with this Agreement and any assumed or fictitious or business name statement or
certificate or any similar document required by the Act or applicable law to be
filed in connection with the formation and operation of the Company, and
Managing Member shall perform such other actions as are required under the Act
and applicable law in order to qualify the Company to conduct the business
contemplated by this Agreement (including any required publication) in the State
of Nevada. The Members further agree to acknowledge, file, record, and publish
as necessary, such amendments to the foregoing as may be required by this
Agreement, the Act or applicable law, and such other documents as may be
appropriate to comply with such requirements for the formation, preservation, or
operation of the Company. Upon termination of the Company, Managing Member shall
promptly execute and cause to be filed all filings required under the Act and
other applicable laws. Managing Member shall promptly deliver to the Members
copies of all filings made on behalf of the Company in accordance with this
Section 1.1.
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Section 1.2 NAME. The Company's business shall continue to be
conducted solely under the name of "LAS VEGAS GOLF CENTER, L.L.C." or any
fictitious name upon which the Members may agree and for which the appropriate
certificate of fictitious name shall be filed with the appropriate government
agency.
Section 1.3 TERM. The term of the Company shall continue until,
and shall be terminated on December 31, 2025, inclusive, unless sooner
terminated as hereinafter provided.
Section 1.4 CHARACTER OF BUSINESS. The Company may engage in
any lawful purpose expressly approved in writing by the Members, except for
banking or insurance. The principal purpose of the Company shall be to expand,
improve, maintain, operate, market, finance, sell and otherwise use or realize
the economic benefit from the "Project" (as defined below) for profit and to
engage in all activities related thereto, all in accordance with the "Business
Plan" (as defined below).
Section 1.5 REGISTERED AGENTS AND OFFICES. The Company's
registered agent and office in the following jurisdictions shall be as follows:
Massachusetts: Senior Tour Players Development, Inc.
c/o Mr. Stanton V. Abrams
266 Beacon Street
Boston, Massachusetts 02116
Delaware: Paracorp Incorporated
15 East North Street
Dover, Delaware 19901
Nevada: Paracorp Incorporated
318 North Carson Street
Carson City, Nevada 89701
At any time and with written notice to the other Members, Managing
Member may designate other registered agents and/or registered offices.
Section 1.6 CERTAIN DEFINITIONS. As used herein, the following
terms have the following meanings:
"ACCOUNTS" means the "Operating Account" and the "Money Market
Account," each as defined in Section 5.9.
"ADJUSTED ADDITIONAL CAPITAL CONTRIBUTIONS" means at any time,
with respect to any Member, an amount equal to the aggregate sum of such
Member's Additional Capital Contributions, reduced by the amount of
Distributable Cash distributed to such Member pursuant to Section 4.1B.
"ADJUSTED DEFICIENCY CONTRIBUTIONS" means at any time, with
respect to any Member, an amount equal to the aggregate sum of such Member's
Deficiency Contributions, reduced by the amount of Distributable Cash
distributed to such Member pursuant to Section 4.1A.
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"AFFILIATE" of a person or entity (or words of similar import,
whether or not capitalized) includes (1) any officer, director, employee,
trustee, shareholder, member, partner or relative within the third degree of
kindred of the person or entity in question; (2) any corporation, partnership,
limited liability company, trust or other entity controlling, controlled by or
under common control with the person or entity in question or any Affiliate of
the person or entity in question (whether directly or indirectly through one or
more intermediaries); and (3) any officer, director, trustee, employee,
shareholder, member or partner of any person or entity described in (2) above.
For the purpose of this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of management and
policies, whether through the ownership of voting securities or by contract or
otherwise.
"APPLICABLE RATE" means the lesser of (1) ten percent (10%); and
(2) the maximum interest that may be charged under any applicable usury law.
"BANKRUPTCY/DISSOLUTION EVENT" with respect to a person or entity,
means the commencement or occurrence of any of the following with respect to
such person or entity: (1) a case under Title 11 of the U.S. Code, as now
constituted or hereafter amended, or under any other applicable federal or state
bankruptcy law or other similar law; (2) the appointment of (or a proceeding to
appoint) a trustee or receiver of any property interest; (3) an attachment,
execution or other judicial seizure of (or a proceeding to attach, execute or
seize) a substantial property interest; (4) an assignment for the benefit of
creditors; (5) the taking of, failure to take, or submission to any action
indicating (after reasonable investigation) an inability to meet its financial
obligations as they accrue; or (6) a dissolution or liquidation; provided,
however, that the events described in Clauses (1), (2) or (3) shall not be
included if the same are (a) involuntary and not at any time consented to, (b)
contested within thirty (30) days of commencement and thereafter diligently and
continuously contested, and (c) dismissed or set aside, as the case may be,
within ninety (90) days of commencement.
"BUDGETS" shall mean (1) the development and construction budget
for any applicable phase of the Project set forth in the applicable Development
Plan, and (2) the Capital Budget, and Operating Budget and in the event that the
Management Agreement is terminated, such substitute budgets as may be agreed
upon in writing by the Members.
"BUSINESS AGREEMENT" shall mean any loan agreement, mortgage,
easement, covenant, restriction or other agreement or instrument at any time or
times affecting all or a portion of any of the "Company Property" (as defined
below).
"BUSINESS PLAN" means the business plan for the Company which is
approved by the Members and adopted by the Company and attached as EXHIBIT "A"
as the same may be amended from time to time with the approval of the Members in
accordance with this Agreement. The Business Plan shall be deemed to include (1)
the Development Plan and (2) the Budgets.
"CARRYOVER AMOUNT" means, in respect of any Member for any Company
Year commencing on or after January 1, 1997, an amount equal to the excess, if
any, of (1) the aggregate maximum amount of Distributable Cash distributable to
such Member pursuant to Section 4.1C for all Company Years prior to such Company
Year, over (2) the aggregate sum of all Distributable Cash actually distributed
to such Member pursuant to Sections 4.1C and 4.1D for all Company Years prior to
such Company Year.
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"CLAIM" means any obligation, liability, claim (including any
claim for damage to property or injury to or death of any persons), lien or
encumbrance, loss, damage, cost or expense (including any judgment, award,
settlement, reasonable attorneys' fees and other costs and expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim [including appellate proceedings], and any collection costs or enforcement
costs).
"COLLATERAL AGREEMENT" means any agreement, instrument, document
or covenant made or entered into under, pursuant to, or in connection or
concurrently with this Agreement, and any certifications made in connection
therewith or amendment or amendments made at any time or times heretofore or
hereafter to any of the same.
"COMPANY" means the limited liability company governed by this
Agreement.
"COMPANY PROPERTY" means all property, of whatever kind or nature,
owned by the Company from time to time.
"COMPANY YEAR" means (1) that portion of the current calendar year
(i.e., the calendar year in which the date hereof occurs) which occurs on or
after the date hereof and prior to the termination of the Company in accordance
with this Agreement, (2) each full calendar year on or after the date hereof and
prior to the termination of the Company in accordance with Agreement, and (3)
that portion of the calendar year in which the Company terminates in accordance
with this Agreement that is on or after the date hereof and prior to such
termination.
"CURE PERIOD" means (1) ten (10) days after written notice from a
Member to a defaulting Member specifying the nature of a default or breach under
this Agreement, in connection with a monetary default that is not a "Noncurable
Default" (as defined below); (2) thirty (30) days after written notice from a
Member to a defaulting Member specifying the nature of a default or breach under
this Agreement, in connection with a non-monetary default that is not a
Noncurable Default (provided, however, that if such non-monetary default cannot
reasonably be cured within such thirty (30) day period, and such defaulting
Member promptly commences the cure of such default and diligently pursues such
cure to completion, then such thirty (30) day period shall be extended to the
extent reasonably necessary, but in no event after the date that is ninety (90)
days after such written notice); and (3) no period at all for a Noncurable
Default. A "Noncurable Default" means any of the following: (a) a breach of
Section 6.1 or any other restriction upon transfer or hypothecation, and (b) a
material breach constituting fraud or willful misconduct.
"DEADLOCK" means the failure of the Members to unanimously approve
a Major Decision; provided, however, that no such Member shall declare a
Deadlock for thirty (30) calendar days following any such failure, during which
thirty (30) day period such Members shall discuss their respective reasons for
approving or disapproving the Major Decision at issue and their respective
recommendations (if any) for resolving the dispute. If, following the expiration
of said thirty (30) day period, the Members are still unable to unanimously
approve such Major Decision, then a Deadlock shall exist for purposes of Section
5.2. Notwithstanding the foregoing, no Deadlock shall exist for purposes of
Section 5.2, (i) when a Member desires approval (and any other such Member is
not willing to grant approval) to alter, amend, modify or otherwise change any
provision of this Agreement or any matter already specifically approved by the
Members in any then applicable Business Plan, Budget or otherwise, (ii) when a
Member fails to
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approve any assignment or transfer of all or any portion of a Member's interest,
or (iii) with respect to matters involving breaches of express duties or
obligations of any Member hereunder.
"DEVELOPMENT PLAN" means the preliminary construction plan,
budget, financing plan and development schedule that has been approved by all
the Members with respect to "Phase I" of the development of the Project and
which is attached hereto as EXHIBIT "B". Such preliminary construction plan,
budget, financing plan and development schedule, as the same may be updated and
amended from time to time as provided herein, are referred to herein as the
"Phase I Plans". As soon as practicable following the date hereof, Managing
Member shall prepare and submit to the Members for their review a preliminary
construction plan, budget, financing plan and development schedule with respect
to "Phase II" of the development of the Project. Such preliminary construction
plan, budget, financing plan and development schedule, as the same may be
updated and amended from time to time as provided herein, referred to herein as
the "Phase II Plans". The Phase II Plans may be implemented only upon the prior
written consent of the Members. The preliminary construction plan, budget,
financing plan and development schedule with respect to any additional phases of
the development of the Project (the "Post Phase II Plans") shall be prepared and
submitted by Managing Member to the Members for their review as soon as
practicable and the approval and implementation of any Post-Phase II Plan shall
be subject to identical terms and conditions as applied under this Agreement to
Phases I and II. The Phase I Plans, Phase II Plans and Post-Phase II Plans are
sometimes hereinafter individually and collectively referred to as the
"Development Plan".
"DISTRIBUTABLE CASH" means, for the applicable period, the
"Distributable Operating Cash Flow" and "Net Capital Proceeds" (each as defined
below) received by the Company during such period.
"DISTRIBUTABLE OPERATING CASH FLOW" for the applicable period
means the amount by which (1) the gross cash revenues and funds received from
Company operations during such period (excluding sale proceeds, financing
proceeds, condemnation proceeds [other than an award for a temporary taking], or
casualty insurance proceeds [other than the proceeds from rental income or
business interruption insurance], and funds received as capital contributions or
loans from any Member); exceed (2) the sum of (a) cash expenditures made by the
Company or which the Company is obligated to make for or during such period in
connection with the Company's operations or in connection with the Company
Property, including business taxes and real and personal property taxes and
assessments, insurance premiums, leasing commissions and fees, tenant
improvements and other capital costs, all expenditures made or required to be
made by the Project Manager under the Management Agreement, management fees
payable to Project Manager under the Management Agreement, and other operating
costs (except to the extent paid from any working capital reserve or other
reserves reasonably established by Managing Member and except to the extent
deducted in the calculation of Net Capital Proceeds), (b) all installments and
payments of principal and interest and other sums and amounts paid or payable
for or during such period on or in connection with any secured or unsecured
indebtedness of the Company, and (c) the establishment or additions to the
Working Capital Reserve and such other reserves as may be reasonably established
by Managing Member. If the amount described in Clause (2) above for the
applicable period exceeds the amount described in Clause (1) for such period,
then such excess shall be referred to herein as the "NEGATIVE CASH FLOW" for
such period. For purposes of determining Distributable Operating Cash Flow and
Distributable Cash allocable to any Company Year, the Members shall prorate the
revenues and expenses of the Company as of midnight of the last day of such
Company Year to determine whether such revenues
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and expenses (and accordingly Distributable Operating Cash Flow and
Distributable Cash) are attributable to such Company Year; for this purpose, any
Net Capital Proceeds shall be deemed to be attributable to the Company Year in
which the capital event giving rise to the same occurred.
"LEASE" means that certain Lease and Concession Agreement entered
into as of January 3, 1995, by and between Clark County, Nevada, and Golf
Centers of America, and assigned by an Assignment of Lease from Golf Centers of
America to the Company pursuant to Section 3.1B of the original Las Vegas Golf
Center, L.L.C. Agreement, and approved by the Clark County Board of
Commissioners as of December 17, 1996. Such Section 3.1B is intentionally
deleted from this First Amended and Restated Agreement as the prior assignment
of said lease is not material to the contribution of the current Members
"LIMITED LIABILITY COMPANY AGREEMENT" or this "AGREEMENT" means
this Agreement, as amended, modified or supplemented from time to time.
"MANAGEMENT AGREEMENT" means that certain agreement captioned
"MANAGEMENT AGREEMENT," dated as of the date hereof, by and between the Company,
as owner, and STPD, as manager. The following terms shall have the respective
meanings specified for the same in the Management Agreement: "Capital Budget"
and "Operating Budget".
"MANAGER OWNERSHIP/CONTROL REQUIREMENT" as of any particular date
means that Managing Member (1) is not then dead, insane, incapacitated or
subject to a Bankruptcy/Dissolution Event; (2) is actively involved in the
management and affairs of the Project.
"MANAGING MEMBER" means Stanton V. Abrams for STPD, subject to
Section 7.2.
"MATERIAL" means that as to "BUDGETS" there shall not be more than
a 15% deviation in the aggregate per Company Year.
"MEMBER" means Ranchito, STPD, and/or PF.
"NET CAPITAL PROCEEDS" means Net Financing Proceeds and Net Sale
Proceeds.
"NET FINANCING PROCEEDS" and "NET SALE PROCEEDS" mean,
respectively, the net proceeds from (1) any financing or refinancing of the
Company Property or any part thereof (other than proceeds from the Construction
Loan), and (2) any sale, disposition, taking or loss (including the proceeds
from any eminent domain proceeding or conveyance in lieu thereof [other than an
award for a temporary taking] or from casualty insurance [other than rental
income or business interruption insurance] or title insurance) of the Company
Property or any part thereof. In the computation of Net Financing Proceeds and
Net Sale Proceeds there shall be deducted the payment of all costs and other
expenses related thereto and approved by the Members and the satisfaction of any
debt being refinanced or discharged and any other debts or liabilities of the
Company for which the Members decide to use the same and the setting aside of
any reserves therefrom reasonably deemed proper by the Members.
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"PROFIT PERCENTAGES" means the following percentage for each
Member:
MEMBER PROFIT PERCENTAGE
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Ranchito 30%
STPD 21.5%
PF 48.5%
"PROJECT" means all of the assets, properties and business of
every kind, character, or description, whether tangible, intangible, real,
person, or mixed, and wherever located, comprising the golf driving range and
related facilities that the Company intends to plan, finance, lease, develop,
construct, manage, own, and operate on a site located in the City of Las Vegas,
State of Nevada.
"PROJECT MANAGER" means STPD.
"REQUIREMENTS" means this Agreement, the Business Plan (including
the Budgets) and the Business Agreements.
Section 1.7. TITLE TO PROPERTY. Title to the assets and property
of the Company shall be held in the name of the Company.
ARTICLE II
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CERTAIN INCORPORATED MATTERS
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Section 2.1 TAX AND ACCOUNTING. Each and all of the provisions
of EXHIBIT "C" are incorporated herein and shall constitute part of this
Agreement. EXHIBIT "C" provides for, among other matters, the maintenance of
capital accounts, the allocation of profits and losses, and the maintenance of
books and records. The Company shall be operated as a partnership solely for
state and federal income tax purposes.
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ARTICLE III
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CAPITALIZATION AND LOANS BY MEMBERS
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Section 3.1 Intentionally Deleted.
Section 3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE MEMBERS.
Subject to the limitations hereinafter set forth in this Section, each Member
shall contribute from time to time its Profit Percentage of anticipated Negative
Cash Flow and any "Financing Shortfall" (as defined below). No additional
capital contributions shall be required by any Member other than as expressly
provided in this Section 3.2.
A. Procedure.
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(1) DEPOSIT. On or before the first (1st) day of each
calendar month, each Member shall contribute to the Company by deposit into the
Operating Account the amount to be contributed by such Member specified in the
Contribution Request, if any, for such month (collectively in connection with a
Contribution Request, the "Subsequent Contribution"), subject to the terms and
conditions set forth below. Managing Member agrees to use any and all
contributions made in conformity with the Requirements (except as otherwise
agreed in writing by the Members).
(2) CONTRIBUTION REQUESTS. If Managing Member reasonably
anticipates that there will be Negative Cash Flow for any given calendar month
or that all or a portion of a Financing Shortfall must be funded during any such
calendar month, then at least ten (10) days prior to the first (1st) day of such
calendar month, Managing Member shall submit a written contribution request for
such month to the Members describing such Negative Cash Flow or Financing
Shortfall (as the case may be) and meeting the requirements of this Subsection
(2) ("Contribution Request"). Each Contribution Request shall (1) describe in
reasonable detail the anticipated Negative Cash Flow or Financing Shortfall for
such month with reference to the Budgets; (2) indicate the amounts expended by
the Company to date in connection with the Project in accordance with the
Budgets; (3) describe the portion of expenditures for such month anticipated to
be funded from available Company funds; (4) describe the portion of expenditures
for such month which is to be funded by contributions from the Members; and (5)
set forth each Member's required contribution. Managing Member may submit
Contribution Requests to the Members no more frequently than once each month
(except as provided in the last sentence of this Subsection), unless each Member
has given its prior written consent in each instance. The amounts contributed by
each Member pursuant to this Section are referred to herein as such Member's
"Additional Capital Contributions".
(3) CONSTRUCTION FINANCING. The Members anticipate that
the Company will finance the development and construction of the improvements
contemplated by the Development Plan through borrowings from an institutional
lender or lenders in the maximum amount that may be available from time to time
(the "Construction Loan"). The Construction Loan may be secured by the Lease and
such other assets of the Company specifically related to the Project as the
lender may reasonably require; provided, however, that any such Construction
Loan shall in all events (i) be non-recourse as to the Members and their
respective Affiliates, unless each Member or Affiliate thereof with respect to
whom it shall be on a recourse basis gives his or its
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prior written consent, and (ii) be for such term and have such other provisions
as are set forth on EXHIBIT "E" attached hereto. To the extent the Company is
unsuccessful in financing the full amount contemplated by the Development Plan,
any such shortfall (a "Financing Shortfall") shall be contributed by the Members
as provided in this Section 3.2.
B LIMITATIONS UPON CONTRIBUTION OBLIGATION.
Notwithstanding anything to the contrary in this Agreement, in no event shall
the total contributions of the Members under this Section 3.2 exceed Two Hundred
and Fifty Thousand Dollars ($250,000) in the aggregate (without taking into
account any distributions made or to be made pursuant to Article IV of this
Agreement), without the prior written consent of all Members.
Section 3.3 DEFAULT; REMEDIES. Upon the failure of a Member (a
"Defaulting Member") to make any capital contribution required by 3.2 (the
portion thereof not contributed by such Defaulting Member being referred to
herein as the "Deficiency"), then each of the other Members (individually, a
"Non-Defaulting Member") who is not then in default under Article III may, in
its sole and absolute discretion, contribute all or any portion of such
Deficiency, within five (5) days after the date the Deficiency was required to
be contributed, and any contributions made by a Non- Defaulting Member pursuant
to this sentence shall be referred to as a "Deficiency Contribution." However,
if there is more than one Non-Defaulting Member desiring to make a Deficiency
Contribution, then they shall share in such Deficiency Contribution on a pro
rata basis (based upon the relative proportions of their then respective Profit
Percentages) or in such other proportions as they may agree. Defaulting Member
shall not receive any distribution of Distributable Cash under Article IV until
such time that Defaulting Member's Deficiency amount has been fully paid plus
15% interest per annum, compounded quarterly to the Non-Defaulting Member who
has made a Deficiency Contribution on behalf of the Defaulting Member. Such
payment may be made by Defaulting Member by credit of Distributable Cash as
described above, or by outside source. If there is more than one Non-Defaulting
Member having made a Deficiency Contribution, then they shall share in such
distribution of Defaulting Member's credit of Distributable Cash on a pro rata
basis according to their Profit Percentage. The exercise by the Company and/or
the Members of the rights set forth in this Section 3.3 shall preclude the
exercise of any other right or remedy of the Company or any Member under this
Agreement, at law or in equity, against any Defaulting Investor (or any
"Transferee" thereof (as defined below), as the case may be) for failure to make
any required capital contribution.
Section 3.4 MEMBER LOANS. Except as otherwise expressly provided
under this Agreement, any Member making a loan to the Company shall be entitled
to interest thereon at the Applicable Rate, compounded monthly, and the same,
together with interest as aforesaid, shall be repaid before any distribution
shall be made under Article IV hereof. However, except as otherwise expressly
provided under this Agreement, no such loan to the Company shall be made without
the prior written consent of the Members.
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ARTICLE IV
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DISTRIBUTIONS
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Section 4.1 DISTRIBUTIONS. Subject to Sections 3.3 and 3.4, each
distribution of Distributable Cash for each Company Year shall be made as
follows:
A. FIRST LEVEL. All such Distributable Cash shall first
be distributed, in preference and priority to any other distribution of such
Distributable Cash, to the Memberrs pro rata and in proportion to their
respective Adjusted Deficiency Contributions to the extent thereof.
B. SECOND LEVEL. The balance, if any, of such
Distributable Cash remaining after the distributions pursuant to Subsection 4.1A
above shall be distributed to the Members pro rata and in proportion to their
respective Adjusted Additional Capital Contributions to the extent thereof.
C. THIRD LEVEL. The balance, if any, of such
Distributable Cash remaining after the distributions pursuant to Subsections
4.1A and 4.1B above shall be distributed to the Members pro rata and in
proportion to their respective Profit Percentage.
D. INSTALLMENT SALES. The cash portion of the sale
price of the Project or any part thereof, together with all installments and
payments of cash (including interest) of or against any deferred portion of such
purchase price, shall be distributed in accordance with the levels provided
above, with each person or entity entitled to payment under a level receiving
the entire amount of such cash until the sum payable under such level shall have
been discharged in cash.
Section 4.2 TIMING OF DISTRIBUTIONS. Distributions of
Distributable Cash shall be made on a quarterly basis concurrently with the date
the "Periodic Report" (as defined below) for the immediately preceding quarter
is required to be delivered pursuant to this Agreement, unless otherwise agreed
by the Members. Each Periodic Report for such last quarter shall include a
calculation by Managing Member of the amount of Distributable Cash for such
quarter.
Section 4.3 DISTRIBUTIONS OF CAPITAL. Except as expressly
provided in this Agreement or as otherwise agreed by the Members, no Member
shall be entitled to withdraw capital or to receive distributions of or against
capital without the prior written consent of, and upon the terms and conditions
agreed upon by, the Members. Each Member shall look solely to the assets of the
Company for return of such Member's capital contributions.
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ARTICLE V
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POWERS, RIGHTS AND DUTIES OF MEMBERS
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Section 5.1 AUTHORITY OF MEMBERS. Management of the Company
shall be vested in Managing Member and the Members in accordance with this
Agreement.
A. AUTHORITY OF MANAGING MEMBER. Except as otherwise
provided in this Agreement, Managing Member shall have full power and authority
to manage the operations and affairs of the Company and to act for and to bind
the Company to the extent provided by the Act, and shall have the duty and
authority, on behalf of the Company, to do all things appropriate to the
accomplishment of the purposes of the Company, including the following (but all
subject to and in accordance with the Business Plan):
(1) Filing appropriate organizational documents
for the Company with the appropriate governmental authorities.
(2) Operating the Company Property and entering
into leases and other agreements and undertakings pertaining to the operation of
the Company Property.
(3) Employing consultants, attorneys, accountants
and agents.
(4) Executing contracts, agreements, deeds and
other writings.
(5) In general, managing the business and affairs
of the Company and taking such actions as may be necessary or appropriate
thereto.
B. MAJOR DECISIONS. Managing Member shall fully consult
with the Members at all times to the extent reasonably practicable, and each of
the following matters ("Major Decisions") must be previously approved in writing
by the Members, however, such approval shall not be unreasonably withheld:
(1) The adoption of, and any material supplement
to, revision of, or deviation from the Business Plan.
(2) Without limitation on Subsection B(1) above,
the adoption of, and any material supplement to, revision of, or deviation from
any of the Budgets (subject to Subsection (3) below). Managing Member agrees to
submit to the members, at least thirty (30) days prior to each calendar year
during the term hereof, the proposed Operating Budget and Capital Budget for
such calendar year, which shall be in the same form as the forms of the initial
Operating Budget and Capital Budget attached as Exhibit "A" to the Management
Agreement, and which proposed Operating Budget and Capital Budget shall be
subject to the prior written approval of the Members, which shall not be
unreasonably withheld. If the Operating Budget or Capital Budget is not approved
in writing by the Members for any particular year, then until such Budgets are
approved in writing by the Members, Managing Member shall obtain the Members'
prior written approval of all capital expenditures (other than capital
expenditures in accordance with the prior year's Budgets which were not expended
in the prior year but which are required to be expended by the Company pursuant
to authorized Company contracts), and Managing Member shall to the extent
practicable operate within the prior year's approved Operating Budget.
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(3) Any deviation from or expenditure
inconsistent with any of the Budgets (or the entry into any agreement therefor).
Notwithstanding the foregoing, the Members' consent to an expenditure payable to
a third party exceeding the amount specified for such expenditure in any
applicable Development Plan, Operating Budget and Capital Budget shall not be
required in any of the following circumstances: (a) Managing Member, in his
reasonable judgment, deems these to be an emergency requiring such expenditures
to effectuate immediate action necessary for the protection of the Company
Property or persons; (b) such expenditure would not cause the aggregate amount
of the expenses (excluding the expenses described in Clause (c) below) within
the applicable Budget to exceed one hundred fifteen percent (115%) of the entire
amount of budgeted expenses (excluding the expenses described in Clause (c)
below) in the applicable Budget (taking into account the amounts expended to
date and reasonably anticipated expenses); or (c) expenditures for debt service,
real property taxes and assessments, utilities and insurance (to the extent
required to be carried under the Management Agreement) for the Company.
(4) Any material activity or expenditure which is
materially inconsistent with the Business Plan.
(5) Any material modification or termination of
the Management Agreement.
(6) Any transaction or matter that is not in the
ordinary course of the Company's business relating to the Project.
(7) Without limitation on Subsection B(6) above,
taking any action with respect to any new projects or acquisition of any
property by the Company other than the Project.
(8) Without limitation on Subsection B(6) above,
any sale or financing of the Project and any other capital transaction involving
more than Five Hundred Thousand Dollars ($500,000) in gross value, and the terms
of such sale or financing.
(9) Any compensation or reimbursement to, or
other transaction with any Affiliate of Managing Member.
(10) The entry into or any material concessions by
or restrictions on the Company or the Project in connection with obtaining
zoning, variances, map approval, entitlements, permits or other governmental
approvals.
(11) Any other decision or action which requires
the approval of the Members as provided elsewhere in this Agreement.
Any approval by the members pursuant to this Subsection B must be in writing;
provided, however, that Managing Member may give the Members written notice of
any proposed Major Decision, and if a Member does not object to the same or
request further information with respect thereto within fifteen (15) days after
receipt of such notice, then such Member shall be deemed to have approved the
proposed Major Decision.
C. PROHIBITED ACTS. No Member shall have any authority
to:
(1) Unilaterally amend this Agreement.
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(2) Extend the term of the Company.
(3) Do any act in contravention of this Agreement
or which would make it impossible to carry on the business of the Company.
(4) Possess any Company Property or assign the
rights of the Company in specific Company Property for other than a Company
purpose.
(5) Admit a person or entity as a Member except
as provided in this Agreement.
(6) Permit the Company to merge or consolidate
with any other entity.
(7) Engage in any transaction with itself or an
Affiliate, even if approved by the Members, except upon terms which are fair as
respects the Company and competitive with the terms available to the Company
from non-Affiliates.
(8) Make, execute or deliver on behalf of the
Company any assignment for the benefit of creditors or any guarantee, indemnity
bond or surety bond, other than reasonable and customary bonds and assurances to
governmental agencies in connection with the obtaining of entitlements and other
governmental approvals or to lenders in connection with development or
construction financing; or obligate the Company or any Member as a surety,
guarantor or accommodation party to any obligation.
(9) Lend funds belonging to the Company or any
Member to any Member or third party or extend to any person, firm or
corporation, credit on behalf of the Company.
(10) Borrow on behalf of the Company, or pledge,
mortgage or encumber, or grant of a security interest in, any Company Property,
without the unanimous consent of the Members.
(11) Confess any judgment on behalf of the
Company.
(12) Distribute any property in kind to any
Member.
(13) Take any action outside the purposes
specified in Section 1.4.
D. REQUIRED SIGNATURES. Each Member's signature (or a
written resolution or written consent granting Managing Member sole authority to
sign) shall be required for all contracts (including documents related to the
sale, financing or transfer of any portion of the Project) entered into by or on
behalf of the Company; provided, however, that only Managing Member's signature
will be required for contracts and agreements that are permitted to be entered
into without the consent of the Members under Section 5.1 B(5).
E. AFFILIATE TRANSACTIONS. Notwithstanding anything to
the contrary herein, any decision by the Company to terminate or exercise any
right (including any right to approve or any right to receive documents) or
remedy under any contract between the Company and the Project Manager or an
Affiliate of the Project Manager may be made jointly by Ranchito and PF. If a
contract with Project Manager or such
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Affiliate is terminated, any substitute contract shall be with a third party
reasonably satisfactory to the Members (including STPD). In addition,
notwithstanding anything to the contrary herein (including any loss of voting
rights), any act or other transaction between the Company on the one hand, and
any Member or its Affiliates on the other hand, shall require the prior written
approval of the non-interested Members.
F. DETERMINATIONS BY THE MEMBERS. Except as expressly
provided herein, any approval, consent, judgment, option, rights or other
determination to be made by a Member shall be in the sole and absolute
discretion of such Member. Any approval, consent, judgment, or other
determination to be made by the Members under and in connection with this
Agreement shall be made jointly by the Members and shall therefore require their
mutual written agreement.
Section 5.2 UNILATERAL SALE RIGHTS UPON DEADLOCK. In the event a
Deadlock occurs at any time following the third (3rd) anniversary of the date of
this Agreement, any Member, shall have the right to unilaterally (without the
consent of any other Member(s)) propose that the Company sell the Project (and
all matters incidental thereto), subject to compliance with the provisions of
this Section 5.2. This Section shall not apply to a sale which the Members
jointly agree in writing to pursue.
A. SALE TERMS. Except as otherwise approved by the
Members, the purchase price for the Project or the portion thereof to be sold or
disposed of shall be payable (1) entirely in cash; or (2) by taking title
subject to or assuming existing indebtedness; or (3) both. In addition, the
terms of the sale of the Project (other than the purchase price) shall be
subject to the reasonable approval of the Members.
B. SALE TO AFFILIATE. No sale of the Project shall be
made to an Affiliate of a Member, without the prior written approval of the
other Members.
C. RIGHT OF FIRST OPPORTUNITY. Prior to consummating a
proposed sale under this Section 5.2, if a Member desires to sell, then that
"Selling Member" shall provide the "Non-Selling Members" with a right to
purchase the Selling Member's interest in the Company on and subject to the
terms and conditions hereinafter stated:
(1) Selling Member shall give written notice (the
"Proposed Sale Notice") to Non-Selling Members setting forth the "Basic Sale
Terms" (as hereinafter defined) of such proposed sale. As used herein, "Basic
Sale Terms" means a good faith offer the Selling Members would be willing to
accept from an unrelated third party containing the proposed purchase price, the
amount of cash payable to the Company by the purchaser at the closing, any other
material economic terms of the proposed sale, and the estimated closing date of
the transaction. The Basic Sale Terms shall otherwise comply with the
requirements of Subsection A above.
(2) Non-Selling Members shall have fifteen (15)
days (the "Election Period") after the giving of the Proposed Sale Notice to
elect to purchase Selling Member's interest in the Company (such election to be
made, if at all, by giving written notice thereof to Selling Member within the
Election Period). The purchase price of Selling Member's Company interest and
the terms of such purchase will be such as will produce for Selling Member the
same consideration and security at the same time or times as Selling Member
would have received if the proposed sale of the Project by the Company had been
consummated (and no sales commissions had been paid by the Company [i.e.,
without any deduction for a sales commission]) and the Company had been
dissolved and wound up following such sale and the proceeds of such sale and
other
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assets of the Company had been distributed to the Members in accordance with the
provisions of this Agreement. In addition, Selling Member shall be required to
pay any sales commissions to which any broker or brokers engaged by Selling
Member (on behalf of the Company for the sale of the Property) are entitled for
a sale of Selling Member's Company interest pursuant to this Section 5.2.
(3) If Non-Selling Member fails to make the
election to purchase, then Selling Member may close a sale at any time or times
during the one hundred eighty (180) day period (the "Closing Period") that
commences on the first (1st) day after the Election Period, for a purchase price
and on terms which are at least as favorable to the Company as the Basic Sale
Terms contained in the Proposed Sale Notice; but if a sale for such purchase
price and on such terms is not consummated within such period, then the rights
of Non-Selling Members to notice and purchase as aforesaid will continue as to
any sale occurring subsequent to such period. A sale shall be deemed "at least
as favorable" as that set forth in the Proposed Sale Notice if the net purchase
price (after the payment by the Company of all of its expenses associated with
the sale, including any real estate commissions) shall be at least as high as
that set forth in the Proposed Sale Notice (after deduction for the expenses
therein set forth).
(4) If Non-Selling Member makes the election to
purchase, then such election shall be deemed to create a contract between
Non-Selling Member and Selling Member pursuant to which Non-Selling Member
agrees to acquire the interest of Selling Member in the Company on the terms
specified in Clause (2) above, except that (a) within ten (10) days after the
Election Period, Non-Selling Member shall deliver to Selling Member five percent
(5%) of the purchase price payable under Clause (2) above as a deposit which is
non-refundable and liquidated damages (but credited towards such purchase price
if the closing of such sale occurs) unless the closing of such sale fails to
occur due to the Selling Member's default, and (b) the closing date for such
sale shall be the date which is sixty (60) days after the making of such
election. If Non-Selling Member makes the election to purchase but the closing
fails to occur due to Non-Selling Member's default (or if Non-Selling Member
fails to make the five percent (5%) deposit described above within the ten (10)
day period described above), then without limitation on the Selling Member's
other rights and remedies (including specific performance and damages),
Non-Selling Member's rights under this Subsection 5.2 will be permanently lost.
Section 5.3 Certain Obligations of Managing Member
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A. GENERALLY. Managing Member shall fully and
faithfully discharge its obligations and responsibilities, shall devote such
time and attention to Company affairs as may be reasonably necessary for the
proper management and supervision of the Company's business and the discharge of
its duties under this Agreement. Managing Member shall diligently perform its
obligations hereunder relative to the entitlement, development, financing,
operation, marketing and sale of the Project in accordance with its reasonable
business judgment, and shall make its personnel and the personnel of its
Affiliates available to the Company to the extent necessary in order that such
obligations may be adequately discharged.
B. PROJECT ADMINISTRATION. Without limitation on the
foregoing or other provisions of this Article V, Managing Member shall monitor
the Project within the time schedules set forth in, and in full compliance with,
all Requirements, and shall, at all times, exercise good faith and shall use
diligent and professional efforts to promote and protect the best interests of
the Project and the Company (without consideration being made to the separate
interests of any particular Member). It is understood that certain
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Project responsibilities have been delegated to STPD under the Management
Agreement and, notwithstanding anything contained herein to the contrary,
Managing Member shall not be in default hereunder because of STPD's default or
failure to perform under the Management Agreement so long as Managing Member has
taken all reasonable steps that a prudent supervising owner would take to
prevent such default, to minimize its adverse effects and to cause it to be
promptly cured. Without limiting the generality of the foregoing, Managing
Member shall have the following duties and obligations:
(1) Except to the extent delegated to STPD under the
Management Agreement (in which event Managing Member shall monitor the same),
obtain the necessary entitlements for the Project, including negotiation with
governmental authorities to obtain any agreements, governmental approvals,
building permits and other permits and licenses as are necessary for the
Project.
(2) Exerting diligent and professional efforts within
the limits of its authority and duties hereunder and monitoring the Project as a
whole so that the same is completed in accordance with the time schedule set
forth in the Business Plan.
(3) Monitoring and enforcing STPD's activities and
performance under or in connection with the Management Agreement, including:
(a) Monitoring on a regular and continuing basis
the cost of materials, labor, equipment and other items used in the planning,
development, construction and marketing of the Project, and, where increases in
costs will cause any Budget for a particular cost item to be exceeded, make
recommendations to the Company as to the most appropriate method of limiting the
effect of such cost increases.
(b) Procurement of insurance for the Company and
the Property through an agent acceptable to the Members, including casualty,
public liability, workers' compensation and all other insurance required by law
or under any Business Agreement, and such other insurance as may be required by
the Members, with amounts and coverages approved by the Members.
(c) In the event the Management Agreement is
terminated, satisfying to the best of Managing Member's ability the obligations
of the "Manager" under the Management Agreement until a replacement Manager is
hired by the Company.
(4) Direct coordination with and supervision of all
litigation and other legal matters, and the preparation of all legal
documentation, including sale contracts, and all other necessary or appropriate
documents and instruments.
(5) Payment or contestation of all real and personal
property taxes and assessments for the Project.
(6) The use of diligent and professional efforts to
comply with all Business Agreements in connection with the performance of
Managing Member's duties and obligations under this Agreement.
(7) Conducting meetings of the Company, as may be
reasonably required by the Members, for the purpose of reviewing the progress of
the Project.
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(8) Recommending, and if approved in writing by the
Members, seeking and facilitating debt and equity financing (if necessary for
operating deficits, construction financing and permanent financing) in
accordance with terms approved by the Members.
(9) Overseeing tax issues for partnership (including
serving as "tax matters partner," preparation of partnership returns, state
business tax filings, franchise filings).
(10) Preparing such reports as the Members may reasonably
request and responding to Member inquiries on operations and performance.
C. Books and Records. Managing Member shall cause to be kept
proper and complete records and books of account in which shall be entered fully
and accurately all transactions and other matters relating to the Company's
business as are usually entered into such records and books of account kept for
business of a like character. The Company's records and books shall be kept on a
accrual basis, except as the Members may otherwise determine. At all times, such
books and records shall be available at the Company's principal place of
business for inspection, examination, photocopying or audit by any Member, or
the duly authorized representative thereof, during reasonable business hours and
upon reasonable advance notice.
D Reports. Subject to Section 5.3B, Managing Member shall
provide the Members with reports as follows:
(1) An annual report of all income and all expenses
within one hundred twenty) (120) days of the end of the calendar year, audited
by an independent nationally recognized accounting firm reasonably satisfactory
to Investor.
(2) Copies of the Company's annual federal and state
income tax returns together with a copy of that certain IRS form commonly
referred to as a "Schedule K-1," plus a copy of its California and Delaware
equivalents, within ninety (90) days following the end of each calendar year.
(3) Copies of all reports received from STPD under the
Management Agreement promptly after the same are received by Managing Member.
(4) A quarterly report for each calendar quarter,
certified by Managing Member to be true, accurate and complete in all material
respects, and submitted to the Members within twenty (20) days of the end of
each such calendar quarter (the "Periodic Report"). Each Periodic Report shall
be in the form approved by the Members, and shall include the following:
(a) An operating statement and report of
financial condition of the Company for such period.
(b) A Contribution Request containing Managing
Member's estimate of the amount needed to be contributed by the Members pursuant
to Article III for the succeeding quarter.
(c) A variance report, comparing actual costs and
expenses and revenues with budgeted costs and expenses and revenues on a
category basis along with a reasonably detailed explanation of all material or
significant variances and all changes in any time schedules relating thereto.
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(d) Quarterly reports, within twenty (20) days
after the end of each quarter, which shall describe in reasonable detail the
daily occupancy and room rates (and average daily room rate) for such quarter,
which such other detail as may be reasonably requested by the Members.
(e) At least sixty (60) days prior to each
Company Year of the Company, proposed annual updates for the Members' approval
of the Business Plan including the Budgets).
(f) If applicable, a calculation by Managing
Member of the amount of Distributable Cash for the preceding and following
calendar quarter and a calculation by Managing Member of the respective
distributions if any, to Members pursuant to Article IV.
E. WORKING CAPITAL RESERVE AND OTHER RESERVES. In
addition to the FF&E and working capital reserves (collectively, the "STPD
Reserves") established by STPD pursuant to the Management Agreement, Managing
Member, in its reasonable discretion, shall establish and maintain such other
reasonable reserves for future costs, expenses and payments or for substantial
costs (including capital repairs, improvements and replacements), to the extent
the payment of such costs is not contemplated by the STPD Reserves, including a
working capital reserve (the "Working Capital Reserve") to pay third party costs
of the Company incurred in accordance with this Agreement (such as attorneys'
fees, business taxes and licensing expenses and consultant fees).
Section 5.4 OTHER ACTIVITIES. Except as otherwise provided in
this Agreement or in any agreement among the Members: (1) each Member recognizes
that each other Member has an interest in investing in, developing,
constructing, operating, transferring, leasing and otherwise using real property
and interests therein for profit, and engaging in any and all activities related
or incidental thereto and that each will make other investments consistent with
such interests; (2) neither the Company nor any Member shall have any right by
virtue of this Agreement or the Company relationship created hereby in or to any
other ventures or activities in which any Member is involved or to the income or
proceeds derived therefrom; (3) the pursuit of other ventures and activities by
any Member, even if competitive with the business of the Company (except as to
the Expansion Opportunity described below), is hereby consented to by the other
Members and shall not be deemed wrongful or improper; (4) no Member and no
Affiliate of a Member shall be obligated to present any particular investment
opportunity to the Company, even if such opportunity is of a character which, if
presented to the Company, could be taken by the Company; and (5) each Member and
each Affiliate of a Member shall have the right to take for its own account, or
to recommend to others, any such particular investment opportunity.
Notwithstanding the provisions of this Section 5.4, Managing Member covenants
and agrees that in the event the Lessor under the Lease is willing to lease
other real property which is adjacent to the Project for either the expansion of
the golf facilities comprising the Project or the development and construction
of a golf course (either 9-hole or 18-hole) or any other improvements (any such
opportunity being sometimes hereinafter referred to as an "Expansion
Opportunity"), Managing Member shall not conduct substantive negotiations with
any potential equity partner with respect to such Expansion Opportunity (i)
without first giving the Members written notice (a "First Negotiation Notice")
identifying the Expansion Opportunity and describing in then available
reasonable detail the nature, terms and conditions of the proposed Expansion
Opportunity, and (ii) without giving the Members a period of thirty (30)
calendar days following their receipt of the First Negotiation Notice (the
"First Negotiation Period") within which to negotiate and attempt to reach
agreement among themselves regarding the Company's participation in such
Expansion Opportunity. Until
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the earlier of (i) the expiration of the First Negotiation Period, or (ii) the
unanimous waiver by the Members of their rights hereunder with respect to any
such Expansion Opportunity (the "First Negotiation Waiver"), the Members shall
in good faith negotiate regarding the possibility of the Company participating
in the Expansion Opportunity. Upon the expiration of the First Negotiation
Period or the earlier delivery of a First Negotiation Waiver any and all rights
of the Members under this Section 5.4 with respect to any such Expansion
Opportunity shall terminate and, thereafter, any Member shall be entitled to
participate with any other potential equity partner in the Expansion Opportunity
which was the subject of the First Negotiation Notice.
Section 5.5 LIABILITY OF MEMBERS. Subject to the provisions of
any other agreement to which the Members are parties, and except for the
obligations to a Member or Members or the Company imposed under such other
agreement, no Member shall be liable, responsible or accountable in damages or
otherwise to the Company or the other Member for any action taken or failure to
act by such Member in its business judgment on behalf of the Company within the
scope of the authority conferred on it by this Agreement unless such action or
omission constitutes a breach or default under this Agreement, a breach of
fiduciary duty, gross negligence or willful misconduct. Unless otherwise agreed
upon in writing by the Members or provided by the Act: (1) no Member shall be
liable for the debts, liabilities, contracts or any other obligations of the
Company, (2) the Members shall be liable to make contributions only to the
extent required under Article III, (3) no Member shall be required to make any
other contributions or to loan any amounts to the Company, (4) no Member shall
have personal liability for the repayment of the contributions or loans of any
other Member. Except as expressly provided in the Act, nothing in this Agreement
shall confer any rights or remedies under or by reason of this Agreement on any
person or entity other than the Members and their respective successors and
assigns, nor shall anything in this Agreement relieve or discharge the
obligation or liability of any third person to any party to this Agreement, nor
shall any provision of this Agreement give any third person any right of
subrogation or action over or against any party to this Agreement. Without
limitation on the foregoing, no third party shall have any right to enforce any
contribution obligation on a Member, except as may be required by the Act.
Section 5.6 INDEMNITY OF MEMBERS. The Company shall indemnify,
defend and hold each Member harmless from and against any Claims suffered or
sustained by it by reason of any acts, omissions or alleged acts or omissions by
such Member on behalf of the Company within the scope of authority conferred on
it by this Agreement, including any judgment, award, settlement, reasonable
attorneys' fees and other costs and expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided that
the acts or omissions or alleged acts or omissions upon which such actual or
threatened action, proceeding or claim is based were in good faith in accordance
with its business judgment and did not constitute a breach or default under this
Agreement, the Management Agreement or any Collateral Agreement, a breach of
fiduciary duty, gross negligence or willful misconduct.
Section 5.7 INDEMNIFICATION BY MEMBERS. Each Member shall
indemnify, protect, defend and hold the Company, each other Member, the Company
Property and the Project harmless from and against any and all Claims suffered
or sustained by it by reason of any act or omission constituting (a) a breach of
any representation or warranty by such Member or any Affiliate under this
Agreement; (b) any other breach or default by such Member or any Affiliate under
this Agreement; or (c) a breach of fiduciary duty, gross negligence or willful
misconduct by such Member or any Affiliate.
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Section 5.8 ADDITIONAL MEMBERS. Except as otherwise specifically
provided in Article VI, no person or entity shall become an additional member
without the prior written consent of the Members. In the event such consent is
granted, the existing Members and such new Member shall execute such documents
as may be reasonably required by the existing Members to effect such admission,
including, without limitation an amendment to this Agreement.
Section 5.9 COMPANY ACCOUNTS. All funds of the Company shall be
deposited by Managing Member into a federally insured operating account
("Operating Account"). In addition, Managing Member shall transfer portions of
the balance of the Operating Account which are not immediately needed to pay for
Company operations from time to time to a federally insured money market account
in accordance with sound cash management principles ("Money Market Account").
The Operating Account and Money Market Account (collectively, the "Accounts")
shall be maintained in the name of the Company with a money center financial
institution approved by the Members. The funds within the Accounts shall be
segregated from, and not commingled with any accounts of any Member or Affiliate
thereof, or any other accounts that the Members may hereafter establish for the
Company from time to time. The investment of the funds within the Accounts shall
be directed by Managing Member, subject to the approval by the Members.
Withdrawals from the Accounts shall be made upon such signature or signatures as
Managing Member may designate, and shall be made only in connection with
expenses related to the Company Property which are in conformance with the
Requirements.
Section 5.10 COMPENSATION OF MANAGING MEMBER. Managing Member
shall not receive any fee or other compensation in connection with the
performance of its obligations under this Agreement except as otherwise set
forth in any applicable Budget.
ARTICLE VI
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TRANSFER OF COMPANY INTERESTS
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Section 6.1 Restrictions on Transfer
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A. Except as otherwise provided herein, no sale,
exchange, delivery, assignment, transfer, disposal, encumbrance, pledge or
hypothecation, whether voluntary, involuntary, by operation of law, or resulting
from death, disability or otherwise (a "Transfer") shall be made by a Member of
the whole or any part of its interest in the Company (including its interest in
the capital or profits of the Company) without the prior written consent of the
Members. For all purposes of this Agreement, an involuntary Transfer shall
include the entry of a final order of a court in a divorce proceeding that is
not subject to appeal, directing transfer of an interest in the Company, or any
other Transfer occasioned by a separation agreement or a divorce proceeding that
is not subject to appeal.
B. No Transfer in violation of the provisions hereof
shall be valid or effective for any purpose, and no consent to one or more of
the same shall be deemed consent to any other of the same.
C. Notwithstanding anything contained in this Article
VI to the contrary, the following Transfers of all or any part of a Member's
interest in the Company, directly or indirectly, voluntarily or involuntarily,
to any of the following (collectively,
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"Permitted Transferees") shall not be prohibited or restricted by the
provisions of Section 6.1A:
(1) Any Transfer of all or any portion of an
interest in the Company to any other Member;
(2) Any Transfer of all or any portion of an
interest in the Company by any individual Member to a corporation, partnership,
limited liability company or other entity one hundred percent (100%) owned and
controlled, directly or indirectly, by such Member;
(3) Any Transfer of all or any portion of an
interest in the Company by any individual Member to an intervivos trust
established for the exclusive benefit of such Member, his spouse, lineal
descendants and/or lineal ancestors, provided such Member is a trustee thereof
with the power to make all decisions on behalf of said trust;
(4) In the event of the death or incapacity of an
individual Member, any Transfer to such Member's spouse, lineal descendants
and/or lineal ancestors, or to a testamentary trust established for the benefit
of such persons;
Any such Permitted Transferee shall receive and hold
the interest being transferred subject to the terms of this Agreement and to the
obligations of the transferor Member, and there shall be no further transfer of
such interest except to a trust, person or entity to whom such Permitted
Transferee could have transferred his or her interest in the Company in
accordance with this Section 6.1C had such Permitted Transferee originally been
named as a Member hereunder, or in accordance with the other terms of this
Agreement.
Section 6.2 EFFECT OF ASSIGNMENT; DOCUMENTS. In the event of any
Transfer permitted hereunder, subject to Article VIII, the Company shall not be
terminated but instead shall continue as before, with, however, the addition or
substitution of such new Member. No such Transfer shall relieve the assignor
from any of its obligations under this Agreement without the prior written
consent of the other Members (which consent shall not be unreasonably withheld
as to obligations assumed by an assignee provided, among other matters, the
assignment is permitted hereunder and the other Members are reasonably satisfied
that the assignee is sufficiently creditworthy to timely satisfy such
obligations). Notwithstanding the foregoing, as a condition to any sale or
assignment by a Member, the transferee or assignee must execute and deliver to
the other Members an assumption (in form reasonably satisfactory to the other
Members) of all the obligations of the assignee under this Agreement arising
from and after the date of such assignment. If any Transfer is made in violation
of this Article VI, the transferee shall have no right to become a Member and
shall have no right to participate in the management and affairs of the Company.
The transferee in such case shall be entitled only to receive the share of the
distributions payable to it under Article IV to which the transferring Member
would have been entitled.
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ARTICLE VII
-----------
CERTAIN REMEDIES
----------------
Section 7.1 Security Agreement
------------------
A. ASSIGNMENT. Each Member shall and does hereby assign
and transfer to the Company and the other Members, all of its or his right,
title and interest in and claims against the Company (or any successor thereto)
now or at any time or times hereafter held, including, its interest in the
capital and the profits and losses of the Company.
B. OBLIGATIONS SECURED. The property and interests
assigned and transferred as aforesaid by each Member shall constitute and shall
be held as collateral security for each and all of the obligations of such
Member, and such Member hereby grants to the Company and each other Member a
security interest in the property and interests assigned and transferred as
aforesaid for such purposes (and hereby waives any guarantor or suretyship
defense that may otherwise apply with respect thereto).
C. REMEDIES. Subject to the last sentence of Section
3.3, in the event a Member shall breach or default in, or fail to comply with,
any of its obligations secured hereby and such breach shall continue past the
expiration of the Cure Period, then the Company and the other Members, or any of
them, in addition to its or their other rights and remedies (including those
provided by law and those provided by any other agreement or security
agreement), may (1) pursue the remedies against the property and interests
transferred and assigned hereunder available under the applicable provisions of
law, including the applicable provisions of any state commercial code, and (2)
cause to be paid to it or them any sum payable on account of or with respect to
the property and interests assigned as security as aforesaid (including any
distribution with respect to a Company interest) and apply such sum to the
amount to which the Company and such other Member, or any of them, are or become
entitled with respect to the obligation or obligations secured hereunder.
Notwithstanding the foregoing, if Managing Member is entitled to and timely
delivers an "Arbitration Notice" (as defined below) pursuant to Section 7.2
below, then the Cure Period (or any period that the Members may take action
under this Section against Managing Member by reason of a Noncurable Default)
shall be tolled as and to the extent provided in Section 7.2B below.
(1) Any foreclosure of a Member's interest
pursuant to this Section may, at the election of such foreclosing party, be made
subject to this security agreement as to any future obligations and liabilities
of such foreclosed interest under this Agreement (with the result that the
security agreement under this Section 7.1 shall not be terminated by a
foreclosure [as to future obligations and liabilities] and therefore the Company
and the other Member may make multiple foreclosures of each Member's interest in
the Company).
(2) Each Member shall execute and cause to be
filed such financing statements as the Company or the other Member shall from
time to time reasonably request to perfect or maintain the perfection of the
security interests herein granted to the Company or such other Member hereunder.
(3) Each Member shall have priority to the
Company with respect to the rights assigned hereunder.
(4) Notwithstanding anything to the contrary
herein, the
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foreclosing party shall have the right to assign its security interest to an
Affiliate in order to avoid a dissolution of the Company in connection with a
foreclosure under this Section.
Section 7.2 Termination of Management Rights
--------------------------------
A. TERMINATION NOTICE. The Members may deliver a
termination notice to STPD ("Termination Notice") removing it as Managing Member
of the Company upon the occurrence of any of the following events:
(1) Any act of fraud, dishonesty or
misappropriation of Company assets by STPD.
(2) Any material breach of this Agreement
(including the failure to timely make a contribution under Article III or a
breach of Article VI) by STPD which is not cured within the applicable Cure
Period.
(3) The failure by STPD to provide reasonably
effective management of the Company and the Company Property in his capacity as
Managing Member pursuant to Article V hereof in a manner substantially
consistent with prevailing commercial practices for the performance of Managing
Member's obligations hereunder (and such failure has or is reasonably expected
to have a material and adverse effect upon the Company Property or the Company),
and the failure to correct such deficiencies within the applicable Cure Period.
(4) The occurrence of a Bankruptcy/Dissolution
Event with respect to STPD or the failure to satisfy the Manager
Ownership/Control Requirement that is not a breach of Article VI.
B. PROCEDURE; ARBITRATION. The Termination Notice shall
specify with particularity the basis for the same and shall become effective the
later of (1) (10) ten days after the date of the Termination Notice, or (2) if
applicable, after the expiration of the applicable Cure Period set forth above.
Notwithstanding the foregoing, STPD may dispute the existence of grounds for the
termination described in Subsection A(1), A(2) or A(3) (but not Subsection A(4))
by written notice ("Arbitration Notice") to the Members within ten (10) days
after its receipt of the Termination Notice. In the event an Arbitration Notice
is given within the period set forth above, then (a) the dispute shall be
resolved in accordance with the procedures set forth in Section 7.3, (b) the
applicable Cure Period set forth above (or any period that the Members may take
action against Managing Member under this Section by reason of a Noncurable
Default) shall be tolled pending the resolution of the dispute in accordance
with such procedures, and (c) if the dispute is arbitrated pursuant to Section
7.3A(2) below and the arbitrators uphold the termination, then the Termination
Notice shall become effective after the expiration of the applicable Cure Period
set forth above (subject to Clause (b) above). A Termination Notice shall become
effective immediately solely in connection with a termination described in
Subsection A(4) above.
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C. Effect of Termination Notice. If a Termination
Notice becomes effective, then:
(1) If the Termination Notice becomes effective,
then (a) a designee appointed by the Members shall become the Managing Member of
the Company with all the power and authority previously possessed by STPD as
Managing Member, and (b) STPD shall remain a Member in the Company, but with no
power, authority or right to vote, approve or act for or bind the Company with
respect to any matter in connection with the Company or its operation.
(2) STPD shall execute and acknowledge any
required amendments to this Agreement reflecting the foregoing, in such form and
content as the Members may reasonably prescribe.
(3) STPD' obligations under this Agreement shall
in no event be limited (except that he shall no longer be obligated to perform
the obligations of Managing Member).
Section 7.3 Arbitration
-----------
A. SUBJECT TO THE PROVISIONS OF THIS SECTION 7.3, ANY
DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF, CONNECTED WITH OR INCIDENTAL TO
THIS AGREEMENT OR A BREACH THEREOF (INCLUDING, WITHOUT LIMITATION, A DISPUTE
BETWEEN THE MEMBERS AND DFS UNDER SECTION 7.2 AS TO THE EFFECTIVENESS OF A
TERMINATION NOTICE) SHALL BE RESOLVED AS FOLLOWS:
(1) IN THE EVENT OF ANY SUCH DISPUTE, CLAIM OR
CONTROVERSY, THE APPLICABLE PARTIES SHALL MEET, NEGOTIATE IN GOOD FAITH, AND
ATTEMPT TO RESOLVE AMICABLY, WITHOUT LITIGATION OR FORMAL ARBITRATION, ANY SUCH
DISPUTE, CLAIM OR CONTROVERSY. IF SUCH PARTIES ARE UNABLE TO RESOLVE THE MATTER
THEMSELVES WITHIN THIRTY (30) DAYS, ANY SUCH PARTY SHALL HAVE THE RIGHT BY
GIVING WRITTEN NOTICE TO THE OTHER PARTY OR PARTIES TO INITIATE NON-BINDING
MEDIATION UNDER THE AUSPICES OF A MEDIATOR AS THE APPLICABLE PARTIES SHALL
MUTUALLY AGREE.
(2) IN THE EVENT THE APPLICABLE PARTIES ARE
UNABLE OR UNWILLING TO RESOLVE ANY SUCH DISPUTE, CLAIM OR CONTROVERSY THROUGH
THE MEDIATION PROCESS DESCRIBED IN SUBSECTION (1) ABOVE, THEN ANY SUCH PARTY MAY
BY WRITTEN NOTICE TO THE OTHER PARTY OR PARTIES ELECT TO HAVE THE MATTER
RESOLVED BY FINAL AND BINDING ARBITRATION TO BE CONDUCTED IN LOS ANGELES,
CALIFORNIA (OR SUCH OTHER LOCATION AGREED UPON BY THE MEMBERS), IN ACCORDANCE
WITH THE FOLLOWING:
(a) THE PARTY OR PARTIES DESIRING
ARBITRATION (INDIVIDUALLY AND COLLECTIVELY, THE "REQUESTING PARTY") SHALL GIVE
WRITTEN NOTICE OF THAT FACT TO THE OTHER PARTY OR PARTIES (INDIVIDUALLY AND
COLLECTIVELY, THE "RESPONDING PARTY"), ACCOMPANIED BY A DESIGNATION OF AN
ARBITRATOR; IF THE RESPONDING PARTY FAILS TO DESIGNATE ANOTHER ARBITRATOR BY
WRITTEN NOTICE TO THE REQUESTING PARTY WITHIN THE TIME PERIOD DESCRIBED BELOW,
THE ARBITRATOR SHALL BE THE PERSON DESIGNATED
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BY THE REQUESTING PARTY; IF THE RESPONDING PARTY DESIGNATES ANOTHER ARBITRATOR
WITHIN SUCH PERIOD, THEN THE TWO ARBlTRATORS SO DESIGNATED SHALL SELECT A THIRD
ARBITRATOR AS SOON AS PRACTICABLE THEREAFTER, AND THE ARBITRATION SHALL BE
CONDUCTED BY ALL THREE ARBITRATORS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE
REQUIRED TIME PERIOD SHALL BE 15 DAYS AFTER SUCH DESIGNATION.
(b) THE MEMBERS AND THE ARBlTRATORS SHALL USE
THEIR MUTUAL DILIGENT EFFORTS TO CAUSE THE ARBITRATION TO BE CONDUCTED AND A
DECISION RENDERED WITHIN NINETY (90) DAYS THEREAFTER.
(c) THE ARBlTRATORS SHALL CONDUCT THE ARBITRATION
GENERALLY IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION,
WITH SUCH MODIFICATIONS THEREOF AS THEY MAY DEEM APPROPRIATE; WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, THE ARBITRATORS MAY AFFORD THE PARTIES THE
OPPORTUNITY TO CONDUCT DISCOVERY IN ACCORDANCE WITH SUCH RULES AND LIMITATIONS
AS THE ARBlTRATORS MAY PRESCRIBE.
(d) THE ARBITRATORS MAY RETAIN COUNSEL (WHICH ARE
NOT AFFILIATES OF ANY MEMBER) TO ADVISE THEM AS TO THE INTERPRETATION OF THIS
AGREEMENT OR OTHER LEGAL MATTERS, THE COST OF WHICH SHALL BE A COST OF THE
ARBITRATION.
(e) THE ARBITRATORS SHALL BE ENTITLED TO
REASONABLE COMPENSATION AND REIMBURSEMENT OF EXPENSES AS MUTUALLY AGREED WITH
THE MEMBERS, OR IF THEY ARE UNABLE TO AGREE THEN AS REASONABLY DETERMINED BY THE
ARBITRATORS.
(f) THE COMPENSATION OF THE ARBlTRATORS AND OTHER
COSTS OF THE ARBITRATION SHALL BE PAID BY THE MEMBERS IN SUCH EQUITABLE
PROPORTIONS AS MAY BE DETERMINED BY THE ARBlTRATORS.
(g) THE AWARD AND ALL OTHER DECISIONS OF THE
ARBlTRATORS SHALL BE FINAL AND BINDING UPON THE MEMBERS AND THE COMPANY, AND A
JUDGMENT MAY BE RENDERED THEREON IN ANY COURT OF RECORD, EXCEPT THAT ANY MEMBER
MAY CONTEST AND OBTAIN JUDICIAL REVIEW OF THE REASONABLENESS OF THE ARBlTRATORS'
DETERMINATION OF COMPENSATION PURSUANT TO CLAUSE (a) ABOVE.
B. THE ONLY ISSUES TO BE DETERMINED BY THE ARBITRATORS SHALL
BE THE EFFECTIVENESS OR INEFFECTIVENESS OF A TERMINATION NOTICE. THE ARBlTRATORS
SHALL HAVE NO AUTHORITY TO AWARD ANY LEGAL OR EQUITABLE RELIEF (INCLUDING
MONETARY DAMAGES). THE PARTIES RESERVE THEIR RIGHT TO A TRIAL BY A COURT OF LAW
OR EQUITY OF ANY CLAIM FOR LEGAL OR EQUITABLE RELIEF AS A CONSEQUENCE OF ANY
MATTER COVERED BY SECTION 7.2, ALTHOUGH IN ANY SUCH TRIAL THE DECISION OF THE
ARBlTRATORS SHALL BE BINDING
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WITH RESPECT TO THE ISSUES DETERMINED BY THEM.
C. DISPUTES UNDER PROVISIONS OF THIS AGREEMENT OTHER
THAN SECTION 7.2 SHALL NOT BE RESOLVED BY ARBITRATION UNLESS THE PARTIES
OTHERWISE AGREE, EXCEPT THAT THE ARBITRATORS SHALL HAVE THE AUTHORITY TO
DETERMINE ISSUES UNDER OTHER PROVISIONS OF THIS AGREEMENT TO THE EXTENT
NECESSARY TO RESOLVE A DISPUTE UNDER SECTION 7.2 AS TO THE EFFECTIVENESS OF A
TERMINATION NOTICE.
D. EACH ARBITRATOR SHALL BE AN INDEPENDENT COMMERCIAL
PROPERTY DEVELOPMENT, CONSULTING, OR MANAGEMENT FIRM THAT IS THEN ACTIVE (AND
HAS AT LEAST FIVE YEARS EXPERIENCE) WITH COMMERCIAL PROPERTIES SIMILAR TO THE
PROPERTY. NO ARBITRATOR SHALL BE IN THE EMPLOY OF THE COMPANY, ANY MEMBER OR ANY
AFFILIATE OF THE FOREGOING DURING THE PENDENCY OF THE ARBITRATION.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP ANY RIGHTS YOU
MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. YOUR AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
____Ranchito ____STPD ___PF
Section 7.4 NO PARTITION. Each Member hereby irrevocably waives
any and all rights that it may have to maintain any action for partition of any
of the Company Property.
Section 7.5 ATTORNEYS' FEES. Subject to Section 7.3, if the
Company or any Member obtains a judgment against any other Member in connection
with a dispute arising under or in connection with this Agreement (whether in an
action or through arbitration), such party shall be entitled to recover its
court (or arbitration) costs, and reasonable attorneys' fees (including the
reasonable value of in-house attorney services) and disbursements incurred in
connection therewith and in any appeal or enforcement proceeding thereafter, in
addition to all other recoverable costs.
Section 7.6 CUMULATIVE REMEDIES. No remedy conferred upon the
Company or any Member in this Agreement is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law, in equity or by statute (subject, however, to the limitations
expressly herein set forth).
Section 7.7 NO WAIVER. No waiver by a Member or the Company of
any breach of this Agreement shall be deemed to be a waiver of any other breach
of any kind
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or nature, and no acceptance of payment or performance by a Member or the
Company after any such breach shall be deemed to be a waiver of any breach of
this Agreement, whether or not such Member or the Company knows of such breach
at the time it accepts such payment or performance. No failure or delay on the
part of a Member or the Company to exercise any right it may have shall prevent
the exercise thereof by such Member or the Company at any time such other may
continue to be so in default, and no such failure or delay shall operate as a
waiver of any default.
ARTICLE VIII
------------
DISSOLUTION OF THE COMPANY
--------------------------
Section 8.1 EVENTS GIVING RISE TO DISSOLUTION. No act, thing,
occurrence, event or circumstance shall cause or result in the dissolution of
the Company; except that the happening of any one of the following events
(individually, a "Dissolution Event") shall work an immediate dissolution of the
Company:
A. The death, incapacity, insanity, retirement or resignation
of Managing Member followed by the failure of the Members to designate another
Managing Member within ninety (90) after the occurrence of any such event.
B. The sale of all of the real estate assets of the Company
(provided, however, that if a portion of the purchase price of such sale is
evidenced by a promissory note, the Company shall not be dissolved by reason of
such sale so long as the Company is the holder of such promissory note).
C. The unanimous agreement in writing by the Members to
dissolve the Company.
D. The termination of the term of the Company pursuant to
Section 1.3 of this Agreement.
Without limitation on the other provisions hereof, neither the assignment of all
or any part of a Member's interest in the Company permitted hereunder nor the
admission of a new member shall work the dissolution of the Company. Except as
otherwise provided in this Agreement, each Member agrees that, without the
consent of the Members, a Member may not retire or withdraw from or cause a
voluntary dissolution of the Company.
Section 8.2 [Intentionally deleted]
Section 8.3 Procedure
---------
A. In the event of the dissolution or termination of the
Company for any reason, the Managing Member shall commence to wind up the
affairs of the Company and to liquidate its investments. The Member obligated to
wind up the affairs of the Company as aforesaid is herein called the "Winding-Up
Member." The Members shall continue to share profits, losses, gain or loss on
sale or disposition, and Distributable Cash during the period of liquidation in
the same manner and proportion as though the Company had not dissolved or
terminated. The Winding-Up Member shall have full right and unlimited discretion
to determine in good faith the time, manner and terms of any sale or sales of
Company Property pursuant to such liquidation having due regard to the activity
and condition of the relevant market and general financial and economic
conditions.
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B. Following the payment of all debts and liabilities of the
Company and all expenses of liquidation, and subject to the right of the
Winding-Up Member to set up such cash reserves as and for so long as it may deem
reasonably necessary in good faith for any contingent or unforeseen liabilities
or obligations of the Company, the proceeds of the liquidation and any other
funds of the Company shall be distributed in accordance with Section 4.1 hereof
(after deducting from the distributive share of a Member any sum such Member
owes the Company).
C. Each Member shall look solely to the assets of the Company
for all distributions with respect to the Company and its capital contribution
thereto and share of profits or losses thereof and shall have no recourse
therefor (in the event of any deficit in a Member's capital account or
otherwise) against the other Members; provided that nothing herein contained
shall relieve any Member of such Member's obligation to make the capital
contributions herein provided or to pay any liability or indebtedness owing the
Company by such Member, and the Company and the other Members shall be entitled
at all times to enforce such obligations of such Member. No holder of an
interest in the Company shall have any right to demand or receive property other
than cash upon dissolution and termination of the Company.
D. Upon the completion of the liquidation of the Company and
the distribution of all Company funds, the Company shall terminate and the
Winding-Up Member shall have the authority to execute and record a certificate
of termination of the Company, as well as any and all other documents required
to effectuate the dissolution and termination of the Company.
ARTICLE IX
----------
MISCELLANEOUS
-------------
Section 9.1 NOTICES. Any notice which a party is required or may desire
to give the other party shall be in writing and may be delivered (1) personally,
(2) by United States registered or certified mail, postage prepaid, (3) by
Federal Express or other reputable courier service regularly providing evidence
of delivery (with charges paid by the party sending the notice); or (4) by
telecopy, provided that such telecopy shall be immediately followed by delivery
of such notice pursuant to Clause (1), (2) or (3) above. Any such notice shall
be addressed as follows (subject to the right of a party to designate a
different address for itself by notice similarly given):
To STPD and/or Managing Member:
------------------------------
Mr. Stanton V. Abrams
c/o Senior Tour Players Development, Inc.
266 Beacon Street
Boston, Massachusetts 02116
Telephone: 617-266-3600
Telecopy: 617-266-1343
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To Ranchito:
-----------
The Ranchito Company, LLC
13849 Weddington Street
Sherman Oaks, California 91401
Attention: Mr. Lodwrick Cook
Telephone: 213-486-2533
Telecopy: 213-486-0186
To PF:
-----
Mr. Paul Fireman
c/o Mr. Arnold Mullen
-
-
Telephone:
Telecopy: 561-684-2168
Any notice so given by United States mail or courier service shall be deemed to
have been given on the date delivered (whether accepted or refused) as evidenced
by the return receipt or other proof of delivery. Any notice not so given by
U.S. mail or courier service shall be deemed to be given upon receipt of the
same by the party to whom the same is to be given.
Section 9.2 ACKNOWLEDGMENT BY MEMBERS. Each Member acknowledges the
following: (A) it is familiar with the business proposed to be conducted by the
Company; (B) it has been advised that its interest in the Company may not be
sold, transferred, or otherwise disposed of except as provided herein; (C) it
understands that the securities being acquired hereby have not been registered
under the Securities Act of 1933, (the "Securities Act"), or any State
securities laws, in reliance on an exception for private offerings and,
therefore, the securities cannot be resold unless they are registered under the
Securities Act and applicable State securities laws or unless an exemption from
such registration is available; (D) it is a "sophisticated investor" with
substantial prior experience in high-risk business investments and is aware of
and familiar with the risks associated with a private limited liability company
and would quality as an "accredited investor" as such term is defined in Rule
501 of Regulation D, as enacted pursuant to Sections 3(b) and 4(2) of the
Securities Act; and (E) it is purchasing the Company Interest for his, her, or
its own account, for investment only and with no present intention of
distributing, reselling, pledging, or otherwise disposing of its interest; and
(F) it is familiar with the type of investment which the Company Interest in the
Company constitutes and has reviewed the purchase of the interest with its tax
and independent legal counsel and investment representatives to the extent he
deems necessary.
Section 9.3 CONSTRUCTION. Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any Member (notwithstanding any rule of law requiring an
Agreement to be strictly construed against the drafting party).
Section 9.4 TIME IS OF THE ESSENCE. Time is of the essence with respect
to this Agreement.
Section 9.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties. This Agreement supersedes any prior agreement or
understandings between the parties.
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Section 9.6 AMENDMENTS. This Agreement may be amended by written
agreement of amendment executed by all Members, but not otherwise, unless
expressly provided herein.
Section 9.7 GOVERNING LAW; VENUE. This Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware (without regard to conflicts of laws). Each party
hereby consents to the exclusive jurisdiction of any state or federal court
located within California, waives personal service of any and all process upon
it, consents to service of process by registered mail directed to it at the
address stated in Section 9.1, and acknowledges that service so made shall be
deemed to be completed upon actual delivery thereof (whether accepted or
refused). In addition, each party consents and agrees that venue of any action
instituted under this Agreement or any agreement executed in connection herewith
shall be proper only in California and hereby waives any objection to venue.
Section 9.8 SUCCESSORS AND ASSIGNS. Except as herein otherwise
specifically provided, this Agreement shall be binding upon and insure to the
benefit of the parties and their legal representatives, successors and assigns.
Section 9.9 CAPTIONS. Captions contained in this Agreement in no way
define, limit or extend the scope or intent of this Agreement.
Section 9.10 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to the persons or circumstances, shall not be affected thereby.
Section 9.11 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
Section 9.12 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer any rights or remedies upon any
person, other than the parties hereto and, subject to the restrictions on
assignment herein contained, their respective successors and assigns.
Section 9.13 Certain Terminology
-------------------
A. Whenever the words "including," "include" or "includes" are
used in this Agreement, they should be interpreted in a non-exclusive manner as
though the words, "without limitation," immediately followed the same.
B. Except as otherwise indicated, all Article, Section and
Exhibit references in this Agreement shall be deemed to refer to the Sections
and Articles in, and the Exhibits to, this Agreement.
Section 9.14 BROKERS. Each Member represents and warrants to the other
Members and the Company that no broker or finder has been engaged by it in
connection with any of the transactions contemplated by this Agreement or to its
knowledge is in any way connected with any of such transactions. In the event of
a Claim for broker's or finder's fee or commissions in connection herewith, then
each Member shall indemnify, protect, defend and hold the Company, the other
Members, and the Company Property harmless from and against the same if it shall
be based upon any statement or agreement alleged to have been made by it or its
Affiliates.
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Section 9.15 SURVIVAL. All warranties, representations, covenants,
obligations and agreements contained in this Agreement shall survive the Closing
and any and all performances hereunder. All warranties and representations shall
be effective regardless of any investigation made or which could have been made
by the party benefiting from such warranties and representations. Unless
otherwise expressly provided herein, all obligations and liabilities accruing
prior to the termination of this Agreement shall survive the termination hereof.
Section 9.16 NON-BUSINESS DAYS. Whenever action must be taken
(including the giving of notice or the delivery of documents) under this
Agreement during a certain period of time or by a particular date that ends or
occurs on a non-business day (i.e., Saturday, Sunday or a holiday recognized by
the U.S. federal government or the State of California or Delaware), then such
period or date shall be extended until the immediately following business day.
Section 9.17 INCORPORATION OF EXHIBITS. All exhibits attached and
referred to in this Agreement are hereby incorporated herein as fully set forth
in (and shall be deemed to be a part of) this Agreement.
Section 9.18 INTENT. It is the intent of the Members that the Company
shall always be operated in a manner consistent with its treatment as a
"partnership" for federal and state income tax purposes. It also is the intent
of the Members that the Company not be operated or treated as a "partnership"
for purposes of Section 303 of the federal Bankruptcy Code. No Member shall take
any action inconsistent with the express intent of the parties hereto.
Section 9.19 COMMISSIONS ON SALE OR SUBLEASE. If during the term of the
Company the Company enters into a contract for the sale of all or substantially
all of the Project (exclusive, however, of any purchase and sale of the Project
pursuant to Section 5.2 hereof), or enters into a sublease for all or any
portion of the Project, the Company shall pay to such person or entity as the
Managing Member may designate (including, notwithstanding anything contained
herein to the contrary, an Affiliate of the Managing Member) (the "Designated
Broker") a brokerage commission in an amount equal to (i) in the case of any
such sale, five percent (5%) of the gross purchase price payable in connection
therewith, or (ii) in the case of any such sublease, five percent (5%) of the
gross rental contemplated thereby; provided, however, that any such commission
shall be reduced by the amount of any commission, fee or similar compensation
any cooperating broker is entitled to receive with respect to such sale or
sublease (as the case may be). Any such commission shall be payable in full at
the time of the closing of such sale or the consummation of such sublease, as
the case may be. If for any reason any such sale fails to close, or any such
sublease is not consummated, no such commission shall be due or payable in
connection therewith. For and in consideration of such commission, the
Designated Broker shall (i) in the case of subleases, diligently pursue new,
renewal, extension or replacement subtenants on the best terms available in the
market and negotiate sublease terms, consistent with the then applicable
Business Plan, with prospective and renewal subtenants, and (ii) in the case of
the sale of all or substantially of the Project, identify potential purchasers
and negotiate sale terms, consistent with the then applicable Business Plan,
with prospective purchasers.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above written.
RANCHITO: THE RANCHITO COMPANY, LLC, a
Nevada limited liability company
By: /s/ Lodwrick M. Cook
-------------------------------------
Lodwrick M. Cook, Managing Member
STPD: SENIOR TOUR PLAYERS DEVELOPMENT, INC, a
Nevada corporation
By: /s/ Stanton V. Abrams
-------------------------------------
Stanton V. Abrams, President
PF: /s/ Paul Fireman
-------------------------------------
PAUL FIREMAN
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