Exhibit 10.1

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
MORGANS GROUP LLC

 

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, dated as of
February 17, 2006 of Morgans Group LLC (the “Company”) is entered into by and
among Morgans Hotel Group Co., as Managing Member (the “Managing Member”), and
the Persons identified on the signature pages hereto (the “Non-Managing
Members”), together with any other Persons who become Members (as defined
herein) in the Company as provided herein;

 

WHEREAS, the Company was formed by the filing of a certificate of formation with
the Secretary of State of the State of Delaware on October 25, 2005 (the
“Formation Date”) by an authorized person of the Company;

 

WHEREAS, on the Formation Date, Morgans Hotel Group LLC, a Delaware limited
liability company (“MHG LLC”), as the sole initial member of the Company,
entered into the Limited Liability Company Agreement (the “Original Operating
Agreement”);

 

WHEREAS, this Agreement is being entered into in accordance with the provisions
of Section 17 of the Original Operating Agreement;

 

WHEREAS, as part of the Formation and Structuring Transactions (as defined
below), the Company will issue Non-Managing Membership Interests to each of
NorthStar Partnership, L.P. and RSA Associates, L.P.;

 

WHEREAS, as part of the Formation and Structuring Transactions, the Non-Managing
Membership Interests of each of NorthStar Partnership, L.P. and RSA Associates,
L.P. will be transferred to the Managing Member and each of NorthStar
Partnership, L.P. and RSA Associates, L.P. shall cease to be a Member of the
Company;

 

WHEREAS, the Members desire that the Managing Member be the sole Managing Member
of the Company upon the completion of the Managing Member’s initial public
offering of its common stock and the contribution by the Managing Member of
certain of the net proceeds from its initial public offering and borrowings
under its new revolving credit facility;  and

 

WHEREAS, the Members desire to continue to operate the Company as a limited
liability company under the Act (as defined below) and to amend and restate the
Original Operating Agreement in its entirety and the terms of such Original
Operating Agreement are hereby amended and restated in their entirety as
hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual promises and agreements herein
made, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Members hereby agree as follows:

 

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ARTICLE I
DEFINED TERMS

 

The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.

 

“Act” means the Delaware Limited Liability Company Act, as it may be amended
from time to time, and any successor to such statute.

 

“Additional Non-Managing Member” means a Person admitted to the Company as a
Non-Managing Member pursuant to Section 4.2 and who is shown as such on the
books and records of the Company.

 

“Adjusted Capital Account” means the Capital Account maintained for each Member
as of the end of each Partnership Year (a) increased by any amounts which such
Member is obligated to restore pursuant to any provision of this Agreement or is
deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (b) decreased by the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).  The foregoing definition
of Adjusted Capital Account is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

 

“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in such Member’s Adjusted Capital Account as of the end
of the relevant Partnership Year.

 

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Section 4.4.

 

“Adjustment Event” has the meaning set forth in Section 4.5(b).

 

“Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling, controlled by or under common control with such Person.  For
purposes of this definition, “control” when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “affiliated,” “controlling” and “controlled” have
meanings correlative to the foregoing.

 

“Agreed Value” means in the case of any Contributed Property and as of the time
of its contribution to the Company, the 704(c) Value of such property or other
consideration, reduced by any liabilities either assumed by the Company upon
such contribution or to which such property is subject when contributed, and
(c) in the case of any property distributed to a Member by the Company, the
Company’s Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Member upon such
distribution or to which such property is subject at the time of distribution as
determined under Section 752 of the Code and the Regulations thereunder.

 

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“Agreement” means this Amended and Restated Limited Liability Company Agreement
and all Exhibits attached hereto, as the same may be amended, supplemented or
restated from time to time.

 

“Assignee” means a Person to whom one or more Membership Units have been
transferred but who has not been admitted as a Substituted Non-Managing Member,
and who has the rights set forth in Section 11.5.

 

“Bankruptcy” as to any Person, shall be deemed to have occurred when (i) such
Person commences a voluntary proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect, (ii) such Person is adjudged as bankrupt or insolvent, or a
final and nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against such Person,
(iii) such Person executes and delivers a general assignment for the benefit of
such Person’s creditors, (iv) such Person files an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against such Person in any proceeding of the nature described in clause
(ii) above, (v) such Person seeks, consents to or acquiesces in the appointment
of a trustee, receiver or liquidator for such Person or for all or any
substantial part of such Person’s properties, (vi) any proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within 120
days after the commencement thereof, (vii) the appointment without such Person’s
consent or acquiescence of a trustee, receiver or liquidator has not been
vacated or stayed within 90 days of such appointment, or (viii) an appointment
referred to in clause (vii) is not vacated within 90 days after the expiration
of any such stay.

 

“Book-Tax Disparities” means, with respect to any item of Contributed Property
or Adjusted Property, as of the date of any determination, the difference
between the Carrying Value of such Contributed Property or Adjusted Property and
the adjusted basis thereof for Federal income tax purposes as of such date.  A
Member’s share of the Company’s Book-Tax Disparities in all of its Contributed
Property and Adjusted Property will be reflected by the difference between such
Member’s Capital Account balance as maintained pursuant to Section 4.4 and the
hypothetical balance of such Member’s Capital Account computed as if it had been
maintained strictly in accordance with Federal income tax accounting principles.

 

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.

 

“Capital Account” means the capital account maintained by the Company for each
Member pursuant to Section 4.4.

 

“Capital Account Limitation” has the meaning set forth in Section 4.6.

 

“Capital Contribution” means, with respect to each Member, the total amount of
cash, cash equivalents and the Agreed Value of Contributed Property which such
Member contributes or is deemed to contribute to the Company pursuant to
Section 4.1 or 4.2 and which are intended to be treated as a contribution to the
Company pursuant to Section 721(a) of the Code.

 

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“Carrying Value” means (a) with respect to a Contributed Property or Adjusted
Property, the 704(c) Value of such property (or in the case of an Adjusted
Property, the fair market value of such property at the time of its latest
adjustment under Section 4.4(d)) reduced (but not below zero) by all
Depreciation with respect to such Contributed Property or Adjusted Property
charged to the Members’ Capital Accounts and (b) with respect to any other
Company property, the adjusted basis of such property for Federal income tax
purposes, all as of the time of determination.  The Carrying Value of any
property shall be adjusted from time to time in accordance with Section 4.4(d),
and to reflect changes, additions or other adjustments to the Carrying Value for
dispositions and acquisitions of Company Properties, as deemed appropriate by
the Managing Member to the extent consistent with Section 704(b) of the Code and
the Regulations issued thereunder.

 

“Cash Amount” means an amount of cash per Unit equal to the number of Units
offered for redemption by the Redeeming Member (multiplied by the Unit
Adjustment Factor) multiplied by the Value of a Common Share on the Valuation
Date.

 

“Certificate” means the Certificate of Formation relating to the Company filed
in the office of the Secretary of State of the State of Delaware, as amended
from time to time in accordance with the terms hereof and the Act.

 

“Charter” means the Certificate of Incorporation of the Managing Member filed in
the office of the Secretary of State of the State of Delaware on October 19,
2005, as amended from time to time in accordance with the terms thereof and the
Delaware General Corporation Law, and any successor to such statute.

 

“Code” means the Internal Revenue Code of 1986, as amended.  Any reference
herein to a specific section or sections of the Code shall be deemed to include
a reference to any corresponding provision of future law.

 

“Common Share Rights” has the meaning set forth in Section 4.2(e).

 

“Common Shares” means the shares of common stock, $0.01 par value per share, of
the Managing Member.

 

“Company” means Morgans Group LLC, the limited liability company formed under
the Act and any successor thereto.

 

“Company Property” means such interests in real property and personal property
including without limitation, fee interests, interests in ground leases,
interests in joint ventures, interests in mortgages, and Debt instruments as the
Company may hold from time to time.

 

“Consent” means the consent or approval of a proposed action by a Member given
in accordance with Section 14.1.

 

“Constituent Person” has the meaning set forth in Section 4.6.

 

“Contributed Property” means each property or other asset (but excluding cash
and cash equivalents), in such form as may be permitted by the Act contributed
or deemed contributed to

 

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the Company.  Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 4.4, such property shall no longer constitute a Contributed
Property, but shall be deemed an Adjusted Property for purposes of Section 4.4.

 

“Conversion Date” has the meaning set forth in Section 4.6.

 

“Conversion Notice” has the meaning set forth in Section 4.6.

 

“Conversion Right” has the meaning set forth in Section 4.6.

 

“Debt” means, as to any Person, as of any date of determination, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, which purchase price is due more than six months
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, (b) all amounts owed by such Person
to banks or other Persons in respect of reimbursement obligations under letters
of credit, surety bonds and other similar instruments guaranteeing payment or
other performance of obligations by such Person, (c) all indebtedness for
borrowed money or for the deferred purchase price of property or services
secured by any lien on any property owned by such Person, to the extent
attributable to such Person’s interest in such property, even though such Person
has not assumed or become liable for the payment thereof, (d) lease obligations
of such Person which, in accordance with generally accepted accounting
principles, should be capitalized and (e) all guarantees and other contingent
obligations of such Person with respect to Debt of others.

 

“Depreciation” means for each fiscal year or other period, an amount equal to
the Federal income tax depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year or other period,
except that if the Carrying Value of an asset differs from its adjusted basis
for Federal income tax purposes at the beginning of such year or other period,
Depreciation shall be an amount which bears the same ratio to such beginning
Carrying Value as the Federal income tax depreciation, amortization, or other
cost recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the Federal income tax
depreciation, amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Carrying
Value using any reasonable method selected by the Managing Member.

 

“Economic Capital Account Balance” has the meaning set forth in Section 6.3(a).

 

“Effective Date” means the date of closing of the initial public offering of the
Common Shares.

 

“Events of Dissolution” has the meaning set forth in Section 13.1.

 

“Exchange Act” has the meaning set forth in Section 7.1(a)(2).

 

 “Forced Conversion” has the meaning set forth in Section 4.6.

 

“Forced Conversion Notice” has the meaning set forth in Section 4.6.

 

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“Formation and Structuring Agreement” means the Formation and Structuring
Agreement, dated October 25, 2005, by and among the Company, Morgans Hotel Group
LLC and other parties thereto.

 

“Formation and Structuring Transactions” means the transactions outlined in
Exhibit A to the Formation and Structuring Agreement.

 

“Formation Date” has the meaning set forth in the recitals.

 

“Guaranty” has the meaning set forth in Section 11.2(e).

 

“Holder” means either (a) a Member or (b) an Assignee, owning a Membership
Interest, that is treated as a Member for federal income tax purposes.

 

“IRS” means the Internal Revenue Service, which is charged with administering
the internal revenue laws of the United States.

 

“Immediate Family” means, with respect to any natural Person, such natural
Person’s spouse, parents, grandparents, descendants (including adopted children
and step-children), nephews, nieces, brothers, and sisters.

 

“Incapacity” or “Incapacitated” means (a) as to any individual Member, death,
total physical disability or entry by a court of competent jurisdiction
adjudicating him incompetent to manage his Person or his estate, (b) as to any
corporation that is a Member, the filing of a certificate of dissolution, or its
equivalent, for the corporation or the revocation of its charter, (c) as to any
partnership that is a Member, the dissolution and commencement of winding up of
the partnership, (d) as to any estate that is a Member, the distribution by the
fiduciary of the estate’s entire interest in the Company, (e) as to any trust
that is a Member, the termination of the trust (but not the substitution of a
new trustee), or (f) as to any Member, the Bankruptcy of such Member.

 

“Incentive Plans” means Common Share or Unit incentive plans or other employee
benefit plans established by, or for the benefit of the employees of, the
Managing Member, the Company or any Subsidiary, including the Morgans Hotel
Group Co. 2006 Omnibus Stock Incentive Plan and the Morgans Hotel Group Co.
Annual Bonus Plan.

 

“Indemnitee” means (a) any Person made a party to a proceeding by reason of his
status as (i) the Managing Member (including as a guarantor of any Membership
Debt) or (ii) an officer of the Company or a director or officer of the Managing
Member, and (b) such other Persons (including Affiliates of the Managing Member
or the Company) as the Managing Member may designate from time to time, in its
sole and absolute discretion.

 

“Liquidating Gains means any net capital gain realized in connection with the
actual or hypothetical sale of all or substantially all of the assets of the
Company (including any Liquidating Transaction), including but not limited to
net capital gain realized in connection with an adjustment to the Carrying Value
of the Company’s assets under Section 4.4(d).

 

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“Liquidating Transaction” means any sale or other disposition of all or
substantially all of the assets of the Company or a related series of
transactions that, taken together, results in the sale or other disposition of
all or substantially all of the assets of the Company.

 

“Liquidator” has the meaning set forth in Section 13.2.

 

“LTIP” means Long Term Incentive Plan .

 

“LTIP Unit” means a Membership Interest which is designated as an LTIP Unit and
which has the rights, preferences and other privileges designated in Section 4.5
hereof and elsewhere in this Agreement in respect of Holders of LTIP Units.  The
allocation of LTIP Units among the Members shall be set forth on Exhibit A, as
may be amended from time to time.

 

“LTIP Unitholder” means a Member that holds LTIP Units.

 

“Managing Member” means Morgans Hotel Group Co., a Delaware corporation, and its
successors as a Managing Member of the Company in accordance with the terms of
this Agreement.

 

“Managing Membership Interest” means a Membership Interest held by the Managing
Member (including any Membership Interest acquired by the Managing Member
pursuant to Section 4.2 hereof) that is a Managing Membership interest and
includes any and all benefits to which the Managing Member may be entitled and
all obligations of the Managing Member hereunder.  A Managing Membership
Interest may be expressed as a number of Membership Units.  All Membership Units
held by the Managing Member shall be deemed to be the Managing Member Interest.

 

“Member” means individually, the Managing Member or a Non-Managing Member, and
“Members” means collectively, the Managing Member and the Non-Managing Members.

 

“Membership Interest” means an ownership interest in the Company representing a
Capital Contribution by either a Non-Managing Member or the Managing Member and
includes any and all benefits to which the holder of such a Membership Interest
may be entitled as provided in this Agreement, together with all obligations of
such Person to comply with the terms and provisions of this Agreement.  A
Membership Interest may be expressed as a number of Membership Units.

 

“Membership Record Date” means the record date established by the Managing
Member for the distribution pursuant to Section 5.1 hereof, which record date
shall be the same as the record date established by the Managing Member for a
distribution to its shareholders of some or all of its portion of such
distribution, and also means any record date established by the Managing Member
in connection with any vote or consent of the Non-Managing Members pursuant to
this Agreement.

 

“Membership Unit” or “Unit” means a fractional, undivided share of the
Membership Interests of all Members issued pursuant to Sections 4.1 and 4.2, in
such number as set forth on Exhibit A, as such Exhibit may be amended from time
to time.  Any rights and preferences or

 

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other obligations with respect to Units as may be authorized hereunder shall be
set forth in an exhibit hereto.

 

“Membership Unit Economic Balance” has the meaning set forth in Section 6.3(a).

 

“Net Income” means for any taxable period, the excess, if any, of the Company’s
items of income and gain for such taxable period over the Company’s items of
loss and deduction for such taxable period.  The items included in the
calculation of Net Income shall be determined in accordance with Section 4.4. 
Once an item of income, gain, loss or deduction that has been included in the
initial computation of Net Income is subjected to the special allocation
rules in Sections 6.3 and 6.4, Net Income or the resulting Net Loss, whichever
the case may be, shall be recomputed without regard to such item.

 

“Net Loss” means for any taxable period, the excess, if any, of the Company’s
items of loss and deduction for such taxable period over the Company’s items of
income and gain for such taxable period.  The items included in the calculation
of Net Loss shall be determined in accordance with Section 4.4.  Once an item of
income, gain, loss or deduction that has been included in the initial
computation of Net Loss is subjected to the special allocation rules in Sections
6.3 and 6.4, Net Loss or the resulting Net Income, whichever the case may be,
shall be recomputed without regard to such item.

 

“New Securities” has the meaning set forth in Section 4.2(c).

 

“Non-Managing Member” means any Person named as a Non-Managing Member on
Exhibit A, as such Exhibit may be amended from time to time, including any
Substituted Non-Managing Member or Additional Non-Managing Member, in such
Person’s capacity as a Non-Managing Member in the Company.

 

“Non-Managing Membership Interest” means a Membership Interest held by a
Non-Managing Member representing a fractional part of the Membership Interests
of all Non-Managing Members and includes any and all benefits to which such
Non-Managing Member may be entitled and all obligations of such Non-Managing
Member hereunder.  A Non-Managing Membership Interest may be expressed as a
number of Membership Units.

 

“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Members pursuant to Section 6.4(b) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no other
consideration.

 

“Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).

 

“Nonrecourse Liability” has the meaning set forth in Regulations
Section 1.752-1(a)(2).

 

“Notice of Redemption” means a Notice of Redemption substantially in the form of
Exhibit B.

 

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“Original Operating Agreement” has the meaning set forth in the recitals.

 

“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Regulations Section 1.704-2(i)(3).

 

“Partner Nonrecourse Debt” has the meaning set forth in Regulations
Section 1.704-2(b)(4).

 

“Partnership Minimum Gain” has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).

 

“Partnership Year” means the fiscal year of the Company, which shall be the
calendar year.

 

“Percentage Interest” means, as to any Member, its interest in the Company as
determined by dividing the Membership Units owned by such Member by the total
number of Membership Units then outstanding and as specified on Exhibit A, as
such Exhibit may be amended from time to time.

 

“Person” means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company, estate or
other entity.

 

“Plan Asset Regulations” means the regulations promulgated by the United States
Department of Labor in Title 29, Code of Federal Regulations, Part 2510,
Section 101.3, and any successor regulations thereto.

 

“Preferred Shares” has the meaning set forth in Section 4.2(c).

 

 “Recapture Income” means any gain recognized by the Company (computed without
regard to any adjustment required by Section 734 or Section 743 of the Code)
upon the disposition of any property or asset of the Company, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

 

“Recourse Liabilities” has the meaning set forth in Regulations
Section 1.752-1(a)(1).

 

“Redeeming Member” shall have the meaning as set forth in Section 4.2(e)(1).

 

“Redemption Right” shall have the meaning as set forth in Section 4.2(e)(1).

 

 “Regulations” means the Income Tax Regulations promulgated under the Code, as
such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

 

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“Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Company recognized for Federal income tax purposes resulting from
a sale, exchange or other disposition of Contributed Property or Adjusted
Property, to the extent such item of gain or loss is not allocated pursuant to
Section 6.4(b)(1)(i) or 6.4(b)(2)(i) to eliminate Book-Tax Disparities.

 

“Securities Act” shall have the meaning set forth in Section 4.2(e)(4).

 

“704(c) Value” of any Contributed Property means the fair market value of such
property or other consideration at the time of contribution as determined by the
Managing Member using such reasonable method of valuation as it may adopt. 
Subject to Section 4.4, the Managing Member shall use such method as it deems
reasonable and appropriate to allocate the aggregate of the 704(c) Value of
Contributed Properties among each separate property on a basis proportional to
its fair market value.

 

“Shares” means any Common Shares, of any class, and Preferred Shares issued to a
Non-Managing Member pursuant to Section 4.2(e).

 

“Shares Amount” shall mean a number of Common Shares equal to the number of
Units offered for redemption by a Redeeming Member, multiplied by the Unit
Adjustment Factor.

 

“Specified Redemption Date” means the tenth Business Day after receipt by the
Managing Member of a Notice of Redemption.

 

“Stock Incentive Plan” means the Morgans Hotel Group Co. 2006 Omnibus Stock
Incentive Plan, as such plan may be amended, modified or supplemented from time
to time.

 

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which a majority of (a) the voting power of the voting equity securities or
(b) the outstanding equity interests is owned, directly or indirectly, by such
Person.

 

“Substituted Non-Managing Member” means a Person who is admitted as a
Non-Managing Member to the Company pursuant to Section 11.4.

 

“Tendered Units” shall have the meaning set forth in Section 4.2(e)(1).

 

“Transaction” has the meaning set forth in Section 11.2(c).

 

“Unit Adjustment Factor” means initially 1.0, unless provided otherwise in an
exhibit hereto setting forth rights, preferences and obligations with respect to
any specific class or series of Membership Units issued after the date hereof;
provided, however, that in the event that the Managing Member (a) declares or
pays a dividend on its outstanding Common Shares in Common Shares or makes a
distribution to all holders of its outstanding Common Shares in Common Shares,
(b) subdivides its outstanding Common Shares, or (c) combines its outstanding
Common Shares into a smaller number of Common Shares, the Unit Adjustment
Factor, as applicable, shall be adjusted by multiplying the Unit Adjustment
Factor by a fraction, the numerator of which shall be the number of Common
Shares issued and outstanding on the record date (assuming for such purposes
that such dividend, distribution, subdivision or combination

 

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has occurred as of such time), and the denominator of which shall be the actual
number of Common Shares (determined without the above assumption) issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination.  Any adjustment to the Unit Adjustment Factor shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.  Any adjustment to the Unit Adjustment
Factor shall be carried forward to successive adjustments.

 

“Unrealized Gain” attributable to any item of Company Property means, as of any
date of determination, the excess, if any, of (a) the fair market value of such
property (as determined under Section 4.4) as of such date, over (b) the
Carrying Value of such property (prior to any adjustment to be made pursuant to
Section 4.4) as of such date.

 

“Unrealized Loss” attributable to any item of Company Property means, as of any
date of determination, the excess, if any, of (a) the Carrying Value of such
property (prior to any adjustment to be made pursuant to Section 4.4) as of such
date, over (b) the fair market value of such property (as determined under
Section 4.4) as of such date.

 

“Unvested LTIP Units” has the meaning set forth in Section 4.5(d)(i).

 

“Valuation Date” means the date of receipt by the Managing Member of a Notice of
Redemption or, if such date is not a Business Day, the first Business Day
thereafter.

 

“Value” means, with respect to a Common Share, of any class, the average of the
daily market price for the twenty (20) consecutive trading days immediately
preceding the Valuation Date.  The market price for each such trading day shall
be: (a) if the Common Shares are listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System, the closing price, regular way,
on such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices on such day; (b) if the Common Shares are not
listed or admitted to trading on any securities exchange or the NASDAQ-National
Market System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on such day,
as reported by a reliable quotation source designated by the Managing Member; or
(c) if the Common Shares are not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation
source designated by the Managing Member, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than 20 days prior to the date in
question) for which prices have been so reported; provided, however, that if
there are no bid and asked prices reported during the 20 days prior to the date
in question, the Value of the Common Shares shall be determined by the Managing
Member acting in good faith on the basis of such quotations and other
information as it considers, in its judgment, appropriate.  In the event a
holder of Common Shares, of any class, would be entitled to receive Common Share
Rights, then the Value of such Common Share Rights shall be determined by the
Managing Member acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.

 

“Vested LTIP Units” has the meaning set forth in Section 4.5(d)(i).

 

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“Vesting Agreement” means each of any, as the context implies LTIP Unit Vesting
Agreement entered into by a LTIP Unitholder upon acceptance of any award of LTIP
Units under the Stock Incentive Plan (as such agreement may be amended, modified
or supplemented from time to time).

 

ARTICLE II
ORGANIZATIONAL MATTERS

 

SECTION 2.1                                      ORGANIZATION AND CONTINUATION;
APPLICATION OF ACT.

 

(A)                                  ORGANIZATION AND CONTINUATION OF COMPANY. 
THE MANAGING MEMBER AND THE NON-MANAGING MEMBERS DO HEREBY CONTINUE THE COMPANY
AS A LIMITED LIABILITY COMPANY ACCORDING TO ALL OF THE TERMS AND PROVISIONS OF
THIS AGREEMENT AND OTHERWISE IN ACCORDANCE WITH THE ACT.  THE MANAGING MEMBER IS
THE SOLE MANAGING MEMBER AND THE NON-MANAGING MEMBERS ARE THE SOLE NON-MANAGING
MEMBERS OF THE COMPANY.

 

(B)                                 APPLICATION OF ACT.  THE COMPANY IS A
LIMITED LIABILITY COMPANY SUBJECT TO THE PROVISIONS OF THE ACT AND THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT.  EXCEPT AS EXPRESSLY PROVIDED HEREIN TO
THE CONTRARY, THE RIGHTS AND OBLIGATIONS OF THE MEMBERS AND THE ADMINISTRATION
AND TERMINATION OF THE COMPANY SHALL BE GOVERNED BY THE ACT.  NO MEMBER HAS ANY
INTEREST IN ANY COMPANY PROPERTY AND THE MEMBERSHIP INTERESTS OF EACH MEMBER
SHALL BE PERSONAL PROPERTY FOR ALL PURPOSES.

 

SECTION 2.2                                      NAME.  THE NAME OF THE COMPANY
IS MORGANS GROUP LLC.  THE COMPANY’S BUSINESS MAY BE CONDUCTED UNDER ANY OTHER
NAME OR NAMES DEEMED ADVISABLE BY THE MANAGING MEMBER, INCLUDING THE NAME OF THE
MANAGING MEMBER OR ANY AFFILIATE THEREOF.  THE WORDS “LIMITED LIABILITY
COMPANY,” OR “LLC” OR SIMILAR WORDS OR LETTERS SHALL BE INCLUDED IN THE
COMPANY’S NAME WHERE NECESSARY FOR THE PURPOSES OF COMPLYING WITH THE LAWS OF
ANY JURISDICTION THAT SO REQUIRES.  THE MANAGING MEMBER IN ITS SOLE AND ABSOLUTE
DISCRETION MAY CHANGE THE NAME OF THE COMPANY AT ANY TIME AND FROM TIME TO TIME
AND SHALL NOTIFY THE NON-MANAGING MEMBERS OF SUCH CHANGE IN THE NEXT REGULAR
COMMUNICATION TO THE NON-MANAGING MEMBERS.

 

SECTION 2.3                                      REGISTERED OFFICE AND AGENT;
PRINCIPAL OFFICE.  THE ADDRESS OF THE REGISTERED OFFICE OF THE COMPANY IN THE
STATE OF DELAWARE IS LOCATED C/O CORPORATION TRUST COMPANY, CORPORATION TRUST
CENTER, 1209 ORANGE STREET, WILMINGTON, DELAWARE 19801, COUNTY OF NEW CASTLE AND
THE REGISTERED AGENT FOR SERVICE OF PROCESS ON THE COMPANY IN THE STATE OF
DELAWARE AT SUCH REGISTERED OFFICE IS THE CORPORATION TRUST COMPANY.  THE
PRINCIPAL OFFICE OF THE COMPANY IS LOCATED AT 475 TENTH AVENUE, NEW YORK, NEW
YORK 10018, OR SUCH OTHER PLACE AS THE MANAGING MEMBER MAY FROM TIME TO TIME
DESIGNATE BY NOTICE TO THE NON-MANAGING MEMBERS.  THE COMPANY MAY MAINTAIN
OFFICES AT SUCH OTHER PLACE OR PLACES WITHIN OR OUTSIDE THE STATE OF DELAWARE AS
THE MANAGING MEMBER DEEMS ADVISABLE.

 

SECTION 2.4                                      TERM.  THE TERM OF THE COMPANY
SHALL CONTINUE UNTIL DISSOLVED PURSUANT TO THE PROVISIONS OF ARTICLE XIII OR AS
OTHERWISE PROVIDED BY LAW.

 

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ARTICLE III
PURPOSE

 

SECTION 3.1                                      PURPOSE AND BUSINESS.  THE
PURPOSE AND NATURE OF THE BUSINESS TO BE CONDUCTED BY THE COMPANY IS (A) TO
CONDUCT ANY BUSINESS THAT MAY BE LAWFULLY CONDUCTED BY A LIMITED LIABILITY
COMPANY ORGANIZED PURSUANT TO THE ACT, (B) TO ENTER INTO ANY PARTNERSHIP, JOINT
VENTURE OR OTHER SIMILAR ARRANGEMENT TO ENGAGE IN ANY OF THE FOREGOING OR THE
OWNERSHIP OF INTERESTS IN ANY ENTITY ENGAGED IN ANY OF THE FOREGOING AND (C) TO
DO ANYTHING NECESSARY OR INCIDENTAL TO THE FOREGOING WHICH, IN EACH CASE, IS NOT
IN BREACH OF THIS AGREEMENT.

 

SECTION 3.2                                      POWERS.  THE COMPANY IS
EMPOWERED TO DO ANY AND ALL ACTS AND THINGS NECESSARY, APPROPRIATE, PROPER,
ADVISABLE, INCIDENTAL TO OR CONVENIENT FOR THE FURTHERANCE AND ACCOMPLISHMENT OF
THE PURPOSES AND BUSINESS DESCRIBED HEREIN AND FOR THE PROTECTION AND BENEFIT OF
THE COMPANY INCLUDING, WITHOUT LIMITATION, FULL POWER AND AUTHORITY, DIRECTLY OR
THROUGH ITS OWNERSHIP INTEREST IN OTHER ENTITIES, TO ENTER INTO, PERFORM AND
CARRY OUT CONTRACTS OF ANY KIND, BORROW MONEY AND ISSUE EVIDENCES OF
INDEBTEDNESS, WHETHER OR NOT SECURED BY MORTGAGE, DEED OF TRUST, PLEDGE OR OTHER
LIEN, ACQUIRE, OWN, MANAGE, IMPROVE AND DEVELOP REAL PROPERTY, AND LEASE, SELL,
TRANSFER AND DISPOSE OF REAL PROPERTY.

 

ARTICLE IV
CAPITAL CONTRIBUTIONS;
ISSUANCE OF UNITS; CAPITAL ACCOUNTS

 

SECTION 4.1                                      CAPITAL CONTRIBUTIONS OF THE
MEMBERS.

 

(A)                                  INITIAL CAPITAL CONTRIBUTIONS.  AT THE TIME
OF THE EXECUTION OF THIS AGREEMENT, THE MEMBERS SHALL MAKE OR SHALL HAVE MADE
INITIAL CAPITAL CONTRIBUTIONS.  THE MEMBERS SHALL OWN MEMBERSHIP UNITS IN THE
AMOUNTS SET FORTH ON EXHIBIT A AND SHALL HAVE A PERCENTAGE INTEREST IN THE
COMPANY AS SET FORTH ON EXHIBIT A, WHICH PERCENTAGE INTEREST SHALL BE ADJUSTED
ON EXHIBIT A FROM TIME TO TIME BY THE MANAGING MEMBER TO THE EXTENT NECESSARY TO
REFLECT ACCURATELY REDEMPTIONS, CONVERSIONS, CAPITAL CONTRIBUTIONS, THE ISSUANCE
OF ADDITIONAL MEMBERSHIP UNITS, OR SIMILAR EVENTS HAVING AN EFFECT ON A MEMBER’S
PERCENTAGE INTEREST.  THE OWNERSHIP OF MEMBERSHIP UNITS MAY BE EVIDENCED BY A
FORM OF CERTIFICATE FOR UNITS DESIGNATED BY THE MANAGING MEMBER; PROVIDED,
HOWEVER, THAT THE MANAGING MEMBER MAY PROVIDE THAT SOME OR ALL OF ANY OR ALL
CLASSES OR SERIES OF THE MEMBERSHIP UNITS SHALL BE UNCERTIFICATED.  EACH
CERTIFICATE FOR MEMBERSHIP UNITS SHALL BE CONSECUTIVELY NUMBERED OR OTHERWISE
IDENTIFIED.  CERTIFICATES OF MEMBERSHIP UNITS SHALL BE SIGNED BY OR IN THE NAME
OF THE COMPANY BY THE CHIEF EXECUTIVE OFFICER, THE PRESIDENT OR A VICE PRESIDENT
AND BY THE TREASURER OR AN ASSISTANT TREASURER OR THE SECRETARY OR AN ASSISTANT
SECRETARY OF THE COMPANY.  WHERE A CERTIFICATE IS COUNTERSIGNED BY A TRANSFER
AGENT, OTHER THAN THE COMPANY OR AN EMPLOYEE OF THE COMPANY, OR BY A REGISTRAR,
THE SIGNATURES OF ONE OR MORE OFFICERS OF THE COMPANY MAY BE FACSIMILES.  IN
CASE ANY OFFICER, TRANSFER AGENT OR REGISTRAR WHO HAS SIGNED OR WHOSE FACSIMILE
SIGNATURE HAS BEEN PLACED UPON A CERTIFICATE SHALL HAVE CEASED TO BE SUCH
OFFICER, TRANSFER AGENT OR REGISTRAR BEFORE SUCH CERTIFICATE IS ISSUED, THE
CERTIFICATE MAY BE

 

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issued by the Company with the same effect as if such officer, transfer agent or
registrar were such officer, transfer agent or registrar at the date of its
issue.

 

(B)                                 ADDITIONAL CAPITAL CONTRIBUTIONS.

 

(1)                                  NO MEMBER SHALL BE ASSESSED OR, EXCEPT AS
PROVIDED FOR IN SECTION 4.1(B)(2) AND EXCEPT FOR ANY SUCH AMOUNTS WHICH A
NON-MANAGING MEMBER MAY BE OBLIGATED TO REPAY UNDER SECTION 10.4, BE REQUIRED TO
CONTRIBUTE ADDITIONAL FUNDS OR OTHER PROPERTY TO THE COMPANY.  ANY ADDITIONAL
FUNDS OR OTHER PROPERTY REQUIRED BY THE COMPANY, AS DETERMINED BY THE MANAGING
MEMBER IN ITS SOLE DISCRETION, MAY, AT THE OPTION OF THE MANAGING MEMBER AND
WITHOUT AN OBLIGATION TO DO SO (EXCEPT AS PROVIDED FOR IN SECTION 4.1(B)(2)), BE
CONTRIBUTED BY THE MANAGING MEMBER AS ADDITIONAL CAPITAL CONTRIBUTIONS.  IF AND
AS THE MANAGING MEMBER OR ANY OTHER MEMBER MAKES ADDITIONAL CAPITAL
CONTRIBUTIONS TO THE COMPANY, EACH SUCH MEMBER SHALL RECEIVE ADDITIONAL
MEMBERSHIP UNITS AS PROVIDED FOR IN SECTION 4.2.

 

(2)                                  EXCEPT TO THE EXTENT PROVIDED IN
SECTION 7.5 BELOW RELATING TO INTERESTS IN COMPANY PROPERTIES HELD DIRECTLY BY
THE COMPANY OR THROUGH SUBSIDIARIES, THE NET PROCEEDS OF ANY AND ALL FUNDS
RAISED BY OR THROUGH THE MANAGING MEMBER THROUGH THE ISSUANCE OF ADDITIONAL
SHARES OF THE MANAGING MEMBER SHALL BE CONTRIBUTED TO THE COMPANY AS ADDITIONAL
CAPITAL CONTRIBUTIONS, AND IN SUCH EVENT THE MANAGING MEMBER SHALL BE ISSUED
ADDITIONAL MEMBERSHIP UNITS PURSUANT TO SECTION 4.2 BELOW.

 

(C)                                  RETURN OF CAPITAL CONTRIBUTIONS.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, THE CAPITAL CONTRIBUTION OF EACH MEMBER
WILL BE RETURNED TO THAT MEMBER ONLY IN THE MANNER AND TO THE EXTENT PROVIDED IN
ARTICLE V AND ARTICLE XIII HEREOF, AND NO MEMBER MAY WITHDRAW FROM THE COMPANY
OR OTHERWISE HAVE ANY RIGHT TO DEMAND OR RECEIVE THE RETURN OF ITS CAPITAL
CONTRIBUTION TO THE COMPANY (AS SUCH), EXCEPT AS SPECIFICALLY PROVIDED HEREIN. 
UNDER CIRCUMSTANCES REQUIRING A RETURN OF ANY CAPITAL CONTRIBUTION, NO MEMBER
SHALL HAVE THE RIGHT TO RECEIVE PROPERTY OTHER THAN CASH, EXCEPT AS SPECIFICALLY
PROVIDED HEREIN.  NO MEMBER SHALL BE ENTITLED TO INTEREST ON ANY CAPITAL
CONTRIBUTION OR CAPITAL ACCOUNT NOTWITHSTANDING ANY DISPROPORTION THEREIN AS
BETWEEN THE MEMBERS.  EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE MANAGING
MEMBER SHALL NOT BE LIABLE FOR THE RETURN OF ANY PORTION OF THE CAPITAL
CONTRIBUTION OF ANY NON-MANAGING MEMBER, AND THE RETURN OF SUCH CAPITAL
CONTRIBUTIONS SHALL BE MADE SOLELY FROM COMPANY ASSETS.

 

(D)                                 LIABILITY OF MEMBERS.  NO MEMBER SHALL HAVE
ANY FURTHER PERSONAL LIABILITY TO CONTRIBUTE MONEY TO, OR IN RESPECT OF, THE
LIABILITIES OR THE OBLIGATIONS OF THE COMPANY, NOR SHALL ANY MEMBER BE
PERSONALLY LIABLE FOR ANY OBLIGATIONS OF THE COMPANY, EXCEPT AS OTHERWISE
PROVIDED IN THIS ARTICLE IV OR IN THE ACT.

 

SECTION 4.2                                      ISSUANCES OF ADDITIONAL
MEMBERSHIP INTERESTS.

 

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(A)                                  ISSUANCE TO OTHER THAN THE MANAGING
MEMBER.  THE MANAGING MEMBER IS HEREBY AUTHORIZED TO CAUSE THE COMPANY TO ISSUE
SUCH ADDITIONAL MEMBERSHIP INTERESTS IN THE FORM OF MEMBERSHIP UNITS FOR ANY
COMPANY PURPOSE AT ANY TIME OR FROM TIME TO TIME, TO THE MEMBERS (OTHER THAN
ISSUANCES TO THE MANAGING MEMBER, WHICH ISSUANCES ARE GOVERNED BY
SECTION 4.2(B) AND SECTION 4.2(C)) OR TO OTHER PERSONS FOR SUCH CONSIDERATION
AND ON SUCH TERMS AND CONDITIONS AS SHALL BE ESTABLISHED BY THE MANAGING MEMBER
IN ITS SOLE AND ABSOLUTE DISCRETION, ALL WITHOUT THE APPROVAL OF ANY
NON-MANAGING MEMBERS EXCEPT TO THE EXTENT PROVIDED HEREIN; PROVIDED, HOWEVER,
THAT THE COMPANY ALSO MAY FROM TIME TO TIME ISSUE TO THIRD PARTIES ADDITIONAL
MEMBERSHIP INTERESTS (OTHER THAN ANY SUCH ISSUANCE TO THE MANAGING MEMBER WHICH
IS GOVERNED BY SECTIONS 4.2(B) AND 4.2(C)) IN ONE OR MORE CLASSES, OR ONE OR
MORE SERIES OF ANY OF SUCH CLASSES, WITH SUCH VOTING POWERS, FULL OR LIMITED, OR
NO VOTING POWERS, AND SUCH DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, INCLUDING VOTING POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS SENIOR TO NON-MANAGING MEMBERSHIP INTERESTS, AS MAY
BE SET FORTH AN EXHIBIT HERETO FROM TIME TO TIME, SUBJECT TO DELAWARE LAW,
INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO (I) THE ALLOCATIONS OF ITEMS OF
INCOME, GAIN, LOSS, DEDUCTION AND CREDIT TO EACH SUCH CLASS OR SERIES OF
MEMBERSHIP INTERESTS, (II) THE RIGHT OF EACH SUCH CLASS OR SERIES OF MEMBERSHIP
INTERESTS TO SHARE IN DISTRIBUTIONS, AND (III) THE RIGHTS OF EACH SUCH CLASS OR
SERIES OF MEMBERSHIP INTERESTS UPON DISSOLUTION AND LIQUIDATION OF THE COMPANY. 
TO THE EXTENT MORE THAN ONE CLASS OF MEMBERSHIP UNITS IS OUTSTANDING, THE
MEMBERSHIP UNITS IN THIS AGREEMENT SHALL BE REFERRED TO AS CLASS A UNITS.  TO
THE EXTENT MORE THAN ONE CLASS OF COMMON SHARES IS OUTSTANDING, THE COMMON
SHARES IN THIS AGREEMENT SHALL BE REFERRED TO AS CLASS A COMMON SHARES.

 

(B)                                 ISSUANCE TO THE MANAGING MEMBER.  THE
COMPANY ALSO MAY FROM TIME TO TIME ISSUE TO THE MANAGING MEMBER ADDITIONAL
MEMBERSHIP UNITS OR OTHER MEMBERSHIP INTERESTS IN ONE OR MORE CLASSES, OR ONE OR
MORE SERIES OF ANY OF SUCH CLASSES, WITH SUCH VOTING POWERS, FULL OR LIMITED, OR
NO VOTING POWERS, AND SUCH DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, INCLUDING VOTING POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS SENIOR TO NON-MANAGING MEMBERSHIP INTERESTS, AS MAY
BE SET FORTH IN AN EXHIBIT HERETO FROM TIME TO TIME, ALL AS SHALL BE DETERMINED
BY THE MANAGING MEMBER, SUBJECT TO DELAWARE LAW, INCLUDING, WITHOUT LIMITATION,
WITH RESPECT TO (I) THE ALLOCATIONS OF ITEMS OF INCOME, GAIN, LOSS, DEDUCTION
AND CREDIT TO EACH SUCH CLASS OR SERIES OF MEMBERSHIP INTERESTS, (II) THE RIGHT
OF EACH SUCH CLASS OR SERIES OF INTERESTS TO SHARE IN DISTRIBUTIONS, AND
(III) THE RIGHTS OF EACH SUCH CLASS OR SERIES OF MEMBERSHIP INTERESTS UPON
DISSOLUTION AND LIQUIDATION OF THE COMPANY; PROVIDED, HOWEVER, THAT (X) THE
ADDITIONAL MEMBERSHIP INTERESTS ARE ISSUED IN CONNECTION WITH AN ISSUANCE OF
SHARES OF THE MANAGING MEMBER, WHICH SHARES HAVE DESIGNATIONS, PREFERENCES AND
OTHER RIGHTS, ALL SUCH THAT THE ECONOMIC INTERESTS ARE SUBSTANTIALLY SIMILAR TO
THE DESIGNATIONS, PREFERENCES AND OTHER RIGHTS OF THE ADDITIONAL MEMBERSHIP
INTERESTS ISSUED TO THE MANAGING MEMBER IN ACCORDANCE WITH THIS SECTION 4.2(B),
AND (Y) THE MANAGING MEMBER SHALL MAKE A CAPITAL CONTRIBUTION TO THE COMPANY
(1) IN AN AMOUNT EQUAL TO THE NET PROCEEDS RAISED IN CONNECTION WITH THE
ISSUANCE OF SUCH SHARES OF THE MANAGING MEMBER IN THE EVENT SUCH SHARES ARE SOLD
FOR

 

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CASH OR CASH EQUIVALENTS OR (2) IN THE FORM OF THE PROPERTY RECEIVED IN
CONSIDERATION FOR SUCH SHARES, IN THE EVENT SUCH SHARES ARE ISSUED IN
CONSIDERATION FOR OTHER PROPERTY.

 

(C)                                  ISSUANCE OF ADDITIONAL COMMON SHARES OR
PREFERRED SHARES.  THE MANAGING MEMBER IS EXPLICITLY AUTHORIZED TO ISSUE
ADDITIONAL COMMON SHARES, OF ANY CLASS, OR PREFERRED SHARES OF BENEFICIAL
INTEREST OF THE MANAGING MEMBER (“PREFERRED SHARES”), OR RIGHTS, OPTIONS,
WARRANTS OR CONVERTIBLE OR EXCHANGEABLE SECURITIES CONTAINING THE RIGHT TO
SUBSCRIBE FOR OR PURCHASE COMMON SHARES, OF ANY CLASS, OR PREFERRED SHARES (“NEW
SECURITIES”) AND IN CONNECTION THEREWITH, AS FURTHER PROVIDED IN SECTION 4.2(B),
(I) THE MANAGING MEMBER SHALL CAUSE THE COMPANY TO ISSUE TO THE MANAGING MEMBER
MEMBERSHIP INTERESTS OR RIGHTS, OPTIONS, WARRANTS OR CONVERTIBLE OR EXCHANGEABLE
SECURITIES OF THE COMPANY HAVING DESIGNATIONS, PREFERENCES AND OTHER RIGHTS, AS
MAY BE SET FORTH ON AN EXHIBIT HERETO FROM TIME TO TIME, ALL SUCH THAT THE
ECONOMIC INTERESTS ARE SUBSTANTIALLY SIMILAR TO THOSE OF THE NEW SECURITIES, AND
(II) THE MANAGING MEMBER SHALL CONTRIBUTE THE NET PROCEEDS FROM, OR THE PROPERTY
RECEIVED IN CONSIDERATION FOR, THE ISSUANCE OF SUCH NEW SECURITIES AND FROM THE
EXERCISE OF RIGHTS CONTAINED IN SUCH NEW SECURITIES TO THE COMPANY.  IN
CONNECTION WITH THE ISSUANCE OF MEMBERSHIP INTERESTS WHICH ARE SUBSTANTIALLY
SIMILAR TO NEW SECURITIES, THE MANAGING MEMBER IS AUTHORIZED TO MODIFY OR AMEND
THE DISTRIBUTIONS OR ALLOCATIONS HEREUNDER SOLELY TO THE EXTENT NECESSARY TO
GIVE EFFECT TO THE DESIGNATIONS, PREFERENCES AND OTHER RIGHTS PERTAINING TO SUCH
MEMBERSHIP INTERESTS.

 

(D)                                 ISSUANCE PURSUANT TO OPTION PLANS.

 

(1)                                  UPON THE EXERCISE OF AN OPTION GRANTED BY
THE MANAGING MEMBER FOR COMMON SHARES, OF ANY CLASS, THE MANAGING MEMBER SHALL
CAUSE THE COMPANY TO ISSUE TO THE MANAGING MEMBER ONE MEMBERSHIP UNIT FOR EACH
SUCH COMMON SHARE ACQUIRED UPON SUCH EXERCISE PURSUANT TO THE OPTION PLANS (OR
SUCH OTHER NUMBER OF MEMBERSHIP UNITS BASED ON THE RELATIONSHIP A DIFFERENT
CLASS OF COMMON SHARES BEARS TO COMMON SHARES), AND THE MANAGING MEMBER SHALL
CONTRIBUTE TO THE COMPANY THE NET PROCEEDS RECEIVED UPON SUCH EXERCISE (IT BEING
UNDERSTOOD THAT THE MANAGING MEMBER MAY ISSUE COMMON SHARES IN CONNECTION WITH
THE OPTION PLANS WITHOUT RECEIVING A SPECIFIED AMOUNT OF PROCEEDS AND THAT THE
ISSUANCE OF SUCH COMMON SHARES SHALL NONETHELESS ENTITLE THE MANAGING MEMBER TO
ADDITIONAL MEMBERSHIP UNITS).

 

(2)                                  THE MANAGING MEMBER SHALL CAUSE THE COMPANY
TO ISSUE MEMBERSHIP UNITS TO EMPLOYEES OF THE COMPANY UPON THE EXERCISE BY ANY
SUCH EMPLOYEES OF AN OPTION TO ACQUIRE MEMBERSHIP UNITS GRANTED BY THE COMPANY
PURSUANT TO THE OPTION PLANS IN ACCORDANCE WITH THE TERMS OF THE OPTION PLANS. 
MEMBERSHIP UNITS SO ISSUED SHALL REPRESENT NON-MANAGING MEMBERSHIP INTERESTS.

 

(3)                                  THE MANAGING MEMBER SHALL CAUSE THE COMPANY
TO ISSUE MEMBERSHIP UNITS TO ANY SUBSIDIARY UPON THE EXERCISE BY AN EMPLOYEE OF
SUCH SUBSIDIARY OF AN OPTION TO ACQUIRE MEMBERSHIP UNITS GRANTED BY SUCH
SUBSIDIARY PURSUANT TO THE OPTION PLANS, AND SUCH SUBSIDIARY SHALL TRANSFER TO
THE COMPANY THE PRICE PER MEMBERSHIP UNIT REQUIRED BY THE OPTION PLANS TO BE
PAID BY

 

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SUBSIDIARIES.  MEMBERSHIP UNITS ISSUED TO ANY SUCH SUBSIDIARY SHALL REPRESENT
NON-MANAGING MEMBERSHIP INTERESTS.

 

(E)                                  REDEMPTION OF UNITS.

 

(1)                                  SUBJECT TO SECTION 11.3(D) AND THE FURTHER
PROVISIONS OF THIS SECTION 4.2(E), AND EXCEPT AS OTHERWISE SET FORTH IN AN
EXHIBIT HERETO SETTING FORTH RIGHTS, PREFERENCES AND OBLIGATIONS WITH RESPECT TO
ANY PARTICULAR CLASS OR SERIES OF MEMBERSHIP UNITS ISSUED AFTER THE DATE HEREOF,
EACH NON-MANAGING MEMBER SHALL HAVE THE RIGHT (I) ON OR AFTER THE DATE TWELVE
(12) MONTHS AFTER THE EFFECTIVE DATE, WITH RESPECT TO THE MEMBERSHIP UNITS
ACQUIRED ON OR CONTEMPORANEOUSLY WITH THE EFFECTIVE DATE, OR (II) ON OR AFTER
SUCH OTHER DATE AS EXPRESSLY PROVIDED IN ANY AGREEMENT ENTERED INTO BETWEEN THE
COMPANY AND ANY NON-MANAGING MEMBER, INCLUDING THE FORMATION AND STRUCTURING
AGREEMENT, TO REQUIRE THE COMPANY TO REDEEM (THE “REDEMPTION RIGHT”) ON A
SPECIFIED REDEMPTION DATE ALL OR A PORTION OF THE MEMBERSHIP UNITS HELD BY SUCH
NON-MANAGING MEMBER AT A REDEMPTION PRICE EQUAL TO AND IN THE FORM OF THE CASH
AMOUNT TO BE PAID BY THE COMPANY.  THE REDEMPTION RIGHT SHALL BE EXERCISED
PURSUANT TO A NOTICE OF REDEMPTION DELIVERED TO THE COMPANY (WITH A COPY TO THE
MANAGING MEMBER) BY THE NON-MANAGING MEMBER WHO IS EXERCISING THE REDEMPTION
RIGHT (THE “REDEEMING MEMBER”); PROVIDED, HOWEVER, THAT THE COMPANY SHALL NOT BE
OBLIGATED TO SATISFY SUCH REDEMPTION RIGHT IF THE MANAGING MEMBER ELECTS TO
PURCHASE THE MEMBERSHIP UNITS SUBJECT TO THE NOTICE OF REDEMPTION (THE “TENDERED
UNITS”); PROVIDED, FURTHER, THAT IN THE EVENT THE MANAGING MEMBER ISSUES TO ALL
HOLDERS OF COMMON SHARES RIGHTS, OPTIONS, WARRANTS OR CONVERTIBLE OR
EXCHANGEABLE SECURITIES ENTITLING THE SHAREHOLDERS TO SUBSCRIBE FOR OR PURCHASE
COMMON SHARES, OR ANY OTHER SECURITIES OR PROPERTY (COLLECTIVELY, THE “COMMON
SHARE RIGHTS”) THEN (EXCEPT TO THE EXTENT SUCH RIGHTS HAVE ALREADY BEEN
REFLECTED IN AN ADJUSTMENT TO THE UNIT ADJUSTMENT FACTOR AS PROVIDED IN
SECTION 4.2(E)(2) BELOW) THE REDEEMING MEMBER SHALL ALSO BE ENTITLED TO RECEIVE
SUCH COMMON SHARE RIGHTS THAT A HOLDER OF THAT NUMBER OF COMMON SHARES WOULD BE
ENTITLED TO RECEIVE.  A NON-MANAGING MEMBER MAY NOT EXERCISE THE REDEMPTION
RIGHT FOR LESS THAN TEN THOUSAND (10,000) MEMBERSHIP UNITS OR, IF SUCH
NON-MANAGING MEMBER HOLDS LESS THAN TEN THOUSAND (10,000) MEMBERSHIP UNITS, ALL
OF THE MEMBERSHIP UNITS HELD BY SUCH NON-MANAGING MEMBER.

 

(2)                                  NOTWITHSTANDING THE PROVISIONS OF
SECTION 4.2(E)(1), A NON-MANAGING MEMBER THAT EXERCISES THE REDEMPTION RIGHT
SHALL BE DEEMED TO HAVE OFFERED TO SELL THE MEMBERSHIP UNITS DESCRIBED IN THE
NOTICE OF REDEMPTION TO THE MANAGING MEMBER, AND THE MANAGING MEMBER MAY, IN ITS
SOLE AND ABSOLUTE DISCRETION, ELECT TO ASSUME DIRECTLY AND SATISFY A REDEMPTION
RIGHT, AND ACQUIRE SOME OR ALL OF SUCH MEMBERSHIP UNITS BY PAYING TO THE
REDEEMING MEMBER EITHER THE CASH AMOUNT, OR THE SHARES AMOUNT, AS ELECTED BY THE
MANAGING MEMBER (IN ITS SOLE AND ABSOLUTE DISCRETION), ON THE SPECIFIED
REDEMPTION DATE, WHEREUPON THE MANAGING MEMBER SHALL ACQUIRE THE MEMBERSHIP
UNITS OFFERED FOR REDEMPTION BY THE REDEEMING MEMBER.  IF THE MANAGING MEMBER
SHALL ELECT TO EXERCISE ITS RIGHT TO PURCHASE MEMBERSHIP UNITS UNDER THIS
SECTION 4.2(E)(2) WITH

 

17

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RESPECT TO A NOTICE OF REDEMPTION, IT SHALL SO NOTIFY THE REDEEMING MEMBER
PROMPTLY AFTER THE RECEIPT BY THE COMPANY OF SUCH NOTICE OF REDEMPTION.  IN THE
EVENT THE MANAGING MEMBER SHALL EXERCISE ITS RIGHT TO PURCHASE MEMBERSHIP UNITS
WITH RESPECT TO THE EXERCISE OF A REDEMPTION RIGHT IN THE MANNER DESCRIBED IN
THE FIRST SENTENCE OF THIS SECTION 4.2(E)(2), THE COMPANY SHALL HAVE NO
OBLIGATION TO PAY ANY AMOUNT TO THE REDEEMING MEMBER WITH RESPECT TO REDEEMING
MEMBER’S EXERCISE OF THE REDEMPTION RIGHT, AND EACH OF THE REDEEMING MEMBER, THE
COMPANY AND THE MANAGING MEMBER SHALL TREAT THE TRANSACTION BETWEEN THE MANAGING
MEMBER AND THE REDEEMING MEMBER FOR FEDERAL INCOME TAX PURPOSES AS A SALE OF THE
REDEEMING MEMBER’S MEMBERSHIP UNITS TO THE MANAGING MEMBER.

 

(3)                                  IN THE EVENT OF ANY CHANGE IN THE UNIT
ADJUSTMENT FACTOR, THE NUMBER OF MEMBERSHIP UNITS HELD BY EACH MEMBER SHALL BE
PROPORTIONATELY ADJUSTED BY MULTIPLYING THE NUMBER OF MEMBERSHIP UNITS HELD BY
SUCH MEMBER IMMEDIATELY PRIOR TO THE CHANGE IN THE UNIT ADJUSTMENT FACTOR BY THE
NEW UNIT ADJUSTMENT FACTOR; THE INTENT OF THIS PROVISION IS THAT ONE MEMBERSHIP
UNIT REMAINS EQUIVALENT IN VALUE TO ONE COMMON SHARE WITHOUT DILUTION (INCLUDING
ANY SECURITIES FOR WHICH SHARES ARE EXCHANGED IN A TRANSACTION CONTEMPLATED BY
SECTION 11.2(C)).  IN THE EVENT THE MANAGING MEMBER ISSUES ANY COMMON SHARES IN
EXCHANGE FOR MEMBERSHIP UNITS PURSUANT TO THIS SECTION 4.2(E), ANY SUCH
MEMBERSHIP UNITS SO ACQUIRED BY THE MANAGING MEMBER SHALL IMMEDIATELY THEREAFTER
BE CANCELED BY THE COMPANY AND THE COMPANY SHALL ISSUE TO THE MANAGING MEMBER
NEW MEMBERSHIP UNITS PURSUANT TO SECTION 4.2(C) HEREOF.  EACH REDEEMING MEMBER
AGREES TO EXECUTE SUCH DOCUMENTS AS THE MANAGING MEMBER MAY REASONABLY REQUIRE
IN CONNECTION WITH THE ISSUANCE OF COMMON SHARES UPON EXERCISE OF THE REDEMPTION
RIGHT.

 

(4)                                  THE SHARES AMOUNT, IF APPLICABLE, SHALL BE
DELIVERED AS DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE
COMMON SHARES AND, IF APPLICABLE, FREE OF ANY PLEDGE, LIEN, ENCUMBRANCE OR
RESTRICTION, OTHER THAN THOSE PROVIDED IN THE CHARTER, THE BYLAWS OF THE
MANAGING MEMBER, THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
RELEVANT STATE SECURITIES OR BLUE SKY LAWS AND ANY APPLICABLE REGISTRATION
RIGHTS AGREEMENT WITH RESPECT TO SUCH COMMON SHARES ENTERED INTO BY THE
REDEEMING MEMBER. NOTWITHSTANDING ANY DELAY IN SUCH DELIVERY (BUT SUBJECT TO
SECTION 4.2(E)(6)), THE REDEEMING MEMBER SHALL BE DEEMED THE OWNER OF SUCH
COMMON SHARES FOR ALL PURPOSES, INCLUDING WITHOUT LIMITATION, RIGHTS TO VOTE OR
CONSENT, AND RECEIVE DIVIDENDS, AS OF THE SPECIFIED REDEMPTION DATE.

 

(5)                               EACH NON-MANAGING MEMBER COVENANTS AND AGREES
WITH THE MANAGING MEMBER THAT ALL TENDERED UNITS SHALL BE DELIVERED TO THE
MANAGING MEMBER FREE AND CLEAR OF ALL LIENS, CLAIMS AND ENCUMBRANCES WHATSOEVER
AND SHOULD ANY SUCH LIENS, CLAIMS AND/OR ENCUMBRANCES EXIST OR ARISE WITH
RESPECT TO SUCH TENDERED UNITS, THE MANAGING MEMBER SHALL BE UNDER NO OBLIGATION
TO ACQUIRE THE SAME. EACH NON-MANAGING MEMBER FURTHER AGREES THAT, IN THE EVENT
ANY STATE OR LOCAL PROPERTY TRANSFER TAX IS PAYABLE SOLELY WITH RESPECT TO ITS

 

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TENDERED UNITS TRANSFERRED TO THE MANAGING MEMBER (OR ITS DESIGNEE), SUCH
NON-MANAGING MEMBER SHALL ASSUME AND PAY SUCH TRANSFER TAX.

 

(6)                               NOTWITHSTANDING THE PROVISIONS OF
SECTION 4.2(E) OR ANY OTHER PROVISION OF THIS AGREEMENT, A MEMBER (I) SHALL NOT
BE ENTITLED TO EFFECT A REDEMPTION FOR CASH OR AN EXCHANGE FOR COMMON SHARES TO
THE EXTENT THE OWNERSHIP OR RIGHT TO ACQUIRE COMMON SHARES PURSUANT TO SUCH
EXCHANGE BY SUCH MEMBER ON THE SPECIFIED REDEMPTION DATE COULD CAUSE SUCH MEMBER
OR ANY OTHER PERSON TO VIOLATE THE RESTRICTIONS ON OWNERSHIP AND TRANSFER OF
COMMON SHARES SET FORTH IN THE CHARTER AND (II) SHALL HAVE NO RIGHTS UNDER THIS
AGREEMENT TO ACQUIRE COMMON SHARES WHICH WOULD OTHERWISE BE PROHIBITED UNDER THE
CHARTER. TO THE EXTENT ANY ATTEMPTED REDEMPTION OR EXCHANGE FOR COMMON SHARES
WOULD BE IN VIOLATION OF THIS SECTION 4.2(E)(6), IT SHALL BE NULL AND VOID AB
INITIO AND SUCH MEMBER SHALL NOT ACQUIRE ANY RIGHTS OR ECONOMIC INTEREST IN THE
CASH OTHERWISE PAYABLE UPON SUCH REDEMPTION OR THE COMMON SHARES OTHERWISE
ISSUABLE UPON SUCH EXCHANGE.

 

(7)                               NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY (BUT SUBJECT TO SECTION 4.2(E)(6)), WITH RESPECT TO ANY REDEMPTION OR
EXCHANGE FOR COMMON SHARES PURSUANT TO THIS SECTION 4.2(E):

 

(i)                                     All Membership Units acquired by the
Managing Member pursuant thereto shall automatically, and without further action
required, be converted into and deemed to be Managing Member Interests comprised
of the same number and class of Membership Units.

 

(ii)                                  The consummation of any redemption or
exchange for Common Shares shall be subject to the expiration or termination of
the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

 

(iii)                               Each Redeeming Member shall continue to own
all Membership Units subject to any redemption or exchange for Common Shares,
and be treated as a Non-Managing Member with respect to such Membership Units
for all purposes of this Agreement, until the Specified Redemption Date. Until a
Specified Redemption Date, the Redeeming Member shall have no rights as a
stockholder of the Managing Member with respect to such Redeeming Member’s
Membership Units, except as may be provided in the Investors Agreement.

 

SECTION 4.3                                      NO PREEMPTIVE RIGHTS.  EXCEPT
AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, NO PERSON SHALL HAVE ANY PREEMPTIVE,
PREFERENTIAL OR OTHER SIMILAR RIGHT WITH RESPECT TO (A) ADDITIONAL CAPITAL
CONTRIBUTIONS OR LOANS TO THE COMPANY, OR (B) ISSUANCE OR SALE OF ANY MEMBERSHIP
UNITS.

 

SECTION 4.4                                      CAPITAL ACCOUNTS OF THE
MEMBERS.

 

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(A)                                  GENERAL.  THE COMPANY SHALL MAINTAIN FOR
EACH MEMBER A SEPARATE CAPITAL ACCOUNT IN ACCORDANCE WITH THE RULES OF
REGULATIONS SECTION 1.704-1(B)(2)(IV).  SUCH CAPITAL ACCOUNT SHALL BE INCREASED
BY (A) THE AMOUNT OF ALL CAPITAL CONTRIBUTIONS MADE BY SUCH MEMBER TO THE
COMPANY PURSUANT TO THIS AGREEMENT AND (B) ALL ITEMS OF INCOME AND GAIN
(INCLUDING INCOME AND GAIN EXEMPT FROM TAX) COMPUTED IN ACCORDANCE WITH
SECTION 4.4(B) HEREOF AND ALLOCATED TO SUCH MEMBER PURSUANT TO SECTIONS 6.1
THROUGH SECTION 6.3 OF THE AGREEMENT, AND DECREASED BY (I) THE AMOUNT OF CASH OR
AGREED VALUE OF ALL ACTUAL AND DEEMED DISTRIBUTIONS OF CASH OR PROPERTY MADE TO
SUCH MEMBER PURSUANT TO THIS AGREEMENT AND (II) ALL ITEMS OF DEDUCTION AND LOSS
COMPUTED IN ACCORDANCE WITH SECTION 4.4(B) HEREOF AND ALLOCATED TO SUCH MEMBER
PURSUANT TO SECTIONS 6.1 THROUGH SECTION 6.3 OF THE AGREEMENT.

 

(B)                                 INCOME, GAINS, DEDUCTIONS AND LOSSES.  FOR
PURPOSES OF COMPUTING THE AMOUNT OF ANY ITEM OF INCOME, GAIN, LOSS OR DEDUCTION
TO BE REFLECTED IN THE MEMBERS’ CAPITAL ACCOUNTS, UNLESS OTHERWISE SPECIFIED IN
THIS AGREEMENT, THE DETERMINATION, RECOGNITION AND CLASSIFICATION OF ANY SUCH
ITEM SHALL BE THE SAME AS ITS DETERMINATION, RECOGNITION AND CLASSIFICATION FOR
FEDERAL INCOME TAX PURPOSES DETERMINED IN ACCORDANCE WITH SECTION 703(A) OF THE
CODE (FOR THIS PURPOSE ALL ITEMS OF INCOME, GAIN, LOSS OR DEDUCTION REQUIRED TO
BE STATED SEPARATELY PURSUANT TO SECTION 703(A)(1) OF THE CODE SHALL BE INCLUDED
IN TAXABLE INCOME OR LOSS), WITH THE FOLLOWING ADJUSTMENTS:

 

(1)                                  EXCEPT AS OTHERWISE PROVIDED IN REGULATIONS
SECTION 1.704-1(B)(2)(IV)(M), THE COMPUTATION OF ALL ITEMS OF INCOME, GAIN, LOSS
AND DEDUCTION SHALL BE MADE WITHOUT REGARD TO ANY ELECTION UNDER SECTION 754 OF
THE CODE WHICH MAY BE MADE BY THE COMPANY.

 

(2)                                  THE COMPUTATION OF ALL ITEMS OF INCOME,
GAIN, LOSS AND DEDUCTION SHALL BE MADE WITHOUT REGARD TO THE FACT THAT ITEMS
DESCRIBED IN SECTIONS 705(A)(1)(B) OR 705(A)(2)(B) OF THE CODE ARE NOT
INCLUDABLE IN GROSS INCOME OR ARE NEITHER CURRENTLY DEDUCTIBLE NOR CAPITALIZED
FOR FEDERAL INCOME TAX PURPOSES.

 

(3)                                  ANY INCOME, GAIN OR LOSS ATTRIBUTABLE TO
THE TAXABLE DISPOSITION OF ANY COMPANY PROPERTY SHALL BE DETERMINED AS IF THE
ADJUSTED BASIS OF SUCH PROPERTY AS OF SUCH DATE OF DISPOSITION WERE EQUAL IN
AMOUNT TO THE COMPANY’S CARRYING VALUE WITH RESPECT TO SUCH PROPERTY AS OF SUCH
DATE.

 

(4)                                  IN LIEU OF THE DEPRECIATION, AMORTIZATION,
AND OTHER COST RECOVERY DEDUCTIONS TAKEN INTO ACCOUNT IN COMPUTING SUCH TAXABLE
INCOME OR LOSS, THERE SHALL BE TAKEN INTO ACCOUNT DEPRECIATION FOR SUCH FISCAL
YEAR.

 

(5)                                  IN THE EVENT THE CARRYING VALUE OF ANY
COMPANY ASSET IS ADJUSTED PURSUANT TO SECTION 4.4(D) HEREOF, THE AMOUNT OF ANY
SUCH ADJUSTMENT SHALL BE TAKEN INTO ACCOUNT AS GAIN OR LOSS FROM THE DISPOSITION
OF SUCH ASSET.

 

(6)                                  ANY ITEMS SPECIALLY ALLOCATED UNDER
SECTION 6.4 HEREOF SHALL NOT BE TAKEN INTO ACCOUNT.

 

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(C)                                  TRANSFERS OF MEMBERSHIP UNITS.  A
TRANSFEREE OF A MEMBERSHIP UNIT SHALL SUCCEED TO A PRO RATA PORTION OF THE
CAPITAL ACCOUNT OF THE TRANSFEROR.

 

(D)                                 UNREALIZED GAINS AND LOSSES.

 

(1)                                  CONSISTENT WITH THE PROVISIONS OF
REGULATIONS SECTION 1.704-1(B)(2)(IV)(F), AND AS PROVIDED IN SECTION 4.4(D)(2),
THE CARRYING VALUES OF ALL COMPANY ASSETS SHALL BE ADJUSTED UPWARD OR DOWNWARD
TO REFLECT ANY UNREALIZED GAIN OR UNREALIZED LOSS ATTRIBUTABLE TO SUCH COMPANY
PROPERTY, AS OF THE TIMES OF THE ADJUSTMENTS PROVIDED IN
SECTION 4.4(D)(2) HEREOF, AS IF SUCH UNREALIZED GAIN OR UNREALIZED LOSS HAD BEEN
RECOGNIZED ON AN ACTUAL SALE OF EACH SUCH PROPERTY AND ALLOCATED PURSUANT TO
SECTION 6.1 OF THE AGREEMENT.

 

(2)                                  SUCH ADJUSTMENTS SHALL BE MADE AS OF THE
FOLLOWING TIMES: (I) IMMEDIATELY PRIOR TO THE ACQUISITION OF AN ADDITIONAL
INTEREST IN THE COMPANY BY ANY NEW OR EXISTING MEMBER IN EXCHANGE FOR MORE THAN
A DE MINIMIS CAPITAL CONTRIBUTION; (II) IMMEDIATELY PRIOR TO THE DISTRIBUTION BY
THE COMPANY TO A MEMBER OF MORE THAN A DE MINIMIS AMOUNT OF PROPERTY AS
CONSIDERATION FOR AN INTEREST IN THE COMPANY; (III) IMMEDIATELY PRIOR TO THE
ISSUANCE OF ANY LTIP UNITS; AND (IV) IMMEDIATELY PRIOR TO THE LIQUIDATION OF THE
COMPANY OR THE MANAGING MEMBER’S INTEREST IN THE COMPANY WITHIN THE MEANING OF
REGULATIONS SECTION 1.704-L(B)(2)(II)(G).

 

(3)                                  IN ACCORDANCE WITH REGULATIONS
SECTION 1.704-1(B)(2)(IV)(E), THE CARRYING VALUES OF COMPANY ASSETS DISTRIBUTED
IN KIND SHALL BE ADJUSTED UPWARD OR DOWNWARD TO REFLECT ANY UNREALIZED GAIN OR
UNREALIZED LOSS ATTRIBUTABLE TO SUCH COMPANY PROPERTY, AS OF THE TIME ANY SUCH
ASSET IS DISTRIBUTED.

 

(4)                                  IN DETERMINING SUCH UNREALIZED GAIN OR
UNREALIZED LOSS, THE AGGREGATE CASH AMOUNT AND FAIR MARKET VALUE OF ALL COMPANY
ASSETS (INCLUDING CASH OR CASH EQUIVALENTS) SHALL BE DETERMINED BY THE MANAGING
MEMBER USING SUCH REASONABLE METHOD OF VALUATION AS IT MAY ADOPT, OR IN THE CASE
OF A LIQUIDATING DISTRIBUTION PURSUANT TO ARTICLE XIII OF THIS AGREEMENT, BE
DETERMINED AND ALLOCATED BY THE LIQUIDATOR USING SUCH REASONABLE METHODS OF
VALUATION AS IT MAY ADOPT.  THE MANAGING MEMBER, OR THE LIQUIDATOR, AS THE CASE
MAY BE, SHALL ALLOCATE SUCH AGGREGATE VALUE AMONG THE ASSETS OF THE COMPANY (IN
SUCH MANNER AS IT DETERMINES IN ITS SOLE AND ABSOLUTE DISCRETION TO ARRIVE AT A
FAIR MARKET VALUE FOR INDIVIDUAL PROPERTIES).

 

(E)                                  MODIFICATION BY MANAGING MEMBER.  THE
PROVISIONS OF THIS AGREEMENT RELATING TO THE MAINTENANCE OF CAPITAL ACCOUNTS ARE
INTENDED TO COMPLY WITH REGULATIONS ISSUED UNDER SECTIONS 704(B) OF THE CODE,
AND SHALL BE INTERPRETED AND APPLIED IN A MANNER CONSISTENT WITH SUCH
REGULATIONS.  IN THE EVENT THE MANAGING MEMBER SHALL DETERMINE THAT IT IS
PRUDENT TO MODIFY THE MANNER IN WHICH THE CAPITAL ACCOUNTS, OR ANY DEBITS OR
CREDITS THERETO (INCLUDING, WITHOUT LIMITATION, DEBITS OR CREDITS RELATING TO
LIABILITIES WHICH ARE SECURED BY CONTRIBUTED OR DISTRIBUTED PROPERTY OR WHICH
ARE ASSUMED BY THE COMPANY, THE MANAGING MEMBER, OR ANY NON-MANAGING MEMBERS)
ARE COMPUTED

 

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IN ORDER TO COMPLY WITH SUCH REGULATIONS, THE MANAGING MEMBER MAY MAKE SUCH
MODIFICATION; PROVIDED, HOWEVER, THAT IT WILL NOT HAVE A MATERIAL EFFECT ON THE
AMOUNTS DISTRIBUTABLE TO ANY PERSON PURSUANT TO ARTICLE XIII OF THIS AGREEMENT
UPON THE LIQUIDATION OF THE COMPANY.  THE MANAGING MEMBER ALSO SHALL (A) MAKE
ANY ADJUSTMENTS THAT ARE NECESSARY OR APPROPRIATE TO MAINTAIN EQUALITY BETWEEN
THE CAPITAL ACCOUNTS OF THE MEMBERS AND THE AMOUNT OF COMPANY CAPITAL REFLECTED
ON THE COMPANY’S BALANCE SHEET, AS COMPUTED FOR BOOK PURPOSES, IN ACCORDANCE
WITH REGULATIONS SECTION 1.704-1(B)(2)(IV)(Q), AND (B) MAKE ANY APPROPRIATE
MODIFICATIONS IN THE EVENT UNANTICIPATED EVENTS MIGHT OTHERWISE CAUSE THIS
AGREEMENT NOT TO COMPLY WITH REGULATIONS SECTION 1.704-1(B).

 

SECTION 4.5                                      LTIP UNITS.

 

(A)                                  ISSUANCE OF LTIP UNITS.  THE MANAGING
MEMBER MAY FROM TIME TO TIME ISSUE LTIP UNITS TO PERSONS WHO PROVIDE SERVICES TO
THE COMPANY, FOR SUCH CONSIDERATION (OR NO CONSIDERATION) AS THE MANAGING MEMBER
MAY DETERMINE TO BE APPROPRIATE, AND ADMIT SUCH PERSONS AS NON-MANAGING
MEMBERS.  SUBJECT TO THE FOLLOWING PROVISIONS OF THIS SECTION AND THE SPECIAL
PROVISIONS OF SECTIONS 4.6, 6.3(A) AND 14.3, LTIP UNITS SHALL BE TREATED AS
MEMBERSHIP UNITS, WITH ALL OF THE RIGHTS, PRIVILEGES AND OBLIGATIONS ATTENDANT
THERETO.  FOR PURPOSES OF COMPUTING THE MEMBERS’ PERCENTAGE INTERESTS, LTIP
UNITS SHALL BE TREATED AS MEMBERSHIP UNITS.

 

(B)                                 ADJUSTMENTS TO LTIP UNITS.  THE COMPANY
SHALL MAINTAIN AT ALL TIMES A ONE-TO-ONE CORRESPONDENCE BETWEEN LTIP UNITS AND
MEMBERSHIP UNITS FOR CONVERSION, DISTRIBUTION AND OTHER PURPOSES, INCLUDING
WITHOUT LIMITATION COMPLYING WITH THE FOLLOWING PROCEDURES:  IF AN ADJUSTMENT
EVENT (AS DEFINED BELOW) OCCURS, THEN THE MANAGING MEMBER SHALL MAKE A
CORRESPONDING ADJUSTMENT TO THE LTIP UNITS TO MAINTAIN A ONE-FOR-ONE
CORRESPONDENCE BETWEEN MEMBERSHIP UNITS AND LTIP UNITS.  THE FOLLOWING SHALL BE
“ADJUSTMENT EVENTS”:  (A) THE COMPANY MAKES A DISTRIBUTION ON ALL OUTSTANDING
MEMBERSHIP UNITS IN MEMBERSHIP UNITS, (B) THE COMPANY SUBDIVIDES THE OUTSTANDING
MEMBERSHIP UNITS INTO A GREATER NUMBER OF UNITS OR COMBINES THE OUTSTANDING
MEMBERSHIP UNITS INTO A SMALLER NUMBER OF UNITS, OR (C) THE COMPANY ISSUES ANY
MEMBERSHIP UNITS IN EXCHANGE FOR ITS OUTSTANDING MEMBERSHIP UNITS BY WAY OF A
RECLASSIFICATION OR RECAPITALIZATION OF ITS MEMBERSHIP UNITS.  IF MORE THAN ONE
ADJUSTMENT EVENT OCCURS, THE ADJUSTMENT TO THE LTIP UNITS NEED BE MADE ONLY ONCE
USING A SINGLE FORMULA THAT TAKES INTO ACCOUNT EACH AND EVERY ADJUSTMENT EVENT
AS IF ALL ADJUSTMENT EVENTS OCCURRED SIMULTANEOUSLY.  FOR THE AVOIDANCE OF
DOUBT, THE FOLLOWING SHALL NOT BE ADJUSTMENT EVENTS:  (X) THE ISSUANCE OF
MEMBERSHIP UNITS IN A FINANCING, REORGANIZATION, ACQUISITION OR OTHER SIMILAR
BUSINESS TRANSACTION, (Y) THE ISSUANCE OF MEMBERSHIP UNITS PURSUANT TO ANY
EMPLOYEE BENEFIT OR COMPENSATION PLAN OR DISTRIBUTION REINVESTMENT PLAN, OR
(Z) THE ISSUANCE OF ANY MEMBERSHIP UNITS TO THE MANAGING MEMBER IN RESPECT OF A
CAPITAL CONTRIBUTION TO THE COMPANY OF PROCEEDS FROM THE SALE OF SECURITIES BY
THE MANAGING MEMBER.  IF THE COMPANY TAKES AN ACTION AFFECTING THE MEMBERSHIP
UNITS OTHER THAN ACTIONS SPECIFICALLY DESCRIBED ABOVE AS “ADJUSTMENT EVENTS” AND
IN THE OPINION OF THE MANAGING MEMBER SUCH ACTION WOULD REQUIRE AN ADJUSTMENT TO
THE LTIP UNITS TO MAINTAIN THE ONE-TO-ONE CORRESPONDENCE DESCRIBED ABOVE, THE
MANAGING MEMBER SHALL HAVE THE RIGHT TO MAKE SUCH ADJUSTMENT TO THE LTIP UNITS,
TO THE EXTENT PERMITTED BY

 

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LAW AND BY THE TERMS OF ANY PLAN PURSUANT TO WHICH THE LTIP UNITS HAVE BEEN
ISSUED, IN SUCH MANNER AND AT SUCH TIME AS THE MANAGING MEMBER, IN ITS SOLE
DISCRETION, MAY DETERMINE TO BE APPROPRIATE UNDER THE CIRCUMSTANCES.  IF AN
ADJUSTMENT IS MADE TO THE LTIP UNITS AS HEREIN PROVIDED THE COMPANY SHALL
PROMPTLY FILE IN THE BOOKS AND RECORDS OF THE COMPANY AN OFFICER’S CERTIFICATE
SETTING FORTH SUCH ADJUSTMENT AND A BRIEF STATEMENT OF THE FACTS REQUIRING SUCH
ADJUSTMENT, WHICH CERTIFICATE SHALL BE CONCLUSIVE EVIDENCE OF THE CORRECTNESS OF
SUCH ADJUSTMENT ABSENT MANIFEST ERROR.  PROMPTLY AFTER FILING OF SUCH
CERTIFICATE, THE COMPANY SHALL MAIL A NOTICE TO EACH LTIP UNITHOLDER SETTING
FORTH THE ADJUSTMENT TO HIS OR HER LTIP UNITS AND THE EFFECTIVE DATE OF SUCH
ADJUSTMENT.

 

FOR THE AVOIDANCE OF DOUBT, MAINTENANCE OF THE ONE-TO-ONE CORRESPONDENCE BETWEEN
LTIP UNITS AND MEMBERSHIP UNITS AS PROVIDED ABOVE IS NOT INTENDED TO ALTER THE
CAPITAL ACCOUNT LIMITATION APPLICABLE TO LTIP UNITS, THE SPECIAL ALLOCATIONS TO
BE MADE WITH RESPECT TO LTIP UNITS UNDER SECTION 6.3(A), OR ANY DIFFERENCES IN
LIQUIDATING DISTRIBUTIONS TO BE MADE UNDER SECTION 13.2 IN THE EVENT THAT THE
COMPANY HAS RECOGNIZED INSUFFICIENT LIQUIDATING GAINS TO MAKE THE FULL SPECIAL
ALLOCATIONS UNDER SECTION 6.3(A).

 

(C)                                  PRIORITY.  THE LTIP UNITS SHALL RANK PARI
PASSU WITH THE MEMBERSHIP UNITS AS TO THE PAYMENT OF REGULAR AND SPECIAL
PERIODIC OR OTHER DISTRIBUTIONS AND, SUBJECT TO THE PROVISIONS OF SECTION 13.2,
AS TO DISTRIBUTION OF ASSETS UPON LIQUIDATION, DISSOLUTION OR WINDING UP.

 

(D)                                 SPECIAL PROVISIONS.  LTIP UNITS SHALL BE
SUBJECT TO THE FOLLOWING SPECIAL PROVISIONS:

 

(I)                                     VESTING AGREEMENTS AND TRANSFERABILITY. 
LTIP UNITS MAY, IN THE SOLE DISCRETION OF THE MANAGING MEMBER, BE ISSUED SUBJECT
TO VESTING, FORFEITURE AND ADDITIONAL RESTRICTIONS ON TRANSFER PURSUANT TO THE
TERMS OF A VESTING AGREEMENT.  THE TERMS OF ANY VESTING AGREEMENT MAY BE
MODIFIED BY THE MANAGING MEMBER FROM TIME TO TIME IN ITS SOLE DISCRETION,
SUBJECT TO ANY RESTRICTIONS ON AMENDMENT IMPOSED BY THE RELEVANT VESTING
AGREEMENT OR BY THE PLAN PURSUANT TO WHICH THE LTIP UNITS WERE ISSUED, IF
APPLICABLE.  LTIP UNITS THAT HAVE VESTED UNDER THE TERMS OF A VESTING AGREEMENT
ARE REFERRED TO AS “VESTED LTIP UNITS”; ALL OTHER LTIP UNITS SHALL BE TREATED AS
“UNVESTED INCENTIVE UNITS.”  SUBJECT TO THE TERMS OF ANY VESTING AGREEMENT, AN
LTIP UNITHOLDER SHALL BE ENTITLED TO TRANSFER HIS OR HER LTIP UNITS TO THE SAME
EXTENT, AND SUBJECT TO THE SAME RESTRICTIONS AS HOLDERS OF MEMBERSHIP UNITS ARE
ENTITLED TO TRANSFER THEIR MEMBERSHIP UNITS PURSUANT TO ARTICLE XI.

 

(II)                                  FORFEITURE.  UNLESS OTHERWISE SPECIFIED IN
THE VESTING AGREEMENT, UPON THE OCCURRENCE OF ANY EVENT SPECIFIED IN A VESTING
AGREEMENT AS RESULTING IN EITHER THE RIGHT OF THE COMPANY OR THE MANAGING MEMBER
TO REPURCHASE LTIP UNITS AT A SPECIFIED PURCHASE PRICE OR SOME OTHER FORFEITURE
OF ANY LTIP UNITS, THEN IF THE COMPANY OR THE MANAGING MEMBER EXERCISES SUCH
RIGHT TO REPURCHASE OR FORFEITURE IN ACCORDANCE WITH THE APPLICABLE VESTING
AGREEMENT, THE RELEVANT LTIP UNITS SHALL IMMEDIATELY, AND WITHOUT ANY FURTHER
ACTION, BE TREATED AS CANCELLED AND NO LONGER OUTSTANDING FOR ANY PURPOSE. 
UNLESS OTHERWISE SPECIFIED IN THE VESTING AGREEMENT, NO CONSIDERATION OR OTHER
PAYMENT SHALL BE DUE WITH RESPECT TO ANY LTIP UNITS THAT HAVE BEEN FORFEITED,
OTHER THAN ANY

 

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DISTRIBUTIONS DECLARED WITH A MEMBERSHIP RECORD DATE PRIOR TO THE EFFECTIVE DATE
OF THE FORFEITURE.  IN CONNECTION WITH ANY REPURCHASE OR FORFEITURE OF LTIP
UNITS, THE BALANCE OF THE PORTION OF THE CAPITAL ACCOUNT OF THE LTIP UNITHOLDER
THAT IS ATTRIBUTABLE TO ALL OF HIS OR HER LTIP UNITS SHALL BE REDUCED BY THE
AMOUNT, IF ANY, BY WHICH IT EXCEEDS THE TARGET BALANCE CONTEMPLATED BY
SECTION 6.3(A), CALCULATED WITH RESPECT TO THE LTIP UNITHOLDER’S REMAINING LTIP
UNITS, IF ANY.

 

(III)                               ALLOCATIONS.  LTIP UNITS SHALL GENERALLY BE
TREATED AS MEMBERSHIP UNITS FOR PURPOSES OF ARTICLE VI, BUT SHALL ALSO BE
ENTITLED TO CERTAIN SPECIAL ALLOCATIONS OF GAIN UNDER SECTION 6.3(A).

 

(IV)                              REDEMPTION.  THE REDEMPTION RIGHT PROVIDED TO
NON-MANAGING MEMBERS UNDER SECTION 4.2(E)(1) SHALL NOT APPLY WITH RESPECT TO
LTIP UNITS UNLESS AND UNTIL THEY ARE CONVERTED TO MEMBERSHIP UNITS AS PROVIDED
IN SECTION 4.6.  THEREAFTER, THE REDEMPTION RIGHT UNDER SECTION 4.2(E)(1) SHALL
APPLY TO SUCH CONVERTED MEMBERSHIP UNITS.

 

(V)                                 LEGEND.  ANY CERTIFICATE EVIDENCING AN LTIP
UNIT SHALL BEAR AN APPROPRIATE LEGEND INDICATING THAT ADDITIONAL TERMS,
CONDITIONS AND RESTRICTIONS ON TRANSFER, INCLUDING WITHOUT LIMITATION ANY
VESTING AGREEMENT, APPLY TO THE LTIP UNIT.

 

(VI)                              CONVERSION TO MEMBERSHIP UNITS.  VESTED LTIP
UNITS ARE ELIGIBLE TO BE CONVERTED INTO MEMBERSHIP UNITS UNDER SECTION 4.6.

 

SECTION 4.6                                      CONVERSION OF LTIP UNITS.

 

(A)                                  RIGHT TO CONVERT LTIP UNITS INTO MEMBERSHIP
UNITS.  A LTIP UNITHOLDER SHALL HAVE THE RIGHT (THE “CONVERSION RIGHT”), AT HIS
OR HER OPTION, AT ANY TIME TO CONVERT ALL OR A PORTION OF HIS OR HER VESTED LTIP
UNITS INTO MEMBERSHIP UNITS; PROVIDED, HOWEVER, THAT A LTIP UNITHOLDER MAY NOT
EXERCISE THE CONVERSION RIGHT FOR FEWER THAN ONE THOUSAND (1,000) VESTED LTIP
UNITS OR, IF SUCH LTIP UNITHOLDER HOLDS FEWER THAN ONE THOUSAND VESTED LTIP
UNITS, ALL OF THE LTIP UNITHOLDER’S VESTED LTIP UNITS.  LTIP UNITHOLDERS SHALL
NOT HAVE THE RIGHT TO CONVERT UNVESTED LTIP UNITS INTO MEMBERSHIP UNITS UNTIL
THEY BECOME VESTED LTIP UNITS; PROVIDED, HOWEVER, THAT WHEN A LTIP UNITHOLDER IS
NOTIFIED OF THE EXPECTED OCCURRENCE OF AN EVENT THAT WILL CAUSE HIS OR HER
UNVESTED LTIP UNITS TO BECOME VESTED LTIP UNITS, SUCH PERSON MAY GIVE THE
COMPANY A CONVERSION NOTICE CONDITIONED UPON AND EFFECTIVE AS OF THE TIME OF
VESTING, AND SUCH CONVERSION NOTICE, UNLESS SUBSEQUENTLY REVOKED BY THE LTIP
UNITHOLDER, SHALL BE ACCEPTED BY THE COMPANY SUBJECT TO SUCH CONDITION.  THE
MANAGING MEMBER SHALL HAVE THE RIGHT AT ANY TIME TO CAUSE A CONVERSION OF VESTED
LTIP UNITS INTO MEMBERSHIP UNITS.  IN ALL CASES, THE CONVERSION OF ANY LTIP
UNITS INTO MEMBERSHIP UNITS SHALL BE SUBJECT TO THE CONDITIONS AND PROCEDURES
SET FORTH IN THIS SECTION 4.6.

 

(B)                                 NUMBER OF UNITS CONVERTIBLE.  A LTIP
UNITHOLDER WHO HOLDS VESTED LTIP UNITS MAY CONVERT SUCH UNITS INTO AN EQUAL
NUMBER OF FULLY PAID AND NON-ASSESSABLE MEMBERSHIP UNITS, GIVING EFFECT TO ALL
ADJUSTMENTS (IF ANY) MADE PURSUANT TO SECTION 4.5(B).  NOTWITHSTANDING THE
FOREGOING, IN NO EVENT MAY A LTIP UNITHOLDER

 

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CONVERT A NUMBER OF VESTED LTIP UNITS THAT EXCEEDS (X) THE ECONOMIC CAPITAL
ACCOUNT BALANCE OF SUCH LTIP UNITHOLDER, TO THE EXTENT ATTRIBUTABLE TO ITS
OWNERSHIP OF LTIP UNITS, DIVIDED BY (Y) THE MEMBERSHIP UNIT ECONOMIC BALANCE, IN
EACH CASE AS DETERMINED AS OF THE EFFECTIVE DATE OF CONVERSION (THE “CAPITAL
ACCOUNT LIMITATION”).

 

(C)                                  NOTICE.  IN ORDER TO EXERCISE HIS OR HER
CONVERSION RIGHT, A LTIP UNITHOLDER SHALL DELIVER A NOTICE (A “CONVERSION
NOTICE”) IN THE FORM ATTACHED AS EXHIBIT C TO THE COMPANY (WITH A COPY TO THE
MANAGING MEMBER) NOT LESS THAN 10 NOR MORE THAN 60 DAYS PRIOR TO A DATE (THE
“CONVERSION DATE”) SPECIFIED IN SUCH CONVERSION NOTICE; PROVIDED, HOWEVER, THAT
IF THE MANAGING MEMBER HAS NOT GIVEN TO THE LTIP UNITHOLDERS NOTICE OF A
PROPOSED OR UPCOMING TRANSACTION AT LEAST THIRTY (30) DAYS PRIOR TO THE
EFFECTIVE DATE OF SUCH TRANSACTION, THEN LTIP UNITHOLDERS SHALL HAVE THE RIGHT
TO DELIVER A CONVERSION NOTICE UNTIL THE EARLIER OF (X) THE TENTH (10TH) DAY
AFTER SUCH NOTICE FROM THE MANAGING MEMBER OF A TRANSACTION OR (Y) THE THIRD
BUSINESS DAY IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF SUCH TRANSACTION.  A
CONVERSION NOTICE SHALL BE PROVIDED IN THE MANNER PROVIDED IN SECTION 15.1. 
EACH LTIP UNITHOLDER COVENANTS AND AGREES WITH THE COMPANY THAT ALL VESTED LTIP
UNITS TO BE CONVERTED PURSUANT TO THIS SECTION 4.6 SHALL BE FREE AND CLEAR OF
ALL LIENS.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, A LTIP UNITHOLDER
MAY DELIVER A REDEMPTION NOTICE RELATING TO THOSE MEMBERSHIP UNITS THAT WILL BE
ISSUED TO SUCH LTIP UNITHOLDER UPON CONVERSION OF SUCH LTIP UNITS INTO
MEMBERSHIP UNITS IN ADVANCE OF THE CONVERSION DATE; PROVIDED, HOWEVER, THAT THE
REDEMPTION OF SUCH MEMBERSHIP UNITS BY THE COMPANY SHALL IN NO EVENT TAKE PLACE
UNTIL AFTER THE CONVERSION DATE.  FOR CLARITY, IT IS NOTED THAT THE OBJECTIVE OF
THIS PARAGRAPH IS TO PUT A LTIP UNITHOLDER IN A POSITION WHERE, IF HE OR SHE SO
WISHES, THE MEMBERSHIP UNITS INTO WHICH HIS OR HER VESTED LTIP UNITS WILL BE
CONVERTED CAN BE REDEEMED BY THE COMPANY SIMULTANEOUSLY WITH THE CONVERSION,
WITH THE FURTHER CONSEQUENCE THAT, IF THE MANAGING MEMBER ELECTS TO ASSUME THE
COMPANY’S REDEMPTION OBLIGATION WITH RESPECT TO SUCH MEMBERSHIP UNITS UNDER
SECTION 4.2(E)(1) BY DELIVERING TO SUCH LTIP UNITHOLDER COMMON SHARES RATHER
THAN CASH, THEN SUCH LTIP UNITHOLDER CAN HAVE SUCH COMMON SHARES ISSUED TO HIM
OR HER SIMULTANEOUSLY WITH THE CONVERSION OF HIS OR HER VESTED LTIP UNITS INTO
MEMBERSHIP UNITS.  THE MANAGING MEMBER SHALL COOPERATE WITH LTIP UNITHOLDERS TO
COORDINATE THE TIMING OF THE DIFFERENT EVENTS DESCRIBED IN THE FOREGOING
SENTENCE.

 

(D)                                 FORCED CONVERSION.  THE COMPANY, AT ANY TIME
AT THE ELECTION OF THE MANAGING MEMBER, MAY CAUSE ANY NUMBER OF VESTED LTIP
UNITS HELD BY A LTIP UNITHOLDER TO BE CONVERTED (A “FORCED CONVERSION”) INTO AN
EQUAL NUMBER OF MEMBERSHIP UNITS, GIVING EFFECT TO ALL ADJUSTMENTS (IF ANY) MADE
PURSUANT TO SECTION 4.2(B); PROVIDED, THAT THE COMPANY MAY NOT CAUSE FORCED
CONVERSION OF ANY LTIP UNITS THAT WOULD NOT AT THE TIME BE ELIGIBLE FOR
CONVERSION AT THE OPTION OF SUCH LTIP UNITHOLDER PURSUANT TO PARAGRAPH
(B) ABOVE.  IN ORDER TO EXERCISE ITS RIGHT OF FORCED CONVERSION, THE COMPANY
SHALL DELIVER A NOTICE (A “FORCED CONVERSION NOTICE”) IN THE FORM ATTACHED AS
EXHIBIT D TO THE APPLICABLE LTIP UNITHOLDER NOT LESS THAN 10 NOR MORE THAN 60
DAYS PRIOR TO THE CONVERSION DATE SPECIFIED IN SUCH FORCED CONVERSION NOTICE.  A
FORCED CONVERSION NOTICE SHALL BE PROVIDED IN THE MANNER PROVIDED IN
SECTION 15.1.

 

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(E)                                  CONVERSION PROCEDURES.  A CONVERSION OF
VESTED LTIP UNITS FOR WHICH THE LTIP UNITHOLDER HAS GIVEN A CONVERSION NOTICE OR
THE COMPANY HAS GIVEN A FORCED CONVERSION NOTICE SHALL OCCUR AUTOMATICALLY AFTER
THE CLOSE OF BUSINESS ON THE APPLICABLE CONVERSION DATE WITHOUT ANY ACTION ON
THE PART OF SUCH LTIP UNITHOLDER, AS OF WHICH TIME SUCH ,MEMBER SHALL BE
CREDITED ON THE BOOKS AND RECORDS OF THE COMPANY WITH THE ISSUANCE AS OF THE
OPENING OF BUSINESS ON THE NEXT DAY OF THE NUMBER OF MEMBERSHIP UNITS ISSUABLE
UPON SUCH CONVERSION.  AFTER THE CONVERSION OF LTIP UNITS, THE COMPANY SHALL
DELIVER TO THE LTIP UNITHOLDER, UPON HIS OR HER WRITTEN REQUEST, A CERTIFICATE
OF THE MANAGING MEMBER CERTIFYING THE NUMBER OF MEMBERSHIP UNITS AND REMAINING
LTIP UNITS, IF ANY, HELD BY SUCH PERSON IMMEDIATELY AFTER SUCH CONVERSION IN THE
MANNER PROVIDED IN SECTION 15.1.

 

(F)                                    TREATMENT OF CAPITAL ACCOUNT.  FOR
PURPOSES OF MAKING FUTURE ALLOCATIONS UNDER SECTION 6.3(A) AND APPLYING THE
CAPITAL ACCOUNT LIMITATION, THE PORTION OF THE ECONOMIC CAPITAL ACCOUNT BALANCE
OF THE APPLICABLE LTIP UNITHOLDER THAT IS TREATED AS ATTRIBUTABLE TO HIS OR HER
LTIP UNITS SHALL BE REDUCED, AS OF THE DATE OF CONVERSION, BY THE PRODUCT OF THE
NUMBER OF LTIP UNITS CONVERTED AND THE MEMBERSHIP UNIT ECONOMIC BALANCE.

 

(G)                                 MANDATORY CONVERSION IN CONNECTION WITH A
TRANSACTION.  IF THE COMPANY OR THE MANAGING MEMBER SHALL BE A PARTY TO ANY
TRANSACTION, AS A RESULT OF WHICH MEMBERSHIP UNITS SHALL BE EXCHANGED FOR OR
CONVERTED INTO THE RIGHT, OR THE LTIP UNITHOLDERS OF SUCH UNITS SHALL OTHERWISE
BE ENTITLED, TO RECEIVE CASH, SECURITIES OR OTHER PROPERTY OR ANY COMBINATION
THEREOF, THEN THE MANAGING MEMBER SHALL, IMMEDIATELY PRIOR TO THE TRANSACTION,
EXERCISE ITS RIGHT TO CAUSE A FORCED CONVERSION WITH RESPECT TO THE MAXIMUM
NUMBER OF LTIP UNITS THEN ELIGIBLE FOR CONVERSION, TAKING INTO ACCOUNT ANY
ALLOCATIONS THAT OCCUR IN CONNECTION WITH THE TRANSACTION OR THAT WOULD OCCUR IN
CONNECTION WITH THE TRANSACTION IF THE ASSETS OF THE COMPANY WERE SOLD AT THE
TRANSACTION PRICE OR, IF APPLICABLE, AT A VALUE DETERMINED BY THE MANAGING
MEMBER IN GOOD FAITH USING THE VALUE ATTRIBUTED TO THE MEMBERSHIP UNITS IN THE
CONTEXT OF THE TRANSACTION (IN WHICH CASE THE CONVERSION DATE SHALL BE THE
EFFECTIVE DATE OF THE TRANSACTION).

 

IN ANTICIPATION OF SUCH FORCED CONVERSION AND THE CONSUMMATION OF THE
TRANSACTION, THE COMPANY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE EACH
LTIP UNITHOLDER TO BE AFFORDED THE RIGHT TO RECEIVE IN CONNECTION WITH SUCH
TRANSACTION IN CONSIDERATION FOR THE MEMBERSHIP UNITS INTO WHICH HIS OR HER LTIP
UNITS WILL BE CONVERTED THE SAME KIND AND AMOUNT OF CASH, SECURITIES AND OTHER
PROPERTY (OR ANY COMBINATION THEREOF) RECEIVABLE UPON THE CONSUMMATION OF SUCH
TRANSACTION BY A HOLDER OF THE SAME NUMBER OF MEMBERSHIP UNITS, ASSUMING SUCH
HOLDER OF MEMBERSHIP UNITS IS NOT A PERSON WITH WHICH THE COMPANY CONSOLIDATED
OR INTO WHICH THE COMPANY MERGED OR WHICH MERGED INTO THE COMPANY OR TO WHICH
SUCH SALE OR TRANSFER WAS MADE, AS THE CASE MAY BE (A “CONSTITUENT PERSON”), OR
AN AFFILIATE OF A CONSTITUENT PERSON.  IN THE EVENT THAT HOLDERS OF MEMBERSHIP
UNITS HAVE THE OPPORTUNITY TO ELECT THE FORM OR TYPE OF CONSIDERATION TO BE
RECEIVED UPON CONSUMMATION OF THE TRANSACTION, PRIOR TO SUCH TRANSACTION THE
MANAGING MEMBER SHALL GIVE PROMPT WRITTEN NOTICE TO EACH LTIP UNITHOLDER OF SUCH
ELECTION, AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO AFFORD SUCH LTIP
UNITHOLDERS THE RIGHT TO ELECT, BY WRITTEN NOTICE TO THE MANAGING MEMBER, THE
FORM

 

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OR TYPE OF CONSIDERATION TO BE RECEIVED UPON CONVERSION OF EACH LTIP UNIT HELD
BY SUCH LTIP UNITHOLDER INTO MEMBERSHIP UNITS IN CONNECTION WITH SUCH
TRANSACTION.  IF A LTIP UNITHOLDER FAILS TO MAKE SUCH AN ELECTION, SUCH LTIP
UNITHOLDER (AND ANY OF ITS TRANSFEREES) SHALL RECEIVE UPON CONVERSION OF EACH
LTIP UNIT HELD BY HIM OR HER (OR BY ANY OF HIS OR HER TRANSFEREES) THE SAME KIND
AND AMOUNT OF CONSIDERATION THAT A HOLDER OF A MEMBERSHIP UNIT WOULD RECEIVE IF
SUCH PERSON FAILED TO MAKE SUCH AN ELECTION.

 

SUBJECT TO THE RIGHTS OF THE COMPANY AND THE MANAGING MEMBER UNDER ANY VESTING
AGREEMENT AND THE TERMS OF ANY PLAN OR PLANS UNDER WHICH THE LTIP UNITS WERE
ISSUED, THE COMPANY SHALL USE COMMERCIALLY REASONABLE EFFORT TO CAUSE THE TERMS
OF ANY TRANSACTION TO BE CONSISTENT WITH THE PROVISIONS OF THIS SECTION 4.6 AND
TO ENTER INTO AN AGREEMENT WITH THE SUCCESSOR OR PURCHASING ENTITY, AS THE CASE
MAY BE, FOR THE BENEFIT OF ANY LTIP UNITHOLDERS WHOSE LTIP UNITS WILL NOT BE
CONVERTED INTO MEMBERSHIP UNITS IN CONNECTION WITH THE TRANSACTION THAT WILL
(I) CONTAIN PROVISIONS ENABLING THE HOLDERS OF LTIP UNITS THAT REMAIN
OUTSTANDING AFTER SUCH TRANSACTION TO CONVERT THEIR LTIP UNITS INTO SECURITIES
AS COMPARABLE AS REASONABLY POSSIBLE UNDER THE CIRCUMSTANCES TO THE MEMBERSHIP
UNITS AND (II) PRESERVE AS FAR AS REASONABLY POSSIBLE UNDER THE CIRCUMSTANCES
THE DISTRIBUTION, SPECIAL ALLOCATION, CONVERSION, AND OTHER RIGHTS SET FORTH IN
THE AGREEMENT FOR THE BENEFIT OF THE LTIP UNITHOLDERS.

 

ARTICLE V
DISTRIBUTIONS

 

SECTION 5.1                                      DISTRIBUTIONS.  THE MANAGING
MEMBER SHALL CAUSE THE COMPANY TO DISTRIBUTE SUCH AMOUNTS AS THE MANAGING MEMBER
MAY IN ITS DISCRETION DETERMINE AMONG THE MEMBERS (I) FIRST, WITH RESPECT TO ANY
CLASS OF MEMBERSHIP INTERESTS ISSUED PURSUANT TO SECTION 4.2(A) OR 4.2(B) WHICH
ARE ENTITLED TO A PREFERENCE OVER MEMBERSHIP UNITS ON DISTRIBUTION AND ARE
SPECIALLY ALLOCATED ITEMS UNDER SECTION 6.1 PRIOR TO ALLOCATED ITEMS WITH
RESPECT TO AMOUNTS DISTRIBUTED PURSUANT TO CLAUSE (II) BELOW (AND WITHIN AND
AMONG SUCH CLASSES, IN ORDER OF THE PREFERENCES DESIGNATED THEREIN AND PRO RATA
AMONG ANY SUCH CLASSES), AND (II) THEREAFTER, PRO RATA IN ACCORDANCE WITH THEIR
RESPECTIVE PERCENTAGE INTERESTS FROM TIME TO TIME AS DETERMINED BY THE MANAGING
MEMBER; PROVIDED THAT IN NO EVENT MAY A MEMBER RECEIVE A DISTRIBUTION WITH
RESPECT TO A UNIT IF SUCH MEMBER IS ENTITLED TO RECEIVE A DIVIDEND FROM THE
MANAGING MEMBER WHICH IS DERIVED FROM A DISTRIBUTION TO THE MANAGING MEMBER WITH
RESPECT TO A COMMON SHARE FOR WHICH SUCH UNIT HAS BEEN REDEEMED OR EXCHANGED. 
IN THE EVENT THE COMPANY IS SUBJECT TO ANY TAX OR OTHER OBLIGATION THAT IS
ATTRIBUTABLE TO THE INTEREST OF ONE OR MORE MEMBERS IN THE COMPANY, BUT FEWER
THAN ALL THE MEMBERS, SUCH TAX OR OTHER OBLIGATION SHALL BE SPECIALLY ALLOCATED
TO, AND CHARGED AGAINST THE CAPITAL ACCOUNT OF, SUCH MEMBER OR MEMBERS, AND THE
AMOUNTS OTHERWISE DISTRIBUTABLE TO SUCH MEMBER OR MEMBERS PURSUANT TO THIS
AGREEMENT SHALL BE REDUCED BY SUCH AMOUNT.

 

SECTION 5.2                                      AMOUNTS WITHHELD.  ALL AMOUNTS
WITHHELD PURSUANT TO THE CODE OR ANY PROVISIONS OF ANY STATE OR LOCAL TAX LAW
AND SECTION 10.4 HEREOF WITH RESPECT TO ANY ALLOCATION, PAYMENT OR DISTRIBUTION
TO THE MANAGING MEMBER, OR ANY NON-MANAGING MEMBERS OR ASSIGNEES

 

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shall be treated as amounts distributed to the Managing Member or such
Non-Managing Members, or Assignees pursuant to Section 5.1 for all purposes
under this Agreement.

 

SECTION 5.3                                      DISTRIBUTIONS UPON
LIQUIDATION.  PROCEEDS FROM A LIQUIDATING TRANSACTION SHALL BE DISTRIBUTED TO
THE MEMBERS IN ACCORDANCE WITH SECTION 13.2.

 

ARTICLE VI
ALLOCATIONS

 

SECTION 6.1                                      ALLOCATIONS FOR CAPITAL ACCOUNT
PURPOSES OTHER THAN THE TAXABLE YEAR OF LIQUIDATION.  SUBJECT TO A PREFERENTIAL
ALLOCATION OF GAIN OR NET INCOME TO ANY CLASS OF MEMBERSHIP INTERESTS ISSUED
PURSUANT TO SECTION 4.2(A) OR 4.2(B) WHICH IS ENTITLED TO A PREFERENCE OVER
MEMBERSHIP UNITS ON DISTRIBUTIONS, FOR PURPOSES OF MAINTAINING THE CAPITAL
ACCOUNTS AND IN DETERMINING THE RIGHTS OF THE MEMBERS AMONG THEMSELVES, THE
COMPANY’S ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION (COMPUTED IN ACCORDANCE WITH
SECTION 4.4 HEREOF) SHALL BE ALLOCATED AMONG THE MEMBERS FOR EACH TAXABLE YEAR
(OR PORTION THEREOF) AS PROVIDED HEREIN BELOW:

 

(A)                                  NET INCOME.  AFTER GIVING EFFECT TO THE
SPECIAL ALLOCATIONS SET FORTH IN SECTIONS 6.2 AND 6.3 BELOW, NET INCOME SHALL BE
ALLOCATED TO THE MEMBERS IN ACCORDANCE WITH THEIR RESPECTIVE PERCENTAGE
INTERESTS.

 

(B)                                 NET LOSSES.  AFTER GIVING EFFECT TO THE
SPECIAL ALLOCATIONS SET FORTH IN SECTIONS 6.2 AND 6.3 BELOW, NET LOSSES SHALL BE
ALLOCATED TO THE MEMBERS IN ACCORDANCE WITH THEIR RESPECTIVE PERCENTAGE
INTERESTS.

 

(C)                                  NONRECOURSE LIABILITIES.  FOR PURPOSES OF
REGULATIONS SECTION 1.752-3(A), THE MEMBERS AGREE THAT NONRECOURSE LIABILITIES
OF THE COMPANY IN EXCESS OF THE SUM OF (I) THE AMOUNT OF PARTNERSHIP MINIMUM
GAIN AND (II) THE TOTAL AMOUNT OF NONRECOURSE BUILT-IN GAIN SHALL BE ALLOCATED
AMONG THE MEMBERS IN THE MANNER DETERMINED BY THE MANAGING MEMBER, PROVIDED THAT
SUCH ALLOCATION SHALL BE PERMISSIBLE UNDER REGULATIONS SECTION 1.752-3.

 

(D)                                 GAINS.  ANY GAIN ALLOCATED TO THE MEMBERS
UPON THE SALE OR OTHER TAXABLE DISPOSITION OF ANY COMPANY ASSET SHALL TO THE
EXTENT POSSIBLE, AFTER TAKING INTO ACCOUNT OTHER REQUIRED ALLOCATIONS OF GAIN
PURSUANT TO SECTION 6.3 BELOW, BE CHARACTERIZED AS RECAPTURE INCOME IN THE SAME
PROPORTIONS AND TO THE SAME EXTENT AS SUCH MEMBERS HAVE BEEN ALLOCATED ANY
DEDUCTIONS DIRECTLY OR INDIRECTLY GIVING RISE TO THE TREATMENT OF SUCH GAINS AS
RECAPTURE INCOME, ALL IN SUCH A MANNER CONSISTENT WITH REGULATIONS
SECTION 1.1245-1.

 

SECTION 6.2                                      ALLOCATIONS FOR CAPITAL ACCOUNT
PURPOSES IN THE TAXABLE YEAR OF LIQUIDATION.  SUBJECT TO SECTION 6.3, THE NET
INCOME AND NET LOSS OF THE COMPANY FOR THE TAXABLE YEAR OF LIQUIDATION OF THE
COMPANY SHALL BE ALLOCATED PRIOR TO THE FINAL LIQUIDATING DISTRIBUTIONS OF THE
COMPANY AND SHALL BE ALLOCATED FIRST TO ELIMINATE ANY MEMBER’S ADJUSTED CAPITAL
ACCOUNT DEFICIT AND THEN, TO THE EXTENT PERMISSIBLE UNDER SECTIONS 704(B) OF THE
CODE, IN A MANNER SUCH THAT THE CAPITAL ACCOUNTS OF THE MEMBERS IMMEDIATELY
PRIOR TO SUCH FINAL

 

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liquidating distributions are equal to the amount which would have been
distributable to the Members under Section 5.1 if such distributions were to be
governed by Section 5.1.  Notwithstanding the preceding sentence, actual
distributions made subsequent to the allocations under this Section 6.2 shall be
made pursuant to Section 5.3.

 

SECTION 6.3                                      SPECIAL ALLOCATION RULES. 
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE FOLLOWING SPECIAL
ALLOCATIONS SHALL BE MADE IN THE FOLLOWING ORDER:

 

(A)                                  SPECIAL ALLOCATIONS WITH RESPECT TO LTIP
UNITS.  AFTER GIVING EFFECT TO THE SPECIAL ALLOCATIONS SET FORTH IN THE
FOLLOWING PROVISIONS OF THIS SECTION 6.3, AND SUBJECT TO ANY PREFERENTIAL
ALLOCATION OF GAIN OR NET INCOME TO ANY CLASS OF MEMBERSHIP INTERESTS ISSUED
PURSUANT TO SECTION 4.2(A) OR 4.2(B) WHICH IS ENTITLED TO A PREFERENCE OVER
MEMBERSHIP UNITS ON LIQUIDATING DISTRIBUTIONS, ANY LIQUIDATING GAINS SHALL FIRST
BE ALLOCATED TO THE LTIP UNITHOLDERS UNTIL THE ECONOMIC CAPITAL ACCOUNT BALANCES
OF SUCH HOLDERS, TO THE EXTENT ATTRIBUTABLE TO THEIR OWNERSHIP OF LTIP UNITS,
ARE EQUAL TO (I) THE MEMBERSHIP UNIT ECONOMIC BALANCE, MULTIPLIED BY (II) THE
NUMBER OF THEIR LTIP UNITS.  THE “ECONOMIC CAPITAL ACCOUNT BALANCES” OF THE LTIP
UNITHOLDERS WILL BE EQUAL TO THEIR CAPITAL ACCOUNT BALANCES, PLUS THE AMOUNT OF
THEIR SHARES OF ANY PARTNER MINIMUM GAIN OR PARTNERSHIP MINIMUM GAIN, IN EITHER
CASE TO THE EXTENT ATTRIBUTABLE TO THEIR OWNERSHIP OF LTIP UNITS.  SIMILARLY,
THE “MEMBERSHIP UNIT ECONOMIC BALANCE” SHALL MEAN (I) THE CAPITAL ACCOUNT
BALANCE OF THE MANAGING MEMBER, PLUS THE AMOUNT OF THE MANAGING MEMBER’S SHARE
OF ANY PARTNER MINIMUM GAIN OR PARTNERSHIP MINIMUM GAIN, IN EITHER CASE TO THE
EXTENT ATTRIBUTABLE TO THE MANAGING MEMBER’S OWNERSHIP OF MEMBERSHIP UNITS AND
COMPUTED ON A HYPOTHETICAL BASIS AFTER TAKING INTO ACCOUNT ALL ALLOCATIONS
THROUGH THE DATE ON WHICH ANY ALLOCATION IS MADE UNDER THIS SECTION 6.3(A),
DIVIDED BY (II) THE NUMBER OF THE MANAGING MEMBER’S MEMBERSHIP UNITS.  ANY SUCH
ALLOCATIONS SHALL BE MADE AMONG THE LTIP UNITHOLDERS IN PROPORTION TO THE
AMOUNTS REQUIRED TO BE ALLOCATED TO EACH UNDER THIS SECTION 6.3(A).  THE PARTIES
AGREE THAT THE INTENT OF THIS SECTION 6.3(A) IS TO MAKE THE CAPITAL ACCOUNT
BALANCE ASSOCIATED WITH EACH LTIP UNIT ECONOMICALLY EQUIVALENT TO THE CAPITAL
ACCOUNT BALANCE ASSOCIATED WITH THE MANAGING MEMBER’S MEMBERSHIP UNITS (ON A
PER-UNIT BASIS).

 

(B)                                 MINIMUM GAIN CHARGEBACK.  NOTWITHSTANDING
ANY OTHER PROVISIONS OF ARTICLE VI, IF THERE IS A NET DECREASE IN PARTNERSHIP
MINIMUM GAIN DURING ANY PARTNERSHIP YEAR, EACH MEMBER SHALL BE SPECIALLY
ALLOCATED ITEMS OF COMPANY INCOME AND GAIN FOR SUCH YEAR (AND, IF NECESSARY,
SUBSEQUENT YEARS) IN AN AMOUNT EQUAL TO SUCH MEMBER’S SHARE OF THE NET DECREASE
IN PARTNERSHIP MINIMUM GAIN, AS DETERMINED UNDER REGULATIONS
SECTION 1.704-2(G).  ALLOCATIONS PURSUANT TO THE PREVIOUS SENTENCE SHALL BE MADE
IN PROPORTION TO THE RESPECTIVE AMOUNTS REQUIRED TO BE ALLOCATED TO EACH MEMBER
PURSUANT THERETO.  THE ITEMS TO BE SO ALLOCATED SHALL BE DETERMINED IN
ACCORDANCE WITH REGULATIONS SECTION 1.704-2(F)(6).  THIS SECTION 6.3(B) IS
INTENDED TO COMPLY WITH THE MINIMUM GAIN CHARGEBACK REQUIREMENTS IN REGULATIONS
SECTION 1.704-2(F) AND FOR PURPOSES OF THIS SECTION 6.3(B) ONLY, EACH MEMBER’S
ADJUSTED CAPITAL ACCOUNT DEFICIT SHALL BE DETERMINED PRIOR TO ANY OTHER
ALLOCATIONS PURSUANT TO ARTICLE VI OF THIS AGREEMENT WITH RESPECT TO SUCH
PARTNERSHIP YEAR, AND WITHOUT REGARD TO ANY DECREASE IN PARTNER MINIMUM GAIN
DURING SUCH FISCAL YEAR.

 

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(C)                                  PARTNER MINIMUM GAIN CHARGEBACK. 
NOTWITHSTANDING ANY OTHER PROVISION OF ARTICLE VI (EXCEPT
SECTION 6.3(B) HEREOF), IF THERE IS A NET DECREASE IN PARTNER MINIMUM GAIN
ATTRIBUTABLE TO A PARTNER NONRECOURSE DEBT DURING ANY PARTNERSHIP YEAR, EACH
MEMBER WHO HAS A SHARE OF THE PARTNER MINIMUM GAIN ATTRIBUTABLE TO SUCH PARTNER
NONRECOURSE DEBT, DETERMINED IN ACCORDANCE WITH REGULATIONS
SECTION 1.704-2(I)(5), SHALL BE SPECIALLY ALLOCATED ITEMS OF COMPANY INCOME AND
GAIN FOR SUCH YEAR (AND, IF NECESSARY, SUBSEQUENT YEARS) IN AN AMOUNT EQUAL TO
SUCH MEMBER’S SHARE OF THE NET DECREASE IN PARTNER MINIMUM GAIN ATTRIBUTABLE TO
SUCH PARTNER NONRECOURSE DEBT, DETERMINED IN ACCORDANCE WITH REGULATIONS
SECTION 1.704-2(I)(5).  ALLOCATIONS PURSUANT TO THE PREVIOUS SENTENCE SHALL BE
MADE IN PROPORTION TO THE RESPECTIVE AMOUNTS REQUIRED TO BE ALLOCATED TO EACH
MEMBER PURSUANT THERETO.  THE ITEMS TO BE SO ALLOCATED SHALL BE DETERMINED IN
ACCORDANCE WITH REGULATIONS SECTION 1.704-2(I)(4).  THIS SECTION 6.3(C) IS
INTENDED TO COMPLY WITH THE MINIMUM GAIN CHARGEBACK REQUIREMENT IN SUCH
SECTION OF THE REGULATIONS AND SHALL BE INTERPRETED CONSISTENTLY THEREWITH. 
SOLELY FOR PURPOSES OF THIS SECTION 6.3(C), EACH MEMBER’S ADJUSTED CAPITAL
ACCOUNT DEFICIT SHALL BE DETERMINED PRIOR TO ANY OTHER ALLOCATIONS PURSUANT TO
ARTICLE VI OF THIS AGREEMENT WITH RESPECT TO SUCH FISCAL YEAR, OTHER THAN
ALLOCATIONS PURSUANT TO SECTIONS 6.3(A) AND 6.3(B) HEREOF.

 

(D)                                 QUALIFIED INCOME OFFSET.  IN THE EVENT ANY
MEMBER UNEXPECTEDLY RECEIVES ANY ADJUSTMENTS, ALLOCATIONS OR DISTRIBUTIONS
DESCRIBED IN REGULATIONS SECTIONS 1.704-1(B)(2)(II)(D)(4),
1.704-1(B)(2)(II)(D)(5), OR 1.704-1(B)(2)(II)(D)(6), AND AFTER GIVING EFFECT TO
THE ALLOCATIONS REQUIRED UNDER SECTIONS 6.3(A), 6.3(B) AND 6.3(C) HEREOF, SUCH
MEMBER HAS AN ADJUSTED CAPITAL ACCOUNT DEFICIT, ITEMS OF COMPANY INCOME AND GAIN
SHALL BE SPECIALLY ALLOCATED TO SUCH MEMBER IN AN AMOUNT AND MANNER SUFFICIENT
TO ELIMINATE, TO THE EXTENT REQUIRED BY THE REGULATIONS, ITS ADJUSTED CAPITAL
ACCOUNT DEFICIT CREATED BY SUCH ADJUSTMENTS, ALLOCATIONS OR DISTRIBUTIONS AS
QUICKLY AS POSSIBLE.  IT IS INTENDED THAT THIS SECTION 6.3(D) QUALIFY AND BE
CONSTRUED AS A “QUALIFIED INCOME OFFSET” WITHIN THE MEANING OF REGULATIONS
1.704-1(B)(2)(II)(D), WHICH SHALL BE CONTROLLING IN THE EVENT OF A CONFLICT
BETWEEN SUCH REGULATIONS AND THIS SECTION 6.3(D).

 

(E)                                  NONRECOURSE DEDUCTIONS.  NONRECOURSE
DEDUCTIONS FOR ANY TAXABLE PERIOD SHALL BE ALLOCATED TO THE MEMBERS IN THE
MANNER DETERMINED BY THE MANAGING MEMBER, PROVIDED THAT SUCH ALLOCATION SHALL BE
PERMISSIBLE UNDER SECTION 704(B) OF THE CODE.

 

(F)                                    PARTNER NONRECOURSE DEDUCTIONS.  ANY
PARTNER NONRECOURSE DEDUCTIONS FOR ANY FISCAL YEAR SHALL BE SPECIALLY ALLOCATED
TO THE MEMBER WHO BEARS THE ECONOMIC RISK OF LOSS WITH RESPECT TO THE PARTNER
NONRECOURSE DEBT TO WHICH SUCH PARTNER NONRECOURSE DEDUCTIONS ARE ATTRIBUTABLE
IN ACCORDANCE WITH REGULATIONS SECTIONS 1.704-2(B)(4) AND 1.704-2(I)(2).

 

(G)                                 CODE SECTION 754 ADJUSTMENTS.  TO THE EXTENT
AN ADJUSTMENT TO THE ADJUSTED TAX BASIS OF ANY COMPANY ASSET PURSUANT TO
SECTION 734(B) OR 743(B) OF THE CODE IS REQUIRED, PURSUANT TO REGULATIONS
SECTION 1.704-1(B)(2)(IV)(M), TO BE TAKEN INTO ACCOUNT IN DETERMINING CAPITAL
ACCOUNTS, THE AMOUNT OF SUCH ADJUSTMENT TO THE CAPITAL ACCOUNTS SHALL BE
SPECIALLY ALLOCATED TO THE MEMBERS IN A MANNER CONSISTENT WITH THE MANNER IN
WHICH THEIR CAPITAL ACCOUNTS ARE REQUIRED TO BE ADJUSTED PURSUANT TO SUCH
SECTION OF THE REGULATIONS.

 

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SECTION 6.4                                      ALLOCATIONS FOR TAX PURPOSES.

 

(A)                                  GENERAL.  EXCEPT AS OTHERWISE PROVIDED IN
THIS SECTION 6.4, FOR FEDERAL INCOME TAX PURPOSES, EACH ITEM OF INCOME, GAIN,
LOSS AND DEDUCTION SHALL BE ALLOCATED AMONG THE MEMBERS IN THE SAME MANNER AS
ITS CORRELATIVE ITEM OF “BOOK” INCOME, GAIN, LOSS OR DEDUCTION IS ALLOCATED
PURSUANT TO SECTIONS 6.1 AND 6.3 OF THIS AGREEMENT.

 

(B)                                 TO ELIMINATE BOOK-TAX DISPARITIES.  IN AN
ATTEMPT TO ELIMINATE BOOK-TAX DISPARITIES ATTRIBUTABLE TO A CONTRIBUTED PROPERTY
OR ADJUSTED PROPERTY, ITEMS OF INCOME, GAIN, LOSS, AND DEDUCTION SHALL BE
ALLOCATED FOR FEDERAL INCOME TAX PURPOSES AMONG THE MEMBERS AS FOLLOWS:

 

(1)                                  (I)  IN THE CASE OF A CONTRIBUTED PROPERTY,
SUCH ITEMS ATTRIBUTABLE THERETO SHALL BE ALLOCATED AMONG THE MEMBERS CONSISTENT
WITH THE PRINCIPLES OF SECTION 704(C) OF THE CODE IN A MANNER THAT TAKES INTO
ACCOUNT THE VARIATION BETWEEN THE 704(C) VALUE OF SUCH PROPERTY AND ITS ADJUSTED
BASIS AT THE TIME OF CONTRIBUTION, AND (II) ANY ITEM OF RESIDUAL GAIN OR
RESIDUAL LOSS ATTRIBUTABLE TO A CONTRIBUTED PROPERTY SHALL BE ALLOCATED AMONG
THE MEMBERS IN THE SAME MANNER AS ITS CORRELATIVE ITEM OF “BOOK” GAIN OR LOSS IS
ALLOCATED PURSUANT TO SECTIONS 6.1 AND 6.3 OF THIS AGREEMENT.

 

(2)                                  (I)  IN THE CASE OF AN ADJUSTED PROPERTY,
SUCH ITEMS SHALL (A) FIRST, BE ALLOCATED AMONG THE MEMBERS IN A MANNER
CONSISTENT WITH THE PRINCIPLES OF SECTION 704(C) OF THE CODE IN A MANNER TO TAKE
INTO ACCOUNT THE ADJUSTMENTS TO THE CARRYING VALUE OF SUCH PROPERTY PURSUANT TO
SECTION 4.4(D) AND (B) SECOND, IN THE EVENT SUCH PROPERTY WAS ORIGINALLY A
CONTRIBUTED PROPERTY, BE ALLOCATED AMONG THE MEMBERS IN A MANNER CONSISTENT WITH
SECTION 6.4(B)(1)(I), AND (II) ANY ITEM OF RESIDUAL GAIN OR RESIDUAL LOSS
ATTRIBUTABLE TO AN ADJUSTED PROPERTY SHALL BE ALLOCATED AMONG THE MEMBERS IN THE
SAME MANNER AS ITS CORRELATIVE ITEM OF “BOOK” GAIN OR LOSS IS ALLOCATED PURSUANT
TO SECTIONS 6.1 AND 6.4 OF THIS AGREEMENT.

 

(3)                                  ALL OTHER ITEMS OF INCOME, GAIN, LOSS AND
DEDUCTION SHALL BE ALLOCATED AMONG THE MEMBERS IN THE SAME MANNER AS THEIR
CORRELATIVE ITEM OF “BOOK” GAIN OR LOSS IS ALLOCATED PURSUANT TO SECTIONS 6.1
AND 6.3 OF THIS AGREEMENT.

 

(C)                                  POWER OF MANAGING MEMBER TO ELECT METHOD. 
TO THE EXTENT TREASURY REGULATIONS PROMULGATED PURSUANT TO SECTION 704(C) OF THE
CODE PERMIT A PARTNERSHIP TO UTILIZE ALTERNATIVE METHODS TO ELIMINATE THE
DISPARITIES BETWEEN THE AGREED VALUE OF PROPERTY AND ITS ADJUSTED BASIS, AND
SUBJECT TO ANY AGREEMENTS EXISTING BETWEEN THE COMPANY AND ANY MEMBER OR MEMBERS
PRIOR TO THE DATE HEREOF, THE MANAGING MEMBER SHALL HAVE THE AUTHORITY TO ELECT
THE METHOD TO BE USED BY THE COMPANY AND SUCH ELECTION SHALL BE BINDING ON ALL
MEMBERS.

 

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ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS

 

SECTION 7.1                                      MANAGEMENT.

 

(A)                                  POWERS OF MANAGING MEMBER.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL MANAGEMENT POWERS OVER THE
BUSINESS AND AFFAIRS OF THE COMPANY ARE EXCLUSIVELY VESTED IN THE MANAGING
MEMBER, AND NO NON-MANAGING MEMBER SHALL HAVE ANY RIGHT TO PARTICIPATE IN OR
EXERCISE CONTROL OR MANAGEMENT POWER OVER THE BUSINESS AND AFFAIRS OF THE
COMPANY.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE
MANAGING MEMBER MAY NOT BE REMOVED BY THE NON-MANAGING MEMBERS WITH OR WITHOUT
CAUSE.  IN ADDITION TO THE POWERS NOW OR HEREAFTER GRANTED A MANAGING MEMBER OF
A LIMITED LIABILITY COMPANY UNDER APPLICABLE LAW OR WHICH ARE GRANTED TO THE
MANAGING MEMBER UNDER ANY OTHER PROVISION OF THIS AGREEMENT, THE MANAGING
MEMBER, SUBJECT TO SECTION 7.3 HEREOF, SHALL HAVE FULL POWER AND AUTHORITY TO DO
ALL THINGS DEEMED NECESSARY OR DESIRABLE BY IT TO CONDUCT THE BUSINESS OF THE
COMPANY, TO EXERCISE ALL POWERS SET FORTH IN SECTION 3.2 HEREOF AND TO
EFFECTUATE THE PURPOSES SET FORTH IN SECTION 3.1 HEREOF INCLUDING, WITHOUT
LIMITATION:

 

(1)                                  THE MAKING OF ANY EXPENDITURES, THE LENDING
OR BORROWING OF MONEY, THE ASSUMPTION OR GUARANTEE OF, OR OTHER CONTRACTING FOR,
INDEBTEDNESS AND OTHER LIABILITIES, THE ISSUANCE OF EVIDENCES OF INDEBTEDNESS
(INCLUDING THE SECURING OF SAME BY MORTGAGE, DEED OF TRUST OR OTHER LIEN OR
ENCUMBRANCE ON THE COMPANY’S ASSETS) AND THE INCURRING OF ANY OBLIGATIONS IT
DEEMS NECESSARY FOR THE CONDUCT OF THE ACTIVITIES OF THE COMPANY;

 

(2)                                  THE MAKING OF TAX, REGULATORY AND OTHER
FILINGS, OR RENDERING OF PERIODIC OR OTHER REPORTS TO THE NEW YORK STOCK
EXCHANGE, GOVERNMENTAL OR OTHER AGENCIES HAVING JURISDICTION OVER THE BUSINESS
OR ASSETS OF THE COMPANY, THE REGISTRATION OF ANY CLASS OF SECURITIES OF THE
COMPANY UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE
ACT”), AND THE LISTING OF ANY DEBT SECURITIES OF THE COMPANY ON ANY EXCHANGE;

 

(3)                                  THE ACQUISITION, DISPOSITION, SALE,
CONVEYANCE, FINANCING, REFINANCING, MORTGAGE, PLEDGE, ENCUMBRANCE,
HYPOTHECATION, CONTRIBUTION OR EXCHANGE OF ANY ASSETS OF THE COMPANY OR THE
MERGER OR OTHER COMBINATION OF THE COMPANY WITH OR INTO ANOTHER ENTITY ON SUCH
TERMS AS THE MANAGING MEMBER DEEMS PROPER;

 

(4)                                  THE USE OF THE ASSETS OF THE COMPANY
(INCLUDING, WITHOUT LIMITATION, CASH ON HAND) FOR ANY PURPOSE CONSISTENT WITH
THE TERMS OF THIS AGREEMENT AND ON ANY TERMS IT SEES FIT INCLUDING, WITHOUT
LIMITATION, THE FINANCING OF THE ASSETS AND THE OPERATIONS OF THE MANAGING
MEMBER, THE COMPANY OR ANY OF THE COMPANY’S SUBSIDIARIES, THE LENDING OF FUNDS
TO OTHER PERSONS (INCLUDING THE MANAGING MEMBER OR ANY OF THE COMPANY’S
SUBSIDIARIES) AND THE REPAYMENT OF OBLIGATIONS OF THE COMPANY AND ITS
SUBSIDIARIES AND ANY OTHER PERSON IN WHICH IT HAS AN EQUITY INVESTMENT AND THE
MAKING OF CAPITAL CONTRIBUTIONS TO ITS SUBSIDIARIES, THE

 

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HOLDING OF ANY REAL, PERSONAL AND MIXED PROPERTY OF THE COMPANY IN THE NAME OF
THE COMPANY OR IN THE NAME OF A NOMINEE OR TRUSTEE (SUBJECT TO SECTION 7.10),
THE CREATION, BY GRANT OR OTHERWISE, OF EASEMENTS OR SERVITUDES, AND THE
PERFORMANCE OF ANY AND ALL ACTS NECESSARY OR APPROPRIATE TO THE OPERATION OF THE
COMPANY ASSETS INCLUDING, BUT NOT LIMITED TO, APPLICATIONS FOR REZONING,
OBJECTIONS TO REZONING, CONSTRUCTING, ALTERING, IMPROVING, REPAIRING,
RENOVATING, REHABILITATING, RAZING, DEMOLISHING OR CONDEMNING ANY IMPROVEMENTS
OR PROPERTY OF THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY;

 

(5)                                  THE NEGOTIATION, EXECUTION, AND PERFORMANCE
OF ANY CONTRACTS, CONVEYANCES OR OTHER INSTRUMENTS (INCLUDING WITH AFFILIATES OF
THE COMPANY TO THE EXTENT PROVIDED IN SECTION 7.6) THAT THE MANAGING MEMBER
CONSIDERS USEFUL OR NECESSARY TO THE CONDUCT OF THE COMPANY’S OPERATIONS OR THE
IMPLEMENTATION OF THE MANAGING MEMBER’S POWERS UNDER THIS AGREEMENT INCLUDING,
WITHOUT LIMITATION, THE EXECUTION AND DELIVERY OF LEASES ON BEHALF OF OR IN THE
NAME OF THE COMPANY (INCLUDING THE LEASE OF COMPANY PROPERTY FOR ANY PURPOSE AND
WITHOUT LIMIT AS TO THE TERM THEREOF, WHETHER OR NOT SUCH TERM (INCLUDING
RENEWAL TERMS) SHALL EXTEND BEYOND THE DATE OF TERMINATION OF THE COMPANY AND
WHETHER OR NOT THE PORTION SO LEASED IS TO BE OCCUPIED BY THE LESSEE OR, IN
TURN, SUBLEASED IN WHOLE OR IN PART TO OTHERS);

 

(6)                                  THE OPENING AND CLOSING OF BANK ACCOUNTS,
THE INVESTMENT OF COMPANY FUNDS IN SECURITIES, CERTIFICATES OF DEPOSIT AND OTHER
INSTRUMENTS, AND THE DISTRIBUTION OF COMPANY CASH OR OTHER COMPANY ASSETS IN
ACCORDANCE WITH THIS AGREEMENT;

 

(7)                                  THE SELECTION AND DISMISSAL OF EMPLOYEES OF
THE COMPANY OR THE MANAGING MEMBER (INCLUDING, WITHOUT LIMITATION, EMPLOYEES
HAVING TITLES SUCH AS “PRESIDENT”, “VICE PRESIDENT”, “SECRETARY” AND
“TREASURER”), AND THE ENGAGEMENT AND DISMISSAL OF AGENTS, OUTSIDE ATTORNEYS,
ACCOUNTANTS, ENGINEERS, APPRAISERS, CONSULTANTS, CONTRACTORS AND OTHER
PROFESSIONALS ON BEHALF OF THE MANAGING MEMBER OR THE COMPANY AND THE
DETERMINATION OF THEIR COMPENSATION AND OTHER TERMS OF EMPLOYMENT OR HIRING;

 

(8)                                  THE MAINTENANCE OF SUCH INSURANCE FOR THE
BENEFIT OF THE COMPANY AND THE MEMBERS AND THE DIRECTORS AND OFFICERS OF THE
COMPANY AS IT DEEMS NECESSARY OR APPROPRIATE;

 

(9)                                  THE FORMATION OF, OR ACQUISITION OF AN
INTEREST IN, AND THE CONTRIBUTION OF PROPERTY TO, ANY FURTHER LIMITED OR GENERAL
PARTNERSHIPS, JOINT VENTURES OR OTHER RELATIONSHIPS THAT IT DEEMS DESIRABLE
(INCLUDING, WITHOUT LIMITATION, THE ACQUISITION OF INTERESTS IN, AND THE
CONTRIBUTION OF PROPERTY TO, ITS SUBSIDIARIES AND ANY OTHER PERSON IN WHICH IT
HAS AN EQUITY INVESTMENT FROM TIME TO TIME);

 

(10)                            THE CONTROL OF ANY MATTERS AFFECTING THE RIGHTS
AND OBLIGATIONS OF THE COMPANY, INCLUDING THE CONDUCT OF LITIGATION AND THE
INCURRING OF LEGAL

 

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EXPENSE AND THE SETTLEMENT OF CLAIMS AND LITIGATION, AND THE INDEMNIFICATION OF
ANY PERSON AGAINST LIABILITIES AND CONTINGENCIES TO THE EXTENT PERMITTED BY LAW;

 

(11)                            THE UNDERTAKING OF ANY ACTION IN CONNECTION WITH
THE COMPANY’S DIRECT OR INDIRECT INVESTMENT IN ITS SUBSIDIARIES OR ANY OTHER
PERSON (INCLUDING, WITHOUT LIMITATION, THE CONTRIBUTION OR LOAN OF FUNDS TO,
INCURRING INDEBTEDNESS ON BEHALF OF, OR GUARANTEEING THE OBLIGATIONS OF ANY SUCH
PERSONS);

 

(12)                            THE DETERMINATION OF THE FAIR MARKET VALUE OF
ANY COMPANY PROPERTY DISTRIBUTED IN KIND USING SUCH REASONABLE METHOD OF
VALUATION AS IT MAY ADOPT;

 

(13)                            THE MANAGEMENT, OPERATION, LEASING, LANDSCAPING,
REPAIR, ALTERATION, DEMOLITION OR IMPROVEMENT OF ANY REAL PROPERTY OR
IMPROVEMENTS OWNED BY THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY OR ANY PERSON
IN WHICH THE COMPANY HAS MADE A DIRECT OR INDIRECT EQUITY INVESTMENT;

 

(14)                            HOLDING, MANAGING, INVESTING AND REINVESTING
CASH AND OTHER ASSETS OF THE COMPANY;

 

(15)                            THE COLLECTION AND RECEIPT OF REVENUES AND
INCOME OF THE COMPANY;

 

(16)                            THE EXERCISE, DIRECTLY OR INDIRECTLY THROUGH ANY
ATTORNEY-IN-FACT ACTING UNDER A GENERAL OR LIMITED POWER OF ATTORNEY, OF ANY
RIGHT, INCLUDING THE RIGHT TO VOTE, APPURTENANT TO ANY ASSET OR INVESTMENT HELD
BY THE COMPANY;

 

(17)                            THE EXERCISE OF ANY OF THE POWERS OF THE
MANAGING MEMBER ENUMERATED IN THIS AGREEMENT ON BEHALF OF OR IN CONNECTION WITH
ANY SUBSIDIARY OF THE COMPANY OR ANY OTHER PERSON IN WHICH THE COMPANY HAS A
DIRECT OR INDIRECT INTEREST, OR JOINTLY WITH ANY SUCH SUBSIDIARY OR OTHER
PERSON;

 

(18)                            THE EXERCISE OF ANY OF THE POWERS OF THE
MANAGING MEMBER ENUMERATED IN THIS AGREEMENT ON BEHALF OF ANY PERSON IN WHICH
THE COMPANY DOES NOT HAVE AN INTEREST PURSUANT TO CONTRACTUAL OR OTHER
ARRANGEMENTS WITH SUCH PERSON;

 

(19)                            THE MAKING, EXECUTION AND DELIVERY OF ANY AND
ALL DEEDS, LEASES, NOTES, DEEDS TO SECURE DEBT, MORTGAGES, DEEDS OF TRUST,
SECURITY AGREEMENTS, CONVEYANCES, CONTRACTS, GUARANTEES, WARRANTIES,
INDEMNITIES, WAIVERS, RELEASES OR LEGAL INSTRUMENTS OR AGREEMENTS IN WRITING
NECESSARY OR APPROPRIATE IN THE JUDGMENT OF THE MANAGING MEMBER FOR THE
ACCOMPLISHMENT OF ANY OF THE POWERS OF THE MANAGING MEMBER ENUMERATED IN THIS
AGREEMENT;

 

(20)                            THE ISSUANCE OF MEMBERSHIP INTERESTS, AS
APPROPRIATE, PURSUANT TO SECTION 4.2 OF THIS AGREEMENT; AND

 

(21)                            THE CONSUMMATION OF THE FORMATION AND
STRUCTURING TRANSACTIONS.

 

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(B)                                 NO APPROVAL REQUIRED FOR ABOVE POWERS. 
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION,
THE LAST SENTENCE OF THIS SECTION 7.1(B)), EACH OF THE MEMBERS AGREES THAT THE
MANAGING MEMBER IS AUTHORIZED TO EXECUTE, DELIVER AND PERFORM THE
ABOVE-MENTIONED AGREEMENTS AND TRANSACTIONS ON BEHALF OF THE COMPANY WITHOUT ANY
FURTHER ACT, APPROVAL OR VOTE OF THE MEMBERS, NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT, THE ACT OR ANY APPLICABLE LAW, RULE OR REGULATION
TO THE FULLEST EXTENT PERMITTED UNDER THE ACT OR OTHER APPLICABLE LAW, RULE OR
REGULATION.  THE EXECUTION, DELIVERY OR PERFORMANCE BY THE MANAGING MEMBER OR
THE COMPANY OF ANY AGREEMENT AUTHORIZED OR PERMITTED UNDER THIS AGREEMENT SHALL
NOT CONSTITUTE A BREACH BY THE MANAGING MEMBER OF ANY DUTY THAT THE MANAGING
MEMBER MAY OWE THE COMPANY OR THE NON-MANAGING MEMBERS OR ANY OTHER PERSONS
UNDER THIS AGREEMENT OR OF ANY DUTY STATED OR IMPLIED BY LAW OR EQUITY.

 

(C)                                  INSURANCE.  AT ALL TIMES FROM AND AFTER THE
DATE HEREOF, THE MANAGING MEMBER MAY CAUSE THE COMPANY TO OBTAIN AND MAINTAIN
CASUALTY, LIABILITY AND OTHER INSURANCE ON COMPANY PROPERTIES AND LIABILITY
INSURANCE FOR THE INDEMNITEES HEREUNDER. THE RIGHT TO PROCURE SUCH INSURANCE ON
BEHALF OF THE INDEMNITEES SHALL IN NO WAY MITIGATE OR OTHERWISE AFFECT THE RIGHT
OF ANY SUCH INDEMNITEE TO INDEMNIFICATION UNDER SECTION 7.7.

 

(D)                                 WORKING CAPITAL RESERVES.  AT ALL TIMES FROM
AND AFTER THE DATE HEREOF, THE MANAGING MEMBER MAY CAUSE THE COMPANY TO
ESTABLISH AND MAINTAIN WORKING CAPITAL RESERVES IN SUCH AMOUNTS AS THE MANAGING
MEMBER, IN ITS SOLE AND ABSOLUTE DISCRETION, DEEMS APPROPRIATE AND REASONABLE
FROM TIME TO TIME.

 

(E)                                  NO OBLIGATION TO CONSIDER TAX CONSEQUENCES
TO NON-MANAGING MEMBERS.  IN EXERCISING ITS AUTHORITY UNDER THIS AGREEMENT, THE
MANAGING MEMBER MAY, BUT SHALL BE UNDER NO OBLIGATION TO, TAKE INTO ACCOUNT THE
TAX CONSEQUENCES TO ANY MEMBER OF ANY ACTION TAKEN BY IT.  THE MANAGING MEMBER
AND THE COMPANY SHALL NOT HAVE LIABILITY TO A NON-MANAGING MEMBER UNDER ANY
CIRCUMSTANCES AS A RESULT OF AN INCOME TAX LIABILITY INCURRED BY SUCH
NON-MANAGING MEMBER AS A RESULT OF AN ACTION (OR INACTION) BY THE MANAGING
MEMBER PURSUANT TO ITS AUTHORITY UNDER THIS AGREEMENT.

 

(F)                                    NO OBLIGATION TO EXPEND INDIVIDUAL FUNDS,
ETC.  EXCEPT AS OTHERWISE PROVIDED HEREIN, TO THE EXTENT THE DUTIES OF THE
MANAGING MEMBER REQUIRE EXPENDITURES OF FUNDS TO BE PAID TO THIRD PARTIES, THE
MANAGING MEMBER SHALL NOT HAVE ANY OBLIGATIONS HEREUNDER EXCEPT TO THE EXTENT
THAT COMPANY FUNDS ARE REASONABLY AVAILABLE TO IT FOR THE PERFORMANCE OF SUCH
DUTIES, AND NOTHING HEREIN CONTAINED SHALL BE DEEMED TO AUTHORIZE OR REQUIRE THE
MANAGING MEMBER, IN ITS CAPACITY AS SUCH, TO EXPEND ITS INDIVIDUAL FUNDS FOR
PAYMENT TO THIRD PARTIES OR TO UNDERTAKE ANY INDIVIDUAL LIABILITY OR OBLIGATION
ON BEHALF OF THE COMPANY.

 

SECTION 7.2                                      CERTIFICATE OF FORMATION.  TO
THE EXTENT THAT SUCH ACTION IS DETERMINED BY THE MANAGING MEMBER TO BE
REASONABLE AND NECESSARY OR APPROPRIATE, THE MANAGING MEMBER SHALL FILE
AMENDMENTS TO AND RESTATEMENTS OF THE CERTIFICATE AND DO ALL THE THINGS TO
MAINTAIN THE COMPANY AS A LIMITED LIABILITY COMPANY (OR AN ENTITY IN WHICH THE
NON-MANAGING MEMBERS HAVE LIMITED LIABILITY) UNDER THE LAWS OF THE STATE OF
DELAWARE AND EACH OTHER JURISDICTION IN WHICH THE COMPANY MAY ELECT TO DO
BUSINESS OR OWN PROPERTY.  SUBJECT TO THE TERMS OF SECTION 8.5(A)(4)

 

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hereof, the Managing Member shall not be required, before or after filing, to
deliver or mail a copy of the Certificate, as it may be amended or restated from
time to time, to any Non-Managing Member.  The Managing Member shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited liability company (or an entity in
which the Non-Managing Members have limited liability) in the State of Delaware
and any other jurisdiction in which the Company may elect to do business or own
property.

 

SECTION 7.3                                      RESTRICTIONS ON MANAGING
MEMBER’S AUTHORITY.  THE MANAGING MEMBER MAY NOT, WITHOUT THE WRITTEN CONSENT OF
ALL OF THE NON-MANAGING MEMBERS, TAKE ANY ACTION IN CONTRAVENTION OF THIS
AGREEMENT INCLUDING, WITHOUT LIMITATION:

 

(A)                                  TAKE ANY ACTION THAT WOULD MAKE IT
IMPOSSIBLE TO CARRY ON THE ORDINARY BUSINESS OF THE COMPANY, EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT (PROVIDED THAT THIS RESTRICTION SHALL NOT BE DEEMED
TO RESTRICT THE SALE, LEASE, TRANSFER OR DISPOSITION OF ALL OR SUBSTANTIALLY ALL
OF THE COMPANY’S ASSETS AS MAY OTHERWISE BE PROVIDED HEREIN);

 

(B)                                 POSSESS COMPANY PROPERTY, OR ASSIGN ANY
RIGHTS IN SPECIFIC COMPANY PROPERTY, FOR OTHER THAN A COMPANY PURPOSE EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT (OTHER THAN THIS SECTION 7.3);

 

(C)                                  ADMIT A PERSON AS A MEMBER, EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT; OR

 

(D)                                 PERFORM ANY ACT THAT WOULD SUBJECT A MEMBER
TO PERSONAL LIABILITY FOR THE DEBTS, OBLIGATIONS AND LIABILITIES OF THE COMPANY
EXCEPT AS PROVIDED HEREIN OR UNDER THE ACT.

 

SECTION 7.4                                      RESPONSIBILITY FOR EXPENSES.

 

(A)                                  NO COMPENSATION.  EXCEPT AS PROVIDED IN
THIS SECTION 7.4 AND ELSEWHERE IN THIS AGREEMENT (INCLUDING THE PROVISIONS OF
ARTICLES V AND VI REGARDING DISTRIBUTIONS, PAYMENTS AND ALLOCATIONS TO WHICH IT
MAY BE ENTITLED), THE MANAGING MEMBER SHALL NOT BE COMPENSATED FOR ITS SERVICES
AS MANAGING MEMBER OF THE COMPANY.

 

(B)                                 RESPONSIBILITY FOR OWNERSHIP AND OPERATION
EXPENSES.  THE COMPANY SHALL BE RESPONSIBLE FOR AND SHALL PAY ALL EXPENSES
RELATING TO THE COMPANY’S OWNERSHIP OF ITS ASSETS, AND THE OPERATION OF, OR FOR
THE BENEFIT OF, THE COMPANY.  THE MANAGING MEMBER IS HEREBY AUTHORIZED TO PAY
COMPENSATION FOR ACCOUNTING, ADMINISTRATIVE, LEGAL, TECHNICAL, MANAGEMENT AND
OTHER SERVICES RENDERED TO THE COMPANY.  THE MANAGING MEMBER SHALL BE REIMBURSED
ON A MONTHLY BASIS, OR SUCH OTHER BASIS AS THE MANAGING MEMBER MAY DETERMINE IN
ITS SOLE AND ABSOLUTE DISCRETION, FOR ALL EXPENSES IT INCURS RELATING TO THE
COMPANY’S OWNERSHIP OF ITS ASSETS AND THE OPERATION OF, OR FOR THE BENEFIT OF,
THE COMPANY; PROVIDED, HOWEVER, THAT THE AMOUNT OF ANY SUCH REIMBURSEMENT SHALL
BE REDUCED BY ANY INTEREST OR OTHER AMOUNTS EARNED BY THE MANAGING MEMBER WITH
RESPECT TO BANK ACCOUNTS OR OTHER INSTRUMENTS HELD BY IT AS PERMITTED IN
SECTION 7.5(A).  THE NON-MANAGING MEMBERS ACKNOWLEDGE THAT ALL SUCH EXPENSES OF
THE MANAGING MEMBER ARE DEEMED TO BE FOR THE BENEFIT OF THE COMPANY.  SUCH
REIMBURSEMENTS SHALL BE IN ADDITION

 

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TO ANY REIMBURSEMENT TO THE MANAGING MEMBER AS A RESULT OF INDEMNIFICATION
PURSUANT TO SECTION 7.7 HEREOF.  IN THE EVENT THAT CERTAIN EXPENSES ARE INCURRED
FOR THE BENEFIT OF THE COMPANY AND OTHER ENTITIES (INCLUDING THE MANAGING
MEMBER), SUCH EXPENSES SHALL BE ALLOCATED TO THE COMPANY AND SUCH OTHER ENTITIES
IN SUCH A MANNER AS THE MANAGING MEMBER IN ITS SOLE AND ABSOLUTE DISCRETION
DEEMS FAIR AND REASONABLE. ALL PAYMENTS AND REIMBURSEMENTS HEREUNDER SHALL BE
CHARACTERIZED FOR FEDERAL INCOME TAX PURPOSES AS EXPENSES OF THE COMPANY
INCURRED ON ITS BEHALF, AND NOT AS EXPENSES OF THE MANAGING MEMBER.

 

(C)                                  RESPONSIBILITY FOR ORGANIZATION EXPENSES. 
THE COMPANY SHALL BE RESPONSIBLE FOR AND SHALL PAY ALL EXPENSES INCURRED
RELATING TO THE ADMISSION OF THE MANAGING MEMBER TO THE COMPANY.

 

(D)                                 COMMON SHARE REPURCHASES.  IF THE MANAGING
MEMBER SHALL ELECT TO PURCHASE FROM ITS STOCKHOLDERS COMMON SHARES FOR THE
PURPOSE OF DELIVERING SUCH COMMON SHARES TO SATISFY AN OBLIGATION UNDER ANY
DIVIDEND REINVESTMENT PROGRAM ADOPTED BY THE MANAGING MEMBER, ANY EMPLOYEE STOCK
PURCHASE PLAN ADOPTED BY THE MANAGING MEMBER, OR ANY SIMILAR OBLIGATION OR
ARRANGEMENT UNDERTAKEN BY THE MANAGING MEMBER IN THE FUTURE OR FOR THE PURPOSE
OF RETIRING SUCH COMMON SHARES, THE PURCHASE PRICE PAID BY THE MANAGING MEMBER
FOR SUCH COMMON SHARES AND ANY OTHER EXPENSES INCURRED BY THE MANAGING MEMBER IN
CONNECTION WITH SUCH PURCHASE SHALL BE CONSIDERED EXPENSES OF THE COMPANY AND
SHALL BE ADVANCED TO THE MANAGING MEMBER OR REIMBURSED TO THE MANAGING MEMBER,
SUBJECT TO THE CONDITION THAT: (I) IF SUCH COMMON SHARES SUBSEQUENTLY ARE SOLD
BY THE MANAGING MEMBER, THE MANAGING MEMBER SHALL PAY TO THE COMPANY ANY
PROCEEDS RECEIVED BY THE MANAGING MEMBER FOR SUCH COMMON SHARES (WHICH SALES
PROCEEDS SHALL INCLUDE THE AMOUNT OF DIVIDENDS REINVESTED UNDER ANY DIVIDEND
REINVESTMENT OR SIMILAR PROGRAM; PROVIDED, THAT A TRANSFER OF COMMON SHARES FOR
MEMBERSHIP UNITS PURSUANT TO SECTION 4.2(E) WOULD NOT BE CONSIDERED A SALE FOR
SUCH PURPOSES); AND (II) IF SUCH COMMON SHARES ARE NOT RETRANSFERRED BY THE
MANAGING MEMBER WITHIN THIRTY (30) DAYS AFTER THE PURCHASE THEREOF, OR THE
MANAGING MEMBER OTHERWISE DETERMINES NOT TO RETRANSFER SUCH COMMON SHARES, THE
MANAGING MEMBER SHALL CAUSE THE COMPANY TO REDEEM A NUMBER OF MEMBERSHIP UNITS
HELD BY THE MANAGING MEMBER EQUAL TO THE NUMBER OF SUCH COMMON SHARES, AS
ADJUSTED (X) PURSUANT TO SECTION 7.5 (IN THE EVENT THE MANAGING MEMBER ACQUIRES
MATERIAL ASSETS, OTHER THAN ON BEHALF OF THE COMPANY) AND (Y) FOR STOCK
DIVIDENDS AND DISTRIBUTIONS, STOCK SPLITS AND SUBDIVISIONS, REVERSE STOCK SPLITS
AND COMBINATIONS, DISTRIBUTIONS OF RIGHTS, WARRANTS OR OPTIONS, AND
DISTRIBUTIONS OF EVIDENCES OF INDEBTEDNESS OR ASSETS RELATING TO ASSETS NOT
RECEIVED BY THE MANAGING MEMBER PURSUANT TO A PRO RATA DISTRIBUTION BY THE
COMPANY (IN WHICH CASE SUCH ADVANCEMENT OR REIMBURSEMENT OF EXPENSES SHALL BE
TREATED AS HAVING BEEN MADE AS A DISTRIBUTION IN REDEMPTION OF SUCH NUMBER OF
MEMBERSHIP UNITS HELD BY THE MANAGING MEMBER).

 

(E)                                  IF AND TO THE EXTENT ANY REIMBURSEMENTS TO
THE MANAGING MEMBER PURSUANT TO THIS SECTION 7.4 CONSTITUTE GROSS INCOME OF THE
MANAGING MEMBER (AS OPPOSED TO THE REPAYMENT OF ADVANCES MADE BY THE MANAGING
MEMBER ON BEHALF OF THE COMPANY), SUCH AMOUNTS SHALL CONSTITUTE GUARANTEED
PAYMENTS WITHIN THE MEANING OF SECTION 707(C) OF THE CODE, SHALL BE TREATED
CONSISTENTLY THEREWITH BY THE COMPANY AND

 

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ALL MEMBERS, AND SHALL NOT BE TREATED AS DISTRIBUTIONS FOR PURPOSES OF COMPUTING
THE MEMBERS’ CAPITAL ACCOUNTS.

 

SECTION 7.5                                      OUTSIDE ACTIVITIES OF THE
MANAGING MEMBER.

 

(A)                                  THE MANAGING MEMBER SHALL NOT DIRECTLY OR
INDIRECTLY ENTER INTO OR CONDUCT ANY BUSINESS, OTHER THAN IN CONNECTION WITH THE
OWNERSHIP, ACQUISITION AND DISPOSITION OF MEMBERSHIP INTERESTS AS A MANAGING
MEMBER OR NON-MANAGING MEMBER AND THE MANAGEMENT OF THE BUSINESS OF THE COMPANY,
ITS OPERATION AS A PUBLIC REPORTING COMPANY WITH A CLASS (OR CLASSES) OF
SECURITIES REGISTERED UNDER THE EXCHANGE ACT AND LISTED ON THE NEW YORK STOCK
EXCHANGE AND SUCH ACTIVITIES AS ARE INCIDENTAL THERETO.  THE MANAGING MEMBER
SHALL NOT OWN ANY ASSETS OTHER THAN MEMBERSHIP INTERESTS (EXCEPT FOR CERTAIN
INTERESTS IN COMPANY PROPERTIES HELD DIRECTLY BY THE MANAGING MEMBER OR WHICH
HAVE BEEN CAUSED BY THE MANAGING MEMBER TO BE CONTRIBUTED TO OR PURCHASED BY
SUBSIDIARIES, WHICH INTERESTS SHALL NOT EXCEED 1% OF THE AGGREGATE ECONOMIC
INTERESTS OF ANY PROPERTY) AND OTHER THAN SUCH BANK ACCOUNTS OR SIMILAR
INSTRUMENTS AS IT DEEMS NECESSARY TO CARRY OUT ITS RESPONSIBILITIES CONTEMPLATED
UNDER THIS AGREEMENT AND THE CHARTER.  THE MANAGING MEMBER AND AFFILIATES OF THE
MANAGING MEMBER MAY ACQUIRE NON-MANAGING MEMBERSHIP INTERESTS AND SHALL BE
ENTITLED TO EXERCISE ALL RIGHTS OF A NON-MANAGING MEMBER RELATING TO SUCH
NON-MANAGING MEMBERSHIP INTERESTS.

 

(B)                                 PURCHASES OF SHARES.  IN THE EVENT THE
MANAGING MEMBER PURCHASES SHARES, THEN THE MANAGING MEMBER SHALL CAUSE THE
COMPANY TO PURCHASE FROM IT AN EQUAL NUMBER OF MEMBERSHIP UNITS (AFTER
APPLICATION OF THE UNIT ADJUSTMENT FACTOR) ON THE SAME TERMS THAT THE MANAGING
MEMBER PURCHASED SUCH SHARES.

 

SECTION 7.6                                      CONTRACTS WITH AFFILIATES.

 

(A)                                  LOANS.  THE MANAGING MEMBER MAY CAUSE THE
COMPANY TO LEND OR CONTRIBUTE TO ITS SUBSIDIARIES OR OTHER PERSONS IN WHICH THE
COMPANY HAS AN EQUITY INVESTMENT, AND SUCH PERSONS MAY BORROW FUNDS FROM THE
COMPANY, ON TERMS AND CONDITIONS ESTABLISHED IN THE SOLE AND ABSOLUTE DISCRETION
OF THE MANAGING MEMBER.  THE FOREGOING AUTHORITY SHALL NOT CREATE ANY RIGHT OR
BENEFIT IN FAVOR OF ANY SUBSIDIARY OR ANY OTHER PERSON.

 

(B)                                 TRANSFERS OF ASSETS.  EXCEPT AS PROVIDED IN
SECTION 7.5(A), THE MANAGING MEMBER MAY CAUSE THE COMPANY TO TRANSFER ASSETS TO
JOINT VENTURES, OTHER PARTNERSHIPS, CORPORATIONS OR OTHER BUSINESS ENTITIES IN
WHICH THE COMPANY IS OR THEREBY BECOMES A PARTICIPANT UPON SUCH TERMS AND
SUBJECT TO SUCH CONDITIONS CONSISTENT WITH THIS AGREEMENT AND APPLICABLE LAW AS
THE MANAGING MEMBER IN ITS SOLE DISCRETION DEEMS ADVISABLE.

 

(C)                                  EMPLOYEE BENEFIT PLANS.  THE MANAGING
MEMBER, IN ITS SOLE AND ABSOLUTE DISCRETION AND WITHOUT THE APPROVAL OF THE
NON-MANAGING MEMBERS, MAY PROPOSE AND ADOPT ON BEHALF OF THE MANAGING MEMBER AND
THE COMPANY EMPLOYEE BENEFIT PLANS FUNDED BY THE COMPANY FOR THE BENEFIT OF
EMPLOYEES OF THE MANAGING MEMBER, THE COMPANY, SUBSIDIARIES OF THE COMPANY OR
ANY AFFILIATE OF ANY OF THEM IN RESPECT OF

 

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SERVICES PERFORMED, DIRECTLY OR INDIRECTLY, FOR THE BENEFIT OF THE COMPANY, THE
MANAGING MEMBER, OR ANY OF THE COMPANY’S SUBSIDIARIES, INCLUDING ANY SUCH PLAN
WHICH REQUIRES THE COMPANY, THE MANAGING MEMBER OR ANY OF THE COMPANY’S
SUBSIDIARIES TO ISSUE OR TRANSFER MEMBERSHIP UNITS TO EMPLOYEES.  THE MANAGING
MEMBER ALSO IS EXPRESSLY AUTHORIZED TO CAUSE THE COMPANY TO ISSUE TO IT
MEMBERSHIP UNITS CORRESPONDING TO COMMON SHARES ISSUED BY THE MANAGING MEMBER
PURSUANT TO ANY SUCH PLAN OR ANY SIMILAR OR SUCCESSOR PLAN AND TO REPURCHASE
SUCH MEMBERSHIP UNITS TO THE EXTENT NECESSARY TO PERMIT THE MANAGING MEMBER TO
REPURCHASE SUCH COMMON SHARES IN ACCORDANCE WITH SUCH PLAN.

 

(D)                                 OTHER AGREEMENTS.  THE MANAGING MEMBER IS
EXPRESSLY AUTHORIZED TO ENTER INTO, ON ITS OWN BEHALF OR IN THE NAME AND ON
BEHALF OF THE COMPANY, ASSET MANAGEMENT AGREEMENTS, CROSS-INDEMNITY AGREEMENTS,
REGISTRATION RIGHTS AGREEMENTS WITH RESPECT TO THE COMMON SHARES, RIGHT OF FIRST
OPPORTUNITY ARRANGEMENTS OR OTHER CONFLICT AVOIDANCE AGREEMENTS WITH VARIOUS
AFFILIATES OF THE COMPANY AND THE MANAGING MEMBER ON SUCH TERMS AS THE MANAGING
MEMBER, IN ITS SOLE AND ABSOLUTE DISCRETION, BELIEVES ARE ADVISABLE.  ANY
INDEMNIFICATION PURSUANT TO THIS SECTION 7.7 SHALL BE MADE ONLY OUT OF THE
ASSETS OF THE COMPANY, AND ANY INSURANCE PROCEEDS FROM ANY LIABILITY POLICY
COVERING THE MANAGING MEMBER AND ANY INDEMNITEE, AND NEITHER THE MANAGING MEMBER
NOR ANY NON-MANAGING MEMBER SHALL HAVE ANY OBLIGATION TO CONTRIBUTE TO THE
CAPITAL OF THE COMPANY OR OTHERWISE PROVIDE FUNDS TO ENABLE THE COMPANY TO FUND
ITS OBLIGATIONS UNDER THIS SECTION 7.7, EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY
AGREED TO BY SUCH MEMBER AND THE COMPANY.

 

SECTION 7.7                                      INDEMNIFICATION.

 

(A)                                  GENERAL.  THE COMPANY SHALL INDEMNIFY, IN
ACCORDANCE WITH AND TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY LAW, ANY
PERSON WHO WAS OR IS A PARTY OR IS THREATENED TO BE MADE A PARTY TO ANY
THREATENED, PENDING OR COMPLETED ACTION, SUIT OR PROCEEDING, WHETHER CIVIL,
CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE (OTHER THAN AN ACTION BY OR IN THE
RIGHT OF THE CORPORATION) BY REASON OF THE FACT THAT THE PERSON IS OR WAS A
MEMBER, DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF THE COMPANY OR THE MANAGING
MEMBER, OR IS OR WAS SERVING AT THE REQUEST OF THE COMPANY AS A DIRECTOR,
OFFICER, EMPLOYEE OR AGENT OF ANOTHER CORPORATION, PARTNERSHIP, JOINT VENTURE,
TRUST OR OTHER ENTERPRISE, AGAINST EXPENSES (INCLUDING ATTORNEYS’ FEES),
JUDGMENTS, FINES AND AMOUNTS PAID IN SETTLEMENT ACTUALLY AND REASONABLY INCURRED
BY THE PERSON IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IF THE PERSON
ACTED IN GOOD FAITH AND IN A MANNER THE PERSON REASONABLY BELIEVED TO BE IN OR
NOT OPPOSED TO THE BEST INTERESTS OF THE COMPANY, AND, WITH RESPECT TO ANY
CRIMINAL ACTION OR PROCEEDING, HAD NO REASONABLE CAUSE TO BELIEVE THE PERSON’S
CONDUCT WAS UNLAWFUL.  THE TERMINATION OF ANY ACTION, SUIT OR PROCEEDING BY
JUDGMENT, ORDER, SETTLEMENT, CONVICTION, OR UPON A PLEA OF NOLO CONTENDERE OR
ITS EQUIVALENT, SHALL NOT, OF ITSELF, CREATE A PRESUMPTION THAT THE PERSON DID
NOT ACT IN GOOD FAITH AND IN A MANNER WHICH THE PERSON REASONABLY BELIEVED TO BE
IN OR NOT OPPOSED TO THE BEST INTERESTS OF THE COMPANY, AND, WITH RESPECT TO ANY
CRIMINAL ACTION OR PROCEEDING, HAD REASONABLE CAUSE TO BELIEVE THAT THE PERSON’S
CONDUCT WAS UNLAWFUL.

 

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(B)                                 ACTIONS IN THE RIGHT OF THE COMPANY.  THE
COMPANY SHALL INDEMNIFY ANY PERSON WHO WAS OR IS A PARTY OR IS THREATENED TO BE
MADE A PARTY TO ANY THREATENED, PENDING OR COMPLETED ACTION OR SUIT BY OR IN THE
RIGHT OF THE COMPANY TO PROCURE A JUDGMENT IN ITS FAVOR BY REASON OF THE FACT
THAT THE PERSON IS OR WAS A MEMBER, DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF THE
COMPANY OR THE MANAGING MEMBER, OR IS OR WAS SERVING AT THE REQUEST OF THE
COMPANY AS A DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE AGAINST EXPENSES
(INCLUDING ATTORNEYS’ FEES) ACTUALLY AND REASONABLY INCURRED BY THE PERSON IN
CONNECTION WITH THE DEFENSE OR SETTLEMENT OF SUCH ACTION OR SUIT IF THE PERSON
ACTED IN GOOD FAITH AND IN A MANNER THE PERSON REASONABLY BELIEVED TO BE IN OR
NOT OPPOSED TO THE BEST INTERESTS OF THE COMPANY AND EXCEPT THAT NO
INDEMNIFICATION SHALL BE MADE IN RESPECT OF ANY CLAIM, ISSUE OR MATTER AS TO
WHICH SUCH PERSON SHALL HAVE BEEN ADJUDGED TO BE LIABLE TO THE COMPANY UNLESS
AND ONLY TO THE EXTENT THAT THE COURT IN WHICH SUCH ACTION OR SUIT WAS BROUGHT
SHALL DETERMINE UPON APPLICATION THAT, DESPITE THE ADJUDICATION OF LIABILITY BUT
IN VIEW OF ALL THE CIRCUMSTANCES OF THE CASE, SUCH PERSON IS FAIRLY AND
REASONABLY ENTITLED TO INDEMNITY OR SUCH EXPENSES WHICH SUCH COURT SHALL DEEM
PROPER.

 

(C)                                  AUTHORIZATION. ANY INDEMNIFICATION UNDER
SUBSECTIONS (A) AND (B) OF THIS SECTION (UNLESS ORDERED BY A COURT) SHALL BE
MADE BY THE COMPANY ONLY AS AUTHORIZED IN THE SPECIFIC CASE UPON A DETERMINATION
THAT INDEMNIFICATION OF THE PRESENT OR FORMER MEMBER, DIRECTOR, OFFICER,
EMPLOYEE OR AGENT IS PROPER IN THE CIRCUMSTANCES BECAUSE THE PERSON HAS MET THE
APPLICABLE STANDARD OF CONDUCT SET FORTH IN SUBSECTIONS (A) AND (B) OF THIS
SECTION.  SUCH DETERMINATION SHALL BE MADE IN THE SOLE AND ABSOLUTE DISCRETION
OF THE MANAGING MEMBER.

 

(D)                                 IN ADVANCE OF FINAL DISPOSITION. EXPENSES
(INCLUDING ATTORNEYS’ FEES) INCURRED BY A PERSON ENTITLED TO INDEMNIFICATION
HEREUNDER IN DEFENDING ANY CIVIL, CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE
ACTION, SUIT OR PROCEEDING MAY BE PAID BY THE COMPANY IN ADVANCE OF THE FINAL
DISPOSITION OF SUCH ACTION, SUIT OR PROCEEDING UPON RECEIPT OF AN UNDERTAKING BY
OR ON BEHALF OF SUCH PERSON TO REPAY SUCH AMOUNT IF IT SHALL ULTIMATELY BE
DETERMINED THAT SUCH PERSON IS NOT ENTITLED TO BE INDEMNIFIED BY THE COMPANY AS
AUTHORIZED IN THIS SECTION.  SUCH EXPENSES (INCLUDING ATTORNEYS’ FEES) INCURRED
BY SUCH PERSONS MAY BE SO PAID UPON SUCH TERMS AND CONDITIONS, IF ANY, AS THE
MANAGING MEMBER DEEMS APPROPRIATE.

 

(E)                                  NON-EXCLUSIVE SECTION.  THE INDEMNIFICATION
AND ADVANCEMENT OF EXPENSES PROVIDED BY, OR GRANTED PURSUANT TO, THIS AGREEMENT
SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THOSE SEEKING
INDEMNIFICATION OR ADVANCEMENT OF EXPENSES MAY BE ENTITLED UNDER ANY AGREEMENT,
OR OTHERWISE, BOTH AS TO ACTION IN SUCH PERSON’S OFFICIAL CAPACITY AND AS TO
ACTION IN ANOTHER CAPACITY WHILE HOLDING SUCH OFFICE.

 

(F)                                    INSURANCE.  THE COMPANY SHALL HAVE POWER
TO PURCHASE AND MAINTAIN INSURANCE ON BEHALF OF ANY PERSON WHO IS OR WAS A
MEMBER, DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF THE COMPANY, OR IS OR WAS
SERVING AT THE REQUEST OF THE COMPANY AS A DIRECTOR, OFFICER, EMPLOYEE OR AGENT
OF ANOTHER CORPORATION, PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE
AGAINST ANY LIABILITY ASSERTED AGAINST SUCH PERSON AND INCURRED BY SUCH PERSON
IN ANY SUCH CAPACITY, OR ARISING OUT OF SUCH PERSON’S STATUS AS SUCH, WHETHER OR
NOT THE

 

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COMPANY WOULD HAVE THE POWER TO INDEMNIFY SUCH PERSON AGAINST SUCH LIABILITY
UNDER THIS SECTION.

 

(G)                                 MERGER AND CONSOLIDATION; OTHER
ENTERPRISES.  FOR PURPOSES OF THIS SECTION, REFERENCES TO “THE COMPANY” SHALL
INCLUDE, IN ADDITION TO THE RESULTING ENTITY, ANY CONSTITUENT ENTITY (INCLUDING
ANY CONSTITUENT OF A CONSTITUENT) ABSORBED IN A CONSOLIDATION OR MERGER WHICH,
IF ITS SEPARATE EXISTENCE HAD CONTINUED, WOULD HAVE HAD POWER AND AUTHORITY TO
INDEMNIFY ITS MEMBERS, DIRECTORS, OFFICERS, AND EMPLOYEES OR AGENTS, SO THAT ANY
PERSON WHO IS OR WAS A MEMBER, DIRECTOR, OFFICER, EMPLOYEE, OR AGENT OF SUCH
CONSTITUENT ENTITY, OR IS OR WAS SERVING AT THE REQUEST OF SUCH CONSTITUENT
ENTITY AS A DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE TRUST OR OTHER ENTERPRISE, SHALL STAND IN THE SAME
POSITION UNDER THIS SECTION WITH RESPECT TO THE RESULTING OR SURVIVING
CORPORATION AS SUCH PERSON WOULD HAVE WITH RESPECT TO SUCH CONSTITUENT ENTITY IF
ITS SEPARATE EXISTENCE HAD CONTINUED.  FOR PURPOSES OF THIS SECTION, REFERENCES
TO “OTHER ENTERPRISES” SHALL INCLUDE EMPLOYEE BENEFIT PLANS; REFERENCES TO
“FINES” SHALL INCLUDE ANY EXCISE TAXES ASSESSED ON A PERSON WITH RESPECT TO ANY
EMPLOYEE BENEFIT PLAN; AND REFERENCES TO “SERVING AT THE REQUEST OF THE COMPANY”
SHALL INCLUDE ANY SERVICE AS A MEMBER, DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF
THE COMPANY WHICH IMPOSES DUTIES ON, OR INVOLVES SERVICES BY, SUCH MEMBER,
DIRECTOR, OFFICER, EMPLOYEE, OR AGENT WITH RESPECT TO AN EMPLOYEE BENEFIT PLAN,
ITS PARTICIPANTS OR BENEFICIARIES; AND A PERSON WHO ACTED IN GOOD FAITH AND IN A
MANNER SUCH PERSON REASONABLY BELIEVED TO BE IN THE INTEREST OF THE PARTICIPANTS
AND BENEFICIARIES OF AN EMPLOYEE BENEFIT PLAN SHALL BE DEEMED TO HAVE ACTED IN A
MANNER “NOT OPPOSED TO THE BEST INTERESTS OF THE COMPANY” AS REFERRED TO IN THIS
SECTION.

 

(H)                                 CONTINUATION.  THE INDEMNIFICATION AND
ADVANCEMENT OF EXPENSES PROVIDED BY, OR GRANTED PURSUANT TO, THIS SECTION SHALL,
UNLESS OTHERWISE PROVIDED WHEN AUTHORIZED OR RATIFIED, CONTINUE AS TO A PERSON
WHO HAS CEASED TO BE A MEMBER, DIRECTOR, OFFICER, EMPLOYEE OR AGENT AND SHALL
INURE TO THE BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF SUCH A
PERSON.

 

(I)                                     INTERESTED TRANSACTIONS.  A PERSON
ENTITLED TO INDEMNIFICATION HEREUNDER SHALL NOT BE DENIED INDEMNIFICATION IN
WHOLE OR IN PART UNDER THIS SECTION 7.7 BECAUSE THE INDEMNITEE HAD AN INTEREST
IN THE TRANSACTION WITH RESPECT TO WHICH THE INDEMNIFICATION APPLIES IF THE
TRANSACTION WAS OTHERWISE PERMITTED BY THE TERMS OF THIS AGREEMENT.

 

(J)                                     BINDING EFFECT.  THE PROVISIONS OF THIS
SECTION 7.7 ARE FOR THE BENEFIT OF THE INDEMNITEES, THEIR HEIRS, SUCCESSORS,
ASSIGNS AND ADMINISTRATORS AND SHALL NOT BE DEEMED TO CREATE ANY RIGHTS FOR THE
BENEFIT OF ANY OTHER PERSONS.  ANY AMENDMENT, MODIFICATION OR REPEAL OF THIS
SECTION 7.7 OR ANY PROVISION HEREOF SHALL BE PROSPECTIVE ONLY AND SHALL NOT IN
ANY WAY AFFECT THE LIMITATIONS ON THE COMPANY’S LIABILITY TO ANY INDEMNITEE
UNDER THIS SECTION 7.7 AS IN EFFECT IMMEDIATELY PRIOR TO SUCH AMENDMENT,
MODIFICATION OR REPEAL WITH RESPECT TO CLAIMS ARISING FROM OR RELATING TO
MATTERS OCCURRING, IN WHOLE OR IN PART, PRIOR TO SUCH AMENDMENT, MODIFICATION OR
REPEAL, REGARDLESS OF WHEN SUCH CLAIMS MAY ARISE OR BE ASSERTED.

 

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(K)                                  REIMBURSEMENTS TO MANAGING MEMBER SHALL NOT
BE TREATED AS DISTRIBUTIONS.  IF AND TO THE EXTENT ANY REIMBURSEMENTS TO THE
MANAGING MEMBER PURSUANT TO THIS SECTION 7.7 CONSTITUTE GROSS INCOME OF THE
MANAGING MEMBER (AS OPPOSED TO THE REPAYMENT OF ADVANCES MADE BY THE MANAGING
MEMBER ON BEHALF OF THE COMPANY) SUCH AMOUNTS SHALL CONSTITUTE GUARANTEED
PAYMENTS WITHIN THE MEANING OF SECTION 707(C) OF THE CODE, SHALL BE TREATED
CONSISTENTLY THEREWITH BY THE COMPANY AND ALL MEMBERS, AND SHALL NOT BE TREATED
AS DISTRIBUTIONS FOR PURPOSES OF COMPUTING THE MEMBERS’ CAPITAL ACCOUNTS.

 

SECTION 7.8                                      LIABILITY OF THE MANAGING
MEMBER.

 

(A)                                  GENERAL.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY SET FORTH IN THIS AGREEMENT, THE MANAGING MEMBER SHALL NOT BE LIABLE
FOR MONETARY DAMAGES TO THE COMPANY, ANY MEMBERS OR ANY ASSIGNEES FOR LOSSES
SUSTAINED OR LIABILITIES INCURRED AS A RESULT OF ERRORS IN JUDGMENT OR OF ANY
ACT OR OMISSION, UNLESS (I) THE MANAGING MEMBER ACTUALLY RECEIVED AN IMPROPER
BENEFIT IN MONEY, PROPERTY OR SERVICES (IN WHICH CASE, SUCH LIABILITY SHALL BE
FOR THE AMOUNT OF THE BENEFIT IN MONEY, PROPERTY OR SERVICES ACTUALLY RECEIVED),
OR (II) THE MANAGING MEMBER’S ACTION OR FAILURE TO ACT WAS THE RESULT OF ACTIVE
AND DELIBERATE DISHONESTY, GROSS NEGLIGENCE OR BAD FAITH AND WAS MATERIAL TO THE
CAUSE OF ACTION BEING ADJUDICATED; PROVIDED, HOWEVER, THAT THE MANAGING MEMBER
SHALL OWE THE SAME DUTY OF CARE TO THE NON-MANAGING MEMBERS AS ITS DIRECTORS OWE
TO THE SHAREHOLDERS OF THE MANAGING MEMBER.

 

(B)                                 NO OBLIGATION TO CONSIDER INTERESTS OF
NON-MANAGING MEMBERS.  THE NON-MANAGING MEMBERS EXPRESSLY ACKNOWLEDGE THAT THE
MANAGING MEMBER IS ACTING ON BEHALF OF THE COMPANY, THE NON-MANAGING MEMBERS AND
THE MANAGING MEMBER’S SHAREHOLDERS COLLECTIVELY, THAT, EXCEPT AS OTHERWISE
PROVIDED IN SECTION 7.8(A), THE MANAGING MEMBER IS UNDER NO OBLIGATION TO GIVE
PRIORITY TO THE SEPARATE INTERESTS OF THE MANAGING MEMBER’S SHAREHOLDERS OR THE
NON-MANAGING MEMBERS (INCLUDING, WITHOUT LIMITATION, THE TAX CONSEQUENCES TO
NON-MANAGING MEMBERS OR ASSIGNEES) IN DECIDING WHETHER TO CAUSE THE COMPANY TO
TAKE (OR DECLINE TO TAKE) ANY ACTIONS WHICH THE MANAGING MEMBER HAS UNDERTAKEN
IN GOOD FAITH ON BEHALF OF THE COMPANY.  IF THERE IS A CONFLICT BETWEEN THE
INTERESTS OF THE MANAGING MEMBER’S SHAREHOLDERS ON THE ONE HAND AND THE
INTERESTS OF THE NON-MANAGING MEMBERS ON THE OTHER, THE MANAGING MEMBER WILL
ENDEAVOR IN GOOD FAITH TO RESOLVE THE CONFLICT IN A MANNER NOT ADVERSE TO EITHER
THE MANAGING MEMBER’S SHAREHOLDERS OR THE NON-MANAGING MEMBERS; PROVIDED,
HOWEVER, THAT FOR SO LONG AS THE MANAGING MEMBER OWNS A CONTROLLING INTEREST IN
THE COMPANY, ANY CONFLICT THAT CANNOT BE RESOLVED IN A MANNER NOT ADVERSE TO
EITHER THE MANAGING MEMBER’S SHAREHOLDERS OR THE NON-MANAGING MEMBERS WILL BE
RESOLVED IN FAVOR OF THE MANAGING MEMBER’S SHAREHOLDERS.  THE MANAGING MEMBER
SHALL NOT BE LIABLE FOR MONETARY DAMAGES FOR LOSSES SUSTAINED, LIABILITIES
INCURRED, OR BENEFITS NOT DERIVED BY NON-MANAGING MEMBERS IN CONNECTION WITH
SUCH DECISIONS WITH RESPECT TO CAUSING THE COMPANY TO TAKE (OR DECLINE TO TAKE)
ANY ACTIONS WHICH THE MANAGING MEMBER HAS UNDERTAKEN IN GOOD FAITH ON BEHALF OF
THE COMPANY, UNLESS (I) THE MANAGING MEMBER ACTUALLY RECEIVED AN IMPROPER
BENEFIT IN MONEY, PROPERTY OR SERVICES (IN WHICH CASE, SUCH LIABILITY SHALL BE
FOR THE AMOUNT OF THE BENEFIT IN MONEY, PROPERTY OR SERVICES ACTUALLY RECEIVED),
OR (II) THE MANAGING MEMBER’S ACTION OR FAILURE TO ACT WAS THE RESULT OF ACTIVE

 

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AND DELIBERATE DISHONESTY, GROSS NEGLIGENCE OR BAD FAITH AND WAS MATERIAL TO THE
CAUSE OF ACTION BEING ADJUDICATED.

 

(C)                                  ACTS OF AGENTS.  SUBJECT TO ITS OBLIGATIONS
AND DUTIES AS MANAGING MEMBER SET FORTH IN SECTION 7.1(A) HEREOF, THE MANAGING
MEMBER MAY EXERCISE ANY OF THE POWERS GRANTED TO IT BY THIS AGREEMENT AND
PERFORM ANY OF THE DUTIES IMPOSED UPON IT HEREUNDER EITHER DIRECTLY OR BY OR
THROUGH ITS AGENTS.  THE MANAGING MEMBER SHALL NOT BE RESPONSIBLE FOR ANY
MISCONDUCT OR NEGLIGENCE ON THE PART OF ANY SUCH AGENT APPOINTED BY IT IN GOOD
FAITH.

 

(D)                                 EFFECT OF AMENDMENT.  ANY AMENDMENT,
MODIFICATION OR REPEAL OF THIS SECTION 7.8 OR ANY PROVISION HEREOF SHALL BE
PROSPECTIVE ONLY AND SHALL NOT IN ANY WAY AFFECT THE LIMITATIONS ON THE MANAGING
MEMBER’S LIABILITY TO THE COMPANY AND THE NON-MANAGING MEMBERS UNDER THIS
SECTION 7.8 AS IN EFFECT IMMEDIATELY PRIOR TO SUCH AMENDMENT, MODIFICATION OR
REPEAL WITH RESPECT TO CLAIMS ARISING FROM OR RELATING TO MATTERS OCCURRING, IN
WHOLE OR IN PART, PRIOR TO SUCH AMENDMENT, MODIFICATION OR REPEAL, REGARDLESS OF
WHEN SUCH CLAIMS MAY ARISE OR BE ASSERTED.

 

SECTION 7.9                                      OTHER MATTERS CONCERNING THE
MANAGING MEMBER.

 

(A)                                  RELIANCE ON DOCUMENTS.  THE MANAGING MEMBER
MAY RELY AND SHALL BE PROTECTED IN ACTING OR REFRAINING FROM ACTING UPON ANY
RESOLUTION, CERTIFICATE, STATEMENT, INSTRUMENT, OPINION, REPORT, NOTICE,
REQUEST, CONSENT, ORDER, BOND, DEBENTURE, OR OTHER PAPER OR DOCUMENT BELIEVED BY
IT TO BE GENUINE AND TO HAVE BEEN SIGNED OR PRESENTED BY THE PROPER PARTY OR
PARTIES.

 

(B)                                 RELIANCE ON CONSULTANTS AND ADVISERS.  THE
MANAGING MEMBER MAY CONSULT WITH LEGAL COUNSEL, ACCOUNTANTS, APPRAISERS,
MANAGEMENT CONSULTANTS, INVESTMENT BANKERS AND OTHER CONSULTANTS AND ADVISERS
SELECTED BY IT, AND ANY ACT TAKEN OR OMITTED TO BE TAKEN IN RELIANCE UPON THE
OPINION OF SUCH PERSONS AS TO MATTERS WHICH SUCH MANAGING MEMBER REASONABLY
BELIEVES TO BE WITHIN SUCH PERSON’S PROFESSIONAL OR EXPERT COMPETENCE SHALL BE
CONCLUSIVELY PRESUMED TO HAVE BEEN DONE OR OMITTED IN GOOD FAITH AND IN
ACCORDANCE WITH SUCH OPINION.

 

(C)                                  ACTION THROUGH OFFICERS AND ATTORNEYS.  THE
MANAGING MEMBER SHALL HAVE THE RIGHT, IN RESPECT OF ANY OF ITS POWERS OR
OBLIGATIONS HEREUNDER, TO ACT THROUGH ANY OF ITS DULY AUTHORIZED OFFICERS AND A
DULY APPOINTED ATTORNEY OR ATTORNEYS-IN-FACT.  EACH SUCH ATTORNEY SHALL, TO THE
EXTENT PROVIDED BY THE MANAGING MEMBER IN THE POWER OF ATTORNEY, HAVE FULL POWER
AND AUTHORITY TO DO AND PERFORM ALL AND EVERY ACT AND DUTY WHICH IS PERMITTED OR
REQUIRED TO BE DONE BY THE MANAGING MEMBER HEREUNDER.

 

SECTION 7.10                                TITLE TO COMPANY ASSETS.  COMPANY
ASSETS, WHETHER REAL, PERSONAL OR MIXED AND WHETHER TANGIBLE OR INTANGIBLE,
SHALL BE DEEMED TO BE OWNED BY THE COMPANY AS AN ENTITY, AND NO MEMBER,
INDIVIDUALLY OR COLLECTIVELY, SHALL HAVE ANY OWNERSHIP INTEREST IN SUCH COMPANY
ASSETS OR ANY PORTION THEREOF.  TITLE TO ANY OR ALL OF THE COMPANY ASSETS MAY BE
HELD IN THE NAME OF THE COMPANY, THE MANAGING MEMBER OR ONE OR MORE NOMINEES, AS
THE MANAGING MEMBER MAY DETERMINE, INCLUDING AFFILIATES OF THE MANAGING MEMBER. 
THE MANAGING MEMBER

 

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hereby covenants, declares and warrants that any Company assets as to which
legal title is held in the name of the Managing Member or any nominee or
Affiliate of the Managing Member shall be held by the Managing Member or such
nominee or Affiliate for the exclusive use and benefit of the Company in
accordance with the provisions of this Agreement; provided, however, that the
Managing Member shall use its best efforts to cause beneficial and record title
to such assets to be vested in the Company as soon as reasonably practicable. 
All Company assets shall be recorded as the property of the Company in its books
and records, irrespective of the name in which legal title to such Company
assets is held.

 

SECTION 7.11                                RELIANCE BY THIRD PARTIES. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ANY PERSON DEALING
WITH THE COMPANY SHALL BE ENTITLED TO ASSUME THAT THE MANAGING MEMBER HAS FULL
POWER AND AUTHORITY TO ENCUMBER, SELL OR OTHERWISE USE IN ANY MANNER ANY AND ALL
ASSETS OF THE COMPANY AND TO ENTER INTO ANY CONTRACTS ON BEHALF OF THE COMPANY,
AND SUCH PERSON SHALL BE ENTITLED TO DEAL WITH THE MANAGING MEMBER AS IF IT WERE
THE COMPANY’S SOLE PARTY IN INTEREST, BOTH LEGALLY AND BENEFICIALLY.  EACH
NON-MANAGING MEMBER HEREBY WAIVES ANY AND ALL DEFENSES OR OTHER REMEDIES WHICH
MAY BE AVAILABLE AGAINST SUCH PERSON TO CONTEST, NEGATE OR DISAFFIRM ANY ACTION
OF THE MANAGING MEMBER IN CONNECTION WITH ANY SUCH DEALING.  IN NO EVENT SHALL
ANY PERSON DEALING WITH THE MANAGING MEMBER OR ITS REPRESENTATIVES BE OBLIGATED
TO ASCERTAIN THAT THE TERMS OF THIS AGREEMENT HAVE BEEN COMPLIED WITH OR TO
INQUIRE INTO THE NECESSITY OR EXPEDIENCE OF ANY ACT OR ACTION OF THE MANAGING
MEMBER OR ITS REPRESENTATIVES. EACH AND EVERY CERTIFICATE, DOCUMENT OR OTHER
INSTRUMENT EXECUTED ON BEHALF OF THE COMPANY BY THE MANAGING MEMBER OR ITS
REPRESENTATIVES SHALL BE CONCLUSIVE EVIDENCE IN FAVOR OF ANY AND EVERY PERSON
RELYING THEREON OR CLAIMING THEREUNDER THAT (A) AT THE TIME OF THE EXECUTION AND
DELIVERY OF SUCH CERTIFICATE, DOCUMENT OR INSTRUMENT, THIS AGREEMENT WAS IN FULL
FORCE AND EFFECT, (B) THE PERSON EXECUTING AND DELIVERING SUCH CERTIFICATE,
DOCUMENT OR INSTRUMENT WAS DULY AUTHORIZED AND EMPOWERED TO DO SO FOR AND ON
BEHALF OF THE COMPANY AND (C) SUCH CERTIFICATE, DOCUMENT OR INSTRUMENT WAS DULY
EXECUTED AND DELIVERED IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF THIS
AGREEMENT AND IS BINDING UPON THE COMPANY.

 

ARTICLE VIII
RIGHTS AND OBLIGATIONS OF NON-MANAGING MEMBERS

 

SECTION 8.1                                      LIMITATION OF LIABILITY.  THE
NON-MANAGING MEMBERS SHALL HAVE NO LIABILITY UNDER THIS AGREEMENT EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, INCLUDING SECTION 10.4 HEREOF, OR UNDER
THE ACT.

 

SECTION 8.2                                      MANAGEMENT OF BUSINESS.  NO
NON-MANAGING MEMBER OR ASSIGNEE (OTHER THAN THE MANAGING MEMBER, ANY OF ITS
AFFILIATES OR ANY OFFICER, DIRECTOR, EMPLOYEE, MEMBER OR AGENT OF THE MANAGING
MEMBER, THE COMPANY OR ANY OF THEIR AFFILIATES, IN THEIR CAPACITY AS SUCH) SHALL
TAKE PART IN THE OPERATION, MANAGEMENT OR CONTROL (WITHIN THE MEANING OF THE
ACT) OF THE COMPANY’S BUSINESS, TRANSACT ANY BUSINESS IN THE COMPANY’S NAME OR
HAVE THE POWER TO SIGN DOCUMENTS FOR OR OTHERWISE BIND THE COMPANY.  THE
TRANSACTION OF ANY SUCH BUSINESS BY THE MANAGING MEMBER, ANY OF ITS AFFILIATES
OR ANY OFFICER, DIRECTOR, EMPLOYEE, MEMBER OR AGENT OR TRUSTEE OF THE MANAGING
MEMBER, THE COMPANY OR ANY OF THEIR AFFILIATES, IN THEIR CAPACITY AS SUCH, SHALL
NOT AFFECT, IMPAIR OR ELIMINATE THE LIMITATIONS ON THE LIABILITY OF THE
NON-MANAGING MEMBERS OR ASSIGNEES UNDER THIS AGREEMENT.

 

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SECTION 8.3                                      OUTSIDE ACTIVITIES OF
NON-MANAGING MEMBERS.  SUBJECT TO ANY AGREEMENTS ENTERED INTO PURSUANT TO
SECTION 7.6 HEREOF AND SUBJECT TO ANY OTHER AGREEMENTS ENTERED INTO BY A
NON-MANAGING MEMBER OR ITS AFFILIATES WITH THE MANAGING MEMBER, THE COMPANY OR A
SUBSIDIARY, THE FOLLOWING RIGHTS SHALL GOVERN OUTSIDE ACTIVITIES OF NON-MANAGING
MEMBERS:  (A) ANY NON-MANAGING MEMBER (OTHER THAN THE MANAGING MEMBER) AND ANY
OFFICER, DIRECTOR, EMPLOYEE, AGENT, TRUSTEE, AFFILIATE OR SHAREHOLDER OF ANY
NON-MANAGING MEMBER SHALL BE ENTITLED TO AND MAY HAVE BUSINESS INTERESTS AND
ENGAGE IN BUSINESS ACTIVITIES IN ADDITION TO THOSE RELATING TO THE COMPANY,
INCLUDING BUSINESS INTERESTS AND ACTIVITIES IN DIRECT COMPETITION WITH THE
COMPANY; (B) NEITHER THE COMPANY NOR ANY MEMBERS SHALL HAVE ANY RIGHTS BY VIRTUE
OF THIS AGREEMENT IN ANY BUSINESS VENTURES OF ANY NON-MANAGING MEMBER OR
ASSIGNEE; (C) NONE OF THE NON-MANAGING MEMBERS (IN THEIR CAPACITIES AS
NON-MANAGING MEMBERS) NOR ANY OTHER PERSON SHALL HAVE ANY RIGHTS BY VIRTUE OF
THIS AGREEMENT OR THE COMPANY RELATIONSHIP ESTABLISHED HEREBY IN ANY BUSINESS
VENTURES OF ANY OTHER PERSON, OTHER THAN THE MANAGING MEMBER, AND SUCH PERSON
SHALL HAVE NO OBLIGATION PURSUANT TO THIS AGREEMENT TO OFFER ANY INTEREST IN ANY
SUCH BUSINESS VENTURES TO THE COMPANY, ANY NON-MANAGING MEMBER OR ANY SUCH OTHER
PERSON, EVEN IF SUCH OPPORTUNITY IS OF A CHARACTER WHICH, IF PRESENTED TO THE
COMPANY, ANY NON-MANAGING MEMBER OR SUCH OTHER PERSON, COULD BE TAKEN BY SUCH
PERSON; (D) THE FACT THAT A NON-MANAGING MEMBER MAY ENCOUNTER OPPORTUNITIES TO
PURCHASE, OTHERWISE ACQUIRE, LEASE, SELL OR OTHERWISE DISPOSE OF REAL OR
PERSONAL PROPERTY AND MAY TAKE ADVANTAGE OF SUCH OPPORTUNITIES HIMSELF OR
INTRODUCE SUCH OPPORTUNITIES TO ENTITIES IN WHICH IT HAS OR HAS NOT ANY
INTEREST, SHALL NOT SUBJECT SUCH MEMBER TO LIABILITY TO THE COMPANY OR ANY OF
THE OTHER MEMBERS ON ACCOUNT OF THE LOST OPPORTUNITY; AND (E) EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED HEREIN, NOTHING CONTAINED IN THIS AGREEMENT
SHALL BE DEEMED TO PROHIBIT A NON-MANAGING MEMBER OR ANY AFFILIATE OF A
NON-MANAGING MEMBER FROM DEALING, OR OTHERWISE ENGAGING IN BUSINESS, WITH
PERSONS TRANSACTING BUSINESS WITH THE COMPANY OR FROM PROVIDING SERVICES
RELATING TO THE PURCHASE, SALE, RENTAL, MANAGEMENT OR OPERATION OF REAL OR
PERSONAL PROPERTY (INCLUDING REAL ESTATE BROKERAGE SERVICES) AND RECEIVING
COMPENSATION THEREFOR, FROM ANY PERSONS WHO HAVE TRANSACTED BUSINESS WITH THE
COMPANY OR OTHER THIRD PARTIES.  NOTHING IN THIS SECTION 8.3 IS INTENDED TO
ALTER ANY FIDUCIARY OBLIGATIONS OF ANY PERSON UNDER APPLICABLE DELAWARE LAW.

 

SECTION 8.4                                      RETURN OF CAPITAL AND PRIORITY
AMONG MEMBERS.  EXCEPT PURSUANT TO THE REDEMPTION RIGHTS SET FORTH IN
SECTION 4.2(E) HEREOF, NO MEMBER SHALL BE ENTITLED TO THE WITHDRAWAL OR RETURN
OF HIS OR HER CAPITAL CONTRIBUTION, EXCEPT TO THE EXTENT OF DISTRIBUTIONS MADE
PURSUANT TO THIS AGREEMENT OR UPON TERMINATION OF THE COMPANY AS PROVIDED
HEREIN. NO MEMBER OR ASSIGNEE SHALL HAVE PRIORITY OVER ANY OTHER MEMBER OR
ASSIGNEE EITHER AS TO THE RETURN OF CAPITAL CONTRIBUTIONS OR OTHERWISE UNLESS
EXPRESSLY PROVIDED IN THIS AGREEMENT, AS TO PROFITS, LOSSES, DISTRIBUTIONS OR
CREDITS.

 

SECTION 8.5                                      RIGHTS OF NON-MANAGING MEMBERS
RELATING TO THE COMPANY.

 

(A)                                  COPIES OF BUSINESS RECORDS.  IN ADDITION TO
OTHER RIGHTS PROVIDED BY THIS AGREEMENT OR BY THE ACT, AND EXCEPT AS LIMITED BY
SECTION 8.5(C) HEREOF, EACH NON-MANAGING MEMBER SHALL HAVE THE RIGHT, FOR A
PURPOSE REASONABLY RELATED TO SUCH NON-MANAGING MEMBER’S INTEREST AS A
NON-MANAGING MEMBER IN THE COMPANY, UPON WRITTEN DEMAND WITH A STATEMENT OF THE
PURPOSE OF SUCH DEMAND AND AT SUCH NON-MANAGING MEMBER’S OWN EXPENSE:

 

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(1)                                  TO OBTAIN A COPY OF THE MOST RECENT ANNUAL
AND QUARTERLY REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY THE
MANAGING MEMBER PURSUANT TO THE EXCHANGE ACT, AND EACH COMMUNICATION SENT TO ALL
OF THE STOCKHOLDERS OF THE MANAGING MEMBER;

 

(2)                                  TO OBTAIN A COPY OF THE COMPANY’S FEDERAL,
STATE AND LOCAL INCOME TAX RETURNS FOR EACH PARTNERSHIP YEAR;

 

(3)                                  TO OBTAIN A CURRENT LIST OF THE NAME AND
LAST KNOWN BUSINESS, RESIDENCE OR MAILING ADDRESS OF EACH MEMBER;

 

(4)                                  TO OBTAIN A COPY OF THIS AGREEMENT AND THE
CERTIFICATE AND ALL AMENDMENTS THERETO, TOGETHER WITH EXECUTED COPIES OF ALL
POWERS OF ATTORNEY PURSUANT TO WHICH THIS AGREEMENT, THE CERTIFICATE AND ALL
AMENDMENTS THERETO HAVE BEEN EXECUTED; AND

 

(5)                                  TO OBTAIN TRUE AND FULL INFORMATION
REGARDING THE AMOUNT OF CASH AND A DESCRIPTION AND STATEMENT OF ANY OTHER
PROPERTY OR SERVICES CONTRIBUTED BY EACH MEMBER AND WHICH EACH MEMBER HAS AGREED
TO CONTRIBUTE IN THE FUTURE, AND THE DATE ON WHICH EACH BECAME A MEMBER.

 

(B)                                 NOTIFICATION OF CHANGES IN UNIT ADJUSTMENT
FACTOR.  THE COMPANY SHALL NOTIFY EACH NON-MANAGING MEMBER IN WRITING OF ANY
CHANGE MADE TO THE UNIT ADJUSTMENT FACTOR WITHIN 10 BUSINESS DAYS OF THE DATE
SUCH CHANGE BECOMES EFFECTIVE.

 

(C)                                  CONFIDENTIAL INFORMATION.  NOTWITHSTANDING
ANY OTHER PROVISION OF THIS SECTION 8.5, THE MANAGING MEMBER MAY KEEP
CONFIDENTIAL FROM THE NON-MANAGING MEMBERS, FOR SUCH PERIOD OF TIME AS THE
MANAGING MEMBER DETERMINES IN ITS SOLE AND ABSOLUTE DISCRETION TO BE REASONABLE,
ANY COMPANY INFORMATION THAT (I) THE MANAGING MEMBER BELIEVES TO BE IN THE
NATURE OF TRADE SECRETS OR OTHER INFORMATION THE DISCLOSURE OF WHICH THE
MANAGING MEMBER IN GOOD FAITH BELIEVES IS NOT IN THE BEST INTERESTS OF THE
COMPANY OR (II) THE COMPANY IS REQUIRED BY LAW OR BY AGREEMENTS WITH
UNAFFILIATED THIRD PARTIES TO KEEP CONFIDENTIAL.

 

(D)                                 DEBT ALLOCATION.  THE MANAGING MEMBER SHALL
ALLOW ANY NON-MANAGING MEMBER TO GUARANTEE ON A “BOTTOM DOLLAR BASIS,” AN AMOUNT
OF INDEBTEDNESS OF THE COMPANY OR ANY SUCCESSOR THERETO, AS IS NECESSARY FROM
TIME TO TIME TO PROVIDE AN ALLOCATION OF DEBT TO SUCH NON-MANAGING MEMBER EQUAL
TO THE AMOUNT OF DEBT THEN REQUIRED TO BE ALLOCATED TO SUCH NON-MANAGING MEMBER
TO ENABLE SUCH NON-MANAGING MEMBER TO AVOID RECOGNIZING GAIN PURSUANT TO
SECTION 731(A)(1) OF THE CODE AS A RESULT OF A DEEMED DISTRIBUTION OF MONEY TO
SUCH NON-MANAGING MEMBER PURSUANT TO SECTION 752(B) OF THE CODE.  THE MANAGING
MEMBER MAY, IN ITS DISCRETION, PERMIT NON-MANAGING MEMBERS TO PROVIDE SIMILAR
GUARANTEES FROM TIME TO TIME OR AS A RESULT OF MINIMUM GAIN CHARGEBACKS.

 

(E)                                  NOTICE FOR CERTAIN TRANSACTIONS.  IN THE
EVENT OF (A) A DISSOLUTION OR LIQUIDATION OF THE COMPANY OR THE MANAGING MEMBER,
(B) A MERGER, CONSOLIDATION OR COMBINATION OF THE COMPANY OR THE MANAGING MEMBER
WITH OR INTO ANOTHER PERSON

 

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(INCLUDING THE EVENTS SET FORTH IN SECTIONS 11.2(C) AND 11.2(D)), (C) THE SALE
OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY OR THE MANAGING MEMBER,
OR (D) THE TRANSFER BY THE MANAGING MEMBER OF ALL OR ANY PART OF ITS INTEREST IN
THE COMPANY, THE MANAGING MEMBER SHALL GIVE WRITTEN NOTICE THEREOF TO EACH
NON-MANAGING MEMBER AT LEAST TWENTY (20) BUSINESS DAYS PRIOR TO THE EFFECTIVE
DATE OR, TO THE EXTENT APPLICABLE, RECORD DATE OF SUCH TRANSACTION, WHICHEVER
COMES FIRST.

 

ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

SECTION 9.1                                      RECORDS AND ACCOUNTING.  THE
MANAGING MEMBER SHALL KEEP OR CAUSE TO BE KEPT AT THE PRINCIPAL OFFICE OF THE
COMPANY APPROPRIATE BOOKS AND RECORDS WITH RESPECT TO THE COMPANY’S BUSINESS,
INCLUDING, WITHOUT LIMITATION, ALL BOOKS AND RECORDS NECESSARY TO PROVIDE TO THE
NON-MANAGING MEMBERS ANY INFORMATION, LISTS AND COPIES OF DOCUMENTS REQUIRED TO
BE PROVIDED PURSUANT TO SECTION 9.3 HEREOF OR REQUIRED BY THE ACT. ANY RECORDS
MAINTAINED BY OR ON BEHALF OF THE COMPANY IN THE REGULAR COURSE OF ITS BUSINESS
MAY BE KEPT ON, OR BE IN THE FORM OF, PUNCH CARDS, MAGNETIC TAPE, PHOTOGRAPHS,
MICROGRAPHICS OR ANY OTHER INFORMATION STORAGE DEVICE; PROVIDED, HOWEVER, THAT
THE RECORDS SO MAINTAINED ARE CONVERTIBLE INTO CLEARLY LEGIBLE WRITTEN FORM
WITHIN A REASONABLE PERIOD OF TIME.  THE BOOKS OF THE COMPANY SHALL BE
MAINTAINED FOR FINANCIAL PURPOSES ON AN ACCRUAL BASIS IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND FOR TAX REPORTING PURPOSES ON THE
ACCRUAL BASIS.

 

SECTION 9.2                                      FISCAL YEAR.  THE FISCAL YEAR
OF THE COMPANY SHALL BE THE CALENDAR YEAR.

 

SECTION 9.3                                      REPORTS.

 

(A)                                  ANNUAL REPORTS.  AS SOON AS PRACTICABLE,
BUT IN NO EVENT LATER THAN 120 DAYS AFTER THE CLOSE OF EACH PARTNERSHIP YEAR, OR
SUCH EARLIER DATE THAT THEY ARE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, THE MANAGING MEMBER SHALL CAUSE TO BE MAILED TO EACH NON-MANAGING
MEMBER AS OF THE CLOSE OF THE COMPANY YEAR, AN ANNUAL REPORT CONTAINING
FINANCIAL STATEMENTS OF THE COMPANY, OR OF THE MANAGING MEMBER IF SUCH
STATEMENTS ARE PREPARED SOLELY ON A CONSOLIDATED BASIS WITH THE MANAGING MEMBER,
FOR SUCH PARTNERSHIP YEAR, PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, SUCH STATEMENTS TO BE AUDITED BY A NATIONALLY RECOGNIZED
FIRM OF INDEPENDENT PUBLIC ACCOUNTANTS SELECTED BY THE MANAGING MEMBER.

 

(B)                                 QUARTERLY REPORTS.  AS SOON AS PRACTICABLE,
BUT IN NO EVENT LATER THAN 60 DAYS AFTER THE CLOSE OF EACH CALENDAR QUARTER
(EXCEPT THE LAST CALENDAR QUARTER OF EACH YEAR), OR SUCH EARLIER DATE THAT THEY
ARE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, THE MANAGING MEMBER SHALL
CAUSE TO BE MAILED TO EACH NON-MANAGING MEMBER AS OF THE LAST DAY OF THE
CALENDAR QUARTER, A REPORT CONTAINING UNAUDITED FINANCIAL STATEMENTS OF THE
COMPANY, OR OF THE MANAGING MEMBER, IF SUCH STATEMENTS ARE PREPARED SOLELY ON A
CONSOLIDATED BASIS WITH THE MANAGING MEMBER, AND SUCH OTHER INFORMATION AS MAY
BE REQUIRED BY APPLICABLE LAW OR REGULATION, OR AS THE MANAGING MEMBER
DETERMINES TO BE APPROPRIATE.

 

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ARTICLE X
TAX MATTERS

 

SECTION 10.1                                PREPARATION OF TAX RETURNS.  THE
MANAGING MEMBER SHALL ARRANGE FOR THE PREPARATION AND TIMELY FILING OF ALL
RETURNS OF COMPANY INCOME, GAINS, DEDUCTIONS, LOSSES AND OTHER ITEMS REQUIRED OF
THE COMPANY FOR FEDERAL AND STATE INCOME TAX PURPOSES AND SHALL USE ALL
REASONABLE EFFORTS TO FURNISH THE TAX INFORMATION REASONABLY REQUIRED BY THE
MANAGING MEMBER AND THE NON-MANAGING MEMBERS FOR FEDERAL AND STATE INCOME TAX
REPORTING PURPOSES WITHIN 60 DAYS AFTER THE CLOSE OF SUCH TAXABLE YEAR.  EACH
NON-MANAGING MEMBER SHALL PROMPTLY PROVIDE THE MANAGING MEMBER WITH ANY
INFORMATION REASONABLY REQUESTED BY THE MANAGING MEMBER RELATING TO ANY
CONTRIBUTED PROPERTY CONTRIBUTED (DIRECTLY OR INDIRECTLY) BY SUCH NON-MANAGING
MEMBER TO THE COMPANY.

 

SECTION 10.2                                TAX ELECTIONS.  EXCEPT AS OTHERWISE
PROVIDED HEREIN, THE MANAGING MEMBER SHALL, IN ITS SOLE AND ABSOLUTE DISCRETION,
DETERMINE WHETHER TO MAKE ANY AVAILABLE ELECTION PURSUANT TO THE CODE, EXCEPT
THAT THE ELECTION UNDER SECTION 754 OF THE CODE IN ACCORDANCE WITH APPLICABLE
REGULATIONS THEREUNDER SHALL BE MADE AT THE REQUEST OF ANY MEMBER.  THE MANAGING
MEMBER SHALL HAVE THE RIGHT TO SEEK TO REVOKE ANY SUCH ELECTION (INCLUDING
WITHOUT LIMITATION, ANY ELECTION UNDER SECTION 754 OF THE CODE) UPON THE
MANAGING MEMBER’S DETERMINATION IN ITS SOLE AND ABSOLUTE DISCRETION THAT SUCH
REVOCATION IS THE BEST INTERESTS OF THE MEMBERS.

 

SECTION 10.3                                TAX MATTERS MEMBER.

 

(A)                                  GENERAL.  THE MANAGING MEMBER SHALL BE THE
“TAX MATTERS MEMBER” OF THE COMPANY FOR FEDERAL INCOME TAX PURPOSES.  PURSUANT
TO SECTION 6223(C) OF THE CODE, UPON RECEIPT OF NOTICE FROM THE IRS OF THE
BEGINNING OF AN ADMINISTRATIVE PROCEEDING WITH RESPECT TO THE COMPANY, THE TAX
MATTERS MEMBER SHALL PROVIDE THE MEMBERS NOTICE OF SUCH RECEIPT AND SHALL
FURNISH THE IRS WITH THE NAME, ADDRESS AND PROFIT INTEREST OF EACH OF THE
NON-MANAGING MEMBERS; PROVIDED, HOWEVER, THAT SUCH INFORMATION IS PROVIDED TO
THE COMPANY BY THE NON-MANAGING MEMBERS.  THE NON-MANAGING MEMBERS SHALL PROVIDE
SUCH INFORMATION TO THE COMPANY AS THE MANAGING MEMBER SHALL REASONABLY REQUEST.

 

(B)                                 POWERS.  THE TAX MATTERS MEMBER IS
AUTHORIZED, BUT NOT REQUIRED:

 

(1)                                  TO ENTER INTO ANY SETTLEMENT WITH THE IRS
WITH RESPECT TO ANY ADMINISTRATIVE OR JUDICIAL PROCEEDINGS FOR THE ADJUSTMENT OF
COMPANY ITEMS REQUIRED TO BE TAKEN INTO ACCOUNT BY A MEMBER FOR INCOME TAX
PURPOSES (SUCH ADMINISTRATIVE PROCEEDINGS BEING REFERRED TO AS A “TAX AUDIT” AND
SUCH JUDICIAL PROCEEDINGS BEING REFERRED TO AS “JUDICIAL REVIEW”), AND IN THE
SETTLEMENT AGREEMENT THE TAX MATTERS MEMBER MAY EXPRESSLY STATE THAT SUCH
AGREEMENT SHALL BIND ALL MEMBERS, EXCEPT THAT SUCH SETTLEMENT AGREEMENT SHALL
NOT BIND ANY MEMBER (A) WHO (WITHIN THE TIME PRESCRIBED PURSUANT TO THE CODE AND
REGULATIONS) FILES A STATEMENT WITH THE IRS PROVIDING THAT THE TAX MATTERS
MEMBER SHALL NOT HAVE THE AUTHORITY TO ENTER INTO A SETTLEMENT AGREEMENT ON
BEHALF OF SUCH MEMBER OR (B) WHO IS A “NOTICE MEMBER” (AS DEFINED IN
SECTION 6231 OF THE

 

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CODE) OR A MEMBER OF A “NOTICE GROUP” (AS DEFINED IN SECTION 6223(B)(2) OF THE
CODE);

 

(2)                                  IN THE EVENT THAT A NOTICE OF A FINAL
ADMINISTRATIVE ADJUSTMENT AT THE COMPANY LEVEL OF ANY ITEM REQUIRED TO BE TAKEN
INTO ACCOUNT BY A MEMBER FOR TAX PURPOSES (A “FINAL ADJUSTMENT”) IS MAILED OR
OTHERWISE GIVEN TO THE TAX MATTERS MEMBER, TO SEEK JUDICIAL REVIEW OF SUCH FINAL
ADJUSTMENT, INCLUDING THE FILING OF A PETITION FOR READJUSTMENT WITH THE TAX
COURT OR THE UNITED STATES CLAIMS COURT, OR THE FILING OF A COMPLAINT FOR REFUND
WITH THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT IN WHICH THE
COMPANY’S PRINCIPAL PLACE OF BUSINESS IS LOCATED;

 

(3)                                  TO INTERVENE IN ANY ACTION BROUGHT BY ANY
OTHER MEMBER FOR JUDICIAL REVIEW OF A FINAL ADJUSTMENT;

 

(4)                                  TO FILE A REQUEST FOR AN ADMINISTRATIVE
ADJUSTMENT WITH THE IRS AT ANY TIME AND, IF ANY PART OF SUCH REQUEST IS NOT
ALLOWED BY THE IRS, TO FILE AN APPROPRIATE PLEADING (PETITION, COMPLAINT OR
OTHER DOCUMENT) FOR JUDICIAL REVIEW WITH RESPECT TO SUCH REQUEST;

 

(5)                                  TO ENTER INTO AN AGREEMENT WITH THE IRS TO
EXTEND THE PERIOD FOR ASSESSING ANY TAX WHICH IS ATTRIBUTABLE TO ANY ITEM
REQUIRED TO BE TAKEN INTO ACCOUNT BY A MEMBER FOR TAX PURPOSES, OR AN ITEM
AFFECTED BY SUCH ITEM; AND

 

(6)                                  TO TAKE ANY OTHER ACTION ON BEHALF OF THE
MEMBERS OF THE COMPANY IN CONNECTION WITH ANY TAX AUDIT OR JUDICIAL REVIEW
PROCEEDING TO THE EXTENT PERMITTED BY APPLICABLE LAW OR REGULATIONS.

 

The taking of any action and the incurring of any expense by the tax matters
Member in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters Member,
and the provisions relating to indemnification of the Managing Member set forth
in Section 7.7 of this Agreement shall be fully applicable to the tax matters
Member in its capacity as such.

 

(C)                                  THE TAX MATTERS MEMBER SHALL, UPON THE
REQUEST OF ANY MEMBER, PROVIDE SUCH MEMBER WITH COPIES OF ANY TAX RETURNS,
ELECTIONS OR ANY RETURNS OR DOCUMENTS TO BE FILED WITH THE IRS AT LEAST TEN
BUSINESS DAYS PRIOR TO THE DATE SUCH FILING IS REQUIRED.

 

(D)                                 REIMBURSEMENT.  THE TAX MATTERS MEMBER SHALL
RECEIVE NO COMPENSATION FOR ITS SERVICES.  ALL THIRD-PARTY COSTS AND EXPENSES
INCURRED BY THE TAX MATTERS MEMBER IN PERFORMING ITS DUTIES AS SUCH (INCLUDING
LEGAL AND ACCOUNTING FEES) SHALL BE BORNE BY THE COMPANY.  NOTHING HEREIN SHALL
BE CONSTRUED TO RESTRICT THE COMPANY FROM ENGAGING AN ACCOUNTING FIRM AND A LAW
FIRM TO ASSIST THE TAX MATTERS MEMBER IN DISCHARGING ITS DUTIES HEREUNDER, SO
LONG AS THE COMPENSATION PAID BY THE COMPANY FOR SUCH SERVICES IS REASONABLE.

 

SECTION 10.4                                WITHHOLDING.  EACH NON-MANAGING
MEMBER HEREBY AUTHORIZES THE COMPANY TO WITHHOLD FROM OR PAY ON BEHALF OF OR
WITH RESPECT TO SUCH NON-MANAGING MEMBER ANY AMOUNT OF FEDERAL, STATE, LOCAL, OR
FOREIGN TAXES THAT THE MANAGING MEMBER DETERMINES THAT

 

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the Company is required to withhold or pay with respect to any amount
distributable or allocable to such Non-Managing Member pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Company pursuant to Section 1441, 1442, 1445 or 1446 of the Code. 
Any amount paid on behalf of or with respect to a Non-Managing Member shall
constitute a loan by the Company to such Non-Managing Member, which loan shall
be repaid by such Non-Managing Member within 15 days after notice from the
Managing Member that such payment must be made unless (a) the Company withholds
such payment from a distribution which would otherwise be made to the
Non-Managing Member or (b) the Managing Member determines, in its sole and
absolute discretion, that such payment may be satisfied out of the available
funds of the Company which would, but for such payment, be distributed to the
Non-Managing Member.  Any amounts withheld pursuant to the foregoing clauses
(a) or (b) shall be treated as having been distributed to such Non-Managing
Member.  Each Non-Managing Member hereby unconditionally and irrevocably grants
to the Company a security interest in such Non-Managing Member’s Membership
Interest to secure such Non-Managing Member’s obligation to pay to the Company
any amounts required to be paid pursuant to this Section 10.4.  In the event
that a Non-Managing Member fails to pay any amounts owed to the Company pursuant
to this Section 10.4 when due, the Managing Member may, in its sole and absolute
discretion, elect to make the payment to the Company on behalf of such
defaulting Non-Managing Member, and in such event shall be deemed to have loaned
such amount to such defaulting Non-Managing Member and shall succeed to all
rights and remedies of the Company as against such defaulting Non-Managing
Member (including, without limitation, the right to receive distributions).  Any
amounts payable by a Non-Managing Member hereunder shall bear interest at the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in the Wall Street Journal, plus four
percentage points (but not higher than the maximum lawful rate) from the date
such amount is due (i.e., 15 days after demand) until such amount is paid in
full.  Each Non-Managing Member shall take such actions as the Company or the
Managing Member shall request in order to perfect or enforce the security
interest created hereunder.

 

ARTICLE XI
TRANSFERS AND WITHDRAWALS

 

SECTION 11.1                                 TRANSFER.

 

(A)                                  DEFINITION.  THE TERM “TRANSFER,” WHEN USED
IN THIS ARTICLE XI WITH RESPECT TO A MEMBERSHIP UNIT, SHALL BE DEEMED TO REFER
TO A TRANSACTION BY WHICH THE MANAGING MEMBER PURPORTS TO ASSIGN ITS MANAGING
MEMBERSHIP INTEREST TO ANOTHER PERSON OR BY WHICH A NON-MANAGING MEMBER PURPORTS
TO ASSIGN ITS NON-MANAGING MEMBERSHIP INTEREST TO ANOTHER PERSON, AND INCLUDES A
SALE, ASSIGNMENT, GIFT, PLEDGE, ENCUMBRANCE, HYPOTHECATION, MORTGAGE, EXCHANGE
OR ANY OTHER DISPOSITION BY LAW OR OTHERWISE.

 

(B)                                 REQUIREMENTS.  NO MEMBERSHIP INTEREST SHALL
BE TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH IN THIS ARTICLE XI.  ANY TRANSFER OR PURPORTED TRANSFER OF
A MEMBERSHIP INTEREST NOT MADE IN ACCORDANCE WITH THIS ARTICLE XI SHALL BE NULL
AND VOID.

 

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SECTION 11.2                                 TRANSFER OF MANAGING MEMBER’S
MEMBERSHIP INTEREST.

 

(A)                                  GENERAL.  THE MANAGING MEMBER MAY NOT
TRANSFER ANY OF ITS MANAGING MEMBERSHIP INTEREST OR WITHDRAW AS MANAGING MEMBER
EXCEPT AS PROVIDED IN SECTION 11.2(B) OR IN CONNECTION WITH A TRANSACTION
DESCRIBED IN EITHER SECTION 11.2(C) OR SECTION 11.2(E).

 

(B)                                 TRANSFER TO COMPANY.  THE MANAGING MEMBER
MAY TRANSFER MEMBERSHIP INTERESTS HELD BY IT TO THE COMPANY IN ACCORDANCE WITH
SECTION 7.5(B) HEREOF.

 

(C)                                  TRANSFER IN CONNECTION WITH
RECLASSIFICATION, RECAPITALIZATION, OR BUSINESS COMBINATION INVOLVING MANAGING
MEMBER.  EXCEPT AS OTHERWISE PROVIDED IN SECTION 11.2(D), THE MANAGING MEMBER
SHALL NOT ENGAGE IN ANY MERGER, CONSOLIDATION OR OTHER BUSINESS COMBINATION WITH
OR INTO ANOTHER PERSON OR SALE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS, OR ANY
RECLASSIFICATION, OR RECAPITALIZATION OR CHANGE OF OUTSTANDING COMMON SHARES
(OTHER THAN A CHANGE IN PAR VALUE, OR FROM PAR VALUE TO NO PAR VALUE, OR AS A
RESULT OF A SUBDIVISION OR COMBINATION AS DESCRIBED IN THE DEFINITION OF “UNIT
ADJUSTMENT FACTOR”) (“TRANSACTION”), UNLESS AS A RESULT OF THE TRANSACTION EACH
NON-MANAGING MEMBER THEREAFTER REMAINS ENTITLED TO REDEEM EACH MEMBERSHIP UNIT
OWNED BY SUCH NON-MANAGING MEMBER (AFTER APPLICATION OF THE UNIT ADJUSTMENT
FACTOR) FOR AN AMOUNT OF CASH, SECURITIES, OR OTHER PROPERTY EQUAL TO THE
GREATEST AMOUNT OF CASH, SECURITIES OR OTHER PROPERTY WHICH SUCH NON-MANAGING
MEMBER WOULD HAVE RECEIVED FROM SUCH TRANSACTION, IF SUCH NON-MANAGING MEMBER
HAD EXERCISED ITS REDEMPTION RIGHT IMMEDIATELY PRIOR TO THE TRANSACTION,
PROVIDED THAT IF, IN CONNECTION WITH THE TRANSACTION, A PURCHASE, TENDER OR
EXCHANGE OFFER SHALL HAVE BEEN MADE TO AND ACCEPTED BY THE HOLDERS OF MORE THAN
50 PERCENT OF THE OUTSTANDING COMMON SHARES, THE HOLDERS OF MEMBERSHIP UNITS
SHALL RECEIVE THE GREATEST AMOUNT OF CASH, SECURITIES, OR OTHER PROPERTY WHICH A
NON-MANAGING MEMBER WOULD HAVE RECEIVED HAD IT EXERCISED THE REDEMPTION RIGHT
AND RECEIVED COMMON SHARES IN EXCHANGE FOR ITS MEMBERSHIP UNITS IMMEDIATELY
PRIOR TO THE EXPIRATION OF SUCH PURCHASE, TENDER OR EXCHANGE OFFER.  IN
CONNECTION WITH ANY MERGER, CONSOLIDATION OR BUSINESS COMBINATION DESCRIBED IN
THIS SECTION 11.2(C) IN WHICH COMMON SHARES WERE EXCHANGED FOR SECURITIES OF THE
ACQUIRING PERSON, THE NON-MANAGING MEMBERS SHALL (UNLESS NON-MANAGING MEMBERS
CONSENT IS OBTAINED) REMAIN ENTITLED TO EXERCISE THEIR REDEMPTION RIGHT WITH
RESPECT TO SUCH PERSON AND THE UNIT ADJUSTMENT FACTOR SHALL CONTINUE TO APPLY.

 

(D)                                 MERGER INVOLVING MANAGING MEMBER WHERE
SURVIVING ENTITY’S ASSETS CONTRIBUTED TO COMPANY.  NOTWITHSTANDING
SECTION 11.2(C), THE MANAGING MEMBER MAY MERGE WITH ANOTHER ENTITY IF, UNDER THE
TERMS OF THE TRANSACTION, NON-MANAGING MEMBERS WILL NOT ENGAGE IN A SALE OR
EXCHANGE FOR FEDERAL INCOME TAX PURPOSES AND IMMEDIATELY AFTER SUCH MERGER
SUBSTANTIALLY ALL OF THE ASSETS OF THE SURVIVING ENTITY, OTHER THAN MEMBERSHIP
UNITS HELD BY THE MANAGING MEMBER, ARE CONTRIBUTED TO THE COMPANY AS A CAPITAL
CONTRIBUTION IN EXCHANGE FOR MEMBERSHIP UNITS WITH A FAIR MARKET VALUE EQUAL TO
THE 704(C) VALUE OF THE ASSETS SO CONTRIBUTED.

 

(E)                                  PLEDGE OF MEMBERSHIP UNITS BY MANAGING
MEMBER.  THE MANAGING MEMBER MAY (I) PLEDGE ITS MANAGING MEMBERSHIP INTEREST AS
SECURITY FOR ANY OBLIGATIONS

 

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OF THE COMPANY OR THE MANAGING MEMBER UNDER ANY CREDIT FACILITY THAT THE COMPANY
MAY ENTER INTO FROM TIME TO TIME, AND (II) TRANSFER SUCH MANAGING MEMBERSHIP
INTEREST IN THE EVENT OF ANY FORECLOSURE (OR IN LIEU OF ANY FORECLOSURE) ON SUCH
PLEDGE.

 

SECTION 11.3                                 NON-MANAGING MEMBERS’ RIGHTS TO
TRANSFER.

 

(A)                                  GENERAL.  PRIOR TO TWELVE (12) MONTHS AFTER
THE CLOSING OF THE INITIAL PUBLIC OFFERING OF COMMON SHARES, NO NON-MANAGING
MEMBER SHALL TRANSFER ALL OR ANY PORTION OF ITS MEMBERSHIP INTERESTS TO ANY
TRANSFEREE WITHOUT THE CONSENT OF THE MANAGING MEMBER, WHICH CONSENT MAY BE
WITHHELD IN ITS SOLE AND ABSOLUTE DISCRETION.  AFTER SUCH TWELVE (12) MONTH
ANNIVERSARY AND SUBJECT TO THE REMAINING PROVISIONS OF THIS SECTION 11.3 AS WELL
AS SECTION 11.4, A NON-MANAGING MEMBER MAY TRANSFER ALL OR ANY PORTION OF HIS
MEMBERSHIP INTEREST, OR ANY OF SUCH NON-MANAGING MEMBER’S RIGHTS AS A
NON-MANAGING MEMBER, WITHOUT THE PRIOR WRITTEN CONSENT OF THE MANAGING MEMBER. 
IN ORDER TO EFFECT SUCH TRANSFER, THE NON-MANAGING MEMBER MUST DELIVER TO THE
MANAGING MEMBER A DULY EXECUTED COPY OF THE INSTRUMENT MAKING SUCH TRANSFER AND
SUCH INSTRUMENT MUST EVIDENCE THE WRITTEN ACCEPTANCE BY THE ASSIGNEE OF ALL OF
THE TERMS AND CONDITIONS OF THIS AGREEMENT AND REPRESENT THAT SUCH ASSIGNMENT
WAS MADE IN ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS. 
NOTWITHSTANDING THE FOREGOING, ANY TRANSFEREE OF ANY TRANSFERRED MEMBERSHIP
INTEREST SHALL BE SUBJECT TO ANY AND ALL OWNERSHIP LIMITATIONS CONTAINED IN THE
CHARTER. UNLESS ADMITTED AS A NON-MANAGING MEMBER, NO TRANSFEREE, WHETHER BY A
VOLUNTARY TRANSFER, BY OPERATION OF LAW OR OTHERWISE, SHALL HAVE ANY RIGHTS
HEREUNDER, OTHER THAN THE RIGHTS OF AN ASSIGNEE AS PROVIDED IN SECTION 11.5.

 

(B)                                 INCAPACITATED NON-MANAGING MEMBERS.  IF A
NON-MANAGING MEMBER IS SUBJECT TO INCAPACITY, THE EXECUTOR, ADMINISTRATOR,
TRUSTEE, COMMITTEE, GUARDIAN, CONSERVATOR OR RECEIVER OF SUCH NON-MANAGING
MEMBER’S ESTATE SHALL HAVE ALL THE RIGHTS OF A NON-MANAGING MEMBER, BUT NOT MORE
RIGHTS THAN THOSE ENJOYED BY OTHER NON-MANAGING MEMBERS FOR THE PURPOSE OF
SETTLING OR MANAGING THE ESTATE AND SUCH POWER AS THE INCAPACITATED NON-MANAGING
MEMBER POSSESSED TO TRANSFER ALL OR ANY PART OF HIS OR ITS INTEREST IN THE
COMPANY.  THE INCAPACITY OF A NON-MANAGING MEMBER, IN AND OF ITSELF, SHALL NOT
DISSOLVE OR TERMINATE THE COMPANY.

 

(C)                                  TRANSFERS CONTRARY TO SECURITIES LAWS.  THE
MANAGING MEMBER MAY PROHIBIT ANY TRANSFER OTHERWISE PERMITTED UNDER THIS
SECTION 11.3 BY A NON-MANAGING MEMBER OF ITS MEMBERSHIP UNITS IF, IN THE OPINION
OF LEGAL COUNSEL TO THE COMPANY, SUCH TRANSFER WOULD REQUIRE FILING OF A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR WOULD OTHERWISE VIOLATE ANY
FEDERAL OR STATE SECURITIES LAWS OR REGULATIONS APPLICABLE TO THE COMPANY OR THE
COMPANY UNITS.

 

(D)                                 PUBLICLY TRADED PARTNERSHIP RESTRICTIONS. 
NO TRANSFER BY A NON-MANAGING MEMBER OF ITS MEMBERSHIP INTERESTS, ANY
REDEMPTION, OR ANY OTHER ACQUISITION OF MEMBERSHIP UNITS BY THE COMPANY OR THE
MANAGING MEMBER MAY BE MADE TO OR BY ANY PERSON IF THE MANAGING MEMBER
DETERMINES, IN ITS REASONABLE DISCRETION, THAT SUCH TRANSFER, REDEMPTION OR
ACQUISITION CREATES A MATERIAL RISK THAT THE COMPANY WILL BE CLASSIFIED AS A
PUBLICLY TRADED PARTNERSHIP UNDER SECTION 7704 OF THE CODE.

 

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SECTION 11.4                                SUBSTITUTED NON-MANAGING MEMBERS.

 

(A)                                  CONSENT OF MANAGING MEMBER REQUIRED.  A
NON-MANAGING MEMBER SHALL HAVE THE RIGHT IN ITS DISCRETION TO SUBSTITUTE A
TRANSFEREE AS A NON-MANAGING MEMBER IN HIS PLACE, IN WHICH EVENT SUCH
SUBSTITUTION SHALL OCCUR IF THE NON-MANAGING MEMBER SO PROVIDES; PROVIDED,
HOWEVER, THAT ANY TRANSFEREE DESIRING TO BECOME A SUBSTITUTED NON-MANAGING
MEMBER MUST FURNISH TO THE MANAGING MEMBER (I) EVIDENCE OF ACCEPTANCE IN FORM
SATISFACTORY TO THE MANAGING MEMBER OF ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE POWER OF ATTORNEY GRANTED IN
ARTICLE XVI AND (II) SUCH OTHER DOCUMENTS OR INSTRUMENTS AS MAY BE REQUIRED IN
THE REASONABLE DISCRETION OF THE MANAGING MEMBER IN ORDER TO EFFECT SUCH
PERSON’S ADMISSION AS A SUBSTITUTED NON-MANAGING MEMBER.

 

(B)                                 RIGHTS AND DUTIES OF SUBSTITUTED
NON-MANAGING MEMBERS.  A TRANSFEREE WHO HAS BEEN ADMITTED AS A SUBSTITUTED
NON-MANAGING MEMBER IN ACCORDANCE WITH THIS ARTICLE XI SHALL HAVE ALL THE RIGHTS
AND POWERS AND BE SUBJECT TO ALL THE RESTRICTIONS AND LIABILITIES OF A
NON-MANAGING MEMBER UNDER THIS AGREEMENT.

 

(C)                                  AMENDMENT OF EXHIBIT A.  UPON THE ADMISSION
OF A SUBSTITUTED NON-MANAGING MEMBER, THE MANAGING MEMBER SHALL AMEND EXHIBIT A
TO REFLECT THE NAME, ADDRESS, NUMBER OF MEMBERSHIP UNITS, AND PERCENTAGE
INTEREST OF SUCH SUBSTITUTED NON-MANAGING MEMBER AND TO ELIMINATE OR ADJUST, IF
NECESSARY, THE NAME, ADDRESS AND INTEREST OF THE PREDECESSOR OF SUCH SUBSTITUTED
NON-MANAGING MEMBER.

 

SECTION 11.5                                ASSIGNEES.  IF A NON-MANAGING
MEMBER, IN ITS SOLE AND ABSOLUTE DISCRETION, DOES NOT PROVIDE FOR THE ADMISSION
OF ANY PERMITTED TRANSFEREE UNDER SECTION 11.4(A) AS A SUBSTITUTED NON-MANAGING
MEMBER, AS DESCRIBED IN SECTION 11.4, SUCH TRANSFEREE SHALL BE CONSIDERED AN
ASSIGNEE FOR PURPOSES OF THIS AGREEMENT.  AN ASSIGNEE SHALL BE ENTITLED TO ALL
THE RIGHTS OF AN ASSIGNEE OF A NON-MANAGING MEMBERSHIP INTEREST UNDER THE ACT,
INCLUDING THE RIGHT TO RECEIVE DISTRIBUTIONS FROM THE COMPANY AND THE SHARE OF
NET INCOME, NET LOSSES, GAIN, LOSS AND RECAPTURE INCOME ATTRIBUTABLE TO THE
COMPANY UNITS ASSIGNED TO SUCH TRANSFEREE, BUT SHALL NOT BE DEEMED TO BE A
HOLDER OF MEMBERSHIP UNITS FOR ANY OTHER PURPOSE UNDER THIS AGREEMENT, AND SHALL
NOT BE ENTITLED TO VOTE SUCH MEMBERSHIP UNITS IN ANY MATTER PRESENTED TO THE
NON-MANAGING MEMBERS FOR A VOTE (SUCH MEMBERSHIP UNITS BEING DEEMED TO HAVE BEEN
VOTED ON SUCH MATTER IN THE SAME PROPORTION AS ALL MEMBERSHIP UNITS HELD BY
NON-MANAGING MEMBERS ARE VOTED).  IN THE EVENT ANY SUCH TRANSFEREE DESIRES TO
MAKE A FURTHER ASSIGNMENT OF ANY SUCH MEMBERSHIP UNITS, SUCH TRANSFEREE SHALL BE
SUBJECT TO ALL THE PROVISIONS OF THIS ARTICLE XI TO THE SAME EXTENT AND IN THE
SAME MANNER AS ANY NON-MANAGING MEMBER DESIRING TO MAKE AN ASSIGNMENT OF
MEMBERSHIP UNITS.

 

SECTION 11.6                                GENERAL PROVISIONS.

 

(A)                                  WITHDRAWAL OF NON-MANAGING MEMBER.  NO
NON-MANAGING MEMBER MAY WITHDRAW FROM THE COMPANY OTHER THAN AS A RESULT OF
(I) A PERMITTED TRANSFER OF ALL OF SUCH NON-MANAGING MEMBER’S MEMBERSHIP UNITS
IN ACCORDANCE WITH THIS ARTICLE XI AND THE TRANSFEREE OF SUCH MEMBERSHIP UNITS
BEING ADMITTED TO THE COMPANY AS A SUBSTITUTED

 

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NON-MANAGING MEMBER OR (II) PURSUANT TO REDEMPTION OR EXCHANGE OF ALL OF ITS
MEMBERSHIP UNITS UNDER SECTION 4.2(E).

 

(B)                                 TRANSFER OF ALL MEMBERSHIP UNITS BY
NON-MANAGING MEMBER.  ANY NON-MANAGING MEMBER WHO SHALL TRANSFER ALL OF HIS
MEMBERSHIP UNITS IN A TRANSFER PERMITTED PURSUANT TO THIS ARTICLE XI WHERE THE
TRANSFEREE WAS ADMITTED AS A SUBSTITUTED NON-MANAGING MEMBER OR PURSUANT TO THE
REDEMPTION OR EXCHANGE OF ALL OF ITS MEMBERSHIP UNITS UNDER SECTION 4.2(E) SHALL
CEASE TO BE A NON-MANAGING MEMBER.

 

(C)                                  TIMING OF TRANSFERS.  TRANSFERS PURSUANT TO
THIS ARTICLE XI MAY ONLY BE MADE ON THE FIRST DAY OF A CALENDAR MONTH OF THE
COMPANY OR ON A NON-RESTRICTED TRANSFER DATE, UNLESS THE MANAGING MEMBER
OTHERWISE AGREES.

 

(D)                                 ALLOCATION WHEN TRANSFER OCCURS.  IF ANY
MEMBERSHIP INTEREST IS TRANSFERRED DURING ANY QUARTERLY SEGMENT OF THE COMPANY’S
FISCAL YEAR IN COMPLIANCE WITH THE PROVISIONS OF THIS ARTICLE XI OR REDEEMED OR
CONVERTED PURSUANT TO SECTION 4.2(E), NET INCOME, NET LOSSES, EACH ITEM THEREOF
AND ALL OTHER ITEMS ATTRIBUTABLE TO SUCH INTEREST FOR SUCH FISCAL YEAR SHALL BE
DIVIDED AND ALLOCATED BETWEEN THE TRANSFEROR MEMBER AND THE TRANSFEREE MEMBER IN
ACCORDANCE WITH THE METHOD DETERMINED BY THE MANAGING MEMBER, PROVIDED THAT SUCH
METHOD SHALL BE PERMISSIBLE UNDER SECTION 706(D) OF THE CODE AND THE REGULATIONS
ISSUED THEREUNDER.  SOLELY FOR PURPOSES OF MAKING SUCH ALLOCATIONS, EACH OF SUCH
ITEMS FOR THE CALENDAR MONTH IN WHICH THE TRANSFER OR REDEMPTION OCCURS SHALL BE
ALLOCATED TO THE PERSON WHO IS A MEMBER AS OF MIDNIGHT ON THE LAST DAY OF SAID
MONTH.  ALL DISTRIBUTIONS WITH RESPECT TO WHICH THE MEMBERSHIP RECORD DATE IS
BEFORE THE DATE OF SUCH TRANSFER OR REDEMPTION SHALL BE MADE TO THE TRANSFEROR
MEMBER, AND ALL DISTRIBUTIONS WITH MEMBERSHIP RECORD DATES THEREAFTER SHALL BE
MADE TO THE TRANSFEREE MEMBER.

 

ARTICLE XII
ADMISSION OF MEMBERS

 

SECTION 12.1                                ADMISSION OF SUCCESSOR MANAGING
MEMBER.  A SUCCESSOR TO ALL OF THE MANAGING MEMBER’S MANAGING MEMBERSHIP
INTEREST PURSUANT TO SECTION 11.2 HEREOF WHO IS PROPOSED TO BE ADMITTED AS A
SUCCESSOR MANAGING MEMBER SHALL BE ADMITTED TO THE COMPANY AS THE MANAGING
MEMBER, EFFECTIVE UPON SUCH TRANSFER.  ANY SUCH TRANSFEREE SHALL CARRY ON THE
BUSINESS OF THE COMPANY WITHOUT DISSOLUTION.  IN EACH CASE, THE ADMISSION SHALL
BE SUBJECT TO THE SUCCESSOR MANAGING MEMBER EXECUTING AND DELIVERING TO THE
COMPANY AN ACCEPTANCE OF ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND
SUCH OTHER DOCUMENTS OR INSTRUMENTS AS MAY BE REQUIRED TO EFFECT THE ADMISSION.

 

SECTION 12.2                                ADMISSION OF ADDITIONAL NON-MANAGING
MEMBERS.

 

(A)                                  GENERAL.  A PERSON WHO MAKES A CAPITAL
CONTRIBUTION TO THE COMPANY IN ACCORDANCE WITH THIS AGREEMENT OR WHO EXERCISES
AN OPTION TO RECEIVE MEMBERSHIP UNITS SHALL BE ADMITTED TO THE COMPANY AS AN
ADDITIONAL NON-MANAGING MEMBER ONLY UPON FURNISHING TO THE MANAGING MEMBER
(I) EVIDENCE OF ACCEPTANCE IN FORM REASONABLY

 

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SATISFACTORY TO THE MANAGING MEMBER OF ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE POWER OF ATTORNEY GRANTED IN
ARTICLE XVI HEREOF AND (II) SUCH OTHER DOCUMENTS OR INSTRUMENTS AS MAY BE
REQUIRED IN THE REASONABLE DISCRETION OF THE MANAGING MEMBER IN ORDER TO EFFECT
SUCH PERSON’S ADMISSION AS AN ADDITIONAL NON-MANAGING MEMBER.

 

(B)                                 CONSENT OF MANAGING MEMBER REQUIRED. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 12.2, NO PERSON SHALL
BE ADMITTED AS AN ADDITIONAL NON-MANAGING MEMBER WITHOUT THE CONSENT OF THE
MANAGING MEMBER, WHICH CONSENT MAY BE GIVEN OR WITHHELD IN THE MANAGING MEMBER’S
SOLE AND ABSOLUTE DISCRETION.  THE ADMISSION OF ANY PERSON AS AN ADDITIONAL
NON-MANAGING MEMBER SHALL BECOME EFFECTIVE ON THE DATE UPON WHICH THE NAME OF
SUCH PERSON IS RECORDED ON THE BOOKS AND RECORDS OF THE COMPANY, FOLLOWING THE
CONSENT OF THE MANAGING MEMBER TO SUCH ADMISSION.

 

SECTION 12.3                                AMENDMENT OF AGREEMENT AND
CERTIFICATE.  FOR THE ADMISSION TO THE COMPANY OF ANY MEMBER, THE MANAGING
MEMBER SHALL TAKE ALL STEPS NECESSARY AND APPROPRIATE UNDER THE ACT TO AMEND THE
RECORDS OF THE COMPANY AND, IF NECESSARY, TO PREPARE AS SOON AS PRACTICAL AN
AMENDMENT OF THIS AGREEMENT (INCLUDING AN AMENDMENT OF EXHIBIT A) AND, IF
REQUIRED BY LAW, SHALL PREPARE AND FILE AN AMENDMENT TO THE CERTIFICATE AND MAY
FOR THIS PURPOSE EXERCISE THE POWER OF ATTORNEY GRANTED PURSUANT TO ARTICLE XVI
HEREOF.

 

ARTICLE XIII
DISSOLUTION AND LIQUIDATION

 

SECTION 13.1                                DISSOLUTION.  THE COMPANY SHALL NOT
BE DISSOLVED BY THE ADMISSION OF SUBSTITUTED NON-MANAGING MEMBERS OR ADDITIONAL
NON-MANAGING MEMBERS OR BY THE ADMISSION OF A SUCCESSOR MANAGING MEMBER IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.  THE COMPANY SHALL DISSOLVE, AND
ITS AFFAIRS SHALL BE WOUND UP, UPON THE FIRST TO OCCUR OF ANY OF THE FOLLOWING
(“EVENTS OF DISSOLUTION”):

 

(A)                                  WITHDRAWAL OF MANAGING MEMBER—AN EVENT OF
WITHDRAWAL OF THE MANAGING MEMBER, AS DEFINED IN THE ACT, UNLESS, WITHIN 90 DAYS
AFTER THE WITHDRAWAL ALL THE REMAINING MEMBERS AGREE IN WRITING TO CONTINUE THE
BUSINESS OF THE COMPANY AND TO THE APPOINTMENT, EFFECTIVE AS OF THE DATE OF
WITHDRAWAL, OF A SUBSTITUTE MANAGING MEMBER;

 

(B)                                 VOLUNTARY DISSOLUTION—FROM AND AFTER THE
DATE OF THIS AGREEMENT, WITH THE CONSENT OF A MAJORITY OF THE PERCENTAGE
INTERESTS OF THE NON-MANAGING MEMBERS, AN ELECTION TO DISSOLVE THE COMPANY MADE
BY THE MANAGING MEMBER, IN ITS SOLE AND ABSOLUTE DISCRETION;

 

(C)                                  JUDICIAL DISSOLUTION DECREE—ENTRY OF A
DECREE OF JUDICIAL DISSOLUTION OF THE COMPANY PURSUANT TO THE PROVISIONS OF THE
ACT;

 

(D)                                 SALE OF COMPANY’S ASSETS--THE SALE OR
DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS AND PROPERTIES OF THE
COMPANY OR A RELATED SERIES OF TRANSACTIONS THAT, TAKEN

 

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TOGETHER, RESULT IN THE SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF
THE ASSETS OF THE COMPANY;

 

(E)                                  BANKRUPTCY OR INSOLVENCY OF MANAGING
MEMBER--THE MANAGING MEMBER

 

(1)                                  MAKES AN ASSIGNMENT FOR THE BENEFIT OF
CREDITORS;

 

(2)                                  FILES A VOLUNTARY PETITION IN BANKRUPTCY;

 

(3)                                  IS ADJUDGED A BANKRUPT OR INSOLVENT, OR HAS
ENTERED AGAINST IT AN ORDER FOR RELIEF IN ANY BANKRUPTCY OR INSOLVENCY
PROCEEDING;

 

(4)                                  FILES A PETITION OR ANSWER SEEKING FOR
ITSELF ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION,
DISSOLUTION OR SIMILAR RELIEF UNDER ANY STATUTE, LAW OR REGULATION;

 

(5)                                  FILES AN ANSWER OR OTHER PLEADING ADMITTING
OR FAILING TO CONTEST THE MATERIAL ALLEGATIONS OF A PETITION FILED AGAINST IT IN
ANY PROCEEDING OF THIS NATURE; OR

 

(6)                                  SEEKS, CONSENTS TO OR ACQUIESCES IN THE
APPOINTMENT OF A TRUSTEE, RECEIVER OR LIQUIDATOR OF THE MANAGING MEMBER OR OF
ALL OR ANY SUBSTANTIAL PART OF ITS PROPERTIES; OR

 

(F)                                    READJUSTMENT, ETC.  ONE HUNDRED AND
TWENTY (120) DAYS AFTER THE COMMENCEMENT OF ANY PROCEEDING AGAINST THE MANAGING
MEMBER SEEKING REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT,
LIQUIDATION, DISSOLUTION OR SIMILAR RELIEF UNDER ANY STATUTE, LAW OR REGULATION,
THE PROCEEDING HAS NOT BEEN DISMISSED, OR IF WITHIN 90 DAYS AFTER THE
APPOINTMENT WITHOUT THE MANAGING MEMBER’S CONSENT OR ACQUIESCENCE OF A TRUSTEE,
RECEIVER OR LIQUIDATOR OF THE MANAGING MEMBER OR OF ALL OR ANY SUBSTANTIAL PART
OF ITS PROPERTIES, THE APPOINTMENT IS NOT VACATED OR STAYED, OR WITHIN 90 DAYS
AFTER THE EXPIRATION OF ANY SUCH STAY, THE APPOINTMENT IS NOT VACATED.

 

SECTION 13.2                                WINDING UP.

 

(A)                                  GENERAL.  UPON THE OCCURRENCE OF AN EVENT
OF DISSOLUTION, THE COMPANY SHALL CONTINUE SOLELY FOR THE PURPOSES OF WINDING UP
ITS AFFAIRS IN AN ORDERLY MANNER, LIQUIDATING ITS ASSETS, AND SATISFYING THE
CLAIMS OF ITS CREDITORS AND MEMBERS.  NO MEMBER SHALL TAKE ANY ACTION THAT IS
INCONSISTENT WITH, OR NOT NECESSARY TO OR APPROPRIATE FOR, THE WINDING UP OF THE
COMPANY’S BUSINESS AND AFFAIRS.  THE MANAGING MEMBER (OR, IN THE EVENT THERE IS
NO REMAINING MANAGING MEMBER, ANY PERSON ELECTED BY A MAJORITY IN INTEREST OF
THE NON-MANAGING MEMBERS (THE “LIQUIDATOR”)) SHALL BE RESPONSIBLE FOR OVERSEEING
THE WINDING UP AND DISSOLUTION OF THE COMPANY AND SHALL TAKE FULL ACCOUNT OF THE
COMPANY’S LIABILITIES AND PROPERTY AND THE COMPANY PROPERTY SHALL BE LIQUIDATED
AS PROMPTLY AS IS CONSISTENT WITH OBTAINING THE FAIR VALUE THEREOF, AND THE
PROCEEDS THEREFROM (WHICH MAY, TO THE EXTENT DETERMINED BY THE MANAGING MEMBER,
INCLUDE SHARES OF STOCK IN THE MANAGING MEMBER) SHALL BE APPLIED AND DISTRIBUTED
IN THE FOLLOWING ORDER:

 

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(1)                                  FIRST, TO THE PAYMENT AND DISCHARGE OF ALL
OF THE COMPANY’S DEBTS AND LIABILITIES TO CREDITORS OTHER THAN THE MEMBERS;

 

(2)                                  SECOND, TO THE PAYMENT AND DISCHARGE OF ALL
OF THE COMPANY’S DEBTS AND LIABILITIES TO THE MEMBERS, PRO RATA IN ACCORDANCE
WITH AMOUNTS OWED TO EACH SUCH MEMBER; AND

 

(3)                                  THE BALANCE, IF ANY, TO THE MANAGING MEMBER
AND NON-MANAGING MEMBERS IN ACCORDANCE WITH THEIR CAPITAL ACCOUNTS, AFTER GIVING
EFFECT TO ALL CONTRIBUTIONS, DISTRIBUTIONS, AND ALLOCATIONS FOR ALL PERIODS.

 

The Managing Member shall not receive any additional compensation for any
services performed pursuant to this Article XIII other than reimbursement of its
expenses as provided for in Section 7.4.

 

(B)                                 WHERE IMMEDIATE SALE OF COMPANY’S ASSETS
IMPRACTICAL.  NOTWITHSTANDING THE PROVISIONS OF
SECTION 13.2 (A) HEREOF WHICH REQUIRE LIQUIDATION OF THE ASSETS OF THE COMPANY,
BUT SUBJECT TO THE ORDER OF PRIORITIES SET FORTH THEREIN, IF PRIOR TO OR UPON
DISSOLUTION OF THE COMPANY THE LIQUIDATOR DETERMINES THAT AN IMMEDIATE SALE OF
PART OR ALL OF THE COMPANY’S ASSETS WOULD BE IMPRACTICAL OR WOULD CAUSE UNDUE
LOSS TO THE MEMBERS, THE LIQUIDATOR MAY, IN ITS SOLE AND ABSOLUTE DISCRETION,
DEFER FOR A REASONABLE TIME THE LIQUIDATION OF ANY ASSETS EXCEPT THOSE NECESSARY
TO SATISFY LIABILITIES OF THE COMPANY (INCLUDING TO THOSE MEMBERS AS CREDITORS)
OR, WITH THE CONSENT OF THE NON-MANAGING MEMBERS HOLDING A MAJORITY OF THE
NON-MANAGING MEMBERSHIP UNITS, DISTRIBUTE TO THE MEMBERS, IN LIEU OF CASH, AS
TENANTS IN COMMON AND IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 13.2(A) HEREOF, UNDIVIDED INTERESTS IN SUCH COMPANY ASSETS AS THE
LIQUIDATOR DEEMS NOT SUITABLE FOR LIQUIDATION.  ANY SUCH DISTRIBUTIONS IN KIND
SHALL BE MADE ONLY IF, IN THE GOOD FAITH JUDGMENT OF THE LIQUIDATOR, SUCH
DISTRIBUTIONS IN KIND ARE IN THE BEST INTEREST OF THE MEMBERS, AND SHALL BE
SUBJECT TO SUCH CONDITIONS RELATING TO THE DISPOSITION AND MANAGEMENT OF SUCH
PROPERTIES AS THE LIQUIDATOR DEEMS REASONABLE AND EQUITABLE AND TO ANY
AGREEMENTS GOVERNING THE OPERATION OF SUCH PROPERTIES AT SUCH TIME.  THE
LIQUIDATOR SHALL DETERMINE THE FAIR MARKET VALUE OF ANY PROPERTY DISTRIBUTED IN
KIND USING SUCH REASONABLE METHOD OF VALUATION AS IT MAY ADOPT.

 

SECTION 13.3                                CAPITAL CONTRIBUTION OBLIGATION.  IF
ANY MEMBER HAS A DEFICIT BALANCE IN HIS OR HER CAPITAL ACCOUNT (AFTER GIVING
EFFECT TO ALL CONTRIBUTIONS, DISTRIBUTIONS AND ALLOCATIONS FOR THE TAXABLE
YEARS, INCLUDING THE YEAR DURING WHICH SUCH LIQUIDATION OCCURS), SUCH MEMBER
SHALL HAVE NO OBLIGATION TO MAKE ANY CONTRIBUTION TO THE CAPITAL OF THE COMPANY
WITH RESPECT TO SUCH DEFICIT, AND SUCH DEFICIT AT ANY TIME SHALL NOT BE
CONSIDERED A DEBT OWED TO THE COMPANY OR TO ANY OTHER PERSON FOR ANY PURPOSE
WHATSOEVER, EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY AGREED TO BY SUCH MEMBER
AND THE COMPANY.

 

SECTION 13.4                                COMPLIANCE WITH TIMING REQUIREMENTS
OF REGULATIONS; ALLOWANCE FOR CONTINGENT OR UNFORESEEN LIABILITIES OR
OBLIGATIONS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN THE
EVENT THE COMPANY IS “LIQUIDATED” WITHIN THE MEANING OF REGULATIONS
SECTION 1.704-1(B)(2)(II)(G), DISTRIBUTIONS SHALL BE MADE PURSUANT TO THIS
ARTICLE XIII TO THE MANAGING MEMBER AND NON-MANAGING MEMBERS WHO HAVE POSITIVE
CAPITAL ACCOUNTS IN

 

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compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) (including any
timing requirements therein).  In the discretion of the Managing Member, a pro
rata portion of the distributions that would otherwise be made to the Managing
Member and Non-Managing Members pursuant to this Article XIII may be: 
(i) distributed to a liquidating trust established for the benefit of the
Managing Member and Non-Managing Members for the purposes of liquidating Company
assets, collecting amounts owed to the Company, and paying any contingent or
unforeseen liabilities or obligations of the Company or of the Managing Member
arising out of or in connection with the Company (the assets of any such trust
shall be distributed to the Managing Member and Non-Managing Members from time
to time, in the reasonable discretion of the Managing Member, in the same
proportions as the amount distributed to such trust by the Company would
otherwise have been distributed to the Managing Member and Non-Managing Members
pursuant to this Agreement); or (ii) withheld or escrowed to provide a
reasonable reserve for Company liabilities (contingent or otherwise) and to
reflect the unrealized portion of any installment obligations owed to the
Company, provided that such withheld or escrowed amounts shall be distributed to
the Managing Member and Non-Managing Members in the manner and priority set
forth in Section 13.2(a) as soon as practicable.

 

SECTION 13.5                                OTHER EVENTS.  NOTWITHSTANDING ANY
OTHER PROVISION OF THIS ARTICLE XIII, IN THE EVENT THE COMPANY IS LIQUIDATED
WITHIN THE MEANING OF REGULATIONS SECTION 1.704-1(B)(2)(II)(G) BUT NO EVENT OF
DISSOLUTION HAS OCCURRED, THE COMPANY’S PROPERTY SHALL NOT BE LIQUIDATED, THE
COMPANY’S LIABILITIES SHALL NOT BE PAID OR DISCHARGED, AND THE COMPANY’S AFFAIRS
SHALL NOT BE WOUND UP. INSTEAD, FOR FEDERAL INCOME TAX PURPOSES THE COMPANY
SHALL BE DEEMED TO HAVE CONTRIBUTED ALL OF ITS ASSETS AND LIABILITIES TO A NEW
LIMITED LIABILITY COMPANY IN EXCHANGE FOR AN INTEREST IN THE NEW LIMITED
LIABILITY COMPANY AND, IMMEDIATELY THEREAFTER, THE TERMINATED COMPANY SHALL BE
DEEMED TO DISTRIBUTE INTERESTS IN THE NEW COMPANY TO THE MANAGING MEMBER AND
NON-MANAGING MEMBERS IN PROPORTION TO THEIR RESPECTIVE MEMBERSHIP INTERESTS IN
LIQUIDATION OF THE TERMINATED COMPANY.

 

SECTION 13.6                                RIGHTS OF NON-MANAGING MEMBERS. 
EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, EACH NON-MANAGING MEMBER
SHALL LOOK SOLELY TO THE ASSETS OF THE COMPANY FOR THE RETURN OF HIS CAPITAL
CONTRIBUTION AND SHALL HAVE NO RIGHT OR POWER TO DEMAND OR RECEIVE PROPERTY
OTHER THAN CASH FROM THE COMPANY.  EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, NO NON-MANAGING MEMBER SHALL HAVE PRIORITY OVER ANY OTHER
NON-MANAGING MEMBER AS TO THE RETURN OF HIS CAPITAL CONTRIBUTIONS,
DISTRIBUTIONS, OR ALLOCATIONS.

 

SECTION 13.7                                NOTICE OF DISSOLUTION.  IN THE EVENT
AN EVENT OF DISSOLUTION OR AN EVENT OCCURS THAT WOULD, BUT FOR PROVISIONS OF
SECTION 13.1, RESULT IN A DISSOLUTION OF THE COMPANY, THE MANAGING MEMBER SHALL,
WITHIN 30 DAYS THEREAFTER, PROVIDE WRITTEN NOTICE THEREOF TO EACH OF THE MEMBERS
AND TO ALL OTHER PARTIES WITH WHOM THE COMPANY REGULARLY CONDUCTS BUSINESS (AS
DETERMINED IN THE DISCRETION OF THE MANAGING MEMBER) AND SHALL PUBLISH NOTICE
THEREOF IN A NEWSPAPER OF GENERAL CIRCULATION IN EACH PLACE IN WHICH THE COMPANY
REGULARLY CONDUCTS BUSINESS (AS DETERMINED IN THE DISCRETION OF THE MANAGING
MEMBER).

 

SECTION 13.8                                CANCELLATION OF CERTIFICATE.  UPON
THE COMPLETION OF THE LIQUIDATION OF THE COMPANY AS PROVIDED IN SECTION 13.2
HEREOF, THE COMPANY SHALL BE TERMINATED AND THE CERTIFICATE AND ALL
QUALIFICATIONS OF THE COMPANY AS A FOREIGN LIMITED LIABILITY COMPANY IN

 

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jurisdictions other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Company shall be taken.

 

SECTION 13.9                                REASONABLE TIME FOR WINDING-UP.  A
REASONABLE TIME SHALL BE ALLOWED FOR THE ORDERLY WINDING-UP OF THE BUSINESS AND
AFFAIRS OF THE COMPANY AND THE LIQUIDATION OF ITS ASSETS PURSUANT TO
SECTION 13.2 HEREOF, IN ORDER TO MINIMIZE ANY LOSSES OTHERWISE ATTENDANT UPON
SUCH WINDING-UP, AND THE PROVISIONS OF THIS AGREEMENT SHALL REMAIN IN EFFECT
BETWEEN THE MEMBERS DURING THE PERIOD OF LIQUIDATION.

 

ARTICLE XIV
AMENDMENT OF AGREEMENT; MEETINGS

 

SECTION 14.1                                AMENDMENTS.

 

(A)                                  GENERAL.  AMENDMENTS TO THIS AGREEMENT MAY
BE PROPOSED BY THE MANAGING MEMBER OR BY ANY NON-MANAGING MEMBERS HOLDING 25
PERCENT OR MORE IN THE AGGREGATE OF THE MEMBERSHIP INTERESTS HELD BY ALL
NON-MANAGING MEMBERS.  FOLLOWING SUCH PROPOSAL, THE MANAGING MEMBER SHALL SUBMIT
ANY PROPOSED AMENDMENT TO THE NON-MANAGING MEMBERS.  THE MANAGING MEMBER SHALL
SEEK THE WRITTEN VOTE OF THE MEMBERS ON THE PROPOSED AMENDMENT OR SHALL CALL A
MEETING TO VOTE THEREON AND TO TRANSACT ANY OTHER BUSINESS THAT IT MAY DEEM
APPROPRIATE.  FOR PURPOSES OF OBTAINING A WRITTEN CONSENT, THE MANAGING MEMBER
MAY REQUIRE A RESPONSE WITHIN A REASONABLE SPECIFIED TIME, BUT NOT LESS THAN 15
DAYS, AND FAILURE TO RESPOND IN SUCH TIME PERIOD SHALL CONSTITUTE A CONSENT
WHICH IS CONSISTENT WITH THE MANAGING MEMBER’S RECOMMENDATION (IF SO
RECOMMENDED) WITH RESPECT TO THE PROPOSAL; PROVIDED, THAT, AN ACTION SHALL
BECOME EFFECTIVE AT SUCH TIME AS REQUISITE CONSENTS ARE RECEIVED EVEN IF PRIOR
TO SUCH SPECIFIED TIME. EXCEPT AS PROVIDED IN SECTION 14.1(B), 14.1(C) OR
14.1(D), A PROPOSED AMENDMENT SHALL BE ADOPTED AND BE EFFECTIVE AS AN AMENDMENT
HERETO IF IT IS APPROVED BY THE MANAGING MEMBER AND IT RECEIVES THE CONSENT OF
NON-MANAGING MEMBERS HOLDING A MAJORITY OF THE PERCENTAGE INTERESTS OF THE
NON-MANAGING MEMBERS.

 

(B)                                 MANAGING MEMBER’S POWER TO AMEND. 
NOTWITHSTANDING SECTION 14.1(A), THE MANAGING MEMBER SHALL HAVE THE POWER,
WITHOUT THE CONSENT OF THE NON-MANAGING MEMBERS, TO AMEND THIS AGREEMENT AS MAY
BE REQUIRED TO FACILITATE OR IMPLEMENT ANY OF THE FOLLOWING PURPOSES:

 

(1)                                  TO ADD TO THE OBLIGATIONS OF THE MANAGING
MEMBER OR SURRENDER FOR THE BENEFIT OF THE NON-MANAGING MEMBERS ANY RIGHT OR
POWER GRANTED TO THE MANAGING MEMBER OR ANY AFFILIATE OF THE MANAGING MEMBER;

 

(2)                                  TO REFLECT THE ISSUANCE OF ADDITIONAL
MEMBERSHIP INTERESTS OR THE ADMISSION, SUBSTITUTION, TERMINATION, OR WITHDRAWAL
OF MEMBERS IN ACCORDANCE WITH THIS AGREEMENT;

 

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(3)                                  TO SET FORTH THE RIGHTS, POWERS, DUTIES,
AND PREFERENCES OF THE HOLDERS OF ANY ADDITIONAL MEMBERSHIP INTERESTS ISSUED
PURSUANT TO SECTION 4.2(B) HEREOF;

 

(4)                                  TO REFLECT A CHANGE THAT IS OF AN
INCONSEQUENTIAL NATURE AND DOES NOT ADVERSELY AFFECT THE NON-MANAGING MEMBERS IN
ANY MATERIAL RESPECT, OR TO CURE ANY AMBIGUITY, CORRECT OR SUPPLEMENT ANY
PROVISION IN THIS AGREEMENT NOT INCONSISTENT WITH LAW OR WITH OTHER PROVISIONS;

 

(5)                                  TO SATISFY ANY REQUIREMENTS, CONDITIONS, OR
GUIDELINES CONTAINED IN ANY ORDER, DIRECTIVE, OPINION, RULING OR REGULATION OF A
FEDERAL OR STATE AGENCY OR CONTAINED IN FEDERAL OR STATE LAW;

 

(6)                                  TO MODIFY THE MANNER IN WHICH CAPITAL
ACCOUNTS ARE COMPUTED AS SET FORTH IN SECTION 4.4(E).

 

The Managing Member will provide notice to the Non-Managing Members when any
action under this Section 14.1(b) is taken.

 

(C)                                  CONSENT OF ADVERSELY AFFECTED MEMBER
REQUIRED.  NOTWITHSTANDING SECTION 14.1(A) AND SECTION 14.1(B) HEREOF, THIS
AGREEMENT SHALL NOT BE AMENDED WITHOUT THE CONSENT OF EACH MEMBER ADVERSELY
AFFECTED IF SUCH AMENDMENT WOULD (I) CONVERT A NON-MANAGING MEMBER’S INTEREST IN
THE COMPANY INTO A MANAGING MEMBER’S INTEREST (EXCEPT AS A RESULT OF THE
MANAGING MEMBER ACQUIRING SUCH INTEREST), (II) MODIFY THE LIMITED LIABILITY OF A
NON-MANAGING MEMBER, (III) ALTER RIGHTS OF THE MEMBER TO RECEIVE DISTRIBUTIONS
PURSUANT TO ARTICLE V, OR THE ALLOCATIONS SPECIFIED IN ARTICLE VI (EXCEPT AS
PERMITTED PURSUANT TO SECTION 4.2 AND SECTION 14.1(B)(3) HEREOF), (IV) ALTER OR
MODIFY THE REDEMPTION RIGHT AS SET FORTH IN SECTIONS 4.2(E) AND 11.2(B), AND
RELATED DEFINITIONS HEREOF, (V) CAUSE THE TERMINATION OF THE COMPANY PRIOR TO
THE TIME SET FORTH IN SECTIONS 2.5 OR 13.1 OR (VI) AMEND THIS SECTION 14.1(C). 
FURTHER, NO AMENDMENT MAY ALTER THE RESTRICTIONS ON THE MANAGING MEMBER’S
AUTHORITY SET FORTH IN SECTION 7.3 WITHOUT THE CONSENT SPECIFIED IN THAT
SECTION.  THIS SECTION 14.1(C) DOES NOT REQUIRE UNANIMOUS CONSENT OF ALL MEMBERS
ADVERSELY AFFECTED UNLESS THE AMENDMENT IS TO BE EFFECTIVE AGAINST ALL MEMBERS
ADVERSELY AFFECTED.

 

(D)                                 WHEN CONSENT OF MAJORITY OF NON-MANAGING
MEMBERSHIP INTERESTS REQUIRED.  NOTWITHSTANDING SECTION 14.1(A) HEREOF, THE
MANAGING MEMBER SHALL NOT AMEND SECTION 4.2(B), THE SECOND SENTENCE OF
SECTION 7.1(A), SECTIONS 7.5, 7.6, 7.8, 11.2, AND 14.1(C), THIS
SECTION 14.1(D) OR SECTION 14.2 WITHOUT THE CONSENT OF TWO-THIRDS OF THE
PERCENTAGE INTERESTS OF THE NON-MANAGING MEMBERS.

 

SECTION 14.2                                MEETINGS OF THE MEMBERS.

 

(A)                                  GENERAL.  MEETINGS OF THE MEMBERS MAY BE
CALLED BY THE MANAGING MEMBER AND SHALL BE CALLED UPON THE RECEIPT BY THE
MANAGING MEMBER OF A WRITTEN REQUEST BY NON-MANAGING MEMBERS HOLDING 25 PERCENT
OR MORE OF THE MEMBERSHIP INTERESTS.  THE CALL SHALL STATE THE NATURE OF THE
BUSINESS TO BE TRANSACTED.  NOTICE OF ANY SUCH MEETING SHALL BE GIVEN TO ALL
MEMBERS NOT LESS THAN SEVEN DAYS NOR MORE THAN 30

 

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DAYS PRIOR TO THE DATE OF SUCH MEETING.  MEMBERS MAY VOTE IN PERSON OR BY PROXY
AT SUCH MEETING.  WHENEVER THE VOTE OR CONSENT OF MEMBERS IS PERMITTED OR
REQUIRED UNDER THIS AGREEMENT, SUCH VOTE OR CONSENT MAY BE GIVEN AT A MEETING OF
MEMBERS OR MAY BE GIVEN IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED IN
SECTION 14.1 HEREOF.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
THE CONSENT OF HOLDERS OF A MAJORITY OF THE PERCENTAGE INTERESTS SHALL CONTROL.

 

(B)                                 INFORMAL ACTION.  ANY ACTION REQUIRED OR
PERMITTED TO BE TAKEN AT A MEETING OF THE MEMBERS MAY BE TAKEN WITHOUT A MEETING
IF A WRITTEN CONSENT SETTING FORTH THE ACTION SO TAKEN IS SIGNED BY A MAJORITY
OF THE PERCENTAGE INTERESTS OF THE MEMBERS (OR SUCH OTHER PERCENTAGE AS IS
EXPRESSLY REQUIRED BY THIS AGREEMENT).  SUCH CONSENT MAY BE IN ONE INSTRUMENT OR
IN SEVERAL INSTRUMENTS, AND SHALL HAVE THE SAME FORCE AND EFFECT AS A VOTE OF A
MAJORITY OF THE PERCENTAGE INTERESTS OF THE MEMBERS (OR SUCH OTHER PERCENTAGE AS
IS EXPRESSLY REQUIRED BY THIS AGREEMENT).  SUCH CONSENT SHALL BE FILED WITH THE
MANAGING MEMBER.  AN ACTION SO TAKEN SHALL BE DEEMED TO HAVE BEEN TAKEN AT A
MEETING HELD ON THE EFFECTIVE DATE SO CERTIFIED.

 

(C)                                  PROXIES.  EACH NON-MANAGING MEMBER MAY
AUTHORIZE ANY PERSON OR PERSONS TO ACT FOR HIM BY PROXY ON ALL MATTERS IN WHICH
A NON-MANAGING MEMBER IS ENTITLED TO PARTICIPATE, INCLUDING WAIVING NOTICE OF
ANY MEETING, OR VOTING OR PARTICIPATING AT A MEETING.  EVERY PROXY MUST BE
SIGNED BY THE NON-MANAGING MEMBER OR HIS ATTORNEY-IN-FACT.  NO PROXY SHALL BE
VALID AFTER THE EXPIRATION OF 11 MONTHS FROM THE DATE THEREOF UNLESS OTHERWISE
PROVIDED IN THE PROXY.  EVERY PROXY SHALL BE REVOCABLE AT THE PLEASURE OF THE
NON-MANAGING MEMBER EXECUTING IT.

 

(D)                                 CONDUCT OF MEETING.  EACH MEETING OF MEMBERS
SHALL BE CONDUCTED BY THE MANAGING MEMBER OR SUCH OTHER PERSON AS THE MANAGING
MEMBER MAY APPOINT PURSUANT TO SUCH RULES FOR THE CONDUCT OF THE MEETING AS THE
MANAGING MEMBER OR SUCH OTHER PERSON DEEMS APPROPRIATE.

 

SECTION 14.3                                VOTING RIGHTS OF LTIP UNITS.  LTIP
UNITHOLDERS SHALL (A) HAVE THOSE VOTING RIGHTS REQUIRED FROM TIME TO TIME BY
APPLICABLE LAW, IF ANY, (B) HAVE THE SAME VOTING RIGHTS AS A HOLDER OF
MEMBERSHIP UNITS, WITH THE LTIP UNITS VOTING AS A SINGLE CLASS WITH THE
MEMBERSHIP UNITS AND HAVING ONE VOTE PER LTIP UNIT; AND (C) HAVE THE ADDITIONAL
VOTING RIGHTS THAT ARE EXPRESSLY SET FORTH BELOW.  SO LONG AS ANY LTIP UNITS
REMAIN OUTSTANDING, THE COMPANY SHALL NOT, WITHOUT THE AFFIRMATIVE VOTE OF THE
LTIP UNITHOLDERS WHO HOLD AT LEAST A MAJORITY OF THE LTIP UNITS OUTSTANDING AT
THE TIME, GIVEN IN PERSON OR BY PROXY, EITHER IN WRITING OR AT A MEETING (VOTING
SEPARATELY AS A CLASS), AMEND, ALTER OR REPEAL, WHETHER BY MERGER, CONSOLIDATION
OR OTHERWISE, THE PROVISIONS OF THIS AGREEMENT APPLICABLE TO LTIP UNITS SO AS TO
MATERIALLY AND ADVERSELY AFFECT ANY RIGHT, PRIVILEGE OR VOTING POWER OF THE LTIP
UNITS OR THE LTIP UNITHOLDERS AS SUCH, UNLESS SUCH AMENDMENT, ALTERATION, OR
REPEAL AFFECTS EQUALLY, RATABLY AND PROPORTIONATELY THE RIGHTS, PRIVILEGES AND
VOTING POWERS OF THE HOLDERS OF MEMBERSHIP UNITS; BUT SUBJECT, IN ANY EVENT, TO
THE FOLLOWING PROVISIONS:

 

(I)                                     WITH RESPECT TO ANY TRANSACTION, SO LONG
AS THE LTIP UNITS ARE TREATED IN ACCORDANCE WITH SECTION 4.6 HEREOF, THE
CONSUMMATION OF SUCH TRANSACTION SHALL NOT BE

 

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DEEMED TO MATERIALLY AND ADVERSELY AFFECT SUCH RIGHTS, PREFERENCES, PRIVILEGES
OR VOTING POWERS OF THE LTIP UNITS OR THE LTIP UNITHOLDERS AS SUCH; AND

 

(II)                                  ANY CREATION OR ISSUANCE OF ANY MEMBERSHIP
UNITS OR OF ANY CLASS OF SERIES OF MEMBERSHIP UNITES INCLUDING WITHOUT
LIMITATION ADDITIONAL MEMBERSHIP UNITS OR LTIP UNITS, WHETHER RANKING SENIOR TO,
JUNIOR TO, OR ON A PARITY WITH THE LTIP UNITS WITH RESPECT TO DISTRIBUTIONS AND
THE DISTRIBUTION OF ASSETS UPON LIQUIDATION, DISSOLUTION OR WINDING UP, SHALL
NOT BE DEEMED TO MATERIALLY AND ADVERSELY AFFECT SUCH RIGHTS, PREFERENCES,
PRIVILEGES OR VOTING POWERS OF THE LTIP UNITS OR THE LTIP UNITHOLDERS AS SUCH.

 

The foregoing voting provisions will not apply if, at or prior to the time when
the act with respect to which such vote would otherwise be required will be
effected, all outstanding LTIP Units shall have been converted into Membership
Units.

 

ARTICLE XV
GENERAL PROVISIONS

 

SECTION 15.1                                ADDRESSES AND NOTICE.  ALL NOTICES
AND DEMANDS UNDER THIS AGREEMENT SHALL BE IN WRITING, AND MAY BE EITHER
DELIVERED PERSONALLY (WHICH SHALL INCLUDE DELIVERIES BY COURIER), BY TELEFAX,
TELEX OR OTHER WIRE TRANSMISSION (WITH REQUEST FOR ASSURANCE OF RECEIPT IN A
MANNER APPROPRIATE WITH RESPECT TO COMMUNICATIONS OF THAT TYPE, PROVIDED THAT A
CONFIRMATION COPY IS CONCURRENTLY SENT BY A NATIONALLY RECOGNIZED EXPRESS
COURIER FOR OVERNIGHT DELIVERY) OR MAILED, POSTAGE PREPAID, BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE PARTIES AT THEIR
RESPECTIVE ADDRESSES SET FORTH ON EXHIBIT A, AS IT MAY BE AMENDED FROM TIME TO
TIME, AND, IF TO THE COMPANY, SUCH NOTICES AND DEMANDS SENT IN THE AFORESAID
MANNER MUST BE DELIVERED AT ITS PRINCIPAL PLACE OF BUSINESS SET FORTH ABOVE. 
UNLESS DELIVERED PERSONALLY OR BY TELEFAX, TELEX OR OTHER WIRE TRANSMISSION AS
ABOVE (WHICH SHALL BE EFFECTIVE ON THE DATE OF SUCH DELIVERY OR TRANSMISSION),
ANY NOTICE SHALL BE DEEMED TO HAVE BEEN MADE THREE (3) DAYS FOLLOWING THE DATE
SO MAILED.  ANY PARTY HERETO MAY DESIGNATE A DIFFERENT ADDRESS TO WHICH NOTICES
AND DEMANDS SHALL THEREAFTER BE DIRECTED BY WRITTEN NOTICE GIVEN IN THE SAME
MANNER AND DIRECTED TO THE COMPANY AT ITS OFFICE HEREINABOVE SET FORTH.

 

SECTION 15.2                                TITLES AND CAPTIONS.  ALL ARTICLE OR
SECTION TITLES OR CAPTIONS IN THIS AGREEMENT ARE FOR CONVENIENCE ONLY.  THEY
SHALL NOT BE DEEMED PART OF THIS AGREEMENT AND IN NO WAY DEFINE, LIMIT, EXTEND
OR DESCRIBE THE SCOPE OR INTENT OF ANY PROVISIONS HEREOF.  EXCEPT AS
SPECIFICALLY PROVIDED OTHERWISE, REFERENCES TO “ARTICLES” AND “SECTIONS” ARE TO
ARTICLES AND SECTIONS OF THIS AGREEMENT.

 

SECTION 15.3                                PRONOUNS AND PLURALS.  WHENEVER THE
CONTEXT MAY REQUIRE, ANY PRONOUN USED IN THIS AGREEMENT SHALL INCLUDE THE
CORRESPONDING MASCULINE, FEMININE OR NEUTER FORMS, AND THE SINGULAR FORM OF
NOUNS, PRONOUNS AND VERBS SHALL INCLUDE THE PLURAL AND VICE VERSA.

 

SECTION 15.4                                FURTHER ACTION.  THE PARTIES SHALL
EXECUTE AND DELIVER ALL DOCUMENTS, PROVIDE ALL INFORMATION AND TAKE OR REFRAIN
FROM TAKING ACTION AS MAY BE NECESSARY OR APPROPRIATE TO ACHIEVE THE PURPOSES OF
THIS AGREEMENT.

 

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SECTION 15.5                                BINDING EFFECT.  THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS, LEGAL REPRESENTATIVES AND
PERMITTED ASSIGNS.

 

SECTION 15.6                                WAIVER OF PARTITION.  THE MEMBERS
HEREBY AGREE THAT THE COMPANY PROPERTIES ARE NOT AND WILL NOT BE SUITABLE FOR
PARTITION.  ACCORDINGLY, EACH OF THE MEMBERS HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHTS (IF ANY) THAT IT MAY HAVE TO MAINTAIN ANY ACTION FOR PARTITION OF ANY
OF THE COMPANY PROPERTIES.

 

SECTION 15.7                                ENTIRE AGREEMENT.  THIS AGREEMENT
CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE MATTERS
CONTAINED HEREIN; IT SUPERSEDES ANY PRIOR AGREEMENTS OR UNDERSTANDINGS AMONG
THEM AND IT MAY NOT BE MODIFIED OR AMENDED IN ANY MANNER OTHER THAN PURSUANT TO
ARTICLE XIV.

 

SECTION 15.8                                SECURITIES LAW PROVISIONS.  THE
MEMBERSHIP UNITS HAVE NOT BEEN REGISTERED UNDER THE FEDERAL OR STATE SECURITIES
LAWS OF ANY STATE AND, THEREFORE, MAY NOT BE RESOLD UNLESS APPROPRIATE FEDERAL
AND STATE SECURITIES LAWS, AS WELL AS THE PROVISIONS OF ARTICLE XI HEREOF, HAVE
BEEN COMPLIED WITH.

 

SECTION 15.9                                REMEDIES NOT EXCLUSIVE.  ANY
REMEDIES HEREIN CONTAINED FOR BREACHES OF OBLIGATIONS HEREUNDER SHALL NOT BE
DEEMED TO BE EXCLUSIVE AND SHALL NOT IMPAIR THE RIGHT OF ANY PARTY TO EXERCISE
ANY OTHER RIGHT OR REMEDY, WHETHER FOR DAMAGES, INJUNCTION OR OTHERWISE.

 

SECTION 15.10                          TIME.  TIME IS OF THE ESSENCE OF THIS
AGREEMENT.

 

SECTION 15.11                          CREDITORS.  NONE OF THE PROVISIONS OF
THIS AGREEMENT SHALL BE FOR THE BENEFIT OF, OR SHALL BE ENFORCEABLE BY, ANY
CREDITOR OF THE COMPANY.

 

SECTION 15.12                          WAIVER.  NO FAILURE BY ANY PARTY TO
INSIST UPON THE STRICT PERFORMANCE OF ANY COVENANT, DUTY, AGREEMENT OR CONDITION
OF THIS AGREEMENT OR TO EXERCISE ANY RIGHT OR REMEDY CONSEQUENT UPON A BREACH
THEREOF SHALL CONSTITUTE WAIVER OF ANY SUCH BREACH OR ANY OTHER COVENANT, DUTY,
AGREEMENT OR CONDITION.

 

SECTION 15.13                          EXECUTION COUNTERPARTS.  THIS AGREEMENT
MAY BE EXECUTED IN COUNTERPARTS, ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE
AGREEMENT BINDING ON ALL THE PARTIES HERETO, NOTWITHSTANDING THAT ALL SUCH
PARTIES ARE NOT SIGNATORIES TO THE ORIGINAL OR THE SAME COUNTERPART.  EACH PARTY
SHALL BECOME BOUND BY THIS AGREEMENT IMMEDIATELY UPON AFFIXING ITS SIGNATURE
HERETO.

 

SECTION 15.14                          APPLICABLE LAW.  THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

 

SECTION 15.15                          INVALIDITY OF PROVISIONS.  IF ANY
PROVISION OF THIS AGREEMENT IS OR BECOMES INVALID, ILLEGAL OR UNENFORCEABLE IN
ANY RESPECT, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE REMAINING
PROVISIONS CONTAINED HEREIN SHALL NOT BE AFFECTED THEREBY.

 

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SECTION 15.16                          NO RIGHTS AS STOCKHOLDERS.  NOTHING
CONTAINED IN THIS AGREEMENT SHALL BE CONSTRUED AS CONFERRING UPON THE HOLDERS OF
MEMBERSHIP UNITS ANY RIGHTS WHATSOEVER AS STOCKHOLDERS OF THE MANAGING MEMBER,
INCLUDING WITHOUT LIMITATION ANY RIGHT TO RECEIVE DIVIDENDS OR OTHER
DISTRIBUTIONS MADE TO STOCKHOLDERS OF THE MANAGING MEMBER OR TO VOTE OR TO
CONSENT OR TO RECEIVE NOTICE AS STOCKHOLDERS IN RESPECT OF ANY MEETING OF
STOCKHOLDERS FOR THE ELECTION OF DIRECTORS OF THE MANAGING MEMBER OR ANY OTHER
MATTER, EXCEPT AS MAY BE PROVIDED IN THE INVESTORS AGREEMENT.

 

Section 15.17                           Uniform Commercial Code.  Each
Membership Unit shall constitute a “security” within the meaning of
Section 8-102(a)(15) of the Uniform Commercial Code as in effect from time to
time in the States of Delaware and New York (and each Membership Unit shall be
treated as such a “security” for all purposes, including, without limitation,
perfection of a security interest therein under Article 8 of the applicable
Uniform Commercial Code).

 

ARTICLE XVI
POWER OF ATTORNEY

 

SECTION 16.1                                POWER OF ATTORNEY.

 

(A)                                  SCOPE.  EACH NON-MANAGING MEMBER AND EACH
ASSIGNEE CONSTITUTES AND APPOINTS THE MANAGING MEMBER, ANY LIQUIDATOR, AND
AUTHORIZED OFFICERS AND ATTORNEYS-IN-FACT OF EACH, AND EACH OF THOSE ACTING
SINGLY, IN EACH CASE WITH FULL POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL
AGENT AND ATTORNEY-IN-FACT, WITH FULL POWER AND AUTHORITY IN ITS NAME, PLACE AND
STEAD TO:

 

(1)                                  EXECUTE, SWEAR TO, ACKNOWLEDGE, DELIVER,
PUBLISH, FILE AND RECORD IN THE APPROPRIATE PUBLIC OFFICES (A) ALL CERTIFICATES,
DOCUMENTS AND OTHER INSTRUMENTS (INCLUDING, WITHOUT LIMITATION, THIS AGREEMENT
AND THE CERTIFICATE AND ALL AMENDMENTS OR RESTATEMENTS THEREOF) THAT THE
MANAGING MEMBER OR THE LIQUIDATOR DEEMS APPROPRIATE OR NECESSARY TO FORM,
QUALIFY OR CONTINUE THE EXISTENCE OR QUALIFICATION OF THE COMPANY AS A LIMITED
LIABILITY COMPANY (OR AN ENTITY IN WHICH THE NON-MANAGING MEMBERS HAVE LIMITED
LIABILITY) IN THE STATE OF DELAWARE AND IN ALL OTHER JURISDICTIONS IN WHICH THE
COMPANY MAY CONDUCT BUSINESS OR OWN PROPERTY; (B) ALL INSTRUMENTS THAT THE
MANAGING MEMBER OR ANY LIQUIDATOR DEEMS APPROPRIATE OR NECESSARY TO REFLECT ANY
AMENDMENT, CHANGE, MODIFICATION OR RESTATEMENT OF THIS AGREEMENT IN ACCORDANCE
WITH ITS TERMS; (C) ALL CONVEYANCES AND OTHER INSTRUMENTS OR DOCUMENTS THAT THE
MANAGING MEMBER OR ANY LIQUIDATOR DEEMS APPROPRIATE OR NECESSARY TO REFLECT THE
DISSOLUTION AND LIQUIDATION OF THE COMPANY PURSUANT TO THE TERMS OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, A CERTIFICATE OF CANCELLATION; (D) ALL
INSTRUMENTS RELATING TO THE ADMISSION, WITHDRAWAL, REMOVAL OR SUBSTITUTION OF
ANY MEMBER PURSUANT TO, OR OTHER EVENTS DESCRIBED IN, ARTICLE XI, XII OR XIII
HEREOF OR THE CAPITAL CONTRIBUTION OF ANY MEMBER; AND (E) ALL CERTIFICATES,
DOCUMENTS AND OTHER INSTRUMENTS RELATING TO THE DETERMINATION OF THE RIGHTS,
PREFERENCES AND PRIVILEGES OF MEMBERSHIP INTERESTS; AND

 

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(2)                                  EXECUTE, SWEAR TO, ACKNOWLEDGE AND FILE ALL
BALLOTS, CONSENTS, APPROVALS, WAIVERS, CERTIFICATES AND OTHER INSTRUMENTS
APPROPRIATE OR NECESSARY, IN THE SOLE AND ABSOLUTE DISCRETION OF THE MANAGING
MEMBER, TO MAKE, EVIDENCE, GIVE, CONFIRM OR RATIFY ANY VOTE, CONSENT, APPROVAL,
AGREEMENT OR OTHER ACTION WHICH IS MADE OR GIVEN BY THE MEMBERS HEREUNDER OR IS
CONSISTENT WITH THE TERMS OF THIS AGREEMENT OR APPROPRIATE OR NECESSARY, IN THE
SOLE DISCRETION OF THE MANAGING MEMBER, TO EFFECTUATE THE TERMS OR INTENT OF
THIS AGREEMENT.

 

Nothing contained herein shall be construed as authorizing the Managing Member
to amend this Agreement except in accordance with Article XIV hereof or as may
be otherwise expressly provided for in this Agreement.

 

(b)                                 Irrevocability.  The foregoing power of
attorney is hereby declared to be irrevocable and a power coupled with an
interest, in recognition of the fact that each of the Members will be relying
upon the power of the Managing Member to act as contemplated by this Agreement
in any filing or other action by it on behalf of the Company, and it shall
survive and not be affected by the subsequent Incapacity of any Non-Managing
Member or Assignee and the transfer of all or any portion of such Non-Managing
Member’s or Assignee’s Membership Units and shall extend to such Non-Managing
Member’s or Assignee’s heirs, successors, assigns and personal representatives. 
Each such Non-Managing Member or Assignee hereby agrees to be bound by any
representation made by the Managing Member, acting in good faith pursuant to
such power of attorney; and each such Non-Managing Member or Assignee hereby
waives any and all defenses which may be available to contest, negate or
disaffirm the action of the Managing Member, taken in good faith under such
power of attorney.  Each Non-Managing Member or Assignee shall execute and
deliver to the Managing Member or the Liquidator, within 15 days after receipt
of the Managing Member’s request therefor, such further designation, powers of
attorney and other instruments as the Managing Member or the Liquidator, as the
case may be, deems necessary to effectuate this Agreement and the purposes of
the Company.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Limited Liability Company Agreement of Morgans Group LLC as of the date first
written above.

 

 

Managing Member:

 

 

 

MORGANS HOTEL GROUP CO.

 

 

 

 

 

By:

/s/ W. Edward Scheetz

 

 

Name:

W. Edward Scheetz

 

Title:

Chief Executive Officer

 

 

 

 

 

Non-Managing Members:

 

 

 

 

 

MORGANS HOTEL GROUP LLC

 

 

 

 

 

By:

/s/ W. Edward Scheetz

 

 

Name:

W. Edward Scheetz

 

Title:

Chief Executive Officer

 

 

 

 

 

NORTHSTAR PARTNERSHIP, L.P.

 

 

 

 

 

By:

/s/ Richard J. McCready

 

 

Name:

Richard J. McCready

 

Title:

President

 

 

 

 

 

RSA ASSOCIATES, L.P.

 

 

 

 

 

By:

/s/ Ian Schrager

 

 

Name:

Ian Schrager

 

Title:

President

 

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EXHIBIT A

MEMBERS, CONTRIBUTIONS AND

MEMBERSHIP INTERESTS

 

Name and Address of Member

 

Membership
Units

 

LTIP
Units

 

Percentage
Interest

 

 

 

 

 

 

 

 

 

Managing Member:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Morgans Hotel Group Co.
475 Tenth Avenue
New York, New York 10018

 

33,500,000

 

0

 

97.1

%

Non-Managing Members:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Morgans Hotel Group LLC
475 Tenth Avenue
New York, New York 10018

 

1,000,000

 

0

 

2.9

%

 

 

 

 

 

 

 

 

Total

 

34,500,000

 

0

 

100

%

 

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EXHIBIT B

NOTICE OF REDEMPTION

 

The undersigned hereby irrevocably (a) elects to exercise its Redemption Right
set forth in the Amended and Restated Limited Liability Company Agreement of
Morgans Group LLC (the “Agreement”; capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in the Agreement),
with respect to an aggregate of            Membership Units, (b) surrenders such
Membership Units and all right, title and interest therein, and (c) directs that
the Cash Amount or Shares Amount (as determined by the Managing Member)
deliverable upon exercise of the Redemption Right be delivered to the address
specified below, and if Common Shares are to be delivered, such Common Shares be
registered or placed in the name(s) and at the address(es) specified below.

 

Dated:

 

Name of Non-Managing Member:

 

(Signature of Non-Managing Member)

 

(Street Address)

 

(City)  (State)  (Zip Code)

 

Signature Guaranteed by:

 

If Common Shares are to be issued, issue to:

 

Please insert social security or identifying number:

 

Name:

 

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EXHIBIT C

NOTICE OF ELECTION BY LTIP UNITHOLDER TO CONVERT LTIP UNITS INTO

MEMBERSHIP UNITS

 

The undersigned Holder of LTIP Units hereby irrevocably (i) elects to convert
the number of LTIP Units in Morgans Group LLC (the “Company”) set forth below
into Membership Units in accordance with the terms of the Amended and Restated
Limited Liability Company Agreement of the Company, as amended; and (ii) directs
that any cash in lieu of Membership Units that may be deliverable upon such
conversion be delivered to the address specified below.  The undersigned hereby
represents, warrants, and certifies that the undersigned (a) has title to such
LTIP Units, free and clear of the rights or interests of any other person or
entity other than the Company; (b) has the full right, power, and authority to
cause the conversion of such LTIP Units as provided herein; and (c) has obtained
the consent or approval of all persons or entities, if any, having the right to
consent or approve such conversion.

 

Name of Holder:

 

Number of LTIP Units to be Converted:

 

Date of this Notice:

 

 

 

(Signature of Holder: Sign Exact Name as Registered with Company)

 

 

(Street Address)

 

 

(City)

(State)

(Zip Code)

 

 

Signature Guaranteed by:

 

 

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EXHIBIT D

NOTICE OF ELECTION BY COMPANY TO FORCE CONVERSION OF LTIP UNITS INTO
MEMBERSHIP UNITS

 

Morgans Group LLC (the “Company”) hereby irrevocably elects to cause the number
of LTIP Units held by the Holder of LTIP Units set forth below to be converted
into Membership Units in accordance with the terms of Amended and Restated
Limited Liability Company Agreement of the Company, as amended.

 

Name of Holder:

 

 

 

(Please Print: Exact Name as Registered with Company)

 

 

 

Number of LTIP Units to be Converted:

 

 

 

Date of this Notice:

 

 

 

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