AKR » Topics » bona fide

These excerpts taken from the AKR 8-K filed Jan 12, 2006.
bona fide offer from a third-party lender or a proposed term sheet prepared by or for the Financing Member, which shall set forth the following information as to the Company (i) incurring new or additional indebtedness secured by the Property or (ii) renewing, replacing or refinancing any indebtedness secured by the Property (each a “Debt Event”): (A) the principal amount of the proposed loan, (B) the rate of interest, whether fixed or floating, for the proposed loan, (C) the term of the proposed loan, (D) the points or fees to the lender in connection with the proposed loan (“Loan Fees”), (E) any contributions of capital required in connection with the proposed loan, (F) any prepayment penalties or similar costs anticipated to be incurred in connection with the prepayment of the existing loan, (G) the amortization, if any, of the proposed loan, (H) brokerage commissions, if any, to be incurred in connection with the proposed loan and (I) other material terms of the proposed loan and such additional terms as the Financing Member may deem to be appropriate.

(b)           Any Debt Event must comply with the following conditions: (i) the loan shall be non-recourse to any Member other than (A) a non-recourse carve-out guaranty customarily granted in similar types of financings, which shall be provided solely by the Managing Member, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated, and (B) an environmental indemnity in favor of such lender which shall be executed and delivered jointly and severally by all of the Members, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated (such guaranty, non-recourse carve out and environmental indemnity and agreement, collectively, the “Ancillary Documents”), (ii) to the extent available at market terms, the principal amount of such indebtedness shall equal or exceed the principal amount of the indebtedness that has been renewed, replaced or refinanced, if any, and (iii) the principal amount of all indebtedness secured by the Property upon the effectiveness of such Debt Event shall not exceed seventy five percent (75%) of the value of the Property, as determined by the lender(s) of such indebtedness at the time of such effectiveness (such indebtedness, “Approved Debt”).

(c)           Within twenty (20) days after receipt of the Loan Term Sheet (such 20-day period, the “Term Sheet Period”), the other Members shall respond to the Financing Member that either (i) it accepts the terms of the loan as set forth in the Loan Term Sheet, or (ii) it has obtained a term sheet from a bona fide third-party institutional lender (A) satisfying all of the conditions required to be Approved Debt and containing no less favorable lender requirements or conditions with respect to assumption, transfer and substitution rights or other terms that might differ between a portfolio-type lender and a conduit-type lender, and (B) acknowledging that the provisions of such term sheet in no manner binds the Company (the “Alternate Term Sheet”), and that all of the other terms set forth in the Alternate Term Sheet are the same as set forth in the Loan Term Sheet except that the Effective Rate set forth in the Alternate Term Sheet shall be at least ten (10) basis points lower than the Effective Rate set forth in the Loan Term Sheet (but the interest rate must be of the same type (i.e., fixed or floating) as set forth in the Loan Term Sheet) (the “Superior Term Sheet”). Notwithstanding any other provision hereof, in connection with obtaining or attempting to obtain an Alternate Term Sheet, no Member may indicate that it represents or can bind the Company with respect to any term sheet or otherwise. Failure by the other Member to respond within the Term Sheet Period shall be deemed to be an election by the other Members to accept the Loan Term Sheet. The Company and each Member shall provide

 

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reasonable cooperation as requested by the Financing Member or any other Member, as the case may be, in the obtaining of a Loan Term Sheet or an Alternate Term Sheet, respectively, from a third party lender. For purposes hereof, the term “Effective Rate” shall mean the sum of (I) the rate of interest set forth in the Loan Term Sheet, plus (II) the Loan Fees divided by the number of years of the term of the proposes loan (rounded to the nearest full year, if applicable).

(d)           Upon the earliest to occur of (x) the Financing Member reasonably determining whether or not the Alternative Term Sheet meets the requirements set forth in Section 3.10(c) as a Superior Term Sheet, (y) the first date on which all the other Members have responded to the Financing Member that the Loan Term Sheet is acceptable, and (z) the expiration of the Term Sheet Period without receipt of a response from the other Members, the Financing Member shall proceed with reasonable diligence to effectuate the financing on the terms provided in the Loan Term Sheet or, in the event the Financing Member so determines that it is a Superior Term Sheet, the Alternative Term Sheet. Thereafter, all Members, including the Managing Member, shall cooperate with the Financing Member to consummate the loan transaction for the Approved Debt as so determined by the Financing Member, including the provision of any information or documentation reasonably requested, and the execution of the Ancillary Documents, if and as applicable, and any customary and reasonable document required in connection with such Approved Debt. Except in connection with obtaining an Alternate Term Sheet, no Member other than the Financing Member shall initiate any discussions or negotiations with any lender regarding a Debt Event, and the other Members shall promptly refer any inquiries or proposals received thereby from a potential lender to the Financing Member.

SECTION 3.11 Removal of the Managing Member.

(a)           In the event of (i) fraud, gross negligence or willful misconduct of the Managing Member, (ii) any breach by the Managing Member of any of its material obligations under this Agreement that remains uncured for thirty (30) days after delivery of notice thereof to the Managing Member by any other Member, (iii) upon the liquidation, dissolution, or Bankruptcy of the Managing Member, (iv) while an ARA Member is the Managing Member, the termination of the Management Agreement or (vi) a Change of Control, the Managing Member may be removed by written notice (a “Removal Notice”) from all of the Members (other than such Managing Member).

(b)           Upon the removal of the Managing Member pursuant to Section 3.11(a), the Managing Member shall continue to hold its Interest and shall become a Member and (ii) the Managing Member may be replaced by a Person selected by the Members other than the Managing Member.

(c)           The removal of the Managing Member pursuant to Section 3.11(a) is not the exclusive remedy of the Company or the Members for any fraud, gross negligence or willful misconduct by the Managing Member.

SECTION 3.12 Withdrawal of the Managing Member. Except as otherwise provided in this Article III, the Managing Member may not withdraw from the Company prior to its dissolution.

 

 

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SECTION 3.13 Duties of Care of Managing Member. The Managing Member shall discharge its duties in a professional manner as provided for in this Agreement and shall have a duty of loyalty to the Company. The Managing Member, on behalf of the Company, shall in good faith use all reasonable efforts to implement all Major Decisions approved by the Members, enforce agreements entered into by the Company, and conduct the ordinary business and affairs of the Company in accordance with good industry practice and this Agreement. The Managing Member shall devote such time as is reasonably necessary or appropriate to perform its duties hereunder properly.

SECTION 3.14 Meetings of Members.

(a)           Meetings. Meetings of the Members may be called by the Managing Member or by any other Member or Members holding at least twenty-five percent (25%) Interest Percentage at any time by delivering at least two (2) Business Days’ prior notice thereof to the other Members to discuss such matters regarding Company business as the Members may elect.

(b)           Procedure. Each Company meeting shall be held at the offices of the Managing Member, unless the Members otherwise agree. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, unless such Person attends the meeting for the purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. A Person may vote at such meeting by written proxy executed by that Person and delivered to the Managing Member or a Member. A proxy shall be revocable unless it is stated to be irrevocable. Any action required or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent or consents in writing setting forth the action so taken is signed by the Managing Member and the Members that would be necessary to take the action at a meeting at which all Members were present and voted. Any meeting may take place by means of telephone conference, video conference, or similar communication equipment by means of which all Persons participating therein can hear each other. Whenever the Managing Member (or any Member) desires to take any proposed action which requires the approval of one or more of the Members in accordance with this Agreement and the Managing Member (or such Member, as applicable) seeks and requests such approval without a meeting, then the Managing Member (or such Member, as applicable) shall give written notice thereof to the applicable Members, describing such proposed action in sufficient detail to enable such Members to exercise an informed judgment with respect thereto. As soon as practicable thereafter, each non-requesting Member shall give the Managing Member (or the requesting Member, as applicable) written notice that such Member either approves or disapproves the proposed action. If any Member fails to respond (as provided herein) on or before the fifteenth (15th) Business Day following the receipt of such written notice of any such action proposed by the Managing Member (or the other Member, as applicable), then such non-responding Member shall be conclusively presumed to have approved such action.

SECTION 3.15 Managing Member Affiliate Agreements. Notwithstanding any other provision hereof, in the event that (a) there is a breach by the Managing Member or any Affiliate thereof of the terms of any agreement relating to the Property (including the Management Agreement) between or among the Company or any subsidiary thereof that is

 

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controlled by the Managing Member or an Affiliate thereof, on the one hand, and the Managing Member or any Affiliate thereof, on the other hand, and (b) the Managing Member (or any Affiliate of the Managing Member that controls a subsidiary of the Company) fails to enforce the rights and remedies of the Company or any such subsidiary, as applicable, with respect to such breach in a commercially reasonable manner, then the GDC Members shall have the right, with respect to such breach, to exercise the rights and remedies of the Company or any such subsidiary under any such contract or agreement, in a commercially reasonable manner, provided that prior to exercising such right (a) the GDC Members deliver written notice (such notice, “Action Notice”) of such breach to the Managing Member, which written notice shall set forth in reasonable detail the course of conduct the GDC Members reasonably believes is in the best interest of the Company with respect to such breach, and (b) the Managing Member fails to either cure the alleged breach or initiate such course of conduct in a manner reasonably acceptable to the GDC Members within thirty (30) days of its receipt of the Action Notice.

 

bona fide offer from a third-party lender or a proposed term sheet prepared by or for the Financing Member, which shall set forth the following information as to the Company (i) incurring new or additional indebtedness secured by the Property or (ii) renewing, replacing or refinancing any indebtedness secured by the Property (each a “Debt Event”): (A) the principal amount of the proposed loan, (B) the rate of interest, whether fixed or floating, for the proposed loan, (C) the term of the

 

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proposed loan, (D) the points or fees to the lender in connection with the proposed loan (“Loan Fees”), (E) any contributions of capital required in connection with the proposed loan, (F) any prepayment penalties or similar costs anticipated to be incurred in connection with the prepayment of the existing loan, (G) the amortization, if any, of the proposed loan, (H) brokerage commissions, if any, to be incurred in connection with the proposed loan and (I) other material terms of the proposed loan and such additional terms as the Financing Member may deem to be appropriate.

(b)           Any Debt Event must comply with the following conditions: (i) the loan shall be non-recourse to any Member other than (A) a non-recourse carve-out guaranty customarily granted in similar types of financings, which shall be provided solely by the Managing Member, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated, and (B) an environmental indemnity in favor of such lender which shall be executed and delivered jointly and severally by all of the Members, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated (such guaranty, non-recourse carve out and environmental indemnity and agreement, collectively, the “Ancillary Documents”), (ii) to the extent available at market terms, the principal amount of such indebtedness shall equal or exceed the principal amount of the indebtedness that has been renewed, replaced or refinanced, if any, and (iii) the principal amount of all indebtedness secured by the Property upon the effectiveness of such Debt Event shall not exceed seventy five percent (75%) of the value of the Property, as determined by the lender(s) of such indebtedness at the time of such effectiveness (such indebtedness, “Approved Debt”).

(c)           Within twenty (20) days after receipt of the Loan Term Sheet (such 20-day period, the “Term Sheet Period”), the other Members shall respond to the Financing Member that either (i) it accepts the terms of the loan as set forth in the Loan Term Sheet, or (ii) it has obtained a term sheet from a bona fide third-party institutional lender (A) satisfying all of the conditions required to be Approved Debt and containing no less favorable lender requirements or conditions with respect to assumption, transfer and substitution rights or other terms that might differ between a portfolio-type lender and a conduit-type lender, and (B) acknowledging that the provisions of such term sheet in no manner binds the Company (the “Alternate Term Sheet”), and that all of the other terms set forth in the Alternate Term Sheet are the same as set forth in the Loan Term Sheet except that the Effective Rate set forth in the Alternate Term Sheet shall be at least ten (10) basis points lower than the Effective Rate set forth in the Loan Term Sheet (but the interest rate must be of the same type (i.e., fixed or floating) as set forth in the Loan Term Sheet) (the “Superior Term Sheet”). Notwithstanding any other provision hereof, in connection with obtaining or attempting to obtain an Alternate Term Sheet, no Member may indicate that it represents or can bind the Company with respect to any term sheet or otherwise. Failure by the other Member to respond within the Term Sheet Period shall be deemed to be an election by the other Members to accept the Loan Term Sheet. The Company and each Member shall provide reasonable cooperation as requested by the Financing Member or any other Member, as the case may be, in the obtaining of a Loan Term Sheet or an Alternate Term Sheet, respectively, from a third party lender. For purposes hereof, the term “Effective Rate” shall mean the sum of (I) the rate of interest set forth in the Loan Term Sheet, plus (II) the Loan Fees divided by the number of years of the term of the proposes loan (rounded to the nearest full year, if applicable).

 

 

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(d)           Upon the earliest to occur of (x) the Financing Member reasonably determining whether or not the Alternative Term Sheet meets the requirements set forth in Section 3.10(c) as a Superior Term Sheet, (y) the first date on which all the other Members have responded to the Financing Member that the Loan Term Sheet is acceptable, and (z) the expiration of the Term Sheet Period without receipt of a response from the other Members, the Financing Member shall proceed with reasonable diligence to effectuate the financing on the terms provided in the Loan Term Sheet or, in the event the Financing Member so determines that it is a Superior Term Sheet, the Alternative Term Sheet. Thereafter, all Members, including the Managing Member, shall cooperate with the Financing Member to consummate the loan transaction for the Approved Debt as so determined by the Financing Member, including the provision of any information or documentation reasonably requested, and the execution of the Ancillary Documents, if and as applicable, and any customary and reasonable document required in connection with such Approved Debt. Except in connection with obtaining an Alternate Term Sheet, no Member other than the Financing Member shall initiate any discussions or negotiations with any lender regarding a Debt Event, and the other Members shall promptly refer any inquiries or proposals received thereby from a potential lender to the Financing Member.

SECTION 3.11 Removal of the Managing Member.

(a)           In the event of (i) fraud, gross negligence or willful misconduct of the Managing Member, (ii) any breach by the Managing Member of any of its material obligations under this Agreement that remains uncured for thirty (30) days after delivery of notice thereof to the Managing Member by any other Member, (iii) upon the liquidation, dissolution, or Bankruptcy of the Managing Member, (iv) while an ARA Member is the Managing Member, the termination of the Management Agreement or (vi) a Change of Control, the Managing Member may be removed by written notice (a “Removal Notice”) from all of the Members (other than such Managing Member).

(b)           Upon the removal of the Managing Member pursuant to Section 3.11(a), the Managing Member shall continue to hold its Interest and shall become a Member and (ii) the Managing Member may be replaced by a Person selected by the Members other than the Managing Member.

(c)           The removal of the Managing Member pursuant to Section 3.11(a) is not the exclusive remedy of the Company or the Members for any fraud, gross negligence or willful misconduct by the Managing Member.

SECTION 3.12 Withdrawal of the Managing Member. Except as otherwise provided in this Article III, the Managing Member may not withdraw from the Company prior to its dissolution.

SECTION 3.13 Duties of Care of Managing Member. The Managing Member shall discharge its duties in a professional manner as provided for in this Agreement and shall have a duty of loyalty to the Company. The Managing Member, on behalf of the Company, shall in good faith use all reasonable efforts to implement all Major Decisions approved by the Members, enforce agreements entered into by the Company, and conduct the ordinary business and affairs of the Company in accordance with good industry practice and this Agreement. The

 

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Managing Member shall devote such time as is reasonably necessary or appropriate to perform its duties hereunder properly.

SECTION 3.14 Meetings of Members.

(a)           Meetings. Meetings of the Members may be called by the Managing Member or by any other Member or Members holding at least twenty-five percent (25%) Interest Percentage at any time by delivering at least two (2) Business Days’ prior notice thereof to the other Members to discuss such matters regarding Company business as the Members may elect.

(b)           Procedure. Each Company meeting shall be held at the offices of the Managing Member, unless the Members otherwise agree. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, unless such Person attends the meeting for the purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. A Person may vote at such meeting by written proxy executed by that Person and delivered to the Managing Member or a Member. A proxy shall be revocable unless it is stated to be irrevocable. Any action required or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent or consents in writing setting forth the action so taken is signed by the Managing Member and the Members that would be necessary to take the action at a meeting at which all Members were present and voted. Any meeting may take place by means of telephone conference, video conference, or similar communication equipment by means of which all Persons participating therein can hear each other. Whenever the Managing Member (or any Member) desires to take any proposed action which requires the approval of one or more of the Members in accordance with this Agreement and the Managing Member (or such Member, as applicable) seeks and requests such approval without a meeting, then the Managing Member (or such Member, as applicable) shall give written notice thereof to the applicable Members, describing such proposed action in sufficient detail to enable such Members to exercise an informed judgment with respect thereto. As soon as practicable thereafter, each non-requesting Member shall give the Managing Member (or the requesting Member, as applicable) written notice that such Member either approves or disapproves the proposed action. If any Member fails to respond (as provided herein) on or before the fifteenth (15th) Business Day following the receipt of such written notice of any such action proposed by the Managing Member (or the other Member, as applicable), then such non-responding Member shall be conclusively presumed to have approved such action.

SECTION 3.15 Managing Member Affiliate Agreements. Notwithstanding any other provision hereof, in the event that (a) there is a breach by the Managing Member or any Affiliate thereof of the terms of any agreement relating to the Property (including the Management Agreement) between or among the Company or any subsidiary thereof that is controlled by the Managing Member or an Affiliate thereof, on the one hand, and the Managing Member or any Affiliate thereof, on the other hand, and (b) the Managing Member (or any Affiliate of the Managing Member that controls a subsidiary of the Company) fails to enforce the rights and remedies of the Company or any such subsidiary, as applicable, with respect to such breach in a commercially reasonable manner, then the GDC Members shall have the right, with respect to such breach, to exercise the rights and remedies of the Company or any such

 

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subsidiary under any such contract or agreement, in a commercially reasonable manner, provided that prior to exercising such right (a) the GDC Members deliver written notice (such notice, “Action Notice”) of such breach to the Managing Member, which written notice shall set forth in reasonable detail the course of conduct the GDC Members reasonably believes is in the best interest of the Company with respect to such breach, and (b) the Managing Member fails to either cure the alleged breach or initiate such course of conduct in a manner reasonably acceptable to the GDC Members within thirty (30) days of its receipt of the Action Notice.

 

bona fide offer from a third-party lender or a proposed term sheet prepared by or for the Financing Member, which shall set forth the following information as to the Company (i) incurring new or additional indebtedness secured by the Property or (ii) renewing, replacing or refinancing any indebtedness secured by the Property (each a “Debt Event”): (A) the principal amount of the proposed loan, (B) the rate of interest, whether fixed or floating, for the proposed loan, (C) the term of the

 

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proposed loan, (D) the points or fees to the lender in connection with the proposed loan (“Loan Fees”), (E) any contributions of capital required in connection with the proposed loan, (F) any prepayment penalties or similar costs anticipated to be incurred in connection with the prepayment of the existing loan, (G) the amortization, if any, of the proposed loan, (H) brokerage commissions, if any, to be incurred in connection with the proposed loan and (I) other material terms of the proposed loan and such additional terms as the Financing Member may deem to be appropriate.

(b)           Any Debt Event must comply with the following conditions: (i) the loan shall be non-recourse to any Member other than (A) a non-recourse carve-out guaranty customarily granted in similar types of financings, which shall be provided solely by the Managing Member, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated, and (B) an environmental indemnity in favor of such lender which shall be executed and delivered jointly and severally by all of the Members, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated (such guaranty, non-recourse carve out and environmental indemnity and agreement, collectively, the “Ancillary Documents”), (ii) to the extent available at market terms, the principal amount of such indebtedness shall equal or exceed the principal amount of the indebtedness that has been renewed, replaced or refinanced, if any, and (iii) the principal amount of all indebtedness secured by the Property upon the effectiveness of such Debt Event shall not exceed seventy five percent (75%) of the value of the Property, as determined by the lender(s) of such indebtedness at the time of such effectiveness (such indebtedness, “Approved Debt”).

(c)           Within twenty (20) days after receipt of the Loan Term Sheet (such 20-day period, the “Term Sheet Period”), the other Members shall respond to the Financing Member that either (i) it accepts the terms of the loan as set forth in the Loan Term Sheet, or (ii) it has obtained a term sheet from a bona fide third-party institutional lender (A) satisfying all of the conditions required to be Approved Debt and containing no less favorable lender requirements or conditions with respect to assumption, transfer and substitution rights or other terms that might differ between a portfolio-type lender and a conduit-type lender, and (B) acknowledging that the provisions of such term sheet in no manner binds the Company (the “Alternate Term Sheet”), and that all of the other terms set forth in the Alternate Term Sheet are the same as set forth in the Loan Term Sheet except that the Effective Rate set forth in the Alternate Term Sheet shall be at least ten (10) basis points lower than the Effective Rate set forth in the Loan Term Sheet (but the interest rate must be of the same type (i.e., fixed or floating) as set forth in the Loan Term Sheet) (the “Superior Term Sheet”). Notwithstanding any other provision hereof, in connection with obtaining or attempting to obtain an Alternate Term Sheet, no Member may indicate that it represents or can bind the Company with respect to any term sheet or otherwise. Failure by the other Member to respond within the Term Sheet Period shall be deemed to be an election by the other Members to accept the Loan Term Sheet. The Company and each Member shall provide reasonable cooperation as requested by the Financing Member or any other Member, as the case may be, in the obtaining of a Loan Term Sheet or an Alternate Term Sheet, respectively, from a third party lender. For purposes hereof, the term “Effective Rate” shall mean the sum of (I) the rate of interest set forth in the Loan Term Sheet, plus (II) the Loan Fees divided by the number of years of the term of the proposes loan (rounded to the nearest full year, if applicable).

 

 

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(d)           Upon the earliest to occur of (x) the Financing Member reasonably determining whether or not the Alternative Term Sheet meets the requirements set forth in Section 3.10(c) as a Superior Term Sheet, (y) the first date on which all the other Members have responded to the Financing Member that the Loan Term Sheet is acceptable, and (z) the expiration of the Term Sheet Period without receipt of a response from the other Members, the Financing Member shall proceed with reasonable diligence to effectuate the financing on the terms provided in the Loan Term Sheet or, in the event the Financing Member so determines that it is a Superior Term Sheet, the Alternative Term Sheet. Thereafter, all Members, including the Managing Member, shall cooperate with the Financing Member to consummate the loan transaction for the Approved Debt as so determined by the Financing Member, including the provision of any information or documentation reasonably requested, and the execution of the Ancillary Documents, if and as applicable, and any customary and reasonable document required in connection with such Approved Debt. Except in connection with obtaining an Alternate Term Sheet, no Member other than the Financing Member shall initiate any discussions or negotiations with any lender regarding a Debt Event, and the other Members shall promptly refer any inquiries or proposals received thereby from a potential lender to the Financing Member.

SECTION 3.11 Removal of the Managing Member.

(a)           In the event of (i) fraud, gross negligence or willful misconduct of the Managing Member, (ii) any breach by the Managing Member of any of its material obligations under this Agreement that remains uncured for thirty (30) days after delivery of notice thereof to the Managing Member by any other Member, (iii) upon the liquidation, dissolution, or Bankruptcy of the Managing Member, (iv) while an ARA Member is the Managing Member, the termination of the Management Agreement or (vi) a Change of Control, the Managing Member may be removed by written notice (a “Removal Notice”) from all of the Members (other than such Managing Member).

(b)           Upon the removal of the Managing Member pursuant to Section 3.11(a), the Managing Member shall continue to hold its Interest and shall become a Member and (ii) the Managing Member may be replaced by a Person selected by the Members other than the Managing Member.

(c)           The removal of the Managing Member pursuant to Section 3.11(a) is not the exclusive remedy of the Company or the Members for any fraud, gross negligence or willful misconduct by the Managing Member.

SECTION 3.12 Withdrawal of the Managing Member. Except as otherwise provided in this Article III, the Managing Member may not withdraw from the Company prior to its dissolution.

SECTION 3.13 Duties of Care of Managing Member. The Managing Member shall discharge its duties in a professional manner as provided for in this Agreement and shall have a duty of loyalty to the Company. The Managing Member, on behalf of the Company, shall in good faith use all reasonable efforts to implement all Major Decisions approved by the Members, enforce agreements entered into by the Company, and conduct the ordinary business and affairs of the Company in accordance with good industry practice and this Agreement. The

 

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Managing Member shall devote such time as is reasonably necessary or appropriate to perform its duties hereunder properly.

SECTION 3.14 Meetings of Members.

(a)           Meetings. Meetings of the Members may be called by the Managing Member or by any other Member or Members holding at least twenty-five percent (25%) Interest Percentage at any time by delivering at least two (2) Business Days’ prior notice thereof to the other Members to discuss such matters regarding Company business as the Members may elect.

(b)           Procedure. Each Company meeting shall be held at the offices of the Managing Member, unless the Members otherwise agree. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, unless such Person attends the meeting for the purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. A Person may vote at such meeting by written proxy executed by that Person and delivered to the Managing Member or a Member. A proxy shall be revocable unless it is stated to be irrevocable. Any action required or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent or consents in writing setting forth the action so taken is signed by the Managing Member and the Members that would be necessary to take the action at a meeting at which all Members were present and voted. Any meeting may take place by means of telephone conference, video conference, or similar communication equipment by means of which all Persons participating therein can hear each other. Whenever the Managing Member (or any Member) desires to take any proposed action which requires the approval of one or more of the Members in accordance with this Agreement and the Managing Member (or such Member, as applicable) seeks and requests such approval without a meeting, then the Managing Member (or such Member, as applicable) shall give written notice thereof to the applicable Members, describing such proposed action in sufficient detail to enable such Members to exercise an informed judgment with respect thereto. As soon as practicable thereafter, each non-requesting Member shall give the Managing Member (or the requesting Member, as applicable) written notice that such Member either approves or disapproves the proposed action. If any Member fails to respond (as provided herein) on or before the fifteenth (15th) Business Day following the receipt of such written notice of any such action proposed by the Managing Member (or the other Member, as applicable), then such non-responding Member shall be conclusively presumed to have approved such action.

SECTION 3.15 Managing Member Affiliate Agreements. Notwithstanding any other provision hereof, in the event that (a) there is a breach by the Managing Member or any Affiliate thereof of the terms of any agreement relating to the Property (including the Management Agreement) between or among the Company or any subsidiary thereof that is controlled by the Managing Member or an Affiliate thereof, on the one hand, and the Managing Member or any Affiliate thereof, on the other hand, and (b) the Managing Member (or any Affiliate of the Managing Member that controls a subsidiary of the Company) fails to enforce the rights and remedies of the Company or any such subsidiary, as applicable, with respect to such breach in a commercially reasonable manner, then the GDC Members shall have the right, with respect to such breach, to exercise the rights and remedies of the Company or any such

 

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subsidiary under any such contract or agreement, in a commercially reasonable manner, provided that prior to exercising such right (a) the GDC Members deliver written notice (such notice, “Action Notice”) of such breach to the Managing Member, which written notice shall set forth in reasonable detail the course of conduct the GDC Members reasonably believes is in the best interest of the Company with respect to such breach, and (b) the Managing Member fails to either cure the alleged breach or initiate such course of conduct in a manner reasonably acceptable to the GDC Members within thirty (30) days of its receipt of the Action Notice.

 

bona fide offer from a third-party lender or a proposed term sheet prepared by or for the Financing Member, which shall set forth the following information as to the Company (i) incurring new or additional indebtedness secured by the Property or (ii) renewing, replacing or refinancing any indebtedness secured by the Property (each a “Debt Event”): (A) the principal amount of the proposed loan, (B) the rate of interest, whether fixed or floating, for the proposed loan, (C) the term of the proposed loan, (D) the points or fees to the lender in connection with the proposed loan (“Loan Fees”), (E) any contributions of capital required in connection with the proposed loan, (F) any prepayment penalties or similar costs anticipated to be incurred in connection with the prepayment of the existing loan, (G) the amortization, if any, of the proposed loan, (H) brokerage commissions, if any, to be incurred in connection with the proposed loan and (I) other material terms of the proposed loan and such additional terms as the Financing Member may deem to be appropriate.

(b)           Any Debt Event must comply with the following conditions: (i) the loan shall be non-recourse to any Member other than (A) a non-recourse carve-out guaranty customarily granted in similar types of financings, which shall be provided solely by the Managing Member, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated, and (B) an environmental indemnity in favor of such lender which shall be executed and delivered jointly and severally by all of the Members, subject to contribution and indemnity among the Members for the acts of any particular Member or its agents, pursuant to the lender’s customary industry standard form, as reasonably negotiated (such guaranty, non-recourse carve out and environmental indemnity and agreement, collectively, the “Ancillary Documents”), (ii) to the extent available at market terms, the principal amount of such indebtedness shall equal or exceed the principal amount of the indebtedness that has been renewed, replaced or refinanced, if any, and (iii) the principal amount of all indebtedness secured by the Property upon the effectiveness of such Debt Event shall not exceed seventy five percent (75%) of the value of the Property, as determined by the lender(s) of such indebtedness at the time of such effectiveness (such indebtedness, “Approved Debt”).

(c)           Within twenty (20) days after receipt of the Loan Term Sheet (such 20-day period, the “Term Sheet Period”), the other Members shall respond to the Financing Member that either (i) it accepts the terms of the loan as set forth in the Loan Term Sheet, or (ii) it has obtained a term sheet from a bona fide third-party institutional lender (A) satisfying all of the conditions required to be Approved Debt and containing no less favorable lender requirements or conditions with respect to assumption, transfer and substitution rights or other terms that might differ between a portfolio-type lender and a conduit-type lender, and (B) acknowledging that the provisions of such term sheet in no manner binds the Company (the “Alternate Term Sheet”), and that all of the other terms set forth in the Alternate Term Sheet are the same as set forth in the Loan Term Sheet except that the Effective Rate set forth in the Alternate Term Sheet shall be at least ten (10) basis points lower than the Effective Rate set forth in the Loan Term Sheet (but the interest rate must be of the same type (i.e., fixed or floating) as set forth in the Loan Term Sheet) (the “Superior Term Sheet”). Notwithstanding any other provision hereof, in connection with obtaining or attempting to obtain an Alternate Term Sheet, no Member may indicate that it represents or can bind the Company with respect to any term sheet or otherwise. Failure by the other Member to respond within the Term Sheet Period shall be deemed to be an election by the other Members to accept the Loan Term Sheet. The Company and each Member shall provide

 

 

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reasonable cooperation as requested by the Financing Member or any other Member, as the case may be, in the obtaining of a Loan Term Sheet or an Alternate Term Sheet, respectively, from a third party lender. For purposes hereof, the term “Effective Rate” shall mean the sum of (I) the rate of interest set forth in the Loan Term Sheet, plus (II) the Loan Fees divided by the number of years of the term of the proposes loan (rounded to the nearest full year, if applicable).

(d)           Upon the earliest to occur of (x) the Financing Member reasonably determining whether or not the Alternative Term Sheet meets the requirements set forth in Section 3.10(c) as a Superior Term Sheet, (y) the first date on which all the other Members have responded to the Financing Member that the Loan Term Sheet is acceptable, and (z) the expiration of the Term Sheet Period without receipt of a response from the other Members, the Financing Member shall proceed with reasonable diligence to effectuate the financing on the terms provided in the Loan Term Sheet or, in the event the Financing Member so determines that it is a Superior Term Sheet, the Alternative Term Sheet. Thereafter, all Members, including the Managing Member, shall cooperate with the Financing Member to consummate the loan transaction for the Approved Debt as so determined by the Financing Member, including the provision of any information or documentation reasonably requested, and the execution of the Ancillary Documents, if and as applicable, and any customary and reasonable document required in connection with such Approved Debt. Except in connection with obtaining an Alternate Term Sheet, no Member other than the Financing Member shall initiate any discussions or negotiations with any lender regarding a Debt Event, and the other Members shall promptly refer any inquiries or proposals received thereby from a potential lender to the Financing Member.

SECTION 3.11 Removal of the Managing Member.

(a)           In the event of (i) fraud, gross negligence or willful misconduct of the Managing Member, (ii) any breach by the Managing Member of any of its material obligations under this Agreement that remains uncured for thirty (30) days after delivery of notice thereof to the Managing Member by any other Member, (iii) upon the liquidation, dissolution, or Bankruptcy of the Managing Member, (iv) while an ARA Member is the Managing Member, the termination of the Management Agreement or (vi) a Change of Control, the Managing Member may be removed by written notice (a “Removal Notice”) from all of the Members (other than such Managing Member).

(b)           Upon the removal of the Managing Member pursuant to Section 3.11(a), the Managing Member shall continue to hold its Interest and shall become a Member and (ii) the Managing Member may be replaced by a Person selected by the Members other than the Managing Member.

(c)           The removal of the Managing Member pursuant to Section 3.11(a) is not the exclusive remedy of the Company or the Members for any fraud, gross negligence or willful misconduct by the Managing Member.

SECTION 3.12 Withdrawal of the Managing Member. Except as otherwise provided in this Article III, the Managing Member may not withdraw from the Company prior to its dissolution.

 

 

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SECTION 3.13 Duties of Care of Managing Member. The Managing Member shall discharge its duties in a professional manner as provided for in this Agreement and shall have a duty of loyalty to the Company. The Managing Member, on behalf of the Company, shall in good faith use all reasonable efforts to implement all Major Decisions approved by the Members, enforce agreements entered into by the Company, and conduct the ordinary business and affairs of the Company in accordance with good industry practice and this Agreement. The Managing Member shall devote such time as is reasonably necessary or appropriate to perform its duties hereunder properly.

SECTION 3.14 Meetings of Members.

(a)           Meetings. Meetings of the Members may be called by the Managing Member or by any other Member or Members holding at least twenty-five percent (25%) Interest Percentage at any time by delivering at least two (2) Business Days’ prior notice thereof to the other Members to discuss such matters regarding Company business as the Members may elect.

(b)           Procedure. Each Company meeting shall be held at the offices of the Managing Member, unless the Members otherwise agree. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, unless such Person attends the meeting for the purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. A Person may vote at such meeting by written proxy executed by that Person and delivered to the Managing Member or a Member. A proxy shall be revocable unless it is stated to be irrevocable. Any action required or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent or consents in writing setting forth the action so taken is signed by the Managing Member and the Members that would be necessary to take the action at a meeting at which all Members were present and voted. Any meeting may take place by means of telephone conference, video conference, or similar communication equipment by means of which all Persons participating therein can hear each other. Whenever the Managing Member (or any Member) desires to take any proposed action which requires the approval of one or more of the Members in accordance with this Agreement and the Managing Member (or such Member, as applicable) seeks and requests such approval without a meeting, then the Managing Member (or such Member, as applicable) shall give written notice thereof to the applicable Members, describing such proposed action in sufficient detail to enable such Members to exercise an informed judgment with respect thereto. As soon as practicable thereafter, each non-requesting Member shall give the Managing Member (or the requesting Member, as applicable) written notice that such Member either approves or disapproves the proposed action. If any Member fails to respond (as provided herein) on or before the fifteenth (15th) Business Day following the receipt of such written notice of any such action proposed by the Managing Member (or the other Member, as applicable), then such non-responding Member shall be conclusively presumed to have approved such action.

SECTION 3.15 Managing Member Affiliate Agreements. Notwithstanding any other provision hereof, in the event that (a) there is a breach by the Managing Member or any Affiliate thereof of the terms of any agreement relating to the Property (including the Management Agreement) between or among the Company or any subsidiary thereof that is

 

 

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controlled by the Managing Member or an Affiliate thereof, on the one hand, and the Managing Member or any Affiliate thereof, on the other hand, and (b) the Managing Member (or any Affiliate of the Managing Member that controls a subsidiary of the Company) fails to enforce the rights and remedies of the Company or any such subsidiary, as applicable, with respect to such breach in a commercially reasonable manner, then the GDC Members shall have the right, with respect to such breach, to exercise the rights and remedies of the Company or any such subsidiary under any such contract or agreement, in a commercially reasonable manner, provided that prior to exercising such right (a) the GDC Members deliver written notice (such notice, “Action Notice”) of such breach to the Managing Member, which written notice shall set forth in reasonable detail the course of conduct the GDC Members reasonably believes is in the best interest of the Company with respect to such breach, and (b) the Managing Member fails to either cure the alleged breach or initiate such course of conduct in a manner reasonably acceptable to the GDC Members within thirty (30) days of its receipt of the Action Notice.

 

bona fide transactions in the ordinary course of the business of the Property Owners.  

 

8.18        Taxes. (a) Each of the Property Owners has properly filed or caused to be filed or will cause to be filed, within the times and within the manner prescribed by law, all Required Tax Returns, (b) each Required Tax Return is complete and accurate, (c) each of the Property Owners has paid or made adequate provisions for the payment of all Taxes due or payable (without regard to whether such Taxes have been assessed), (d) there are no Tax Liens upon the Properties or any other asset of a Property Owner, except Liens for Taxes not yet due and payable, (e) none of the the Property Owners is a party to any pending or, to the Knowledge of ARA, threatened Action for collection of any Tax, (f) to the Knowledge of ARA, none of the Properties or Property Owners has been audited by any Tax authority nor has any Property Owner received notice of any such authority’s intention to conduct any such audit, and (g) none of the Property Owners has any liability for any Taxes of any Person as a transferee or successor, by contract or otherwise. “

EXCERPTS ON THIS PAGE:

8-K (5 sections)
Jan 12, 2006
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