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SECURlTIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934
(Amendment No. )*
CNY Financial Corporaation
- -------------------------------------------------------------------------------
Common Stock
- -------------------------------------------------------------------------------
12613U107
-----------------------------------------------------------------------------
(CUSIP Number)
Lawrence B. Seidman, 100 Misty Lane, Parsippany, NJ 07054, (201) 560-1400
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 19, 1999
- ----------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box .
Check the following box if a fee is being paid with the statement . (A fee is
not required only if the reporting person: (I) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item l; and (2) has hled no amendment subsequent thereto
reporting beneficial ownership of hve percent or less of such class.) (See Rule
13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subjcct to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Seidman and Associates, L.L.C. 22-3343079
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
36,450
NUMBER OF -------------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
36,450
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 36,450
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .694
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO.12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Seidman and Associates II, L.L.C. 22-3435964
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 37,640
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
37,640
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 37,640
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .716
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Seidman Investment Partnership, L.P. 22-3360395
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 36,950
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
36,950
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 36,950
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .703
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Seidman Investment Partnership II, L.P. 22-3603662
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 37,640
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
37,640
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 37,640
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .716
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Kerrimatt, L.P. 22-3583179
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 37,640
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
37,640
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 37,640
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .716
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Federal Holdings, L.L.C. 13-3838083
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 37,640
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
37,640
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 37,640
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .716
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Lawrence B. Seidman 075 38 0679
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 286,000
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
286,000
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 286,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.446
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Richard Whitman, Individually ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 1,000
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER 72,400
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
72,400
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 73,400
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.397
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Lorraine DiPaolo, Individually 094 28 8963
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 1,000
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER 72,400
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER 72,400
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 73,400
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.397
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Benchmark Partners, L.P. 11-2955345
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 57,200
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
57,200
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 57,200
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.089
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 The Benchmark Company, Inc. 11-2950925
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 15,200
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
15,200
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 15,200
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .289
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* BD
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
SCHEDULE 13D
CUSIP NO. 12613U107
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Dennis Pollack ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 11,869
--------------------------------------------------------------
SHARES
BENFICIALLY 8 SHARED VOTING POWER
--------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
11,869
PERSON -----------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 11,869
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .226
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATIONSCHEDULE 13D
<PAGE>
1. Security and Issuer
The class of equity securities to which this Statement relates is the common
stock (the "Common Stock") of CNY Financial Corporation, a Delaware corporation
(the "Issuer"). The Issuer's principal executive offices are located at One
North Main Street, Cortland, New York 13045.
2. Identity and Background
(a-c) This statement is being filed by Seidman and Associates L.L.C. ("SAL"), a
New Jersey limited liability company, organized to invest in securities, whose
principal and executive offices are located at 19 Veteri Place, Wayne, New
Jersey 07470. Lawrence Seidman is the Manager of SAL and has sole investment
discretion and voting authority with respect to such securities.
This statement is also being filed by Seidman and Associates II, L.L.C.
("SALII"), a New Jersey limited liability company, organized to invest in
securities, whose principal and executive offices are located at 19 Veteri
Place, Wayne, New Jersey 07470. Lawrence Seidman is the Manager of SALII and has
sole investment discretion and voting authority with respect to such securities.
This statement is also being filed by Seidman Investment Partnership, L.P.
("SIP"), a New Jersey limited partnership, whose principal and executive offices
are located at 19 Veteri Place, Wayne, NJ 07470. Veteri Place Corporation is the
sole General Partner of SIP and Lawrence Seidman is the only shareholder
director and officer of Veteri Place Corporation. Seidman has sole investment
discretion and voting authority with respect to such securities.
This statement is also being filed by Seidman Investment Partnership II, L.P.
("SIPII"), a New Jersey limited partnership, whose principal and executive
offices are located at 19 Veteri Place, Wayne, NJ 07470. Veteri Place
Corporation is the sole General Partner of SIPII and Lawrence Seidman is the
only shareholder director and officer of Veteri Place Corporation. Seidman has
sole investment discretion and voting authority with respect to such securities.
This statement is also being filed by Kerrimatt, LP (Kerrimatt),a limited
partnership formed, in part, to invest in stock of public companies whose
principal and executive offices are located at 80 Main Street, West Orange, New
Jersey 07052. Pursuant to the Kerrimatt Letter Agreement, Lawrence Seidman has
the sole investment discretion and voting authority with respect to such
securities until May 2000.
This statement is also being filed by Federal Holdings L.L.C. ("Federal"), a New
York limited liability company, organized to invest in securities, whose
principal and executive offices are located at One Rockefeller Plaza, 31st
Floor, New York, NY 10020. Lawrence B. Seidman is the Manager of Federal and has
sole investment discretion and voting authority with respect to such securities.
This statement is also being filed by Lawrence Seidman whose principal office is
located at 100 Misty Lane, Parsippany, NJ 07054. Mr. Seidman has sole investment
discretion and voting authority for SAL, SALII, SIP, SIPII, Kerrimatt, Federal,
Richard Baer (RB), Melissa Baer ("MB"), Jeffrey Greenberg ("JG"), Steven
Greenberg ("SG"), and Richard Greenberg ("RG").
This statement is also being filed by The Benchmark Company, Inc. ("TBCI"), a
New York Corporation and Benchmark Partners, LP ("Partners"), a Delaware limited
partnership. Richard Whitman is the president of TBCI and the general partner of
Partners in which capacity he shares voting control and dispositive power over
securities reported herein by TBCI and Partners with Lorraine DiPaolo. Lorraine
DiPaolo is the Executive Vice President of TBCI and a general partner of
Partners. Whitman and DiPaolo are the only directors and shareholders of TBCI.
The principal business of TBCI is to act as a broker-dealer and investment
advisor and the principal business of Partners is to invest in securities. Mr.
Whitman and Ms. DiPaolo share the investment discretion and voting authority
with respect to such securities.
This statement is also being filed by Richard Whitman and Lorraine DiPaolo whose
principal office is located at 750 Lexington Avenue, New York, NY 10022. Mr.
Whitman and Mrs. DiPaolo have discretionary and voting authority for TBCI and
Partners.
This statement is also being filed by Dennis Pollack ("Pollack") whose principal
address is 47 Blueberry Drive, Woodcliff Lake, NJ 07675. His principal
occupation is being President of Pegasus Funding Group.
The name, residence or business address, and the principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment is conducted, of each executive
officer and director and each controlling person, if any,of Seidman, Pollack,
Whitman, Di Paolo, TCBI, Partners SAL, SALII, SIP, SIPII, Kerrimatt, Federal, is
set forth in Exhibit A hereto. Seidman,Pollack, Whitman, DiPaolo, TCBI,
Partners, Federal, Kerrimatt, SAL, SALII, and SIP, SIPII, shall hereinafter be
referred to as "Reporting Persons". The Reporting Persons have formed a group
with respect to the securities of the Issuer within the meaning of Rule 13d-5
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(d-e) During the last five years none of SAL, SALII, SIP, SIPII, Federal,
Kerrimatt, TCBI, Partners, Whitman, DiPaolo, Pollack and Seidman, or, to the
best of their knowledge, any person listed in Exhibit A attached hereto (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to, a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Each of the individuals listed on Exhibit A attached hereto is a citizen of
the United States.
3. Source and Amount of Funds or Other Consideration
The aggregate purchase price of the stock covered by this statement is
$3,917,434. The purchases of Common Stock by some of the above entities were in
margin accounts carried by Bear Stearns Securities Corp. This extension of
credit was extended in the ordinary course of business. As of February 25, 1999,
there was no margin loan balance outstanding.
4. Purpose of Transaction
The securities covered by this Statement were acquired for the purpose of
investment. The Reporting Persons filing this Statement may decide, jointly or
individually, to purchase additional shares of the Common Stock or other
securities of the Issuer. In addition the Reporting Persons, jointly or
individually, may dispose of any or all securities of the Issuer in any manner
permitted by applicable securities laws.
The Reporting Persons believe the profitability of the Issuer's business can be
improved by re-deploying certain assets and better utilizing its excess capital.
Mr. Seidman will work with the Issuer's management and Directors to try and
maximize the value of the Issuer's Common Stock which is not adequately
reflected in the current market price of the Issuer's Common Stock.
On February 25, 1999, the Reporting Persons entered into an Agreement with the
Issuer, wherein the Issuer has agreed to increase the size of its board of
Directors by one and add Seidman as a Director. In addition Seidman shall be
nominated at the Annual Meeting for a term expiring in 2002. The Reporting
Persons have agreed to certain restrictions and to vote their shares in support
of the two stock-based compensations plans to be proposed at the 1999 Annual
Meeting. (A copy of the Agreement is attached hereto as Exhibit B and
incorporated herein its entirety.)
Certain of the Reporting Persons were involved in a proxy contest seeking the
election of directors to the Board of Directors of IBS Financial Corp. These
Reporting Persons conducted two proxy contests and during litigation with
respect to the results of the second proxy contest the management of IBS
Financial Corp. agreed to sell the institution in a stock for stock transaction
to Hubco Inc.
In addition certain of the Reporting Persons were involved in two proxy contests
involving Wayne Bancorp, Inc. The first proxy contest involved the approval of
certain stock plans and option plans for the directors and senior management of
Wayne. This proxy contest was resolved prior to a shareholder vote because the
respective Reporting Persons agreed to vote for the stock plans and option plans
and the Board of Directors of Wayne Bancorp, Inc. agreed to place a
representative of the Reporting Persons on the Board. The second proxy contest
involved election of directors. During this proxy contest the management of
Wayne Bancorp, Inc. announced that Wayne, Bancorp, Inc. would be sold and
therefore the Reporting Persons representative withdrew from seeking election to
the Board of Wayne Bancorp, Inc.
In addition certain of the Reporting Persons have filed a Schedule 13D in
connection with the common stock of 1st Bergen Bancorp, Inc.which company
has been acquired by Kearney Federal Savings Bank.
In addition certain of the Reporting Persons have filed a Schedule 13D in
connection with the Common Stock of Eagle BancGroup, Inc. and informally
notified the Company that they intend to sollicit proxies for two director
nominees in opposition to the two management director nomineees at the next
annual meeting scheduled for April 21, 1999.
In addition, the Reporting Persons' reserve the right to exercise any and all of
their respective rights as stockholders of the Issuer in a manner consistent
with their equity interests.
Except as set forth above, neither the Reporting Persons nor, to the best of the
Reporting Persons' knowledge, any executive officer or director of the Reporting
Persons, has any present plans or intentions which would result in or relate to
any of the transactions described in subparagraphs (b) through (j) of Item 4 of
Schedule 13D.
5. Interest in Securities of the Issuer
(a)(b)(c) As of the close of business on February 26, 1999, the Reporting
Persons owned beneficially an aggregate of 372,269 shares of Common Stock, which
constituted approximately 7.08% of the 5,251,037 shares of Common Stock
outstanding as of December 31, 1998, as disclosed in the Issuer's January 20,
1999 Press Release.
Seidman, individually, in his capacity as the sole shareholder and officer of
the corporate general partner of SIP, SIPII, and as the Manager of Federal, SAL
and SALII and as the person with investment and voting authority for Kerrimatt,
RB, MB, SS, SJ, JG and RG may be deemed to own beneficially (as defined in Rule
13d-3 promulgated under the Exchange Act) the 286,000 shares of Common Stock
which constituted approximately 5.44% of the Issuer's outstanding Common Stock
owned individually, and by SIP, SALII, SAL and Federal, Kerrimatt, RB, MB, SS,
SJ, JG, and RG. Whitman and DiPaolo, as the persons with the investment and
discretionary authority for Partners and TBCI may be deemed to own beneficially
(as defined in Rule 13D-3 promulgated under the Exchange Act) the 74,400 shares
of Common Stock owned by Partners and TBCI which constituted approximately 1.41%
of the Issuer's outstanding Common Stock. In total the Reporting Persons have
the right to vote and dispose of 372,269 shares of Common Stock of the Issuer.
The schedule attached as Exhibit C describes transactions in the Common Stock
effected by the Reporting Persons. Except as set forth in this Item 5, none of
the Reporting Persons owns beneficially or has a right to acquire beneficial
ownership of any Common Stock, and except as set forth in this Item 5, none of
the Reporting Persons has effected transactions in the Common Stock during the
past sixty (60) days.
(d) N/A
(e) N/A
6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Except as described herein neither the Reporting Persons nor to the best of
their knowledge, any of the persons named in Exhibit "A" attached hereto , has
any contract, arrangement, understanding or relationship (legal or otherwise)
with any person with respect to any securities of the Issuer, including, but not
limited to, transfer or voting of any securities, finders' fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
A. The General Partner of SIP is: Veteri Place Corp; a New Jersey Corporation
(Seidman is the sole officer, and shareholder). Seidman through Veteri Place
Corp. is entitled to 20% of the profits through Veteri Place Corp. (See Exhibit
D for Amended and Restated Agreement of Limited Partnership of Seidman
Investment Partnership, L.P.)
B. The General Partner of SIPII is: Veteri Place Corp; a New Jersey Corporation
(Seidman is the sole officer, and shareholder). Seidman through Veteri Place
Corp. is entitled to 25% of the profits through Veteri Place Corp. (See Exhibit
E for Amended and Restated Agreement of Limited Partnership of Seidman
Investment Partnership II, L.P.)
C. Seidman is the Managing Member of SAL and SALII and Brant Cali is the
Managing Member of Seidcal Associates which owns a majority interest in SAL and
SALII. Seidman is entitled to a 5% of the profits earned by SAL and SALII (See
Exhibit F for the Operating Agreement for Seidman and Associates, L.L.C. and the
First and Second Amendment.and See Exhibit G for the Operating Agreement for
Seidman and Associates II, L.L.C.)
D. "Seidman's clients" are: Jeffrey Greenberg (owns 7,500 shares), Steven
Greenberg (owns 10,000 Shares) [Seidman has letter agreements with Jeffrey and
Steven Greenberg (these agreements are annexed as Exhibit H).] Richard and
Melissa Baer (own 2,700 shares personally and in their IRA accounts) and Richard
Greenberg (owns 3,000 shares personally and in his IRA accounts). (Seidman has
an oral agreement with Mr. and Mrs. Baer and Richard Greenberg.) Under the oral
agreement which is an at-will agreement, these owners have agreed to sell and
vote their shares as directed by Seidman.)
E. Sonia Seidman (owns 37,540 shares) is the wife of Seidman. she has orally
agreed to vote and sell the shares as directed by Seidman.
F. None of the partners of SIP, SIPII and Partners, or members of SAL, SALII,
Federal, Kerrimatt, or any of Seidman's discretionary clients, or the officers
and directors of TBCI own any shares of Issuer except as disclosed herein.
G. Seidman owns 1,300 shares in his SEP IRA account.
H. Mr. Seidman has an agreement with Kerrimatt, L.P., which gives him the
complete discretion to vote and dispose of securities of the Issuer owned by
Kerrimatt, L.P. (Kerrimatt, L.P. presently owns 37,640 shares of the Issuer.)
Mr. Seidman is entitled to a percentage of the profits derived from these
securities, which is calculated after allowing a return to Kerrimatt, L.P.. (See
Exhibit I for the Letter Agreement.)
I. Mr. Seidman has an agreement with Federal which gives him the complete
discretion to vote and dispose of securities of the Issuer owned by Federal
(Federal presently owns 37,640 shares of the Issuer). Mr. Seidman is entitled to
a percentage of the profits derived from these securities which is calculated
after allowing a return to Federal. (See Exhibit J for the Operating Agreement
for Federal Holdings, LLC and the First and Second Amendment.)
J. The Managing General Partner of Partners is Benchmark Capital Advisors
("BCA"), a division of TBCI. Whitman and DiPaolo share the power to invest and
vote the securities owned by Partners. BCA is entitled to 20% of the Net Profits
each year and an Annual Administrative Fee, payable quarterly, of 1% of the
value of Partners assets. (See Exhibit K for the Amended and Restated Agreement
of Limited Partnership for Partners.)
The following are certain provisions concerning the division of profits or
losses or guarantees of profits with reference to SAL, SALII , SIP, SIPII and
Federal. In Section 8.1(d) of the operating agreements for each of SAL and
SALII, Mr. Seidman is entitled to 5% of the net profits each year and his wife
is entitled to 15% of the net profits. In addition Section 11.3(b) in SAL's
operating agreement entitles Mr. Seidman to annual compensation of $125,000. Mr.
Seidman is also entitled to 20% of the net profits under the agreements with SIP
[Section 9(a)(i)],and 25% of the net profits under the agreement with SIP II.
[Section 9 (b)]]. Mr. Seidman also gets management or administrative fees based
upon the total assets of SIP, Federal, Kerrimatt, SG and JG. Mr. Seidman's
agreement with SG and JG expires on May 15, 2000. In addition Mr. Seidman is
also entitled to 25% of the Net Profits under the Agreement with Federal (Second
Amendment of the Operating Agreement).
Mr. Seidman is the Manager of Federal, SAL, SALII and is the president of the
corporate general partner of SIP and SIPII; and investment manager for Kerrimatt
and, in that capacity, Mr. Seidman has the authority to cause those entities to
acquire, hold, trade and vote these securities. SAL, SALII, Federal, Kerrimatt,
SIP and SIPII were all created to acquire, hold and sell publicly traded
securities. None of the entities disclosed herein were formed to solely acquire,
hold and sell the Issuer's securities. Each of these entities owns securities
issued by one or more companies other than Issuer. The members and limited
partners in SAL, SALII and SIP are all passive investors, who do not - and can
not - directly or indirectly participate in the management of these entities,
including without limitation proxy contests conducted by such entities.
Seidman's compensation is, in part, dependent upon the profitability of the
operations of these entities, but no provision is made to compensate Seidman
solely based upon the profits resulting from transactions from the Issuer's
securities.
The voting power over the Issuer's securities is not subject to any
contingencies beyond standard provisions for entities of this nature, (i.e.,
limited partnerships and limited liability companies) which govern the
replacement of a manager or a general partner.
Pursuant to Section 16 of the Amended and Restated Agreement of Limited
Partnership (Partnership Agreement), Veteri Place Corporation, as of the end of
each fiscal quarter shall be entitled to receive an administrative fee equal to
a quarter of 1% of SIP's assets. (See Section 16 of the Partnership Agreement
Exhibit D, attached hereto and incorporated herein by reference.)
The scheduled term of SIP is until December 1, 2014 unless sooner terminated as
provided in the Partnership Agreement. (See Term of Partnership, page 16 of the
Partnership Agreement, Exhibit D, attached hereto and incorporated herein by
reference.)
The scheduled term of SIPII is until December 31, 2014 unless sooner terminated
as provided in the Partnership Agreement. (See Term of Partnership, page 3 of
the Partnership Agreement, Exhibit E, attached hereto and incorporated herein by
reference.)
SAL's term shall continue in full force and effect until May 1, 2024 unless
terminated as provided for in its operating agreement. (See Article 4 - Term and
Duration, Exhibit F, attached hereto and incorporated herein by reference.)
SALII's term shall continue in full force and effect until May 1, 2024 unless
terminated as provided for in its operating agreement. (See Article 4 - Term and
Duration, Exhibit G, attached hereto and incorporated herein by reference.)
Kerrimatt's term shall continue in full force and effect as provided in Letter
Agreement attached in Exhibit I. Pursuant to Paragraph 7 of the Letter
Agreement, Mr. Seidman is entitled to a quarterly administration fee equal to a
.25% of 1% of Kerrimatt assets.
Federal's term shall continue in full force and effect until April 30, 2045 as
provided for in its operating agreement. (See Article 4 - Term and Duration,
Exhibit I, attached hereto and incorporated herein by reference.) Pursuant to
Article 10.1 of the operating agreement, Mr. Seidman's management term expires
on June 30, 2000. (See Article 10 and the Second Amendment to Operating
Agreement, Exhibit J, attached hereto and incorporated herein by reference.)
Pursuant to Article 10.2 of the Operating Agreement, Mr. Seidman is entitled to
a quarterly administration fee equal to .25% of 1% of Federal's assets.
Partners term shall continue in full force and effect until December 31, 2009
unless terminated earlier as provided for in its Operating Agreement. (See
Article 5, Term of Partnership, Exhibit K attached hereto and incorporated
herein by reference.)
7. Material to be filed as Exhibits
Exhibit A Executive Officers and Director of Reporting
Persons
Exhibit B Agreement between CYNF and Seidman Group
Exhibit C Stock Purchase Transactions
Exhibit D Amended and Restated Agreement of
Limited Partnership of Seidman Investment
Partnership, L.P. and Amendment #1 and 2
Exhibit E Amended and Restated Agreement of
Limited Partnership of Seidman Investment
Partnership II, L.P. and Amendment #1.
Exhibit F Operating Agreement for Seidman and
Associates, L.L.C.with First Amendment.
Exhibit G Operating Agreement for Seidman and
Associates II,L.L.C.with First Amendment.
Exhibit H Letter Agreements with Jeffrey Greenberg
and Steven Greenberg
Exhibit I Letter Agreement with Kerrimatt, L.P.
Exhibit J Operating Agreement for Federal Holdings
L.L.C.
First Amendment to Operating Agreement and
Second Amendment to Operating Agreement
Exhibit K Amended and Restated Agreement of
Partnership of Benchmark Partners,
L.P.
Exhibit L Joint Filing Agreement
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
2/26/99 ss/Lawrence B. Seidmn
------ ------------------------------
Date Lawrence B. Seidman, Manager
Seidman and Associates, L.L.C.
2/26/99 ss/Lawence B. Seidman
------ ------------------------------
Date Lawrence B. Seidman, Manager
Seidman and Associates II, L.L.C.
2/26/99 ss/Lawrence B. Seidman
------ ------------------------------
Date Lawrence B. Seidman, President
of the Corporate General Partner
Seidman Investment Partnership,L.P.
2/26/99 ss/Lawrence B. Seidma
------ ------------------------------
Date Lawrence B. Seidman, President
of the Corporate General Partner
Seidman Investment Partnership II,
L.P.
2/26/99 ss/Lawrence B. Seidman
------ ------------------------------
Date Lawrence B. Seidman, Individually
2/26/99 ss/Richard Whitman
------ ------------------------------
Date Richard Whitman, President
The Benchmark Company, Inc.
2/26/99 ss/Richard Whitman
------ ------------------------------
Date Richard Whitman, General Partner
Benchmark Partners, LP
2/26/99 ss/Richard Whitman
------ ------------------------------
Date Richard Whitman, Individually
2/26/99 ss/Lorraine DiPaolo
------ ------------------------------
Date Lorraine DiPaolo, Individually
2/26/99 ss/David Mandelbaum
------ ------------------------------
Date David Mandelbaum, General Partner
Kerrimatt, L.P.
2/26/99 ss/Lawrence Seidman
------ ------------------------------
Date Lawrence Seidman, Investment
Manager
Federal Holdings, L.L.C.
2/26/99 ss/Dennis Pollack
------ ------------------------------
Date Dennis Pollack, Individually
<PAGE>
EXHIBIT A
LAWRENCE B. SEIDMAN, INDIVIDUALLY
100 Misty Lane
Parsippany, New Jersey 07054
Principal occupation: Attorney and Consultant.
Employment principally conducted through Seidman & Associates, L.L. C.
(Manager), Seidman & Associates II, L.L.C. (Manager), Seidman Investment
Partnership, L.P.(General Partner), and Lawrence B. Seidman, Esq.
(Sole Proprietor).
THE BENCHMARK COMPANY, INC.
750 Lexington Avenue
New York, NY 10022
Richard Whitman, President
Lorraine Di Poalo, Executive Vice President
Principal Business: NASD-registered broker-dealer
BENCHMARK PARTNERS L. P.
750 Lexington Avenue
New York, NY 10022
Richard Whitman, General Partner
Lorraine Di Paolo, General Partner
Principal Business: Registered Investment Partnership
RICHARD WHITMAN, INDIVIDUALLY
c/o The Benchmark Company, Inc.
750 Lexington Avenue
New York, NY 10022
Principal occupation: President (The Benchmark Company, Inc.)
Employment conducted through: Benchmark Capital Advisors (President);
Benchmark Partners, L.P. (General Partner); and The Benchmark Company, Inc.
(President).
LORRAINE DI PAOLO, INDIVIDUALLY
750 Lexington Avenue
New York, NY 10022
Principal occupation: Executive Vice President (The Benchmark Company, Inc.)
Employment conducted through: Benchmark Capital Advisors
(Executive Vice President );
Benchmark Partners, L.P. (General Partner); and The Benchmark Company, Inc.
(Executive Vice President).
KEVIN S. MOORE
Clark Estates, Inc.
One Rockefeller Plaza
New York, NY 10020
Principal Occupation: Senior Vice President
Employment conducted through: Clark Estates,Inc.
ANGELA CALI KLOBY
11 Commerce Drive
Cranford, New Jersey 07016
Principal Occupation: Unemployed
Member of Seidcal & Associates, LLC
Seidcal & Associates, LLC is a Member of SAL and SAL II
BRANT CALI
11 Commerce Drive
Cranford, New Jersey 07016
Principal Occupation: Executive Vice President, Mack-Cali
Real Estate Corporation (Public REIT)
Employment conducted through: Mack-Cali Real Estate
Member of Seidcal & Associates, LLC
Seidcal & Associates, LLC is a Member of SAL and SAL II
CHRISTOPHER CALI
11 Commerce Drive
Cranford, New Jersey 07016
Principal Occupation: Part-Time Musician
Member of Seidcal & Associates, LLC
Seidcal & Associates, LLC is a Member of SAL and SAL II
JOHN R. CALI
11 Commerce Drive
Cranford, New Jersey 07016
Principal Occupation: Executive Vice President, Mack-Cali Real Estate
Corporation (Public REIT)
Employment conducted through: Mack-Cali Real Estate
Member of Seidcal & Associates, LLC
Seidcal & Associates, LLC is a Member of SAL and SAL II
JONNA CALI
11 Commerce Drive
Cranford, New Jersey 07016
Principal Occupation: Unemployed
Member of Seidcal & Associates, LLC
Seidcal & Associates, LLC is a Member of SAL and SAL II
ROSE CALI
11 Commerce Drive
Cranford, New Jersey 07016
Principal Occupation: Unemployed
Member of Seidcal & Associates, LLC
Seidcal & Associates, LLC is a Member of SAL and SAL II
DENNIS POLLACK
47 Blueberry Drive
Woodcliff Lake, NJ 07675
Principal Occupation:President of Pegasus Funding Group
Employment conducted through: Pegasus Funding Group
Exhibit B
Agreement
This Agreement is made this ___ day of February, 1999 among Lawrence B.
Seidman ("Seidman"), having an office at 100 Misty Lane, Parsippany, NJ 07054,
the "Seidman Group" as that term is defined in paragraph 9, and CNY Financial
Corporation ("CNY"), having an office at One North Main Street, Cortland, New
York.
1. CNY shall increase the size of its Board of Directors by one and appoint
Seidman to the resulting vacancy, for a term commencing at the March
meeting of the Board of Directors and ending at the Annual Meeting of
Stockholders scheduled for April 28, 1999. The Board shall nominate Seidman
for election at that Annual Meeting for a term expiring in 2002. The Board
shall solicit proxies for his election along with the solicitation of
proxies by the Board for the other two nominees nominated by the Board.
2. CNY shall take such action as may be necessary to add Seidman as a director
of CSB for a term comparable to his term as a director of CNY as set forth
in Section 1.
3. The Seidman Group, as defined below, shall vote all stock of CNY owned or
controlled by any of them as of the record date for the 1999 Annual Meeting
of Stockholders in favor of the election of Seidman and in favor of the
election of the two other nominees for directorships nominated by the Board
of Directors, currently expected to be Patrick J. Hayes and Robert S.
Kashdin.
4. The Seidman Group will not acquire any shares of common stock of CNY which
would cause its percentage ownership of the issued and outstanding common
stock of CNY to exceed 9.9% on or before the Annual Meeting of Stockholders
held in the year 2000.
5. The Board of Directors of CNY will propose at the 1999 Annual Meeting of
Stockholders two stock-based compensation plans - a stock option plan and a
restricted stock plan (the "PRRP"), as described in the prospectus for
CNY's initial public offering. The Seidman Group will vote all shares of
stock of CNY owned or controlled by any of them as of the record date for
the 1999 Annual Meeting of Stockholders in favor of those two plans. The
Seidman Group also agrees that if the Board proposes amendments to those
plans to be voted on at a subsequent meeting of stockholders to permit
accelerated vesting in the event of retirement or a change in control, the
Seidman Group will vote all shares of stock of CNY owned or controlled by
any of them in favor of those amendments. For the purposes of the preceding
sentence, retirement shall mean ceasing to be a director, employee or
officer of CNY and the Company other than removal for cause.
6. The Seidman Group will not engage in a solicitation in opposition to
management of CNY or submit any of their own proposals for stockholder
approval without Board approval. This provision shall not apply to the
nomination of directors and the solicitation of proxies for such nominees,
or any other matter arising at, the Annual Meeting of Stockholders to be
held in 2000 or thereafter. Nothing contained in this paragraph shall be
interpreted to prohibit Seidman from voting, as a director, in such manner
as he deems appropriate on any matter which may come before the Board of
Directors or any committee of CNY or the Bank, nor shall the same prohibit
him from including, in any disclosure by CNY under the Securities Exchange
Act of 1934, any statement explaining his vote if he is required to include
such an explanation in such disclosure.
7. The Seidman Group concurs that, subject to whatever fiduciary duties may
exist as required by the Employee Retirement Income Security Act, as
amended, unallocated ESOP shares and unallocated "PRRP" shares may be voted
in accordance with the terms of the plans, which generally provide, or will
provide, that unallocated shares will be voted pro rata in the same
percentage as the votes cast by the holders of allocated shares who
exercise their right to direct the voting of allocated shares.
8. The Seidman Group will not take any action indirectly, or induce any other
person or entity to take any action which, if taken directly by the member
of the Seidman Group, would be in violation of this agreement, nor will the
Seidman Group take any action which would reasonably be anticipated to
thwart any of the provisions of this Agreement. All the members of the
Seidman Group individually, and all members of limited liability companies,
partners of partnerships, stockholders, directors and officers of
corporations, trustees and beneficiaries of trusts, and other persons
holding comparable positions in any other entities, making up the Seidman
Group shall be personally bound by the provisions of this Agreement which
by their terms are applicable to the Seidman Group. The members of the
Seidman Group agree not to seek to use the press or other public
pronouncements to publicly air disputes with the Company through and
including December 31, 1999.
9. The term "the Seidman Group" shall mean Seidman & Associates, LLC, Seidman
Investment Partnership, L.P., Seidman Investment Partnership II, L.P.,
Seidman & Associates II, LLC, Kerrimatt, L.P., Federal Holdings, LLC,
Richard Whitman, The Benchmark Company, Inc., Benchmark Partners, LP,
Lorraine Di Paolo, Dennis Pollack, Lawrence B. Seidman, Veteri Place Corp.,
Jeffrey Greenberg, Steven Greenberg, Richard Greenberg, Sonia Seidman,
Melissa Baer, Richard Baer, Seidecal Associates, LLC, Brant Cali and Paul
Schmidt.
10. Seidman hereby represents and warrants that he has the authority to bind
all of the members of the Seidman Group to this Agreement and that by his
signature below he binds himself and all of such other members of the
Seidman Group. CNY Financial Corporation
_____________________________
Lawrence B. Seidman, personally and
By:____________________________ As agent for the persons and entities
Wesley D. Stisser, President named in paragraph 9, other than those form
who separate signatures are provided below
_______________________________ _____________________________
Richard Whitman, personally and on Dennis Pollack
behalf of The Benchmark Company, Inc.
and Benchmark Partners, LP _____________________________
Lorraine Di Paolo
Exhibit C
DATE PRICE PROCEEDS SHARES
- ------------------------------------------------------------------------------
SEIDMAN & ASSOC. LLC
122499 10.10 1,010.00 100
122498 10.10 24,852.00 2,460
10799 10.22 13,284.00 1,300
10899 10.19 23,024.00 2,260
11299 10.19 23,431.00 2,300
12099 10.45 99,275.00 9,500
12299 10.36 16,787.00 1,620
12599 10.56 21,125.00 2,000
12899 10.55 21,733.00 2,060
12899 10.95 1,095.00 100
2199 11.19 16,780.00 1,500
2999 10.56 10,562.00 1,000
21299 10.56 13,202.00 1,250
21999 10.74 75,182.00 7,000
22299 10.69 21,375.00 2,000
SUB-TOTAL 382,717.00 36,450
SEIDMAN INVEST.
PARTNERSHIP, LP
122499 10.10 1,010.00 100
122498 10.10 24,852.00 2,460
1799 10.22 13,284.00 1,300
1899 10.19 23,024.00 2,260
12099 10.45 99,275.00 9,500
12199 10.37 18,156.00 1,750
12599 10.56 21,125.00 2,000
12899 10.55 44,626.00 4,230
12899 10.95 1,095.00 100
2899 10.55 21,100.00 2,000
2999 10.56 10,562.00 1,000
21299 10.56 13,202.00 1,250
21999 10.74 75,182.00 7,000
22299 10.69 21,375.00 2,000
- ------------------------------------------------------------------------------
SUB-TOTAL 387,868.00 36,950
SEIDMAN & ASSOCIATES
II, LLC
122499 10.10 1,010.00 100
122498 10.10 24,852.00 2,460
1799 10.22 13,284.00 1,300
10899 10.19 23,024.00 2,260
11299 10.19 23,431.00 2,300
12099 10.45 99,275.00 9,500
12599 10.56 21,125.00 2,000
12899 10.55 38,824.00 3,680
12899 10.95 1,095.00 100
2899 10.55 21,100.00 2,000
2999 10.56 10,562.00 1,000
21999 10.69 75,182.00 7,000
22299 10.69 21,375.00 2,000
22399 10.62 20,612.00 1,940
- ------------------------------------------------------------------------------
SUB-TOTAL 394,751.00 37,640
LAWRENCE SEIDMAN
CLIENTS
1799 10.35 10,347.00 1,000
1799 10.35 10,347.00 1,000
1799 10.36 5,182.00 500
1799 10.36 5,180.00 500
1799 10.36 5,180.00 500
11199 10.19 24,450.00 2,400
12099 10.45 31,350.00 3,000
12599 10.56 24,294.00 2,300
12599 10.66 10,662.00 1,000
12599 10.76 2,691.00 250
12599 10.76 2,691.00 250
12599 10.62 31,870.00 3,000
12599 10.62 31,870.00 3,000
12599 10.66 10,665.00 1,000
12599 10.69 5,344.00 500
12999 10.71 10,706.00 1,000
12999 10.71 10,706.00 1,000
2999 10.56 5,281.00 500
21099 10.55 18,990.00 1,800
21699 10.62 35,057.00 3,300
21999 10.74 85,922.00 8,000
21999 10.74 26,852.00 2,500
21999 10.74 53,702.00 5,000
21999 10.74 8,594.00 800
21999 10.74 4,296.00 400
21999 10.74 13,962.00 1,300
22299 10.69 106,875.00 10,000
22399 10.62 66,300.00 6,240
- ------------------------------------------------------------------------------
SUB-TOTAL 659,366.00 62,040
KERRIMATT, LP
122798 10.54 1,054.00 100
122798 10.54 25,932.00 2,460
10799 10.22 13,288.00 1,300
10899 10.19 23,027.00 2,260
11199 10.19 25,472.00 2,500
11299 10.19 23,435.00 2,300
12099 10.45 99,275.00 9,500
12599 10.56 21,125.00 2,000
12899 10.55 12,449.00 1,180
12899 10.95 1,095.00 100
2899 10.55 21,100.00 2,000
2999 10.56 10,562.00 1,000
21999 10.74 75,182.00 7,000
22299 10.69 21,375.00 2,000
22399 10.62 20,612.00 1,940
- ------------------------------------------------------------------------------
SUB-TOTAL 394,983.00 37,640
FEDERAL HOLDINGS LLC
122499 10.10 1,010.00 100
122498 10.10 24,852.00 2,460
10799 10.22 13,284.00 1,300
10899 10.19 23,024.00 2,260
12099 10.45 99,275.00 9,500
12299 10.36 45,388.00 4,380
12599 10.56 21,125.00 2,000
12899 10.55 16,880.00 1,600
12899 10.95 1,095.00 100
2899 10.55 21,100.00 2,000
2999 10.56 10,562.00 1,000
21999 10.74 75,182.00 7,000
22299 10.69 21,375.00 2,000
22399 10.62 20,612.00 1,940
- ------------------------------------------------------------------------------
SUB-TOTAL 394,764.00 37,640
SEIDMAN INVEST.
PARNERSHIP II, LP
11399 9.81 9,810.00 100
11399 9.81 28,456.00 2,900
11999 10.17 51,892.00 5,100
12099 10.45 99,275.00 9,500
12199 10.37 18,156.00 1,750
12599 10.56 21,125.00 2,000
12899 10.55 23,737.00 2,250
12899 10.95 1,095.00 100
2899 10.55 21,100.00 2,000
2999 10.56 10,562.00 1,000
21999 10.74 75,182.00 7,000
22299 10.69 21,375.00 2,000
22399 10.62 20,612.00 1,940
- ------------------------------------------------------------------------------
SUB-TOTAL 402,377.00 37,640
DENNIS POLLACK
12099 10.54 39,890.00 3,784
12199 10.54 20,947.00 1,985
12199 10.38 10,380.00 1,000
12199 10.50 10,500.00 1,000
12199 10.50 10,500.00 1,000
12199 10.56 10,560.00 1,000
12799 10.61 22,289.00 2,100
- ------------------------------------------------------------------------------
SUB-TOTAL 125,066.00 11,869
BENCHMARK PARTNERS
10799 10.22 1,022.00 100
10799 10.22 101,180.00 9,900
11199 10.19 50,952.00 5,000
11299 10.19 70,309.00 6,900
11399 9.82 29,452.00 3,000
12099 10.45 156,765.00 15,000
12299 10.32 51,577.00 5,000
12599 10.57 53,884.00 5,100
12899 10.85 1,085.00 100
2199 11.13 16,702.00 1,500
22599 10.88 60,915.00 5,600
- ------------------------------------------------------------------------------
593,843.00 57,200
THE BENCHMARK
COMPANY, INC.
12299 10.52 5,261.00 500
12299 10.5 10,504.00 1,000
12299 10.5 10,504.00 1,000
12299 10.52 5,259.00 500
12299 10.5 10,504.00 1,000
12299 10.5 10,504.00 1,000
12599 10.59 10,586.00 1,000
12599 10.59 10,586.00 1,000
12599 10.59 10,586.00 1,000
12599 10.62 5,309.00 500
12599 10.58 13,748.00 1,300
12599 10.59 10,586.00 1,000
12599 10.64 4,256.00 400
12599 10.56 31,693.00 3,000
12599 10.66 10,665.00 1,000
12999 10.59 10,586.00 1,000
12999 10.56 10,562.00 1,000
- ------------------------------------------------------------------------------
SUB-TOTAL 150,105.00 17,200
TOTAL 3,917,434.00 372,269
Exhibit D
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SEIDMAN INVESTMENT PARTNERSHIP, L.P.
JANUARY 5, 1995
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
<PAGE>
Table of Contents
1.
Definitions............................................................
(a) "Act".................................................
(b) "Affiliate"...........................................
(c) "Agreement"...........................................
(d) "Capital Account"....................................
(e) "Certificate".........................................
(f) "Code"................................................
(g) "Fiscal
Period"...............................................
(h) "Fiscal Quarter"......................................
(i) "Fiscal Year".........................................
(j) "General Partner Percentage".........................
(k) "Net Profit".........................................
(l) "Net Loss"........................................
(m) "Partnership Percentage".............................
2. Organization.................................................
3. Name of
Partnership...................................................
4. Principal Office, Resident Agent,
Registered Office.............................................
5. Term of the Partnerships......................................
6. Purposes......................................................
7. Contributions of the
Partners; New Partners.....................................
8. Capital
Accounts......................................................
9. Adjustments to Capital Accounts...............................
10. Hot Issues...................................................
11. Valuation.....................................................
12. Determination by General Partners of
Certain Matters...............................................
13. Liability of Partners.........................................
14. Rights and Duties of General Partner..........................
15. Expensess.....................................................
16. Administrative Fee............................................
17. Limitation on Power of Limited Partners.......................
18. Other Business
Ventures......................................................
19. Limitation on Assignability of Interests
of Limited
Partners......................................................
20. Withdrawals by the Limited Partners...........................
21. Withdrawal by the General Partner and
Affiliates....................................................
22. Dissolution and Winding Up of the
Partnership...................................................
23. Accounting and
Reports.......................................................
24. Books and
Records.......................................................
25. Indemnification...............................................
26. Amendment of Partnership Agreement............................
27. Notices.......................................................
28. Agreement Binding on Successors
and Assigns...................................................
29. Governing Law.................................................
30. Consents......................................................
31. Miscellaneous.................................................
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
SEIDMAN INVESTMENT PARTNERSHIP, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Seidman
Investment Partnership, L.P. (the "Partnership"), dated as of January 5, 1995,
by and between Veteri Place Corporation, as the General Partner (the "General
Partner") and the persons and entities, referred to in schedule A on file at the
offices of the Partnership, who have executed, either directly or indirectly by
an attorney-in-fact, as limited partners (the "Limited Partners").
PREMISES:
A. The Partnership was organized in accordance with the New Jersey
revised Uniform Limited Partnership act by the filing by the General Partner of
a certificate of Limited Partnership with the office of the Secretary of State
of the State of New Jersey on----------------, 1995.
B. The General Partner, pursuant to the authority granted to him under
section 26 of the Agreement, desires to amend the Agreement and to restate the
same.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, effective as of February 15, 1995, it is hereby
agreed as follows:
The following terms shall have the following meaning when used in this
Agreement:
(a) "Act" shall mean the New Jersey Revised Uniform Limited
Partnership Act, amended from time to time.
(b) "Affiliate" shall mean any person performing services on
behalf of the Partnership who (i) directly or indirectly controls, is controlled
by, or is under common control with a General Partner; (ii) is any company of
which a General Partner or its controlling shareholder is an officer, director,
partner or trustee; (iii) a member of the family of the controlling shareholder
of the General Partner; or (iv) an Individual Retirement account or similar
trust for the benefit of one or more General Partner or its affiliates.
(c) "Agreement" shall mean this agreement of Limited
Partnership, as originally executed and as amended, modified, supplemented or
restated from time to time.
(d) "Capital account" shall mean the account described in
Section 8 of this Agreement.
(e) "Certificate" shall mean the Partnership's certificate of
Limited Partnership as defined in section 2 of this Agreement.
(f) "Code" shall mean the Internal Revenue code of 1986, or
successor provision of law, and the regulations issued thereunder.
<PAGE>
(g) "Fiscal Period" shall mean the period beginning on the day
immediately succeeding the last day of the immediately preceding fiscal Period
and ending on the earliest occurring of the following:
(i) The last day of the Fiscal Year;
(ii) The day immediately preceding the day on which
a new Partner is admitted to the
Partnership;
(iii) the day immediately preceding the date on
which a Partner makes an additional capital
contribution to the Partner's capital account;
(iv) The day on which a Partner withdraws, in whole
or in part, the amount of his or its
Capital account;
(v) The date of dissolution of the Partnership in
accordance with Section 5 of this Agreement.
(h) "Fiscal "Quarter" shall mean a fiscal quarter of the
Partnership.
(i) "Fiscal Year" shall mean the fiscal year of the
Partnership, which shall be the calendar year.
(j) "General Partner Percentage" shall mean a percentage
established by the General Partner for each General Partner on the Partnership's
books as of the first day of each Fiscal Period. The sum of the General Partners
Percentages for each Fiscal Period shall equal one hundred percent (100%).
(k) "Net Profit" of the Partnership shall mean, with respect
to any Fiscal Period, the excess of the aggregate revenue, income and gains
(realized and unrealized) earned on an accrual basis during the fiscal Period by
the Partnership from all sources over the expenses and losses (realized and
unrealized) incurred on an accrual basis during the fiscal Period by the
Partnership.
(l) "Net Loss" of the Partnership shall mean, with respect to
any fiscal Period, the excess of all expenses and losses (realized and
unrealized) incurred on an accrual basis during the fiscal Period by the
Partnership over the aggregate revenue, income and gains (realized and
unrealized) earned on the accrual basis during the fiscal period by the
Partnership from all sources.
(m) "Partnership Percentage" shall mean a percentage
established for each partner on the Partnership' books as of the first day of
each Fiscal Period. The Partnership Percentage of a Partner for a Fiscal Period
shall be determined by dividing the amount of the Partner's capital account as
of the beginning of the Fiscal Period by the sum of the capital accounts of all
of the Partners as of the beginning of the fiscal Period. The sum of the
Partnership Percentage for each fiscal Period shall equal one hundred percent
(100%).
2. Organization.
The General Partner has executed a Certificate of Limited Partnership
pursuant to the provisions of the Act (the "Certificate") and has cause the
certificate to be filed as required by the Act. The General Partner shall also
execute and record all amendments to the Certificate or additional certificates
as may be required by this Agreement or by law.
<PAGE>
3. Name of Partnership.
The name of the Partnership shall be Seidman Investment Partnership,
L.P. or such other name as the General Partner may from time to time designate.
4. Principal Office, Resident Agent, Registered Office.
The principal office of the Partnership is 1235A Route 23 South, Wayne,
New Jersey
or any other place determined by the General Partner. The Partnership's phone
number is (201) 633-7900. The name and address of the registered agent for
service of process in the State of New Jersey is Lawrence B. Seidman, 1235A
Route 23 South, Wayne, NJ 07470. The address of the registered office of the
Partnership in the State of New Jersey is c/o Lawrence B. Seidman, 1235A Route
23 South, Wayne, New Jersey 07470.
5. Term of the Partnership.
(a) The term of the Partnership, having commenced on the date the
Certificate was filed shall continue until the first of the following events
occurs:
(i) December 31, 2014;
(ii) a written consent to dissolution of the Partnership by
all Partners;
(iii) upon all of the General Partners ceasing to be general
partners as a result of doing or being subject to one or more of the following:
(A) withdrawing from the Partnership in accordance
with Section 21 of this Agreement;
(B) assigning all of its interest in the
Partnership;
(C) making an assignment for the benefit of its
creditors;
(D) filing a voluntary petition in bankruptcy;
(E) being adjudged bankrupt or insolvent or having
entered against it an order of relief in any bankruptcy or insolvency
proceeding;
(F) filing a petition or answer seeking for itself
any reorganization, arrangement,composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation;
(G) filling an answer or other pleading admitting
or failing to contest the material allegations of a petition filed
against it in any proceeding seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under
any statute, law or regulation;
(H) seeking consenting to, or acquiescing in the
appointment of a trustee or receiver, or liquidator of all or any substantial
part of its properties;
(I) being the subject of any proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation, which
proceeding shall have continued for one hundred and twenty (120) days
<PAGE>
after the commencement thereof; or the appointment of a trustee, receiver,
or liquidator for such General Partner or all or any substantial part of it
properties without its consent or acquiescence, which appointment is not
vacated or stayed for ninety (90) days after the expiration of the stay during
which period the appointment is not vacated;
(J) the death of a General Partner; or
(K) the entry by a court of competent jurisdiction
adjudicating such General Partner incompetent to manage his person or his
property; or
(iv) upon issuance of a non-appealable decree of dissolution
of the Partnership by a New Jersey Court of competent jurisdiction.
(b) In the event a General Partner does or becomes subject to any of
the provisions of subsection (a)(iii) of this Section 5, the remaining General
Partner shall be permitted to carry on the business of the Partnership upon
written notice provided to all Partners of the decision to continue the
Partnership's business. Each Limited Partner shall have the right for a period
of thirty (30) days from the date of the written notice (the "Election Period")
to elect to withdraw from the Partnership as of ten (10) days after the last day
of the Election Period. The Limited Partner will receive the proceeds of a
withdrawal made pursuant to this subsection (b) within ninety (90) days of the
date of withdrawal. The amount of such proceeds will be calculated after the
adjustments to his capital account provided for in Section 9 hereof, made as if
the withdrawal date were the end of a Fiscal Year.
(c) If any one or more of the termination events listed in this Section
5 occurs, and if the remaining General Partner chooses not to carry on the
business of the Partnership in accordance with the provisions of subsection (b)
of this Section 5, the Partnership shall be dissolved and its affairs wound up
as provided in Section 22 of this Agreement.
6. Purposes
The Partnership is organized for the following purposes:
(a) to invest and trade, on margin or otherwise, in "Securities," as
that term is defined in Section 2(1) of the Securities Act of 1933, as amended
(the "1933 Act");
(b) to sell Securities short and cover short sales;
(c) to lend funds or properties of the Partnership, either with or
without security; and
(d) to execute, deliver and perform all contracts and other
undertakings, and engage in all activities and transactions, that the General
Partner believes is necessary or advisable in carrying out the purposes
specified all subsections (a), (b), and (c) of this Section 6, including without
limitation:
(i) to purchase, transfer or acquire in any manner and
exercise all rights, powers, privileges and other incidents of ownership or
possession with respect to the investments described in subsection (a) of this
Section 6; and
(ii) to register or qualify the Partnership under any
applicable Federal or state laws, or to obtain exemptions under those laws, if
registration qualification or exemption is deemed necessary by the General
Partner.
<PAGE>
7. Contributions of the Partners; New Partners.
(a) Each Partner shall make a contribution to the Partnership's capital
("Capital Contribution") in the amount set out opposite the Limited Partner's
name in Schedule A attached to this Agreement.
(b) Any Partner may elect, with the consent of the General Partner to
make an additional Capital Contribution, as of the first day of any fiscal
Quarter. The General Partner may, in its sole discretion, permit additional
Capital Contributions to be made more frequently than quarterly.
(c) No Partner shall be required to make any additional Capital
Contributions.
(d) Capital Contributions made by Limited Partners must be in cash.
(e) The General Partner shall have the right, but not the obligation,
to admit new Partners to the Partnership as of the first day of any Fiscal
quarter. The General Partner may, however, in its sole discretion, admit new
Partners more frequently than quarterly.
8. Capital Accounts.
A Capital account shall be established for each Partner. For the Fiscal
Period during which a Partner is admitted to the Partnership, his or its capital
account shall equal the amount of his or its initial Capital Contribution. For
each subsequent Fiscal Period, the Partner's Capital account will equal the sum
of the amount of his or its Capital account as finally adjusted for the
immediately preceding fiscal Period and the amount of any additional Capital
Contribution made by the Partner as of the first day of the current Fiscal
Period.
9. Adjustments to Capital Accounts.
At the end of each Fiscal Period, the Capital Accounts of the Partners
shall be adjusted in the following manner:
(a) Subject to the provisions of subsections (c) and (d) and (f) of
this Section 9, Net Profit of the Partnership for the Fiscal Year shall be
credited as follows:
(i) Twenty percent (20%) of the Net Profit shall be
reallocated to the General Partner for each Fiscal
Year as a "Incentive Allocation".
(ii) The remaining Net Profit shall be allocated to the
Partners in proportion to their Capital Accounts.
(b) Net Loss of the Partnership for the Fiscal Year shall be debited
against the Capital Account of each Partner in proportion to and in accordance
with the balance in the Capital Account of the Partner until the value of any
Partners' Capital account becomes zero. Thereafter, any remaining Net Loss for
the Fiscal Year shall be debited to Partners having positive balances in their
Capital accounts in proportion to those balances, until the value of each
Partner's Capital Account becomes zero. Thereafter, any remaining Net Loss for
the Fiscal Year shall be debited to the General Partner in accordance with each
General Partner's General Partner Percentage for the Fiscal Period.
<PAGE>
(c) In the event that the Capital Account of one or more General
Partner has a negative balance, one hundred percent (100%) of the Net Profit of
the Partnership for the Fiscal Period shall be credited to those General
Partners whose Capital Accounts have negative balances in accordance with their
respective General Partner Percentages until no General Partner shall have a
negative Capital Account balance.
(d) Anything in this Section 9 to the contrary notwithstanding, if any
Net Losses are allocated to the account of any Limited Partner, each such
Limited Partner shall be entitled to a "Recoupment Allocation" of subsequent Net
Profits of the Partnership, in an amount in proportion to his Partnership
Percentage, until such Net Loss shall have been eliminated. The amount of Net
Profits allocated as a Recoupment Allocation shall not exceed, but shall reduce,
the amount of Net Profits otherwise allocable to the General Partners as the
Incentive Allocation pursuant to Section 9(a) (ii) hereof. If a Limited Partner
who is entitled to a Recoupment Allocation shall withdraw any portion of his
Capital Account, the amount of Recoupment Allocation to which he is entitled
shall be reduced in proportion to the amount of capital withdrawn.
(e) The amount of any withdrawal made by the Partner pursuant to
Section 21 or Section 22 of this Agreement shall be debited against the Capital
Account of that Partner.
(f) Allocations of Net Profit or Net Loss for a Fiscal Period, if
necessary, shall be made in accordance with each Partner's Partnership
percentage, adjusted as provided in paragraph (a) of this Section 9 at the end
of the Fiscal Year, provided that the "Incentive Allocation" may not exceed
twenty percent (20%) of the Net Profit for the Fiscal Year.
10. Hot Issues.
In the event the General Partner decides to invest in securities which
are the subject of a public distribution and which the General Partner, in his
sole discretion, believes may become a "hot issue" as that term is defined in
Article III, Section 1 of the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. (the "Association"), such investment shall be made
in accordance with the following provisions:
(a) any such investment made in a particular Fiscal Period shall be
made in a special account (the "Hot Issues account");
(b) only those Partners who do not fall within the proscription of
Article III, section 1 of said Rules of Fair Practice ("Unrestricted Partners")
shall have any beneficial interest in the Hot Issues Account;
(c) each Unrestricted Partner shall have a beneficial interest in the
Hot Issues Account for any Fiscal Period in the proportion which (i)a such
Unrestricted Partner's Capital account as of the beginning of the Fiscal Period
bore to (ii) the sum of the Capital Accounts of all Unrestricted Partners as of
the beginning of such fiscal Period.
(d) Funds required to make a particular investment shall be transferred
to the Hot Issues account from the regular account of the Partnership;
securities involved in the public distribution shall be purchased in the Hot
Issues Account, held in the Hot Issues Account and eventually sold from the Hot
Issues Account or transferred to the regular account at fair market value as of
the day of transfer as determined by the General Partner with such transfer
being treated as a sale; if such securities are sold from the Hot Issues
account, the proceeds of the sale shall be transferred from the Hot Issues
account to the regular account of the Partnership.
<PAGE>
(e) as of the last day of each Fiscal Period in which a particular
investment or investments are held in the Hot Issues Account: (A) interest shall
be debited to the Capital Accounts of the Unrestricted Partners in accordance
with their beneficial interest in the Hot Issues Account at the interest rate
being paid by the Partnership from time to time for borrowed funds during the
period in that Fiscal Period that funds from the regular account have been held
in or made available to the particular Hot Issues Account or, if no such funds
are being borrowed during such period, the interest rate that the General
Partner determines would have been paid if funds had been borrowed by the
Partnership during such period; and such interest shall be credited to the
Capital Accounts of all the Partners, both General and Limited, in the
proportions which (i) each Partner's Capital Account as of the beginning of such
Fiscal Period bore to (iii) the sum of the Capital accounts of all Partners as
of the beginning of such Fiscal Period and (B) any Net Profits or Net Losses
during such Fiscal Period with respect to the Hot Issues Account shall be
allocated to the Capital accounts of the Unrestricted Partners in accordance
with their beneficial interest in the Hot Issues Account during such Fiscal
Period; provided, however, that the amount of such interest shall not exceed the
amount of profit accrued in the Hot Issues Account; and
(f) the determination of the General Partners as to whether a
particular Partner falls within the proscription of Article III, Section I of
said Rules of Fair Practice shall be final.
11. Valuation.
The Partnership's assets shall be valued in accordance with the
following principles:
(a) Any Security that is listed on a national securities exchange will
be valued at its last sale price on the date of determination as recorded by the
composite tape system, or if no sales occurred on that day, at the mean between
the closing "bid" and "asked" prices on that day as recorded by the system or
the exchange, as the case may be;
(b) Any Security that is a National Market Security will be valued at
its last sale price on the date of determination as reported by the National
Association of Securities dealers automated quotations system ("NASDAQ") or if
no sale occurred on that day, at the mean between the closing "bid" and "asked"
prices on that day as reported by NASDAQ:
(c) Any Security not listed on a national securities exchange and not a
National Market Security will be valued at the mean between the closing "bid"
and "asked" prices on the date of determination as reported by NASDAQ or, if not
so reported, as reported in the over-the-counter market in the United States;
(d) An option shall be valued at the last sales price or, in the
absence of a last sales price, the last offer price; and
(e) All other Securities shall be assigned the value that the General
Partner in good faith determine.
12. Determination by General Partner of Certain Matters.
(a) All matters concerning the valuation of Securities, the allocation
of profits, gains and losses among the Partners, including the taxes on them and
accounting procedures, not specifically and expressly provided for by the terms
of this Agreement, shall be determined in good faith by the General Partner,
whose determination shall be final, binding and conclusive upon all of the
Partners.
<PAGE>
(b) gains, losses, and expenses of the Partnership for each Fiscal
Period shall be allocated among the Partners for income tax purposes in a manner
so as to reflect, as nearly as possible, the amounts credited or charged to each
Partner's Capital Account pursuant to Section 9 of this Agreement.
(c) The General Partner shall have the power to make all tax elections
and determinations for the Partnership, and to take any and all action necessary
under the Code or other applicable law to effect those elections and
determinations. All such elections and determinations by the General Partner
shall be final, binding and conclusive upon all Partners.
13. Liability of Partners.
(a) The General Partner shall not be obligated to contribute cash or
other assets to the Partnership to make up deficits in their Capital accounts or
in the Capital Accounts of the Limited Partners either during the term of the
Partnership or upon liquidation. The General Partner shall be liable for all
debts and obligations of the partnership to the extent that the Partnership is
unable to pay such debts and obligations up to the extent of Veteri's capital.
(b) The doing of any act or the failure to do any act by a General
Partner, the effect of which may cause or result in loss, liability, damage or
expense to the Partnership or any Partner shall not subject a General Partner to
any liability to the Partnership or to any Partner, except that a General
Partner may be so liable if it has not acted in good faith, or has committed
gross misconduct or was grossly negligent.
(c) A Limited Partner will not be liable for any debts or bound by any
obligations of the Partnership except to the extent set forth in subsections
(d), (e) and (f) of this Section 13.
(d) A Limited Partner who has received the return of any part of his or
its Capital contribution without violation of this Agreement or the Act shall
not therefore be labile to the Partnership or its creditors.
(e) A Limited Partner receiving a return of any portion of his or its
Capital Contribution in violation the Act or this Agreement will be Liable to
the Partnership for a period of six (6) years thereafter for the amount of the
contribution wrongfully returned.
(f) A Limited Partner may be liable to the Partnership or creditors of
the Partnership for any amounts distributed if, and to the extent that, at the
time of the distribution, he actually knew that, after giving effect to the
distribution, all liabilities of the Partnership, other than liabilities to
Partners on account of their interest in the Partnership, exceeded the fair
value of the Partnership's assets.
14. Rights and Duties of the General Partner
(a) The General Partner shall have the exclusive right to manage and
control the affairs of the Partnership, and shall have the power and authority
to do all things necessary or proper to carry out the purposes of the
Partnership. The General Partner shall devote an amount of time and attention
that the General Partner in its sole discretion deems necessary or appropriate.
(b) Without limiting the generality of the foregoing, the General
Partner shall have full power and authority:
(i) to engage independent agents, investment advisors,
attorneys, accountants and custodians as the General Partner deems necessary or
advisable for the affairs of the Partnership;
<PAGE>
(ii) to receive, buy sell, exchange, trade, and otherwise
deal in and with Securities and other property of the Partnership;
(iii) to open, conduct and close accounts with brokers on
behalf of the Partnership and to pay the customary fees and charges applicable
to transactions in those accounts;
(iv) to open, maintain and close accounts, including margin
accounts, with brokers and banks, and to draw checks and other orders for the
payment of money by the Partnership;
(v) to file, on behalf of the Partnership, all required
local, state and Federal tax and other returns relating to the Partnership;
(vi) to cause the Partnership to purchase or bear the cost of
any insurance covering the potential liabilities of the General Partner and any
associate, employee or agent of the General Partner arising out of the General
Partner's actions as General Partner under this Agreement;
(vii) to cause the Partnership to purchase or bear the cost of
any insurance covering the potential liabilities of any person serving as a
director, officer or employee of an entity in which the Partnership has an
investment or of which the Partnership is a creditor;
(viii) to commence or defend litigation or submit to
arbitration any claim or cause of action that pertains to the Partnership or any
Partnership assets;
(ix) to enter into, make and perform contracts, agreements and
other undertakings, and to do any other acts, as the General Partner deems
necessary or advisable for, or as may be incidental to, the conduct of the
business of the Partnership, including, without limiting the generality of the
foregoing, contracts, agreements, undertakings and transactions with any Partner
or with any other person, firm or corporation having any business, financial or
other relationship with any Partner or Partners:
(x) to make or revoke elections pursuant to Section 754 of the
Code to adjust the basis of the Partnership's property as permitted by Sections
734(b) and 743(b) of the Code; and
(xi) to designate a Tax Matters Partner for all purposes
under the Code.
15. Expenses.
The Partnership shall bear all expenses relating to its organization.
The Partnership will bear the expenses of its administration, accountant, its
legal counsel, and expenses of investments.
16. Administrative Fee.
The Partnership shall pay the General Partner as of the end of each
Fiscal Quarter of the Partnerhship an administrative fee at an annual rate equal
to 1% of the value of the Partnership's assets.
17. Limitation on Powers of Limited Partners.
No Limited Partner shall participate in the control of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for the Partnership or to bind the Partnership in
any other way.
<PAGE>
18. Other Business ventures.
Each Partner agrees that each General Partner and its affiliates and
associates may engage in other business activities or possess interest in other
business activities of every kind and description, independently or with others.
These activities may include, without limitation, establishing a broker-dealer
and investing in real estate and real estate related partnerships, or in
investing, in financing, acquiring and disposing of interest in securities in
which the Partnership may from time to time invest, or in which the Partnership
is able to invest or otherwise have any interest. The Limited Partners agree
that the General Partner and its affiliates may act as general partner of other
partnerships, including investment partnerships.
19. Limitation on Assignability of Interest of Limited Partners.
(a) No Limited Partner may assign or otherwise transfer or encumber his
or its interest in the Partnership, in whole or in part, without the consent of
the General Partner and without a written opinion of counsel to or approved by
the General Partner that the proposed transfer (i) is consistent with all
applicable provisions of the 1933 Act, and the rules and regulations thereunder,
as from time to time in effect, as well as any applicable provisions of any
state "blue sky" law; and (ii) would not result in the Partnership's having to
register as an investment company under the Investment Company Act of 1940, as
amended.
(b) Notwithstanding any other provision of this Agreement, any
successor to any Limited Partner shall be bound by the provisions of this
Agreement. Prior to recognizing any assignment of an interest in the Partnership
that has been transferred in accordance with this Section 19, the General
Partner may require the transferring Limited Partner to execute and acknowledge
an instrument of assignment in form and substance satisfactory to the General
Partner, and may require the assignee to agree in writing to be bound by all the
terms and provisions of this Agreement, to assume all of the obligations of the
assigning Limited Partner and to execute whatever other instruments or documents
the General Partner deems necessary or desirable in connection with the
assignment.
(c) No Limited Partner shall have the right to have his or its assignee
admitted as a substitute Limited Partner, except upon the written consent of the
General Partner, which consent may be withheld in the sole discretion of the
General Partner.
(d) Each Limited Partner hereby approves of the admission to the
Partnership as a Limited Partner of any assignee who succeed to the interest in
the Partnership of a Limited Partner in accordance with the provisions of this
Section 19.
20. Withdrawals by a Limited Partner.
(a) (i) A Limited Partner who shall have been a Limited Partner for at
least eight full Fiscal Quarters shall have the right, as of the end of any
Fiscal Year, or at other times at the discretion of the General Partner, to
withdraw all or a portion of the amount of his or its Capital Account, so long
as the General Partner receives written notice of the intended withdrawal not
less than one hundred eighty (180) days prior to the withdrawal, stating the
amount to be withdrawn. In no event, however, shall a Limited Partner be
permitted to withdraw any amounts from his or its Capital Account in excess of
the positive balance of his or its Capital Account. If the amount of a Limited
Partner's withdrawal represents less than seventy-five (75%) of the Limited
Partner's Capital Account, the Limited Partner will receive the proceeds of the
withdrawal within thirty (30) days after the date of withdrawal. If the amount
of a Limited Partner's withdrawal represents seventy-five (75%) or more of the
Limited Partner's Capital Account, the Limited Partner will receive seventy-five
percent (75%) of his Capital account within thirty (30) days after the date of
withdrawal and the remainder of the amount withdrawn within ten (10) days after
the Partnership has received financial statements from its independent certified
public accountants pursuant to Section 23(c) of this
<PAGE>
Agreement. If a Limited Partner requests withdrawal of capital which would
reduce his Capital Account below the amount of his initial Capital Contribution,
the General Partner may treat such request as a request for withdrawal of all of
such Partner's Capital Account. The distribution of any amount withdrawn by a
Limited Partner may take the form of cash and/or marketable securities as
determined by the General Partner in his sole discretion.
(ii) In the event of a proposed withdrawal of capital by one
or more General Partner or Affiliates pursuant to Section 21(a)(ii) of this
Agreement, as a result of which the aggregate of the Capital Accounts of the
General Partner and Affiliates will be less than $50,000 (fifty thousand
dollars), a Limited Partner shall have the right to withdraw all or a portion of
the amount of his or its Capital Account, so long as the General Partner
receives written notice of the intended withdrawal not more than fifteen (15)
days after the date of the notice of withdrawal by such General Partner or
General Partner or Affiliate or Affiliates pursuant to said Section 21(a)(ii),
stating the amount to be withdrawn. In such event the withdrawal by such Limited
Partner shall be effective as of the effective date of the withdrawal by the
General Partner or General Partners pursuant to said Section 21(a)(ii). The
amount available for withdrawal shall be calculated in the same manner as
provided for in the last sentence of paragraph (b) of Section 5 hereof.
(b) Any Limited Partner's interest in the Partnership may be terminated
by the Partnership as of the end of any Fiscal Year upon prior written notice,
so long as the General Partner determines the termination to be in the best
interest of the Partnership. In the event that a Limited Partner's interest in
the Partnership is terminated pursuant to this Section 20, the Limited Partner
shall receive ninety percent (90%) of the value of his Capital Account within
one hundred eighty (180) days after written notice of termination is given by
the Partnership and the remaining ten percent (10%) within ten (10) business
days after receipt by the Partnership of financial statements with respect to
the Fiscal Year in which his or its interest in the Partnership is terminated.
21. Withdrawals by the General Partners and Affiliates.
(a) (i) Each General Partner shall have the right to withdraw any
amount of cash from his Capital Account as of the end of any Fiscal Year,
without prior notification to the Limited Partners, provided that, after giving
effect to such withdrawal, the aggregate Capital accounts of the General
Partners and their Affiliates are not less than $50,000 (fifty thousand
dollars).
(ii) Upon forty-five (45) days ' prior notice to the Limited
Partners, a General Partner or an Affiliate may withdraw any amount from his
Capital Account contributed to the Partnership as a result of which withdrawal
the aggregate Capital Accounts of the General Partner and their Affiliates would
be reduced below $50,000. (fifty thousand dollars).
(b) Any or all of the General Partners may voluntarily resign or
withdraw from the Partnership as of the end of any Fiscal Year upon sixty (60)
days' written notice sent to all Partners.
22. Dissolution and Winding Up of the Partnership.
On dissolution of the Partnership, the General Partners or if there is
no General Partner, one or more persons approved by Limited Partners holding a
majority in interest of the Capital Accounts of the Limited Partners) shall wind
up the Partnership's affairs and shall distribute the Partnership's assets in
the following manner and order:
(a) in satisfaction of the claims of all creditors of the Partnership,
other than the General Partners;
<PAGE>
(b) in satisfaction of the claims of the General Partners as creditors
of the Partnership; and
(c) any balance to the Partners in the relative proportions that their
respective Capital Accounts bear to each other, those Capital Accounts to be
determined as if the Fiscal Year ended on the date of the dissolution.
23. Accounting and Reports.
(a) The records and books of account of the Partnership shall be
reviewed as of the end of each fiscal Year by independent certified public
accountants selected by the General Partner in his sole discretion.
(b) As soon as practicable after the end of each Fiscal Year, the
General Partner shall cause to be delivered to each person who was a Partner at
any time during that Fiscal Year all information deemed necessary by the General
Partner in his sole discretion for the preparation of the Partner's income tax
returns, including a Form 1065/Schedule K-1 statement showing the Partner's
share of Net Profit or Net Loss, deductions and credits for the year Federal
income tax purposes, and the amount of any distributions made to or for the
account of the Partner pursuant to this Agreement.
(c) The independent certified public accounts selected by the General
Partner in accordance with subsection (a) of this Section 23 shall prepare and
mail to each Partner, within ninety (90) days after the end of each fiscal Year,
an income statement for the Fiscal Year and a balance sheet as of the end of the
Fiscal Year.
(d) The Partnership shall cause to be prepared and mailed to each
Partner a report setting out as of the end of each fiscal quarter information
determined by the General Partner to be appropriate.
(e) The General Partner shall cause tax returns for the Partnership to
be prepared and timely filed with the appropriate authorities.
24. Books and Records.
The General Partner shall keep at the Partnership's principal office:
(a) books and records pertaining to the Partnership's business showing
all of its assets and liabilities, receipts and disbursements, realized profits
and losses, Partners' Capital Accounts and all transactions enter into by the
Partnership;
(b) a current list of the full name and last known home, business or
mailing address of each Partner set out in alphabetical order;
(c) a copy of the Certificate and all amendments to it, together with
executed copies of any powers of attorney pursuant to which the Certificate and
any amendments to it have been executed;
(d) copies of the Partnership's Federal, state and local income tax
returns and reports, if any, for the three (3) most recent years; and
(e) copies of this Agreement as may be amended from time to time.
All books and records of the Partnership required to be kept under this
Section 24 shall be available for inspection by a Partner of the Partnership at
the offices of the Partnership during ordinary business hours for any purpose
reasonably related to the Partner's interest as a Partner in the Partnership.
<PAGE>
25. Indemnification.
(a) The Partnership shall indemnify each General Partner and any of his
Affiliates (each an "Indemnitee") to the fullest extent permitted by law and
will hold each harmless from and with respect to (i) all fees, costs and
expenses incurred in connection with, or resulting from, any claim, action or
demand against any indemnitee that arises out of or in any way relates to the
Partnership, its properties, business or affairs, and (ii) any losses or damages
resulting from any such claim, action or demand, including amounts paid in
settlement or compromise of the claim, action or demand.
(b) No Indemnitee shall be indemnified by the Partnership with respect
to any action or failure to act that does not constitute good faith, or that
constitutes willful misfeasance.
(c) The Partnership may pay the expenses incurred by an Indemnitee in
defending a civil or criminal action, suit or proceeding brought by a party
against the Indemnitee that arises out of or is in any way related to the
Partnership, its properties, business or affairs, upon receipt of an undertaking
by the Indemnitee to repay the amount advanced by the Partnership if an
adjudication or determination is subsequently made by a court of competent
jurisdiction that the Indemnitee is not entitled to indemnification as provided
in this Agreement.
(d) The right of indemnification provided in this Section 25 shall be
in addition to any rights to which an Indemnitee may otherwise be entitled and
shall inure to the benefit of the executors, administrators, personal
representatives, successors or assigns of each Indemnitee.
(e) The rights to indemnification and reimbursement provided for in
this Section 25 may be satisfied only out of the assets of the Partnership. No
Partner shall be personally liable for any claim for indemnification or
reimbursement under this Section 25.
26. Amendment of Partnership Agreement.
This Agreement may be amended, in whole or in part, by the written
consent of (a) the General Partner, and (b) Partners the value of whose Capital
Account constitute not less than fifty percent (50%) of the total value of all
Capital Accounts of the Partnership, provided that no such amendment shall
affect the allocation of Net Profit or Net Loss to any Partner who has not
consented to such amendment. In addition, any provision of this Agreement, other
than Section 9, may be amended by the General Partner in any manner that does
not, in the sole discretion of the General Partner, adversely affect any Limited
Partner.
27. Notices.
Notices that may or are required to be given under this Agreement by
any part to another shall be in writing and deposited in the United States mail,
certified or registered, postage prepaid, addressed to the respective parties at
their addresses set out in Schedule A to this Agreement or to any other
addressee designated by any Partner by notice addressed to the Partnership in
the case of any Limited Partner and to the General Partner in the case of the
General Partners. Notices shall be deemed to have been given when deposited in
the United States mail within the continental United States.
<PAGE>
28. Agreement Binding Upon Successors and Assigns.
This Agreement shall inure to the benefit of and shall be binding upon
the heirs, executors, administrators or other representatives, successors and
assigns of the Partners.
29. Governing Law.
This Agreement, and the rights of the Partners under it, shall be
governed by and construed in accordance with the law of the State of New Jersey.
30. Consents.
Any and all consents, agreements or approvals provided for or permitted
by this Agreement shall be in writing and signed copies of them shall be filed
and kept with the books of the Partnership.
31. Miscellaneous.
(a) This Agreement, including Schedule A appended to it, constitutes
the entire understanding and Agreement of the Partners as to the operation of
the Partnership.
(b) This agreement may be executed in counterparts, each of which
shall be deemed to be an original.
(c) Each provision of this Agreement is intended to be severable. A
determination that a particular provision of this Agreement is illegal or
invalid shall not affect the validity of the remainder of the Agreement.
(d) Nothing contained in this Agreement shall be construed to
constitute any Partner the agent of another Partner, except as specifically
provided in this Agreement, or in any manner to limit the partners in the
carrying on of their own respective business or activities.
(e) If there is a conflict between the terms and conditions of the
Partnership Agreement and Offering Memorandum, the Partnership Agreement shall
be controlling.
<PAGE>
IN WITNESS WHEREOF, the Partners have executed this Agreement as of the
date first above written.
GENERAL PARTNER
VETERI PLACE CORPORATION
By:/s/Lawrence B. Seidman, President
LIMITED PARTNERS:
All Limited Partners now and hereafter admitted as Limited Partners of the
Partnership, pursuant to Powers of Attorney now and hereafter executed in favor
of, and delivered to the General Partner.
LAWRENCE B. SEIDMAN
Attorney-in-Fact
/s/Lawrence B. Seidman
<PAGE>
AMENDMENT #1
TO LIMITED PARTNERSHIP
CERTIFICATE OF
SEIDMAN INVESTMENT PARTNERSHIP, L.P.
Section 1 The Name of the Partnership is Seidman Investment
Partnership, L.P., which was filed with the Secretary of State on
January 17, 1995.
Section 6 Section 6 is hereby amended to add the following people and entities
as limited partners:
NAME CAPITAL CONTRIBUTION
James J. Gallagher, Ph.D,
TTEE Gallagher Living
Trust DTD 11/30/92
3636 Paradise dr.
Tiburon, CA 94920 $200,000.00
Robert Kaplus, G.P.
Kaplus Hanover Associates
4 Pewter Lane
New Providence, NJ 07974 $125,000.00
Russ Ketron, TTEE
The Ketron Family Trust DTD 10/20/89
33 San Miguel Way
Novato, CA 94945 $50,000.00
Louis M. Rogow, M.D. &
Enid Z. Rogow
P. O. Box 57
211 Post Rd.
Bernardsville, NJ 07924 $100,000.00
Seidman and Associates, L.L.C. $100,000.00
100 Misty Lane
Parsippany, NJ 07054
VETERI PLACE CORPORATION
Dated: November 21, 1996 By:
/s/Lawrence B. Seidman, President
<PAGE>
STATE OF NEW JERSEY )
)ss:
COUNTY OF MORRIS )
On the 21 day of November, 1996, before me personally came Lawrence B.
Seidman, to me known, who, being by me sworn, did depose and say that he resides
at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri
Place Corporation described in and which executed the above instrument; and that
he signed such instrument by order of the Board of Directors of said
Corporation.
/s/ Ruth W. Rivkind
A Notary Public of the
State of New Jersey
My Commission Expires
February 14, 2001
AMENDMENT #2
TO LIMITED PARTNERSHIP
CERTIFICATE OF
SEIDMAN INVESTMENT PARTNERSHIP, L.P.
FILED JANUARY 17, 1995
Section 1 The Name of the Partnership is Seidman Investment
Partnership, L.P., which was filed with the Secretary of State on
January 17, 1995 and Amendment #1 was filed on November 25, 1996.
Section 6 Section 6 is hereby amended to add the following
people and entities as limited partners:
NAME CAPITAL CONTRIBUTION
Richard Greenberg
100 Misty Lane
Parsippany, NJ 07054 $250,000.00
Robert Kessler
40 Warren St.
Paterson, NJ 07524 $100,000.00
Marci Parejo Irrevocable Trust $125,000.00
Sharon E. Sigesmund Trustee U/A/D9/10/92
2859 Queens Courtyard Dr.
Las Vegas,NV 89109
Ross Zeltzer Irrevocable Trust $125,000.00
Sharon E. Sigesmund Trustee U/A/D9/10/92
2859 Queens Courtyard Dr.
Las Vegas,NV 89109
SECTION 6 Section 6 is hereby amended to revise the amount of
Capital Contribution for the following people and entities as limited
partners:
James J. Gallagher, Ph.D. $300,000.00
Gallagher Family Limited
Partnership #1
3636 Paradise Dr
Tiburon, CA 94920
<PAGE>
Robert Kaplus, G.P. $150,000.00
Kaplus Hanover Associates
4 Pewter Lane
New Providence, NJ 07974
Russ Ketron, TTEE $120,000.00
The Ketron Family Trust DTD 10/20/89
33 San Miguel Way
Novato, CA 94945
Louis M. Rogow, M.D. & $200,000.00
Enid Z. Rogow
P. O. Box 57
211 Post Rd.
Bernardsville, NJ 07924
VETERI PLACE CORPORATION
Dated: September 8, 1998 By:
/s/Lawrence B. Seidman, President
Veteri Place Corporation
Certificate of Incorporation filed
January 6, 1995
<PAGE>
STATE OF NEW JERSEY )
)ss:
COUNTY OF MORRIS )
On the 8th day of September, 1998, before me personally came Lawrence B.
Seidman, to me known, who, being by me sworn, did depose and say that he resides
at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri
Place Corporation, the General Partner of Seidman Investment Partnership,L.P.
described in and which executed the above instrument; and that he signed such
instrument by order of the Board of Directors of said Corporation.
/s/ Ruth W. Rivkind
A Notary Public of the
State of New Jersey
My Commission Expires
February 14, 2001
Exhibit E
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
SEIDMAN INVESTMENT PARTNERSHIP II, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Seidman
Investment Partnership II, L.P. (the "Partnership"), dated as of August __,
1998, by and between Veteri Place Corporation, as the General Partner (the
"General Partner") and the persons and entities, referred to in schedule A on
file at the offices of the Partnership, who have executed, either directly or
indirectly by an attorney-in-fact, as limited partners (the "Limited Partners").
PREMISES:
A. The Partnership was organized in accordance with the New Jersey revised
Uniform Limited Partnership Act by the filing by the General Partner of a
Certificate of Limited Partnership with the office of the Secretary of State of
the State of New Jersey on August __ , 1998.
B. The General Partner, pursuant to the authority granted to him under
section 26 of the Agreement, desires to amend the Agreement and to restate the
same.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, effective as of August __, 1998, it is hereby agreed as
follows:
The following terms shall have the following meaning when used in this
Agreement:
(a) "Act" shall mean the New Jersey Revised Uniform Limited Partnership
Act, amended from time to time.
(b) "Affiliate" shall mean any person performing services on behalf of the
Partnership who (i) directly or indirectly controls, is controlled by, or is
under common control with a General Partner; (ii) is any company of which a
General Partner or its controlling shareholder is an officer, director, partner
or trustee; (iii) a member of the family of the controlling shareholder of the
General Partner; or (iv) an Individual Retirement account or similar trust for
the benefit of one or more General Partner or its affiliates.
(c) "Agreement" shall mean this agreement of Limited Partnership, as
originally executed and as amended, modified, supplemented or restated from time
to time.
(d) "Capital account" shall mean the account described in Section 8 of this
Agreement.
(e) "Certificate" shall mean the Partnership's certificate of Limited
Partnership as defined in section 2 of this Agreement.
(f) "Code" shall mean the Internal Revenue code of 1986, or successor
provision of law, and the regulations issued thereunder.
(g) "Fiscal Period" shall mean the period beginning on the day immediately
succeeding the last day of the immediately preceding fiscal Period and ending on
the earliest occurring of the following:
(i) The last day of the Fiscal Year;
(ii) The day immediately preceding the day on which
a new Partner is admitted to the Partnership;
(iii) the day immediately preceding the date on
which a Partner makes an additional capital contribution to the Partner's
capital account;
(iv) The day on which a Partner withdraws, in
whole or in part, the amount of his or its Capital account;
(v) The date of dissolution of the Partnership in
accordance with Section 5 of this Agreement.
(h) "Fiscal "Quarter" shall mean a fiscal quarter of the
Partnership.
(i) "Fiscal Year" shall mean the fiscal year of the
Partnership, which shall be the calendar year.
(j) "General Partner Percentage" shall mean a percentage
established by the General Partner for each General Partner on the
Partnership's books as of the first day of each Fiscal Period. The sum of
the General Partner's Percentages for each Fiscal Period shall equal one
hundred percent (100%).
(k) "Net Profit" of the Partnership shall mean, with
respect to any Fiscal Period, the excess of the aggregate revenue, income
and gains (realized and unrealized) earned on an accrual basis during the
fiscal Period by the Partnership from all sources over the expenses and losses
(realized and unrealized) incurred on an accrual basis during the fiscal
Period by the Partnership.
(l) "Net Loss" of the Partnership shall mean, with
respect to any fiscal Period, the excess of all expenses and losses
(realized and unrealized) incurred on an accrual basis during the fiscal
Period by the Partnership over the aggregate revenue, income and gains
(realized and unrealized) earned on the accrual basis during the fisca
period by the Partnership from all sources.
(m) "Partnership Percentage" shall mean a percentage
established for each partner on the Partnership'books as of the first day of
each Fiscal Period. The Partnership Percentage of a Partner for a Fiscal
Period shall be determined by dividing the amount of the Partner's capital
account as of the beginning of the Fiscal Period by the sum of the capital
accounts of all of the Partners as of the beginning of the fiscal
Period. The sum of the Partnership Percentage for each fiscal Period shall
equal one hundred percent (100%).
2. Organization.
The General Partner has executed a Certificate of Limited Partnership
pursuant to the provisions of the Act (the "Certificate") and has caused the
certificate to be filed as required by the Act. The General Partner shall also
execute and record all amendments to the Certificate or additional certificates
as may be required by this Agreement or by law.
3. Name of Partnership.
The name of the Partnership shall be Seidman Investment Partnership II,
L.P. or such other name as the General Partner may from time to time designate.
4. Principal Office, Resident Agent, Registered Office.
The principal office of the Partnership is 100 Misty Lane, Parsippany, New
Jersey 07054 or any other place determined by the General Partner. The
Partnership's phone number is (973) 560-1400, Ext. 108. The name and address of
the registered agent for service of process in the State of New Jersey is
Lawrence B. Seidman, 100 Misty Lane, Parsippany, NJ 07054. The address of the
registered office of the Partnership in the State of New Jersey is c/o Lawrence
B. Seidman,100 Misty Lane, Parsippany, NJ 07054.
5. Term of the Partnership.
(a) The term of the Partnership, having commenced on the date the
Certificate was filed shall continue until the first of the following events
occurs:
(i) December 31, 2014;
(ii) a written consent to dissolution of the Partnership by
all Partners;
(iii) upon the General Partner ceasing to be a general
partner as a result of doing or being subject to one or more of the following:
(A) withdrawing from the Partnership in accordance
with Section 21 of this Agreement;
(B) assigning all of its interest in the
Partnership;
(C) making an assignment for the benefit of its
creditors;
(D) filing a voluntary petition in bankruptcy;
(E) being adjudged bankrupt or insolvent or having
entered against it an order of relief in any bankruptcy or insolvency
proceeding;
(F) filing a petition or answer seeking for itself
any reorganization, arrangement,composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation;
(G) filling an answer or other pleading admitting
or failing to contest the material allegations of a petition filed against
it in any proceeding seeking reorganization, arrangement,composition,
readjustment, liquidation, dissolution, or similar relief under any
statute, law or regulation;
(H) seeking, consenting to, or acquiescing in the
appointment of a trustee or receiver, or liquidator of all or any substantial
part of its properties;
(I) being the subject of any proceeding seeking
reorganization, arrangement,composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation,which
proceeding shall have continued for one hundred and twenty (120) days after the
commencement thereof; or the appointment of a trustee, receiver, or liquidator
for such General Partner or all or any substantial part of its properties
without its consent or acquiescence, which appointment is not vacated or
stayed for ninety (90) days after the expiration of the stay during which period
the appointment is not vacated;
(J) the death of the General Partner; or
(K) the entry by a court of competent jurisdictio
adjudicating such General Partner incompetent to manage his person or his
property; or
(iv) upon issuance of a non-appealable decree of
dissolution of the Partnership by a New Jersey Court of competent
jurisdiction.
(b) In the event a General Partner does or becomes subject to any of the
provisions of subsection (a)(iii) of this Section 5, the Partnership shall be
dissolved and its affairs wound up as provided in Section 22 of this Agreement.
6. Purposes
The Partnership is organized for the following purposes:
(a) to invest and trade, on margin or otherwise, in "Securities," as that
term is defined in Section 2(1) of the Securities Act of 1933, as amended (the
"1933 Act");
(b) to sell Securities short and cover short sales;
(c) to lend funds or properties of the Partnership, either with or without
security; and
(d) to execute, deliver and perform all contracts and other undertakings,
and engage in all activities and transactions, that the General Partner believes
are necessary or advisable in carrying out the purposes specified all
subsections (a), (b), and (c) of this Section 6, including without limitation:
(i) to purchase, transfer or acquire in any manner and
exercise all rights, powers, privileges and other incidents of ownership or
possession with respect to the investments described in subsection (a) of this
Section 6; and
(ii) to register or qualify the Partnership under any
applicable Federal or state laws, or to obtain exemptions under those laws, if
registration, qualification, or exemption is deemed necessary by the General
Partner.
7. Contributions of the Partners; New Partners.
(a) Each Partner shall make a contribution to the Partnership's
capital ("Capital Contribution") in the amount set out opposite the
Limited Partner's name in Schedule A attached to this Agreement.
(b) Any Partner may elect, with the consent of the General Partner to
make an additional Capital Contribution, as of the first day of any fiscal
Quarter. The General Partner may, in its sole discretion, permit additional
Capital Contributions to be made more frequently than quarterly.
(c) No Partner shall be required to make any additional Capital
Contributions.
(d) Capital Contributions made by Limited Partners must be in cash.
(e) The General Partner shall have the right, but not the obligation,
to admit new Partners to the Partnership as of the first day of any Fiscal
quarter. The General Partner may, however, in its sole discretion, admit
new Partners more frequently than quarterly.
8. Capital Accounts.
A Capital account shall be established for each Partner. For the
Fiscal Period during which a Partner is admitted to the Partnership, his or
its capital account shall equal the amount of his or its initial Capital
Contribution. For each subsequent Fiscal Period, the Partner's Capital
account will equal the sum of the amount of his or its Capital account as
finally adjusted for the immediately preceding fiscal Period and the amount
of any additional Capital Contribution made by the Partner as of the first
day of the current Fiscal Period.
9. Adjustments to Capital Accounts.
At the end of each Fiscal Period, the Capital Accounts of the Partners
shall be adjusted in the following manner:
Net Profits for each year (as defined below) shall be allocated as
follows:
(a) First, to the extent of any net losses allocated to the Limited
Partners, ninety-nine (99%) percent of the Net Profits shall be allocated
to the Limited Partners, and one percent (1%) to the General Partner until
the Limited Partners have recouped any Net Losses previously allocated to
them.
(b) Thereafter, any remaining Net Profit shall be allocated
seventy-five (75%) percent to the Limited Partners and twenty-five (25%)
percent to the General Partner (the "Incentive Allocation").
Net Losses for each calendar year shall be allocated as follows:
(a) First, to the extent that the General Partner's capital account is
positive, seventy-five (75%) percent of the Net Losses shall be allocated
to the Limited Partner and twenty-five (25%) percent to the General
Partner.
(b) From and after the General Partner's capital account is zero, the
Net Losses shall be allocated ninety-nine (99%) percent to the Limited
Partner and one percent (1%) to the General Partner.
The portion of the Net Profit and Net Losses allocated to the Limited
Partner shall be allocated between the Limited Partners based on the
proportion that such Limited Partner's capital account bears to the capital
account of all limited partners.
Notwithstanding the preceding provisions of this Article 4:
(a) Except as provided in sub-section (e) below, no allocation of loss
or deduction shall be made to a Partner if such allocation would cause at
the end of any taxable year a deficit in such Partner's Adjusted Capital
Account to exceed his or its allocable share of Minimum Gain (as defined in
Treasury Regulation Section 1.704-1(b)(iv)(e); and any such loss or
deduction not allocated to a Partner by reason of this Section shall be
allocated pro-rata to each other Partner if and to the extent that such
allocation shall not create a deficit in such other Partner's Adjusted
Capital Account in excess of his allocable share of Minimum Gain; provided,
however, that if such allocation would create such deficit in all Partner'
Adjusted Capital Accounts in excess of their share of Minimum Gain, then
such allocation shall be made in accordance with the principles of Treasury
Regulation Section 1.704-1(b).
(b) If, during any taxable year, there is a net decrease in Minimum
Gain then each Partner shall, before any other allocations are made for
such year, be allocated in a manner so as to satisfy the requirements of
Treasury Regulation Section 1.704-2(f), items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal
to each Partner's share of the net decrease in Partnership Minimum Gain
(within the meaning of Treasury Regulation Section 1.704-2(g)(2).
(c) If, during any taxable year, there is a net decrease in
Partnership Minimum Gain Attributable to Partner Nonrecourse Debt, then
each Partner with a share of the Partnership Minimum Gain Attributable to
Partner Nonrecourse debt at the beginning of the year shall , before any
other allocations are made for such year other than those pursuant to
Section (b) above, be allocated in a manner so as to satisfy the
requirements of Treasury Regulation Section 1.704-2(i)(4), items of
Partnership income and gain for such year (and, if necessary, for
subsequent years) in an amount equal to each Partner's share of the net
decrease in Minimum Gain Attributable to Partner Nonrecourse Debt as
determined in accordance with Treasury Regulation Section 1.704-2(i)(4).
(d) If during any taxable year a Partner unexpectedly receives (i) a
distribution of cash or property from the Partnership or (ii) an adjustment
or allocation described in Treasury Regulation Section 1.704-1(b)(2)(ii)
(d) (5) as in effect on the date hereof (concerning allocations of loss and
deduction if Partners' interests change during the year, if a Partnership
interest is acquired by gift or if a Partner receives certain Partnership
property in redemption of part or all of his or its interest in the
Company), and if such adjustment , allocation or distribution would cause
at the end of the taxable year a deficit balance in such Partner's Adjusted
Capital Account in excess of his allocable share of Minimum Gain, then a
pro-rata portion of each item of partnership income, including gross
income, and gain for such taxable year (and, if necessary, subsequent
taxable years) shall be allocated to such Partner in an amount and in a
manner sufficient to eliminate such excess balance as quickly as possible
before any other allocation is made for such year other than pursuant to
Subsection (b) hereof so as to satisfy the requirements of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) (qualified income offset).
(e) To the extent required by Treasury Regulation Section
1.704-2(i)(1), Partner Nonrecourse Debt Deductions for any taxable year
shall be allocated to the Partner (or Partners) who bear(s) the economic
risk of loss of such Partner Nonrecourse Debt.
(f) In the event that any allocation is or has been made to a Partner
pursuant to Subsections (a), (b), (c) (d) or (e) above, subsequent items of
income, deduction, gain and loss shall be allocated before any other
allocations are made (subject to the provisions of Subsections (a), (b),
(c) (d) or (e)) to the Partners in the manner which would result in each
Partner having a Capital Account balance equal to what it would have been
had the allocation pursuant to subsections (a), (b), (c) (d) or (e) not
occurred.
(g) For purposes of this Article, each Partners "Adjusted Capital
Account" shall equal the Capital Account of each Partner (1) reduced at the
end of each taxable year by the sum of (x) the excess of distributions
reasonably expected to be made to such Partner over the offsetting
increases to such Partner's Capital Account reasonably expected to be made
in the same taxable year as the aforesaid distributions, and (y)
allocations expected to be made described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(5) as in effect on the date hereof (concerning
allocations of loss and deduction if Partners' interests change during the
year, if a Partnership interest is acquired by gift or if a Partner
receives certain Partnership property in redemption of part or all of his
interest in the Partnership), and (2) increased by the sum of (i) the
amount, if any, which the Partner is obligated to restore to the
Partnership upon liquidation of his interest therein if a deficit balance
exists in his Capital Account at such time, (ii) the outstanding principal
balance of any promissory note made by such Partner and contributed to the
Partnership if such note is not readily tradable on an established
securities market and if such note must be satisfied within 90 days after
the date said Partner's interest is liquidated, (iii) the amount of any
unconditional obligation of such Partner to make subsequent contributions
to the Partnership (whether imposed by this Agreement or by law), and (iv)
the sum of (a) the amount the Partner would be personally liable for either
as a Partner or in his individual capacity as a guarantor or otherwise, and
(b) the economic risk of loss the Partner would bear attributable to any
Partnership liability (as determined in accordance with Treasury Regulation
Section 1.752-2).
(h) In accordance with Section 704(b) and (c) of the Code and
Regulations thereunder, income, gain, loss and deduction with respect to
any property contributed to the capital of the Partnership (including all
or part of any deemed capital contribution under Section 708 of the Code)
shall, solely for tax purposes, be allocated among the Partners so as to
take account of any variation between the adjusted basis of such property
to the Partnership and its agreed value. In the event that Capital Accounts
are ever adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2) to
reflect the fair market value of any Partnership property, subsequent
allocations of income gain, loss and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such
asset and its value as adjusted in the same manner as required under
Section 704(c) of the Code and the Regulations thereunder.
(i) The allocations provided in Sections 4.5(a)-(h) are intended to
comply with the provisions of Section 704(b) of the Code and the
Regulations thereunder. However, If any such allocation causes a distortion
in the Partner's Partnership Interest in contravention of the Partners'
economic arrangement as reflected in Article 4, the General Partner has the
authority to make curative allocations to bring such allocations in
accordance with such Partner' Partnership Interest, as if such allocations
which caused the distortion had not occurred.
(j) The allocations provided in this Section are intended to comply
with the provisions of Section 704(b) of the Code and the Regulations
thereunder. If any such allocation under this Section is inconsistent
therewith, the General Partner has the authority to make a curative
allocation to bring such allocations in compliance with Section 704(b) of
the Code and Regulations thereunder.
For purposes of this Agreement, the following terms shall have the
definitions set forth below:
"Nonrecourse Liability." Any debt of the Partnership for which no
Partner has any economic risk of loss, determined in accordance with
Internal Revenue Regulation Section 1.704-2(b)(3).
"Partner Nonrecourse Debt." Any nonrecourse debt of the Partnership
for which a Partner bears the economic risk of loss, determined in
accordance with Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Deductions." With regard to any Partner
Nonrecouse Debt, the amount of the net increase during any Partnership
taxable year in the amount of Minimum Gain Attributable to Partner
Nonrecourse Debt, over the aggregate amount of any distributions during
such year to the Partner who bears the economic risk of loss for such debt
that are allocable to an increase in the Minimum Gain Attributable to such
Partner Nonrecourse Debt. Such amounts shall be determined in accordance
with Treasury Regulation Section 1.704-2(I) (2).
"Recourse Debt." All Partnership debt other than Nonrecourse Liability.
10. Hot Issues.
In the event the General Partner decides to invest in securities which
are the subject of a public distribution and which the General Partner, in
his sole discretion, believes may become a "hot issue" as that term is
defined in Article III, Section 1 of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. (the "Association"), such
investment shall be made in accordance with the following provisions:
(a) any such investment made in a particular Fiscal Period shall be
made in a special account (the "Hot Issues account");
(b) only those Partners who do not fall within the proscription of
Article III, section 1 of said Rules of Fair Practice ("Unrestricted
Partners") shall have any beneficial interest in the Hot Issues Account;
(c) each Unrestricted Partner shall have a beneficial interest in the
Hot Issues Account for any Fiscal Period in the proportion which (i) such
Unrestricted Partner's Capital account as of the beginning of the Fiscal
Period bore to (ii) the sum of the Capital Accounts of all Unrestricted
Partners as of the beginning of such fiscal Period.
(d) Funds required to make a particular investment shall be
transferred to the Hot Issues account from the regular account of the
Partnership; securities involved in the public distribution shall be
purchased in the Hot Issues Account, held in the Hot Issues Account and
eventually sold from the Hot Issues Account or transferred to the regular
account at fair market value as of the day of transfer as determined by the
General Partner with such transfer being treated as a sale; if such
securities are sold from the Hot Issues account, the proceeds of the sale
shall be transferred from the Hot Issues account to the regular account of
the Partnership.
(e) as of the last day of each Fiscal Period in which a particular
investment or investments are held in the Hot Issues Account: (A) interest
shall be debited to the Capital Accounts of the Unrestricted Partners in
accordance with their beneficial interest in the Hot Issues Account at the
interest rate being paid by the Partnership from time to time for borrowed
funds during the period in that Fiscal Period that funds from the regular
account have been held in or made available to the particular Hot Issues
Account or, if no such funds are being borrowed during such period, the
interest rate that the General Partner determines would have been paid if
funds had been borrowed by the Partnership during such period; and such
interest shall be credited to the Capital Accounts of all the Partners,
both General and Limited, in the proportions which (i) each Partner's
Capital Account as of the beginning of such Fiscal Period bore to (iii) the
sum of the Capital Accounts of all Partners as of the beginning of such
Fiscal Period and (B) any Net Profits or Net Losses during such Fiscal
Period with respect to the Hot Issues Account shall be allocated to the
Capital accounts of the Unrestricted Partners in accordance with their
beneficial interest in the Hot Issues Account during such Fiscal Period;
provided, however, that the amount of such interest shall not exceed the
amount of profit accrued in the Hot Issues Account; and
(f) the determination of the General Partners as to whether a
particular Partner falls within the proscription of Article III, Section I
of said Rules of Fair Practice shall be final.
11. Valuation.
The Partnership's assets shall be valued in accordance with the
following principles:
(a) Any Security that is listed on a national securities exchange will
be valued at its last sale price on the date of determination as recorded
by the composite tape system, or if no sales occurred on that day, at the
mean between the closing "bid" and "asked" prices on that day as recorded
by the system or the exchange, as the case may be;
(b) Any Security that is a National Market Security will be valued at
its last sale price on the date of determination as reported by the
National Association of Securities dealers automated quotations system
("NASDAQ") or if no sale occurred on that day, at the mean between the
closing "bid" and "asked" prices on that day as reported by NASDAQ:
(c) Any Security not listed on a national securities exchange and not
a National Market Security will be valued at the mean between the closing
"bid" and "asked" prices on the date of determination as reported by NASDAQ
or, if not so reported, as reported in the over-the-counter market in the
United States;
(d) An option shall be valued at the last sales price or, in the
absence of a last sales price, the last offer price; and
(e) All other Securities shall be assigned the value that the General
Partner in good faith determine.
12. Determination by General Partner of Certain Matters.
(a) All matters concerning the valuation of Securities, the allocation
of profits, gains and losses among the Partners, including the taxes on
them and accounting procedures, not specifically and expressly provided for
by the terms of this Agreement, shall be determined in good faith by the
General Partner, whose determination shall be final, binding and conclusive
upon all of the Partners.
(b) gains, losses, and expenses of the Partnership for each Fiscal
Period shall be allocated among the Partners for income tax purposes in a
manner so as to reflect, as nearly as possible, the amounts credited or
charged to each Partner's Capital Account pursuant to Section 9 of this
Agreement.
(c) The General Partner shall have the power to make all tax elections
and determinations for the Partnership, and to take any and all action
necessary under the Code or other applicable law to effect those elections
and determinations. All such elections and determinations by the General
Partner shall be final, binding and conclusive upon all Partners.
13. Liability of Partners.
(a) The General Partner shall not be obligated to contribute cash or
other assets to the Partnership to make up deficits in their Capital
accounts or in the Capital Accounts of the Limited Partners either during
the term of the Partnership or upon liquidation. The General Partner shall
be liable for all debts and obligations of the partnership to the extent
that the Partnership is unable to pay such debts and obligations up to the
extent of Veteri's capital.
(b) The doing of any act or the failure to do any act by a General
Partner, the effect of which may cause or result in loss, liability, damage
or expense to the Partnership or any Partner shall not subject a General
Partner to any liability to the Partnership or to any Partner, except that
a General Partner may be so liable if it has not acted in good faith, or
has committed gross misconduct or was grossly negligent.
(c) A Limited Partner will not be liable for any debts or bound by any
obligations of the Partnership except to the extent set forth in
subsections (d), (e) and (f) of this Section 13.
(d) A Limited Partner who has received the return of any part of his
or its Capital contribution without violation of this Agreement or the Act
shall not therefore be labile to the Partnership or its creditors.
(e) A Limited Partner receiving a return of any portion of his or its
Capital Contribution in violation the Act or this Agreement will be Liable
to the Partnership for a period of six (6) years thereafter for the amount
of the contribution wrongfully returned.
(f) A Limited Partner may be liable to the Partnership or creditors of
the Partnership for any amounts distributed if, and to the extent that, at
the time of the distribution, he actually knew that, after giving effect to
the distribution, all liabilities of the Partnership, other than
liabilities to Partners on account of their interest in the Partnership,
exceeded the fair value of the Partnership's assets.
14. Rights and Duties of the General Partner
(a) The General Partner shall have the exclusive right to manage and
control the affairs of the Partnership, and shall have the power and
authority to do all things necessary or proper to carry out the purposes of
the Partnership. The General Partner shall devote an amount of time and
attention that the General Partner in its sole discretion deems necessary
or appropriate.
(b) Without limiting the generality of the foregoing, the General
Partner shall have full power and authority:
(i) to engage independent agents, investment advisors, attorneys,
accountants and custodians as the General Partner deems necessary or
advisable for the affairs of the Partnership;
(ii) to receive, buy sell, exchange, trade, and otherwise deal in
and with Securities and other property of the Partnership;
(iii) to open, conduct and close accounts with brokers on behalf
of the Partnership and to pay the customary fees and charges
applicable to transactions in those accounts;
(iv) to open, maintain and close accounts, including margin
accounts, with brokers and banks, and to draw checks and other orders
for the payment of money by the Partnership;
(v) to file, on behalf of the Partnership, all required local,
state and Federal tax and other returns relating to the Partnership;
(vi) to cause the Partnership to purchase or bear the cost of any
insurance covering the potential liabilities of the General Partner
and any associate, employee or agent of the General Partner arising
out of the General Partner's actions as General Partner under this
Agreement;
(vii) to cause the Partnership to purchase or bear the cost of
any insurance covering the potential liabilities of any person serving
as a director, officer or employee of an entity in which the
Partnership has an investment or of which the Partnership is a
creditor;
(viii) to commence or defend litigation or submit to arbitration
any claim or cause of action that pertains to the Partnership or any
Partnership assets;
(ix) to enter into, make and perform contracts, agreements and
other undertakings, and to do any other acts, as the General Partner
deems necessary or advisable for, or as may be incidental to, the
conduct of the business of the Partnership, including, without
limiting the generality of the foregoing, contracts, agreements,
undertakings and transactions with any Partner or with any other
person, firm or corporation having any business, financial or other
relationship with any Partner or Partners:
(x) to make or revoke elections pursuant to Section 754 of the
Code to adjust the basis of the Partnership's property as permitted by
Sections 734(b) and 743(b) of the Code; and
(xi) to designate a Tax Matters Partner for all purposes under
the Code
15. Expenses.
The Partnership shall bear all expenses relating to its
organization. The Partnership will bear the expenses of its
administration, accountant, its legal counsel, and expenses of
investments.
16. Administrative Fee.
The General Partner will not charge an administrative fee.
17. Limitation on Powers of Limited Partners.
No Limited Partner shall participate in the control of the
Partnership's business, transact any business in the Partnership's
name or have the power to sign documents for the Partnership or to
bind the Partnership in any other way.
18. Other Business ventures.
Each Partner agrees that each General Partner and its affiliates
and associates may engage in other business activities or possess
interest in other business activities of every kind and description,
independently or with others. These activities may include, without
limitation, establishing a broker-dealer and investing in real estate
and real estate related partnerships, or in investing, in financing,
acquiring and disposing of interest in securities in which the
Partnership may from time to time invest, or in which the Partnership
is able to invest or otherwise have any interest. The Limited Partners
agree that the General Partner and its affiliates may act as general
partner of other partnerships, including investment partnerships.
19. Limitation on Assignability of Interest of Limited Partners.
(a) No Limited Partner may assign or otherwise transfer or
encumber his or its interest in the Partnership, in whole or in part,
without the consent of the General Partner and without a written
opinion of counsel to or approved by the General Partner that the
proposed transfer (i) is consistent with all applicable provisions of
the 1933 Act, and the rules and regulations thereunder, as from time
to time in effect, as well as any applicable provisions of any state
"blue sky" law; and (ii) would not result in the Partnership's having
to register as an investment company under the Investment Company Act
of 1940, as amended.
(b) Notwithstanding any other provision of this Agreement, any
successor to any Limited Partner shall be bound by the provisions of
this Agreement. Prior to recognizing any assignment of an interest in
the Partnership that has been transferred in accordance with this
Section 19, the General Partner may require the transferring Limited
Partner to execute and acknowledge an instrument of assignment in form
and substance satisfactory to the General Partner, and may require the
assignee to agree in writing to be bound by all the terms and
provisions of this Agreement, to assume all of the obligations of the
assigning Limited Partner and to execute whatever other instruments or
documents the General Partner deems necessary or desirable in
connection with the assignment.
(c) No Limited Partner shall have the right to have his or its
assignee admitted as a substitute Limited Partner, except upon the
written consent of the General Partner, which consent may be withheld
in the sole discretion of the General Partner.
(d) Each Limited Partner hereby approves of the admission to the
Partnership as a Limited Partner of any assignee who succeed to the
interest in the Partnership of a Limited Partner in accordance with
the provisions of this Section 19.
20. Withdrawals by a Limited Partner.
(a) (i) A Limited Partner who shall have been a Limited Partner
for at least eight full Fiscal Quarters shall have the right, as of
the end of any Fiscal Year, or at other times at the discretion of the
General Partner, to withdraw all or a portion of the amount of his or
its Capital Account, so long as the General Partner receives written
notice of the intended withdrawal not less than ninety (90) days prior
to the withdrawal, stating the amount to be withdrawn. In no event,
however, shall a Limited Partner be permitted to withdraw any amounts
from his or its Capital Account in excess of the positive balance of
his or its Capital Account. If the amount of a Limited Partner's
withdrawal represents less than seventy-five (75%) of the Limited
Partner's Capital Account, the Limited Partner will receive the
proceeds of the withdrawal within thirty (30) days after the date of
withdrawal. If the amount of a Limited Partner's withdrawal represents
seventy-five (75%) or more of the Limited Partner's Capital Account,
the Limited Partner will receive seventy-five percent (75%) of his
Capital account within thirty (30) days after the date of withdrawal
and the remainder of the amount withdrawn within ten (10) days after
the Partnership has received financial statements from its independent
certified public accountants pursuant to Section 23(c) of this
Agreement. If a Limited Partner requests withdrawal of capital which
would reduce his Capital Account below the amount of his initial
Capital Contribution, the General Partner may treat such request as a
request for withdrawal of all of such Partner's Capital Account. The
distribution of any amount withdrawn by a Limited Partner may take the
form of cash and/or marketable securities as determined by the General
Partner in his sole discretion.
(ii) In the event of a proposed withdrawal of capital by one or
more General Partner or Affiliates pursuant to Section 21(a)(ii) of
this Agreement, as a result of which the aggregate of the Capital
Accounts of the General Partner and Affiliates will be less than
$50,000 (fifty thousand dollars), a Limited Partner shall have the
right to withdraw all or a portion of the amount of his or its Capital
Account, so long as the General Partner receives written notice of the
intended withdrawal not more than fifteen (15) days after the date of
the notice of withdrawal by such General Partner or General Partner or
Affiliate or Affiliates pursuant to said Section 21(a)(ii), stating
the amount to be withdrawn. In such event the withdrawal by such
Limited Partner shall be effective as of the effective date of the
withdrawal by the General Partner or General Partners pursuant to said
Section 21(a)(ii). The amount available for withdrawal shall be
calculated in the same manner as provided for in the last sentence of
paragraph (b) of Section 5 hereof.
(b) Any Limited Partner's interest in the Partnership may be
terminated by the Partnership as of the end of any Fiscal Year upon
prior written notice, so long as the General Partner determines the
termination to be in the best interest of the Partnership. In the
event that a Limited Partner's interest in the Partnership is
terminated pursuant to this Section 20, the Limited Partner shall
receive ninety percent (90%) of the value of his Capital Account
within ninety (90) days after written notice of termination is given
by the Partnership and the remaining ten percent (10%) within ten (10)
business days after receipt by the Partnership of financial statements
with respect to the Fiscal Year in which his or its interest in the
Partnership is terminated.
21. Withdrawals by the General Partners and Affiliates.
(a) (i) The General Partner shall have the right to withdraw any
amount of cash from his Capital Account as of the end of any Fiscal
Year, without prior notification to the Limited Partners, provided
that, after giving effect to such withdrawal, the aggregate Capital
accounts of the General Partner and his Affiliates are not less than
$50,000 (fifty thousand dollars).
(ii) Upon forty-five (45) days' prior notice to the Limited
Partners, a General Partner or an Affiliate may withdraw any amount
from his Capital Account contributed to the Partnership as a result of
which withdrawal the aggregate Capital Accounts of the General Partner
and their Affiliates would be reduced below $50,000. (fifty thousand
dollars).
(b) The General Partner may voluntarily resign or withdraw from
the Partnership as of the end of any Fiscal Year upon sixty (60) days'
written notice sent to all Partners.
22. Dissolution and Winding Up of the Partnership.
On dissolution of the Partnership, the General Partner or if
there is no General Partner, one or more persons approved by Limited
Partners holding a majority in interest of the Capital Accounts of the
Limited Partners) shall wind up the Partnership's affairs and shall
distribute the Partnership's assets in the following manner and order:
(a) in satisfaction of the claims of all creditors of the
Partnership, other than the General Partners;
(b) in satisfaction of the claims of the General Partners as
creditors of the Partnership; and
(c) any balance to the Partners in the relative proportions that
their respective Capital Accounts bear to each other, those Capital
Accounts to be determined as if the Fiscal Year ended on the date of
the dissolution.
23. Accounting and Reports.
(a) The records and books of account of the Partnership shall be
reviewed as of the end of each fiscal Year by independent certified
public accountants selected by the General Partner in his sole
discretion.
(b) As soon as practicable after the end of each Fiscal Year, the
General Partner shall cause to be delivered to each person who was a
Partner at any time during that Fiscal Year all information deemed
necessary by the General Partner in his sole discretion for the
preparation of the Partner's income tax returns, including a Form
1065/Schedule K-1 statement showing the Partner's share of Net Profit
or Net Loss, deductions and credits for the year Federal income tax
purposes, and the amount of any distributions made to or for the
account of the Partner pursuant to this Agreement.
(c) The independent certified public accounts selected by the
General Partner in accordance with subsection (a) of this Section 23
shall prepare and mail to each Partner, within ninety (90) days after
the end of each fiscal Year, an income statement for the Fiscal Year
and a balance sheet as of the end of the Fiscal Year.
(d) The Partnership shall cause to be prepared and mailed to each
Partner a report setting out as of the end of each fiscal quarter
information determined by the General Partner to be appropriate.
(e) The General Partner shall cause tax returns for the
Partnership to be prepared and timely filed with the appropriate
authorities.
24. Books and Records.
The General Partner shall keep at the Partnership's principal
office:
(a) books and records pertaining to the Partnership's business
showing all of its assets and liabilities, receipts and disbursements,
realized profits and losses, Partners' Capital Accounts and all
transactions enter into by the Partnership;
(b) a current list of the full name and last known home, business
or mailing address of each Partner set out in alphabetical order;
(c) a copy of the Certificate and all amendments to it, together
with executed copies of any powers of attorney pursuant to which the
Certificate and any amendments to it have been executed;
(d) copies of the Partnership's Federal, state and local income
tax returns and reports, if any, for the three (3) most recent years;
and
(e) copies of this Agreement as may be amended from time to time.
All books and records of the Partnership required to be kept
under this Section 24 shall be available for inspection by a Partner
of the Partnership at the offices of the Partnership during ordinary
business hours for any purpose reasonably related to the Partner's
interest as a Partner in the Partnership.
25. Indemnification.
(a) The Partnership shall indemnify each General Partner and any
of his Affiliates (each an "Indemnitee") to the fullest extent
permitted by law and will hold each harmless from and with respect to
(i) all fees, costs and expenses incurred in connection with, or
resulting from, any claim, action or demand against any indemnitee
that arises out of or in any way relates to the Partnership, its
properties, business or affairs, and (ii) any losses or damages
resulting from any such claim, action or demand, including amounts
paid in settlement or compromise of the claim, action or demand.
(b) No Indemnitee shall be indemnified by the Partnership with
respect to any action or failure to act that does not constitute good
faith, or that constitutes willful misfeasance.
(c) The Partnership may pay the expenses incurred by an
Indemnitee in defending a civil or criminal action, suit or proceeding
brought by a party against the Indemnitee that arises out of or is in
any way related to the Partnership, its properties, business or
affairs, upon receipt of an undertaking by the Indemnitee to repay the
amount advanced by the Partnership if an adjudication or determination
is subsequently made by a court of competent jurisdiction that the
Indemnitee is not entitled to indemnification as provided in this
Agreement.
(d) The right of indemnification provided in this Section 25
shall be in addition to any rights to which an Indemnitee may
otherwise be entitled and shall inure to the benefit of the executors,
administrators, personal representatives, successors or assigns of
each Indemnitee.
(e) The rights to indemnification and reimbursement provided for
in this Section 25 may be satisfied only out of the assets of the
Partnership. No Partner shall be personally liable for any claim for
indemnification or reimbursement under this Section 25.
26. Amendment of Partnership Agreement.
This Agreement may be amended, in whole or in part, by the
written consent of (a) the General Partner, and (b) Partners the value
of whose Capital Account constitute not less than fifty percent (50%)
of the total value of all Capital Accounts of the Partnership,
provided that no such amendment shall affect the allocation of Net
Profit or Net Loss to any Partner who has not consented to such
amendment. In addition, any provision of this Agreement, other than
Section 9, may be amended by the General Partner in any manner that
does not, in the sole discretion of the General Partner, adversely
affect any Limited Partner.
27. Notices.
Notices that may or are required to be given under this Agreement
by any part to another shall be in writing and deposited in the United
States mail, certified or registered, postage prepaid, addressed to
the respective parties at their addresses set out in Schedule A to
this Agreement or to any other addressee designated by any Partner by
notice addressed to the Partnership in the case of any Limited Partner
and to the General Partner in the case of the General Partners.
Notices shall be deemed to have been given when deposited in the
United States mail within the continental United States.
28. Agreement Binding Upon Successors and Assigns.
This Agreement shall inure to the benefit of and shall be binding
upon the heirs, executors, administrators or other representatives,
successors and assigns of the Partners.
29. Governing Law.
This Agreement, and the rights of the Partners under it, shall be
governed by and construed in accordance with the law of the State of
New Jersey.
30. Consents.
Any and all consents, agreements or approvals provided for or
permitted by this Agreement shall be in writing and signed copies of
them shall be filed and kept with the books of the Partnership.
31. Miscellaneous.
(a) This Agreement, including Schedule A appended to it,
constitutes the entire understanding and Agreement of the Partners as
to the operation of the Partnership.
(b) This agreement may be executed in counterparts, each of which
shall be deemed to be an original.
(c) Each provision of this Agreement is intended to be severable.
A determination that a particular provision of this Agreement is
illegal or invalid shall not affect the validity of the remainder of
the Agreement.
(d) Nothing contained in this Agreement shall be construed to
constitute any Partner the agent of another Partner, except as
specifically provided in this Agreement, or in any manner to limit the
partners in the carrying on of their own respective business or
activities.
(e) If there is a conflict between the terms and conditions of
the Partnership Agreement and Offering Memorandum, the Partnership
Agreement shall be controlling.
IN WITNESS WHEREOF, the Partners have executed this Agreement as
of the date first above written.
GENERAL PARTNER
VETERI PLACE CORPORATION
By: Lawrence B. Seidman, President
LIMITED PARTNERS:
All Limited Partners now and
hereafter admitted as Limited
Partners of the Partnership,
pursuant to Powers of Attorney
now and hereafter executed in
favor of, and delivered to the
General Partner.
LAWRENCE B. SEIDMAN
Attorney-in-Fact
Lawrence B. Seidman
AMENDMENT #1
TO LIMITED PARTNERSHIP
CERTIFICATE OF
SEIDMAN INVESTMENT PARTNERSHIP II, L.P.
FILED AUGUST 13, 1998
Section 1 The name of the Partnership is Seidman Investment
Partnership II, L.P.
Section 6 Section 6 is hereby amended to add the following people
and entities as limited partners:
NAME CAPITAL CONTRIBUTION
Dr. John Tafel $150,000.00
2604 South Hayden
Amarillo, Texas 79109
Hawthorne Financial $179,284.87
c/o Eric Nettere
560 West Hawthorne Place
Chicago, Illinois 60657
Eric & Julie Nettere JTWROS $ 70,715.13
560 West Hawthorne Place
Chicago, Illinois 60657
Stephen Chaleff $100,000.00
20 Norman Drive
Rye, New York 10580
Chaleff Family Irrevocable Trust $ 150,000.00
20 Norman Drive
Rye, New York 10580
Urban West Capital Partners,L.P. $ 250,000.00
Att: Stephen Gunther
520 Broadway, Suite 100
Santa Monica, California 90401
Cordell Consultants, Inc. $ 22,000.00
Money Purchase Plan
5540 Laurel Ridge Road
Ruckersville, Virginia 22968
Amalgamated Sludge LLC $ 178,000.00
5540 Laurel Ridge Road
Ruckersville, Virginia 22968
VETERI PLACE CORPORATION, G.P.
By:
Lawrence B. Seidman, President
Veteri Place Corporation
Certificate of Incorporation filed
January 6, 1995
Dated: September 4, 1998
STATE OF NEW JERSEY)
) ss:
COUNTY OF MORRIS )
On the 4th day of September, 1998, before me personally came
Lawrence B. Seidman, to me known, who being by me sworn, did depose and say that
he resides at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President
of Veteri Place Corporation, the General Partner of Seidman Investment
Partnership II, L.P. described in and which executed the above instrument; and
that he signed such instrument by order of the Board of Directors of said
Corporation.
Exhibit F
OPERATING AGREEMENT
FOR
SEIDMAN AND ASSOCIATES, LLC.
Dated: November 9, 1994
<PAGE>
INDEX
Page No.
Article 1 - Definitions 1
Article 2 - Formation 5
Article 3 - Principal Office 5
Article 4 - Term and Duration 6
Article 5 - Purpose 7
Article 6 - Capital Contributions by the Member7
Article 7 - Additional Capital Contributions 9
Article 8 - Cash Contributions 10
Article 9 - Tax Allocations 11
Article 10 - Rights, Powers and Representation of
the Members 15
Article 11 - Managing Member 17
Article 12 - Books, Records and Reports 19
Article13 - Bank Accounts 20
Article 14 - Rights and Duties of Members 20
Article 15 - Tax Matters 21
Article 16 - Bankruptcy 21
Article 17 - Assignability or Transfer of Int 22
Article 18 - Admission of Substituted Members; Death
or Incapacity; Further Conditions 24
Article 19 - Liquidation 25
Article 20 - Gender 26
Article 21 - Further Assurances 26
Article 22 - Covenant Against Partition 26
Article 23 - Notices 26
Article 24 - Applicable Law 27
Article 25 - Captions 27
Article 26 - Counterparts 27
Article 27 - Binding Effect 27
Article 28 - Partial Invalidity 27
Article 29 - Integration 28
Exhibit A - Property Description
Exhibit B - Contract of Sale
Schedule A - Members' Percentage Interests
Schedule B - Example of the Operation of Section 8.3
<PAGE>
OPERATING AGREEMENT
FOR
SEIDMAN AND ASSOCIATES, LLC.
AGREEMENT made November 9, 1994 by and between LAWRENCE SEIDMAN
("Lawrence Seidman"), having an address at 19 Veteri Place, Wayne, New Jersey
07470; SONIA SEIDMAN ("Sonia Seidman"), having an address at 19 Veteri Place,
Wayne, New Jersey 07470; SEIDCAL Associates ("Seidcal"), a New Jersey general
partnership having an address c/o Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016; PAUL SCHIMDT ("Schimdt"), having an address at 159
Clinton Place, Hackensack, New Jersey 07601; and RICHARD GREENBERG
("Greenberg"), having an address at 1235A Route 23 South, Wayne, New Jersey
07474 (hereinafter Lawrence Seidman, Sonia Seidman, Seidcal, Schimdt and
Greenberg may sometimes be referred to individually as a "Member" and
collectively as the "Members").
WITNESSETH:
WHEREAS, the Members desire to form a limited liability company (the
"Company") pursuant to the New Jersey Limited Liability Company Act (the"Act")
and adopt this Operating Agreement in connection therewith; and
WHEREAS, the purpose of the Company shall be to purchase stock in
private and public companies and manage and invest the funds of others for these
purposes and for any and all other purposes permitted pursuant to the Act; and
WHEREAS, the Members wish to set forth the terms and conditions as to
the manner in which the Company shall be operated and to set forth the rights,
obligations and duties of the Members to each other and to the Company; and
WHEREAS, by executing this Operating Agreement, each Member represents
that he has sufficient right and authority to execute this Operating Agreement
and not acting on behalf of any undisclosed or partially disclosed principal.
NOW, THEREFORE, in consideration of ten ($10) dollars and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows effective as of the date first
written above.
ARTICLE 1
DEFINITIONS
1.1 For purposes of this Agreement, the following terms shall have
the definitions set forth below:
<PAGE>
"Additional Contribution": Each Member's pro-rata portion of a
Required Amount, determined by multiplying the Required Amount by each Member's
Interest.
"Additional Member": Any person or entity who acquires an additional
interest in the Company.
"Adjusted Capital Account": As defined in Section 9.4(h).
"Capital Account" or "Capital Accounts": As defined in Section 6.4.
"Capital Contributions": The respective capital contributions,
including any Additional Contribution,of each of Member to the Company.
"Capital Transaction" or "Capital Transactions": Sale, transfer,
assignment or exchange of stock purchases or other investment made by the
Company or other similar transactions which, in accordance with generally
accepted principles, are treated as a capital transaction.
"Certificate of Formation": The Certificate of Formation of the Company
filed with the Secretary of State of the State of New Jersey, pursuant to the
Act to form the Company, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"Code": The Internal Revenue Code of 1986, as amended, and any
reference to a particular section of the Code shall be deemed to include any
successor section to such section.
"Company": Seidman and Associates, LLC.
"Contributing Member": A Member which has made its Additional
Contribution.
"Default Loan": A loan to the Company of an amount equal to the
Additional Contribution not made by a Defaulting Member.
"Defaulting Member": A Member which fails to make his Additional
Contribution as required herein.
"Default Rate": A floating rate equal to the lesser of (a) ten (10%)
percent per annum in excess of the rate of interest announced from time to time
in The Wall Street Journal as the "prime rate" or "base rate" charged by
institutional commercial lenders, from time to time or (b) the maximum rate of
interest then permitted according to the laws of the State of New Jersey or
according to Federal law, to the extent applicable.
<PAGE>
"Gain from a Capital Transaction": The gain recognized by the Company
attributable to a Capital Transaction, determined in accordance with the method
of accounting used by the Company for federal income tax purposes. In the event
there is a revaluation of Company property and the Capital Accounts are adjusted
pursuant to Section 6.4(c), Gain from a Capital Transaction shall be computed by
reference to the "book items" and not the corresponding "tax items".
"Income": Net Proceeds and all other income or amounts, however
characterized, received by the Company.
"Interest": The respective percentage interest of each Member as set
forth on Schedule A.
"Loss from a Capital Transaction": The loss recognized by the Company
attributable to a Capital Transaction, determined in accordance with the method
of accounting used by the Company for federal income tax purposes. In the event
there is a revaluation of the Company property and the Capital Accounts are
adjusted pursuant to Section 6.4(c), Loss from a Capital Transaction shall be
computed by reference to the "book items" and not the corresponding "tax items".
"Managing Member": Lawrence Seidman, or such successor appointed by a
majority in interest of the remaining Members.
"Member": Each of the parties who has executed this Operating
Agreement and any party who may hereafter become an Additional Member or a
Substitute Member pursuant to this Operating Agreement.
"Member Nonrecourse Debt": Any nonrecourse debt of the Company for
which a Member bears the economic risk of loss, determined in accordance with
Treasury Regulation Section 1.704-2(b) (4).
"Member Nonrecourse Debt Deductions": With regard to any Member
Nonrecourse Debt, the amount of the net increase during any taxable year to the
Company in the amount of Minimum Gain Attributable to Member Nonrecourse Debt,
over the aggregate amount of any distributions during such year to the Member
who bears the economic risk of loss for such debt of proceeds of such debt that
are allocable to an increase in the Minimum Gain Attributable to such Member
Nonrecourse Debt. Such amounts shall be determined in accordance with Treasury
Regulation Section 1.704-2(i) (2).
"Minimum Gain": The amount of gain which would be recognized to the
Company for federal income tax purposes if all Company property secured by
Nonrecourse Liability were transferred to the creditor of such debt in
satisfaction thereof (and for no other consideration) in a taxable transaction.
<PAGE>
The amount of such gain shall be determined and calculated in accordance with
Treasury Regulation Section 1.704--2(g) (i).
"Minimum Gain Attributable to Member Nonrecourse Debt": The amount of
gain which would be recognized by the Company for federal income tax purposes if
all Company property secured by Member Nonrecourse Debt were transferred to the
creditor of such debt in satisfaction thereof (and for no other consideration)
in a taxable transaction. The amount of such gain shall be determined and
calculated in accordance with Treasury Regulation Section 1.704-2(f) (i) (4).
"Net Proceeds": The net proceeds available to the Company from a
Capital Transaction after deducting (i) all costs and expenses incurred in
connection therewith, (ii) any liens or other indebtedness which is satisfied or
refinanced as a result of such Capital Transaction, and (iii) reasonable
reserves established by the Company from time to time for working capital and
other purposes.
"Net Profit" and "Net Loss": The net income (including income exempt
from tax) and net loss (including expenditures that can neither be capitalized
nor deducted), respectively, of the Company, determined in accordance with the
method of accounting used by the Company for federal income tax purposes, but
computed without regard for Gain from Capital Transactions, Loss from Capital
Transactions and items of income or loss, if any, that are specifically
allocated to Members. In the event there is a revaluation of Company property
and the Capital Accounts are adjusted pursuant to Section 6.4(c), Net Profits
and Net Losses shall be computed by reference to the "book items" and not
corresponding "tax items".
"Nonrecourse Liability": Any Company debt for which no Member has any
economic risk of loss, determined in accordance with Treasury Regulation
Section 1.704-2(b) (3).
"Operating Agreement": This Operating Agreement as originally
executed and as amended, modified,supplemented or restated from time to time.
"Required Amount": The amount of cash required by the Company as
determined by a majority in interestof the Members.
"Substitute Member": Any transferee of a Member's Interests who is
admitted as a Member in the Company pursuant to Article 17 or 18.
"Unrecovered Additional Contributions": The aggregate amount of
Additional Contribution made by a Member pursuant to Section 7.1 hereof less
prior distributions to such Member of Income which is distributed to repay
outstanding Additional Contributions and any interest on any Default Loan
specially allocated to such Member.
<PAGE>
ARTICLE 2
FORMATION
2.1 The parties hereto do hereby form the Company under the name
of SEIDMAN AND ASSOCIATES, LLC.pursuant to the Act. Pursuant to the provisions
of the Act, the formation of the Company shall be effective upon the filing of
the Certificate of Formation.
In order to maintain the Company as a limited liability company under
the laws of the State of New Jersey, the Company shall from time to time take
appropriate action, including the preparation and filing of such amendments to
the Certificate of Formation and such other assumed name certificates,
documents, instruments and publications as may be required by law, including,
without limitation, action to reflect:
(i) a change in the Company name;
(ii) a correction of a defectively or erroneously executed
Certificate of Formation;
(iii) a correction of false or erroneous statements in the
Certificate of Formation or the desire of the Members
to make a change in any statement therein in order
that it shall accurately represent the agreement
among the Members; or
(iv) a change in the time for dissolution of the Company
as stated in the Certificate of
Formation and in this Agreement.
Section 2.2 Other Instruments. Each Member hereby agrees to execute and
deliver to the Company within five (5) days after receipt of a written request
therefor, such other and further documents and instruments, statements of
interest and holdings, designations, powers of attorney and other instruments
and to take such other action as the Company deems necessary, useful or
appropriate to comply with any laws, rules or regulations as may be necessary to
enable the Company to fulfill its responsibilities under this Operating
Agreement, to preserve the Company as a limited liability company under the Act
and to enable the Company to be taxed as a partnership for federal and state
income tax purposes.
ARTICLE 3
PRINCIPAL OFFICE
3.1 The Company's registered office in New Jersey shall be at 19 Veteri
Place, Wayne, New Jersey 07470. The Company's registered agent who is a resident
of New Jersey is Lawrence Seidman, whose business address 19 Veteri Place,
Wayne, New Jersey 07470. At any time, the Company may designate another
registered agent and/or office.
<PAGE>
3.2 The principal place of business of the Company shall be at 19
Veteri Place, Wayne, New Jersey 07470. At any time, the Company may change the
location of its principal place of business and may establish additional
offices.
ARTICLE 4
TERM AND DURATION
4.1 The Company shall commence upon the filing of the Certificate of
Formation, and shall continue in full force and effect until May 1, 2024,
provided, however, that the Company shall be dissolved prior to such date upon
the happening of any of the following events:
(a) The mutual written consent of the Members to dissolve the
Company.
(b) The sale or other divestiture of all or substantially all of the
assets of the Company and the distribution of the proceeds thereof to the
Members, including real estate or interests held or owned by the Company (other
than a transfer to a nominee of the Company for any Company purpose, which event
shall not be construed as an event of termination); provided, however, that (i)
if the Company receives a purchase money mortgage or other collateral security
in connection with such sale, the Company shall continue (A) until such mortgage
or security interest is paid in full or otherwise disposed of, or (B) in the
event of foreclosure of such mortgage, or security interest provided the Company
retains title therein; and (ii) the Company shall continue if the assets of the
Company are exchanged under Section 1031 of the Code.
(c) Upon the death, retirement, expulsion, bankruptcy or dissolution of
a Member or occurrence of any other event that terminates the continued
membership of a Member in the Company (a "Dissolution Event") unless the
business of the Company is continued by the unanimous consent of the remaining
Members within ninety (90) days following the Dissolution Event.
(d) The entry of a decree of judicial dissolution under Section
49 of the Act.
(e) The happening of any other prior event which pursuant to the terms
and provisions of this Operating Agreement shall cause a dissolution or
termination of the Company.
<PAGE>
4.2 Upon any dissolution of the Company, the distribution of the Company's
assets and the winding up of its affairs shall be concluded in accordance with
Article 19 of this Operating Agreement.
ARTICLE 5
PURPOSE
5.1 The business of the Company shall be for the purpose of:
(a) Purchasing stock in private and public companies and managing
and investing funds of others for
these purposes.
(b) Such other activities incident or appropriate to the foregoing,
including acting directly or in conjunction with others through joint ventures,
partnerships or otherwise.
5.2 The business of the Company shall also be for any lawful
purpose.
ARTICLE 6
CAPITAL CONTRIBUTIONS BY THE MEMBERS
6.1 (a) Upon execution hereof, or at such other times as determined by
the Managing Member, each Member shall contribute in cash to the capital of the
Company an amount in the aggregate equal to that set forth opposite his/her/its
name on Schedule A attached hereto.
(b) A Member's interest in the Company shall be represented by the
percentage interest held by such Member. Each Member's respective initial
interest in the Company is set forth opposite his/her name on Exhibit B attached
hereto.
6.2 No Member shall have the right to withdraw any part of his Capital
Contribution or receive any distribution, except in accordance with the
provisions of this Operating Agreement. No interest shall be paid on any Capital
Contribution.
6.3 No Member shall have any priority over any other Member with
respect to the return of Capital Contributions.
6.4 The Company shall maintain a capital account (a "Capital Account")
for each Member within the provisions of Treasury Regulation Section 1.704-1 (b)
(2) (iv) as such regulation may be amended from time to time. Without limiting
the foregoing, the Member's Capital Accounts shall be adjusted as follows:
(a) Subject to the last sentence of Section 6.4 (c), the Capital
Account of each Member shall be credited with (i) an amount equal to such
<PAGE>
Member's initial cash contribution and any additional cash contributions to the
Company and the fair market value of property or securities contributed to the
Company (net of liabilities secured by such property) if a contribution of
property or securities shall be permitted by the Company and (ii) such Member's
share of the Company's Net Profits and Gain from Capital Transactions (including
income and gain exempt from tax).
(b) Subject to the last sentence of Section 6.4 (c), the Capital
Account of each Member shall be debited by (i) the amount of cash distributions
to such Member and the fair market value of property and/or securities
distributed to the Member (net of liabilities secured by such property and/or
securities) and (ii) such Member's share of the Company's Net Loss and Net Loss
from Capital Transactions (including expenditures which are not permitted to be
capitalized or deducted for tax purposes).
(c) Upon the transfer of an interest in the Company, the Capital
Account of the transfer Member (as adjusted, if at all, as required by this
Section 6.4) that is attributable to the transferred interest will be carried
over to the transferee Member. The Capital Account will not be adjusted to
reflect any adjustment under Section 743 of the Code except as specifically
provided in Treasury Regulation Section 1.704-1 (b) (2) (iv) (m). Upon (i) the
"liquidation of the Company" (as hereinafter defined), (ii) the "liquidation of
a Member's interest in the Company" (as hereinafter defined), (iii) the
distribution of money, property or securities to a Member as consideration for
an interest in the Company, or (iv) the contribution of money or (if permitted
pursuant to (a) above) property and/or securities to the Company by a new or
existing Member as consideration for an interest in the Company, or upon any
transfer causing a termination of the Company for tax purposes within the
meaning of Section 708(b) (1) (B) of the Code, then adjustments shall be made to
the Members' Capital Accounts in the following manner: all property and
securities of the Company which are not sold in connection with such event shall
be valued at their then fair market value; such fair market value shall be used
to determine both the amount of gain or loss which would have been recognized by
the Company if the property and securities had been sold for its fair market
value (subject to any debt secured by the property and securities) at such time,
and the amount of Income, which would have been distributable by the Company
pursuant to Article 9 if the property and securities had been sold at such time
for said fair market value, less the amount of any debt secured by the property;
the Capital Accounts of the Members shall be adjusted to reflect the deemed
allocation of such hypothetical gain or loss in accordance with Article 10; and
the Capital Accounts of the Members (or of a transferee of a Member) shall
thereafter be adjusted to reflect "book items" and not "tax items" in accordance
with Treasury Regulation Sections 1.704-1 (b) (2) (iv) (g) and 1.704-1 (b) (4)
(i).
(d) For purposes of this Article 6, (i) the term "liquidation of the
Company" shall mean (A) a termination of the Company effected in accordance with
this Operating Agreement, which shall be deemed to occur, for purposes of
<PAGE>
Article 6, on the date upon which the Company ceases to be a going concern and
is continued in existence solely to wind-up its affairs, or (B) a termination of
the Company pursuant to Section 708(b)(1) of the Code; and (ii) the term
"liquidation of a Member's interest in the Company" shall mean the termination
of the Member's entire interest in the Company effected by a distribution, or a
series of distributions, by the Company to the Member.
ARTICLE 7
ADDITIONAL CAPITAL CONTRIBUTIONS
7.1 No Member shall be obligated to make additional capital
contributions to the Company. If the Managing Member, with the concurrence of
Members holding a majority in interest of the Company, shall determine there
shall be a Required Amount for any Company purpose, including, without
limitation, those purposes set forth in Article 5, then within fifteen (15) days
of notice of such requirement, each Member may, but shall not be obligated to,
contribute to the Company his Additional Contribution.
7.2 If a Member fails to make his Additional Contribution, in whole or
in part, as required in Section 7.1 above (the "Noncontributing Member"), then,
so long as any other Member shall make his Additional Contribution as provided
herein (each such Member making his Additional Contribution being hereinafter
referred to as "Contributing Member"), any Contributing Member shall have the
option (a) with the consent of a majority in interest of the Contributing
Members (i) to make a capital contribution equal to the Additional Contribution
not made by the Noncontributing Member or (ii) to make a Default Loan equal to
the Additional Contribution not made by the Noncontributing Member or (b) with
the unanimous written consent of each Contributing Member, to declare the
Company terminated as a result of the Noncontributing Member's default. In the
event that more than one Contributing Member desires to make an Additional
Contribution, or is permitted to make a Default Loan, on account of the
Noncontributing Member, each such Contributing Member shall be permitted to
participate in proportion to their respective Interests. All loans made pursuant
to this Section 7.2 shall bear interest at the Default Rate.
7.3 Upon the making of a capital contribution to the Company pursuant
to Section 7.2, the Interest of the Noncontributing Member and the Contributing
Members shall be adjusted as follows: (a) the Noncontributing Member's Interest
shall be decreased (but not below zero) by subtracting therefrom an amount equal
to the percentage equivalent of the quotient of (i) the Additional Contribution
not made by the Noncontributing Member giving rise to application of this
Section 7.3 multiplied by (A) 200% upon the first failure of the Noncontributing
Member to make an Additional Contribution, (B) 300% upon the second such failure
and (C) 400% upon the third such failure, divided by (ii) the aggregate amount
of all Capital Contributions made by the Members (including the Additional
Contributions received by the Company), and (b) the Contributing Members'
<PAGE>
Interest shall be increased by adding thereto an amount equal to the percentage
by which the Noncontributing Member's Interest was decreased pursuant to clause
(a) above. Upon the fourth and each subsequent failure of the Noncontributing
Member to make an Additional Contribution giving rise to the application of this
Section 7.3, a majority-in-interest of the Contributing Members shall have the
option, exercisable in their sole discretion, to cause the remaining Interest of
the Noncontributing Member to be forfeited and allocated to the Contributing
Members or to continue re-allocating the Interests of the Noncontributing Member
and Contributing Members as provided in the preceding sentence except that the
percentage multiple set forth in clause (i) (C) shall be increased 100% for each
failure of the Noncontributing Member to make an Additional Contribution. An
example of the operation of this Section 7.3 with respect to a re-allocation of
Interests upon the first failure of a Noncontributing Member to make an
Additional Contribution, is set forth in Schedule B attached hereto.
7.4 The obligations of the Members contained in this Section 7 are
personal and run only to the benefit of the Company and the Members and may not
be enforced by any third parties. No creditor of the Company may rely on the
foregoing provisions of this Article 7 or any other provision of this Operating
Agreement to make any contributions or returns to the Company, notwithstanding
any agreement, representation, intention, indication or otherwise to the
contrary.
ARTICLE 8
CASH DISTRIBUTIONS
8.1 The Company shall distribute Income to the Members at such times as
the Company shall determine (but not less often than quarterly), in the
following order of priority:
(a) first, to any Member who made a Default Loan, to the
payment of accrued and unpaid interest, and the then outstanding principal
balance of, any Default Loan, such distribution to be proportion to the
aggregate amount of interest, and the principal, owed. If more than one Member
participates in the making of a Default Loan, then distributions to such Members
on account of this Section 8.1(a) shall be made in proportion to the amounts so
loaned. If there shall be more than one instance in which a Default Loan has
been made, then Default Loans shall be repaid in the order in which they shall
have been outstanding the longest;
(b) second, to the Members in an amount equal to and in
proportion to their Unrecovered Additional Contributions;
(c) next, to the Members in an amount sufficient to give them
a ten percent (10%) return compounded annually on the aggregate of their Capital
Contributions and Additional Contributions;
<PAGE>
(d) next, to Sonia Seidman and the Managing Member in an
amount sufficient to pay to them, in the aggregate, up to twenty percent (20%)
of the net annual profits of the Company for each year calendar that the Company
is in existence to be paid 5% to the Managing Member and 15% to Sonia Seidman;
and
(e) the balance, if any, shall be distributed to the
Members in proportion to their Interests.
8.2 Notwithstanding Section 8.1, Net Proceeds from a Capital
Transaction which constitutes a liquidation of the Company, together with other
funds remaining to be distributed, shall be distributed to the Members no later
than the later of (a) the end of the taxable year of the Company in which such
liquidation occurs; or (b) within ninety (90) days after the date of such
liquidation event, after payment of all Company liabilities and expenses (or
adequate provision therefor), in accordance with Section 9.1, except that in no
event shall (x) a distribution be made to any Member if, after giving effect to
such distribution, all liabilities of the Company, other than liabilities to
Members on account of their Interests and liabilities for which the recourse of
creditors of the Company is limited to specified property of the Company, exceed
the fair value of the assets of the Company, except that the fair value of
property that is subject to a liability for which the recourse of creditors is
limited shall be included in the assets of the Company only to the extent that
the fair value of the property exceeds that liability and (y) the distribution
to a Member exceed the positive balance in such Member's Capital Account after
giving effect to all allocations to such Member under Article 9 of Net Profits,
Net Losses, and Gain and Loss from Capital Transactions so that liquidation
proceeds shall be distributed in accordance with each Member's positive Capital
Account balance (within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(b) as in effect on the date hereof). If a members shall
receive a distribution that should not have been made based upon the provisions
of Section 8.2 (x), the provisions of Section 42:2B-42 (b) of the act shall
apply . Section 42:2B-42(c) of the Act shall apply to all distributions made to
the Members.
ARTICLE 9
TAX ALLOCATIONS
10.1 Net Profits, Net Losses and any investment tax credit for each
fiscal year or part thereof shall be allocated to the Members in proportion to
their Interests.
10.2 Gain from a Capital Transaction shall be allocated in the
following order:
(a) There shall first be allocated to those Members, if any,
who have deficit balances in their Capital Accounts immediately prior to such
Capital Transaction an amount of such gain equal to the aggregate amount of such
deficit balances, which amount shall be allocated in the same proportion as such
deficit balances.
<PAGE>
(b) There shall next be allocated to each of the Members gain
in proportion to (but not greater than) the amount by which (x) the amount of
Net Losses theretofore allocated to each Member and not theretofore taken into
account under this Section 9.2(b), exceeds (y) the gain allocated to such Member
under Section 9.2(a).
(c) There shall next be allocated to each of the Members gain
equal to the amount by which (x) the aggregate proceeds derived from a Capital
Transaction distributable to each Member in accordance with the provisions of
Section 8.1 or 8.2 other than with respect to Default Loans, as the case may be,
exceeds (y) the positive balance, if any, in such Member's Capital Account after
such Member's Capital Account has been adjusted to reflect the gain allocated to
such Member pursuant to Sections 9.2(a) and 9.2(b); provided, however, that if
there shall be an insufficient amount of gain determined by this Section 9.2(c),
then the gain shall be allocated to the Members in proportion to the respective
amounts determined pursuant to this Section 9.2(c).
(d) Any remaining gain shall be allocated among the
Members in proportion to their
Interests.
(e) If the Company shall realize, upon a Capital Transaction,
gain which is treated as ordinary income under Sections 1245 or 1250 of the
Code, such ordinary income shall be allocated to the Members who receive the
allocation of the depreciation or cost recovery deduction that generated the
ordinary income in the same proportions as such deductions.
(f) Notwithstanding the foregoing, distributions of Income
made to a Member for interest and in repayment of the principal on any Default
Loan shall not be treated as Income for the purpose of allocating gain pursuant
to this Section 9.2 or for any other purpose. Any interest on a Default Loan
shall be treated as a "guaranteed payment" for purposes of Section 707(c) of the
Code.
10.3 Losses from Capital Transactions shall be allocated in the
following order:
(a) There shall first be allocated to those Members, if any,
whose positive balances in their Capital Accounts exceed their Unrecovered
Additional Contributions, an amount of such loss equal to such excess amount,
which amount shall be allocated in the same proportion as such excess amounts.
(b) There shall next be allocated to those Members, if any,
that have positive balances in their Capital Accounts, an amount of such loss
equal to the aggregate amount of such positive balances, which amount shall be
allocated in the same proportion as such positive balances.
<PAGE>
(c) The balance of such loss shall be allocated to the
Members in proportion to their Percentage Interests.
10.4 Notwithstanding the preceding provisions of this Article 10:
(a) Except as provided in sub-section (e) below, no allocation
of loss or deduction shall be made to a Member if such allocation would cause at
the end of any taxable year a deficit in such Member's Adjusted Capital Account
to exceed his allocable share of Minimum Gain; and any such loss or deduction
not allocated to a Member by reason of this Section 9.4 shall be allocated
pro-rata to each other Member if and to the extent that such allocation shall
not create a deficit in such other Member's Adjusted Capital Account in excess
of his allocable share of Minimum Gain; provided, however, that if such
allocation would create such deficit in all Members' Adjusted Capital Accounts
in excess of their share of Minimum Gain, then such allocation shall be made in
accordance with the principles of Treasury Regulation Section 1.704-1(b).
(b) If, during any taxable year, there is a net decrease in
Minimum Gain then, before any other allocations are made for such year, each
Member shall be allocated items of Company income and gain for such year (and,
if necessary, subsequent years) in an amount equal to each Member's share of the
net decrease in Company Minimum Gain (within the meaning of Treasury Regulation
Section 1.704-2(g)(2)) in a manner so as to satisfy the requirements of Treasury
Regulation Section 1.704-2(f).
(c) If, during any taxable year, there is a net decrease in
Company Minimum Gain Attributable to Member to Member Nonrecourse Debt, then,
before any other allocations are made for such year other than those pursuant to
Section 9.4(b) above, each Member with a share of the Company Minimum Gain
Attributable to Member Nonrecourse Debt at the beginning of the year shall be
allocated items of Company income and gain for such year (and, if necessary, for
subsequent years) in an amount equal to each Member's share of the net decrease
in Minimum Gain Attributable to Member Nonrecourse Debt as determined in
accordance with Treasury Regulation Section 1.704-2(i)(4) in a manner so as to
satisfy the requirements of said Treasury Regulation.
(d) If during any taxable year a Member unexpectedly receives
(i) a distribution of cash or property from the Company or (ii) an adjustment or
allocation described in either Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4) as in effect on the date hereof (concerning depletion
allowances with respect to oil and gas properties) or Treasury Regulation
Section 1.704-1 (b) (2) (ii) (d) (5) as in effect on the date hereof (concerning
allocations of loss and deduction in interests change during the year, if an
interest is acquired by gift or if a Member receives certain Company property in
redemption of part or all his interest), and if such adjustment, allocation or
<PAGE>
distribution would cause at the end of the taxable year a deficit balance in
such Member's adjusted capital account in excess of his allocable share of
Minimum Gain, then a pro-rata portion of each item of Company income, including
gross income, and gain for such taxable year (and, if necessary, subsequent
taxable years) shall be allocated to such Member in an amount and in a manner
sufficient to eliminate such excess balance as quickly as possible before any
other allocation is made for such year other than pursuant to Section 9.4(b)
above so as to satisfy the requirements of Treasury Regulation Section
1.704-1(b) (2) (ii) (d) (qualified income offset).
(e) To the extent required by Treasury Regulation Section
1.704-2(i) (1), Member Nonrecourse Debt Deductions for any taxable year shall be
allocated to the Member (or Members) who bear(s) the economic risk of loss of
such Member Nonrecourse Debt.
(f) In the event that any allocation is or has been made to a
Member pursuant to Sections 9.4(a), (b), (c), (d) or (e) above, subsequent items
of income, deduction, gain and loss shall be allocated before any other
allocations are made (subject to the provisions of said Sections) to the Members
in the manner which would result in each Member having a Capital Account balance
equal to what it would have been had the allocation pursuant to said Sections.
(g) Upon the occurrence of an event described in Section
6.4(c), all Company property shall be revalued on the Company's books at fair
market value, Capital Accounts will be adjusted in accordance with Section 6.4
(c), and subsequent allocations of taxable income, gain, loss and deductions
shall, solely for tax purposes, be made necessary so as to take account of the
variation between the adjusted tax basis and the fair market value of such
property in accordance with Section 704 of the Code and the Treasury Regulations
thereunder.
(h) For the purposes of this Article, each Member's "Adjusted
Capital Account" shall equal the Capital Account of each Member (1) reduced at
the end of each taxable year by the sum of (x) the excess of distributions
reasonable expected to be made to such Member over the offsetting increases to
such Member's Member's Capital Account reasonably expected to be made in the
same taxable year as the aforesaid distributions, (y) adjustments expected to be
made to such Member's Capital Account described in Treasury Regulation Section
1.704-1(b) (2) (ii) (d) (4) as in effect on the date hereof (concerning
depletion allowances with respect to oil and gas properties), and (z)
allocations expected to be made described in Treasury Regulation Section 1.704-1
(b) (2) (ii) (d) (5) as in effect on the date hereof (concerning allocations of
loss and deduction if Interests change during the year, if an Interest is
acquired by gift or if a Member receives certain Company property in redemption
of part or all of his Interest in the Company), and (2) increased by the sum of
(i) the amount, if any, which the Member is obligated to restore the Company
upon liquidation of his Interest if a deficit balance exists in his Capital
Account at such time, (ii) the outstanding principal balance of any promissory
<PAGE>
note made by such Member and contributed to the company if such note is not
readily tradable on an established securities market and if such note must be
satisfied within ninety (90) days after the date said Member's Interest is
liquidated and (iii) the sum of (a) the amount the Member would be personally
liable for either as a Member or in his individual capacity as a guarantor or
otherwise, and (b) the economic risk of loss the Member would bear attributable
to any Company liability (as determined in accordance with Treasury Regulation
Section 1.752-2).
(i) In accordance with Section 704(b) and (c) of the Code and
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Company (including all or part of any
deemed capital contribution under Section 708 of the Code) shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company and its agreed value.
In the event that Capital Accounts are ever adjusted pursuant to Treasury
Regulation Section 1.704-1(b) (2) to reflect the fair market value of any
Company property, subsequent allocations of income, gain, loss and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset and its value as adjusted in the same manner as
required under Section 704(c) of the Code and the Regulations thereunder.
(j) The allocations provided in this Section 10.4 are intended
to comply with the provisions of Section 704(b) of the Code and the regulations
thereunder. However, if any such allocation causes a distortion in the Members'
Interest in contravention of the Members' economic arrangement as reflected in
Article 6, the Company has the authority to make curative allocations to bring
such allocations in accordance with such Member's Interest, as if such
allocations which caused the distortion had not occurred and to bring such
allocations in compliance with Section 794(b) of the Code and regulations
thereunder.
ARTICLE 10
RIGHTS, POWERS AND REPRESENTATIONS OF THE MEMBERS
10.1 All decisions, consents, authorizations and rights in connection
with the business and affairs the company shall be carried on and managed by a
majority in interest of the Members, which shall have full, exclusive and
complete discretion with respect thereto. Any Member or person acting pursuant
to any authority granted to him in writing by a majority in interest of the
Members shall have all necessary and appropriate powers to carry out the
authority so granted, and no other Member or person without such authority so
granted shall have the right to take any action or give any consent, by
affirmative act or acquiescence, to any matter or thing, affecting the Company,
Premises or Project. In furtherance of the foregoing, any Member or person so
authorized as provided above may:
<PAGE>
(a) negotiate, execute, deliver and perform on behalf of, and
in the name of, and in the name of, the Company any and all contracts, deeds,
assignments, deeds of trust, leases, subleases, promissory notes and other
evidences of indebtedness, mortgages, bills of sale, financing statements,
security agreements, easements, stock powers, and any and all other instruments
necessary or incidental to the business of the Company and the financing
thereof,
(b) borrow money, without limit as to amount, and to secure
the payment thereof by mortgage, pledge, or assignment of, or security interest
in, all or any part of the assets then owned or thereafter acquired by the
Company,
(c) effectuate the purpose of the Company as provided in
Article 5 hereof,
(d) establish, maintain and draw upon checking and other
accounts of the Company,
(e) execute any notifications, statements, reports, returns or
other filings that are necessary or desirable to be filed with any state or
Federal agency, commission or authority,
(f) enter into contracts in connection with the business
of the Company,
(g) arrange for facsimile signatures for the Members in
executing and all documents, papers, checks or other writings or legal
instruments which may be necessary or desirable in the Company business, and
(h) execute, ackowledge and deliver any and all contracts,
documents and instruments deemed appropriate to carry out any of the foregoing
purposes and intent of this Operating Agreement.
10.2 In the management of the Company, and with respect to any and all
decisions with respect to the Company and its business and the conduct of its
operations, the Members of the Company shall have a cumulative total of one
hundred (100) votes, and each Member shall have the number of votes equal to
his/her Interest. Wherever and whenever the word "majority" appears in this
Operating Agreement, either as a noun or as an adjective, it shall mean for all
purposes that number of Members whose votes when considered or added together
constitute more than fifty (50) of the total one hundred (100) votes of all the
Members. Any act or decision of any of the Members may be confirmed, overruled
or precluded by the majority of the Members.
<PAGE>
10.3 Each of the Members, on their own behalf and on behalf of anyone
who shall represent their Interests, hereby waives notice of the time, place or
purpose of any meeting at which any matter is to be voted on by the Members or
anyone acting by or for them, waives any requirement that there be such a
meeting and agrees that any action may be taken by consent without a meeting.
10.4 The fact that the Members are directly or indirectly interested in
or connected with any person, firm or corporation employed by the Company to
render or perform a service, or from which or whom the Company may buy
merchandise, material or other property shall not prohibit the Company from
employing such persons, firms or corporations, or from otherwise dealing with
him under such reasonable terms and conditions as the Company may determine.
ARTICLE 11
MANAGING MEMBER
11.1 Notwithstanding any provision contained in Article 10 to the
contrary, the daily affairs of the Company shall be conducted by the Managing
Member who shall the power and authority to make ordinary and usual decisions
concerning the business and affairs of the Company. The Managing Member shall
have the power and authority, on behalf of the Company, to do the following:
(a) open one or more depository accounts and make
deposits into and checks and withdrawals against such accounts;
(b) invest the capital resources of the Company, in amounts
not to exceed one hundred and twenty-five percent (125%) of the capital of the
Company without the prior consent of a majority in interest of the Members, in
stocks, bonds and other securities of publically traded companies (collectively
"Permitted Investments"), including the ability to buy, sell, exchange, swap or
transfer such securities;
(c) open one or more cash or margin brokerage accounts in
the name of the Company for purposes of making Permitted Investments;
(d) obtain insurance covering the business and affairs
of the Company;
(e) commence, prosecute or defend any proceeding in the
Company's name; and
(f) enter into any and all agreements and execute any
and all contracts, documents and instruments necessary or required to
effectuate the foregoing.
<PAGE>
11.2 Notwithstanding any provision contained in this Operating
Agreement to the contrary, it is specifically agreed between the Members that
the Company shall make no investment in Cali Realty Corporation without the
unanimous prior consent of all Members.
11.3 (a) The Managing Member shall perform and discharge his duties as
a manager in good faith, with the care an ordinary prudent person in a like
position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company. The Managing
Member shall not be liable for any monetary damages to the Company for any
breach of such duties except for: receipt of a financial benefit to which the
Manager is not entitled; voting for or assenting to a distribution to Members in
violation of this Operating Agreement or the Act; a knowing violation of the
Law; fraud; or a willful breach of fiduciary obligations owed to the Members.
(b) The Managing Member shall devote a significant amount of
his time and efforts to furthering the business and investments of the Company
and any other corporations and partnerships formed to invest in the stock in
private and public companies or real estate assets and mortgages. The Managing
Member shall also be permitted to perform consulting and legal services for
Environmental Waste Management Associates, Inc., its principal shareholders,
Richard Greenberg, and for Glenn Woo and other real estate related clients. In
compensation equal to $125,000, payable quarterly.
11.4 Unless otherwise provided by law or expressly assumed, a person
who is a Member or manager, or both, shall not be liable for the acts, debts or
liabilities of the Company.
11.5 The Company shall indemnify the Managing Member and each other
Member and may indemnify and employee or agent of the Company who was or is a
party or is threatened to be made a party to threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, and whether formal or informal, other than action by or in the
right of the Company, by reason of the fact that such person is or was a
manager, employee or agent of the Company against expenses, including attorneys
fees, judgements, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action, suit or
proceeding, if the person acted in good faith, with the care an ordinary prudent
person in a like position would exercise under similar circumstances, and in a
manner that such person reasonably believed to be in the best interests of the
Company and with respect to a criminal action or proceeding, if such person had
<PAGE>
no reasonable cause to believe such person's conduct was unlawful. To the extent
that a Member, employee or agent of the Company has been successful on the
merits or otherwise in defense of an action, suit or proceeding or in defense of
any claim, issue or other matter in the action, suit or proceeding, such person
shall be indemnified against actual and reasonable expenses, including attorneys
fees incurred by such person in connection with the action, suit or proceeding
and any action, suit or proceeding brought to enforce the mandatory
indemnification provided herein. Any indemnification permitted under this
Article, unless ordered by a court, shall be made by the Company only as
authorized in the specific case upon a determination that the indemnification is
proper under the circumstances because the person to be indemnified has met the
applicable standard of conduct and upon an evaluation of the reasonableness of
expenses and amount paid in settlement. This determination and evaluation shall
be made by a majority vote of the Members who are not parties or threatened to
be made parties to the action, suit or proceeding. Notwithstanding the foregoing
to the contrary, no indemnification shall be provided to the Managing Member or
any other Member, employee or agent of the Company for or in connection with the
receipt of a financial benefit to which such person is not entitled, voting for
or assenting to a distribution to Members in violation of this Operating
Agreement of the Act, or a knowing violation of law.
ARTICLE 12
BOOKS, RECORDS AND REPORTS
12.1 At all times during the continuance of the Company, the Company
shall keep or cause to be kept full and true books of account, in which shall be
entered fully and accurately each transaction of the Company. The books of
account, together with an executed copy of the Certificate of Formation of the
Company and any amendments thereto, shall at all times be maintained at the
principal office of the Company and shall be open to inspection and examination
by the members or their representatives at reasonable hours and upon reasonable
notice. For purpose hereof, the Company shall keep its books and records on the
same method of accounting employed for tax purposes.
12.2 The fiscal year of the Company shall be the calendar year. Within
a reasonable time after the end of each fiscal year and in any event on or
before thirty (30) days prior to the filing date for individual tax returns
(including extensions), the accountants for the Company shall deliver to each
Member (a) upon request of a Member, an annual statement of the Company's
accountants, and (b) a report or a tax return setting forth such Member's share
of the Company's profit or loss for such year and such Member's allocable share
of all items of income, gain, loss, deduction and credit for Federal income tax
purposes.
<PAGE>
12.3 The Company shall also cause to be prepared and filed all Federal,
state and local tax returns required of the Company. All books, records, balance
sheets, statements, reports and tax returns required pursuant to Section 12.1
and 12.2 hereof shall be prepared at the expense of the Company.
ARTICLE 13
BANK ACCOUNTS
13.1 All funds and income of the Company (a) shall be deposited in the
name of the Company in such bank account or accounts as shall be designated by
the Managing Member, (b) shall be invested in such Permitted Investments as
Managing Member shall determine and (c) shall be kept separate and apart from
the funds of any other individual or entity.
13.2 Withdrawals from any such bank account or accounts shall be made
upon the signature of any person so designated by the Company in writing.
ARTICLE 14
RIGHTS AND DUTIES OF MEMBERS
14.1 Subject to duties and obligations of the Managing Member, it is
expressly understood that each Member may engage in any other business or
investment, whether or not in direct competition with the business of the
Company, and neither the Company nor any other Member shall have any rights in
and to said businesses or investments, or the income or profits derived
therefrom.
14.2 The Managing Member may employ, on behalf of the Company, such
persons, firms or corporations, including those firms or corporations in which
any Member has an interest, and on such terms as the Managing Member shall deem
advisable in the operation and management of the business of the Company,
including, without limitation, such accountants, attorneys, architects,
engineers, contractors, appraisers and experts.
14.3 No Member shall be personally liable to the Company or any of the
other Members for any act or omission performed or omitted by him, except if
such act or omission was attributable to willful misconduct or gross negligence.
14.4 Each Member (and each former Member) shall be indemnified and
saved harmless by the Company from any loss, damage or expense incurred by him
by reason of any act or omission performed or omitted by him, except if such act
or omission was attributable to willful misconduct or gross negligence.
<PAGE>
ARTICLE 15
TAX MATTERS
15.1 (a) Notwithstanding any provisions hereof to the contrary, each of
the Members hereby recognizes that the Company will be a partnership for United
States federal income tax purposes and that the Company will be subject to all
provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided,
however, that the filing of U.S. Partnership Returns of Income shall not be
construed to extend the purposes of the company or expand the obligations or
liabilities of the Members. At the request of any Member, the Company shall file
an election under Section 754 of the Code.
(b) The Company shall engage an accountant (the "Accountant")
to prepare at the expense of the company all tax returns and statements, if any,
which must be filed on behalf of the Company regarding the Premises and the
operation, dissolution and liquidation of the Company with any taxing authority.
(c) Lawrence Seidman is designated Tax Matters Member (herein
"TMM") for purposes of Chapter 63 of the Code and the Members will take such
actions as may be necessary, appropriate, or convenient to effect the
designation of Lawrence Seidman as TMM. The TMM shall attempt to comply with the
responsibilities outlined in this Section 15.1 and in Sections 6222 through 6231
of the Code (including any Treasury Regulations promulgated thereunder).
ARTICLE 16
BANKRUPTCY OF A MEMBER
16.1 Unless a majority in interest of the Members shall elect
otherwise, a Member shall cease to be a Member of the Company:
(a) if he/she/it:
(i) Makes an assignment for the benefit of
creditors;
(ii) Files a voluntary petition in bankruptcy;
(iii) Is adjudged bankrupt or insolvent, or has
entered against him an order for relief, in any bankruptcy or insolvency
proceeding;
(iv) Files a petition or answer
seeking for himself/herself/itself any
reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation;
<PAGE>
(v) Files an answer or other pleading
admitting or failing to contest the
material allegations of a petition filed against him/
her/it in any proceeding of this nature; or
(vi) Seeks, consents to or acquiesces in
the appointment of a trustee,
receiver or liquidator of the Member or of all or
any substantial part of his/her/its
properties; or
(b) One hundred twenty (120) days after the commencement of
any proceeding against the Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, if the proceeding has not been dismissed, or within
ninety (90) days after the appointment without his consent or acquiescence of a
trustee, receiver or liquidator of the Member or of all or any substantial part
of his/her properties, the appointment is not vacated or stayed, or within
ninety (90) days after the expiration of any such stay, the appointment is not
vacated.
ARTICLE 17
ASSIGNABILITY, TRANSFER OR PLEDGE OF
INTERESTS; RESIGNATION OF MEMBER
17.1 (a) No Member shall have the right to assign, convey, sell or
otherwise transfer or dispose of, or pledge, mortgage, hypothecate or otherwise
encumber his/her/its Interest, whether record or beneficial interest thereof,
without the prior written consent of the Company. Notwithstanding the preceding
sentence, but subject to the restrictions on transferability required by law, or
set forth in any instrument or agreement by which the Company may be bound, or
which may be contained in this Operating Agreement, an individual Member, if
any, may, without any consent, assign, convey, sell or otherwise transfer or
dispose of all or any portion of his interest in the Company to any one or more
of the members of his/her immediate family or families (defined for the purposes
of this Operating Agreement as a mother, father, sister, brother, son, daughter,
stepson, stepdaughter or spouse (in each instance whether by marriage or
otherwise)) and/or a trust or other entity for the benefit thereof or
themselves, by a written instrument of assignment and assumption, provided that
the instrument of transfer provides for the assumption of the assignor's
liabilities and obligations hereunder and has been duly executed by the assignor
of such interest and by the transferee. The Member shall notify the Company of
any assignment, transfer or disposition of a beneficial interest in any interest
of the Member which occurs without a transfer of record ownership, although such
notification, or the absence of a response thereto, shall not be deemed a
consent thereof.
(b) An assignee or transferee of any portion of the interest
of the Member shall be entitled to receive allocations and distributions
<PAGE>
attributable to the interest acquired by reason of such assignment from and
after the effective date of the assignment of such interest to such assignee;
however. anything herein to the contrary notwithstanding, the Company shall be
entitled to treat the assignor of such interest of the Member as the absolute
owner thereof in all respects, and shall incur no liability for allocations of
net income, net losses, or gain or loss on sale of Company property, or
transmittal of reports and notices required to be given to Members hereunder
which are made in good faith to such assignor until such time as the written
assignment has been received by the Company, approved and recorded on its books
and the effective date of the assignment has passed. Provided that the Company
has actual notice of any assignment of the interest of the Member, the effective
date of such assignment on which the assignee shall be deemed an assignee of
record shall be the date set forth on the written instrument of assignment.
(c) Any assignment, sale, exchange, transfer or other
disposition in contravention of any of the provisions of this Article 17 and
Article 18 hereof shall be void and ineffective and shall not bind or be
recognized by the Company.
(d) In the event that there shall be more than one assignee,
transferee, representative or other successor in interest as permitted herein
(collectively, the "Transferees") and the Member as of the date of this
Operating Agreement shall remain a Member, then the Member shall be authorized
to act, and shall so act, on behalf of the Member and all of the Transferees
acting as such by, through or under the Member. In the event that there shall be
more than one Transferee, and the Member as of the date of this Operating
Agreement shall no longer be a Member, then the Company must be advised by the
Member whose interest is the subject of such event or failing which by a
two-thirds (2/3) majority in interest of those holding any portion of the
interests of the Member, of one person to act on behalf of all the Transferees.
The Member, if the first sentence of this paragraph shall be applicable, or the
person so noted to the Company, if the second sentence of this paragraph shall
be applicable, shall be authorized to act, and shall so act, for all of the
Transferees, all of whom shall be bound by any decision or action taken by such
person, and the Company, the Company and all of the other Members, shall be
entitled to rely on the decisions or actions taken by such person. Until the
Company shall be advised as to the identity of such person, (i) the Transferees
shall be entitled only to distributions and tax allocations as provided in
Article 8 and 9 hereof, but shall have no right, power or authority with respect
to any decision making reserved herein to the Members or any of them and (ii)
wherever in this Operating Agreement provision shall be made for the Members to
make decisions with respect to Company matters, the interests of the Member, as
transferred to the Transferees, shall not be included in determining whether the
requisite interest of members have consented to or approved of such decision.
<PAGE>
17.2 Without the prior written consent of all Members and other than as
provided in Section 6.1(b) above, a Member may not resign from the Company prior
to the dissolution and winding up of the Company.
ARTICLE 18
ADMISSION OF SUBSTITUTED MEMBERS;
DEATH OR INCAPACITY; FURTHER CONDITIONS
18.1 No assignment or transfer of all or any part of the interest of a
Member permitted to be made under this Operating Agreement shall be binding upon
the Company unless and until a duplicate original of such assignment or
instrument of transfer, duly executed and acknowledged by the assignor and the
transferee, has been delivered to the Company.
18.2 As a condition to the admission of any substituted Member, as
provided in Article 17 hereof, the person so to be admitted shall execute and
acknowledge such instruments, in form and substance reasonably satisfactory to
the Company, as a majority in interest of the Members may deem necessary or
desirable to effectuate such admission and to confirm the agreement of the
person to be admitted as a Member to be bound by all of the covenants, terms and
conditions of this Operating Agreement, as the same may have been amended.
18.3 Any person to be admitted as a member pursuant to the provisions
of this Operating Agreement shall, as a condition to such admission as a Member,
pay all reasonable expenses in connection with such admission as a Member,
including, but not limited to, the cost of the preparation, filing and
publication of any amendment to this Operating Agreement and/or Certificate of
Formation.
18.4 In the event of the death or adjudication of incompetency of a
Member, or upon the happening of any event described in Article 16, the
executor, administrator, committee or other legal representative of such Member,
or the successor in interest of such Member, shall succeed only to be right of
such Member to receive allocations and distributions hereunder, and may be
admitted to the Company as a Member in the place and stead of the deceases,
incompetent, or bankrupt Member in accordance with this Article 18, but shall
not be deemed to be a substituted Member unless so admitted. Such event,
however, shall cause a termination or dissolution of the Company within one
hundred twenty (120) days of such event unless a majority in interest of the
Members shall elect to continue the Company within said one hundred twenty (120)
day period.
18.5 Notwithstanding anything to the contrary contained in this
Operating Agreement, no sale or exchange of an interest in the Company may be
made if the interest sought to be sold or exchanged, when added to the total of
all other interests sold or exchanged within the period of twelve (12)
<PAGE>
consecutive months prior thereto, results in the termination of the Company
under Section 708 of the Code without the prior written consent of a majority in
interest of the Members.
18.6 In the event of a permitted transfer of all or part of the
interest of a Member, the Company shall, if requested, file an election in
accordance with Section 754 of the Code or a similar provision enacted in lieu
thereof, to adjust the basis of the Property of the Company. The Member
requesting said election shall pay all costs and expenses incurred by the
Company in connection therewith.
ARTICLE 19
LIQUIDATION
19.1 Upon the dissolution of the Company, the Company shall be
liquidated and its assets distributed as required by Section 42:2B-51 of the
Act.
19.2 The assets of the Company shall be liquidated as promptly as
possible, but in an orderly and businesslike manner so as not to involve undue
sacrifice.
19.3 In the event that any proceeds are to be distributed to the
Members same shall be distributed, if practicable, no later than the later of
(i) the end of the taxable year of the Company in which such liquidation occurs;
or (ii) within ninety (90) days after the date of such liquidation event.
19.4 In any liquidation, the Company's assets shall be used first to
pay the costs and expenses of the dissolution and liquidation. The liquidation
trustee (which may be a Member) shall be entitled to establish reserves to
provide for any contingent or unforeseen liabilities or obligations of the
Company.
19.5 With respect to distributions to Members, said distributions
shall be made:
(a) first, to the repayment of any accrued and unpaid interest
on, and the then outstanding principal balance of, any Default Loan, in
proportion to the aggregate amount of interest, and then principal, owed, and if
more than one Member shall have made a Default Loan, then in proportion to the
amounts so loaned. If there shall be more than one instance in which a Default
loan has been made, the Default loans shall be repaid in the order in which they
shall have been outstanding the longest;
(b) second, to the payment of an obligation owed
pursuant to Section 11.3 (c).
(c) third, to all Members in proportion to and to the extent
of any remaining positive balances in such Member's Capital Account
after giving effect to all locations to such Member under Article 10 of
this Operating Agreement so that liquidation proceeds shall be
<PAGE>
distributed in accordance with each Member's positive Capital Account
balance (within the meaning of Treasury Regulation Section 1.704-1(b)
(2) (ii) (b) as in effect on the date hereof); and
(d) last, to all Members pro rata in accordance with
their Company Interests.
ARTICLE 20
GENDER
20.1 All terms and words used in this Operating Agreement, regardless
of the sense or gender in which they are used, shall be deemed to include each
other sense and gender unless the context requires otherwise.
ARTICLE 21
FURTHER ASSURANCES
21.1 The Members agree immediately and from time to time to execute,
acknowledge, deliver, file, record and publish such further certificates,
amendments to certificates, instruments and documents, and to do all such other
acts and things as may be required by law, or as may, in the opinion of a
majority in interest of the Members, be necessary or advisable to carry out the
intent and purposes of this Operating Agreement.
ARTICLE 22
COVENANT AGAINST PARTITION
22.1 The Members, on behalf of themselves, their legal representatives,
heirs, successors and assigns, hereby specifically renounce, waive and fofeit
all rights whether arising under contract, statute, or by operation of law, to
seek, bring, or maintain any action for partition in any court of law or equity
pertaining to any real property which the Company may now or in the future own,
regardless of the manner in which title to any such property may be held.
ARTICLE 23
NOTICES
23.1 Unless otherwise specified in this Operating Agreement, all
notices, demands, requests or other communications which any of the parties to
this Operating Agreement may desire or be required to give hereunder
(hereinafter referred to collectively as "Notices") shall be in writing and
shall be given by mailing the same by postage prepaid certified or registered
mail, return receipt requested, or by nationally recognized overnight courier to
the appropriate Member at the address set forth in this Operating Agreement.
Notices given in compliance with the provisions of this Article shall be deemed
<PAGE>
given one (1) business day after delivery to a nationally recognized overnight
courier or four (4) business days after mailing in a repository of the United
States Postal Service.
ARTICLE 24
APPLICABLE LAW
24.1 The parties agree that the parties shall be governed by, and this
Operating Agreement construed in accordance with, the laws of the State of New
Jersey applicable to agreements made and to be performed in such state and that
all claims and suits shall be heard in the courts located in the State of New
Jersey.
ARTICLE 25
CAPTIONS
25.1 All section titles or captions contained in this Operating
Agreement are for convenience only and shall not be deemed a part of this
Operating Agreement.
ARTICLE 26
COUNTERPARTS
26.1 This Operating Agreement may be executed in counterparts and each
counterpart so executed by each Member shall constitute and original, all of
which when taken together shall constitute one agreement, notwithstanding that
all the parties are not signatories to the same counterpart.
ARTICLE 27
BINDING EFFECT
27.1 This Operating Agreement may not be changed, modified, waived or
discharged, in whole or in part, unless in writing and signed by all of the
Members. This Operating Agreement shall be binding upon the Members and their
respective executors, administrators, legal representatives, heirs, successor
and assigns. The singular of any defined term or term used herein shall be
deemed to include the plural.
ARTICLE 28
PARTIAL INVALIDITY
28.1 If any term or provision of this Operating Agreement or the
application thereof to any person or circumstance shall to any extent be invalid
<PAGE>
or unenforceable, the reminder of this Operating Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby and each term
and provision of this Operating Agreement shall be valid and enforced to the
fullest extent permitted by law.
ARTICLE 29
INTEGRATION
29.1 This Operating Agreement is the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior agreements
relative to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Operating
Agreement as of the day and year first above written.
/S/ Lawrence Seidman
/S/ Sonia Seidman
/S/ SEIDCAL ASSOCIATES
By:
/S/ Angelo R. Cali, Partner
/S/ Paul Schmidt
/S/ Richard Greenberg
<PAGE>
SCHEDULE A
Required Contributions
Lawrence Seidman
$50,000
Sonia Seidman
$200,000
SEIDCAL Associates
$1,500,000
Paul Schmidt
$100,000
Richard Greenberg
$250,000
<PAGE>
SCHEDULE B
PERCENTAGE INTEREST
Lawrence Seidman:
%
Sonia Seidman:
%
SEIDCAL Associates:
%
Paul Schmidt:
%
Richard Greenberg:
%
<PAGE>
SCHEDULE B
EXAMPLE OF THE OPERATION OF SECTION 7.3
Assume the following facts:
(a) The interests are as follows:
A 10%
B 30%
C 60%
(b) The aggregate capital contributions made by the Members in
proportion to their respective interests is $2,000,000.
(c) The Company requires additional funds of $1,000,000.
(d) A and B each contribute their Additional Contributions to the
Company ($100,000 and $300,000, respectively) and C fails to contribute his
Additional Contribution ($600,000).
(e) B contributes C's Additional Contribution to Company.
The amount that C's Interest is decreased and the amount that B's
Interest is increased is computed as follows:
(i) Multiply the amount of the contribution not made by C
($600,000) by 200% resulting in a product of $1,200,000;
(ii) Divide the result of (i) above ($1,200,000) by the aggregate
amount of all capital
contributions made by the Members ($3,000,000), resulting in a product of .40;
(iii) Convert the product arrived at in computation (ii) above (.40) to
a percentage (by multiplying the same by 100) resulting in 40%. Subtract such
percentage from the Company Interest of C (40%) resulting in a new Interest for
C of 20%; and
(iv) Increase the Interest of B (30%) by adding thereto the same
Percentage that was subtracted from Member C (40%) resulting in a new Interest
for B of 70%.
<PAGE>
FIRST AMENDMENT TO OPERATING AGREEMENT
FOR SEIDMAN & ASSOCIATES, L.L.C.
THIS AMENDMENT is made on July , 1998, by and between LAWRENCE SEIDMAN,
having an address at 19 Veteri Place, Wayne, New Jersey 07470, SONIA SEIDMAN,
having an address at 19 Veteri Place, Wayne, New Jersey 07470; SEIDCAL
ASSOCIATES, L.L.C., a New Jersey limited liability company, having an address
c/o Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016;
PAUL SCHMIDT, having an address at 159 Clinton Place, Hackensack, New Jersey
07601; and RICHARD GREENBERG, having an address at 1235A Route 23 South, Wayne,
New Jersey 07474 (hereinafter referred to collectively as the "Members").
W I T N E S S E T H:
WHEREAS, the Members previously formed a limited liability company known as
Seidman & Associates, L.L.C. (the "Company") pursuant to the New Jersey Limited
Liability Company Act; and
WHEREAS, the Members entered into an Operating Agreement for the Company,
dated November 1994; and
WHEREAS, the Members desire to amend the Operating Agreement, pursuant to
Article 27 thereof, in accordance with the terms and provisions set forth below.
NOW, THEREFORE, the Members do hereby agree as follows:
1. INCORPORATION BY REFERENCE
Subject to the provisions of this Amendment, the definitions, terms and
conditions of the Operating Agreement are incorporated in this Amendment by
reference in the same manner and to the same extent as if such definitions,
terms and conditions were fully set forth in this Amendment.
2. AMENDMENT OF OPERATING AGREEMENT
2.1 Subparagraph 4.1(a) of the Operating Agreement be and the same is
hereby amended to read as follows:
4.1 The Company shall commence upon the filing of the Certificate of
Formation, and shall continue in full force and effect until May 1, 2024,
provided, however, that the Company shall be dissolved prior to such date upon
the happening of any of the following events:
(a) The mutual written consent of the Members to dissolve the Company;
provided, however, that the Company may not be dissolved by mutual consent prior
to December 31, 2000.
2.2 Subparagraph 11.3(c) of the Operating Agreement be and the same is
hereby amended to read as follows:
The Managing Member may be removed or replaced
any any time after December 31, 2000 by a majority in
interest of the Members, but if the Managing Member
is removed, he shall be entitled to receive $315,000.00
reduced by the payments already received pursuant
to Section 11.3(b), together with any other fees earned
prior to his removal.
2.3 Except as modified by Subparagraphs 2.1 and 2.2 of this Agreement, all
of the terms and conditions of the Operating Agreement shall remain in full
force and effect.
3. COVENANT OF FURTHER ASSURANCES
The Members agree that they shall execute and deliver any and all
additional writings, instruments, and other documents and take such further
action as shall reasonably be required in order to effectuate the provisions of
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Operating Agreement as of the day and year first above written.
-----------------------
LAWRENCE SEIDMAN
-----------------------
SONIA SEIDMAN
[SIGNATURES CONTINUED ON NEXT PAGE]
SEIDCAL ASSOCIATES, L.L.C.
By:----------------------
-----------------------
Brant B. Cali, Member
-----------------------
PAUL SCHMIDT
-----------------------
RICHARD GREENBERG
Exhibit G
OPERATING AGREEMENT
FOR
SEIDMAN AND ASSOCIATES II, L.L.C.
Dated: February , 1996
<PAGE>
INDEX
Page No.
Article 1 - Definitions 1
Article 2 - Formation 5
Article 3 - Principal Office 5
Article 4 - Term and Duration 6
Article 5 - Purpose 7
Article 6 - Capital Contributions by the Member 7
Article 7 - Additional Capital Contributions 9
Article 8 - Cash Contributions 10
Article 9 - Tax Allocations 11
Article 10 - Rights, Powers and Representation of
the Members 15
Article 11 - Managing Member 17
Article 12 - Books, Records and Reports 19
Article 13 - Bank Accounts 20
Article 14 - Rights and Duties of Members 20
Article 15 - Tax Matters 21
Article 16 - Bankruptcy 21
Article 17 - Assignability or Transfer of I 22
Article 18 - Admission of Substituted Members; Death
or Incapacity; Further Conditions 24
Article 19 - Liquidation 25
Article 20 - Gender 26
Article 21 - Further Assurances 26
Article 22 - Covenant Against Partition 26
Article 23 - Notices 26
Article 24 - Applicable Law 27
Article 25 - Captions 27
Article 26 - Counterparts 27
Article 27 - Binding Effect 27
Article 28 - Partial Invalidity 27
Article 29 - Integration 28
Exhibit A - Property Description
Exhibit B - Contract of Sale
Schedule A - Members' Percentage Interests
Schedule B - Example of the Operation of Section 8.3
<PAGE>
OPERATING AGREEMENT
FOR
SEIDMAN AND ASSOCIATES II, L.L.C.
AGREEMENT made February , 1996 by and between SONIA SEIDMAN
("Seidman"), having an address at 19 Veteri Place, Wayne, New Jersey 07470; and
SEIDCAL ASSOCIATES L.L.C. ("Seidcal"), a New Jersey limited liability company
having an address c/o Cali Realty Corporation, 11 Commerce Drive, Cranford, New
Jersey 07016 (hereinafter Seidman and Seidcal may sometimes be referred to
individually as a "Member" and collectively as the "Members").
WITNESSETH:
WHEREAS, the Members desire to form a limited liability company (the
"Company") pursuant to the New Jersey Limited Liability Company Act (the"Act")
and adopt this Operating Agreement in connection therewith; and
WHEREAS, the purpose of the Company shall be to purchase stock in
private and public companies and manage and invest the funds of others for these
purposes and for any and all other purposes permitted pursuant to the Act; and
WHEREAS, the Members wish to set forth the terms and conditions as to
the manner in which the Company shall be operated and to set forth the rights,
obligations and duties of the Members to each other and to the Company; and
WHEREAS, by executing this Operating Agreement, each Member represents
that she has sufficient right and authority to execute this Operating Agreement
and is not acting on behalf of any undisclosed or partially disclosed principal.
NOW, THEREFORE, in consideration of ten ($10) dollars and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows effective as of the date first
written above.
<PAGE>
ARTICLE 1
DEFINITIONS
1.1 For purposes of this Agreement, the following terms shall have
the definitions set forth below:
"Additional Contribution": Each Member's pro-rata portion of a
Required Amount, determined by multiplying the Required Amount by each Member's
Interest.
"Additional Member": Any person or entity who acquires an additional
interest in the Company.
"Adjusted Capital Account": As defined in Section 9.4(h).
"Capital Account" or "Capital Accounts": As defined in Section 6.4.
"Capital Contributions": The respective capital contributions,
including any Additional Contribution,of each Member to the Company.
"Capital Transaction" or "Capital Transactions": Sale, transfer,
assignment or exchange of stock purchases or other investments made by the
Company or other similar transactions which, in accordance with generally
accepted principles, are treated as a capital transaction.
"Certificate of Formation": The Certificate of Formation of the Company
filed with the Secretary of State of the State of New Jersey pursuant to the Act
to form the Company, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"Code": The Internal Revenue Code of 1986, as amended, and any
reference to a particular section of the Code shall be deemed to include any
successor section to such section.
"Company": Seidman and Associates II, L.L.C.
"Contributing Member": A Member which has made its Additional
Contribution.
<PAGE>
"Default Loan": A loan to the Company of an amount equal to the
Additional Contribution not made by a Defaulting Member.
"Defaulting Member": A Member which fails to make her Additional
Contribution as required herein.
"Default Rate": A floating rate equal to the lesser of (a) ten (10%)
percent per annum in excess of the rate of interest announced from time to time
in The Wall Street Journal as the "prime rate" or "base rate" charged by
institutional commercial lenders from time to time, or (b) the maximum rate of
interest then permitted according to the laws of the State of New Jersey or
according to Federal law, to the extent applicable.
"Gain from a Capital Transaction": The gain recognized by the Company
attributable to a Capital Transaction, determined in accordance with the method
of accounting used by the Company for federal income tax purposes. In the event
there is a revaluation of Company property and the Capital Accounts are adjusted
pursuant to Section 6.4(c), Gain from a Capital Transaction shall be computed by
reference to the "book items" and not the corresponding "tax items".
"Income": Net Proceeds and all other income or amounts, however
characterized, received by the Company.
"Interest": The respective percentage interest of each Member as set
forth on Schedule A.
"Loss from a Capital Transaction": The loss recognized by the Company
attributable to a Capital Transaction, determined in accordance with the method
of accounting used by the Company for federal income tax purposes. In the event
there is a revaluation of the Company property and the Capital Accounts are
adjusted pursuant to Section 6.4(c), Loss from a Capital Transaction shall be
computed by reference to the "book items" and not the corresponding "tax items".
<PAGE>
"Manager": Lawrence B. Seidman, or such successor appointed by a
majority in interest of the Members.
"Member": Each of the parties who has executed this Operating
Agreement and any party who may hereafter become an Additional Member or a
Substitute Member pursuant to this Operating Agreement.
"Member Nonrecourse Debt": Any nonrecourse debt of the Company for
which a Member bears the economicrisk of loss, determined in accordance with
Treasury Regulation Section 1.704-2(b) (4).
"Member Nonrecourse Debt Deductions": With regard to any Member
Nonrecourse Debt, the amount of the net increase during any taxable year to the
Company in the amount of Minimum Gain Attributable to Member Nonrecourse Debt,
over the aggregate amount of any distributions during such year to the Member
who bears the economic risk of loss for such debt of proceeds of such debt that
are allocable to an increase in the Minimum Gain Attributable to such Member
Nonrecourse Debt. Such amounts shall be determined in accordance with Treasury
Regulation Section 1.704-2(I) (2).
"Minimum Gain": The amount of gain which would be recognized to the
Company for federal income tax purposes if all Company property secured by
Nonrecourse Liability were transferred to the creditor of such debt in
satisfaction thereof (and for no other consideration) in a taxable transaction.
The amount of such gain shall be determined and calculated in accordance with
Treasury Regulation Section 1.704--2(g) (I).
"Minimum Gain Attributable to Member Nonrecourse Debt": The amount of
gain which would be recognized by the Company for federal income tax purposes if
all Company property secured by Member Nonrecourse Debt were transferred to the
creditor of such debt in satisfaction thereof (and for no other consideration)
in a taxable transaction. The amount of such gain shall be determined and
calculated in accordance with Treasury Regulation Section 1.704-2(f) (I) (4).
"Net Proceeds": The net proceeds available to the Company from a
Capital Transaction after deducting (I) all costs and expenses incurred in
connection therewith, (ii) any liens or other indebtedness which is satisfied or
refinanced as a result of such Capital Transaction, and (iii) reasonable
reserves established by the Company from time to time for working capital and
other purposes.
<PAGE>
"Net Profit" and "Net Loss": The net income (including income exempt
from tax) and net loss (including expenditures that can neither be capitalized
nor deducted), respectively, of the Company, determined in accordance with the
method of accounting used by the Company for federal income tax purposes, but
computed without regard for Gain from Capital Transactions, Loss from Capital
Transactions and items of income or loss, if any, that are specifically
allocated to Members. In the event there is a revaluation of Company property
and the Capital Accounts are adjusted pursuant to Section 6.4(c), Net Profits
and Net Losses shall be computed by reference to the "book items" and not
corresponding "tax items".
"Nonrecourse Liability": Any Company debt for which no Member has any
economic risk of loss, determined in accordance with Treasury Regulation
Section 1.704-2(b) (3).
"Operating Agreement": This Operating Agreement as originally
executed and as amended, modified,supplemented or restated from time to time.
"Required Amount": The amount of cash required by the Company as
determined by a majority in interest of the Members.
"Substitute Member": Any transferee of a Member's Interests who is
admitted as a Member in the Company pursuant to Article 17 or 18.
"Unrecovered Additional Contributions": The aggregate amount of
Additional Contribution made by a Member pursuant to Section 7.1 hereof less
prior distributions to such Member of Income which is distributed to repay
outstanding Additional Contributions and any interest on any Default Loan
specially allocated to such Member.
<PAGE>
ARTICLE 2
FORMATION
2.1 The parties hereto do hereby form the Company under the name of
SEIDMAN AND ASSOCIATES II, L.L.C. pursuant to the Act. Pursuant to the
provisions of the Act, the formation of the Company shall be effective upon the
filing of the Certificate of Formation.
In order to maintain the Company as a limited liability company under
the laws of the State of New Jersey, the Company shall from time to time take
appropriate action, including the preparation and filing of such amendments to
the Certificate of Formation and such other assumed name certificates,
documents, instruments and publications as may be required by law, including,
without limitation, action to reflect:
(I) a change in the Company name;
(ii) a correction of a defectively or erroneously executed
Certificate of Formation;
(iii) a correction of false or erroneous statements in the
Certificate of Formation or the desire of the Members
to make a change in any statement therein in order
that it shall accurately represent the agreement
among the Members; or
(iv) a change in the time for dissolution of the Company
as stated in the Certificate of Formation and in this Agreement.
Section 2.2 Other Instruments. Each Member hereby agrees to execute and
deliver to the Company within five (5) days after receipt of a written request
therefor, such other and further documents and instruments, statements of
interest and holdings, designations, powers of attorney and other instruments
and to take such other action as the Company deems necessary, useful or
appropriate to comply with any laws, rules or regulations as may be necessary to
enable the Company to fulfill its responsibilities under this Operating
Agreement, to preserve the Company as a limited liability company under the Act
and to enable the Company to be taxed as a partnership for federal and state
income tax purposes.
<PAGE>
ARTICLE 3
PRINCIPAL OFFICE
3.1 The Company's registered office in New Jersey shall be at 19 Veteri
Place, Wayne, New Jersey 07470. The Company's registered agent who is a resident
of New Jersey is Lawrence B. Seidman, whose address is 19 Veteri Place, Wayne,
New Jersey 07470. At any time, the Company may designate another registered
agent and/or office.
3.2 The principal place of business of the Company shall be at 19
Veteri Place, Wayne, New Jersey 07470. At any time, the Company may change the
location of its principal place of business and may establish additional
offices.
ARTICLE 4
TERM AND DURATION
4.1 The Company shall commence upon the filing of the Certificate of
Formation, and shall continue in full force and effect until May 1, 2024,
provided, however, that the Company shall be dissolved prior to such date upon
the happening of any of the following events:
(a) The mutual written consent of the Members to dissolve the
Company.
(b) The sale or other divestiture of all or substantially all of the
assets of the Company and the distribution of the proceeds thereof to the
Members, including real estate or interests held or owned by the Company (other
than a transfer to a nominee of the Company for any Company purpose, which event
shall not be construed as an event of termination); provided, however, that (I)
if the Company receives a purchase money mortgage or other collateral security
in connection with such sale, the Company shall continue (A) until such mortgage
or security interest is paid in full or otherwise disposed of, or (B) in the
event of foreclosure of such mortgage, or security interest provided the Company
retains title therein; and (ii) the Company shall continue if the assets of the
Company are exchanged under Section 1031 of the Code.
<PAGE>
(c) Upon the death, retirement, expulsion, bankruptcy or dissolution of
a Member or occurrence of any other event that terminates the continued
membership of a Member in the Company (a "Dissolution Event") unless the
business of the Company is continued by the unanimous consent of the remaining
Member(s) within ninety (90) days following the Dissolution Event.
(d) The entry of a decree of judicial dissolution under Section
49 of the Act.
(e) The happening of any other prior event which pursuant to the terms
and provisions of this Operating Agreement shall cause a dissolution or
termination of the Company.
4.2 Upon any dissolution of the Company, the distribution of the Company's
assets and the winding up of its affairs shall be concluded in accordance with
Article 19 of this Operating Agreement.
ARTICLE 5
PURPOSE
5.1 The business of the Company shall be for the purpose of:
(a) Purchasing stock in private and public companies and managing
and investing funds of others for these purposes.
(b) Such other activities incident or appropriate to the foregoing,
including acting directly or in conjunction with others through joint ventures,
partnerships or otherwise.
5.2 The business of the Company shall also be for any lawful
purpose.
ARTICLE 6
CAPITAL CONTRIBUTIONS BY THE MEMBERS
6.1 (a) Upon execution hereof, or at such other times as determined by
the Manager, each Member shall contribute in cash to the capital of the Company
an amount in the aggregate equal to that set forth opposite her/its name on
Schedule A attached hereto.
(b) A Member's interest in the Company shall be represented by the
percentage interest held by such Member. Each Member's respective initial
interest in the Company is set forth opposite her/its name on Exhibit B attached
hereto.
<PAGE>
6.2 No Member shall have the right to withdraw any part of her/its
Capital Contribution or receive any distribution, except in accordance with the
provisions of this Operating Agreement. No interest shall be paid on any Capital
Contribution.
6.3 No Member shall have any priority over any other Member with
respect to the return of Capital Contributions.
6.4 The Company shall maintain a capital account (a "Capital Account")
for each Member within the provisions of Treasury Regulation Section 1.704-1 (b)
(2) (iv) as such regulation may be amended from time to time. Without limiting
the foregoing, the Member's Capital Accounts shall be adjusted as follows:
(a) Subject to the last sentence of Section 6.4 (c), the Capital
Account of each Member shall be credited with (I) an amount equal to such
Member's initial cash contribution and any additional cash contributions to the
Company and the fair market value of property or securities contributed to the
Company (net of liabilities secured by such property) if a contribution of
property or securities shall be permitted by the Company and (ii) such Member's
share of the Company's Net Profits and Gain from Capital Transactions (including
income and gain exempt from tax).
(b) Subject to the last sentence of Section 6.4 (c), the Capital
Account of each Member shall be debited by (I) the amount of cash distributions
to such Member and the fair market value of property and/or securities
distributed to the Member (net of liabilities secured by such property and/or
securities) and (ii) such Member's share of the Company's Net Loss and Net Loss
from Capital Transactions (including expenditures which are not permitted to be
capitalized or deducted for tax purposes).
(c) Upon the transfer of an interest in the Company, the Capital
Account of the transfer Member (as adjusted, if at all, as required by this
Section 6.4) that is attributable to the transferred interest will be carried
over to the transferee Member. The Capital Account will not be adjusted to
<PAGE>
reflect any adjustment under Section 743 of the Code except as specifically
provided in Treasury Regulation Section 1.704-1 (b) (2) (iv) (m). Upon (I) the
"liquidation of the Company" (as hereinafter defined), (ii) the "liquidation of
a Member's interest in the Company" (as hereinafter defined), (iii) the
distribution of money, property or securities to a Member as consideration for
an interest in the Company, or (iv) the contribution of money or (if permitted
pursuant to (a) above) property and/or securities to the Company by a new or
existing Member as consideration for an interest in the Company, or upon any
transfer causing a termination of the Company for tax purposes within the
meaning of Section 708(b) (1) (B) of the Code, then adjustments shall be made to
the Members' Capital Accounts in the following manner: all property and
securities of the Company which are not sold in connection with such event shall
be valued at their then fair market value; such fair market value shall be used
to determine both the amount of gain or loss which would have been recognized by
the Company if the property and securities had been sold for its fair market
value (subject to any debt secured by the property and securities) at such time,
and the amount of Income, which would have been distributable by the Company
pursuant to Article 9 if the property and securities had been sold at such time
for said fair market value, less the amount of any debt secured by the property;
the Capital Accounts of the Members shall be adjusted to reflect the deemed
allocation of such hypothetical gain or loss in accordance with Article 10; and
the Capital Accounts of the Members (or of a transferee of a Member) shall
thereafter be adjusted to reflect "book items" and not "tax items" in accordance
with Treasury Regulation Sections 1.704-1 (b) (2) (iv) (g) and 1.704-1 (b) (4)
(I).
(d) For purposes of this Article 6, (I) the term "liquidation of the
Company" shall mean (A) a termination of the Company effected in accordance with
this Operating Agreement, which shall be deemed to occur, for purposes of
Article 6, on the date upon which the Company ceases to be a going concern and
is continued in existence solely to wind-up its affairs, or (B) a termination of
the Company pursuant to Section 708(b)(1) of the Code; and (ii) the term
"liquidation of a Member's interest in the Company" shall mean the termination
of the Member's entire interest in the Company effected by a distribution, or a
series of distributions, by the Company to the Member.
<PAGE>
ARTICLE 7
ADDITIONAL CAPITAL CONTRIBUTIONS
7.1 No Member shall be obligated to make additional capital
contributions to the Company. If the Manager, with the concurrence of Members
holding a majority in interest of the Company, shall determine there shall be a
Required Amount for any Company purpose, including, without limitation, those
purposes set forth in Article 5, then within fifteen (15) days of notice of such
requirement, each Member may, but shall not be obligated to, contribute to the
Company his Additional Contribution.
7.2 If a Member fails to make his Additional Contribution, in whole or
in part, as required in Section 7.1 above (the "Noncontributing Member"), then,
so long as any other Member shall make his Additional Contribution as provided
herein (each such Member making his Additional Contribution being hereinafter
referred to as "Contributing Member"), any Contributing Member shall have the
option (a) with the consent of a majority in interest of the Contributing
Members (I) to make a capital contribution equal to the Additional Contribution
not made by the Noncontributing Member or (ii) to make a Default Loan equal to
the Additional Contribution not made by the Noncontributing Member or (b) with
the unanimous written consent of each Contributing Member, to declare the
Company terminated as a result of the Noncontributing Member's default. In the
event that more than one Contributing Member desires to make an Additional
Contribution, or is permitted to make a Default Loan, on account of the
Noncontributing Member, each such Contributing Member shall be permitted to
participate in proportion to their respective Interests. All loans made pursuant
to this Section 7.2 shall bear interest at the Default Rate.
7.3 Upon the making of a capital contribution to the Company pursuant
to Section 7.2, the Interest of the Noncontributing Member and the Contributing
Members shall be adjusted as follows: (a) the Noncontributing Member's Interest
shall be decreased (but not below zero) by subtracting therefrom an amount equal
to the percentage equivalent of the quotient of (I) the Additional Contribution
not made by the Noncontributing Member giving rise to application of this
Section 7.3 multiplied by (A) 200% upon the first failure of the Noncontributing
Member to make an Additional Contribution, (B) 300% upon the second such failure
and (C) 400% upon the third such failure, divided by (ii) the aggregate amount
<PAGE>
of all Capital Contributions made by the Members (including the Additional
Contributions received by the Company), and (b) the Contributing Members'
Interest shall be increased by adding thereto an amount equal to the percentage
by which the Noncontributing Member's Interest was decreased pursuant to clause
(a) above. Upon the fourth and each subsequent failure of the Noncontributing
Member to make an Additional Contribution giving rise to the application of this
Section 7.3, a majority-in-interest of the Contributing Members shall have the
option, exercisable in their sole discretion, to cause the remaining Interest of
the Noncontributing Member to be forfeited and allocated to the Contributing
Members or to continue re-allocating the Interests of the Noncontributing Member
and Contributing Members as provided in the preceding sentence except that the
percentage multiple set forth in clause (I) (c) shall be increased 100% for each
failure of the Noncontributing Member to make an Additional Contribution. An
example of the operation of this Section 7.3 with respect to a re-allocation of
Interests upon the first failure of a Noncontributing Member to make an
Additional Contribution, is set forth in Schedule B attached hereto.
7.4 The obligations of the Members contained in this Section 7 are
personal and run only to the benefit of the Company and the Members and may not
be enforced by any third parties. No creditor of the Company may rely on the
foregoing provisions of this Article 7 or any other provision of this Operating
Agreement to make any contributions or returns to the Company, notwithstanding
any agreement, representation, intention, indication or otherwise to the
contrary.
ARTICLE 8
CASH DISTRIBUTIONS
8.1 The Company shall distribute Income to the Members at such times as
the Company shall determine (but not less often than quarterly), in the
following order of priority:
(a) first, to any Member who made a Default Loan, to the
payment of accrued and unpaid interest, and the then outstanding principal
balance of, any Default Loan, such distribution to be in proportion to the
aggregate amount of interest, and the principal, owed. If more than one Member
participates in the making of a Default Loan, then distributions to such Members
on account of this Section 8.1(a) shall be made in proportion to the amounts so
<PAGE>
loaned. If there shall be more than one instance in which a Default Loan has
been made, then Default Loans shall be repaid in the order in which they shall
have been outstanding the longest;
(b) second, to the Members in an amount equal to and in
proportion to their Unrecovered
Additional Contributions;
(c) next, to the Members in an amount sufficient to give them
a ten percent (10%) return compounded annually on the aggregate of their Capital
Contributions and Additional Contributions;
(d) next, to Sonia Seidman and the Manager in an amount
sufficient to pay to them, in the aggregate, up to twenty percent (20%) of the
net annual profits of the Company for each year calendar that the Company is in
existence to be paid 5% to the Manager and 15% to Sonia Seidman; and
(e) the balance, if any, shall be distributed to the
Members in proportion to their Interests.
8.2 Notwithstanding Section 8.1, Net Proceeds from a Capital
Transaction which constitutes a liquidation of the Company, together with other
funds remaining to be distributed, shall be distributed to the Members no later
than the later of (a) the end of the taxable year of the Company in which such
liquidation occurs; or (b) within ninety (90) days after the date of such
liquidation event, after payment of all Company liabilities and expenses (or
adequate provision therefor), in accordance with Section 9.1, except that in no
event shall (x) a distribution be made to any Member if, after giving effect to
such distribution, all liabilities of the Company, other than liabilities to
Members on account of their Interests and liabilities for which the recourse of
creditors of the Company is limited to specified property of the Company, exceed
the fair value of the assets of the Company, except that the fair value of
property that is subject to a liability for which the recourse of creditors is
limited shall be included in the assets of the Company only to the extent that
the fair value of the property exceeds that liability and (y) the distribution
to a Member exceed the positive balance in such Member's Capital Account after
giving effect to all allocations to such Member under Article 9 of Net Profits,
Net Losses, and Gain and Loss from Capital Transactions so that liquidation
proceeds shall be distributed in accordance with each Member's positive Capital
<PAGE>
Account balance (within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(b) as in effect on the date hereof). If a members shall
receive a distribution that should not have been made based upon the provisions
of Section 8.2 (x), the provisions of Section 42:2B-42 (b) of the act shall
apply. Section 42:2B-42(c) of the Act shall apply to all distributions made to
the Members.
ARTICLE 9
TAX ALLOCATIONS
10.1 Net Profits, Net Losses and any investment tax credit for each
fiscal year or part thereof shall be allocated to the Members in proportion to
their Interests.
10.2 Gain from a Capital Transaction shall be allocated in the
following order:
(a) There shall first be allocated to those Members, if any,
who have deficit balances in their Capital Accounts immediately prior to such
Capital Transaction an amount of such gain equal to the aggregate amount of such
deficit balances, which amount shall be allocated in the same proportion as such
deficit balances.
(b) There shall next be allocated to each of the Members gain
in proportion to (but not greater than) the amount by which (x) the amount of
Net Losses theretofore allocated to each Member and not theretofore taken into
account under this Section 9.2(b), exceeds (y) the gain allocated to such Member
under Section 9.2(a).
(c) There shall next be allocated to each of the Members gain
equal to the amount by which (x) the aggregate proceeds derived from a Capital
Transaction distributable to each Member in accordance with the provisions of
Section 8.1 or 8.2 other than with respect to Default Loans, as the case may be,
exceeds (y) the positive balance, if any, in such Member's Capital Account after
such Member's Capital Account has been adjusted to reflect the gain allocated to
such Member pursuant to Sections 9.2(a) and 9.2(b); provided, however, that if
there shall be an insufficient amount of gain determined by this Section 9.2(c),
then the gain shall be allocated to the Members in proportion to the respective
amounts determined pursuant to this Section 9.2(c).
<PAGE>
(d) Any remaining gain shall be allocated among the
Members in proportion to their Interests.
(e) If the Company shall realize, upon a Capital Transaction,
gain which is treated as ordinary income under Sections 1245 or 1250 of the
Code, such ordinary income shall be allocated to the Members who receive the
allocation of the depreciation or cost recovery deduction that generated the
ordinary income in the same proportions as such deductions.
(f) Notwithstanding the foregoing, distributions of Income
made to a Member for interest and in repayment of the principal on any Default
Loan shall not be treated as Income for the purpose of allocating gain pursuant
to this Section 9.2 or for any other purpose. Any interest on a Default Loan
shall be treated as a "guaranteed payment" for purposes of Section 707(c) of the
Code.
10.3 Losses from Capital Transactions shall be allocated in the
following order:
(a) There shall first be allocated to those Members, if any,
whose positive balances in their Capital Accounts exceed their Unrecovered
Additional Contributions, an amount of such loss equal to such excess amount,
which amount shall be allocated in the same proportion as such excess amounts.
(b) There shall next be allocated to those Members, if any,
that have positive balances in their Capital Accounts, an amount of such loss
equal to the aggregate amount of such positive balances, which amount shall be
allocated in the same proportion as such positive balances.
(c) The balance of such loss shall be allocated to the
Members in proportion to their Percentage Interests.
10.4 Notwithstanding the preceding provisions of this Article 10:
(a) Except as provided in sub-section (e) below, no allocation
of loss or deduction shall be made to a Member if such allocation would cause at
<PAGE>
the end of any taxable year a deficit in such Member's Adjusted Capital Account
to exceed his allocable share of Minimum Gain; and any such loss or deduction
not allocated to a Member by reason of this Section 9.4 shall be allocated
pro-rata to each other Member if and to the extent that such allocation shall
not create a deficit in such other Member's Adjusted Capital Account in excess
of his allocable share of Minimum Gain; provided, however, that if such
allocation would create such deficit in all Members' Adjusted Capital Accounts
in excess of their share of Minimum Gain, then such allocation shall be made in
accordance with the principles of Treasury Regulation Section 1.704-1(b).
(b) If, during any taxable year, there is a net decrease in
Minimum Gain then, before any other allocations are made for such year, each
Member shall be allocated items of Company income and gain for such year (and,
if necessary, subsequent years) in an amount equal to each Member's share of the
net decrease in Company Minimum Gain (within the meaning of Treasury Regulation
Section 1.704-2(g)(2)) in a manner so as to satisfy the requirements of Treasury
Regulation Section 1.704-2(f).
(c) If, during any taxable year, there is a net decrease in
Company Minimum Gain Attributable to Member to Member Nonrecourse Debt, then,
before any other allocations are made for such year other than those pursuant to
Section 9.4(b) above, each Member with a share of the Company Minimum Gain
Attributable to Member Nonrecourse Debt at the beginning of the year shall be
allocated items of Company income and gain for such year (and, if necessary, for
subsequent years) in an amount equal to each Member's share of the net decrease
in Minimum Gain Attributable to Member Nonrecourse Debt as determined in
accordance with Treasury Regulation Section 1.704-2(I)(4) in a manner so as to
satisfy the requirements of said Treasury Regulation.
(d) If during any taxable year a Member unexpectedly receives
(I) a distribution of cash or property from the Company or (ii) an adjustment or
allocation described in either Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4) as in effect on the date hereof (concerning depletion
allowances with respect to oil and gas properties) or Treasury Regulation
Section 1.704-1 (b) (2) (ii) (d) (5) as in effect on the date hereof (concerning
allocations of loss and deduction in interests change during the year, if an
interest is acquired by gift or if a Member receives certain Company property in
<PAGE>
redemption of part or all his interest), and if such adjustment, allocation or
distribution would cause at the end of the taxable year a deficit balance in
such Member's adjusted capital account in excess of his allocable share of
Minimum Gain, then a pro-rata portion of each item of Company income, including
gross income, and gain for such taxable year (and, if necessary, subsequent
taxable years) shall be allocated to such Member in an amount and in a manner
sufficient to eliminate such excess balance as quickly as possible before any
other allocation is made for such year other than pursuant to Section 9.4(b)
above so as to satisfy the requirements of Treasury Regulation Section
1.704-1(b) (2) (ii) (d) (qualified income offset).
(e) To the extent required by Treasury Regulation Section
1.704-2(I) (1), Member Nonrecourse Debt Deductions for any taxable year shall be
allocated to the Member (or Members) who bear(s) the economic risk of loss of
such Member Nonrecourse Debt.
(f) In the event that any allocation is or has been made to a
Member pursuant to Sections 9.4(a), (b), (c), (d) or (e) above, subsequent items
of income, deduction, gain and loss shall be allocated before any other
allocations are made (subject to the provisions of said Sections) to the Members
in the manner which would result in each Member having a Capital Account balance
equal to what it would have been had the allocation pursuant to said Sections.
(g) Upon the occurrence of an event described in Section
6.4(c), all Company property shall be revalued on the Company's books at fair
market value, Capital Accounts will be adjusted in accordance with Section 6.4
(c), and subsequent allocations of taxable income, gain, loss and deductions
shall, solely for tax purposes, be made necessary so as to take account of the
variation between the adjusted tax basis and the fair market value of such
property in accordance with Section 704 of the Code and the Treasury Regulations
thereunder.
(h) For the purposes of this Article, each Member's "Adjusted
Capital Account" shall equal the Capital Account of each Member (1) reduced at
the end of each taxable year by the sum of (x) the excess of distributions
reasonable expected to be made to such Member over the offsetting increases to
such Member's Capital Account reasonably expected to be made in the same taxable
year as the aforesaid distributions, (y) adjustments expected to be made to such
<PAGE>
Member's Capital Account described in Treasury Regulation Section 1.704-1(b) (2)
(ii) (d) (4) as in effect on the date hereof (concerning depletion allowances
with respect to oil and gas properties), and (z) allocations expected to be made
described in Treasury Regulation Section 1.704-1 (b) (2) (ii) (d) (5) as in
effect on the date hereof (concerning allocations of loss and deduction if
Interests change during the year, if an Interest is acquired by gift or if a
Member receives certain Company property in redemption of part or all of his
Interest in the Company), and (2) increased by the sum of (I) the amount, if
any, which the Member is obligated to restore the Company upon liquidation of
his Interest if a deficit balance exists in his Capital Account at such time,
(ii) the outstanding principal balance of any promissory note made by such
Member and contributed to the company if such note is not readily tradable on an
established securities market and if such note must be satisfied within ninety
(90) days after the date said Member's Interest is liquidated and (iii) the sum
of (a) the amount the Member would be personally liable for either as a Member
or in his individual capacity as a guarantor or otherwise, and (b) the economic
risk of loss the Member would bear attributable to any Company liability (as
determined in accordance with Treasury Regulation Section 1.752-2).
(I) In accordance with Section 704(b) and (c) of the Code and
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Company (including all or part of any
deemed capital contribution under Section 708 of the Code) shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company and its agreed value.
In the event that Capital Accounts are ever adjusted pursuant to Treasury
Regulation Section 1.704-1(b) (2) to reflect the fair market value of any
Company property, subsequent allocations of income, gain, loss and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset and its value as adjusted in the same manner as
required under Section 704(c) of the Code and the Regulations thereunder.
(j) The allocations provided in this Section 10.4 are intended
to comply with the provisions of Section 704(b) of the Code and the regulations
thereunder. However, if any such allocation causes a distortion in the Members'
Interest in contravention of the Members' economic arrangement as reflected in
<PAGE>
Article 6, the Company has the authority to make curative allocations to bring
such allocations in accordance with such Member's Interest, as if such
allocations which caused the distortion had not occurred and to bring such
allocations in compliance with Section 794(b) of the Code and regulations
thereunder.
ARTICLE 10
RIGHTS, POWERS AND REPRESENTATIONS OF THE MEMBERS
10.1 All decisions, consents, authorizations and rights in connection
with the business and affairs the company shall be carried on and managed by a
majority in interest of the Members, who shall have full, exclusive and complete
discretion with respect thereto. Any Member or person acting pursuant to any
authority granted to him in writing by a majority in interest of the Members
shall have all necessary and appropriate powers to carry out the authority so
granted, and no other Member or person without such authority so granted shall
have the right to take any action or give any consent, by affirmative act or
acquiescence, to any matter or thing, affecting the Company. In furtherance of
the foregoing, any Member or person so authorized as provided above may:
(a) negotiate, execute, deliver and perform on behalf of, and
in the name of, the Company any and all contracts, deeds, assignments, deeds of
trust, leases, subleases, promissory notes and other evidences of indebtedness,
mortgages, bills of sale, financing statements, security agreements, easements,
stock powers, and any and all other instruments necessary or incidental to the
business of the Company and the financing thereof,
(b) borrow money, without limit as to amount, and to secure
the payment thereof by mortgage, pledge, or assignment of, or security interest
in, all or any part of the assets then owned or thereafter acquired by the
Company,
(c) effectuate the purpose of the Company as provided in
Article 5 hereof,
<PAGE>
(d) establish, maintain and draw upon checking and other
accounts of the Company,
(e) execute any notifications, statements, reports, returns or
other filings that are necessary or desirable to be filed with any state or
Federal agency, commission or authority,
(f) enter into contracts in connection with the business
of the Company,
(g) arrange for facsimile signatures for the Members in
executing and all documents, papers, checks or other writings or legal
instruments which may be necessary or desirable in the Company business, and
(h) execute, acknowledge and deliver any and all contracts,
documents and instruments deemed appropriate to carry out any of the foregoing
purposes and intent of this Operating Agreement.
10.2 In the management of the Company, and with respect to any and all
decisions with respect to the Company and its business and the conduct of its
operations, the Members of the Company shall have a cumulative total of one
hundred (100) votes, and each Member shall have the number of votes equal to
his/her/its Interest. Wherever and whenever the word "majority" appears in this
Operating Agreement, either as a noun or as an adjective, it shall mean for all
purposes that number of Members whose votes when considered or added together
constitute more than fifty (50) of the total one hundred (100) votes of all the
Members. Any act or decision of any of the Members may be confirmed, overruled
or precluded by the majority of the Members.
10.3 Each of the Members, on their own behalf and on behalf of anyone
who shall represent their Interests, hereby waives notice of the time, place or
purpose of any meeting at which any matter is to be voted on by the Members or
anyone acting by or for them, waives any requirement that there be such a
meeting and agrees that any action may be taken by consent without a meeting.
10.4 The fact that the Members are directly or indirectly interested in
or connected with any person, firm or corporation employed by the Company to
<PAGE>
render or perform a service, or from which or whom the Company may buy
merchandise, material or other property shall not prohibit the Company from
employing such persons, firms or corporations, or from otherwise dealing with
him under such reasonable terms and conditions as the Company may determine.
ARTICLE 11
MANAGER
11.1 Notwithstanding any provision contained in Article 10 to the
contrary, the daily affairs of the Company shall be conducted by the Manager who
shall have the power and authority to make ordinary and usual decisions
concerning the business and affairs of the Company. The Manager shall have the
power and authority, on behalf of the Company, to do the following:
(a) open one or more depository accounts and make
deposits into and checks and withdrawals against such accounts;
(b) invest the capital resources of the Company, in amounts
not to exceed one hundred and twenty-five percent (125%) of the capital of the
Company without the prior consent of a majority in interest of the Members, in
stocks, bonds and other securities of publicly traded companies (collectively
"Permitted Investments"), including the ability to buy, sell, exchange, swap or
transfer such securities;
(c) open one or more cash or margin brokerage accounts
in
(d) obtain insurance covering the business and affairs
of the Company;
(e) commence, prosecute or defend any proceeding in the
Company's name; and
(f) enter into any and all agreements and execute any and
all contracts, documents and instruments necessary or required to effectuate the
foregoing.
<PAGE>
11.2 Notwithstanding any provision contained in this Operating
Agreement to the contrary, it is specifically agreed between the Members that
the Company shall make no investment in Cali Realty Corporation without the
unanimous prior consent of all Members.
11.3 (a) The Manager shall perform and discharge his duties as a
manager in good faith, with the care an ordinary prudent person in a like
position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company. The Manager
shall not be liable for any monetary damages to the Company for any breach of
such duties except for: receipt of a financial benefit to which the Manager is
not entitled; voting for or assenting to a distribution to Members in violation
of this Operating Agreement or the Act; a knowing violation of the law; fraud;
or a willful breach of fiduciary obligations owed to the Members.
(b) The Manager shall devote a significant amount of his time
and efforts to furthering the business and investments of the Company and any
other corporations and partnerships formed to invest in the stock in private and
public companies or real estate assets and mortgages. The Manager shall also be
permitted to perform consulting and legal services for Environmental Waste
Management Associates, Inc., its principal shareholders, Richard Greenberg, and
for Glenn Woo and other real estate related clients. The Manager shall not
receive a salary or other compensation from the Company for performing his
duties under this Agreement..
(c) The Manager may be removed or replaced at any time by
a majority in interest of the Members.
11.4 Unless otherwise provided by law or expressly assumed, a person
who is a Member or manager, or both, shall not be liable for the acts, debts or
liabilities of the Company.
11.5 The Company shall indemnify the Manager and each Member and may
indemnify any employee or agent of the Company who was or is a party or is
threatened to be made a party to threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, or investigative, and
whether formal or informal, other than action by or in the right of the Company,
<PAGE>
by reason of the fact that such person is or was a manager, employee or agent of
the Company against expenses, including attorneys fees, judgements, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with the action, suit or proceeding, if the person acted in
good faith, with the care an ordinary prudent person in a like position would
exercise under similar circumstances, and in a manner that such person
reasonably believed to be in the best interests of the Company and with respect
to a criminal action or proceeding, if such person had no reasonable cause to
believe such person's conduct was unlawful. To the extent that a Member,
employee or agent of the Company has been successful on the merits or otherwise
in defense of an action, suit or proceeding or in defense of any claim, issue or
other matter in the action, suit or proceeding, such person shall be indemnified
against actual and reasonable expenses, including attorneys fees incurred by
such person in connection with the action, suit or proceeding and any action,
suit or proceeding brought to enforce the mandatory indemnification provided
herein. Any indemnification permitted under this Article, unless ordered by a
court, shall be made by the Company only as authorized in the specific case upon
a determination that the indemnification is proper under the circumstances
because the person to be indemnified has met the applicable standard of conduct
and upon an evaluation of the reasonableness of expenses and amount paid in
settlement. This determination and evaluation shall be made by a majority vote
of the Members who are not parties or threatened to be made parties to the
action, suit or proceeding. Notwithstanding the foregoing to the contrary, no
indemnification shall be provided to the Manager or any Member, employee or
agent of the Company for or in connection with the receipt of a financial
benefit to which such person is not entitled, voting for or assenting to a
distribution to Members in violation of this Operating Agreement of the Act, or
a knowing violation of law.
ARTICLE 12
BOOKS, RECORDS AND REPORTS
12.1 At all times during the continuance of the Company, the Company
shall keep or cause to be kept full and true books of account, in which shall be
entered fully and accurately each transaction of the Company. The books of
account, together with an executed copy of the Certificate of Formation of the
Company and any amendments thereto, shall at all times be maintained at the
<PAGE>
principal office of the Company and shall be open to inspection and examination
by the members or their representatives at reasonable hours and upon reasonable
notice. For purpose hereof, the Company shall keep its books and records on the
same method of accounting employed for tax purposes.
12.2 The fiscal year of the Company shall be the calendar year. Within
a reasonable time after the end of each fiscal year and in any event on or
before thirty (30) days prior to the filing date for individual tax returns
(including extensions), the accountants for the Company shall deliver to each
Member (a) upon request of a Member, an annual statement of the Company's
accountants, and (b) a report or a tax return setting forth such Member's share
of the Company's profit or loss for such year and such Member's allocable share
of all items of income, gain, loss, deduction and credit for Federal income tax
purposes.
12.3 The Company shall also cause to be prepared and filed all Federal,
state and local tax returns required of the Company. All books, records, balance
sheets, statements, reports and tax returns required pursuant to Section 12.1
and 12.2 hereof shall be prepared at the expense of the Company.
ARTICLE 13
BANK ACCOUNTS
13.1 All funds and income of the Company (a) shall be deposited in the
name of the Company in such bank account or accounts as shall be designated by
the Manager, (b) shall be invested in such Permitted Investments as Manager
shall determine and (C) shall be kept separate and apart from the funds of any
other individual or entity.
13.2 Withdrawals from any such bank account or accounts shall be made
upon the signature of any person so designated by the Company in writing.
ARTICLE 14
RIGHTS AND DUTIES OF MEMBERS
14.1 Subject to duties and obligations of the Manager, it is expressly
understood that each Member may engage in any other business or investment,
<PAGE>
whether or not in direct competition with the business of the Company, and
neither the Company nor any other Member shall have any rights in and to said
businesses or investments, or the income or profits derived therefrom.
14.2 The Manager may employ, on behalf of the Company, such persons,
firms or corporations, including those firms or corporations in which any Member
has an interest, and on such terms as the Manager shall deem advisable in the
operation and management of the business of the Company, including, without
limitation, such accountants, attorneys, architects, engineers, contractors,
appraisers and experts.
14.3 No Member shall be personally liable to the Company or any of the
other Members for any act or omission performed or omitted by him/her/it, except
if such act or omission was attributable to willful misconduct or gross
negligence.
14.4 Each Member (and each former Member) shall be indemnified and
saved harmless by the Company from any loss, damage or expense incurred by him
by reason of any act or omission performed or omitted by him, except if such act
or omission was attributable to willful misconduct or gross negligence.
ARTICLE 15
TAX MATTERS
15.1 (a) Notwithstanding any provisions hereof to the contrary, each of
the Members hereby recognizes that the Company will be a partnership for United
States federal income tax purposes and that the Company will be subject to all
provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided,
however, that the filing of U.S. Partnership Returns of Income shall not be
construed to extend the purposes of the company or expand the obligations or
liabilities of the Members. At the request of any Member, the Company shall file
an election under Section 754 of the Code.
(b) The Company shall engage an accountant (the "Accountant")
to prepare at the expense of the company all tax returns and statements, if any,
<PAGE>
which must be filed on behalf of the Company regarding the Premises and the
operation, dissolution and liquidation of the Company with any taxing authority.
(c) Lawrence Seidman is designated Tax Matters Member (herein
"TMM") for purposes of Chapter 63 of the Code and the Members will take such
actions as may be necessary, appropriate, or convenient to effect the
designation of Lawrence Seidman as TMM. The TMM shall attempt to comply with the
responsibilities outlined in this Section 15.1 and in Sections 6222 through 6231
of the Code (including any Treasury Regulations promulgated thereunder).
ARTICLE 16
BANKRUPTCY OF A MEMBER
16.1 Unless a majority in interest of the Members shall elect
otherwise, a Member shall cease to be a Member of the Company:
(a) if he/she/it:
(I) Makes an assignment for the benefit of
creditors;
(ii) Files a voluntary petition in bankruptcy;
(iii) Is adjudged bankrupt or insolvent, or has
entered against him/her/it an order for relief, in
any bankruptcy or indolvency proceeding;
(iv) Files a petition or answer seeking for
himself/herself/itself any reorganization,
arrangement, composition, readjustment,liquidation,
dissolutionor similar relief under any statute, law
or regulation;
(v) Files an answer or other pleading
admitting or failing to contest the
material allegations of a petition filed against
him/her/it in any proceeding of this
nature; or
(vi) Seeks, consents to or acquiesces in
the appointment of a trustee, receiver or liquidator
of the Member or of all or any substantial part of
his/her/its properties; or
<PAGE>
(b) One hundred twenty (120) days after the commencement of
any proceeding against the Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, if the proceeding has not been dismissed, or within
ninety (90) days after the appointment without his consent or acquiescence of a
trustee, receiver or liquidator of the Member or of all or any substantial part
of his/her properties, the appointment is not vacated or stayed, or within
ninety (90) days after the expiration of any such stay, the appointment is not
vacated.
ARTICLE 17
ASSIGNABILITY, TRANSFER OR PLEDGE OF
INTERESTS; RESIGNATION OF MEMBER
17.1 (a) No Member shall have the right to assign, convey, sell or
otherwise transfer or dispose of, or pledge, mortgage, hypothecate or otherwise
encumber his/her/its Interest, whether record or beneficial interest thereof,
without the prior written consent of the Company. Notwithstanding the preceding
sentence, but subject to the restrictions on transferability required by law, or
set forth in any instrument or agreement by which the Company may be bound, or
which may be contained in this Operating Agreement, an individual Member, if
any, may, without any consent, assign, convey, sell or otherwise transfer or
dispose of all or any portion of his interest in the Company to any one or more
of the members of his/her immediate family or families (defined for the purposes
of this Operating Agreement as a mother, father, sister, brother, son, daughter,
stepson, stepdaughter or spouse (in each instance whether by marriage or
otherwise)) and/or a trust or other entity for the benefit thereof or
themselves, by a written instrument of assignment and assumption, provided that
the instrument of transfer provides for the assumption of the assignor's
liabilities and obligations hereunder and has been duly executed by the assignor
of such interest and by the transferee. The Member shall notify the Company of
any assignment, transfer or disposition of a beneficial interest in any interest
of the Member which occurs without a transfer of record ownership, although such
notification, or the absence of a response thereto, shall not be deemed a
consent thereof.
<PAGE>
(b) An assignee or transferee of any portion of the interest
of the Member shall be entitled to receive allocations and distributions
attributable to the interest acquired by reason of such assignment from and
after the effective date of the assignment of such interest to such assignee;
however. anything herein to the contrary notwithstanding, the Company shall be
entitled to treat the assignor of such interest of the Member as the absolute
owner thereof in all respects, and shall incur no liability for allocations of
net income, net losses, or gain or loss on sale of Company property, or
transmittal of reports and notices required to be given to Members hereunder
which are made in good faith to such assignor until such time as the written
assignment has been received by the Company, approved and recorded on its books
and the effective date of the assignment has passed. Provided that the Company
has actual notice of any assignment of the interest of the Member, the effective
date of such assignment on which the assignee shall be deemed an assignee of
record shall be the date set forth on the written instrument of assignment.
(c) Any assignment, sale, exchange, transfer or other
disposition in contravention of any of the provisions of this Article 17 and
Article 18 hereof shall be void and ineffective and shall not bind or be
recognized by the Company.
(d) In the event that there shall be more than one assignee,
transferee, representative or other successor in interest as permitted herein
(collectively, the "Transferees") and the Member as of the date of this
Operating Agreement shall remain a Member, then the Member shall be authorized
to act, and shall so act, on behalf of the Member and all of the Transferees
acting as such by, through or under the Member. In the event that there shall be
more than one Transferee, and the Member as of the date of this Operating
Agreement shall no longer be a Member, then the Company must be advised by the
Member whose interest is the subject of such event or failing which by a
two-thirds (2/3) majority in interest of those holding any portion of the
interests of the Member, of one person to act on behalf of all the Transferees.
The Member, if the first sentence of this paragraph shall be applicable, or the
person so noted to the Company, if the second sentence of this paragraph shall
be applicable, shall be authorized to act, and shall so act, for all of the
Transferees, all of whom shall be bound by any decision or action taken by such
person, and the Company, the Company and all of the other Members, shall be
<PAGE>
entitled to rely on the decisions or actions taken by such person. Until the
Company shall be advised as to the identity of such person, (I) the Transferees
shall be entitled only to distributions and tax allocations as provided in
Article 8 and 9 hereof, but shall have no right, power or authority with respect
to any decision making reserved herein to the Members or any of them and (ii)
wherever in this Operating Agreement provision shall be made for the Members to
make decisions with respect to Company matters, the interests of the Member, as
transferred to the Transferees, shall not be included in determining whether the
requisite interest of members have consented to or approved of such decision.
17.2 Without the prior written consent of all Members and other than as
provided in Section 6.1(b) above, a Member may not resign from the Company prior
to the dissolution and winding up of the Company.
ARTICLE 18
ADMISSION OF SUBSTITUTED MEMBERS;
DEATH OR INCAPACITY; FURTHER CONDITIONS
18.1 No assignment or transfer of all or any part of the interest of a
Member permitted to be made under this Operating Agreement shall be binding upon
the Company unless and until a duplicate original of such assignment or
instrument of transfer, duly executed and acknowledged by the assignor and the
transferee, has been delivered to the Company.
18.2 As a condition to the admission of any substituted Member, as
provided in Article 17 hereof, the person so to be admitted shall execute and
acknowledge such instruments, in form and substance reasonably satisfactory to
the Company, as a majority in interest of the Members may deem necessary or
desirable to effectuate such admission and to confirm the agreement of the
person to be admitted as a Member to be bound by all of the covenants, terms and
conditions of this Operating Agreement, as the same may have been amended.
18.3 Any person to be admitted as a member pursuant to the provisions
of this Operating Agreement shall, as a condition to such admission as a Member,
pay all reasonable expenses in connection with such admission as a Member,
including, but not limited to, the cost of the preparation, filing and
publication of any amendment to this Operating Agreement and/or Certificate of
Formation.
<PAGE>
18.4 In the event of the death or adjudication of incompetency of a
Member, or upon the happening of any event described in Article 16, the
executor, administrator, committee or other legal representative of such Member,
or the successor in interest of such Member, shall succeed only to be right of
such Member to receive allocations and distributions hereunder, and may be
admitted to the Company as a Member in the place and stead of the deceases,
incompetent, or bankrupt Member in accordance with this Article 18, but shall
not be deemed to be a substituted Member unless so admitted. Such event,
however, shall cause a termination or dissolution of the Company within one
hundred twenty (120) days of such event unless a majority in interest of the
Members shall elect to continue the Company within said one hundred twenty (120)
day period.
18.5 Notwithstanding anything to the contrary contained in this
Operating Agreement, no sale or exchange of an interest in the Company may be
made if the interest sought to be sold or exchanged, when added to the total of
all other interests sold or exchanged within the period of twelve (12)
consecutive months prior thereto, results in the termination of the Company
under Section 708 of the Code without the prior written consent of a majority in
interest of the Members.
18.6 In the event of a permitted transfer of all or part of the
interest of a Member, the Company shall, if requested, file an election in
accordance with Section 754 of the Code or a similar provision enacted in lieu
thereof, to adjust the basis of the Property of the Company. The Member
requesting said election shall pay all costs and expenses incurred by the
Company in connection therewith.
ARTICLE 19
LIQUIDATION
19.1 Upon the dissolution of the Company, the Company shall be
liquidated and its assets distributed as required by Section 42:2B-51 of the
Act.
19.2 The assets of the Company shall be liquidated as promptly as
possible, but in an orderly and businesslike manner so as not to involve undue
sacrifice.
<PAGE>
19.3 In the event that any proceeds are to be distributed to the
Members same shall be distributed, if practicable, no later than the later of
(I) the end of the taxable year of the Company in which such liquidation occurs;
or (ii) within ninety (90) days after the date of such liquidation event.
19.4 In any liquidation, the Company's assets shall be used first to
pay the costs and expenses of the dissolution and liquidation. The liquidation
trustee (which may be a Member) shall be entitled to establish reserves to
provide for any contingent or unforeseen liabilities or obligations of the
Company.
19.5 With respect to distributions to Members, said distributions
shall be made:
(a) first, to the repayment of any accrued and unpaid interest
on, and the then outstanding principal balance of, any Default Loan, in
proportion to the aggregate amount of interest, and then principal, owed, and if
more than one Member shall have made a Default Loan, then in proportion to the
amounts so loaned. If there shall be more than one instance in which a Default
loan has been made, the Default loans shall be repaid in the order in which they
shall have been outstanding the longest;
(b) second, to the payment of an obligation owed pursuant
to Section 11.3 (c).
(c) third, to all Members in proportion to and to
the extent of any remaining positive balances in such Member's
Capital Account after giving effect to all locations to such Member under
Article 10 of this Operating Agreement so that liquidation proceeds shall be
distributed in accordancewith each Member's positive Capital Account balance
(within the meaning of Treasury Regulation Section 1.704-1(b) (2) (ii)
(b) as in effect on the date hereof); and
(d) last, to all Members pro rata in accordance with thei
Company Interests.
<PAGE>
ARTICLE 20
GENDER
20.1 All terms and words used in this Operating Agreement, regardless
of the sense or gender in which they are used, shall be deemed to include each
other sense and gender unless the context requires otherwise.
ARTICLE 21
FURTHER ASSURANCES
21.1 The Members agree immediately and from time to time to execute,
acknowledge, deliver, file, record and publish such further certificates,
amendments to certificates, instruments and documents, and to do all such other
acts and things as may be required by law, or as may, in the opinion of a
majority in interest of the Members, be necessary or advisable to carry out the
intent and purposes of this Operating Agreement.
ARTICLE 22
COVENANT AGAINST PARTITION
22.1 The Members, on behalf of themselves, their legal representatives,
heirs, successors and assigns, hereby specifically renounce, waive and forfeit
all rights whether arising under contract, statute, or by operation of law, to
seek, bring, or maintain any action for partition in any court of law or equity
pertaining to any real property which the Company may now or in the future own,
regardless of the manner in which title to any such property may be held.
ARTICLE 23
NOTICES
23.1 Unless otherwise specified in this Operating Agreement, all
notices, demands, requests or other communications which any of the parties to
this Operating Agreement may desire or be required to give hereunder
(hereinafter referred to collectively as "Notices") shall be in writing and
shall be given by mailing the same by postage prepaid certified or registered
mail, return receipt requested, or by nationally recognized overnight courier to
the appropriate Member at the address set forth in this Operating Agreement.
Notices given in compliance with the provisions of this Article shall be deemed
given one (1) business day after delivery to a nationally recognized overnight
courier or four (4) business days after mailing in a repository of the United
States Postal Service.
<PAGE>
ARTICLE 24
APPLICABLE LAW
24.1 The parties agree that the parties shall be governed by, and this
Operating Agreement construed in accordance with, the laws of the State of New
Jersey applicable to agreements made and to be performed in such state and that
all claims and suits shall be heard in the courts located in the State of New
Jersey.
ARTICLE 25
CAPTIONS
25.1 All section titles or captions contained in this Operating
Agreement are for convenience only and shall not be deemed a part of this
Operating Agreement.
ARTICLE 26
COUNTERPARTS
26.1 This Operating Agreement may be executed in counterparts and each
counterpart so executed by each Member shall constitute and original, all of
which when taken together shall constitute one agreement, notwithstanding that
all the parties are not signatories to the same counterpart.
ARTICLE 27
BINDING EFFECT
27.1 This Operating Agreement may not be changed, modified, waived or
discharged, in whole or in part, unless in writing and signed by all of the
Members. This Operating Agreement shall be binding upon the Members and their
respective executors, administrators, legal representatives, heirs, successor
and assigns. The singular of any defined term or term used herein shall be
deemed to include the plural.
<PAGE>
ARTICLE 28
PARTIAL INVALIDITY
28.1 If any term or provision of this Operating Agreement or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Operating Agreement or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby and each
term and provision of this Operating Agreement shall be valid and enforced to
the fullest extent permitted by law.
ARTICLE 29
INTEGRATION
29.1 This Operating Agreement is the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior agreements
relative to such subject matter.
<PAGE>
/s/SONIA SEIDMAN
SEIDCAL ASSOCIATES, L.L.C.
By:
/s/Brant B. Cali, Member
<PAGE>
SCHEDULE A
REQUIRED CONTRIBUTIONS
SONIA SEIDMAN $150,000
SEIDCAL ASSOCIATES, L.L.C. $450,000
<PAGE>
SCHEDULE B
PERCENTAGE INTEREST
Sonia Seidman: 25%
Seidcal Associates, L.L.C.: 75%
Total 100%
<PAGE>
SCHEDULE B
EXAMPLE OF THE OPERATION OF SECTION 7.3
Assume the following facts:
(a) The interests are as follows:
A 10%
B 30%
C 60%
(b) The aggregate capital contributions made by the Members in
proportion to their respective Company Interests is $2,000,000.
(c) The Company requires additional funds of $1,000,000.
(d) A and B each contribute their Additional Contributions to the
Company ($100,000 and $300,000, respectively) and C fails to contribute his
Additional Contribution ($600,000).
(e) B contributes C's Additional Contribution to Company.
The amount that C's Interest is decreased and the amount that B's
Interest is increased is computed as follows:
(I) Multiply the amount of the contribution not made by C
($600,000) by 200% resulting in a product
of $1,200,000;
(ii) Divide the result of (I) above ($1,200,000) by the aggregate
amount of all capital contributions made by the Members ($3,000,000), resulting
in a product of .40;
(iii) Convert the product arrived at in computation (ii) above (.40) to
a percentage (by multiplying the same by 100) resulting in 40%. Subtract such
percentage from the Company Interest of C (40%) resulting in a new Interest for
C of 20%; and
<PAGE>
(iv) Increase the Interest of B (30%) by adding thereto the same
Percentage that was subtracted from Member C (40%) resulting in a new Interest
for B of 70%.
FIRST AMENDMENT TO OPERATING AGREEMENT
FOR SEIDMAN & ASSOCIATES II, L.L.C.
THIS AMENDMENT is made on June , 1998, by and between SONIA SEIDMAN, having
an address at 19 Veteri Place, Wayne, New Jersey 07470 and SEIDCAL ASSOCIATES,
L.L.C., a New Jersey limited liability company, having an address c/o Mack-Cali
Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 (hereinafter
referred to collectively as the "Members").
W I T N E S S E T H:
WHEREAS, the Members previously formed a limited liability company known as
Seidman & Associates II, L.L.C. (the "Company") pursuant to the New Jersey
Limited Liability Company Act; and
WHEREAS, the Members entered into an Operating Agreement for the Company,
dated February 1996; and
WHEREAS, the Members desire to amend the Operating Agreement, pursuant to
Article 27 thereof, in accordance with the terms and provisions set forth below.
NOW, THEREFORE, the Members do hereby agree as follows:
1. INCORPORATION BY REFERENCE
Subject to the provisions of this Amendment, the definitions, terms and
conditions of the Operating Agreement are incorporated in this Amendment by
reference in the same manner and to the same extent as if such definitions,
terms and conditions were fully set forth in this Amendment.
2. AMENDMENT OF OPERATING AGREEMENT
2.1 Subparagraph 4.1(a) of the Operating Agreement be and the same is
hereby amended to read as follows:
4.1 The Company shall commence upon the filing of the Certificate of
Formation, and shall continue in full force and effect until May 1, 2024,
provided, however, that the Company shall be dissolved prior to such date upon
the happening of any of the following events:
(a) The mutual written consent of the Members to dissolve the Company;
provided, however, that the Company may not be dissolved by mutual consent prior
to December 31, 2000.
2.2 Subparagraph 11.3(c) of the Operating Agreement be and the same is
hereby amended to read as follows:
The Managing Member may be removed or replaced
any any time after December 31, 2000 by a majority in
interest of the Members.
2.3 Except as modified by Subparagraphs 2.1 and 2.2 of this Agreement, all
of the terms and conditions of the Operating Agreement shall remain in full
force and effect.
3. COVENANT OF FURTHER ASSURANCES
The Members agree that they shall execute and deliver any and all
additional writings, instruments, and other documents and take such further
action as shall reasonably be required in order to effectuate the provisions of
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Operating Agreement as of the day and year first above written.
--------------------------------------
SONIA SEIDMAN
SEIDCAL ASSOCIATES, L.L.C.
By:-----------------------------------
Brant B. Cali, Member
EXHIBIT H
LAWRENCE B. SEIDMAN, ESQ.
Koll Executive Center
100 Misty Lane
P. O. Box 5430
Parsippany, NJ 07054
May 4, 1998
Mr. Jeffrey Greenberg
Heritage Management
P. O. Box 627
50 W. Ridgewood Avenue
Ridgewood, New Jersey 07451
Dear Mr. Greenberg:
The following are the terms and conditions in reference to the investment
account for the purchase of stock in public companies:
1. A margin brokerage account will be opened at Bear Stearns through The
Benchmark Company, Inc., in the name of Jeffery Greenberg.
2. The account will be a discretionary account with Larry Seidman having
the Power of Attorney to buy and sell stock in said account provided all funds
deposited into the account are for Jeffery Greenberg and all stock purchased in
the account is in the name of Jeffery Greenberg.
3. The account will be funded with an additonal $100,000.00
4. Jeffery Greenberg shall have the right to terminate the relationship
anytime after May 15, 2000.
5. Upon such termination, my discretion shall be terminated automatically.
6. My compensation shall be 1/4 of 1% of the value of the assets in the
account computed as of the last day of each calendar quarter. An incentive fee
will be paid me equal to 20% of the net profits earned in the account as of the
termination date whether same shall be the above termination date or later if
<PAGE>
Mr. Jeffery Greenberg
May 4, 1998
Page 2
agreed to between the parties. 100% of all funds shall go to Jeffery
Greenberg until 100% of the capital is returned, and then the division shall be
80% to Steven Greenberg and 20% to Larry Seidman.
7. I shall have the sole right to vote the shares in the account until
termination of my Power of Attorney.
8. In the event any portion of this agreement is not in compliance with
law, then Jeffery Greenberg shall have the sole right to terminate this letter,
and an accounting shall be done based upon the above quoted administrative fee
and profit participation to the date of the termination.
Very truly yours,
LAWRENCE B. SEIDMAN
AGREED AND ACCEPTED:
Jeffery Greenberg
<PAGE>
LAWRENCE B.SEIDMAN ESQ
Koll Executive Center
100 Misty Lane
P.O. Box 5430
Parsippany, NJ 07054
May 4, 1998
Mr. Steven Greenberg
Heritage Management
P. O. Box 627
50 W. Ridgewood Avenue
Ridgewood, New Jersey 07451
Dear Mr. Greenberg:
The following are the terms and conditions in reference to the investment
account for the purchase of stock in public companies:
1. A margin brokerage account will be opened at Bear Stearns through The
Benchmark Company, Inc., in the name of Steven Greenberg.
2. The account will be a discretionary account with Larry Seidman having
the Power of Attorney to buy and sell stock in said account provided all funds
deposited into the account are for Steven Greenberg and all stock purchased in
the account is in the name of Steven Greenberg.
3. The account will be funded with a minimum of $50,000.00.
4. Steven Greenberg shall have the right to terminate the relationship
anytime after May 15, 2000.
5. Upon such termination, my discretion shall be terminated automatically.
6. My compensation shall be 1/4 of 1% of the value of the assets in the
account computed as of the last day of each calendar quarter. An incentive fee
will be paid me equal to 20% of the net profits earned in the account as of the
termination date whether same shall be the above termination date or later if
<PAGE>
Mr. Steven Greenberg
May 4, 1998
Page 2
agreed to between the parties. 100% of all funds shall go to Steven
Greenberg until 100% of the capital is returned, and then the division shall be
80% to Steven Greenberg and 20% to Larry Seidman.
7. I shall have the sole right to vote the shares in the account until
termination of my Power of Attorney.
8. In the event any portion of this agreement is not in compliance with
law, then Steven Greenberg shall have the sole right to terminate this letter,
and an accounting shall be done based upon the above quoted administrative fee
and profit participation to the date of the termination.
Very truly yours,
LAWRENCE B. SEIDMAN
AGREED AND ACCEPTED:
Steven Greenberg
EXHIBIT I
Lawrence B. Seidman, Esq.
Koll Executive Center
100 Misty Lane
P. O. Box 5430
Parsippany, NJ 07054
April 17, 1998
David M. Mandelbaum, Esq.
Mandelbaum & Mandelbaum
80 Main Street
West Orange, NJ 07052
Dear David:
The following are the terms and conditions in reference to the investment
account for the prchase of publicly traded bank and thrift stocks:
1. A brokerage account will be opened at Bear Stearns & Company in the name
of Kerrimatt L.P.
2. The account will be a discretionary account with Larry Seidman having a
revocable Power of Attorney to buy and sell stock in said account provided all
funds deposited into the account are for Kerrimatt L.P. and all stock purchased
in the account is in the name of Kerrimatt L.P.
3. The account will be funded with a maximum of $2,000,000 and will not be
margined.
4. Only shares of publicly traded bank and thrift stocks with their
principal operations located in New Jersey may be purchased. I will notify David
Mandelbaum, in writing, when I commence the purchase of the stock of any
individual entity.
5. Kerrimatt L.P. shall have the right to terminate the relationship
twenty-four months after the account is initially funded or in the event of a
breach by Larry Seidman of this Agreement.
6. Upon such termination, my discretion shall be terminated automatically
7. My compensation shall be 1/4 of 1% of the value of the assets in the
account computed as of the last day of each calendar quarter, but not to exceed
$5,000 per quarter. An incentive fee will be paid me equal to 20% of the net
profits earned in the account as of the termination date whether same shall be
<PAGE>
Michael J. Mandelbaum, Esq.
April 17, 1998
Page 2
the two year anniversary date or later if agreed to between the parties. 100% of
all funds shall go to Kerrimatt L.P. until 100% of the capital plus a 8% annual
noncumulative return (the "Hurdle") is returned, and then the division shall be
80% to Kerrimatt L.P. and 20% to Larry Seidman.
8. Net profits, if any in excess of the hurdle, shall be defined to be
the amount earned in the account without regard to a "Hurdle" or without
regard to cash dividends. Cash dividends shall be the property of Kerrimatt
L.P. and shall not be included in net profits
9. I shall have the sole right to vote the shares in the account until
termination of my Power of Attorney.
10. In the event any portion of this agreement is not in compliance
with law, then Kerrimatt L.P. shall have the sole right to terminate this
letter, and an accounting shall be done based upon the above quoted
administrative fee and profit participation to the date of the termination.
Very truly yours,
LAWRENCE B. SEIDMAN
AGREED AND ACCEPTED:
KERRIMATT L.P.
By: David Mandelbaum, General Partner
EXHIBIT J
OPERATING AGREEMENT
FOR
FEDERAL HOLDINGS L.L.C.
Dated: June 12,1995
<PAGE>
INDEX
Page No.
Article 1 Definitions
Article 2 Formation
Article 3 Principal Office
Article 4 Term and Duration
Article 5 Purpose
Article 6 Capital Contributions by the Members
Article 7 Additional Capital Contributions
Article 8 Distributions of Net Proceeds
Article 9 Tax Allocations and Distributions
Article 10 Rights, Powers and Representations of the Investment
Manager and Administrative Manager; Management Fee
Article 11 Books, Records and Reports
Article 12 Indemnification
Article 13- Tax Matters
Article 14- Death, Dissolution or Bankruptcy of A Member
Article 15- Assignability, Transfer or Pledge of
Interests; Resignation of A Member
Article 16- Admission of Substituted Members;
Incapacity; Further Condition
Article 17 Liquidation
Article 18 Miscellaneous
Schedule A - Members' Percentage Interests and Capital
Contributions
<PAGE>
OPERATING AGREEMENT
FOR
FEDERAL HOLDINGS L.L.C.
AGREEMENT made June 12,1995 by and among the members listed on Schedule A
annexed hereto (individually, a "Member" and collectively, the "Members").
W I T N E S S E T H:
WHEREAS, the Members desire to form a limited liability company pursuant to the
New York Limited Liability Company Law (the "Law") and adopt this Agreement in
connection therewith; and
WHEREAS, by executing this Agreement, each Member represents that it has
sufficient right and authority to execute this Agreement and is not acting on
behalf of any undisclosed or partially disclosed principal.
NOW, THEREFORE, in consideration of ten ($10) dollars and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows effective as of the date first
written above.
ARTICLE 1
DEFINITIONS
1.1 For purposes of this Agreement, the following terms shall have the
definitions set forth below:
"Account": As defined in Section 10.4
"Additional Member": Means any person or entity other than the Members of
the Company as of the date hereof who acquires an interest in the Company.
"Administrative Manager': Kevin Moore.
"Advance": As defined in Section 7.2.
<PAGE>
"Agreement": This Operating Agreement as originally executed and as amended,
modified, supplemented or restated
from time to time.
"Articles of Organization": The Articles of Organization of the Company filed
with the Secretary of State of the State of New York, pursuant to the Law to
form the Company, as originally executed and as amended, modified, supplemented
or restated from time to time.
"Capital Account" or "Capital Accounts": As defined in Section 6.4.
"Capital Contributions": The respective capital contributions, including any
additional Capital Contribution,of each Member to the Company.
"Capital Transaction" or "Capital Transactions": Any transaction which, in
accordance with generally accepted accounting principles consistently applied,
is treated as a capital transaction including, without limitation, any sale of
all or substantially all of the assets of the Company.
"Closing Price": As defined in Section 16.4
"Code": The Internal Revenue Code of 1986, as amended, and any reference
to a particular section of the Code shall be deemed to include any successor
section to such section.
"Company": FEDERAL HOLDINGS L.L.C., a New York limited liability company.
"Contributing Member": A Member which has made its additional Capital
Contribution.
"Current Market Value": As defined in Section 16.4.
"Fair Market Value": As defined in Section 16.4.
"Gain from a Capital Transaction": The gain recognized by the Company
attributable to a Capital Transaction, determined in accordance with the method
of accounting used by the Company for federal income tax purposes.
"Interest": The respective percentage interest of each Member as set forth on
Schedule A.
"Investment Manager": Shall mean Lawrence Seidman, subject to the provisions
of Section 10.5.
<PAGE>
"Loss from a Capital Transaction": The loss recognized by the Company
attributable to a Capital Transaction, determined in accordance with the method
of accounting used by the Company for federal income tax purposes.
"Management Fee": As defined in Section 10.2.
"Member": Means each of the parties who has executed this Agreement and any
party who may hereafter become an Additional Member or a Substitute Member
pursuant to this Agreement.
"Net Proceeds": As defined in Section 8.1.
"Net Profit" and "Net Loss": The net income (including income exempt from tax)
and net loss (including expenditures that can neither be capitalized nor
deducted), respectively, of the Company, determined in accordance with the
method of accounting used by the Company for federal income tax purposes, but
computed without regard for Gain from Capital Transactions, Loss from Capital
Transactions and items of income or loss, if any, that are specially allocated
to Members. In the event there is a revaluation of Company assets and the
Capital Accounts are adjusted pursuant to Section 704(b) of the Code and
applicable regulations promulgated thereunder, Net Profits and Net Losses shall
be computed by reference to the "book items" and not corresponding "tax items".
"Preferred Return": With respect to a Member, an amount equal to 7.5% per annum
simple interest (prorated for any partial year) on the amount of such Member's
Unrecovered Capital Contribution, from time to time, calculated from the date a
Capital Contribution is made.
"Substitute Member": Any transferee of a Member's Interests who is admitted
as a Member in the Company pursuant to Article 15 or 16.
"Trading Day": As defined in Section 16.4.
"Unrecovered Capital Contribution": For any Member, the aggregate amount of
capital contributed by such Member reduced by the aggregate amount of capital
theretofore distributed to such Member pursuant to Articles 16 and 17.
"Unrecovered Preferred Return": For any Member an amount equal to the
Preferred Return reduced by the aggregate amount of distributions theretofore
made to such Member pursuant to Section 8.1(b)(i).
<PAGE>
"Unrecovered 20% IM Fee": An amount equal to 20% of the aggregate annual
Preferred Return for all Members divided by .8, reduced by the aggregate amount
of distributions of Net Proceeds theretofore made pursuant to Section 8.1(b)
(ii).
ARTICLE 2
FORMATION
2.1 The parties hereto do hereby form the Company under the name of FEDERAL
HOLDINGS L.L.C. pursuant to the Law.
In order to maintain the Company as a limited liability company under the laws
of the State of New York, the Company shall from time to time take appropriate
action, including the preparation and filing of such amendments to the Articles
of Organization and such other assumed name certificates, documents, instruments
and publications as may be required by law, including, without limitation,
action to reflect:
(i) a change in the Company name;
(ii) a correction of a defectively or erroneously executed Articles of
Organization;
(iii) a correction of false or erroneous statements in the Articles of
Organization or the desire of the Members to make a change in any statement
therein in order that it shall accurately represent the agreement among the
Members; or
(iv) a change in the time for dissolution of the Company as stated in
the Articles of Organization and in this Agreement.
2.2 Each Member hereby agrees to execute and deliver to the Company within five
(5) days after receipt of a written request therefor, such other and further
documents and instruments, statements of interest and holdings, designations,
powers of attorney and other instruments and to take such other action as the
Company deems necessary, useful or appropriate to comply with any laws, rules or
regulations as may be necessary to enable the Company to fulfill its
responsibilities under this Agreement, to preserve the Company as a limited
liability company under the Law and to enable the Company to be taxed as a
partnership for federal and state income tax purposes.
<PAGE>
ARTICLE 3
PRINCIPAL OFFICE
3.1 The Company's registered office in New York shall be at 30 Wall
Street, Ninth Floor, New York, New
York. The Company's registered agent who is a resident of New York is
Jonathan A. Bernstein, Esq. whose business address is Pryor, Cashman,
Sherman & Flynn, 410 Park Avenue, New York, New York 10022. At any time, the
Company may designate another registered agent and/or office.
3.2 The principal place of business of the Company shall be at 30 Wall Street,
Ninth Floor, New York, New York. At any time, the Company may change the
location of its principal place of business and may establish additional
offices.
ARTICLE 4
TERM AND DURATION
4.1 The Company shall commence upon the filing of the Articles of Organization,
and shall continue in full force and effect until April 30, 2045; provided,
however, that the Company shall be dissolved prior to such date upon the
happening of any of the following events:
(a) The mutual written consent of all of the Members to dissolve the
Company;
(b) The divestiture or distribution of all or substantially
all of the assets of the Company, (other than a transfer to a nominee of the
Company for any Company purpose, which event shall not be construed as an event
of termination);
(c) The entry of a decree of judicial dissolution under Section 702 of the
Law; or
(d) The happening of any other prior event which pursuant to the terms and
provisions of this Agreement shall cause a dissolution or termination of the
Company.
4.2 Upon any dissolution of the Company, the liquidation of the Company's assets
and the winding up of its affairs shall be concluded in accordance with Article
17 of this Agreement.
<PAGE>
ARTICLE 5
PURPOSE
5.1 The purpose of the Company is to legally or beneficially acquire, own, sell,
transfer, hold and vote shares of common stock, preferred stock, convertible or
exchangeable securities of any bank, bank holding company, savings and loan
association or trust company (hereinafter referred to as "Stock") and to enter
into any contracts or commitments, assume any obligation, execute any documents
and do any and all other acts and things, either directly or in conjunction with
others through corporations, joint ventures, partnerships, trusts, limited
liability companies or otherwise, which may be necessary, incidental or
convenient to carry on the business of the Company as contemplated by this
Agreement. The Company may also sell covered calls, repurchase such calls and
buy puts, but the Company shall not sell uncovered calls or puts.
5.2 The purpose of the Company shall also be for any other lawful purpose for
which the Members shall herewith agree in writing by amendment to this
Agreement.
ARTICLE 6
CAPITAL CONTRIBUTIONS BY THE MEMBERS
6.1 Each Member shall contribute to the capital of the Company the amounts
set forth on Schedule A.
6.2 No Member shall have the right to withdraw any part of his Capital
Contribution or receive any distribution, except in accordance with the
provisions of this Agreement. No interest shall be paid on any Capital
Contribution other than the Preferred Return.
6.3 No Member shall have any priority over any other Member with respect to the
return of Capital Contributions.
6.4 The Company shall maintain a capital account (a "Capital Account") for each
Member within the provisions of Treasury Regulation Section 1.704-1(b) (2) (iv)
as such regulation may be amended from time to time.
<PAGE>
6.5 To the extent not inconsistent with the foregoing, the following shall
apply:
(a) The Capital Account of each Member shall be credited with (1) an amount
equal to such Member's cash contributions and the fair market value of property
contributed to the Company by such Member (net of liabilities securing such
contributed property that the Company is considered to assume or take subject to
under Section 752 of the Code) and (2) such Member's share of the Company's Net
Proceeds (or items thereof) and Gain from a Capital Transaction. The Capital
Account of each Member shall be debited by (1) the amount of cash distributions
to such Member and the fair market value of property distributed to such Member
(net of liabilities assumed by such Member and liabilities to which such
distributed property is subject) and (2) such Member's share of the Company's
Net Losses (or items thereof) and Loss from a Capital Transaction.
(b) Upon the transfer of an Interest in the Company after the date of this
Agreement, (x) if such transfer does not cause a termination of the Company
within the meaning of Section 708 (b) (1) (B) of the Code, the Capital Account
of the transferor Member that is attributable to the transferred Interest will
be carried over to the transferee Member but, if the Company has a Section 754
election in effect, the Capital Account will not be adjusted to reflect any
adjustment under Section 743 of the Code, or (y) if such transfer causes a
termination of the Company within the meaning of Section 708 (b) (1) (B) of the
Code, the income tax consequences of the deemed distribution of the property and
of the deemed immediate contribution of the property to a new Company (which for
all other purposes continues to be the Company) shall be governed by the
relevant provisions of Subchapter K of Chapter 1 of the Code and the regulations
promulgated thereunder, and the initial Capital Accounts of the Members in the
new Company shall be determined in accordance with Treasury Regulation Sections
1.704-1(b) (2) (iv) (d, (e), (f), (g), and (i) and thereafter in accordance with
Section 6.5 (a).
(c) Upon (i) the "liquidation of the Company" (as hereinafter defined), (ii) the
"liquidation of a Member's Interest in the Company" (as hereinafter defined),
(iii) the distribution of money or property to a Member as consideration for an
Interest in the Company , or (iv) the contribution of money or (if permitted
pursuant to (a) above) property to the Company by a new or existing Member as
consideration for an Interest in the Company, or upon any transfer causing a
termination of the Company for tax purposes within the meaning of Section 708
(b) (1) (B) of the Code, then adjustments shall be made to the Members' Capital
Accounts in the following manner: All property of the Company which is not sold
in connection with such event shall be valued at its then "agreed value". Such
"agreed value" shall be used to determine both the amount of gain or loss which
would have been recognized by the Company if the property had been sold for its
agreed value (subject to any debt secured by the property) at such time, and the
amount of Net Proceeds, as the case may be, which would have been distributable
by the Company pursuant to Section 9.2 if the property had been sold at such
time for said value, less the amount of any debt secured by the property. The
Capital Accounts of the Members shall be adjusted to reflect the deemed
allocation of such hypothetical gain or loss in accordance with Section 9.1. The
Capital Accounts of the Members (or of a transferee of a Member) shall
thereafter be adjusted to reflect "book items" and not tax items in accordance
with Treasury Regulation Section 1.704 1(b) (2) (iv) (g) and 1.704-1(b) (4) (i).
(d) For purposes of this Section 6.5, (i) the term "liquidation of the Company"
shall mean (A) a termination of the Company effected in accordance with this
Agreement, which shall be deemed to occur, for purposes of this Article 6, on
the date upon which the Company ceases to be a going concern and is continued in
existence solely to wind-up its affairs, or (B) a termination of the Company
pursuant to Section 708 (b) (1) of the Code; and (ii) the term "liquidation of a
Member's Interest in the Company" shall mean the termination of the Member's
entire Interest in the Company effected by a distribution, or a series of
distributions, by the Company to the Member.
ARTICLE 7
ADDITIONAL CAPITAL CONTRIBUTIONS
7.1 No Member shall be obligated to make additional Capital Contributions to the
Company. If the Administrative Manager determines that the Company shall need
additional funds for any Company purpose, including, without limitation, (a)
those purposes set forth in Article 5, or (b) cash in excess of Net Proceeds in
order to satisfy any obligations and liabilities of the Company, then within
fifteen (15) days of notice of such requirement, each Member may, but shall not
be obligated to, contribute to the Company his pro rata share.
If a Member elects to make an additional Capital Contribution and another Member
forgoes contributing additional capital, the Company shall, for purposes of
distributions and allocations, recompute each Member's percentage Interest in
the Company in proportion to the total capital contributed to the Company such
that thereafter each Member's Interest shall be equal to the percentage that
such Member's aggregate Capital Contribution theretofore made to the Company
bears to the total Capital Contributions theretofore made by all the Members.
7.2 A Member may from time to time, upon the consent of the Administrative
Manager but without the consent of a majority in interest of the Members,
<PAGE>
advance additional monies (an "Advance") to or for the benefit of the Company,
and such advances shall not be treated as Capital Contributions but shall be
considered as loans to be repaid upon demand together with annual interest at a
rate not less than the lowest applicable federal rate of interest which allows
for the avoidance of imputed or unstated interest, for federal income tax
purposes. Such loans shall be evidenced by a promissory note executed and
delivered by the Company to the Member making such Advance.
ARTICLE 8
DISTRIBUTIONS OF NET PROCEEDS
8.1 (a) Net Proceeds shall be computed and distributed by the Company once, on
an aggregated basis of all stocks in which the Company has traded, at the
earlier of (i) a determination by the Investment Manager in his sole discretion,
(ii) the resignation or other termination of the Investment Manager, (iii) the
liquidation or winding up of the Company or (iv) the end of the Management Term.
"Net Proceeds" shall be defined as dividends received, interest income, all net
trading profits (i.e. proceeds from the sale of Stock less the Company's basis
in the Stock) less all expenses (including but not limited to brokerage
commissions, the Management Fee and other applicable accounting or professional
fees but not including the Unrecovered 20% IM Fee) all as computed in accordance
with generally accepted accounting principles.
(b) Net Proceeds shall be distributed as follows:
(i) first, to the Members, pro rata, an amount equal to each Member's cumulative
Unrecovered Preferred Return in proportion to their Unrecovered Preferred Return
until the Preferred Return shall be paid in full;
(ii) second, to the Investment Manager an amount equal to the Unrecovered
20% IM Fee; and
(iii) the balance, if any, shall be paid 80% to the Members in proportion
to their Interests and 20% to the Investment Manager.
(c) If Stock cannot be readily sold because of the lack of its liquidity in the
market or if the Administrative Manager elects not to sell the Stock at the time
of a distribution of Net Proceeds, the Company shall calculate the fair market
value of the Stock by averaging the closing sale prices (or if there is no sale
on a particular day, the average closing bid and ask prices) for the five
consecutive trading days preceding the date of computation. Thereafter, based
<PAGE>
upon its valuation, the Company shall calculate the amount of Net Proceeds that
would be distributed if the Stock had actually been sold for its fair market
value (including all applicable commissions). The Company shall then distribute
the Stock in kind in accordance with Section 8.1(b) as if the Stock were Net
Proceeds.
(d) Notwithstanding Section 8.1(c), if the Investment Manager makes a
determination to distribute Net Proceeds in accordance with Section 8.1(a)(i)
and the Stock cannot be readily sold because of its lack of liquidity in the
market, the Investment Manager shall liquidate the Stock in an orderly fashion
over a six (6) month period. Thereafter, Net Proceeds shall be distributed in
accordance with Section 8.1(b).
8.2 Notwithstanding Section 8.1, Net Proceeds from a Capital Transaction which
constitutes a liquidation of the Company, together with other funds remaining to
be distributed, shall be distributed to the Members no later than the later of
(a) the end of the taxable year of the Company in which such liquidation occurs
or (b) within ninety (90) days after the date of such liquidation event, after
payment of all Company liabilities and expenses (or adequate provision therefor)
including the Management Fee, except that in no event shall (x) a distribution
be made to any Member if, after giving effect to such distribution, all
liabilities of the Company, other than liabilities to Members on account of
their Interests and liabilities for which the recourse of creditors of the
Company is limited to specified property of the Company, exceed the Fair Market
Value (as defined in Section 16.4(c)) of the assets of the Company, except that
the Fair Market Value of assets that is subject to a liability for which the
recourse of creditors is limited shall be included in the assets of the Company
only to the extent that the Fair Market Value of those assets exceeds that
liability and (y) the distribution to a Member exceed the positive balance in
such Member's Capital Account after giving effect to all allocations to such
Member under Article 9 50 that liquidation proceeds shall be distributed in
accordance with each Member's positive Capital Account balance (within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(~ as in effect on the
date hereof). If a Member shall receive a distribution that should not have been
made based upon the provisions of Section 8.2(x), the provisions of Section
508(b) of the Act shall apply. Section 508(c) of the Law shall apply to all
distributions made to the Members.
ARTICLE 9
TAX ALLOCATIONS AND DISTRIBUTIONS
9.1 The Net Profits of the Company for each fiscal year shall be allocated
among the Members as follows:
<PAGE>
(a) First to the Members in an amount equal to, and in proportion to,
the aggregate amount of Net Losses
theretofore allocated to each Member; and
(b) Thereafter, in proportion to their respective Interests in the Company
Any credit available for income tax purposes shall be allocated among the
Members in proportion to their respective Interests in the Company.
9.2 Gain from a Capital Transaction shall be allocated in the following
order:
(a) There shall first be allocated to those Members, if any, who have deficit
balances in their Capital Accounts immediately prior to such transaction, an
amount of such gain equal to the aggregate amount of such deficit balances,
which amount shall be allocated in the same proportion as such deficit balances.
(b) There shall next be allocated to each of the Members, gain equal to the
amount by which (x) the aggregate Net Proceeds derived from such transaction
distributable to each Member in accordance with the provisions of Section 8.1(b)
(i) and (iii), assuming such amounts are distributable, exceeds (y) the positive
balance, if any, in such Member's Capital Account after such Member's Capital
Account has been adjusted to reflect the gain allocated to such Member pursuant
to paragraph (a) above; provided, however, that if there shall be an
insufficient amount of gain determined by this paragraph, then the gain shall be
allocated to the Members in proportion to the respective amounts determined
pursuant to this paragraph.
(c) Any remaining gain shall be allocated among the Members in
proportion to their respective Interests in the Company.
(d) If the Company shall realize, upon such transaction, gain which is treated
as ordinary income under Section 1245 or 1250 of the Code, such ordinary income
shall be allocated to the Members who receive the allocation of the depreciation
or cost recovery deduction that generated the ordinary income, which amount
shall be allocated in the same proportions as such deductions.
9.3 Net Losses of the Company shall be allocated among the Members as follows:
(a) First, to the Members in proportion to their respective positive
Capital Account balances until such balances are reduced to zero; and
(b) The balance shall be allocated to the Members in proportion to their
respective Interests in the Company.
<PAGE>
9.4 Loss from a Capital Transaction from the sale or other disposition of all or
substantially all of the assets shall be allocated in the following order:
(a) First, to those Members, if any, who have positive balances in their Capital
Accounts, an amount of such loss equal to the aggregate amount of such positive
balances, which amount shall be allocated in the same proportion as such
positive balances; and
(b) The balance of such loss shall be allocated to the Members in
proportion to their respective Interests in the Company
9.5 Notwithstanding the foregoing provisions of Article 9:
(a) In accordance with Sections 704 (b) and (c) of the Code and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Company (including all or part of any
deemed Capital Contribution under Section 708 of the Code) shall, solely for tax
purposes, be allocated among the Members so as to take into account any
variation between the adjusted basis of such property to the Company and its
agreed value. In the event that Capital Accounts are ever adjusted pursuant to
Treasury Regulation Section 1.704-1(b) (2) to reflect the fair market value of
any Company property, subsequent allocations of income, gain, loss and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset and its value as adjusted in the same manner as
required under Section 704 (c) of the Code and the Treasury Regulations
thereunder.
(b) At no time shall any allocation of losses be made to a Member if such
allocation would cause the deficit in the Member's adjusted Capital Account, if
any, to exceed his allocable share of "Company Minimum Gain" or "Minimum Gain
Attributable to Member Nonrecourse Debt" (as defined in Treasury Regulation
Sections 1.704-2 (g) (1) and (i) (5), respectively), and any losses not
allocated to a Member by reason of this clause (b) shall be allocated to each
Member whose deficit, if any, in the Member's adjusted Capital Account of such
Member shall not exceed his allocable share of such minimum gain by reason of
such allocation.
<PAGE>
(c) If there is a net decrease in the Company's minimum gain (within the meaning
of Treasury Regulation Section 1.704-2 (g) (2)) for a Company taxable year and,
at the end of such taxable year, the deficit, if any, in a Member's Capital
Account exceeds his allocable share of such minimum gain, gross income of the
Company shall be allocated to such Member in an amount equal to such excess so
as to satisfy the requirements of Treasury Regulation Section 1.704-2 (f)
(minimum gain chargeback).
(d) If, during any taxable year, there is a net decrease in Company Minimum Gain
Attributable to Member Nonrecourse Debt, then, before any other allocations are
made for such year other than those pursuant to clause (b) above, each Member
with a share of the Company Minimum Gain Attributable to Member Nonrecourse Debt
at the beginning of the year shall be allocated items of Company income and gain
for such year (and, if necessary, for subsequent years) in an amount equal to
each Member's share of the net decrease in Minimum Gain Attributable to Member
Nonrecourse Debt as determined in accordance with Treasury Regulation Section
1.704-2 (i) (4) in a manner so as to satisfy the requirements of said Treasury
Regulation.
(e) If, during any taxable year, a Member unexpectedly receives an adjustment,
allocation or distribution described in paragraph (4), (5) or (6) of Treasury
Regulation Section 1.704-1(b) (2) (ii) (~, and if such adjustment, allocation or
distribution would cause at the end of the taxable year a deficit balance in
such Member's Capital Account in excess of his allocable share of minimum gain
as described above, then such Member shall be allocated items of income and gain
for such taxable year (and, if necessary, subsequent taxable years) in an amount
and in a manner sufficient to eliminate such excess balance as quickly as
possible before any other allocation is made for such year, other than pursuant
to Sections 9.5(b) and (c), so as to satisfy the requirements of Treasury
Regulation Section 1.704-1(b) (2) (ii) (~ (qualified income offset).
(f) In the event any Member has a deficit balance in his Capital Account at the
end of the fiscal year which is in excess of the sum of (i) the amount such
Member is obligated to restore pursuant to any provision of this Agreement, if
any, and (ii) the amount such Member is deemed to be obligated to restore
pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2
(g) (1) and 1.704-2 (i) (5), each Member shall be specially allocated items of
Company income and gain in the amount of such excess as quickly as possible.
ARTICLE 10
RIGHTS, POWERS AND REPRESENTATIONS
OF THE INVESTMENT MANAGER AND
ADMINISTRATIVE MANAGER: MANAGEMENT FEE
10.1 The Investment Manager shall have the full, exclusive and complete power
and authority to buy, sell and vote the Stock. The Investment Manager shall have
all necessary and appropriate powers to carry out the authority so granted, and
no other party, including any Member, shall have the right to take any action
with respect to the acquisition, sale or voting of the Stock. "Management Term"
shall mean a term of two (2) years commencing on the date hereof, unless sooner
<PAGE>
terminated by the Administrative Manager for cause. The Administrative Manager
may terminate the Investment Manager for cause upon 30 days written notice to
the Investment Manager setting forth with specificity the grounds for
termination. For purposes of this Section, "cause" means any willful (i)
dissemination of genuine trade secrets or other confidences of the Company or
any of its affiliates by the Investment Manager; (ii) dishonesty of the
Investment Manager as punishable by criminal law or for which the Investment
Manager would be liable to the Company or its affiliates under civil law; (iii)
deliberate activity of the Investment Manager which is prejudicial to the
interests of the Company or its affiliates; and (iv) deliberate failure by the
Investment Manager to perform any of his material obligations hereunder which is
not cured by the Investment Manager within 30 days after ~ from the Company of
such failure. In the event of a termination of the Investment Manager under this
Section, or upon the death or adjudication of incompetency of the Investment
Manager, the Company shall, within 30 days, make a distribution of Net Proceeds
in accordance with Section 8.1 above.
10.2 The Company shall pay the Investment Manager a Management Fee. The
"Management Fee" shall be equal to .25% of the Fair Market Value (as defined
Section 16.4(c)) of the assets of the Company, payable quarterly, on the last
day of March, June, September and December of each calendar year of the
Management Term. The Management Fee shall be prorated as to the first such
quarter and upon the termination, resignation, death or adjudication of
incompetency of the Investment Manager
10.3 Except for the matters set forth in Section 10.1, all other decisions,
consents, authorizations and rights in connection with the management of the
Company shall be made, given or performed, as the case may be, by the
Administrative Manager. In furtherance of the foregoing, the Administrative
Manager may: i (a) negotiate, execute, deliver and perform on behalf of, and in
the name of, the Company any, wire transfer instructions, disbursement
authorizations, agreements, contracts, promissory notes and other evidences of
indebtedness, and any and all other instruments necessary or incidental to the
business of the Company and the financing thereof;
(b) to secure the payment thereof by all or any part of the assets then
owned or thereafter acquired by the
Company;
(c) effectuate the purpose of the Company as provided in Article 5 hereof;
<PAGE>
(d) establish, maintain and draw upon any brokerage, money market,
demand deposit, checking and other accounts of the Company;
(e) execute any notifications, statements, reports, returns or other filings
that are necessary or desirable to be filed with any state or federal agency,
commission or authority;
(f) enter into contracts in connection with the business of the Company;
(g) retain professionals, accountants, lawyers, consultants as the
case may be to further the purpose and business of the Company;
(h) arrange for facsimile signatures for the Members in executing any and all
documents, papers, checks or other writings or legal instruments which may be
necessary or desirable in the Company's business;
(i) execute, acknowledge and deliver any and all contracts, documents and
instruments deemed appropriate to carry out any of the foregoing purposes and
intent of this Agreement;
(j) establish reserves for anticipated expenses, debts and obligations
incident to the operation of the Company's business; and
(k) perform all other duties and make all other decisions in furtherance of the
management and operation of the Company's business in accordance with the Law
except as otherwise set forth in this Agreement.
10.4 The Administrative Manager, on behalf of the Company, shall establish a
brokerage account (the "Account") at Spear, Leeds and Kellogg or any other
brokerage company (the "Broker") approved by the Administrative Manager through
which the Investment Manager shall have the exclusive power and authority to
direct the Broker to disburse the funds necessary to acquire Stock and to sell
Stock. The Investment Manager shall have no power or authority to cause funds to
be disbursed from the Account other than for the purpose of acquiring Stock. Any
withdrawals of any kind from the Account shall be made by the Administrative
Manager.
10.5 Upon the expiration of the Management Term, the Administrative Manager
shall, upon the concurrence of the Investment Manager, have the right to extend
the Management Term or, in his sole discretion, select a successor Investment
Manager. The duties of a successor Investment Manager shall commence upon the
date so designated by the Administrative Manager, and from and after such date,
the prior existing Investment Manager shall be relieved of all duties and
<PAGE>
obligations with respect to the Company, shall no longer hold himself or herself
out to any other person or entity as the Investment Manager of the Company,
shall turn over to the Administrative Manager any and all books and records of
the Company, and shall take such action as the Company shall request in order to
effectuate such discharge and termination. No such discharge shall affect any
obligations of the Company to the Investment Manager, including reimbursement
and indemnity obligations as set forth herein or in the Law.
10.6 The fact that the Members, the Investment Manager or the Administrative
Manager are directly or indirectly interested in or connected with any person,
firm or corporation employed by the Company to render or perform a service, or
from which or whom the Company may buy merchandise, material, services or other
property shall not prohibit the Company from employing such persons, firms or
corporations, or from otherwise dealing with such persons, firms or corporations
so long as such terms and conditions are equivalent to those available at the
Company and the transaction was on an arms-length basis.
ARTICLE 11
BOOKS, RECORDS AND REPORTS
11.1 At all times during the continuance of the Company, the Administrative
Manager shall keep or cause to be kept full and true books of account, in which
shall be entered fully and accurately each transaction of the Company. The books
of account, together with an executed copy of the Articles of Organization of
the Company and any amendments thereto, shall at all times be maintained at the
principal office of the Company and shall be open to inspection and examination
by the Members or their representatives at reasonable hours and upon reasonable
notice. For purposes hereof, the Company shall keep its books and records on the
same method of accounting employed for tax purposes.
11.2 The fiscal year of the Company shall be the calendar year. Within a
reasonable time after the end of each fiscal year and in any event on or before
thirty (30) days prior to the filing date for individual tax returns (including
extensions), the accountants for the Company shall deliver to each Member (a) an
annual statement of the Company's receipts and expenses for such year and the
Capital Account of such Member as of the end of each such year, prepared by the
Company's accountants, and (b) a report or a tax return setting forth such
Member's share of the Company's profit or loss for such year and such Member's
allocable share of all items of income, gain, loss, deduction and credit for
federal income tax purposes.
<PAGE>
11.3 The Company shall also cause to be prepared and filed all federal, state
and local tax returns required of the Company. All books, records, balance
sheets, statements, reports and tax returns required pursuant to this Section 11
shall be prepared at the expense of the Company.
11.4 In accordance with Section 301(e) of the Law,. the Administrative Manager
shall cause to be prepared and filed biennially the requisite statements for
which service of process shall be accepted by the Secretary of State on behalf
of the Company.
ARTICLE 12
INDEMNIFICATION
12.1 Subject to the limitations and conditions provided in this Article 12 and
in the Law, each person ("Indemnified Person") who was or is made a party or is
threatened to be made a party to or is involved in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative ("Proceeding"), or any appeal in such a Proceeding
or any action or investigation that could lead to such a Proceeding, by reason
of the fact that any manager or member was or is a Member, a Manager or an
officer of the Company or was or is the legal representative of or a manager,
director, officer, member, venturer, proprietor, trustee, employee, agent or
similar functionary of a Member, shall be indemnified by the Company against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable costs and expenses (including, without
limitation, attorneys' fees) actually incurred by such Indemnified Person in
connection with such Proceeding if such Indemnified Person acted in good faith
and in a manner he 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 his conduct was unlawful. The termination of
any 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 Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal action or proceeding, that the Indemnified
Person had reasonable cause to believe that such conduct was unlawful.
12.2 Subject to the limitations and conditions provided in this Article 12 and
in the Law, the Company shall and does hereby 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 such person is or was a Member, a
<PAGE>
Manager or an officer of the Company, the legal representative of a Member or
officer, or manager, director, officer, member, venturer, proprietor, trustee,
employee, agent or similar functionary of a Member against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, if such person acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Company, provided 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 for negligence or misconduct in the performance of
his duty 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 for such expenses as
the court shall deem proper.
12.3 To the extent that a person has been successful, on the merits or
otherwise, in the defense of any action, suit or proceeding referred to in
Sections 12.1 or 12.2, or in defense of any claim, issue or matter there;-' such
person shall be indemnified against expenses (including attorneys' fee3)
actually and reasonably incurred by such person in connection therewith.
<PAGE>
12.4 Any indemnification under Sections 12.1 or 12.2 (unless ordered by a court)
shall be made by the Company except upon a reasonable determination that
indemnification is proper in the circumstances because such person has not met
the applicable standard of conduct set forth therein; and if such standard is
met indemnification shall be mandatory. Such determination shall be made (i) by
the holders of a majority of the Interests held by Members who were not parties
to such action, suit or proceedings, or (ii) if such a quorum is not obtainable,
or even if obtainable, if a quorum of disinterested Members so directs, by the
Company's independent legal counsel in a written opinion.
12.5 Indemnification under this Article 12 shall continue as to a person who has
ceased to serve in the capacity which initially entitled such person to
indemnity hereunder. The rights granted pursuant to this Article 12 shall be
deemed contract rights, and no amendment, modification or repeal of this Article
12 shall have the effect of limiting or denying any such rights with respect to
actions taken or Proceedings arising prior to any such amendment, modification
or repeal.
12.6 The right to indemnification conferred by this Article 12 shall include the
right to be paid or reimbursed by the Company for the reasonable expenses
incurred in advance of the final disposition of the Proceeding and without any
determination as to the person's ultimate entitlement to indemnification;
provided, however, that the payment of such expenses incurred in advance of the
final disposition of a Proceeding shall be made only upon delivery to the
<PAGE>
Company of a written affirmation by such person of his good faith belief that he
has met the standard of conduct necessary for indemnification under this Article
12 and a written undertaking, by or on behalf of such person, to repay all
amounts so advanced if it shall ultimately be determined that such person is not
entitled to be indemnified under this Article 12 or otherwise.
12.7 The right to indemnification and the advancement and payment of expenses
conferred by this Article 12 shall not be exclusive of any other right which a
person may have or hereafter acquire under any law (common or statutory),
provision of the Articles of Organization or this Agreement, agreements, vote of
Members or otherwise.
12.8 Insurance. The Company may purchase and maintain insurance, at its expense,
to protect itself and any Indemnified Person against any expense, liability or
loss, whether or not the Company would have the power to indemnify such person
against such expense, liability or loss under this Article 12.
12.9 Savings Clause. If Sections 12.1,12.2 or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Indemnified Person
as to costs, charges and expenses (including attorneys' fees), judgments, fines
and accounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent
permitted by any applicable portion of this Article 12 that shall not have been
invalidated and to the fullest extent permitted by applicable law.
ARTICLE 13
TAX MATTERS
13.1 (a) Notwithstanding any provisions hereof to the contrary, each of the
Members hereby recognizes that the Company will be a Company for United States
federal income tax purposes and that the Company will be subject to all
provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided,
however, that the filing of United States Company Returns of Income shall not be
construed to extend the purposes of the Company or expand the obligations or
liabilities of the Members. At the request of any Member, the Company shall file
an election under Section 754 of the Code.
(b) The Company shall engage an accountant (the "Accountant") to prepare at the
expense of the Company all tax returns and statements, if any, which must be
<PAGE>
filed on behalf of the Company regarding the operation, dissolution and
liquidation of the Company with any taxing authority.
(c) The Administrative Manager is designated the Tax Matters Member (herein
"TMM") for purposes of Chapter 63 of the Code and the Members will take such
actions as may be necessary, appropriate, or convenient to effect the
designation of the Administrative Manager as TMM. The TMM shall attempt to
comply with the responsibilities outlined in this Section 13.1 and in Sections
6222' through 6231 of the Code (including any Treasury Regulations promulgated
thereunder.
ARTICLE 14
DEATH, DISSOLUTION OR
BANKRUPTCY OF A MEMBER
14.1 Upon the death, dissolution, resignation, retirement, expulsion,
adjudication of bankruptcy or adjudication of incompetency of a Member, the
Company shall be dissolved and its affairs shall be wound up unless within 180
days after such event, the Company is continued by the vote of the majority in
Interest of the Members (which approval may be granted or withheld in such
Member's sole discretion). In the event the Company is continued, such Member
(a) making an assignment for the benefit of creditors; (b) filing a voluntary
petition in bankruptcy; (c) being adjudged bankrupt or insolvent, or having
entered against him an order for relief, in any bankruptcy or insolvency
proceeding; (d) filing a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation; (e) filing an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against him in any proceeding of this nature; or (f) seeking,
consenting to or acquiescing in the appointment of a trustee, receiver or
liquidator of the Member or of all or any substantial part of its assets, shall
not be entitled to vote on any matters regarding the operation of the Company
except for matters described in Articles 14 and 15.
ARTICLE 15
ASSIGNABILITY, TRANSFER OR PLEDGE OF
INTERESTS RESIGNATION OF MEMBER
15.1 (a) No Member shall have the right to assign, convey, sell or otherwise
transfer or dispose of, or pledge, mortgage, hypothecate or otherwise encumber
his Interest, whether record or beneficial interest thereof, without the prior
<PAGE>
written consent of the Administrative Manager and a majority in Interest of the
Members, which consent may be withheld or delayed in each Member's sole
discretion. Notwithstanding the preceding sentence, but subject to the
restrictions on transferability required by law, or set forth in any instrument
or agreement by which the Company may be bound, or which may be contained in
this Agreement, an individual Member may, with the consent of a majority in
interest of the other Members, assign, convey, sell or otherwise transfer or
dispose of all or any portion of his Interest in the Company to any one or more
of the members of his immediate family or families (defined for the purposes of
this Agreement as a mother, father, sister, brother, son, daughter, stepson,
stepdaughter or spouse (in each instance whether by marriage or otherwise))
and/or to a trust or other entity for the benefit thereof or themselves, by a
written instrument of assignment and assumption, provided that the instrument of
transfer provides for the assumption of the assignor's liabilities and
obligations hereunder and has been duly executed by the assignor of such
Interest and by the transferee. Upon consent of the Administrative Manager, such
assignee shall become a Member and shall thereafter have the rights, powers,
preferences and limitations and be subject to the restrictions and limitations
of a Member under this Agreement. The Member shall notify the Company of any
assignment, transfer or disposition of a beneficial interest in any Interest of
the Member which occurs without a transfer of record ownership, although such
notification, or the absence of a response thereto, shall not be deemed a
consent thereof.
(b) An assignee or transferee of any portion of the Interest of a Member shall
be entitled to receive allocations and distributions attributable to the
Interest acquired by reason of such assignment, from and after the effective
date of the assignment of such Interest to such assignee; however, anything
herein to the contrary notwithstanding, the Company shall be entitled to treat
the assignor of such Interest of the Member as the absolute owner thereof in all
respects, and shall incur no liability for allocations of net profits, net
losses, or gain or loss on sale of Company assets or property, or transmittal of
reports and notices required to be given to Members hereunder which are made in
good faith to such assignor until such time as the written assignment has been
received by the Company, approved and recorded on its books and the effective
date of the assignment has passed. Provided that the Company has actual notice
of any assignment of the Interest of the Member, the effective date of such
assignment on which the assignee shall be deemed an assignee of record shall be
the date set forth on the written instrument of assignment.
(c) Any assignment, sale, exchange, transfer or other disposition in
contravention of any of the provisions of this Article 15 and Article 16 hereof
shall be void and ineffective and shall not bind or be recognized by the
Company.
<PAGE>
(d) In the event that there shall be more than one assignee, transferee,
representative or other successor-in-interest as permitted herein (collectively,
the "Transferees") and the Member as of the date of this Agreement shall remain
a Member, then the Member shall be authorized to act, and shall so act, on
behalf of the Member and all of the Transferees acting as such by, through or
under the Member. In the event that there shall be more than one Transferee, and
the Member as of the date of this Agreement shall no longer be a Member, then
the Company must be advised by the Member whose Interest is the subject of such
event or failing which by a two-thirds (2/3) majority in interest of those
holding any portion of the Interests of the Member, of one person to act on
behalf of all of the Transferees. The Member, if the first sentence of this
paragraph shall be applicable, or the person so noted to the Company, if the
second sentence of this paragraph shall be applicable, shall be authorized to
act, and shall so act, for all of the Transferees, all of whom shall be bound by
any decision or action taken by such person, and the Company and all of the
other Members shall be entitled to rely on the decisions or actions taken by
such person. Until the Company shall be advised as to the identity of such
person, (i) the Transferees shall be entitled only to distributions and tax
allocations as provided in Article 8 and 9 hereof, but shall have no right,
power or authority with respect to any decision making reserved herein to the
Members or any of them and (ii) wherever in this Agreement provision shall be
made for the Members to make decisions with respect to. Company matters, the
Interest of the Member, as transferred to the Transferees, shall not be included
in determining whether the requisite Interest of Members have consented to or
approved of such decision.
15.2 Without the prior written consent of all Members, a Member may not resign
from the Company prior to the dissolution and winding up of the Company.
<PAGE>
ARTICLE 16
ADMISSION OF SUBSTITUTED MEMBERS;
INCAPACITY FURTHER CONDITIONS
16.1 No assignment or transfer of all or any part of the Interest of a Member
permitted to be made under this Agreement shall be binding upon the Company
unless and until a duplicate original of such assignment or instrument of
transfer, duly executed and acknowledged by the assignor and the transferee, has
been delivered to the Company.
16.2 As a condition to the admission of any Substituted Member, as provided in
Article 16 hereof, the person so to be admitted shall execute and acknowledge
such instruments, in form and substance as the Administrative Manager may deem
<PAGE>
necessary or desirable to effectuate such admission and to confirm the agreement
of the person to be admitted as a Member to be bound by all of the covenants,
terms and conditions of this Agreement, as the same may have been amended.
16.3 Any person to be admitted as a Member pursuant to the provisions of this
Agreement shall, as a condition to such admission as a Member, pay all
reasonable expenses in connection with such admission as a Member, including,
but not limited to, the cost of the preparation, filing and publication of any
amendment to this Agreement and/or Articles of Organization.
16.4 (a) In the event of the death or adjudication of incompetency of a Member,
or upon the happening of any event described in Article 14, the executor,
administrator, committee or other legal representative of such Member, or the
successor-in-interest of such Member, shall succeed to the rights of such Member
to receive allocations and distributions hereunder, and at such party's election
may be admitted to the Company as a Member in the place and stead of the
deceased, incompetent, or bankrupt Member (as defined in Article 14), but shall
not be deemed to be a Substituted Member until admitted in accordance with the
procedures of this Article 16.
(b) Upon the death of a Member, the estate of a deceased Member or his heirs or
legatees thereunder, as the case may be, shall have the option to continue in
the Company, or, alternatively, may elect within ninety (90) days of the
deceased Member's death, to offer in writing, within nine (9) months of such
deceased Member's death, to sell the deceased Member's Interest to the Company
at a price equal to the then Fair Market Value thereof, and upon such additional
terms and conditions as may be agreed upon. If the Company does not elect to
purchase the deceased Member's Interest within thirty (30) days of said written
offer, then the remaining Member or Members, as the case may be, shall have the
option, for a period of thirty (30) days thereafter, to purchase the deceased
Member's entire Interest, either in proportion to their respective Interests in
the Company or in such other proportions as they may agree, at a price equal to
the Fair Market Value thereof and upon such additional terms and conditions as
may be agreed upon.
(c) For purposes of this Agreement, "Fair Market Value" shall be the then
aggregate value of the Company's assets including cash or cash equivalents and
Stock as determined by the Current Market Value, computed as of the Trading Day
immediately preceding the valuation date. "Current Market Value" on any date
shall mean the average of the Closing Price for a share of Stock for five (5)
consecutive Trading Days ending on such date. "Closing Price" shall mean, on any
date, with respect to a share of Stock, the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, for one share of Stock in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on its national securities exchange.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Stock is listed or admitted to trading is open for the
transaction of business or, if the Stock is not listed or admitted to trading on
any national securities exchange, any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
16.5 Notwithstanding anything to the contrary contained in this Agreement, no
sale or exchange of an Interest in the Company may be made if the Interest
sought to be sold or exchanged, when added to the total of all other Interests
sold or exchanged within the period of twelve (12) consecutive months prior
thereto, results in the termination of the Company under Section 708 of the Code
without the prior written consent of a majority in Interest of the Members.
16.6 In the event of a permitted transfer of all or part of the Interest of a
Member, the Company shall, if requested, file an election in accordance with
Section 754 of the Code or a similar provision enacted in lieu thereof, to
adjust the basis of the assets of the Company. The Member requesting said
election shall pay all costs and expenses incurred by the Company in connection
therewith.
ARTICLE 17
LIQUIDATION
17.1 Upon the dissolution of the Company, the Company shall be liquidated and
its assets distributed as required by Article VII of the Law.
17.2 The assets of the Company shall be liquidated as promptly as possible, but
in an orderly and businesslike manner so as not to involve undue sacrifice.
17.3 In the event that any proceeds are to be distributed to the Members, same
shall be distributed, if practicable, no later than the later of (i) the end of
the taxable year of the Company in which such liquidation occurs; or (ii) within
ninety (90) days after the date of such liquidating event.
17.4 In any liquidation, the Company's assets shall be used first to pay the
costs and expenses of the dissolution and liquidation. In connection with any
liquidation, the Members may establish any reserves they deem reasonably
necessary for any contingent or unforeseen liabilities or obligations of the
Company or of the Members arising out of or in connection with the Company. Such
reserves shall be paid over by the Members to an attorney-at-law of the State of
New York as escrowee designated by the Members, to be held by him for the
<PAGE>
purpose of disbursing such reserves in payment of any of the aforementioned
contingencies. At the expiration of such period as the Members shall deem
advisable, said escrowee shall distribute the balance remaining in the manner
hereinafter provided. No reserves shall be held for longer than two (2) years.
17.5 Any remaining proceeds shall be distributed as follows:
(a) first, to all Members in proportion to and to the extent of any remaining
positive balances in such Member's Capital Account after giving effect to all
allocations to such Member under Article 9 of this Agreement so that liquidation
proceeds shall be distributed in accordance with each Member's positive Capital
Account balance (within the meaning of Treasury Regulation Section 1.704-1(b)
(2) (ii) (~ as in effect on the date hereof); and
(b) second, in accordance with Section 8.1 hereof.
17.6 Each of the Members shall be furnished with a statement prepared by the
Company's then Accountants, which shall set forth the assets and liabilities of
the Company as at the date of completion of liquidation. Upon the Company's
compliance with the provisions of Section 17.4 (including payment over to the
Attorney-Escrowee if there are sufficient funds therefor), the Members shall
cease to be such under this Agreement, and shall execute, acknowledge and cause
to be filed the Articles of Dissolution of the Company.
ARTICLE 18
MISCELLANEOUS
18.1 All terms and words used in this Agreement, regardless of the sense or
gender in which they are used, shall be deemed to include each other sense and
gender unless the context requires otherwise.
18.2 The Members agree immediately and from time to time to execute,
acknowledge, deliver, file, record and publish such further certificates,
amendments to certificates, instruments and documents, and to do all such other
acts and things as may be required by law, or as may, in the opinion of a
majority in Interest of the Members, be necessary or advisable to carry out the
intent and purposes of this Agreement.
18.3 The Members, on behalf of themselves, their legal representatives, heirs,
successors and assigns, hereby specifically renounce, waive and forfeit all
<PAGE>
rights whether arising under contract, statute, or by operation of law, to seek,
bring, or maintain any action for partition in any court of law or equity
pertaining to any property which the Company may now or in the future own,
regardless of the manner in which title to any such real property may be held.
18.4 Unless otherwise specified in this Agreement, all notices, demands,
requests or other communications which any of the parties to this Agreement may
desire or be required to give hereunder (hereinafter referred to collectively as
"Notices") shall be in writing and shall be delivered by personal delivery
against receipt or by any nationally recognized overnight courier to the
appropriate Member at the address first set forth above, with a copy of any
Notice being sent simultaneously to Pryor, Cashman, Sherman & Flynn, Attention:
Jonathan A. Bernstein, Esq., 410 Park Avenue, New York, New York 10022. Notice
may also be sent to such other addresses or substitute addresses of which a
Member advises the Company by notice given in the manner set forth herein.
Notices given in compliance with the provisions of this Article shall be deemed
given on the day received or attempted delivery.
18.5 The parties agree that the parties shall be governed by, and this Agreement
construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed in such State and that all claims and suits
shall be heard in the courts located in the State of New York.
18.6 All section titles or captions contained in this Agreement are for
convenience only and shall not be deemed a part of this Agreement.
18.7 This Agreement may be executed in counterparts and each counterpart so
executed by each Member shall constitute an original, all of which when taken
together shall constitute one agreement, notwithstanding that all the parties
are not signatories to the same counterpart.
18.8 This Agreement may not be changed, modified, amended waived or discharged,
in whole or in part, unless in writing and signed by a majority in Interest of
the Members. This Agreement shall be binding upon the Members and their
respective executors, administrators, legal representatives, heirs, successors
and assigns. The singular of any defined term or term used herein shall be
deemed to include the plural.
18.9 If any term or provision of this Agreement or the application thereof to
any person or circumstance shall to any extent be invalid or unenforceable, the
<PAGE>
remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
18.10 This Agreement is the entire agreement among the parties with respect to
the subject matter hereof and supersedes all prior agreements relative to such
subject matter.
18.11 It is expressly understood that the Investment Manager, the Administrative
Manager and each Member may engage in any other business or investment,
including the ownership of or investment in stocks, options, bonds, funds, and
other investment vehicles, whether or not in direct competition with the
business of the Company and neither the Company nor any other Member shall have
any rights in and to said businesses or investments, or the income or profits
derived therefrom.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
CHARISMA PARTNERS, L.P., a New York
limited Partnership
By: 8th Floor Realty Corp., its sole general
partner
By:
Name: /S/ Kevin S. Moore
Title: Vice President
---------------------------
/S/Anne L. Peretz
---------------------------
/S/Jesse W. Peretz
---------------------------
/S/Eugenia Peretz
---------------------------
/S/David L. Farnsworth
---------------------------
/S/ Anne Farnsworth
---------------------------
/S/ Edmund S. Twining III
---------------------------
/S/Taylor Twining
---------------------------
/S/ Edmund S. Twining IV
FIRST AMENDMENT TO
OPERATING AGREEMENT
This First Amendment to Operating Agreement -dated August 1, 1995 by
and among the parties who are Members in Federal Holdings L.L.C. prior to the
date hereof (the "Original Members*) and Jonathan A. Bernstein ('JAB').
STATEMENT OF FACTS
By execution of that certain Operating Agreement (the
"Agreementm) for Federal Holdings L.L.C. (the OLLC") dated
June 12, 1995, the Original Members formed the LLC. The
Original Members have agreed to amend the Agreement to provide
for the inclusion of JAB as an Additional Member and to permit
the Administrative Manager (a) to admit such other persons as
he shall deem proper as Additional Members and (b) provide for
and accept Substitute Members as he shall deem proper, all in
his sole and exclusive discretion.
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. All terms used in this First Amendment and not
defined hereinshall be as defined in the Agreement.
2. JAB is hereby admitted into the LLC as an
Additional Member as of the date hereof, with all of the rights and obligations
of a Member, and fromand after the date hereof, JAB shall be considered
a Member for all purposes under the Agreement, as the same may be modified or
amended from time to time.
3. On the date hereof, JAB is making an Initial Capital
Contribution to the LLC of $100,000. As a result of JAB becoming a Member and
making his Initial Capital Contribution, the Interests of each Member in the LLC
is as set forth on Schedule A annexed hereto and by this reference made a part
hereof.
4. The Administrative Manager shall have the sole and
exclusive right to admit Additional Members and provide for and accept
Substitute Members.
5. Except as modified by this First Amendment, the
Agreement remains unmodified and in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
CHARISMA PARTNERS, L.P., a New York
limited Partnership
By: 8th Floor Realty Corp.,
its sole general partner By:
Name: /S/ Kevin S. Moore
Title: Vice President
/s/ Attorney in fact
Anne L. Peretz
/s/ Attorney in fact
Jesse W. Peretz
/s/ Attorney in fact
Eugenia Peretz
/s/ Attorney in fact
Anne Farnsworth
/s/ Attorney in fact
Edmund S. Twining III
/s/ Attorney in fact
Taylor Twining
/s/ Attorney in fact
Edmund S. Twining IV
/s/ Attorney in fact
Jonathan A. Bernstein
<PAGE>
SCHEDULE A
INITIAL CAPITAL
CONTRIBUTION
CHARISMA PARTNERS, LP $600,000.00
ANNE PERETZ $100,000.00
JESSE W. PERETZ $50,000.00
EUGENIA PERETZ $50,000.00
DAVID L. FARNSWORTH $50,000.00
ANNE FARNSWORTH $50,000.00
EDMUND TWINING III $50,000.00
TAYLOR TWINING $25,000.00
EDMUND S. TWINING IV $25,000.00
JONATHAN A. BERNSTEIN $100,000.00
SECOND AMENDMENT TO
OPERATING AGREEMENT
THIS Second Amendment to Operating Agreement dated as of July 1, 1998 by
and among the parties who are Members in Federal Holdings L.L.C.
STATEMENT OF FACTS
This Second Amendment to Operating Agreement dated as of July 1, 1998 by
and among the parties who are Members in Federal Holdings L.L.C.
By execution of that certain Operating Agreement (the "Original Agreement") for
Federal Holdings L.L.C. (the "LLC") dated June 12, 1995, the LLC was formed. The
Original Agreement was amended by a First Amendment to Operating Agreement dated
August 1, 1995 To admit an additional member. The original Agreement, As
modified by the First Amendment To Operating Agreement, is hereinafter referred
to as the "Agreement". The Members have agreed to amend the Agreement on the
Terms and conditions set forth below.
NOW, THEREFORE the parties hereto herby agree as follows:
1. All terms used in this Amendment and not defined herein shall be as
defined in the Agreement.
2. The definition of "Preferred Return" in Section 1.1 of the Original
Agreement is deleted in its entirety and the following is substituted
in its place and stead:
"Preferred Return": with respect to a Member, an amount equal to the Bank Index
Percentage on a per annum interest basis (prorated for any partial year) on the
amount of such Member's Unrecovered Capital Contribution, from time to time,
calculated from the date a Capital Contribution is made.
3. The following definitions are hereby inserted into section 1.1;
"Bank Index Percentage": A percentage determined by subtracting 2,123 from the
Current Index Value, and dividing the resulting number 2,123.
"Current Index Value": the value of the NASDAQ Bank Index as reported by NASDAQ
at the close of trading on any trading day, as provided in rule 2871(e) in the
NASDQ Manual and published in The Wall Street Journal under the NASDAQ Market
Indices. If The Wall Street Journal shall no longer publish such value, then the
Administrative Manger shall select another publication whether in print or
electronic form. As of the close of business on June 30, 1998, the Current Index
Value was 2,123.
"NASDAQ Bank Index": The index commonly known as the NASDAQ Bank Index as
reported by NASDAQ. In the event that the NASDAQ Bank Index is no longer
reported by NASDAQ, the administrative Manager shall select another index in
substitution thereof.
4. Modifying section 3.1 of the Original Agreement, the Company's
registered office in New York shall be at One Rockefeller Plaza, 31st
Floor, New York, New York 10120.
5. The reference to "20%" in the defined term of "Unrecovered 20% IM Fee",
and in the definition thereof, shall be and hereby is changed to "25%."
6. Section 8.1 (b)(iv) is hereby deleted in its entirety and the following
is substituted in its place and stead: "the balance,if any, shall be
paid 75% of the Members in proportion to their Interest and 25% to
the Investment Manager."
7. The Management Term shall mean a term of (2) years commencing as of the
date hereof and continuing through and including June 30, 2000.
8. Modifying Sections 10.4, the "Account" is currently at Bear Stearns &
Co., Inc.
9. Except as modified by this Second Amendment, the Agreement remains
unmodified and in full force and effect.
IN WITHNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the day and year first above written.
CHARISMA PARTNERS, L.P., a New York
limited Partnership
By: 8th Floor Realty Corp.,
its sole general partner By:
Name: /S/ Kevin S. Moore
Title: Vice President
/s/ Attorney in fact
Anne L. Peretz
/s/ Attorney in fact
Jesse W. Peretz
/s/ Attorney in fact
Eugenia Peretz
/s/ Attorney in fact
Anne Farnsworth
/s/ Attorney in fact
Edmund S. Twining III
/s/ Attorney in fact
Taylor Twining
/s/ Attorney in fact
Edmund S. Twining IV
/s/ Attorney in fact
Jonathan A. Bernstein
<PAGE>
The undersigned, as Investment Manager, is executing this Second Amendment
to evidence its acknowledgment and agreement to the terms and conditions set
forth above.
Lawrence Seidman
Exhibit K
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BENCHMARK PARTNERS L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Benchmark Partners
L.P. (the "Partnership"), dated as of July 1, 1998, by and between Benchmark
Capital Advisors, a division of The Benchmark Company, Inc., Lorraine DiPaolo
and Richard Whitman, as the general partners (the "General Partners") and the
persons and entities, referred to in Schedule A on file at the offices of the
Partnership, who have executed, either directly or indirectly by an
attorney-in-fact, as limited partners (the "Limited Partners").
PREMISES:
A. The Partnership was organized in accordance with the Delaware Revised Uniform
Limited Partnership Act by the filing by the General Partners of a Certificate
of Limited Partnership with the office of the Secretary of State of the State of
Delaware on March 13, 1989.
B. Prior to July 1, 1998, the agreement relating to the Partnership was set
forth in the Agreement of Limited Partnership of Benchmark Partners L.P., dated
as of March 13, 1989 (the "March 13, 1989 Agreement") and amended January 3,
1994 and June 1, 1996.
C. The General Partners, pursuant to the authority granted to them under Section
26 of the March 13, 1989 Agreement, desire to amend the March 13, 1989 Agreement
and to restate the same.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, effective as of July 1, 1998, it is hereby agreed as
follows:
1. Definitions.
The following terms shall have the following meaning when used in this
Agreement:
(a) "Act" shall mean the Delaware Revised Uniform Limited Partnership Act, Del
Code tit. 6, Section 17-101, et seq., as amended from time to time.
(b) "Affiliate" shall mean any person performing services on behalf of the
Partnership who (i) directly or indirectly controls, is controlled by, or is
under common control with a General Partner; (ii) is any company of which a
GeneralPartner is an officer, director, partner or trustee; (iii) a member of
the family of a General Partner; or (iv) an Individual Retirement Account or
similar trust for the benefit of one or more General Partners or their
Affiliates.
(c) "Agreement" shall mean this Agreement of Limited Partnership, as originally
executed and as amended, modified, supplemented or restated from time to time.
(d) "Capital Account" shall mean the account described in Section 8 of this
Agreement.
(e) "Certificate" shall mean the Partnership's Certificate of Limited
Partnership as defined in Section 2 of this Agreement.
(f) "Code" shall mean the Internal Revenue Code of 1986, or successor provision
of law, and the regulations issued thereunder.
(g) "Fiscal Period" shall mean the period beginning on the day immediately
succeeding the last day of the immediately preceding Fiscal Period and ending on
the earliest occurring of the following:
(i) The last day of the Fiscal Year;
(ii) The day immediately preceding the day on which a new Partner
is admitted to the Partnership;
(iii) The day immediately preceding the date on which a Partner
makes an additional Capital Contribution to the Partner's Capital Account;
(iv) The day on which a Partner withdraws, in whole or in part,
the amount of his or its Capital Account;
(v) The date of dissolution of the Partnership in accordance with
Section 5 of this Agreement.
(h) "Fiscal Quarter" shall mean a fiscal quarter of the Partnership.
(i) "Fiscal Year" shall mean the fiscal year of the Partnership, which shall be
the calendar year.
(j) "General Partner Percentage" shall mean a percentage established by the
General Partners for each General Partner on the Partnership's books as of the
first day of each Fiscal Period. The sum of the General Partner Percentages for
each Fiscal Period shall equal one hundred percent (100%).
(k) "Managing General Partner" shall mean Benchmark Capital Advisors, a division
of The Benchmark Company, Inc.
(l) "Net Profit" of the Partnership shall mean, with respect to any Fiscal
Period, the excess of the aggregate revenue, income and gains (realized and
unrealized) earned on an accrual basis during the Fiscal Period by the
Partnership from all sources over the expenses and losses (realized and
unrealized) incurred on an accrual basis during the Fiscal Period by the
Partnership.
(m) "Net Loss" of the Partnership shall mean, with respect to any Fiscal Period,
the excess of all expenses and losses (realized and unrealized) incurred on an
accrual basis during the Fiscal Period by the Partnership over the aggregate
revenue, income and gains (realized and unrealized) earned on the accrual basis
during the Fiscal period by the Partnership from all sources.
(n) "Partnership Percentage" shall mean a percentage established for each
partner on the Partnership's books as of the first day of each Fiscal Period.
The Partnership Percentage of a Partner for a Fiscal Period shall be determined
by dividing the amount of the Partner's Capital Account as of the beginning of
the Fiscal Period by the sum of the Capital Accounts of all of the Partners as
of the beginning of the Fiscal Period. The sum of the Partnership Percentage for
each Fiscal Period shall equal one hundred percent (100%).
2. Organization.
The General Partners have executed a Certificate of Limited Partnership pursuant
to the provisions of the Act (the "Certificate") and caused the Certificate to
be filed as required by the Act. The General Partners shall also execute and
record all amendments to the Certificate or additional certificates as may be
required by this Agreement or by law.
3. Name of Partnership.
The name of the Partnership shall be "BENCHMARK PARTNERS L.P." or such other
name as the General Partners may from time to time designate.
4. Principal Office, Resident Agent, Registered Office.
The principal office of the Partnership is 750 Lexington Avenue, New York, New
York 10022 or any other place determined by the General Partners. The name and
address of the registered agent for service of process in the State of
<PAGE>
Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801. The address of the registered office of the Partnership in the
State of Delaware is c/o The Corporation Trust Company, 1209 Orange Street,
Wilmington, Delaware 19801.
5. Term of the Partnership.
(a) The term of the Partnership, having commenced on the date the Certificate
was filed, shall continue until the first of the following events occurs:
(i) December 31, 2009;
(ii) a written consent to dissolution of the Partnership by all
Partners;
(iii) upon all of the General Partners ceasing to be general
partners as a result of doing or being subject to one or more of the
following:
(A) withdrawing from the Partnership in accordance with
Section 21 of this Agreement;
(B) assigning all of his interest in the Partnership;
(C) making an assignment for the benefit of his creditors;
(D) filing a voluntary petition in bankruptcy;
(E) being adjudged bankrupt or insolvent or having entered
against him an order of relief in any bankruptcy or insolvency
proceeding;
(F) filing a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation;
(G) filing an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against him in any
proceeding seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute, law or
regulation;
(H) seeking, consenting to, or acquiescing in the appointment
of a trustee or receiver,or liquidator of all or any substantial part of his
properties;
<PAGE>
(I) being the subject of any proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation, which
proceeding shall have continued for one hundred and twenty (120) days after the
commencement thereof; or the appointment of a trustee, receiver, or liquidator
for such General Partner or all or any substantial part of his properties
without his consent or acquiescence, which appointment is not vacated or stayed
for ninety (90) days or, if the appointment is stated, for ninety (90) days
after the expiration of the stay during which period the appointment is not
vacated;
(J) the death of a General Partner; or
(K) the entry by a court of competent jurisdiction
adjudicating such General Partner incompetent to manage his person or his
property; or
(iv) upon issuance of a decree of dissolution of the Partnership
by the Delaware Court of Chancery in accordance with Section 17-802 of the Act.
(b) In the event a General Partner does or becomes subject to any of the
provisions of subsection (a) (iii) of this Section 5, the remaining General
Partner shall be permitted to carry on the business of the Partnership upon
written notice provided to all Partners of the decision to continue the
Partnership's business. Each Limited Partner shall have the right for a period
of thirty (30) days from the date of the written notice (the "Election Period")
to elect to withdraw from the Partnership as of ten (10) days after the last day
of the Election Period. The Limited Partner will receive the proceeds of a
withdrawal made pursuant to this subsection (b) within ninety (90) days of the
date of withdrawal. The amount of such proceeds will be calculated after the
adjustments to his capital account provided for in Section 9 hereof, made as if
the withdrawal date were the end of a Fiscal Year.
(c) If any one or more of the termination events listed in this Section 5
occurs, and if the remaining General Partner chooses not to carry on the
business of the Partnership in accordance with the provisions of subsection (b)
of this Section 5, the Partnership shall be dissolved and its affairs wound up
as provided in Section22 of this Agreement.
<PAGE>
6. Purposes.
The Partnership is organized for the following purposes:
(a) to invest and trade, on margin or otherwise, in "Securities," as that term
is defined in Section 2(1) of the Securities Act of 1933, as amended (the "1933
Act");
(b) to sell Securities short and cover short sales;
(c) to lend funds or properties of the Partnership, either with or without
security; and
(d) to execute, deliver and perform all contracts and other undertakings, and
engage in all activities and transactions, that the General Partners believe are
necessary or advisable in carrying out the purposes specified all subsections
(a),(b), and (c) of this Section 6, including without limitation:
(i) to purchase, transfer or acquire in any manner and exercise
all rights, powers, privileges and other incidents of ownership or
possession with respect to the investments described in subsection (a) of this
Section 6; and
(ii) to register or qualify the Partnership under any applicable
Federal or state laws, or to obtain exemptions under those laws, if
registration, qualification or exemption is deemed necessary by the General
Partners.
7. Contributions of the Partners; New Partners.
(a) Each Partner shall make a contribution to the Partnership's capital
("Capital Contribution") in the amount set out opposite the Limited Partner's
name in Schedule A attached to this Agreement.
(b) Any Partner may elect, with the consent of the General Partners, to make an
additional Capital Contribution, as of the first day of any Fiscal Quarter. The
General Partners may, in their sole discretion, permit additional Capital
Contributions to be made more frequently than quarterly.
(c) No Partner shall be required to make any additional Capital Contributions.
(d) Capital Contributions made by Limited Partners must be in cash.
<PAGE>
(e) The General Partners shall have the right, but not the obligation,to admit
new Partners to the Partnership as of the first day of any Fiscal Quarter. The
General Partners may, however, in their sole discretion, admit new Partners more
frequently than quarterly.
8. Capital Accounts.
A Capital Account shall be established for each Partner. For the Fiscal Period
during which a Partner is admitted to the Partnership, his or its Capital
Account shall equal the amount of his or its initial Capital Contribution. For
each subsequent Fiscal Period, the Partner's Capital Account will equal the sum
of the amount of his or its Capital Account as finally adjusted for the
immediately preceding Fiscal Period and the amount of any additional Capital
Contribution made by the Partner as of the first day of the current Fiscal
Period.
9. Adjustments to Capital Accounts.
At the end of each Fiscal Period, the Capital Accounts of the Partners shall be
adjusted in the following manner:
(a) Subject to the provisions of subsections (c) and (d) and (f) of this Section
9, Net Profit of the Partnership for the Fiscal Year shall be credited as
follows:
(i) There shall first be made a provisional allocation of Net
Profit to the Capital Account of all Partners in proportion to the amount of
their respective Capital Accounts on the first day of each Fiscal Period.
(ii) Then, twenty percent (20%) of the Net Profit provisionally
allocated to the Capital Account of each Limited Partner (except any Limited
Partner that is an Affiliate of a General Partner and is so designated in
writing by the General Partners) shall be reallocated to the General Partners in
accordance with their General Partner Percentages for such Fiscal Year. Such
twenty percent (20%) of Net Profits is the "Incentive Allocation".
(b) Net Loss of the Partnership for the Fiscal Year shall be debited against the
Capital Account of each Partner adjusted for withdrawals in proportion to and in
accordance with the balance in the Capital Account of the Partner until the
value of any Partners' Capital Account becomes zero. Thereafter, any remaining
Net Loss for the Fiscal Year shall be debited to Partners having positive
balances in their Capital Accounts in proportion to those balances, until the
value of each
<PAGE>
Partner's Capital Account becomes zero. Thereafter, any remaining Net Loss for
the Fiscal Year shall be debited to the General Partners in accordance with each
General Partner's General Partner Percentage for the Fiscal Period.
(c) In the event that the Capital Account of one or more General Partners has a
negative balance, one hundred percent (100%) of the Net Profit of the
Partnership for the Fiscal Period shall be credited to those General Partners
whose Capital Accounts have negative balances in accordance with their
respective General Partner Percentages until no General Partner shall have a
negative Capital Account balance.
(d) Anything in this Section 9 to the contrary notwithstanding, if any Net
Losses are allocated at the account of any Limited Partner, each such Limited
Partner shall be entitled to a "Recoupment Allocation" of subsequent Net Profits
of the Partnership, in an amount in proportion to his Partnership Percentage,
until such Net Loss shall have been eliminated. The amount of Net Profits
allocated as a Recoupment Allocation shall not exceed, but shall reduce, the
amount of Net Profits otherwise allocable to the General Partners as the
Incentive Allocation pursuant toSection 9(a) (ii) hereof. If a Limited Partner
who is entitled to a Recoupment Allocation shall withdraw any portion of his
Capital Account, the amount of Recoupment Allocation to which he is entitled
shall be reduced in proportion to the amount of capital withdrawn.
(e) The amount of any withdrawal made by the Partner pursuant to Section 21 or
Section 22 of this Agreement shall be debited against the Capital Account of
that Partner.
(f) Allocations of Net Profit or Net Loss for a Fiscal Period, if necessary,
shall be made in accordance with each Partner's Partnership Percentage, adjusted
as provided in paragraph (a) of this Section 9 at the end of the Fiscal Year,
provided that the share of the Partnership's Net Profit allocated to the General
Partners in accordance with the provisions of subsection (a)(ii) of this Section
9 for any Fiscal Year may not exceed twenty percent (20%) of the Net Profit for
the FiscalYear.
10. Hot Issues.
In the event the General Partners decide to invest in securities which are the
subject of a public distribution and which the General Partners, in their sole
discretion, believe may become a "hot issue" as that term is defined in Article
III, Section 1 of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "Association"), such investment shall be made in
accordance with the following provisions:
<PAGE>
(a) any such investment made in a particular Fiscal Period shall be made in a
special account (the "Hot Issues Account");
(b) only those Partners who do not fall within the proscription of Article III,
Section 1 of said Rules of Fair Practice ("Unrestricted Partners") shall have
any beneficial interest in the Hot Issues Account;
(c) each Unrestricted Partner shall have a beneficial interest in the Hot Issues
Account for any Fiscal Period in the proportion which (i) such Unrestricted
Partner's Capital Account as of the beginning of the Fiscal Period bore to (ii)
the sum of the Capital Accounts of all Unrestricted Partners as of the beginning
of such Fiscal Period.
(d) funds required to make a particular investment shall be transferred to the
Hot Issues Account from the regular account of the Partnership; securities
involved in the public distribution shall be purchased in the Hot Issues
Account, held in the Hot Issues Account and eventually sold from the Hot Issues
Account or transferred to the regular account at fair market value as of the day
of transfer as determined by the General Partners with such transfer being
treated as a sale; if such securities are sold from the Hot Issues Account, the
proceeds of the sale shall be transferred from the Hot Issues Account to the
regular account of the Partnership;
(e) as of the last day of each Fiscal Period in which a particular investment or
investments are held in the Hot Issues Account: (A) interest shall be debited to
the Capital Accounts of the Unrestricted Partners in accordance with their
beneficial interest in the Hot Issues Account at the interest rate being paid by
the Partnership from time to time for borrowed funds during the period in that
Fiscal period that funds from the regular account have been held in or made
available to the particular Hot Issues Account or, if no such funds are being
borrowed during such period, the interest rate that the General Partners
determine would have been paid if funds had been borrowed by the Partnership
during such period; and such interest shall be credited to the Capital Accounts
of all the Partners, both General and Limited, in the proportions which (i) each
Partner's Capital Account as of the beginning of such Fiscal Period bore to (ii)
the sum of the Capital Accounts of all Partners as of the beginning of such
Fiscal Period and (B) any Net Profits or Net Losses during such Fiscal Period
with respect to the Hot Issues Account shall be allocated to the Capital
Accounts of the Unrestricted Partners in accordance with their beneficial
interests in the Hot Issues Account during such Fiscal Period; provided,
however, that the amount of such interest shall not exceed the amount of profit
accrued in the Hot Issues Account; and
<PAGE>
(f) the determination of the General Partners as to whether a particular Partner
falls within the proscription of Article III, Section I of said Rules of Fair
Practice shall be final.
11. Valuation.
The Partnership's assets shall be valued in accordance with the following
principles:
(a) Any Security that is listed on a national securities exchange will be valued
at its last sale price on the date of determination as recorded by the composite
tape system, or if no sales occurred on that day, at the mean between the
closing "bid" and "asked" prices on that day as recorded by the system or the
exchange, as the case may be;
(b) Any Security that is a National Market Security will be valued at its last
sale price on the date of determination as reported by the National Association
of Securities Dealers Automated Quotations system ("NASDAQ"), or if no sale
occurred on that day, at the mean between the closing "bid" and "asked" prices
on that day as reported by NASDAQ;
(c) Any Security not listed on a national securities exchange and not a National
Market Security will be valued at the mean between the closing "bid" and "asked"
prices on the date of determination as reported by NASDAQ or, if not so
reported, as reported in the over-the-counter market in the United States;
(d) An option shall be valued at the last sales price or, in the absence of a
last sales price, the last offer price; and
(e) All other Securities shall be assigned the value that the General Partners
in good faith determine.
12. Determination by General Partners of Certain Matters.
(a) All matters concerning the valuation of Securities, the allocation of
profits, gains and losses among the Partners, including the taxes on them and
accounting procedures, not specifically and expressly provided for by the terms
of thisAgreement, shall be determined in good faith by the General Partners,
whose determination shall be final, binding and conclusive upon all of the
Partners.
(b) Gains, losses, and expenses of the Partnership for each Fiscal Period shall
be allocated among the Partners for income tax purposes in a manner so as to
reflect, as nearly as possible, the amounts credited or charged to each
Partner's Capital Account pursuant to Section 9 of this Agreement.
(c) The General Partners shall have the power to make all tax elections and
determinations for the Partnership, and to take any and all action necessary
under the Code or other applicable law to effect those elections and
determinations. All such elections and determinations by the General Partners
shall be final, binding and conclusive upon all Partners.
13. Liability of Partners.
(a) The General Partners shall not be obligated to contribute cash or other
assets to the Partnership to make up deficits in their Capital Accounts or in
the Capital Accounts of the Limited Partners either during the term of the
Partnership or upon liquidation. The General Partners shall be liable for all
debts and obligations of the Partnership to the extent that the Partnership is
unable to pay such debts and obligations.
(b) The doing of any act or the failure to do any act by a General Partner, the
effect of which may cause or result in loss, liability, damage or expense to the
Partnership or any Partner shall not subject a General Partner to any liability
to the Partnership or to any Partner, except that a General Partner may be so
liable if he has not acted in good faith, or has committed misconduct or was
grossly negligent or as otherwise provided under the Employee Retirement Income
Security Act of 19764 as amended ("ERISA").
(c) Limited Partner will not be liable for any debts or bound by any obligations
of the Partnership except to the extent set forth in subsections (d), (e) and(f)
of this Section 13.
(d) A Limited Partner who has received the return of any part of his or its
Capital Contribution without violation of this Agreement or the Act shall not
therefore be liable to the Partnership or its creditors.
(e) Limited Partner receiving a return of any portion of his or its Capital
Contribution in violation of the Act or this Agreement will be Liable to the
Partnership for a period of six (6) years thereafter for the amount of the
contribution wrongfully returned.
(f) A Limited Partner may be liable to the Partnership or creditors of the
Partnership for any amounts distributed if, and to the extent that, at the time
of the distribution, he actually knew that, after giving effect to the
distribution, all liabilities of the Partnership, other than liabilities to
Partners on account of their interests in the Partnership, exceeded the fair
value of the Partnership's assets.
14. Rights and Duties of the General Partners.
(a) The General Partners shall have the exclusive right to manage and control
the affairs of the Partnership, and shall have the power and authority to do all
things necessary or proper to carry out the purposes of the Partnership. The
General Partners shall devote an amount of time and attention that the General
Partners in their sole discretion deem necessary or appropriate. Notwithstanding
the foregoing, the Managing General Partner shall have sole discretion regarding
investment decisions or other decisions with respect to the management of the
Partnership's assets.
(b) Without limiting the generality of the foregoing, the General Partners shall
have full power and authority:
(i) to engage independent agents, attorneys, accountants and
custodians as the General Partners deem necessary or advisable for the affairs
of the Partnership;
(ii) to enter, or cause the Partnership to enter, into an
agreement with Benchmark Capital Group, Inc., a corporation organized under the
laws of the State of New York (the "Administrator"), for administrative services
that the General Partners deem necessary in connection with the operation of the
Partnership's business;
(iii) to receive, buy, sell, exchange, trade, and otherwise
deal in and with Securities and other property of the Partnership;
(iv) to open, conduct and close accounts with brokers on behalf of
the Partnership and to pay the customary fees and charges applicable to
transactions in those accounts;
(v) to open, maintain and close accounts, including margin
accounts, with brokers and banks, and to draw checks and other orders for the
payment of money by the Partnership;
(vi) to file, on behalf of the Partnership, all required local,
state and Federal tax and other returns relating to the Partnership;
(vii) except to the extent prohibited by ERISA, to cause the
Partnership to purchase or bear the cost of any insurance covering the potential
liabilities of the General Partners and any associate, employee or agent of the
General Partners arising out of the General Partners' actions as General
Partners under this Agreement;
<PAGE>
(viii) to cause the Partnership to purchase or bear the cost of
any insurance covering the potential liabilities of any person serving as a
director, officer or employee of an entity in which the Partnership has an
investment or of which the Partnership is a creditor;
(ix) to commence or defend litigation or submit to arbitration
any claim or cause of action that pertains to the Partnership or any Partnership
assets;
(x) to enter into, make and perform contracts, agreements and
other undertakings, and to do any other acts, as the General Partners deem
necessary or advisable for, or as may be incidental to, the conduct of the
business of the Partnership, including, without limiting the generality of the
foregoing, contracts, agreements, undertakings and transactions with any Partner
or with any other person, firm or corporation having any business, financial or
other relationship with any Partner or Partners;
(xi) to make or revoke elections pursuant to Section 754 of the
Code to adjust the basis of the Partnership's property as permitted by Sections
734(b) and 743(b) of the Code; and
(xii) to designate a Tax Matters Partner for all purposes under
the Code.
15. Expenses.
The Partnership shall bear all expenses relating to its organization,
whichexpenses shall be amortized through November 30, 1994. Administrative
expensesof the Partnership shall be borne by the Administrator. The Partnership
will bear theexpenses of its auditor, its legal counsel, and expenses of
investments.
16. Administrative Fee.
The Partnership shall pay the Administrator as of the end of each Fiscal Quarter
an administrative fee at an annual rate of one percent (1%) of the value of
thePartnership's assets as of the end of the Fiscal Quarter. For purposes of
this Section 16, the Partnership's assets will be valued in accordance with
Section 11 of this Agreement.
<PAGE>
17. Limitation on Powers of Limited Partners.
No Limited Partner shall participate in the control of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for the Partnership or to bind the Partnership in any other way.
18. Other Business Ventures.
Each Partner agrees that each General Partner and his Affiliates and associates
may engage in other business activities or possess interests in other business
activities of every kind and description, independently or with others. These
activities may include, without limitation, establishing a broker-dealer and
investing in, financing, acquiring and disposing of interests in securities in
which the Partnership may from time to time invest, or in which the Partnership
is able to invest or otherwise have any interest. The Limited Partners agree
that the General Partners may act as general partners of other partnerships,
including investment partnerships.
19. Limitation on Assignability of Interests of Limited Partners.
(a) No Limited Partner may assign or otherwise transfer or encumber his or its
interest in the Partnership, in whole or in part, without the consent of
theGeneral Partners and without a written opinion of counsel to or approved by
the General Partners that the proposed transfer (i) is consistent with all
applicable provisions of the 1933 Act, and the rules and regulations thereunder,
as from time to time in effect, as well as any applicable provisions of any
state "blue sky" law; and (ii) would not result in the Partnership's having to
register as an investment company under the Investment Company Act of 1940, as
amended;
(b) Notwithstanding any other provision of this Agreement, any successor to any
Limited Partner shall be bound by the provisions of this Agreement. Prior to
recognizing any assignment of an interest in the Partnership that has been
transferred in accordance with this Section 19, the General Partners may require
the transferring Limited Partner to execute and acknowledge an instrument of
assignment in form and substance satisfactory to the General Partners, and may
require the assignee to agree in writing to be bound by all the terms and
provisions of this Agreement, to assume all of the obligations of the assigning
Limited Partner and to execute whatever other instruments or documents the
General Partners deem necessary or desirable in connection with the assignment.
(c) No Limited Partner shall have the right to have his or its assignee admitted
as a substitute Limited Partner, except upon the written consent of theGeneral
Partners, which consent may be withheld in the sole discretion of the General
Partners.
(d) Each Limited Partner hereby approves of the admission to the Partnership as
a Limited Partner of any assignee who succeeds to the interest in the
Partnership of a Limited Partner in accordance with the provisions of this
Section 19.
20. Withdrawals by a Limited Partner.
(a)(i) A Limited Partner who shall have been a Limited Partner for at least four
full Fiscal Quarters (or such lesser period of time as may be required to
satisfy Section 408(b)(2) of ERISA and Section 4975(d)(2) of the Code) shall
have the right, as of the end of any Fiscal Year, or at other times at the
discretion of the General Partners, to withdraw all or a portion of the amount
of his or its Capital Account, so long as the General Partners receive written
notice of the intended withdrawal not less than thirty (30) days prior to the
withdrawal, stating the amount to be withdrawn. In no event, however, shall a
Limited Partner be permitted to withdraw any amounts from his or its Capital
Account in excess of the positive balance of his or its Capital Account. If the
amount of a Limited Partner's withdrawal represents less than seventy-five (75%)
of the Limited Partner's Capital Account, the Limited Partner will receive the
proceeds of the withdrawal within thirty (30) days after the date of withdrawal.
If the amount of a Limited Partner's withdrawal represents seventy-five percent
(75%) or more of the Limited Partner's Capital Account, the Limited Partner will
receive seventy-five percent (75%) of his Capital Account within thirty (30)
days after the date of withdrawal and the remainder of the amount withdrawn
within ten (10) days after the Partnership has received audited financial
statements from its independent certified public accountants pursuant to Section
23(c) of this Agreement. If a Limited Partner requests withdrawal of capital
which would reduce his Capital Account below the amount of his initial Capital
Contribution, the General Partners may treat such request as a request for
withdrawal of all of such Partner's Capital Account. The distribution of any
amount withdrawn by a Limited Partner may take the form of cash and/or
marketable securities as determined by the General Partners in their sole
discretion.
(ii) In the event of a proposed withdrawal of capital by one or more General
Partners or Affiliates pursuant to Section 21(a)(ii) of this Agreement, as a
result of which the aggregate of the Capital Accounts of the General Partners
and Affiliates will be less than $1,000,000 (one million dollars), a Limited
Partner shall have the right to withdraw all or a portion of the amount of his
or its Capital Account, so long as the General Partners receive written notice
of the intended withdrawal not more than fifteen (15) days after the date of the
notice of withdrawal by such General Partner or General Partners or Affiliate or
Affiliates pursuant to said Section 21(a)(ii), stating the amount to be
withdrawn. In such event the withdrawal by such Limited Partner shall be
effective as of the effective date of the withdrawal by the General Partner or
General Partners pursuant to said Section 21(a)(ii). The amount available for
withdrawal shall be calculated in the same manner as provided for in the last
sentence of paragraph (b) of Section 5 hereof.
(b) Any Limited Partner's interest in the Partnership may be terminated by the
Partnership as of the end of any Fiscal Year or at the discretion of the General
Partners, upon prior written notice, so long as the General Partners determine
the termination to be in the best interest of the Partnership. In the event that
a Limited Partner's interest in the Partnership is terminated pursuant to this
Section 20, the Limited Partner shall receive ninety percent (90%) of the value
of his Capital Account within thirty (30) days after written notice of
termination is given by the Partnership and the remaining ten percent (10%)
within ten (10) business days after receipt by the Partnership of audited
financial statements with respect to the Fiscal Year in which his or its
interest in the Partnership is terminated.
21. Withdrawals by the General Partners and Affiliates.
(a)(i) Each General Partner shall have the right to withdraw any amount of cash
from his Capital Account as of the end of any Fiscal Year, without prior
notification to the Limited Partners, provided that, after giving effect to such
withdrawal, the aggregate Capital Accounts of the General Partners and their
Affiliates are not less than $1,000,000 (one million dollars).
(ii) Upon forty-five (45) days' prior notice to the Limited Partners, a General
Partner or an Affiliate may withdraw any amount from his Capital Account
contributed to the Partnership as a result of which withdrawal the aggregate
Capital Accounts of the General Partners and their Affiliates would be reduced
below $1,000,000 (one million dollars).
(b) Any or all of the General Partners may voluntarily resign or withdraw from
the Partnership as of the end of any Fiscal Year upon sixty (60) days' written
notice sent to all Partners.
22. Dissolution and Winding Up of the Partnership.
On dissolution of the Partnership, the General Partners (or if there is no
General Partner, one or more persons approved by Limited Partners holding a
majority ininterest of the Capital Accounts of the Limited Partners) shall wind
up the Partnership's affairs and shall distribute the Partnership's assets in
the following manner and order:
(a) in satisfaction of the claims of all creditors of the Partnership, other
than the General Partners;
(b) in satisfaction of the claims of the General Partners as creditors of the
Partnership; and
(c) any balance to the Partners in the relative proportions that their
respective Capital Accounts bear to each other, those Capital Accounts to be
determined as if the Fiscal Year ended on the date of the dissolution.
23. Accounting and Reports.
(a) The records and books of account of the Partnership shall be audited as of
the end of each Fiscal Year by independent certified public accountants selected
by the General Partners in their discretion.
(b) As soon as practicable after the end of each Fiscal Year, the General
Partners shall cause to be delivered to each person who was a Partner at any
time during that Fiscal Year all information deemed necessary by the General
Partners in their sole discretion for the preparation of the Partner's income
tax returns, including a Form 1065/Schedule K-1 statement showing the Partner's
share of Net Profit or Net Loss, deductions and credits for the year Federal
income tax purposes,and the amount of any distributions made to or for the
account of the Partner pursuant to this Agreement.
(c) The independent certified public accountants selected by the General
Partners in accordance with subsection (a) of this Section 23 shall prepare and
mail to each Partner, within ninety (90) days after the end of each Fiscal Year,
an audited income statement for the Fiscal Year and an audited balance sheet as
of the end of the Fiscal Year.
(d) The Partnership shall cause to be prepared and mailed to each Partner a
report setting out as of the end of each Fiscal Quarter information determined
by the General Partners to be appropriate.
(e) The General Partners shall cause tax returns for the Partnership to be
prepared and timely filed with the appropriate authorities.
24. Books and Records.
The General Partners shall keep at the Partnership's principal office:
<PAGE>
(a) books and records pertaining to the Partnership's business showing all of
its assets and liabilities, receipts and disbursements, realized profits and
losses, Partners' Capital Accounts and all transactions entered into by the
Partnership;
(b) a current list of the full name and last known home, business or mailing
address of each Partner set out in alphabetical order;
(c) a copy of the Certificate and all amendments to it, together with executed
copies of any powers of attorney pursuant to which the Certificate and any
amendments to it have been executed;
(d) copies of the Partnership's Federal, state and local income tax returns
and reports, if any, for the three (3) most recent years;
and
(e) copies of this Agreement as may be amended from time to time.
All books and records of the Partnership required to be kept under this Section
24 shall be available for inspection by a Partner of the Partnership at the
offices of the Partnership during ordinary business hours for any purpose
reasonably related to the Partner's interest as a Partner in the Partnership.
25. Indemnification.
(a) The Partnership shall indemnify each General Partner and any of his
Affiliates (each an "Indemnitee") to the fullest extent permitted by law and
will hold each harmless from and with respect to (i) all fees, costs and
expenses incurred in connection with, or resulting from, any claim, action or
demand against any Indemnitee that arises out of or in any way relates to the
Partnership, its properties,business or affairs, and (ii) any losses or damages
resulting from any such claim, action or demand, including amounts paid in
settlement or compromise of the claim, action or demand.
(b) No Indemnitee shall be indemnified by the Partnership with respect to any
action or failure to act that does not constitute good faith, or that
constitutes willful misfeasance.
(c) The Partnership may pay the expenses incurred by an Indemnitee in defending
a civil or criminal action, suit or proceeding brought by a party against the
Indemnitee that arises out of or is in any way related to the Partnership, its
properties, business or affairs, upon receipt of an undertaking by the
Indemnitee to repay the amount advanced by the Partnership if an adjudication or
determination is subsequently made by a court of competent jurisdiction that the
Indemnitee is not entitled to indemnification as provided in this Agreement.
(d) The right of indemnification provided in this Section 25 shall be in
addition to any rights to which an Indemnitee may otherwise be entitled and
shall inure to the benefit of the executors, administrators, personal
representatives, successors or assigns of each Indemnitee.
(e) The rights to indemnification and reimbursement provided for in this Section
25 may be satisfied only out of the assets of the Partnership. No Partner shall
be personally liable for any claim for indemnification or reimbursement under
this Section 25.
26. Amendment of Partnership Agreement.
This Agreement may be amended, in whole or in part, by the written consent of
(a) the General Partners, and (b) Partners the value of whose Capital Account
constitute not less than fifty percent (50%) of the total value of all Capital
Accounts of the Partnership, provided that no such amendment shall affect the
allocation of Net Profit or Net Loss to any Partner who has not consented to
such amendment. In addition, any provision of this Agreement, other than Section
9, may be amended by the General Partners in any manner that does not, in the
sole discretion of the General Partners, adversely affect any Limited Partner.
27. Notices.
Notices that may or are required to be given under this Agreement by any party
to another shall be in writing and deposited in the United States mail,
certified or registered, postage prepaid, addressed to the respective parties at
their addresses set out in Schedule A to this Agreement or to any other
addressee designated by any Partner by notice addressed to the Partnership in
the case of any Limited Partner and to the Limited Partners in the case of the
General Partners. Notices shall be deemed to have been given when deposited in
the United States mail within the continental United States.
28. Agreement Binding Upon Successors and Assigns.
This Agreement shall inure to the benefit of and shall be binding upon the
heirs, executors, administrators or other representatives, successors and
assigns of thePartners.
29. Governing Law.
This Agreement, and the rights of the Partners under it, shall be governed by
and construed in accordance with the law of the State of Delaware.
30. Consents.
Any and all consents, agreements or approvals provided for or permitted by this
Agreement shall be in writing and signed copies of them shall be filed and kept
with the books of the Partnership.
31. Miscellaneous.
(a) This Agreement, including Schedule A appended to it, constitutes the entire
understanding and agreement of the Partners as to the operation of the
Partnership.
(b) This Agreement may be executed in counterparts, each of which shall be
deemed to be an original.
(c) Each provision of this Agreement is intended to be severable. A
determination that a particular provision of this Agreement is illegal or
invalid shall not affect the validity of the remainder of the Agreement.
(d) Nothing contained in this Agreement shall be construed to constitute any
Partner the agent of another Partner, except as specifically provided in this
Agreement, or in any manner to limit the Partners in the carrying on of their
own respective business or activities.
<PAGE>
IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date
first above written.
GENERAL PARTNERS
Benchmark Capital Advisors, A Division of The Benchmark Company, Inc.
By:__________________________
Lorraine DiPaolo
- -----------------------------
Lorraine DiPaolo
- -----------------------------
Richard Whitman
LIMITED PARTNERS:
All Limited Partners now and hereafter admitted as limited partners of the
Partnership, pursuant to Powers of Attorney now and hereafter executed in favor
of, and delivered to the General Partners.
LORRAINE DIPAOLO, Attorney-in-Fact
- -----------------------------
Lorraine DiPaolo
EXHIBIT L
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree to the joint filing with each other of
the attached statement on Schedule 13D and to all amendments to such statement
and that such Statement and all amendments to such statement is made on behalf
of each of them.
In addition the undersigned hereby appoints Lawrence B. Seidman as
attorney-in-fact for the undersigned with authority to execute and deliver on
behalf of the undersigned any and all documents (including any amendments
thereto) required to be filed by the undersigned or otherwise executed and
delivered by the undersigned pursuant to the Securities Exchange Act of 1934, as
amended, all other federal, state and local securities and corporation laws, and
all regulations promulgated thereunder.
IN WITNESS WHEREOF, the undersigned hereby execute this agreement on
February 26, 1999.
2/26/99 ss/Lawrence B. Seidmn
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Date Lawrence B. Seidman, Manager
Seidman and Associates, L.L.C.
2/26/99 ss/Lawence B. Seidman
------ ------------------------------
Date Lawrence B. Seidman, Manager
Seidman and Associates II, L.L.C.
2/26/99 ss/Lawrence B. Seidman
------ ------------------------------
Date Lawrence B. Seidman, President
of the Corporate General Partner
Seidman Investment Partnership,L.P.
2/26/99 ss/Lawrence B. Seidma
------ ------------------------------
Date Lawrence B. Seidman, President
of the Corporate General Partner
Seidman Investment Partnership II,
L.P.
2/26/99 ss/Lawrence B. Seidman
------ ------------------------------
Date Lawrence B. Seidman, Individually
2/26/99 ss/Richard Whitman
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Date Richard Whitman, President
The Benchmark Company, Inc.
2/26/99 ss/Richard Whitman
------ ------------------------------
Date Richard Whitman, General Partner
Benchmark Partners, LP
2/26/99 ss/Richard Whitman
------ ------------------------------
Date Richard Whitman, Individually
2/26/99 ss/Lorraine DiPaolo
------ ------------------------------
Date Lorraine DiPaolo, Individually
2/26/99 ss/David Mandelbaum
------ ------------------------------
Date David Mandelbaum, General Partner
Kerrimatt, L.P.
2/26/99 ss/Lawrence Seidman
------ ------------------------------
Date Lawrence Seidman, Investment
Manager
Federal Holdings, L.L.C.
2/26/99 ss/Dennis Pollack
------ ------------------------------
Date Dennis Pollack, Individually
