FIRST AMENDMENT TO THE
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
WELLSFORD/WHITEHALL GROUP, L.L.C.
This FIRST AMENDMENT (this "First Amendment") to the LIMITED LIABILITY
COMPANY OPERATING AGREEMENT of WELLSFORD/WHITEHALL GROUP, L.L.C. (the "Operating
Agreement"), is made as of December 21, 2000, by and among WHWEL Real Estate
Limited Partnership, a Delaware limited partnership ("WHWEL"), Wellsford
Commercial Properties Trust, a Maryland real estate investment trust ("WCPT"),
WXI/WWG Realty, L.L.C., a Delaware limited liability company ("Whitehall XI"),
W/W Group Holdings, L.L.C., a Delaware limited liability company ("Holding
Co."), and WP Commercial, L.L.C., a Delaware limited liability company
("Management Co.").
RECITALS
WHEREAS, WHWEL, WCPT, Whitehall XI, Holding Co. and the additional
Members set forth on Schedule 1 annexed to the Operating Agreement are parties
to the Operating Agreement, dated as of May 28, 1999;
WHEREAS, concurrently with the execution of this First Amendment, WHWEL
is transferring Membership Units to Management Co.; and
WHEREAS, the parties hereto agree (i) that WCPT shall no longer act as
the Manager of the Company, and that such event shall not be deemed to be a
removal with Cause (as defined in the Operating Agreement), (ii) that Management
Co. is admitted as a Member of the Company and appointed as the Manager of the
Company and (iii) to otherwise amend the Operating Agreement as set forth in
this First Amendment.
NOW, THEREFORE, in order to carry out their intent as expressed above
and in consideration of the mutual agreements hereinafter contained, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby covenant and agree as follows:
ARTICLE I.
DEFINITIONS; RECITALS; EFFECTIVENESS
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SECTION 1.1. Capitalized terms used but not defined in this First
Amendment shall have the meanings given to such terms in the Operating
Agreement.
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SECTION 1.2. The Recitals are hereby incorporated into the First
Amendment and it is acknowledged and agreed that (i) WCPT shall no longer act as
the Manager of the Company, and that such event shall not be deemed to be a
removal with Cause (as defined in the Operating Agreement) and (ii) Management
Co. is admitted as a Member. As of the Effective Date, Management Co. is hereby
appointed as the Manager of the Company. From and after the Effective Date, WCPT
shall have no further right to exercise any of the powers and duties granted to
the Manager under the Operating Agreement, as amended by this First Amendment.
SECTION 1.3. This First Amendment shall automatically become effective
as of January 1, 2001.
ARTICLE II.
AMENDMENTS TO THE OPERATING AGREEMENT
-------------------------------------
The Operating Agreement is hereby amended as follows:
SECTION 2.1.
(a) Each of the following terms and definitions contained in Section
1.1 of the Operating Agreement is hereby amended and restated to read in its
entirety as follows:
"'Agreement' shall mean this Limited Liability Company
Operating Agreement, as amended by the First Amendment, and as further
amended or modified from time to time."
"'Available Cash' shall mean, for any fiscal period, the
excess, if any, of (A) the sum of (i) the amount of all cash receipts
of the Company during such period from whatever source, other than
Capital Proceeds, and (ii) Permitted Reserves and any other cash
reserves of the Company existing at the start of such period (other
than reserves funded from Capital Proceeds) over (B) the sum of (i) all
cash amounts paid or payable (without duplication) in such period on
account of expenses and capital expenditures incurred in connection
with the Company's business (including general operating expenses,
taxes and principal repayments or interest on any debt of the Company
(including the repayment of the Short-Term Advances and the payment of
interest thereon)) and (ii) Permitted Reserves that are established and
continue to be maintained in accordance with this Agreement by the
Manager in such fiscal period plus such other cash reserves that are
established and continue to be maintained in accordance with the terms
of this Agreement in such fiscal period which may be required for the
working capital and future needs of the Company; provided that in the
case of cash reserves other than Permitted Reserves, the amount thereof
must be approved by
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the Management Committee or, failing such approval, such other cash
reserves shall not exceed the amount required under any loan documents
to which the Company or its Subsidiaries are a party. For the avoidance
of doubt, cash released from Permitted Reserves or other cash reserves
funded from Capital Proceeds as a result of a determination by or an
obligation of the Manager to reduce the amount of such reserves (but
not a reduction resulting from the application of such reserves for
their intended purpose) will be deemed to constitute Capital Proceeds,
and cash released from Permitted Reserves or other cash reserves funded
other than from Capital Proceeds as a result of a determination by or
an obligation of the Manager to reduce the amount of such reserves (but
not a reduction resulting from the application of such reserves for
their intended purpose) will be deemed to constitute Available Cash.
Furthermore, expenses paid from Capital Proceeds (including expenses
associated with the Capital Event giving rise to such Capital Proceeds)
shall not be deducted pursuant to clause (B)(i) above."
"'Capital Commitment' shall mean, as of the Effective Date,
with respect to each Member listed below, the amount set forth opposite
such Member's name less the cumulative amounts actually funded, from
time to time, by such Member after the Effective Date:
WHWEL: $5,902,876
Whitehall XI: $41,345,789
WCPT: $8,468,213
Total: $55,716,878
To the extent any Interim Capital Contribution made by a Managing
Member is subsequently returned to such Managing Member pursuant to
Section 7.1(b)(i) within five (5) months of the date such Interim
Capital Contribution was made and in any event prior to December 31,
2001, the amount so returned shall be added back to such Managing
Member's outstanding Capital Commitment on the date returned as if it
had not been funded. To the extent a Member receives a distribution
from the Company in connection with the sale of a Recently Acquired
Asset to an Affiliate of the Whitehall Group as contemplated by Section
3.4A(i) hereof, the amount so received by such Member representing a
return of capital (as opposed to a return on capital) shall be added
back to such Member's outstanding Capital Commitment on the date
received as if it had not been funded."
"'Capital Proceeds' shall mean the net amount of cash proceeds
received by the Company (including the net amount of cash proceeds
received from an Affiliate but excluding the net amount of proceeds
from a sale of a Property in connection with a Section 1031 Transaction
that are reinvested in new assets) from the occurrence of one or more
of the following events: (i) a merger (including a triangular merger),
consolidation or other combination with or into
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another Person, (ii) the direct or indirect sale, lease (other than
space leases), exchange or other disposition or transfer of any
Property or Company Asset, (iii) an eminent domain taking, insurance
recovery or condemnation award, (iv) any refinancing or borrowing by
the Company or its Affiliates, (v) any issuance of equity securities of
the Company or its Affiliates; and (vi) Capital Contributions."
"'Deemed Value Per Membership Unit' shall, from and after
October 25, 2000, mean an amount equal to (x) $18.00 minus (y) the
amount equal to the quotient of the amount of any Capital Proceeds
distributed after October 25, 2000 and prior to December 31, 2001
divided by the number of outstanding Membership Units at the time of
each such distribution (it being agreed that any distributions of
Capital Proceeds resulting from the Whitehall Group's purchase of any
Recently Acquired Asset will not reduce the then Deemed Value Per
Membership Unit); provided, however, that the Deemed Value Per
Membership Unit may be changed at any time with the prior consent of
the Management Committee, provided that it may only be reduced below
$15.85 if prior to giving effect to such reduction the Company receives
a fairness opinion with respect to the fairness of the revised Deemed
Value Per Membership Unit from any of Valuation Research Corporation,
Arthur Andersen LLP, PricewaterhouseCoopers LLP or other independent,
disinterested appraiser reasonably acceptable to the Saracen Members;
provided, further, that if a New Member acquires Membership Units from
the Company, the Deemed Value Per Membership Unit shall thereafter
equal the (x) the sum of the cash plus the agreed net fair market value
of property contributed to the Company by the Person who most recently
became a New Member (including on such date), which amount was solely
attributable to the Membership Units issued and referred to in clause
(y) below, divided by (y) the total number of Membership Units issued
to such New Member in respect of such contributions."
"'Funding Percentage' shall mean, with respect to each
Managing Member listed below, such Managing Member's pro rata share of
the capital contribution required by a Mandatory Capital Call or a
Capital Call, as the case may be, determined by dividing (x) the amount
remaining for such Managing Member's Capital Commitment by (y) the sum
of the amounts remaining for the Capital Commitments of all of the
Managing Members. The Funding Percentage for each Managing Member as of
the Effective Date is as follows:
WHWEL: 10.6%
Whitehall XI: 74.2%
WCPT: 15.2%
Total: 100.0%
Notwithstanding the foregoing, Whitehall XI may elect to fund
all or any portion of the amount of any Mandatory Capital Call that
would otherwise be required to be funded by WHWEL.
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"'Manager' shall mean (i) Management Co. upon the Effective
Date and (ii) if for any reason Management Co. ceases to be the
Manager, shall thereafter mean another Person appointed by the
Management Committee."
"'Mandatory Capital Call' shall mean a Capital Call for any
capital contributions that would be required pursuant to Section 5.2(a)
or Section 5.2(f)."
"'Members' shall mean WHWEL, WCPT, Saracen, Whitehall XI,
Holding Co. and Management Co. (for as long as such Persons are still
members of the Company), their successors and permitted assigns and any
other members of the Company admitted in accordance with Article VIII.
"'Promote' shall mean the WCPT Promote and the Manager
Promote, collectively, or, if the context so requires, either the WCPT
Promote or the Manager Promote."
"'Promote Payments' shall mean an amount, as determined from
time to time, equal to: (i) with respect to WHWEL, the sum of all
amounts paid to (A) WCPT pursuant to Sections 7.1(c)(iii)(x) or
7.1(c)(iv)(x) or (B) the Manager pursuant to Sections 7.1(c)(iii)(y) or
7.1(c)(iv)(y), and not returned to WHWEL pursuant to Section 7.2; (ii)
with respect to Whitehall XI, the sum of all amounts paid to (A) WCPT
pursuant to Sections 7.1(d)(iii)(x) or 7.1(d)(iv)(x) or (B) the Manager
pursuant to Sections 7.1(d)(iii)(y) or 7.1(d)(iv)(y), and not returned
to Whitehall XI pursuant to Section 7.2; (iii) with respect to Holding
Co., the sum of all amounts paid to (A) WCPT pursuant to Sections
7.1(e)(iii)(x) or 7.1(e)(iv)(x) or (B) the Manager pursuant to Sections
7.1(e)(iii)(y) or 7.1(e)(iv)(y), and not returned to Holding Co.
pursuant to Section 7.2; (iv) with respect to WCPT, the sum of all
amounts paid to (A) WCPT pursuant to (1) Sections 7.1(f)(iii)(x) or
7.1(f)(iv)(x) and (2) Sections 7.1(g)(iii)(x) or 7.1(g)(iv)(x) or (B)
the Manager pursuant to (1) Sections 7.1(f)(iii)(y) or 7.1(f)(iv)(y)
and (2) Sections 7.1(g)(iii)(y) or 7.1(g)(iv)(y), and not returned to
WCPT pursuant to Section 7.2; and (v) with respect to Management Co.,
the sum of all amounts paid to (A) WCPT pursuant to Sections
7.1(h)(iii)(x) or 7.1(h)(iv)(x) or (B) the Manager pursuant to Sections
7.1(h)(iii)(y) or 7.1(h)(iv)(y), and not returned to Management Co.
pursuant to Section 7.2."
"'WCPT I Distributions' shall mean, as of any date, an amount
equal to the product of (x) the distributions made to WCPT, WHWEL,
Whitehall XI, Holding Co. and Management Co. pursuant to Section
7.1(b)(iv)(B) multiplied by (y) the quotient (expressed as a percentage
rounded up to the nearest one ten-thousandth (0.0001)) of the WCPT I
Percentage Interest divided by the Combined Whitehall/WCPT Percentage
Interest."
"'WCPT II Distributions' shall mean, as of any date, an amount
equal to the product of (x) the distributions made to WCPT, WHWEL,
Whitehall XI,
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Holding Co. and Management Co. pursuant to Section 7.1(b)(iv)(B)
multiplied by (y) the quotient (expressed as a percentage rounded up to
the nearest one ten-thousandth (0.0001)) of the WCPT II Percentage
Interest divided by the Combined Whitehall/WCPT Percentage Interest."
"'WCPT I Percentage Interest' shall mean, as of any date, the
percentage obtained by dividing (A) the number of Membership Units
issued to WCPT as of the Effective Date in respect of WCPT Phase I
Capital Contributions, plus the number of Membership Units issued to
WCPT after the Effective Date in respect of the WCPT Phase I Capital
Contribution by (B) the total number of Membership Units issued to all
Members."
"'WCPT II Percentage Interest' shall mean, as of any date, the
percentage obtained by dividing (A) the number of Membership Units
issued to WCPT as of the Effective Date with respect to WCPT Phase II
Capital Contributions, plus the number of Membership Units issued to
WCPT after the Effective Date in respect of the WCPT Phase II Capital
Contribution by (B) the total number of Membership Units issued to all
Members."
"'Whitehall Group' shall mean, collectively, WHWEL, Whitehall
XI, Holding Co. and Management Co., together with any assignees or
transferees to the extent permitted hereunder."
(b) Section 1.1 of the Operating Agreement is hereby amended by
inserting the following terms and definitions in their appropriate alphabetical
order:
"'Absolute Net Rent' shall mean, for any lease, the initial
full service gross annual rent per square foot on the effective date of
such lease, minus (i) an amount equal to the initial annual operating
expenses per square foot, minus (ii) an amount per square foot equal to
the quotient of (A) the present value of all free rent, commissions,
tenant improvements and other deal-related costs as of the effective
date of such lease per square foot (utilizing a discount rate of 11%
per annum) divided by (B) the number of years in the term of the lease,
plus (iii) an amount per square foot equal to the quotient of (I) the
sum of the present value of each rent increase per square foot during
the then current term of such lease (utilizing a discount rate of 11%
per annum) divided by (II) the number of years in the term of the
lease."
"'Actual Debt Level' shall have the meaning set forth in
Section 8.2(c)(vii)(C)."
"'Additional Services' shall have the meaning set forth in
Section 8.2(b)(vi)."
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"'All-In Acquisition Cost' shall mean, with respect to any
Property, the sum of (i) the purchase price paid to seller, plus (ii)
without duplication, the amount of debt in connection with such
acquisition either assumed by the Company or its Subsidiary or to which
the Company or its Subsidiary takes subject, plus (iii) all attorneys'
fees and expenses and other transaction costs (including third-party
due diligence costs) paid by the Company or its Subsidiary in
connection with the acquisition of such Property."
"'Approved Company' shall mean any company listed on Schedule
8.2(a) or its affiliated operating limited partnership, and any
successors or assigns thereof."
"'Approved Counsel' shall mean (i) Sullivan & Cromwell, (ii)
Robinson Silverman Pearce Aronsohn & Berman LLP, (iii) Arent Fox
Kintner Plotkin & Kahn, (iv) Fried, Frank, Harris, Shriver & Jacobson
and (v) any other law firm in the States where the Properties are
located that has previously been engaged by the Company and/or its
Subsidiaries or that is approved by WCPT."
"'Approved Extraordinary Transaction' shall mean any (A)
merger, consolidation or similar business combination or (B) sale of
all or substantially all of the Properties in a single transaction. A
transaction otherwise permitted under clause (ii), (iii) or (iv) of
Section 8.2(a) shall not be deemed to be an Approved Extraordinary
Transaction."
"'Assumed Debt Level' shall have the meaning set forth in
Section 8.2(c)(i)."
"'Base Value' shall mean an amount equal to $700 million,
minus (i) the Initial Allocated Value of any Property (or the Equity
Value in the case of a Credit Lease Property) that is sold by the
Company, (provided that such reduction shall take effect only on the
day that is one day after the day that is six months after the sale of
such Property), plus (ii) the All-In Acquisition Cost of all Properties
(other than Credit Lease Properties) acquired by the Company or its
Subsidiaries after the Effective Date; provided, that (a) with respect
to any property acquired in a Section 1031 Transaction, such increase
shall become effective on the date that is one day after the day that
is six months after the date of the acquisition of such Property in a
Section 1031 Transaction and (b) such increase shall become effective
immediately upon the acquisition by the Company of any Property other
than in a Section 1031 Transaction. The Base Value will also be
increased with respect to each Credit Lease Property acquired by the
Company by an amount equal to the Equity Value of such Credit Lease
Property and such increase shall become effective on the date that is
one day after the day that is six months after the date of the
acquisition of such Credit Lease Property."
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"'Borrowing Base' shall mean the sum total of the Initial
Borrowing Base Allocated Values for each of the Properties, which will
initially be equal to $700 million. The Borrowing Base will (x) be
reduced by the Borrowing Base Allocated Value of any Property that is
sold and by a pro rata portion of the Borrowing Base Allocated Value of
any asset that is subject to an unrestored casualty or condemnation
(based on the portion of such Property that is subject to such a
casualty or condemnation) and (y) exclude any Credit Lease Property
that is financed pursuant to Section 3.9."
"'Borrowing Base Allocated Value' shall mean, with respect to
any Property, the Initial Borrowing Base Allocated Value for such
Property, provided that the Borrowing Base Allocated Value of any
Property shall, upon closing of any re-financing of such Property, be
increased or decreased to equal either the appraised value of such
Property as determined in connection with such financing (if the
Company obtains a copy thereof) or, in the event no such appraisal is
made by, or made available to, the Company, the implied valuation of
such Property (i.e., based on the gross loan amount (or, in the case of
a financing of multiple Properties, the portion of the loan allocated
to such Property) divided by the loan-to-value ratio for the entire
financing, regardless of whether a third party appraisal is procured);
provided, however, that in connection with financings that permit or
contemplate additional advances, the Borrowing Base Allocated Value of
any Property shall be increased, upon each additional advance, by an
amount equal to the increase of the implied valuation of such Property
directly or indirectly evidenced by such additional advance (i.e., an
amount obtained by dividing the principal amount of such advance by the
original loan-to-value ratio for the entire financing). In the event
that neither an appraisal nor an implied valuation based on the
loan-to-value ratio is made available to the Company, and WCPT and the
Whitehall Group are unable to agree upon the adjustments to the
Borrowing Base Allocated Value in connection with the closing of a
refinancing of a Property, the Company will, at its sole expense, hire
an independent real estate appraisal firm (reasonably acceptable to
WCPT and the Whitehall Group) to determine the value of the refinanced
Property."
"'Cash Equivalent Assets' shall include: (i) cash and cash
equivalents (including cash the use of which is restricted by
contract), (ii) the fair market value of any interest rate caps or
hedging instruments to which the Company is a party, (iii) accounts
receivable (net of reserves for credit losses), (iv) prepaid insurance,
prepaid real estate taxes and other prepaid costs having value in the
future, (v) utility, performance bonds and other cash or cash
equivalent deposits having value in the future. 'Cash Equivalent
Assets' shall exclude straight-line rents, deferred financing costs and
corporate furniture fixtures and equipment (it being understood and
agreed that if categories of assets are different at the time of the
Global Buy-Sell from those listed above, such differently classified
categories of assets will constitute 'Cash Equivalent Assets' if the
nature of such categories of assets is economically substantially
similar to the 'Cash Equivalent Assets'
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listed above such that they would be properly characterized as 'Cash
Equivalent Assets' if they existed on the date hereof)."
"'Cash Equivalent Liabilities' shall include: (i) accounts
payable and accrued expenses, (ii) accrued debt interest payments,
(iii) advance rent receipts, (iv) the outstanding principal balance of
the Saracen Notes and (v) security deposits made by tenants to the
Company or its Subsidiaries. 'Cash Equivalent Liabilities' shall
exclude the effect of straight lining ground lease obligations and
capitalized ground lease liabilities (it being understood and agreed
that if categories of liabilities are different at the time of the
Global Buy-Sell from those listed above, such differently classified
categories of liabilities will constitute 'Cash Equivalent Liabilities'
if the nature of such categories of liabilities is economically
substantially similar to the 'Cash Equivalent Liabilities' listed above
such that they would be properly characterized as 'Cash Equivalent
Liabilities' if they existed on the date hereof)."
"'Cash Equivalent Net Worth' shall mean the Cash Equivalent
Assets minus the Cash Equivalent Liabilities."
"'Claims' shall mean, collectively, the claims, demands,
losses, damages, liabilities, lawsuits and other proceedings,
judgements and awards, and costs and expenses (including but not
limited to reasonable attorneys' fees and expenses) alleged against or
incurred by any Person."
"'Closing Balance Sheet' shall have the meaning set forth in
Section 8.2(c)(vii)."
"'Closing Cash Equivalent Net Worth' shall mean the
consolidated Cash Equivalent Net Worth of the Company and its
Subsidiaries on a consolidated basis as reflected on the Closing
Balance Sheet for the Company."
"'Company Value' shall have the meaning set forth in Section
8.2(c)(ii)."
"'Controlled Affiliate' shall mean an Affiliate of WRP that is
at least 51% owned by, and solely controlled directly or indirectly by,
WRP. For purposes of this definition and Section 8.2, 'controlled'
shall mean, when used with respect to any Person, the power to direct
the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise."
"'Conversion Price' shall have the meaning set forth in
Section 8.2(c)(i)."
"'Covered Indebtedness' shall mean all Indebtedness for
borrowed money incurred by the Company or any of the Subsidiaries
(whether or not such Indebtedness is secured by mortgages or other
security interests on any of the Properties), together with any
preferred equity issued by the Company after the
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Effective Date to a mezzanine lender (for the avoidance of doubt, it is
understood and agreed that Covered Indebtedness shall not include the
Series A Preferred Membership Units and any amounts funded by the
Members pursuant to Section 5.2(f))."
"'Credit Lease Property' shall mean any property to be owned
or, if a part of an acquisition of a pool of properties that also
includes fee-owned properties, ground leased by the Company (or a
Subsidiary) that is encumbered by one or more Credit Tenant Leases."
"'Credit Tenant Lease' shall mean any lease to a tenant having
a credit rating of at least 'Baa' by Moody's or 'BBB+' by S&P."
"'Development Assets' shall mean any Property as to which, at
the relevant time of determination, more than $1 million of tenant
improvements, base building or renovation work, in the aggregate,
relating to such Property set forth in any Approved Budget remains to
be completed."
"'Effective Date' shall mean January 1, 2001."
"'Equity Value' shall mean, with respect to any Credit Lease
Property, the excess of the All-In-Acquisition Cost of such Credit
Lease Property over the principal amount of any loan secured by such
Credit Lease Property."
"'Estimated Balance Sheet' shall have the meaning set forth in
Section 8.2(c)(vii)(B)."
"'Estimated Cash Equivalent Net Worth' shall have the meaning
set forth in Section 8.2(c)(vii)(B)."
"'Financing Parameters' shall mean the conditions set forth in
clauses (a), (b) and (c) of Section 3.9."
"'First Amendment' shall mean the First Amendment to the
Limited Liability Operating Agreement of Wellsford/Whitehall Group,
L.L.C., dated as of the Effective Date, by and among all of the Members
of the Company as of the Effective Date."
"'GAAP' shall mean United States generally accepted accounting
principles as in effect from time to time."
"'Global Buying Party' shall have the meaning set forth in
Section 8.2(c)(ii)."
"'Global Buy-Sell' shall have the meaning set forth in Section
8.2(c)."
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"'Global Buy-Sell Closing Date' shall have the meaning set
forth in Section 8.2 (c)(vii)(B)."
"'Global Buy-Sell Notice' shall have the meaning set forth in
Section 8.2(c)(i)."
"'Global Election Notice' shall have the meaning set forth in
Section 8.2(c)(i)."
"'Global Non-Triggering Party' shall have the meaning set
forth in Section 8.2(c)(i)."
"'Global Non-Triggering Party Interest' shall have the meaning
set forth in Section 8.2(c)(i)."
"'Global Offer to Buy' shall have the meaning set forth in
Section 8.2(c)(i)."
"'Global Offer to Sell' shall have the meaning set forth in
Section 8.2(c)(i)."
"'Global/Portfolio Buy-Sell' shall have the meaning set forth
in Section 8.2(d)."
"'Global/Portfolio Buy-Sell Notice' shall have the meaning set
forth in Section 8.2(d)(i)."
"'Global/Portfolio Election Notice' shall have the meaning set
forth in Section 8.2(d)(i)."
"'Global Selling Party' shall have the meaning set forth in
Section 8.2(c)(ii)."
"'Global Triggering Party' shall have the meaning set forth in
Section 8.2(c)."
"'Global Triggering Party Interest' shall have the meaning set
forth in Section 8.2(c)(i)."
"'Initial Allocated Value' shall mean, with respect to any
Property, the value set forth opposite the name of such Property on
Schedule A hereto."
"'Initial Borrowing Base Allocated Value' shall mean, with
respect to any Property, the value set forth opposite the name of such
Property on Schedule B hereto."
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"'LIBOR' shall mean, as of the date of calculation, the rate
for deposits in U.S. Dollars for such applicable period as determined
by the Manager that appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on such calculation date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on the applicable
calculation date, LIBOR will be the arithmetic mean of the offered
rates for deposits in U.S. Dollars for such applicable period that
appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time,
on such calculation date."
"'Loan' shall mean any loan for borrowed money made to the
Company and its Subsidiaries."
"'Management Co.' shall mean WP Commercial, L.L.C., a Delaware
limited liability company."
"'Management Co. Cause' shall mean the fraud, criminal felony
indictment, gross negligence or willful misconduct of Management Co. in
connection with the business of the Company or any of its Subsidiaries;
provided, however, that such fraud, gross negligence or willful
misconduct shall not in any event constitute 'Management Co. Cause'
unless (i) WCPT has provided written notice to the Whitehall Group of
the conduct it believes constitutes 'Management Co. Cause' and such
conduct shall remain unremedied for a period of 45 days after such
written notice is provided, (ii) if the Whitehall Group or Management
Co. contests whether such conduct constitutes 'Management Co. Cause',
an arbitrator selected pursuant to Section 5.10 shall have issued its
final determination that such conduct does in fact constitute
'Management Co. Cause' and (iii) such fraud, gross negligence or
willful misconduct results in damages, in any one instance or in all
instances collectively, to the Company or any of its Subsidiaries in an
amount equal to $50,000."
"'Manager Promote' shall mean the aggregate distributions that
would be made to the Manager pursuant to Sections 7.1(c)(iii)(y),
7.1(c)(iv)(y), 7.1(d)(iii)(y), 7.1(d)(iv)(y), 7.1(e)(iii)(y),
7.1(e)(iv)(y), 7.1(f)(iii)(y), 7.1(f)(iv)(y), 7.1(g)(iii)(y),
7.1(g)(iv)(y), 7.1(h)(iii)(y) and 7.1(h)(iv)(y)."
"'Master Environmental Services Agreement' shall mean the
Environmental Master Services Agreement in the form set forth in
Schedule F."
"'Moody's' shall mean Moody's Investor Services, Inc. or any
successor thereto."
"'Other Assets' shall mean those Properties other than the
Nomura Properties and the Non-Nomura Properties, as more particularly
described in Schedule 2.4(I)."
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"'Permitted Reserves' shall mean, as of any date, reserves
determined and made by the Manager in an amount equal to not greater
than the sum of (1) the sum of (A) $1,000,000 of Company-level reserves
(less any reserves held by the Subsidiaries other than Property-level
reserves) plus (B) Property-level reserves of up to 0.5% of the book
value of the applicable Property; (2) an amount equal to the amount
that may be payable in respect of potential claims from a purchaser of
one or more of the Properties for breach of representations and
warranties and any other claims or liabilities under a purchase and
sale agreement (as such reserves or potential liabilities are
determined in the Whitehall Group's reasonable discretion) after the
sale of such Property (provided that no such reserve shall exceed 5% of
the purchase price of the Property in respect of which such reserve is
made or be withheld for more than 18 months following the closing of
such sale, even though the dollar limit on and duration of the
Company's (or Subsidiary's) liability under any sales agreement may
exceed such amounts and duration if the Manager and the Whitehall Group
so determine); and (3) an amount equal to the aggregate principal
amount of Indebtedness of the Company or any of its Subsidiaries
maturing or otherwise becoming payable within 120 days after the date
of the sale of such Property (and accrued interest on Indebtedness that
is not current and interest that will accrue on other Indebtedness
within the following 120 days to the extent the Company's projected
unrestricted cash flow will not otherwise be sufficient to pay interest
on a current basis), provided, however that in the event such
Indebtedness maturing or otherwise becoming payable within 120 days
after the date of the sale of such Property is repaid, refinanced or
the maturity date of such Indebtedness is extended to another date
beyond 120 days from the date of extension, the remaining amounts
previously reserved for such Indebtedness shall cease to constitute
Permitted Reserves and shall be distributed under Section 7.1(b) as a
Capital Proceeds Distribution Amount. Reserves established under this
definition will be funded from Capital Proceeds or, if the Manager
reasonably determines (and certifies in writing to WCPT) that the
failure to establish such reserves could be materially detrimental to
the Company, from other sources."
"'Pointview' shall mean the property located at Berdan Avenue,
Township of Wayne, New Jersey."
"'Pointview Buying Party' shall have the meaning set froth in
Section 8.2(b)(ii)."
"'Pointview Buy-Sell' shall have the meaning set forth in
Section 8.2(b)(i)."
"'Pointview Election Notice' shall have the meaning set forth
in Section 8.2(b)(i)."
"'Pointview Offer Price' shall have the meaning set forth in
Section 8.2(b)(i)."
<PAGE>
"'Pointview Offer to Buy' shall have the meaning set forth in
Section 8.2(b)(i)."
"'Pointview Offer to Sell' shall have the meaning set forth in
Section 8.2(b)(i)."
"'Portfolio' shall have the meaning set forth in Section
8.2(d)."
"'Portfolio Buying Party' shall have the meaning set forth in
Section 8.2(d)(ii)."
"'Portfolio Non-Triggering Party' shall have the meaning set
forth in Section 8.2(d)(i)."
"'Portfolio Offer to Buy' shall have the meaning set forth in
Section 8.2(d)(i)."
"'Portfolio Offer to Sell' shall have the meaning set forth in
Section 8.2(d)(i)."
"'Portfolio Offer Price' shall have the meaning set forth in
Section 8.2(d)(i)."
"'Portfolio Purchase Price' shall have the meaning set forth
in Section 8.2(d)(iv)."
"'Portfolio Selling Party' shall have the meaning set forth in
Section 8.2(d)(ii)."
"'Portfolio Triggering Party' shall have the meaning set forth
in Section 8.2(d)."
"'Qualified OP Units' shall mean partnership interests or
units in a partnership that may have 'lock-up' restrictions prohibiting
their transfer so long as such restrictions are for 6 months or less
and will, after such 'lock-up,' be convertible into or exchangeable for
common stock (or preferred stock that is convertible into or
exchangeable for common stock) registered with the Securities Act or
common stock (or preferred stock that is convertible into or
exchangeable for common stock) entitled to registration rights
reasonably deemed acceptable by the Manager."
"'Recently Acquired Asset Capital' shall mean, with respect to
any Recently Acquired Asset, the total amount of capital contributed by
the Company to the Subsidiary owning such Recently Acquired Asset (less
amounts distributed to the Company by such Subsidiary prior to the
Effective Date), plus all attorneys'
<PAGE>
fees and expenses and other transaction costs (including third-party
due diligence costs) paid for by the Company rather than the applicable
Subsidiary. As of the date hereof, the Recently Acquired Asset Capital
for each Recently Acquired Asset is set forth on Schedule D."
"'Recently Acquired Assets' shall mean the properties commonly
known as 'Channel Lumber' (located at 945 Rt. 10, Whippany, NJ), '250
Elm Street' (located at 250 Elm Street, Dedham, MA) and 'BF Goodrich'
(located at 197 Ridgedale Avenue, Cedar Knolls, NJ)."
"'REIT Distribution Notice' shall have the meaning set forth
in Section 7.1(o)."
"'Requisite Manager Promote' shall mean an amount, as
determined from time to time, equal to:
(i) with respect to WHWEL, the sum of (a) 4.6484% of the total
distributions distributed to WHWEL pursuant to Section 7.1(b) in excess
of a 17.5% Internal Rate of Return (but only with respect to any such
distributions that, after deducting the amount of the distributions
made by WHWEL on account of the Manager Promote, provide WHWEL with an
Internal Rate of Return of up to 22.5%), plus (b) 5.9766% of the total
distributions distributed to WHWEL pursuant to Section 7.1(b) that,
after deducting the amount of the distributions made by WHWEL on
account of the Manager Promote, provide WHWEL with an Internal Rate of
Return in excess of 22.5%;
(ii) with respect to Whitehall XI, the sum of (a) 5.8438% of
the total distributions distributed to Whitehall XI pursuant to Section
7.1(b) in excess of a 15% Internal Rate of Return (but only with
respect to any such distributions that, after deducting the amount of
the distributions made by Whitehall XI on account of the Manager
Promote, provide Whitehall XI with an Internal Rate of Return of up to
25%), plus (b) 7.3047% of the total distributions distributed to
Whitehall XI pursuant to Section 7.1(b) that, after deducting the
amount of the distributions made by Whitehall XI on account of the
Manager Promote, provide Whitehall XI with an Internal Rate of Return
in excess in excess of 25%;
(iii) with respect to Holding Co., the sum of (a) 5.8438% of
the total distributions distributed to Holding Co. pursuant to Section
7.1(b) in excess of a 15% Internal Rate of Return (but only with
respect to any such distributions that, after deducting the amount of
the distributions made by Holding Co. on account of the Manager
Promote, provide Holding Co. with an Internal Rate of Return of up to
25%), plus (b) 7.3047% of the total distributions distributed to
Holding Co. pursuant to Section 7.1(b) that, after deducting the amount
of the distributions made by Holding Co. on account of the Manager
Promote, provide Holding Co. with an Internal Rate of Return in excess
in excess of 25%;
<PAGE>
(iv) with respect to WCPT on account of the WCPT I
Distributions, the sum of (a) 7.4375% of the total distributions
distributed to WCPT pursuant to Section 7.1(b) in excess of a 17.5%
Internal Rate of Return with respect to the WCPT Phase I Capital
Contributions (but only with respect to any such distributions that,
after deducting the amount of the distributions made by WCPT on account
of the Manager Promote, provide WCPT with an Internal Rate of Return of
up to 22.5% with respect to the WCPT Phase I Capital Contributions),
plus (b) 9.5625% of the total distributions distributed to WCPT
pursuant to Section 7.1(b) that, after deducting the amount of the
distributions made by WCPT on account of the Manager Promote, provide
WCPT with an Internal Rate of Return in excess of 22.5% with respect to
the WCPT Phase I Capital Contributions;
(v) with respect to WCPT on account of its WCPT II
Distributions, the sum of (a) 9.35% of the total distributions
distributed to WCPT pursuant to Section 7.1(b) in excess of a 15%
Internal Rate of Return with respect to the WCPT Phase II Capital
Contributions (but only with respect to any such distributions that,
after deducting the amount of the distributions made by WCPT on account
of the Manager Promote, provide WCPT with an Internal Rate of Return of
up to 25% with respect to the WCPT Phase II Capital Contributions),
plus (b) 11.6875% of the total distributions distributed to WCPT
pursuant to Section 7.1(b) that, after deducting the amount of the
distributions made by WCPT on account of the Manager Promote, provide
WCPT with an Internal Rate of Return in excess in excess of 25%; and
(vi) with respect to Management Co., the sum of (a) 4.6484% of
the total distributions distributed to Management Co. pursuant to
Section 7.1(b) in excess of a 17.5% Internal Rate of Return (but only
with respect to any such distributions that, after deducting the amount
of the distributions made by Management Co. account of the Manager
Promote, provide Management Co. with an Internal Rate of Return of up
to 22.5%), plus (b) 5.9766% of the total distributions distributed to
Management Co. pursuant to Section 7.1(b) that, after deducting the
amount of the distributions made by Management Co. on account of the
Manager Promote, provide Management Co. with an Internal Rate of Return
in excess of 22.5%."
"'Requisite WCPT Promote' shall mean an amount, as determined
from time to time, equal to:
(i) with respect to WHWEL, the sum of (a) 10.0625% of the
total distributions distributed to WHWEL pursuant to Section 7.1(b) in
excess of a 17.5% Internal Rate of Return (but only with respect to any
such distributions that, after deducting the amount of the
distributions made by WHWEL on account of the WCPT Promote, provide
WHWEL with an Internal Rate of Return of up to 22.5%), plus (b)
12.9375% of the total distributions distributed to WHWEL pursuant to
Section 7.1(b) that, after deducting the amount of the distributions
<PAGE>
made by WHWEL on account of the WCPT Promote, provide WHWEL with an
Internal Rate of Return in excess of 22.5%;
(ii) with respect to Whitehall XI, the sum of (a) 10.65% of
the total distributions distributed to Whitehall XI pursuant to Section
7.1(b) in excess of a 15% Internal Rate of Return (but only with
respect to any such distributions that, after deducting the amount of
the distributions made by Whitehall XI on account of the WCPT Promote,
provide Whitehall XI with an Internal Rate of Return of up to 25%),
plus (b) 13.3125% of the total distributions distributed to Whitehall
XI pursuant to Section 7.1(b) that, after deducting the amount of the
distributions made by Whitehall XI on account of the WCPT Promote,
provide Whitehall XI with an Internal Rate of Return in excess in
excess of 25%;
(iii) with respect to Holding Co., the sum of (a) 10.65% of
the total distributions distributed to Holding Co. pursuant to Section
7.1(b) in excess of a 15% Internal Rate of Return (but only with
respect to any such distributions that, after deducting the amount of
the distributions made by Holding Co. on account of the WCPT Promote,
provide Holding Co. with an Internal Rate of Return of up to 25%), plus
(b) 13.3125% of the total distributions distributed to Holding Co.
pursuant to Section 7.1(b) that, after deducting the amount of the
distributions made by Holding Co. on account of the WCPT Promote,
provide Holding Co. with an Internal Rate of Return in excess in excess
of 25%;
(iv) with respect to WCPT on account of the WCPT I
Distributions, the sum of (a) 10.0625% of the total distributions
distributed to WCPT pursuant to Section 7.1(b) in excess of a 17.5%
Internal Rate of Return with respect to the WCPT Phase I Capital
Contributions (but only with respect to any such distributions that,
after deducting the amount of the distributions made by WCPT on account
of the WCPT Promote, provide WCPT with an Internal Rate of Return of up
to 22.5% with respect to the WCPT Phase I Capital Contributions), plus
(b) 12.9375% of the total distributions distributed to WCPT pursuant to
Section 7.1(b) that, after deducting the amount of the distributions
made by WCPT on account of the WCPT Promote, provide WCPT with an
Internal Rate of Return in excess of 22.5% with respect to the WCPT
Phase I Capital Contributions;
(v) with respect to WCPT on account of its WCPT II
Distributions, the sum of (a) 10.65% of the total distributions
distributed to WCPT pursuant to Section 7.1(b) in excess of a 15%
Internal Rate of Return with respect to the WCPT Phase II Capital
Contributions (but only with respect to any such distributions that,
after deducting the amount of the distributions made by WCPT on account
of the WCPT Promote, provide WCPT with an Internal Rate of Return of up
to 25% with respect to the WCPT Phase II Capital Contributions), plus
(b) 13.3125% of the total distributions distributed to WCPT pursuant to
Section 7.1(b) that, after deducting the amount of the distributions
made by WCPT on
<PAGE>
account of the WCPT Promote, provide WCPT with an Internal Rate of
Return in excess in excess of 25%; and
(vi) with respect to Management Co., the sum of (a) 10.0625%
of the total distributions distributed to Management Co. pursuant to
Section 7.1(b) in excess of a 17.5% Internal Rate of Return (but only
with respect to any such distributions that, after deducting the amount
of the distributions made by Management Co. on account of the WCPT
Promote, provide Management Co. with an Internal Rate of Return of up
to 22.5%), plus (b) 12.9375% of the total distributions distributed to
Management Co. pursuant to Section 7.1(b) that, after deducting the
amount of the distributions made by Management Co. on account of the
WCPT Promote, provide Management Co. with an Internal Rate of Return in
excess of 22.5%."
"'Reuters Screen LIBO Page' shall mean the display designated
as page 'LIBO' on the Reuters Monitor Money Rates Service (or such
other page as may replace the LIBO page on that service) for the
purpose of displaying interbank rates from London in U.S. Dollars."
"'Sales Parameters' shall mean the conditions set forth in
clauses (ii) through (v) of Section 8.2(a)."
"'Saracen Notes' shall mean, collectively, (i) the note in the
principal amount of $333,333.33, dated January 21, 1999, by WCPT in
favor of Dominic J. Saraceno, (ii) the note in the principal amount of
$333,333.33, dated January 21, 1999, by WCPT in favor of Carleton G.
Tarpinian and (iii) the note in the principal amount of $333,333.33,
dated January 21, 1999, by WCPT in favor of Kurt Saraceno."
"'Section 1031 Transaction' shall mean a transaction involving
the exchange of one or more Properties by the Company or one or more of
its Subsidiaries for other real property(ies), which transaction
qualifies as an exchange of property held for productive use in a trade
or business or for investment for property of like kind which is to be
held either for productive use in a trade or business or for investment
under Section 1031(a)(1) of the Code."
"'Securities Act' means the Securities Act of 1933, as
amended."
"'Sell' shall mean sell, assign, convey, transfer or otherwise
dispose of any asset by any means whatsoever, whether directly or
indirectly, including by means of a transfer of ownership interests in
the entities owning such asset. The terms 'Selling' and 'Sale' shall
have the meanings correlative to the foregoing."
<PAGE>
"'Short-Term Advances' shall have the meaning set forth in
Section 3.4B.(i)."
"'S&P' shall mean Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or any successor thereto."
"'Standard Member Recourse Carveouts' shall mean liabilities
for or guaranties of liabilities set forth in Schedule 3.9A or, if the
Manager determines in good faith that additional recourse carveouts are
reasonably necessary for the purpose of entering into a financing for
the Company or its Subsidiaries, similar matters consistent with market
practice."
"'Standard Parent Recourse Carveouts' shall mean liabilities
for or guaranties of liabilities set forth in Schedule 3.9B or, if the
Manager determines in good faith that additional recourse carveouts are
reasonably necessary for the purpose of entering into a financing for
the Company or its Subsidiaries, similar matters consistent with market
practice."
"'Subordinated Preferred Equity' shall mean any amounts
contributed by the Whitehall Group or WCPT pursuant to Section 5.2(f)
to the extent the Manager designates such amounts so contributed
pursuant to Section 5.2(f) as preferred equity in the Mandatory Capital
Call made in respect of such contributions."
"'Tax Opinion' shall mean an opinion of an Approved Counsel or
another firm approved by WCPT addressed to the Company to the effect
that either a Section 1031 Transaction as set forth in Section 8.2 or,
if and to the extent such an opinion is required pursuant to Section
3.9(c), a financing 'should' not result in a liability under the tax
indemnification in favor of Saracen under Section 8.2A."
"'Telerate Page 3750' shall mean the display designated as
'Page 3750' on the Dow Jones Telerate Service (or such other page as
may replace Page 3750 on that service) or such other service as may be
nominated by the British Bankers' Association as the information vendor
for the purpose of displaying British Bankers' Association Interest
Settlement Rates for U.S. Dollar deposits."
"'Unit Price' shall have the meaning set forth in Section
8.2(c)(i)."
"'WCPT Employee Claim' shall have the meaning set forth in
Section 3.1(f).'"
"'WCPT Promote' shall mean the aggregate distributions that
would be made to WCPT pursuant to Sections 7.1(c)(iii)(x),
7.1(c)(iv)(x), 7.1(d)(iii)(x), 7.1(d)(iv)(x), 7.1(e)(iii)(x),
7.1(e)(iv)(x), 7.1(f)(iii)(x), 7.1(f)(iv)(x), 7.1(g)(iii)(x),
7.1(g)(iv)(x), 7.1(h)(iii)(x) and 7.1(h)(iv)(x)."
<PAGE>
"'Weighted Average Interest Rate' shall mean, as of the date
of calculation, the quotient of (i) the summation of the total annual
interest payments to be made on all of the Loans outstanding on such
date (calculated by multiplying (x) the interest rate specified for
each outstanding Loan by (y) the outstanding principal balance of such
outstanding Loan as of such date), divided by (ii) the aggregate
outstanding principal balance of all such Loans as of such date."
"'Whitehall Funds' shall mean any of Whitehall Street Real
Estate Limited Partnership V, a Delaware limited partnership, Whitehall
Street Real Estate Limited Partnership VII, a Delaware limited
partnership, Whitehall Street Real Estate Limited Partnership XI, a
Delaware limited partnership, and Whitehall Street Real Estate Limited
Partnership XIII, a Delaware limited partnership or any other
multi-investor fund sponsored by Goldman, Sachs & Co. or one of its
Affiliates that invests in real estate or real estate related
investments."
(c) The following terms and definitions appearing in Section 1.1 are
hereby deleted: "Administration Fee", "Cause", "Determination Date", "Executive
Officer", "Insurance Program", "Marketing Member", "Marketing Period",
"Marketing Plan", "New Warrant Agreement", "New WRP Warrants", "Non-Marketing
Member", "Requisite Promote", "Sales Notice", "Section 8.2(c) Termination Date",
"Subject Asset", "Warrant Agreement", "WCPT Amount", "WRP At-Market Shares",
"WRP Letter Agreement", "WRP Shares" and "WRP Warrants".
(d) The definition of "Interim Capital Contribution" is hereby amended
by deleting the reference to "December 31, 2000" and replacing such deleted text
with the date "December 31, 2001".
(e) The definition of "Internal Rate of Return" is hereby amended by
adding the following language at the end of such definition:
"Amounts distributed to WHWEL pursuant to Section
7.1(c)(iii)(z) and 7.1(c)(iv)(z) shall be disregarded (and not deemed
distributed to WHWEL) for purposes of calculating WHWEL's Internal Rate
of Return except solely for purposes of determining whether the 15%
Internal Rate of Return specified in Section 7.1(m) has been satisfied.
Amounts distributed to Whitehall XI pursuant to Section 7.1(d)(iii)(z)
and 7.1(d)(iv)(z) shall be disregarded (and not deemed distributed to
Whitehall XI) for purposes of calculating Whitehall XI's Internal Rate
of Return except solely for purposes of determining whether the 15%
Internal Rate of Return specified in Section 7.1(l) has been satisfied.
Amounts distributed to Holding Co. pursuant to Section 7.1(e)(iii)(z)
and 7.1(e)(iv)(z) shall be disregarded (and not deemed distributed to
Holding Co.) for purposes of calculating Holding Co.'s Internal Rate of
Return except solely for purposes of determining whether the 15%
Internal Rate of Return specified in Section 7.1(l) has been satisfied.
Amounts distributed to Management Co. pursuant to Section
<PAGE>
7.1(h)(iii)(z) and 7.1(h)(iv)(z) shall be disregarded (and not deemed
distributed to Management Co.) for purposes of calculating Management
Co.'s Internal Rate of Return except solely for purposes of determining
whether the 15% Internal Rate of Return specified in Section 7.1(m) has
been satisfied."
(f) The definition of "Membership Unit" is hereby amended by deleting
the second sentence thereof.
(g) The definition of "Percentage Interest" is hereby amended by
deleting the reference to "Schedule 5.1" and replacing such deleted text with
"Schedule 5.1A", and the Operating Agreement is hereby further amended by
replacing Schedule 5.1 thereto with "Schedule 5.1A" attached to this First
Amendment.
SECTION 2.2. Section 2.4 of the Operating Agreement is hereby amended
by deleting references to "Schedule 2.4A" and "Schedule 2.4B" and replacing such
deleted text with "Schedule 2.4(I)" and "Schedule 2.4(II)", respectively, and
the Operating Agreement is hereby further amended by replacing Schedule 2.4A and
Schedule 2.4B thereto with "Schedule 2.4(I)" and "Schedule 2.4(II)",
respectively, attached to this First Amendment.
SECTION 2.2. Section 2.5 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"2.5. Principal Office; Registered Agent. The principal office
of the Company shall be c/o WP Commercial, L.L.C., 85 Broad Street,
10th Floor, New York, New York 10004. The Company may change its place
of business to such location or locations as may at any time or from
time to time be determined by the Management Committee. The mailing
address of the Company shall be c/o Goldman, Sachs & Co., 100 Crescent
Court, Suite 1000, Dallas, Texas 75201, or such other address as may be
selected from time to time by the Management Committee. The Company
shall maintain a registered office at The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The name and address of the Company's
registered agent is The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware
19801."
SECTION 2.3. Section 2.8 of the Operating Agreement is hereby
amended by adding the following language as paragraph (d) thereof:
"(d) Each of WHWEL, Holding Co. and Whitehall XI hereby
represents and warrants to the other Members that, as of the Effective
Date, WHWEL, Holding Co., and Whitehall XI collectively own more than
51% of the limited liability company interests in Management Co. It is
understood and agreed by the Company and the Members that the
representation and warranty contained in this paragraph (d) is merely a
representation of the state of facts as of
<PAGE>
the Effective Date and that the limited liability company interests in
Management Co. may be transferred or assigned from time to time after
the Effective Date to any Person without notice to, or the consent or
approval of, the Company or the Members."
SECTION 2.4. Article II of the Operating Agreement is hereby amended by
adding the following language as Section 2.11 thereof:
"2.11. Saracen Notes. (a) WCPT hereby represents and warrants
that (i) the total outstanding principal balance of the Saracen Notes
is $999,999.99 and (ii) that the loans evidenced by the Saracen Notes
are not in default with respect to the payment of interest or principal
or in any other manner.
(b) The Company hereby assumes and agrees to make all payments
of principal and interest due under the Saracen Notes after the date
hereof."
SECTION 2.5. Section 3.1(a) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(a) Except as otherwise specifically set forth in this
Agreement, including Sections 3.1(c), 3.2, 3.3, 3.4, 3.5 and 3.6, the
Manager shall have the right, power and authority, without the consent
of the Management Committee or WCPT, to conduct the business and
affairs of the Company (whether for the Company itself or where the
Company is acting in its capacity as a direct or indirect member,
partner or owner of any Subsidiary) and to do all things necessary or
desirable to carry on the business of the Company, and Manager is
hereby authorized, without the consent of the Management Committee or
WCPT, to execute, deliver and perform any and all agreements,
instruments or other documents in the name and on behalf of the Company
and to do or take any other actions of any kind as the Manager deems
necessary or appropriate in accordance with the provisions of this
Agreement and applicable law. The Manager shall have the authority,
without the consent of the Management Committee or WCPT, to carry out
the Business Plan approved by the Management Committee for each
Property subject to the limitations therein and in the Approved
Budget."
SECTION 2.6. Section 3.1(b) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows: "Intentionally
Omitted".
SECTION 2.7. Section 3.1 of the Operating Agreement is hereby further
amended by adding the following language as paragraphs (e) and (f) thereof:
"(e) Subject to paragraph (f) below, WCPT shall indemnify and
hold harmless the Manager, the Company, its Subsidiaries and the
Members and their
<PAGE>
Affiliates from and against any and all Claims for which WCPT would
otherwise have been liable under Section 3.1(c) (as in effect prior to
the Effective Date).
(f) The Manager, WCPT, WRP and the Company expressly
acknowledge and agree that the Manager does not assume, and is not
liable for, liabilities for Claims made by employees of WCPT, WRP or
the Company relating to the business of the Company or the Subsidiaries
or the Properties that arise from the period prior to the Effective
Date ("WCPT Employee Claims"). WRP and WCPT hereby indemnify and hold
harmless the Manager from and against any WCPT Employee Claims arising,
directly or indirectly, in whole or in part, out of the illegal or
tortious actions taken (or failed to be taken) or allegedly taken (or
allegedly failed to be taken) by WCPT, WRP or the Company, including
the gross negligence, fraud, breach of fiduciary duty or willful
misconduct of WRP, WCPT or the Company; provided that the indemnity
provided in this sentence shall not limit the Company's obligations, if
any, under Section 4.3(a) to indemnify WCPT in its capacity as former
manager of the Company. The Company hereby indemnifies and holds
harmless the Manager, the Whitehall Group, WCPT, WRP and their
respective Affiliates from and against any WCPT Employee Claims arising
out of any breach or alleged breach of any written or oral agreement
occurring prior to the Effective Date for salary, bonus or other
compensation or benefits. For the avoidance of doubt, the immediately
preceding two sentences do not limit the scope of the first sentence of
this subparagraph (f), but rather allocate responsibility for all WCPT
Employee Claims among WRP, WCPT and the Company. Notwithstanding the
foregoing, but subject to the reimbursement obligations of WCPT under
the Agreement Regarding Employees of WRP and Fees, dated as of the
Effective Date, by and among WRP, WCPT, WHWEL, Whitehall XI, Holding
Co., the Company and Management Co., the Manager shall be liable for
any amounts of bonuses that have been declared by and reimbursed to the
Manager but that have not been paid by the Manager to employees that
are entitled to such bonuses."
SECTION 2.8. Section 3.2(a)(iv) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(iv) procuring all necessary insurance to the extent
available at commercially reasonable rates for the Company and its
Subsidiaries (provided that Manager will use reasonable efforts to
obtain or maintain an insurance program at competitive rates for
similar coverages for the Properties and, if a blanket policy is
utilized that covers the Properties in addition to other properties, to
ensure that the insurance costs for the Properties will be fairly
allocated among the Properties and such other properties covered by the
policy and provided that the Manager shall increase any insurance
coverage carried by the Company and its Subsidiaries or procure any
additional insurance coverage if required under the terms of any
Property Loan); causing the Members to be named as additional insureds
on all liability policies maintained by the Company and its
Subsidiaries;
<PAGE>
delivering to the members of the Management Committee copies of all
insurance policies maintained by the Company and its Subsidiaries from
time to time, including renewals or replacements of any expiring
policies prior to the expiration thereof;"
SECTION 2.9. Section 3.3 of the Operating Agreement is hereby amended
by deleting each occurrence of the words "and/or WRP" contained therein.
SECTION 2.10. Section 3.4 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"3.4. Decisions Requiring Approval of the Management
Committee. Notwithstanding anything to the contrary in this Agreement,
except with respect to such matters expressly set forth in Section 3.4
as requiring the consent of the Management Committee or WCPT, the
Manager shall have the right, power and authority to act, expend such
sums, make any decision or incur any obligation on behalf of the
Company (in its own behalf or in its capacity as a member, partner or
other equity holder of any Subsidiary). The provisions of this
Agreement relating to the management and control of the business and
affairs of the Company shall also be construed to be fully applicable
to the management and control of each Subsidiary and any and all
matters listed in Part A below in this Section 3.4 shall constitute
Major Decisions for purposes hereof whether such matter relates to the
Company or any Subsidiary of the Company and any and all matters listed
in Part B below in this Section 3.4 shall constitute Operational
Decisions for purposes hereof whether such matter relates to the
Company or any Subsidiary of the Company. The consent of the Management
Committee shall be required only with respect to the Major Decisions
and Operational Decisions set forth in this Section 3.4, and prior to
taking the actions described in Parts A or B of this Section 3.4, the
Manager shall obtain such Required Committee Approval pursuant to and
in accordance with Sections 3.4 and 3.5, shall make such request of the
Management Committee in writing and shall provide each member of the
Management Committee with any information reasonably necessary for the
Management Committee to make an informed decision. The Manager shall
use its reasonable efforts to keep the Management Committee informed of
the status of any matter regarding which the Manager intends to request
the Management Committee's consent under this Section 3.4.
A. The 'Major Decisions' are:
(a) altering the nature of the business of the
Company or its Subsidiaries from the businesses permitted by
Section 2.4(a);
(b) taking any action in contravention of, amending,
modifying or waiving, the provisions of this Agreement or the
Certificate of Formation, or taking any action in
contravention of, amending, modifying
<PAGE>
or waiving the provisions of any Organizational Documents for
any Subsidiary;
(c) making a Capital Call except as permitted by
Section 5.2;
(d) instituting proceedings to adjudicate the Company
or any Subsidiary a bankrupt, or consent to the filing of a
bankruptcy proceeding against the Company or any Subsidiary,
or file a petition or answer or consent seeking reorganization
of the Company or any Subsidiary under the Federal Bankruptcy
Act or any other similar applicable federal or state law, or
consent to the filing of any such petition against the Company
or any Subsidiary, or consent to the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or any Subsidiary or of its
property, or make an assignment for the benefit of creditors
of the Company or any Subsidiary, or admit the Company's or
any Subsidiary's inability to pay its debts generally as they
become due;
(e) extending the term of the Company or any of its
Subsidiaries beyond December 31, 2045;
(f) approving any Annual Capital Budget, Annual
Operating Budget or Business Plan or modifying (or deviating
from) any of the foregoing except to the extent the Manager is
so permitted by this Section 3.4;
(g) establishing any reserve for the Company in
excess of $1 million (less any reserves held by the Company's
Subsidiaries other than Property-level reserves) or
establishing any Property-level reserves in excess of 0.5% of
the book value of the applicable Property (before
depreciation)); provided that the Manager shall have the
right, power and authority, without the consent of the
Management Committee or WCPT, to establish or cause the
Company and/or its Subsidiaries to establish Permitted
Reserves (it being understood and agreed that the Manager
shall not establish any reserve that is duplicative of any
reserves permitted under clause (1) of the definition of
'Permitted Reserves');
(h) selecting or varying depreciation and accounting
methods which would have a material effect on the income,
loss, gain or deduction of the Company or any of its
Subsidiaries other than any such changes that are required by
GAAP as determined by Ernst & Young (or such other accounting
firm as may then be serving as auditors for the Company) and
making any other decisions or elections with respect to
federal, state, local or foreign tax matters or other
financial purposes;
<PAGE>
(i) Selling or pledging all or any portion of any
Property or any Subsidiary or any interest in any of the
foregoing; provided that each of the Manager and each or any
of the members of the Whitehall Group, acting alone, shall
have the right, power and authority, without the consent of
the Management Committee or WCPT, (i) to cause the Company
and/or its Subsidiaries to Sell the Recently Acquired Assets
to an Affiliate of the Whitehall Group for a purchase price
equal to the sum of the Recently Acquired Asset Capital plus a
return on the equity invested by the Company (or a Subsidiary
of the Company) at a rate equal to LIBOR plus 400 basis points
(4%) per annum during the period beginning on the applicable
date that funds were advanced by the Company in connection
with such action (including the payment of a deposit, the
payment of out-of-pocket expenses and the payment of the
purchase price) and ending on the date of the sale by the
Company (or its Subsidiary) of such Recently Acquired Asset to
an Affiliate of the Whitehall Group, (ii) to (x) Sell or cause
the Sale of any or all of the Properties or of the Company
itself or any of its Subsidiaries or (y) cause the Company to
engage in an Approved Extraordinary Transaction, in each case
pursuant to Section 8.2 and (iii) to pledge, hypothecate,
assign or otherwise grant security interests in the Properties
or any other assets of the Company and/or its Subsidiaries in
connection with financings entered into in accordance with the
Financing Parameters;
(j) extending credit, making loans or becoming or
acting as a surety, guarantor, endorser or accommodation
endorser (or materially modifying any obligations relating to
the foregoing); provided that each of the Manager and each or
any of the members of the Whitehall Group, acting alone, shall
have the right, power and authority, without the consent of
the Management Committee or WCPT, to (i) negotiate checks or
other instruments received by the Company (or any Subsidiary),
(ii) take or cause the Company and/or its Subsidiaries to take
any of the foregoing actions in respect of immaterial amounts
in the ordinary course of business and (iii) take or cause the
Company and/or its Subsidiaries to take any of the foregoing
actions in respect of Indebtedness incurred pursuant to
Section 3.9;
(k) selecting the Company's or any Subsidiary's
accountants and independent auditors (unless such accountants
or auditors are Ernst & Young); and approving financial
statements prepared by the Company's or any Subsidiary's
auditors;
(l) making or agreeing to any material changes to the
zoning of any Property, and approving the material terms and
provisions of any material restrictive covenants or easement
agreements or any material documents establishing a
cooperative, condominium or similar association
<PAGE>
or related entity affecting any Property or any portion
thereof; provided that each of the Manager and each or any of
the members of the Whitehall Group, acting alone, shall have
the right, power and authority, without the consent of the
Management Committee or WCPT, to (i) enter into or cause the
Company and/or its Subsidiaries to enter into utility
easements or other non-material easements necessary for the
operation or development of a Property and (ii) execute,
deliver and perform or cause the Company and/or its
Subsidiaries to execute, deliver and perform all agreements,
instruments and other documents to effect or implement any
change in zoning that (x) results in a higher floor to area
ratio for any Property without causing the Company to incur
costs that are not set forth in a Business Plan, (y) is part
of or required to implement a Business Plan, or (z) would cost
no more than $100,000 in excess of the amounts specified in a
Business Plan, provided that in case of this clause (z) the
Manager will not expend such amount unless it reasonably
expects that doing so will result in a higher floor to area
ratio than specified in such Business Plan;
(m) obtaining financing or incurring Indebtedness, or
entering into any amendment or modification of existing
agreements regarding Indebtedness, provided that each of the
Manager and each or any of the members of the Whitehall Group,
acting alone, shall have the right, power and authority,
without the consent of the Management Committee or WCPT, to
obtain or cause the Company and/or its Subsidiaries to obtain
any financing pursuant to Section 3.9, and to (i) execute,
deliver and perform, all agreements, instruments and other
documents incurring, evidencing or relating to Indebtedness as
long as the Financing Parameters will be satisfied after
giving effect to the incurrence of such Indebtedness and (ii)
execute, deliver and perform any amendments or modifications
of any of the foregoing as long as the Financing Parameters
will be satisfied after giving effect to such amendment or
modification;
(n) approving the admission to the Company of a
successor or a New Member or removing any Member, issuing any
additional Membership Units, designating or approving the
classification of any new class of Membership Units issued to
a New Member (and establishing the designations, preferences
and relative, participating, optional or other special rights,
powers and duties of each class of Membership Units) or
approving the admission to any Subsidiary of a successor or an
additional partner or member or other equity owner; provided
that each of the Manager and each or any of the members of the
Whitehall Group, acting alone, shall have the right, power and
authority, without the consent of the Management Committee or
WCPT, to (i) admit to the Company one or more 'mezzanine
lenders' as New Members of the Company and issue one or more
new classes of Membership Units to such New Member, as long
<PAGE>
as the terms of such Membership Units provide the holder
thereof prior to a default with only those voting/approval
rights as are customarily provided to lenders of indebtedness
as the Manager reasonably determines, (ii) admit to the
Company Management Co. as a New Member of the Company and
issue one or more new classes of Membership Units to any such
New Member so long as (x) the issue price of such Membership
Units equals or exceeds the Deemed Value Per Membership Unit
(except that any member of the Whitehall Group may transfer a
portion of its Membership Units to the Manager at any price it
deems appropriate) and (y) the terms of such Membership Units
do not provide to the holder thereof with voting rights and
(iii) issue Membership Units in connection with Capital
Contributions made hereafter pursuant to the terms of this
Agreement;
(o) terminating and dissolving the Company (or
causing or consenting to any such action relating to a
Subsidiary) except in accordance with Article X below and
except that the Manager shall be permitted to terminate and
dissolve any Subsidiary that no longer owns a Property;
(p) acquiring any land or other real property or any
interest therein; provided that each of the Manager and each
or any of the members of the Whitehall Group, acting alone,
shall have the right, power and authority, without the consent
of the Management Committee or WCPT, to acquire or cause the
Company and/or its Subsidiaries to acquire new assets pursuant
to Section 8.2(a)(ii) or (iii) and to execute and perform all
agreements, instruments and other documents relating to the
acquisition of any new assets (including Credit Lease
Properties);
(q) [Intentionally Omitted];
(r) except as the Manager is otherwise permitted
pursuant to the terms of this Article III, modifying the
material terms of any material agreement after the same has
been approved by the Members or the Management Committee (but
only if the consent of the Management Committee was required
as a condition to the Manager's executing such material
agreement by the terms of this Agreement);
(s) approving or entering into an Extraordinary
Transaction with respect to the Company or any Subsidiary or
causing the Company (or any Subsidiary) to sell ownership
interests or other equity securities in a public or private
offering or otherwise (or taking any action which has
substantially the same effect or commits the Company or any
Subsidiary to do any of the foregoing); provided that each of
the Manager and each or any of the members of the Whitehall
Group, acting alone, shall have the
<PAGE>
right, power and authority, without the consent of the
Management Committee or WCPT, (i) to approve and enter into or
cause the Company and/or its Subsidiaries to approve and enter
into, and to execute and perform all agreements, instruments
and other documents implementing or relating to, any Approved
Extraordinary Transactions pursuant to Section 8.2(a) and (ii)
to take actions that the Manager is permitted to take pursuant
to the other terms of this Agreement, including Section 3.4A
(i) or (n);
(t) taking any action or giving or withholding any
consent, waiver or approval or exercising any right that
requires the approval of the Management Committee pursuant to
the terms of this Agreement;
(u) forming any subsidiary of the Company other than
those listed in Schedule 2.4(II); provided that each of the
Manager and each or any of the members of the Whitehall Group,
acting alone, shall have the right, power and authority,
without the consent of the Management Committee or WCPT, to
form subsidiaries that are directly or indirectly wholly owned
by the Company; or
(v) material changes to the development plans and
construction budget (which plans and budget will be subject to
WCPT's approval) for Pointview, if such changes result in more
than a 10% increase in the development and construction budget
for the development of Pointview or result in material new
uses for Pointview not contemplated by any approved
development plan or plans.
B. The 'Operational Decisions' are:
(a) (i) terminating any lease covering premises
greater than 25,000 rentable square feet or, (ii) executing or
modifying any lease covering premises greater than 25,000
rentable square feet if the Absolute Net Rent is less than 90%
of the amount set forth in the Leasing Plan; provided,
however, that each of the Manager and each or any of the
members of the Whitehall Group, acting alone, shall have the
right, power and authority, without the consent of the
Management Committee or WCPT, to terminate any lease (and
bring eviction and legal proceedings against the tenant
thereunder) where the tenant has defaulted in its rent
payments or is otherwise in material default;
(b) [Intentionally Omitted];
(c) retaining legal counsel for the Company or its
Subsidiaries in connection with any major financing or other
capital event (including a merger, combination or public
offering of the Company); provided that
<PAGE>
each of the Manager and each or any of the members of the
Whitehall Group, acting alone, shall have the right, power and
authority, without the consent of the Management Committee or
WCPT, to retain any Approved Counsel;
(d) taking any action in respect of any Property
relating to environmental matters; provided that each of the
Manager and each or any of the members of the Whitehall Group,
acting alone, shall have the right, power and authority,
without the consent of the Management Committee or WCPT, (i)
to obtain environmental studies and reports and conduct (or
arrange for) evaluations and analyses thereof and (ii) to
remediate any environmental contamination or other similar
matters with respect to any Property as required by law if the
cost of such remediation with respect to such Property would
not exceed $250,000;
(e) settling an insurance claim or condemnation
action involving a claim in excess of $500,000 or which, when
added to all other insurance or condemnation claims during a
single calendar year, exceeds $1,000,000; provided that each
of the Manager and each or any of the members of the Whitehall
Group, acting alone, shall have the right, power and
authority, without the consent of the Management Committee or
WCPT, to settle and execute, deliver and perform all
agreements, instruments or other documents necessary for the
implementation of the settlement, or any settlement, of the
pending litigation claim relating to Pointview if the amount
of such settlement exceeds $1.5 million in excess of
litigation and arbitrations costs;
(f) utilizing the proceeds of the Company's casualty
insurance policies or condemnation awards to repair or rebuild
any Property in case of damage resulting in the destruction of
more than 10% of the rentable square footage of any
improvements on such Property arising out of a casualty or
condemnation (it being understood that Manager may, without
the consent of the Management Committee or WCPT, choose not to
repair or rebuild any damage arising out of a casualty or
condemnation); provided that each of the Manager and each or
any of the members of the Whitehall Group, acting alone, shall
have the right, power and authority, without the consent of
the Management Committee or WCPT, (i) to make such emergency
repairs as may be necessary to protect such Property and (ii)
to repair or rebuild any Property if the Company or any
Subsidiary is required to do so by any ground lease or
mortgage encumbering any Property;
(g) making any expenditure or incurring any cost or
obligation which, when added to any other expenditure, cost or
obligation of the Company (or its Subsidiaries, as the case
may be), either exceeds the
<PAGE>
applicable Approved Budget applicable to the Budget Year when
such expenditure was made or cost or obligation was incurred
or exceeds any line items specified in such Approved Budget;
provided, however that each of the Manager and each or any of
the members of the Whitehall Group, acting alone, may, without
the approval of the Management Committee or WCPT, make or
incur or cause the Company and/or its Subsidiaries to make or
incur any of the following: (i) expenditures or obligations
necessitated by the occurrence of an event which was not in
the control of the Manager or relating to a non-discretionary
expenditure (e.g., taxes, utilities and insurance), (ii)
except as permitted under Section 3.4A(v) with respect to the
development and construction budget for Pointview, such
expenditures or obligations that are within a 5% variance from
the line item in question set forth in such Approved Budget
(taking into account all other expenditures in excess of such
line item during the same Budget Year not previously approved
by the Management Committee), as long as such expenditure or
obligation would not cause the applicable Property Loan, if
any, to be in default, (iii) up to $100,000 of expenses with
respect to any Property in any Budget Year, provided that such
expenses result from an event or occurrence that was not
expressly contemplated by the Approved Budget relating to such
Budget Year and that the total variances would not exceed 5%
of the total expenditures in such Approved Budget in the
aggregate, (iv) expenses or expenditures funded or reimbursed
from the proceeds of a casualty or liability insurance policy
used to restore damage caused by the casualty covered by such
policy or in connection with a liability covered by such
policy, as applicable and (v) expenses to purchase interest
rate cap agreements and similar hedge agreements for the
purpose of hedging interest rates on financings entered into
in accordance with the Financing Parameters, provided that the
annual expense of such agreement, calculated on a
straight-line basis over the term of the applicable financing,
will be considered part of the interest expense for such
financing for purposes of calculating compliance with Section
3.9(b);
(h) giving or withholding any consent, waiver or
approval or exercising any right that the Company or any
Subsidiary has the right to give, withhold or exercise under
or with respect to the Organizational Document of any
Subsidiary to the extent that the Management Committee would
have the right to approve, consent or exercise rights
hereunder regarding such matter;
(i) entering into any property management, leasing,
development or other agreements with the Manager or any
Affiliate of the Manager or the Whitehall Group; provided that
each of the Manager and each or any of the members of the
Whitehall Group, acting alone, shall have the right, power and
authority, without the approval of the
<PAGE>
Management Committee or WCPT, to (i) enter into and perform
property management agreements with Affiliates of the Manager
with the consent of WCPT, which consent shall not be
unreasonably withheld; (ii) enter into and perform the
Additional Services at such rates set forth in Schedule C;
(iii) enter into and perform the Master Environmental Services
Agreement, provided that the rates for the services under such
agreement shall be commercially reasonable; (iv) obtain any
unsecured short-term advances or other unsecured short-term
financing from the Manager or any member of the Whitehall
Group or their Affiliate (collectively, the "Short-Term
Advances"), and to execute, deliver and perform, all
agreements, instruments and other documents incurring,
evidencing or relating thereto, provided that (x) the
Short-Term Advances do not exceed $20 million, in the
aggregate, outstanding at any time and shall accrue interest
at a rate per annum of LIBOR plus 500 basis points (5%) and
(y) after giving effect to the incurrence of such financing or
advances, the Company remains in compliance with the Financing
Parameters or (v) obtain any financing in compliance with the
Financing Parameters from Goldman Sachs Mortgage Company or
the Goldman Sachs Group or any Affiliate thereof, and to
execute, deliver and perform, all agreements, instruments and
other documents incurring, evidencing or relating thereto,
provided that Goldman Sachs Mortgage Company or the Goldman
Sachs Group or any Affiliate thereof makes such loan as part
of a syndicate of lenders and is not acting as the lead agent
or bank in connection with such financing; or
(j) replacing any third party leasing, development
and property management agreement in effect as of the date
hereof or subsequent replacement with another third party if
the terms of any such new agreement are less favorable to the
Company than the existing terms of any such agreement."
SECTION 2.11. Section 3.5(c)(iv) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(iv) The Committee Representatives effective as of the
Effective Date hereof shall be as follows:
WHWEL: Steven M. Feldman and Richard Previdi
Whitehall XI: Ronald L. Bernstein and Todd A. Williams.
WCPT: Jeffrey H. Lynford, Edward Lowenthal, James Burns and
Marc Kwestel
<PAGE>
Saracen: Michael Vallace and Kurt W. Saraceno, which Committee
Representatives shall have been appointed pursuant to
Section 3.5(e)(vi) below."
SECTION 2.12. Section 3.7 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"3.7. Members Shall Not Have Power to Bind Company. No Member
shall transact business for the Company nor shall any Member have the
power or authority to sign, act for or bind the Company, all of such
powers being vested solely and exclusively in the Manager and the
Management Committee, provided that each of the Manager and each or any
of the members of the Whitehall Group, acting alone, shall have the
right, power and authority described in Sections 3.4, 3.9 and 8.2 to
Sell or cause the Sale of Properties, Subsidiaries of the Company
and/or the Company itself as set forth in Section 8.2."
SECTION 2.13. The Operating Agreement is hereby amended by adding the
following Section 3.9 thereto:
"3.9. Financing Parameters. Notwithstanding anything contained
herein to the contrary, each of the Manager and each or any of the
members of the Whitehall Group, acting alone, shall have the right,
power and authority, without the consent of the Management Committee or
WCPT, from time to time (i) to cause the Company and its Subsidiaries
to incur Covered Indebtedness and to mortgage, pledge, hypothecate or
otherwise grant security interests in or with respect to the Company's
and/or its Subsidiaries' assets including any or all of the Properties
and/or the ownership interests in any one or more of the Subsidiaries,
to secure such financings and re-financings and (ii) to execute,
deliver and perform any and all agreements, instruments and other
documents in the name and on behalf of the Company and/or its
Subsidiaries and to do or take any other actions of any kind relating
thereto, provided that:
(a) (i) the Members shall have no personal liability
for the repayment of such Covered Indebtedness except that
each Member (other than the Saracen Members) may be liable for
(and shall execute any and all agreements or documents at the
request of the Manager or a lender to evidence its liability
for) the Standard Member Recourse Carveouts (provided that,
except as set forth in Schedule 3.9A, each such Member shall
be liable for the Standard Member Recourse Carveouts only to
the extent of damages or losses suffered by such lender
arising from or on account of such events that give rise to
such applicable Standard Member Recourse Carveout) and (ii)
neither WRP nor any Whitehall Fund shall have personal
liability for the repayment of such Covered Indebtedness
except for the Standard Parent Recourse Carveouts; provided
that (1) unless one or more of the Whitehall Funds actually
provides a guaranty
<PAGE>
with respect to a particular Standard Parent Recourse
Carveout, WRP shall not be required to do so and (2) WRP and
the Whitehall Funds shall be liable for the Standard Parent
Recourse Carveouts only to the extent of damages or losses
suffered by such lender arising from or on account of such
events that give rise to such applicable Standard Parent
Recourse Carveout; and provided further that any environmental
indemnity not be recourse to WRP or any Whitehall Fund);
(b) the Weighted Average Interest Rate of all Covered
Indebtedness of the Company and its Subsidiaries taken
together does not exceed LIBOR plus 400 basis points (4%) per
annum (calculated quarterly based on the outstanding debt
balances of the Company and its Subsidiaries as of the end of
each calendar quarter); and
(c) the aggregate Covered Indebtedness of the Company
and its Subsidiaries will not exceed 70% of the Borrowing Base
(calculated quarterly based on the outstanding debt balances
of the Company and its Subsidiaries as of the end of each
calendar quarter).
For the avoidance of doubt, (i) any particular financing may,
without the approval of WCPT or the Management Committee, deviate from
the terms set forth in clauses (b) and (c) above as long as all of the
financings, taken together, continue to comply with the Financing
Parameters, (ii) WCPT may be required (and hereby agrees) to provide
guarantees to a prospective lender with respect to Standard Member
Recourse Carveouts (provided that the members of the Whitehall Group
actually provide such a guarantee, WCPT shall not be required to do
so), (iii) WRP may be required (and hereby agrees) to provide
guarantees to a prospective lender with respect to Standard Parent
Recourse Carveouts (provided that unless one or more of the Whitehall
Funds actually provides such a guarantee, WRP shall not be required to
do so and provided further that any environmental indemnity may only be
recourse to the Company, the Subsidiaries, WCPT and/or the Whitehall
Group and not to WRP or any Whitehall Fund), (iv) such financing may be
cross-collateralized and cross-defaulted with other assets of the
Company or its Subsidiaries within the same or related financings that
are contemporaneously closed with each other (including a cross-
collateralized facility that allows for additional advances in
connection with the financing or re-financing of other assets of the
Company or its Subsidiaries) , (v) such financing may be fully or
partially recourse to the Company and/or any or all of its Subsidiaries
and (vi) Manager may incur financing, including fixed rate financings,
secured by any Credit Lease Property and such financing and assets will
not be taken into account in determining compliance with the tests in
paragraphs (b) and (c) of this Section 3.9 (it being agreed that
Manager may only incur fixed rate financings in connection with a
Section 1031 Transaction involving Credit Lease Properties).
Notwithstanding the foregoing, in the event of a refinancing or
repayment of debt (including a repayment of debt in
<PAGE>
connection with a Sale of a Property) that is then currently allocable
to the Saracen Members that could result in a Saracen Debt Reduction
Event, Manager will obtain a Tax Opinion. The foregoing tests in
clauses (b) and (c) are incurrence tests and not maintenance tests,
meaning that additional Covered Indebtedness may not be incurred if the
incurrence would cause the tests in clauses (b) or (c) to be violated,
but the failure of the Company to satisfy these tests for reasons other
than the incurrence of Covered Indebtedness (e.g., the sale of an asset
for less than its Allocated Value) shall not require the repayment of
any Covered Indebtedness or other action by the Manager or the
Company."
SECTION 2.14. Section 4.4 of the Operating Agreement is hereby amended
and restated by adding the following language at the end thereof:
"Without limitation of, and in supplement to, the foregoing,
the Manager may, in its sole discretion, retain Goldman, Sachs & Co. or
one or more of its Affiliates on behalf of the Company and/or its
Subsidiaries in respect of debt financing transactions, and Goldman,
Sachs & Co. or one or more of its Affiliates shall be paid a fee for
arranging such financing transactions in an amount not greater than 1%
of gross proceeds for financings up to $150 million and 0.75% of the
gross proceeds for financings in excess of $150 million."
SECTION 2.15. Section 5.2(a) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(a) If any of the Managing Members shall reasonably determine
that funds are required for a Necessary Expenditure, or in the event of
a Preferential Distribution Non-Payment (as defined in the Series A
Terms), such Managing Member shall have the right to make a Mandatory
Capital Call describing the amount and nature of the Necessary
Expenditure or the aggregate amount of any payment default pursuant to
the Series A Terms, in which event each of the Managing Members shall,
within twenty (20) days after receipt of notice of such Mandatory
Capital Call, fund a portion of the capital contribution required by
such Mandatory Capital Call (which portion shall be equal to such
Member's Funding Percentage multiplied by the amount of such Mandatory
Capital Call). Notwithstanding anything to the contrary herein, except
as provided in Section 5.2(f) and except for the payment of any
Preferential Distribution Non-Payment (as defined in the Series A
Terms), no Managing Member shall be required to contribute or lend any
funds to the Company (and no Mandatory Capital Call for a Necessary
Expenditure may be issued to such Member) pursuant to this Section 5.2
or otherwise (i) if such Member has fully funded its Capital Commitment
(whether or not the other Members have fully funded their Capital
Commitments), (ii) in response to a Capital Call made at any time after
December 31, 2001 (irrespective of the amounts previously contributed)
or (iii) at any time after an initial public offering of Shares by
WCPT."
<PAGE>
SECTION 2.16. Section 5.2(b) of the Operating Agreement is hereby
amended by inserting the words "or the Manager" after the words "Management
Committee" appearing therein.
SECTION 2.17. Section 5.2 of the Operating Agreement is hereby amended
by adding the following paragraph (f) thereto:
"(f) Notwithstanding anything contained herein to the
contrary, after the Capital Commitments are fully funded or expire, the
Whitehall Group and WCPT will, within 20 days after receipt of notice
of a Mandatory Capital Call delivered by the Manager, fund or cause to
be funded on a 'revolving' basis up to $10 million for Necessary
Expenditures (i.e. amounts funded under this provision may be returned
and redrawn again later). Such amounts will be funded 60% by the
Members of the Whitehall Group and 40% by WCPT and will be callable at
any time prior to December 31, 2003. Fundings of the $10 million for
Necessary Expenditures will be contributed as Subordinated Preferred
Equity, and will accrue dividends at the rate of LIBOR plus 500 basis
points (5%) per annum. Such Subordinated Preferred Equity will be (A)
senior in priority to the Membership Units and will be paid prior to
any distributions made on the account of the Membership Units and (B)
junior in priority to the Series A Preferred Membership Units and any
payments made in respect of the such Subordinated Preferred Equity will
be subordinate to any payments due in respect of the Series A Preferred
Membership Units."
SECTION 2.18. Section 5.9(c) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(c) The Manager is hereby authorized and directed to cause
the Company to issue Membership Units (i) to WCPT in connection with
WHWEL's, Whitehall XI's, Holding Co.'s and Saracen's exercise of their
rights set forth in Section 8.3 and (ii) to Saracen in connection with
the conversion of the Series A Preferred Membership Units."
SECTION 2.19. Section 5.10 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"5.10. Arbitration. Any matter arising pursuant to any
provision hereunder which specifies that such matter shall be resolved by
arbitration and any other dispute involving an alleged breach or violation of
this Agreement (including an alleged event constituting Management Co. Cause)
shall be submitted to arbitration ("Arbitration") in accordance with the
provisions of this Section 5.10. The party having the right to submit a matter
to Arbitration and exercising its rights to do so shall have the right to
request an arbitration which shall be conducted in accordance with the Rules of
Arbitration of the American Arbitration Association for a single arbitrator
arbitration (the "Rules") in New York, New York, or at such other location as
may be agreed between the
<PAGE>
parties. The Arbitration shall be conducted by a single arbitrator chosen in
accordance with the Rules, provided that, such arbitrator shall be a person
having at least ten (10) years experience in the matter in dispute including
valuing real estate. The determination of the arbitrator shall be made within
thirty (30) days following the appointment of such arbitrator and shall be
conclusive and binding upon the parties and judgment upon the same may be
entered in any court having jurisdiction thereof. Each party shall pay the fees
and expenses of the arbitrator as determined by the arbitrator. The arbitrator
shall not have the right to amend any provision of this Agreement."
SECTION 2.20. Section 6.2(a) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"6.2. Profits and Losses.
(a) The profits and losses of the Company ("Profits" and
"Losses") shall be the net income or net loss (including capital gains
and losses, income and gain exempt from tax, and items of loss,
deduction of expense not deductible from Company income or
capitalizable into the basis of Company property), respectively, of the
Company determined for each Fiscal Year in accordance with the
accounting method followed for federal income tax purposes except that
(i) in computing Profits and Losses, all depreciation and cost recovery
deductions shall be deemed equal to Depreciation and (ii) gain or loss
on the sale or other disposition of a Company Asset or an asset of a
Subsidiary shall be determined by reference to Book Value.
(b) Whenever a proportionate part of the Profits or Losses is
allocated to a Member, every item of income, gain, loss, deduction or
credit entering into the computation of such Profits or Losses or
arising from the transactions with respect to which such Profits or
Losses were realized shall be credited or charged, as the case may be,
to such Member in the same proportion; provided, however, that
"recapture income", if any, shall be allocated to the Members who were
allocated the corresponding depreciation deductions.
(c) If any Member transfers all or any part of its Interest
during any Fiscal Year or its Interest is increased or decreased,
Profits and Losses attributable to such Interest for such Fiscal Year
shall be apportioned between the transferor and transferee ratably on a
daily basis, provided in all events that any apportionment described
above shall be permissible under the Code and applicable regulations
thereunder.
(d) Profits shall be allocated each year among the Members as
follows:
(i) First, among all the Members holding Membership
Units, in proportion to the amounts previously allocated
pursuant to Section
<PAGE>
6.2(e)(vi) until the amounts allocated pursuant to this
Section 6.2(d)(i) in the current and all prior years equals
such amounts previously allocated pursuant to Section
6.2(e)(vi) in the current and all prior years.
(ii) Second, to the Saracen Members holding Series A
Preferred Units, in proportion to the amounts previously
allocated pursuant to Section 6.2(e)(v) until the amount
allocated pursuant to this Section 6.2(d)(ii) in the current
and all prior years equals such amounts previously allocated
pursuant to Section 6.2(e)(v) in the current and all prior
years;
(iii) Third, to the members of the Whitehall Group
and WCPT, in proportion to the amounts previously allocated
pursuant to Section 6.2(e)(iv) until the amount allocated
pursuant to this Section 6.2(d)(iii) in the current and all
prior years equals such amounts previously allocated pursuant
to Section 6.2(e)(iv) in the current and all prior years;
(iv) Fourth, to each Saracen Member holding Series A
Preferred Units, an amount equal to the aggregate amounts
distributed and distributable pursuant to Section 7.1(b)(ii)
(assuming that the Company had received all the cash
attributable to the income being allocated) until the amounts
allocated pursuant to this Section 6.2(d)(iv) in the current
and all prior years equals such amounts previously distributed
and distributable pursuant to Sections 7.1(b)(ii) in the
current and all prior years; provided, however, that in no
event shall amounts be allocated under this Section 6.2(d)(iv)
in excess of the Preferred Limitation;
(v) Fifth, to the members of the Whitehall Group and
WCPT, in proportion to the aggregate amounts actually
distributed to the members of the Whitehall Group and WCPT
(other than amounts attributable to a return of capital)
pursuant to Section 7.1(b)(iii) until the amounts allocated
pursuant to this Section 6.2(d)(v) in the current and all
prior years equals such amounts previously distributed
pursuant to Sections 7.1(b)(iii) in the current and all prior
years;
(vi) Sixth, among all the Members holding Membership
Units, in proportion to the amounts previously allocated
pursuant to Section 6.2(e)(iii) until the amount allocated
pursuant to this Section 6.2(d)(vi) in the current and all
prior years equals such amounts previously allocated pursuant
to Section 6.2(e)(iii) in the current and all prior years.
(vii) Seventh, to the Saracen Members holding
Membership Units, in proportion to their respective Percentage
Interests, an amount equal to the product of (x) their
aggregate Percentage Interests, and (y) the remaining Profits
of the Company after taking into account Sections 6.2(d)(i)
through (d)(vi) above; and
<PAGE>
(viii) The balance of the Company's Profits shall be
allocated as follows:
(I) The relative Percentage Interest of WHWEL to the
combined Percentage Interests of the Whitehall Group and WCPT
multiplied by the balance of the Company's Profits shall be
allocated as follows:
(A) First, to WHWEL up to the amounts
previously allocated pursuant to Section
6.2(e)(ii)(I)(D) until the amount allocated pursuant
to this Section 6.2(d)(viii)(I)(A) equals such
amounts previously allocated pursuant to Section
6.2(e)(ii)(I)(D);
(B) Next, to WHWEL until the amount
allocated pursuant to this Section 6.2(d)(viii)(I)(B)
(and not reversed by Section 6.2(e)(ii)(I)(C)) equals
such amounts previously distributed and distributable
pursuant to Section 7.1(c)(ii) assuming that the
Company had received all the cash attributable to the
income being allocated;
(C) Next, to WHWEL, WCPT and the Manager in
proportion to the aggregate amounts distributed and
distributable pursuant to Section 7.1(c)(iii)
(assuming that the Company had received all the cash
attributable to the income being allocated) until the
amount allocated pursuant to this Section
6.2(d)(viii)(I)(C) (and not reversed by Section
6.2(e)(ii)(I)(B)) equals such amounts previously
distributed and distributable pursuant to Section 7.1
(c)(iii);
(D) Thereafter, to WHWEL, WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(c)(iv) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(I)(D) (and not reversed by
Section 6.2(e)(ii)(I)(A)) equals such amounts
previously distributed and distributable pursuant to
Section 7.1(c)(iv);
(II) The relative Percentage Interest of Whitehall XI
to the combined Percentage Interests of the Whitehall Group
and WCPT multiplied by the balance of the Company's Profits
shall be allocated as follows:
(A) First, to Whitehall XI up to the amounts
previously allocated pursuant to Section
6.2(e)(ii)(II)(D) until the amount
<PAGE>
allocated pursuant to this Section
6.2(d)(viii)(II)(A) equals such amounts previously
allocated pursuant to Section 6.2(e)(ii)(II)(D);
(B) Next, to Whitehall XI until the amount
allocated pursuant to this Section
6.2(d)(viii)(II)(B) (and not reversed by Section
6.2(e)(ii)(II)(C)) equals such amounts previously
distributed and distributable pursuant to Section
7.1(d)(ii) assuming the Company had received all the
cash attributable to the income being allocated;
(C) Next, to Whitehall XI, WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(d)(iii) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(II)(C) (and not reversed by
Section 6.2(e)(ii)(II)(B)) equals such amounts
previously distributed and distributable pursuant to
Section 7.1(d)(iii);
(D) Next, to Whitehall XI, WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(d)(iv) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(II)(D) (and not reversed by
Section 6.2(e)(ii)(II)(A)) equals such amounts
previously distributed and distributable pursuant to
Section 7.1(d)(iv);
(III) The relative Percentage Interest of Holding Co.
to the combined Percentage Interests of the Whitehall Group
and WCPT multiplied by the balance of the Company's Profits
shall be allocated as follows:
(A) First, to Holding Co. up to the amounts
previously allocated pursuant to Section
6.2(e)(ii)(III)(D) until the amount allocated
pursuant to this Section 6.2(d)(viii)(III)(A) equals
such amounts previously allocated pursuant to Section
6.2(e)(ii)(III)(D);
(B) Next, to Holding Co. until the amount
allocated pursuant to this Section
6.2(d)(viii)(III)(B) (and not reversed by Section
6.2(e)(ii)(III)(C)) equals such amounts previously
distributed and distributable pursuant to Section
7.1(e)(ii) assuming that the Company had received all
the cash attributable to the income being allocated;
<PAGE>
(C) Next, to Holding Co., WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(e)(iii) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(III)(C) (and not reversed
by Section 6.2(e)(ii)(III)(B)) equals such amounts
previously distributed and distributable pursuant to
Section 7.1(e)(iii);
(D) Next, to Holding Co., WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(e)(iv) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(III)(D) (and not reversed
by Section 6.2(e)(ii)(III)(A)) equals such amounts
previously distributed and distributable pursuant to
Section 7.1(e)(iv);
(IV) The relative Percentage Interest of WCPT to the
combined Percentage Interests of the Whitehall Group and WCPT
multiplied by the balance of the Company's Profits shall be
allocated as follows:
(A) First, to WCPT up to the amounts
previously allocated pursuant to Section
6.2(e)(ii)(IV)(D) until the amount allocated pursuant
to this Section 6.2(d)(viii)(IV)(A) equals such
amounts previously allocated pursuant to Section
6.2(e)(ii)(IV)(D);
(B) Next, to WCPT until the amount allocated
pursuant to this Section 6.2(d)(viii)(IV)(B) (and not
reversed by Section 6.2(e)(ii)(IV)(C)) equals such
amounts previously distributed and distributable
pursuant to Sections 7.1(f)(ii) and 7.1(g)(ii)
assuming that the Company had received all the cash
attributable to the income being allocated;
(C) Next, to WCPT and the Manager in
proportion to the aggregate amounts distributed and
distributable pursuant to Sections 7.1(f)(iii) and
7.1(g)(iii) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(IV)(C) (and not reversed by
Section 6.2(e)(ii)(IV)(B)) equals such amounts
previously distributed and distributable pursuant to
Sections 7.1(f)(iii) and 7.1(g)(iii);
(D) Next, to WCPT and the Manager in
proportion to the aggregate amounts distributed and
distributable pursuant to
<PAGE>
Sections 7.1(f)(iv) and 7.1(g)(iv) (assuming that the
Company had received all the cash attributable to the
income being allocated) until the amount allocated
pursuant to this Section 6.2(d)(viii)(IV)(D) (and not
reversed by Section 6.2(e)(ii)(IV)(A)) equals such
amounts previously distributed and distributable
pursuant to Sections 7.1(f)(iv) and 7.1(g)(iv).
(V) The relative Percentage Interest of Management
Co. to the combined Percentage Interests of the Whitehall
Group and WCPT multiplied by the balance of the Company's
Profits shall be allocated as follows:
(A) First, to Management Co. up to the
amounts previously allocated pursuant to Section
6.2(e)(ii)(V)(D) until the amount allocated pursuant
to this Section 6.2(d)(viii)(V)(A) equals such
amounts previously allocated pursuant to Section
6.2(e)(ii)(V)(D);
(B) Next, to Management Co. until the amount
allocated pursuant to this Section 6.2(d)(viii)(V)(B)
(and not reversed by Section 6.2(e)(ii)(V)(C)) equals
such amounts previously distributed and distributable
pursuant to Section 7.1(h)(ii) assuming that the
Company had received all the cash attributable to the
income being allocated;
(C) Next, to Management Co., WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(h)(iii) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(V)(C) (and not reversed by
Section 6.2(e)(ii)(V)(B)) equals such amounts
previously distributed and distributable pursuant to
Sections 7.1(h)(iii);
(D) Next, to Management Co., WCPT and the
Manager in proportion to the aggregate amounts
distributed and distributable pursuant to Section
7.1(h)(iv) (assuming that the Company had received
all the cash attributable to the income being
allocated) until the amount allocated pursuant to
this Section 6.2(d)(viii)(V)(D) (and not reversed by
Section 6.2(e)(ii)(V)(A)) equals such amounts
previously distributed and distributable pursuant to
Section 7.1(h)(iv).
(e) Losses shall be allocated each year among the
Members as follows:
<PAGE>
(i) First, among the Members holding Membership
Units, in proportion to the amounts previously allocated
pursuant to Sections 6.2(d)(vii) and (viii) until the amount
allocated pursuant to this Section 6.2(e)(i) equals such
amounts previously allocated pursuant to Sections 6.2(d)(vii)
and (viii); such amount allocable to the Members, other than
the Saracen Members, to be further allocated among them as set
forth in Section 6.2(e)(ii) below.
(ii) The allocation among the Members described in
Section 6.2(e)(i), other than the Saracen Members, shall be as
follows:
(I) The relative Percentage Interest of WHWEL to the
combined Percentage Interests of the Whitehall Group and WCPT
multiplied by the Losses allocable pursuant to Section
6.2(e)(i) to the Members other than the Saracen Members shall
be allocated as follows:
(A) First, to WHWEL, WCPT and the Manager in
proportion to the amounts previously allocated
pursuant to Section 6.2(d)(viii)(I)(D) until the
amount allocated pursuant to this Section
6.2(e)(ii)(I)(A) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(I)(D);
(B) Next, to WHWEL, WCPT and the Manager in
proportion to the amounts previously allocated
pursuant to Section 6.2(d)(viii)(I)(C) until the
amount allocated pursuant to this Section
6.2(e)(ii)(I)(B) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(I)(C);
(C) Next, to WHWEL until the amount
allocated pursuant to this Section 6.2(e)(ii)(I)(C)
equals such amounts previously allocated pursuant to
Section 6.2(d)(viii)(I)(B); and
(D) Thereafter, to WHWEL; and
(II) The relative Percentage Interest Whitehall XI to
the combined Percentage Interests of the Whitehall Group and
WCPT multiplied by the Losses allocated pursuant to Section
6.2(e)(i) to the Members other than the Saracen Members shall
be allocated as follows:
(A) First, to Whitehall XI, WCPT and the
Manager in proportion to the amounts previously
allocated pursuant to Section 6.2(d)(viii)(II)(D)
until the amount allocated pursuant to this Section
6.2(e)(ii)(II)(A) equal such amounts previously
allocated pursuant to Section 6.2(d)(viii)(II)(D);
<PAGE>
(B) Next, to Whitehall XI, WCPT and the
Manager in proportion to the amounts previously
allocated pursuant to Section 6.2(d)(viii)(II)(C)
until the amount allocated pursuant to this Section
6.2(e)(ii)(II)(B) equal such amounts previously
allocated pursuant to Section 6.2(d)(viii)(II)(C);
(C) Next, to Whitehall XI until the amount
allocated pursuant to this Section 6.2(e)(ii)(II)(C)
equals such amounts previously allocated pursuant to
Section 6.2(d)(viii)(II)(B); and
(D) Thereafter, to Whitehall XI.
(III) The relative Percentage Interest of Holding Co.
to the combined Percentage Interests of the Whitehall Group
and WCPT multiplied by the Losses allocated pursuant to
Section 6.2(e)(i) to the Members other than the Saracen
Members shall be allocated as follows:
(A) First, to Holding Co., WCPT and the
Manager in proportion to the amounts previously
allocated pursuant to Section 6.2(d)(viii)(III)(D)
until the amount allocated pursuant to this Section
6.2(e)(ii)(III)(A) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(III)(D);
(B) Next, to Holding Co., WCPT and the
Manager in proportion to the amounts previously
allocated pursuant to Section 6.2(d)(viii)(III)(C)
until the amount allocated pursuant to this Section
6.2(e)(ii)(III)(B) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(III)(C);
(C) Next, to Holding Co. until the amount
allocated pursuant to this Section 6.2(e)(ii)(III)(C)
equals such amounts previously allocated pursuant to
Section 6.2(d)(viii)(III)(B); and
(D) Thereafter, to Holding Co.
(IV) The relative Percentage Interest of WCPT to the
combined Percentage Interests of the Whitehall Group and WCPT
multiplied by the Losses allocated pursuant to Section
6.2(e)(i) to the Members other than the Saracen Members shall
be allocated as follows:
(A) First, to WCPT and the Manager in
proportion to the amounts previously allocated
pursuant to Section 6.2(d)(viii)(IV)(D) until the
amount allocated pursuant to this Section
6.2(e)(ii)(IV)(A) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(IV)(D);
<PAGE>
(B) Next, to WCPT and the Manager in
proportion to the amounts previously allocated
pursuant to Section 6.2(d)(viii)(IV)(C) until the
amount allocated pursuant to this Section
6.2(e)(ii)(IV)(B) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(IV)(C);
(C) Next, to WCPT until the amount allocated
pursuant to this Section 6.2(e)(ii)(IV)(C) equals
such amounts previously allocated pursuant to Section
6.2(d)(viii)(IV)(B); and
(D) Thereafter, to WCPT.
(V) The relative Percentage Interest of Management
Co. to the combined Percentage Interests of the Whitehall
Group and WCPT multiplied by the Losses allocated pursuant to
Section 6.2(e)(i) to the Members other than the Saracen
Members shall be allocated as follows:
(A) First, to Management Co., WCPT and the
Manager in proportion to the amounts previously
allocated pursuant to Section 6.2(d)(viii)(V)(D)
until the amount allocated pursuant to this Section
6.2(e)(ii)(V)(A) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(V)(D);
(B) Next, to Management Co., WCPT and the
Manager in proportion to the amounts previously
allocated pursuant to Section 6.2(d)(viii)(V)(C)
until the amount allocated pursuant to this Section
6.2(e)(ii)(V)(B) equals such amounts previously
allocated pursuant to Section 6.2(d)(viii)(V)(C);
(C) Next, to Management Co. until the amount
allocated pursuant to this Section 6.2(e)(ii)(V)(C)
equals such amounts previously allocated pursuant to
Section 6.2(d)(viii)(V)(B); and
(D) Thereafter, to Management Co.
(iii) Next, to the Members holding Membership Units,
an amount required to reduce their positive Membership Capital
Account balances to zero (except to the extent of any Capital
Account attributable to any Subordinated Preferred Equity), in
proportion to the respective required amounts.
(iv) Next, to the Members holding Subordinated
Preferred Equity, an amount required to reduce their positive
Membership Capital Account balances to zero, in proportion to
the respective required amounts.
<PAGE>
(v) Next, to the Saracen Members holding Series A
Preferred Membership Units, an amount required to reduce their
positive Series A Capital Account balances to zero, in
proportion to the respective required amounts.
(vi) Any remaining Losses shall be allocated among
all Members holding Membership Units in proportion to their
respective Percentage Interests.
(f) Notwithstanding Sections 6.2(d) and (e) hereof,
(i) For federal income tax purposes but not for
purposes of crediting or charging Capital Accounts,
depreciation or gain or loss realized by the Company with
respect to any property that was contributed to the Company or
that was held by the Company at a time when the Book Value of
the Company Assets and the assets of the Subsidiaries was
adjusted pursuant to the third sentence of Section 6.1(b)
shall, in accordance with the "traditional method" under
Section 704(c) of the Code and Treasury Regulation Section
1.704-1(b)(2)(iv)(d) and (f), be allocated among the Members
in a manner which takes into account the differences between
the adjusted basis for federal income tax purposes to the
Company of its interest in such property and the fair market
value of such interest at the time of its contribution or
revaluation.
(ii) If there is a net decrease in the Minimum Gain
of the Company during a taxable year (including any Minimum
Gain attributable to Member-Funded Debt), each Member at the
end of such year shall be allocated, prior to any other
allocations required under this Article VI, items of gross
income for such year (and, if necessary, for subsequent years)
in the amount and proportions described in Treasury Regulation
Sections 1.704-2(g) and 1.704-2(i)(4).
(iii) Notwithstanding the allocations provided for in
Sections 6.2(d) and (e), no allocation of an item of loss or
deduction shall be made to a Member to the extent such
allocation would cause or increase a deficit balance in such
Member's Capital Account as of the end of the taxable year to
which such allocation relates. If any Member receives an
adjustment, allocation or distribution that causes or
increases such a deficit balance, taking into account the
rules of Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
(5) and (6), such Member shall be allocated (after taking into
account any allocations made pursuant to Section 6.2(f)(ii))
items of income and gain in an amount and manner to eliminate
the Member's Capital Account deficit attributable to such
adjustment, allocation or distribution as quickly as possible.
For purposes of this Section 6.2(f)(iii), there shall be
excluded from a Member's deficit Capital
<PAGE>
Account balance at the end of a taxable year of the Company
(a) such Member's share, determined in accordance with Section
704(b) of the Code and Treasury Regulation Section 1.704-2(g)
of Minimum Gain (provided that, in the case of Minimum Gain
attributable to Member-Funded Debt, such Minimum Gain shall
be allocated to the Member or Members to whom such debt is
attributable pursuant to Treasury Regulation Section
1.704-2(i)), and (b) the amount that such Member is obligated
to restore to the Company under Treasury Regulation Section
1.704-1(b)(2)(ii)(c).
(iv) Notwithstanding the allocations provided for in
subsection (ii) of this Section 6.2(f) and Sections 6.2(d) and
(e), if there is a net increase in Minimum Gain of the Company
during a taxable year of the Company that is attributable to
Member-Funded Debt, then first Depreciation, to the extent the
increase in such Minimum Gain is allocable to depreciable
property, and then a proportionate part of other deductions
and expenditures described in Section 705(a)(2)(B) of the
Code, shall be allocated to the lending or guaranteeing Member
(and to joint lenders or guarantors in proportion to their
relative obligations), provided that the total amount of
deductions so allocated for any year shall not exceed the
increase in Minimum Gain attributable to such Member-Funded
Debt in such year.
(v) Any special allocation under Sections 6.2(f)(ii)
through (iv) shall be taken into account in computing
subsequent allocations of Profits and Losses of any item
thereof pursuant to this Article VI so that the net amount of
any items so allocated and the Profits, Losses and all items
thereof allocated to each Member pursuant to this Article VI
shall, to the extent permissible under Section 704(b) of the
Code and the Treasury Regulations promulgated thereunder, be
equal to the net amount that would have been allocated to each
Member pursuant to this Article VI if such special allocation
had not occurred.
(vi) It is intended that prior to a distribution of
the proceeds from a liquidation of the Company pursuant to
Section 10.2(vi) hereof, the positive Capital Account balance
of each Member shall be equal to the amount that such Member
would receive if liquidation proceeds were distributed in
accordance with Section 7.1. Accordingly, notwithstanding
anything to the contrary in this Section 6.2, to the extent
permissible under Sections 704(b) and 514(c)(9) of the Code
and the Treasury Regulations promulgated thereunder, Profits
and Losses and, if necessary, items of gross income and gross
deductions, of the Company for the year of liquidation of the
Company (or, if the liquidation spans more than one year, each
such year) shall be allocated among the Members so as to bring
the positive Capital Account balance of each Member as close
as possible
<PAGE>
to the amount that such Member would receive if liquidation
proceeds were distributed in accordance with Section 7.1.
(vii) Appropriate adjustments shall be made to the
provisions of this Section 6.2 if a New Member is admitted to
the Company.
(viii) To the extent any payments are made pursuant
to Sections 7.1(i), 7.1(k), 7.1(l), 7.1(m), 7.1(p) and 7.2
then, to the extent permissible under Sections 704(b) and
514(c)(9) of the Code and the Treasury Regulations promulgated
thereunder, appropriate adjustments shall be made to the
allocation of Profits and Losses under Sections 6.2(d) and (e)
among the Members, other than the Saracen Members, so that the
cumulative Profits and Losses allocated to such Members
equals, as nearly as possible, the amount of distributions
received by each Member, after taking into account all
payments made pursuant to Sections 7.1(i), 7.1(k), 7.1(l),
7.1(m), 7.1(p) and 7.2.
SECTION 2.21. Section 7.1 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"7.1. Application and Distributions.
(a) Distributions on account of the Series A Preferred
Membership Units, the Subordinated Preferred Equity and the Membership
Units shall be made by the Manager to the Members of all or a portion
of Available Cash as determined by the Manager (such amount, the
'Distribution Amount') in accordance with Section 7.1(b) through (h)
within thirty (30) days after the end of each quarter of each Fiscal
Year. The Members acknowledge and agree, notwithstanding anything in
this Agreement to the contrary, that the Company shall make
distributions to the Members in accordance with this Section 7.1 in an
amount at least sufficient to pay the amounts to Saracen set forth in
Section 7.1(b)(ii) below.
(b) The Distribution Amount and the Capital Proceeds
Distribution Amount, if any, shall be distributed as follows:
(i) First, but only with respect to, and to the
extent of, any Capital Proceeds Distribution Amount derived
from a third-party mortgage financing or refinancing relating
to a Property acquired with the proceeds of a corresponding
specified Interim Capital Contribution, to each Managing
Member pro rata (in proportion to the unreturned Interim
Capital Contributions made by such Managing Member) until each
such Managing Member shall have received, taking into account
the amount of all prior distributions under this Section
7.1(b)(i), the full amount of all
<PAGE>
Interim Capital Contributions made by such Managing Member
through the date of distribution;
(ii) Second, in an aggregate amount equal to the sum
of (A) the Unpaid Preferred Distribution, if any, plus (B) the
Preferred Distribution Amount, pro rata to each Saracen
Member, in proportion to its relative Series A Preferred
Percentage Interests;
(iii) Third, if amounts have been funded pursuant to
Section 5.2(f) as Subordinated Preferred Equity, to the
members of the Whitehall Group and WCPT (pro rata to each of
them in accordance with the relative amounts of such
Subordinated Preferred Equity and accrued and unpaid dividends
thereon owing to each Member that has funded such Subordinated
Preferred Equity) until all accrued dividends on all such
Subordinated Preferred Equity have been all paid in full and
all such Subordinated Preferred Equity has been redeemed in
full; and
(iv) Fourth, in an aggregate amount equal to the
Common Distribution Amount, pro rata and on a pari passu
basis, (A) to each Saracen Member, an amount equal to each
Saracen Member's Percentage Interest multiplied by the Common
Distribution Amount and (B) to Whitehall XI, WHWEL, Holding
Co., WCPT and Management Co. an amount equal to their combined
Percentage Interests multiplied by the Common Distribution
Amount which amount shall be distributed to Whitehall XI,
WHWEL, Holding Co., WCPT and Management Co. in accordance with
Section 7.1(c) through (h), respectively."
(c) A portion of the total amount distributed to WHWEL,
Whitehall XI, Holding Co., WCPT and Management Co. pursuant to Section
7.1(b)(iv)(B) above equal to the product of such amount multiplied by
the quotient (expressed as a percentage rounded up to the nearest one
ten-thousandth (0.0001)) of the Percentage Interest of WHWEL divided by
the Combined Whitehall/WCPT Percentage Interest shall be further
distributed as follows:
(i) First, to WHWEL until WHWEL shall have received,
taking into account the amount of all prior distributions
under this Section 7.1(c)(i), the full amount of all Capital
Contributions made by WHWEL through the date of distribution
(it being understood and agreed that as of the Effective Date
such Capital Contributions shall be deemed to be the aggregate
amount shown for WHWEL in Schedule 5.1A);
(ii) Second, to WHWEL until WHWEL shall have
received, taking into account the timing and amount of all
prior contributions and distributions, an Internal Rate of
Return equal to 17.5% per annum;
<PAGE>
(iii) Third, on a pari passu basis: (w) 82.5% to
WHWEL, (x) 10.0625% to WCPT (subject to Section 7.1(l)), (y)
4.6484% to the Manager (subject to Section 7.1(l)) and (z)
2.7891% to WHWEL, until WHWEL shall have received, taking into
account the timing and amount of all prior contributions and
distributions, an Internal Rate of Return equal to 22.5% per
annum; and
(iv) Thereafter, on a pari passu basis: (w) 77.5% to
WHWEL, (x) 12.9375% to WCPT (subject to Section 7.1(l)), (y)
5.9766% to the Manager (subject to Section 7.1(l)) and (z)
3.5859% to WHWEL.
(d) A portion of the total amount distributed to Whitehall XI,
WHWEL, Holding Co., WCPT and Management Co. pursuant to Section
7.1(b)(iv)(B) above equal to the product of such amount multiplied by
the quotient ((expressed as a percentage rounded up to the nearest one
ten-thousandth (0.0001)) of the Percentage Interest of Whitehall XI
divided by the Combined Whitehall/WCPT Percentage Interest shall be
further distributed as follows:
(i) First, to Whitehall XI until Whitehall XI shall
have received, taking into account the amount of all prior
distributions under this Section 7.1(d)(i), the full amount of
all Capital Contributions made by Whitehall XI through the
date of distribution (it being understood and agreed that as
of the Effective Date such Capital Contributions shall be
deemed to be the aggregate amount shown for Whitehall XI in
Schedule 5.1A);
(ii) Second, to Whitehall XI until Whitehall XI shall
have received, taking into account the timing and amount of
all prior contributions and distributions, an Internal Rate of
Return equal to 15% per annum;
(iii) Third, on a pari passu basis: (w) 80% to
Whitehall XI, (x) 10.65% to WCPT (subject to Section 7.1(m)),
(y) 5.8437% to the Manager (subject to Section 7.1(m)) and (z)
3.5063% to Whitehall XI, until Whitehall XI shall have
received, taking into account the timing and amount of all
prior contributions and distributions, an Internal Rate of
Return equal to 25% per annum; and
(iv) Thereafter, on a pari passu basis: (w) 75% to
Whitehall XI, (x) 13.3125% to WCPT (subject to Section
7.1(m)), (y) 7.3048% to the Manager (subject to Section
7.1(m)) and (z) 4.3827% to Whitehall XI.
(e) A portion of the total amount distributed to Holding Co.,
WHWEL, Whitehall XI, WCPT and Management Co. pursuant to Section
7.1(b)(iv)(B) above equal to the product of such amount multiplied by
such
<PAGE>
amount by the quotient ((expressed as a percentage rounded up to the
nearest one ten-thousandth (0.0001)) of the Percentage Interest of
Holding Co. divided by the Combined Whitehall/WCPT Percentage Interest
shall be further distributed as follows:
(i) First, to Holding Co. until Holding Co. shall
have received, taking into account the amount of all prior
distributions under this Section 7.1(e)(i), the full amount of
all Capital Contributions made by Holding Co. through the date
of distribution (it being understood and agreed that as of the
Effective Date such Capital Contributions shall be deemed to
be the aggregate amount shown for Holding Co. in Schedule
5.1A);
(ii) Second, to Holding Co. until Holding Co. shall
have received, taking into account the timing and amount of
all prior contributions and distributions, an Internal Rate of
Return equal to 15% per annum;
(iii) Third, on a pari passu basis: (w) 80% to
Holding Co., (x) 10.65% to WCPT (subject to Section 7.1(m)),
(y) 5.8438% to the Manager (subject to Section 7.1(m)) and (z)
3.5062% to Holding Co., until Holding Co. shall have received,
taking into account the timing and amount of all prior
contributions and distributions, an Internal Rate of Return
equal to 25% per annum; and
(iv) Thereafter, on a pari passu basis: (w) 75% to
Holding Co. (x) 13.3125% to WCPT (subject to Section 7.1(m)),
(y) 7.3047% to the Manager (subject to Section 7.1(m)) and (z)
4.3828% to Holding Co.
(f) The total amount equal to the WCPT I Distributions shall
be further distributed as follows:
(i) First, to WCPT until WCPT shall have received,
taking into account the amount of all prior distributions
under this Section 7.1(f)(i), the full amount of all WCPT
Phase I Capital Contributions made by WCPT through the date of
distribution (it being understood and agreed that for the
purposes of this Section 7.1(f), as of the Effective Date, the
total amount of WCPT Phase I Capital Contributions made by
WCPT shall be deemed to be the aggregate amount shown for WCPT
in Schedule 5.1A);
(ii) Second, to WCPT until WCPT shall have received,
taking into account the timing and amount of all prior
contributions and distributions, an Internal Rate of Return
equal to 17.5% per annum with respect to the WCPT Phase I
Capital Contributions;
<PAGE>
(iii) Third, on a pari passu basis: (w) 82.5% to
WCPT, (x) 10.0625% to WCPT and (y) 7.4375% to the Manager,
until WCPT shall have received, taking into account the timing
and amount of all prior contributions and distributions, an
Internal Rate of Return equal to 22.5% per annum with respect
to the WCPT Phase I Capital Contributions; and
(iv) Thereafter, on a pari passu basis: (w) 77.5% to
WCPT, (x) 12.9375% to WCPT and (y) 9.5625% to the Manager.
(g) The total amount equal to the WCPT II Distributions shall
be further distributed as follows:
(i) First, to WCPT until WCPT shall have received,
taking into account the amount of all prior distributions
under this Section 7.1(g)(i), the full amount of all WCPT
Phase II Capital Contributions made by WCPT through the date
of distribution (it being understood and agreed that for the
purposes of this Section 7.1(g) as of the Effective Date, the
total amount of WCPT Phase II Capital Contributions made by
WCPT shall be deemed to be the aggregate amount shown for WCPT
in Schedule 5.1A);
(ii) Second, to WCPT until WCPT shall have received,
taking into account the timing and amount of all prior
contributions and distributions, an Internal Rate of Return
equal to 15% per annum with respect to the WCPT Phase II
Capital Contributions;
(iii) Third, on a pari passu basis: (w) 80% to WCPT,
(x) 10.65% to WCPT and (y) 9.35% to the Manager, until WCPT
shall have received, taking into account the timing and amount
of all prior contributions and distributions, an Internal Rate
of Return equal to 25% per annum with respect to the WCPT
Phase II Capital Contributions; and
(iv) Thereafter, on a pari passu basis: (w) 75% to
WCPT, (x) 13.3125% to WCPT and (y) 11.6875% to the Manager.
(h) A portion of the total amount distributed to Management
Co., WHWEL, Whitehall XI, Holding Co. and WCPT pursuant to Section
7.1(b)(iv)(B) above equal to the product of such amount multiplied by
the quotient (expressed as a percentage rounded up to the nearest one
ten-thousandth (0.0001)) of the Percentage Interest of Management Co.
divided by the Combined Whitehall/WCPT Percentage Interest shall be
further distributed as follows:
(i) First, to Management Co. until Management Co.
shall have received, taking into account the amount of all
prior distributions under this Section 7.1(h)(i), the full
amount of all Capital Contributions made by
<PAGE>
Management Co. through the date of distribution (it being
understood and agreed that as of the Effective Date such
Capital Contributions shall be deemed to be the aggregate
amount shown for Management Co. in Schedule 5.1A);
(ii) Second, to Management Co. until Management Co.
shall have received, taking into account the timing and amount
of all prior contributions and distributions, an Internal Rate
of Return equal to 17.5% per annum;
(iii) Third, on a pari passu basis: (w) 82.5% to
Management Co., (x) 10.0625% to WCPT (subject to Section
7.1(l)), (y) 4.6484% to the Manager (subject to Section
7.1(l)) and (z) 2.7891% to Management Co., until Management
Co. shall have received, taking into account the timing and
amount of all prior contributions and distributions, an
Internal Rate of Return equal to 22.5% per annum; and
(iv) Thereafter, on a pari passu basis: (w) 77.5% to
Management Co., (x) 12.9375% to WCPT (subject to Section
7.1(l)), (y) 5.9766% to the Manager (subject to Section
7.1(l)) and (z) 3.5859% to Management Co.
(i) If, after the Effective Date, a New Member is admitted to
the Company and such New Member is subject to provisions comparable to
Section 7.1(c) through (h) pursuant to which a portion of the amount
distributed by the Company to such New Member is to be distributed to
the Manager, then WCPT shall be entitled to a portion of such amount
which shall be reasonably determined by WCPT and the Whitehall Group,
and such amount shall be distributed by the Company to WCPT and Manager
and/or its designee as a promote.
(j) [Intentionally Omitted.]
(k) Distributions shall be made by the Manager to the Members
of all or any portion of Capital Proceeds in the amount, if any,
required by the last sentence of this Section 7.1(k) (such amount, the
"Capital Proceeds Distribution Amount") in accordance with Section
7.1(b), provided, however, that such Capital Proceeds Distribution
Amount shall not be made unless at least thirty (30) days' prior
written notice of the approximate amount of such Capital Proceeds
Distribution Amount has been delivered to the Preferred Holders;
provided, further, that any Capital Proceeds Distribution Amount
distributable pursuant to Section 7.1(b)(i) from a third-party mortgage
financing or refinancing relating to a particular Property which has
been acquired with the proceeds of a corresponding specified Interim
Capital Contribution with respect to such Property that, at the time of
such distribution, continues to qualify as an Interim Capital
Contribution, shall not require such thirty (30) days' prior written
notice specified in the
<PAGE>
preceding clause. It is understood and agreed that the Manager will
cause the Company to distribute all Capital Proceeds Distribution
Amounts within 45 days of such event; provided that with respect to any
Property sold on or after December 15 of any year, the Capital Proceeds
from such sale shall be distributed by January 29 of the immediately
following year; provided further that any and all amounts distributable
pursuant to this Section 7.1(k) will be net of Permitted Reserves as
determined by the Manager.
(l) In connection with any distribution, if WCPT is entitled
to receive payments pursuant to Sections 7.1(c)(iii)(x) or
7.1(c)(iv)(x) or Sections 7.1(h)(iii)(x) or 7.1(h)(iv)(x), but
Whitehall XI or Holding Co. shall have not received, taking into
account the timing and amount of all prior contributions and
distributions, an Internal Rate of Return equal to 15% per annum with
respect to its Capital Contributions pursuant to Section 7.1(d) or
Section 7.1(e) (as applicable), the amount otherwise to be distributed
to WCPT pursuant to Sections 7.1(c)(iii)(x) or 7.1(c)(iv)(x) or
Sections 7.1(h)(iii)(x) or 7.1(h)(iv)(x), if any, shall be distributed
to Whitehall XI and Holding Co. on a pro rata basis in accordance with
their relative Percentage Interests, until Whitehall XI and Holding Co.
shall have received, taking into account the timing and amount of all
prior contributions and distributions, an Internal Rate of Return equal
to 15% per annum with respect to their Capital Contributions. In
connection with any distribution, if the Manager is entitled to receive
payments pursuant to Sections 7.1(c)(iii)(y) or 7.1(c)(iv)(y) or
Sections 7.1(h)(iii)(y) or 7.1(h)(iv)(y), but Whitehall XI and Holding
Co. shall have not received, taking into account the timing and amount
of all prior contributions and distributions, an Internal Rate of
Return equal to 15% per annum with respect to its Capital Contributions
pursuant to Section 7.1(d) or Section 7.1(e)(as applicable), then the
amount otherwise to be distributed to the Manager pursuant to Sections
7.1(c)(iii)(y) or 7.1(c)(iv)(y) or Sections 7.1(h)(iii)(y) or
7.1(h)(iv)(y), if any, shall be distributed to Whitehall XI and Holding
Co. on a pro rata basis in accordance with their relative Percentage
Interests, until Whitehall XI and Holding Co. shall have received,
taking into account the timing and amount of all prior contributions
and distributions, an Internal Rate of Return equal to 15% per annum
with respect to their Capital Contributions. Any amounts distributed to
Whitehall XI and Holding Co. under this Section 7.1(l) shall be taken
into account in determining the distributions under Sections 7.1(d) and
(e). Notwithstanding the foregoing, WCPT and the Manager agree that
each shall only be obligated to distribute a portion of the aggregate
amounts required to be distributed by each of them pursuant to this
Section 7.1(l) based upon the relative ratio of (A) the amounts to be
distributed to WCPT pursuant to Sections 7.1(c)(iii)(x) or
7.1(c)(iv)(x) or Sections 7.1(h)(iii)(x) or 7.1(h)(iv)(x) to (B) the
amounts to be distributed to the Manager pursuant to sections
7.1(c)(iii)(y) or 7.1(c)(iv)(y) or Sections 7.1(h)(iii)(y) or
7.1(h)(iv)(y), respectively. Neither WCPT nor the Manager shall be
obligated to make any distributions pursuant to this Section 7.1(l)
required to be made by the other which has not been made.
<PAGE>
(m) In connection with any distribution, if WCPT is entitled
to receive payments pursuant to Sections 7.1(d)(iii)(x) or
7.1(d)(iv)(x) or Sections 7.1(e)(iii)(x) or 7.1(e)(iv)(x), but WHWEL or
Management Co. shall have not received, taking into account the timing
and amount of all prior contributions and distributions, an Internal
Rate of Return equal to 15% per annum with respect to its Capital
Contributions pursuant to Section 7.1(c) or Section 7.1(h) (as
applicable), then the amount otherwise to be distributed to WCPT
pursuant to Sections 7.1(d)(iii)(x) or 7.1(d)(iv)(x) or Sections
7.1(e)(iii)(x) or 7.1(e)(iv)(x), if any, shall be distributed to WHWEL
and Management Co. on a pro rata basis in accordance with their
relative Percentage Interests, until WHWEL and Management Co. shall
have received, taking into account the timing and amount of all prior
contributions and distributions, an Internal Rate of Return equal to
15% per annum with respect to their Capital Contributions. In
connection with any distribution, if the Manager is entitled to receive
payments pursuant to Sections 7.1(d)(iii)(y) or Sections 7.1(d)(iv)(y)
or 7.1(e)(iii)(y) or 7.1(e)(iv)(y), but WHWEL and Management Co. shall
have not received, taking into account the timing and amount of all
prior contributions and distributions, an Internal Rate of Return equal
to 15% per annum with respect to its Capital Contributions pursuant to
Section 7.1(c) or Section 7.1(h) (as applicable), then the amount
otherwise to be distributed to the Manager pursuant to Sections
7.1(d)(iii)(y) or 7.1(d)(iv)(y) or Sections 7.1(e)(iii)(y) or
7.1(e)(iv)(y), if any, shall be distributed to WHWEL and Management Co.
on a pro rata basis in accordance with their relative Percentage
Interests, until WHWEL and Management Co. shall have received, taking
into account the timing and amount of all prior contributions and
distributions, an Internal Rate of Return equal to 15% per annum with
respect to their Capital Contributions. Any amounts distributed to
WHWEL and Management Co. under this Section 7.1(l) shall be taken into
account in determining the distributions under Sections 7.1(c) and (h).
Notwithstanding the foregoing, WCPT and the Manager agree that each
shall only be obligated to distribute a portion of the aggregate
amounts required to be distributed by each of them pursuant to this
Section 7.1(m) based upon the relative ratio of (A) the amounts to be
distributed to WCPT pursuant to Sections 7.1(d)(iii)(x) or
7.1(d)(iv)(x) or Sections 7.1(e)(iii)(x) or 7.1(e)(iv)(x) to (B) the
amounts to be distributed to the Manager pursuant to sections
7.1(d)(iii)(y) or 7.1(d)(iv)(y) or Sections 7.1(e)(iii)(y) or
7.1(e)(iv)(y), respectively. Neither WCPT nor the Manager shall be
obligated to make any distributions pursuant to this Section 7.1(m)
required to be made by the other which has not been made.
(n) Although the terms of this Section 7.1 contemplate
distributions being made under paragraph (b) and then under paragraphs
(c), (d), (e), (f), (g) and (h) of this Section 7.1, the parties intend
for the calculations required by such paragraphs to be made
simultaneously and for the funds to be distributed simultaneously in
accordance with such paragraphs in a single distribution rather than in
seriatim.
<PAGE>
(o) Notwithstanding anything to the contrary herein, WCPT will
be solely responsible for monitoring and maintaining compliance with
the requirements to qualify as a "real estate investment trust" under
the Code (a "REIT"). The Manager will deliver to WCPT quarterly
statements of the Company's net taxable income from operations (and,
for informational purposes, the net capital gains) for each of the
calendar quarters of each calendar year within 30 days after the end of
each such quarter; provided that, with respect to the fourth calendar
quarter, such statements shall be delivered by January 20 of the
following calendar year. At Manager's discretion the foregoing
statements with respect to the first three calendar quarters may be
prepared utilizing financial statement income amounts. WCPT shall have
the right, acting reasonably and in good faith, to advise the Manager
(the "REIT Distribution Notice") of the amount of distributions
required to be made by WCPT in order for WCPT to remain qualified as a
REIT under the Code from the Company's net taxable income for each
quarter and on a year-to-date basis (i.e., taking into account the
Company's year-to-date net taxable income and the amount of any
distributions already made to WCPT during such year). Subject to (i)
WCPT confirming in writing to the Manager that WCPT is still qualified
as a REIT, (ii) the accuracy of the calculation of the proposed
distributions requested by WCPT in the REIT Distribution Notice based
on the distribution requirements of Section 857(a)(1) of the Code
required to be made to WCPT in order WCPT to remain qualified as a REIT
under the Code (or any successor provision thereto), (iii) the Company
having sufficient Available Cash and (iv) any restrictions or
limitations imposed by the terms and conditions of any loan or other
agreements to which the Company or any Subsidiary is a party, the
Manager shall make distributions of cash to the Members in accordance
with Section 7.1(b) sufficient in amount to enable WCPT to receive the
amount requested by WCPT (or, if the Manager reasonably determines that
making such distributions in the full amount requested would be
materially detrimental to the Company and certifies such determination
in writing to WCPT, then not less than 40% of such requested amount) by
the later of (i) 45 days after the end of each calendar quarter of each
calendar year or 30 days after the final calendar quarter of such
calendar year (or if such day is not a Business Day, the Business Day
immediately preceding such 30th day after the close of the preceding
calendar year) and (ii) two Business Days after receipt of the REIT
Distribution Notice. Notwithstanding the foregoing, (i) WCPT shall not
be entitled to receive any special distributions to which it would not
otherwise be entitled under Section 7.1(b) (such as distributions under
Section 7.1(b)(iii) that would exceed WCPT's pro rata share) and (ii)
distributions shall cease to be required under this Section 7.1(o) if
WCPT ceases to be qualified as a REIT. For the purposes of this Section
7.1(o), all Permitted Reserves shall be disregarded in calculating
Available Cash. Any liability of Manager for wrongful or illegal
distributions made to all Members pro rata in accordance with their
Percentage Interests (e.g., because the Company was or became insolvent
upon the distribution or because the Company did not adequately reserve
for liabilities) will be borne by the Whitehall Group and WCPT pro rata
in accordance with their
<PAGE>
relative Percentage Interests. Notwithstanding the foregoing, no
Saracen Member shall be relieved of any liability it would have to
return such distributions that such Saracen Member would otherwise be
required to return in accordance with the Act. In the event any Saracen
Member pays any amount to the Company in respect of such obligations,
the Company shall distribute such amounts to all Members other than the
Saracen Members pursuant to Section 7.1(b) (based on the proportionate
amounts previously paid by such Members in excess of their pro rata
portion of the amount of such illegal or wrongful distribution required
to be returned by all of the Members) of the amounts so paid by such
Saracen Member to the Company and such amounts shall be subject to
further distribution pursuant to Sections 7.1(c) through (h).
(p) Notwithstanding anything to the contrary in this Section
7.1, the first $500,000 that would otherwise be distributed on account
of the Manager Promote and WCPT Promote, taken together, shall instead
be distributed solely to the Manager."
SECTION 2.22. Section 7.2 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"7.2. Restoration of Excess Distributions. Subject to Section
7.3:
If any Promote Payments to WCPT or the Manager have previously
been made and, subsequently, the Internal Rate of Return for any of
WHWEL, Whitehall XI, Holding Co., WCPT and Management Co. is reduced as
a result of a Capital Contribution being made pursuant to Section 5.2
or otherwise, then the parties hereto shall make appropriate
adjustments to the amounts previously distributed or paid to them (and
each of the Manager and WCPT shall return all or a portion of such
Promote Payments to such Member from whom such Promote Payment was
received) to the extent necessary so that the balance of such Promote
Payments retained by each of the Manager and WCPT (after giving effect
to such adjustments) does not exceed the Requisite Manager Promote (in
the case of amounts received and retained by the Manager) or the
Requisite WCPT Promote (in the case of amounts received and retained by
WCPT) with respect to such Member, taking into account (x) such
reduction in such Member's Internal Rate of Return, (y) the timing and
amount of all Capital Contributions made by, and all the Common
Distribution Amounts received by, such Member and (z) the Promote
Payments previously received by each of the Manager and WCPT and not
yet returned to such Member pursuant to this Section 7.2. In the event
the Manager is required to return any amounts under this Section 7.2,
then an amount equal to 160% of the amounts required to be returned to
such Member by the Manager shall be deemed received by such Member for
the purposes of calculating the Internal Rate of Return of such
Member."
<PAGE>
SECTION 2.23. Section 7.6 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"7.6. [Intentionally Omitted.]"
SECTION 2.24. Section 8.1(a) of the Operating Agreement is hereby
amended by adding the following language at the end thereof:
"Notwithstanding anything to the contrary herein, to the
extent permitted under the terms of any Indebtedness of the Company or
its Subsidiaries, (A) WCPT shall have the right, subject to Section 8.9
and WCPT providing the Whitehall Group 30-days' prior written notice,
to Transfer up to 10% of its Interest in the Company to a designated
subsidiary of WRP in which WRP owns, and continues to own, not less
than 90% of each class of outstanding equity interests (it being
understood and agreed that in WRP's discretion, the equity owners of
the subsidiary other than WRP may hold and be entitled to receive the
entire economic interest in such entity (but not more than 10% of any
voting or other control rights); provided that (i) WCPT shall transfer
such Interest only for the benefit of employees of WRP and the portion
of the equity interests in such subsidiary not owned by WRP (and each
said assigned economic rights) must always be owned by persons who are
employees of WRP and have been employed by WRP for a minimum of six
months (provided that upon the death, disability or retirement of any
such person, such person or, in the event of such person's death, such
person's executors, heirs and legal assigns may continue to own or have
an economic interest in such interests), (ii) any required lender
consents or other third-party consents are obtained, (iii) the terms of
such Membership Units transferred do not provide the holder thereof
with voting rights, (iv) such transfer complies with all applicable
securities and other laws and regulations and such transferee certifies
to the Company and the Members that it is an "accredited investor" (as
such term is defined in Regulation D adopted by the Securities and
Exchange Commission under the Securities Act of 1933, as amended), (v)
any costs associated with amending this Agreement, obtaining such
consents or otherwise implementing such transfer shall be borne and
paid by WCPT and (vi) such transferee or assignee waives, to the
fullest extent permitted by law, any fiduciary or similar duties that
may be owed by any of the Members to such transferee and executes an
agreement making all of the representations made by the Members in
Sections 2.8(a)(ii) and (iii) and agreeing to be bound by all of the
provisions of this Agreement and (B) the members of the Whitehall Group
shall have the right to Transfer, collectively, up to 10% of their
Interests in the Company to Management Co. so long as the terms of such
Membership Units transferred do not provide the holder thereof with
voting rights. Notwithstanding anything to the contrary herein, the
following events with respect to WRP shall not by themselves be deemed
to be an impermissible disposition of the ownership interest in WCPT:
(i) a merger (including a triangular merger), consolidation or other
combinations with or into another Person; (ii) the sale of all or
substantially
<PAGE>
all (but not less than 90%) of the assets of WRP in a single
transaction; (iii) any reclassification, recapitalization or change of
its outstanding equity interests (other than any reclassification or
creation of a new class of securities that would entitle the holder
thereof to interests in WCPT, its assets, business or profits or
distributions or dividends in respect thereof and not to other assets
or businesses of WRP (e.g., 'lettered' or 'tracking stock' or a
spin-off or other similar transaction), (iv) any issuance of equity
securities by WRP in exchange for assets or for other equity securities
of WRP or the redemption by WRP of equity securities issued by it; (v)
the adoption of any plan of liquidation or dissolution by WRP; (vi) any
acquisition by another Person of any stock in WRP; and (vii) any change
in membership of WRP's board of directors."
SECTION 2.25. Section 8.1(b) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(b) Subject to compliance with the remaining provisions of
this Article VIII and with Section 4.2 and notwithstanding anything to
the contrary set forth in Section 8.1(a) above, each of WCPT, WHWEL,
Whitehall XI, Holding Co. and Saracen may, from time to time and
without any consent or approval, pledge or otherwise grant a security
interest in all or part of such Member's Interest to an Institutional
Lender to secure a loan made to such Member (a "Pledgor") by such
Institutional Lender (a "Pledgee"); provided that, (i) such pledged
Interest may not be transferred to the Pledgee by foreclosure,
assignment in lieu thereof or other enforcement of such pledge, and
(ii) WCPT, WHWEL, Whitehall XI, Holding Co. and Saracen may pledge only
their respective economic interests in the Company and no other rights
hereunder. In addition, notwithstanding anything to the contrary set
forth herein, (A) WHWEL shall have the right at any time to transfer
all or any part of its Interest without the prior consent of any Member
(including WCPT and the Manager) pursuant to Section 8.3, (B) Whitehall
XI shall have the right at any time to transfer all or any part of its
Interest without the prior consent of any Member (including WCPT and
the Manager) pursuant to Section 8.3, (C) Holding Co. shall have the
right at any time to transfer all or any part of its Interest without
the prior consent of any Member (including WCPT and the Manager)
pursuant to Section 8.3, (D) any Saracen Member shall have the right at
any time to transfer all or any part of his or her Interest without the
prior consent of any Member (i) pursuant to Section 8.3, (ii) to
another Saracen Member, provided that such transfer shall not result in
Dominic J. Saraceno having a Percentage Interest (assuming for purposes
of determining Dominic J. Saraceno's Percentage Interest pursuant to
this Section 8.1(b) only, all of his outstanding Series A Preferred
Membership Units were converted into Membership Units at the conversion
price set forth in the Series A Terms) equal to or greater than 10% or
(iii) pursuant to a transfer for a tax or estate planning purpose only,
by inter vivos gift or sale to an entity or trust or pursuant to any
applicable laws of descent; provided that at all times the voting
control of such entity or trust is held by and the decisions of such
entity or trust
<PAGE>
are made solely by such Member (or, if applicable, by any executor) and
(E) WHWEL, Whitehall XI and Holding Co. shall have the right at any
time to transfer all or any part of its Interest without the prior
consent of any Member (including WCPT and the Manager) to any Affiliate
of the Goldman Sachs Group."
SECTION 2.26. Section 8.2 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"8.2. Sale of Assets; Buy-Sell Provisions. (a) Notwithstanding
anything to the contrary contained herein, each or any of the Manager
and each or any of the members of the Whitehall Group, acting alone,
shall have the right, power and authority, without the consent of the
Management Committee or WCPT, to Sell or cause the Company and its
Subsidiaries to Sell any or all of the Properties or the Company itself
or any or all of its Subsidiaries in accordance with the following:
(i) the Manager gives WCPT notice at least 30 days
prior to closing of any such Sale, which notice shall (A) be
for informational purposes only (with no obligation to sell
such asset to WCPT) and (B) set forth the projected or
anticipated terms and conditions thereof and, if available,
any sales memorandum and analyses with respect to such sale;
(ii) the Manager may Sell any of the Non-Nomura
Properties, only as part of a Section 1031 Transaction,
pursuant to which the Company or its Subsidiaries purchase
other real properties selected by the Manager in its sole
discretion, provided that Manager obtains either (A) a Tax
Opinion with respect to such transaction or (B) a waiver by
Saracen of any tax indemnification claim under Section 8.2A
with respect to such transaction;
(iii) the Manager may Sell any of the Nomura
Properties, (A) only as part of a Section 1031 Transaction
pursuant to which the Company or its Subsidiaries purchase
Credit Lease Properties, provided that Manager obtains either
(I) a Tax Opinion with respect to such transaction or (II) a
waiver by Saracen of any tax indemnification claim under
Section 8.2A with respect to such transaction or (B) in
exchange for Qualified OP Units (with no limit as to the
amount thereof) issued by an Approved Company; and provided
further the Company or its Subsidiaries obtain financing for
such Credit Lease Properties in an amount equal to at least
$140 million in the aggregate (i.e., among all of such Credit
Lease Properties taken together) or, if greater, 85% of the
total purchase price of such Credit Lease Properties.
(iv) the Manager may Sell any of the Other Assets for
(A) cash consideration or (B) Qualified OP Units issued by an
Approved Company
<PAGE>
so long as the total value of such OP units received in all
such transactions consummated under this clause (iv) is less
than $50 million (as reasonably determined by the Manager at
the time of such sale); and
(v) the Manager may cause the Company to be party to
an Approved Extraordinary Transaction for (x) cash
consideration or (y) a combination of cash and Qualified OP
Units issued by an Approved Company so long as the total value
of such OP units received in such a transaction consummated
pursuant to this clause (v) plus the total value of the OP
units received in a transaction consummated pursuant to the
preceding clause (iv) is less than $50 million (as reasonably
determined by the Manager at the time of such sale); provided
that, in the event the Company and its Subsidiaries own any
Properties the Sale of which would trigger the tax
indemnification obligations under Section 8.2A, with respect
to the transaction described in clause (y), the Manager
obtains either (I) a Tax Opinion with respect to such
transaction or (II) a waiver by Saracen of any tax
indemnification claim under Section 8.2A with respect to such
transaction.
The Company may not, without the consent of WCPT, Sell the
Company's assets to any Affiliate of the Whitehall Group other than (i)
the Recently Acquired Assets and (ii) pursuant to the provisions of
Sections 8.2(b) or 8.2(d). Whenever the Manager shall have the right to
cause a Sale pursuant to the foregoing provisions, it shall have the
right, power and authority, without the consent of the Management
Committee or WCPT, to execute, deliver and perform on behalf of the
Company and/or its Subsidiaries all purchase agreements, deeds,
assignments and other agreements, instruments or documents that the
Manager determines in its sole discretion are necessary or desirable to
effect or implement such sale.
If a Tax Opinion is to be obtained by Manager pursuant to
clauses (ii) or (iii) or (v) above, the Manager shall deliver to WCPT a
copy of a draft of such Tax Opinion at least five Business Days prior
to the closing of such Sale for informational purposes only (but such
opinion shall not be subject to WCPT's review or approval). In
connection with a Section 1031 Transaction pursuant to clause (iii)
above, the ownership interest of the Company in any Credit Lease
Property may, at the election of Manager, and provided that a Tax
Opinion is obtained, be distributed to the Members so that each Member
owns an undivided tenancy-in-common interest in such Credit Lease
Property and held by such Members pursuant to a tenancy-in-common
agreement in substantially the same form as this Agreement with such
changes as may be reasonably acceptable to WCPT and the Whitehall
Group. In addition, in the event the Company and its Subsidiaries own
any Properties the Sale of which would trigger the tax indemnification
obligations under Section 8.2A, for (x) any subsequent Sale of real
properties acquired by the Company or its Subsidiaries in connection
with a
<PAGE>
Section 1031 Transaction set forth in clauses (ii) and (iii) above and
(y) any distribution in kind of Properties to the Members, the Manager
shall obtain either (A) a Tax Opinion with respect to such transaction
or (B) a waiver by Saracen of any tax indemnification claim under
Section 8.2A with respect to such transaction.
In connection with an Approved Extraordinary Transaction, the
Manager agrees that it will not execute a confidentiality agreement
without WCPT's consent, which consent will not be unreasonably
withheld, conditioned or delayed and, in any event, such consent shall
be deemed given if it is not granted or denied within three Business
Days of delivery by the Whitehall Group of written notice thereof and
copy of such agreement; provided that it shall not be considered
unreasonable for WRP to request a 'standstill' provision in such
confidentiality agreement in appropriate circumstances in the form set
forth in Schedule E.
In the event that a purchaser of one or more Properties also
acquires the limited liability company interests in, or all or
substantially all of the assets of, the Manager, the Manager shall
allocate the purchase price for such sale between the Properties being
sold and the Management Co., or its assets, on a fair and reasonable
basis.
(b) If one or more of the Committee Representatives appointed
by WCPT vote against a decision requiring consent under Section
3.4(A)(v) (i.e., the Major Decision relating to Pointview), then the
Whitehall Group shall have the right to exercise the following buy-sell
mechanism with respect to Pointview (the 'Pointview Buy-Sell') such
that either WCPT or the Whitehall Group will purchase Pointview from
the Company or its Subsidiary pursuant to the following terms:
(i) The Whitehall Group may trigger a Pointview
Buy-Sell by delivering to WCPT a notice in the form attached
to this Agreement as Schedule 8.2(b)(i)-A (the 'Pointview
Buy-Sell Notice') that specifies the price at which the
Whitehall Group is willing (1) to buy Pointview from the
Company or (2) to cause the Company to sell Pointview to WCPT.
Such Pointview Buy-Sell Notice shall contain both (A) an
irrevocable and unconditional offer by the Whitehall Group to
buy Pointview for a price (the 'Pointview Offer Price') equal
to the price specified in the Pointview Buy-Sell Notice (the
'Pointview Offer to Buy') and (B) an irrevocable and
unconditional offer to cause the Company to sell Pointview to
WCPT at the Pointview Offer Price (the 'Pointview Offer to
Sell'). Within 45 days after receipt of a Pointview Buy-Sell
Notice, WCPT shall deliver to the Whitehall Group a notice in
the form attached to this Agreement as Schedule 8.2(b)(i)-B
(the 'Pointview Election Notice') specifying whether it elects
to accept the Pointview Offer to Buy or to accept the
Pointview Offer to Sell, which Pointview Election Notice shall
be binding and shall
<PAGE>
constitute an irrevocable and unconditional acceptance of the
Pointview Offer to Buy or the Pointview Offer to Sell, as
applicable. If within such 45-day period, WCPT shall not have
delivered a Pointview Election Notice expressly making an
election to accept the Pointview Offer to Sell, then WCPT
shall be conclusively deemed to have irrevocably and
unconditionally accepted the Pointview Offer to Buy.
(ii) If WCPT accepts (or is deemed to have accepted)
the Pointview Offer to Buy, the Whitehall Group shall deliver
to the Company within three Business Days after such
acceptance a deposit in the amount equal to 10% of the
Pointview Offer Price, which deposit shall be non-refundable
except in the event of a failure for the sale of Pointview to
be completed not resulting from the default of the Whitehall
Group. If WCPT accepts the Pointview Offer to Sell, WCPT shall
deliver to the Company within three Business Days after such
acceptance a deposit in the amount equal to 10% of the
Pointview Offer Price, which deposit shall be non-refundable
except in the event of a failure for the sale of Pointview to
be completed not resulting from the default of WCPT. Any
deposit made pursuant to this Section 8.2(b) (ii) shall be
funded by wire transfer of immediately available funds and
shall be held by the Company in an interest bearing account,
and any interest earned thereon shall constitute part of the
deposit. The party obligated to buy Pointview pursuant to this
Section 8.2(b)(ii) is referred to as the 'Pointview Buying
Party.' If the deposit is not timely funded by the Pointview
Buying Party, then (x) (i) in the event such party is WCPT,
the Whitehall Group and the Manager shall have the right to
make all future decisions with respect to Pointview without
the consent of the Management Committee or WCPT and Section
3.4A(v) shall thereupon be deemed deleted from this Agreement
and (ii) in the event such party is the Whitehall Group, it
shall lose any further rights to trigger the Pointview
Buy-Sell and WCPT shall have the right, after the expiration
of the 60 day period specified in clause (y) of this sentence,
to exercise the Pointview Buy-Sell with the same effect as if
WCPT were the Whitehall Group under this Section 8.2(b) (and
in such event the Whitehall Group shall have the same rights
as WCPT under this Section 8.2(b)) and (y) the non-defaulting
party shall have the right (but not the obligation),
exercisable at any time within 60 days after the date the
Pointview Buying Party was required to fund the deposit, to
purchase Pointview at a price equal to 90% of the Pointview
Offer Price, in which case (A) all Members other than the
Pointview Buying Party shall be entitled to receive a
distribution of the proceeds from the sale of Pointview equal
to the amount such Members would be entitled to receive had
Pointview been acquired at the Pointview Offer Price, and (B)
the Pointview Buying Party shall be entitled to receive a
distribution of the proceeds from the sale of Pointview in an
amount equal to the excess, if any, of (i) the amount the
Pointview Buying Party would have been
<PAGE>
entitled to receive had Pointview been acquired at the
Pointview Offer Price over (ii) the amount of the deposit
required to be delivered to the Company pursuant to this
Section 8.2(b)(ii). Notwithstanding anything contained herein
to the contrary, in the event Pointview is purchased for a
price that is less than the Pointview Offer Price, each of the
Saracen Members shall be entitled to receive, in cash upon the
distribution of such amounts, an amount not less than the
amount such Saracen Member would have received if Pointview
were purchased at the Pointview Offer Price.
(iii) Closing of the Pointview Buy-Sell shall occur
within 90 (or if the Offer Price exceeds $25 million, 180)
days after the Pointview Election Notice is delivered or an
election is deemed made. In the event the Company or WCPT, in
the event the Pointview Offer to Buy is accepted, or the
Whitehall Group, in the event the Pointview Offer to Sell is
accepted, defaults in its obligation to sell (or to cause the
Company to sell) Pointview, the non-defaulting party shall be
entitled to the return of the deposit or to seek specific
performance. If the Pointview Buying Party defaults in its
obligation to purchase Pointview, then either (A) the Company
shall retain the deposit as liquidated damages and shall have
no other remedy under law or equity (in which case the
defaulting party shall not share in the same and such deposit
shall be distributed by the Manager to the Members pursuant to
Section 7.1 with the defaulting party's Percentage Interest
being deemed to be 0% for such purpose) or (B) at the election
of the non-defaulting party (WCPT, in the event the Pointview
Offer to Buy is accepted, or the Whitehall Group, in the event
the Pointview Offer to Sell is accepted), the non-defaulting
party shall have the right (but not the obligation) as its
sole remedy, exercisable at any time within 60 days after the
date the closing of the Pointview Buy-Sell was scheduled, to
complete the purchase of Pointview for its account with a
reduction in the Pointview Offer Price by the amount of such
deposit, which deposit shall be applied to the purchase price
for Pointview with the same effect as if the deposit were
funded by the non-defaulting party. In the event the Whitehall
Group defaults in its obligation either to cause the Company
to sell Pointview (if the Pointview Offer to Sell is accepted)
or buy Pointview (if the Pointview Offer to Buy is accepted),
it shall lose any further rights to trigger the Pointview
Buy-Sell and WCPT shall, after the expiration of the 60-day
period specified in the preceding sentence, have the right to
exercise the Pointview Buy-Sell with the same effect as if
WCPT were the Whitehall Group under this Section 8.2(b) (and
in such event the Whitehall Group shall have the same rights
as WCPT under Section 8.2(b)).
(iv) The Manager shall have the right, power and
authority to sell Pointview to the party entitled to purchase
Pointview pursuant to Section 8.2(b)(ii) or Section
8.2(b)(iii) (or its designee) and to execute,
<PAGE>
deliver and perform, and cause the Company or its Subsidiaries
to execute, deliver and perform, any and all agreements,
instruments or other documents necessary or desirable to
effect such sale. In the event that WCPT is obligated to
purchase Pointview from the Company pursuant to this Section
8.2(b), during the period beginning on the date that WCPT
delivers the Pointview Election Notice and ending on the
earlier of (x) the date WCPT defaults in its obligations or
(y) date designated as the closing date for the Pointview
Buy-Sell, Manager will provide to WCPT at least ten Business
Days' written notice (but shall not be required to obtain
WCPT's consent) prior to executing any lease with respect to
more than 5,000 square feet of rentable space at Pointview.
Notwithstanding anything to the contrary herein, the Manager
shall not cause a sale of Pointview during the period from the
posting of a deposit pursuant to this Section 8.2(b) until the
earlier of the closing of the acquisition of Pointview or the
forfeiture of such deposit; provided that a sale of Pointview
may be completed during such period at a price in excess of
the Pointview Offer Price, in which event the party entitled
to purchase Pointview shall be reimbursed for any costs and
expenses incurred in connection with the Pointview Buy-Sell up
to a maximum amount of $50,000 plus any out of pocket
financing fees paid to a lender. For the avoidance of doubt,
any costs or benefits relating to the currently pending
litigation affecting Pointview shall belong to the Company and
the party purchasing Pointview pursuant to this Section 8.2(b)
shall have no rights or obligations with respect to such
pending litigation.
(v) In connection with the foregoing purchase and
sale, (i) no representations shall be made by the Company and
(ii) if the fee title interest of Pointview is being
transferred, the Company or its Subsidiary shall (A) deliver
customary title affidavits and provide sufficient evidence of
authority and organization necessary for the party entitled to
purchase Pointview to obtain requisite title insurance and (B)
execute and deliver assignments of the leases and contracts
affecting Pointview. Any Capital Contributions made by the
Members to the Company to fund expenses relating specifically
to Pointview from and after the date the Pointview Buy-Sell
Notice is delivered shall result in a dollar-for-dollar
increase in the Pointview Offer Price and all reserves or
other cash deposits owned by the Company or its Subsidiary
relating specifically to Pointview as well as casualty
proceeds or condemnation awards received by the Company or any
Subsidiary in respect of Pointview shall be transferred or
delivered to the party that acquires Pointview. Without
duplication of the adjustments pursuant to the immediately
preceding sentence, there shall also be an adjustment of the
Pointview Offer Price at closing (i) to reflect a proration of
any accrued income and expenses relating specifically to
Pointview, excluding non-cash items, from the date the
Pointview Buy-Sell Notice was first delivered through the date
of closing of the sale of Pointview and
<PAGE>
(ii) to reduce the purchase price by any liens to which the
purchaser would take title subject and that can be discharged
by the payment of a liquidated sum of money that are the
responsibility of the Company or its Subsidiary to discharge
(as opposed to any tenant or other third party). Within 45
days after the closing, the party that acquires Pointview
shall direct the independent accountants for the Company to
complete a review of such proration and such independent
accountants shall deliver their report to such party and the
Manager. If such report shall adjust such proration, the party
in whose favor such adjustment is made shall promptly be paid
by the other party the amount of such adjustment. The
following costs and expenses relating to the Pointview
Buy-Sell shall be allocated as follows: (i) the Company shall
be responsible for its own attorneys' fees and expenses and
the party that acquires Pointview shall be responsible for its
own attorneys' fees and expenses; (ii) the Company shall be
responsible for the payment of any transfer taxes in
connection with the sale of Pointview and (iii) the Company
will bear any consent or similar fees or expenses.
(vi) The party entitled to acquire Pointview may, at
the closing of the sale of Pointview pursuant to this Section
8.2(b), designate another entity to take title to Pointview,
provided that in the event such party elects to do so, such
party shall not be relieved of any obligations hereunder. In
the event WRP or its Controlled Affiliate actually acquires
Pointview pursuant to the Pointview Buy-Sell, Manager shall,
at the request of WRP or its controlled Affiliate, agree to
act as asset manager of Pointview for a fee of 1% per annum of
the Offer Price and to act as leasing agent, development
manager or construction manager (the 'Additional Services') at
such fees set forth on Schedule C for a period of not more
than three years after the closing date of the Pointview
Buy-Sell (it being understood that Manager will not be
required to act as an asset manager unless it is also engaged
to provide Additional Services and shall not be required to
provide Development Services unless it is also engaged to act
as an asset manager). Upon any transfer of Pointview by WRP or
its Controlled Affiliate (or if such Controlled Affiliate
ceases to be a Controlled Affiliate of WRP), the Manager may,
at its sole election, terminate the asset management and
Additional Services agreements.
<PAGE>
(vii) If there would be substantial savings achieved
by structuring the transfer of Pointview as a sale of the
interests in the Subsidiary that owns Pointview, then at the
option of the Pointview Buying Party, the Pointview Buying
Party may elect to acquire all of the interests in such
Subsidiary, in which case all of the provisions of this
Section 8.2(b) shall apply mutatis mutandis.
(c) Commencing on January 1, 2004, if there shall be any
Property owned by the Company or a Subsidiary the sale of which would
trigger the tax indemnification obligations of the Company under
Section 8.2A, then, except as otherwise provided in this clause (c) or
in clause (d), each of the Whitehall Group and WCPT (each a 'Global
Triggering Party') shall each have the right to exercise the following
Buy-Sell mechanism (the 'Global Buy-Sell') after on or after January 1,
2004:
(i) A Global Triggering Party may trigger a Global
Buy-Sell by delivering to the other party (the 'Global
Non-Triggering Party') a notice in the form attached to this
Agreement as Schedule 8.2(c)(i)-A (the 'Global Buy-Sell
Notice') that specifies (x) the price per membership unit of
the Company (as such price may be adjusted pursuant to clause
(vii) of this Section 8.2(c); the 'Unit Price') such Global
Triggering Party is willing (1) to pay for the entire interest
of the Global Non-Triggering Party in the Company (the 'Global
Non-Triggering Party Interest') or (2) to accept to sell to
the Global Non-Triggering Party the entire interest of the
Global Triggering Party in the Company (the 'Global Triggering
Party Interest') and (y) the amount of Indebtedness for
borrowed money (including Short-Term Advances) plus, in the
event the Unit Price is less than the then effective
conversion price of the Series A Preferred Membership Units
(as set forth in the terms of the Series A Preferred
Membership Units, the 'Conversion Price'), the outstanding
amount of the liquidation preference of the outstanding Series
A Preferred Membership Units (it being understood and agreed
that in the event the Unit Price is equal to or greater than
the Conversion Price, all outstanding Series A Preferred
Membership Units shall, for all purposes of this Global Buy-
Sell, be assumed to be converted into Membership Units) and
the Subordinated Preferred Equity of the Company and its
Subsidiaries (the 'Assumed Debt Level') that the Global
Triggering Party assumed was outstanding in calculating the
Unit Price (which amounts shall be equal to the corresponding
amounts set forth in the Company's most recent balance sheet
delivered to the Members). Such Global Buy-Sell Notice shall
contain both (A) an irrevocable and unconditional offer by the
Global Triggering Party to buy the Global Non-Triggering Party
Interest for a price equal to the product of such Unit Price
multiplied by the number of Membership Units owned by the
Global Non-Triggering Party (the 'Global Offer to Buy') and
(B) an irrevocable and unconditional offer to
<PAGE>
sell the Global Triggering Party Interest for a price equal to
the product of such Unit Price multiplied by the number of
Membership Units owned by the Global Triggering Party (the
'Global Offer to Sell'). Within 45 days after receipt of a
Global Buy-Sell Notice, the Global Non-Triggering Party shall
deliver to the Global Triggering Party notice in the form
attached to this Agreement as Schedule 8.2(c)(i)-B (the
'Global Election Notice') specifying whether it elects to
accept the Global Offer to Buy or to accept the Global Offer
to Sell, which Global Election Notice shall be binding and
shall constitute an irrevocable and unconditional acceptance
of the Global Offer to Buy or the Global Offer to Sell, as
applicable. If within such 45-day period the Global
Non-Triggering Party shall not have delivered a Global
Election Notice expressly making an election to accept the
Global Offer to Sell, then the Global Non-Triggering Party
shall be conclusively deemed to have irrevocably and
unconditionally accepted the Global Offer to Buy.
(ii) If the Global Non-Triggering Party accepts (or
is deemed to have accepted) the Global Offer to Buy, the
Global Triggering Party shall deliver to the Global
Non-Triggering Party within three Business Days after such
acceptance a deposit in the amount equal to 10% of the product
of (x) the number of Membership Units owned by the Global Non-
Triggering Party multiplied by (y) the Unit Price specified in
the Global Buy-Sell Notice; provided that in the event the sum
of (I) the product of (A) the total number of outstanding
Membership Units multiplied by (B) the Unit Price specified in
the Global Buy-Sell Notice, plus (II) the Assumed Debt Level
(the "Company Value")) is greater than $250 million, the
deposit shall be in the amount equal to 7.5% of the product of
(x) the number of Membership Units owned by the Global
Non-Triggering Party multiplied by (y) the Unit Price
specified in the Global Buy-Sell Notice. Such deposit shall be
non-refundable except in the event of a failure for the sale
of the Global Non-Triggering Party Interest to be completed
not resulting from the default of the Global Triggering Party.
If the Global Non-Triggering Party accepts the Global
Triggering Party's Global Offer to Sell, the Global
Non-Triggering Party shall deliver to the Global Triggering
Party within three Business Days after such acceptance a
deposit in the amount equal to 10% of the product of (x) the
number of Membership Units owned by the Global Triggering
Party multiplied by (y) the Unit Price specified in the Global
Buy-Sell Notice; provided that in the event the Company Value
is greater than $250 million, the deposit shall be in the
amount equal to 7.5% of the product of (x) the number of
Membership Units owned by the Global Triggering Party
multiplied by (y) the Unit Price specified in the Global
Buy-Sell Notice. Such deposit shall be non-refundable except
in the event of a failure for
<PAGE>
the sale of the Global Triggering Party Interest to be
completed not resulting from the default of the Global
Non-Triggering Party.
Any deposit made pursuant to this Section 8.2(c)
shall be funded by wire transfer of immediately available
funds and shall be held by the recipient in an interest
bearing account and any interest earned thereon shall
constitute part of the deposit. The party obligated to buy the
other party's Interests in the Company pursuant to this
Section 8.2(c)(ii) is referred to as the 'Global Buying
Party'. The party obligated to sell its Interests in the
Company pursuant to this Section 8.2(c)(ii) is referred to as
the 'Global Selling Party'. In the event WCPT is the Global
Buying Party, WCPT shall be obligated to buy the entire
Interest of each member of the Whitehall Group in the Company.
If the deposit is not timely funded by the Global Buying
Party, then (i) the Global Buying Party shall lose any further
rights to trigger a Global Buy-Sell and the Global Selling
Party shall thereupon have the right to exercise the Global
Buy-Sell at any time thereafter and (ii) the Global Selling
Party shall have the right (but not the obligation) as its
sole remedy, exercisable at any time within 60 days after the
date on which the Global Buying Party was required to fund the
deposit, to acquire all of the Global Buying Party's Interests
at 90% of the Unit Price specified in the Global Buy-Sell
Notice.
(iii) Closing of the Global Buy-Sell shall occur
within 180 days after the Global Election Notice is delivered
or an election is deemed made. In the event the Global Selling
Party defaults in its obligation to sell its Interests, the
Global Buying Party shall be entitled to the return of the
deposit or to seek specific performance. If the Global Buying
Party defaults in its obligation to purchase the Interests of
the Global Selling Party, the Global Selling Party shall
retain the deposit for its own account as liquidated damages.
In addition, (i) the defaulting party shall lose any further
rights to exercise a Global Buy-Sell and the non-defaulting
party shall have the right (but not the obligation),
exercisable at any time within 60 days after the date the
closing of the Global Buy-Sell was scheduled, to exercise the
Global Buy-Sell and (ii) the non-defaulting party shall have
the right to acquire the defaulting party's Interests at 90%
of the Unit Price specified in the Global Buy-Sell Notice on
the same basis and terms (other than price) as would have
applied to the purchase of the non-defaulting party's
interest.
(iv) In connection with the foregoing purchase and
sale, the party obligated to sell its Interests will deliver
to the party obligated to purchase such Interests an
assignment of interest in the form attached hereto as Schedule
8.2(c)(iv). After the closing of a purchase and sale pursuant
to the Global Buy-Sell, the party selling its Interests will
not be liable for any claims in connection with the Company
(the 'Post-Closing
<PAGE>
Claims') except for claims that result from or are on account
of tortious actions of such party, and the party obligated to
purchase such Interests shall either obtain a release of the
seller from, or indemnify the seller against, the Post-Closing
Claims. The following costs and expenses relating to the
Global Buy-Sell will be allocated as follows: (i) each party
will be responsible for its own attorneys' fees and expenses;
(ii) the party that actually sells its Interests will be
responsible for the payment of any transfer taxes in
connection with the sale of such party's Interests; and (iii)
the purchaser of such Interests will bear any consent or
similar fees or expenses. In the event WCPT is the purchaser
of such Interests, upon the transfer of the Interests by each
member of the Whitehall Group, subject to the terms set forth
in Section 8.2(c)(vi), (A) WCPT shall have the right to
terminate Management Co. as the Manager and any asset
management and Additional Services agreements with Management
Co., and (B) Management Co. shall have the right to resign as
the Manager and to terminate any asset management and
Additional Services agreements with the Company.
(v) Upon payment of the purchase price for the
Interests of the party obligated to sell its Interests, the
party obligated to purchase such Interests shall, with respect
to any Indebtedness of the Company and its Subsidiaries for
which the selling party (or any guarantor affiliated therewith
or which delivered the guaranty on behalf of such Person) is
or may be personally liable (x) obtain a release of the
selling party (and any guarantor affiliated therewith or which
delivered the guaranty on behalf of such Person) from all
liability, direct or contingent, from holders of Indebtedness,
other than with respect to claims arising prior to the
transfer of such selling party's Interests, from the fraud,
misappropriation or other willful misconduct of such selling
party, (y) cause Indebtedness to be paid in full at the
closing, or (z) deliver to such selling party, an agreement in
form and substance reasonably satisfactory to such selling
party, which satisfaction may require a creditworthy
guarantor, to defend, indemnify and hold the Global Selling
Party (and any guarantor affiliated therewith or which
delivered the guaranty on behalf of such Person) harmless from
any actions, including attorneys' fees and costs of
litigation, claims or loss arising from such Indebtedness. In
no event shall such indemnity apply to liabilities resulting
from the breach by any Member of its obligations under this
Agreement. This subparagraph (v) shall not apply to any
Indebtedness which is fully insured by public liability
insurer(s) reasonably acceptable to both the buying and
selling parties. Notwithstanding anything to the contrary
herein, in the event WCPT is the party obligated to purchase
such Interests, WCPT shall not be obligated to satisfy any of
the obligations set forth in clauses (x), (y) or (z) above for
any Indebtedness incurred by the Company or its Subsidiaries
in violation
<PAGE>
of the express terms hereof unless WCPT consents to the
incurrence of such Indebtedness.
(vi) At the closing of the sale of such Interests
pursuant to this Section 8.2(c), the party obligated to
purchase such Interests (a) may designate one of its
Affiliates to acquire such Interests (provided that in such
event the party obligated to purchase such Interests shall not
be released of any of the obligations herewith) and (b) shall
purchase the Subordinated Preferred Equity from the selling
party(ies) for an additional amount equal to the outstanding
amount of the Subordinated Preferred Equity funded by such
selling party(ies) plus all accrued and unpaid dividends in
respect of such Subordinated Preferred Equity.
(vii) Notwithstanding anything contained herein to
the contrary, the Unit Price for each Membership Unit to be
paid in connection with the closing of the Global Buy-Sell
shall be adjusted as follows:
(A) The Unit Price to be paid for each
Membership Unit shall be reduced by an amount equal
to the sum of the amount of Capital Proceeds
distributed in respect of each Membership Unit during
the period beginning on the date the Global Buy-Sell
Notice is delivered pursuant to clause (i) of this
Section 8.2(c) and ending on the date of the Closing
of the Global Buy-Sell.
(B) At least ten Business Days prior to the
closing date for the Global Buy-Sell (the "Global
Buy-Sell Closing Date"), the Manager shall prepare,
based on the Company's books and records and other
information then available, and deliver to WCPT and
the Whitehall Group a consolidated balance sheet
(each an "Estimated Balance Sheet") prepared in
accordance with GAAP consistent with the Company's
past practice (except as provided herein) and setting
forth an estimate of the aggregate Cash Equivalent
Net Worth as of the Global Buy-Sell Closing Date (the
"Estimated Cash Equivalent Net Worth") for the
Company. If the Estimated Cash Equivalent Net Worth
exceeds zero, the Unit Price to be paid at the
closing of the Global Buy-Sell shall be increased by
a portion of such excess (determined by dividing the
amount of such excess by the number of Membership
Units outstanding on the Global Buy-Sell Closing
Date). If the Estimated Cash Equivalent Net Worth is
less than zero, the Unit Price to be paid at the
closing of the Global Buy-Sell shall be decreased by
a portion of the amount by which the Estimated Cash
Equivalent Net Worth is less than zero (determined by
dividing the amount of such shortfall by the number
of Membership Units outstanding on the Global Buy-
Sell Closing Date). In the event the Estimated Cash
Equivalent
<PAGE>
Net Worth is zero, the Unit Price for each Membership
Unit to be paid at the closing of the Global Buy-Sell
shall not be adjusted.
As promptly as practicable, but no later
than 90 days after the Global Buy-Sell Closing Date,
the Manager shall cause the Company's accountants, to
prepare and deliver to WCPT and its accountants and
the Whitehall Group, a consolidated balance sheet of
the Company (the "Closing Balance Sheet"), together
with a report of the Company's accountants thereon,
for the purpose of establishing the Closing Cash
Equivalent Net Worth for the Company. The Closing
Balance Sheet shall reflect the Cash Equivalent
Assets and Cash Equivalent Liabilities of the Company
as of the close of business on the Global Buy-Sell
Closing Date and shall be prepared on a basis
consistent with that required hereby to be used in
the preparation of the Estimated Cash Equivalent Net
Worth Balance Sheet.
If the Closing Cash Equivalent Net Worth
exceeds the Estimated Cash Equivalent Net Worth, the
party that acquired Membership Units in the Global
Buy-Sell shall promptly (and in any event within ten
Business Days after receipt of the Closing Balance
Sheet unless a disagreement relating thereto is being
resolved as described below) deliver to the
party(ies) that sold the Membership Units in the
Global Buy-Sell an amount equal to the product of (i)
the number of Membership Units sold in the Global
Buy-Sell by the selling party(ies) multiplied by (ii)
a portion of the amount of such excess (determined by
dividing the amount of such excess by the number of
Membership Units outstanding on the Global Buy-Sell
Closing Date). If the Closing Cash Equivalent Net
Worth is less than the Estimated Cash Equivalent Net
Worth, the party(ies) that sold Membership Units in
the Global Buy-Sell shall promptly (and in any event
within ten Business Days after receipt of the Closing
Balance Sheet unless a disagreement relating thereto
is being resolved as described below) deliver to each
party that acquired Membership Units in the Global
Buy-Sell an amount equal to the product of (i) the
number of Membership Units sold by the selling
party(ies) in the Global Buy-Sell multiplied by (ii)
a portion of the amount of such deficit (determined
by dividing the amount of such deficit by the number
of Membership Units outstanding on the Global
Buy-Sell Closing Date). In the event the Closing Cash
Equivalent Net Worth equals the Estimated Cash
Equivalent Net Worth no payment shall be made to any
party pursuant to this paragraph.
<PAGE>
(C) If the principal amount of the
outstanding Indebtedness for borrowed money
(including Short-Term Advances) plus, in the event
the Unit Price is less than the Conversion Price, the
outstanding amount of the liquidation preference of
the outstanding Series A Preferred Membership Units
and the Subordinated Preferred Equity of the Company
and its Subsidiaries of the Company and its
Subsidiaries set forth in the Closing Balance Sheet
(the "Actual Debt Level") is less than the Assumed
Debt Level, then (I) the Unit Price shall be
increased by an amount equal to the quotient of (A)
the difference between the Assumed Debt Level and the
Actual Debt Level and (B) the number of Membership
Units outstanding on the Global Buy-Sell Closing
Date, and (II) the party that acquired Membership
Units in the Global Buy-Sell shall promptly (and in
any event within ten Business Days after receipt of
the Closing Balance Sheet unless a disagreement
relating thereto is being resolved as described
below) deliver to the party(ies) that sold the
Membership Units an amount equal to the product of
(i) the increase in the Unit Price multiplied by (ii)
the number of Membership Units sold by the party(ies)
in the Global Buy-Sell.
If the Actual Debt Level is greater than the
Assumed Debt Level, then (I) the Unit Price shall be
decreased by an amount equal to the quotient of (A)
the difference between the Actual Debt Level and the
Assumed Debt Level and (B) the number of Membership
Units outstanding on the Global Buy-Sell Closing
Date, and (II) the party(ies) that sold Membership
Units in the Global Buy-Sell shall promptly (and in
any event within ten Business Days after receipt of
the Closing Balance Sheet unless a disagreement
relating thereto is being resolved as described
below) deliver to the party that purchased the
Membership Units an amount equal to the product of
(i) the decrease in the Unit Price multiplied by (ii)
the number of Membership Units sold by the party(ies)
in the Global Buy-Sell.
(D) If either WCPT or the Whitehall Group
disagrees with any items on the Closing Balance
Sheet, WCPT or the Whitehall Group shall notify the
Manager and the other party in writing of such
disagreement within ten Business Days after the
receipt thereof, and such notice shall set forth the
basis for such disagreement in reasonable detail.
During such ten-Business Day period, the Manager
shall afford WCPT and the Whitehall Group and their
duly designated representatives access to all the
Company's books and records solely for the purpose of
resolving such disagreement. WCPT and the Whitehall
Group shall
<PAGE>
thereafter negotiate in good faith to resolve any
such disagreements; provided that WCPT shall promptly
pay to the Whitehall Group, or the Whitehall Group
shall promptly pay to WCPT, as the case may be, the
amount, if any, determined pursuant to this clause
(vii) that is not subject to dispute. If WCPT and the
Whitehall Group are unable to resolve any such
disagreements within such ten-Business Day period,
WCPT and the Whitehall Group shall select an Auditor
to resolve the disagreements in accordance with this
clause (vii).
(E) The "Auditor" shall be a "Big Five"
nationally recognized certified public accounting
firm mutually selected by the respective accounting
firms of WCPT and the Whitehall Group solely to
resolve only those disputed items in accordance with
the terms of this Agreement. WCPT and the Whitehall
Group shall use their reasonable best efforts to
cause the Auditor to resolve all disagreements on the
disputed items as soon as practicable; provided that
the Auditor shall be bound by the provisions of this
clause (vii) and shall not assign a value to any item
greater than the greatest value for such item claimed
by either party or less than the smallest value for
such item claimed by either party. Each of WCPT and
the Whitehall Group shall permit the Auditor to have
full access to their books, records, key employees
and independent accountants in order to resolve any
such disagreements. The resolution of such
disagreements by the Auditor shall be final and
binding on WCPT and the Whitehall Group. The fees and
expenses of the Auditor shall be paid by the party
whose position is most at variance with the decision
of the Auditor, as such person shall be determined by
the Auditor.
(F) If any amounts (the 'True-Up Amounts')
are owed by one party to the other as a result of the
true-up set forth in paragraphs (B) and (C) of this
Section 8.2(c)(vii), the party paying the True-Up
Amounts shall also pay an amount equal to the
interest accrued on such True-Up Amounts at a rate of
15% per annum, calculated from and including the
Global Buy-Sell Closing Date to but excluding the
date such party pays the True-Up Amounts.
(viii) During the period beginning on the date that
the party entitled to acquire the Membership Units in the
Global Buy-Sell exercises its election to acquire such
Membership Units and ending on the earlier of (x) the date
such party defaults in its obligation to fund the deposit
pursuant to Section 8.2(c)(ii) or (y) the date designated as
the scheduled Global Buy-Sell Closing Date, Manager shall not,
without the consent of
<PAGE>
such party, sell or enter into any agreement to sell any of
the Company's Properties. Notwithstanding the foregoing, the
Manager may complete the sale of any Properties that the
Company or its Subsidiaries were obligated to sell as of the
date the Global Buy-Sell Notice was delivered.
(d) Commencing on January 1, 2004, if the Company and its
Subsidiaries do not own any Properties the sale of which would trigger
the tax indemnification obligations of the Company under Section 8.2A,
then, except as provided in this clause (d), each of the Whitehall
Group and WCPT (each, a 'Portfolio Triggering Party') shall have the
right on or after January 1, 2004, to exercise the following buy-sell
mechanism (the 'Global/Portfolio Buy-Sell') with respect to all of the
Properties of the Company and its Subsidiaries (the 'Portfolio') upon
the following terms:
(i) A Portfolio Triggering Party may trigger a
Global/Portfolio Buy-Sell by delivering to the other party
(the 'Portfolio Non-Triggering Party') a notice in the form
attached to this Agreement as Schedule 8.2(d)(i)-A (the
'Global/Portfolio Buy-Sell Notice') that specifies (x) the
price at which such Portfolio Triggering Party is willing (1)
to buy the Portfolio from the Company and its Subsidiaries and
(2) to cause the Company and its Subsidiaries to sell the
Portfolio to the Portfolio Non-Triggering Party and (y) the
Unit Price such Portfolio Triggering Party is willing (1) to
pay for the Global Non-Triggering Party Interest or (2) to
accept to sell to the Portfolio Non-Triggering Party the
Global Triggering Party Interest (the provisions of the
Global/Portfolio Buy-Sell Notice for purposes of this Section
8.2(d)(i)(y) shall be identical to the provisions of the
Global Buy-Sell Notice). Such Global/Portfolio Buy-Sell Notice
shall contain (A) an irrevocable and unconditional offer by
such Portfolio Triggering Party to buy the Portfolio for a
price (the 'Portfolio Offer Price') equal to the price
specified in the Portfolio Buy-Sell Notice (the 'Portfolio
Offer to Buy'), (B) an irrevocable and unconditional offer to
cause the Company and its Subsidiaries to sell the Portfolio
to the Portfolio Non-Triggering Party at the Portfolio Offer
Price (the 'Portfolio Offer to Sell'), (C) a Global Offer to
Buy (on the same basis as if the Global Triggering Party
exercised its rights under Section 8.2(c)) and (D) a Global
Offer to Sell (on the same basis as if the Global Triggering
Party exercised its rights under Section 8.2(c)). Within 45
days after receipt of a Global/ Portfolio Buy-Sell Notice, the
Portfolio Non-Triggering Party shall deliver to the Portfolio
Triggering Party a notice in the form attached to this
Agreement as Schedule 8.2(d)(i)-B (the 'Global/Portfolio
Election Notice') specifying whether it elects to accept
either (i) at the election of the Portfolio Triggering Party,
the Portfolio Offer to Buy or the Global Offer to Buy or (ii)
at the election of the Portfolio Non-Triggering Party, the
Portfolio Offer to Sell or the Global Offer to Sell. If within
such 45-day period, the Portfolio Non-Triggering Party shall
not have delivered a
<PAGE>
Global/Portfolio Election Notice expressly making an election
to accept one of the foregoing, then the Portfolio
Non-Triggering Party shall be conclusively deemed to have
irrevocably and unconditionally accepted, at the option of the
Portfolio Triggering Party, the Portfolio Offer to Buy or the
Global Offer to Buy. If the Portfolio Triggering Party is
deemed to have elected to accept, the Portfolio Offer to Buy
or the Global Offer to Buy, the Portfolio Triggering Party
shall have the election, exercisable in its sole discretion,
whether to acquire the Membership Units pursuant to the Global
Offer to Buy or the Portfolio pursuant to the Portfolio Offer
to Buy. If the Portfolio Non-Triggering Party elects to accept
the Global Offer to Sell or the Portfolio Offer to Sell, the
Portfolio Non-Triggering Party shall have the election,
exercisable in its sole discretion, whether to acquire the
Membership Units pursuant to the Global Offer to Sell or the
Portfolio pursuant to the Portfolio Offer to Sell. In the
event that the Portfolio Offer to Buy or the Portfolio Offer
to Sell is accepted or deemed to be accepted pursuant to this
clause (i), the parties shall proceed with the Portfolio Offer
to Sell or the Portfolio Offer to Buy in accordance with the
provisions of this Section 8.2(d). In the event that the
Global Offer to Buy or the Global Offer to Sell is accepted or
deemed to be accepted, such acceptance or deemed acceptance
shall be deemed to be an acceptance of the Global Offer to
Sell or the Global Offer to Buy, as applicable, and the
parties shall proceed with the Global Buy-Sell pursuant to
clauses (ii) through (viii) of Section 8.2(c).
(ii) If the Portfolio Non-Triggering Party accepts
(or is deemed to have accepted) the Portfolio Offer to Buy,
the Portfolio Triggering Party (or its designee) shall deliver
to the Company within three Business Days after such
acceptance a deposit in the amount equal to 5% of the
Portfolio Offer Price, which deposit shall be non-refundable
except in the event of a failure for the sale of the Portfolio
to be completed not resulting from the default of the
Portfolio Triggering Party. If the Portfolio Non-Triggering
Party accepts the Portfolio Offer to Sell, the Portfolio Non-
Triggering Party shall deliver to the Company within three
Business Days after such acceptance a deposit in the amount
equal to 5% of the Portfolio Offer Price, which deposit shall
be non-refundable except in the event of a failure for the
sale of the Portfolio to be completed not resulting from the
default of the Portfolio Non-Triggering Party. Any deposit
made pursuant to this Section 8.2(d) (ii) shall be funded by
wire in immediately available funds and shall be held by the
Company in an interest bearing account, and any interest
earned thereon shall constitute part of the deposit. The party
obligated to buy the Portfolio pursuant to this Section
8.2(d)(ii) is referred to as the 'Portfolio Buying Party'. The
party obligated to sell the Portfolio pursuant to this Section
8.2(d)(ii) is referred to as 'Portfolio Selling Party'. If the
deposit is not timely funded by the Portfolio Buying Party,
then (x) the Portfolio Buying Party shall thereupon lose any
further
<PAGE>
rights to trigger the Portfolio Buy-Sell and the Portfolio
Selling Party shall have the right (but not the obligation),
exercisable at any time within 180 days after the date on
which the Portfolio Buying Party was required to fund the
deposit, to exercise the Portfolio Buy-Sell to exercise the
Portfolio Buy-Sell at any time thereafter and (y) the
Portfolio Selling Party shall have the right to acquire the
Portfolio at a purchase price equal to the Portfolio Offer
Price less the amount of the deposit required to be delivered
to the Company pursuant to this Section 8.2(d)(ii), in which
case (A) all Members other than the Portfolio Buying Party
shall be entitled to receive a distribution of the proceeds
from the sale of the Portfolio equal to an amount such Member
would be entitled to receive if the Portfolio had been
acquired by at the Portfolio Offer Price, and (B) the
Portfolio Buying Party shall be entitled to receive a
distribution equal to the excess, if any, of (i) the amount it
would be entitled to receive if the Portfolio had been
acquired by the Portfolio Buying Party at the Portfolio Offer
Price over (ii) the amount of the deposit delivered to the
Company pursuant to this Section 8.2(d)(ii). Notwithstanding
anything contained herein to the contrary, in the event the
Portfolio is purchased for a price that is less than the
Portfolio Offer Price, each of the Saracen Members shall be
entitled to receive, in cash upon the distribution of such
amounts, an amount not less than the amount such Saracen
Member would have received if the Portfolio were purchased at
the Portfolio Offer Price.
(iii) Closing of the Portfolio Buy-Sell shall occur
within 90 (or if the total purchase price for the Portfolio
(debt plus equity) (the 'Portfolio Purchase Price') exceeds
$250 million, 120) days after the Portfolio Election Notice is
delivered or an election is deemed made. In the event the
Company or the Portfolio Non-Triggering Party, in the event
the Portfolio Offer to Buy is accepted, or the Portfolio
Triggering Party, in the event the Portfolio Offer to Sell is
accepted, defaults in its obligation to sell (or to cause the
Company and its Subsidiaries to sell) the Portfolio, the
non-defaulting party will be entitled to the return of the
deposit or to seek specific performance. If the Portfolio
Buying Party defaults in its obligation, then either (A) the
Company shall retain the deposit as liquidated damages and
shall have no other remedy under law or equity (in which case
the defaulting party shall not share in the same and such
deposit may be distributed by the Manager to the Members
pursuant to Section 7.1 with the defaulting party's Percentage
Interest being deemed to be 0% for such purpose) or (B) at the
election of the non-defaulting party (the Portfolio
Non-Triggering Party, in the event the Portfolio Offer to Buy
is accepted, or the Portfolio Triggering Party, in the event
the Portfolio Offer to Sell is accepted), the non-defaulting
party shall have the right (but not the obligation) as its
sole remedy, exercisable at any time within 180 days after the
date on which the closing of the Portfolio Buy-Sell was
scheduled, to complete the purchase of the Portfolio for its
<PAGE>
account with a reduction in the Portfolio Offer Price by the
amount of such deposit, which deposit shall be applied to the
purchase price for the Portfolio with the same effect as the
deposit were funded by the non-defaulting party. In addition,
the defaulting party shall lose any further rights to trigger
the Portfolio Buy-Sell the Portfolio Non-Triggering Party will
have the right to exercise the Portfolio Buy-Sell at any time
thereafter.
(iv) The Manager shall have the right, power and
authority to sell the Portfolio to the party entitled to
purchase the Portfolio pursuant to Section 8.2(d)(ii) or
Section 8.2(d)(iii) (or its designee) and to execute, deliver
and perform, and cause the Company or its Subsidiaries to
execute, deliver and perform, any and all agreements,
instruments or other documents necessary or desirable to
effect such sale. For the period between (A) the date the
Portfolio Election Notice is delivered or an election is
deemed made and (B) the earlier of the date the party
obligated to purchase the Portfolio defaults in its obligation
or the closing date of the Portfolio Buy-Sell, the Manager
shall provide to WCPT at least ten Business Days' written
notice (but shall not be required to obtain WCPT's consent)
prior to executing any lease with respect to more than 10,000
square feet of rentable space at any Property.
(v) In connection with the foregoing purchase and
sale, (i) no representations will be made by the Company and
(ii) if the fee title interest of any Property in the
Portfolio is being transferred, the Company or its
Subsidiaries shall (A) deliver customary title affidavits and
provide sufficient evidence of authority and organization
necessary for the party entitled to purchase the Portfolio to
obtain requisite title insurance for such Property in the
Portfolio and (B) execute and deliver assignments of the
leases and contracts. Any Capital Contributions made by the
Members from and after the date the Portfolio Buy-Sell Notice
is delivered shall result in a dollar-for-dollar increase in
the Portfolio Offer Price and all reserves or other cash
deposits owned by the Company or its Subsidiary as well as
casualty proceeds or condemnation awards received by the
Company or any Subsidiary in respect of the Portfolio shall be
transferred or delivered to the party that acquires the
Portfolio. Without duplication of the adjustments pursuant to
the immediately preceding sentence, there shall be an
adjustment of the Portfolio Offer Price at closing (i) to
reflect a proration of any accrued income and expenses,
excluding non-cash items, from the date the Portfolio Buy-Sell
Notice was first delivered through the date of closing of the
sale of the Portfolio and (ii) to reduce the purchase price by
any liens to which the purchaser would take title subject and
that can be discharged by the payment of a liquidated sum of
money that are the responsibility of the Company or its
Subsidiaries to discharge (as opposed to any tenant or other
third party). Within 45 days after the closing, the party that
acquires the Portfolio shall direct the independent
<PAGE>
accountants for the Company to complete a review of such
proration and such independent accountants shall deliver their
report to such party and the Manager. If such report shall
adjust such proration, the party in whose favor such
adjustment is made shall promptly be paid by the other party
the amount of such adjustment. The following costs and
expenses relating to the Portfolio Buy-Sell will be allocated
as follows: (i) the Company will be responsible for its own
attorneys' fees and expenses and the party that acquires the
Portfolio will be responsible for its own attorneys' fees and
expenses; (ii) the Company and/or its Subsidiaries will be
responsible for the payment of any transfer taxes in
connection with the sale of the Portfolio and (iii) the
Company will bear any consent or similar fees or expenses. In
the event WCPT is the party that acquires the Portfolio, upon
the transfer of the Portfolio by the Company or its
Subsidiaries, subject to the terms set forth in Section
8.2(d)(vi), (A) WCPT shall have the right to terminate
Management Co. as the Manager and any asset management and
Additional Services agreements with Management Co., and (B)
Management Co. shall have the right to resign as the Manager
and to terminate any asset management and Additional Services
agreements with the Company.
(vi) On payment of the purchase price for the
Portfolio, the party obligated to purchase the Portfolio or
its designee shall, with respect to any Indebtedness of the
Company and its Subsidiaries for which any Member other than
such buying party (or any guarantor affiliated therewith or
which delivered the guaranty on behalf of such Person) is or
may be personally liable with respect to the Company, any of
its Subsidiaries or the Portfolio (x) obtain a release of the
Company, its Subsidiaries and the any Member other than such
buying party (and any guarantor affiliated therewith or which
delivered the guaranty on behalf of such Person) from all
liability, direct or contingent, from holders of such
Indebtedness other than with respect to claims arising prior
to the transfer of the Portfolio, from the fraud,
misappropriation or other willful misconduct of any Member
other than such buying party, (y) cause such Indebtedness to
be paid in full at the closing, or (z) deliver to the Members
other than such buying party, an agreement in form and
substance reasonably satisfactory to the Members other than
such buying party, which satisfaction may require a
creditworthy guarantor, to defend, indemnify and hold the
Members other than such buying party (and any guarantor
affiliated therewith or which delivered the guaranty on behalf
of such Person) harmless from any actions, including
attorneys' fees and costs of litigation, claims or loss
arising from such Indebtedness. In no event shall such
indemnity apply to liabilities resulting from the breach by
any Member of its obligations under this Agreement. This
subparagraph (v) shall not apply to any Indebtedness or claim
which is fully insured by public liability insurer(s)
reasonably acceptable to both the buying and
<PAGE>
selling parties. Notwithstanding anything to the contrary
herein, if WCPT is the party obligated to purchase the
Portfolio and the Manager has violated the express terms
hereof by causing the Company or its Subsidiaries to incur
Indebtedness in violation of the Financing Parameters without
obtaining WCPT's consent, then WCPT shall not be obligated to
comply with clauses (x), (y) and (z) with respect to such
Indebtedness.
(vii) During the period beginning on the date that
the party entitled to acquire the Portfolio pursuant to the
Portfolio Buy-Sell exercises its election to acquire the
Portfolio and ending on the earlier of (x) the date such party
defaults in its obligation to fund the deposit pursuant to
Section 8.2(d)(ii) or (y) the date designated as the scheduled
closing date of the Portfolio Buy-Sell, Manager shall not,
without the consent of such party, sell or enter into any
agreement to sell, any of the Properties. Notwithstanding the
foregoing, the Manager may complete the sale of any Properties
that the Company or its Subsidiaries were obligated to sell as
of the date the Global/Portfolio Buy-Sell Notice was
delivered. In the event that one or more of the Properties is
sold pursuant to the immediately preceding sentence, the
Portfolio Purchase Price shall be decreased by an amount equal
to the amount of the proceeds of the sale of such Property,
including any debt repaid in connection with such sale, and
the proceeds of such sale shall be distributed to the Members
(including the purchasing party) in accordance with the
provisions of Section 7.1.
(viii) Each of the Properties sold pursuant to the
Portfolio Buy-Sell shall be sold free and clear of all liens
and encumbrances; provided that in the event the party
entitled to acquire Portfolio elects to assume any
Indebtedness in connection with the Portfolio Buy-Sell, the
Portfolio Purchase Price shall be decreased, on a dollar for
dollar basis, by the principal amount of such Indebtedness so
assumed by such acquiror.
(ix) The Portfolio Buying Party may, at the time
closing of the sale of the Portfolio pursuant to this Section
8.2(d), designate a Controlled Affiliate of such Portfolio
Buying Party to acquire the Portfolio; in the event the
Portfolio Buying Party elects to do so, the Portfolio Buying
Party shall not be released of any obligations herewith.
(e) In connection with any of the buy-sells triggered pursuant
to this Section 8.2, neither party will make any representations to the
other, except only for those representations contained in the
assignment of interest in the form as set forth on Schedule 8.2(c)(iv).
In the event that at the time of the closing of either the Global
Buy-Sell or the Portfolio Buy-Sell, the Company owns any Development
Assets, then the Manager will, at the request of WCPT or a Controlled
Affiliate (if it is the purchaser), agree to act as asset manager for
such Properties for a fee of 1% per annum of the costs of such
Development Assets and
<PAGE>
to provide Additional Services in respect of such Developmental Assets
at 90% of the rates set forth on Schedule C for a period of up to one
year. Time shall be of the essence with respect to each deadline or
time period specified in this Section 8.2.
(f) In the event WCPT is the buying party in connection with a
Global Buy-Sell or a Global/Portfolio Buy-Sell, the Manager (i) shall
notify WCPT (for informational purposes only) of its intent to obtain
any financings for the Company or its Subsidiaries and of the proposed
or expected amount to be borrowed and the proposed or expected interest
rate and (ii) shall keep WCPT informed of any material developments (as
determined in the Manager's reasonable discretion) thereof."
SECTION 2.27. Section 8.2A of the Operating Agreement is
hereby amended by adding the following language as paragraph (d) thereof:
"(d) Any liability in respect of a Saracen Gain Recognition or
a Saracen Debt Reduction Event under this Section 8.2A in connection
with any Section 1031 Transaction effected by the Manager pursuant to
Sections 8.2(a)(ii) and (iii) shall be borne by the Company."
SECTION 2.28. Section 8.4 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"8.4. [Intentionally Omitted]."
SECTION 2.29. Section 9.1 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"9.1. Event of Cause. Upon the occurrence of Management Co.
Cause, WCPT shall have the right to exercise the Global Buy-Sell or the
Portfolio Buy-Sell without regard to when such right is first
exercisable by any Global Triggering Party under Section 8.2(c)(i) or
any Portfolio Triggering Party under Section 8.2(d)(i)."
SECTION 2.30. Section 9.2 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"9.2. Manager Fee. (a) The Company shall pay to the Manager,
monthly in arrears on the first day of each month, an asset management
fee equal to 1/12 multiplied by the product of (A) 0.93% and (B) the
Base Value as of the date which is six months before such date. This
fee will be in exchange for the services rendered by the Manager under
this Agreement, which services shall not include the Additional
Services. In the event the Company acquires one or more Credit Lease
Properties, Manager will, in its sole discretion, have the right to
<PAGE>
commence a bidding process in which each of Manager and WCPT will seek
a bid from one manager on a list of pre approved third party managers
who will be responsible for all asset management services, tax services
and accounting services (the scope of such services to be reasonably
approved by WCPT and Manager before the commencement of the bidding
process) with respect to such Credit Lease Properties. After the
receipt by the Company of complying bids in response to such
invitations to bid, Manager will, in its sole discretion, have the
option of managing such Credit Lease Properties for a fee equal to the
more competitive bid submitted in the bidding process or awarding the
management of such Credit Lease Properties to the more competitive
bidder. In the event Manager elects to award the management of such
Credit Lease Properties to the more competitive bidder, Manager shall
have no further reporting, tax, accounting, information or other
obligations to WRP or WCPT with respect to such Credit Lease Properties
(other than, for so long as the Company owns such Credit Lease
Properties, the consolidation of the financial results of such Credit
Lease Properties in the financial statements and tax returns of the
Company).
(b) The Company will pay Manager additional fees for the
Additional Services at 90% of rates set forth on Schedule C. As of
January 1, 2001, the Administration Fee payable to WRP will be
terminated.
(c) Except as provided in this Section 9.2 and elsewhere in
this Agreement, the Manager shall not be compensated for its services
as the Manager of the Company. Notwithstanding the foregoing, the
Manager shall be paid the fee set forth in clause (a) of this Section
9.2 on the first day of each month on a monthly basis in arrears and
shall be reimbursed, on a monthly basis, for all expenses that it
incurs relating to the operating expenses and other costs for the
Properties and/or in connection with any Capital Events."
SECTION 2.31. Section 11.3(b) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(b) For each Fiscal Year, the Manager shall send to each
Person who was a Member at any time during such Fiscal Year, within 60
days after the end of such Fiscal Year, an annual report of the Company
including an annual balance sheet, profit and loss statement, a
statement of cash flow and a statement of changes in Member's capital,
all as prepared in accordance with generally accepted accounting
principles consistently applied and audited by the Company's
independent public accountants, which shall be Ernst & Young, unless
another "Big Five" independent public accountants of recognized
standing is selected by the Management Committee, and a statement
showing allocations to the Members of taxable income, gains, losses,
deductions and credits, as prepared by such accountants. In addition,
the Manager shall send to each Member, such other information
concerning the Company and reasonably requested by such Member
<PAGE>
as is necessary for the preparation of such Member's federal, state and
local income or other tax returns."
SECTION 2.32. Section 11.3 of the Operating Agreement is hereby further
amended by adding the following clauses (d), (e), (f), (g), (h) and (i) thereto.
"(d) Commencing January 1, 2001, the Manager will be required
to deliver such reports and financial statements in the same form as
has been previously customarily provided by the Manager (the 'Reports')
on a monthly basis within 20 days after such calendar month. In the
event Manager fails to deliver the Reports on or before the 25th day
after a month-end or the 60th day after a year-end (each such date, a
'Reporting Deadline'), the Manager will be assessed the following
penalties: (1) $10,000 if Manager fails to deliver the Reports after
the Reporting Deadline for any month-end (other than a quarter-end
month and year-end), (2) $100,000 if the Manager fails to deliver any
Reports necessary for WRP to file its Form 10-Q or Form 10-K after the
Reporting Deadline for any quarter-end month or year-end and such
penalty will be increased to $250,000 (instead of $100,000) if the
Manager fails to deliver any Reports on or before the 5th day after
such applicable Reporting Deadline; provided that no penalty shall be
assessed in the event that, with respect to an annual report, the
Manager delivers such annual report within 60 days after the end of the
fiscal year to which such annual report relates and delivers the
monthly Reports for the first two months of the succeeding fiscal year
within 80 days of the beginning of such fiscal year (and in such event
all penalties for January and February shall be refunded). If the
Manager fails to meet two or more Reporting Deadlines, then WCPT may
assume responsibility for supervising the Company's financial reporting
(which will continue to be performed by Manager's accounting staff), in
which event WCPT will be paid an annual fee of $600,000 (payable in
monthly installments of $50,000 on the last day of each month) in
consideration of supervising such reporting to the Company's Members.
If WCPT takes over such responsibility, there will be no further
penalties assessed on Manager for late reports. If the Manager provides
a quarterly report and financial statements to WCPT within 25 days
after the end of the calendar quarter, then any penalties for late
monthly reports and financial statements for such quarter shall be
refunded, no penalty shall be assessed in respect of such quarterly
report and such monthly reports shall not be counted toward the number
of Reporting Deadlines that the Manager must fail to meet before the
penalties specified in the second sentence of this Section 11.3(d)
apply. WCPT and not the Manager will be responsible for the supervision
of the year-end audit, financial statement and tax reporting and any
other reporting requirements necessary for WRP to file its 10-K or any
other reporting requirement under the Exchange Act of 1934, as amended,
for the year ended December 31, 2000. Any penalties paid pursuant to
this Section 11.3(d) shall constitute liquidated damages with respect
to the failure or delay in delivering the Reports and WCPT shall have
no further rights or remedies with respect to such failure or delay.
<PAGE>
(e) At least four calendar days before any penalty would
otherwise be imposed on the Manager pursuant to the foregoing
provision, WCPT shall provide notice to the President and General
Counsel of the Manager identifying the Report that is overdue and that
a penalty will be assessed, and no penalties will be payable until not
earlier than the fourth day after such notice is provided.
(f) Upon reasonable request by WCPT, the Manager will promptly
make available to WCPT, consistent with past practice (and Ernst &
Young for its quarterly review of the financial statements of WRP)
financial and other data and personnel of Manager during reasonable
business hours, provided that such requests by WCPT will not impose any
additional significant cost on the Company and Manager. In addition,
WRP will be provided with financial information and analyses consistent
with past practice that are reasonably requested by WRP for its board
meetings.
(g) WCPT will be provided with a quarterly report showing
amounts of leasing, development and construction fees payable to
Manager or its Affiliates by the Company and the calculations thereof.
(h) In connection with the exercise of any buy/sell rights of
WCPT set forth in Section 8.2, WCPT will be given access to the
Properties to conduct a customary real estate due diligence
investigation (including access to leases, rent rolls, tenant books and
records, commission agreements, mortgage documents, title materials,
property managers, tenants, environmental engineering reports,
construction-related documents and correspondences with tenants) and
each of WCPT and WRP will, jointly and severally, indemnify and hold
harmless the Company, the Whitehall Group and the Manager for any loss
or harm caused by or arising from such investigation or inspection.
(i) WRP shall be solely responsible for determining whether it
is required to file, and to cause to be filed, any current reports on
Form 8-K as a result of the acquisition and/or disposition of assets by
WRP and its Affiliates and/or the Company and its Affiliates. In
addition to the notice required to be given pursuant to Section 8.2,
the Manager will provide WCPT with a copy of any executed contract for
the sale or purchase of a Property within five Business Days after such
contract is executed. The Manager will also notify WRP of any
acquisition or disposition of assets within five Business Days after
the consummation thereof. In addition, the Manager shall notify WCPT of
the Manager's intent to execute a definitive agreement with respect to
any acquisition of Credit Lease Properties in connection with a Section
1031 Transaction involving a Nomura Property pursuant to Section
8.2(a)(iii) no later than ten Business Days prior to the execution of
such definitive agreement and shall use its reasonable efforts to
include in such definitive agreement a covenant of the seller of such
Credit Lease Properties to cooperate with WRP in providing information
necessary for WRP to file a Form 8-K in connection with such
transaction in the
<PAGE>
event WRP determines that it is required to file a Form 8-K (it being
understood and agreed that in the event such seller does not agree with
the Manager to include such covenant in the definitive agreement, the
Manager shall permit WRP to discuss with the seller, during such
ten-Business Day period prior to the execution of such definitive
agreement, the terms, if any, upon which the seller would, at the sole
cost and expense of WRP, agree with WRP to provide such information to
WRP, provided that the Manager shall be entitled to participate in all
meetings or other telephonic conversations between the seller and WRP
and the Manager shall in no event have any obligation to agree to any
request made by the seller in connection with the agreement that will
have any adverse monetary effect on the Company unless the Company is
compensated by WRP for the amount of such adverse effect; provided
further that if WRP fails to reach agreement with the seller upon the
expiration of such ten-Business Day period, the Manager shall have the
right to proceed with the execution of such agreement).
(j) The Manager will provide WCPT notice within 15 days after
retaining any third-party broker to market a Property for sale, which
notice shall be for informational purposes only."
SECTION 2.33. Section 11.4 of the Operating Agreement is hereby amended
and restated to read in its entirety as follows:
"11.4. Reimbursable Expenses. Professional fees for normal and
customary accounting, audit, legal and tax preparation functions as
well as other normal operating expenses previously included in the
Company's general and administrative budget, and consistent with past
practices, shall be borne by the Manager and not be subject to
reimbursement, but property operating and capital expenses as well as
transactional expenses such as legal, accounting and tax costs incurred
in connection with a Sale, financing or refinancing of a Property or
any other event that results in Capital Proceeds shall be charged to or
reimbursed by the Company."
SECTION 2.34. Section 11.5 of the Operating Agreement is hereby amended
by deleting the last sentence thereof and replacing such deleted text with the
following sentence:
"The Manager from time to time shall authorize signatories for
such accounts and withdrawals or checks in excess of $100,000 shall
require the signature of an appointee of the Whitehall Group."
SECTION 2.35. Section 11.6 of the Operating Agreement is hereby amended
by adding the following language to the end thereof.
<PAGE>
"The Manager shall not be entitled to be reimbursed for the
cost of the fidelity bonds or worker's compensation insurance referred
to above."
SECTION 2.36. Section 13.2(a) of the Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"(a) To the Company, c/o WP Commercial, L.L.C., Chatham
Executive Center, 26 Main Street, Chatham, New Jersey 07928, or at such
other address as may be designated by the Manager upon written notice
to all Members; and"
ARTICLE III.
MISCELLANEOUS
SECTION 3.1. Headings and Captions. All headings and captions contained
in this First Amendment and the table of contents hereto are inserted for
convenience only and shall not be deemed a part of this First Amendment.
SECTION 3.2. Variance of Pronouns. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity of the person or entity may require.
SECTION 3.3. Counterparts. This First Amendment may be executed in two
or more counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute one agreement.
SECTION 3.4. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
SECTION 3.5. Invalidity. Every provision of this First Amendment is
intended to be severable. The invalidity and unenforceability of any particular
provision of this First Amendment in any jurisdiction shall not affect the other
provisions hereof, and this First Amendment shall be construed in all respects
as if such invalid or unenforceable provision were omitted.
SECTION 3.6. Exhibits and Schedules. All exhibits and schedules
attached to this First Amendment shall constitute exhibits and schedules to the
Operating Agreement, and shall be incorporated therein by reference.
SECTION 3.7. Ratification of Operating Agreement. Except as expressly
set forth herein, the parties hereby ratify the Operating Agreement (as amended
hereby) and agree that the Operating Agreement continues in full force and
effect, provided that
<PAGE>
no party shall be relieved of any liability accruing under the Operating
Agreement prior to giving effect to this First Amendment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General Partner
By: /s/ Ronald Bernstein
---------------------------------
Name: Ronald Bernstein
Title: Vice President
WXI/WWG REALTY, L.L.C.
By: /s/ Ronald Bernstein
---------------------------------------
Name: Ronald Bernstein
Title: Vice President
W/W GROUP HOLDINGS, L.L.C.
By: /s/ Ronald Bernstein
---------------------------------------
Name: Ronald Bernstein
Title: Vice President
<PAGE>
WELLSFORD COMMERCIAL PROPERTIES TRUST
By: /s/ Edward Lowenthal
---------------------------------------
Name: Edward Lowenthal
Title: President
WP COMMERCIAL, L.L.C.
By: /s/ Stuart Rothenberg
---------------------------------------
Name: Stuart Rothenberg
Title: Vice President
FOR PURPOSES OF SECTIONS 3.1, 3.9, 8.2(B)
AND 11.3 OF THE OPERATING AGREEMENT:
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Edward Lowenthal
---------------------------------------
Name: Edward Lowenthal
Title: President
