EFTA01084507.pdf

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF IGY-AYH ST. THOMAS HOLDINGS, LLC dated as of May? z% 2007 among IGY-AYH ST. THOMAS HOLDINGS, LLC, ISLAND GLOBAL YACHTING FACILITIES LTD. and JEFFREY EPSTEIN EFTA01084507  TABLE OF CONTENTS Page ARTICLE I DEFINED TERMS 2 SECTION 1.01. Certain Defined Terms 2 ARTICLE 11 . FORMATION, TERM, PURPOSE AND POWERS 7 SECTION 2.01. Members 7 SECTION 2.02. Duration 7 SECTION 2.03. Title to Company Property 8 SECTION 2.04. Purpose 8 SECTION 2.05. Maintenance of Separate Existence; No Personal Liability 8 SECTION 2.06. Admission of New Members; Repurchase and Redemption of Membership Units 8 SECTION 2.07. Waiver of Fiduciary Duties; IGYF Corporate Opportunities 8 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE MEMBERS 9 SECTION 3.01. Organization and Authority 9 SECTION 3.02. No Conflict 10 SECTION 3.03. Governmental Consents and Approvals 10 ARTICLE IV CAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS AND ADVANCES .. 10 SECTION 4.01. Membership Units 10 SECTION 4.02. Additional Membership Units 10 SECTION 4.03. Additional Capital; Additional Capital Contributions I0 SECTION 4.04. Status of Capital Contributions 11 SECTION 4.05. Capital Accounts 12 ARTICLE V MANAGEMENT OF THE COMPANY 13 SECTION 5.01. Management of the Company 13 SECTION 5.02. Officers 13 ARTICLE VI ALLOCATIONS; TAX MATTERS 13 SECTION 6.01. Allocations: Tax Matters 13 ARTICLE VII DISTRIBUTIONS 13 SECTION 7.01. Distributions 13 SECTION 7.02. Distribution Rules 14 EFTA01084508 ARTICLE VIII BOOKS AND RECORDS; FINANCIAL STATEMENTS 14 SECTION 8.01. Books and Records; Financial Statements 14 ARTICLE IX TRANSFER OF MEMBERSHIP INTEREST 14 SECTION 9.01. Transfers and Assignments 14 SECTION 9.02. Sale of the Company; Drag Along Rights 15 SECTION 9.03. Right of First Refusal 15 SECTION 9.04. Transfer in General 16 ARTICLE X DISSOLUTION AND LIQUIDATION 17 SECTION 10.01. Events Causing Dissolution 17 SECTION 10.02. Notice of Dissolution 17 SECTION 10.03. Liquidation 17 ARTICLE XI LIABILITY AND INDEMNIFICATION 18 SECTION 11.01. Indemnification of Covered Persons 18 SECTION 11.02. Indemnification by Members 18 SECTION 11.03. Indemnification by the Company 18 SECTION 11.04. Advancement of Expenses 20 ARTICLE XII OTHER AGREEMENTS 20 SECTION 12.01. IGYS Services and Fees 20 SECTION 12.02. Further Assurances 21 ARTICLE XIII MISCELLANEOUS 21 SECTION 13.01. Notices 21 SECTION 13.02. Cumulative Remedies 22 SECTION 13.03. Binding Effect 22 SECTION 13.04. Interpretation 22 SECTION 13.05. Severability 22 SECTION 13.06. Counterparts 23 SECTION 13.07. Entire Agreement 23 SECTION 13.08. Arbitration 23 SECTION 13.09. Specific Performance 24 SECTION 13.10. Expenses 24 SECTION 13.11. Amendments and Waivers; Assignment 24 SECTION 13.12. No Third Party Beneficiaries 25 SECTION 13.13. Headings and Construction 25 SECTION 13.14. Governing Law 25 SECTION 13.15. Waiver of Jury Trial 26 ii EFTA01084509 Schedule 2.01 Member Information Schedule 6.01 Allocations: Tax Matters Exhibit A The Site iii EFTA01084510  AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF IGY-AYH ST. THOMAS HOLDINGS, LLC AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of IGY-AYH ST. THOMAS HOLDINGS, LLC, a U.S. Virgin Islands limited liability company (the "Company"), is made and effective as ofMayi , 2007, by and among the Company, Island Global Yachting Facilities Ltd., a Cayman Islands company ("IOW"), Mr. Jeffrey Epstein ("Epstein") and any other Person (as defined in Article I below) who becomes a Member (as hereinafter defined) as provided herein. WITNES§,ETH: WHEREAS, the Company was formed as a company organized under the laws of the U.S. Virgin Islands on December 6, 2006; WHEREAS, IGYF adopted that certain Limited Liability Company Agreement of the Company, dated December 6, 2006 (the "Original Limited Liability Company Agreement"); WHEREAS, IGYF desires to amend and restate the Original Limited Liability Company Agreement in its entirety and Epstein desires to become a party hereto; WHEREAS, the Company, owns and operates the properties known as the American Yacht Harbor Marina, located in St. Thomas, U.S. Virgin Islands (the "Property"), consisting of approximately 2.12 acres in the fee estate, as more particularly described on Exhibit A hereto (the "5ite"), which includes, without limitation, a 128-slip fixed dock marina, the benefit of CZM Permits Nos. CZT-81-87L, CZT-53-85SL and CZT-4-99W, as modified and amended from time to time, and the improvements, furniture, equipment, machinery and other personal property used or held for use by the Company at the Property; WHEREAS, IGYF and Epstein have simultaneously herewith entered into that certain Membership Interest Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to which, among other things, Epstein purchased a 50% equity interest in the Company for $12,976,977.85; WHEREAS, on the date hereof, IGYF and Epstein are the holders of the respective Membership Units (as such term is defined below) set forth on Schedule 2.01 hereto; and WHEREAS, the Members desire to memorialize their respective rights and obligations with respect to the Company and the Property, their relationship as Members and certain other matters; NOW, THEREFORE, in consideration of the foregoing premises and the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be EFTA01084511 legally bound, hereby agree that the Original Limited Liability Company Agreement is amended and restated in its entirety as follows: ARTICLE I DEFINED TERMS SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the following terms shall have the following meanings: "Apr" means the Uniform Limited Liability Company Act of the U.S. Virgin Islands, as amended from time to time. "Additional Property" means any real property or tangible asset acquired by the Company following the date hereof. "Adjusted Capital Account" means, with respect to each Member (as hereinafter defined), the balance in such Member's Capital Account (as hereinafter defined) as of the end of the relevant Fiscal Year (as hereinafter defined), after giving effect to the following adjustments: (i) credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of each of Sections 1.704-2(g)(I) and 1.704-2(i)(5) of the Regulations (as hereinafter defined); and (ii) debit to such Capital Account the items described in Sections 1.704-1(b)(2Xii)(dX4), 1.704-1(b)(2)(ii)(dX5) and 1.704-1(b)(2Xii)(d)(6) of the Regulations. "Adjusted Capital Account Deficit" means, with respect to each Member, the deficit balance, if any, in such Member's Adjusted Capital Account as of the end of the relevant Fiscal Year. "Affiliate" means, with respect to a specified Person (as hereinafter defined), any other Person that directly, or indirectly through one or more intermediaries, Controls (as hereinafter defined), is Controlled by, or is under common Control with, such specified Person. "Agreement" means this Amended and Restated Limited Liability Company Agreement, as amended, modified, supplemented or restated from time to time. "Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) the initial Asset Value of any asset (other than money) contributed by a Member to the Company shall be the gross fair market value of such asset as reasonably determined by the Managing Member (as hereinafter defined); 2 EFTA01084512  (ii) the Asset Values of all Company assets may be adjusted in the discretion of the Managing Member (acting reasonably) to equal their respective gross fair market values, as reasonably determined by the Managing Member, at the times specified in Section I.704-1(b)(2)(ivXf) of the Regulations; and (iii) the Asset Value of any Company asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution, as reasonably determined by the Managing Member. If the Asset Value of an asset has been determined or adjusted pursuant to subparagraph (i) or (ii), such Asset Value shall thereafter be adjusted by the Depreciation (as hereinafter defined) taken into account with respect to such asset. "Bona Fide Offer" means a bona fide offer in writing, made and signed by a Third Party (as hereinafter defined) that is capable of carrying out the terms of such bona fide offer. "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law (as hereinafter defined) to be closed in The City of New York and/or St. Thomas, U.S. Virgin Islands. "Capital Account" means, with respect to any Member, the account maintained for such Member in accordance with the provisions of Section 4.06. "Capital Contribution" means, with respect to any Member, the aggregate amount of money contributed or deemed contributed to the Company and the Asset Value of any property (other than money) contributed to the Company. In the case of a Member that acquires an interest in the Company by virtue of an assignment or transfer in accordance with the terms of this Agreement, "Capital Contribution" means the Capital Contribution of such Member's predecessor to the extent relating to the acquired interest. "Closing" means the closing of the transactions contemplated by the Purchase Agreement. "Closing Date" means the date on which the Closing occurs. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Control" (including the term "Controlled by") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person. "Covered Person" means a Member, the Managing Member, any Affiliate of the foregoing, any officers, directors, shareholders, employees, partners or members of a 3 EFTA01084513 Member or the Managing Member or their respective Affiliates or any Officer of the Company. "Depreciation" means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for United States federal income tax purposes with respect to an asset for such Fiscal Year or other period; provided, however, that if the Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction with respect to such asset for such Fiscal Year or other period bears to such beginning adjusted tax basis; and provided, further that, if the federal income tax depreciation, amortization or other cost recovery deduction for such Fiscal Year or other period is zero, Depreciation shall be determined with reference to such beginning Asset Value using any reasonable method selected by the Managing Member. "Dispute" means any controversy, claim or dispute. "Equity Percentage" with respect to any Member, means the quotient obtained by dividing (i) the aggregate number of Membership Units (as hereinafter defined) held by such Member by (ii) the total aggregate number of Membership Units of the Company outstanding at the time of such calculation, expressed as a percentage. The initial Equity Percentage of each Member is set forth on Schedule 2.01. "Fiscal Year" means (i) the period commencing upon the organization of the Company and ending on December 31, 2007, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31, or (iii) any portion of the period described in clause (ii) of this sentence for which the Company is required to allocate Net Profits, Net Losses and other items of Company income, gain, loss or deduction pursuant to Article VII hereof. "GAAP" means generally accepted accounting principles as in effect in the United States from time to time, consistently applied. "JOYS" means Island Global Yachting Services Ltd., a Cayman Islands exempted company. "JOYS Fees" means, collectively, the fees and other compensation described in Section 12.01(a). "In" means any statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order issued or promulgated by any national, supranational, state, federal, provincial, island, local or municipal government or any administrative or regulatory body with authority therefrom with jurisdiction over the Company, as the case may be. "LIBOR" means with respect to each ninety (90) day period during any part of which any principal is outstanding under an applicable loan, the rate (expressed as a 4 EFTA01084514 percentage per annum and rounded upward, if necessary, to the next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period, that appears on Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London time, on the first Libor Business Day (as hereinafter defined) of such month. If such rate does not appear on Telerate Page 3750 as of 11:00 a.m., London time, on such determination date, the LIBOR Rate shall be the arithmetic mean of the offered rates (expressed as a percentage per annum) for deposits in U.S. dollars for a one month period that appear on the Reuters Screen Libor Page as of 11:00 a.m., London Time, on such determination date, if at least two such offered rates so appear. "LIBOR Business Day" shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in London, England are not open for business. "Member" means any Person named as a Member of the Company on Schedule 2.01 hereto and any Person admitted as an additional Member pursuant to the provisions of this Agreement, in each case, in such Person's capacity as a Member of the Company. "Membership Units" means the limited liability company equity interests of the Company issued in accordance with the terms of the Act. "Net Cash Flow" means the sum of all funds received by the Company from any source (excluding Capital Contributions or loans by the Members) less all cash expenditures by the Company (including, but not limited to, operating expenses, taxes, IGYS Fees and other fees owed to third party service providers and costs incurred upon the sale of any assets of the Company) and reserves or escrows as required by any lender to the Company or as the Managing Member may reasonably deem necessary for the Company's requirements. "Net Profits" and "Net Losses" mean, for each Fiscal Year, an amount equal to the Company's taxable income or loss for such Fiscal Year, determined in accordance with Section 703(a) of the Code (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code), with the following adjustments: (i) any income of the Company exempt from federal income tax and not otherwise taken into account in computing Net Profits or Net Losses pursuant to this definition shall be added to such taxable income or loss; (ii) any expenditures of the Company described in Section 705(a)(2)(B) of the Code (or treated as expenditures described in Section 705(a)(2)(B) of the Code pursuant to Regulation Section 1.704-1(b)(2)(ivXi)) and not otherwise taken into account in computing Net Profits or Net Losses pursuant to this definition shall be subtracted from such taxable income or loss; (iii) in the event the Asset Value of any asset of the Company is adjusted in accordance with paragraph (ii) or paragraph (iii) of the definition of "Asset Value" above, the amount of such adjustment shall be taken into account 5 EFTA01084515  as gain or loss from the disposition of such asset for purposes of computing Net Profits or Net Losses; (iv) gain or loss resulting from any disposition of any asset of the Company with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Asset Value; (v) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of"Depreciation" above; and (vi) any items which are specially allocated pursuant to Sections 1.02 or 1.03 of Schedule 6.01 hereto shall not be taken into account in computing Net Profits or Net Losses. The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Sections 1.02 or 1.03 of Schedule 6.01 hereto shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (v) above. "Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust, unincorporated or governmental organization or any agency or political subdivision thereof. "Regulations" means the income tax regulations, including temporary regulations, promulgated under the Cod; as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Sale" means, in respect of any Membership Units, property or other asset, any sale, assignment, transfer, distribution or other disposition thereof or of a participation therein, or other conveyance of legal or beneficial interest therein, or any short position in a security or any other action or position otherwise reducing risk related to ownership through hedging or other derivative instruments, whether voluntarily or by operation of Law or any agreement or commitment to do any of the foregoing. "Third Party" means an offeror or offerors who is (or who are) not an Affiliate (or a prospective Affiliate) of a Member. "Transferee" means any Person that is a transferee of a Member's interest in the Company, or part thereof. (b) The following terms have the meanings set forth in the Section set forth opposite such term: EFTA01084516  Term Section Additional Capital Section 4.03(a) Additional Capital Notice Section 4.03(b) Additional Capital Contribution Date Section 4.03(b) Auditors Section 8.01 Claim Amount Section 13.08(b) Company Preamble Company Business Section 2.04 Complainant Section 13.08(a) Corporate Opportunities Group Section 2.07(a) Dispute Section 13.08 Distribution Notice Section 7.01 Epstein Preamble First Offer Section 9.03(a) IGYF Preamble Indemnified Party Section 11.03 Liquidator Section 10.02 Losses Section 11.01 Managing Member Section 5.01 Member Acceptance Period Section 9.03(a) Member Additional Capital Contribution Entitlement Amount Section 4.03(b) Negotiation Period Section 13.08(a) Offeror Section 9.03(a) Offered Membership Units Section 9.03(a) Officers Section 5.02 Project Section 2.04 Property Recitals Purchase Agreement Recitals Regulatory Allocations Schedule 6.01 Required Capital Amount Section 4.03(b) Respondent Section 13.08(a) Respondent's Amount Section 13.08(6) Site Recitals Transfer Section 9.01 ARTICLE H. FORMATION, TERM, PU RPOSE AND POWERS SECTION 2.01. Members. Schedule 2.01 attached hereto sets forth, among other things, the name, mailing address and number of Membership Units issued to each initial Member on or before the date hereof. Additional Members shall be admitted as Members of the Company in accordance with Section 2.06. SECTION 2.02. Duration; Principal Place of Business. The Company shall have no fixed duration. The principal place of business of the Company shall be in St. Thomas, 7 EFTA01084517 U.S. Virgin Islands, or such other place as the Managing Member may determine from time to time, and the Company shall have other regional offices and operations as the Managing Member may determine from time to time. The Managing Member shall provide the Members with reasonable notice of any change to the location of the Company's principal place of business and/or the location of Company's regional offices or operations. SECTION 2.03. Title to Company Property. All property of the Company, whether real, personal or mixed, tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Member, individually, shall have any direct ownership interest in such property. SECTION 2.04. Purpose. The business of the Company (the "Company Business") shall be the following (whether directly or indirectly through a subsidiary): owning, investing in, holding, leasing, financing, developing, operating, managing and otherwise dealing with the Property and the areas adjacent thereto (including, without limitation, developing a shipyard catering to mega-yachts and other vessels at the Site and the areas adjacent thereto) and other lawful activities directly or indirectly incidental, or related, to the foregoing (collectively, the "Project"). SECTION 2.05. Maintenance of Separate Existence; No Personal Liability. (a) The Company and the Members shall do all things necessary to maintain its existence as a limited liability company separate and apart from each Member and any Affiliate of any Member, including maintaining its books and records on a current basis separate from that of any Affiliate of the Company or any other Person, and shall not commingle the Company's assets with those of any Affiliate of the Company or any other Person. (b) No Member, Managing Member or Officer shall be personally liable for any obligations of the Company, and no Member shall have any obligation or be required to make any Capital Contribution or loan or otherwise advance any funds to the Company, except, in each case, as provided in the Act. SECTION 2.06. Admission of New Members; Repurchase and Redemption of Membership Units. (a) A Person shall be admitted as a Member only in accordance with the terms and conditions hereof and the Act. Any such new Members shall obtain Membership Units, and shall participate in the profits, losses and distributions of the Company, on the same terms as all other Members. (b) A Transferee will be admitted as a substitute Member only if the Sale to the Transferee is made in compliance with all the requirements of this Agreement and the Act. No Member may require the redemption or repurchase of its Membership Units except as otherwise provided herein. SECTION 2.07. Waiver of Fiduciary Duties: IGYF Corporate Opportunities. To the fullest extent permitted by applicable law, this Agreement is not intended to, and does not, create or impose any fiduciary duty as a member of the Company on any of the Members hereto or their respective Affiliates. Further, to the fullest extent permitted by applicable Law or equity, the Members and the Company hereby waive any and all fiduciary 8 EFTA01084518 duties imposed on Members that, absent such waiver, may be implied by Law or in equity, and in doing so, recognize, acknowledge and agree that their duties and obligations to one another and to the Company are only as expressly set forth in this Agreement. Additionally, the Company and each Member acknowledges that certain Members and their Affiliates own and/or manage other businesses, including businesses that may compete with the Company. Except as otherwise provided in this Agreement, without any accountability to the Company or any Member by virtue of this Agreement: (a) no Member nor its Affiliates, nor their respective officers, directors, shareholders, members, managers, partners, agents and employees (collectively, the "Corporate Opportunities Group"), shall in any way be prohibited or restricted from engaging or investing in, independently or with others, any business opportunity of any type or description, including, without limitation, those business opportunities that might be the same or similar to the business engaged in by the Company; (b) neither the Company nor any Member shall have any right in or to such other business opportunities of any other Member or such Corporate Opportunities Group or to the income or proceeds derived therefrom; (c) neither any Member nor its Corporate Opportunities Group shall be obligated to present any business opportunity to the Company, even if the opportunity is of the character that, if presented to the Company or any other Member, could be taken by the Company or such other Member; and (d) each Member and its Corporate Opportunities Group shall have the right to hold any such business opportunity for its own account or to recommend such opportunity to Persons other than the Company and/or any other Members. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE MEMBERS Each Member severally, but not jointly, represents and warrants to the Company and each other Member as follows: SECTION 3.01. Organization and Authority. To the extent such Member is not a natural person, it is duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all necessary power and authority to enter into this Agreement, to carry out its obligations hereunder and to perform the actions contemplated hereby. Such Member is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not prevent or materially hinder the performance of the actions contemplated by this Agreement. The execution and delivery of this Agreement by such Member, the performance by it of its obligations hereunder and the performance by it of the actions contemplated hereby have been duly authorized by all requisite action on its part. This Agreement has been duly executed and delivered by such Member, and 9 EFTA01084519 (assuming due authorization, execution and delivery by the other Persons signatory hereto) this Agreement constitutes a legal, valid and binding obligation of such Member enforceable against it in accordance with its terms. SECTION 3.02. No Conflict. Assuming that all consents, approvals, authorizations and other actions described in Section 3.03 have been obtained, the execution, delivery and performance of this Agreement by such Member do not and will not (a) violate, conflict with or result in the breach of any provision of its charter or by-laws (or similar organizational documents), to the extent it has such, (b) conflict with or violate any Law, governmental regulation or governmental order applicable to such party or any of its assets, properties or businesses or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights pursuant to, any contract, agreement or arrangement by which such party is bound, except to the extent that any conflict under (b) or (c) above would not prevent or materially hinder the performance of the actions contemplated by this Agreement. SECTION 3.03. Governmental Consents and Approvals. The execution, delivery and performance of this Agreement by such party do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any governmental authority. ARTICLE IV CAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS AND ADVANCES SECTION 4.01. Membership Units. (a) Each Member's interest in the Company will be measured in terms of Membership Units. Fractional Membership Units may be issued. On or prior to the date hereof the Company has allotted and issued to (i) IGYF the number of Membership Units set forth opposite its name on Schedule 2.01 and (ii) Epstein the number of Membership Units set forth opposite his name on Schedule 2.01. (b) Each Member hereby agrees that its interest in the Company represented by the number of Membership Units held by such Member, at any given time, shall for all purposes be personal property. Unless determined otherwise by the Managing Member, the Membership Units shall not be represented by certificates, but the ownership thereof shall be reflected in the books and records of the Company. SECTION 4.02. Additional Membership Units. Additional Membership Units may be authorized by the Managing Member from time to time and may be issued or reserved for issuance on such terms, and subject to such conditions, as may be approved by the Managing Member in accordance with Section 4.03. The Managing Member (or a nominee of any of the foregoing) may amend Schedule 2.01 hereto to reflect any such issuance. SECTION 4.03. Additional Capital: Additional Capital Contributions. (a) The Managing Member shall have the right and authority to determine both: (i) the amount, if any, of additional capital that, from time to time, is required by the Company (the "Additional 10 EFTA01084520 Capital"); and (ii) whether and to what extent such Additional Capital will be obtained by: (x) the Company incurring secured or unsecured debt (which shall be deemed to include preferred equity investments), and in such instance, the identity of the lender and terms of such loan (which lender may be an Affiliate of any Member); (y) IGYF and/or Epstein or an Affiliate of either, making a Capital Contribution to the Company (in accordance with Section 4.03(6)); or (z) Capital Contributions from one or more third party investors in exchange for Membership Units. The Company shall allot and issue to any Person contributing Additional Capital one (1) Membership Units for each $1,000 of Additional Capital contributed, such that the contribution of Additional Capital shall dilute the Equity Percentages of a non-contributing Member. (b) Each Member shall have the right, but not the obligation, to contribute Additional Capital in exchange for Membership Units on the terms set forth herein. In the event that the Managing Member shall determine that the Company requires Additional Capital, it shall provide each Member with a written notice (the "Additional Capital Notice") specifying (i) the Company's requirement for such Additional Capital (such amount the "Required Capital Amount"), (ii) the contribution date with respect to such Additional Capital (which date shall not be sooner than thirty (30) days after the date of such Additional Capital Notice) (the "Additional Capital Contribution Date"), and (iii) such Member's pro rata portion of such Required Capital Amount, determined by multiplying such Member's Equity Percentage by such Required Capital Amount (such amount, a "Member Additional Capital Contribution Entitlement Amount"). (c) Within ten (10) Business Days following the date of any such Additional Capital Notice, each Member shall give the Managing Member written notice (an "Additional Capital Contribution Notice") of its desire to contribute Additional Capital on the Additional Capital Contribution Date, which notice shall specify the amount of such Additional Capital contribution (which may not exceed the Member Additional Capital Contribution Entitlement Amount specified in the relevant Additional Capital Notice). If a Member fails to respond to such Additional Capital Contribution Notice as set forth above within such ten (10) Business Day period, then such Member shall be deemed to have waived any right to contribute Additional Capital in connection with such Additional Capital Notice. (d) On the Additional Capital Contribution Date, each Member shall be entitled to make a contribution of Additional Capital, in cash, in an amount not to exceed the Required Capital Amount specified in the relevant the Additional Capital Notice, less the amount, if any, of the aggregate contributions of Additional Capital, in cash, made on such date by each other Member in accordance with the terms of the relevant Additional Capital Contribution Notice. (e) No Member shall be permitted to make any Capital Contributions except as expressly contemplated in this Agreement. SECTION 4.04. Status of Capital Contributions. (a) No Member shall receive any interest, salary or drawing with respect to its Capital Contributions or for services rendered on behalf of the Company or otherwise in its capacity as a Member, except as specifically provided in this Agreement (including, without limitation, in Section 12.01). Except as otherwise expressly provided herein, no Member will be permitted to borrow, make an early withdrawal of, or demand or receive a return of any Capital Contributions. Under circumstances 11 EFTA01084521 requiring a return of any Capital Contributions, except as otherwise expressly provided in this Agreement, no Member will have the right to receive property other than cash. For purposes of this Section 4.04, any loans made by any Member to the Company shall constitute Additional Capital. (b) No Member shall be required to lend any funds to the Company. No Member shall have any personal liability for the repayment of any Capital Contribution of any other Member or Transferee. Notwithstanding any other provision in this Agreement, neither the obligations of the Members pursuant to this Section 4.04 nor the obligations of IGYF pursuant to Section 4.03 shall be, or deemed to be, a guaranty, maintenance agreement or other similar agreement, or under any circumstances utilized to satisfy the general obligations and liabilities of the Company. SECTION 4.05. Capital Accounts. The Capital Account of each Member shall be maintained in accordance with the following provisions: (a) The Capital Account of each Member shall be increased by (i) the amount of any cash contributed by such Member to the capital of the Company, (ii) the Asset Value of any property contributed by such Member to the capital of the Company (net of liabilities that the Company is considered to assume, or take property subject to, (iii) such Member's share of Net Profits (as determined in accordance with Section 1.01 of Schedule 6.01 hereto) and (iv) any gross income and gain allocated to such Member pursuant to Section 1.02 of Schedule 6.01 hereto. (b) The Capital Account of each Member shall be decreased by (I) the amount of all cash distributions to such Member, (2) the Asset Value of any property distributed to such Member by the Company (net of liabilities that the Member is considered to assume, or take property subject to, (3) such Member's share of Net Losses (as determined in accordance with Section 1.01 of Schedule 6.01 hereto) and (4) any gross deduction and loss allocated to such Member pursuant to Section 1.02 of Schedule 6.01 hereto. (c) No Member shall be required to restore any negative balance in its Capital Account. (d) In the event that any Membership Units are transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Membership Units. (e) The Capital Account of each Member shall be adjusted to reflect any adjustment to the Asset Value of the Company's assets to the extent required pursuant to applicable Law. (1) Except as otherwise provided in this Agreement, whenever it is necessary to determine the Capital Account balance of any Member, the Capital Account balance of such Member shall be determined after giving effect to all allocations pursuant to Article VI and all contributions and distributions made prior to the time as of which such determination is to be made. 12 EFTA01084522  ARTICLE V MANAGEMENT OF THE COMPANY SECTION 5.01. Management of the Company. The business and affairs of the Company shall be managed by the managing Member (the "Managing Member"). IGYF shall, so long as it is a Member, have the exclusive power and authority to appoint, remove and replace the Managing Member; provided, however, Epstein shall have the right to consent to the appointment, removal or replacement of the Managing Member at any time that Epstein holds a majority of the Membership Units . IGYF hereby appoints IGYF as the Managing Member. The Managing Member shall exercise all such authority and powers of the Company and do all such lawful acts and things as are by Law or this Agreement directed or required to be exercised or done by the Company, including, without limitation, the right to make all decisions with respect to the Project, borrow money and allot and issue Membership Units to new Members. No Member, acting as such, shall have any right or authority to take any action on behalf of the Company or to bind or commit the Company with respect to Third Parties or otherwise. SECTION 5.02. Officers. The Managing Member may from time to time by resolution delegate authority to the officers ("Officers") or to others to act on behalf of the Company. The initial Officers appointed by the Managing Member are as follow: Charles H. F. Gamer President Marc W. Levy Executive Vice-President, Secretary Elie M. Finegold Executive Vice-President Seth A. Cohen • Vice-President Daniel C. Kaplan Chief Financial Officer James A. Aston Treasurer William H. Jarrard, Jr. Vice-President, Controller Yvonne Owens Assistant Secretary ARTICLE VI ALLOCATIONS; TAX MATTERS SECTION 6.01. Allocations: Tax Matters. The Members shall comply with the terms of Schedule 6.01 hereto (relating to the allocation of Net Profits or Net Losses and other tax matters). ARTICLE VII DISTRIBUTIONS SECTION 7.01. Distributions. (a) Subject to applicable Law, distributions of Net Cash Flow, in each case as determined in the discretion of the Managing Member, shall be made (to the extent such distributions may be made within the limitations set forth below) to all Members, pro rata, in accordance with their Equity Percentages. The Managing Member shall give written notice in accordance with Section 13.01 of such each proposed distribution (the "Distribution Notice") to the Members. 13 EFTA01084523  (b) Distributions made upon liquidation of the Company shall be made as provided in Section 10.03. SECTION 7.02. Distribution Rules. (a) All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment, distribution or allocation by the Company to the Members shall be treated as amounts distributed to the Members pursuant to this Article VII for all purposes of this Agreement. The Managing Member is authorized and directed to withhold from distribution, or with respect to allocations, to the Members and to pay over to any federal, state or local government any amounts required to be so withheld pursuant to the Code or any provision of any other federal, state or local law and shall allocate such amounts to those Members with respect to which such amounts were withheld. Promptly upon learning of any requirement under any provision of the Code or any other applicable law requiring the Company to withhold any sum from a distribution to a Member or to make any payment to any taxing authority in respect of such Member, the Company shall give written notice to such Member of such requirement and, if practicable and if requested by such Member, shall cooperate with such Member in all lawful respects to minimize or to eliminate any such withholding or payment. (b) To the maximum extent permitted by applicable Law, each Member hereby waives all remedies available to them as a creditor of the Company with regard to distributions that such Member becomes entitled to receive. (c) Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its Membership Units if such distribution would violate the Act or other applicable Law. ARTICLE VIII BOOKS AND RECORDS; FINANCIAL STATEMENTS SECTION 8.01. Books and Records: Financial Statements. At all times during the continuance of the Company's existence, the Company shall prepare and maintain books of account for the Company that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company's business. Such books of account shall, in the discretion of the Managing Member, be prepared in accordance with GAAP. The books of account and the records of the Company shall be examined by and reported upon as of the end of each Fiscal Year by a firm of independent cert