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Exhibit 99.11
AMENDED AND RESTATED
OPERATING AGREEMENT OF
CARR CAPITAL 1575 EYE, LLC
This Amended and Restated
Operating Agreement (the " Agreement ") of CARR CAPITAL
1575 EYE, LLC (the " Company "), made and entered into
as of February 28, 2002, is between CARR CAPITAL REAL
ESTATE INVESTMENTS, LLC , a Virginia limited liability company
(" CC "), THE OLIVER CARR COMPANY , a District of
Columbia corporation (" OCCO "), CARR HOLDINGS, LLC ,
a Maryland limited liability company (" HOLDINGS "),
AETNA LIFE INSURANCE COMPANY , a Connecticut corporation ("
AETNA "), LESLIE SHROYER , an individual residing at
the address shown on Exhibit A ( "SHROYER" ),
and all of the other undersigned Persons (CC, OCCO, HOLDINGS,
AETNA, SHROYER and all of the other undersigned Persons being
collectively hereinafter referred to as the " Members
").
RECITALS
A. The Company was organized
on February 5, 2002 pursuant to the Articles of Organization
(as defined below).
B. All of the Members, with
the exception of AETNA and SHROYER, entered into that certain
Operating Agreement of Carr Capital 1575 Eye, LLC dated
February 28, 2002 (the " Initial Operating Agreement
").
C. Immediately prior to the
execution of this Agreement, OCCO and HOLDINGS transferred portions
of their interests in the Company to AETNA, as and for the
Anticipated Transfer contemplated by Section 8.1(c) of the
Initial Operating Agreement.
D. The Members hereby consent
to the admission of AETNA and SHROYER to the Company as Members
pursuant to the terms of this Agreement.
E. The Members desire to
continue the Company and to hereby amend and restate the Initial
Operating Agreement in its entirety.
AGREEMENT
Based on the foregoing, and other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS; THE COMPANY
1.1.
Definitions . Capitalized words and phrases used in this
Agreement shall have the meanings set forth in
Section 10.14 .
1.2.
Formation . CC formed the Company as a District of Columbia
limited liability company pursuant to the provisions of the Act (as
hereinafter defined) and upon the terms and conditions set forth in
this Agreement and the Articles of Organization. This Agreement
shall serve as the Company’s "operating
agreement" pursuant to the provisions of the Act and this
Agreement shall fully replace the Initial Operating Agreement
effective as of the date of this Agreement.
1.3.
Name . The name of the Company is Carr Capital 1575 Eye,
LLC.
1.4.
Purpose . The purpose of the Company is to acquire, own,
hold, manage, operate, sell and otherwise deal with a general
partnership interest in and to act as the managing general partner
of 1575 Eye Street Associates, a District of Columbia limited
partnership (the " Limited Partnership "), whose purpose is
to own, hold, finance, refinance, operate, lease, sell and
otherwise deal with the property known as the ASAE Building,
located at 1575 Eye Street, N.W., Washington, D.C. (the "
Property "), (collectively, the " Permitted
Activities ") pursuant to the terms of the Second Amended and
Restated Agreement of Limited Partnership of 1575 Eye Street
Associates as it may be amended (the " Limited Partnership
Agreement "). A copy of the Limited Partnership Agreement is
attached hereto as Exhibit B . The Company shall
not engage in any activity or business other than the Permitted
Activities absent the unanimous approval of the Members, and no
Member shall have any authority to hold itself out as a general
agent of the Company or of any other Member in any other business
or activity.
1.5.
Intent . It is the intent of the Members that the Company
shall always be operated in a manner consistent with its treatment
as a "partnership" for federal and state income tax purposes. The
Company is not a "partnership" for purposes of the District of
Columbia Revised Uniform Partnership Act or a "limited partnership"
for purposes of the District of Columbia Revised Uniform Limited
Partnership Act, and the Members are not partners. It also is the
intent of the Members that the Company not be operated or treated
as a "partnership" for purposes of Section 303 of the federal
Bankruptcy Code. No Member shall take any action inconsistent with
the express intent of the parties hereto.
1.6.
Office . The registered office of the Company within the
District of Columbia shall be located at c/o CT Corporation System,
1025 Vermont Avenue, N.W., Washington, D.C. 20005. The registered
office may be changed by Manager upon prior written notice to all
Members.
1.7.
Registered Agent for Service of Process . The name and
address of the registered agent for service of legal process on the
Company in the District of Columbia is CT Corporation System at the
address provided in Section 1.6 above. The registered
agent may be changed by Manager upon prior written notice to all
Members.
1.8.
Term . The existence of the Company commenced on
February 5, 2002, and the Company shall continue until it is
dissolved in accordance with this Agreement.
1.9.
Fiscal Year . The fiscal year of the Company shall be the
calendar year unless otherwise determined by Manager upon written
notice to all Members.
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1.10.
Articles of Organization . The Articles of Organization of
the Company (the " Articles of Organization ") were filed
with the D.C. Department of Consumer and Regulatory Affairs,
Business Regulation Administration (" DCRA ") on
February 5, 2002. Manager shall file any amendments to the
Articles of Organization from time to time deemed necessary by
Manager to reflect any amendments to this Agreement adopted in
accordance with the terms hereof.
1.11.
Independent Activities .
(a) Each
Member hereby expressly acknowledges that CC, and the other Members
(either directly or through its Affiliates) are involved in
transactions, investments and business ventures and undertakings of
every nature, some of which involve the real estate industry (all
such investments and activities being referred to as "Independent
Activities").
(b) Nothing
in this Agreement shall be construed to: (i) prohibit CC or
any other Member or their respective Affiliates from continuing,
acquiring, owning or otherwise participating in any Independent
Activity that is not owned or operated by the Company, even if such
Independent Activity is or may be in competition with the Company;
or (ii) require CC or any other Member to allow the Company or
the other Member to participate in the ownership or profits of any
such Independent Activity.
SECTION 2. MEMBERS; CAPITAL CONTRIBUTIONS; LOANS
2.1.
Members and Initial Capital Contributions . The names,
addresses, initial Capital Contributions and Percentage Interests
of the Members are set forth on Exhibit A
attached hereto.
2.2.
Additional Funding Requests .
If
Manager determines, in its reasonable discretion, that additional
funds are required for the operation of the Limited Partnership or
the Property, then Manager shall, if and only to the extent
permitted under the Loan (as hereinafter defined), first attempt to
borrow such funds from third party lenders at market rates. If it
is not possible to borrow funds from third party lenders, Manager
shall give written notice (the " Funding Notice ") thereof
to all of the Members setting forth (i) the amount of
additional funds so required, (ii) the proposed application of
such funds, and (iii) when any such additional funds are to be
funded (which funding date shall not be less than thirty
(30) days following the delivery of the notice pursuant to
this Section; provided that such funding date shall be determined
at Manager’s discretion in the event of an emergency). Upon
receipt of a Funding Notice, any Member shall have the right, but
not the obligation, to make a Member Loan to the Company in an
amount equal to the product obtained by multiplying its Percentage
Interests by the additional funds required. Any Member Loan made
pursuant to this Section shall bear interest at the rate of the
Prime Rate plus two percent (2%) per annum, and shall be repaid as
hereinafter provided. If any Member (the " Non-Participating
Member ") chooses not to make a Member Loan to the Company
within the time period set forth in the applicable Funding Notice,
then the other Members, or any of them (the " Advancing
Member(s) ") may make such
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additional Member Loans (" Additional Member Loans ") to
the Company which in the aggregate are equal to the amount of the
Member Loan which the Non-Participating Member elected not to make,
in such proportion (in the event there is more than one
(1) Advancing Member) between them as their Percentage
Interests bear inter se , and any such Additional
Member Loans shall bear interest at the rate of the Prime Rate plus
four percent (4%) per annum, and shall be repaid as hereinafter
provided.
2.3.
Payment of Member Loans and Additional Member Loans . Any
Member Loan or Additional Member Loan made to the Company pursuant
to Section 2.2 shall be evidenced by a promissory note duly
issued by the Company. Member Loans shall be payable from the first
available Net Cash Flow. Additional Member Loans shall be payable
to the Advancing Member solely from the Non-Participating
Member’s allocable share of the first available Net Cash Flow
after payments with respect to any Member Loans pursuant to the
immediately preceding sentence. In the event that distributions of
Net Cash Flow have been insufficient to fully repay any Member
Loans or Additional Member Loans, then any remaining balance due
(including accrued interest) shall be repaid from distributions of
Company assets pursuant to Section 9.2 below.
2.4.
Limitations Pertaining to Capital Contributions .
(a)
Return of Capital . Except as otherwise provided in this
Agreement, no Capital Contributions or any money or other property
shall be withdrawn from or paid by the Company unless such
withdrawal or payment is approved by Majority Vote. Under
circumstances requiring a return of any Capital Contributions, no
Member shall have the right to receive property other than
cash.
(b)
Liability of Members . No Member shall be liable for the
debts, liabilities, contracts or any other obligations of the
Company. No Member shall have any personal liability for the
repayment of the Capital Contributions, Additional Member Loans or
Member Loans of any other Member.
(c)
No Interest . No Member shall receive any interest with
respect to such Member’s Capital Contributions or Capital
Account.
(d)
No Third Party Rights . Nothing in this Agreement is
intended or will be deemed to benefit any creditor of the Company,
and no creditor of the Company will be entitled to require any
Member to solicit or demand Capital Contributions from any other
Member.
(e)
Withdrawal . Except as provided in Section 9
hereof, no Member may voluntarily or involuntarily withdraw from
the Company or terminate its interest therein except upon the prior
written consent of CC, and in the case of a withdrawal or
termination by CC, upon a Majority Vote. Any Member that withdraws
from the Company in breach of this Section 2.4(e) :
(i) shall
have no right to participate in the business and affairs of the
Company or to exercise any rights of a Member under this Agreement
or the Act; and
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(ii) shall
continue to share in Company distributions on the same basis as if
it had not withdrawn, provided that any damages to the Company as a
result of such withdrawal shall be offset against amounts that
would otherwise be distributed to such Member.
SECTION 3. DISTRIBUTIONS
Except as provided in
Section 9 or as otherwise required by
Section 2.3 , Net Cash Flow shall be distributed upon
receipt of same by the Company to the Members pro rata based upon
their respective Percentage Interests (provided that any Additional
Member Loan(s) and accrued interest thereon shall be payable to
Advancing Member(s) from the Non-Participating Member(s)’
allocable share of Net Cash Flow).
SECTION 4. TAX ALLOCATIONS
4.1.
General Allocation Rules.
(a)
General Allocation Rule . For each taxable year of the
Company, after the application of Section 4.1(d) and
Section 4.2 , Profits and/or Losses shall be allocated
to the Members in a manner that causes each Member’s Adjusted
Capital Account Balance to equal the amount that would be
distributed to such Member pursuant to Section 3 and
Section 9.2(c)(iii) .
(b) (Intentionally
Omitted).
(c)
Special Loss Allocation . If the Company incurs Losses at
any time when the Members’ Adjusted Capital Account Balances
have been reduced to or below zero, such Losses shall be allocated
to the Members in proportion to their Percentage Interests.
(d)
Special Profits Allocation . If the Company incurs Profits
at any time when the Members’ Adjusted Capital Account
Balances are less than zero, Profits shall be allocated to the
Members in proportion to their negative Adjusted Capital Account
Balances, until such negative balances have been eliminated.
(e)
Item Allocations . If Manager determines that
allocations of Profits and/or Losses over the term of the Company
are not likely to produce the Adjusted Capital Account Balances
intended under this Section 4.1 , then special
allocations of income, gain, loss and/or deduction shall be made as
deemed appropriate by Manager to achieve the intended Adjusted
Capital Account Balances.
4.2.
Regulatory and Curative Allocations . The allocations set
forth in Section 4.1 are intended to comply with the
requirements of Regulations Sections 1.704-1(b) and 1.704-2.
If the Company incurs "nonrecourse deductions" or "partner
nonrecourse deductions," or if there is any change in the
Company’s "minimum gain" or "partner nonrecourse debt minimum
gain," as defined in such Regulations, or if Manager determines
that the foregoing allocations fail for any reason to comply with
the Regulations, the allocation of Profits, Losses and items
thereof to the Members
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shall be modified in a reasonable manner deemed necessary or
advisable by Manager to comply with the Regulations. In determining
allocations to be made pursuant to this Section 4 ,
Manager may take into account any requirements of Code Sections
704(c) and 706 (and any Regulations which require allocations to be
made in a manner consistent with such Code Sections) and shall make
such modifications to the allocations under this
Section 4 as are deemed appropriate by Manager to
comply with the requirements of such Code and Regulation
Sections.
4.3.
Capital Accounts . A Capital Account shall be maintained for
each Member in accordance with the Regulations under uniform
policies reasonably established by Manager, upon the advice of the
Company’s accountants.
4.4.
Code Section 754 Election . In the event of a Transfer
(as hereinafter defined) pursuant to the terms of
Section 8 by CC or any Member that owns at least five
percent (5%) of the Percentage Interests, such Member or its
transferee shall have the right to require the Company to make a
Code Section 754 election with respect to both the Company
and, if necessary, the Limited Partnership, for the benefit of such
transferee, so long as such election does not create any negative
tax implications for the Limited Partnership, the Company, and/or
the respective then-existing partners and Members therein. The
transferring Member or its transferee, as applicable, shall be
responsible for all costs associated with making the Code
Section 754 election.
SECTION 5. MANAGEMENT
5.1
Day-to Day Operations; Manager . The business, operations
and affairs of the Company shall be managed by Manager, and Manager
shall have the general responsibility and authority for managing
and carrying out the day-to-day business of the Company. CC is
hereby designated as the Company’s initial Manager. Because
CC is also a Member of the Company, CC shall be referred to as the
Company’s Managing Member and shall have all of the power and
authority of the Manager described herein. Except as otherwise
provided by Section 5.2 below, Manager shall have the
right to make all decisions on behalf of the Company.
5.2
Major Decisions .
(a) Notwithstanding
Section 5.1 above, the following actions shall not be
taken without a Majority Vote:
(i) the
sale, assignment, pledge, hypothecation, encumbrance or transfer of
all or any portion of the Company’s general partnership
interest in the Limited Partnership (except to the extent such sale
is pursuant to the exercise by another party of a purchase right
provided for under the Limited Partnership Agreement);
(ii) the
purchase of any additional partnership interest in the Limited
Partnership, except for the redemption of SRIR’s interest
pursuant to the First Amendment (as such terms are hereinafter
defined);
(iii) the
sale of the Property or any interest therein;
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(iv) the
financing or refinancing of the Property; and
(v) determination
or change of the Limited Partnership’s legal counsel or tax
accountant.
(b) Notwithstanding
Section 5.1 above, the following actions shall not be taken
without the prior written consent of AETNA or the successor of
AETNA’s entire Percentage Interest:
(i) initiate
or defend litigation, arbitration, mediation or other legal
proceedings by or against the Company, the Limited Partnership or
the Property, except for eviction actions, rent collection actions
or other lease enforcement actions against tenants or occupants of
the Property in the normal course, real estate tax assessment
appeals, or other actions or proceedings consistent with the normal
operation of the Property where the amount in dispute is less than
$100,000;
(ii) entering
into any lease of the Property with a single tenant for one
(1) full floor or more or which provides for exterior or lobby
signage (other than usual and customary directory board signage for
office tenants and exterior signage for retail tenants) or which is
for the parking garage (as well as any parking management agreement
in lieu thereof);
(iii) granting
or consenting to the acquisition of any liens, security interests,
mortgages or other encumbrances on or against the Property;
(iv) modifying
the Agreement to Redeem and Retire Partnership Interest with SRIR
(beyond such modifications of same contained within the First
Amendment) or modifying the Put;
(v) any
of the actions described at §§6.1(b)(1) and (2) of
the Limited Partnership Agreement;
(vi) converting
the Limited Partnership to a limited liability company;
(vii) materially
amending the Limited Partnership Agreement;
(viii) granting
any consent required under the Limited Partnership Agreement for
the admission of new partners or for the assignment or transfer of
a partnership interest (except to the extent such transfer is
pursuant to the exercise by another party of a purchase right
provided for under the Limited Partnership Agreement);
(ix) filing
or acquiescing in the filing against the Limited Partnership or the
Company of a bankruptcy petition;
(x) voting
for a dissolution of the Limited Partnership;
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(xi) entering
into any agreement that would impose any personal obligation or
liability upon any Member without such Member’s consent;
and
(xii) making
any special allocations pursuant to Section 4.1(d) ,
modifying allocations pursuant to Section 4.2 , and/or
any tax elections pursuant to Section 6.3 (as well as
any tax elections on behalf of the Limited Partnership).
Additionally, upon AETNA’s written request provided by
January 15, copies of the Company’s and Limited
Partnership’s annual federal tax returns with respect to the
immediately prior year shall be submitted to AETNA for its review
prior to the filing of same.
If AETNA shall fail to either approve or disapprove of an action
set forth in (a) subparagraphs (i) and (iii) —
(xi) above within ten (10) business days, or
(b) subparagraph (ii) above within seven
(7) business days, following receipt by AETNA of written
notice of such proposed action, together with a description of the
details relating thereto (including a term sheet with respect to
any proposed lease pursuant to subparagraph (ii) above), shall
be deemed to have approved such action. In connection with any
proposed lease pursuant to subparagraph (ii) above, AETNA
hereby agrees and acknowledges that the Manager shall only be
required to submit a term sheet (and not a signed lease) to AETNA
with respect to any such proposed lease, and if AETNA approves such
term sheet the Manager shall have the right to enter into a lease
with any such proposed tenant, provided that the business terms of
any such lease are on substantially the same business terms as set
forth in the term sheet provided to AETNA.
5.3
Transactions Authorization . All Members hereby approve of
the following transactions:
(i) the
acquisition by the Company of the general partnership interests in
the Limited Partnership (the " Acquisition ");
(ii) the
entry by the Company into the Limited Partnership pursuant to the
Limited Partnership Agreement, and the rights and responsibilities
therein provided (the " Partnership ");
(iii) the
acceptance by the Limited Partnership of the $44,500,000 mortgage
loan from the Metropolitan Life Insurance Company, pursuant to the
terms of the Mortgage Loan Application executed by Carr Capital
Corporation on February 8, 2002 (the " Loan ");
(iv) the
entry by the Company and the Limited Partnership into the First
Amendment to Agreement to Redeem
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