CONFIDENTIAL — FOR DISCUSSION PURPOSES ONLY
LIMITED LIABILITY COMPANY AGREEMENT
OF
BFO 450 WEST 34TH LLC
(A Delaware Limited Liability Company)
DRAFT — For Discussion Purposes Only
Dated as of [●], 2026
Prepared by:
Calderwood & Harkness LLP One Liberty Plaza, 38th Floor New York, New York 10006
Matter Number: 1026-00003 Drafting Attorneys: Cynthia Ho / Grace Nakamura
TABLE OF CONTENTS
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LIMITED LIABILITY COMPANY AGREEMENT
OF
BFO 450 WEST 34TH LLC
(A Delaware Limited Liability Company)
This Limited Liability Company Agreement (this "Agreement") of BFO 450 West 34th LLC, a Delaware limited liability company (the "Company"), is entered into as of [●], 2026, by Briarwood Family Office LLC, a Delaware limited liability company ("Briarwood" or the "Member"), as the sole member of the Company.
RECITALS
WHEREAS, the Company was formed as a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq. (the "Act"), by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware on [●], 2026 (the "Certificate of Formation");
WHEREAS, the Company is formed for the sole purpose of acquiring, owning, holding, operating, managing, leasing, financing, refinancing, and ultimately disposing of the real property known as 450 West 34th Street, New York, New York 10001, designated as Block 754, Lot 42, Borough of Manhattan, City and State of New York (the "Property"), and activities incidental thereto;
WHEREAS, the Member desires to enter into this Agreement to set forth the rights, powers, duties, and obligations of the Member and to govern the affairs of the Company in accordance with the Act and applicable law;
WHEREAS, the Company is intended to be a single-purpose entity in accordance with the requirements of Pinnacle Federal Savings Bank (the "Lender") in connection with the senior acquisition financing to be provided by the Lender in an amount of up to Seventy-Eight Million Dollars ($78,000,000) (the "Loan"); and
WHEREAS, the Property is being acquired from Meridian Gateway Holdings LLC, a New York limited liability company (the "Seller"), for a purchase price of One Hundred Twenty Million Dollars ($120,000,000) pursuant to a Purchase and Sale Agreement to be entered into by and between the Company and the Seller (the "PSA").
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Member hereby agrees as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings ascribed to them below. Capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Agreement.
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time.
"Agreement" means this Limited Liability Company Agreement of BFO 450 West 34th LLC, as the same may be amended, modified, supplemented, or restated from time to time in accordance with the terms hereof.
"Authorized Representative" means Theodore R. Ashworth, Founder & Managing Principal of the Member, or Margaux Ashworth-Levine, Principal & Head of Real Estate Investments of the Member, or such other person as the Member may designate in writing from time to time by written notice delivered in accordance with Section 15.6 of this Agreement.
"Bankruptcy" means, with respect to any Person, the occurrence of any of the following events: (a) such Person files a voluntary petition in bankruptcy or is adjudicated bankrupt or insolvent, or files any petition or answer seeking, consenting to, or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the present or any future federal bankruptcy code or any other present or future applicable federal, state, or other law relating to bankruptcy, insolvency, or similar matters; (b) such Person makes a general assignment for the benefit of its creditors; (c) such Person seeks or consents to or acquiesces in the appointment of any trustee, receiver, custodian, conservator, liquidator, or similar official for such Person or for all or any substantial part of its property; (d) any proceeding seeking any of the relief described in the foregoing clauses is commenced against such Person and such Person fails to contest such proceeding in a timely manner, or such proceeding is not dismissed within ninety (90) days after commencement; or (e) a court of competent jurisdiction enters an order, judgment, or decree approving any such petition, or appointing any such trustee, receiver, custodian, conservator, liquidator, or similar official, or approving the dissolution, winding-up, or liquidation of such Person, and such order, judgment, or decree remains unstayed and in effect for ninety (90) days.
"Capital Account" means the capital account maintained for the Member in accordance with Section 4.5 of this Agreement.
"Capital Contribution" means the total amount of cash and/or property contributed by the Member to the Company, as reflected in Schedule A attached hereto, as the same may be updated from time to time.
"Certificate of Formation" means the Certificate of Formation of the Company as filed with the Secretary of State of the State of Delaware on [●], 2026, as the same may be amended or restated from time to time.
"Company" means BFO 450 West 34th LLC, a Delaware limited liability company.
"EIN" means the Employer Identification Number to be obtained for the Company from the Internal Revenue Service upon formation, as more particularly described in Section 2.6 hereof.
"Independent Director" has the meaning ascribed thereto in Section 9.2 of this Agreement.
"Lender" means Pinnacle Federal Savings Bank, a federal savings bank, with its principal offices located at 245 Park Avenue, 12th Floor, New York, New York 10167, or its successors and assigns.
"Loan" means the senior acquisition financing in an amount of up to Seventy-Eight Million Dollars ($78,000,000) to be provided by the Lender to the Company in connection with the acquisition of the Property, as more particularly described in Section 12.2 of this Agreement.
"Loan Documents" means, collectively, the mortgage, note, loan agreement, assignment of leases and rents, environmental indemnity agreement, guaranty (if applicable), and all other documents, instruments, agreements, and certificates executed and delivered by the Company and/or the Member (or its principals) in connection with the Loan, as the same may be amended, modified, supplemented, or restated from time to time.
"Member" means Briarwood Family Office LLC, a Delaware limited liability company, with its principal office at 680 Park Avenue, 9th Floor, New York, New York 10065 (EIN: 83-2947156), or any permitted successor or assign.
"Percentage Interest" means the percentage interest of the Member in the Company, which shall be one hundred percent (100%), as further described in Section 4.1 of this Agreement.
"Permitted Activities" means those activities permitted to be conducted by the Company in accordance with Section 3.1 and the SPE Covenants set forth in Article VIII of this Agreement.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated association, governmental authority, or any other entity.
"Property" means the real property located at 450 West 34th Street, New York, New York 10001, designated as Block 754, Lot 42, Borough of Manhattan, City, County, and State of New York, including all improvements, buildings, structures, fixtures, equipment, systems, and appurtenances now or hereafter located on or forming a part of such real property, together with all easements, rights-of-way, privileges, and other rights appurtenant thereto.
"PSA" means the Purchase and Sale Agreement to be entered into by and between the Company (as purchaser) and Meridian Gateway Holdings LLC (as seller) for the acquisition of the Property for an aggregate purchase price of One Hundred Twenty Million Dollars ($120,000,000), together with all amendments, modifications, supplements, and side letters thereto.
"SPE Covenants" means the single-purpose entity covenants set forth in Article VIII of this Agreement.
"Springing Member" has the meaning ascribed thereto in Section 9.1 of this Agreement.
"Transfer Taxes" means, collectively, the New York City Real Property Transfer Tax imposed pursuant to Chapter 21 of Title 11 of the Administrative Code of the City of New York, the New York State Real Estate Transfer Tax imposed pursuant to Article 31 of the New York Tax Law, and any other applicable real property transfer taxes, conveyance taxes, or documentary stamp taxes imposed in connection with the transfer of the Property.
Section 1.2 — Rules of Construction
Unless the context otherwise requires, the following rules of construction shall apply to this Agreement:
(a) All headings and captions contained in this Agreement are inserted for convenience of reference only and shall not be deemed a part of this Agreement or considered in construing any provision hereof.
(b) All references in this Agreement to "Articles," "Sections," "Schedules," and "Exhibits" are to articles, sections, schedules, and exhibits of or to this Agreement, unless the context otherwise requires.
(c) Words in the singular shall include the plural, and words in the plural shall include the singular, as the context requires. Words importing a specific gender shall include every other gender.
(d) The word "including" and words of similar import shall mean "including, without limitation," unless the context otherwise requires.
(e) References to any statute or statutory provision shall include such statute or statutory provision as amended, modified, supplemented, or re-enacted from time to time, and any successor statute or statutory provision and any rules and regulations promulgated thereunder.
(f) References to any Person shall include such Person's successors and permitted assigns.
(g) The terms "hereof," "herein," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(h) Each provision of this Agreement shall be interpreted so as to be effective and valid under applicable law. If any provision shall be held to be prohibited or invalid under applicable law, such provision shall be deemed amended to the minimum extent necessary to render it effective and valid under applicable law.
ARTICLE II — FORMATION AND NAME
Section 2.1 — Formation
The Company was formed as a limited liability company under the laws of the State of Delaware by the filing of the Certificate of Formation with the Secretary of State of the State of Delaware on [●], 2026. The Member hereby ratifies and confirms the filing of the Certificate of Formation and all actions taken in connection therewith. The rights, powers, duties, and obligations of the Member and the administration, dissolution, and termination of the Company shall be governed by this Agreement and, to the extent not inconsistent herewith or not specifically addressed herein, by the Act. To the extent that any provision of this Agreement is inconsistent with any mandatory provision of the Act, such mandatory provision of the Act shall control. To the extent that any provision of this Agreement is inconsistent with any non-mandatory provision of the Act, this Agreement shall control.
Section 2.2 — Name
The name of the Company is "BFO 450 West 34th LLC." The Company may conduct business under such name or any other name as may be approved by the Member from time to time in its sole discretion, subject to compliance with all applicable laws, including the Act and any requirements for qualification to do business in the State of New York or any other jurisdiction in which the Company conducts business. The Member shall cause to be filed or executed such assumed name certificates, trade name registrations, or similar filings as the Member deems appropriate in connection with the conduct of the Company's business.
Section 2.3 — Registered Office and Registered Agent
The registered office of the Company in the State of Delaware is located at Cobalt Ridge Technologies, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent of the Company at such address is Crowne Albany Corporation. The Member may change the registered office and/or the registered agent from time to time in accordance with the Act by filing the appropriate certificate with the Secretary of State of the State of Delaware and by notifying the Lender of any such change to the extent required by the Loan Documents.
Section 2.4 — Principal Office
The principal office of the Company shall be located at c/o Briarwood Family Office LLC, 680 Park Avenue, 9th Floor, New York, New York 10065, or at such other place or places as the Member may from time to time designate. The Company shall qualify to do business in the State of New York and in any other jurisdiction in which the nature of the Company's business or the ownership of its assets requires such qualification.
Section 2.5 — Term
The Company shall continue in perpetual existence unless and until the Company is dissolved in accordance with the provisions of Article XI of this Agreement. Notwithstanding any provision of the Act to the contrary, the Bankruptcy, dissolution, withdrawal, expulsion, or cessation of membership of the Member shall not cause the dissolution of the Company; provided that the Springing Member provisions set forth in Article IX shall apply in such circumstances.
Section 2.6 — Employer Identification Number
The Company shall obtain an Employer Identification Number from the Internal Revenue Service as soon as reasonably practicable following the date hereof. The Member shall cause an IRS Form SS-4 (Application for Employer Identification Number) to be prepared and filed on behalf of the Company. Until such time as the EIN is obtained, the Company may use the Member's EIN for purposes of any required filings, to the extent permitted by applicable law and consistent with the Company's status as a disregarded entity for federal income tax purposes.
ARTICLE III — PURPOSE AND POWERS
Section 3.1 — Purpose
The Company is formed for the sole and exclusive purpose of:
(a) Acquiring the Property from Meridian Gateway Holdings LLC for a purchase price of One Hundred Twenty Million Dollars ($120,000,000) pursuant to the PSA;
(b) Owning, holding, operating, managing, leasing, and maintaining the Property;
(c) Entering into the Loan Documents with Pinnacle Federal Savings Bank in connection with the Loan;
(d) Entering into any property management agreement for the operation and management of the Property, including any agreement with Atlas Urban Management Corp. or any replacement property manager selected by the Member;
(e) Entering into and performing all tenant leases at the Property, including without limitation leases with Harmon & Voss Retail Partners LLC, Solstice Wellness Studio Inc., Ridgepoint Consulting Group LLC, Calderon Specialty Insurance Digital Media Corp., various office tenants on floors eight and nine, residential tenants on floors ten through fourteen, and any future tenants as may be approved by the Member from time to time;
(f) Financing, refinancing, and disposing of the Property on such terms and conditions as the Member shall determine in its sole discretion, subject to compliance with the Loan Documents and the SPE Covenants;
(g) Engaging in any and all activities that are incidental, necessary, advisable, or related to the foregoing purposes, including without limitation entering into contracts, retaining professionals, opening and maintaining bank accounts, obtaining insurance, filing tax returns, prosecuting and defending legal proceedings, and taking all other actions that the Member deems necessary or desirable in furtherance of the foregoing.
The foregoing purposes and activities shall collectively constitute the "Permitted Activities" for purposes of this Agreement.
Section 3.2 — Powers
The Company shall have all powers necessary, convenient, or incidental to carry out the purposes set forth in Section 3.1, as authorized by the Act, including without limitation the power to:
(a) Enter into, make, perform, and carry out contracts and agreements of every kind and description with any Person;
(b) Acquire (by purchase, lease, contribution, or otherwise), own, hold, improve, develop, operate, maintain, sell, convey, exchange, assign, mortgage, pledge, encumber, or otherwise dispose of real property, personal property, and mixed property;
(c) Borrow money and issue evidences of indebtedness, and to secure the same by mortgage, pledge, security interest, or other lien on the Company's assets;
(d) Sue and be sued, complain, and defend in all courts of competent jurisdiction;
(e) Hire employees, engage independent contractors, retain property managers, and appoint other agents as the Member deems necessary or desirable for the conduct of the Company's business;
(f) Open and maintain bank accounts and other deposit accounts with such banks or financial institutions as the Member shall select, and to designate and change signatories thereon;
(g) Obtain and maintain insurance in such amounts and covering such risks as the Member deems prudent in connection with the ownership and operation of the Property;
(h) Make, execute, and deliver any and all deeds, leases, mortgages, notes, assignments, instruments, documents, and certificates of any kind necessary or appropriate in connection with the business of the Company;
(i) Do all other acts and things that are necessary, advisable, or incidental to the conduct of the Company's business and the accomplishment of its purposes, in each case subject to the limitations set forth in Section 3.3 and Article VIII hereof.
Section 3.3 — Limitation on Purpose
The Company shall not engage in any business or activity other than the Permitted Activities described in Section 3.1, and the Company shall at all times be subject to the SPE Covenants set forth in Article VIII of this Agreement. In the event of any conflict between the provisions of this Section 3.3 and Section 3.1 or Section 3.2, the provisions of this Section 3.3 and Article VIII shall control.
ARTICLE IV — MEMBER; CAPITAL CONTRIBUTIONS
Section 4.1 — Sole Member
Briarwood Family Office LLC is the sole member of the Company as of the date hereof. The name, address, employer identification number, and Percentage Interest of the Member are as follows:
Name: Briarwood Family Office LLC
Address: 680 Park Avenue, 9th Floor, New York, New York 10065
EIN: 83-2947156
Percentage Interest: 100%
The foregoing information is also set forth on Schedule A attached hereto and incorporated herein by reference. The Member shall promptly notify the Company of any changes to its address or other information set forth above.
Section 4.2 — Initial Capital Contribution
The Member shall make an initial capital contribution to the Company in cash in such amount as is necessary to fund the Company's equity portion of the acquisition of the Property. Based on the proposed capital stack for the acquisition, the Member's equity contribution is expected to be approximately Twenty-Four Million Dollars ($24,000,000), which represents approximately twenty percent (20%) of the aggregate purchase price of One Hundred Twenty Million Dollars ($120,000,000). The balance of the purchase price is expected to be funded from the following sources: (a) the Loan from Pinnacle Federal Savings Bank in an amount of up to Seventy-Eight Million Dollars ($78,000,000), representing approximately sixty-five percent (65%) of the purchase price; and (b) preferred equity from Caliber Point Capital Partners LP in an amount of up to Eighteen Million Dollars ($18,000,000), representing approximately fifteen percent (15%) of the purchase price, if applicable.
The precise amount and timing of the initial Capital Contribution shall be determined by the Member in its sole discretion based on the final terms of the Loan, the preferred equity arrangement (if consummated), and the adjustments and prorations at closing. The preferred equity from Caliber Point Capital Partners LP, if consummated, may be structured at the Company level or at the Member level; the final structure is under discussion and will be reflected in a supplement or amendment to this Agreement, as appropriate.
The initial Capital Contribution shall be made prior to or simultaneously with the closing of the acquisition of the Property and shall be recorded in the books and records of the Company and reflected on Schedule A hereto.
Section 4.3 — Additional Capital Contributions
The Member may, but shall not be obligated to, make additional capital contributions to the Company from time to time as the Member determines in its sole and absolute discretion. No additional capital contribution shall be required of the Member under this Agreement or under the Act. The amount and timing of any additional capital contributions shall be at the sole discretion of the Member, and no Person (including any creditor of the Company) shall have the right to compel the Member to make any additional capital contribution.
Section 4.4 — No Interest on Capital Contributions
No interest shall accrue on or be paid with respect to any capital contribution made by the Member to the Company. The Member acknowledges that any return on its capital contribution shall be derived solely from distributions, if any, made by the Company in accordance with Section 5.2 of this Agreement.
Section 4.5 — Capital Account
A single capital account shall be maintained for the Member in accordance with the principles set forth in Treasury Regulation § 1.704-1(b)(2)(iv) and any successor provisions thereto, to the extent applicable to a single-member limited liability company. The Capital Account shall be credited with the amount of all Capital Contributions made by the Member and all items of income and gain allocated to the Member, and shall be debited for the amount of all distributions made to the Member and all items of loss and deduction allocated to the Member. The Capital Account shall be adjusted in a manner consistent with the foregoing principles and the maintenance requirements of the applicable Treasury Regulations.
Section 4.6 — No Third-Party Beneficiary Rights
No creditor or other third party having dealings with the Company shall have the right to enforce the obligation of the Member to make capital contributions or to pursue any other right or remedy hereunder or at law or in equity, it being understood that the provisions of this Article IV are intended solely to benefit the Member and the Company and, to the extent set forth herein, the Lender. Nothing in this Section 4.6 is intended to limit the rights of the Lender under the Loan Documents.
ARTICLE V — ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 — Allocation of Profits and Losses
All items of income, gain, loss, deduction, and credit of the Company, and all items recognized by or with respect to the Company for federal, state, and local income tax purposes, shall be allocated one hundred percent (100%) to the Member. Insofar as the Company is treated as a disregarded entity for federal income tax purposes, all items of income, gain, loss, deduction, and credit attributable to the Company's activities shall be reported on the tax returns of the Member as if such activities were conducted directly by the Member.
Section 5.2 — Distributions
Distributions of cash or other property of the Company shall be made to the Member at such times and in such amounts as the Member shall determine in its sole discretion; provided, however, that no distribution shall be made if, after giving effect to such distribution:
(a) The Company would have insufficient funds to maintain adequate reserves for its ongoing operations, including but not limited to reserves for debt service under the Loan (estimated annual debt service of approximately Five Million Nine Hundred Eighty-Six Thousand Eight Hundred Dollars ($5,986,800)), real estate taxes on the Property (estimated at approximately Two Million Six Hundred Forty Thousand Dollars ($2,640,000) per annum), insurance premiums (estimated at approximately Three Hundred Twelve Thousand Dollars ($312,000) per annum), property management fees, capital expenditures, and other obligations of the Company incurred in the ordinary course of business;
(b) Such distribution would cause the Company to be in violation of, or in default under, any provision of the Loan Documents, including without limitation any cash management, lockbox, or distribution restriction provisions contained therein; or
(c) Such distribution would violate Section 18-607 of the Act (i.e., the Company may not make a distribution to the Member to the extent that, at the time of the distribution, after giving effect to the distribution, all liabilities of the Company, other than liabilities to the Member on account of its membership interest, exceed the fair value of the assets of the Company).
The Member shall determine the timing and amount of distributions giving due consideration to the foregoing limitations and the overall financial condition and liquidity needs of the Company.
Section 5.3 — Tax Treatment
The Company, as a single-member limited liability company, shall be treated as a "disregarded entity" for federal income tax purposes pursuant to Treasury Regulation § 301.7701-3 and shall not file a separate federal income tax return. The Member shall report all items of income, gain, loss, deduction, and credit attributable to the Company's activities on its own federal, state, and local income tax returns as if such activities were conducted directly by the Member. The Member shall coordinate with Edgemont Nash & Co. LLP (Laura Siddiqui, CPA, as the primary contact for tax matters) for the preparation and filing of all required tax returns and reports attributable to the Company's activities. The Company shall not elect to be classified as an association taxable as a corporation for federal or state income tax purposes without the prior written consent of the Member.
ARTICLE VI — MANAGEMENT
Section 6.1 — Member-Managed
The Company shall be member-managed. The Member shall have the full, exclusive, and complete authority, power, and discretion to manage and control the business, affairs, and properties of the Company, to make all decisions regarding the same, and to perform any and all acts or activities customary or incident to the management of the Company's business. The Member may act through its Authorized Representatives, namely Theodore R. Ashworth, Founder & Managing Principal, and Margaux Ashworth-Levine, Principal & Head of Real Estate Investments, either of whom shall have the authority to bind the Company. Any action taken by an Authorized Representative on behalf of the Company within the scope of the Member's authority shall be deemed to be the act of the Member for all purposes of this Agreement.
Section 6.2 — Authority of the Member
Without limiting the generality of Section 6.1, the Member shall have the authority, acting through its Authorized Representatives or otherwise, to take all of the following actions on behalf of the Company:
(a) Execute and deliver the PSA and all ancillary closing documents, instruments, certifications, affidavits, and agreements necessary or appropriate for the acquisition of the Property from Meridian Gateway Holdings LLC for a purchase price of One Hundred Twenty Million Dollars ($120,000,000);
(b) Execute and deliver the Loan Documents with Pinnacle Federal Savings Bank for the Loan in an aggregate amount of up to Seventy-Eight Million Dollars ($78,000,000), including a mortgage note, mortgage, loan agreement, assignment of leases and rents, environmental indemnity agreement, guaranty (if required of the Member or its principals), and all other documents, instruments, and certificates required by the Lender in connection therewith;
(c) Execute and deliver any preferred equity documents with Caliber Point Capital Partners LP or such other preferred equity providers as the Member may select, for preferred equity financing of up to Eighteen Million Dollars ($18,000,000), subject to the terms and conditions to be negotiated and documented;
(d) Deposit the earnest money deposit of Six Million Dollars ($6,000,000) and the additional deposit of Three Million Dollars ($3,000,000), for a total earnest money deposit of Nine Million Dollars ($9,000,000), with Prestige Escrow Services LLC, 1 Penn Plaza, Suite 4500, New York, New York 10119, or such other escrow agent as may be designated in the PSA;
(e) Execute, deliver, amend, modify, extend, renew, and terminate tenant leases, lease amendments, lease guarantees, commencement date agreements, estoppel certificates, subordination, non-disturbance and attornment agreements, and all other documents related to the leasing of space at the Property;
(f) Enter into, modify, amend, extend, renew, or terminate any property management agreement for the Property, including any agreement with Atlas Urban Management Corp. or a replacement property manager, on such terms and conditions as the Member deems appropriate;
(g) Enter into insurance contracts, select insurance brokers and carriers, and bind coverage for the Property, including coordination with Lockhart & Pryor Insurance Advisors LLC or such other insurance advisor as the Member may retain;
(h) Retain and compensate professionals, consultants, and advisors for the Company, including without limitation legal counsel (Calderwood & Harkness LLP), accountants and tax advisors (Edgemont Nash & Co. LLP), environmental consultants (Whitmore Environmental Sciences LLC), appraisers (Kensington Valuation Group Inc.), zoning consultants (Halcyon Planning Associates LLC), surveyors (Clearview Land Surveyors Inc.), and title companies (Granite State Title Insurance Company), and such other professionals as the Member deems necessary or appropriate;
(i) Commence, prosecute, defend, compromise, settle, or otherwise resolve any and all litigation, arbitration, mediation, and administrative proceedings in the name of the Company or on behalf of the Company;
(j) Prepare and file, or cause to be prepared and filed, all real property transfer tax returns, including New York City Real Property Transfer returns (NYC RPT) and New York State Real Estate Transfer Tax returns, and pay all Transfer Taxes owing in connection with the acquisition of the Property;
(k) Participate in, commence, prosecute, defend, or settle real property tax assessment review and certiorari proceedings with respect to the Property, including the filing of petitions, negotiation of settlements, and acceptance of reduced assessments;
(l) Sell, exchange, convey, assign, transfer, refinance, or otherwise dispose of the Property or any interest therein, on such terms and conditions as the Member shall determine in its sole discretion, subject to compliance with the Loan Documents;
(m) Execute and deliver CEMA (Consolidation, Extension, and Modification Agreement) documents and any related instruments in connection with the assignment of the existing mortgage from Eastbridge Commercial Bank, N.A. to Pinnacle Federal Savings Bank, in order to effectuate a consolidation, extension, and modification of the existing mortgage and the new mortgage for the purpose of achieving mortgage recording tax savings;
(n) Open, maintain, and close bank accounts and other deposit and investment accounts in the name of the Company, designate and change authorized signatories thereon, and manage the Company's cash and liquid assets;
(o) Take any and all other actions that the Member deems necessary, advisable, or appropriate in connection with the business, purposes, and affairs of the Company.
Section 6.3 — Actions Requiring Member Consent
Notwithstanding the foregoing provisions of this Article VI, the following actions shall require the express prior written consent or direction of the Member:
(a) The sale, exchange, or other disposition of all or substantially all of the Company's assets outside of the ordinary course of business;
(b) The merger, consolidation, conversion, or domestication of the Company with or into any other entity;
(c) The admission of any additional member to the Company (other than the Springing Member as set forth in Article IX);
(d) The voluntary dissolution of the Company;
(e) Any amendment, modification, restatement, or supplement to this Agreement; and
(f) The filing of a voluntary petition in bankruptcy or the consent to any involuntary bankruptcy proceeding with respect to the Company.
Notwithstanding the foregoing, certain of the actions described above (particularly the action described in Section 6.3(f)) are also subject to the SPE Covenants set forth in Article VIII and the Springing Member and Independent Director consent provisions set forth in Article IX. In the event that the provisions of Article VIII or Article IX impose additional conditions or restrictions on any of the foregoing actions, such additional conditions and restrictions shall apply and must be satisfied in addition to the Member's consent.
Section 6.4 — Officers
The Member may, from time to time, appoint one or more officers of the Company, including without limitation a President, one or more Vice Presidents, a Secretary, a Treasurer, and such other officers as the Member may determine. Each officer shall be appointed by, and shall serve at the pleasure of, the Member and may be removed by the Member at any time, with or without cause. The authority, duties, and responsibilities of each officer shall be as determined by the Member from time to time. The appointment of an officer shall not limit or restrict the authority of the Member or any Authorized Representative to act on behalf of the Company. Initial officers, if any, shall be designated by the Member and recorded in the books and records of the Company.
Section 6.5 — Standard of Care; Indemnification
(a) Standard of Care. The Member and its Authorized Representatives shall not be liable to the Company for any act or omission taken or suffered in good faith on behalf of the Company and in a manner reasonably believed to be in or not opposed to the best interests of the Company, except to the extent that such act or omission constitutes fraud, willful misconduct, or gross negligence. In performing their duties hereunder, the Member and its Authorized Representatives shall be entitled to rely in good faith on information, opinions, reports, and statements (including financial statements and information) of officers, employees, legal counsel, accountants, appraisers, and other professional advisors retained by the Company or the Member.
(b) Indemnification. The Company shall indemnify, defend, and hold harmless the Member and its Authorized Representatives, and their respective officers, directors, managers, members, partners, shareholders, employees, agents, heirs, legal representatives, successors, and assigns (collectively, the "Indemnified Parties"), from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and disbursements, court costs, and expenses of investigation and litigation) arising out of or relating to any act or omission taken or suffered in good faith by any Indemnified Party in connection with the business or affairs of the Company, except to the extent that such losses, claims, damages, liabilities, costs, or expenses result from the fraud, willful misconduct, or gross negligence of such Indemnified Party. The indemnification provided in this Section 6.5 shall survive the dissolution and winding up of the Company and the termination of this Agreement. The provisions of this Section 6.5 are in addition to, and not in lieu of, any other rights of indemnification that any Indemnified Party may have under the Act, by agreement, or otherwise.
ARTICLE VII — BOOKS, RECORDS, AND REPORTS
Section 7.1 — Books and Records
The Company shall maintain at its principal office, or at such other location as the Member shall determine, complete and accurate books and records of account of the Company, including:
(a) A current list of the full name and last known business, residence, or mailing address of the Member;
(b) A copy of the Certificate of Formation and all amendments thereto;
(c) A copy of this Agreement and all amendments, modifications, restatements, and supplements hereto;
(d) Copies of the Company's federal, state, and local tax returns and information reports (to the extent applicable given the Company's disregarded entity status) for the three (3) most recent fiscal years, or such longer period as may be required by the Loan Documents;
(e) Financial statements of the Company, including balance sheets, income statements, and statements of cash flow, prepared on a basis consistent with the requirements of the Loan Documents;
(f) Complete files for all tenant leases at the Property, including all amendments, modifications, extensions, renewals, supplements, assignments, subletting consents, estoppel certificates, subordination, non-disturbance and attornment agreements, and related correspondence;
(g) Copies of all Loan Documents and all correspondence with the Lender;
(h) Records of all Capital Contributions made by the Member and all distributions made to the Member;
(i) All property management agreements, service contracts, insurance policies, and other material contracts and agreements entered into by the Company;
(j) Environmental reports, surveys, appraisals, title policies, zoning analyses, and other due diligence materials relating to the Property; and
(k) Such other books, records, and documents as may be required by the Act, the Loan Documents, or applicable law.
The books and records of the Company shall be open to inspection by the Member or its designated representatives at all reasonable times during regular business hours at the Company's principal office.
Section 7.2 — Fiscal Year
The fiscal year of the Company shall be the calendar year, commencing on January 1 and ending on December 31 of each year. The first fiscal year of the Company shall commence on the date of formation of the Company and shall end on December 31 of the calendar year in which the Company was formed.
Section 7.3 — Tax Returns
The Company is a disregarded entity for federal income tax purposes and, accordingly, is not required to file a separate federal income tax return. The Member, or its tax advisor (Edgemont Nash & Co. LLP, Laura Siddiqui, CPA), shall cause all required federal, state, and local tax filings attributable to the Company's activities to be prepared and filed in a timely manner. Without limiting the foregoing, the Member shall cause to be prepared and filed all real property tax returns, Transfer Tax returns, and any other tax returns, reports, or filings required by applicable federal, state, or local law in connection with the ownership and operation of the Property and the business of the Company.
Section 7.4 — Bank Accounts
All funds of the Company shall be deposited in one or more accounts in the Company's name at such banks or other financial institutions as the Member shall select from time to time. The Company's funds shall not be commingled with the funds of the Member, any affiliate of the Member, or any other Person, and the Company shall maintain separate bank accounts at all times in furtherance of the SPE Covenants set forth in Article VIII. Withdrawals from any account of the Company shall be made only by persons authorized by the Member, and the records relating to all such accounts shall be maintained with the Company's books and records.
ARTICLE VIII — SINGLE-PURPOSE ENTITY COVENANTS (SPE COVENANTS)
Section 8.1 — General
The Member acknowledges and agrees that the Lender (Pinnacle Federal Savings Bank) requires the Company to comply with certain separateness and single-purpose entity covenants as a material condition of extending the Loan to the Company. The provisions of this Article VIII are an essential inducement for the Lender to extend the Loan and are included for the benefit of the Lender and its successors and assigns. The provisions of this Article VIII may not be amended, modified, waived, or terminated, in whole or in part, without the prior written consent of the Lender, for so long as any indebtedness, obligation, or liability remains outstanding under or in connection with the Loan Documents. The Member covenants and agrees that the Company shall at all times comply with the following affirmative and negative covenants.
Section 8.2 — Affirmative Covenants
The Company shall at all times:
(a) Maintain its existence as a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and qualify to do business in the State of New York and each other jurisdiction in which the nature of its business or the ownership of its assets requires such qualification;
(b) Maintain its own separate books of account, records, and bank accounts, apart from and not intermingled with the books, records, and bank accounts of the Member, any affiliate of the Member, or any other entity;
(c) File its own tax returns to the extent required by applicable law, noting its disregarded entity status for federal income tax purposes, or ensure that the activities of the Company are properly and accurately reflected on the tax returns of the Member in a manner consistent with applicable law;
(d) Maintain its assets and liabilities separate and apart from those of any other Person or entity, and not permit the assets of the Company to be listed as assets on the financial statements of any other entity, except as required by generally accepted accounting principles for consolidated financial reporting with appropriate notation of the Company's separate legal existence;
(e) Conduct its business in its own name, and hold itself out to the public and to all third parties (including without limitation landlords, tenants, creditors, suppliers, and governmental authorities) as a legal entity separate and distinct from the Member, any affiliate of the Member, and any other Person;
(f) Maintain adequate capitalization for its business operations in light of its contemplated business purpose, and not render itself insolvent by distributing assets to the Member in excess of amounts permitted under this Agreement and the Loan Documents;
(g) Pay its own liabilities, debts, and expenses (including without limitation salaries, wages, rent, and overhead expenses) from its own funds and assets, and not pay or assume the liabilities, debts, or expenses of any other Person;
(h) Observe all limited liability company formalities required by the Act and this Agreement, including without limitation acting through duly authorized representatives, maintaining accurate records of all actions and decisions, and otherwise conducting its affairs in a manner consistent with its separate legal existence;
(i) Maintain arm's-length relationships with all affiliates, and ensure that all transactions between the Company and any affiliate of the Company or the Member are on commercially reasonable terms and conditions that are substantially similar to those that would be obtained in a comparable arm's-length transaction with an unrelated third party;
(j) Maintain at least one Independent Director or Springing Member as set forth in Article IX of this Agreement;
(k) Correct any known misunderstanding regarding the Company's separate identity, and take all reasonable steps to prevent any Person from being misled as to the separate existence of the Company from the Member or any other Person;
(l) Allocate fairly and reasonably any overhead expenses that are shared with the Member or affiliates of the Member, and maintain supporting documentation for all such allocations;
(m) Use separate stationery, invoices, checks, and other business forms from those of the Member and affiliates of the Member, bearing the Company's own name and, where applicable, the Company's own address;