FILED: NEW YORK COUNTY CLERK 05/09/ :20 AM INDEX NO /2016 NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 05/09/2016 EXHIBIT C

Transcription

1 FILED: NEW YORK COUNTY CLERK 05/09/ :20 AM INDEX NO /2016 NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 05/09/2016 EXHIBIT C

2 AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT 6 TIMES SQUARE MEMBER LLC As of March 30,

3 AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF 6 TIMES SQUARE MEMBER LLC THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made and entered into as of March 30, 2007 by and among Marilyn Sitt, Eddie Sitt, Ralph Sitt, David Sitt and Jack Sitt, each individuals having an address at c/o Sitt Asset Management, LLC, One Penn Plaza, Suite 3430, New York, New York (Marilyn, Eddie, Ralph, David and Jack Sitt are herein collectively referred to as "Sitt"), Sharon Sutton, an individual having an address 2039 East 4th Street, Brooklyn, New York ("Sutton") and such other persons listed on Exhibit A hereto. In consideration of the covenants and conditions set forth in this Agreement, the parties agree as follows: ARTICLE I CERTAIN DEFINITIONS For purposes of this Agreement, the following terms shall have the meanings set forth below: Article Additional Member: Any Person admitted to the Company as a Member pursuant to 1.2 Adjusted Capital Contributions: With respect to any Member, an amount equal to the Capital Contributions of such Member reduced, from time to time, by any Distributions to such Member pursuant to Section 5.1(a). 1.3 Adjusted Capital Account Deficit: With respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments: (i) Credit to such Capital Account any amounts which such Member is obligated to contribute to the Company (pursuant to the terms of this Agreement or otherwise) or is deemed to be obligated to restore pursuant to the penultimate sentences of Regulations Section (g) or Regulations Section (i)(4), as applicable. (ii) Debit to such Capital Account the items described in Regulations Section (b)(2)(ii)(d)(4), (5) and (6). 1.4 Affiliate: With respect to a specified Person, (i) a Person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the specified Person, (ii) any Person who is an officer, director, member or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is an officer, member or trustee, or with respect to which the specified Person serves in a similar capacity, (iii) any Person who, directly or indirectly, is the beneficial owner of 20% or more of any class of equity securities of, or otherwise has a substantial beneficial interest in, the specified Person or of which the specified Person has a substantial beneficial interest and (iv) the spouse, issue, or parent of the specified Person or a trust created for the benefit of such Person, spouse, issue, or parent. An Affiliate does not include a Person who is a member or partner in a partnership or joint venture with the Company or any Member if such Person is not otherwise an Affiliate of 2

4 the Company or any Member. 1.5 Available Cash: For any period, the excess, if any, of (i) the sum of (A) all cash received during such period by the Company from 6 JV LLC (hereinafter defined), pursuant to Article VI and Section 7.04 (to the extent applicable) of the 6 JV Agreement (hereinafter defined) and (B) any cash reserves of the Company existing at the start of such period, less (ii) the sum of (A) all cash amounts paid or payable (without duplication) in such period on account of expenses and capital expenditures incurred in connection with the Company's business, (B) such cash reserves that may be required, as reasonably determined by the Members, (C) the Promote Distributions and (I)) the Permitted Fees. 1.6 Bankruptcy: With respect to any Member, (i) the filing by that Member of a voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United States Code or any other Federal or state insolvency law, or a Member's filing an answer consenting to or acquiescing in any such petition, (ii) the making by that Member of any assignment for the benefit of its creditors or (iii) the expiration of 90 days after the filing of an involuntary petition under Title 11 of the United States Code, an application for the appointment of a receiver, trustee or custodian for the assets of that Member, or an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other Federal or state insolvency law, provided that the same shall not have been vacated, set aside or stayed within such 90-day period. 1.7 "Base Return" means a 7% return (compounded annually) on the amount of a Member's. Gross Adjusted Capital Contribution outstanding from time to time through the relevant distribution date. I:8 Book Basis: With respect to any asset of the Company, the adjusted basis of such asset for federal income tax purposes; provided, however, that (a) if any asset is contributed to the Company, the initial Book Basis of such asset shall equal its fair market value o:n the date of contribution, and (b) the Book Basis of all Company assets shall be adjusted to equal their respective gross fair market values as of the following times: (i) the acquisition of an additional Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an Interest; and (iii) in connection with the liquidation of the Company within the meaning of Treasury Regulation Section (b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i) and (ii) above shall be made only if the Manager determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. The Book Basis of all assets of the Company shall be adjusted thereafter by depreciation as provided in Treasury Regulation Section (b)(2)(iv)(g) and any other adjustment to the basis of such assets other than depreciation or amortization. 1.7A Business Day. Any day other than Saturday, Sunday, any day that is a legal holiday in the State of New York, or any other day on which banking institutions in New York are authorized to close. H 1.9 pital Accounts: The capital accounts of the Members, maintained in accordance with Article 1.10 Capital Contributions: The capital contributions of the Members to the Company made pursuant to Article 4. If Sitt or any of its Affiliates shall execute and deliver to any lender to the Company or to any entity in which the Company owns a direct or indirect interest, any indemnities, guarantees, covenants, representations and warranties or other recourse agreements which such lender requires in connection with its loan, any payment made by Sitt or its Affiliate under any such agreement shall be referred to as and treated as a "Capital Contribution" by Sitt, provided such payment is not incurred as a result of a misrepresentation, fraud or other willful act or omission by Sitt or its Affiliate in violation of an express obligation or covenant of the loan documents executed and delivered to any such lender in connection with any such loan.

5 1.11 Code: The Internal Revenue Code of 1986, as amended from time to time, or any similar Federal internal revenue law enacted in substitution for the Code_ 1.12 Company: 6 Times Square Member LLC, a Delaware limited liability company Company Interest : The ownership interest of any Member in the Company Company Minimum Gain: Partnership minimum gain as defined in Treasury Regulation Section (d) Company Nonrecourse Debt : Any "nonrecourse liability as defined in Regulations Section (a)(2) Company Property : The ownership interest of the Company in 6 JV LLC and all other property owned by the Company, whether real or personal, tangible or intangible Depreciation: With respect to each taxable year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such year or other period, except that, if the Gross Asset Value of an asset. differs from its adjusted.basis for Federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the Federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the Federal income tax depreciation, amortization, or other cost recovery deduction for such asset for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Members Distributions : Any distributions of cash or other assets of the Company, including Distributions of Available Cash 1.19 Gross Asset Value: With respect to any asset of the Company, the asset's adjusted basis for Federal income tax purposes, except that: The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking into account Section 7701(g) of the Code in the case of adjustments pursuant to clauses (B) or (C) of this Section 1.16), as reasonably determined by the Members, as of the following times: (A) immediately before the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution, and (B) immediately before the Distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an interest in the Company, in either case if the Members reasonably determine that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members within the meaning of Regulations Section (b)(2)(iv)(g), (C) immediately before the liquidation of the Company within the meaning of Regulations Section (b)(2)(ii)(g), and. (D) in connection with an election under Sections 734(b) or 743(b) of the Code, but only as provided in Regulations Section (b)(2)(iv)(m) Gross Adjusted Capital Contributions : With respect to each Member, the total amount of Capital Contributions contributed by such Member to the Company pursuant to the terms hereof and applicable law Law: Delaware Limited Liability Company Act, as amended from time to time IRR: The annual percentage rate, compounded monthly, which, when utilized to calculate the present value of Distributions to a Member, causes such present value of Distributions to equal the present value of such Member's Capital Contributions. The present value of a Member's initial Capital Contribution is the nominal amount of such capital, and the present value of any additional Capital 4

6 Contribution is the nominal amount of such additional Capital Contribution discounted back to the date the Initial Capital Contribution was contributed utilizing said annual percentage rate JV Agreement : That certain limited liability company agreement of 6 Times Square JV LLC, of even date herewith, by and among the members thereof JV LLC: 6 Times Square JV LLC, a Delaware limited liability company Mananer: Each of Eddie Sitt or Ralph Sitt or such other person designated by Eddie Sitt and/or Ralph Sitt Members : Sitt, Sutton, the members listed on Exhibit A and any other Persons who are admitted to the Company as Members pursuant to Article Member Minimum Gain : `Partnership minimum gain" as determined in accordance with Regulations Sections (i)(3) and (i)(4) Member Minimum Gain: The Company's "partner nonrecourse debt minimum gain" as defined in Treasury Regulation Section (1)(2) Member Nonrecourse Debt : "Partner Nonrecourse Debt" as defined in Regulations Section (b)(4) Member Nonrecourse Deductions : "Partner Nonrecourse Deductions" as defined in Regulations Section (l)(2) Nonrecourse Deductions : Has the meaning set forth in Regulations Sections (b)(1) and (c) Permitte d Fees : has the meaning set forth in.section 1.01 of the 6 JV Agreement Person : An individual, trust, estate, partnership, limited liability company, joint venture, association, company, corporation or other entity Profits and Losses : With respect to each taxable year or other period, an amount equal to the Company's taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments: (i) Any income of the Company that is exempt from Federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits and Losses shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section (b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits and Losses, shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to Section,1.16 (A) the amount of such adjustment shall be taken into account as gain or loss on a disposition of such asset for purposes of computing Profits and Losses, and (B) in lieu of the Depreciation, taken into account in computing such taxable income or loss, there shall be taken into 1 5

7 account Depreciation for such fiscal year or other period, computed in accordance with the definition of Depreciation herein; (iv) Gain or loss resulting from any disposition of Company Property with respect to which gain or loss is recognized for Federal income tax. purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; and (v) Notwithstanding any other provision of this definition of Profits and Losses, any items that are specially allocated pursuant to Section 5.4 shall not be taken into account in computing Profits or Losses Promote Distributions : has the meaning set forth in Section 1.01 of the 6 JV Agreement Regulations : The final and temporary Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). ARTICLE II GENERAL PROVISIONS 2.1 Acts of Formation. The Members formed the Company in accordance with the Law upon filing the Certificate of Formation of the Company with the Secretary of State of the State of Delaware on October 6, The filing of the Certificate of Formation is hereby ratified and affirmed. The provisions of the Law shall govern the rights and obligations of, and the relationships among, the Members except as modified by the provisions of this Agreement. 2.2 Further Action. Members shall take any and all action as may be required, from time to time, under the laws of the State of Delaware to give effect to, and continue in good standing, the Company. 2.:3 Name of the Corny. The name of the Company shall be 6 Times Square Member LLC, or such other name as the Members may from time to time determine. The Members shall have the right to cause the Company to operate under one or more assumed names where required to comply with the laws of any states in which the Company is doing business. The Members shall cause to be filed on behalf of the Company such assumed or fictitious name certificates or other documents as may from time to time be required by law for the formation and continuation of the Company as a limited liability company under the Law or where required to comply with the laws of any states in which the Company is doing business. 2.4 Business of the Company. The business of the Company shall be to: (i) act as a.member and the managing member of 6 JV LLC subject to and in accordance with the 6 JV Agreement and take all other actions which it has the right and duty to take as a member and the managing member of 6 JV LLC under the 6 JV Agreement; (ii) borrow money for the operation of the Company's business, in accordance with the terms of this Agreement, whether secured or unsecured, including without limitation, to refinance borrowings outstanding from time to time; and (iii) make, enter into, perform and carry out any arrangements, contracts or agreements consistent with the foregoing and to do any and all things necessary or incidental to any of the foregoing to carry out and further the business of the Company as contemplated by this Agreement. The Company shall not engage in any business or activity not authorized by this Agreement. 6

8 2.5 Place of Business. The Company's principal place of business shall be c/o Sitt Asset Management, LLC, One Penn Plaza, Suite 3430, New York, New York Duration of the Comp y. The Company shall continue in perpetuity, unless terminated at an earlier date in accordance with Article 9 of this Agreement. 2.7 Title to Company Prerty. All Company Property shall be owned by the Company as an entity, and no Member, individually, shall have any ownership interest in that property. ARTICLE III MANAGEMENT 3.1 Management of the Company. The overall management and control of the business and affairs of the Company shall be vested in the Manager. Either individual Manager shall have the right, acting on his own, to exercise the rights of the Manager hereunder and to bind the Company. 3.2 Authorityf the Manager. Except as otherwise expressly provided in this Agreement, all decisions with respect to any matter set forth in this Agreement or otherwise affecting or arising out of the conduct of the business of the Company including without limitation in the Company's capacity as Managing Member of 6 JV LLC shall be made by the Manager without the requirement of consent by the Members. With respect to all of its rights, powers and responsibilities under this Agreement, including without limitation in the Company's capacity as Managing Member of 6 JV LLC, the Manager is authorized to execute and deliver, in the name and on behalf of the Company, such notes and other evidence of indebtedness, contracts, assignments, deeds, loan agreements, mortgages, deeds of trust and other security instruments as it deems proper, all on such terms and conditions as it deems necessary or appropriate for the purposes of the Company. 3.3 Company Funds. The Manager shall not employ or permit another to employ Company funds or assets in any manner except for the exclusive benefit of the Company. No funds of the Company shall be commingled with the funds of the Manager or any other Person. 3.4 Appointment of Officers. In connection with the Manager's duties hereunder, the Manager is hereby authorized and empowered to act himself or through his or its officers and employees and other persons designated by the Manager in carrying out any and all of its powers and authorities that the Manager possesses under this Agreement to any of Manager's officers and employees and to any other person designated by the Manager. The Manager shall have the right to appoint, from time to time, such officers and directors of the Company as the Manager deems appropriate. The Manager hereby appoints, as officers of the Company, Ralph Sitt, as president of the Company, Ralph Sitt, as chief executive officer of the Company, David Sitt and Jack Sitt, as vice presidents of the Company to perform such acts as may be designated by the Manager for them to perform from time-to-time. 7

9 3.5 Services of the Manager. The Manager shall devote such time and effort to the business of the Company as may be necessary to promote adequately the interests of the Company and the mutual interests of the Members; however, it is specifically understood and agreed that the Manager and its members, managers, officers and directors and their Affiliates shall not be required to devote full time to the business of the Company and that the Manager and its Affiliates may at any time and from to time engage in and possess interests in other business ventures of any and every type and description, including, without limitation, the ownership, operation, financing and management of real estate, interests in real estate or real estate-related securities, independently or with others, including those that compete with interests of the Company, and neither the Company nor any Member shall by virtue of this Agreement or otherwise have any right, title or interest in or to such independent ventures. 3.6 Liability of Members and Mana ers. The liabilities of the Members and Managers to third parties shall be limited to the fullest extent provided in the Law. 3.7 Liability and I ndemnification. (a) To the fullest extent permitted by applicable law, each Manager and each Member and the respective stockholders, directors, officers, employees, servants, attorneys and agents of the Company, of each Manager and of each Member (each, an "Indemnitee") shall each be indemnified and held harmless by the Company from and against any damages, losses, penalties, fines, settlement payments, obligations, liabilities, claims, actions and causes of action and costs and expenses suffered, sustained, incurred or required to be paid by any Indemnitee, including without limitation, any costs of investigation and attorneys' or experts' fees and disbursements, based upon or arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative which arise primarily out of or relate primarily to the operations of the Company (including in enforcing the foregoing indemnification), in which the Indemnitee may be involved, or threatened to be involved, as a party, irrespective of whether the Indemnitee continues to be a stockholder, director, officer, employee, servant, attorney or agent of the Company, of a Manager or of a Member at the time any such obligation, liability or expense is paid or incurred. (b) be limited to, the assets of the Company. All indemnifications set forth in this Section 3.7 shall be paid out of, and shall ARTICLE N CAPITAL CONTRIBUTIONS 4.1 Capital. The capital of the Company shall consist of amounts contributed to the Company pursuant to this Article Capital Contributions. Upon execution of this Agreement, the Members shall make the initial Capital Contributions required of them. The Members shall have Company Interests as are set forth on Exhibit A. 4.2.A Additional Capital Contributions.

10 (a) If at any time or from time-to-time after all of the initial Capital Contributions shall have been contributed, the Manager determines that additional funds (a "Shortfall") are reasonably required (i) for costs required in connection with the 6 JV LLC, including, without limitation, the amount reasonably necessary to close the acquisition by an indirect subsidiary of 6 JV LLC of property known as 2 Herald Square (a/k/a 1328 Broadway), New York, New York, as determined by the Manager, including, without limitation, the Company's equity, closing costs, contract and due diligence costs, and a reasonable amount of initial working capital of, and reserves for, the Company, as determined by the Manager (collectively, the "Project Cost"), (ii) to meet the ongoing obligations, liabilities, expenses or reasonable business needs of the Company, or (iii) for any other purpose, the Manager may (but shall not be obligated to) require that each of the Members contribute its pro rata share (based upon the Company Interests of the Members at the time of such request) of such Shortfall (Additional Capital Contributions"). If so requested by the Manager, such payment shall be due, in the case of Project Costs, within two (2) Business Days thereafter, and in all other cases, within four (4) Business Days thereafter. (b) The Capital Contributions required shall be made by wire transfer of funds to a Company account designated by the Manager, (c) If any Member (the "Non-Contributing Member") fails to timely make the Capital Contributions (or any portions thereof) required by Section 4.2A, then one or more of the other Members (the "Contributing Member") may make such Capital Contribution (i.e., the Non-Contributing Member's share, in addition to the Contributing Member's share; provided that if there is one or more Contributing Member who wishes to so contribute the Non-Contributing Members share, such Contributing Member(s), in the aggregate, must contribute the entire amount of the Non-Contributing Member's share), and, whether or not the other Members contribute the Non-Contributing Member's share, then the Company Interest of each of the Members shall be adjusted to equal the percentage equivalent of the quotient determined by dividing (1) the positive difference, if any, between (a) the sum of (1) 100% of the aggregate Capital Contributions (excluding Substituted Capital Contributions (as hereinafter defined)) then or theretofore made, by such Member to the Company, plus (ii) 150% of the Substituted Capital Contributions then or theretofore made by such Member to the Company (the excess of 150% of such Member's Substituted Capital Contributions over such Member's Substituted Capital Contributions is referred to herein as the "Excess Amounts"), minus (b)the Excess Amounts attributable to the Substituted Capital Contributions then or theretofore made by the other Member(s) to the Company on behalf of the Member whose Company Interest is being adjusted, by (2) 100% of the aggregate Capital Contributions (including without limitation Substituted. Capital Contributions) then or theretofore made by all of the Members to the Company. As used herein, the term "Substituted Capital Contribution" shall mean an Additional Capital Contribution made on behalf of the Non-Contributing Member pursuant to this Section 4.2(A). An example of the operation of such calculation is set forth on Exhibit B attached hereto. If a Contributing Member's Company Interest is increased pursuant to this Section 4.2(A), then (A) its Gross Adjusted Capital Contributions, as previously adjusted, shall, in addition to being increased by the amount of Capital Contributions (including without limitation ordinary Capital Contributions and Substituted Capital Contributions) made by such Member, also be increased by an amount equal to 100% of the Substituted Capital Contributions made by such Member, and (B) the Capital Account balances of the Members shall, be adjusted so that they equal an amount such that if all of the Company Property were sold for Book Basis, all of the liabilities of the Company were satisfied according to their terms (except that if a nonrecourse liability exceeds the Book Basis of the asset securing such liability such calculation shall be made assuming such asset were transferred to the lender in satisfaction of the liability), all Company Minimum Gain and Member Minimum Gain were properly taken into account, and the net proceeds were distributed to the Members in accordance with the provisions of this Agreement, all Capital Accounts would equal zero after such distribution. Any Non-Contributing Member shall have until sixty (60) days after the date on which its missed Additional Capital Contribution (the "Missed Contribution") was due in order to cure its failure to make such Missed Contribution by depositing into an account designated by the Manager an amount equal to the amount of the Missed Contribution together with interest thereon at a 20% per annum rate from the due

11 date established by the Manager until such amount has been so deposited in full into such account, at which point such amount shall promptly be distributed to the Contributing Member(s) if and to the extent the Contributing Member(s) made a Substituted Capital Contribution on account of the Missed Contribution. If the Non-Contributing Member makes such deposits as aforesaid, the dilution to the Company Interests and adjustments of Gross Adjusted Capital Contributions and Capital Accounts (and the distributions affected thereby) caused by its failure to make the applicable Additional Capital Contribution shall be unwound, and the payment and distribution of interest described above shall not be reflected in the Members' Capital Accounts. (d) In the event the proceeds of any Additional Capital Contribution are not used as contemplated by the Manager for the purpose of funding the Shortfall giving rise to the need for such Additional Capital Contribution or such other Shortfall as the Manager may determine, such excess proceeds shall be distributed as a special distribution only to the Contributing Members with regard to such Additional Capital Contribution. (e) Each Member acknowledges and agrees that the other Members would not be entering into this Agreement were it not for (i) the Members agreeing to make the Capital Contributions provided for in Section 4.2 and this Section 4.2A and (ii) the remedy provisions set forth above in this Section 4.2A. Each Member acknowledges and agrees that in the event any Member fails to make its Capital Contributions pursuant to this Agreement, the other Members will suffer substantial damages and the remedy provisions set forth above are fair, just and equitable in all respects and are agreed by the parties to be the exclusive remedies in respect thereof along with those other remedies expressly set forth in this Agreement. 4.3 Capital Accounts. (a) the following provisions: A Capital Account shall be maintained for each Member in accordance with (i) To each Member's Capital Account there shall be credited such Member's Capital Contributions, such Member's allocable share of the Profits, and any items of income or gain that are specially allocated to such Member pursuant to Article 5. (ii) To each Member's Capital Account there shall be debited the amount of cash and the. Gross Asset Value of any Company Property (net of any liabilities assumed or taken subject to by such Member in connection therewith) distributed to such Member pursuant to any provision of this Agreement, such Member's..allocable share of Losses, and any items of deductions or Loss that are specially allocated to such Member pursuant to Article 5. (iii) If any Company Interest is 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 Company Interest. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section (b), and shall be interpreted and applied in a maimer consistent with such Regulations. In the event the Members shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto are computed in order to comply with such Regulations, the Members may make such modification provided that it is not likely to have a material effect on the amounts distributable to any Member pursuant to Section 9.3 upon the dissolution of the Company. The Members also shall make any appropriate modifications in the event unanticipated events (for example, the Company making an election under Code Section 754) might otherwise cause this Agreement not to comply with Regulations Section (b). (b) A Member shall not be entitled to demand the return of, or to withdraw, any 10

12 part of its Capital Contribution or any balance in its Capital Account, or to receive any Distribution, except as provided for in this Agreement. No Member shall be liable for the return of the Capital Contributions of any other Member and no Member shall have any obligation to restore the amount of any deficit in its Capital Account to the Company. 4.4 Obligations of Member. In no event shall any Member or any of its Affiliates be required to execute a guaranty, indemnity or other agreement, instrument or certificate under which the Member or its Affiliate has any liability whatsoever in connection with any financing or refinancing (including, but not limited to, liability for (i) payment of any debt, (ii) performance of any obligations under the documents evidencing such financing, (iii) fraud or misrepresentation of the Company or the Members, (iv) environmental matters or (v) any other matter commonly excluded from the exculpatory provisions of such financing) Loans. The Company and the Members agree to use their diligent efforts to secure from Wachovia Bank, National Association (the "Initial Lender") for 1328 Broadway Owners LLC (either directly or by assignment/assumption one or more loans to finance the acquisition of the 2 Herald Square (la/kla 1328 Broadway), New York, NY ("2 Herald Square Property") on substantially the terms described on the Term Sheet given by Initial Lender to Company. Prior to the maturity or earlier prepayment of the Initial Loan, the Company agrees to use its diligent efforts to apply on behalf of 1328 Broadway Owners LLC, 1328 Broadway Mezz LLC, 6 Times Square LLC, 6 Times Square Mezz LLC and 6 Times Square JV LLC for and secure a loan to refinance the Initial Loan at a then prevailing rate and on commercially reasonable non-recourse teens (with customary carve outs) for senior financing and/or mezzanine financing, as the case may be, taking into account the then-- existing condition of the 2 Herald Square Property and applicable markets (the "Loan"), which Loan shall be secured, directly or indirectly, by the 2 Herald Square Property. Notwithstanding the foregoing, if Sharon Sutton and/or Marilyn Sitt (as required) shall execute and deliver to the Initial Lender and any lender which makes the Loan (the "Lender"), if required by Initial Lender and/or such Lender, any indemnities, guarantees, covenants, representations and warranties or other recourse agreements which such Initial Lender and/or any mezzanine lenders (the `Initial Mezz Lender") and/or Lender requires which are consistent with those set forth in the Term Sheet in the case of Initial Lender and Initial Mezz Lender, and consistent with then customary terms in the case of Lender, and if requested by Managing Member, each Member shall execute a reimbursement agreement in a form reasonably satisfactory to Sitt. The Managing Member shall direct the Company to solicit debt or other financing from potential lenders and/or providers of equity, and, notwithstanding anything contained herein to the contrary, the Managing Member shall have the sole discretion and authority to select which Initial Loan, Initial Lender, Loan and Lender is in the Company's best interests..the Members agree to make such reasonable changes to this Agreement as may be requested by the Initial Lender and/or Lender, provided that such changes shall not alter the economic terms, or any rights or obligations of the Members or their Affiliates, set forth herein. The documents executed in connection with the Initial Loan and the Loan from time-to-time in effect are referenced to as the "Loan Documents". The Company shall take such action as is otherwise required in order to effectuate the acquisition of the 2 Herald Property as determined by Manager. 4.6 Ground Lease. The Company and the Members agree to use their diligent efforts to secure the lessee interest in a certain ground lease for the 2 Herald Property from SL Green or an affiliate ("Ground Lessor") for then Herald Square Property or as the Manager may determine. The Members agree to make such reasonable changes to this Agreement as may be requested by the Ground Lessor, provided that such changes shall not alter the economic terms, or any rights or obligations of the Members or their Affiliates, set forth herein. ARTICLE V 11

13 DISTRIBUTIONS; ALLOCATIONS OF INCOME AND LOSSES 5.1 Distributions. Distributions of Available Cash, the Promote Distributions, and the Permitted Fees shall be made upon receipt thereof from 6 JV LLC. All Distributions shall be made as follows: unpaid Base Return; (a) First, to each Member in an amount equal to each Member's accrued and Second, parri passu, to each Member in an amount equal to (an in proportion to) the Gross Adjusted Capital Contribution of each Member, until all Gross Adjusted Capital Contributions are repaid; and Third, twenty-five-percent (25%) to Sitt (the "6 Times Square Distribution Promote"), % to Sitt (subject to adjustment of said % to the extent necessary to reflect Sitt's Company interest), and the balance to the Members (other than Sitt), pro rata, in proportion to their respective Company interests. (b) Notwithstanding anything contained herein to the contrary, Distributions of the Promote Distributions and the Permitted Fees (as well as the 6 Times Square Distribution Promote) shall be made 100% to Sitt. The Members hereby acknowledge and agree that all amounts constituting Promote Distributions and Permitted Fees (i) shall belong solely to Sitt; (ii) shall not be used to pay any Company expense or for any purpose other than distribution to Sitt; and (iii) no Members other than Sitt shall have any interest therein. 5.2 Allocation of Losses. After making the allocations set forth in Section 5.4, Losses for each fiscal year shall be allocated as follows: (a) Subject to the limitation imposed by Section 5.3(b), first among the Members so as to produce balances in their Capital Accounts such that a Distribution of an amount of cash equal to such Capital Account balances at the end of such fiscal year in accordance with such Capital Account balances would be in the amounts, sequence and priority set forth in Section 5.1, until such Capital Account balances are reduced to zero. Any remaining Losses shall be allocated, among the Members in proportion to their Capital Contributions. (b) Losses allocated to a Member pursuant to Section 5.3(a) shall not exceed the maximum amount of Losses that can be so allocated without causing such Member to have an Adjusted Capital Account Deficit at the end of such fiscal year. 5.3 Allocation of Losses. After making the allocations set forth in Section 5.4, Losses for each fiscal year shall be allocated as follows: (a) Subject to the limitation imposed by Section 5.3(b), first among the Members so as to produce balances in their Capital Accounts such that a Distribution of an amount of cash equal to such Capital Account balances at the end of such fiscal year in accordance with such Capital Account balances would be in the amounts, sequence and priority set forth in Section 5.1, until such Capital Account balances are reduced to zero. Any remaining Losses shall be allocated among the Members in proportion to their Capital Contributions. (b) Losses allocated to a Member pursuant to Section 5.3(a) shall not exceed the maximum amount of Losses that can be so allocated without causing such Member to have an Adjusted Capital Account Deficit at the end of such fiscal year. 5.4 Special Allocati ons. Except as otherwise provided, the following special allocations 12

14 shall be made: (a) Qualified Income Offset. If a Member unexpectedly receives any adjustments, allocations, or distributions described in Regulations Sections (b)(2)(ii)(d)(4), (b)(2)(ii)(d)(5), or (b)(2)(i)(d)(6), or otherwise has an Adjusted Capital Account Deficit as of the end of a taxable year, items of Company income and gain shall be specially allocated to the Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 5.4(a) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article have been tentatively applied as if this Section 5.4(a) were not in the Agreement. (b) Minimum Gain Chargeback. Notwithstanding the preceding provisions of this Article 5, except as otherwise provided in Regulation Section (0 if there is a net decrease in the Minimum Gain during a fiscal year, each Member with a share of Minimum Gain shall be allocated items of income and gain for that year (and, if necessary, subsequent years), in accordance with Regulations Sections (f) and (j)(2)(i), in an amount equal to such Member's share of the net decrease in the Minimum Gain. This Section 5.4(b) is intended to comply with the minimum gain chargeback requirement in Regulations Section (fl and shall be interpreted consistently therewith. (c) Member Minimum. Gain Chargeback. Notwithstanding any other provision of this Article 5, except as otherwise provided in Regulation Section (i)(4) if there is a net decrease in the Member Minimum Gain during a fiscal year, after the allocation required by Section 5.4(b), but prior to any other allocation for the year, each Member with a share of the Member Minimum Gain shall be allocated income and gain for that year (and, if necessary, subsequent years), in accordance with Regulations Section 1 _704-2(j)(2)(ii), in an amount equal to such Member's share of the net decrease in the Member Minimum Gain. This Section 5.4(c) is intended to comply with the Member minimum gain chargeback requirement in Regulations Section (i)(4) and shall be interpreted consistently therewith. (d) Nonrecourse Deductions. Nonrecourse Deductions for each fiscal year shall be allocated among the Members in proportion to the Distributions made for such year pursuant to Section 5.1. (e) Member Nonrecourse Deductions. Notwithstanding anything to the contrary herein, Member Nonrecourse Deductions for each fiscal year shall be allocated to the Member who bears the economic risk of loss with respect to the Member nonrecourse debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section (i)(1). 5.5 Regulatory Allocations. The allocations set forth in Section 5.4 (the `Regulatory Allocations") are intended to comply with certain requirements of Regulations Sections (b) and The Regulatory Allocations may not be consistent with the manner in which the Members intend to divide Company Distributions. Accordingly, the Members on advice of tax counsel. or independent..accountant to the Company are hereby authorized to allocate Profits, Losses, and other items among the Members so as to prevent the Regulatory Allocations from distorting the manner in which Company Distributions will be made among the Members pursuant to Sections 5.1 and 9.3. In general, the Members anticipate that this will be accomplished by specially allocating other Profits, Losses, and items of income gain, loss, and deduction among the Members so that the net amount of the Regulatory Allocations and such special allocations to each such Member is zero. However, the Members shall have discretion to accomplish this result in any reasonable manner permitted under Regulations Section (b). 5.6 Other Allocations Rule s. (a) Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction and any other allocations not otherwise provided for shall be allocated among the Members in the same, proportions as they share Profits or Losses, as the case may be, for the year. 13

15 (b) Except as otherwise provided in this Agreement, all items that are components of Profits or Losses shall be allocated among the Members in the same proportions as they have been allocated such Profits or Losses, as the case may be, for the year. 5.7 Tax Allocations; Code Section 704(c). Following an adjustment to the Gross Asset Value of any Company Property pursuant to Section 1.18, Depreciation and/or cost recovery deductions and gain or loss with respect to each item of Company Property shall be allocated among the Members for federal income tax purposes in accordance with the principles of Section 704(c) of the Code and the Regulations promulgated thereunder so as to take into account the variation, if any, between the adjusted tax basis of such property and its Gross Asset Value. Any elections or other decisions relating to such allocations shall be made by the Members in a manner that reasonably reflects the purpose and intention of this Agreement, and may include a decision to use the "traditional method" of allocation described in Regulation Section (b)(1). 5.8 Tax Elections. The Members may elect in accordance with Section 754 of the Code to adjust the basis of the assets of the Company for Federal income tax purposes in the event of a distribution of Company Property as described in Section 734 of the Code or a transfer by any Member of its Company Interest as described in Section 734 of the Code. 5.9 Transfers. If any Company Interest is transferred pursuant to and in compliance with Article 7, Profits and Losses and other items allocable to the transferred Company Interest shall be divided and allocated between the transferor and the transferee by taking into account their varying interest during the relevant period in accordance with Section 706(d) of the Code using any conventions permitted by law and reasonably selected by the Members. ARTICLE VI BOOKS AND RECORDS; ACCOUNTS 6.1 Books and Records_ True and correct books of account with respect to the operations of the. Company,shall be kept at the principal place of business of the Company. The Company shall also maintain at its principal place of business the following records: (a) a current list of the full name and last known business address of each Member set forth in alphabetical order, (b) a copy of the Certificate of Formation and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed, (c) copies of the Company's federal, state and local income tax returns and reports, if any, for the three most recent years and (d) copies of any then effective Company agreements and of any financial statements of the Company for the three most recent years. Any Member shall have the right (after reasonable prior notice to the other Members), at its own expense, to examine, or have its duly authorized representative examine, the books of account of the Company and such other information reasonably related to such Member's Company interest, and the Company shall make them available at the office at which those books are maintained. 6.2 Accounting Basis and Fiscal Year. The Company's books shall be kept on the accrual method of accounting or such other method as determined by the Manager in its sole discretion. The fiscal year of the Company shall be the calendar year. 6.3 Reports. Within 120 days after the end of each fiscal year, the Company shall cause to be prepared and sent to each Person who was a Member at any time during the fiscal year then ended a financial report of the Company, including, if so decided by the Manager, and at no cost to the Manager, an audited balance sheet and profit and loss statement of the Company for the year, and a statement of the Capital 14

16 Account of each Member. Any Member may (after reasonable prior notice to the other Members), at any time, and at his or its own expense, cause an additional audit of the Company books to be made by a certified accountant of his or its own selection. 6.4 'Tax Returns. The Members shall prepare or cause to be prepared and shall file on or before the due date (or any extension thereof) any Federal, state or local tax returns required to be filed by the Company. Also within 120 days after the end of each fiscal year, the Company shall furnish each Member with such information as may be needed to enable each Member to file its Federal income tax return and any required state income tax return. The Company shall pay, out of available cash flow and other assets of the Company, any taxes payable by the Company. Except as otherwise set forth in this Agreement, all decisions regarding tax elections shall be made by the Manager. 6.5 Tax Matters Member. The Manager is hereby designated the "Tax Matters Member" pursuant to the Code. The Manager is authorized to take such actions as may be required by the Code and the Regulations to continue such designation. Ralph Sitt is designated initially as the Tax Matters Member. ARTICLE VII ASSIGN ABILITY OF INTERESTS; ADDITIONAL MEMBER S 7.1 General Conditions. Whether or not otherwise permitted by this Agreement, no Member shall sell, transfer, assign pledge or otherwise dispose of (as the case may be, a "Transfer") all or any portion of its Company Interest or any right to receive any Distributions under this Agreement ("Distributive Rights") if the Transfer will violate or conflict with the provisions of the 6 JV Agreement or the provisions of any limited liability company agreement, operating agreement, partnership agreement, charter or by-laws of any direct or indirect subsidiary of 6 JV LLC or of the loan documents entered into by 6 Times Square LLC and/or 6 Times Square Mezz LLC and/or 1328 Broadway Mezz LLC and/or 1328 Broadway Owners LLC in connection with the acquisition of the property located at 2 Herald Square (a/k/a 1328 Broadway) New York, New York or such other loan documents thereafter entered into by said entities or, in the opinion of counsel satisfactory to the Company: (a) cause the termination or dissolution of the Company under the Law; (b) require registration under the Securities Act of 1933, as:.a vended or under any other securities law or result in the violation of any applicable state securities laws; or (c) cause the Company or any Member to be subject to any additional regulatory requirements Distributive Rights. Subject to Section 7.1, any Member shall have the right to Transfer its Distributive Rights provided that the transferee shall not have any rights of a Member under this Agreement (including, but not limited to, voting and consent rights and rights to inspect the Company's books and records) unless admitted as an Additional Member as hereinafter provided. 7.3 Transfer by Members. No Member may Transfer all or any portion of its Company Interest unless such Transfer is in compliance with the provisions of Section Additional Member. A transferee of all or part of the Company Interest of a Member permitted under this Agreement shall be admitted to the Company as an Additional Member and be listed as a Member on the books and records of the Company only if (a) the transferring Member gives such right to the transferee, (1,) the Manager consents to the admission of the transferee (which consent shall not be required in the case of a transferee which is an Affiliate of the transferring Member and shall otherwise not be unreasonably withheld or delayed), (c) the transferee shall execute and deliver an agreement reasonably satisfactory to the Manager agreeing to assume, to be bound by and to comply with all of the terms and conditions of this Agreement applicable to the Members, (d) the transferee shall execute, and deliver all necessary certificates or other documents and perform such other acts as may be required under the Law or other applicable laws and regulations to effectuate the admission of the Additional Member and to preserve 15