Exhibit 3.4
This Limited Liability Company Agreement of XXXXX FARGO STUDENT LOANS
RECEIVABLES III, LLC (the "Company") is made as of November 6, 2001, by XXXXX
FARGO & COMPANY as the sole member ("Member").
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Member hereby, intending
to be legally bound, agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement,
have the meanings herein specified.
"Additional Member" has the meaning set forth in Section 12.1
hereof.
"Additional Units" has the meaning set forth in Section 12.1 hereof.
"Affiliate" means with respect to a specified Person, any Person
that directly or indirectly controls, is controlled by, or is under common
control with, the specified Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
"Agreement" means this Limited Liability Company Agreement of the
Company as amended, modified, supplemented or restated from time to time.
"Assignee" means any Person who is an assignee of a Member's limited
liability company interest in the Company, or part thereof, and who does not
become a Member pursuant to Section 13.1 hereof.
"Bankruptcy" means, with respect to any Person, if such Person (i)
makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against it in any proceeding of this nature, (vi) seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the Person or of all or any substantial part of its properties,
or (vii) if 120 days after the commencement of any proceeding against the
Person
seeking reorganization, arrangement, composition, readjustment, liquidation or
similar relief under any statute, law or regulation, if the proceeding has not
been dismissed, or if within 90 days after the appointment without such
Person's consent or acquiescence of a trustee, receiver or liquidator of such
Person or of all or any substantial part of its properties, the appointment is
not vacated or stayed, or within 90 days after the expiration of any such
stay, the appointment is not vacated. The foregoing definition of "Bankruptcy"
is intended to replace and shall supersede and replace the definition of
"Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the Act.
"Basic Documents" means this Agreement and all documents and
certificates contemplated by or delivered in connection with this Agreement,
the formation of a Securitization Trust or the issuance of Securities.
"Board" means the Board of Directors of the Company.
"Capital Account" means, with respect to any Unit Holder, the
account maintained for such Unit Holder in accordance with the provisions of
Section 4.4 hereof.
"Capital Contribution" means, with respect to any Unit Holder, the
aggregate amount of money and the initial fair market value of any property
(other than money) contributed to the Company pursuant to Section 4.1 hereof
with respect to the Units held by such Unit Holder. In the case of a Unit
Holder who acquires an interest in the Company by virtue of an assignment in
accordance with the terms of this Agreement, the "Capital Contribution" of
such Unit Holder shall be determined in accordance with Section 4.4(b) hereof.
"Certificate" means the Certificate of Formation of the Company and
any and all amendments thereto and restatements thereof filed on behalf of the
Company with the office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any corresponding federal tax statute enacted after the date of
this Agreement. A reference to a specific Section (ss.) of the Code refers not
only to such specific section but also to any corresponding provision of any
federal tax statute enacted after the date of this Agreement, as such specific
section or corresponding provision is in effect on the date of application of
the provisions of this Agreement containing such reference.
"Company" means XXXXX FARGO STUDENT LOANS RECEIVABLES III, LLC, the
limited liability company hereby established under and pursuant to the
Delaware Act and this Agreement.
"Covered Person" means a Member, a Director, an Officer, a Manager,
any Affiliate of a Member, a Director, an Officer or a Manager, any Officers,
Directors, Member, partners, employees, representatives or agents of a Member,
a Director, an Officer or a Manager or their respective Affiliates, or any
employee or agent of the Company or its Affiliates.
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"Delaware Act" means the Delaware Limited Liability Company Act, 6
Del. C. ss. 18-101 et seq., as amended from time to time.
"Director" means a Director of the Company.
"Eligible Lender Trustee" means a national banking association, not
in its individual capacity but solely as Eligible Lender Trustee under the
Trust Agreement.
"Federal Student Loans" means student loans which are guaranteed as
to principal and interest by a guaranty agency pursuant to a guaranty
agreement, under pertinent provisions of the Higher Education Act.
"Fiscal Year" means (i) the period commencing upon the formation of
the Company and ending on December 31 of the year of formation, (ii) any
subsequent twelve (12) month period commencing on January 1 and ending on
December 31, or (iii) any portion of the period described in Clause (ii) of
this sentence for which the Company is required to allocate Profits, Losses
and other items of Company income, gain, loss or deduction pursuant to Article
VIII hereof.
"Higher Education Act" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations of the
United States Department of Education or the applicable guaranty agency.
"Independent Director" means a natural person who, for the five-year
period prior to his or her appointment as Independent Director has not been,
and during the continuation of his or her service as Independent Director is
not: (i) an employee, director, stockholder, partner or officer of the Company
or any of its Affiliates (other than his or her service as an Independent
Director of the Company), (ii) a customer or supplier of the Company or any of
its Affiliates or (iii) any member of the immediate family of a person
described in (i) or (ii).
An individual that otherwise satisfies the foregoing shall not be
disqualified from serving as an Independent Director of the Company if such
individual is at the time of initial appointment, or at any time while serving
as an Independent Director of the Company, an Independent Director of a
Special Purpose Entity that is an Affiliate of the Company or a Member. For
purposes of this paragraph only, a "Special Purpose Entity" is an entity whose
organizational documents contain restrictions on its activities and impose
requirements intended to preserve its separateness that are substantially
similar to those of the Company, and provide, inter alia, that it is (a)
organized for a limited purpose; (b) has restrictions on its ability to incur
indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c)
may not file voluntarily a bankruptcy petition on its own behalf (and/or on
behalf of certain Affiliates) without the consent of the Independent
Director(s); and (d) shall conduct itself (and/or cause certain Affiliates to
conduct themselves) in accordance with certain "separateness covenants,"
including, but not
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limited to, the maintenance of books, records, bank accounts and assets
separate from those of any other Person.
"Liquidating Trustee" has the meaning set forth in Section 14.3
hereof.
"Majority Vote" means the approval of, or the affirmative vote by,
Members holding a majority of the Units held by Members.
"Manager" means a Person designated by a Member as a manager of the
Company within the meaning of the Delaware Act and shall include Officers of
the Company.
"Material Action" means to consolidate or merge the Company with or
into any Person, or sell all or substantially all of the assets of the
Company, or to institute proceedings to have the Company be adjudicated
bankrupt or insolvent, or consent to the institution of Bankruptcy proceedings
against the Company or file a petition seeking, or consent to, reorganization
or relief with respect to the Company under any applicable federal or state
law relating to Bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or a substantial part of its property, or make any assignment for the
benefit of creditors of the Company, or admit in writing the Company's
inability to pay its debts generally as they become due, or take action in
furtherance of any such action, or, to the fullest extent permitted by law,
dissolve or liquidate the Company.
"Member" means any Person named as a member in the recitals to this
Agreement or who executes this Agreement as a member and includes any Person
admitted as an Additional Member or a Substitute Member pursuant to the
provisions of this Agreement, and "Members" means two (2) or more of such
Persons when acting in their capacities as members of the Company. "Members"
shall also include the sole Member of the Company at any time there is only
one Member. For purposes of the Delaware Act, the Members shall constitute one
(1) class or group of members.
"Net Cash Flow" means, for each Fiscal Year or other period of the
Company, the gross cash receipts of the Company from all sources, but
excluding any amounts, such as gross receipts taxes, that are held by the
Company as a collection agent or in trust for others or that are otherwise not
unconditionally available to the Company, less all amounts paid by or for the
account of the Company during the same Fiscal Year or other period (including,
without limitation, payments of principal and interest on any Company
indebtedness), and less any amounts determined by the Board to be necessary to
provide a reasonable reserve for working-capital needs or any other
contingencies of the Company. Net Cash Flow shall be determined in accordance
with the cash receipts and disbursements method of accounting and otherwise in
accordance with generally accepted accounting principles, consistently
applied. Net Cash Flow shall not be reduced by depreciation, amortization,
cost recovery deductions, depletion, similar allowances or other non-cash
items, but shall be increased by any reduction of reserves previously
established.
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"Obligations" shall mean the Securities issued by any Securitization
Trust for which the Company acts as depositor, settlor or grantor and any
indebtedness, liabilities and obligations of the Company under or in
connection with this Agreement, the other Basic Documents or any related
document, in each case in effect as of any date of determination.
"Officer" means an Officer of the Company.
"Permitted Temporary Investments" means those investments authorized
by the Board from time to time for temporary investments of Company funds.
"Person" includes any individual, association, corporation,
partnership (general or limited), joint venture, trust, estate, limited
liability company or partnership, or other legal entity or organization.
"President" means the President of the Company.
"Private Student Loans" means student loans which are made outside
the Higher Education Act that may or may not be privately guaranteed or
insured.
"Profits" and "Losses" means, for each Fiscal Year, the net profits
or net losses, as the case may be, of the Company for such Fiscal Year,
determined on the accrual method of accounting in accordance with generally
accepted accounting principles.
"Rating Agency" means each nationally recognized rating agency that
has rated any Securities that have been issued and are outstanding pursuant to
any pooling and servicing agreement, indenture, trust agreement or other
similar agreement entered into by the Company or any of its Affiliates.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given ten days prior notice thereof and
that each of the Rating Agencies shall have notified the Company in writing
that such action will not result in a reduction or withdrawal of the then
current rating by such Rating Agency of any Securities.
"Securities" has the meaning set forth in Section 3.1(b).
"Securitization Trust" has the meaning set forth in Section 3.1(b).
"Student Loans" means Federal Student Loans and/or Private Student
Loans.
"Substitute Member" means a Person who is admitted to the Company as
a Member pursuant to Section 13.1 hereof, and who is named as a Member on
Schedule A to this Agreement.
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"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"Unit" means a limited liability company interest in the Company
representing such fractional part of the limited liability company interest of
all Unit Holders pursuant to this Agreement as is equal to the quotient of one
(1) divided by the total number of Units.
"Unit Holder" means any Person who holds one (1) or more Units,
regardless of whether such Person is a Member and regardless of whether such
Units were initially acquired by such Person from the Company or by assignment
from another Unit Holder.
Section 1.2 Headings. The headings and subheadings in this Agreement
are included for convenience and identification only and are in no way
intended to describe, interpret, define or limit the scope, extent or intent
of this Agreement or any provision hereof.
ARTICLE II
THE COMPANY
Section 2.1 Formation.
(i) The Member, by execution of this Agreement and the
filing of the Certificate hereby enters into and forms the Company
as a limited liability company under and pursuant to the Delaware
Act. The Member agrees that the rights, powers, duties and
liabilities of the Member, Directors and Officers shall be as
provided in the Delaware Act, except as otherwise provided in this
Agreement.
(ii) The name and mailing address of each Member or Unit
Holder shall be listed on Schedule A attached hereto. The Company
shall be required to update Schedule A from time to time as
necessary to accurately reflect the information therein. Any
amendment or revision to Schedule A made in accordance with this
Agreement shall not be deemed an amendment to this Agreement. Any
reference in this Agreement to Schedule A shall be deemed to be a
reference to Schedule A as amended and in effect from time to time.
(iii) Xxxx X. Xxxxxxxxx, as an authorized person within
the meaning of the Delaware Act, shall execute, deliver and file the
Certificate and shall thereafter resign and have no further
authority to act for the Company.
Section 2.2 Name. The name of the Company formed and continued
hereby is XXXXX FARGO STUDENT LOANS RECEIVABLES III, LLC.
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Section 2.3 Term. The term of the Company commenced on the date the
Certificate was filed in the office of the Secretary of State of the State of
Delaware and shall continue for 100 years unless dissolved before such date in
accordance with the provisions of this Agreement. The existence of the Company
as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Delaware Act.
Section 2.4 Registered Agent and Office. The Company's registered
agent and office in Delaware shall be the Corporation Service Company, 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxx, Xxxxxxxx 00000. At any time, an
Officer may designate another registered agent and/or registered office.
Section 2.5 Principal Place of Business. The principal place of
business of the Company shall be at [Sixth and Marquette, Xxxxxxxxxxx,
Xxxxxxxxx 00000].
Section 2.6 Qualification in Other Jurisdictions. Any Officer shall
cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company transacts business and to file under another name in other
jurisdictions if required in order to conduct business there. Any Officer, as
an authorized person, within the meaning of the Delaware Act, shall execute,
deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Company to qualify to do business in a jurisdiction
in which the Company may wish to conduct business.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The purpose of the Company is to engage in any
of the following activities:
(a) to acquire, own, hold, sell, transfer, convey, dispose
of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with, publicly or privately and whether with
unrelated third parties or with affiliated entities, Student Loans
directly or through one or more trustees;
(b) to act as depositor, settlor or grantor of one or more
trusts or special purpose entities (each, a "Securitization Trust")
formed pursuant to a trust agreement or other agreement for the
purpose of issuing one or more series or classes of certificates,
bonds, notes or other evidences of interest or indebtedness
(collectively, "Securities") secured by or representing beneficial
interests in Student Loans;
(c) to acquire Securities or other property of a
Securitization Trust or any interest in any of the foregoing;
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(d) to issue, authorize, sell and deliver Securities or
other instruments secured or collateralized by the Securities;
(e) to engage servicers (or other agents) to service
Student Loans pursuant to related servicing arrangements and to
engage trustees to hold legal title to Student Loans on behalf of
the Company or other beneficiaries pursuant to related trust
agreements, in each case to the extent such arrangements are deemed
beneficial to the Company;
(f) to enter into interest rate, basis swap, cap, floor or
collar arrangements or other hedging arrangements and management and
administrative agreements in connection with the foregoing
activities;
(g) to own equity interests in other limited liability
companies or partnerships whose purposes are substantially
restricted to those described in clauses (a) through (f) above;
(h) to borrow money other than pursuant to clause (a)
above, but only to the extent that such borrowing is permitted by
the terms of the transactions contemplated by clauses (a) through
(g) above;
(i) to xxx and be sued, complain and defend, and
participate in administrative or other proceedings, in its name;
(j) to employ and otherwise engage employees and agents of
the Company (who may be designated as Officers with titles), and
define their duties and fix their compensation;
(k) to indemnify any Person in accordance with the
Delaware Act;
(l) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take any
other action with respect to any lease, contract or security
agreement in respect of any assets of the Company;
(m) to pay, collect, compromise, litigate, arbitrate or
otherwise adjust or settle any and all other claims or demands of or
against the Company or to hold such proceeds against the payment of
contingent liabilities; and
(n) to engage in any lawful act or activity and to
exercise any powers permitted to limited liability companies
organized
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under the laws of the State of Delaware that are necessary,
convenient or incidental to the accomplishment of the purpose of the
Company.
Section 3.2 Powers. Subject to Section 6.9, the Company, and the
Board of Directors, and any Officers and any Manager, acting singly, on behalf
of the Company, (i) shall have and exercise all powers necessary, convenient
or incidental to accomplish its purposes as set forth in Section 3.1 and (ii)
shall have and exercise all of the powers and rights conferred upon limited
liability companies formed pursuant to the Act.
ARTICLE IV
CAPITAL CONTRIBUTIONS, UNITS,
CAPITAL ACCOUNTS AND ADVANCES
Section 4.1 Capital Contributions.
(i) The records of the Company shall reflect the cash or
property that each Unit Holder has contributed or is deemed to have
contributed to the capital of the Company and the agreed value of
such Capital Contributions.
(ii) No Unit Holder shall be required to make any
additional capital contribution to the Company. However, a Unit
Holder may make additional capital contributions to the Company upon
approval by a Majority Vote of the Members.
Section 4.2 Units. A Unit Holder's limited liability company
interest in the Company shall be represented by the "Unit" or "Units" held by
such Unit Holder. Each Unit Holder's respective Units shall be set forth on
Schedule A attached hereto. Each Unit Holder hereby agrees that its limited
liability company interest in the Company and in its Units shall for all
purposes be personal property. A Unit Holder has no interest in specific
Company property.
Section 4.3 Status of Capital Contributions.
(i) Except as otherwise provided in this Agreement, the
amount of a Unit Holder's Capital Contributions may be returned to
it, in whole or in part, at any time, but only with the consent of
all Members. Any such returns of Capital Contributions shall be made
to all Unit Holders in proportion to the number of Units then held
by each Unit Holder. Notwithstanding the foregoing, no return of a
Unit Holder's Capital Contributions shall be made hereunder if such
distribution would violate applicable state law. Under circumstances
requiring a return of any Capital Contribution, no Unit Holder shall
have the right to demand or receive property other than cash, except
as may be specifically provided in this Agreement.
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(ii) No Unit Holder shall receive any interest, salary or
drawing with respect to its Capital Contributions or its Capital
Account or for services rendered on behalf of the Company or
otherwise in its capacity as a Unit Holder, except as otherwise
specifically provided in this Agreement.
(iii) Except as otherwise provided herein and by
applicable state law, the Members shall be liable only to make their
capital contributions pursuant to Section 4.1 hereof, and no Member
or Assignee shall be required to lend any funds to the Company or,
after a Member's Capital Contributions have been fully paid pursuant
to Section 4.1 hereof, to make any additional capital contributions
to the Company. No Unit Holder shall have any personal liability for
the repayment of any Capital Contribution of any other Member or
Assignee.
Section 4.4 Capital Accounts.
(a) An individual Capital Account shall be established and
maintained for each Unit Holder in accordance with the following
provisions:
(i) to such Unit Holder's Capital Account there shall be
credited such Unit Holder's Capital Contributions, such Unit
Holder's distributive share of Profits and the amount of any Company
liabilities that are assumed by such Unit Holder or that are secured
by any Company assets distributed to such Unit Holder; and
(ii) to such Unit Holder's Capital Account there shall be
debited the amount of cash and the fair market value of any Company
assets distributed to such Unit Holder pursuant to any provision of
this Agreement, such Unit Holder's distributive share of Losses and
the amount of any liabilities of such Unit Holder that are assumed
by the Company or that are secured by any property contributed by
such Unit Holder to the Company.
(b) Upon any transfer of a Unit Holder's interest in the
Company, the transferee shall succeed to the allocable portion of
the transferor's Capital Account.
Section 4.5 Advances. If any Unit Holder shall advance any funds to
the Company in excess of its Capital Contributions, the amount of such advance
shall neither increase its Capital Account nor entitle it to any increase in
its share of the distributions of the Company. The amount of any such advance
shall be a debt obligation of the Company to such Unit Holder and shall be
repaid to it by the Company with interest at a rate equal to the lesser of (i)
the applicable federal rate under Section 1274(d) of the Code and (ii) the
maximum rate permitted by applicable law, and upon such other terms and
conditions as shall be mutually determined by such Unit Holder and a Manager.
Any such advance shall be payable and collectible only out of
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Company assets, and the other Unit Holders shall not be personally obligated
to repay any part thereof. No Person who makes any nonrecourse loan to the
Company shall have or acquire, as a result of making such loan, any direct or
indirect interest in the profits, capital or property of the Company, other
than as a creditor.
ARTICLE V
MEMBERS AND MEETINGS OF MEMBERS
Section 5.1 Powers of Members. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. The Members shall also have the power to
authorize the Board, by Majority Vote, to possess and exercise any right or
power not already vested in the Board pursuant to Section 6.1 or any other
provision of this Agreement. In addition to the foregoing, the Members have
the power to exercise any and all other rights or powers of the Company and do
all lawful acts and things as are not by the Delaware Act or this Agreement
directed or required to be exercised or done by the Board. Except as provided
herein, the Members shall have no power to bind the Company.
Section 5.2 Reimbursements. The Company shall reimburse the Members
for all ordinary and necessary out of pocket expenses incurred by the Members
on behalf of the Company.
Section 5.3 Partition. Each Member waives any and all rights that it
may have to maintain an action for partition of the Company's property.
Section 5.4 Meetings of the Members.
(i) Meetings of the Members may be called at any time by
any Member. Notice of any meeting shall be given to all Members not
less than two (2) days nor more than thirty (30) days prior to the
date of such meeting. Each Member may authorize any Person to act
for it by proxy on all matters in which a Member is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Member
or its attorney-in-fact.
(ii) The Members shall establish all other provisions
relating to meetings of Members, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by
any Members, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
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(iii) The Company may take any action contemplated by this
Agreement as approved by the unanimous written consent of the
Members.
ARTICLE VI
MANAGEMENT OF THE COMPANY
Section 6.1 Board of Directors. The business and affairs of the
Company shall be managed by or under the direction of a Board of one or more
Directors. Except as provided herein, it is intended that this grant of
authority shall authorize the Board of Directors to function in all matters
not otherwise reserved to the Members as if the Company were a corporation
formed under the Delaware General Corporation Law and the Board were the Board
of Directors of such corporation. Subject to Sections 6.9 and 6.10, the
Members from time to time shall determine the number of Directors to
constitute the Board, provided that thereafter the authorized number of
Directors may be increased by the Members or the Board and decreased by the
Members. Each Director elected shall hold office until a successor is elected
and qualified or until such Director's earlier death, resignation or removal.
Directors need not be Members. Subject to Sections 6.9 and 6.10, vacancies,
except vacancies caused by removal pursuant to Section 6.7 of this Article VI,
and newly created directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Directors then in
office, though less than a quorum, or by a sole remaining Director, and the
Directors so chosen shall hold office until the next election of Directors and
until their successors are duly elected and shall qualify, unless sooner
displaced.
Section 6.2 Meetings of the Board of Directors. The Board of
Directors of the Company may hold meetings, both regular and special, either
within or without the State of Delaware. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board. Special meetings of the Board
may be called by the Chief Executive Officer or President on one (1) day
notice to each Director, either personally, by telephone, by mail, by
facsimile, by electronic mail or by any other means of communication; special
meetings shall be called by the President or Secretary in like manner and on
like notice on the written request of one or more of the Directors. Whenever
any notice is required to be given, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Attendance of a person at
a meeting shall constitute a waiver of notice of such meeting, except when the
persons attend a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business to be transacted
at, or the purpose of, any regular or special meeting of the Members,
Directors or a committee of Directors need be specified in any written waiver
of notice.
Section 6.3 Quorum and Acts of the Board. At all meetings of the
Board a majority of the Directors shall constitute a quorum for the
transaction of business and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of
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the Board of Directors, except as may be otherwise specifically provided by
this Agreement. If a quorum shall not be present at any meeting of the Board
of Directors, the Directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken without a
meeting, if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee. Such written actions of the Board will
be effective on the date such acts are approved or such earlier or later date
as the Board may designate, except as may be designated or required by
applicable law.
Section 6.4 Electronic Communications. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Section 6.5 Committees of Directors. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the Directors of the
Company. The Board may designate one or more Directors as alternate members of
any committee, who may replace any absent or disqualified member at any
meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not such members constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, and subject to Sections 6.9 and 6.10, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Company, but no such committee
shall have the power and authority to declare a distribution, unless the
resolution of the Board designating such committee expressly so provides. Such
committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors. Each
committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
Section 6.6 Compensation of Directors. The Board of Directors shall
have the authority to fix the compensation of Directors. The Directors may be
paid their expenses, if any, of attendance at such meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as Director. No such payment shall
preclude any Director from serving the Company in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
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Section 6.7 Removal of Directors. Unless otherwise restricted by
law, any Director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of Units entitled to vote at an
election of Directors. Any vacancy caused by any such removal may be filled by
action of the Members.
Section 6.8 Directors as Agents. The Directors, to the extent of
their powers set forth in this Agreement, are agents of the Company for the
purposes of the Company's business, and the actions of the Directors taken in
accordance with this Agreement shall bind the Company.
Section 6.9 Limitations on the Company's Activities.
(a) This Section is being adopted in order to comply with
certain provisions required in order to qualify the Company as a
"special purpose" entity.
(b) The Members shall not, so long as any Obligation is
outstanding, amend, alter, change or repeal the definition of
"Independent Director", or Sections 3.1, 3.2, 6.1, 6.9, 6.10, 14.1,
14.2, 14.5, 16.1, 16.2 and 16.3 of this Agreement without the
unanimous written consent of the Board (including all Independent
Directors). Subject to this Section, the Members and the Board are
reserved the right to amend, alter, change or repeal any provisions
contained in this Agreement in accordance with Article XVI.
(c) Notwithstanding any other provision of this Agreement
and any provision of law that otherwise so empowers the Company, the
Members, the Board, any Officer, any Manager, or any other Person,
neither the Members nor the Board nor any Officer nor any other
Person shall be authorized or empowered, nor shall they permit the
Company, without the prior unanimous written consent of the Member
and the Board (including all Independent Directors), to take any
Material Action.
(d) The Board and the Members shall cause the Company to
do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, rights (charter and statutory)
and franchises; provided, however, that the Company shall not be
required to preserve any such existence, right or franchise if: (i)
the Board shall determine that the preservation thereof is no longer
desirable for the conduct of its business and that the loss thereof
is not disadvantageous in any material respect to the Company and
(ii) the Rating Agency Condition is satisfied. The Board also shall
cause the Company to:
(1) maintain its own separate books and records
and bank accounts;
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(2) at all times hold itself out to the public
and all other Persons as a legal entity separate from the
Members and any other Person;
(3) have a Board of Directors separate from that
of the Members and any other Person;
(4) file its own tax returns, if any, as may be
required under applicable law, to the extent (1) not part
of a consolidated group filing a consolidated return or
returns or (2) not treated as a division for tax purposes
of another taxpayer, and pay any taxes so required to be
paid under applicable law;
(5) except as contemplated by the Basic
Documents, not commingle its assets with assets of any
other Person;
(6) conduct its business in its own name and
strictly comply with all organizational formalities to
maintain its separate existence;
(7) maintain separate financial statements;
(8) pay its own liabilities;
(9) maintain an arm's length relationship with
its Affiliates and the Members;
(10) pay the salaries of its own employees, if
any;
(11) not hold out its credit or assets as being
available to satisfy the obligations of others;
(12) allocate fairly and reasonably any overhead
for shared office space;
(13) use separate stationery, invoices and
checks;
(14) except as contemplated by the Basic
Documents, not pledge its assets for the benefit of any
other Person;
(15) correct any known misunderstanding
regarding its separate identity;
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(16) maintain adequate capital in light of its
contemplated business purpose, transactions and
liabilities;
(17) cause its Board of Directors to meet at
least annually or act pursuant to written consent and keep
minutes of such meetings and actions and observe all other
Delaware limited liability company formalities;
(18) not acquire any securities of the Members
except to the extent permitted by the Basic Documents; and
(19) cause the Directors, Officers, agents and
other representatives of the Company to act at all times
with respect to the Company consistently and in
furtherance of the foregoing and in the best interests of
the Company;
failure of the Company, or the Members or Board on behalf of the Company, to
comply with any of the foregoing covenants or any other covenants contained in
this Agreement shall not affect the status of the Company as a separate legal
entity or the limited liability of the Members or the Directors.
(e) So long as any Obligation is outstanding, the Board shall
not cause or permit the Company to:
(1) except as contemplated by the Basic
Documents, guarantee any obligation of any Person,
including any Affiliate;
(2) engage, directly or indirectly, in any
business other than the actions required or permitted to
be performed under Section 3.1, the Basic Documents or
this Section;
(3) incur, create or assume any indebtedness
other than as expressly permitted under the Basic
Documents;
(4) make or permit to remain outstanding any
loan or advance to, or own or acquire any stock or
securities of, any Person, except that the Company may
invest in those investments permitted under the Basic
Documents and may make any advance required or expressly
permitted to be made pursuant to any provisions of the
Basic Documents and permit the same to remain outstanding
in accordance with such provisions;
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(5) to the fullest extent permitted by law,
engage in any dissolution, liquidation, consolidation,
merger, asset sale or transfer of ownership interests
other than such activities as are expressly permitted
pursuant to any provision of the Basic Documents; or
(6) form, acquire or hold any subsidiary
(whether corporate, partnership, limited liability company
or other).
Section 6.10 Independent Director. As long as any Obligation is
outstanding, the Members shall cause the Company at all times to have at least
one Independent Director who will be appointed by the Members. To the fullest
extent permitted by law, including Section 18-1101(c) of the Act, the
Independent Directors shall consider only the interests of the Company,
including its respective creditors, in acting or otherwise voting on the
matters referred to in Section 6.9. No resignation or removal of an
Independent Director, and no appointment of a successor Independent Director,
shall be effective until such successor shall have accepted his or her
appointment as an Independent Director by a written instrument. In the event
of a vacancy in the position of Independent Director, the Members shall, as
soon as practicable, appoint a successor Independent Director. All right,
power and authority of the Independent Director shall be limited to the extent
necessary to exercise those rights and perform those duties specifically set
forth in this Agreement. Except as provided in the second sentence of this
Section, in exercising their rights and performing their duties under this
Agreement, the Independent Director shall have a fiduciary duty of loyalty and
care similar to that of a director of a business corporation organized under
the General Corporation Law of the State of Delaware. No Independent Director
shall at any time serve as trustee in bankruptcy for any Affiliate of the
Company.
ARTICLE VII
OFFICERS
Section 7.1 Officers. The Officers of the Company shall be chosen by
the Board of Directors and shall include a President, a Chief Financial
Officer, a Secretary and a Treasurer. The Board of Directors may also choose a
Chief Executive Officer, one or more Vice Presidents including Executive,
Senior and Assistant Vice Presidents, and one or more Assistant Secretaries
and Assistant Treasurers. A person elected or appointed to be an Officer is by
such election or appointment designated a Manager by the Members for purposes
of the Delaware Act. Any number of offices may be held by the same person. The
Board of Directors may appoint such other Officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board. The salaries of all Officers and agents of the Company shall be fixed
by or in the manner prescribed by the Board of Directors. The Officers of the
Company shall hold office until their successors are chosen and qualify.
Officers need not be Members. Any Officer elected or appointed by the Board of
Directors may be removed at any time by the affirmative vote of a
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majority of the Board of Directors. Any vacancy occurring in any office of the
Company shall be filled by the Board of Directors.
Section 7.2 Chief Executive Officer. The Chief Executive Officer, if
any, shall preside at all meetings of the Members and the Board of Directors
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. The Chief Executive Officer may execute bonds, mortgages,
leases and other contracts, except where required by law to be otherwise
signed and executed and except where signing and execution thereof shall be
expressly delegated by the Board of Directors to some other Officer or agent
of the Company.
Section 7.3 The President. The President shall have general and
active management of the business of the Company and, if the President is not
the Chief Executive Officer, shall report to the Chief Executive Officer. The
President may execute bonds, mortgages, leases and other contracts, except
where required by law to be otherwise signed and executed and except where
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other Officer or agent of the Company.
Section 7.4 The Vice President. In the absence of the President or
in the event of the President's inability to act, the Vice President, if any
(or in the event there be more than one Vice President, the Vice Presidents in
the order designated by the Directors, or in the absence of any designation,
then in the order of their election), shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. The Vice Presidents, if any, shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 7.5 The Secretary and Assistant Secretary. The Secretary
shall attend all meetings of the Board of Directors and all meetings of the
Members and record all the proceedings of the meetings of the Company and of
the Board of Directors in a book to be kept for that purpose, may certify as
necessary the accuracy and completeness of such records and shall perform like
duties for the standing committees when required. The Secretary shall give, or
cause to be given, notice of all meetings of the Members and special meetings
of the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors, the Chief Executive Officer or
President, under whose supervision the Secretary shall be. The Assistant
Secretary, or if there be more than one, the Assistant Secretaries in the
order determined by the Board of Directors (or if there be no such
determination, then in order of their election) shall, in the absence of the
Secretary or in the event of the Secretary's inability to act, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
Section 7.6 The Chief Financial Officer, the Treasurer and Assistant
Treasurer. The Chief Financial Officer shall have the custody of the Company
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall deposit all moneys
and other valuable effects in the name and to the credit of the
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Company in such depositories as may be designated by the Board of Directors.
The Chief Financial Officer shall disburse the funds of the Company as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer, the President
and the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all of the Chief Financial Officer's
transactions and of the financial condition of the Company. The Treasurer and
Assistant Treasurer, or if there shall be more than one, the Assistant
Treasurers in the order determined by the Board of Directors (or if there be
no such determination, then in the order of their election), shall, in the
absence of the Chief Financial Officer or in the event of the Chief Financial
Officer's inability to act, perform the duties and exercise the powers of the
Chief Financial Officer and shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
Section 7.7 Officers as Agents. The Officers, to the extent of their
powers set forth in this Agreement, are agents of the Company for the purpose
of the Company's business, and the actions of any Officer taken in accordance
with this Agreement shall bind the Company.
Section 7.8 Third Party Reliance. Any person dealing with the
Company or any Member, Director or Officer in connection with the business of
the Company, may rely upon a certificate signed by a Secretary or Assistant
Secretary of the Company as to:
(i) the identity of a Member, Director or
Officer of the Company;
(ii) the existence or non-existence of any fact
or facts that constitute a condition precedent to acts by
the Board of Directors, the Members or the Officers or in
any matter related to the affairs of the Company;
(iii) the Persons who are authorized to execute
and deliver any instrument or document of, or on behalf
of, the Company; or
(iv) any act or failure to act by the Company or
as to any other matter whatsoever involving the Company,
or any Member, Director or Officer.
ARTICLE VIII
ALLOCATIONS
Section 8.1 Profits and Losses. Subject to the allocation rules of
Section 8.2 hereof, Profits and Losses for any Fiscal Year shall be allocated
among the Unit Holders in proportion to the number of Units held by each Unit
Holder.
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Section 8.2 Allocation Rules.
(i) If Members are admitted to the Company
pursuant to this Agreement on different dates, the Profits
or Losses allocated to the Unit Holders for each Fiscal
Year during which Members are so admitted shall be
allocated among the Unit Holders in proportion to the
number of Units each holds from time to time during such
Fiscal Year in accordance with ss.706 of the Code, using
any convention permitted by law and selected by the
Treasurer, unless another allocation is authorized by the
Board.
(ii) For purposes of determining the Profits,
Losses or any other items allocable to any period,
Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as
determined by the Treasurer using any method that is
permissible under ss.706 of the Code and the Treasury
Regulations thereunder.
(iii) 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 divided among the Unit Holders in the same
proportions as they share Profits and Losses for the
Fiscal Year in question.
(iv) The Members are aware of the income tax
consequences of the allocations made by this Article VIII
and hereby agree to be bound by the provisions of this
Article VIII in reporting their shares of Company income
and loss for income tax purposes.
Section 8.3 Tax Allocations: Section 704(c) of the Code. In
accordance with ss.704(c) of the Code and the Treasury Regulations thereunder,
income, gain, loss and deduction with respect to any property contributed to
the capital of the Company shall, solely for income tax purposes, be allocated
among the Unit Holders so as to take account of any variation between the
adjusted basis of such property to the Company for federal income tax purposes
and its initial fair market value.
ARTICLE IX
DISTRIBUTIONS
Section 9.1 Net Cash Flow. Except as otherwise provided in Article
XIV hereof (relating to the dissolution of the Company), any distribution of
the Net Cash Flow during any Fiscal Year shall be made to the Unit Holders in
proportion to the number of Units held by each Unit Holder.
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Section 9.2 Distribution Rules.
(i) All distributions pursuant to Section 9.1
hereof shall be at such times and in such amounts as shall
be determined by the Board; provided, however, that the
Board shall use its best efforts to cause the Company to
distribute to the Unit Holders an amount of Net Cash Flow
as shall be sufficient to enable the Unit Holders to fund
their federal and state income tax liabilities
attributable to their respective distributive shares of
the taxable income of the Company.
(ii) All amounts withheld pursuant to the Code
or any provision of any state or local tax law with
respect to any payment, distribution or allocation to the
Company or the Unit Holders shall be treated as amounts
distributed to the Unit Holders pursuant to this Article
IX for all purposes of this Agreement. The Board is
authorized to withhold from distributions, or with respect
to allocations, to the Unit Holders and to pay over to any
federal, state or local government any amounts required to
be so withheld pursuant to the Code or any provision of
any other federal, state or local law and shall allocate
such amounts to those Unit Holders with respect to which
such amounts were withheld.
Section 9.3 Limitations on Distribution. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution to any Unit Holder on account of its interest in the
Company if such distribution would violate Section 18-607 of the Delaware Act
or other applicable law.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books, Records and Financial Statements.
(i) At all times during the continuance of the
Company, the Company shall maintain, at its principal
place of business, separate books of account for the
Company that shall show a true and accurate record of all
costs and expenses incurred, all charges made, all credits
made and received and all income derived in connection
with the operation of the Company business in accordance
with generally accepted accounting principles consistently
applied, and, to the extent inconsistent therewith, in
accordance with this Agreement. Such books of account,
together with a certified copy of this Agreement and of
the Certificate, shall at all times be maintained at the
principal place of business of the Company and shall be
open to inspection and examination at reasonable times by
each Member and its duly authorized representative for any
purpose reasonably related to such Member's interest in
the Company. The books of account and the
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records of the Company shall be examined by and reported
upon as of the end of each Fiscal Year under the direction
of the Chief Financial Officer or Treasurer, or if
required by the Board, by a firm of independent certified
public accountants selected by the Board. Any Member shall
have the right to have a private audit of the Company
books and records conducted at reasonable times and after
reasonable advance notice to the Company for any purpose
reasonably related to such Member's interest in the
Company, but any such private audit shall be at the
expense of the Member desiring it, and it shall not be
paid for out of Company funds. Notwithstanding any other
provisions of this Agreement, the Board of Directors shall
have the right to keep confidential from the Members, for
such period of time as the Board deems reasonable, any
information which the Board of Directors reasonably
believes to be in the nature of trade secrets or other
information the disclosure of which the Board of Directors
in good faith believes is not in the best interests of the
Company or could damage the Company or its business or
which the Company is required by law or by Agreement with
a third party to keep confidential.
(ii) The Company shall prepare and maintain, or
cause to be prepared and maintained, the books of account
of the Company and the following documents shall be
transmitted by a Manager to each Member at the times
hereinafter set forth.
(a) Within three (3) months after the close
of each Fiscal Year, the following financial
statements, examined under the direction of the Chief
Financial Officer or Treasurer, or if required by the
Board, examined by and certified to by the
independent certified public accountants referred to
in Subsection (i) of this Section 10.1:
(1) balance sheet of the Company as of
the beginning and close of such Fiscal Year;
(2) statement of Company Profits and
Losses for such Fiscal Year; and
(3) statement of such Member's Capital
Account as of the close of such Fiscal Year, and
changes therein during such Fiscal Year.
(b) Within three (3) months after the close
of each Fiscal Year, the following documents:
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(1) a statement indicating such
Member's share of each item of Company income,
gain, loss, deduction or credit for such Fiscal
Year for income tax purposes; and
(2) a copy of each income tax return,
federal or state, filed by the Company for such
Fiscal Year.
Section 10.2 Accounting Method. For both financial and tax reporting
purposes and for purposes of determining Profits and Losses, the books and
records of the Company shall be kept on the accrual method of accounting
applied in a consistent manner and shall reflect all Company transactions and
be appropriate and adequate for the Company's business.
ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.1 Liability. Except as otherwise provided by the Delaware
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Covered Person.
Section 11.2 Exculpation.
(i) No Covered Person shall be liable to the Company or
any other Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Covered
Person in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of authority conferred on
such Covered Person by this Agreement, except that a Covered Person
shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person's gross negligence or willful
misconduct.
(ii) A Covered Person shall be fully protected in relying
in good faith upon the records of the Company and upon such
information, opinions, reports or statements presented to the
Company by any Person as to matters the Covered Person reasonably
believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on
behalf of the Company, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities,
Profits, Losses or Net Cash Flow or any other facts pertinent to the
existence and amount of assets from which distributions to Members
might properly be paid.
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Section 11.3 Fiduciary Duty.
(i) To the extent that, at law or in equity, a Covered
Person has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to
the Company or to any other Covered Person for its good faith
reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict the duties and
liabilities of a Covered Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Covered Person.
(ii) Unless otherwise expressly provided herein, (a)
whenever a conflict of interest exists or arises between Covered
Persons, or (b) whenever this Agreement or any other agreement
contemplated herein or therein provides that a Covered Person shall
act in a manner that is, or provides terms that are, fair and
reasonable to the Company or any Member, the Covered Person shall
resolve such conflict of interest, taking such action or providing
such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to
such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or
principles. In the absence of bad faith by the Covered Person, the
resolution, action or term so made, taken or provided by the Covered
Person shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty or obligation of the
Covered Person at law or in equity or otherwise.
Section 11.4 Indemnification. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by
reason of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by this
Agreement, except that no Covered Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Covered Person by
reason of gross negligence or willful misconduct with respect to such acts or
omissions; provided, however, that any indemnity under this Section 11.4 shall
be provided out of and to the extent of Company assets only, and no Covered
Person shall have any personal liability on account thereof.
Section 11.5 Expenses. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as authorized in
Section 11.4 hereof.
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Section 11.6 Outside Businesses. Except as otherwise provided in any
employment agreement or other agreement any Member, Director, Officer, Manager
or Affiliate thereof may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
or dissimilar to the business of the Company, and the Company, the Members,
Directors, Officers and Managers shall have no rights by virtue of this
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Company, shall not be deemed wrongful or improper. Except as
otherwise provided in any employment agreement or other agreement, no Member,
Director, Officer, Manager or Affiliate thereof shall be obligated to present
any particular investment opportunity to the Company even if such opportunity
is of a character that, if presented to the Company, could be taken by the
Company, and any Member, Director, Officer, Manager or Affiliate thereof shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment
opportunity.
ARTICLE XII
ADDITIONAL MEMBERS AND UNITS
Section 12.1 Additional Units. If approved by Majority Vote, the
Company is authorized to raise additional capital by offering and selling, or
causing to be offered and sold, additional limited liability company interests
in the Company ("Additional Units") to any Person in such amounts and on such
terms as the Members may determine. Each Person who subscribes for any of the
Additional Units shall be admitted as an additional member of the Company
(each, an "Additional Member" and collectively, the "Additional Members") at
the time such Person (i) executes this Agreement or a counterpart of this
Agreement and (ii) is named as a Member on Schedule A hereto. The legal fees
and expenses associated with such admission shall be borne by the Company.
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ARTICLE XIII
ASSIGNABILITY AND SUBSTITUTE MEMBERS
Section 13.1 Assignability of Units.
(i) A Member may assign the whole or any part of its Units
or other interests in the Company to an Affiliate in such Member's
sole discretion and without the prior consent of the Board of
Directors. Any such assignment shall, nevertheless, not entitle the
assignee to become a Substitute Member or to be entitled to exercise
or receive any of the rights, powers or benefits of a Member, other
than the right to receive distributions, to which the assigning
Member would be entitled, unless the assigning Member designates, in
a written instrument, its assignee to become a Substitute Member.
Such written instrument or Substitute Member designation does not
require the approval or prior consent of the Board.
(ii) No Member may assign the whole or any part of its
Units or other interests in the Company to any Person who is not an
Affiliate without the prior consent of the Board, which consent may
be given or withheld in the sole and absolute discretion of the
Board. If the prior consent of the Board is obtained for any such
assignment, such assignment shall, nevertheless, not entitle the
assignee to become a Substitute Member or to be entitled to exercise
or receive any of the rights, powers or benefits of a Member, other
than the right to receive distributions to which the assigning
Member would be entitled, unless the assigning Member designates, in
a written instrument delivered to the Board or otherwise to the
satisfaction of the Board, its assignee to become a Substitute
Member and the Board, in its sole and absolute discretion, consents
to the admission of such assignee as a Member; and provided further,
that such assignee shall not become a Substitute Member without
having first executed an instrument reasonably satisfactory to the
Board accepting and agreeing to the terms and conditions of this
Agreement, including a counterpart signature page to this Agreement,
and without having paid to the Company a fee sufficient to cover all
reasonable expenses of the Company in connection with such
assignee's admission as a Substitute Member. If a Member assigns all
of its interest in the Company and the assignee of such interest is
entitled to become a Substitute Member pursuant to this Section
13.1, then unless otherwise agreed, such assignee shall be admitted
to the Company effective immediately prior to the effective date of
the assignment, and, immediately following such admission, the
assigning Member shall cease to be a Member of the Company.
Section 13.2 Recognition of Assignment by Company. No assignment, or
any part thereof, that is in violation of this Article XIII shall be valid or
effective, and neither the Company nor the Members shall recognize the same
for the purpose of making distributions of
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Net Cash Flow pursuant to Section 9.1 hereof with respect to such Company
interest or part thereof. Neither the Company nor the nonassigning Members
shall incur any liability as a result of refusing to make any such
distributions to the assignee of any such invalid assignment.
Section 13.3 Indemnification. In the case of an assignment or
attempted assignment of an interest in the Company that has not received the
consents required by Section 13.1 hereof, the parties engaging or attempting
to engage in such assignment shall be liable to indemnify and hold harmless
the Company and the other Members from all costs, liabilities and damages that
any of such indemnified Persons may incur (including, without limitation,
incremental tax liability and lawyers' fees and expenses) as a result of such
assignment or attempted assignment and efforts to enforce the indemnity
granted hereby.
Section 13.4 Effective Date of Assignment. Any valid assignment of a
Member's interest in the Company, or part thereof, pursuant to the provisions
of Section 13.1 hereof shall be effective as of the close of business on the
last day of the calendar month in which the Board gives its consent, if
required, to such assignment (or the last day of the calendar month in which
such assignment occurs, if later), unless, in the case of assignment to an
Affiliate, a written instrument of the assigning Member sets forth a different
effective date, or, in any case, the Board in its discretion approves a
different effective date. The Company shall, from the effective date of such
assignment, thereafter pay all further distributions on account of the Company
interest (or part thereof) so assigned, to the assignee of such interest, or
part thereof. As between any Member and its assignee, Profits and Losses for
the Fiscal Year of the Company in which such assignment occurs shall be
apportioned for federal income tax purposes in accordance with any convention
permitted under ss.706(d) of the Code and selected by the Treasurer or as
otherwise permitted by the Board.
ARTICLE XIV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 14.1 No Dissolution. The Company shall not be dissolved by
the admission of Additional Members or Substitute Members in accordance with
the terms of this Agreement or by the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member or the occurrence of any
other event under the Delaware Act that terminates the continued membership of
a Member in the Company.
Section 14.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(i) the expiration of the term of the Company, as provided
in Section 2.3 hereof;
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(ii) so long as no Obligation is outstanding, a Majority
Vote of the Members;
(iii) the entry of a decree of judicial dissolution under
Section 18-802 of the Delaware Act.
Section 14.3 Notice of Dissolution. Upon the dissolution of the
Company, the Person or Persons approved by a Majority Vote to carry out the
winding up of the Company (the "Liquidating Trustee") shall promptly notify
the Members of such dissolution.
Section 14.4 Liquidation. Upon dissolution of the Company, the
Liquidating Trustee shall immediately commence to wind up the Company's
affairs; provided, however, that a reasonable time shall be allowed for the
orderly liquidation of the assets of the Company and the satisfaction of
liabilities to creditors so as to enable the Members to minimize the normal
losses attendant upon a liquidation. The Unit Holders shall continue to share
Profits and Losses during liquidation in the same proportions, as specified in
Article VIII hereof, as before liquidation. Each Member shall be furnished
with a statement prepared by the Company's certified public accountants that
shall set forth the assets and liabilities of the Company as of the date of
dissolution. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(i) to creditors of the Company, including Unit Holders
who are creditors, to the extent otherwise permitted by law, in
satisfaction of the liabilities of the Company (whether by payment
or the making of reasonable provision for payment thereof), other
than liabilities for distributions to Unit Holders; and
(ii) to the Unit Holders the remaining proceeds of
liquidation in accordance with their Capital Account balances, after
giving effect to all contributions, distributions and allocations
for all periods.
Section 14.5 Termination. The Company shall terminate when all of
the assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Unit Holders in the manner provided for in this Article XIV, and the
Certificate shall have been canceled in the manner required by the Delaware
Act.
Section 14.6 Claims of the Members. The Members and Assignees shall
look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and Assignees
shall have no recourse against the Company or any other Member or Manager.
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ARTICLE XV
APPOINTMENT OF OFFICERS AND DIRECTORS
Section 15.1 First Officers and Directors. The Member hereby
appoints as the initial Officers and Directors of this Company, the persons
set forth next to their respective offices in Schedule B. According to Section
6.1 and as set forth in Schedule B, the Member hereby determines that the
initial number of Directors which shall constitute the Board shall be two.
ARTICLE XVI
AMENDMENTS
Section 16.1 Amendments to be Adopted Solely by the Board. The
Board, without the approval of any Member may amend any provision of this
Agreement, and execute, swear to, acknowledge, deliver, file and record all
documents required or desirable in connection therewith, to reflect:
(i) a change in the name of the Company or the location of
the principal place of business of the Company;
(ii) the admission, substitution, termination or
withdrawal of Members or Assignees in accordance with this
Agreement;
(iii) a change that is (a) of an inconsequential nature
and does not adversely affect the Members or Assignees in any
material respect; (b) necessary or desirable to cure any ambiguity,
to correct or supplement any provision herein that would be
inconsistent with any other provisions herein, or to make any other
provision with respect to matters or questions arising under this
Agreement that will not be inconsistent with the provisions of this
Agreement, in each case so long as such change does not adversely
affect the Members or Assignees; (c) necessary or desirable to
satisfy any requirements, conditions or guidelines contained in any
opinion, directive, order, ruling or regulation of any federal or
state statute, so long as such change is made in a manner which
minimizes any adverse effect on the Members or Assignees; or (d)
required or contemplated by this Agreement; or
(iv) any other amendments similar to the foregoing.
Section 16.2 Amendment Procedures. Except as specifically provided
in Section 16.1 and 16.3, all amendments to this Agreement shall be made
solely in accordance with the following requirements:
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(i) Amendments of this Agreement may be proposed only by
the Board or any Member;
(ii) If an amendment is proposed, the Board shall seek the
written approval of the holders of the requisite number of Units or
call a meeting of the Members to consider and vote on such proposed
amendment. A proposed amendment shall be effective upon its approval
by a Majority Vote, unless a greater percentage is required by this
Agreement; and
(iii) The Board shall notify all Members upon final
adoption of any proposed amendment.
Section 16.3 Amendment Restrictions. Notwithstanding the provisions
of Section 16.1 and 16.2, no amendment to this Agreement shall be valid
without a unanimous vote of the Members if such amendment would (i) materially
and adversely affect the liability of the Members, (ii) have an effect on the
provisions that allocate distributions and profits and losses or on the voting
rights of the Members that is materially adverse to the Members unless such
materially and adversely affected Members consent in writing to such
amendment, or (iii) cause the Company to be treated as an association taxable
as a corporation for federal income tax purposes.
ARTICLE XVII
MISCELLANEOUS
Section 17.1 Notices. All notices provided for in this Agreement
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail as follows:
(i) if given to the Company, in care of the President at
the Company's mailing address set forth on Schedule A attached
hereto;
(ii) if given to a Director, at such Director's mailing
address as provided to the Company; or
(iii) if given to any Member, at the address set forth
opposite its name on Schedule A attached hereto, or at such other
address as such Member may hereafter designate by written notice to
the Company.
All such notices shall be deemed to have been given when received.
Whenever any notice is required to be given under this Agreement, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto. Attendance of a person at a meeting shall constitute waiver of notice
of such meeting, except when the person attends for the express purpose of
objecting, at the
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beginning of the meeting, to the transaction of business because the meeting
is not lawfully called or convened.
Section 17.2 Failure to Pursue Remedies. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of,
any provision of this Agreement shall not prevent a subsequent act, which
would have originally constituted a violation, from having the effect of an
original violation.
Section 17.3 Cumulative Remedies. The rights and remedies provided
by this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
Section 17.4 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of all of the parties and, to the extent permitted by
this Agreement, their successors, legal representatives and assigns.
Section 17.5 Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed as masculine, feminine, neuter, singular
or plural, whichever shall be applicable. All references herein to "Articles,"
"Sections" and paragraphs shall refer to corresponding provisions of this
Agreement.
Section 17.6 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
Section 17.7 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had
signed the same document. All counterparts shall be construed together and
shall constitute one instrument.
Section 17.8 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
Section 17.9 Governing Law. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the
State of Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
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IN WITNESS WHEREOF, the Members hereto have executed this Agreement
as of the date first above stated.
MEMBER:
XXXXX FARGO & COMPANY
By______________________________________
Its Senior Vice President
--------------------------------
AND
By______________________________________
Its Assistant Secretary
-------------------------------
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SCHEDULE A
----------
COMPANY
Name Mailing Address
---- ---------------
Xxxxx Fargo Student Loans Receivables III, LLC MAC #N9305-173
Sixth & Marquette
Xxxxxxxxxxx, XX 00000
Attn: Secretary
Number
Name Mailing Address of Units
---- ---------------- --------
MEMBERS
Xxxxx Fargo & Company MAC #N9305-173 0
Xxxxx & Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Corporate Secretary
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SCHEDULE B
----------
INITIAL OFFICERS AND DIRECTORS OF
XXXXX FARGO STUDENT LOANS RECEIVABLES III, LLC
OFFICERS (MANAGERS)
Xxx X. Xxxxxx President and Chief Executive Officer
Xxxx X. Xxxxxxx Senior Vice President and Chief Financial Officer
Xxxxx X. Xxxxxxxxxxxxx Vice President
Xxxxxxx X. Xxxxxxx Vice President
Xxxx X. Xxxxxxxxx Secretary
Xxxxxxxx X. Xxxxx Assistant Secretary
Xxxxx X. Xxx-Xxxxx Assistant Secretary
DIRECTORS
Xxx X. Xxxxxx
Xxxx X. Xxxxxxx
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