Exhibit 10.1
COMPANY AGREEMENT
OF
Canyon Ferry Capital LLC
A TEXAS LIMITED LIABILITY COMPANY
EFFECTIVE AS OF DECEMBER __, 2006
THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACTS. SUCH INTERESTS ARE
BEING ACQUIRED FOR INVESTMENT ONLY, AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED,
DONATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER SUCH ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED WITH RESPECT TO THE PROPOSED DISPOSITION THEREOF
AND THAT SUCH DISPOSITION WILL NOT CAUSE THE LOSS OF THE EXEMPTION UPON WHICH
THE ISSUER RELIED IN SELLING THESE MEMBERSHIP INTERESTS TO THE ORIGINAL
PURCHASER THEREOF.
THE MEMBERSHIP INTERESTS AND THE TRANSFER THEREOF ARE SUBJECT TO QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS SET FORTH IN THIS COMPANY AGREEMENT, AND THE
MEMBERSHIP INTERESTS SHALL NOT BE TRANSFERRED UPON THE BOOKS OF THE COMPANY
UNTIL THE TERMS AND CONDITIONS OF THIS AGREEMENT HAVE BEEN FULLY COMPLIED WITH.
Company Agreement Canyon Ferry Capital LLC
TABLE OF CONTENTS
ARTICLE I. FORMATION..........................................................1
1.1. FORMATION...........................................................1
1.2. PRINCIPAL PLACE OF BUSINESS.........................................1
1.3. REGISTERED AGENT OFFICE.............................................1
1.4. TERM................................................................1
1.5. PURPOSE.............................................................1
ARTICLE II. RIGHTS AND DUTIES OF MANAGERS.....................................1
2.1. MANAGEMENT OF COMPANY VESTED IN THE MANAGERS........................1
2.2. CERTAIN POWERS OF MANAGERS..........................................2
2.3. LIABILITY FOR CERTAIN ACTS..........................................2
2.4. MEMBERS AND MANAGERS HAVE NO EXCLUSIVE DUTY TO COMPANY..............2
2.5. AUTHORITY OF MANAGERS TO DEAL WITH AFFILIATES.......................3
2.6. NUMBER OF MANAGERS..................................................3
2.7. COMPENSATION AND FEES...............................................3
ARTICLE III. RIGHTS AND OBLIGATIONS OF MEMBERS................................3
3.1. LIMITATION OF MEMBERS' LIABILITIES..................................3
3.2. NO CONTROL OF BUSINESS OR RIGHT TO ACT FOR COMPANY..................3
3.3. PRIORITY AND RETURN OF CAPITAL......................................3
3.4. MEETINGS OF THE COMPANY; VOTING RIGHTS..............................4
3.5. POWERS RESERVED TO THE MEMBERS......................................4
ARTICLE IV. COMPANY BOOKS AND RECORDS; AMENDMENT OF AGREEMENT;
POWER OF ATTORNEY.................................................5
4.1. AMENDMENT OF AGREEMENT..............................................5
4.2. BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS...............5
ARTICLE V. CONTRIBUTIONS TO THE COMPANY; CAPITAL ACCOUNTS;
SECURITIES MATTERS.................................................7
5.1. INITIAL CAPITAL CONTRIBUTIONS.......................................7
5.2. ADDITIONAL CONTRIBUTIONS; ADDITIONAL UNITS; PREEMPTIVE RIGHTS.......7
5.3. FAILURE TO CONTRIBUTE ADDITIONAL CONTRIBUTIONS......................7
5.4. CAPITAL ACCOUNTS....................................................7
5.5. SECURITIES MATTERS..................................................8
ARTICLE VI. ALLOCATIONS, DISTRIBUTIONS........................................8
6.1. ALLOCATIONS OF PROFITS AND LOSSES...................................8
6.2. SPECIAL ALLOCATIONS.................................................8
6.3. DISTRIBUTIONS......................................................10
ARTICLE VII. TRANSFERABILITY.................................................11
7.1. GENERAL............................................................11
7.2. TRANSFERS NOT REQUIRING PRIOR CONSENT..............................11
7.3. VOLUNTARY TRANSFER PROCEDURE.......................................11
7.4. PURCHASE PRICE.....................................................12
7.5. REMEDIES...........................................................13
7.6. EFFECT OF TRANSFER OF INTEREST.....................................13
ARTICLE VIII. ADMISSION AND WITHDRAWAL OF MEMBERS............................13
8.1. ADMISSION OF MEMBERS...............................................13
8.2. WITHDRAWAL OF MEMBERS..............................................14
ARTICLE IX. WINDING UP AND TERMINATION.......................................14
Company Agreement Canyon Ferry Capital LLC
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9.1. EVENTS REQUIRING WINDING UP........................................14
9.2. WINDING UP, LIQUIDATION AND DISTRIBUTION OF ASSETS.................14
9.3 RETURN OF CONTRIBUTION NONRECOURSE TO MEMBERS......................15
ARTICLE X. MISCELLANEOUS.....................................................15
10.1. NOTICE.............................................................15
10.2. WAIVER OF NOTICE...................................................15
10.3. AUTHORITY TO BIND THE COMPANY......................................15
10.4. WAIVER OF ACTION FOR PARTITION.....................................15
10.5. INDEMNIFICATION BY COMPANY.........................................15
10.6. CONSTRUCTION.......................................................16
10.7. ARTICLES AND OTHER HEADINGS........................................16
10.8. SEVERABILITY.......................................................16
10.9. APPLICATION OF TEXAS LAW...........................................16
10.10. DISREGARDED ENTITY TAX TREATMENT INTENDED IF ONE MEMBER............16
10.11. PARTNERSHIP TAX TREATMENT INTENDED IF MORE THAN ONE MEMBER;
TAX ADMINISTRATIVE MATTERS.........................................16
10.12. NO PARTNERSHIP INTENDED FOR NON-TAX PURPOSES.......................16
10.13. EXPENSES...........................................................17
CERTIFICATION.................................................................18
EXHIBIT A MEMBER CAPITAL CONTRIBUTIONS................................21
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EXHIBIT B SERVICING CONTRACT...........................................23
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Company Agreement Canyon Ferry Capital LLC
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This Company Agreement of CANYON FERRY CAPITAL LLC is adopted by the Managers
and the undersigned Members, for the purpose of forming and operating CANYON
FERRY CAPITAL LLC as a Texas limited liability company, and the undersigned
Managers and Members do each mutually acknowledge and agree as follows:
DEFINITIONS
The following terms used in this Company Agreement shall have the following
meanings unless otherwise expressly provided herein:
(i) "Agreement" shall mean this Company Agreement, as originally
executed, and as amended from time to time in writing, including all
exhibits and schedules hereto, which concerns the conduct of the business
of the Company.
(ii) "Capital Account" shall mean the Capital Account maintained for
each Member in accordance with Section 5.4.
(iii) "Capital Contribution" shall mean any contribution to the
capital of the Company in cash or property by a Member whenever made.
(iv) "Certificate of Formation" shall mean the Certificate of
Formation filed with the Texas Secretary of State for the purpose of
organizing the Company, as the same may be amended or restated from time to
time.
(v) "Code" shall mean the Internal Revenue Code of 1986, as amended,
or corresponding provisions of subsequent superseding federal revenue laws.
(vi) "Company" shall mean Canyon Ferry Capital LLC, the Company
organized pursuant to the Certificate of Formation and this Agreement.
(vii) "Deficit Capital Account" shall mean with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end
of the taxable year, after giving effect to the following adjustments:
(a) credit to such Capital Account any amount which such Member
is obligated to restore under Section 1.704-1(b)(2)(ii)(c) of the
Treasury Regulations, as well as any addition thereto pursuant to the
next to last sentence of Sections 1.704-2(g)(1) and (i)(5) of the
Treasury Regulations, after taking into account thereunder any changes
during such year in company minimum gain (as determined in accordance
with Section 1.704-2(d) of the Treasury Regulations) and in the
minimum gain attributable to any member nonrecourse debt (as
determined under Section 1.704-2(i)(3) of the Treasury Regulations);
and
(b) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations.
Company Agreement Canyon Ferry Capital LLC
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This definition of Deficit Capital Account is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and 1.704-2, and
will be interpreted consistently with those provisions.
(viii) "Distributable Cash" shall mean all cash, revenues and funds
received by the Company from Company operations, including from the sale of
any asset to the extent not reinvested in replacement assets, less the sum
of the following to the extent paid or set aside by the Company: (a) all
principal and interest payments on indebtedness of the Company and all
other sums paid to lenders; (b) all cash expenditures incurred incident to
the purchase or sale of any asset and the normal operation of the Company's
business; (c) reimbursement of expenses and payment of compensation to any
Manager; and (d) such Reserves as the Managers deem reasonably necessary to
the proper operation of the Company's business.
(ix) "Entity" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business
trust, cooperative or association.
(x) "Fair Market Value" shall mean, on the date such Fair Market Value
is to be determined, the excess of the value of all of the Company's assets
minus all of the Company's liabilities. For purposes of determining Fair
Market Value, (a) no value shall be placed on the goodwill or name of the
Company or the office records, files, statistical data or any similar
intangible assets of the Company not normally reflected in the Company's
accounting records, (b) there shall be taken into consideration any related
items of income earned but not received, expenses incurred but not yet
paid, liabilities fixed or contingent, prepaid expenses to the extent not
otherwise reflected in the books of account, and the value of options or
commitments to purchase securities pursuant to agreements entered into on
or prior to the valuation date, (c) determination of value of any
publicly-traded security or bond, shall be the most recent closing sale
price quoted for such security on the exchange on which it is traded, (d)
determination of the value of other securities shall be based on all
relevant factors, including without limitation, type of security,
marketability, restrictions on disposition, and current financial position
and operating results, (e) the value of real estate shall be deemed to be
the most recent fair market value of such real estate as determined by a
real estate appraiser selected by the Managers; and (f) as to the
liabilities and any other assets of the Company, the book value carried on
the books of the Company in accordance with Generally Accepted Accounting
Principles, consistent with the Company's past practice.
(xi) "Fiscal Year" shall mean the Company's fiscal year, which shall
end on December 31, of each year.
(xii) "Initial Capital Contribution" shall mean the initial
contribution to the capital of the Company pursuant to this Agreement.
(xiii) "Invested Capital" means, at any point in time, for any Member,
the excess of (i) the aggregate amount of cash Capital Contributions
contributed to the Company by such Member over (ii) the aggregate amount
distributed (or deemed distributed) to such Member pursuant to Section
6.3(a)(2).
Company Agreement Canyon Ferry Capital LLC
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(xiv) "Investor Group" shall mean, collectively, GSSF Master Fund, LP,
Xxxx Private Equities 1, LP, C. A. Xxxx 1971 Trust fbo Xxxx Xxxx Xxxxx,
1991 Investment Company, and Federated North Texas, L.P. (or their
respective assigns).
(xv) "Manager" and "Managers". As used in this Agreement the term
"Manager" shall mean each individual Manager of the Company. The term
"Managers" shall refer, collectively, to all of the Managers of the
Company. The Company shall at all times have three (3) Managers. The
Members and the Company shall take all action within their respective
power, including, without limitation, the voting of Units, required to
cause the election of: (a) at all times during the period in which the
Servicing Contract is in force and effect, (i) two (2) Managers designated
by Mortgage Assistance Corp., a Texas corporation ("MAC"), who shall
initially be Xxx Xxxxxxx and Xxxx Xxxxx, and (ii) one (1) Manager
designated by the Investor Group, who shall initially be Xxxxxxx Xxxxxxxx;
or (b) at all times after the date that the Servicing Contract expires or
is otherwise terminated, (i) two (2) Managers designated by the Investor
Group, and (ii) one (1) Manager designated by MAC. The Members of the
Company hereby elect and appoint Xxx Xxxxxxx, Xxxx Xxxxx and Xxxxxxx
Xxxxxxxx as Managers of the Company, each to serve as such until his
successor is elected or appointed in accordance with this Agreement or, if
earlier, until his death, resignation, or removal from office in accordance
with this Agreement. In the event that any Manager (a "Withdrawing
Manager") designated by MAC or the Investor Group is unable to serve, or
once having commenced to serve, is removed or withdraws as a Manager, such
Withdrawing Manager's replacement (the "Substitute Manager") shall be
designated by MAC or the Investor Group, as applicable. The Company and
each of the Members agree to take all action within their respective power
to cause the election of such designated Substitute Manager, including,
without limitation (A) the voting of Units to cause the election of such
Substitute Manager as soon as practicable following his designation, and
(B) the instructing of the Manager(s) it had previously designated to serve
as a Manager, as the first order of business at the first meeting thereof
after such Substitute Manager has been so designated, to vote to seat such
designated Substitute Manager as a Manager in place of the Withdrawing
Manager. In the event MAC or the Investor Group fails to designate a
Manager as permitted in this definition, such Manager seat shall remain
vacant.
(xvi) "Member" shall mean any person that signs in person or by an
attorney-in-fact, or otherwise is a party to the Agreement at the time that
the Company is formed and is identified as a Member in the Agreement and
any Person who is subsequently admitted as a Member in the Company in
accordance with the Texas Act and the Agreement, until such time as such
Person withdraws, is removed, or is otherwise no longer a Member of the
Company.
(xvii) "Membership Interest" shall mean a Member's entire interest in
the Company, including such Member's right to participate in the decisions
of the Members, as reflected by the ratio of such Member's Units to the
aggregate of the Units of all Members.
(xviii) "Net Profits" and "Net Losses" shall mean the income, gain,
loss, deductions and credits of the Company in the aggregate or separately
stated, as appropriate, determined under the Company's adopted method of
accounting at the close of each Fiscal Year.
(xix) "Offer" shall have the meaning ascribed to such term in Section
7.3 hereof.
Company Agreement Canyon Ferry Capital LLC
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(xx) "Offered Interest" shall have the meaning ascribed to such term
in Section 7.3 hereof.
(xxi) "Percentage of Interest" means, for a Member, the percentage
equivalent of a fraction, the numerator of which is the number of Units
owned by such Member and the denominator of which is the total number of
Units owned by all Members.
(xxii) "Persons" shall mean any individuals, partnerships, limited
liability companies, corporations, trusts, business trusts, real estate
investment trusts, estates and other associations or business entities.
(xxiii) "Priority Return" means, at any point in time, for any Member,
that amount which, when considered together with all amounts previously
distributed (or deemed distributed) to such Member pursuant to Section
6.3(a)(1), will result in such Member having received a cumulative return,
calculated at the rate of interest equal to nine percent (9%) per annum,
compounded annually, on such Member's weighted average Invested Capital.
(xxiv) "Reserves" shall mean, with respect to any fiscal period, funds
set aside or amounts allocated during such period to reserves which shall
be maintained in amounts deemed sufficient by the Managers for working
capital and to pay taxes, insurance, debt service or other costs or
expenses incident to the ownership or operation of the Company's business.
(xxv) "Securities Acts" shall mean the Securities Act of 1933 or any
other applicable state securities laws.
(xxvi) "Selling Member" shall mean any Member who sells, assigns, or
otherwise transfers for consideration, all or any portion of a Membership
Interest.
(xxvii) "Servicing Contract" shall mean that certain Servicing
Contract between the Company and MAC in the form of Exhibit B, attached
hereto and incorporated herein by this reference.
(xxviii) "Texas Act" shall mean the Texas Limited Liability Company
Law, part of the Texas Business Organizations Code, as amended.
(xxix) A "Transfer" of all or any part of a Membership Interest means
any type of disposition of any right, title or interest whatsoever in such
Membership Interest, voluntarily or involuntarily, directly or indirectly,
including without limitation any sale, exchange, assignment, encumbrance,
grant of security interest, pledge, hypothecation, gift, transfer by trust,
transfer by will or intestate succession, or other disposition whatsoever.
(xxx) "Transferring Person" shall have the meaning ascribed to such
term in Section 7.3.
Company Agreement Canyon Ferry Capital LLC
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(xxxi) "Treasury Regulations" shall mean the proposed, temporary and
final regulations promulgated under the Code in effect as of the date of
filing the Certificate of Formation and the corresponding sections of any
regulations subsequently issued that amend or supersede such regulations.
(xxxii) "Units" shall mean equity ownership in the Company represented
by membership units ("Units"). The Company may issue such total number of
Units as the Managers shall determine, and may issue partial Units.
ARTICLE I. FORMATION
1.1. Formation. On September 13, 2006, the Company was organized as a Texas
limited liability company by execution and delivery of Certificate of Formation
to the Texas Secretary of State in accordance with the Texas Act.
1.2. Principal Place Of Business. The principal place of business of the
Company shall be located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000. The Company
at any time may change the location of such principal office and may have such
other offices, either within or without the State of Texas, as the Managers may
designate or as the business of the Company may require.
1.3. Registered Agent Office. The initial registered agent of the Company
is MAC and the address of the initial registered agent office of the Company is
0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000. The registered agent office and the
registered agent may be changed from time to time by the Managers by filing the
prescribed form with the Texas Secretary of State.
1.4. Term. The existence of the Company shall be perpetual, unless
terminated or dissolved as set forth herein.
1.5. Purpose. The Company may conduct or promote any lawful businesses or
purposes for which limited liability companies may be organized under the Texas
Act. The Company shall possess and may exercise all the powers and privileges
necessary or convenient to the conduct, promotion, or attainment of the
businesses or purposes of the Company.
ARTICLE II. RIGHTS AND DUTIES OF MANAGERS
2.1. Management of Company Vested in the Managers. The business and affairs
of the Company shall be managed by the Managers. The consent of a majority in
number of the Managers then-serving shall be the act of the Managers. The
Managers shall direct, manage and control the business of the Company to the
best of their ability. Except for situations in which the approval of the
Members is expressly required herein and as specifically provided in Section
3.5, the Managers shall have full and complete authority, power and discretion
to: (i) manage and control the business, affairs and property of the Company;
(ii) make all decisions regarding the business, affairs and property of the
Company; and (iii) perform any and all other acts incident to the management of
Company Agreement Canyon Ferry Capital LLC
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the Company's business subject to the provisions of this Agreement. Subject to
the limitations in the preceding sentence, the right, power, and authority of
the Managers pursuant to this Agreement shall be liberally construed to
encompass all acts and activities in which a Company may engage under the Texas
Act. Notwithstanding the foregoing or any other provision of this Agreement to
the contrary, the Manager(s) of the Company who are designated by the Investor
Group shall have the sole and exclusive right and duty to act on behalf of the
Company in connection with any matter relating to the Servicing Contract,
including, without limitation, exercising any right (including the right to
terminate the Servicing Contract in accordance with its terms) or remedy
accruing to the Company under the Servicing Contract.
2.2. Certain Powers of Managers. Without limiting the generality of the
provisions set forth in Section 2.1 above, the Managers shall have the power to
act on behalf of the Company:
(a) To enter into and execute, on behalf of the Company, all
agreements, contracts, instruments and related documents in connection with
the Company's business, on such terms as the Managers, in their reasonable
discretion, deem to be in the best interests of the Company.
(b) To carry out the business of the Company.
(c) To acquire and enter into, on behalf of the Company, any contract
of insurance, which the Managers reasonably deem necessary and proper for
the protection of the Company, for the conservation of its property, or for
any purpose beneficial to the Company.
(d) To employ persons (including affiliates of any Manager, subject to
the restrictions on compensation to such affiliates set forth in this
Agreement) in the operation of the Company, on such terms and for such
compensation as the Managers shall reasonably determine.
(e) To employ attorneys, accountants, consultants, brokers, and other
outside entities or individuals (including affiliates of any Manager,
subject to the restrictions on compensation to such affiliates set forth in
this Agreement) on behalf of the Company.
(f) To pay, collect, compromise, arbitrate, resort to legal action for
or otherwise adjust claims or demands of or against the Company.
(g) To sell assets to another investor as well as maintain servicing
and/or obtain other incentives as deemed in the best interest of the
company.
2.3. Liability for Certain Acts. Each Manager shall perform his duties as a
Manager in good faith, in a manner reasonably believed to be in the best
interest of the Company, and with such care as an ordinarily prudent person in a
like position would use under similar circumstances. If any Manager so performs
the duties as a Manager, he shall not have any liability by reason of being or
having been a Manager. No Manager shall be liable to the Company or to any
Company Agreement Canyon Ferry Capital LLC
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Member for any loss or damage sustained by the Company or any Member, unless the
loss or damage shall have been the result of fraud, deceit, gross negligence,
willful misconduct or a wrongful taking by such Manager.
2.4. Members and Managers Have No Exclusive Duty to Company. The Managers,
and affiliates of the Managers, shall not be required to manage the Company as
their sole and exclusive function and each Member and Manager and their
affiliates may have other business interests and may engage in other activities
in addition to those relating to the Company, including business interests or
other activities that directly compete with the business of the Company.
2.5. Authority of Managers to Deal with Affiliates. The Managers may, on
behalf of the Company, contract with any person, firm or corporation, including,
without limitation, any of the Members, any entity in which any of the Members
or any Manager has a direct or indirect interest and any affiliated or related
corporation or other entity, for the performance of any and all services which
may at any time be necessary, proper, convenient or advisable to carry on the
business of the Company; provided that any such transaction shall be effected
only on terms competitive with those that may be obtained from unaffiliated
persons. Any goods or services provided by affiliates to the Company shall be
pursuant to a written contract which sets forth the goods and services to be
provided and the compensation to be paid.
2.6. Number of Managers. The Members by unanimous vote may increase or
decrease (but not below one (1)) the number of Managers constituting all of the
Managers of the Company.
2.7. Compensation and Fees. Each Manager shall be reimbursed by the Company
for all approved out of pocket expenses incurred by such Manager in furtherance
of performing his obligations to the Company as Manager. Except as specifically
provided in the Servicing Contract, no Manager shall receive any compensation
other than reimbursement of out-of-pocket expenses incurred by such Manager in
furtherance of the business of the Company. No Manager shall receive any
additional compensation except as the Members shall decide.
ARTICLE III. RIGHTS AND OBLIGATIONS OF MEMBERS
3.1. Limitation of Members' Liabilities. Based on the Texas Act, a Member
shall not be bound by, or be personally liable for, the expenses, liabilities or
obligations of the Company or the Managers, and such Member's liability shall be
limited solely to the amount of its Capital Contributions, whether or not
returned to such Member, together with the undistributed share of the profits of
the Company from time to time credited to such Member's Capital Account and any
money or other property wrongfully paid or conveyed to such Member on account of
its Capital Contributions, including but not limited to money or property to
which creditors were legally entitled, paid or conveyed to a Member, and, under
certain circumstances, interest on returned capital.
3.2. No Control of Business or Right to Act for Company. No Member shall
have any right or authority to act for or bind the Company or to vote on matters
other than the matters set forth in this Agreement, except as specifically
required by applicable law.
Company Agreement Canyon Ferry Capital LLC
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3.3. Priority and Return of Capital. Except as provided herein, no Member
shall have priority over any other Member, as to the return of Capital
Contributions, Net Profits, Net Losses or distributions.
3.4. Meetings of the Members; Voting Rights.
(a) Meetings of the Members may be called by the Managers and shall be
called by the Managers upon the written request of Members with the
authority to vote an aggregate of not less than 49% Percentage of Interest.
Upon receipt of such a written request, stating the purpose of the proposed
meeting, the Managers shall provide each Member, within ten (10) days of
such request, with written notification of a meeting and the purpose of
such meeting. Such meetings shall be held not less than fifteen (15) days
or more than sixty (60) days after the receipt of such request and shall be
held at the principal place of business or principal executive office of
the Company or such other place as the Members shall unanimously decide.
(b) At all meetings of the Members, any decision, determination,
consent, approval or action by or of the Members shall be effected by the
favorable vote of all of the Members of the Company, unless the vote of a
greater or lesser number is otherwise required by the Texas Act, the
Certificate of Formation or this Agreement.
(c) At all meetings of the Members, a Member may vote by proxy
executed in writing by the Member or by a duly authorized attorney-in-fact.
Such proxy shall be filed with the Company at least one (1) day before the
meeting. Unless otherwise provided in the proxy, no proxy shall be
effective after eleven (11) months after the date of its execution.
(d) Action required or permitted to be taken at a meeting of Members
may be taken without a meeting if the action is evidenced by one or more
written consents describing the action taken, signed by each Member
entitled to vote, and delivered to a Manager for inclusion in the minutes
or for filing with the Company records. Action taken under this section is
effective when all Members entitled to vote have signed a consent, unless
the consent specifies a different effective date.
(e) When any notice is required to be given to any Member, a waiver of
the notice in writing signed by the person entitled to the notice, whether
before, at, or after the time stated therein, shall be equivalent to the
giving of the notice.
3.5. Powers Reserved to the Members. At all times while the Servicing
Contract is in full force and effect (but not from and after the expiration or
other termination of the Servicing Contract), each of the following actions on
behalf of the Company shall require the unanimous approval of the Members:
(a) the acquisition of any real property in excess of $100,000 per
parcel of real estate;
Company Agreement Canyon Ferry Capital LLC
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(b) the acquisition of any asset or portfolio of assets in excess of
$100,000 per asset;
(c) the execution, on behalf of the Company, of the Servicing
Contract, or any amendment thereto, to service the REOs
referenced therein and any additional portfolio of assets owned
by the Company;
(d) the sale, exchange or other disposition of substantially all of
the assets of the Company;
(e) the filing by the Company of any voluntary petition in bankruptcy
or delivery of any assignment for the benefit of creditors;
(f) the lending of Company funds to any Person (except as otherwise
set forth herein), or obligating the Company as surety, guarantor
or accommodation party, except that the Company shall be able to
guarantee credit accounts with suppliers in the ordinary course
of business;
(g) the incurrence of any debt on behalf of the Company, other than
trade debt incurred in the ordinary course of the Company's
business;
(h) the investment or participation by the Company in any other
entity;
(i) the merger or consolidation of the Company;
(j) the admission of new Members of the Company, except as
specifically provided in Section 8.1;
(k) the establishment of Reserves to help meet anticipated Company
expenses and the investment of such Reserves pending utilization;
or
(l) The opening of any bank or investment account;
ARTICLE IV. COMPANY BOOKS AND RECORDS; AMENDMENT OF AGREEMENT; POWER OF ATTORNEY
4.1. Amendment of Agreement.
(a) Amendment. Any amendment to this Agreement must be approved in
writing by all of the Members and by the Managers.
(b) Recording of Amendment. In making any amendments, there shall be
prepared and filed for recordation by the Managers such documents and
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certificates, if any, as shall be required to be prepared and filed under
the Texas Act and under the laws of the other jurisdictions in which the
Company is then formed or qualified.
4.2. Books and Records, Accounting, Reports, Tax Elections.
(a) Availability. At all times during the existence of the Company,
the Managers shall keep or cause to be kept full and true books and records
of account. Such books and records of account shall be maintained at the
principal place of business of the Company or such other place or places as
may be determined by the Managers from time to time. In addition, the
Company shall maintain at its principal office (i) a current list of the
full name and last known business address of each Member set forth in
alphabetical order, (ii) a copy of this Agreement and all amendments
thereto, together with executed copies of any powers of attorney pursuant
to which this Agreement or any amendment has been executed, (iii) copies of
the Company's federal, state and local tax returns and reports, if any, for
the three (3) most recent years, and (iv) accounting records of the
Company. The Company shall keep all original titles to real property owned
by the Company at a title company to be designated by the Managers as soon
as commercially practical. Any Member or his, her or its duly authorized
representative shall have the right to inspect and copy the books and
records of the Company upon reasonable notice during business hours.
(b) Financial Reports. The Managers shall cause to be prepared and
delivered to each Member, at the expense of the Company, such financial
reports as shall be decided by the Managers.
(c) Income Tax Information. The Managers shall cause income tax
returns for the Company to be prepared by the Company's accountant and
filed with the appropriate authorities and shall furnish to each Member
within ninety (90) days after the close of the taxable year of the Company,
all tax information with respect to the Company as may be required by each
Member for the preparation of his, her or its individual federal and state
tax returns, at the expense of the Company.
(d) Accounting Principles. The Company's books shall be maintained in
accordance with generally accepted accounting principles determined by the
Company's accountants, which accounting principles shall be consistently
applied.
(e) Bank Accounts. The Managers are authorized to open one or more
bank or investment accounts for and in the name of the Company and withdraw
funds or sign checks withdrawing funds from each such bank or investment
account for the sole purpose of paying all ordinary and necessary charges
and expenses incident to or arising out of the operations of the Company in
the ordinary course of business (including expenses arising out of the
Servicing Contract provided that the Servicing Contract has been approved
by the Members as required herein) or to make distributions of
Distributable Cash to the Members, and that such banks and investment
companies be, and hereby are, authorized and directed to honor, pay and
charge to the account of the Company all checks and orders for the payment
of money so drawn when so signed; provided, however, that the signature of
at least one Manager designated by the Investor Group and one Manager
designated by MAC shall be required to withdraw funds (whether by check,
Company Agreement Canyon Ferry Capital LLC
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wire transfer or otherwise) from any such account in any amount greater
than $2,000. The Managers are authorized to certify to any bank or other
investment company a copy of this Section 4.2(e) and the names and
signatures of the Company's Managers authorized and/or required to sign
checks as provided in this Section 4.2(e), and such bank or other
investment company is hereby authorized to rely upon such certificate until
formally advised of any changes therein.
ARTICLE V. CONTRIBUTIONS TO THE COMPANY; CAPITAL ACCOUNTS; SECURITIES MATTERS
5.1. Initial Capital Contributions. Each Member shall contribute the cash
amount set forth opposite such Member's name on Exhibit A, attached hereto and
incorporated herein, as his, her or its Initial Capital Contribution. Exhibit A
shall be revised from time to time as necessary to record all Capital
Contributions and all changes in the Company and ownership of the Company
effected in accordance with this Agreement, and Exhibit A as so revised shall be
furnished to each Member.
5.2. Additional Contributions; Additional Units; Preemptive Rights.
(a) Unless approved by all of the Members, no additional Capital
Contributions shall be required from any Members. Upon such approval, the
Managers shall give written notice to each Member of the amount of any
required additional Capital Contributions, and each Member shall deliver to
the Company his, her or its pro rata share thereof based upon such Member's
Percentage of Interest no later than ten (10) days following the date such
notice is given.
(b) Unless approved by all of the Members, the Company shall not offer
additional Units or any other interest in the Company for sale to third
parties. If authorized by the Members, the purchase price for which
additional Units shall be offered shall be determined by the Managers.
Purchasers of additional Units pursuant to this paragraph who are not
already Members shall be admitted to the Company as Members in accordance
with Section 8.1 hereof. The Managers are authorized to adjust the
Percentages of Interest of the Members as appropriate to reflect the
issuance of additional Units. Exhibit A shall be revised from time to time
as necessary to record all changes in the ownership of the Company effected
in accordance with this section, and Exhibit A as so revised shall be
furnished to each Member.
5.3. Failure to Contribute Additional Contributions. In the event that
a Member does not contribute his, her or its portion of the additional
Capital Contribution provided for in Section 5.2(a) when due, then such
Member's Membership Interest shall be reduced pro-rata by the proportion of
the unpaid additional Capital Contribution of such Member to the aggregate
of all Capital Contributions actually made by such Member pursuant to
Sections 5.1 and 5.2.
Company Agreement Canyon Ferry Capital LLC
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5.4. Capital Accounts.
(a) A Capital Account will be maintained for each Member in accordance
with Section 1.704-1(b)(2)(iv) of the Treasury Regulations. Each Member's
Capital Account will be increased by: (i) the amount of money or the fair
market value of property contributed by such Member to the Company; (ii)
allocations to each Member of Net Profits; and (iii) allocations to each
Member of income described in Code Section 705(a)(1)(B). Each Member's
Capital Account will be decreased by: (a) the amount of money distributed
to each Member by the Company; (b) the Fair Market Value of property
distributed to each Member by the Company, net of liabilities secured by
such distributed property that such Member is considered to assume or take
subject to, pursuant to Code Section 752; (c) allocations to the Member for
expenditures described in Code Section 705(a)(2)(B); (d) allocations to
each Member of Net Losses; and (e) allocations to the account of such
Member of other Company losses and deductions as set forth in the Treasury
Regulations.
(b) In the event of a permitted sale or exchange of a Membership
Interest in the Company, the Capital Account of the transferor shall become
the Capital Account of the transferee to the extent it relates to the
transferred Membership Interest in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv).
(c) A Member shall not receive out of the Company's property any part
of its Capital Contribution until all liabilities of the Company, except
liabilities to Members on account of their Capital Contributions, have been
paid or there remains property of the Company sufficient to pay them.
5.5. Securities Matters. The undersigned Members understand: (i) that the
Membership Interests evidenced by this Agreement have not been, and will not be,
registered under the Securities Acts because the Company is issuing these
Membership Interests in reliance upon the exemptions from the registration
requirements of the Securities Acts; (ii) that the Company has relied upon the
fact that the Membership Interests are to be held by each Member for investment;
and (iii) that exemption from registrations under the Securities Acts would not
be available if the Membership Interests were acquired by a Member with a view
to distribution.
ARTICLE VI. ALLOCATIONS, DISTRIBUTIONS
6.1. Allocations of Profits and Losses.
(a) Except as provided in Section 6.2, Net Profits of the Company for
each Fiscal Year shall be allocated to each Member in proportion to their
Percentage of Interests.
(b) Except as provided in Section 6.2, Net Losses of the Company for
each Fiscal Year shall be allocated to the Members in proportion to their
Percentage of Interests.
6.2. Special Allocations.
Notwithstanding any other provisions of this Agreement to the contrary:
Company Agreement Canyon Ferry Capital LLC
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(a) No allocation of loss, deduction, and/or expenditures described in
Code Section 705(a)(2)(B) shall be charged to the Capital Account of any
Member if such allocation would cause such Member to have a Deficit Capital
Account. The amount of the loss, deduction and/or expenditure which would
have caused a Member to have a Deficit Capital Account shall instead be
charged to the Capital Account of each Member who would not have a Deficit
Capital Account as a result of the allocation, in proportion to its
respective Capital Contributions.
(b) In the event any Member unexpectedly receives any adjustments,
allocations, or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4),(5), or (6), which create or increase a Deficit
Capital Account of such Member, then items of Company income and gain
(consisting of a pro rata portion of each item of Company income, including
gross income, and gain for such year and, if necessary, for subsequent
years) shall be specially credited to the Capital Account of such Member in
an amount and manner sufficient to eliminate, to the extent required by the
Treasury Regulations, the Deficit Capital Account so created as quickly as
possible. This provision is intended to constitute a "qualified income
offset" within the meaning of Treasury Regulation Section
l.704-1(b)(2)(ii)(d)(3) and shall be applied and interpreted consistent
therewith.
(c) In the event any Member would have a Deficit Capital Account at
the end of any Fiscal Year which is in excess of the sum of any amount that
such Member is obligated to restore to the Company under Treasury
Regulations Section 1.704-l(b)(2)(ii)(c) and such Member's share of minimum
gain as defined in Treasury Regulation Section 1.704-2(g)(1), the Capital
Account of such Member shall be specially credited with items of Company
income (including gross income) and gain in the amount of such excess as
quickly as possible.
(d) Notwithstanding any other provision of this Section 6.2 to the
contrary, if there is a net decrease in the Company's minimum gain as
defined in Treasury Regulation Section 1.704-2(d) during a taxable year of
the Company, then each Member shall be allocated items of income (including
gross income) and gain for such year (and if necessary for subsequent
years) equal to that Member's share of the net decrease in Company minimum
gain. This Section 6.2(d) is intended to comply with the minimum gain
chargeback requirement of Treasury Regulation Section 1.704-2(f) and shall
be interpreted consistently therewith. If in any taxable year that the
Company has a net decrease in the Company's minimum gain, the minimum gain
chargeback requirement would cause a distortion in the economic arrangement
among the Members and it is not expected that the Company will have
sufficient other income to correct that distortion, the Managers may in
their discretion (and shall, if requested to do so by a Member) seek to
have the Internal Revenue Service waive the minimum gain chargeback
requirements in accordance with Treasury Regulation Section 1.704-2(f)(4).
(e) Items of Company loss, deduction and expenditures described in
Code Section 705(a)(2)(B) which are attributable to any nonrecourse debt of
the Company and are characterized as member nonrecourse deductions under
Treasury Regulation Section 1.704-2(i) shall be allocated to the Members'
Capital Accounts in accordance with Treasury Regulation Section 1.704-2(i).
Company Agreement Canyon Ferry Capital LLC
9
(f) Beginning in the first taxable year in which there are allocations
of "nonrecourse deductions," as described in Treasury Regulation Section
1.704-2(b), such deductions shall be allocated to the Members in accordance
with, and as a part of, the allocations of Company Net Profit or Net Loss
for such period.
(g) In connection with a Capital Contribution by a new or existing
Member as consideration for one or more Units, or in connection with the
liquidation of the Company or a distribution of money or other property
(other than a de minimis amount) by the Company to a retiring Member as
consideration for one or more Units, the Capital Accounts of the Members
shall be adjusted to reflect a revaluation of Company property including
intangible assets in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f). If under Treasury Regulation Section
1.704-1(b)(2)(iv)(f) Company property that has been revalued is properly
reflected in the Capital Accounts and on the books of the Company at a book
value that differs from the adjusted tax basis of such property, then
depreciation, depletion, amortization and gain or loss with respect to such
property shall be shared among the Members in a manner that takes account
of the variation between the adjusted tax basis of such property and its
book value, in the same manner as variations between the adjusted tax basis
and Fair Market Value of property contributed to the Company are taken into
account in determining the Members' shares of tax items under Code Section
704(c).
(h) All recapture of income tax deductions resulting from sale or
disposition of Company property shall be allocated to the Members to whom
the deduction that gave rise to such recapture was allocated hereunder to
the extent that such Member is allocated any gain from the sale or other
disposition of such Company property.
(i) Any credit or charge to the Capital Accounts of the Members under
this section 6.2 shall be taken into account in computing subsequent
allocations of profits and losses, so that the net amount of any items
charged or credited to Capital Accounts shall be equal to the net amount
that would have been allocated to the Capital Account of each Member
pursuant to the provisions of this Article if the special allocations
required by this Section 6.2 had not occurred.
(j) In accordance with Code Section 704(c)(1)(A) and Treasury
Regulation Section 1.704-3, if a Member contributes property with a fair
market value that differs from its adjusted basis at the time of
contribution, income, gain, loss and deductions with respect to the
property shall, solely for federal income tax purposes, be allocated among
the Members so as to take account of any variation between the adjusted
basis of such property to the Company and its fair market value at the time
of contribution.
6.3. Distributions.
(a) Notwithstanding anything herein to the contrary, Distributable
Cash of the Company may be distributed to the Members, at such times and in
such amounts as the Managers may in their sole discretion determine, as
follows:
Company Agreement Canyon Ferry Capital LLC
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1) First, 100% to all Members in proportion to their respective
amounts of Invested Capital, until they each have received their
unpaid Priority Return;
2) Second, 100% to all Members in proportion to their respective
amounts of Invested Capital, until they have received cumulative
distributions equal to their aggregate Invested Capital; and
3) Third, to the Members in accordance with their respective
Percentages of Interest.
ARTICLE VII. TRANSFERABILITY
7.1. General. Except as provided herein or as otherwise consented to in
writing by the Members, a Member shall not Transfer all or any part of a
Membership Interest. Any purported or attempted Transfer of all or any part of a
Membership Interest in violation of this Article VII shall be null and void and
the purported transferee of such invalid Transfer shall not be entitled to have
any interest in the Company transferred to such purported transferee on the
books of the Company.
7.2. Transfers Not Requiring Prior Consent. A Member may, without first
obtaining the written consents required in Section 7.1 above, Transfer by sale
or gift all or any undivided share of its Membership Interest to any one or more
of the following: (i) a partnership, limited liability company or corporation in
which fifty percent (50%) or more of the capital and profit interests (in the
case of a partnership or a limited liability company) or in which fifty percent
(50%) or more of the capital stock (in the case of a corporation) is owned by or
for the benefit of the Member; (ii) the Member's partners (if the Member is a
partnership), the Member's members (if the Member is a limited liability
company) or the Member's shareholders (if the Member is a corporation); (iii)
the Company; and (iv) a Member or Members; provided any such transferee shall
agree in writing to be bound by the terms and conditions of this Agreement as
they applied to the transferring Member on the date of execution of this
Agreement in the same manner as if the transferring Member had retained
ownership of its Membership Interest (upon meeting the foregoing requirements,
such transferee shall be referred to as a "Permitted Transferee").
7.3. Voluntary Transfer Procedure.
Company Agreement Canyon Ferry Capital LLC
11
(a) A Member who desires to Transfer all or any portion of a
Membership Interest (the "Transferring Person") to a third party, except as
permitted under Section 7.2, shall obtain from such third party a bona fide
written offer to purchase such Membership Interest (the "Offered
Interest"), stating the terms and conditions upon which the purchase is to
be made and the consideration offered therefor (the "Offer"). The
Transferring Person shall give written notification to the Managers and
each of the Members, by certified mail or personal delivery, of his, her or
its intention to Transfer the Offered Interest, furnishing to the Managers
and each Member a copy of the Offer.
(b) Upon receipt of the written notice required under paragraph (a)
above, the Company and the Members shall comply with the following
procedure:
(i) The Company shall have thirty (30) days from the date of
delivery of the notice required by paragraph (a) above to notify the
Transferring Person in writing of the Company's election to redeem all
or a part of the Offered Interest at the purchase price set forth in
Section 7.4 of this Agreement, which decision of the Company shall be
made by an affirmative vote of all of the Members.
(ii) If the Company does not elect to redeem all of the Offered
Interest, the other Members shall have the right, within thirty (30)
days of the date of the notice of nonelection by the Company or
election as to less than all of the Offered Interest, to elect to
purchase the remaining Offered Interest, and the Transferring Person
shall sell such interest to the other Members at the purchase price
set forth in Section 7.4 of this Agreement. Any Member desiring to
acquire any or all of the Offered Interest shall deliver to the
Managers and each of the Members a written election to purchase the
Offered Interest.
(iii) If two or more Members of the Company elect to exercise the
option to purchase the Offered Interest then, in the absence of an
agreement between them, each Member shall have priority to purchase
such proportion of the available interest that such Member's
Percentage of Interest bears to the total Percentage of Interests held
by all other Members electing to purchase. The portion of the Offered
Interest not purchased on such a priority basis shall be allocated in
one or more successive allocations to those Members electing to
purchase more than the proportion of the Percentage of Interest to
which they have a priority right, up to the proportion of the Offered
Interest specified in their respective notices, in the proportion that
the Percentage of Interests held by each of them bears to the total
Percentage of Interest held by all of them.
(iv) If the Company and the Members do not exercise their rights
to redeem or purchase, as the case may be, all of the Offered Interest
pursuant to the terms set forth in Section 7.3(b)(i) and Section
7.3(b)(ii) above, then the Transferring Person shall be free to
Transfer the remaining part of the Offered Interest to the bona fide
purchaser set forth in the Offer under the terms of the Offer, subject
to the restrictions on such Transfer imposed by this Agreement or any
other agreement or by law.
(v) If the Company exercises its right to redeem all or a part of
the Offered Interest in accordance with Section 7.3(b)(i) above, the
Transferring Person shall be obligated to sell such Offered Interest
to the Company. If any or all of the Members exercise their rights to
purchase all or a part of the Offered Interest in accordance with
Section 7.3(b)(ii) above, the Transferring Person shall be obligated
to sell such Offered Interest to such exercising Members. The closing
of the Transfer of the Offered Interest from the Transferring Person
to the Company or any Members pursuant to this Section shall be held
at the principal offices of the Company not later than ninety (90)
days after receipt of notice required by paragraph (a) above.
(c) In the event of the Transfer of all or any part of any Offered
Interest by a Transferring Person to any third party, and as a condition to
Company Agreement Canyon Ferry Capital LLC
12
recognizing the effectiveness and binding nature of any such Transfer, the
Company may require the Transferring Person or Transferring Person and the
third party, as the case may be, to execute, acknowledge and deliver to the
Members or Managers such instruments of transfer, assignment and assumption
and such other certificates, representations and documents, and to perform
all such other acts which the Managers deem necessary or desirable.
7.4. Purchase Price. The purchase price to be paid to a Transferring Person
for all or any part of such Transferring Person's Membership Interest redeemed
by the Company or purchased by a Member under Section 7.3(b) shall be the lower
of (i) the purchase price set forth in the Offer for such Membership Interest,
or (ii) the product of (A) the Percentage of Interest represented by the Offered
Interest multiplied by (B) the Fair Market Value of the Company as of the date
of such redemption or purchase.
7.5. Remedies. The Members agree that a violation by any of them of this
Article VII will cause such damage to the Company and to the other Members as
will be irreparable and the exact amount of which will be impossible to
ascertain. For this reason, the Members agree that the Company shall be entitled
as a matter of right to a decree of specific performance of the terms of this
Article VII or for temporary or permanent injunctive relief from any court of
competent jurisdiction restraining any attempted or purported Transfer of
interest in the Company in violation of this Article VII. In addition, any
Member attempting or purporting to Transfer an interest in the Company in
violation of this Article VII and the purported transferee participating in the
attempted or purported Transfer, shall be jointly and severally liable to
reimburse and pay the Company for any and all costs, fees and expenses including
without limitation any attorneys', accountants', and other professional fees and
expenses actually expended or incurred by the Company in connection with any
such violation, whether or not litigation ensues. The remedies set forth in this
Section 7.5 shall be cumulative and in addition to whatever other rights and
remedies the Company and the Members may have to protect their respective rights
in the event of a violation of the provisions of this Article VII, including
without limitation the right to recover damages including actual, compensatory,
consequential, incidental and punitive damages.
7.6. Effect of Transfer of Interest. Upon the Transfer of any interest in
the Company in accordance with the provisions of this Article VII, the
transferee of such interest shall own and hold such interest in the Company as a
transferee, subject to all the terms, conditions, and limitations of this
Agreement, including without limitation restriction on any further Transfer of
such interest as provided in this Article VII. Consent to such Transfer shall
not constitute consent to the admission of the transferee as a Member of the
Company. A transferee may become a Member only in accordance with the provisions
of Section 8.1. Unless a transferee is admitted to the Company as a Member in
accordance with the provisions of Section 8.1, such transferee shall not be
entitled to any of the rights or benefits of a Member hereunder except the right
to the share of profits and losses and distributions of assets based on the
transferee's Percentage of Interest. Without limiting the generality of the
preceding sentence, such transferee shall have no right (i) to vote upon,
approve, or consent to, any matter requiring the vote, approval or consent of
the Members, or (ii) to receive any information from the Company of the kind to
which Members are entitled, or any other information.
Company Agreement Canyon Ferry Capital LLC
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ARTICLE VIII. ADMISSION AND WITHDRAWAL OF MEMBERS
8.1. Admission of Members. No additional Member may be admitted to the
Company, except upon the prior written consent of all of the Members and upon
such additional Member signing, in person or by attorney-in-fact, or otherwise
becoming a party to this Agreement; provided, however, each Permitted Assignee
(as defined in Section 7.2) shall automatically be deemed to be a Member of the
Company regardless of whether or not the Members consented to said transfer. No
Member shall have the power to grant a transferee, and no transferee shall have,
the right to become a Member of the Company except as specifically provided in
the preceding sentence. If a Member who is an individual dies or a court of
competent jurisdiction adjudges him or her to be incompetent to manage person or
property, the Member's executor, administrator, guardian, conservator, or other
legal representative may exercise all of the Member's rights for the purpose of
settling his estate or administering his property and shall have any power the
Member had to give his or her assignee a Percentage of Interest in Net Profits
and Net Losses. Said assignee may not be admitted as a Member of the Company
except upon the prior written consent of the Members.
8.2. Withdrawal of Members. No Member shall have any right to withdraw or
resign as a Member of the Company prior to the dissolution and winding up of the
Company, except upon a Transfer of all of his, her or its interest in the
Company in accordance with the terms and conditions of Article VII. A Member who
resigns or whose Membership Interest is otherwise terminated for any reason,
shall not be entitled to receive any distributions to which such Member would
have been entitled had such Member remained a Member. Damages for breach of this
section 8.2 shall be monetary damages only and not specific performance, and
such damages may be offset against distributions by the Company to which such
Member would otherwise be entitled.
ARTICLE IX. WINDING UP AND TERMINATION
9.1. Events Requiring Winding Up. The Company shall be wound up upon the
occurrence of any of the following events:
(a) Unanimous written consent of the Members; or
(b) The consent of a majority in number of the remaining Members to
wind up the Company within ninety (90) days after the Company is wound up
in accordance with the Texas Act.
9.2. Winding Up, Liquidation and Distribution of Assets. If an event
requiring the winding up of the Company occurs, the Managers shall wind up the
business of the Company and shall apply or distribute the assets of the Company,
or shall sell the assets of the Company and apply or distribute proceeds
thereof, as promptly as practicable and in the following order of priority:
Company Agreement Canyon Ferry Capital LLC
14
(a) First, if there are sufficient assets therefor, to creditors of
the Company, including Members who are creditors, to the extent permitted
by law, in satisfaction of liabilities of the Company (whether by payment
or the making of reasonable provision for payment thereof) other than
liabilities for distributions to Members; and if there are insufficient
assets, such claims and obligations shall be paid or provided for according
to their priority and, among claims and obligations of equal priority,
ratably to the extent of assets available therefor; and if there is any
contingent, conditional, or unmatured debt, claim, obligation, or liability
known to the Company, a reserve shall be established for it in accordance
with law, in an amount determined by the Managers to be appropriate for
such purpose; and
(b) Second, any remaining assets, to the Members in accordance with
the priorities set forth in Section 6.3(a). The Company may offset damages
for breach of this Agreement by a Member against the amount otherwise
distributable to such Member hereunder.
At the time final distributions, exclusive of any reserves for
contingent, conditional or unmatured items, are made in accordance with
clause (c) above, the Company shall terminate, but, if at any time
thereafter, any reserve is released because the Managers determine the need
for such reserve is ended, then such reserve shall be distributed in
accordance with clause (c) above.
9.3. Return of Contribution Nonrecourse to Members. Except as provided by
law or as expressly provided in this Agreement, upon winding up, each Member
shall look solely to the assets of the Company for the return of his, her or its
Capital Contribution. If the Company property remaining after the payment or
discharge of the debts and liabilities of the Company is insufficient to return
the Capital Contribution of one or more Members, such Member or Members shall
have no recourse against any other Member or any Manager.
ARTICLE X. MISCELLANEOUS
10.1. Notice. Any notice required or permitted to be given pursuant to the
provisions of the Texas Act or this Agreement shall be effective as of the date
personally delivered, delivered via facsimile with electronic confirmation, or
delivered via overnight express mail, or if sent by certified mail, return
receipt requested, three (3) days after being deposited with the United States
Postal Service, prepaid and addressed to the intended recipient at the last
known address as shown in the Company's records.
10.2. Waiver of Notice. Whenever any notice is required to be given under
the provisions of the Texas Act or this Agreement, a waiver thereof, in writing,
signed by the person entitled to such notice shall be deemed equivalent to the
giving of such notice.
10.3. Authority to Bind the Company. Unless authorized to do so by this
Agreement or by the Managers, no attorney-in-fact, employee or other agent of
the Company shall have any power or authority to bind the Company in any way, to
pledge its credit or to render it liable pecuniary for any purpose. No Member
Company Agreement Canyon Ferry Capital LLC
15
shall have any power or authority to bind the Company unless the Member has been
authorized by the Managers to act as an agent of the Company.
10.4. Waiver of Action For Partition. Each Member irrevocably waives any
right to maintain an action for partition with respect to the property of the
Company during the term of the Company.
10.5. Indemnification By Company. The Company may indemnify any person who
was or is a party defendant or is threatened to be made a party defendant to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a Manager, Member,
employee or agent of the Company, or is or was serving at the request of the
Company, against expenses, including attorney's fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the Managers determine that he, she or it
acted in good faith and in a manner reasonably believed to be in the best
interest of the Company, and with respect to any criminal action or proceeding,
had no reasonable cause to believe the conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not in itself create a
presumption that the Person did or did not act in good faith and in a manner
which was reasonably believed to be in the best interest of the Company, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe the conduct was unlawful.
10.6. Construction. Whenever the context requires, as used in this
Agreement, the singular shall include the plural and the masculine gender shall
include the feminine and neuter genders, and vice versa.
10.7. Articles and Other Headings. The Articles and headings in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation thereof.
10.8. Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the remainder of this Agreement shall not be
affected.
10.9. Application of Texas Law. This Agreement will be governed by the laws
of the State of Texas, without giving effect to its conflicts of laws
provisions.
10.10. Disregarded Entity Tax Treatment Intended If One Member. At any time
when the Company has only one (1) Member, the parties intend that the provisions
of this Agreement will qualify the Company to be taxed as a disregarded entity
under the Code and not as a corporation, and the Managers and each Member shall
take such action from time to time as may be necessary or desirable to carry out
such intention. The Managers may make any tax elections for the Company allowed
under the Code or the tax laws of any state or other jurisdiction having taxing
jurisdiction over the Company.
10.11. Partnership Tax Treatment Intended If More Than One Member; Tax
Administrative Matters. At any time when there is more than one Member of the
Company Agreement Canyon Ferry Capital LLC
16
Company, the parties intend that the provisions of this Agreement will qualify
the Company to be taxed as a partnership under the Code and not as a
corporation, and the Managers and Members shall take such action from time to
time as may be necessary or desirable to carry out such intention. The Managers
may make any tax elections for the Company allowed under the Code or the tax
laws of any state or other jurisdiction having taxing jurisdiction over the
Company. The Members hereby designate MAC as the tax matters partner of the
Company pursuant to Section 6231(a)(7) of the Code. The person designated tax
matters partner shall not take any action contemplated by Section 6222 through
6232 of the Code without the approval of the Members.
10.12. No Partnership Intended For Non-Tax Purposes. The undersigned
Members have formed the Company under the Texas Act, and as long as there is
more than one Member of the Company such parties expressly do not intend hereby
to form a partnership under either the Revised Uniform Partnership Act of the
State of Texas nor the Revised Uniform Limited Partnership Act of the State of
Texas. The Members do not intend to be partners one to another, or partners as
to any third party. To the extent any Member, by word or action, represents to
another Person that any other Member is a partner or that the Company is a
partnership, the Member making such wrongful representation shall be liable to
any other Member who incurs personal liability by reason of such wrongful
representation.
10.13 Expenses. Each party shall pay the fees and expenses of its advisors,
counsel, accountants and other experts, if any, and all other expenses, incurred
by such party incident to the negotiation, preparation, execution and delivery
of this Agreement; provided, however, that the Company shall pay a flat $5,000
to the Investor Group to reimburse the Investor Group for the fees and expenses
(including attorneys' fees and expenses) incurred by the Investor Group in
connection with its due diligence review of the Company and the preparation,
negotiation, execution and delivery of this Agreement, which amount shall be due
and payable in cash promptly after the members of the Investor Group have funded
their Initial Capital Contributions.
[The remainder of this page is intentionally left blank.]
Company Agreement Canyon Ferry Capital LLC
17
CERTIFICATION
THE UNDERSIGNED hereby evidence their adoption and ratification of the
foregoing Company Agreement of Canyon Ferry Capital LLC as of the date indicated
below.
Mortgage Assistance Corp., as Member
Date: December __, 2006 By:________________________________
Name:
Its:
Company Agreement Canyon Ferry Capital LLC
18
GSSF MASTER FUND, LP, as Member
By Gryphon Special Situations Fund, LP,
its general partner
By GSSF Management Partners, LP,
its general partner
By GSSF, LLC, its general partner
By:
--------------------------------------
Name: Xxxxxx X. Garden
Title: Authorized Agent
XXXX PRIVATE EQUITIES 1, LP, as Member
By Xxxx Fund Management, L.P.,
its general partner
By Xxxxx X. Xxxx & Co.,
its general partner
By:
--------------------------------------
Name: X. Xxxx Xxxx
Title: President
C. A. XXXX 1971 TRUST FBO
XXXX XXXX XXXXX, as Member
By:
--------------------------------------
Xxxxxx X. Xxxxxxxx, Trustee
1991 INVESTMENT COMPANY, as Member
By: X. X. Xxxx 1965 Trust fbo
C. A. Xxxx, Jr., its Managing Partner
By:
--------------------------------------
Xxxxxx X. Xxxxxxxx, Trustee
Company Agreement Canyon Ferry Capital LLC
00
XXXXXXXXX XXXXXXXXX XXXXX XXXXX, L.P.,
as Member
By: Southwest Federated, Inc.,
its general partner
By:
--------------------------------------
Xxxxxxx X. Xxxx III, President
Company Agreement Canyon Ferry Capital LLC
20
EXHIBIT A
MEMBER CAPITAL CONTRIBUTIONS
AS OF DECEMBER __, 2006
===================================== =================== ========== ===========
MEMBER INITIAL CAPITAL UNITS PERCENTAGE
CONTRIBUTION OF INTEREST
------------------------------------- ------------------- ---------- -----------
Mortgage Assistance Corp., a Texas
Corporation None 50 50%
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxxxxx
Fax No.: (000) 000-0000
------------------------------------- ------------------- ---------- -----------
GSSF Master Fund, LP $931,253.52 19.230 19.230%
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: J. Xxxxxxx Xxxx
Fax No.: (000) 000-0000
------------------------------------- ------------------- ---------- -----------
Xxxx Private Equities 1, LP $745,051.24 15.385 15.385%
000 Xxxxxxxx Xxxxx, Xxx 000
Xxxxxx, XX 00000
Attn: X. Xxxx Xxxx
Fax No.: (000) 000-0000
------------------------------------- ------------------- ---------- -----------
C. A. Xxxx 1971 Trust fbo Xxxx Xxxx $186,299.13 3.847 3.847%
Xxxxx
0000 X. Xxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Fax No.: (000) 000-0000
------------------------------------- ------------------- ---------- -----------
1991 Investment Company $279,376.06 5.769 5.769%
0000 X. Xxx, Xxx Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Fax No.: (000) 000-0000
------------------------------------- ------------------- ---------- -----------
Southwest Federated North Texas, L.P. $279,376.06 5.769 5.769%
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx Xxxx
Fax No.: (000) 000-0000
------------------------------------- ------------------- ---------- -----------
Total $2,421,356.00 100 100%
===================================== =================== ========== ===========
Company Agreement Canyon Ferry Capital LLC
21
EXHIBIT B
SERVICING CONTRACT
Mortgage Assistance Corporation
0000 Xxxx Xxxxxx * Xxxxxx Xx 00000 * 000-000-0000 * fax 000-000-0000
xxx.xxx-xx.xxx Trading Symbol: MTGC.OB
Servicing Contract
Owner: Canyon Ferry Capital LLC
Owner's Address: 0000 Xxxx Xxxxxx, Xxxxxx, XX 00000
Servicer: Mortgage Assistance Corporation
Servicer Address: 0000 Xxxx Xxxxxx, Xxxxxx, XX 00000
Notes and/or REOs: Attachment A
------------------
This servicing agreement was made and entered into this 14th day of December,
2006, by and between SERVICER and OWNER.
OWNER shall initial below where appropriate.
Section 1. Servicing of Notes
Note Servicing: OWNER hereby authorizes and instructs SERVICER, and SERVICER
agrees to service the "NOTES" and in that connection, to do the following:
A. To receive any and all payments due OWNER on the NOTES, which includes but
is not limited to all monthly payments, all late payments and all payoffs
in full or in part. SERVICER is authorized to direct any payment to be made
payable to SERVICER's Trust Account;
B. To endorse to SERVICER's Trust Account any checks or money orders payable
to OWNER and to immediately deposit same in SERVICER's Trust Account which
is to be maintained in accordance with such laws and rules applicable
thereto and as to which SERVICER will not commingle its assets;
C. To transmit OWNER's portion of such payments of principal and interest as
required by laws, rules and regulations which are applicable. There is a
seven day hold on all checks to allow for clearing with the bank. Good
funds are delivered to OWNER without a hold at the address shown herein.
SERVICER will not use such payment for any other transaction other than the
transaction for which the funds are received;
D. To provide periodic reporting on the OWNER's NOTES that SERVICER is
servicing per this contract;
E. If the source of payment is not the maker of the NOTES, to so inform OWNER;
F. To cause SERVICER's Trust Account utilized for this transaction to be
inspected as required by such laws, rules and regulations as are applicable
thereto;
G. To take any other action which SERVICER deems necessary or convenient to
the collection and servicing of the NOTES including but not limited to
instituting foreclosure proceedings in the event of default or making such
payments for OWNER's account or taking such other action as SERVICER deems
necessary or desirable to protect the security of the Security Agreement or
the priority thereof;
H. To execute and deliver on OWNER's behalf and in OWNER's name any documents
necessary or convenient for the exercise of any rights or duties which
OWNER may have under the NOTES, including but not limited to Request for
Reconveyance, Payoff Demands, Beneficiary Statements, Declarations and
Notices of Default, bidding authorizations and other instructions to the
Trustee of the NOTES;
I. To receive Notices of Default of prior encumbrances and to promptly notifiy
OWNER of any default upon the Notes and any prior encumbrances;
J. To grant such extensions or loan modifications as SERVICER deems reasonably
appropriate;
K. THE FOLLOWING PROVISIONS (1) & (2) APPLY ONLY TO LOANS IN WHICH OWNER HOLDS
AN UNDIVIDED FRACTIONAL INTEREST IN THE NOTES:
1. A default upon any interest in the NOTES shall constitute a default
upon all interests. A simple majority in interest of lenders may determine
and direct the actions to be taken on behalf of all lenders in the event of
default or with respect to other matters requiring the direction or
approval of lenders, and such majority may designate the SERVICER to so act
in their behalf.
2. SERVICER shall furnish to OWNER a list of names and addresses of
all lenders holding an interest in the NOTES upon five (5) days written
notice.
Section 2 - Servicing of REOs
I. REO Servicing: OWNER hereby authorizes and instructs SERVICER, and SERVICER
agrees to service the "REOs" and in that connection, to do the following:
A. Authorize SERVICER to act on behalf of OWNER as landlord to the REOs, where
applicable;
B. Authorize SERVICER to manage, operate, control, rent and lease OWNER'S
REOs.
C. Authorize SERVICER to contract for or undertake the making of all necessary
repairs and the performance of all other necessary work for the benefit of
the REOs including all required alterations to properly carry out this
agreement. SERVICER agrees to secure prior written approval of the OWNER on
expenditures in excess of $1,000 except emergency repairs in excess of the
maximum if, in the opinion of SERVICER, such repairs are necessary to
2
protect the property from damage, prevent damage to life or to the property
of others;
D. To collect any and all payments due OWNER, which includes but is not
limited to, all monthly RENT payments and all LATE payments. SERVICER is
authorized to direct any payment to be made payable to SERVICER's Trust
Account. There is a seven day hold on all checks to allow for clearing with
the bank. Good funds are delivered to OWNER without a hold at the address
shown herein. SERVICER will not use such payment for any other transaction
other than the transaction for which the funds are received;
E. Any trust account SERVICER maintained under this agreement may be an
interest-bearing or income producing account.
F. To hold security deposits from tenants in escrow or trust account until the
end of tenancy.
G. To endorse to SERVICER's Trust Account any checks or money orders payable
to OWNER and to immediately deposit same in SERVICER's Trust Account which
is to be maintained in accordance with such laws and rules applicable
thereto and as to which SERVICER will not commingle its assets;
H. To provide weekly sales reports and other periodic (but not less than
monthly) reports, as requested from time to time by the OWNER, on the
OWNER's REOs that SERVICER is servicing per this contract;
I. To cause SERVICER's Trust Account utilized for this transaction to be
inspected as required by such laws, rules and regulations as are applicable
thereto;
J. To take any other action which SERVICER deems necessary or convenient to
the collection and servicing of the REOs including but not limited to
instituting eviction proceedings in the event of default or selling of the
REOs or making such payments for OWNER's account or taking such other
action as SERVICER deems necessary or desirable to protect the OWNER's
interest in the property. To advertise the property and display signs
thereon; to rent and lease the property; to sign, renew and cancel rental
agreements and leases for the property or any part thereof; to xxx or
recover for rent and for loss or damage to any part of the property and/or
furnishings thereof; and, when expedient, to compromise, settle and release
any such legal proceedings or lawsuits;
K. To execute and deliver on OWNER's behalf and in OWNER's name any documents
necessary or convenient for the exercise of any rights or duties which
OWNER may have as to the REOs, including but not limited to evictions,
listing the property for sale, selling the property, or renting the
property;
L. To pay all operating expenses and such other expenses as requested by the
OWNER from the rents received. This may include the payment of taxes and
insurance;
M. OWNER hereby agrees to indemnify and hold SERVICER harmless from any and
all claims, charges, debts, demands and lawsuits, including attorney's fees
3
related to SERVICER's management of OWNER's REOs, and from any liability
for injury on or about the properties which may be suffered by an employee,
tenant or guest upon the properties; provided, however, that OWNER shall
have no such indemnification obligations in respect of any such claims,
charges, debts, demands or lawsuits resulting primarily from SERVICER's
gross negligence or willful misconduct.
Section 3 - General Provisions
FEES: SERVICER shall not be entitled to any fees or other compensation for
providing services hereunder, and shall bear all costs and expenses incurred in
connection with providing services hereunder. Notwithstanding the foregoing, the
costs and expenses set forth on Attachment B and incurred to third parties will
be paid by the OWNER directly or, if paid by SERVICER, the OWNER will reimburse
the SERVICER without markup.
PERFORMANCE OF SERVICES: SERVICER shall, to the best of its ability, perform all
services required to be performed by it hereunder diligently, carefully and in a
good and workmanlike manner as would a reasonable and prudent person. Without
limiting the generality of the foregoing, SERVICER shall devote enough of its
time, attention and resources to providing services hereunder as is necessary to
adequately perform its services hereunder. SERVICER shall, in connection with
the performance of the services hereunder, obtain all permits, licenses,
certificates or other administrative or regulatory authorizations as may be
required by any governmental authority from time to time or as may be necessary
or incident to SERVICER's performance of its obligations in all material
respects under this agreement. In connection with the performance of the
services, SERVICER shall comply with all applicable material laws, rules and
regulations, and with all applicable material contracts and agreements that now
pertain, or in the future may pertain, to the services. In addition, SERVICER
shall, in the performance of its obligations under this agreement, abide by any
applicable restrictions contained in any indenture, loan agreement, mortgage or
other agreement to which OWNER or any of its subsidiaries or affiliates is a
party and of which SERVICER has actual knowledge or receives notice.
TERM AND TERMINATION: Unless terminated earlier in accordance with the other
provisions of this paragraph, the term of this agreement shall begin on the date
of this agreement and shall end on the first anniversary of the date hereof, and
shall thereafter automatically renew for successive three-month terms, unless
notice is given by either party to the other at least 30 days before the end of
the then current term that this agreement shall terminate as of the end of such
term. Notwithstanding the foregoing, this agreement may be terminated prior to
the expiration of the then current term (a) by the mutual written consent of
both parties, or (b) by either party for nonperformance or material breach of
this agreement by the other party after giving the nonperforming or breaching
party no less than 30 days written notice (which notice shall specify the
nonperformance and/or material breach) and an opportunity to cure such
nonperformance or material breach within such 30 day period. Upon any
termination of this agreement (including, without limitation, by expiration of
the term), the parties shall have no further rights, duties or obligations
hereunder, other than those accruing prior to the effective date of termination,
which shall survive any termination of this agreement. SERVICER acknowledges and
agrees that, in accordance with the Company Agreement of OWNER, the Manager(s)
of OWNER who are designated by the Investor Group (as defined in such Company
4
Agreement) have the sole and exclusive right and duty under such Company
Agreement to act on behalf of OWNER in connection with any matter relating to
this agreement, including, without limitation, exercising any right (including
the right to terminate this agreement in accordance with the foregoing
provisions of this paragraph) or remedy accruing to OWNER hereunder.
OWNER represents that all of the persons designated above are over the age of 18
and are competent.
Make OWNER Check Payable To: Canyon Ferry Capital LLC
Address: 0000 Xxxx Xxxxxx
Xxxx, Xxxxx, Xxx Code: Xxxxxx, Xxxxx 00000
Tax ID Number: 00-0000000
ATTORNEY'S FEES: If OWNER or SERVICER is a prevailing party in any legal
proceeding brought as a result of a dispute under this agreement or any
transaction related to or contemplated by this agreement, such party will be
entitled to recover from the non-prevailing party all costs of such proceeding
and reasonable attorney's fees.
SPECIAL PROVISIONS: This Agreement may be amended from time to time by the
parties pursuant to a written agreement or addendum signed by the SERVICER and
the OWNER.
ENTIRE AGREEMENT: This document contains the entire agreement of the parties and
may not be changed except by written agreement.
ASSIGNMENTS: Neither party may assign this agreement without the written consent
of the other party.
BINDING EFFECT: OWNER's obligations to SERVICER under this agreement is binding
upon OWNER and OWNER's heirs, executors, successors, and permitted assignees.
JOINT AND SEVERAL: Parties executing this agreement are jointly and severally
liable for the performance of all its terms. Any act or notice to, refund to, or
signature of, any one or more of the parties regarding any term of this
agreement or its termination is binding on all parties executing this agreement.
GOVERNING LAW: Texas law governs the interpretation, validity, performance, and
enforcement of this agreement.
SEVERABILITY: If a court finds any clause in this agreement invalid or
unenforceable, the remainder of this agreement will not be affected and all
other provisions of this agreement will remain valid and enforceable.
CONTEXT: When the context requires, singular nouns and pronouns include the
plural.
5
NOTICES: Notices between the parties must be in writing and are effective when
sent to the receiving party's address as stated in this agreement.
OWNER: Canyon Ferry Capital LLC
Signed: _______________________________ Date: December 14, 2006
Print Name: ___________________________
Title: ______________________________
SERVICER: Mortgage Assistance Corporation
Signed: _______________________________ Date: December 14, 2006
Print Name: ___________________________
Title: ________________________________
6
Attachment A
------------------------------------------------------------------------------------------------------------------------------------
Estimated Minimum Prorated
FC Sale Redemption Redemption MAC's Updated Purchase
Address City State Zip Date Date amount Values cost
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxx Xxxx XXXX XXXXXX XX 00000 9/1/2006 3/1/2007 $ 85,000 $ 78,000.00 $ 35,726.75
------------------------------------------------------------------------------------------------------------------------------------
100 000 Xxxxxx XXXXX XX 00000 9/7/2006 3/7/2007 $ 54,400 $ 68,000.00 $ 31,146.39
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx XXXX XXXXX XX 00000 8/17/2006 2/17/2007 $ 52,000 $ 60,000.00 $ 27,482.11
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxx Xxxxxx XXXXXXX XX 00000 8/10/2006 2/12/2007 $ 154,770 $ 150,000.00 $ 68,705.28
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxx Xxx XXXXXXX XX 00000 7/6/2006 1/6/2007 $ 80,750 $ 87,600.00 $ 40,123.88
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxxx XXX XXXX XX 00000 9/8/2006 3/8/2007 $ 67,915 $ 92,000.00 $ 42,139.24
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxx Xxxxxx XXXXXX XX 00000 9/13/2006 11/27/2006 $ 33,750 $ 40,000.00 $ 18,321.41
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxxxx Xx XXXXXXX XX 00000 8/9/2006 2/9/2007 $ 44,000 $ 60,000.00 $ 27,482.11
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx XXXXXXX XX 00000 9/12/2006 3/12/2007 $ 44,000 $ 45,000.00 $ 20,611.58
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxx XXXXXXX XX 00000 6/28/2006 12/28/2006 $ 33,750 $ 46,000.00 $ 21,069.62
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxx Xxxxxx XXXXXX XXXXX XX 00000 8 /11/2006 2/11/2007 $ 30,000 $ 55,500.00 $ 25,420.95
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxx Xxxxxx XXXXXXX XX 00000 8/23/2006 2/23/2007 $ 37,500 $ 55,000.00 $ 25,191.94
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxx XXXXXXX XX 00000 8/2/2006 2/2/2007 $ 52,000 $ 55,000.00 $ 25,191.94
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxx Xx XXXXXXX XX 00000 7/12/2006 1/12/2007 $ 44,000 $ 50,000.00 $ 22,901.76
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxx Xxxxxx XXXXXXX XX 00000 9/6/2006 3/6/2007 $ 60,000 $ 65,000.00 $ 29,772.29
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxxxxx XXXXXXXXX XX 00000 6/15/2006 12/15/2006 $ 96,050 $ 100,000.00 $ 45,803.52
------------------------------------------------------------------------------------------------------------------------------------
0000 X. Xxxxxxxxxxxx XXXXXXX XX 00000 6/1/2006 12/1/2006 $ 55,920 $ 65,000.00 $ 29,772.29
------------------------------------------------------------------------------------------------------------------------------------
172 000 Xxxxxxx Xxxxxx XXXXX XX 00000 6/15/2006 12/15/2006 $ 59,200 $ 64,000.00 $ 29,314.25
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxx XXXXXXXXXX XX 00000 8/30/2006 2/28/2007 $ 48,000 $ 55,000.00 $ 25,191.94
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxxx XXXXXXX XX 00000 7/5/2006 1/5/2007 $ 94,925 $ 78,000.00 $ 35,726.75
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxx XXXXXXX XX 00000 8/16/2006 2/16/2007 $ 107,741 $ 104,000.00 $ 47,635.66
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxx XXXXXXX XX 00000 8/3/2006 2/5/2007 $ 56,000 $ 55,000.00 $ 25,191.94
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxx Xx XXXXXXX XX 00000 6/21/2006 12/21/2006 $ 68,000 $ 62,000.00 $ 28,398.18
------------------------------------------------------------------------------------------------------------------------------------
19937-39 Derby XXXXXXXX XXXX XX 00000 5/31/2006 11/30/2006 $ 33,750 $ 50,000.00 $ 22,901.76
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxx XXXXXXX XX 00000 6/7/2006 12/7/2006 $ 66,300 $ 61,000.00 $ 22,901.76
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxx XXXXXXX XX 00000 7/5/2006 1/5/2007 $ 73,728 $ 65,000.00 $ 29,772.29
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxx Xxxxxx XXXXXXX XX 00000 8/31/2006 2/28/2007 $ 77,350 $ 88,000.00 $ 40,307.10
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxx Xxxxx XXXXXXXX XXXXXXX XX 00000 8/9/2006 2/9/2007 $ 160,650 $ 137,000.00 $ 62,750.82
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxx Xx XXXXXXX XX 00000 6/14/2006 12/14/2006 $ 68,000 $ 66,000.00 $ 30,230.32
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxx Xxx XXXXXXXXXX XX 00000 8/25/2006 2/25/2007 $ 60,000 $ 65,000.00 $ 29,772.29
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx XXXXXXXXX XX 00000 5/31/2006 12/1/2006 $ 68,850 $ 65,000.00 $ 29,772.29
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxx Xxxxx Xxxxxx XXXXXXX XX 00000 9/8/2006 3/8/2007 $ 67,150 $ 64,000.00 $ 29,314.2
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxxx Xxxxxx XXXXXXXX XX 00000 8/9/2006 2/9/2007 $ 97,750 $ 95,000.00 $ 43,513.34
------------------------------------------------------------------------------------------------------------------------------------
00 Xxxx Xxxxxxxx XXXXXX XX 00000 7/5/2006 1/5/2007 $ 29,320 $ 52,000.00 $ 23,817.83
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Xxx XXXXXX XXXX XX 00000 8/22/2006 1/9/2007 $ 83,725 $ 89,000.00 $ 40,765.13
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx Xx XXXX XXXXX XX 00000 6/22/2006 12/22/2006 $ 54,400 $ 63,000.00 $ 28,856.22
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxxxx XXXXXXX XX 00000 9/6/2006 1/25/2007 $ 33,750 $ 45,000.00 $ 20,611.58
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxx Xx XXXXXXX XX 00000 6/21/2006 12/21/2006 $ 44,800 $ 7,000.00 $ 35,268.71
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxx Xx. XXXXXXX XX 00000 5/25/2006 11/25/2006 $ 64,600 $ 55,000.00 $ 25,191.94
------------------------------------------------------------------------------------------------------------------------------------
00 Xxxxx Xxxxxx XXXXXXX XX 00000 9/12/2006 3/12/2007 $ 46,400 $ 40,000.00 $ 18,321.41
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx XXXXX XX 00000 5/31/2006 11/30/2006 $ 80,325 $ 45,000.00 $ 20,611.58
------------------------------------------------------------------------------------------------------------------------------------
7
00000 Xxxxxxxxxx Xxxx XXXXXXX XX 00000 8/10/2006 2/10/2007 $ 65,450 $ 90,000.00 $ 41,223.17
------------------------------------------------------------------------------------------------------------------------------------
000 Xxx Xxx Xxxxxxxxx XXXXXXXXXX XX 00000 8/3/2006 2/3/2007 $ 106,607 $ 90,000.00 $ 41,223.17
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxx Xxxxxx XXXXXXXX XX 00000 9/1/2006 3/1/2007 $ 20,300 $ 29,900.00 $ 13,695.25
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx XXXXXXX XX 00000 8/2/2006 2/2/2007 $ 48,600 $ 50,000.00 $ 22,901.76
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx Xxxxxx XXXXXXXXX XX 00000 9/6/2006 3/6/2007 $ 70,550 $ 60,000.00
------------------------------------------------------------------------------------------------------------------------------------
00 Xxxx Xx XXXXXXXXXXXX XX 00000 8/31/2006 3/1/2007 $ 86,022 $ 89,900.00 $ 41,177.36
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxxxxx Xxxxxx XXXXX XXXX XX 00000 7/6/2006 1/6/2007 $ 48,000 $ 75,000.00 $ 34,352.64
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxxxx Xxxxxx XXXXXXXXX XX 00000 6/22/2006 12/22/2006 $ 68,000 $ 102,000.00 $ 46,719.59
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx XXXXXXXXX XX 00000 7/6/2006 1/6/2007 $ 73,950 $ 84,500.00 $ 38,703.97
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxx Xxxxxx XXXXXXX XX 00000 7/12/2006 1/12/2007 $ 57,600 $ 75,000.00 $ 34,352.64
------------------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxxx Xx XXXXXX XX 00000 7/21/2006 1/22/2007 $ 112,200 $ 120,000.00 $ 54,964.22
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Xx. XXXXXXX XX 00000 7/13/2006 1/13/2007 $ 36,000 $ 35,000.00 $ 16,031.23
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxx Xxxxxxx Xxxxxx XXXXXXX XX 00000 9/13/2006 1/11/2007 $ 85,000 $ 90,000.00 $ 41,223.17
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxx Xxxx XXXXXX XX 00000 6/7/2006 12/7/2006 $ 68,000 $ 80,000.00 $ 36,642.82
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Xxx MUSKEGON M 49442 8/18/2006 2/18/2007 $ 96,304 $ 82,000.00 $ 37,558.89
------------------------------------------------------------------------------------------------------------------------------------
5772 Chalet Ct. OSCODA M 48750 8/9/2006 2/9/2007 $ 55,200 $ 64,000.00 $ 29,314.25
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxx Xx XXXXXXX XX 00000 9/13/2006 3/13/2007 $ 37,500 $ 64,000.00 $ 29,314.25
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxx Xxxxxx XXXXX XXXXXXX XX 00000 8/17/2006 2/17/2007 $ 52,000 $ 80,000.00 $ 36,642.82
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxx XXXXX XX 00000 8/30/2006 2/28/2007 $ 44,000 $ 30,000.00 $ 13,741.06
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxx XXXXXX XXX XX 00000 8/22/2006 2/22/2007 $ 65,450 $ 93,000.00 $ 42,597.27
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx XXXXXXX XX 00000 6/1/2006 12/1/2006 $ 77,073 $ 98,000.00 $ 44,887.45
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxxx Xxxxxx XXXXXXX XX 00000 8/2/2006 2/2/2007 $ 76,500 $ 74,000.00 $ 33,894.61
------------------------------------------------------------------------------------------------------------------------------------
0 Xxxxxxxxx Xxxxx XXXXX XXXXXXX XX 00000 9/8/2006 3/8/2007 $ 80,750 $ 121,000.00 $ 55,422.26
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Xx XXXXXXX XX 00000 8/30/2006 2/28/2007 $ 37,500 $ 35,000.00 $ 16,031.23
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxx Xxx XXXXXXX XX 00000 8/30/2006 2/28/2007 $ 75,650 $ 73,000.00 $ 33,436.57
------------------------------------------------------------------------------------------------------------------------------------
000 X Xxxxxxxx Xx XXXXXXX XX 00000 8/30/2006 2/27/2007 $ 56,000 $ 43,500.00 $ 19,924.53
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxx XXXXXX XX 00000 6/9/2006 12/9/2006 $ 68,000 $ 65,000.00 $ 29,772.29
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxx XXXXXXX XX 00000 8/16/2006 2/16/2007 $ 72,250 $ 80,000.00 $ 36,642.82
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxx Xxxxx XXXXXXX XX 00000 9/14/2006 3/14/2007 $ 104,970 $ 90,000.00 $ 41,223.17
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxx XXXXXXX XX 00000 9/6/2006 3/6/2007 $ 48,000 $ 60,000.00 $ 27,482.11
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx XXXXXXX XX 00000 7/6/2006 1/27/2007 $ 37,500 $ 5,000.00 $ 25,191.94
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx Xxxxxx XXXXXXX XX 00000 8/23/2006 2/23/2007 $ 68,000 $ 0,000.00 $ 32,062.46
------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXX XX 00000 8/31/2006 1/30/2007 $ 52,000 $ 0,000.00 $ 27,482.11
000 Xxx Xxxxxx
------------------------------------------------------------------------------------------------------------------------------------
$ 4,821,445 $5,220,900.00 $2,391,356.00
----------------------------------------------------
8
Attachment B
o Eviction fees and costs
o Property Preservation (winterization, lawn maintenance, property
clean-outs, board-up, improvements required by city to prevent fines and
liens, re-key property, etc.)
o Emergency Maintenance - flooding, break-ins, gas leak, etc.
o Closing Costs from title company
o Taxes and Insurance
o Third-Party Management Fee to process listings and closings of REOs
o Sales Commission
o Seller Concessions on behalf of Buyer (portion of Buyer's closing costs or
credit for repairs, termite treatment, and/or inspections, etc.)
o Title Work Costs
o Recording fees and costs
o Transfer Taxes
o Cash for Keys to Occupants of REOs
o Utilities and any liens on the property
o Banking Service Fees
o LLC formation costs
o All other reasonable expenses approved by the Investor Group, which
approval shall not be unreasonably withheld
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