EXHIBIT 10.13
OPERATING AGREEMENT
FOR
XXXXXXXX MORTGAGE SERVICE COMPANY, L.L.C.
As of the date of this Operating Agreement, we have requested that the
law firm of Silver, Xxxxxxxx & Taff, L.L.P. organize a limited liability company
in Texas on our behalf. It is the intent of the parties hereto that this
Operating Agreement constitute the regulations of the limited liability company
of the Texas Limited Liability Company Act (the "Act"), as well as a membership
agreement between the members of Xxxxxxxx Mortgage Service Company, L.L.C.
1. The name of the limited liability company shall be Xxxxxxxx Mortgage
Service Company, L.L.C. ("New Xxxxxxxx") and the members of the limited
liability company shall be Fort Bend Federal Savings and Loan Association of
Rosenberg ("Fort Bend") and Xxxxxxxx Mortgage Company, a Texas corporation
("Xxxxxxxx Mortgage") or its successor as permitted by Section 8 hereof.
2. Management of New Xxxxxxxx shall be reserved to a board of managers
(hereinafter called the "board of directors"), which shall be comprised of five
individuals (with three directors to be appointed by Fort Bend and two directors
to be appointed by Xxxxxxxx Mortgage). In addition, each of Fort Bend and
Xxxxxxxx Mortgage may appoint up to two advisory directors to the board of
directors who shall not have any voting or decision-making authority. The board
of directors of New Xxxxxxxx shall hire such officers as it deems appropriate to
manage the day-to-day operations of New Xxxxxxxx, and adopt such other
regulations for the operation and governance of New Xxxxxxxx as they deem
necessary and appropriate provided the same does not conflict with this
Operating Agreement.
3. Fort Bend shall own fifty-one percent (51%) of New Xxxxxxxx and
Xxxxxxxx Mortgage shall own forty-nine percent (49%) of New Xxxxxxxx. Profits,
losses and distributions shall be made in accordance with the members'
percentage ownership interest in New Xxxxxxxx. Members shall be entitled vote in
accordance with their percentage ownership interest, subject to Section 2 above.
4. The capital contributions by each member are as follows:
Fort Bend: $2,586,719.49 in cash
Mitchell Mortgage: an undivided 49% interest in certain
assets and liabilities being transferred
to New Xxxxxxxx having a value equal to
49% of the initial capitalization of New
Xxxxxxxx.
5. New Xxxxxxxx'x minimum member's equity will at all time be
maintained at a minimum of eight percent of its assets; and to the extent it
shall ever be reduced below such minimum level, both Fort Bend and Xxxxxxxx
Mortgage shall agree to either: (x) provide a capital infusion to increase
members' equity to the minimum amount required on a pro rata basis equal to
their respective equity ownership percentage in New Xxxxxxxx or (y) take other
steps deemed appropriate to have members' equity in an amount equal to at least
eight percent. Except as set forth in the preceding sentence, there are no
agreements between the members regarding any times at
which or events on the happening of which any additional contributions by each
member are to be made.
6. New Xxxxxxxx shall make periodic capital distributions of earnings
and profits to Fort Bend and Xxxxxxxx Mortgage which, on an annualized basis,
will be equal to at least a ten percent return on equity; provided, however that
to the extent New Xxxxxxxx does not generate earnings and profits sufficient to
support such distributions it will distribute all of its earnings and profits
for the year; and provided further, however, that no distribution shall be made
at any time that New Xxxxxxxx'x member's equity is less than the greater of (x)
eight percent of total assets and (y) $5,000,000. The ten percent return on
equity shall include any amounts distributed to Fort Bend and Xxxxxxxx Mortgage
of the purpose of paying income tax liabilities resulting from New Xxxxxxxx
being a limited liability company.
7. The only events upon the happening of which New Xxxxxxxx is to be
dissolved and its affairs wound up are those events specified in the Act.
8. The members' ownership interests in New Xxxxxxxx are not
transferrable, for any reason, except upon the prior written unanimous consent
of all New Xxxxxxxx members, and except as set forth a letter agreement between
Fort Bend Holding Corp., Fort Bend, The Woodland's and Xxxxxxxx Mortgage, of
even date herewith; provided, however, in the case of a member that is not an
individual, such member may transfer its ownership interest to an entity which
is at least the majority owner of such member without the prior written
unanimous consent of the other members of New Xxxxxxxx.
9. New Xxxxxxxx will maintain an office in the Woodlands development
for at least five years from its formation, subject to a unanimous decision by
New Xxxxxxxx'x board of directors that such a location would no longer be
prudent or economically feasible.
10. Notwithstanding a change in control of FBHC (as discussed in
Section 3(c) of the Letter Agreement executed contemporaneously with this
Operating Agreement), New Xxxxxxxx, to the extent prudently available and
economically feasible, intends to maintain at least $25,000,000 in construction
loans or commitments in The Woodlands development with additional amount to be
lent on properties located both within and without The Woodlands development,
subject to Section 5 and 6 hereto, at all time during the five years following
its formation.
11. Fort Bend will provide, as soon as possible after formation, a
master credit facility to New Xxxxxxxx for a period of at least five years after
formation, and will become the primary warehouse lender for New Xxxxxxxx at
rates which will be: (i) for loan amounts that are match funded with New
Xxxxxxxx escrow deposits, the rate would be 1.5% over Fort Bend's cost for such
funds (which currently would be zero); and (ii) for loan amounts in excess of
the match funded amounts, the rate would be 1.5% over the comparable term
Federal Home Loan Bank advance rate. In all other respects, the facility will be
substantially similar to that in place at the time of New Xxxxxxxx'x formation.
12. All other aspects of the operations of New Xxxxxxxx shall be
governed by the provisions of the Act as may be in effect from time to time.
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13. Nothing in this Operating Agreement shall be deemed to restrict in
any way the rights of any member to conduct any other business of activity
whatsoever, and the member shall not be accountable to New Xxxxxxxx or to any
member with respect to that business or activities unless the business or
activity competes with New Xxxxxxxx'x business, as may be further spelled out in
a Non-Competition Agreement executed by Xxxxxxxx Mortgage and its affiliates (a
copy of which is attached hereto). To the extent this Section 13 conflicts with
the Non-Competition Agreement, the terms of the Non-Competition Agreement shall
control. The organization of New Xxxxxxxx shall be without prejudice to their
respective rights to maintain, expand or diversity such other interests and
activities and to receive and enjoy profits or compensation therefrom. Each
member waives any rights the member might otherwise have to share or participate
in such other interest or activities of any other member.
14. Each member shall execute all such certificates and other documents
and shall do all such filing, recording, publishing, and other acts appropriate
to comply with the requirements of law for the formation and operation of New
Xxxxxxxx and to comply with any laws, rules, and regulations relating to the
acquisition, operation, or holding of the property of New Xxxxxxxx.
15. Any notice, demand, consent, election, offer, approval, request, or
other communication (collectively, a "notice") required or permitted under this
Operating Agreement must be in writing and either delivered personally, by
recognized national overnight carrier or sent by certified or registered mail,
postage prepaid, return receipt requested. A notice must be addressed to a
member or interest holder at the such person's last known address on the records
of New Xxxxxxxx. A notice to New Xxxxxxxx must be addressed to New Xxxxxxxx'x
principal office. A notice delivered personally will be deemed given only when
acknowledged in writing by the person to whom it is delivered. A notice given by
overnight carrier will be deemed given the next day. A notice that is sent by
mail will be deemed given upon receipt or refusal. Any party may designate, by
notice to all of the others, substitute addresses or addressees for notices;
and, thereafter, notices are to be directed to those substitute addresses or
addressees.
16. The members recognize that irreparable injury will result form a
breach of any provision of this Operating Agreement and that money damages will
be inadequate to fully remedy the injury. Accordingly, in the event of a breach
or threatened breach of one or more of the provisions of this Operating
Agreement, any party who may be injured (in addition to any other remedies which
may be available to that party) shall be entitled to one or more preliminary or
permanent orders (i) restraining and enjoining any act which would constitute a
breach of this Operating Agreement and (ii) compelling the performance of any
obligation under this Agreement which, if not performed, would constitute a
breach.
17. This Operating Agreement constitutes the complete and exclusive
regulations of the Company and the statement of the agreement among the members.
It supersedes all prior written and oral statements, including any prior
representation, statement, condition, or warranty. Except as expressly provided
otherwise herein, this Operating Agreement may not be amended without the
written unanimous consent of the members.
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18. All questions concerning the construction, validity, and
interpretation of this Operating Agreement and the performance of the
obligations imposed by this Operating Agreement shall be governed by the
internal law, not the law of conflicts, of the State of Texas.
19. This Operating Agreement is binding upon, inures to the benefit of,
the parties hereto and their respective heirs, executors, administrators,
personal and legal representatives, successors, and permitted assigns.
20. Each provision of this Agreement shall be considered separable; and
if, for any reason, any provision or provisions herein are determined to be
invalid and contrary to any existing or future law, such invalidity shall not
impair the operation of or affect those portions of this Operating Agreement
which are valid.
21. This Operating Agreement may be executed simultaneously in
counterparts each of which shall be deemed an original, and all of which, when
taken together, constitute one and the same document. The signature of any party
to any counterpart shall be deemed a signature to, and may be appended to, any
other counterpart.
IN WITNESS WHEREOF, the parties have executed, or caused this Operating
Agreement to be executed as of the date set forth herein above.
Date: January 1, 1997 FORT BEND FEDERAL SAVINGS AND
LOAN ASSOCIATION OF ROSENBERG
By: /S/ XXXX XXXX
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Xxxx Xxxx, President
XXXXXXXX MORTGAGE COMPANY
By: /S/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx, President
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