LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXX AMERICAN RECEIVABLES, LLC
This Limited Liability Company Agreement (together with the schedules
attached hereto, and as amended, restated or supplemented or otherwise modified
from time to time, this "Agreement") of Xxxxxx American Receivables, LLC (the
"Company"), is entered into by Great American Knitting Xxxxx, Inc. (a
wholly-owned subsidiary of Xxxxxx American Corp. (the "Parent")), as the sole
equity member (the "Member"), and Xxxxxx Xxxxxxx and Xxxx Xxxxx as the Special
Members (as defined on Schedule A hereto).
The Member, by execution of this Agreement, hereby forms the Company as a
limited liability company pursuant to and in accordance with the Delaware
Limited Liability Company Act (6 Del. C. ' 18-101 et seq.), as amended from time
to time (the "Act"), and this Agreement, and the Member, Xxxxxx Xxxxxxx and Xxxx
Xxxxx hereby agree as follows:
Section 1. Name.
The name of the limited liability company formed hereby is Xxxxxx American
Receivables, LLC.
Section 2. Principal Business Office.
The principal business office of the Company shall be located at 000 Xxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000 or such other location as may hereafter be
determined by the Member.
Section 3. Registered Office.
The address of the registered office of the Company in the State of
Delaware is c/o The Corporation Trust Company, Corporate Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
Section 4. Registered Agent.
The name and address of the registered agent of the Company for service of
process on the Company in the State of Delaware is The Corporation Trust
Company, Corporate Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000.
Section 5. Members.
(a) The mailing address of the Member is set forth on Schedule B attached
hereto. The Member was admitted to the Company as a member of the Company upon
its execution of a counterpart signature page to this Agreement.
(b) Subject to Section 9(j), the Member may act by written consent.
(c) Upon the occurrence of any event that causes the Member to cease to be
a member of the Company (other than (i) upon an assignment by the Member of all
of its limited liability company interest in the Company and the admission of
the transferee pursuant to Sections 21 and 23, or (ii) the resignation of the
Member and the admission of an additional member of the Company pursuant to
Sections 22 and 23), each person acting as an Independent Manager pursuant to
Section 10 shall, without any action of any Person and simultaneously with the
Member ceasing to be a member of the Company, automatically be admitted to the
Company as a Special Member and shall continue the Company without dissolution.
No Special Member may resign from the Company or transfer its rights as Special
Member unless (i) a successor Special Member has been admitted to the Company as
Special Member by executing a counterpart to this Agreement, and (ii) such
successor has also accepted its appointment as an Independent Manager pursuant
to Section 10; provided, however, the Special Members shall automatically cease
to be members (but not Independent Managers) of the Company upon the admission
to the Company of a substitute Member. Each Special Member shall be a member of
the Company that has no interest in the profits, losses and capital of the
Company and has no right to receive any distributions of Company assets.
Pursuant to Section 18-301 of the Act, a Special Member shall not be required to
make any capital contributions to the Company and shall not receive a limited
liability company interest in the Company. A Special Member, in its capacity as
Special Member, may not bind the Company. Except as required by any mandatory
provision of the Act, each Special Member, in its capacity as Special Member,
shall have no right to vote on, approve or otherwise consent to any action by,
or matter relating to, the Company, including, without limitation, the merger,
consolidation or conversion of the Company. In order to implement the admission
to the Company of each Special Member, each person acting as an Independent
Manager pursuant to Section 10 shall execute a counterpart to this Agreement.
Prior to its admission to the Company as Special Member, each person acting as
an Independent Manager pursuant to Section 10 shall not be a member of the
Company.
Section 6. Certificates.
Xxxxx X. Xxxxxx, Xx. is hereby designated as an "authorized person" within
the meaning of the Act, and has executed, delivered and filed the Certificate of
Formation of the Company with the Secretary of State of the State of Delaware.
Upon the filing of the Certificate of Formation with the Secretary of State of
the State of Delaware, his powers as an "authorized person" ceased, and the
Member thereupon became the designated "authorized person" and shall continue as
the designated "authorized person" within the meaning of the Act. The Member
shall execute, deliver and file any other certificates (and any amendments
and/or restatements thereof) necessary for the Company to qualify to do business
in North Carolina and in any other jurisdiction in which the Company may wish to
conduct business.
The existence of the Company as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.
Section 7. Purposes.
The purpose to be conducted or promoted by the Company is to engage in the
following activities:
(a)
(i) to purchase from time to time, pursuant to a receivables transfer
agreement between the Company and the Member, current and future receivables
(the "Receivables") and other rights, assets and property of the Member and to
transfer or sell the Receivables and such other rights, assets and property to
commercial banks, financial institutions other purchasers pursuant to an
agreement therewith;
(ii) to acquire, own, hold, sell, transfer, service, convey, safekeep,
dispose of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with, publicly or privately and whether with unrelated third
parties or with affiliated entities, the Receivables and other rights, assets
and property;
(iii) to engage in any lawful act or activity and to exercise any powers
permitted to limited liability companies organized under the laws of the State
of Delaware that are related or incidental to and necessary, convenient or
advisable for the accomplishment of the above-mentioned purposes (including the
entering into of interest rate or basis swap, cap, floor or collar agreements,
currency exchange agreements or similar hedging transactions and referral,
management, servicing and administration agreements).
(b) The Company may enter into and perform any documents, agreements,
certificates or financing statements relating to the transactions set forth in
paragraph (a) above, all without any further act, vote or approval of any other
Person notwithstanding any other provision of this Agreement, the Act or
applicable law, rule or regulation. The foregoing authorization shall not be
deemed a restriction on the powers of the Member to enter into other agreements
on behalf of the Company.
Section 8. Powers.
Subject to Section 9(j), the Company (i) shall have and exercise all powers
necessary, convenient or incidental to accomplish its purposes as set forth in
Section 7 and (ii) shall have and exercise all of the powers and rights
conferred upon limited liability companies formed pursuant to the Act.
Section 9. Management.
(a) Board of Directors. Subject to Section 9(j), the business and affairs
of the Company shall be managed by or under the direction of a Board of one or
more Directors designated by the Member. Subject to Section 10, the Member may
determine at any time in its sole and absolute discretion the number of
Directors to constitute the Board. The authorized number of Directors may be
increased or decreased by the Member at any time in its sole and absolute
discretion, upon notice to all Directors, and subject in all cases to Section
10. The initial number of Directors shall be one. Each Director elected,
designated or appointed by the Member shall hold office until a successor is
elected and qualified or until such Director's earlier death, resignation,
expulsion or removal. Each Director shall execute and deliver the Management
Agreement. Directors need not be a Member. The initial Directors designated by
the Member are listed on Schedule D hereto.
(b) Powers. Subject to Section 9(j), the Board of Directors shall have the
power to do any and all acts necessary, convenient or incidental to or for the
furtherance of the purposes described herein, including all powers, statutory or
otherwise. Subject to Section 7, the Board of Directors has the authority to
bind the Company. A Director is hereby designated as a "manager" of the Company
within the meaning of Section 18-101(10) of the Act.
(c) Meeting of the Board of Directors. The Board of Directors of the
Company may hold meetings, both regular and special, within or outside the State
of Delaware. Regular meetings of the Board may be held without notice at such
time and at such place as shall from time to time be determined by the Board.
Special meetings of the Board may be called by the President on not less than
one day's notice to each Director by telephone, facsimile, mail, telegram or any
other means of communication, and special meetings shall be called by the
President or Secretary in like manner and with like notice upon the written
request of any one or more of the Directors. The Board of Directors may act by
written consent.
(d) Quorum: Acts of the Board. At all meetings of the Board, a majority of
the Directors shall constitute a quorum for the transaction of business and,
except as otherwise provided in any other provision of this Agreement, the act
of a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board. If a quorum shall not be present at any meeting
of the Board, the Directors present at such meeting may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present. Any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken without a meeting
if all members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee, as the case may be.
(e) Electronic Communications. Members of the Board, or any committee
designated by the Board, may participate in meetings of the Board, or any
committee, by means of telephone conference or similar communications equipment
that allows all persons participating in the meeting to hear each other, and
such participation in a meeting shall constitute presence in person at the
meeting. If all the participants are participating by telephone conference or
similar communications equipment, the meeting shall be deemed to be held at the
principal place of business of the Company.
(f) Committees of Directors.
(i) The Board may, by resolution passed by a majority of the whole Board,
designate one or more committees, each committee to consist of one or more of
the Directors of the Company. The Board may designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee.
(ii) In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not such members constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in the place of any such
absent or disqualified member.
(iii) Any such committee, to the extent provided in the resolution of the
Board, shall have and may exercise all the powers and authority of the Board in
the management of the business and affairs of the Company. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board. Each committee shall keep regular minutes of
its meetings and report the same to the Board when required.
(g) Compensation of Directors; Expenses. The Board shall have the authority
to fix the compensation of Directors. The Directors may be paid their expenses,
if any, of attendance at meetings of the Board, which may be a fixed sum for
attendance at each meeting of the Board or a stated salary as Director. No such
payment shall preclude any Director from serving the Company in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
(h) Removal of Directors. Unless otherwise restricted by law, any Director
or the entire Board of Directors may be removed or expelled, with or without
cause, at any time by the Member, and any vacancy caused by any such removal or
expulsion may be filled by action of the Member.
(i) Directors as Agents. To the extent of their powers set forth in this
Agreement and subject to Section 9(j), the Directors are agents of the Company
for the purpose of the Company's business, and the actions of the Directors
taken in accordance with such powers set forth in this Agreement shall bind the
Company. Notwithstanding the last sentence of Section 18-402 of the Act, except
as provided in this Agreement or in a resolution of the Directors, a Director
may not bind the Company.
(j) Limitations on the Company's Activities.
(i) This Section 9(j) is being adopted in order to comply with certain
provisions required in order to qualify the Company as a "special purpose"
entity.
(ii) The Member shall not, prior to the date which is one year and one date
after the date on which all obligations of the Company under the documents
referred to in Section 7(a)(i) have been paid in full, amend, alter, change or
repeal the definition of "Independent" or Sections 5(c), 7, 8, 10, 20, or 31 (or
Schedule A of this Agreement to the extent such modification would affect the
foregoing provisions) without the prior written consent of the Independent
Managers. Subject to this Section 9(j), the Member reserves the right to amend,
alter, change or repeal any provisions contained in this Agreement in accordance
with Section 31.
(iii) Notwithstanding any other provision of this Agreement and any
provision of law that otherwise so empowers the Company, the Member, the Board,
any Officer or any other Person, none of the Company, the Member or the Board or
any Officer or any other Person shall be authorized or empowered, nor shall they
permit the Company, to take any of the following actions without the prior
written consent of the Independent Managers:
1. File or consent to the filing of any bankruptcy, insolvency or
reorganization petition naming the Company as debtor or otherwise institute
bankruptcy or insolvency proceedings by or against the Company or otherwise seek
with respect to the Company relief under any laws relating to the relief from
debts or the protection of debtors generally;
2. Seek or consent to the appointment of a receiver, liquidator,
conservator, assignee, trustee, sequestrator, custodian or any similar official
for the Company or all or any portion of any of its properties;
3. Make or consent to any assignment for the benefit of the Company's
creditors;
4. Take any action that might reasonably be expected to cause the Company
to become insolvent;
5. Admit in writing the inability of the Company to pay its debts generally
as they become due;
Except as contemplated by the documents referred to in Section 7(a)(i),
engage in any transactions with an Affiliate of the Company;
Consent to substantive consolidation with the Member or the Parent;
Declare or permit any distribution to the Member other than out of legally
available funds or otherwise in accordance with the documents referred to in
Section 7(a)(i); or
Take any action in furtherance of any of the preceding actions.
(iv) The Board and the Member shall cause the Company to do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
following the date which is one year and one date after the date on which all
obligations of the Company under the documents referred to in Section 7(a)(i)
have been paid in full if the Board shall determine that the preservation
thereof is no longer desirable for the conduct of its business and that the loss
thereof is not disadvantageous in any material respect to the Company. The
Company shall, and the Board shall cause the Company to:
1. At all times have at least two Independent Managers.
2. At all times have sufficient personnel to run its business and
operations. Compensate its employees (if any) from its own available funds for
services provided to it. In the event employees of the Company participate in
pension, insurance and other benefit plans of the Member or the Parent or any
Affiliates of the Member or the Parent, the Company will on a current basis
reimburse the Member, the Parent or the relevant Affiliate, as the case may be,
for its pro rata share of the costs thereof.
3. Pay its own liabilities out of its own funds and assets.
4. Maintain a separate office (a) which if leased from the Member or the
Parent will be on terms no more or less favorable to the Company than could be
obtained in a comparable arm's-length transaction with an unaffiliated Person
and (b) which will be conspicuously identified as the Company's office so it can
be easily located by outsiders. The Company will use its own stationery,
invoices, checks and telephone and facsimile numbers.
5. The Company will hold itself out and identify itself as a separate and
distinct entity under its own name and not as a division or part of any other
Person.
6. The Company will promptly correct any misunderstanding regarding its
separate existence and identity.
7. The Company will prepare and maintain its own full and complete books,
records and financial statements separate from any other Person. The Company's
financial statements will comply with generally accepted accounting principles.
8. The Company will maintain a bank account in its name.
9. Except for the servicing of the Receivables pursuant to the documents
referred to in Section 7(a)(i), all business transactions entered into by the
Company with any of its Affiliates will be on terms that are intrinsically fair
and not more or less favorable to the Company, as the case may be, than terms
and conditions available at the time to the Company for comparable arm's-length
transactions with unaffiliated Persons.
10. The Company will not assume or guarantee or become obligated for debts
of the Member or the Parent and neither the Member nor the Parent will assume or
guarantee or become obligated for the debts of the Company, other than as
provided in the documents referred to in Section 7(a)(i). The Company will not
hold its credit out as being available to satisfy the obligations of any other
Persons.
11. The Company will not acquire obligations or securities of the Member,
the Parent or any of their respective Affiliates. The Company will not make
loans to the Member or the Parent.
12. Except to the limited extent provided in the documents referred to in
Section 7(a)(i), the Company will not commingle any of its money or other assets
with the money or assets of the Member or the Parent. The Company will ensure
that its funds will be clearly traceable at each step in any financial
transaction.
13. The Company will engage in transactions and conduct all other business
activities solely in its own name and through its own authorized officers and
agents and will present itself to the public as a separate company. Except to
the limited extent provided in the documents referred to in Section 7(a)(i),
neither the Member nor the Parent will be appointed agent of the Company.
14. The Company will not engage in any transaction with any of its
Affiliates involving any intent to hinder, delay or defraud any Person.
Failure of the Company or the Member or the Board on behalf of the Company
to comply with any of the foregoing covenants or any other covenants contained
in this Agreement shall not affect the status of the Company as a separate legal
entity or the limited liability of the Member or the Directors.
(v) Prior to the date which is one year and one date after the date on
which all obligations of the Company under the documents referred to in Section
7(a)(i) have been paid in full, the Company shall not and the Member shall not
cause or permit the Company to:
1. Except as contemplated by the documents referred to in Section 7(a)(i),
guarantee any obligation of any Person, including any Affiliate;
2. Engage, directly or indirectly, in any business other than the actions
required or permitted to be performed under Section 7 or this Section 9(j);
3. Incur, create or assume any indebtedness other than as expressly
permitted under the documents referred to in Section 7(a)(i);
4. Make or permit to remain outstanding any loan or advance to, or own or
acquire any stock or securities of, any Person, except that the Company may
invest in those investments permitted under the documents referred to in Section
7(a)(i);
5. To the fullest extent permitted by law, engage in any dissolution,
liquidation, consolidation, merger, asset sale or transfer of ownership
interests other than such activities as are expressly permitted pursuant to any
provision of the documents referred to in Section 7(a)(i); or
6. Form, acquire or hold any subsidiary (whether corporate, partnership,
limited liability company or other).
Section 10. Independent Managers.
Prior to the date which is one year and one date after the date on which
all obligations of the Company under the documents referred to in Section
7(a)(i) have been paid in full, the Member shall cause the Company at all times
to have at least two managers, appointed by the Member, who will be (x) natural
persons and (y) Independent (each, an "Independent Manager"). The initial
Independent Managers appointed by the Member are Xxxxxx Xxxxxxx and Xxxx Xxxxx.
Each Independent Manager is hereby designated as a "manager" of the Company
within the meaning of Section 18-101(10) of the Act. Each Independent Manager
shall execute and deliver the Management Agreement.
To the fullest extent permitted by law, including Section 18-1101(c) of the
Act, the Independent Managers shall consider only the interests of the Company,
including its respective creditors, in acting or otherwise voting on the matters
referred to in Section 9(j)(iii).
The Independent Managers may be removed by the Member at any time. No
resignation or removal of an Independent Manager shall be effective until a
successor Independent Manager is appointed and such successor (i) shall have
accepted his or her appointment as an Independent Manager by a written
instrument, which may be a counterpart signature page to the Management
Agreement, and (ii) shall have executed a counterpart to this Agreement as
required by Section 5(c). In the event of a vacancy in the position of an
Independent Manager, the Member shall, as soon as practicable, appoint a
successor Independent Manager.
All right, power and authority of the Independent Managers shall be limited
to the extent necessary to exercise those rights and perform those duties
specifically set forth in this Agreement. Except as provided in the second
paragraph of this Section 10, in exercising its rights and performing its duties
under this Agreement, each Independent Manager shall have a fiduciary duty of
loyalty and care similar to that of a director of a business corporation
organized under the General Corporation Law of the State of Delaware. No
Independent Manager shall at any time serve as trustee in bankruptcy for the
Company or any Affiliate of the Company.
Section 11. Officers.
(a) Officers. The initial Officers of the Company shall be designated by
the Member. The additional or successor Officers of the Company shall be chosen
by the Board and shall consist of at least a President, a Secretary and a
Treasurer. The Board of Directors may also choose one or more Vice Presidents,
Assistant Secretaries and Assistant Treasurers. Any number of offices may be
held by the same person. The Board shall choose a President, a Secretary and a
Treasurer. The Board may appoint such other Officers and agents as it shall deem
necessary or advisable who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board. The salaries of all Officers and agents of the Company shall
be fixed by or in the manner prescribed by the Board. The Officers of the
Company shall hold office until their successors are chosen and qualified. Any
Officer may be removed at any time, with or without cause, by the affirmative
vote of a majority of the Board. Any vacancy occurring in any office of the
Company shall be filled by the Board. The initial Officers of the Company
designated by the Member are listed on Schedule E hereto.
(b) President. The President shall be the chief executive officer of the
Company, shall preside at all meetings of the Board, shall be responsible for
the general and active management of the business of the Company and shall see
that all orders and resolutions of the Board are carried into effect. The
President or any other Officer authorized by the President or the Board shall
execute all bonds, mortgages and other contracts, except: (i) where required or
permitted by law or this Agreement to be otherwise signed and executed,
including Section 7(b); (ii) where signing and execution thereof shall be
expressly delegated by the Board to some other Officer or agent of the Company,
and (iii) as otherwise permitted in Section 11(c).
(c) Vice President. In the absence of the President or in the event of the
President's inability to act, the Vice President, if any (or in the event there
be more than one Vice President, the Vice Presidents in the order designated by
the Directors, or in the absence of any designation, then in the order of their
election), shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents, if any, shall perform such other duties and have
such other powers as the Board may from time to time prescribe.
(d) Secretary and Assistant Secretary. The Secretary shall be responsible
for filing legal documents and maintaining records for the Company. The
Secretary shall attend all meetings of the Board and record all the proceedings
of the meetings of the Company and of the Board in a book to be kept for that
purpose and shall perform like duties for the standing committees when required.
The Secretary shall give, or shall cause to be given, notice of all meetings of
the Member, if any, and special meetings of the Board, and shall perform such
other duties as may be prescribed by the Board or the President, under whose
supervision the Secretary shall serve. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the Board
(or if there be no such determination, then in order of their election), shall,
in the absence of the Secretary or in the event of the Secretary's inability to
act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board may from time
to time prescribe.
(e) Treasurer and Assistant Treasurer. The Treasurer shall have the custody
of the Company funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board. The Treasurer
shall disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and to
the Board, at its regular meetings or when the Board so requires, an account of
all of the Treasurer's transactions and of the financial condition of the
Company. The Assistant Treasurer, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board (or if there be no
such determination, then in the order of their election), shall, in the absence
of the Treasurer or in the event of the Treasurer's inability to act, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board may from time to time prescribe.
(f) Officers as Agents. The Officers, to the extent of their powers set
forth in this Agreement or otherwise vested in them by action of the Board not
inconsistent with this Agreement, are agents of the Company for the purpose of
the Company's business and, subject to Section 9(j), the actions of the Officers
taken in accordance with such powers shall bind the Company.
(g) Duties of Board and Officers. Except to the extent otherwise provided
herein, each Director and Officer shall have a fiduciary duty of loyalty and
care similar to that of directors and officers of business corporations
organized under the General Corporation Law of the State of Delaware. No
director or officer shall at any time serve as trustee in bankruptcy for any
Affiliate of the Company.
Section 12. Limited Liability.
Except as otherwise expressly provided by the Act, the debts, obligations
and liabilities of the Company, whether arising in contract, tort or otherwise,
shall be the debts, obligations and liabilities solely of the Company, and
neither the Member, the Independent Managers, any Special Member nor any
Director shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a Member, Special Member,
Independent Manager or Director of the Company.
Section 13. Capital Contributions.
The Member has contributed to the Company property of an agreed value as
listed on Schedule B attached hereto. In accordance with Section 5(c), Special
Members shall not be required to make any capital contributions to the Company.
Section 14. Additional Contributions.
The Member is not required to make any additional capital contribution to
the Company. However, the Member may make additional capital contributions to
the Company at any time upon the written consent of the Member. To the extent
that the Member makes an additional capital contribution to the Company, the
Member shall revise Schedule B of this Agreement. The provisions of this
Agreement, including this Section 14, are intended to benefit the Member and the
Special Members and, to the fullest extent permitted by law, shall not be
construed as conferring any benefit upon any creditor of the Company (and no
such creditor of the Company shall be a third-party beneficiary of this
Agreement) and the Member and the Special Members shall not have any duty or
obligation to any creditor of the Company to make any contribution to the
Company or to issue any call for capital pursuant to this Agreement. Section 15.
Allocation of Profits and Losses.
The Company's profits and losses shall be allocated to the Member.
Section 16. Distributions.
Distributions shall be made to the Member at the times and in the aggregate
amounts determined by the Board. Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not be required to make a
distribution to the Member on account of its interest in the Company if such
distribution would violate Section 18-607 of the Act or any other applicable law
or any agreement referred to in Section 7(a)(i).
Section 17. Books and Records.
The Board shall keep or cause to be kept complete and accurate books of
account and records with respect to the Company's business. The books of the
Company shall at all times be maintained by the Board. The Member and its duly
authorized representatives shall have the right to examine the Company books,
records and documents during normal business hours. The Company, and the Board
on behalf of the Company, shall not have the right to keep confidential from the
Member any information that the Board would otherwise be permitted to keep
confidential from the Member pursuant to Section 18-305(c) of the Act. The
Company's books of account shall be kept using the method of accounting
determined by the Member. The Company's independent auditor, if any, shall be an
independent public accounting firm selected by the Member.
Section 18. Reports.
(a) Within 60 days after the end of each fiscal quarter, the Board shall
cause to be prepared an unaudited report setting forth as of the end of such
fiscal quarter:
(i) unless such quarter is the last fiscal quarter, a balance sheet of the
Company; and
(ii) unless such quarter is the last fiscal quarter, an income statement of
the Company for such fiscal quarter.
(b) The Board shall use diligent efforts to cause to be prepared and mailed
to the Member, within 120 days after the end of each fiscal year, an audited or
unaudited report setting forth as of the end of such fiscal year:
(i) a balance sheet of the Company;
(ii) an income statement of the Company for such fiscal year; and
(iii) a statement of the Member's capital account.
(c) The Board shall, after the end of each fiscal year, use reasonable
efforts to cause the Company's independent accountants, if any, to prepare and
transmit to the Member as promptly as possible any such tax information as may
be reasonably necessary to enable the Member to prepare its federal, state and
local income tax returns relating to such fiscal year.
Section 19. Other Business.
The Member, the Special Members, the Independent Managers and any Affiliate
of the Member, Special Members or Independent Managers may engage in or possess
an interest in other business ventures (unconnected with the Company) of every
kind and description, independently or with others. The Company shall not have
any rights in or to such independent ventures or the income or profits therefrom
by virtue of this Agreement.
Section 20. Exculpation and Indemnification.
(a) Neither the Member, the Special Members, the Independent Managers nor
any agent of the Company nor any employee, representative, agent or Affiliate of
the Member, Special Members or Independent Managers (collectively, the "Covered
Persons") shall be liable to the Company or any other Person who has an interest
in or claim against the Company for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner reasonably believed to be within the
scope of the authority conferred on such Covered Person by this Agreement,
except that a Covered Person shall be liable for any such loss, damage or claim
incurred by reason of such Covered Person's gross negligence or willful
misconduct.
(b) To the fullest extent permitted by applicable law, a Covered Person
shall be entitled to indemnification from the Company for any loss, damage or
claim incurred by such Covered Person by reason of any act or omission performed
or omitted by such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the authority conferred
on such Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Covered Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions; provided, however,
that any indemnity under this Section 20 by the Company shall be provided out of
and to the extent of Company assets only, and the Member, the Special Members
and the Independent Managers shall not have personal liability on account
thereof; and provided further, that prior to the date which is one year and one
date after the date on which all obligations of the Company under the documents
referred to in Section 7(a)(i) have been paid in full, no payment of any
indemnity (or advance of expenses) from funds of the Company (as distinct from
funds from other sources, such as insurance) under this Section 20 shall be
payable from amounts allocable to any other Person pursuant to the such
documents.
(c) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by a Covered Person defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Company prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Company of an undertaking by or on behalf of the Covered Person
to repay such amount if it shall be determined that the Covered Person is not
entitled to be indemnified as authorized in this Section 20.
(d) A Covered Person shall be fully protected in relying in good faith upon
the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, or any other facts pertinent to the
existence and amount of assets from which distributions to the Member might
properly be paid.
(e) To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Company or
to any other Covered Person, a Covered Person acting under this Agreement shall
not be liable to the Company or to any other Covered Person for its good faith
reliance on the provisions of this Agreement or any approval or authorization
granted by the Company or any other Covered Person. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities of a
Covered Person otherwise existing at law or in equity, are agreed by the Member
and the Special Members to replace such other duties and liabilities of such
Covered Person.
(f) The foregoing provisions of this Section 20 shall survive any
termination of this Agreement.
Section 21. Assignments.
Subject to Section 23, the Member may assign in whole or in part its
limited liability company interest in the Company. If the Member transfers all
of its limited liability company interest in the Company pursuant to this
Section 21, the transferee shall be admitted to the Company as a member of the
Company upon its execution of an instrument signifying its agreement to be bound
by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of the Company.
Notwithstanding anything in this Agreement to the contrary, any successor to the
Member by merger or consolidation in compliance with the documents set forth in
Section 7(a)(i) shall, without further act, be the Member hereunder, and such
merger or consolidation shall not constitute an assignment for purposes of this
Agreement and the Company shall continue without dissolution.
Section 22. Resignation.
Prior to the date which is one year and one day after the date on which all
obligations of the Company under the documents referred to in Section 7(a) have
been paid in full, the Member may not resign, except as permitted under such
documents. If the Member is permitted to resign pursuant to this Section 22, an
additional member of the Company shall be admitted to the Company, subject to
Section 23, upon its execution of an instrument signifying its agreement to be
bound by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the resignation and, immediately following such
admission, the resigning Member shall cease to be a member of the Company.
Section 23. Admission of Additional Members.
One or more additional members of the Company may be admitted to the
Company with the written consent of the Member.
Section 24. Dissolution.
(a) Subject to Section 9(j), the Company shall be dissolved, and its
affairs shall be wound up upon the first to occur of the following: (i) the
termination of the legal existence of the last remaining member of the Company
or the occurrence of any other event which terminates the continued membership
of the last remaining member of the Company in the Company unless the business
of the Company is continued in a manner permitted by this Agreement or the Act
or (ii) the entry of a decree of judicial dissolution under Section 18-802 of
the Act. Upon the occurrence of any event that causes the last remaining member
of the Company to cease to be a member of the Company, to the fullest extent
permitted by law, the personal representative of such member is hereby
authorized to, and shall, within 90 days after the occurrence of the event that
terminated the continued membership of such member in the Company, agree in
writing (i) to continue the Company and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute
member of the Company, effective as of the occurrence of the event that
terminated the continued membership in the Company of the last remaining member
of the Company.
(b) Notwithstanding any other provision of this Agreement, the Bankruptcy
of the Member or the Special Members shall not cause the Member or Special
Members, respectively, to cease to be a member of the Company and upon the
occurrence of such an event, the business of the Company shall continue without
dissolution.
(c) In the event of dissolution, the Company shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of the Company in an orderly manner), and the assets of the Company shall
be applied in the manner, and in the order of priority, set forth in Section
18-804 of the Act.
(d) The Company shall terminate when (i) all of the assets of the Company,
after payment of or due provision for all debts, liabilities and obligations of
the Company shall have been distributed to the Member in the manner provided for
in this Agreement and (ii) the Certificate of Formation shall have been canceled
in the manner required by the Act.
Section 25. Waiver of Partition; Nature of Interest.
Except as otherwise expressly provided in this Agreement, to the fullest
extent permitted by law, each of the Member and the Special Members hereby
irrevocably waives any right or power that such Person might have to cause the
Company or any of its assets to be partitioned, to cause the appointment of a
receiver for all or any portion of the assets of the Company, to compel any sale
of all or any portion of the assets of the Company pursuant to any applicable
law or to file a complaint or to institute any proceeding at law or in equity to
cause the dissolution, liquidation, winding up or termination of the Company.
The Member shall not have any interest in any specific assets of the Company,
and the Member shall not have the status of a creditor with respect to any
distribution pursuant to Section 16 hereof. The interest of the Member in the
Company is personal property.
Section 26. Benefits of Agreement; No Third-Party Rights.
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Company or by any creditor of the Member or
the Special Members. Nothing in this Agreement shall be deemed to create any
right in any Person (other than Covered Persons) not a party hereto, and this
Agreement shall not be construed in any respect to be a contract in whole or in
part for the benefit of any third Person (except as provided in Section 29).
Section 27. Severability of Provisions.
Each provision of this Agreement shall be considered severable and if for
any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of or affect those
portions of this Agreement which are valid, enforceable and legal.
Section 28. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof.
Section 29. Binding Agreement.
Notwithstanding any other provision of this Agreement, the Member agrees
that this Agreement constitutes a legal, valid and binding agreement of the
Member, and is enforceable against the Member by the Independent Managers in
accordance with its terms. In addition, each Independent Manager shall be an
intended beneficiary of this Agreement.
Section 30. Governing Law.
This Agreement shall be governed by and construed under the laws of the
State of Delaware (without regard to conflict of laws principles), all rights
and remedies being governed by said laws.
Section 31. Amendments.
Subject to Section 9(j), this Agreement may be modified, altered,
supplemented or amended pursuant to a written agreement executed and delivered
by the Member except that no such modification, alteration, supplement or
amendment may modify, alter, supplement or amend the rights, duties and
limitations of the Independent Managers without the consent of each Independent
Manager.
Section 32. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.
Section 33. Notices.
Any notices required to be delivered hereunder shall be in writing and
personally delivered, mailed or sent by telecopy, electronic mail or other
similar form of rapid transmission, and shall be deemed to have been duly given
upon receipt (a) in the case of the Company, to the Company at its address in
Section 2, (b) in the case of the Member, to the Member at its address as listed
on Schedule B attached hereto and (c) in the case of either of the foregoing, at
such other address as may be designated by written notice to the other party.
Section 34. Effectiveness.
Pursuant to Section 18-201(d) of the Act, this Agreement shall be effective
as of the time of the filing of the Certificate of Formation with the Office of
the Delaware Secretary of State on May 8, 2000.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has duly executed this Limited Liability Company Agreement as of the 12th day of
May, 2000.
MEMBER:
GREAT AMERICAN KNITTING XXXXX, INC.
By:_______________________________
Name:
Title:
SPECIAL MEMBERS:
--------------------
Name: Xxxxxx Xxxxxxx
--------------------
Name: Xxxx Xxxxx
SCHEDULE A
Definitions
A. Definitions
When used in this Agreement, the following terms not otherwise defined
herein have the following meanings:
"Act" has the meaning set forth in the preamble to this Agreement.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such Person.
"Bankruptcy" means, with respect to any Person, if such Person (i) makes an
assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it
an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, (v) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or of all or any
substantial part of its properties, or (vii) if 120 days after the commencement
of any proceeding against the Person seeking reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, if the proceeding has not been dismissed, or if within 90 days
after the appointment without such Person's consent or acquiescence of a
trustee, receiver or liquidator of such Person or of all or any substantial part
of its properties, the appointment is not vacated or stayed, or within 90 days
after the expiration of any such stay, the appointment is not vacated. The
foregoing definition of "Bankruptcy" is intended to replace and shall supersede
and replace the definition of"Bankruptcy" set forth in Sections 18-101(1) and
18-304 of the Act.
"Board" or "Board of Directors" means the Board of Directors of the
Company.
"Certificate of Formation" means the Certificate of Formation of the
Company filed with the Secretary of State of the State of Delaware on May 8,
2000, as amended or amended and restated from time to time.
"Company" means Xxxxxx American Receivables, LLC, a Delaware limited
liability company.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Covered Persons" has the meaning set forth in Section 20(a).
"Directors" means the persons elected to the Board of Directors from time
to time by the Member, in their capacity as managers of the Company within the
meaning of Section 18-101(10) of the Act.
"Independent" means, with respect to a manager of the Company, a Person who
shall not have been at the time of such Person's appointment, and may not have
been at any time during the preceding five years and shall not be as long as
such Person is a manager of the Company (i) a director, member, officer,
manager, partner, shareholder or employee of the Member or any of its directors,
members, partners, subsidiaries, shareholders or Affiliates (collectively, the
"Independent Parties"), (ii) a supplier to any of the Independent Parties, (iii)
a person Controlling or under common Control with any directors, members,
partners, shareholder or supplier of any of the Independent Parties or (iv) a
member of the immediate family of any director, member, partner, shareholder,
officer, manager, employee or supplier of the Independent Parties.
"Independent Manager" has the meaning set forth in Section 10.
"Management Agreement" means the agreement of the Directors in the form
attached hereto as Schedule C. The Management Agreement shall be deemed
incorporated into, and a part of, this Agreement.
"Member" means Great American Knitting Xxxxx, Inc., as the initial member
of the Company, and includes any Person admitted as an additional member of the
Company or a substitute member of the Company pursuant to the provisions of this
Agreement, each in its capacity as a member of the Company, provided, however,
the term "Member" shall not include any Special Member.
"Officer" means an officer of the Company described in Section 11.
"Parent" has the meaning set forth in the preamble to this Agreement.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, limited liability partnership, association, joint
stock company, trust, unincorporated organization, or other organization,
whether or not a legal entity, and any governmental authority.
"Special Member" means, upon such Person's admission to the Company as a
member of the Company pursuant to Section 5(c), a Person acting as an
Independent Manager, in such Person's capacity as a member of the Company. A
Special Member shall only have the rights and duties expressly set forth in this
Agreement.
B. Rules of Construction
Definitions in this Agreement apply equally to both the singular and plural
forms of the defined terms. The words "include" and "including" shall be deemed
to be followed by the phrase "without limitation." The terms "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Section, paragraph or subdivision. The Section
titles appear as a matter of convenience only and shall not affect the
interpretation of this Agreement. All Section, paragraph, clause, Exhibit or
Schedule references not attributed to a particular document shall be references
to such parts of this Agreement.
B-1
SCHEDULE B
Member
Agreed Value of Membership
Name Mailing Address Capital Contribution Interest
----------------------------- -------------------------------------- ---------------------------- ------------------
Great American 000 Xxxxx Xxxxxx
Knitting Xxxxx, Inc. Xxxxxxxxxx, XX 00000 $318,057.88 100%
Attention: Xxxxx X. Xxxxxx
----------------------------- -------------------------------------- ---------------------------- ------------------
SCHEDULE C
Management Agreement
Xxxxxx American Receivables, LLC
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: Management Agreement -- Xxxxxx American Receivables, LLC
Ladies and Gentlemen:
For good and valuable consideration, each of the undersigned, who have been
designated as [Directors] [Independent Managers] of Xxxxxx American Receivables,
LLC, a Delaware limited liability company (the "Company"), in accordance with
and as defined in the Limited Liability Company Agreement of the Company, dated
as of May 10, 2000, as it may be amended or restated from time to time (the "LLC
Agreement"), hereby agree as follows:
1. Each of the undersigned accepts his or her rights and authority as a
[Director] [Independent Manager] under the LLC Agreement and agrees to perform
and discharge his or her duties and obligations as a [Director] [Independent
Manager] under the LLC Agreement, and further agrees that such rights,
authorities, duties and obligations under the LLC Agreement shall continue until
his or her successor as a [Director] [Independent Manager] is designated [or
until his or her resignation or removal as a Director in accordance with the LLC
Agreement]. Each of the undersigned agrees and acknowledges that he or she has
been designated as a "manager" of the Company within the meaning of the Delaware
Limited Liability Company Act. [For Independent Managers: The undersigned hereby
represents and warrants that the undersigned has read the definition of
"Independent" set forth in the LLC Agreement and is Independent within the
meaning thereof].
2. Prior to the date which is one year and one day after the date on which
all obligations of the Company under the documents referred to in Section
7(a)(i) have been paid in full, the undersigned agrees, solely in the
undersigned's capacity as a creditor of the Company on account of any
indemnification or other payment owing to the undersigned by the Company, not to
acquiesce, petition or otherwise invoke or cause the Company to invoke the
process of any court or governmental authority for the purpose of commencing or
sustaining a case against the Company under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Company or any
substantial part of the property of the Company, or ordering the winding up or
liquidation of the affairs of the Company.
3. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Initially capitalized terms used and not otherwise defined herein have the
meanings set forth in the LLC Agreement.
This Management Agreement may be executed in any number of counterparts,
each of which shall be deemed an original of this Management Agreement and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.
-------------------------------
Name:
Agreed and accepted as of the
date first above written:
XXXXXX AMERICAN RECEIVABLES, LLC
By: ________________________
Name: ________________________
Title: ________________________
X-0
XXXXXXXX X
XXXXXXXXX
0. Xxxxx X. Xxxxxx
X-0
SCHEDULE E
OFFICERS
NAME TITLE
-------------------------------- ----------------------------------------------
Xxxxx Xxxxxxxx President and Chief Executive Officer
Xxxxx Xxxxxxx Secretary
Xxxx Xxxxxxx Treasurer
Xxxxx Xxxxxx Vice President
TABLE OF CONTENTS
Page
Section 1. Name.........................................................4
Section 2. Principal Business Office....................................4
Section 3. Registered Office............................................4
Section 4. Registered Agent.............................................4
Section 5. Members......................................................4
Section 6. Certificates.................................................5
Section 7. Purposes.....................................................5
Section 8. Powers.......................................................6
Section 9. Management...................................................6
Section 10. Independent Managers..........................................10
Section 11. Officers......................................................12
Section 12. Limited Liability.............................................12
Section 13. Capital Contributions.........................................12
Section 14. Additional Contributions......................................12
Section 15. Allocation of Profits and Losses..............................12
Section 16. Distributions.................................................12
Section 17. Books and Records.............................................12
Section 18 Reports.....................................................13
Section 19. Other Business................................................13
Section 20. Exculpation and Indemnification...............................13
Section 21. Assignments...................................................14
Section 22. Resignation...................................................14
Section 23. Admission of Additional Members...............................15
Section 24. Dissolution...................................................15
Section 25. Waiver of Partition; Nature of Interest.......................15
Section 26. Benefits of Agreement; No Third-Party Rights..................16
Section 27. Severability of Provisions....................................16
Section 28. Entire Agreement..............................................16
Section 29. Binding Agreement.............................................16
Section 30. Governing Law.................................................16
Section 31. Amendments....................................................16
Section 32. Counterparts..................................................16
Section 33. Notices.......................................................16
Section 34. Effectiveness.................................................16
