Exhibit 3.5
This Limited Liability Company Agreement of XXXXX FARGO STUDENT
LOANS RECEIVABLES IV, LLC (the "Company") is made as of November 6, 2001, by
XXXXX FARGO & COMPANY as the sole member ("Member").
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Member
hereby, intending to be legally bound, agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise requires,
the terms defined in this Article I shall, for the purposes of this Agreement,
have the meanings herein specified.
"Additional Member" has the meaning set forth in Section 12.1
hereof.
"Additional Units" has the meaning set forth in Section 12.1
hereof.
"Affiliate" means with respect to a specified Person, any
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person. As used in this definition, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Agreement" means this Limited Liability Company Agreement of
the Company as amended, modified, supplemented or restated from time to time.
"Assignee" means any Person who is an assignee of a Member's
limited liability company interest in the Company, or part thereof, and who
does not become a Member pursuant to Section 13.1 hereof.
"Bankruptcy" means, with respect to any Person, if such Person
(i) makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against it in any proceeding of this nature, (vi) seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the Person or of all or any substantial part of its properties,
or (vii) if 120 days after the commencement of any proceeding against the
Person
seeking reorganization, arrangement, composition, readjustment, liquidation or
similar relief under any statute, law or regulation, if the proceeding has not
been dismissed, or if within 90 days after the appointment without such
Person's consent or acquiescence of a trustee, receiver or liquidator of such
Person or of all or any substantial part of its properties, the appointment is
not vacated or stayed, or within 90 days after the expiration of any such
stay, the appointment is not vacated. The foregoing definition of "Bankruptcy"
is intended to replace and shall supersede and replace the definition of
"Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the Act.
"Basic Documents" means this Agreement and all documents and
certificates contemplated by or delivered in connection with this Agreement,
the formation of a Securitization Trust or the issuance of Securities.
"Board" means the Board of Directors of the Company.
"Capital Account" means, with respect to any Unit Holder, the
account maintained for such Unit Holder in accordance with the provisions of
Section 4.4 hereof.
"Capital Contribution" means, with respect to any Unit Holder,
the aggregate amount of money and the initial fair market value of any
property (other than money) contributed to the Company pursuant to Section 4.1
hereof with respect to the Units held by such Unit Holder. In the case of a
Unit Holder who acquires an interest in the Company by virtue of an assignment
in accordance with the terms of this Agreement, the "Capital Contribution" of
such Unit Holder shall be determined in accordance with Section 4.4(b) hereof.
"Certificate" means the Certificate of Formation of the Company
and any and all amendments thereto and restatements thereof filed on behalf of
the Company with the office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding federal tax statute enacted after the date
of this Agreement. A reference to a specific Section (ss.) of the Code refers
not only to such specific section but also to any corresponding provision of
any federal tax statute enacted after the date of this Agreement, as such
specific section or corresponding provision is in effect on the date of
application of the provisions of this Agreement containing such reference.
"Company" means XXXXX FARGO STUDENT LOANS RECEIVABLES IV, LLC,
the limited liability company hereby established under and pursuant to the
Delaware Act and this Agreement.
"Covered Person" means a Member, a Director, an Officer, a
Manager, any Affiliate of a Member, a Director, an Officer or a Manager, any
Officers, Directors, Member, partners, employees, representatives or agents of
a Member, a Director, an Officer or a Manager or their respective Affiliates,
or any employee or agent of the Company or its Affiliates.
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"Delaware Act" means the Delaware Limited Liability Company
Act, 6 Del. C. ss. 18-101 et seq., as amended from time to time.
"Director" means a Director of the Company.
"Eligible Lender Trustee" means a national banking association,
not in its individual capacity but solely as Eligible Lender Trustee under the
Trust Agreement.
"Federal Student Loans" means student loans which are
guaranteed as to principal and interest by a guaranty agency pursuant to a
guaranty agreement, under pertinent provisions of the Higher Education Act.
"Fiscal Year" means (i) the period commencing upon the
formation of the Company and ending on December 31 of the year of formation,
(ii) any subsequent twelve (12) month period commencing on January 1 and
ending on December 31, or (iii) any portion of the period described in Clause
(ii) of this sentence for which the Company is required to allocate Profits,
Losses and other items of Company income, gain, loss or deduction pursuant to
Article VIII hereof.
"Higher Education Act" means the Higher Education Act of 1965,
as amended, together with any rules, regulations and interpretations of the
United States Department of Education or the applicable guaranty agency.
"Independent Director" means a natural person who, for the
five-year period prior to his or her appointment as Independent Director has
not been, and during the continuation of his or her service as Independent
Director is not: (i) an employee, director, stockholder, partner or officer of
the Company or any of its Affiliates (other than his or her service as an
Independent Director of the Company), (ii) a customer or supplier of the
Company or any of its Affiliates or (iii) any member of the immediate family
of a person described in (i) or (ii).
An individual that otherwise satisfies the foregoing shall not
be disqualified from serving as an Independent Director of the Company if such
individual is at the time of initial appointment, or at any time while serving
as an Independent Director of the Company, an Independent Director of a
Special Purpose Entity that is an Affiliate of the Company or a Member. For
purposes of this paragraph only, a "Special Purpose Entity" is an entity whose
organizational documents contain restrictions on its activities and impose
requirements intended to preserve its separateness that are substantially
similar to those of the Company, and provide, inter alia, that it is (a)
organized for a limited purpose; (b) has restrictions on its ability to incur
indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c)
may not file voluntarily a bankruptcy petition on its own behalf (and/or on
behalf of certain Affiliates) without the consent of the Independent
Director(s); and (d) shall conduct itself (and/or cause certain Affiliates to
conduct themselves) in accordance with certain "separateness covenants,"
including, but not
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limited to, the maintenance of books, records, bank accounts and assets
separate from those of any other Person.
"Liquidating Trustee" has the meaning set forth in Section 14.3
hereof.
"Majority Vote" means the approval of, or the affirmative vote
by, Members holding a majority of the Units held by Members.
"Manager" means a Person designated by a Member as a manager of
the Company within the meaning of the Delaware Act and shall include Officers
of the Company.
"Material Action" means to consolidate or merge the Company
with or into any Person, or sell all or substantially all of the assets of the
Company, or to institute proceedings to have the Company be adjudicated
bankrupt or insolvent, or consent to the institution of Bankruptcy proceedings
against the Company or file a petition seeking, or consent to, reorganization
or relief with respect to the Company under any applicable federal or state
law relating to Bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or a substantial part of its property, or make any assignment for the
benefit of creditors of the Company, or admit in writing the Company's
inability to pay its debts generally as they become due, or take action in
furtherance of any such action, or, to the fullest extent permitted by law,
dissolve or liquidate the Company.
"Member" means any Person named as a member in the recitals to
this Agreement or who executes this Agreement as a member and includes any
Person admitted as an Additional Member or a Substitute Member pursuant to the
provisions of this Agreement, and "Members" means two (2) or more of such
Persons when acting in their capacities as members of the Company. "Members"
shall also include the sole Member of the Company at any time there is only
one Member. For purposes of the Delaware Act, the Members shall constitute one
(1) class or group of members.
"Net Cash Flow" means, for each Fiscal Year or other period of
the Company, the gross cash receipts of the Company from all sources, but
excluding any amounts, such as gross receipts taxes, that are held by the
Company as a collection agent or in trust for others or that are otherwise not
unconditionally available to the Company, less all amounts paid by or for the
account of the Company during the same Fiscal Year or other period (including,
without limitation, payments of principal and interest on any Company
indebtedness), and less any amounts determined by the Board to be necessary to
provide a reasonable reserve for working-capital needs or any other
contingencies of the Company. Net Cash Flow shall be determined in accordance
with the cash receipts and disbursements method of accounting and otherwise in
accordance with generally accepted accounting principles, consistently
applied. Net Cash Flow shall not be reduced by depreciation, amortization,
cost recovery deductions, depletion, similar allowances or other non-cash
items, but shall be increased by any reduction of reserves previously
established.
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"Obligations" shall mean the Securities issued by any
Securitization Trust for which the Company acts as depositor, settlor or
grantor and any indebtedness, liabilities and obligations of the Company under
or in connection with this Agreement, the other Basic Documents or any related
document, in each case in effect as of any date of determination.
"Officer" means an Officer of the Company.
"Permitted Temporary Investments" means those investments
authorized by the Board from time to time for temporary investments of Company
funds.
"Person" includes any individual, association, corporation,
partnership (general or limited), joint venture, trust, estate, limited
liability company or partnership, or other legal entity or organization.
"President" means the President of the Company.
"Private Student Loans" means student loans which are made
outside the Higher Education Act that may or may not be privately guaranteed
or insured.
"Profits" and "Losses" means, for each Fiscal Year, the net
profits or net losses, as the case may be, of the Company for such Fiscal
Year, determined on the accrual method of accounting in accordance with
generally accepted accounting principles.
"Rating Agency" means each nationally recognized rating agency
that has rated any Securities that have been issued and are outstanding
pursuant to any pooling and servicing agreement, indenture, trust agreement or
other similar agreement entered into by the Company or any of its Affiliates.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given ten days prior notice thereof
and that each of the Rating Agencies shall have notified the Company in
writing that such action will not result in a reduction or withdrawal of the
then current rating by such Rating Agency of any Securities.
"Securities" has the meaning set forth in Section 3.1(b).
"Securitization Trust" has the meaning set forth in Section
3.1(b).
"Student Loans" means Federal Student Loans and/or Private
Student Loans.
"Substitute Member" means a Person who is admitted to the
Company as a Member pursuant to Section 13.1 hereof, and who is named as a
Member on Schedule A to this Agreement.
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"Treasury Regulations" means the income tax regulations,
including temporary regulations, promulgated under the Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"Unit" means a limited liability company interest in the
Company representing such fractional part of the limited liability company
interest of all Unit Holders pursuant to this Agreement as is equal to the
quotient of one (1) divided by the total number of Units.
"Unit Holder" means any Person who holds one (1) or more Units,
regardless of whether such Person is a Member and regardless of whether such
Units were initially acquired by such Person from the Company or by assignment
from another Unit Holder.
Section 1.2 Headings. The headings and subheadings in this
Agreement are included for convenience and identification only and are in no
way intended to describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof.
ARTICLE II
THE COMPANY
Section 2.1 Formation.
(i) The Member, by execution of this Agreement and
the filing of the Certificate hereby enters into and forms the
Company as a limited liability company under and pursuant to
the Delaware Act. The Member agrees that the rights, powers,
duties and liabilities of the Member, Directors and Officers
shall be as provided in the Delaware Act, except as otherwise
provided in this Agreement.
(ii) The name and mailing address of each Member or
Unit Holder shall be listed on Schedule A attached hereto. The
Company shall be required to update Schedule A from time to
time as necessary to accurately reflect the information
therein. Any amendment or revision to Schedule A made in
accordance with this Agreement shall not be deemed an amendment
to this Agreement. Any reference in this Agreement to Schedule
A shall be deemed to be a reference to Schedule A as amended
and in effect from time to time.
(iii) Xxxx X. Xxxxxxxxx, as an authorized person
within the meaning of the Delaware Act, shall execute, deliver
and file the Certificate and shall thereafter resign and have
no further authority to act for the Company.
Section 2.2 Name. The name of the Company formed and continued
hereby is XXXXX FARGO STUDENT LOANS RECEIVABLES IV, LLC.
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Section 2.3 Term. The term of the Company commenced on the date
the Certificate was filed in the office of the Secretary of State of the State
of Delaware and shall continue for 100 years unless dissolved before such date
in accordance with the provisions of this Agreement. The existence of the
Company as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Delaware Act.
Section 2.4 Registered Agent and Office. The Company's
registered agent and office in Delaware shall be the Corporation Service
Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxx, Xxxxxxxx 00000. At any
time, an Officer may designate another registered agent and/or registered
office.
Section 2.5 Principal Place of Business. The principal place of
business of the Company shall be at [Sixth and Marquette, Xxxxxxxxxxx,
Xxxxxxxxx 00000].
Section 2.6 Qualification in Other Jurisdictions. Any Officer
shall cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company transacts business and to file under another name in other
jurisdictions if required in order to conduct business there. Any Officer, as
an authorized person, within the meaning of the Delaware Act, shall execute,
deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Company to qualify to do business in a jurisdiction
in which the Company may wish to conduct business.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The purpose of the Company is to engage in
any of the following activities:
(a) to acquire, own, hold, sell, transfer, convey, dispose
of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with, publicly or privately and whether with
unrelated third parties or with affiliated entities, Student
Loans directly or through one or more trustees;
(b) to act as depositor, settlor or grantor of one or more
trusts or special purpose entities (each, a "Securitization
Trust") formed pursuant to a trust agreement or other agreement
for the purpose of issuing one or more series or classes of
certificates, bonds, notes or other evidences of interest or
indebtedness (collectively, "Securities") secured by or
representing beneficial interests in Student Loans;
(c) to acquire Securities or other property of a
Securitization Trust or any interest in any of the foregoing;
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(d) to issue, authorize, sell and deliver Securities or
other instruments secured or collateralized by the Securities;
(e) to engage servicers (or other agents) to service
Student Loans pursuant to related servicing arrangements and to
engage trustees to hold legal title to Student Loans on behalf
of the Company or other beneficiaries pursuant to related trust
agreements, in each case to the extent such arrangements are
deemed beneficial to the Company;
(f) to enter into interest rate, basis swap, cap, floor or
collar arrangements or other hedging arrangements and
management and administrative agreements in connection with the
foregoing activities;
(g) to own equity interests in other limited liability
companies or partnerships whose purposes are substantially
restricted to those described in clauses (a) through (f) above;
(h) to borrow money other than pursuant to clause (a)
above, but only to the extent that such borrowing is permitted
by the terms of the transactions contemplated by clauses (a)
through (g) above;
(i) to xxx and be sued, complain and defend, and
participate in administrative or other proceedings, in its
name;
(j) to employ and otherwise engage employees and agents of
the Company (who may be designated as Officers with titles),
and define their duties and fix their compensation;
(k) to indemnify any Person in accordance with the
Delaware Act;
(l) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take
any other action with respect to any lease, contract or
security agreement in respect of any assets of the Company;
(m) to pay, collect, compromise, litigate, arbitrate or
otherwise adjust or settle any and all other claims or demands
of or against the Company or to hold such proceeds against the
payment of contingent liabilities; and
(n) to engage in any lawful act or activity and to
exercise any powers permitted to limited liability companies
organized
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under the laws of the State of Delaware that are
necessary, convenient or incidental to the accomplishment of
the purpose of the Company.
Section 3.2 Powers. Subject to Section 6.9, the Company, and
the Board of Directors, and any Officers and any Manager, acting singly, on
behalf of the Company, (i) shall have and exercise all powers necessary,
convenient or incidental to accomplish its purposes as set forth in Section
3.1 and (ii) shall have and exercise all of the powers and rights conferred
upon limited liability companies formed pursuant to the Act.
ARTICLE IV
CAPITAL CONTRIBUTIONS, UNITS,
CAPITAL ACCOUNTS AND ADVANCES
Section 4.1 Capital Contributions.
(i) The records of the Company shall reflect the cash
or property that each Unit Holder has contributed or is deemed
to have contributed to the capital of the Company and the
agreed value of such Capital Contributions.
(ii) No Unit Holder shall be required to make any
additional capital contribution to the Company. However, a Unit
Holder may make additional capital contributions to the Company
upon approval by a Majority Vote of the Members.
Section 4.2 Units. A Unit Holder's limited liability company
interest in the Company shall be represented by the "Unit" or "Units" held by
such Unit Holder. Each Unit Holder's respective Units shall be set forth on
Schedule A attached hereto. Each Unit Holder hereby agrees that its limited
liability company interest in the Company and in its Units shall for all
purposes be personal property. A Unit Holder has no interest in specific
Company property.
Section 4.3 Status of Capital Contributions.
(i) Except as otherwise provided in this Agreement,
the amount of a Unit Holder's Capital Contributions may be
returned to it, in whole or in part, at any time, but only with
the consent of all Members. Any such returns of Capital
Contributions shall be made to all Unit Holders in proportion
to the number of Units then held by each Unit Holder.
Notwithstanding the foregoing, no return of a Unit Holder's
Capital Contributions shall be made hereunder if such
distribution would violate applicable state law. Under
circumstances requiring a return of any Capital Contribution,
no Unit Holder shall have the right to demand or receive
property other than cash, except as may be specifically
provided in this Agreement.
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(ii) No Unit Holder shall receive any interest,
salary or drawing with respect to its Capital Contributions or
its Capital Account or for services rendered on behalf of the
Company or otherwise in its capacity as a Unit Holder, except
as otherwise specifically provided in this Agreement.
(iii) Except as otherwise provided herein and by
applicable state law, the Members shall be liable only to make
their capital contributions pursuant to Section 4.1 hereof, and
no Member or Assignee shall be required to lend any funds to
the Company or, after a Member's Capital Contributions have
been fully paid pursuant to Section 4.1 hereof, to make any
additional capital contributions to the Company. No Unit Holder
shall have any personal liability for the repayment of any
Capital Contribution of any other Member or Assignee.
Section 4.4 Capital Accounts.
(a) An individual Capital Account shall be established
and maintained for each Unit Holder in accordance with the
following provisions:
(i) to such Unit Holder's Capital Account there shall
be credited such Unit Holder's Capital Contributions, such Unit
Holder's distributive share of Profits and the amount of any
Company liabilities that are assumed by such Unit Holder or
that are secured by any Company assets distributed to such Unit
Holder; and
(ii) to such Unit Holder's Capital Account there
shall be debited the amount of cash and the fair market value
of any Company assets distributed to such Unit Holder pursuant
to any provision of this Agreement, such Unit Holder's
distributive share of Losses and the amount of any liabilities
of such Unit Holder that are assumed by the Company or that are
secured by any property contributed by such Unit Holder to the
Company.
(b) Upon any transfer of a Unit Holder's interest in the
Company, the transferee shall succeed to the allocable portion
of the transferor's Capital Account.
Section 4.5 Advances. If any Unit Holder shall advance any
funds to the Company in excess of its Capital Contributions, the amount of
such advance shall neither increase its Capital Account nor entitle it to any
increase in its share of the distributions of the Company. The amount of any
such advance shall be a debt obligation of the Company to such Unit Holder and
shall be repaid to it by the Company with interest at a rate equal to the
lesser of (i) the applicable federal rate under Section 1274(d) of the Code
and (ii) the maximum rate permitted by applicable law, and upon such other
terms and conditions as shall be mutually determined by such Unit Holder and a
Manager. Any such advance shall be payable and collectible only out of
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Company assets, and the other Unit Holders shall not be personally obligated
to repay any part thereof. No Person who makes any nonrecourse loan to the
Company shall have or acquire, as a result of making such loan, any direct or
indirect interest in the profits, capital or property of the Company, other
than as a creditor.
ARTICLE V
MEMBERS AND MEETINGS OF MEMBERS
Section 5.1 Powers of Members. The Members shall have the power
to exercise any and all rights or powers granted to the Members pursuant to
the express terms of this Agreement. The Members shall also have the power to
authorize the Board, by Majority Vote, to possess and exercise any right or
power not already vested in the Board pursuant to Section 6.1 or any other
provision of this Agreement. In addition to the foregoing, the Members have
the power to exercise any and all other rights or powers of the Company and do
all lawful acts and things as are not by the Delaware Act or this Agreement
directed or required to be exercised or done by the Board. Except as provided
herein, the Members shall have no power to bind the Company.
Section 5.2 Reimbursements. The Company shall reimburse the
Members for all ordinary and necessary out of pocket expenses incurred by the
Members on behalf of the Company.
Section 5.3 Partition. Each Member waives any and all rights
that it may have to maintain an action for partition of the Company's
property.
Section 5.4 Meetings of the Members.
(i) Meetings of the Members may be called at any time
by any Member. Notice of any meeting shall be given to all
Members not less than two (2) days nor more than thirty (30)
days prior to the date of such meeting. Each Member may
authorize any Person to act for it by proxy on all matters in
which a Member is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting.
Every proxy must be signed by the Member or its
attorney-in-fact.
(ii) The Members shall establish all other provisions
relating to meetings of Members, including notice of the time,
place or purpose of any meeting at which any matter is to be
voted on by any Members, waiver of any such notice, action by
consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
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(iii) The Company may take any action contemplated by
this Agreement as approved by the unanimous written consent of
the Members.
ARTICLE VI
MANAGEMENT OF THE COMPANY
Section 6.1 Board of Directors. The business and affairs of the
Company shall be managed by or under the direction of a Board of one or more
Directors. Except as provided herein, it is intended that this grant of
authority shall authorize the Board of Directors to function in all matters
not otherwise reserved to the Members as if the Company were a corporation
formed under the Delaware General Corporation Law and the Board were the Board
of Directors of such corporation. Subject to Sections 6.9 and 6.10, the
Members from time to time shall determine the number of Directors to
constitute the Board, provided that thereafter the authorized number of
Directors may be increased by the Members or the Board and decreased by the
Members. Each Director elected shall hold office until a successor is elected
and qualified or until such Director's earlier death, resignation or removal.
Directors need not be Members. Subject to Sections 6.9 and 6.10, vacancies,
except vacancies caused by removal pursuant to Section 6.7 of this Article VI,
and newly created directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Directors then in
office, though less than a quorum, or by a sole remaining Director, and the
Directors so chosen shall hold office until the next election of Directors and
until their successors are duly elected and shall qualify, unless sooner
displaced.
Section 6.2 Meetings of the Board of Directors. The Board of
Directors of the Company may hold meetings, both regular and special, either
within or without the State of Delaware. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board. Special meetings of the Board
may be called by the Chief Executive Officer or President on one (1) day
notice to each Director, either personally, by telephone, by mail, by
facsimile, by electronic mail or by any other means of communication; special
meetings shall be called by the President or Secretary in like manner and on
like notice on the written request of one or more of the Directors. Whenever
any notice is required to be given, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Attendance of a person at
a meeting shall constitute a waiver of notice of such meeting, except when the
persons attend a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business to be transacted
at, or the purpose of, any regular or special meeting of the Members,
Directors or a committee of Directors need be specified in any written waiver
of notice.
Section 6.3 Quorum and Acts of the Board. At all meetings of
the Board a majority of the Directors shall constitute a quorum for the
transaction of business and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of the
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Board of Directors, except as may be otherwise specifically provided by this
Agreement. If a quorum shall not be present at any meeting of the Board of
Directors, the Directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken without a
meeting, if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee. Such written actions of the Board will
be effective on the date such acts are approved or such earlier or later date
as the Board may designate, except as may be designated or required by
applicable law.
Section 6.4 Electronic Communications. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Section 6.5 Committees of Directors. The Board of Directors
may, by resolution passed by a majority of the whole Board, designate one or
more committees, each committee to consist of one or more of the Directors of
the Company. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee.
In the absence or disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not such members constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of
the Board of Directors, and subject to Sections 6.9 and 6.10, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Company, but no such committee
shall have the power and authority to declare a distribution, unless the
resolution of the Board designating such committee expressly so provides. Such
committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors. Each
committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
Section 6.6 Compensation of Directors. The Board of Directors
shall have the authority to fix the compensation of Directors. The Directors
may be paid their expenses, if any, of attendance at such meeting of the Board
of Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as Director. No such payment shall
preclude any Director from serving the Company in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
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Section 6.7 Removal of Directors. Unless otherwise restricted
by law, any Director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of Units entitled to vote at an
election of Directors. Any vacancy caused by any such removal may be filled by
action of the Members.
Section 6.8 Directors as Agents. The Directors, to the extent
of their powers set forth in this Agreement, are agents of the Company for the
purposes of the Company's business, and the actions of the Directors taken in
accordance with this Agreement shall bind the Company.
Section 6.9 Limitations on the Company's Activities.
(a) This Section is being adopted in order to comply with
certain provisions required in order to qualify the Company as
a "special purpose" entity.
(b) The Members shall not, so long as any Obligation is
outstanding, amend, alter, change or repeal the definition of
"Independent Director", or Sections 3.1, 3.2, 6.1, 6.9, 6.10,
14.1, 14.2, 14.5, 16.1, 16.2 and 16.3 of this Agreement without
the unanimous written consent of the Board (including all
Independent Directors). Subject to this Section, the Members
and the Board are reserved the right to amend, alter, change or
repeal any provisions contained in this Agreement in accordance
with Article XVI.
(c) Notwithstanding any other provision of this Agreement
and any provision of law that otherwise so empowers the
Company, the Members, the Board, any Officer, any Manager, or
any other Person, neither the Members nor the Board nor any
Officer nor any other Person shall be authorized or empowered,
nor shall they permit the Company, without the prior unanimous
written consent of the Member and the Board (including all
Independent Directors), to take any Material Action.
(d) The Board and the Members shall cause the Company to
do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights (charter
and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such existence,
right or franchise if: (i) the Board shall determine that the
preservation thereof is no longer desirable for the conduct of
its business and that the loss thereof is not disadvantageous
in any material respect to the Company and (ii) the Rating
Agency Condition is satisfied. The Board also shall cause the
Company to:
(1) maintain its own separate books and records
and bank accounts;
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(2) at all times hold itself out to the public
and all other Persons as a legal entity separate from the
Members and any other Person;
(3) have a Board of Directors separate from that
of the Members and any other Person;
(4) file its own tax returns, if any, as may be
required under applicable law, to the extent (1) not part
of a consolidated group filing a consolidated return or
returns or (2) not treated as a division for tax purposes
of another taxpayer, and pay any taxes so required to be
paid under applicable law;
(5) except as contemplated by the Basic
Documents, not commingle its assets with assets of any
other Person;
(6) conduct its business in its own name and
strictly comply with all organizational formalities to
maintain its separate existence;
(7) maintain separate financial statements;
(8) pay its own liabilities;
(9) maintain an arm's length relationship with
its Affiliates and the Members;
(10) pay the salaries of its own employees, if
any;
(11) not hold out its credit or assets as being
available to satisfy the obligations of others;
(12) allocate fairly and reasonably any overhead
for shared office space;
(13) use separate stationery, invoices and
checks;
(14) except as contemplated by the Basic
Documents, not pledge its assets for the benefit of any
other Person;
(15) correct any known misunderstanding
regarding its separate identity;
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(16) maintain adequate capital in light of its
contemplated business purpose, transactions and
liabilities;
(17) cause its Board of Directors to meet at
least annually or act pursuant to written consent and keep
minutes of such meetings and actions and observe all other
Delaware limited liability company formalities;
(18) not acquire any securities of the Members
except to the extent permitted by the Basic Documents; and
(19) cause the Directors, Officers, agents and
other representatives of the Company to act at all times
with respect to the Company consistently and in
furtherance of the foregoing and in the best interests of
the Company;
failure of the Company, or the Members or Board on behalf of the Company, to
comply with any of the foregoing covenants or any other covenants contained in
this Agreement shall not affect the status of the Company as a separate legal
entity or the limited liability of the Members or the Directors.
(e) So long as any Obligation is outstanding, the Board
shall not cause or permit the Company to:
(1) except as contemplated by the Basic
Documents, guarantee any obligation of any Person,
including any Affiliate;
(2) engage, directly or indirectly, in any
business other than the actions required or permitted to
be performed under Section 3.1, the Basic Documents or
this Section;
(3) incur, create or assume any indebtedness
other than as expressly permitted under the Basic
Documents;
(4) make or permit to remain outstanding any
loan or advance to, or own or acquire any stock or
securities of, any Person, except that the Company may
invest in those investments permitted under the Basic
Documents and may make any advance required or expressly
permitted to be made pursuant to any provisions of the
Basic Documents and permit the same to remain outstanding
in accordance with such provisions;
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(5) to the fullest extent permitted by law,
engage in any dissolution, liquidation, consolidation,
merger, asset sale or transfer of ownership interests
other than such activities as are expressly permitted
pursuant to any provision of the Basic Documents; or
(6) form, acquire or hold any subsidiary
(whether corporate, partnership, limited liability company
or other).
Section 6.10 Independent Director. As long as any Obligation is
outstanding, the Members shall cause the Company at all times to have at least
one Independent Director who will be appointed by the Members. To the fullest
extent permitted by law, including Section 18-1101(c) of the Act, the
Independent Directors shall consider only the interests of the Company,
including its respective creditors, in acting or otherwise voting on the
matters referred to in Section 6.9. No resignation or removal of an
Independent Director, and no appointment of a successor Independent Director,
shall be effective until such successor shall have accepted his or her
appointment as an Independent Director by a written instrument. In the event
of a vacancy in the position of Independent Director, the Members shall, as
soon as practicable, appoint a successor Independent Director. All right,
power and authority of the Independent Director shall be limited to the extent
necessary to exercise those rights and perform those duties specifically set
forth in this Agreement. Except as provided in the second sentence of this
Section, in exercising their rights and performing their duties under this
Agreement, the Independent Director shall have a fiduciary duty of loyalty and
care similar to that of a director of a business corporation organized under
the General Corporation Law of the State of Delaware. No Independent Director
shall at any time serve as trustee in bankruptcy for any Affiliate of the
Company.
ARTICLE VII
OFFICERS
Section 7.1 Officers. The Officers of the Company shall be
chosen by the Board of Directors and shall include a President, a Chief
Financial Officer, a Secretary and a Treasurer. The Board of Directors may
also choose a Chief Executive Officer, one or more Vice Presidents including
Executive, Senior and Assistant Vice Presidents, and one or more Assistant
Secretaries and Assistant Treasurers. A person elected or appointed to be an
Officer is by such election or appointment designated a Manager by the Members
for purposes of the Delaware Act. Any number of offices may be held by the
same person. The Board of Directors may appoint such other Officers and agents
as it shall deem necessary who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board. The salaries of all Officers and agents of the
Company shall be fixed by or in the manner prescribed by the Board of
Directors. The Officers of the Company shall hold office until their
successors are chosen and qualify. Officers need not be Members. Any Officer
elected or appointed by the Board of Directors may be removed at any time by
the affirmative vote of a
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majority of the Board of Directors. Any vacancy occurring in any office of the
Company shall be filled by the Board of Directors.
Section 7.2 Chief Executive Officer. The Chief Executive
Officer, if any, shall preside at all meetings of the Members and the Board of
Directors and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The Chief Executive Officer may execute
bonds, mortgages, leases and other contracts, except where required by law to
be otherwise signed and executed and except where signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
Officer or agent of the Company.
Section 7.3 The President. The President shall have general and
active management of the business of the Company and, if the President is not
the Chief Executive Officer, shall report to the Chief Executive Officer. The
President may execute bonds, mortgages, leases and other contracts, except
where required by law to be otherwise signed and executed and except where
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other Officer or agent of the Company.
Section 7.4 The Vice President. In the absence of the President
or in the event of the President's inability to act, the Vice President, if
any (or in the event there be more than one Vice President, the Vice
Presidents in the order designated by the Directors, or in the absence of any
designation, then in the order of their election), shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. The Vice Presidents, if any, shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 7.5 The Secretary and Assistant Secretary. The
Secretary shall attend all meetings of the Board of Directors and all meetings
of the Members and record all the proceedings of the meetings of the Company
and of the Board of Directors in a book to be kept for that purpose, may
certify as necessary the accuracy and completeness of such records and shall
perform like duties for the standing committees when required. The Secretary
shall give, or cause to be given, notice of all meetings of the Members and
special meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors, the Chief Executive
Officer or President, under whose supervision the Secretary shall be. The
Assistant Secretary, or if there be more than one, the Assistant Secretaries
in the order determined by the Board of Directors (or if there be no such
determination, then in order of their election) shall, in the absence of the
Secretary or in the event of the Secretary's inability to act, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
Section 7.6 The Chief Financial Officer, the Treasurer and
Assistant Treasurer. The Chief Financial Officer shall have the custody of the
Company funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
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Company in such depositories as may be designated by the Board of Directors.
The Chief Financial Officer shall disburse the funds of the Company as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer, the President
and the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all of the Chief Financial Officer's
transactions and of the financial condition of the Company. The Treasurer and
Assistant Treasurer, or if there shall be more than one, the Assistant
Treasurers in the order determined by the Board of Directors (or if there be
no such determination, then in the order of their election), shall, in the
absence of the Chief Financial Officer or in the event of the Chief Financial
Officer's inability to act, perform the duties and exercise the powers of the
Chief Financial Officer and shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
Section 7.7 Officers as Agents. The Officers, to the extent of
their powers set forth in this Agreement, are agents of the Company for the
purpose of the Company's business, and the actions of any Officer taken in
accordance with this Agreement shall bind the Company.
Section 7.8 Third Party Reliance. Any person dealing with the
Company or any Member, Director or Officer in connection with the business of
the Company, may rely upon a certificate signed by a Secretary or Assistant
Secretary of the Company as to:
(i) the identity of a Member, Director or Officer of
the Company;
(ii) the existence or non-existence of any fact or
facts that constitute a condition precedent to acts by the
Board of Directors, the Members or the Officers or in any
matter related to the affairs of the Company;
(iii) the Persons who are authorized to execute and
deliver any instrument or document of, or on behalf of, the
Company; or
(iv) any act or failure to act by the Company or as
to any other matter whatsoever involving the Company, or any
Member, Director or Officer.
ARTICLE VIII
ALLOCATIONS
Section 8.1 Profits and Losses. Subject to the allocation rules
of Section 8.2 hereof, Profits and Losses for any Fiscal Year shall be
allocated among the Unit Holders in proportion to the number of Units held by
each Unit Holder.
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Section 8.2 Allocation Rules.
(i) If Members are admitted to the Company pursuant
to this Agreement on different dates, the Profits or Losses
allocated to the Unit Holders for each Fiscal Year during which
Members are so admitted shall be allocated among the Unit
Holders in proportion to the number of Units each holds from
time to time during such Fiscal Year in accordance with ss.706
of the Code, using any convention permitted by law and selected
by the Treasurer, unless another allocation is authorized by
the Board.
(ii) For purposes of determining the Profits, Losses
or any other items allocable to any period, Profits, Losses and
any such other items shall be determined on a daily, monthly or
other basis, as determined by the Treasurer using any method
that is permissible under ss.706 of the Code and the Treasury
Regulations thereunder.
(iii) Except as otherwise provided in this Agreement,
all items of Company income, gain, loss, deduction and any
other allocations not otherwise provided for shall be divided
among the Unit Holders in the same proportions as they share
Profits and Losses for the Fiscal Year in question.
(iv) The Members are aware of the income tax
consequences of the allocations made by this Article VIII and
hereby agree to be bound by the provisions of this Article VIII
in reporting their shares of Company income and loss for income
tax purposes.
Section 8.3 Tax Allocations: Section 704(c) of the Code. In
accordance with ss.704(c) of the Code and the Treasury Regulations thereunder,
income, gain, loss and deduction with respect to any property contributed to
the capital of the Company shall, solely for income tax purposes, be allocated
among the Unit Holders so as to take account of any variation between the
adjusted basis of such property to the Company for federal income tax purposes
and its initial fair market value.
ARTICLE IX
DISTRIBUTIONS
Section 9.1 Net Cash Flow. Except as otherwise provided in
Article XIV hereof (relating to the dissolution of the Company), any
distribution of the Net Cash Flow during any Fiscal Year shall be made to the
Unit Holders in proportion to the number of Units held by each Unit Holder.
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Section 9.2 Distribution Rules.
(i) All distributions pursuant to Section 9.1 hereof
shall be at such times and in such amounts as shall be
determined by the Board; provided, however, that the Board
shall use its best efforts to cause the Company to distribute
to the Unit Holders an amount of Net Cash Flow as shall be
sufficient to enable the Unit Holders to fund their federal and
state income tax liabilities attributable to their respective
distributive shares of the taxable income of the Company.
(ii) All amounts withheld pursuant to the Code or any
provision of any state or local tax law with respect to any
payment, distribution or allocation to the Company or the Unit
Holders shall be treated as amounts distributed to the Unit
Holders pursuant to this Article IX for all purposes of this
Agreement. The Board is authorized to withhold from
distributions, or with respect to allocations, to the Unit
Holders and to pay over to any federal, state or local
government any amounts required to be so withheld pursuant to
the Code or any provision of any other federal, state or local
law and shall allocate such amounts to those Unit Holders with
respect to which such amounts were withheld.
Section 9.3 Limitations on Distribution. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution to any Unit Holder on account of its interest in the
Company if such distribution would violate Section 18-607 of the Delaware Act
or other applicable law.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books, Records and Financial Statements.
(i) At all times during the continuance of the
Company, the Company shall maintain, at its principal place of
business, separate books of account for the Company that shall
show a true and accurate record of all costs and expenses
incurred, all charges made, all credits made and received and
all income derived in connection with the operation of the
Company business in accordance with generally accepted
accounting principles consistently applied, and, to the extent
inconsistent therewith, in accordance with this Agreement. Such
books of account, together with a certified copy of this
Agreement and of the Certificate, shall at all times be
maintained at the principal place of business of the Company
and shall be open to inspection and examination at reasonable
times by each Member and its duly authorized representative for
any purpose reasonably related to such Member's interest in the
Company. The books of account and the
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records of the Company shall be examined by and reported upon
as of the end of each Fiscal Year under the direction of the
Chief Financial Officer or Treasurer, or if required by the
Board, by a firm of independent certified public accountants
selected by the Board. Any Member shall have the right to have
a private audit of the Company books and records conducted at
reasonable times and after reasonable advance notice to the
Company for any purpose reasonably related to such Member's
interest in the Company, but any such private audit shall be at
the expense of the Member desiring it, and it shall not be paid
for out of Company funds. Notwithstanding any other provisions
of this Agreement, the Board of Directors shall have the right
to keep confidential from the Members, for such period of time
as the Board deems reasonable, any information which the Board
of Directors reasonably believes to be in the nature of trade
secrets or other information the disclosure of which the Board
of Directors in good faith believes is not in the best
interests of the Company or could damage the Company or its
business or which the Company is required by law or by
Agreement with a third party to keep confidential.
(ii) The Company shall prepare and maintain, or cause
to be prepared and maintained, the books of account of the
Company and the following documents shall be transmitted by a
Manager to each Member at the times hereinafter set forth.
(a) Within three (3) months after the close
of each Fiscal Year, the following financial statements,
examined under the direction of the Chief Financial
Officer or Treasurer, or if required by the Board,
examined by and certified to by the independent certified
public accountants referred to in Subsection (i) of this
Section 10.1:
(1) balance sheet of the Company as of
the beginning and close of such Fiscal Year;
(2) statement of Company Profits and
Losses for such Fiscal Year; and
(3) statement of such Member's Capital
Account as of the close of such Fiscal Year, and
changes therein during such Fiscal Year.
(b) Within three (3) months after the close
of each Fiscal Year, the following documents:
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(1) a statement indicating such
Member's share of each item of Company income, gain,
loss, deduction or credit for such Fiscal Year for
income tax purposes; and
(2) a copy of each income tax return,
federal or state, filed by the Company for such
Fiscal Year.
Section 10.2 Accounting Method. For both financial and tax
reporting purposes and for purposes of determining Profits and Losses, the
books and records of the Company shall be kept on the accrual method of
accounting applied in a consistent manner and shall reflect all Company
transactions and be appropriate and adequate for the Company's business.
ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.1 Liability. Except as otherwise provided by the
Delaware Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Covered Person shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Covered Person.
Section 11.2 Exculpation.
(i) No Covered Person shall be liable to the Company
or any other Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted
by such Covered Person in good faith on behalf of the Company
and in a manner reasonably believed to be within the scope of
authority conferred on such Covered Person by this Agreement,
except that a Covered Person shall be liable for any such loss,
damage or claim incurred by reason of such Covered Person's
gross negligence or willful misconduct.
(ii) A Covered Person shall be fully protected in
relying in good faith upon the records of the Company and upon
such information, opinions, reports or statements presented to
the Company by any Person as to matters the Covered Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Company, including information,
opinions, reports or statements as to the value and amount of
the assets, liabilities, Profits, Losses or Net Cash Flow or
any other facts pertinent to the existence and amount of assets
from which distributions to Members might properly be paid.
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Section 11.3 Fiduciary Duty.
(i) To the extent that, at law or in equity, a
Covered Person has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other
Covered Person, a Covered Person acting under this Agreement
shall not be liable to the Company or to any other Covered
Person for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that
they restrict the duties and liabilities of a Covered Person
otherwise existing at law or in equity, are agreed by the
parties hereto to replace such other duties and liabilities of
such Covered Person.
(ii) Unless otherwise expressly provided herein, (a)
whenever a conflict of interest exists or arises between
Covered Persons, or (b) whenever this Agreement or any other
agreement contemplated herein or therein provides that a
Covered Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Company or any Member, the
Covered Person shall resolve such conflict of interest, taking
such action or providing such terms, considering in each case
the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation
and the benefits and burdens relating to such interests, any
customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the
absence of bad faith by the Covered Person, the resolution,
action or term so made, taken or provided by the Covered Person
shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty or obligation of
the Covered Person at law or in equity or otherwise.
Section 11.4 Indemnification. To the fullest extent
permitted by applicable law, a Covered Person shall be entitled to
indemnification from the Company for any loss, damage or claim incurred by
such Covered Person by reason of any act or omission performed or omitted by
such Covered Person in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of authority conferred on such
Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Covered Person by reason of gross negligence or willful misconduct with
respect to such acts or omissions; provided, however, that any indemnity under
this Section 11.4 shall be provided out of and to the extent of Company assets
only, and no Covered Person shall have any personal liability on account
thereof.
Section 11.5 Expenses. To the fullest extent permitted by
applicable law, expenses (including legal fees) incurred by a Covered Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Company prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Covered Person to repay such amount if it
shall be determined that the Covered Person is not entitled to be indemnified
as authorized in Section 11.4 hereof.
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Section 11.6 Outside Businesses. Except as otherwise
provided in any employment agreement or other agreement any Member, Director,
Officer, Manager or Affiliate thereof may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Company, and the Company,
the Members, Directors, Officers and Managers shall have no rights by virtue
of this Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive
with the business of the Company, shall not be deemed wrongful or improper.
Except as otherwise provided in any employment agreement or other agreement,
no Member, Director, Officer, Manager or Affiliate thereof shall be obligated
to present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be
taken by the Company, and any Member, Director, Officer, Manager or Affiliate
thereof shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
opportunity.
ARTICLE XII
ADDITIONAL MEMBERS AND UNITS
Section 12.1 Additional Units. If approved by Majority Vote,
the Company is authorized to raise additional capital by offering and selling,
or causing to be offered and sold, additional limited liability company
interests in the Company ("Additional Units") to any Person in such amounts
and on such terms as the Members may determine. Each Person who subscribes for
any of the Additional Units shall be admitted as an additional member of the
Company (each, an "Additional Member" and collectively, the "Additional
Members") at the time such Person (i) executes this Agreement or a counterpart
of this Agreement and (ii) is named as a Member on Schedule A hereto. The
legal fees and expenses associated with such admission shall be borne by the
Company.
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ARTICLE XIII
ASSIGNABILITY AND SUBSTITUTE MEMBERS
Section 13.1 Assignability of Units.
(i) A Member may assign the whole or any part of its
Units or other interests in the Company to an Affiliate in such
Member's sole discretion and without the prior consent of the
Board of Directors. Any such assignment shall, nevertheless,
not entitle the assignee to become a Substitute Member or to be
entitled to exercise or receive any of the rights, powers or
benefits of a Member, other than the right to receive
distributions, to which the assigning Member would be entitled,
unless the assigning Member designates, in a written
instrument, its assignee to become a Substitute Member. Such
written instrument or Substitute Member designation does not
require the approval or prior consent of the Board.
(ii) No Member may assign the whole or any part of
its Units or other interests in the Company to any Person who
is not an Affiliate without the prior consent of the Board,
which consent may be given or withheld in the sole and absolute
discretion of the Board. If the prior consent of the Board is
obtained for any such assignment, such assignment shall,
nevertheless, not entitle the assignee to become a Substitute
Member or to be entitled to exercise or receive any of the
rights, powers or benefits of a Member, other than the right to
receive distributions to which the assigning Member would be
entitled, unless the assigning Member designates, in a written
instrument delivered to the Board or otherwise to the
satisfaction of the Board, its assignee to become a Substitute
Member and the Board, in its sole and absolute discretion,
consents to the admission of such assignee as a Member; and
provided further, that such assignee shall not become a
Substitute Member without having first executed an instrument
reasonably satisfactory to the Board accepting and agreeing to
the terms and conditions of this Agreement, including a
counterpart signature page to this Agreement, and without
having paid to the Company a fee sufficient to cover all
reasonable expenses of the Company in connection with such
assignee's admission as a Substitute Member. If a Member
assigns all of its interest in the Company and the assignee of
such interest is entitled to become a Substitute Member
pursuant to this Section 13.1, then unless otherwise agreed,
such assignee shall be admitted to the Company effective
immediately prior to the effective date of the assignment, and,
immediately following such admission, the assigning Member
shall cease to be a Member of the Company.
Section 13.2 Recognition of Assignment by Company. No
assignment, or any part thereof, that is in violation of this Article XIII
shall be valid or effective, and neither the Company nor the Members shall
recognize the same for the purpose of making distributions of
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Net Cash Flow pursuant to Section 9.1 hereof with respect to such Company
interest or part thereof. Neither the Company nor the nonassigning Members
shall incur any liability as a result of refusing to make any such
distributions to the assignee of any such invalid assignment.
Section 13.3 Indemnification. In the case of an assignment or
attempted assignment of an interest in the Company that has not received the
consents required by Section 13.1 hereof, the parties engaging or attempting
to engage in such assignment shall be liable to indemnify and hold harmless
the Company and the other Members from all costs, liabilities and damages that
any of such indemnified Persons may incur (including, without limitation,
incremental tax liability and lawyers' fees and expenses) as a result of such
assignment or attempted assignment and efforts to enforce the indemnity
granted hereby.
Section 13.4 Effective Date of Assignment. Any valid assignment
of a Member's interest in the Company, or part thereof, pursuant to the
provisions of Section 13.1 hereof shall be effective as of the close of
business on the last day of the calendar month in which the Board gives its
consent, if required, to such assignment (or the last day of the calendar
month in which such assignment occurs, if later), unless, in the case of
assignment to an Affiliate, a written instrument of the assigning Member sets
forth a different effective date, or, in any case, the Board in its discretion
approves a different effective date. The Company shall, from the effective
date of such assignment, thereafter pay all further distributions on account
of the Company interest (or part thereof) so assigned, to the assignee of such
interest, or part thereof. As between any Member and its assignee, Profits and
Losses for the Fiscal Year of the Company in which such assignment occurs
shall be apportioned for federal income tax purposes in accordance with any
convention permitted under ss.706(d) of the Code and selected by the Treasurer
or as otherwise permitted by the Board.
ARTICLE XIV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 14.1 No Dissolution. The Company shall not be dissolved
by the admission of Additional Members or Substitute Members in accordance
with the terms of this Agreement or by the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member or the occurrence of any
other event under the Delaware Act that terminates the continued membership of
a Member in the Company.
Section 14.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(i) the expiration of the term of the Company, as
provided in Section 2.3 hereof;
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(ii) so long as no Obligation is outstanding, a
Majority Vote of the Members;
(iii) the entry of a decree of judicial dissolution
under Section 18-802 of the Delaware Act.
Section 14.3 Notice of Dissolution. Upon the dissolution of the
Company, the Person or Persons approved by a Majority Vote to carry out the
winding up of the Company (the "Liquidating Trustee") shall promptly notify
the Members of such dissolution.
Section 14.4 Liquidation. Upon dissolution of the Company, the
Liquidating Trustee shall immediately commence to wind up the Company's
affairs; provided, however, that a reasonable time shall be allowed for the
orderly liquidation of the assets of the Company and the satisfaction of
liabilities to creditors so as to enable the Members to minimize the normal
losses attendant upon a liquidation. The Unit Holders shall continue to share
Profits and Losses during liquidation in the same proportions, as specified in
Article VIII hereof, as before liquidation. Each Member shall be furnished
with a statement prepared by the Company's certified public accountants that
shall set forth the assets and liabilities of the Company as of the date of
dissolution. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(i) to creditors of the Company, including Unit
Holders who are creditors, to the extent otherwise permitted by
law, in satisfaction of the liabilities of the Company (whether
by payment or the making of reasonable provision for payment
thereof), other than liabilities for distributions to Unit
Holders; and
(ii) to the Unit Holders the remaining proceeds of
liquidation in accordance with their Capital Account balances,
after giving effect to all contributions, distributions and
allocations for all periods.
Section 14.5 Termination. The Company shall terminate when all
of the assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Unit Holders in the manner provided for in this Article XIV, and the
Certificate shall have been canceled in the manner required by the Delaware
Act.
Section 14.6 Claims of the Members. The Members and Assignees
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and Assignees
shall have no recourse against the Company or any other Member or Manager.
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ARTICLE XV
APPOINTMENT OF OFFICERS AND DIRECTORS
Section 15.1 First Officers and Directors. The Member hereby
appoints as the initial Officers and Directors of this Company, the persons
set forth next to their respective offices in Schedule B. According to Section
6.1 and as set forth in Schedule B, the Member hereby determines that the
initial number of Directors which shall constitute the Board shall be two.
ARTICLE XVI
AMENDMENTS
Section 16.1 Amendments to be Adopted Solely by the Board. The
Board, without the approval of any Member may amend any provision of this
Agreement, and execute, swear to, acknowledge, deliver, file and record all
documents required or desirable in connection therewith, to reflect:
(i) a change in the name of the Company or the
location of the principal place of business of the Company;
(ii) the admission, substitution, termination or
withdrawal of Members or Assignees in accordance with this
Agreement;
(iii) a change that is (a) of an inconsequential
nature and does not adversely affect the Members or Assignees
in any material respect; (b) necessary or desirable to cure any
ambiguity, to correct or supplement any provision herein that
would be inconsistent with any other provisions herein, or to
make any other provision with respect to matters or questions
arising under this Agreement that will not be inconsistent with
the provisions of this Agreement, in each case so long as such
change does not adversely affect the Members or Assignees; (c)
necessary or desirable to satisfy any requirements, conditions
or guidelines contained in any opinion, directive, order,
ruling or regulation of any federal or state statute, so long
as such change is made in a manner which minimizes any adverse
effect on the Members or Assignees; or (d) required or
contemplated by this Agreement; or
(iv) any other amendments similar to the foregoing.
Section 16.2 Amendment Procedures. Except as specifically
provided in Section 16.1 and 16.3, all amendments to this Agreement shall be
made solely in accordance with the following requirements:
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(i) Amendments of this Agreement may be proposed only
by the Board or any Member;
(ii) If an amendment is proposed, the Board shall
seek the written approval of the holders of the requisite
number of Units or call a meeting of the Members to consider
and vote on such proposed amendment. A proposed amendment shall
be effective upon its approval by a Majority Vote, unless a
greater percentage is required by this Agreement; and
(iii) The Board shall notify all Members upon final
adoption of any proposed amendment.
Section 16.3 Amendment Restrictions. Notwithstanding the
provisions of Section 16.1 and 16.2, no amendment to this Agreement shall be
valid without a unanimous vote of the Members if such amendment would (i)
materially and adversely affect the liability of the Members, (ii) have an
effect on the provisions that allocate distributions and profits and losses or
on the voting rights of the Members that is materially adverse to the Members
unless such materially and adversely affected Members consent in writing to
such amendment, or (iii) cause the Company to be treated as an association
taxable as a corporation for federal income tax purposes.
ARTICLE XVII
MISCELLANEOUS
Section 17.1 Notices. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail
as follows:
(i) if given to the Company, in care of the President
at the Company's mailing address set forth on Schedule A
attached hereto;
(ii) if given to a Director, at such Director's
mailing address as provided to the Company; or
(iii) if given to any Member, at the address set
forth opposite its name on Schedule A attached hereto, or at
such other address as such Member may hereafter designate by
written notice to the Company.
All such notices shall be deemed to have been given when
received. Whenever any notice is required to be given under this Agreement, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. Attendance of a person at a meeting shall constitute
waiver of notice of such meeting, except when the person attends for the
express purpose of objecting, at the
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beginning of the meeting, to the transaction of business because the meeting
is not lawfully called or convened.
Section 17.2 Failure to Pursue Remedies. The failure of any
party to seek redress for violation of, or to insist upon the strict
performance of, any provision of this Agreement shall not prevent a subsequent
act, which would have originally constituted a violation, from having the
effect of an original violation.
Section 17.3 Cumulative Remedies. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or
remedy by any party shall not preclude or waive its right to use any or all
other remedies. Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or otherwise.
Section 17.4 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of all of the parties and, to the extent
permitted by this Agreement, their successors, legal representatives and
assigns.
Section 17.5 Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed as masculine, feminine, neuter, singular
or plural, whichever shall be applicable. All references herein to "Articles,"
"Sections" and paragraphs shall refer to corresponding provisions of this
Agreement.
Section 17.6 Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.
Section 17.7 Counterparts. This Agreement may be executed in
any number of counterparts with the same effect as if all parties hereto had
signed the same document. All counterparts shall be construed together and
shall constitute one instrument.
Section 17.8 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
Section 17.9 Governing Law. This Agreement and the rights of
the parties hereunder shall be interpreted in accordance with the laws of the
State of Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
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IN WITNESS WHEREOF, the Members hereto have executed this
Agreement as of the date first above stated.
MEMBER:
XXXXX FARGO & COMPANY
By
-------------------------------
Its Senior Vice President
---------------------
AND
By
-------------------------------
Its Assistant Secretary
-------------------
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SCHEDULE A
COMPANY
Name Mailing Address
---- ---------------
Xxxxx Fargo Student Loans Receivables IV, LLC MAC #N9305-173
Sixth & Marquette
Xxxxxxxxxxx, XX 00000
Attn: Secretary
Number
Name Mailing Address of Units
--- ---------------- --------
MEMBERS
Xxxxx Fargo & Company MAC #N9305-173 0
Xxxxx & Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Corporate Secretary
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SCHEDULE B
INITIAL OFFICERS AND DIRECTORS OF
XXXXX FARGO STUDENT LOANS RECEIVABLES IV, LLC
OFFICERS (MANAGERS)
Xxx X. Xxxxxx President and Chief Executive Officer
Xxxx X. Xxxxxxx Senior Vice President and Chief Financial Officer
Xxxxx X. Xxxxxxxxxxxxx Vice President
Xxxxxxx X. Xxxxxxx Vice President
Xxxx X. Xxxxxxxxx Secretary
Xxxxxxxx X. Xxxxx Assistant Secretary
Xxxxx X. Xxx-Xxxxx Assistant Secretary
DIRECTORS
Xxx X. Xxxxxx
Xxxx X. Xxxxxxx
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