Exhibit 10.60
LIMITED LIABILITY COMPANY AGREEMENT
OF
ORIGEN FINANCIAL, L.L.C.
THE UNITS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, THE DELAWARE UNIFORM
SECURITIES ACT OR THE SECURITIES LAWS OF ANY OTHER STATE. TRANSFER OF SUCH
UNITS IS RESTRICTED BY THE TERMS OF THIS LIMITED LIABILITY COMPANY
AGREEMENT.
TABLE OF CONTENTS
Page
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1. CONTINUATION AND PURPOSE.............................................. 2
1.1 Continuation.................................................... 2
1.2 Purpose......................................................... 2
1.3 Name............................................................ 2
1.4 Principal Place of Business..................................... 2
1.5 Registered Office and Resident Agent............................ 2
1.6 Duration........................................................ 3
2. CAPITAL CONTRIBUTIONS, UNITS AND RELATED MATTERS...................... 3
2.1 Capital Contributions........................................... 3
2.2 Units........................................................... 3
2.3 Additional Capital Contributions................................ 3
(a) Additional Capital Calls.................................. 3
(b) Member's Failure to Make Additional Contribution
-- Dilution............................................... 4
2.4 Contribution Returns............................................ 5
2.5 No Third Party Beneficiaries.................................... 5
3. PROFITS, LOSSES AND DISTRIBUTIONS..................................... 5
3.1 Allocation of Profits and Losses................................ 5
3.2 Tax Allocations................................................. 5
(a) Taxable Income............................................ 6
(b) Losses.................................................... 6
(c) Section 704(c) Allocations................................ 6
3.3 Special Allocations............................................. 7
(a) Company Minimum Gain Chargeback........................... 7
(b) Member Nonrecourse Debt Minimum Gain Chargeback........... 7
(c) Qualified Income Offset................................... 8
(d) Nonrecourse Deductions.................................... 8
(e) Member Nonrecourse Deductions............................. 8
3.4 Curative Allocations............................................ 8
3.5 Tax Distributions............................................... 8
3.6 Distributions of Excess Cash.................................... 9
3.7 Limitations on Distributions.................................... 9
4. MANAGEMENT OF THE COMPANY; RIGHTS AND DUTIES OF THE MANAGER........... 9
4.1 Management by Board of Managers; Number......................... 9
4.2 Power and Authority............................................. 10
4.3 Meetings of the Board of Managers; Voting Requirements;
Actions by Written Consent...................................... 13
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(a) Notice of Meeting......................................... 13
(b) Attendance................................................ 13
(c) Voting Requirements; Action by Written Consent............ 14
(d) Miscellaneous Matters..................................... 14
4.4 Standard of Care; Liability; Indemnification;
Confidentiality............................................... 14
(a) Standard of Care.......................................... 14
(b) Liability................................................. 15
(c) Indemnification........................................... 15
(d) Confidentiality........................................... 16
4.5 Tenure; Resignation; Removal; Vacancies......................... 16
(a) Tenure.................................................... 16
(b) Annual Appointment........................................ 16
(c) Resignation............................................... 16
(d) Removal................................................... 16
(e) Vacancies................................................. 16
(f) Independent Manager....................................... 17
4.6 Self-Dealing.................................................... 17
4.7 Devotion of Time to Company..................................... 18
4.8 Compensation and Expenses....................................... 18
4.9 Officers........................................................ 18
(a) Optional Appointment...................................... 18
(b) Tenure.................................................... 19
(c) Resignation............................................... 19
(d) Removal................................................... 19
(e) Vacancies................................................. 19
(f) President and Chief Executive Officer..................... 19
(g) Chief Financial Officer................................... 20
(h) Vice Presidents........................................... 20
(i) Secretary................................................. 20
(j) Assistant Secretaries..................................... 20
4.10 Employment Agreements........................................... 21
5. RIGHTS AND DUTIES OF MEMBERS.......................................... 21
5.1 Participation in Management; Voting Rights...................... 21
5.2 Withdrawal; Expulsion........................................... 22
(a) Withdrawal................................................ 22
(b) Expulsion................................................. 22
(c) Death..................................................... 22
5.3 Limited Liability of Members.................................... 22
5.4 Access to Company Information................................... 22
5.5 Meetings of the Members; Actions by Written Consent............. 22
(a) Notice of Meeting......................................... 23
(b) Attendance................................................ 23
(c) Quorum.................................................... 23
(d) Voting Requirements....................................... 23
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(e) Adjournment............................................... 23
(f) Minutes................................................... 24
(g) Action by Written Consent................................. 24
5.6 Sale of the Company............................................. 24
6. ASSIGNMENT OF UNITS AND ADMISSION OF ADDITIONAL MEMBERS............... 25
6.1 Compliance with Securities Laws................................. 25
6.2 Assignments and Substitute Members.............................. 26
(a) Effect of Assignments..................................... 26
(b) Substitute Members........................................ 26
(c) Effect of Assignment...................................... 27
6.3 Section 754 Election............................................ 28
6.4 Admission of Additional Members................................. 28
6.5 Amendment of Limited Liability Company Agreement to
Reflect Assignment............................................ 29
6.6 Definition...................................................... 29
6.7 Call Option..................................................... 29
7. NOTICES............................................................... 31
7.1 Manner of Delivery.............................................. 31
7.2 Date............................................................ 31
7.3 Change of Address............................................... 32
8. DISSOLUTION........................................................... 32
8.1 Events of Dissolution........................................... 32
8.2 Winding Up and Liquidating Distributions........................ 32
9. MISCELLANEOUS......................................................... 33
9.1 Books and Records............................................... 33
9.2 Financial Statements............................................ 33
9.3 Governing Law................................................... 33
9.4 Amendments...................................................... 34
9.5 Binding Effect.................................................. 34
9.6 Severability.................................................... 34
9.7 Construction.................................................... 34
9.8 Pronouns........................................................ 34
9.9 Counterparts and Facsimile Signatures........................... 34
9.10 Tax Matters Partner............................................. 35
10. DEFINITIONS........................................................... 35
10.1 Definitions..................................................... 35
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LIMITED LIABILITY COMPANY AGREEMENT
OF
ORIGEN FINANCIAL L.L.C.
This Limited Liability Company Agreement of Origen Financial L.L.C. a
Delaware limited liability company (the "Company"), is made and entered into as
of December 18, 2001, by and among the parties signing this Limited Liability
Company Agreement on the signature page hereto and all other persons who become
members of the Company after the date hereof (the "LLC Agreement"). This LLC
Agreement shall be null and void and of no effect whatsoever absent consummation
of the Transactions (as defined below). Certain capitalized terms used in this
Limited Liability Company Agreement are defined in Section 10 below.
RECITALS
A. The Company was organized on June 15, 2001 by filing a Certificate
of Formation with the Delaware Secretary of State. The Company has not engaged
in any business to date. The Company is the sole owner of four subsidiary
limited liability companies: Origen Special Purpose, L.L.C., Origen
Manufactured Home Financial, L.L.C. and Origen Special Purpose II, L.L.C., each
organized in Delaware, and Origen Insurance Agency, L.L.C., organized in
Virginia (collectively, the "Company Subsidiaries").
B. The Original Member has been the sole member of the Company since
the date the Company was organized but has heretofore not contributed any assets
or services to the Company.
C. Subject to and in accordance with the provisions of Section 2.1,
pursuant to the Mergers and in accordance with Section 721 of the Code, the
Original Member will transfer certain assets and liabilities to the Company and
concurrent therewith the Original Member will admit certain new members to the
Company (collectively, the "Transactions").
D. The parties hereto desire to set forth in this Limited Liability
Company Agreement their entire agreement and understanding with respect to the
constitution and operation of the Company after the date hereof.
COVENANTS
NOW, THEREFORE, for and in consideration of the Recitals set forth above
and other good and valuable consideration, the receipt and adequacy of which are
acknowledged, the parties to this Limited Liability Company Agreement agree as
follows:
1. CONTINUATION AND PURPOSE
1.1 CONTINUATION. The parties hereto agree to continue the Company as a
limited liability company under and pursuant to the provisions of
the Delaware Act and agree that the rights, duties and liabilities
of the Members and the Board of Managers shall be as provided in the
Delaware Act, except as otherwise provided herein. The Original
Member represents that the Company has not heretofore engaged in any
business.
1.2 PURPOSE. The Company was organized for the purpose of engaging in
any activity within the purposes for which limited liability
companies may be formed under the Delaware Act, including, without
limitation, the following:
(a) originating and underwriting manufactured home loans;
(b) brokering, selling or securitizing manufactured home loans
originated by the Company;
(c) servicing manufactured home loans, including processing
payments and remitting them to investors as required under the
relevant servicing contracts and repossessing and reselling
homes on defaulted contracts; and
(d) doing any and all things incidental to any of the activities
described above.
1.3 NAME. The name of the Company shall be Origen Financial L.L.C. The
Company may conduct its business under one or more assumed names, as
the Board of Managers deems appropriate in its sole discretion.
1.4 PRINCIPAL PLACE OF BUSINESS. The Company's principal place of
business shall be located at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000. The Company may establish additional
places of business, and may change the location of its principal
place of business or any additional place of business, as the Board
of Managers deems appropriate in its sole discretion.
1.5 REGISTERED OFFICE AND RESIDENT AGENT. The Company's registered
office shall be 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx,
Xxxxxxxx 00000, and its resident agent at the registered office
shall be The Corporation Trust Company. The Board of Managers shall
have the authority to change either the Company's registered office
or its resident agent or both, as the Board of Managers deems
appropriate in its sole discretion. If the Company's resident agent
resigns, the Board of Managers shall promptly appoint a successor
resident agent and designate a successor registered office. The
Board of Managers shall have the authority to amend the Certificate
of Formation (in the manner provided in Xxxxxxx 00 - 000 xx xxx
Xxxxxxxx Xxx) to reflect any change in the Company's registered
office or resident agent, no matter how effected.
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1.6 DURATION. Unless its duration is limited in the Certificate of
Formation, the Company shall exist perpetually, subject to earlier
dissolution in accordance with either the other provisions of this
Limited Liability Company Agreement or the provisions of the
Delaware Act.
2. CAPITAL CONTRIBUTIONS, UNITS AND RELATED MATTERS
2.1 CAPITAL CONTRIBUTIONS. On the Effective Date, the Original Member
will cause the Mergers to occur pursuant to the Merger Agreement,
which will vest ownership of all operations of Origen Financial
Inc., Origen Special Holdings Corporation, Origen Manufactured Home
Financial, Inc. and Origen Insurance Agency, Inc. (collectively, the
"Origen Corporations") in the Company and the Company Subsidiaries.
The parties hereto contemplate that as a result of the Mergers, all
operating assets of Origen Financial Inc. and its subsidiaries will
be transferred to the Company and the Company Subsidiaries. If
licensing restrictions or other similar regulations delay
consummation of the Mergers, then on the Effective Date the Origen
Corporations shall contribute to the Company (and the Company
Subsidiaries), to the extent permitted, all assets and liabilities,
and shall effectuate, as soon as practicable thereafter, the
Mergers. In consideration for the Original Member's contributions,
it shall be issued the number of Series A Units set forth opposite
the Original Member's name on Exhibit A, and the parties hereto
agree that the initial Capital Account of the Original Member shall
be zero ($0.00). Also on the Effective Date, each other Member shall
make, in the form of cash, the initial Capital Contribution and
shall be issued the number of Series B or Series C Units set forth
opposite its name on Exhibit A hereto. The parties hereto
contemplate that all such transfers will be in accordance with
Section 721 of the Code.
2.2 UNITS. The Members' respective interests in the governance, capital,
Profits, Losses and distributions of the Company are represented by
"Units." Units include Series A, Series B, Series C and Series D
Units. The aggregate Units of all Members represent 100% of the
total interest of Members in the votes, capital, Profits, Losses and
distributions of the Company. Series C Units have no voting rights.
Series D Units shall be issued solely to Key Employees as described
in Section 6.4(c). As of the Effective Date, the total number of
Units held by each of the Members are set forth in Exhibit A.
2.3 ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Additional Capital Calls. If the Board of Managers
determines, in its sole and absolute discretion, at any time
or from time to time, that the Company requires additional
capital ("Additional Capital"), in the form of Capital
Contributions other than the Members' initial Capital
Contributions set forth on Exhibit A, in order to enable the
Company to pay its operating expenses, to meet its
obligations in a timely fashion, to
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maintain sufficient working capital, to make any other
expenditures necessary or desirable to carry out its
objectives or for any other purpose whatsoever, the Board of
Managers, on behalf of the Company, shall call for such
Additional Capital by written notice to all Members. Each
Member shall be required to deliver his, her or its Share
(defined below) of such Additional Capital to the Company on
or before the fifteenth (15th) day after the date on which
such notice was given, and on the receipt of such Share, each
Member's Capital Account shall be increased by the amount of
his, her or its Share. Each Member's "Share" of the Additional
Capital shall equal the product of the Additional Capital and
such Member's ownership percentage of outstanding Units,
calculated as a fraction, the numerator of which is the number
of such Member's Units and the denominator of which is the
total number of Units outstanding at the time of the capital
call.
(b) Member's Failure to Make Additional Contribution --
Dilution. If any Member (a "Defaulting Member") fails to
advance all or any portion of his, her or its Share of any
Additional Capital called for by the Company within the
15-day time period described in Section 2.3(a) above, any of
the other Members (each a "Contributing Member") may, but are
not obligated to, contribute all or a portion of the amount
which such Defaulting Member failed to advance. In such
event, and following such contributions, the number of Units
of each Member shall be adjusted as follows:
(i) The adjusted number of Units held by each Contributing
Member shall be equal to a percentage of the total
number of Units held by all Members, with such
percentage being equal to a percentage which is the
equivalent of the fraction, the numerator of which is
the Capital Account balance of such Contributing
Member, subsequent to contribution of the Additional
Capital and the denominator of which is the aggregate
of all Member Capital Account balances, subsequent to
contribution of the Additional Capital; provided,
however, that all Capital Accounts shall first be
adjusted in accordance with (ii) of the definition of
Gross Asset Value in Section 10.1(s) hereof; and
provided further, solely for purposes of this Section
2.3(b), the initial Capital Account of the Original
Member shall be deemed to equal $10 million; and
(ii) The adjusted number of Units of each Defaulting Member
shall be equal to a percentage of the total number of
Units held by all Members, with such percentage being
equal to a percentage which is the equivalent of the
fraction, the numerator of which is the Capital Account
balance of such Defaulting Member, subsequent
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to contribution of the Additional Capital and the
denominator of which is the aggregate of all Member
Capital Account balances, subsequent to contribution of
the Additional Capital; provided, however, that all
Capital Accounts shall first be adjusted in accordance
with (ii) of the definition of Gross Asset Value in
Section 10.1(s) hereof; and provided further, solely for
purposes of this Section 2.3(b), the initial Capital
Account of the Original Member shall be deemed to equal
$10 million.
In the event that more than one Member desires to contribute a
Defaulting Member's Share of Additional Capital, such Members
may do so pro rata, in accordance with their relative current
Unit holdings.
2.4 CONTRIBUTION RETURNS. Except as otherwise provided in this Limited
Liability Company Agreement, a Member is not entitled to the return
of any part of the Member's Capital Contributions or to be paid
interest in respect of either the Member's Capital Account or
Capital Contributions. Except as provided herein, an unpaid Capital
Contribution is not a liability of the Company or of any Member.
2.5 NO THIRD PARTY BENEFICIARIES. The obligations undertaken by the
Members in this Limited Liability Company Agreement, including their
obligations, if any, to make Capital Contributions, loans and
reimbursements, are for the benefit of the Company and the Members
only, and neither any creditor of the Company or of any Member, nor
any other party (other than a successor in interest to the Company
or the Members), shall have the right to rely on or enforce the
provisions of this Limited Liability Company Agreement as a
third-party beneficiary or otherwise. Without limiting the
generality of the foregoing, the Board of Managers, to the extent
provided in Section 2.3 above only, shall have the sole discretion
whether to make capital calls, and neither any creditor of the
Company or of any Member, nor any other party, may compel a capital
call, regardless of whether the Company's assets are sufficient to
provide for its liabilities. In addition, the discretions granted to
the Board of Managers and the Members in this Limited Liability
Company Agreement are personal to them, and no receiver, trustee or
liquidator of the Company's business shall the right or power to
exercise any such discretions.
3. PROFITS, LOSSES AND DISTRIBUTIONS
3.1 ALLOCATION OF PROFITS AND LOSSES. For financial accounting purposes
exclusively, Profits and Losses of the Company shall be allocated
proportionately among the Members, in accordance with their
percentage ownership of Units (regardless of the Series).
3.2 TAX ALLOCATIONS.
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(a) Taxable Income. Subject to Sections 3.2(c), 3.3 and 3.4,
Company income or gain, as computed for Federal income tax
purposes, shall be allocated:
(i) First, to the Members pro rata, in proportion to, and
to the extent of, any tax losses previously allocated
to them pursuant to Section 3.2(b)(iv) below;
(ii) Next, to the holders of Series B, C and D Units pro
rata, in proportion to, and to the extent of, any tax
losses previously allocated to them pursuant to Section
3.2(b)(iii) below; and
(iii) Then, to the Original Member, to the extent of
$10,000,000; and
(iv) Finally, to the Members pro rata, in proportion to
their respective Unit holdings.
(b) Tax Losses. Subject to Sections 3.2(c), 3.3 and 3.4, Company
losses, as computed for federal income tax purposes, shall be
allocated:
(i) First, to the Members pro rata, in proportion to, and to
the extent of, any taxable income or gain previously
allocated to them pursuant to Section 3.2(a)(iv) above;
(ii) Next, to the Original Member, to the extent of taxable
income or gain previously allocated to it pursuant to
Section 3.2(a)(iii) above;
(iii) Then, to the holders of Series B, C and D Units,
pro-rata, in proportion to, and to the extent of, their
Net Capital Contributions; and
(iv) Finally, to the Members pro rata, in proportion to
their percentage ownership of Units.
(c) Section 704(c) Allocations. Notwithstanding Sections 3.2(a)
and (b) above, income, gain, loss, and deduction with respect
to any property contributed to the capital of the Company
will, solely for tax purposes, in accordance with Code
Section 704(c) and the related Treasury Regulations, be
allocated among the Members so as to take account of any
variation between the adjusted basis to the Company of the
property for Federal income tax purposes and the initial
Gross Asset Value of the property (computed in accordance
with subparagraph (i) of the definition of Gross Asset Value)
in the manner described in Treasury Regulations at Section
1.704-3(d), using the remedial method of allocation. The
parties hereto acknowledge that the Original Member has made
its initial Capital Contribution in the form of
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property with an aggregate fair market value of zero ($0.00)
dollars; notwithstanding, the Board of Managers in the
exercise of its reasonable discretion, in accordance with the
Treasury Regulations, shall determine the amount of
built-in-gain or loss of each particular asset contributed by
the Original Member. If the Gross Asset Value of any Company
asset is adjusted under subparagraph (ii) of the definition of
Gross Asset Value, subsequent allocations of income, gain,
loss, and deduction with respect to that asset will also take
account of any variation between the adjusted basis of the
asset for federal income tax purposes and its Gross Asset
Value in the manner described in Treasury Regulations at
Section 1.704-3(d), using the remedial method of allocation.
Allocations under this Section 3.2(c) are solely for purposes
of Federal, state and local taxes and will not affect, or in
any way be taken into account in computing, but only to the
extent of such built-in gain (or loss), any Member's Capital
Account or other items or distributions under any provision of
this Limited Liability Company Agreement.
3.3 SPECIAL ALLOCATIONS. Special allocations of items of income, gain,
loss, deduction and credit shall be made in the following order and
priority:
(a) Company Minimum Gain Chargeback. Notwithstanding any other
provision of this Limited Liability Company Agreement, if
there is a net decrease in Company Minimum Gain during any
taxable year or other period for which allocations are made,
and such decrease is not the result of any of the
circumstances set forth in Treasury Regulations Sections
1.704-2(f)(2) or 1.704-2(f)(3), then each Member will be
specially allocated items of Company income and gain for that
period (and, if necessary, subsequent periods) to the extent
of an amount equal to such Member's Share of the Net Decrease
in Company Minimum Gain. This Section 3.3(a) is intended to
comply with the minimum gain chargeback requirement of
Treasury Regulations Section 1.704-2(f)(1) and shall be
interpreted consistently therewith.
(b) Member Nonrecourse Debt Minimum Gain Chargeback.
Notwithstanding any other provision of this Limited Liability
Company Agreement, except Section 3.3(a), if there is a net
decrease in Member Nonrecourse Debt Minimum Gain with respect
to a Member Nonrecourse Debt during any taxable year or other
period for which allocations are made, and such decrease is
not the result of one of the circumstances described in the
third sentence of Treasury Regulations Section
1.704-(2)(i)(4), then each Member will be specifically
allocated items of Company income and gain for such year or
other period (and, if necessary, subsequent periods) to the
extent of an amount equal to such Member's Share of the Net
Decrease in Member Nonrecourse Debt Minimum Gain. This
Section 3.3(b) is intended
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to comply with the minimum gain chargeback requirement of
Treasury Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.
(c) Qualified Income Offset. A Member who unexpectedly receives
any adjustment, allocation or distribution described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5),
or (6) will be specially allocated items of Company income
and gain (including gross income) in an amount and manner
sufficient to eliminate, to the extent required by the
Treasury Regulations, the Adjusted Capital Account Deficit of
the Member as quickly as possible, provided that an
allocation pursuant to this Section 3.3(c) will be made if
and only to the extent that such Member would have an
Adjusted Capital Account Deficit after all other allocations
provided for in this Article 3 have been tentatively made as
if this Section 3.3(c) were not in the Limited Liability
Company Agreement.
(d) Nonrecourse Deductions. Company Nonrecourse Deductions for any
taxable year or other period for which allocations are made
will be allocated among the Members in proportion to their
percentage ownership of Units.
(e) Member Nonrecourse Deductions. In accordance with Treasury
Regulations Section 1.704-2(i)(1), any Member Nonrecourse
Deductions for any taxable year or other period for which
allocations are made will be allocated to the Member that
bears the economic risk of loss with respect to the Member
Nonrecourse Debt to which the Member Nonrecourse Deductions
are attributable.
3.4 CURATIVE ALLOCATIONS. The allocations set forth in Section 3.3 are
intended to comply with certain requirements of Treasury Regulations
Sections 1.704-1 and 1.704-2, but may not be consistent with the
manner in which the Members intend to share the economic benefits of
the Company. To insure that Members' economic arrangements are not
distorted, the Board of Managers shall have sole discretion to
request a waiver of the minimum gain chargeback and member
nonrecourse debt minimum gain chargeback rules, pursuant to Treasury
Regulations Sections 1.704-2(f)(4) and 1.704-2(i)(4), respectively.
In addition, the Board of Managers is authorized to divide
allocations of income, loss, deduction and credit among the Members
so as to prevent the allocations in Section 3.3 from distorting the
manner in which Company distributions would be divided among the
Members pursuant to this Article 3 but for application of Section
3.3. The Board of Managers will have discretion to accomplish this
result in any reasonable manner that is consistent with Code Section
704 and the Treasury Regulations.
3.5 TAX DISTRIBUTIONS. On or before March 15 of each year, the Board of
Managers shall cause the Company to distribute to each Member, to
the extent of available
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Excess Cash, an amount equal to such Member's Tax Distribution
computed with respect to the previous calendar year and, to the
extent Tax Distributions for any prior year were not made in full,
the amount of such deficiency. Whenever feasible, the Company shall
estimate the amount of the Tax Distributions, and proportionately
distribute the same concurrently with the Members' need to make
estimated tax payments.
3.6 DISTRIBUTIONS OF EXCESS CASH. Subject to Section 8.2 hereof with
respect to liquidating distributions, and subsequent to the payment
of all accrued but unpaid Tax Distributions, the Board of Managers
may distribute the Excess Cash to the Members, at such times as the
Board of Managers may determine in its sole discretion, provided
that such distributions are in the following priority:
(a) First, to the Series B, C and D Members, pro-rata in
proportion to and to the extent of their Net Capital
Contributions;
(b) Next, to the Original Member, to the extent of the balance in
its Capital Account, provided, however, that such amount shall
in no event exceed $10,000,000; and
(c) Finally, to the Members pro-rata, in proportion to the
percentage ownership of their Units.
3.7 LIMITATIONS ON DISTRIBUTIONS. Distributions, whether pursuant to
Sections 3.5 or 3.6 above, may be made from any source; provided
they do not violate any agreement that the Company has with any of
its creditors or any provision of the Delaware Act. In the event
that any Tax Distributions to be made in accordance with Section 3.5
above would violate any such agreement or provision, or would cause
any of such limitations to occur, to the extent permitted, the Board
of Managers shall make such distributions pro rata to the Members,
in accordance with the respective Tax Distributions due them.
4. MANAGEMENT OF THE COMPANY; RIGHTS AND DUTIES OF THE MANAGER
4.1 MANAGEMENT BY BOARD OF MANAGERS; NUMBER. The Company shall be
managed by a Board of Managers, which shall consist of no less than
three (3) nor more than five (5) individuals, none of whom are
required to be Members. Members of the Board shall have five (5)
votes. The Members owning Series A Units shall have the right to
appoint up to two members of the Board of Managers and shall control
two (2) of the Board's five (5) votes. Members owning Series B
Units, shall have the right acting by majority of their Series B
Unit Holdings to appoint up to two members of the Board of Managers
and shall control two (2) of the Board's five (5) votes. The fifth
vote of the Board of Managers shall be held by a person, subject to
Section 4.5(f), jointly selected by the other four managers;
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provided, however, that such person is not an Affiliate of either
the Original Member, Sun Communities, Inc. or Sun Communities
Operating Limited Partnership (the "Independent Manager").
Notwithstanding the above, upon an assignment of a majority of
Series B Units pursuant to Section 6.2(c), the right of the Series B
Unit holders to appoint up to two members of the Board of Managers
and control two Board votes, shall be transferred to the Independent
Manager. The initial member of the Board of Managers appointed by
the Members owning Series A Units shall be Xxxxxx X. Xxxxx (2
votes). The initial member of the Board of Managers appointed by the
Members owning Series B Units shall be Xxxx X. Xxxxxxxx (2 votes).
4.2 POWER AND AUTHORITY. The Board of Managers shall have full and
complete power, authority and discretion to manage and control the
Company and its business and to make all incidental decisions,
subject only to Section 5.1 below and any power and authority which
this Limited Liability Company Agreement or the Delaware Act
expressly vests in the Members or any number of them. Without
limiting the generality of the immediately preceding sentence, but
subject to Section 5.1 below and any power and authority which this
Limited Liability Company Agreement or the Delaware Act expressly
vests in the Members or any number of them, the Board of Managers
shall have the power, authority and discretion, for and on behalf of
the Company:
(a) To borrow money, in the ordinary course of the Company's
business of underwriting manufactured home loans, and to
secure such loans by security interests in or liens or other
encumbrances on, property of the Company;
(b) To broker, sell or securitize manufactured home loans and
commercial loans originated or held by the Company;
(c) To purchase any interest in any real or personal property, to
hold such interest, if appropriate, for investment and
appreciation and to ultimately sell, transfer, assign, convey,
exchange or otherwise dispose of all or any portion of such
interest;
(d) To make, in the ordinary course of the Company's business,
capital expenditures for the acquisition of or addition to any
machinery, equipment, motor vehicles, fixtures, furniture or
other property;
(e) To sell, transfer, assign, convey, exchange or otherwise
dispose of, in the ordinary course of the Company's business,
any real or personal property of the Company, or any interest
in such property;
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(f) To lease, in the ordinary course of the Company's business,
real or personal property, whether the term of such leases (or
any renewals of such leases) extend beyond the Company's
duration;
(g) To demand, xxx for, settle, collect, receive and give releases
and discharges for all moneys, debts, accounts, interest,
dividends, securities and other tangible or intangible
personal or real property which now is due or belongs, or in
the future shall be due or belong, to the Company;
(h) To purchase, in the ordinary course of the Company's business,
any interest in any real or personal property for use in
connection with the Company's business and, to the extent such
purchases are for supplies to be used in connection with the
Company's business, to incur unsecured debts owed to the
Company's vendors;
(i) To settle and pay the Company's debts and obligations;
(j) To engage, employ and dismiss employees, independent
contractors, attorneys, accountants and other persons hired to
perform management, administrative, sales or other services
for and on behalf of the Company, and to define such persons'
respective duties and establish their compensation or
remuneration;
(k) To make temporary advances to employees, representatives or
agents of the Company for business travel and other similar
purposes in the ordinary course of the Company's business;
(l) To procure and maintain insurance policies for the protection
of or for any purpose beneficial to the Company;
(m) To purchase and maintain insurance on behalf of the Board of
Managers against any liability or expense asserted against or
incurred by the members of the Board in any such capacity or
arising out of their status as members of the Board of
Managers, whether or not the Company has or could indemnify
them against such liability or expense;
(n) To open, maintain, deposit into and withdraw from bank
accounts, and, if desired, to designate other persons to
execute checks or drafts on such accounts;
(o) To invest Company funds temporarily in (by way of example but
not limitation) time deposits, short-term governmental
obligations, commercial paper or other investments;
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(p) To commence, prosecute and defend all actions and other
proceedings affecting the Company in any way;
(q) To negotiate, prepare, modify, execute, deliver and amend any
and all contracts, agreements and documents to which the
Company is or proposes to become a party, including, without
limitation, loan agreements, notes, mortgages, security
agreements and other loan documents and instruments;
(r) Generally, to carry on the Company's business in the ordinary
course, to manage the Company's day-to-day operations and to
carry out the development and expansion of the Company and its
business in the ordinary course;
(s) To do such other acts as have been authorized by the
affirmative vote of the Members, taken in accordance with
Section 5.1 below (unless a greater percentage is specifically
required pursuant to the Delaware Act, the Certificate of
Formation or this Limited Liability Company Agreement);
(t) To make capital calls as provided in Section 2.3 hereof and
to sell and determine the price for additional Units;
(u) To determine, by unanimous vote of Managers other than those
appointed by the Original Member, whether the Company should
consummate a Capital Event;
(v) To make loans to the Original Member, on such terms and
conditions as determined by Managers other than those persons
appointed by the Original Member, for the purpose of allowing
Xxxxxxx to fund reasonable expenses necessary to preserve its
status as a public company;
(w) To exercise all rights and powers, and to perform all duties
and obligations, which the Company possesses, or to which it
is subject, in connection with each of the Company
Subsidiaries and its interest therein.
(x) In the event the Company secures mezzanine financing
exceeding $10 million, to determine whether, if permitted by
the terms of the debt instruments to which the Company is
then a party, to cause the Company to distribute to the
Members holding Series B and Series C Units, pro-rata in
proportion to their respective ownership of such Units
(regardless of Series), as a return of capital, the proceeds
of such mezzanine financing in excess of $10 million, but in
no event greater than $40 million, (which distribution shall
in no event reduce the number of Series B or Series C Units
owned by such holders); provided, however, that such
determination
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shall be made unanimously by the Board of Managers other than those
appointed by the Original Member; and
(y) To negotiate, prepare, modify, change, execute, deliver and,
if appropriate, file or record any and all documents,
agreements, instruments and papers, and to do and perform any
and all acts and deeds, which are or become necessary,
proper, convenient or desirable in connection with or in
furtherance of any of the powers enumerated above or in order
to effectuate or carry out the Company's purpose, as
described in Section 1.2 above.
4.3 MEETINGS OF THE BOARD OF MANAGERS; VOTING REQUIREMENTS; ACTIONS BY
WRITTEN CONSENT.
(a) Notice of Meeting. Any member of the Board of Managers may
call a meeting of the Board by giving written notice to each
member specifying the date (which may not be more than three
(3) business days after the notice is given), time, place and
purpose of such meeting. Unless all of the members of the
Board agree otherwise, all meetings shall be held in the
State of Michigan at a place reasonably convenient to the
members.
(b) Attendance. A member of the Board of Managers may participate
in a meeting by conference telephone or similar
communications equipment which enables all persons
participating in the meeting to hear each other, and such
participation shall constitute attendance at such meeting.
At each meeting of the Board, the presence in person or by
telephone, as appropriate, of a majority of the five Board
votes shall be necessary to constitute a quorum for the
transaction of business; provided, however, that the
Independent Manager and at least one of the votes held by the
Board member(s) appointed by the holders of Series B Units
(or their successors) are among those votes present. A
member may not attend a Board meeting by way of proxy. A
member's attendance at a meeting constitutes waiver of (i)
notice of the meeting, unless attendance is for the sole
purpose, announced at the beginning of the meeting, of
objecting to the transaction of any business because the
meeting was not called or convened properly, and (ii)
objection to any action taken or consideration of any matter
at the meeting which is not within the purposes described in
the notice of the meeting, unless the member objects to such
action or consideration when it is first presented at the
meeting. Regardless of the number of members in attendance
at a meeting, any action taken by the Board of Managers at
such meeting shall be effective, provided that such action
was taken in conformity with the other provisions of this
Limited Liability Company Agreement and was approved in
accordance with Section 4.3(c) below.
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(c) Voting Requirements; Action by Written Consent. Unless
otherwise noted in this Limited Liability Company Agreement,
consent or approval of the Board shall mean the affirmative
vote of a majority of the five Board votes present in person
or by telephone, as appropriate, and voting at a duly held
meeting of the Board at which a quorum is present. Voting
shall be by voice unless a Board of Managers requests a
ballot, in which event voting shall be by written ballot.
Each ballot shall be signed by the member who cast it, and
shall be preserved with the minutes of the meeting. Any
approval, consent, vote or other action of the Board of
Managers required or contemplated by this Limited Liability
Company Agreement or the Delaware Act may be taken without a
meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the approval,
consent, vote or action so taken is signed by members of the
Board representing all five (5) Board votes.
(d) Miscellaneous Matters. A meeting of the Board of Managers may
be adjourned to another time and place by the affirmative
vote of the votes in attendance. If a meeting is adjourned
to another day, the members in attendance at the meeting
shall use reasonable efforts to inform the other members of
the Board of the date, time and place on and at which the
meeting will reconvene, and if such date is more than five
(5) days after the date of the meeting, shall notify the
other members of such date, time and place.
4.4 STANDARD OF CARE; LIABILITY; INDEMNIFICATION; CONFIDENTIALITY.
(a) Standard of Care. Each member of the Board of Managers shall
discharge his duties in good faith, with the care that an
ordinarily prudent person in a like position would exercise
under similar circumstances, and in a manner he reasonably
believes is in the best interests of the Company and its
Members. In discharging his duties, a member may rely on
information, opinions, reports or statements, including, but
not necessarily limited to, financial statements or other
financial data, prepared or presented by (i) one or more
other members of the Board, Members or employees of the
Company whom the member in question reasonably believes is
reliable and competent with respect to the matter prepared or
presented, or (ii) legal counsel, public accountants,
engineers or other persons as to matters the member in
question reasonably believes are within such person's
professional or expert competency; provided that the member
in question does not have knowledge concerning the matter in
question which makes such reliance unwarranted.
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(b) Liability.
(i) Each member of the Board shall be liable solely to the
Company and, derivatively, to its Members for the
member's gross negligence or willful misconduct. A
Board member's taking of any action or failure to take
any action, or a Board member's errors in judgment, the
effect of which may cause or result in loss or damage
to the Company, if done pursuant to the provisions of
the Delaware Act, the Certificate of Formation and this
Limited Liability Company Agreement, shall be presumed
not to constitute gross negligence or willful
misconduct on the part of such member.
(ii) The Members shall look solely to the Company's property
for the return of their Capital Contributions and if the
Company's property remaining after payment or discharge
of the Company's debts and liabilities is insufficient
to return such Capital Contributions, no Member shall
have recourse against the members of the Board of
Managers, except as provided in Section 4.4(b)(i) above,
or any other Member.
(c) Indemnification. The Company shall indemnify, defend and
hold harmless each member of the Board of Managers (and, if
applicable, its officers, directors, shareholders, general or
limited partners, members, employees, agents, successors and
assigns) from and against any and all losses, damages,
liabilities, claims, demands, obligations, fines, penalties,
expenses (including reasonable fees and expenses of attorneys
engaged by a member of the Board of Managers in defense of
any act or omission), judgments or amounts paid in settlement
by such member by reason of any act performed, or omitted to
be performed, by him in connection with the Company's
business or in furtherance of the Company's interests, or in
connection with any proceeding to which the Board member is a
party or is threatened to be made a party because he is or
was a Board member. The provisions of this Section 4.4(c),
however, shall not relieve a Board member of any liability
which he may have (i) pursuant to Section 4.4(b) above for
gross negligence or willful misconduct, (ii) in connection
with the receipt of a financial benefit to which the member
is not entitled, (iii) for knowingly making a distribution
which violates Section 18-607(a) of the Delaware Act, or (iv)
in connection with a knowing violation of law, and no Board
member shall be entitled to indemnification with respect to
any such matters. The indemnification afforded pursuant to
this Section 4.4(c) shall be limited to the Company's assets,
and no Board member shall have a claim against any Member by
virtue of this Section 4.4(c), nor
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shall this Section 4.4(c) be construed so as to impose any
obligation on any Member to make a Capital Contribution.
(d) Confidentiality. Each member of the Board of Managers shall
deal in confidence with all matters involving the Company
until such time as there has been general public disclosure
of such matters. No member of the Board of Managers shall
disclose or use any Confidential Information except for the
direct or indirect benefit of the Company. Each member of
the Board of Managers acknowledges that the disclosure of
Confidential Information by the member or a breach of the
provisions of this Section 4.4(d) will give rise to
irreparable injury to the Company, which injury could not be
adequately compensated for in damages. Accordingly, the
Company may seek and obtain injunctive relief against any
breach or threatened breach of the member's agreements and
undertakings contained in this Section 4.4(d) in addition to
any other legal remedies which may be available to the
Company.
4.5 TENURE; RESIGNATION; REMOVAL; VACANCIES.
(a) Tenure. Subject to Section 4.5(f), each person who has been
appointed or elected as a Board member shall serve for a term
of one year, unless he is sooner removed by the Members who
appointed him or resigns or otherwise vacates the position.
(b) Annual Appointment. Subject to Section 4.5(f), the members of
the Board of Managers shall be appointed annually in
accordance with the provisions of Section 4.1 above.
(c) Resignation. Any Board member may resign at any time by
giving written notice to the other Board members. Such
resignation shall be effective as of the giving of the notice
or at such later time, if any, as may be specified in the
notice. Unless otherwise specified in the notice, acceptance
of the member's resignation by the Board of Managers shall
not be necessary to make it effective. The resignation of a
Board member who is also a Member shall not affect such
Member's rights as a Member and shall not constitute the
withdrawal of such Member as a Member.
(d) Removal. Subject to Section 4.5(f), any Board member may be
removed, at any time, with or without cause, by the Member(s)
(or their successors) who appointed him. The removal of a
Board member who is also a Member shall not affect such
Member's rights as a Member and shall not constitute the
withdrawal of such Member as a Member.
(e) Vacancies. Subject to Section 4.5(f), any vacancy on the
Board occurring as the result of a Board member's
resignation, removal, death, disability or
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any other reason whatsoever may be filled by the Member(s) (or
their successors) who appointed the member who vacated his
position. Each person who has been appointed to fill a vacancy
shall hold such office until such time as his successor shall
have been duly appointed in accordance with this Limited
Liability Company Agreement and shall have qualified, or until
he resigns, is removed or otherwise vacates the position.
(f) Independent Manager. The Independent Manager shall serve as
a permanent member of the Board of Managers, possessing such
votes as is provided herein, subject only to voluntary
resignation, death, or termination for cause, as determined
by the unanimous vote of all other members of the Board of
Managers. For the purposes of this Section 4.5(f), the term
"cause" means (i) any action of such Independent Manager (or
any failure to act) which involves fraud or the
misappropriation of Company funds or which, if generally
known, would have a material adverse effect on the Company,
its business or its reputation; (ii) the refusal or repeated
failure of the Independent Manager in any material manner, to
perform satisfactorily all of the material duties required of
him under this Operating Agreement; (iii) any breach of the
Independent Manager's fiduciary duties to the Company or the
Members; (iv) any breach by the Independent Manager of any
material provision of this Agreement which is not cured
within thirty (30) days after written demand by any Member;
(v) the mental or physical incapacity of the Independent
Manager to discharge his duties and obligations under this
Operating Agreement which continues for a continuous period
of at least one hundred eighty (180) days or which is likely
to be permanent or indefinite in duration. The Independent
Manager shall have the exclusive right to appoint three (3)
successors to the Board, each of whom shall serve
sequentially, by delivering to the Board, at any time,
written notice which specifies the identity of the
successors. Each such successor must not be an Affiliate of
either the Original Member, Sun Communities, Inc. or Sun
Communities Operating Limited Partnership.
4.6 SELF-DEALING. Any Board member and any Affiliate of any Board member
may deal with the Company, directly or indirectly, as vendor,
purchaser, employee, agent or otherwise, if the Board of Managers
has informed the Members of the material terms of such dealings, and
such dealings were approved, in advance, by a vote of the Members
taken in accordance with Section 5.1 below (except that, for the
purposes of such vote only, the Board member in question, if he is
also a Member, shall not be entitled to participate and shall not be
considered a Member). No contract or other act of the Company shall
be voidable or affected in any manner by the fact that a Board
member or his Affiliate is directly or indirectly interested in such
contract or other act apart from his interest as a Board
-17-
member, nor shall such Board member or his Affiliate be accountable
to the Company or the other Members with respect to any profits
directly or indirectly realized by reason of such contract or other
act, if such contract or other act was approved in accordance with
this Section 4.6.
4.7 DEVOTION OF TIME TO COMPANY. The members of the Board of Managers
shall not be required to manage the Company as their sole and
exclusive function, and the Board members may have other business
interests and may engage in other activities in addition to those
relating to the Company. Neither the Company nor any Member shall
have any right, by virtue of this Limited Liability Company
Agreement, to share or participate in such other interests or
activities of the Board members or to the income or proceeds derived
from such interests or activities. The Board of Managers shall incur
no liability to the Company or to any of the Members as a result of
engaging in any other interests or activities. The provisions of
this Section 4.7 shall be subject to those of Section 4.6 above.
4.8 COMPENSATION AND EXPENSES.
(a) The Independent Manager shall be entitled to a stipend with
respect to all meetings of the Board he or she attends, in an
amount customary for such service. No additional
compensation for managing the affairs of the Company shall be
provided to any of the members of the Board of Managers.
This Section 4.8(a) shall not prohibit, however, the Company
from retaining a Board member or his Affiliates to perform
services for or supply goods to the Company, and to
compensate such Board member or Affiliate for such services
or goods, in accordance with Section 4.6 above.
(b) Section 4.8(a) above notwithstanding, the Company shall
reimburse the members of the Board of Managers for all
reasonable costs and expenses incurred by them on behalf of
the Company. Such costs and expenses may include, but shall
not necessarily be limited to, current and recurring legal and
accounting expenses and all costs of negotiating financing
relating to the Company's business.
4.9 OFFICERS.
(a) Optional Appointment. From time to time, the Board of
Managers may appoint, and delegate some or all of its
responsibilities to, one or more officers for the Company,
which may include a President and Chief Executive Officer, a
Chief Financial Officer, one or more Vice Presidents, a
Secretary, and one or more Assistant Secretaries. An officer
shall be a natural person, and may, but need not, be a Member
or a member of the Board of Managers. One person may hold
two or more offices, but in no event shall any officer
execute, acknowledge or verify any instrument in more than
one capacity. Officers of the Company shall derive their
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authority only by way of an express grant from the Board or
this Limited Liability Company Agreement. Any provision of
this Limited Liability Company Agreement to the contrary
notwithstanding, no provision of this Section 4.9 shall be
construed so as to require the Board to appoint any officer
whatsoever.
(b) Tenure. The officers of the Company shall be chosen by the
Board of Managers, and each officer shall hold his or her
office until his or her successor has been selected by the
Board or until his or her earlier resignation, removal or
other vacancy.
(c) Resignation. Any officer may resign at any time by giving
written notice to the Board. Such resignation shall be
effective as of the giving of the notice or at such later
time, if any, as may be specified in the notice. Unless
otherwise specified in the notice, acceptance of an officer's
resignation by the Board shall not be necessary to make it
effective. The resignation of an officer who is also a
Member or a Board member shall not affect such officer's
rights and duties as a Member or a Board member and shall not
constitute the withdrawal of such officer as a Member or the
resignation of such officer as a Board member.
(d) Removal. The Board may remove any officer, at any time, with
or without cause. The removal of an officer who is also a
Member or a Board member shall not affect such officer's
rights and duties as a Member or a Board member and shall not
constitute the withdrawal of such officer as a Member or the
removal or resignation of such officer as a Board member.
(e) Vacancies. Any vacancy in any officer position occurring as
the result of an officer's resignation, removal, death,
disability or any other reason whatsoever may be filled by
the Board. Each person who has been selected to fill a
vacancy in an officer position shall hold his or her office
until his or her successor has been selected by the Board or
until his or her earlier resignation, removal or other
vacancy.
(f) President and Chief Executive Officer. The President and
Chief Executive Officer shall serve as the chief executive
officer of the Company and, subject to any and all
restrictions placed on the Board, shall have general
supervision, direction and control of the Company's business
and its day-to-day operations. The President and Chief
Executive Officer shall preside at all meetings of the
Members. The President and Chief Executive Officer shall see
that all orders and resolutions of the Members and of the
Board are effected and shall have and shall exercise and
perform such other powers and duties as may from time to time
be assigned to him or her by the Board or pursuant to this
Limited Liability Company
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Agreement. The initial President and Chief Executive Officer
shall be Xxxxxx X. Xxxxx.
(g) Chief Financial Officer. The Chief Financial Officer shall
be the principal financial officer of the Company and shall
have general supervision of the direction of the finances of
the Company. The Chief Financial Officer shall hold the
office of Vice President, shall report to the President and
Chief Executive Officer and shall exercise and perform such
other powers and duties as may from time to time may be
assigned to him or her by the Board or the President and
Chief Executive Officer or pursuant to this Limited Liability
Company Agreement. The initial Chief Financial Officer shall
be X. Xxxxxxxx Xxxxxx, Jr.
(h) Vice Presidents. In the event of the President and Chief
Executive Officer's absence or disability, the Vice President
(or, if more than one, the Vice Presidents, in order of their
rank as fixed by the Board) shall have and shall exercise and
perform all of the powers and duties of the President and
Chief Executive Officer, subject to any and all restrictions
placed on the President and Chief Executive Officer by the
Board or pursuant to this Limited Liability Company
Agreement. The Vice Presidents shall have and shall exercise
and perform such other powers and duties as may from time to
time may be assigned to them by the Board or the President
and Chief Executive Officer or pursuant to this Limited
Liability Company Agreement.
(i) Secretary. The Secretary shall attend all meetings of the
Board of Managers or the Members and shall keep or cause to
be kept, in his or her custody at the Company's principal
place of business or at such other place as the Board may
order, a book containing all written consents executed by the
members of the Board of Managers or the Members and the
minutes of all meetings of the Board of Managers or the
Members (which minutes shall set forth the place, date, and
hour of the meeting, a copy of the notice of the meeting, the
names of those present at the meeting and a summary of the
proceedings of the meeting). The Secretary shall have and
shall exercise and perform such other powers and duties as
may from time to time be assigned to him or her by the Board
of Managers or the President and Chief Executive Officer or
pursuant to this Limited Liability Company Agreement.
(j) Assistant Secretaries. In the event of the Secretary's
absence or disability, any Assistant Secretary shall act as
Secretary in all respects and shall have and shall exercise
and perform all of the powers and duties of the Secretary,
subject to any and all restrictions placed on the Secretary
by the Board of Managers or the President and Chief Executive
Officer or pursuant to this Limited Liability Company
Agreement. The Assistant
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Secretaries shall have and shall exercise and perform such
other powers and duties as may from time to time be assigned
to them by the Board of Managers, the President and Chief
Executive Officer or the Secretary or pursuant to this Limited
Liability Company Agreement.
4.10 EMPLOYMENT AGREEMENTS. All employment agreements for executive
officers of the Company, or the Company Subsidiaries, shall be
approved by the Board of Managers.
5. RIGHTS AND DUTIES OF MEMBERS
5.1 PARTICIPATION IN MANAGEMENT; VOTING RIGHTS. Members shall have no
right to take part in, vote on or interfere in any manner with the
management, conduct or control of the Company or its business, and
shall have no right or authority whatsoever to act for or on behalf
of, or to bind, the Company. Notwithstanding the immediately
preceding sentence, the Members holding Series A, B and D Units
shall have the right to vote, in accordance with their relative
ownership of Units, on each of the following matters:
(i) The dissolution of the Company, as provided in Section
8.1(b) below;
(ii) An amendment to the Certificate of Formation, or an
amendment to this Limited Liability Company Agreement,
as provided in Section 9.4 below; and
(iii) Any other matters with respect to which this Limited
Liability Company Agreement expressly contemplates that
the Members will have a right to vote.
Unless a greater or lesser vote is expressly required pursuant
to any other provision of this Limited Liability Company
Agreement, any action which the Members are required or
permitted to take, including, without limitation, the matters
described above, shall require the affirmative vote of a
Majority Interest, and any lesser interest shall have no power
whatsoever to take any action for or on behalf of, or to bind,
the Company or the Members. Any action by the requisite number
of Members, if taken in conformity with this Section 5.1,
shall bind all of the Members, and no Member shall have the
right to dissent from such action. Any Member may delegate all
or any of his, her or its voting rights or powers to another
Member (but only in writing), in which case any act of the
other Member shall be the act of the delegating Member.
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5.2 WITHDRAWAL; EXPULSION.
(a) Withdrawal. No Member shall be entitled to withdraw from the
Company without first obtaining the approval of the Board of
Managers and all of the other Members. No withdrawing Member
shall be entitled to a withdrawal distribution unless such a
distribution has been approved by all of the Members, which
approval may be subject to such conditions, terms or
qualifications as the Members deem appropriate.
(b) Expulsion. On the bankruptcy or dissolution of a Member,
such Member shall be expelled from the Company and,
notwithstanding Section 5.2(a) above, shall be deemed to have
withdrawn from the Company; provided, however, that no such
Member shall be entitled to a withdrawal distribution unless
such a distribution has been approved by all of the Members,
which approval may be subject to such conditions, terms or
qualifications as the Members deem appropriate.
(c) Death. On the death of a Member, such Member shall be deemed
to have assigned his or her Units to his or her estate, and
his or her estate shall be deemed to have been automatically
admitted to the Company as a substitute Member in place of the
deceased Member to the extent of the Units assigned, Section
6.2(b) below notwithstanding.
5.3 LIMITED LIABILITY OF MEMBERS. No Member shall be personally liable
for the Company's acts, debts or obligations, unless the Delaware
Act or any other provision of this Limited Liability Company
Agreement expressly provides otherwise.
5.4 ACCESS TO COMPANY INFORMATION. On written request by a Member, the
Board of Managers shall provide such Member with a copy of the
Company's most-recent annual financial statements and federal, state
and local income tax returns and reports. On reasonable written
request by a Member, (i) the Board of Managers shall provide such
Member with information regarding the current state of business and
financial condition of the Company; (ii) any Member, or his, her or
its designated representative, may inspect and copy, at such
Member's request, any of the records maintained pursuant to Section
9.2 below; and (iii) a Member may obtain such other information
regarding the Company's affairs or inspect, personally or through a
representative, during ordinary business hours, such other books and
records of the Company as is just and reasonable. Any Member may
call for a formal accounting of the Company's affairs whenever
circumstances render such request just and reasonable.
5.5 MEETINGS OF THE MEMBERS; ACTIONS BY WRITTEN CONSENT.
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(a) Notice of Meeting. The Board of Managers may call, and, at
the request of one or more Members holding aggregate voting
Units of at least ten percent (10%) of the aggregate voting
Units held by all Members, shall call, a meeting of the
Members by giving written notice to each Member specifying
the date (which may not be less than five (5) business days
after the notice is given, and with respect to a notice which
has been given at the request of one or more Members, may not
be more than fifteen (15) days after the notice is given),
time, place and purpose of such meeting. Unless all of the
Members agree otherwise, all meetings shall be held in the
State of Michigan at a place reasonably convenient to the
Members.
(b) Attendance. A Member may participate in a meeting by
conference telephone or similar communications equipment
which enables all persons participating in the meeting to
hear each other, and such participation shall constitute
personal attendance at such meeting. In addition, a Member
may attend and vote by proxy. A Member's attendance at a
meeting constitutes waiver of (i) notice of the meeting,
unless attendance is for the sole purpose, announced at the
beginning of the meeting, of objecting to the transaction of
any business because the meeting was not called or convened
properly, and (ii) objection to any action taken or
consideration of any matter at the meeting which is not
within the purposes described in the notice of the meeting,
unless the Member objects to such action or consideration
when it is first presented at the meeting.
(c) Quorum. A quorum for the conduct of any business at a
meeting of the Members consists of a Majority Interest
(determined with reference to Members who are entitled to
vote at the meeting), except for purposes of adjournment of
such meeting. If a quorum is not present, the meeting must
be adjourned until such time as a quorum can be obtained, or
postponed (in which event notice of the rescheduled meeting
date must be given). Regardless of the number of Members in
attendance at a meeting (so long as a quorum is present), any
action taken by the Members at such meeting shall be
effective, provided that such action was taken in conformity
with the other provisions of this Limited Liability Company
Agreement.
(d) Voting Requirements. Only those persons who were Members at
the close of business on the last business day prior to the
date of the meeting shall be entitled to vote at a meeting of
the Members. Voting shall be by voice unless a Member requests
a ballot, in which event voting shall be by written ballot.
Each ballot shall be signed by the Member who casts it, and
shall be preserved with the minutes of the meeting.
(e) Adjournment. A meeting of the Members may be adjourned to
another time and place by the affirmative vote of a Majority
Interest (determined
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with reference to Members who are present and entitled to vote
at the meeting). If a meeting is adjourned to another day, the
Board of Managers shall use reasonable efforts to inform the
other Members of the date, time and place on and at which the
meeting will reconvene, and if such date is more than five (5)
days after the date of the meeting, shall notify the other
Members of such date, time and place.
(f) Minutes. The President and Chief Executive Officer (or another
person designated by the Board of Managers) shall preside at
all meetings of Members. The Secretary (or another person
designated by the Board of Managers) shall keep the minutes of
the meeting.
(g) Action by Written Consent. Any action which, pursuant to
this Limited Liability Company Agreement or the Delaware Act,
is to be taken by all of the Members may be taken, without a
meeting of the Members and without a vote, pursuant to a
written consent signed by all of the Members. Any action
which, pursuant to this Limited Liability Company Agreement
or the Delaware Act, is to be taken by a Majority Interest or
any greater or lesser number of Members may be taken, without
a meeting of the Members and without a vote, pursuant to a
written consent signed by a Majority Interest or the
requisite number of Members; provided, however, that such
action shall not be effective until the Members who did not
consent have been notified of the action (which notice shall
include a copy of the written consent).
5.6 SALE OF THE COMPANY
(a) If a Capital Event that involves the sale of all or
substantially all of the Company's Units (whether by merger,
recapitalization, consolidation, reorganization, conversion,
combination or otherwise) to any third party (any such sale
constituting an "Approved Sale") is approved by each of the
Independent Manager and all votes of the Series B Manager(s)
appointed to the Board, each Member (including holders of
Series A, C and D Units) shall consent to and raise no
objections against such Approved Sale.
(b) Notwithstanding anything to the contrary in this Limited
Liability Company Agreement, in connection with an Approved
Sale involving a transfer of Members' Units, each Member
shall receive the identical form of consideration and the
identical portion of aggregate consideration that such Member
would have received, if such aggregate consideration had been
received directly by the Company and then distributed to the
Members in complete liquidation pursuant to Section 8.2 of
this Limited Liability Company Agreement.
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(c) In connection with any such Approved Sale, (i) if the
Approved Sale is structured as (A) a merger or consolidation,
each Member shall waive any dissenters rights, appraisal
rights or similar rights in connection with such merger or
consolidation, or (B) a sale of Units, each Member shall
agree to sell all of his Units and rights to acquire Units on
the terms and conditions so approved, (ii) each Member shall
take all necessary or desirable actions in connection with
the consummation of the Approved Sale reasonably requested by
the Company; and (iii) each Member shall be obligated to join
on a pro rata basis (based on the share of the aggregate
proceeds paid in such Approved Sale) in any indemnification
or other obligations that the Company agrees to provide in
connection with such Approved Sale other than any such
obligations that relate specifically to a particular Member
such as indemnification with respect to representations and
warranties given by a Member regarding such Member's title to
and ownership of Units; provided that no Member shall be
obligated in connection with such Approved Sale to agree to
indemnify or hold harmless the prospective transferee(s) with
respect to an amount in excess of the net cash proceeds paid
to such Member in connection with such Approved Sale.
(d) The obligations of the Members with respect to an Approved
Sale are subject to the satisfaction of the following
conditions: (i) if any Member is given an option as to the
form and amount of consideration to be received, each Member
shall be given the same option; and (ii) each holder of then
currently exercisable rights to acquire Units shall be given
an opportunity to exercise such rights prior to the
consummation of the Approved Sale and participate in such
sale as a Member.
(e) Members shall bear their pro-rata share of the costs of any
sale of Units pursuant to an Approved Sale to the extent such
costs are incurred for the benefit of all Members and are not
otherwise paid by the Company or the acquiring party. For
purposes of this Section 5.6(d), costs incurred in exercising
reasonable efforts to take all necessary actions in
connection with the consummation of an Approved Sale in
accordance with Section 5.6(a) shall be deemed to be for the
benefit of all Members.
(f) The provisions of this Section 5.6 shall terminate and cease
to have effect upon the first sale of the Company's equity
securities to the public pursuant to a registration statement
filed with, and declared effective by, the Securities and
Exchange Commission.
6. ASSIGNMENT OF UNITS AND ADMISSION OF ADDITIONAL MEMBERS
6.1 COMPLIANCE WITH SECURITIES LAWS. Each Member covenants with, and
represents and warrants to, the Company and the other Members as
follows:
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(a) Such Member has acquired his, her or its Units for his, her or
its own account and for investment purposes only, and not with
a view to the assignment of all or any portion of such Units;
(b) Such Member shall not assign all or any portion of his, her or
its Units in a manner which violates any federal or state
securities law; and
(c) Such Member shall indemnify, defend and hold harmless the
other Members, the Company and the Company's Board of
Managers, officers, employees, agents, successors and assigns
from and against any and all losses, damages, liabilities,
claims, demands, obligations, fines, penalties, expenses
(including reasonable fees and expenses of attorneys engaged
by the indemnitee in defense of any act or omission),
judgments or amounts paid in settlement by the indemnitee
incurred by the indemnitee as a result of any breach of the
covenants, representations and warranties made in this
Section 6.1 by such Member.
6.2 ASSIGNMENTS AND SUBSTITUTE MEMBERS.
(a) Effect of Assignments. Subject to the remaining provisions
of this Section 6.2, and except for any assignment to a
Competitive Business or any Affiliate of a Competitive
Business, a Member may assign all or any portion of his, her
or its Units at any time. Notwithstanding the immediately
preceding sentence, an assignment of Units does not entitle
the assignee to participate in the management and affairs of
the Company or to become, or exercise any rights of, a
Member. An assignment of Units merely entitles the assignee
to receive, to the extent assigned, distributions to which
the assigning Member would be entitled pursuant to this
Limited Liability Company Agreement. In no event shall the
Company, the Board of Managers or any other Member have any
obligation whatsoever to recognize an assignment of Units
unless the assignee has been admitted, in accordance with
Section 6.2(b) below, as a substitute Member in place of the
assigning Member to the extent of the Units assigned. Until
such time as the assignee has been so admitted, the Company,
the Board of Managers and the other Members shall consider
the assigning Member to be the owner of his, her or its Units
for all purposes relevant to the Certificate of Formation,
this Limited Liability Company Agreement and the Delaware
Act, and all distributions relating to the assigned Units
shall be made to the assigning Member, it being his, her or
its responsibility to forward the appropriate portion of such
distributions to the assignee.
(b) Substitute Members. An assignee of Units shall be admitted as
a substitute Member in place of the assigning Member to the
extent of the Units
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assigned, only on satisfaction of each of the following
conditions precedent:
(i) The Board of Managers shall have consented to such
admission in writing;
(ii) The agreement effecting the assignment is reasonably
satisfactory, in form and substance, to the Board of
Managers and the Company's counsel, and the assigning
Member and the assignee have executed and acknowledged
such agreement and such other documents, instruments and
papers as the Board of Managers and the Company's
counsel reasonably deem necessary, proper, convenient or
desirable in order to evidence or effect the assignment
or the admission of the assignee as a substitute Member
in place of the assigning Member to the extent of the
Units assigned;
(iii) The assignee accepts, adopts and agrees to be bound by
all of the terms and provisions of this Limited
Liability Company Agreement, as it may have been
amended, from and after the effective date of the
assignment, as if the assignee had joined in the
original execution of this Limited Liability Company
Agreement (and all subsequent amendments to this Limited
Liability Company Agreement) as a Member. Such
acceptance, adoption and agreement shall be set forth in
a writing, the form and substance of which shall be
satisfactory to the Board of Managers and the Company's
counsel; and
(iv) The assignee has paid, or acknowledged that he, she or
it is obligated to pay, all reasonable fees and expenses
(including, without limitation, all reasonable
attorneys' fees and expenses) incurred by the Company in
connection with such admission.
(c) Effect of Assignment. An assignee who is admitted as a
substitute Member in accordance with Section 6.2(b) above
has, to the extent assigned, the rights and powers, and is
subject to the restrictions and liabilities, of a Member
under the Certificate of Formation, this Limited Liability
Company Agreement and the Delaware Act. Such an assignee
also is liable for any obligations of his, her or its
assignor to make Capital Contributions and to return
distributions, to the extent provided in the Delaware Act or
this Limited Liability Company Agreement, but shall not be
obligated for liabilities unknown to the assignee at the time
he, she or it became a Member, unless the liabilities are
shown on the Company's financial records. Notwithstanding
the above, in the case of Units assigned by a Series B
Member, such Units shall become Series C Units in
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the hands of the Substituted Member, unless such assignment is
to one or more existing Series B Members, and such assignee
shall have no voting rights hereunder.
6.3 SECTION 754 ELECTION. In the event of the assignment of all or any
portion of Units voluntarily by way of a sale or exchange (and the
subsequent admission of the assignee as a substitute Member pursuant
to Section 6.2 above) or by operation of law on the death of a
Member, the Company shall elect, pursuant to Code Section 754, to
adjust the basis of the Company's property, if the recipient of the
Units so requests, and if the Board of Managers consents to such
adjustment (which consent shall not be unreasonably withheld). Each
Member shall provide the Company with all information necessary to
make such election. Any provision of this Limited Liability Company
Agreement to the contrary notwithstanding, any change in the amount
of depreciation deducted by the Company or any change in the gain or
loss of the Company for federal income tax purposes resulting from
such election shall be allocated entirely to the recipient of the
Units in question; provided, however, that neither the Unit holdings
of any Member, the Capital Contribution obligations of any Member
nor the amount of any distributions of Excess Cash shall be affected
as a result of such election; and provided, further, that such
election shall have no effect except for federal income tax
purposes.
6.4 ADMISSION OF ADDITIONAL MEMBERS.
(a) In order for a person to be admitted as an additional Member,
such admission, and the terms and conditions of such
admission, must be approved by the Board of Managers and such
person must accept, adopt and agree to be bound by all of the
terms and provisions of this Limited Liability Company
Agreement, as the same may have been amended, as if such
person had joined in the original execution of this Limited
Liability Company Agreement. Any provision of this Limited
Liability Company Agreement to the contrary notwithstanding,
the provisions of this Section 6.4(a) shall not govern or
apply to any admission to be effected in connection with
employee options, as contemplated in subsection (b) below,
the assignment of Units, as contemplated in Section 6.2
above, or pursuant to Section 5.2(c) above.
(b) If the Board of Managers determines, in the exercise of its
reasonable discretion, that admission of one or more Members
depends on granting such Member(s) certain management rights,
the Board may modify Section 5.1(a) to reflect that such new
Member(s) has the right to appoint up to two members to the
Board, or control up to 40% of the Board's votes; provided,
however, that any rights granted to such new Member(s)
pursuant to this Section 6.4(b), shall decrease,
proportionately, the voting rights of the Original Member.
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(c) The Board of Managers may, from time to time, offer in
writing (pursuant to a plan or otherwise) to Key Employees
(as defined below) Series D Units not to exceed in the
aggregate 11.5% of all outstanding Units under such terms and
subject to such conditions as the Board shall determine in
its sole discretion. The Board may establish vesting
schedules for individual Key Employees that defer such Key
Employee's rights to full ownership of his or her Series D
Units or forfeiture provisions that forfeit a Key Employee's
rights to his Series D Units upon the occurrence of certain
events (together, "Restricted Units"). Any Restricted Units
(or options to acquire such Units) issued in connection with
receipt of the initial Capital Contributions, shall assume a
$50 million enterprise value of the Company. The Board shall
amend Exhibit A from time to time to reflect the admission of
Key Employees as Members upon the issuance of Restricted
Units or upon exercise of their options to purchase Series D
Units (in the case of options). A Key Employee will not be
admitted as a Member until he or she agrees in writing to be
bound by the terms and provisions of this Limited Liability
Company Agreement. For purposes of this Section 6.4(c), "Key
Employee" shall mean any person designated by the Board of
Managers as a Key Employee eligible to receive the benefits
of this Section 6.4(c).
6.5 AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT TO REFLECT
ASSIGNMENT. Notwithstanding Section 9.4 below, the Board of Managers
may amend this Limited Liability Company Agreement to reflect any
assignment or admission of a substitute or additional Member
accomplished in accordance with this Section 6 or Section 5.2(c)
above.
6.6 DEFINITION. As used in this Section 6, the term "assign" means to
sell, transfer, assign, gift, pledge or otherwise dispose of or
encumber all or any portion of a Unit. All derivations of the term
"assign" shall have similar meanings, as is appropriate.
6.7 CALL OPTION.
(a) The Series B and Series C Members as of the date hereof shall
have the right (the "Call Option") to purchase from the
Original Member, proportionate to their relative Unit
holdings, on the terms and subject to the conditions set
forth in this Section 6.7, all, but not less than all, of the
Original Member's Units owned on the date of the exercise of
the Call Option (the "Called Interests"). The Call Option
shall be exercisable at any time after 36 months from the
date hereof and before 60 months from the date hereof (the
"Exercise Period").
(b) Any exercise of the Call Option shall be effected by written
notice given to the Original Member and signed by all of the
Members participating in
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the exercise of the Call Option, which notice may be given at
any time during the Exercise Period, and which notice shall
set forth a closing date not sooner than 30 nor later than 60
days following the date of the notice. Such closing shall be
delayed to the extent required to permit completion of the
procedures for determining the Call Option Purchase Price (as
defined below).
(c) For purposes of this Section 6.7, the Call Option Purchase
Price shall be equal to the amount which the Original Member
would receive upon liquidation of the Company pursuant to
Section 8.2, assuming a fair market value of the Company
equal to its Enterprise Value; provided however, for this
purpose all outstanding options and warrants to purchase
Units shall be treated as exercised. "Enterprise Value"
shall mean the saleable value of the equity of the Company
(as of the date the notice was received by the Original
Member) that is the mid-point of the range of such values
resulting from a nationally recognized investment banking
firm's application of generally accepted valuation
methodologies. The investment banker selected to make the
valuation determination shall not represent the Company, any
Member or member of the Board of Managers in a lead capacity
and shall be selected by the Board of Managers. Such
selection shall occur within 20 days of the Original Member's
receipt of the exercise notice. The cost of such investment
banker shall be borne by the Members exercising the Call
Option.
(d) At the closing of the exercise of the Call Option, the
following shall occur: (i) all debts between the Company and
the Original Member shall be reconciled, and the resulting
balance, in the case of funds owed to the Original Member,
shall be paid off or caused to be paid off, by Members
exercising the Call Option; or in the case of funds owed to
the Company, such amount shall be netted against and reduce
payment of the Call Option Purchase Price; (ii) such Members
shall pay or cause to be paid to the Original Member the Call
Option Purchase Price in cash by wire transfer of immediately
available funds (after any adjustments required by (i)
above); and (iii) the Original Member shall execute and
deliver to the Members or person or entity designated by the
Members an assignment and transfer of its Units in form and
substance reasonably satisfactory to the Members exercising
the Call Option. The Units sold pursuant to this Section 6.7
shall be transferred free and clear of all liens, pledges,
encumbrances, claims and equities of any kind, except those
which secure obligations of the Company and which are
applicable to the Units held by the Members exercising the
Call Option.
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7. NOTICES
7.1 MANNER OF DELIVERY. Any notice, election, demand, request, consent,
approval, concurrence or other communication (collectively, a
"notice") given or made under any provision of this Limited
Liability Company Agreement shall be deemed to have been
sufficiently given or made for all purposes only if it is in writing
and it is: (a) delivered personally to the party to whom it is
directed; (b) sent by first class mail or overnight express mail,
postage and charges prepaid, addressed to the party to whom it is
directed, at his, her or its address set forth opposite his, her or
its name on the attached Exhibit A; or (c) telecopied to the party
to whom it is directed, at his, her or its address set forth
opposite his, her or its name on the attached Exhibit A. All notices
to the Company also shall be sent to each member of the Board of
Managers.
7.2 DATE. Unless any other provision of this Limited Liability Company
Agreement expressly provides to the contrary, any notice:
(a) given or made in the manner indicated in Section 7.1(a) above
shall be deemed to have been given or made on the day on which
such notice was actually delivered to an adult residing or
employed at the address of the intended recipient, but if such
day was not a business day, such notice shall be deemed to
have been given or made on the first business day following
such day;
(b) given or made in the manner indicated in Section 7.1(b) above
shall be deemed to have been given or made on the third
business day after the day on which it was deposited in a
regularly maintained receptacle for the deposit of the United
States' mail, or in the case of overnight express mail, on
the business day immediately following the day on which it
was deposited in a regularly maintained receptacle for the
deposit of overnight express mail, provided that the notice
is subsequently delivered by the U.S. Post Office or the
courier service to the designated address in the ordinary
course of business; and
(c) given or made in the manner indicated in Section 7.1(c) above
shall be deemed to have been given or made on receipt by the
transmitting party of printed confirmation that the
transmission was received, provided that if the transmission
occurs after 4:30 p.m. EST or EDT (as appropriate) or on a
non-business day, the notice shall be deemed to have been
given or made on the first business day to follow such
transmission.
Notwithstanding the immediately preceding sentence, if the intended
recipient actually receives a notice before the date on which such
notice is deemed to have been given or made, as specified above, the
date of actual receipt shall be the date
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on which such notice is deemed to have been given or made for the
purposes of this Limited Liability Company Agreement.
7.3 CHANGE OF ADDRESS. Any Member or the Company may change his, her or
its address for purposes of this Limited Liability Company Agreement
by giving all of the Members, the Board of Managers and the Company
notice of such change in the manner provided in Section 7.1 above.
8. DISSOLUTION
8.1 EVENTS OF DISSOLUTION. The Company shall be dissolved and its
affairs wound up only upon the occurrence of any of the following
events, whichever occurs first:
(a) The expiration of the period fixed for the Company's duration
set forth in its Certification of Formation;
(b) The majority vote of Managers; or
(c) The entry of a decree of judicial dissolution under Section
18-802 of the Delaware Act.
8.2 WINDING UP AND LIQUIDATING DISTRIBUTIONS. On the dissolution of the
Company pursuant to Section 8.1 above or otherwise, the Board of
Managers shall file a Certificate of Cancellation for the Company
with the Delaware Secretary of State and shall wind up the Company's
affairs in accordance with the provisions of the Delaware Act. Once
the Company's affairs have been wound up, the Board of Managers
shall proceed with an orderly liquidation of the Company's assets.
On completion of such liquidation, the Board of Managers shall file
all tax returns and pay all tax obligations required by applicable
Delaware law, and within a reasonable time, the Board of Managers
shall furnish each Member with a statement prepared by the Company's
accountants, which shall set forth the assets and liabilities of the
Company as of the date of dissolution and the proceeds and expenses
of the Company's liquidation. The Board of Managers shall apply or
distribute the proceeds of the liquidation in the following order of
priority:
(a) First, to the Company's creditors, whether they are or are
not Members, to the extent permitted by applicable law, in
satisfaction of the debts and liabilities of the Company and
the expenses of liquidation, other than debts and liabilities
for distributions to Members under Sections 3.5 and 3.6
above. At the same time, the Board of Managers shall
establish such reserves as it reasonably deems necessary, and
in such amounts as it reasonably deems necessary, for any
contingent or unforeseen debts, liabilities or obligations of
the Company. The Board of Managers shall pay such reserves
over to a bank or other institutional escrow agent to be
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held, for such period of time as the Board of Managers
reasonably deems appropriate, for the purpose of future
disbursement in payment of such debts, liabilities and
obligations. On the expiration of the period described
above, the Board of Managers shall distribute the balance of
such reserves in accordance with the remaining provisions of
this Section 8.2;
(b) Then, to the Members pro rata, in proportion to their
positive Capital Account balances; provided, however, that
the Members' Capital Accounts first shall be adjusted to
reflect the manner in which any unrealized income, gain, loss
and deduction inherent in the Company's property, which has
not previously been reflected in the Members' Capital
Accounts, would be allocated among the Members if there had
been a taxable disposition of the Company's assets at fair
market value on the date of distribution, and such income,
gain, loss or deduction were allocated in accordance with
Section 3.2 hereof.
9. MISCELLANEOUS
9.1 BOOKS AND RECORDS. The Company's books shall be kept on such method
of accounting as the Board of Managers deems appropriate in its sole
discretion. The Company's books shall be maintained in a full and
accurate manner at its principal place of business, and each and
every transaction of the Company shall be entered fully and
accurately in such books. The Company shall keep the following
records at its registered office: (i) a current and accurate list of
each Member and each member of the Board of Managers, including his,
her or its full name and last known address; (ii) a copy of the
Certificate of Formation and this Limited Liability Company
Agreement, including all amendments and restatements; (iii) copies
of the Company's federal, state and local tax returns and financial
statements for the Company's last three (3) fiscal years; and (iv)
copies of records that would enable a Member to determine his, her
or its relative share of the Company's distributions and his, her or
its relative voting rights, to the extent such information is not
ascertainable from the records required to be maintained pursuant to
clauses (i), (ii) and (iii) of this sentence.
9.2 FINANCIAL STATEMENTS. At the Company's expense, the Board of
Managers shall cause to be prepared and distributed to all of the
Members all appropriate information relating to the Company that is
necessary for the preparation of the Members' federal income tax
returns.
9.3 GOVERNING LAW. This Limited Liability Company Agreement shall be
deemed to have been entered into within the State of Delaware. This
Limited Liability Company Agreement shall be construed and enforced
in accordance with the laws of the State of Delaware, without regard
to its conflict of laws principles.
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9.4 AMENDMENTS. Except to the extent that another provision of this
Limited Liability Company Agreement expressly provides to the
contrary, any amendment to this Limited Liability Company Agreement
must be approved, in writing, by the Members in accordance with
Section 5.1 above; provided, however, that any amendment to Articles
3, 8 or Sections 2.3, 4.2, 4.6, 5.1, 5.2, 5.6, 6.2, 6.4, 6.7, above,
to the attached Exhibit A (except to the extent contemplated in
Section 6.5 above) or to this Section 9.4, shall require the
approval of all of the Members; and provided further, that no
amendments may be made which impact the selection of, voting rights
or any other item relating to the Independent Manager, without such
Manager's prior written approval.
9.5 BINDING EFFECT. Except to the extent that another provision of this
Limited Liability Company Agreement expressly provides to the
contrary, this Limited Liability Company Agreement shall be binding
on and inure to the benefit of the parties to it and their
respective estates, personal representatives, executors,
administrators, heirs, devisees, successors and permitted assigns.
9.6 SEVERABILITY. The provisions of this Limited Liability Company
Agreement shall be severable. Any section, paragraph, clause or
provision of this Limited Liability Company Agreement which is found
to be unenforceable or invalid shall not affect the enforceability
or validity of any other section, paragraph, clause or provision of
this Limited Liability Company Agreement.
9.7 CONSTRUCTION. The parties acknowledge that they each participated in
the drafting of this Limited Liability Company Agreement and the
negotiation of its provisions. This Limited Liability Company
Agreement shall not be construed for or against any party,
regardless of whether some parties had a greater degree of
participation than others. This Limited Liability Company Agreement
sets forth the entire understanding and agreement of the parties
with respect to its subject matter and supersedes all prior
understandings and agreements, whether written or oral, with respect
to its subject matter.
9.8 PRONOUNS. References in this Limited Liability Company Agreement to
a Member, a member of the Board of Managers or any other person in
the singular or plural or as him, her, it, or other like references,
shall also, where the context so requires, be deemed to include the
singular or the plural reference, or the masculine, feminine or
neuter reference, as the case may be.
9.9 COUNTERPARTS AND FACSIMILE SIGNATURES. This Limited Liability
Company Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which
together shall constitute one instrument. Copies (whether facsimile,
photostatic or otherwise) of signatures to this Limited Liability
Company Agreement shall be deemed to be originals and may be relied
on to the same extent as the originals.
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9.10 TAX MATTERS PARTNER. The President and Chief Executive Officer, if
he is a Member, or a Member designated by the Board of Managers if
the President and Chief Executive Officer is not a Member or is
unable or unwilling to serve, shall serve as the Company's "Tax
Matters Partner" for purposes of Code Section 6231(a)(7). The Tax
Matters Partner shall have the powers and duties provided for in
such Code Section and in the related Treasury Regulations. The Tax
Matters Partner shall promptly send the Members copies of any
notices received from the Internal Revenue Service with respect to
the Company and shall keep them advised as to the status of any
Company issues or proceedings before the Internal Revenue Service.
The Tax Matters Partner shall have no liability to the Company or
any Member for any acts or omissions in his, her or its capacity as
the Tax Matters Partner. The Company shall reimburse the Tax Matters
Partner for all costs and expenses reasonably incurred by him, her
or it on behalf of the Company. The Company shall indemnify, defend
and hold harmless the Tax Matters Partner from and against any and
all claims, liabilities, costs and expenses (including reasonable
attorney fees and court costs) incurred by him, her or it as a
consequence as serving or acting as the Tax Matters Partner.
10. DEFINITIONS
10.1 DEFINITIONS. As used in this Limited Liability Company Agreement,
the following terms shall have the following meanings:
(a) "Adjusted Capital Account Deficit" means, with respect to any
Member, the deficit balance, if any, in such Member's Capital
Account as of the end of the taxable year, after giving effect
to the following adjustments:
(i) credit to such Capital Account any amount which such
Member is obligated to restore under Section
1.704-l(b)(2)(ii)(c) of the Treasury Regulations, as
well as any addition thereto pursuant to the next to
last sentence of Sections 1.704-2(g)(1) and (i)(5) of
the Treasury Regulations, after taking into account
thereunder any changes during such year in minimum
gain, as determined in accordance with Sections
1.704-2(d) and 1.704-2(i)(3) of the Treasury
Regulations; and
(ii) debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the
Treasury Regulations.
This definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations
Section 1.704-1(b)(2)(ii)(d) and 1.704-2, and will be
interpreted consistently with those provisions.
(b) An "Affiliate" of a person is (i) any person who, directly or
indirectly, controls, is controlled by or is under common
control with such person,
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(ii) if such person is an entity, any officer, director,
manager or trustee, or (iii) any person who is an officer,
director, manager or trustee, or who, directly or indirectly,
controls, is controlled by or is under common control with any
person described in clauses (i) or (ii) of this sentence. For
the purposes of this definition, the term "control" means to
own or to have power to vote or direct the vote of at least
ten percent (10%) of the outstanding voting securities of
another person.
(c) "Board of Managers" means the person or persons appointed as
the Board of Managers of the Company pursuant to Section 4
above.
(d) "Capital Account" means, with respect to each Member, a single
capital account which shall be established for such Member and
which shall be maintained for such Member in accordance with
the following provisions:
(i) To each Member's Capital Account there shall be
credited the amount of cash and the Gross Asset Value
of any property contributed by such Member to the
capital of the Company, such Member's allocable share
of income or gain pursuant to Section 3.2, as well as
tax-exempt income or gain, any items specially
allocated to a Member under Sections 3.3 or 3.4, and
the amount of any Company liabilities that are assumed
by such Member or that are secured by any Company
property distributed to such Member.
(ii) To each Member's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any
Company property distributed to such Member pursuant to
any provision of this Limited Liability Company
Agreement, such Member's allocable share of losses
pursuant to Section 3.2, as well as non-deductible
expenditures, any items specially allocated to a Member
under Sections 3.3 or 3.4, and the amount of any
liabilities of such Member that are assumed by the
Company or that are secured by any property contributed
by such Member to the Company.
(iii) In the event the Gross Asset Values of Company assets
are adjusted, the Capital Accounts of all Members shall
be adjusted simultaneously to reflect the aggregate net
adjustment as if the Company recognized gain or loss
equal to the amount of such aggregate net adjustment.
All subsequent Depreciation or other related items shall
thereafter be reflected in the Members' Capital
Accounts.
(iv) The foregoing provisions relating to the maintenance of
Capital Accounts are intended to comply with Treasury
Regulation Section 1.704-1(b), and shall be interpreted
and applied in a manner
-36-
consistent with such Regulations. It is the intent of
the parties hereto that their underlying economic
arrangement be reflected in their Capital Account
balances, as computed in accordance with the provisions
of (i) - (iii) above.
(v) In the event any interest in the Company is transferred
in accordance with the terms of this Limited Liability
Company Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it
relates to the transferred interest.
(e) "Capital Contribution" means anything of value that a Member
contributes to the Company's capital, whether in the form of
cash, property (tangible or intangible), services or a
promissory note or other binding obligation to contribute cash
or property or to perform services, whenever made.
(f) "Capital Event" shall mean (i) the sale of all or
substantially all of the Company's Units (whether by merger,
recapitalization, consolidation, reorganization, combination
or otherwise) resulting in a Member or Members (other than
Members on the date hereof) owning in excess of 50% of all
Units then outstanding or (ii) the sale of all or
substantially all of the Company's assets.
(g) "Certificate of Formation" means the Certificate of Formation
of the Company filed with the Delaware Secretary of State in
accordance with the Delaware Act, as the same may be amended
or restated from time to time.
(h) "Code" means the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding federal
revenue laws.
(i) "Company" means Origen Financial L.L.C., a limited liability
company organized under the laws of the State of Delaware
pursuant to the Certificate of Formation and this Limited
Liability Company Agreement.
(j) "Company Minimum Gain" has the meaning assigned to the term
partnership minimum gain in Treasury Regulations Sections
1.704-2(b)(2) and 1.704-2(d)(1). In general, Company Minimum
Gain equals the excess of the amount by which a Nonrecourse
Liability exceeds the adjusted tax basis of the Company
property it encumbers.
(k) "Company Subsidiaries" is defined in Recital A.
(l) "Competitive Business" means any business that competes with
the business of the Company or of Xxxxxxx Financial Services
Corporation or any of its directly or indirectly owned
subsidiaries.
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(m) "Confidential Information" means information or knowledge not
readily ascertainable by the general public or the industry in
which the Company is engaged, including, but limited to, the
Company's business plan, financial information, products,
systems, processes, designs, accounting, marketing, client or
customer lists and information.
(n) "Delaware Act" means the Delaware Limited Liability Company
Act, Del. Code Xxx. tit. 6,Sections 18-101 to -1109,
as it may be amended from time to time.
(o) "Depreciation" means, for each taxable year or other period,
an amount equal to the depreciation, amortization, or other
cost recovery deduction allowable with respect to an asset
for the year or other period for Federal income tax purposes,
except that if the Gross Asset Value of an asset differs from
its adjusted basis for Federal income tax purposes at the
beginning of the year or other period, Depreciation will be
an amount that bears the same ratio to the beginning Gross
Asset Value as the Federal income tax depreciation,
amortization, or other cost recovery deduction for the year
or other period bears to the beginning adjusted tax basis,
provided that if the Federal income tax depreciation,
amortization, or other cost recovery deduction for the year
or other period is zero, Depreciation will be determined with
reference to the beginning Gross Asset Value using any
reasonable method selected by the Board of Managers.
(p) "Effective Date" means the date the Mergers become effective
under applicable state law, or pursuant to Section 2.1, the
date the Origen Corporations contribute assets and liabilities
to the Company and Company Subsidiaries, and the holders of
the Series B and Series C Units are deemed to have made their
initial Capital Contributions to the Company.
(q) "Excess Cash" means, at any time, that portion of the cash
and cash equivalent assets of the Company which the Board of
Managers determines, in its sole discretion, exceeds the
amount of cash needed by the Company to (i) remain "solvent",
(ii) maintain adequate working capital and reserves, and
(iii) conduct its business and carry out its purposes as
described in Section 1.2 above. In making this
determination, the Board of Managers shall take into account
the Company's then current and foreseeable sources of, and
needs for, cash. For the purposes of this definition, the
Company is "solvent" if it its capable of paying its debts as
they become due in the usual course of business or the value
of its assets are equal to or greater than the sum of its
liabilities.
(r) "Fiscal Year" means the calendar year ending December 31,
2001, and each subsequent calendar year thereafter,
respectively.
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(s) "Gross Asset Value" means, with respect to any asset, the
adjusted basis of such asset for Federal income tax purposes,
except as follows:
(i) The initial Gross Asset Value of any asset contributed
by a Member to the Company will be the fair market value
of the asset on the date of the contribution, as
determined by the Board of Managers.
(ii) The Board of Managers shall adjust the Gross Asset
Values of all Company assets to equal the respective
fair market values of the assets, as reasonably
determined by the Board of Managers, as of (a) the
acquisition of an additional interest in the Company by
any new or existing Member in exchange for more than a
de minimis Capital Contribution; (b) the distribution by
the Company to a Member of more than a de minimis amount
of Company property as consideration for an interest in
the Company if the Board of Managers reasonably
determines an adjustment is necessary or appropriate to
reflect the relative economic interests of the Members
in the Company and (c) the liquidation of the Company
within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(g).
(iii) The Gross Asset Values of Company assets will be
increased or decreased to reflect any adjustment to the
adjusted basis of the assets under Code Sections 734(b)
or 743(b), but only to the extent that the adjustment is
taken into account in determining Capital Accounts under
Treasury Regulations Section 1.704-1(b)(2)(iv)(m).
(iv) The Gross Asset Value of any Company asset distributed
to any Member will be the gross fair market value of the
asset on the date of distribution.
After the Gross Asset Value of any asset has been determined
or adjusted under subparagraphs (i), (ii), or (iii) above, the
Gross Asset Value will be adjusted by the Depreciation taken
into account with respect to the asset for purposes of
computing the Capital Account balances of the Members.
(t) "Independent Manager" is defined in Section 4.1.
(u) "Limited Liability Company Agreement" (or "Agreement") means
this Limited Liability Company Agreement of the Company, as it
may be amended or restated from time to time.
(v) "Majority Interest" means one or more Members who hold, in the
aggregate, voting Units which exceed one-half of the total
voting Units held by all Members.
-39-
(w) "Member" means each person who has executed this Limited
Liability Company Agreement as a Member, including the
Original Member, as well as each person who may become a
Member by both (i) fulfilling the applicable requirements set
forth in this Limited Liability Company Agreement with
respect to the admission of a person as a Member, and (ii)
accepting, adopting and agreeing to be bound by all of the
terms and provisions of this Limited Liability Company
Agreement, as it may have been amended or restated, from and
after the effective date of his, her or its admission to the
Company as a Member, as if such person had joined in the
original execution of this Limited Liability Company
Agreement (and all amendments and restatements) as a Member.
The term "Member" shall include a member of the Board of
Managers to the extent such individual has purchased Units in
the Company.
(x) "Member Nonrecourse Debt" means any nonrecourse debt of the
Company for which any Member bears the economic risk of loss,
as described in Treasury Regulations Section 1.704-2(b)(4).
(y) "Member Nonrecourse Debt Minimum Gain" means an amount, with
respect to each Member Nonrecourse Debt, equal to the Company
Minimum Gain that would result if such Member Nonrecourse Debt
were treated as a Nonrecourse Liability, determined in
accordance with Treasury Regulations Section 1.704-2(i)(3).
(z) "Member Nonrecourse Deductions" has the meaning assigned to
the term partner nonrecourse deductions in Treasury
Regulations Section 1.704-2(i)(2). In general, the amount of
Member Nonrecourse Deductions with respect to a Member
Nonrecourse Debt for any tax year is the excess, if any, of
the net increase during such year in the amount of Member
Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, over the aggregate amount of any
distributions during such year to the Member that bears the
economic risk of loss for such Member Nonrecourse Debt to the
extent such distributions are from the proceeds of such
Member Nonrecourse Debt, and are allocable to an increase in
the Member Nonrecourse Debt Minimum Gain attributable to such
Member Nonrecourse Debt.
(aa) "Member's Share of Company Minimum Gain" generally means, as
described in Treasury Regulations Section 1.704-2(g)(1), the
sum of Nonrecourse Deductions allocated to such Member and the
aggregate amount of distributions made to such Member of
proceeds of a Nonrecourse Liability that are allocable to an
increase in Company Minimum Gain, minus the aggregate of such
Member's Share of the Net Decrease in Company Minimum Gain.
-40-
(bb) "Member's Share of Member Nonrecourse Debt Minimum Gain"
generally means, as described in Treasury Regulations Section
1.704-2(i)(5), an amount determined in a manner consistent
with Treasury Regulations Section 1.704-2(g)(1) with respect
to each Member Nonrecourse Debt for which such Member bears
the economic risk of loss.
(cc) "Member's Share of the Net Decrease in Company Minimum Gain"
generally means, as described in Treasury Regulations Section
1.704-2(g)(2), an amount equal to the total net decrease in
Company Minimum Gain multiplied by a ratio equal to such
Member's Share of Company Minimum Gain at the end of the
immediately preceding taxable year over the total Company
Minimum Gain at such time.
(dd) "Member's Share of the Net Decrease of Member Nonrecourse Debt
Minimum Gain" generally means, as described in Treasury
Regulations 1.704-2(i)(4), an amount determined in a manner
consistent with Treasury Regulations Section 1.704-2(g)(2).
(ee) "Merger Agreement" means the Merger Agreement dated December
17, 2001 by and among the Original Member, the Company and
Origen Financial, Inc. ("OFI"), pursuant to which the
Original Member will cause the mergers of: (A) OFI with and
into the Company; (B) Origen Special Holdings Corporation
with and into Origen Special Purpose L.L.C.; (C) Origen
Manufactured Home Financial, Inc. with and into Origen
Manufactured Home Financial, L.L.C., and (D) Origen Insurance
Agency, Inc. with and into Origen Insurance Agency, L.L.C.,
each as more fully described in such Merger Agreement.
(ff) "Mergers" mean the transactions described in the Merger
Agreement.
(gg) "Net Capital Contribution" shall mean the difference between a
Member's total Capital Contributions less amounts distributed
to such Member under Section 3.6(a).
(hh) "Nonrecourse Deductions" has the meaning assigned to such term
in Treasury Regulations Section 1.704-2(c). In general, the
amount of Nonrecourse Deductions for a Company taxable year
equals the excess of the net increase, if any, in the amount
of Company Minimum Gain during such year over the aggregate
amount of distributions during such year of proceeds of a
Nonrecourse Liability that are allocable to an increase in
Company Minimum Gain.
(ii) "Nonrecourse Liability" means any debt of the Company to the
extent that no Member (or a person related to a Member) bears
the economic risk of
-41-
loss for that liability, as described in Treasury Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).
(jj) "Original Member" shall mean Xxxxxxx Financial Services
Corporation, a Michigan corporation.
(kk) "Profits" and "Losses" mean, for each taxable year or other
period, an amount equal to the Company's Federal taxable
income or loss (as is appropriate) for such year or other
period, determined in accordance with Code Section 703(a)
(including all items of income, gain, loss or deduction
required to be stated separately under Section 703(a)(1) of
the Code), with the following adjustments:
(i) Any income of the Company that is exempt from Federal
income tax and not otherwise taken into account in
computing Profits or Losses will be added to taxable
income or loss;
(ii) Any expenditures of the Company described in Code
Section 705(a)(2)(B) or treated as Code Section
705(a)(2)(B) expenditures under Treasury Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Profits or Losses, will be
subtracted from taxable income or loss;
(iii) Gain or loss resulting from any disposition of Company
property (with respect to which gain or loss is
recognized for Federal income tax purposes) will be
computed by reference to the Gross Asset Value of the
property, notwithstanding that the adjusted tax basis of
the property differs from its Gross Asset Value;
(iv) In lieu of depreciation, amortization, and other cost
recovery deductions taken into account in computing
taxable income or loss, there will be taken into account
Depreciation for the taxable year or other period; and
(v) If the Gross Asset Value of any Company asset is
adjusted pursuant to clauses (ii) or (iii) of the
definition of "Gross Asset Value," the amount of such
adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of
computing Profits or Losses.
(ll) "Series A Units" means the Units of membership interest in the
Company designated as Series A Units, which Series A Units
shall have such rights, terms and obligations as otherwise
provided in this Limited Liability Company Agreement.
-42-
(mm) "Series B Units" means the Units of membership interest in the
Company designated as Series B Units, which Series B Units
shall have such rights, terms and obligations as otherwise
provided in this Limited Liability Company Agreement.
(nn) "Series C Units" means the non-voting Units of membership
interest in the Company designated as Series C Units, which
Series C Units shall have such rights, terms and obligations
as otherwise provided in this Limited Liability Company
Agreement.
(oo) Series D Units" means the Units of membership interest in the
Company designated as Series D Units and issued to Key
Employees, which shall have such rights, terms and obligations
as otherwise provided in this Limited Liability Company
Agreement
(pp) "Tax Distribution" means with respect to each Member, for each
Fiscal Year, that amount equal to the Federal, state and local
income taxes for such tax year of such Member then payable on
the difference between the cumulative excess of items of
income and gain over items of loss and deduction allocated to
such Member (as determined by the Company's regularly employed
accountants, assuming such Member was an individual taxable
for such Fiscal Year at the maximum individual Federal, state
and local income tax rates applicable to such Member (after
giving effect to the deductibility of state and local taxes,
as well as any preferential capital gains rates)), less the
aggregate of all amounts distributed to such Member pursuant
to Section 3.5; provided, however, that no such distribution
shall be paid to the Original Member with respect to any tax
allocations described in Sections 3.2(a)(iii), or 3.2(c).
(qq) "Treasury Regulations" includes proposed, temporary and final
regulations promulgated under the Code in effect as of the
date of the filing of the Certificate of Formation and the
corresponding sections of any regulations subsequently issued
that amend or supersede such regulations.
(rr) "Unit" is defined in Section 2.2.
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IN WITNESS HEREOF, the undersigned have executed this Limited Liability
Company Agreement of Origen Financial, L.L.C. on or as of December 18, 2001.
MEMBERS:
XXXXXXX FINANCIAL SERVICES
CORPORATION, a Michigan corporation
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx, CEO
SUI TRS, INC. a Michigan corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx, President
Xxxxxxxx Family LLC, a Michigan
Limited Liability Company
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx, Manager
Xxxxxxxx Holding, LLC, a Michigan
Limited Liability Company
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Xxxx X. Xxxxxxx
Its: Manager
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MANAGERS:
/s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx
/s/ Xxxx Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx
------------------------------
(Independent Manager)
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EXHIBIT A
Series A Series B Series C Total Unit Initial Capital
Member Address Units Units Units Holdings Contribution
------ ------- ----- ----- ----- -------- ------------
Xxxxxxx Financial Services 000 Xxxx Xxxxx Xxxxxx, Xxxxx
Xxxxxxxxxxx 000, Xxxxxxxxxx, XX 00000 200,000 -0- -0- 200,000 $ 0
Xxxxxxxx Family LLC 00000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000 -0- 84,211 -0- 84,211 $ 4,210,526
SUI TRS, Inc. 00000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000 -0- 315,789 -0- 315,789 $15,789,474
Xxxxxxxx Holding, LLC 0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx -0- -0- 400,000 400,000 $20,000,000
------- ------- ------- ------- -----------
Total Initial Capital Contributions
$40,000,000
===========
Total Unit Holdings 200,000 400,000 400,000 1,000,000
======= ======= ======= ===========
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