Exhibit 10.54
LIMITED LIABILITY COMPANY AGREEMENT
OF
ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES LLC
DATED AS OF NOVEMBER 28, 2000
TABLE OF CONTENTS
Page
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ARTICLE I. GENERAL PROVISIONS; CAPITAL CONTRIBUTIONS; DEFINITIONS
Section 1.1 Formation 1
Section 1.2 Name 1
Section 1.3 Purpose 1
Section 1.4 Powers 2
Section 1.5 Limitations on the Company's Powers 2
Section 1.6 Members 4
Section 1.7 Special Member 5
Section 1.8 Registered Office; Registered Agent; Place of Business 5
Section 1.9 Capital Contributions 5
Section 1.10 Term 6
Section 1.11 Limited Liability 6
Section 1.12 No State-Law Partnership 6
ARTICLE II. CAPITAL ACCOUNTS
Section 2.1 Capital Accounts 7
Section 2.2 Computation of Amounts 7
Section 2.3 Distribution in Kind 7
ARTICLE III. DISTRIBUTIONS AND ALLOCATIONS
Section 3.1 Distributions 8
Section 3.2 Allocation of Profits and Losses 8
ARTICLE IV. MANAGEMENT AND MEMBER RIGHTS
Section 4.1 Management Authority 8
Section 4.2 Independent Manager 9
Section 4.3 Officers 10
Section 4.4 Indemnification 12
ARTICLE V. MEMBERS
Section 5.1 Transfer of Company Interest 12
Section 5.2 Member Rights; Meetings 13
Section 5.3 Additional Members 14
Section 5.4 Resignation of a Member 14
Section 5.5 Termination of a Member 14
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Section 5.6 Outside Businesses 14
ARTICLE VI. DURATION
Section 6.1 Duration 15
Section 6.2 Winding Up 15
Section 6.3 Termination 16
ARTICLE VII. VALUATION
Section 7.1 Valuation 16
ARTICLE VIII. BOOKS OF ACCOUNT; MEETINGS
Section 8.1 Books 16
Section 8.2 Fiscal Year 16
Section 8.3 Tax Allocation and Reports 16
ARTICLE IX. MISCELLANEOUS
Section 9.1 Amendments 17
Section 9.2 Successors 17
Section 9.3 Governing Law; Severability 17
Section 9.4 Notices 17
Section 9.5 Complete Agreement; Headings, Counterparts 18
Section 9.6 Partition 18
Section 9.7 Benefits of Agreement; No Third-Party Rights 18
Section 9.8 Binding Agreement 18
Section 9.9 No Strict Construction 18
APPENDIX A. DEFINITIONS
SCHEDULE 1 MEMBER AND MANAGER INFORMATION
EXHIBIT A FORM OF MANAGER AGREEMENT
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THIS LIMITED LIABILITY COMPANY AGREEMENT dated as of November 28,
2000 (this "Agreement"), is adopted, executed and agreed to, for good and
valuable consideration, by the sole Initial Member and the person specified in
accordance with Section 1.7 who shall initially be Xxxxxxx X. Xxxxxxx, upon the
occurrence of events specified herein, as Special Member. Certain terms used
herein are defined in Appendix A attached hereto. Terms used herein not
otherwise defined shall have the meanings set forth in Appendix A to the Pooling
and Servicing Agreement.
ARTICLE I.
GENERAL PROVISIONS; CAPITAL CONTRIBUTIONS; DEFINITIONS
Section 1.1 Formation. The formation of Alliance Laundry Equipment
Receivables LLC (the "Company") pursuant to and in accordance with the Delaware
Limited Liability Company Act, 6 Del. C. ss.18-101, et seq., as amended from
time to time (the "Act"), occurred on November 22, 2000. Xxxxx Xxxxx, as an
authorized person, within the meaning of the Act, has executed, delivered and
filed the certificate of formation of the Company (which certificate of
formation as amended from time to time is referred to as the "Certificate of
Formation"). Upon the Initial Member's (i) execution of this Agreement or a
counterpart hereof and (ii) the making of the capital contribution required by
Section 1.9, such Initial Member shall be admitted to the Company as its sole
initial member. The existence of the Company as a separate legal entity shall
continue until the cancellation of the Certificate of Formation of the Company
as provided in the Act.
Section 1.2 Name. The name of the Company will be "Alliance Laundry
Equipment Receivables LLC" or such other name or names as the Board of Managers
may from time to time designate.
Section 1.3 Purpose.
(a) The purposes of the Company are to engage in the following
activities:
(i) to acquire from time to time any right, title and
interest in and to equipment loans related to commercial laundry
equipment, monies due thereunder and proceeds related thereto,
security interests in the equipment financed thereby and other
assets, insurance policies related thereto and other related assets
(collectively, "Receivables") pursuant to the Basic Documents;
(ii) to acquire, own, hold, service, sell, assign,
pledge, invest, lend and otherwise deal with the Receivables,
related insurance policies, cash, marketable securities and any
proceeds or further rights associated with any of the foregoing
pursuant to the Basic Documents;
(iii) to transfer the Receivables to Alliance Laundry
Equipment Receivables Trust 2000-A (the "Trust");
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(iv) to obtain and sell or otherwise transfer any series
or class of certificates, notes or other securities issued by the
Trust (collectively, "Securities");
(v) to hold and enjoy all of the rights and privileges
of the Securities;
(vi) to perform its obligations under the Basic
Documents; and
(vii) to engage in any activity and to exercise any
powers permitted to limited liability companies under the laws of
the State of Delaware that are related or incidental to the
foregoing and necessary, convenient or advisable to accomplish the
foregoing, including the entering into referral, management,
servicing and administration agreements.
(b) The Company, by or through any of its officers on behalf
of the Company, may enter into and perform its obligations under the Basic
Documents and all documents, agreements or certificates contemplated
thereby or related thereto, all without any further act, vote or approval
of any Member or any of its Managers or officers notwithstanding any other
provision of this Agreement, the Act or applicable law, rule or
regulation. The foregoing authorization shall not be deemed a restriction
on the powers of any officer to enter into other agreements on behalf of
the Company to carry out the purposes set out in this Section 1.3.
Section 1.4 Powers. Subject to Section 1.5, the Company shall (i)
have and exercise all powers necessary, convenient or incidental to accomplish
its purposes as set forth in Section 1.3 and (ii) have and exercise all of the
powers and rights conferred upon limited liability companies formed pursuant to
the Act.
Section 1.5 Limitations on the Company's Powers.
(a) This Section 1.5 is being adopted in order to comply with
certain provisions required in order to qualify the Company as a "special
purpose" entity. The Company shall not engage in any business or activity
other than as set forth in Section 1.3(a) hereof.
(b) The Company shall not incur (i) any indebtedness, whether
or not contingent, in respect of borrowed money or evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances, (ii)
any obligations constituting capitalized lease obligations or the deferred
purchase price of property or (iii) any obligations to guarantee or secure
with a lien upon property of the Company (other than a lien created in
connection with a sale of property) any such indebtedness or obligations
of another person, other than Permitted Indebtedness.
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(c) The Company shall not, so long as any Permitted
Indebtedness is outstanding, amend, alter, change or repeal the definition
of "Independent Manager" or Sections 1.3, 1.4, 1.5, 1.7, 4.1, 4.2, 4.4,
5.1, 5.3, 5.4, 5.5, 6.1, 6.2, 6.3, 9.1 or 9.7 or Schedule 1 of this
Agreement without the unanimous written consent of the Board of Managers
(including each of the Independent Managers) and the satisfaction of the
Rating Agency Condition with respect thereto; provided, however, that
subject to this Section 1.5, the Members shall have the right to amend,
alter, change or repeal any provisions contained in this Agreement in
accordance with Section 9.1.
(d) Notwithstanding any other provision of this Agreement and
any provision of law that otherwise so empowers the Company, the Members
or the Board of Managers, the Company shall not be authorized or
empowered, nor shall the Members or the Board of Managers permit the
Company, without the prior unanimous written consent of the Board of
Managers (including each of the Independent Managers), to take any
Material Action (except as otherwise provided in the Act); provided,
however, that the Board may not vote on, or authorize the taking of, any
Material Action, unless there are at least two Independent Managers then
serving in such capacity.
(e) The Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if
the Board of Managers (including the Independent Managers) shall determine
that the preservation thereof is no longer desirable for the conduct of
its business and that the loss thereof is not disadvantageous in any
material respect to the Insurer and the holders of the Permitted
Indebtedness and the Company shall deliver to the Indenture Trustee and
the Insurer an Officer's Certificate to that effect. The Company shall
also:
(i) maintain its own separate books and records and bank
accounts;
(ii) at all times hold itself out to the public as a
legal entity separate from the Members and any other Person;
(iii) have the Board of Managers composed differently
from that of the Members and any other Person;
(iv) file its own tax returns, if any, as may be
required under applicable law, to the extent (a) not part of a
consolidated group filing a consolidated return or returns or (b)
not treated as a division for tax purposes of another taxpayer, and
pay any taxes so required to be paid under applicable law;
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(v) not commingle its assets with assets of any other
Person (except as contemplated by the Basic Documents);
(vi) conduct its business in its own name and comply
with all organizational formalities to maintain its corporate
existence;
(vii) [reserved];
(viii) pay its own liabilities only out of its own
funds;
(ix) maintain an arm's length relationship with its
Affiliates and its Members;
(x) pay the salaries of its own employees and maintain a
sufficient number of employees in light of its contemplated business
operations, if any;
(xi) not hold out its credit or assets as being
available to satisfy the obligations of others nor guarantee or
become obligated for the debts of any other entity (except as
contemplated by the Basic Documents);
(xii) allocate fairly and reasonably any overhead for
shared office space;
(xiii) use separate stationery, invoices and checks;
(xiv) not pledge its assets for the benefit of any other
Person, except as contemplated by the Basic Documents;
(xv) correct any known misunderstanding regarding its
separate identity;
(xvi) maintain adequate capital in light of its
contemplated business purposes;
(xvii) cause the Board of Managers to meet at least
annually or act pursuant to written consent and keep minutes of such
meetings and actions and observe all other Delaware limited
liability company formalities; and
(xviii) not acquire any obligations or securities of a
Member or any Affiliate (except as contemplated by the Basic
Documents); and
(xix) cause the Directors, Officers, agents and other
representatives of the Company to act at all times with respect to
the Company consistently and in furtherance of the foregoing and in
the best interest of the Company.
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Failure of the Company, or any Member, Manager or officer on behalf of the
Company, to comply with any of the covenants set forth in this Section 1.5
shall not affect the status of the Company as a separate legal entity or
the limited liability of the Member.
Section 1.6 Members. The name and the mailing address of the Initial
Member is set forth on Schedule 1 attached hereto. The Board of Managers shall
amend from time to time Schedule 1 to reflect any future addition, resignation,
withdrawal or termination of Members. Subject to Section 1.5, Members may act by
written consent.
Section 1.7 Special Member. Upon the occurrence of any event that
causes the Initial Member to cease to be a Member of the Company (other than (i)
upon the assignment by the Initial Member of all of its limited liability
company interest in the Company and the admission of the transferee pursuant to
Section 5.1 or (ii) the resignation of the Initial Member and the admission of
an additional Member of the Company pursuant to Section 5.4), one person acting
as an Independent Manager, who shall be specified from time to time by
resolution of the Board of Managers and shall have executed a signature page to
this Agreement and who shall initially be Xxxxxxx X. Xxxxxxx, shall, without any
action of any Person and simultaneously with the Initial Member ceasing to be a
member of the Company, automatically be admitted to the Company as a Special
Member and shall continue the Company without dissolution. No Special Member may
resign from the Company or transfer its rights as Special Member unless (i) a
successor Special Member has been admitted to the Company as Special Member by
executing a counterpart to this Agreement and (ii) such successor has also
accepted its appointment as Independent Manager pursuant to Section 4.2;
provided, however, the Special Member shall automatically cease to be a member
of the Company upon the admission to the Company of a substitute Member. Each
Special Member shall be a member of the Company that has no interest in the
profits, losses and capital of the Company and has no right to receive any
distributions of Company assets. Pursuant to Section 18-301 of the Act, a
Special Member shall not be required to make any capital contributions to the
Company and shall not receive a limited liability company interest in the
Company. A Special Member, in its capacity as Special Member, shall have no
right to vote on, approve or otherwise consent to any action by, or matter
relating to, the Company, including, without limitation, the merger,
consolidation or conversion of the Company. In order to implement the admission
to the Company of each Special Member, each Person acting as an Independent
Manager shall execute a counterpart to this Agreement. Prior to its admission to
the Company as a Special Member, each person acting as an Independent Manager
shall not be a member of the Company.
Section 1.8 Registered Office; Registered Agent; Place of Business.
The registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate of Formation or such other office (which need not be a place of
business of the Company) as the Board of Managers may designate from time to
time in the manner provided by law. The registered agent of the Company in the
State of Delaware shall be the initial registered agent named in the Certificate
of Formation or such other person or persons as the Board of Managers may
designate from
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time to time in the manner provided by law. The Company will maintain a chief
executive office and principal place of business at such place or places inside
or outside the State of Delaware as the Board of Managers may designate from
time to time.
Section 1.9 Capital Contributions.
(a) The Initial Member shall, promptly following the execution of
this Agreement, contribute to the capital of the Company the amount set forth on
Schedule 1. The Initial Member is not required to make any additional capital
contribution to the Company. However, the Initial Member may make additional
capital contributions to the Company at any time at the sole discretion of such
Initial Member. All such contributions shall take the form of (i) the Initial
Member's right, title and interest in and to Authorized Assets or (ii) a cash
transfer. The Persons hereafter admitted as Members of the Company shall make
such contributions of cash (or promissory obligations), property or service to
the Company as shall be determined by the Board of Managers at the time of each
such admission. The Persons hereafter admitted as Members of the Company shall
not be required to make any additional capital contribution to the Company.
However, each such Person may make additional capital contributions to the
Company at any time upon the written consent of such Person. All such additional
contributions shall take the form of a cash transfer or a deed cash transfer as
contemplated by Section 2.02 of the Purchase Agreement unless otherwise approved
by the Board of Managers at the time of each such contribution. The Board of
Managers shall amend Schedule 1 from time to time to reflect any capital
contribution made by any Participant. The provisions of this Agreement,
including this Section 1.9, are intended solely to benefit the Participants and,
to the fullest extent permitted by law, shall not be construed as conferring any
benefit upon any creditor of the Company (and no such creditor of the Company
shall be a third-party beneficiary of this Agreement) and no Participant or
Special Member shall have any duty or obligation to any creditor of the Company
to make any contribution to the Company or to issue any call for capital
pursuant to this Agreement.
(b) No Participant shall have any responsibility to restore any
negative balance in such Participant's Capital Account or to contribute to or in
respect of liabilities or obligations of the Company, whether arising in tort,
contract or otherwise, or return distributions made by the Company except as
required by the Act or other applicable law. The failure of the Company to
observe any formalities or requirements relating to the exercise of its powers
or management of its business or affairs under this Agreement or the Act shall
not be grounds for imposing personal liability on the Participants for
liabilities of the Company.
(c) No interest shall be paid by the Company on capital
contributions or on balances in Capital Accounts.
(d) A Participant shall not be entitled to withdraw any part of its
Capital Account or to receive any distributions from the Company except as
provided in Articles III and VI; nor shall a Participant be entitled to make any
capital contribution to the Company other than as expressly provided herein. Any
Participant may, with the approval of the Board of
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Managers, make loans to the Company, and any loan by a Participant to the
Company shall not be considered to be a capital contribution for any purpose and
shall not result in an increase in the amount of the Capital Account of such
Participant.
Section 1.10 Term. The Company shall continue until dissolved and
terminated in accordance with Article VI of this Agreement.
Section 1.11 Limited Liability. To the fullest extent permitted by
law, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be the debts, obligations and liabilities
solely of the Company, and no Member, Special Member, Manager or any officer of
the Company shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a Member, Special Member,
Manager or officer of the Company.
Section 1.12 No State-Law Partnership. The Participant(s) intend
that the Company not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Participant be a partner or joint
venturer of any other Participant, for any purposes, and neither this Agreement
nor any other document entered into by the Company or any Participant shall be
construed to suggest otherwise.
Section 1.13 Return of Contributions. The contributions of the
Members are to be returned to the Members only upon the termination and
liquidation of the LLC in accordance with Article VI of this Agreement but
contributions may be returned prior to such time with the consent of the
Independent Manager.
ARTICLE II.
CAPITAL ACCOUNTS
Section 2.1 Capital Accounts. A "Capital Account" will be
established for each Participant on the books of the Company and will be
adjusted as follows:
(a) Such Participant's contributions to the capital of the
Company will be credited to such Participant's Capital Account when
received by the Company.
(b) At the end of each fiscal year of the Company and upon
dissolution and winding up of the Company pursuant to Article VI, Profits
for such period allocated to such Participant pursuant to Section 3.2
shall be credited and Losses for such period allocated to such Participant
pursuant to Section 3.2 shall be debited, as the case may be, to such
Participant's Capital Account.
(c) Any amounts distributed to such Participant will be
debited against such Participant's Capital Account.
(d) Such Participant's Capital Account will otherwise be
adjusted in accordance with Treas. Reg. ss.1. 704-1(b)(2)(iv).
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Section 2.2 Computation of Amounts. For purposes of computing the
amount of any item of income, gain, loss, deduction or expense to be reflected
in Capital Accounts, the determination, recognition and classification of each
such item shall be the same as its determination, recognition and classification
for federal income tax purposes; provided that
(a) any income that is exempt from Federal income tax shall be
added to such taxable income or losses and any expenditures of the Company
described in Section 705(a)(2)(B) of the Code or treated as Section
705(a)(2)(B) of the Code expenditures pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(i), shall be subtracted from such taxable income
or losses;
(b) if the Book Value of any Company property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) (in
connection with a distribution of such property) or (f) (in connection
with a revaluation of Capital Accounts), the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such
property; and
(c) if property that is reflected on the books of the Company
has a Book Value that differs from the adjusted tax basis of such
property, depreciation, amortization and gain or loss with respect to such
property shall be determined by reference to such Book Value.
Section 2.3 Distribution in Kind. If property is to be distributed
in kind to the Participant(s) pursuant to this Agreement, (i) the value of such
property shall first be adjusted pursuant to Section 2.2(b) to its value (as
determined pursuant to Article VII as of the date of such distribution), (ii)
the Capital Accounts of the Participant(s) shall be adjusted immediately prior
to the distribution as if such property were sold at its value (as so
determined) and (iii) the value of such property (as so determined) received by
each Participant shall be debited against such Participant's respective Capital
Account at the time of distribution.
ARTICLE III.
DISTRIBUTIONS AND ALLOCATIONS
Section 3.1 Distributions. Distributions of cash or other assets
(except Authorized Assets) of the Company shall be made at such times and in
such amounts as the Board of Managers may determine. Unless the Board of
Managers determines otherwise, distributions shall be made to Participant's pro
rata based on the Percentage Interests held by each Participant. Notwithstanding
any provision to the contrary contained in this Agreement, the Company shall not
make a distribution to any Participant on account of such Participant's interest
in the Company if such distribution would violate Section 18-607 of the Act or
other applicable law or any Basic Document.
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Section 3.2 Allocation of Profits and Losses. Except as may be
required by the Code, each item of income, gain, loss, deduction or expense to
the Company shall be allocated among the Participant(s) in proportion to the
Percentage Interests held by each Participant.
ARTICLE IV.
MANAGEMENT AND MEMBER RIGHTS
Section 4.1 Management Authority.
(a) Subject to Section 1.5, the business and affairs of the
Company shall be managed by or under the direction of a board of one or
more Managers (the "Board of Managers"). Subject to Section 1.5, the
Members may determine at any time in their sole and absolute discretion
the number of Managers to constitute the Board of Managers. The authorized
number of Managers may be increased or decreased by the Members at any
time in their sole and absolute discretion, upon notice to all Managers,
and subject in all cases to Section 1.5. The initial number of Managers
shall be five, two of which shall be Independent Managers pursuant to
Section 4.2. Each Manager elected, designated or appointed shall hold
office until a successor is elected and qualified or until such Manager's
earlier death, resignation or removal. Each Manager (other than the
Independent Managers) shall execute and deliver the Manager Agreement.
Managers need not be Members. Each Manager shall be a natural person.
(b) Subject to Section 1.5, the Board of Managers shall have
the power to do any and all acts necessary, convenient or incidental to or
for the furtherance of the purposes described herein, including all
powers, statutory or otherwise. Subject to Sections 1.3(b) and 1.5, the
Board of Managers has the authority to bind the Company. Notwithstanding
the last sentence of Sentence 18-402 of the Act, no Member, unless such
Member is also a Manager and acts as its capacity as Manager, shall have
any authority to act for or bind the Company but shall have only the right
to vote on or approve the actions herein specified to be voted on or
approved by the Members or as otherwise specified in the Act.
(c) The Board of Managers may hold meetings, both regular and
special, within or outside the State of Delaware. Regular meetings of the
Board of Managers may be held without notice at such time and at such
place as shall from time to time be determined by the Board of Managers.
Special meetings of the Board of Managers may be called by any one or more
of the Managers on not less than one (1) day's (or such shorter period as
shall be agreed to by such Manager) notice to each Manager by telephone,
facsimile, mail, telegram or any other means of communication.
(d) At all meetings of the Board of Managers, a majority of
the Managers shall constitute a quorum for the transaction of business
and, except as otherwise provided in any other provision of this
Agreement, the act of a majority of the
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Managers present at any meeting at which there is a quorum shall be the
act of the Board of Managers. If a quorum shall not be present at any
meeting of the Board of Managers, the Managers present at such meeting may
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. Any action
required or permitted to be taken at any meeting of the Board of Managers
may be taken without a meeting if all members of the Board of Managers, as
the case may be, consent thereto in writing, and the writing or writings
are filed with the minutes of proceedings of the Board of Managers.
(e) Managers may participate in meetings of the Board of
Managers, by means of telephone conference or similar communications
equipment that allows all persons participating in the meeting to hear
each other, and such participation in a meeting shall constitute presence
in person at the meeting and shall be counted for purposes of determining
whether a quorum exists. If all the participants are participating by
telephone conference or similar communications equipment, the meeting
shall be deemed to be held at the principal place of business of the
Company.
(f) The Board of Managers shall have the authority to fix the
compensation of Managers. The Managers may be paid their expenses, if any,
of attendance at meetings of the Board of Managers, which may be a fixed
sum for attendance at each meeting of the Board of Managers or a stated
salary as Manager. No such payment shall preclude any Manager from serving
the Company in any other capacity and receiving compensation therefor.
(g) Subject to Section 4.2, unless otherwise restricted by
law, any Manager or the entire Board of Managers, may be removed, with or
without cause, at any time by the Members, and, subject to Section 4.2,
any vacancy caused by any such removal may be filled by action of the
Members.
(h) Subject to Section 4.2, in exercising the rights and
performing the duties of Managers under this Agreement, each Manager shall
have a fiduciary duty of loyalty and care similar to that of a director of
a business corporation organized under the General Corporation Law of the
State of Delaware.
Section 4.2 Independent Managers. As long as any Permitted
Indebtedness is outstanding, the Members shall cause the Company at all times to
have at least two Independent Managers who will be appointed as Managers by the
Members. The initial Independent Managers shall execute and deliver Independent
Manager Agreements. To the fullest extent permitted by Section 18-1101(c) of the
Act, the Independent Managers shall consider only the interests of the Company,
including its respective creditors, in acting or otherwise voting on any
Material Action or the matters referred to in Section 1.5(c). No resignation or
removal of an Independent Manager, and no appointment of a successor Independent
Manager, shall be effective until the successor Independent Manager shall have
accepted his or her appointment by an Independent Manager Agreement and, if such
person shall be designated as the Special
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Member, shall have executed a counterpart of this Agreement. All right, power
and authority of an Independent Manager shall be limited to the extent necessary
to exercise those rights and perform those duties specifically set forth in this
Agreement. Except as provided in the third sentence of this Section 4.2, in
exercising such Independent Manager's rights and performing such Independent
Manager's duties under this Agreement, an Independent Manager shall have a
fiduciary duty of care similar to that of a director of a business corporation
organized under the General Corporation Law of the State of Delaware.
Notwithstanding the last sentence of Section 18-402 of the Act, except as
expressly provided in this Agreement, the Independent Managers shall not bind
the Company. No Independent Manager shall at any time serve as trustee in
bankruptcy for any Affiliate of the Company.
In the event of a vacancy in the position of Independent Manager,
the Members shall, as soon as practicable, appoint a successor Independent
Manager. Notwithstanding anything to the contrary set forth herein, the Company
shall not take any Material Action until such successor Independent Manager is
appointed.
Section 4.3 Officers.
(a) The officers of the Company shall consist of at least a
Chief Executive Officer, a Secretary and a Treasurer. The officers of the
Company may also consist of one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Any number of offices may be held by
the same person. The Board of Managers shall appoint a Chief Executive
Officer, a Secretary and a Treasurer. The Board of Managers may appoint
such other officers and agents as it shall deem necessary or advisable who
shall hold their offices for such terms and shall exercise such powers and
perform such duties as specified in this Agreement or as shall be
determined from time to time by the Board of Managers. The salaries of all
officers and agents of the Company shall be fixed by or in the manner
prescribed by the Board of Managers. The officers of the Company shall
hold office until their successors are chosen and qualified. Any officer
may be removed at any time, with or without cause, by the affirmative vote
of a majority of the Board of Managers. Any vacancy occurring in any
office of the Company shall be filled by the Board of Managers. The Board
of Managers may delegate to any such officer, person or entity such
authority to act on behalf of the Company as the Board of Managers may
from time to time deem appropriate in its sole discretion.
(b) Chief Executive Officer. The Chief Executive Officer shall
preside at all meetings of the Members, if any, and the Board of Managers,
shall be responsible for the general and active management of the business
of the Company and shall see that all orders and resolutions of the Board
of Managers are carried into effect. The Chief Executive Officer shall
execute all bonds, mortgages and other contracts, except: (i) where
required or permitted by law or this Agreement to be otherwise signed and
executed; (ii) where signing and execution thereof shall be expressly
delegated by the Board of Managers to some other officer or agent of the
Company, including Section 4.1(b); and (iii) as otherwise permitted by
Section 4.3(f).
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(c) Vice President. In the absence of the Chief Executive
Officer or in the event of the Chief Executive Officer's inability or
refusal to act, the Vice President, if any (or in the event there be more
than one Vice President, the Vice Presidents in the order designated by
the Managers, or in the absence of any designation, then in the order of
their election), shall perform the duties of the Chief Executive Officer,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the Chief Executive Officer. The Vice Presidents, if
any, shall perform such other duties and have such other powers as the
Board of Managers may from time to time prescribe.
(d) Secretary and Assistant Secretary. The Secretary shall be
responsible for filing legal documents and maintaining records for the
Company. The Secretary shall attend all meetings of the Board of Managers
and all meetings of the Members, if any, and record all the proceedings of
the meetings of the Company and of the Board of Managers in a book to be
kept for that purpose and shall perform like duties for the standing
committees when required. The Secretary shall give, or cause to be given,
notice of all meetings of the Members, if any, and special meetings of the
Board of Managers, and shall perform such other duties as may be
prescribed by the Board of Managers or the Chief Executive Officer, under
whose supervision the Secretary shall serve. The Assistant Secretary, if
any, or if there be more than one, the Assistant Secretaries in the order
determined by the Board of Managers (or if there be no such determination,
then in order of their election), shall, in the absence of the Secretary
or in the event of the Secretary's inability to act, perform the duties
and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Managers may from time
to time prescribe.
(e) Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the Company funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books belonging to
the Company and shall deposit all moneys and other valuable effects in the
name and to the credit of the Company in such depositories as may be
designated by the Board of Managers. The Treasurer shall disburse the
funds of the Company as may be ordered by the Board of Managers, taking
proper vouchers for such disbursements, and shall render to the Chief
Executive Officer and to the Board of Managers, at its regular meetings or
when the Board of Managers so requires, an account of all of the
Treasurer's transactions and of the financial condition of the Company.
The Assistant Treasurer, if any, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board of Managers (or
if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers
as the Board of Managers may from time to time prescribe.
(f) Officers. The Officers, to the extent of their powers set
forth in this Agreement or otherwise vested in them by the Board of
Managers not inconsistent with
12
this Agreement, shall have the power and authority, subject to Section
1.5, to bind the Company.
(g) When the taking of such action has been authorized by the
Board of Managers, any officer of the Company or any other person or
entity specifically authorized by the Board of Managers may execute any
contract or other agreement or document on behalf of the Company and may
execute and file on behalf of the Company with the Secretary of State of
the State of Delaware any certificates of amendment to the Certificate of
Formation, one or more restated certificates of formation and certificates
of merger or consolidation and, upon the dissolution and completion of
winding up of the Company, at any time when there are no Members, or as
otherwise provided in the Act, a certificate of cancellation canceling the
Certificate of Formation. Except to the extent otherwise provided herein,
each officer shall have a fiduciary duty of loyalty and care similar to
that of officers of business corporations organized under the General
Corporation Law of the State of Delaware.
Section 4.4 Indemnification. Except as limited by law and subject to
the provisions of this Section 4.4, each Person shall be entitled to be
indemnified and held harmless on an as incurred basis by the Company (but only
after first making a claim for indemnification available from any other source
and only to the extent indemnification is not provided by that source) to the
fullest extent permitted under the Act and other applicable law (including
indemnification for negligence, gross negligence and breach of fiduciary duty to
the extent so authorized), as amended from time to time (but, in the case of any
such amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than such law permitted the Company to
provide prior to such amendment), against all losses, liabilities and expenses,
including attorneys' fees and expenses, arising from claims, actions and
proceedings in which such Person may be involved, as a party or otherwise, by
reason of such Person being or having been a Manager, Participant, Special
Member or officer of the Company, or by reason of such Person serving at the
request of the Company as a director, officer, member, manager, partner,
employee or agent of another limited liability company or of a corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan whether or not such Person continues to be
such or serve in such capacity at the time any such loss, liability or expense
is paid or incurred. The rights of indemnification provided in this Section 4.4
will be in addition to any rights to which such Person may otherwise be entitled
by contract or as a matter of law and shall extend to such Person's successors
and assigns. In particular, and without limitation of the foregoing, such Person
shall be entitled to indemnification by the Company against expenses (as
incurred),
13
including attorneys' fees and expenses, incurred by such person or entity upon
the delivery by such Person to the Company of a written undertaking (reasonably
acceptable to the Board of Managers) to repay all amounts so advanced if it
shall ultimately be determined that such person or entity is not entitled to be
indemnified under this Section 4.4. The Company may, to the extent authorized
from time to time by the Board of Managers, grant rights to indemnification and
to advancement of expenses to any employee or agent of the Company to the
fullest extent of the provisions of this Section 4.4 with respect to the
indemnification and advancement of expenses of the Managers, Participants and
officers of the Company, provided however, indemnification of expenses to any
employee or agent of the Company will be subordinated to the full repayment of
the Noteholders.
ARTICLE V.
MEMBERS
Section 5.1 Transfer of Company Interest.
(a) Subject to Section 5.3, no Participant shall sell, assign,
transfer or otherwise dispose of, whether voluntarily or involuntarily or
by operation of law (a "Transfer"), all or any portion of such
Participant's interest in the Company without the prior written consent of
the Board of Managers, which consent may be given or withheld in its sole
discretion. No Participant shall pledge or otherwise encumber all or any
portion of such Participant's interest in the Company, without the prior
written consent of the Board of Managers, which consent may be given or
withheld in its sole and absolute discretion.
(b) Notwithstanding any other provision of this Agreement, any
Transfer by the Participants in contravention of any of the provisions of
this Section 5.1 shall be void and ineffective, and shall not bind, or be
recognized by, the Company.
(c) If and to the extent any Transfer of an interest in the
Company is made pursuant to and in accordance with the terms of this
Agreement, this Agreement (including the Appendix, Schedule and Exhibits
hereto) shall be amended by the Board of Managers to reflect the Transfer
of the Company interest to the transferee, to admit the transferee as a
Member and to reflect the elimination of the transferring Participant (or
the reduction of such transferring Participant's interest in the Company)
and (if and to the extent then required by the Act) a certificate of
amendment to the Certificate of Formation reflecting such admission and
elimination (or reduction) shall be filed in accordance with the Act. The
effectiveness of the Transfer of an interest in the Company permitted
hereunder and the admission of any substitute Member pursuant to Section
5.3 shall be deemed effective upon the later to occur of the time of
Transfer of an interest in the Company to such transferee or the first
date that the Board of Managers receives evidence of such Transfer,
including the terms thereof. If the transferring Participant has
transferred all or any of its interest in the Company pursuant to this
Section 5.1, then, upon the later to occur of the time of such Transfer or
the first date that the Board of
14
Managers receives evidence of such Transfer, including the terms thereof,
the transferring Participant shall cease to be a Participant with respect
to such interest.
(d) Any person or entity who acquires in any manner whatsoever
any interest in the Company, irrespective of whether such person or entity
has accepted and adopted in writing the terms and provisions of this
Agreement, shall be deemed by the acceptance of the benefits of the
acquisition thereof to have (i) made all of the capital contributions,
(ii) received all of the distributions, and (iii) agreed to be subject to
and bound by all of the terms and conditions of this Agreement, that any
predecessor in such interest in the Company made, received and was subject
to or bound.
Section 5.2 Member Rights; Meetings.
(a) No Member, unless such Member is also a Manager and acts
in its capacity as Manager, shall have any right, power or duty, including
the right to approve or vote on any matter, except as expressly required
by the Act or other applicable law or as expressly provided for hereunder.
(b) Unless a greater vote is required by the Act or as
expressly provided for hereunder, the affirmative vote of a Majority in
Interest of the Members entitled to vote shall be required to approve any
proposed action.
(c) Meetings of the Members for the transaction of such
business as may properly come before such Members shall be held at such
place, on such date and at such time as a Member or Members holding a
Majority in Interest shall determine. Special meetings of Members for any
proper purpose or purposes may be called at any time by the Board of
Managers or the Member or Members holding a Majority in Interest. The
Company shall deliver oral or written notice (written notice may be
delivered by mail) stating the date, time, place and purposes of any
meeting to each Member entitled to vote at the meeting. Such notice shall
be given not less than four (4) and not more than sixty (60) days before
the date of the meeting.
(d) Any action required or permitted to be taken at an annual
or special meeting of the Members may be taken without a meeting, without
prior notice, and without a vote, provided that written consents, setting
forth all proposed actions to be taken at such meeting, are signed by the
Members holding at least the minimum Percentage Interest that would be
necessary to authorize or take such action at a meeting at which all
Members entitled to vote on such action were present and voted. Every
written consent shall bear the date and signature of each Member who signs
such consent. Prompt notice of the taking of action without a meeting by
less than unanimous written consent shall be given to all Members who have
not consented in writing to such action.
15
Section 5.3 Additional Members. The Board of Managers shall have the
sole right to admit additional Members upon such terms and conditions and at
such time or times as the Board of Managers shall in its sole discretion
determine; provided that, notwithstanding the foregoing, so long as any
Permitted Indebtedness remains outstanding, no additional Members may be
admitted to the Company. In connection with any such admission, the Board of
Managers shall amend Schedule 1 to reflect the name, address and capital
contribution of the additional Member and the new Percentage Interests of all
Participants.
Section 5.4 Resignation of a Member. So long as any Permitted
Indebtedness is outstanding, the Initial Member may not resign without prior
written consent of the Indenture Trustee and the Insurer. A Member (other than
the Initial Member) may resign from the Company with the written consent of the
Board of Managers. The sole Member shall not be permitted to resign pursuant to
this Section 5.4 unless an additional member of the Company is admitted to the
Company. Such admission shall be deemed effective immediately prior to the
resignation, and, immediately following such admission, the resigning Member
shall cease to be a member of the Company.
Section 5.5 Termination of a Member. Notwithstanding the provisions
of Section 5.4, a person or entity will no longer be a Member for purposes of
this Agreement upon an Event of Withdrawal. The Terminated Member shall only be
entitled to continue to receive allocation of Profits and Losses and
distributions of the Company, including distributions pursuant to Article V
hereof, as and when paid by the Company, to the same extent such Terminated
Member was entitled to such distributions as a Member. Except as provided in
Section 8.1, such Terminated Member's successors and assigns will not be
entitled to participate in any Company decision or determination, and such
Terminated Member's successors and assigns will acquire only such Terminated
Member's right to receive allocation of Profits and Losses and to share in
Company distributions.
Section 5.6 Outside Businesses. Any Participant or Special Member
may engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company, and the Company and the Participants shall have no rights by
virtue of this Agreement in and to such independent ventures or the income or
gains derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Company, shall not be deemed wrongful or
improper. No Participant shall be obligated to present any particular investment
opportunity to the Company even if such opportunity is of a character that, if
presented to the Company, could be taken by the Company, and any Participant
shall have the right to take for such Participant's own account (individually or
as a partner or fiduciary) or to recommend to others any such particular
investment opportunity.
Section 5.7 Waiver of Rejection Right. In the event of a Bankruptcy
of the Member, the Member hereby agrees to waive any right to reject this
Agreement under the federal bankruptcy laws.
ARTICLE VI.
DURATION
16
Section 6.1 Duration. Subject to the provisions of Section 6.2 of
this Agreement, the Company shall be dissolved and its affairs wound up and
terminated upon the first to occur of the following:
(a) The determination of the Board of Managers including the
Independent Managers; or
(b) The entry of a decree of judicial dissolution under
Section 18-802 of the Act.
Upon the occurrence of any event that causes the last remaining member of the
Company to cease to be a member of the Company, to the fullest extent permitted
by law, the personal representative of such member is hereby authorized to, and
shall, within 90 days after the occurrence of the event that terminated the
continued membership of such member in the Company, agree in writing (i) to
continue the Company and (ii) to the admission of the personal representative or
its nominee or designee, as the case may be, as a substitute member of the
Company, effective as of the occurrence of the event that terminated the
continued membership of the last remaining member of the Company in the Company
Except as otherwise set forth in this Article VI, the Members intend for the
Company to have perpetual existence. Notwithstanding any other provision of this
Agreement, the Bankruptcy of any Member of Special Member shall not cause such
Member or Special Member to cease to be a member of the Company and upon the
occurrence of such an event, the business of the Company shall continue without
dissolution.
Section 6.2 Winding Up.
Upon dissolution of the Company, the Company shall be liquidated in
an orderly manner. The Board of Managers shall be the liquidator pursuant to
this Agreement and shall proceed diligently to wind up the affairs of the
Company and make final distributions as provided herein and in the Act. The
costs of liquidation shall be borne as the Company's expense. The steps to be
accomplished by the liquidator are as follows:
(a) First, the liquidator shall satisfy all of the Company's
debts and liabilities to creditors other than Participants (whether by
payment or the reasonable provision for payment thereof);
(b) Second, the liquidator shall satisfy all of the Company's
debts and liabilities to Participants (whether by payment or the
reasonable provision for payment thereof);
(c) Third, all remaining Authorized Assets shall be sold on
terms and conditions as favorable to the Company as are obtainable in the
market; provided, that no Affiliate of the Company shall be entitled to
acquire such Authorized Assets unless the
17
purchase price to be paid by such Affiliate is at least as high as the
price specified in the highest bona fide bid for such Authorized Assets
from a third party, provided, however, that Affiliates of the Company
shall be entitled to acquire such Authorized Assets if (x) no bona fide
bids are received for such Authorized Assets (after reasonable efforts to
obtain such bids) and (y) such acquisition is at a price at least equal to
the fair value of such Authorized Assets, as established in written advice
to the Company from a Person, selected by the Independent Managers,
engaged in the brokering or valuation of financial assets such as
Authorized Assets; and
(d) Fourth, all remaining assets shall be distributed to the
Participants in accordance with Section 3.1.
Section 6.3 Termination. The Company shall terminate when all of the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Participants in the manner provided for in this Article VI, and the Certificate
of Formation of the Company shall have been canceled in the manner required by
the Act.
ARTICLE VII.
VALUATION
Section 7.1 Valuation. For purposes of this Agreement, the value of
any property contributed by or distributed to any Participant shall be valued as
determined by the Board of Managers.
ARTICLE VIII
BOOKS OF ACCOUNT; MEETINGS
Section 8.1 Books. The Board of Managers will maintain on behalf of
the Company complete and accurate books of account of the Company's affairs at
the Company's principal office, which books will be open to inspection by any
Member (or such Member's authorized representative) at any time during ordinary
business hours and shall be maintained in accordance with the Act.
Section 8.2 Fiscal Year. The fiscal year of the Company shall end on
December 31 of each year.
Section 8.3 Tax Allocation and Reports.
(a) The income, gains, losses, deductions and credits of the
Company will be allocated, for federal, state and local income tax
purposes, among the Participants in accordance with the allocation of such
income, gains, losses, deductions and credits among the Participants for
computing their Capital Accounts, except as otherwise provided in the Code
or other applicable law.
18
(b) In accordance with Section 704(c) of the Code and the
Treasury Regulations thereunder, income, gain, loss, deduction and expense
with respect to any property contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Participants so as
to take account of any variation between the adjusted basis of such
property to the Company for federal income tax purposes and its fair
market value at the time of contribution.
(c) Within 75 days after the end of each fiscal year, the Tax
Matters Partner (as defined below) shall cause the Company to furnish each
Participant with a copy of the Company's tax return and form K-1 for such
fiscal year.
(d) The Company hereby designates the Initial Member to act as
the "Tax Matters Partner" (as defined in Section 6231(a)(7) of the Code)
in accordance with Sections 6221 through 6233 of the Code.
(e) If and for so long as the Company has only one Member, the
Company shall make an election on IRS Form 8832 to be treated as a
domestic entity with a single owner electing to be disregarded as a
separate entity.
ARTICLE IX.
MISCELLANEOUS
Section 9.1 Amendments. Subject to Section 1.5, this Agreement may
be amended or modified from time to time only by a written instrument adopted by
the unanimous consent of its Board of Managers; provided, however, that any
amendment or modification reducing disproportionately a Participant's Percentage
Interest or other interest in the profits or losses or in distributions or
increasing such Participant's capital contribution shall be effective only with
such Participant's consent. Notwithstanding anything to the contrary in this
Agreement, so long as the Insurer is the Controlling Party and any Permitted
Indebtedness is outstanding, this Agreement may not be modified, altered,
supplemented or amended without prior written consent of the Controlling Party.
Section 9.2 Successors. Except as otherwise provided herein, this
Agreement will inure to the benefit of and be binding upon the Participants and
their respective legal representatives, heirs, successors and permitted assigns.
Section 9.3 Governing Law; Severability. The Agreement will be
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of laws, and, to the maximum extent possible, in such
manner as to comply with the terms and conditions of the Act. If it is
determined by a court of competent jurisdiction that any provision of this
Agreement is invalid under applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
Section 9.4 Notices. All notices, demands and other communications
to be given and delivered under or by reason of provisions under this Agreement
shall be in writing
19
and shall be deemed to have been given when personally delivered, mailed by
first class mail (postage prepaid and return receipt requested), sent by
telecopy or sent by reputable overnight courier service (charges prepaid) to the
addresses or telecopy numbers set forth in Schedule 1 hereto or to such other
addresses or telecopy numbers as have been supplied in writing to the Company.
Section 9.5 Complete Agreement; Headings, Counterparts. This
Agreement terminates and supersedes all other agreements concerning the subject
matter hereof previously entered into among any of the parties. Descriptive
headings are for convenience only and will not control or affect the meaning or
construction of any provision of this Agreement. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, feminine or the neuter gender shall include the masculine, the
feminine and the neuter. This Agreement may be executed in any number of
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts together will constitute one agreement.
Section 9.6 Partition. Except as otherwise expressly provided in
this Agreement, to the fullest extent permitted by law, each Participant and
Special Member hereby irrevocably waives any right or power that such
Participant might have to cause the Company or any of its assets to be
partitioned, to cause the appointment of a receiver for all or any portion of
the assets of the Company, to compel any sale of all or any portion of the
assets of the Company pursuant to any applicable law or to file a complaint or
to institute any proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of the Company. No Participant shall have
any interest in any specific assets of the Company, and no Participant shall
have the status of a creditor with respect to any distribution pursuant to
Section 3.1 hereof. The interest of the Participants in the Company is personal
property.
Section 9.7 Benefits of Agreement; Third-Party Rights. The Insurer
and its successors and assigns shall be a third party beneficiary of this
Agreement, as it may be supplemented or amended, and shall be entitled to rely
upon and directly to enforce such provisions of this Agreement. None of the
provisions of this Agreement shall be for the benefit of or enforceable by any
creditor of the Company or by any creditor of any Participant or Special Member.
Nothing in this Agreement shall be deemed to create any right in any Person
(except as otherwise provided in Section 4.4) not a party hereto, and this
Agreement shall not be construed in any respect to be a contract in whole or in
part for the benefit of any third Person.
Section 9.8 Binding Agreement. Notwithstanding any other provision
of this Agreement, each Member agrees that this Agreement constitutes a legal,
valid and binding agreement of the Member, and is enforceable against the Member
by the Independent Managers, in accordance with its terms. In addition, the
Independent Manager shall be a intended beneficiary of this Agreement except as
provided in Section 9.8.
20
Section 9.9 No Strict Construction. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Persons (if more than one) then parties hereto, and
no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement. In
addition, the Independent Manager shall be an intended beneficiary of this
Agreement.
Section 9.10 Effectiveness. Pursuant to Section 18-201(d) of the
Act, this Agreement shall be effective as of the Closing Date.
* * * * * * * * *
21
IN WITNESS WHEREOF, the Initial Member hereto has caused this
Agreement to be signed as of the date first above written.
INITIAL MEMBER:
ALLIANCE LAUNDRY SYSTEMS LLC
By: ___________________________________________
Xxxxx X. Xxxxxx
Vice President, Chief Financial Officer and
Treasurer
IN WITNESS WHEREOF, the Special Member hereto has caused this
Agreement to be signed as of November 28, 2000.
SPECIAL MEMBER:
Name:_______________________________________
Xxxxxxx X. Xxxxxxx
1
APPENDIX A.
DEFINITIONS
A. When used in this Agreement, the following terms not otherwise defined herein
have the following meanings:
"Act" has the meaning set forth in Section 1.1.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly Controlling or Controlled by or under direct or indirect common
Control with such Person.
"Agreement" has the meaning set forth in the preamble to this Agreement.
"Assignee" means person or entity to whom an Company interest has been
transferred in a Transfer described in Section 4.6, unless and until such person
or entity becomes a Member with respect to such Company interest.
"Authorized Assets" means Equipment Notes and related assets.
"Bankruptcy" means, with respect to any Person, if such Person (i) makes
an assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it
an order for relief, in any bankruptcy or insolvency proceeding, (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, (v) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against it in
any proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or of all or any
substantial part of its seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, if the proceeding has not been dismissed, or if within 90 days
after the appointment without such Person's consent or acquiescence of a
trustee, receiver or liquidator of such Person or of all or any substantial part
of its properties, the appointment is not vacated or stayed, or within 90 days
after the expiration of any such stay, the appointment is not vacated. With
respect to the Member, the foregoing definition of "Bankruptcy" is intended to
replace and shall supersede and replace the definition of "Bankruptcy" set forth
in Sections 18-101(1) and 18-304 of the Act.
"Basic Documents" means the Certificate of Trust, the Trust Agreement, the
Purchase Agreement, the Pooling and Servicing Agreement, any Assignment, the
Custodial Agreement, the Administration Agreement, the Indenture, the Note
Depository Agreement, the Ambac Insurance Agreement, the Lockbox Agreement, the
Independent Manager Agreements, the Independent Manager Services Agreement and
the other documents and certificates delivered in connection therewith.
"Book Value" means, with respect to any Company property, the Company's
adjusted basis for federal income tax purposes, except that the initial Book
Value of any property
2
contributed by a Member to the Company shall be the value of such property on
the date of such contribution, as agreed by the Board of Managers and the Member
contributing the property, and the Book Value of any Company property shall be
adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) (in
connection with a distribution of such property) or (f) (in connection with a
revaluation of Capital Accounts).
"Board of Managers" has the meaning set forth in Section 4.1(a).
"Capital Account" has the meaning set forth in Section 2.1.
"Certificate of Formation" has the meaning set forth in Section 1.1.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Company" has the meaning set forth in Section 1.1.
"Control" means the possession, directly or indirectly, or the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities or general partnership or managing
member interests, by contract or otherwise. "Controlling" and "Controlled" shall
have correlative meanings.
"Event of Withdrawal" means the death or dissolution of a Member.
"Independent Manager" means a natural person who, for the five-year period
prior to such person's appointment as Independent Manager (or independent
director with respect to corporations) has not been, and during the continuation
of such person's service as Independent Manager such Independent Manager is not:
(i) an employee, director, stockholder, manager, partner or officer of the
Company or any of its Affiliates (other than such person's service as an
Independent Manager of the Company or any of the Initial Member's Affiliates);
(ii) a customer or supplier of the Company or any of its Affiliates; (iii) a
beneficial owner at the time of such individual's appointment as an Independent
Manager, or at any time thereafter while serving as an Independent Manager, of
more than 2% of the voting securities of the Initial Member of any of its
subsidiaries or affiliates; (iv) is not affiliated with a significant customer,
supplier or creditor of the Initial Member or any of its affiliates or
subsidiaries; (v) does not have any significant personal service contracts with
the Initial Member or any of its affiliates or subsidiaries; (vi) has prior
experience as an independent director for a corporation whose charter documents
require the unanimous consent of all independent directors thereof before such
corporation could consent to the institution of bankruptcy or insolvency
proceedings against it or could file a petition seeking relief under any
applicable federal or state law; (vii) has at least three years of employment
experience with one or more entities that provide, in the ordinary course of
their respective businesses, advisory, management or placement services to
issuers of securitization or structured finance instruments, agreements or
securities; or (viii) is not any member of the immediate family of a person
described in (i) or (ii). An Independent
3
Manager of the Company is hereby designated as a Manager of the Company within
the meaning of Section 18-101(10) of the Act.
"Independent Manager Agreement" means an agreement by and between the
Company and an Independent Manager relating to such Independent Manager's
position as Independent Manager.
"Independent Manager Services Agreement" means an agreement by and between
the Company and a Person relating to the identification of qualified individuals
to serve as Independent Managers.
"Initial Member" means Alliance Laundry Systems LLC, a Delaware limited
liability company, as the sole member of the Company.
"Lockbox Agreements" means any agreement relating to the provision of
lockbox or other account services.
"Losses" for any period means all items of Company loss, deduction and
expense for such period determined according to Section 2.2.
"Majority in Interest" means a majority of Percentage Interests of all
Participants.
"Manager" means each Person identified as such on Schedule 1 as a manager,
and any successor thereto. Each Manager is hereby designated as a "manager" of
the Company within the meaning of Section 18-101 (10) of the Act.
"Manager Agreement" means the Manager Agreement in the form attached
hereto as Exhibit A.
"Material Action" means to consolidate or merge the Company with or into
any Person, or sell all or substantially all of the assets of the Company, or to
institute proceedings to have the Company or the Issuer be adjudicated bankrupt
or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Company or the Issuer or file a petition seeking, or
consent to, reorganization or relief with respect to the Company or the Issuer
under any applicable federal or state law relating to bankruptcy, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or the Issuer or a substantial part of
its property, or make any assignment (or consent to the making of any
assignment) for the benefit of creditors of the Company, or admit in writing the
Company's inability to pay its debts generally as they become due, or, to the
fullest extent permitted by law, take action in furtherance of any such action,
or dissolve or liquidate (or consent to the dissolution or liquidation of) the
Company or the Issuer or except to the extent permitted by the Basic Documents,
engage in any business activity not contemplated hereby, sell all or
substantially all of the assets of the Company or incur debt not contemplated by
the Basic Documents.
4
"Member" means any of the parties identified on Schedule 1 as a member or
admitted as a member after the date of this Agreement in accordance with the
terms hereof, in each case for so long as such person continues to be a member
hereunder; provided, however, the term "Member" shall not include the Special
Members.
"Officer's Certificate" means a certificate signed by any officer of the
Company who is authorized to act for the Company in matters relating to the
Company.
"Participant" means a Member, a Terminated Member or an Assignee.
"Percentage Interest" means, in respect of each Participant, such
Participant's interest in the income, gains, losses, deductions and expenses of
the Company as set forth on Schedule 1.
"Permitted Indebtedness" means the indebtedness for borrowed money of the
Company and the other liabilities and obligations arising under the Notes and
the other Basic Documents.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of November 28, 2000 among the Initial Member, the Company
and Alliance Laundry Equipment Receivables Trust 2000-A.
"Profits" for any period means all items of Company income and gain for
such period determined according to Section 2.2.
"Special Member" means, upon such Person's admission to the Company as a
member of the Company pursuant to Section 1.7, a person acting as an Independent
Manager, in such person's capacity as a member of the Company. A Special Member
shall have only the rights and duties expressly set forth in this Agreement.
"Terminated Member" means a person who has ceased to be a Member pursuant
to Section 5.5.
"Transfer" has the meaning set forth in Section 5.1(a).
B. Rules of Construction. Definitions in this Agreement apply equally to both
the singular and plural forms of the defined terms. The words "include" and
"including" shall be deemed to be followed by the phrase "without limitation."
The terms "herein," "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Section, paragraph
or subdivision. The Section titles appear as a matter of convenience only and
shall not affect the interpretation of this Agreement. All Section, paragraph,
clause, Exhibit or Schedule references not attributed to a particular document
shall be references to such parts of this Agreement.
5
CERTIFICATE OF FORMATION
OF
ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES LLC
This Certificate of Formation of Alliance Laundry Equipment
Receivables LLC (the "LLC"), dated as of November __, 2000, is being duly
executed and filed by [__________], as an authorized person, to form a limited
liability company under the Delaware Limited Liability Company Act (6 Del. C.
ss.18-101, et seq.).
FIRST. The name of the limited liability company formed hereby is
Alliance Laundry Equipment Receivables LLC.
SECOND. The address of the registered office of the LLC in the State
of Delaware is c/o The Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
THIRD. The name and address of the registered agent for service of
process on the LLC in the State of Delaware is The Corporation Trust Company,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.
_________________________________
Name:
Authorized Person
