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EXHIBIT 10.13
AGREEMENT TO RESTRUCTURE
THIS AGREEMENT is made effective April 1, 1997, by and among
UNIVERSITY BANCORP, INC., a Delaware bank holding company ("University
Bancorp") and UNIVERSITY BANK, a Michigan banking corporation ("University
Bank") and XXXX XXXXXXXXXX, XXXXXXX X. XXXX and XXXXXXXX OPT XXXXXXXX.
BACKGROUND
On February 13, 1996, University Bank and University Bancorp filed
Articles of Organization to form Varsity Mortgage Services, L.L.C., a Michigan
limited liability company (the "Company"). In connection therewith, University
Bancorp, University Bank and Xxxx Xxxxxxxxxx, Xxxxxxx X. Xxxx and Xxxxxxxx Opt
Xxxxxxxx, xx managers, executed the Operating Agreement of the Company (the
"1996 Operating Agreement").
The parties now wish to amend and restate the 1996 Operating
Agreement to create a class of non-voting members of the Company, to remove
University Bancorp from the Company and take certain other actions described in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions set forth below, the parties agree as follows:
TERMS AND CONDITIONS
1. Restatement of 1996 Operating Agreement. The 1996 Operating
Agreement is hereby amended and restated in the form attached hereto as Exhibit
"A" (the "Amended and Restated Operating Agreement") whereby, among other
changes, a class of non-voting members of the Company is created and University
Bancorp is no longer a Member of the Company. Contemporaneously with execution
of this Agreement, University Bank and Xxxx Xxxxxxxxxx, Xxxxxxx X. Xxxx and
Xxxxxxxx Opt Xxxxxxxx (the "Non-Voting Members"), shall execute the Amended and
Restated Operating Agreement.
2. Membership Interest. As of the date of this Agreement, the
membership interest of the Company shall be owned as follows:
Voting Membership Interest Non-Voting Membership Interest
-------------------------- ------------------------------
University Bank 100% Xxxx Xxxxxxxxxx 25%
Xxxxxxx X. Xxxx 25%
Xxxxxxxx Opt Xxxxxxxx 50%
To the extent necessary, this Section 2 shall constitute an assignment of
membership interest to cause the membership interests of the Company to be
owned as set forth herein.
3. Capital Accounts. Giving effect to the distributions approved
by resolution pursuant to Section 5 below, the parties agree and acknowledge
that as of
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the date of this Agreement: (a) the capital account of University Bank is
$300,000; and (b) the capital account of each of the Non-Voting Members is
zero.
4. Termination of Net Branch Agreement. On January 12, 1996,
University Bank and Xxxx Xxxxxxxxxx, Xxxxxxx X. Xxxx and Xxxxxxxx Opt Xxxxxxxx
executed a Net Branch Agreement which has been amended from time to time (the
"Net Branch Agreement"). The Net Branch Agreement, as amended, is hereby
terminated together with all rights, duties and obligations thereunder.
5. Approval of Resolutions. Contemporaneously with execution of
this Agreement: (i) University Bank shall approve the resolutions attached
hereto as Exhibit "B" by unanimous written consent; and (ii) Xxxx Xxxxxxxxxx,
Xxxxxxx X. Xxxx and Xxxxxxxx Opt Xxxxxxxx, xx Managers of the Company, shall
approve the resolutions attached hereto as Exhibit "C" by unanimous written
consent. To the extent the Non- Voting Members' consent is required for any of
the actions contemplated in the resolutions attached hereto as Exhibit "B",
such consent is hereby granted by the Non-Voting Members and such action is
approved. Exhibits "B" and "C" and any of the provisions contained therein
cannot be rescinded without the consent of the Non-Voting Members.
6. Employment at Will. Each of Xxxx Xxxxxxxxxx, Xxxxxxx X. Xxxx
and Xxxxxxxx Opt Xxxxxxxx hereby acknowledge that he or she is an employee "at
will" and may be terminated from employment with the Company at any time for
any reason or no reason whatsoever.
7. Investment Representation. Each of the Non-Voting Members
acknowledges that his or her non-voting membership interest in the Company is
being offered in reliance upon an exemption from registration under the
Securities Act of 1933, and the Michigan Uniform Securities Act, and
accordingly, represents and warrants to the Company, as follows:
(a) The non-voting membership interest
is being purchased for the Non-Voting Member's own investment and not
with a view to the distribution or resale thereof;
(b) The Non-Voting Member will be
actively engaged in the management of the Company, and has, and will
have, full access to the books and records of the Company, and is
knowledgeable and has experience in financial and business matters
necessary to evaluate the merits or risk of an investment in the
non-voting membership interest;
(c) The Non-Voting Member understands
that the transferability of the non-voting membership interest is
severely limited and that the Non-Voting Member must continue to bear
the economic risk of this investment for an indefinite period as the
non-voting membership interest has not been registered under the
Securities Act of 1933 or any other state securities law, and
therefore, cannot be offered or sold unless it is subsequently
registered under such acts or an exemption from such registration is
available;
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(d) The Non-Voting Member acknowledges
that no commission has been paid by the Non-Voting Member with respect
to acquisition of the non-voting membership interest and the
Non-Voting Member did not learn of or discover the opportunity to
purchase the non-voting membership interest by virtue of any general
advertising or general solicitations; and
(e) The Non-Voting Member understands
that the non-voting membership interest does not confer general voting
rights on the Non-Voting Member and accordingly, operation of the
Company will be subject to the exclusive control and direction of
University Bank who has authority to make decisions affecting the
Company and authority to elect or remove the managers of the Company.
8. Release. Each of the parties to this Agreement hereby
releases each of the other parties to this Agreement and the Company of and
from any and all obligations, duties and liabilities arising under the 1996
Operating Agreement and the Net Branch Agreement.
9. University Bank Resolutions. The President of University Bank
will approve the Resolutions attached hereto as Exhibit "D" pursuant to the
authority granted by the Board of Directors of University Bank at its June 24,
1997 meeting.
10. Miscellaneous Provisions.
10.1 Benefit and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and their
respective successors, assigns, heirs and legal representatives. No party
shall assign or attempt to assign this Agreement without the prior written
consent of the other parties hereto.
10.2 Choice of Law and Choice of Forum. This
Agreement shall be governed, construed and enforced in accordance with the laws
of the State of Michigan. Unless otherwise precluded by Section 10.3 hereof,
any and all actions concerning any dispute arising hereunder shall be filed and
maintained only in a state or federal court sitting in the State of Michigan,
and the parties hereto consent and submit to the jurisdiction of such state or
federal court.
10.3 Arbitration. No civil action concerning any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, shall be instituted before any court, and all such controversies or
claims shall be submitted to final and binding arbitration in Ann Arbor,
Michigan, in accordance with the rules then pertaining of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court having jurisdiction thereof.
10.4 Counterparts. This Agreement may be signed in
any number of counterparts with the same effect as if the signature on each
such counterpart were upon the same instrument. Each executed copy shall be
deemed an executed original for all purposes.
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10.5 Entire Agreement. This Agreement, and all
documents and exhibits prepared or executed in connection herewith, represent
the entire understanding and agreement between the parties with respect to the
subject matter hereof, supersede all prior agreements or negotiations between
such parties, and may be amended, supplemented or changed only by an agreement
in writing which makes specific reference to this Agreement or the agreement
delivered pursuant hereto, as the case may be, and which is signed by the party
against whom enforcement of any such amendment, supplement or modification is
sought.
10.6 Acknowledgement of Legal Representation. Each
of the Non-Voting Members acknowledges that this Agreement and the documents
delivered in connection herewith have been prepared by legal counsel to
University Bank and each of the Non-Voting Members has been advised to obtain
separate legal counsel to represent the legal interests of such Non-Voting
Member.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective the day and year first set forth above.
UNIVERSITY BANK
By: Xxxx Xxxxxx
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Its: President
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The Non-Voting Members:
Xxxx Xxxxxxxxxx Xxxxxxx X. Xxxx
------------------------------ ------------------------------
Xxxx Xxxxxxxxxx Xxxxxxx X. Xxxx
Xxxxxxxx Opt Xxxxxxxx
------------------------------
Xxxxxxxx Opt Xxxxxxxx
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AMENDED AND RESTATED
OPERATIONG AGREEMENT
OF
VARSITY MORTAGAGE SERVICES, L.L.C.
(A MICHIGAN LIMITED LIABILITY COMPANY)
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VARSITY MORTGAGE SERVICES, L.L.C.
(A MICHIGAN LIMITED LIABILITY COMPANY)
AMENDED AND RESTATED
OPERATING AGREEMENT
Table of Contents
Page
ARTICLE I - ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Name of Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.03 Duration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.04 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.05 Legal Status of Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.06 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.01 Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.02 Additional Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.03 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.04 Liability to Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.05 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.06 Meetings and Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.07 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.08 Member to Vote in Person or by Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.09 Action by Written Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.10 No Authority to Commence Civil Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.11 Independent Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.12 Transactions Permitted With Members and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.13 Participation by Communication Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III - MANAGEMENT BY MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.01 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.02 Actions Requiring Unanimous Consent of all Members . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.03 Actions Requiring Unanimous Consent of Voting Members . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.04 Number and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.05 Limitation of Authority of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.06 Meetings and Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.07 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.08 Managers to Have One Vote Each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.09 Action by Unanimous Written Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.10 Resignation and Removal of Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.11 Discharge of Duties; Reliance on Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.12 Accountable as Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.13 Authority to Execute Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.14 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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Section 3.15 Removal, Resignation or Replacement of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV - CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.01 Membership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.02 Subsequent Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.03 Failure to Make Additional Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.04 Contribution Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.05 Loans by Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.06 Income Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.07 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V - ALLOCATIONS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.01 Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.02 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI - WITHDRAWAL; TRANSFER OF MEMBERSHIP INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.01 No Withdrawal of Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.02 Transferability of Membership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.03 Permitted Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.04 Bankrupt Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.05 Action or Derivative Proceeding by Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.06. Involuntary Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.07 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.08 Purchase Price and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.09 Sale of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII - TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.01 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.02 Accounting and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.03 Indemnification of Tax Matters Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII - DISSOLUTION, LIQUIDATION, AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.01 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.02 Certificate of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.03 Winding Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.04 Liquidation and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.05 Deficit Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.01 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.02 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.03 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.04 Choice of Law and Choice of Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.05 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.06 Further Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.07 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.08 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 9.09 Conflict With Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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AMENDED AND RESTATED
OPERATING AGREEMENT
OF
VARSITY MORTGAGE SERVICES, L.L.C.
(A MICHIGAN LIMITED LIABILITY COMPANY)
This AMENDED AND RESTATED OPERATING AGREEMENT of Varsity Mortgage
Services, L.L.C. (the "Company") made effective as of April 1, 1997, is hereby
adopted and agreed to, for good and valuable consideration, by the Members (as
defined below).
ARTICLE I - ORGANIZATION
Section 1.01 Organization. The Company has been organized as a
Michigan limited liability company under the Michigan Limited Liability Company
Act (the "MLLCA") pursuant to the Company's Articles of Organization (the
"Articles"), filed with the Michigan Department of Consumer and Industry
Services.
Section 1.02 Name of Company. The name of the Company shall be
Varsity Mortgage Services, L.L.C. All business of the Company shall be
transacted in that name or in other names that are selected by the Company from
time to time and are in compliance with the MLLCA.
Section 1.03 Duration. The Company began its existence upon the
filing of its Articles of Organization with the Michigan Department of Consumer
and Industry Services, and it shall continue in existence for the period of
time specified in the Articles or in conformity with the provisions of this
Agreement.
Section 1.04 Purpose. The purposes of the Company is to engage in
any activity for which limited liability companies may be formed under the
MLLCA. The Company shall have all the powers necessary or convenient to effect
any purpose for which it is formed, including all powers granted by the MLLCA.
Section 1.05 Legal Status of Company. The Members do not intend
that the Company be a co-partnership, limited partnership or corporation, and
none of the Members or Managers of the Company is a partner of any other Member
or Manager, except for purposes of federal and state tax law, and this
Agreement shall not be construed as providing otherwise.
Section 1.06 Definitions. Terms used herein which are not
otherwise defined shall have the meaning, if given, in the MLLCA. Any
reference herein to the "Agreement" shall mean this Amended and Restated
Operating Agreement.
ARTICLE II - MEMBERS
Section 2.01 Members. The members of the Company are the persons
executing this Agreement effective as of the date hereof as members, each of
which is admitted to the Company as a member effective upon such execution (the
"Members"). There shall be two classes of Members, "Voting Members" and
"Non-Voting Members" and two classes of membership interests, "Voting
Membership Interest" and "Non-Voting Membership Interest."
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Section 2.02 Additional Members. Additional members may be
admitted, and the capital contribution to be made thereby shall be set, only
upon the approval (written or otherwise) of 100% of the existing Members.
Section 2.03 Information. In addition to the other rights
specifically set forth in this Agreement, each Member is entitled to all
information to which that Member is entitled to have access pursuant to Section
503 of the MLLCA under the circumstances and subject to the conditions therein
stated, including without limitation the books, records of account, business
records, the Articles and this Agreement.
Section 2.04 Liability to Third Parties. Unless provided by law
or expressly assumed, a person who is a Member or Manager, or both, shall not
be liable for the acts, debts, or liabilities of the Company, including those
under a judgment, decree or order of a court.
Section 2.05 Voting Rights. Each Voting Member shall be entitled
to vote on all matters to be submitted for a vote by the Members, including the
selection of Managers, in proportion to such Voting Member's Voting Membership
Interest of the Company; and the approval of all such matters and the selection
of Managers shall be by majority vote of the Voting Members (measured with
respect to all matters by their Voting Membership Interest), unless a higher
percentage is required for approval elsewhere in this Agreement. Non-Voting
Members shall have no voting rights except as expressly stated in Section 3.02
of this Agreement and the MLLCA.
Section 2.06 Meetings and Notice. Regular meetings of the Members
and Managers shall be held on a monthly basis on or before the second Friday of
each month to determine the accruals for profit sharing, Member distributions
and bonuses. In addition to the regular meetings, any Voting Member or Voting
Members with at least 25% of the Voting Membership Interests or the Managers
acting unanimously, may call a meeting of the Members for any reasonable time
at the principal office of the Company, upon at least 5 days' notice to all the
Members. The notice shall state the nature of the business to be transacted
and the matters, if any, upon which the Members will be requested to vote
(subject to the voting limitations on Non-Voting Members); provided, however,
action may be taken on any matter to be brought before the meeting regardless
of whether set forth in the notice.
Section 2.07 Quorum. Except as otherwise required by the MLLCA or
the Articles, the presence of Voting Members (in person or by proxy) owning a
majority of the Voting Membership Interests in the Company at a meeting shall
be sufficient to constitute a quorum for the transaction of business.
Regardless of whether a quorum is present, the meeting may be adjourned by a
vote of the Voting Members present. At the adjourned meeting at which the
requisite quorum shall be represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 2.08 Member to Vote in Person or by Proxy. A Member
entitled to vote at a meeting of Members or to express consent or dissent
without a meeting shall be entitled to vote in person, or by proxy appointed by
an instrument in writing authorizing other persons to act. A proxy shall be
signed by the Member or authorized agent or representative and shall not be
valid after the expiration of 3 years from its date unless otherwise provided.
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Section 2.09 Action by Written Consent. Any action required or
permitted to be taken at a meeting of Members may be taken without a meeting,
without prior notice and without a vote, if consents in writing, setting forth
the action so taken, are signed by all of the Members entitled to vote. All
such consents shall be dated within a period of 90 days from the first date
thereof to the last date.
Section 2.10 No Authority to Commence Civil Suit. No Member shall
have the authority to commence and maintain a civil suit in the right of the
Company, and no such civil suit shall be commenced and maintained in the right
of the Company, except upon majority vote of the Voting Members, approval of
the Managers, or as provided in Section 510 of the MLLCA.
Section 2.11 Independent Activities. Any Member may,
notwithstanding the existence of this Agreement, engage in whatever other
activities such Member chooses, whether the same is competitive with the
Company or otherwise, without having or incurring any obligation to offer any
interest in such activities to the Company or to any other party to this
Agreement.
Section 2.12 Transactions Permitted With Members and Affiliates.
The validity of any transaction, agreement or payment involving the Company,
the Members or any affiliate thereof, otherwise permitted by the terms of this
Agreement shall not be affected by reason of the relationship between any
Member and such affiliate or by reason of the approval of said transaction,
agreement or payment by any Member.
Section 2.13 Participation by Communication Equipment. A Member
may participate in a meeting of the Members by a conference telephone or by
other similar communications equipment through which all persons participating
in the meeting may communicate with the other participants. All participants
shall be advised of the communications equipment and the names of the parties
in the conference shall be divulged to all participants. Participation in a
meeting pursuant to this section constitutes presence in person at the meeting.
ARTICLE III - MANAGEMENT BY MANAGERS
Section 3.01 General Powers. Except as otherwise provided in this
Agreement, the property, affairs, and business of the Company shall be managed
by the Managers, and the Managers may exercise all the powers of the Company,
whether derived from law, the Articles or otherwise. The Members shall only
act as a member, and the Members shall have no managerial power unless
explicitly authorized by this Agreement or a majority vote of the Managers.
Each Manager has the power, on behalf of the Company, to do all things
necessary or convenient to carry out the business and affairs of the Company in
the ordinary course of business, including, the power to: (i) purchase, lease
or otherwise acquire any real or personal property with a purchase price not
exceeding $25,000; (ii) sell, convey, mortgage, grant a security interest in,
pledge, lease, exchange or otherwise dispose of or encumber any real or
personal property; (iii) borrow money and incur liabilities and other
obligations; (iv) enter into any and all agreements and execute any and all
contracts, documents and instruments; (v) engage employees and agents, define
their respective duties, and establish their compensation or remuneration; (vi)
establish pension plans, trusts, profit sharing plans and other benefit
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and incentive plans for Members, employees and agents of the Company; (vii)
obtain insurance covering the business and affairs of the Company and its
property and on the lives and well being of its Members, employees and agents;
(viii) commence, prosecute or defend any proceeding in the Company's name; and
(ix) participate with others in partnerships, joint ventures and other
associations and strategic alliances.
Section 3.02 Actions Requiring Unanimous Consent of all Members.
Notwithstanding the foregoing Section 3.01 or any other provision contained in
this Agreement to the contrary, the following actions shall require the
unanimous approval of all the Voting Members and Non- Voting Members: (i)
distributions of profits and losses to the Members, except for profits not
exceeding the profit allocated to a Member for the monthly period most recently
ended; (ii) amendments to the Articles or this Agreement; (iii) sale or
transfer of all or substantially all of the Company's assets except as provided
in Section 6.09 below; (iv) change in any Member's Membership Interest relative
to all other Members; (v) establishment of the consideration to be accepted for
the sale of any Membership Interest in the Company; (vi) approval of any merger
or consolidation, except as provided in Section 6.09 below; (vii) admission of
new Members as provided in Section 2.02; (viii) changes in the amount of life
insurance on Non-Voting Members acquired by the Company as provided in Section
6.07; (ix) approval of additional capital contributions by Members as provided
in Section 4.02; and (x) election and compensation of Managers and payment of
bonuses to any employees of the Company.
Section 3.03 Actions Requiring Unanimous Consent of Voting
Members. Notwithstanding the foregoing Section 3.01 or any other provision
contained in this Agreement to the contrary, the following actions shall
require the unanimous approval of all the Voting Members (and shall not require
the consent of the Non-Voting Members or the Managers): (i) approval of any
liquidation or dissolution; (ii) creation of any mortgage, pledge, lien, charge
or encumbrance upon any of the assets now owned or hereafter acquired by the
Company or disposition of any such property or assets except in the ordinary
course of business; (iii) approval of capital expenditures over $25,000,
including capital expenditures to purchase, lease or otherwise acquire any real
or personal property; (iv) the guaranty of obligations of any other person or
entity; (v) approval or disapproval of the purchase of any Membership Interest;
(vi) any substantial change in the character of the business and affairs of the
Company; (vii) the opening of a depository account on behalf of the Company;
(viii) authorization of any person other than the Comptroller to sign checks or
withdraw funds from a depository account of the Company; and (ix) election and
compensation of the Comptroller of the Company who shall be an employee of
University Bank.
Section 3.04 Number and Term of Office. The number of Managers of
the Company shall be determined from time to time by the Voting Members. If
the Voting Members make no such determination, the number of Managers shall be
3. A Manager shall hold office for the term elected, until a successor is
elected and qualified or until death, resignation or removal. The Managers
shall be elected by the Voting Members on an annual basis. The election of a
Manager does not of itself create contract rights. The initial Managers shall
be Xxxx Xxxxxxxxxx, Xxxxxxx X. Xxxx and Xxxxxxxx Opt Xxxxxxxx. The annual
salaries of the initial Managers shall be as follows:
Xxxx Xxxxxxxxxx $ 67,500
Xxxxxxx X. Xxxx 67,500
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Xxxxxxxx Opt Xxxxxxxx 135,000
The annual salaries for the initial Managers shall be increased on January 1st
of each successive year by the following amounts:
Xxxx Xxxxxxxxxx $1,500
Xxxxxxx X. Xxxx 1,500
Xxxxxxxx Opt Xxxxxxxx 3,000
In the event Xxxx Xxxxxxxxxx or Xxxxxxx X. Xxxx no longer serves as a Manager
of the Company for any reason, the salary of the individual who no longer
serves as a Manager shall be added to the salary of the remaining of these two
Managers.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, IT IS AGREED AND ACKNOWLEDGED BY THE
VOTING MEMBERS AND THE NON-VOTING MEMBERS THAT XXXX XXXXXXXXXX, XXXXXXX X. XXXX
AND XXXXXXXX OPT XXXXXXXX ARE EMPLOYED AT THE WILL OF THE COMPANY AND THEY MAY
BE TERMINATED AS MANAGERS AND EMPLOYEES BY THE VOTE OF THE VOTING MEMBERS AT
ANY TIME, FOR ANY REASON OR FOR NO REASON.
Section 3.05 Limitation of Authority of Members. No Member (other
than a Manager) has the authority or power to act for or on behalf of the
Company, to do any act which would be binding on the Company or to incur any
expenditures on behalf of the Company.
Section 3.06 Meetings and Notice. Meetings of the Managers shall
be held whenever called by the Chairman of the Managers, or by any Manager, at
such time and place as may be specified in the notice or waiver of notice.
Special meetings of the Managers may be called on 24 hours' notice to each
Manager, given personally or by telephone, or on 3 days' written notice.
Notice of any special meeting need not be given to any Manager who shall be
present at the meeting, or who shall waive notice of the meeting in writing,
whether before or after the time of the meeting. No notice need be given of
any adjourned special meeting. A Manager may participate in a meeting of the
Managers by a conference telephone or by other similar communications equipment
through which all persons participating in the meeting may communicate with the
other participants. All participants shall be advised of the communications
equipment and the names of the parties in the conference shall be divulged to
all participants. Participation in a meeting pursuant to this section
constitutes presence in person at the meeting.
Section 3.07 Quorum. A majority of the Managers then in office
constitutes a quorum for transaction of business, unless the Articles or this
Agreement, provide for a larger or smaller number. The vote of the majority of
Managers present at a meeting at which a quorum is present constitutes the
action of the Managers, unless the vote of a larger number is required by the
MLLCA, the Articles or this Agreement.
Section 3.08 Managers to Have One Vote Each. Each Manager shall
have one vote. Except as otherwise required by the MLLCA or the Articles, all
questions shall be decided by a majority vote of the Managers represented at
the meeting in person or by proxy.
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Section 3.09 Action by Unanimous Written Consent. Any action
required or permitted to be taken at any meeting of the Managers or a committee
appointed by the Managers may be taken without a meeting if, under
authorization voted before or after the action, written consents thereto are
signed by all Managers then in office or of a committee of Members and such
written consents are filed with the minutes of the proceedings of the Managers
or committee. All such consents shall be dated within a period of 90 days from
the first date thereof to the last date.
Section 3.10 Resignation and Removal of Managers. Any Manager may
resign at any time by delivering a written resignation to the remaining
Managers and each of the Voting Members and such resignation shall be effective
upon receipt thereby or at a subsequent time as set forth in the notice of
resignation. Any or all of the Managers may be removed from office at any time
with or without cause upon the vote for removal of a majority of the Voting
Members. However, in the event a Manager is removed by vote of the Voting
Members (and not by voluntary resignation or death), the Company shall pay the
removed Manager, within fourteen (14) days of the effective removal date, cash
in an amount equal to one year's salary (without bonus) of the removed Manager.
Section 3.11 Discharge of Duties; Reliance on Reports. A Manager
shall discharge his or her duties as a Manager in good faith, with the care an
ordinarily prudent person in a like position would exercise under similar
circumstances and in a manner he or she reasonably believes to be in the best
interests of the Company. In discharging his or her duties, a Manager may rely
on information, opinions, reports or statements, including financial statements
and other financial data, if prepared or presented by any of the following:
(a) One or more Members, or employees of the Company whom
the Manager reasonably believes to be reliable and competent in the matter
presented.
(b) Legal counsel, public accountants, engineers, or
other persons as to matters the Manager reasonably believes are within the
person's professional or expert competence.
(c) A committee of Managers of which he or she is not a
member if the Manager reasonably believes the committee merits confidence.
A Manager is not entitled to rely on the information set forth in this section
if the Manager has knowledge concerning the matter in question that makes
reliance otherwise permitted by this provision unwarranted. A Manager is not
liable for any action taken as a Manager or any failure to take any action if
he or she performs the duties of his or her office in compliance with this
section.
Section 3.12 Accountable as Trustee. A Manager shall account to
the Company and hold as trustee for it any profit or benefit derived without
the informed consent of the Members by the Manager from any transaction
connected with the conduct or winding up of the Company or from any personal
use by him or her of its property.
Section 3.13 Authority to Execute Documents. All deeds,
documents, contracts, agreements, bonds, debentures, notes, obligations,
evidences of indebtedness,
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checks, drafts, and other instruments requiring execution by the Company shall
be executed and delivered by one or more Managers as may from time to time be
authorized by the Managers. All funds of the Company not otherwise employed
shall be deposited to the credit of the Company in such financial institutions
as designated by the Managers. The Managers may execute or cause to be
executed in the name and on behalf of the Company, as the holder of stock or
other securities in any corporation, all written proxies, powers of attorney or
other written instruments as the Managers may deem necessary for the Company to
exercise such powers and rights.
Section 3.14 Officers. The Company may have one or more officers
who shall be elected or appointed by the Managers, and who shall have the
title, authority and duties as authorized or directed by the Managers. An
officer shall hold office for the term for which elected or appointed and until
a successor is elected or appointed and qualified, or until resignation or
removal.
Section 3.15 Removal, Resignation or Replacement of Officers. An
officer elected or appointed by the Managers may be removed by the Managers
with or without cause. The removal of an officer shall be without prejudice to
his or her contract rights, if any. The election or appointment of an officer
does not of itself create contract rights. An officer may resign by written
notice to the Company, which resignation is effective upon its receipt by the
Company or at a subsequent time specified in the notice of resignation.
Vacancies in any office may be filled by the Managers.
ARTICLE IV - CAPITAL CONTRIBUTIONS
Section 4.01 Membership Interest. The Voting Membership Interest
and Non-Voting Membership Interest shall be referred to herein collectively as
the "Membership Interest". The respective rights of each Voting Member in the
Company, including, but not limited to, any right to vote or receive
distributions with respect to Voting Membership Interest, shall be in
proportion to the Voting Membership Interest set forth in Exhibit "A" attached,
as may be adjusted from time to time as provided in this Agreement. The
respective rights of each Non-Voting Member in the Company including, but not
limited to, any right to receive distributions with respect to Non-Voting
Membership Interest, shall be in proportion to the Non-Voting Membership
Interest as set forth in Exhibit "A" attached, as may be adjusted from time to
time as provided in this Agreement. Except as set forth in Section 4.07 below,
all distributions of the Company's profits and other assets shall be allocated
50% to the Voting Members and 50% to the Non-Voting Members until such time as
one or more of the Member's capital accounts is reduced to $0 or is negative.
If any distribution is made when one or more of the Member's capital accounts
is $0 or is negative, such distribution shall be made to the Members in
proportion to their respective positive capital account balances.
Section 4.02 Subsequent Contributions. No Member shall be
required to advance or contribute any additional funds to the Company except
upon approval by all of the Members.
Section 4.03 Failure to Make Additional Contribution. Upon the
failure by a Member to make the full amount of any additional capital
contribution described in Section 4.02 above, the Membership Interests of the
Members shall be reallocated so that the noncontributing Members' percentage
interests in the Company shall be reduced as
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provided herein to reflect the failure to make the required capital
contribution, and the Members making such contributions shall be allocated a
percentage interest in the Company to equitably reflect such contribution.
Section 4.04 Contribution Returns. Except as provided herein, 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 capital account
or the capital contributions. An unrepaid capital contribution is not a
liability of the Company or of any Member. A Member is not required to
contribute or to lend any cash or property to the Company to enable it to
return any Member's capital contribution.
Section 4.05 Loans by Members. Should the Company lack sufficient
cash to pay its obligations, any Member that may agree to do so may advance all
or part of the needed funds to or on behalf of the Company. An advance
described in this section constitutes a loan from the Member to the Company,
bears interest at the interest rate agreed to by the Company and the lending
Member from the date of the advance until the date of payment, and is not a
capital contribution.
Section 4.06 Income Accounts. An individual income account shall
be maintained for each Member. At the end of each month, each Member's share
of net profits or net losses of the Company, if not previously credited or
debited, shall be credited or debited to such Member's income account. After
such amounts have been credited or debited to such Member's income account, any
balance or deficit remaining in such account at the end of such month shall be
transferred to or charged against such Member's capital account.
Section 4.07 Capital Accounts. A capital account shall be
maintained for each Member. The capital account for each Member shall consist
of: (i) that Member's initial contribution to capital, if any; (ii) any amounts
that have been assigned from such Member's capital account to another Member's
capital account as a result of a sale, devise or transfer of their interest or
a part thereof in the Company; (iii) any additional capital contributions; and
(iv) any amounts transferred from a Member's capital account to their capital
account pursuant to this Agreement, and reduced by all distributions and
reductions of Company capital. The Members acknowledge and agree that the
initial capital accounts of the Members, as of the date of this Agreement, are
as set forth on Exhibit "A" attached, subject to the right of the Voting
Members to receive a one-time special distribution to reduce their capital
accounts to the balances described in Exhibit "A."
ARTICLE V - ALLOCATIONS AND DISTRIBUTIONS
Section 5.01 Allocations. Except as may be required by Section
704(c) of the Internal Revenue Code of 1986, as amended, (the "Code") and
Treasury Regulation Section 1.704-1(b)(2)(iv)(f)(4); all items of income, gain,
loss, deduction, and credit of the Company shall be allocated among the Voting
Members and Non-Voting Members in accordance with their proportional Membership
Interest (with Voting Membership in the aggregate and Non-Voting Membership in
the aggregate treated equally). All items of income, gain, loss, deduction and
credit allocable to any Membership Interest that may have been transferred or
reallocated shall be allocated between the transferor and transferee based upon
the portion of the tax year during which each was recognized as
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owning that Membership Interest, without regard to the results of Company
operations during any particular portion of that tax year and without regard to
whether cash distributions were made to the transferor or the transferee during
that tax year; provided, however, that this allocation must be made in
accordance with a method permissible under Section 706 of the Code and the
regulations thereunder.
Section 5.02 Distributions. Except for monthly distributions to
the extent profit is allocated to a Member's capital account which may be
authorized by the Managers, the Company shall pay such distributions to the
Members as may be agreed upon unanimously by all of the Members. Cash
available for distribution shall be determined monthly and shall be distributed
on a regular periodic basis, taking into account the reasonable business needs
of the Company. All distributions shall be in accordance with Section 4.01
above.
ARTICLE VI - WITHDRAWAL; TRANSFER OF MEMBERSHIP INTEREST
Section 6.01 No Withdrawal of Member. A Member does not have the
right or power to voluntarily withdraw from the Company as a Member. Any such
voluntary withdrawal shall be in violation of this Agreement and the
withdrawing Member shall not be entitled to receive any distribution pursuant
to Section 305 of the MLLCA. A "voluntary withdrawal" shall mean a Member's
disassociation from the Company by any means other than under Section 6.03
(transfer with consent of the Members), Section 6.04 (bankruptcy), Section 6.05
(proceedings), Section 6.06 (involuntary transfer), Section 6.07 (death) or
Section 6.09 (sale of the Company).
Section 6.02 Transferability of Membership Interest. Except as
specifically permitted in this Agreement, no Member shall sell or otherwise
transfer any portion of the Member's Membership Interest in the Company in any
manner, voluntarily or involuntarily, including without limitation, by sale,
gift, granting an option to purchase, bequest, descent, divorce, device or
operation of law, or any other disposition. Any attempted disposition by a
Member of an interest or right, or any part thereof, in or in respect of the
Company other than in accordance with this Section shall be null and void. A
Membership Interest may not be assigned, in whole or in part.
Section 6.03 Permitted Transfers. Notwithstanding Section 6.02,
any Member may transfer all or a portion of the Membership Interest in the
Company by first obtaining the unanimous consent of all the other Members upon
which the transferor Member shall cease to be a Member of the Company and the
transferor Member's assignee shall become a Member of the Company with all
rights and obligations thereof.
Section 6.04 Bankrupt Members. If any Member becomes a Bankrupt
Member (as defined below), the Company shall have the option, exercisable by
notice from the Company to the Bankrupt Member at any time prior to the 180th
day after receipt of notice of the occurrence of the event causing it to become
a Bankrupt Member, to buy and on the exercise of this option the Bankrupt
Member shall sell the Membership Interest of such Member. The purchase price
and payment terms under this Section shall be as set forth in Section 6.08. As
used herein a "Bankrupt Member" shall mean a Member who: (i) has been declared
bankrupt through the issuance of an order of relief; (ii) has filed a petition
in bankruptcy or for reorganization, or to effect a plan or other agreement
with creditors; or (iii) has any bankruptcy petition filed against such Member
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unless discharged within 60 days; or (iv) has filed an answer to a creditor's
petition (admitting the material allocations thereof) in bankruptcy or for
reorganization or to affect a plan or other arrangement of creditors; or (v)
has applied to have a receiver, trustee or custodian appointed with respect to
any of the Member's assets.
Section 6.05 Action or Derivative Proceeding by Member. In the
event a Member commences an action for dissolution of the Company under Section
801 of the MLLCA or a derivative proceeding against the Company pursuant to
Section 510 of the MLLCA, the Company shall, for a period of 90 days after such
an action or proceeding is served upon the Company have the option to purchase
the Member's Membership Interest in the Company by giving written notice to the
Member of the exercise thereof. The purchase price and payment terms under
this Section shall be as set forth in Section 6.08.
Section 6.06. Involuntary Transfer. In the event of an involuntary
transfer of any Membership Interest by operation of law or otherwise,
including, without limitation, transfer by virtue of divorce, insolvency or
creditor's proceedings or arrangements of any kind, execution or attachment,
the Company shall, for a period of 90 days after such transfer have the option
to purchase the transferred Membership Interest in the Company by giving
written notice to the Member of the exercise thereof. The purchase price and
payment terms under this Section shall be as set forth in Section 6.08.
Section 6.07 Death. In the event of the death of a Member, within
90 days of the date of death, the Company shall purchase and the deceased
Member's heirs or legal representatives shall sell to the Company the deceased
Member's Membership Interest. The purchase price and payment terms under this
Section shall be as set forth in Section 6.08. In addition, the Company shall
purchase and maintain life insurance on each of the Non-Voting Members in an
amount of no less than $2,000,000 for Xxxxxxxx Opt Xxxxxxxx, $1,000,000 for
Xxxx Xxxxxxxxxx and $1,000,000 for Xxxxxxx X. Xxxx for as long as such
individuals are Non-Voting Members. Such policies shall not be canceled, nor
the amount of insurance coverage changed without the unanimous consent of all
the Members; provided however, that a Non-Voting Member may request Xxxxx
Xxxxxx or the accountant then servicing the Company, to determine, at the
Company's expense not more than once in a 3 year period, the fair market value
of that Non-Voting Member's Membership Interest and determine whether the
amount of such insurance adequately reflects the fair market value of that
Non-Voting Member's Membership Interest. In the event that Xxxxx Xxxxxx
determines that the amount of life insurance is lower than the fair market
value of such Membership Interest, the Company shall purchase such additional
insurance for the Non-Voting Members as is necessary to cover the fair market
value of the Membership Interest. Upon the death of a Non-Voting Member, the
proceeds of the insurance shall be paid to the beneficiary designated by such
Non-Voting Member. Such payment of proceeds shall be separate from and in
addition to any payment for the Membership Interest under Section 6.08. This
Section 6.07 shall not be construed to guarantee payment of the "fair market
value" of the deceased Member's Membership Interest. The deceased Member's
estate, representatives and/or beneficiaries are only entitled to receive the
proceeds of the insurance policy on the life of the deceased Member existing as
of the date of death and the purchase price under Section 6.08 which may or may
not equal in the aggregate the fair market value of the deceased Member's
Membership Interest.
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Section 6.08 Purchase Price and Payment. The purchase price under
Sections 6.04, 6.05, 6.06 and 6.07 shall equal the positive balance of the
capital account of the Membership Interest to be purchased as of the date of
exercise of the option or death, as the case may be. Determination of the
purchase price shall be made by the accountant then regularly servicing the
Company whose determination shall be final and binding upon the Company, all of
the Members and any non-Member transferor. The Company shall pay the purchase
price in cash, which payment shall be in complete liquidation and satisfaction
of all rights and interests of the Member. The closing shall be on or before
the 30th day after determination of the purchase price.
Section 6.09 Sale of the Company. The Non-Voting Members, acting
unanimously as a group, and the Voting Members, acting unanimously as a group,
will each have the right to present in writing to the other group, at any time,
a good xxxxx xxxx fide cash offer to purchase the Company. The group receiving
notice of such offer (the "Notified Group") may accept such offer by giving
written notice to the group presenting such offer (the "Presenting Group")
within 60 days of notification of such offer. In the event the Notified Group
fails to accept the offer within the 60 day time period, such offer shall be
deemed rejected by the Notified Group and the firm of Xxxxx Xxxxxx or another
firm to be unanimously agreed upon by the Voting Members and the Non-Voting
Members (the "Appraisal Firm") shall be retained at the expense of the Company
to determine whether such offer is fair. The Appraisal Firm shall render such
decision within 90 days from the date of being retained and its decision shall
be final and binding on the Members and the Company. In the event the offer is
determined by the Appraisal Firm to be less than fair, no Member will have any
further obligation with respect to such offer. In the event the Appraisal Firm
determines the offer to be fair, the Notified Group will be obligated to sell
the Company in accordance with the terms of such cash offer. As a condition
to any sale of the Company pursuant to this Section 6.09, the Voting Members
shall receive repayment of the $300,000 in their capital accounts as of the
date of this Agreement (or any remaining part thereof) and the balance of the
sale proceeds shall be paid one-half for the benefit of the Voting Members and
one-half for the benefit of the Non-Voting Members.
ARTICLE VII - TAXES
Section 7.01 Tax Returns. The Voting Members shall designate an
individual as the Tax Matters Member, and he shall cause to be prepared and
filed all necessary federal and state income tax returns for the Company.
Section 7.02 Accounting and Reports. Unaudited financial
statements shall be prepared at least monthly and delivered to the Members.
Within 60 days after the close of the Company's fiscal year, a balance sheet
and profit and loss statement of the Company relating to the prior fiscal year
shall be prepared in accordance with generally accepted accounting principles,
consistently applied, and delivered to the Members. All financial statements
shall be certified as to accuracy by the Managers.
Section 7.03 Indemnification of Tax Matters Member. The Company
shall defend, indemnify and hold harmless the Tax Matters Member for all
expenses including, but not limited to, legal and accounting fees, claims,
liabilities, losses and damages incurred in connection with the performance of
such Member as Tax Matters Member.
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ARTICLE VIII - DISSOLUTION, LIQUIDATION, AND TERMINATION
Section 8.01 Dissolution. The Company is dissolved and its
affairs shall be wound up upon the first occurrence of any of the following:
(a) at the time specified in the Articles;
(b) upon the happening of events specified in this
Agreement;
(c) by the unanimous consent of all the Voting Members;
(d) Upon the entry of a decree of judicial dissolution.
Section 8.02 Certificate of Dissolution. Upon the dissolution and
commencement of winding up the Company, a certificate of dissolution shall be
duly executed and filed with the Michigan Department of Consumer and Industry
Services containing the information required by the MLLCA.
Section 8.03 Winding Up. Except as otherwise provided in the
Articles, this Agreement, or Section 805 of the MLLCA, the Members or Managers
who have not wrongfully dissolved the Company may wind up the Company's
affairs. The Members or Managers who are winding up the Company's affairs
shall continue to function, for the purpose of winding up, in accordance with
the procedures set by the MLLCA, the Articles, and this Agreement, shall be
held to no greater standard of conduct than that described by Section 404 of
the MLLCA and shall be subject to no greater liabilities than would apply in
the absence of dissolution. The Company may xxx and be sued in its name and
process may issue by and against the Company in the same manner as if
dissolution had not occurred. An action brought by or against the Company
before its dissolution does not xxxxx because of the dissolution.
Section 8.04 Liquidation and Termination. On dissolution of the
Company, one or more Members or Managers shall serve as liquidator. The
liquidator shall proceed diligently to wind up the affairs of the Company and
make final distributions as provided herein and in the MLLCA. The costs of
liquidation shall be borne as a Company expense. Until final distribution, the
liquidator shall continue to operate the Company properties with all of the
power and authority of the Managers. The steps to be accomplished by the
liquidator are as follows:
(a) As promptly as possible after dissolution and again
after final liquidation, the liquidator shall cause a proper accounting to be
made by a recognized firm of certified public accountants of the Company's
assets, liabilities, and operations through the last day of the calendar month
in which the dissolution occurs or the final liquidation is completed, as
applicable.
(b) The liquidator shall cause the notice described in
Sections 806 and 807 of the MLLCA to be mailed to each known creditor of and
claimant against the Company and published in the manner described in Sections
806 and 807.
(c) The assets shall be distributed in the following
order:
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(i) To creditors, including Members who are
creditors, to the extent permitted by law, in satisfaction of
liabilities of the Company other than liabilities for distributions to
Members under Section 304 or 305 of the MLLCA. Reasonable provisions
shall be made for debts, liabilities, and obligations that are not
liquidated but will not be barred under Sections 806 or 807 of the
MLLCA.
(ii) To Members and former Members in satisfaction
of liabilities for distributions under Section 304 of the MLLCA.
(iii) To the Members pursuant to (d) below.
(d) The distribution of assets to the Members shall be as
follows:
(i) The liquidator may sell any or all Company
property, including to Members, and any resulting gain or loss from
each sale shall be computed and allocated to the capital accounts of
the Members;
(ii) With respect to all Company property that has
not been sold, the fair market value of that property shall be
determined and the capital accounts of the Members shall be adjusted
to reflect the manner in which the unrealized income, gain, loss, and
deduction inherent in property that has not previously been reflected
in the capital accounts would be allocated among the Members if there
were a taxable disposition of that property for the fair market value
of that property on the date of distribution; and
(iii) Company property shall be distributed among
the Members in accordance with the positive capital account balances
of the Members, as determined after taking into account all capital
account adjustments for the taxable year of the Company during which
the liquidation of the Company occurs (other than those made by reason
of this clause (iii)); and those distributions shall be made by the
end of the taxable year of the Company during which the liquidation of
the Company occurs (or, if later, 90 days after the date of the
liquidation).
All distributions in kind to the Members shall be made subject to the liability
of each distributee for costs, expenses, and liabilities theretofore incurred
or for which the Company has committed prior to the date of termination and
those costs, expenses, and liabilities shall be allocated to the distributee
pursuant to this Section. The distribution of cash and/or property to a Member
in accordance with the provisions of this Section constitutes a complete return
to the Member of its capital contributions and a complete distribution to the
Member of its Membership Interest and all the Company's property and
constitutes a compromise to which all Members have consented within the meaning
of Section 808(1)(c) of the MLLCA.
Section 8.05 Deficit Capital Accounts. Notwithstanding anything
to the contrary contained in this Agreement, and notwithstanding any custom or
rule of law to the contrary, to the extent that the deficit, if any, in the
capital account of any Member results from or is attributable to deductions and
losses of the Company (including non-cash items such as depreciation), or
distributions of money pursuant to this Agreement to all Members in proportion
to their respective Membership Interests, upon dissolution of the Company such
deficit shall not be an asset of the Company and such Members
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shall not be obligated to contribute such amount to the Company to bring the
balance of such Member's capital account to zero.
ARTICLE IX - GENERAL PROVISIONS
Section 9.01 Books and Records. The Company shall keep at its
registered office all the following:
(a) A current list of the full name and last known
address of each Member and Manager.
(b) A copy of the Articles of Organization, together with
any amendments to the Articles.
(c) Copies of the Company's federal, state, and local tax
returns and reports, if any, for the three most recent years.
(d) Copies of any financial statements of the Company for
the three most recent years.
(e) Copies of operating agreements, including this
Agreement.
(f) Copies of records that would enable a Member to
determine the Member's relative share of the Company's distributions and their
relative voting rights.
Section 9.02 Invalidity. The invalidity of any provision of this
Agreement shall not affect the validity of the remainder of any such provision
or the remaining provisions of this Agreement.
Section 9.03 Waiver. The failure of any party at any time to
require performance by any other party of any provision of this Agreement shall
not be deemed a continuing waiver of that provision or a waiver of any other
provision of this Agreement and shall in no way affect the full right to
require such performance from the other party at any time thereafter.
Section 9.04 Choice of Law and Choice of Forum. This Agreement
shall be governed by and construed according to the laws of the State of
Michigan. Any and all actions concerning any dispute arising hereunder that is
not subject to Section 9.08 shall be filed and maintained only in a state or
federal court sitting in the State of Michigan, and the parties hereto
specifically consent and submit to the jurisdiction of such state or federal
court.
Section 9.05 Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signature on each such
counterpart were upon the same instrument. Each executed copy shall be deemed
an executed original for all purposes.
Section 9.06 Further Assistance. Each party shall, at the request
of any other party, furnish, execute and deliver such other documents as the
other party may reasonably request and shall take such other actions as any
other party shall reasonably
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request, provided only that the furnishing of such documents and taking of such
action shall be necessary and convenient to consummate or confirm the
transactions contemplated herein.
Section 9.07 Notices. All notices, demands and requests required
or permitted to be given under the provisions of this Agreement shall be in
writing and shall be deemed given: (i) when personally delivered to the party
to be given such notice or other communication; (ii) on the business day that
such notice or other communication is sent by facsimile or similar electronic
device, fully prepaid, which facsimile or similar electronic communication
shall promptly be confirmed by written notice; (iii) on the third business day
following the date of deposit in the United States mail if such notice or other
communication is sent by first class mail with postage thereon fully prepaid;
or (iv) on the business day following the day such notice or other
communication is sent by reputable overnight courier, to the address that the
party receiving notice designates in writing.
Section 9.08 Arbitration. No civil action concerning any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, shall be instituted before any court, and all such controversies or
claims shall be submitted to final and binding arbitration in Ann Arbor,
Michigan, in accordance with the rules then pertaining of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court having jurisdiction thereof.
Section 9.09 Conflict With Statute. In the event any article or
section of this Agreement shall conflict with the MLLCA, as amended from time
to time, the MLLCA, as amended, shall control.
Section 9.10 Entire Agreement. This Agreement represents the
entire understanding and agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements or negotiations
between such parties including an Operating Agreement executed in 1996 by
University Bank and Xxxxxxxx Bancorp, Inc. n/k/a University Bancorp, Inc., as
members and Xxxx Xxxxxxxxxx, Xxxxxxx Xxxx and Xxxxxxxx Opt Xxxxxxxx, xx
Managers.
IN WITNESS WHEREOF, the members have made this Agreement effective as
of the date first set forth above.
The Voting Member:
UNIVERSITY BANK
By: Xxxx Xxxxxx
----------------------------
Its: President
----------------------------
15
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The Non-Voting Members:
Xxxx Xxxxxxxxxx Xxxxxxx X. Xxxx
-------------------------------------- ----------------------------------
Xxxx Xxxxxxxxxx Xxxxxxx X. Xxxx
Xxxxxxxx Opt Xxxxxxxx
------------------------------------
Xxxxxxxx Opt Xxxxxxxx
16
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EXHIBIT "A"
VOTING MEMBERSHIP INFORMATION
Initial
Name, Taxpayer Phone No. Membership Capital
Identification No. Address Fax No. Interest Contribution
------------------- ------- ----------- ------------ -------------
University Bank 000 Xxxxxx Xxxx 000-000-0000 100% $300,000
Xxx Arbor, Mich. 000-000-0000
NON-VOTING MEMBERSHIP INFORMATION
Initial
Name, Taxpayer Phone No. Membership Capital
Identification No. Address Fax No. Interest Contribution
------------------- ------- ----------- ------------ -------------
Xxxx Xxxxxxxxxx 0000 Xxxxxx Xx. 248-360-0931 25% $0
###-##-#### X. Xxxxxxxxxx, Xx 00000 248-360-0931
Xxxxxxx X. Xxxx 000 Xxxxxxxx Xx (000) 000-0000 25% $0
###-##-#### Xxxxxxxx, XX 00000 (248) 661-9184
Xxxxxxxx Opt Xxxxxxxx 725 Half Moon 000-000-0000 50% $0
###-##-#### Bloomfield Hills, MI 000-000-0000
48301
26
EXHIBIT "B"
ACTION BY UNANIMOUS WRITTEN CONSENT
OF THE VOTING MEMBERS OF
VARSITY MORTGAGE SERVICES, L.L.C.
--------------------------------------------------------------------------------
The undersigned, being all the Voting Members of VARSITY MORTGAGE
SERVICES, L.L.C., a limited liability company duly organized and existing under
the laws of the State of Michigan (the "Company"), acting pursuant to the
Articles of Organization of the Company and the Michigan Limited Liability
Company Act, do hereby consent to, approve and adopt the following resolutions:
Distribution of Assets
"RESOLVED, that the Company shall distribute cash to University
Bancorp, Inc. equal to the positive balance of the capital account of
University Bancorp, Inc. as of March 31, 1997."
"RESOLVED FURTHER, that the Company shall distribute cash to
University Bank equal to the positive balance of the capital account
of University Bank as of March 31, 1997 to the extent such capital
account balance exceeded $300,000."
Amended and Restated Operating Agreement
"RESOLVED FURTHER, that the Amended and Restated Operating Agreement
of the Company dated April 1, 1997 is hereby approved and adopted as
the Operating Agreement of the Company."
Election of Managers
"RESOLVED FURTHER, that the following individuals are hereby elected
as the Managers of the Company, to hold office until the election and
qualification of their respective successors or until their
resignation or removal:
Xxxx Xxxxxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxxx Opt Xxxxxxxx."
Bonus to Non-Bonus Pool Employees
"RESOLVED FURTHER, that the employees (the "Non-Bonus Pool Employees")
of the Company not entitled to profit sharing under the Bonus Pool (as
defined below) shall be eligible to receive a monthly bonus from the
Company which shall be determined by the Managers provided such bonus
in the aggregate to all Non-Bonus Pool Employees shall not exceed
$4,000 per month."
"RESOLVED FURTHER, that the bonus to the Non-Bonus Pool Employees
shall be accrued on the books of the Company on a monthly basis as an
expense."
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Bonus to Bonus Pool Employees
"RESOLVED FURTHER, that the employees of the Company entitled to
receive profit sharing (the "Bonus Pool Employees") together with the
Managers shall be entitled to receive a monthly bonus from the Company
which shall be determined by the Managers; provided such bonus in the
aggregate shall not exceed one-third of the Company's net income (the
"Bonus Pool"), and further provided that the amount of such bonus in
the aggregate for Bonus Pool Employees only shall not exceed
two-ninths of the Company's net income. For purposes hereof, the "net
income" of the Company each month shall be determined after payment of
the bonuses to the Non-Bonus Pool Employees, before payment of the
Bonus Pool, before payment of bonuses to the Managers and before
payment of any distributions to the Voting and Non-Voting Members."
"RESOLVED FURTHER, that the bonus to the Bonus Pool Employees shall be
estimated and accrued on the books of the Company on a monthly basis
as an expense and adjusted to actual when the true accounting results
have been determined."
"RESOLVED FURTHER, that any funds from the Bonus Pool not paid to
Bonus Pool Employees may be paid to the Managers at the Managers'
discretion."
Dated: April 1, 1997 UNIVERSITY BANK, Member
By: Xxxx Xxxxxx
------------------------------
Its: President
------------------------------
2
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EXHIBIT "C"
ACTION BY UNANIMOUS WRITTEN CONSENT
OF THE MANAGERS OF
VARSITY MORTGAGE SERVICES, L.L.C.
--------------------------------------------------------------------------------
The undersigned, being all the Managers of VARSITY MORTGAGE SERVICES,
L.L.C., a limited liability company duly organized and existing under the laws
of the State of Michigan (the "Company"), acting pursuant to the Articles of
Organization of the Company and the Michigan Limited Liability Company Act, do
hereby consent to, approve and adopt the following resolutions:
Administrative Support Services
"RESOLVED, that the Company's monthly charge for
administrative support services paid to University Bank shall
increase to $4,210."
"RESOLVED FURTHER, that this fee shall be adjusted
semi-annually based on actual expenses."
"RESOLVED FURTHER, that the Company shall enter into a
subcontracting arrangement to provide administrative support
services directly to Varsity Funding."
Xxxxxxx X. Xxxx
Dated: April 1, 1997 -----------------------------------
Xxxxxxx X. Xxxx, Manager
Xxxx Xxxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxxx, Manager
Xxxxxxxx Opt Xxxxxxxx
-----------------------------------
Xxxxxxxx Opt Xxxxxxxx, Manager
29
EXHIBIT "D"
RESOLUTIONS
The undersigned, President of University Bank, pursuant to the
authority granted by the Board of Directors of University Bank, hereby
approves the actions set forth in the Resolutions below:
Table Funding Rate
"RESOLVED, that the table funding rate charged to Varsity
Mortgage Services, L.L.C., a Michigan limited liability
company ("Varsity Mortgage") shall be the Federal Funds Rate
plus 1% and that such funding arrangement shall be made
available to Varsity Mortgage on a non-exclusive basis
permitting Varsity Mortgage to seek funds from other lenders."
"RESOLVED FURTHER, that any officer of the Corporation is
authorized to execute a letter agreement with Varsity Mortgage
that provides for a three year commitment for the above
described table funding line, subject to the availability of
funds, the Corporation's capital position and any applicable
regulatory restrictions."
Line of Credit
"RESOLVED FURTHER, that an operating line of credit to Varsity
Mortgage in the amount of $500,000, without points or fees and
interest at the prime rate of interest listed in the Wall
Street Journal, is hereby approved."
"RESOLVED FURTHER, that any officer of the Corporation is
hereby authorized to prepare loan documentation for the above
described line of credit for an initial term of three (3)
years with an automatic renewal for one year, unless there is
notice of an intent not to renew within six (6) months of the
end of the initial term."
Administrative Support Services
"RESOLVED FURTHER, that the Corporation shall charge $4,210
per month to Varsity Mortgage for administrative support
services provided to Varsity Mortgage by the Corporation.
This fee shall be adjusted semi-annually based on actual
expenses."
Dated: April 1 ,1997
------------- Xxxx Xxxxxx
-----------------------------------
President
---------------,
