EXHIBIT 4.4
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
DVI RECEIVABLES XIX, L.L.C.
DATED AS OF APRIL 10, 2003
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
DVI RECEIVABLES XIX, L.L.C
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.1 Act.............................................................................................1
1.2 Affiliate.......................................................................................1
1.3 Agreement.......................................................................................1
1.4 Articles........................................................................................1
1.5 Assignee........................................................................................1
1.6 Capital Contribution............................................................................1
1.7 Closing.........................................................................................1
1.8 Company.........................................................................................1
1.9 Contribution and Servicing Agreement............................................................1
1.10 Disposition (Dispose)...........................................................................2
1.11 Dissolution Event...............................................................................2
1.12 Distribution....................................................................................2
1.13 DVI.............................................................................................2
1.14 Effective Date..................................................................................2
1.15 Event of Bankruptcy.............................................................................2
1.16 Fiscal Year.....................................................................................2
1.17 Indenture.......................................................................................2
1.18 Independent Director............................................................................2
1.19 Management Right................................................................................3
1.20 Managing Member.................................................................................3
1.21 Member..........................................................................................3
1.22 Membership Interest.............................................................................3
1.23 Notes...........................................................................................3
1.24 Officer.........................................................................................3
1.25 Organization....................................................................................3
1.26 Person..........................................................................................3
1.27 Principal Office................................................................................3
1.28 Proceeding......................................................................................3
1.29 Property........................................................................................3
1.30 Related Company.................................................................................3
1.31 SCTA............................................................................................3
1.32 Tax Characterization and Additional Tax Terms...................................................3
1.33 Term............................................................................................4
1.34 Unit............................................................................................4
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ARTICLE II FORMATION
2.1 Organization....................................................................................4
2.2 Agreement.......................................................................................4
2.3 Name............................................................................................5
2.4 Term............................................................................................5
2.5 Registered Agent and Office.....................................................................5
2.6 Principal Office................................................................................5
ARTICLE III LIMITED PURPOSE; NATURE OF BUSINESS
3.1 Limited Business Purpose........................................................................5
ARTICLE IV LIMITATIONS ON ACTIVITIES
4.1 Limitations on Activities.......................................................................7
ARTICLE V ACCOUNTING AND RECORDS
5.1 Records to be Maintained........................................................................8
5.2 Reports.........................................................................................9
5.3 Tax Returns and Reports.........................................................................9
5.4 Records to be Kept Separate.....................................................................9
ARTICLE VI NAME AND ADDRESS OF MEMBER
ARTICLE VII RIGHTS AND DUTIES OF MEMBER
7.1 Liability of Member.............................................................................9
7.2 Representations and Warranties..................................................................9
7.3 Conflicts of Interest..........................................................................10
ARTICLE VIII MANAGEMENT
8.1 Management of the Company......................................................................10
8.2 Authority of Managing Member to Bind the Company...............................................11
8.3 Actions of the Managing Member.................................................................11
8.4 Compensation of Managing Member................................................................11
8.5 Managing Member's Standard of Care.............................................................12
8.6 Resignation....................................................................................12
8.7 Payment of Liabilities.........................................................................12
ARTICLE IX CONTRIBUTIONS
9.1 Membership Interest............................................................................12
9.2 Contributions..................................................................................12
9.3 Withdrawal.....................................................................................12
9.4 Interest.......................................................................................12
9.5 No Personal Liability..........................................................................12
ARTICLE X ALLOCATIONS AND DISTRIBUTIONS
10.1 Taxable Income Allocations.....................................................................13
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10.2 Distributions..................................................................................13
ARTICLE XI TRANSFER OF MEMBERSHIP INTEREST
11.1 Compliance with Securities Laws................................................................13
11.2 Transfer of Economic Interest..................................................................13
11.3 Transfer of Membership Interest................................................................14
11.4 Status of Transferee...........................................................................14
11.5 Dissolution or Bankruptcy of the Member........................................................14
ARTICLE XII DISSOLUTION AND WINDING UP
12.1 Dissolution....................................................................................14
12.2 Effect of Dissolution..........................................................................15
12.3 Distribution of Assets on Dissolution..........................................................15
12.4 Winding Up and Filing Articles of Dissolution..................................................16
ARTICLE XIII MISCELLANEOUS
13.1 Notices........................................................................................16
13.2 Headings.......................................................................................16
13.3 Entire Agreement...............................................................................16
13.4 Binding Agreement..............................................................................16
13.5 Saving Clause..................................................................................17
13.6 Counterparts...................................................................................17
13.7 Governing Law..................................................................................17
13.8 No Membership Intended for Nontax Purposes.....................................................17
13.9 No Rights of Creditors and Third Parties under Agreement.......................................17
13.10 General Interpretive Principles................................................................17
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LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
DVI RECEIVABLES XIX, L.L.C.
This Limited Liability Company Operating Agreement of DVI Receivables
XIX, L.L.C. (the "Company"), a Delaware limited liability company organized
pursuant to the Delaware Limited Liability Company Act, is entered into and
shall be effective as of April 10, 2003, by and between the Company and DVI
Receivables Corp. VIII, as the sole member of the Company.
ARTICLE I
DEFINITIONS
Capitalized terms not defined herein shall have the meaning set forth
in the Indenture (as defined below). For purposes of this Agreement (as defined
below), unless the context clearly indicates otherwise, the following terms
shall have the following meanings:
1.1 Act. The Delaware Limited Liability Company Act and all amendments
thereto.
1.2 Affiliate. Any entity other than the Member (i) which owns
beneficially, directly or indirectly, 10% or more of the outstanding shares of
common stock of the Managing Member; or (ii) of which 10% or more of the
outstanding shares of its common stock is owned beneficially, directly or
indirectly, by any entity described in clause (i) above, or (iii) which is
"controlled", as defined in Section 230.405 of the Rules and Regulations of the
Securities and Exchange Commission, 17 C.F.R. Section 230.405, by an entity
described in clause (i) above.
1.3 Agreement. This Limited Liability Company Operating Agreement
including all amendments adopted in accordance with this Agreement and the Act.
1.4 Articles. The Articles of Organization of the Company, as amended
from time to time, and filed with the Department of State of the State of
Delaware.
1.5 Assignee. A transferee of the Membership Interest.
1.6 Capital Contribution. Any contribution of rights, Property or
services made by or on behalf of the Member or its Assignee.
1.7 Closing. The "Closing Date" as defined in the Indenture.
1.8 Company. DVI Receivables XIX, L.L.C., a limited liability company
formed under the laws of Delaware, and any successor limited liability company.
1.9 Contribution and Servicing Agreement. That certain Contribution and
Servicing Agreement (as amended, supplemented, restated or otherwise modified
from time to time), dated
as of May 1, 2003, by and between DVI Receivables Corp. XIX and DVI, as
contributor and servicer.
1.10 Disposition (Dispose). Any sale, assignment, exchange, mortgage,
pledge, grant, hypothecation, or other transfer, absolute or as security or
encumbrance (including dispositions by operation of law).
1.11 Dissolution Event. An event, the occurrence of which will result
in the dissolution of the Company under Article XIV.
1.12 Distribution. A transfer of Property to the Member on account of
its Membership Interest as described in Article X.
1.13 DVI. DVI Financial Services Inc., a Delaware corporation.
1.14 Effective Date. April 10, 2003.
1.15 Event of Bankruptcy. As to any Person means the filing of a
petition for relief as to such Person as debtor or bankrupt under the Bankruptcy
Reform Act of 1978, as amended, or other similar provision of law of any
jurisdiction (except if such petition is contested by such Person and has been
dismissed within 90 days); insolvency of such Person as finally determined by a
court proceeding; filing by such Person of a petition or application to
accomplish the same or for the appointment of a receiver or a trustee for such
Person or a substantial part of its assets; commencement of any proceedings
relating to such Person as a debtor under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction, whether
now in existence or hereinafter enacted, if such Person indicates its approval
of such proceeding, consents thereto or acquiesces therein, or such proceeding
is contested by such Person and has not been finally dismissed within 90 days.
1.16 Fiscal Year. The year commencing on the opening of business on the
first day of July of each calendar year and terminating on the close of business
on the last day of June of the immediately succeeding calendar year thereto.
1.17 Indenture. That certain Indenture (as amended, supplemented,
restated or otherwise modified from time to time), dated as of May 1, 2003, by
and between the Company and U.S. Bank National Association (as successor to U.S.
Bank Trust National Association), as Trustee.
1.18 Independent Director. An individual who is not, at the time of
initial appointment, nor has been, a director of any Affiliate of the Member
(except that an individual who serves in similar capacities for other "special
purpose corporations" formed by DVI or its affiliates is not thereby
disqualified from being an Independent Director) or is an officer of, employed
by, a creditor, supplier or contractor of, or holding any beneficial or economic
interest in the Member or any Affiliate of the Member, or is a family member of
any of the foregoing.
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1.19 Management Right. The right of the Member to participate in the
management of the Company, to vote on any matter, and to grant or to withhold
consent or approval of actions of the Company.
1.20 Managing Member. The Member, as set forth in Section 8.1.
1.21 Member. DVI Receivables Corp. VIII, or any Assignee thereof.
1.22 Membership Interest. The rights of the Member to Distributions
(liquidating or otherwise) and allocations of the profits, losses, gains,
deductions, and credits of the Company, and, to the extent permitted by this
Agreement, to possess and exercise Management Rights.
1.23 Notes. The Notes, as set forth in the Indenture and any Class F
Instruments.
1.24 Officer. An individual appointed as an officer of the Company
pursuant to Section 8.1(c). The initial Officers of the Company shall be:
Xxxx X. Xxxxx CEO
Xxxxxx X. Xxxxxxxxx CFO and EVP
Xxxxxx X. Xxxxxxx Vice President
Xxxxxxxx X. Xxxxxx Secretary
Xxxxxx Xxxxxxxx Assistant Secretary
1.25 Organization. A Person other than a natural person, including
without limitation corporations (both non-profit and other corporations),
partnerships (both limited and general), joint ventures, limited liability
companies, business trusts and unincorporated associations, but the term does
not include joint tenancies and tenancies by the entirety.
1.26 Person. An individual, trust, estate, or any Organization
permitted to be a member of a limited liability company under the laws of the
State of Delaware.
1.27 Principal Office. The Principal Office of the Company set forth in
Section 2.6.
1.28 Proceeding. Any administrative, judicial, or other adversary
proceeding, including without limitation litigation, arbitration, administrative
adjudication, mediation, and appeal or review of any of the foregoing.
1.29 Property. Any property, real or personal, tangible or intangible,
including money, and any legal or equitable interest in such property, but
excluding services and promises to perform services in the future.
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1.30 Related Company. The Member of the Company or any entity other
than the Company now or hereafter controlled directly or indirectly by, or under
direct or indirect common control with, the Member of the Company.
1.31 SCTA. That certain Subsequent Contract Transfer Agreement, dated
as of May 1, 2003, by and between the Company and DVI Receivables Corp XIX.
1.32 Tax Characterization and Additional Tax Terms. For federal income
tax purposes, and to the extent applicable for state and local income and
franchise tax purposes, it is intended that the Company be disregarded as an
entity separate from the Member; provided, however, if it is determined that
there are two or more members of the Company then it is intended that the
Company be treated as a partnership for such purposes, and the Managing Member
shall (i) file any information returns and reports and make any elections or
take any other similar action required for the Company to be classified as a
partnership for such purposes and (ii) act as the tax matters partner of the
Company pursuant to Section 6231(a)(7) of the Code and applicable Tax
Regulations.
(a) CODE shall mean the Internal Revenue Code of 1986.
(b) TAX REGULATIONS shall mean the federal income tax
regulations promulgated by the United States Treasury Department under the Code
as such Tax Regulations may be amended from time to time. All references herein
to a specific section of the Tax Regulations shall be deemed also to refer to
any corresponding provision of succeeding Tax Regulations.
1.33 Term. The term of this Agreement, as set forth in Section 2.4
hereof.
1.34 Unit. One of the one hundred (100) units of Membership Interest
that are authorized to be issued under this Agreement. Each unit represents a
Membership Interest of one percent (1%). All Units issued pursuant this
Agreement are issued to the Member, as sole member of the Company.
ARTICLE II
FORMATION
2.1 Organization. The Member hereby organizes the Company as a Delaware
limited liability company pursuant to the provisions of the Act.
2.2 Agreement. (a) For and in consideration of the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, (i) the Company and DVI Receivables
Corp. VIII hereby agree to the terms and conditions of this Agreement, as it may
from time to time be amended and (ii) in exchange for the agreement of DVI
Receivables Corp. VIII to act as Managing Member of the Company, the Company
hereby issues, assigns, transfers and conveys all of its Membership Interests to
DVI Receivables Corp. VIII, and, prior to and at all times after the Effective
Date, the term "Member" shall be deemed to refer to DVI Receivables Corp. VIII,
its successors and assigns. It is the express intention of the Company and DVI
Receivables Corp. VIII that this
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Agreement shall be the sole source of agreement of the parties, and, except to
the extent a provision of this Agreement expressly incorporates federal income
tax rules by reference to sections of the Code or Tax Regulations or is
expressly prohibited or ineffective under the Act, this Agreement shall govern,
even when inconsistent with, or different than, the provisions of the Act or any
other law or rule, and to the extent any provision of this Agreement is
prohibited or ineffective under the Act, this Agreement shall be deemed to be
amended to the least extent necessary in order to make this Agreement effective
under the Act, in the event the Act is subsequently amended or interpreted in
such a way to make any provision of this Agreement that was formerly invalid
valid, such provision shall be considered to be valid from the effective date of
such interpretation or amendment.
(b) The Company has been formed by DVI Receivables Corp. VIII to serve
as a special purpose entity in connection with securitization of certain
financial assets of DVI Receivables Corp. VIII or its Affiliates, and to engage
in any or all actions incidental thereto, including, without limitation,
entering into interest rate hedge tranactions. To facilitate the optimal
securitization of the Contributed Property (as defined in the Contribution and
Servicing Agreement), DVI has formed DVI Receivables Corp. XIX to receive from
DVI all Contributed Property pursuant to the Contribution and Servicing
Agreement, and to transfer all such Contributed Property to the Company pursuant
to the Subsequent Contract Transfer Agreement. To facilitate the optimal
securitization of such assets, pursuant to the Funding Sale Agreement, the
Company will also receive the Sold Company Assets (as defined in the Funding
Sale Agreement) and, pursuant to the DVI XV Sale Agreement, the Company will
receive the Sold Trust Property (as defined in the DVI XV Sale Agreement).
2.3 Name. The name of the Company is DVI Receivables XIX, L.L.C., and
all business of the Company shall be conducted under that name.
2.4 Term. The Company shall be dissolved and its affairs wound up in
accordance with the Act and this Agreement one year and one day after the Notes
have been paid in full pursuant to the Indenture, unless the Term shall be
extended by amendment to this Agreement and the Articles.
2.5 Registered Agent and Office. The registered agent for the service
of process and the registered office shall be that Person and location reflected
in the Articles. The Member may, from time to time, change the registered agent
or office through appropriate filings with the Secretary of State of the State
of Delaware. In the event the registered agent ceases to act as such for any
reason or the registered office shall change, the Managing Member shall promptly
designate a replacement registered agent or file a notice of change of address
as the case may be.
2.6 Principal Office. The Principal Office of the Company shall be
located at
x/x XXX Financial Services Inc.
0000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Securitization Manager
Telephone: (000) 000-0000
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or at such other address as such person may designate by written notice to the
Managing Member.
ARTICLE III
LIMITED PURPOSE; NATURE OF BUSINESS
3.1 Limited Business Purpose. The business purpose to be conducted or
promoted by the Company is limited to the following activities and none other:
(a) To acquire, own, purchase, hold, transfer, pledge and
otherwise deal with notes, debt, or other securities;
(b) To acquire, own, and hold one or more series of securities
("PASS-THROUGH SECURITIES") issued pursuant to one or more pooling agreements
(each, a "POOLING AGREEMENT"), and to issue one or more series of Pass-Through
Securities; such Pass-Through Securities of each series (i) will represent
ownership interests in various equipment finance contracts, the cash flow,
income, payments and proceeds therefrom and any related property and/or
collections in respect thereof, and (ii) may be structured to contain one or
more classes of Pass-Through Securities, each class having the characteristics
specified in the related Pooling Agreement; and to sell, transfer, assign,
finance and refinance one or more Pass-Through Securities or classes of
Pass-Through Securities of any series;
(c) To issue, acquire, own and hold one or more series of debt
obligations ("NOTES") pursuant to one or more indentures (each, an "INDENTURE"),
which Notes are collateralized by equipment finance contracts or income,
payments or proceeds therefrom ("FUNDING AGREEMENTS"), Pass-Through Securities
or supplemental collateral (collectively, the "COLLATERAL"); and to sell,
transfer, assign and finance such Notes with Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Banc of America Securities LLC, Nomura Securities
International, Inc. or any other underwriter and such other organizations as any
of them shall designate, at any time on or after May 1, 2003;
(d) To establish one or more trusts or other entities
("TRUSTS") to engage in any one or more of the activities described in any of
the clauses above or to issue, acquire, own, hold and sell a particular series
of notes to be issued pursuant to an indenture between such trust and an
indenture trustee (the "TRUSTEE"); to receive upon the formation of any such
Trust one or more certificates ("TRUST CERTIFICATES") representing the
beneficial ownership interest in such Trust; and to acquire, own, hold, sell,
transfer, assign, pledge, finance, refinance and otherwise deal with any or all
of the Trust Certificates in any such Trust;
(e) To invest and reinvest the funds received or collected by
the Company on Collateral in other investments of such types or in other
interest-bearing or discount securities, loans or other investments;
(f) To convey or transfer all or any portion of the Company's
right, title and interest in and to the Collateral for any series of Notes,
subject and subordinate to the rights of the related Noteholders;
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(g) To transfer the Company's rights to (i) any cash flow in
excess of amounts necessary to pay holders of the Notes remitted, or to be
remitted to, the Company pursuant to an indenture with respect to such Notes or
(ii) amounts remitted or to be remitted to the Company pursuant to a pooling
agreement or a funding agreement;
(h) To acquire, own, hold, sell, transfer, assign, pledge,
finance, refinance and otherwise deal with (i) installment sales contracts,
equipment leases, equipment finance leases, rental and other contract payments
from leases or other contracts, equipment finance loans and notes secured (in
whole or in part) by income and proceeds from equipment (collectively,
"Contracts"), (ii) the equipment which is the subject of such Contracts, (iii)
policies of insurance relating to such Contracts, Contract payments due
thereunder, equipment, or proceeds of any of the foregoing, (iv) any other
assets which may be incidental to the ownership of such Contracts, or (v) any
participation interest in or security based on or backed by assets described in
(i) through (iv) (collectively, "Lease Receivables"); and
(i) To borrow money pursuant to one or more interim finance
agreements between the Company and one or more lenders and acquiring, owning,
leasing, purchasing, investing, transferring, selling and/or pledging certain
property to be contributed to the Company pursuant to a contribution agreement
or subsequent contract transfer agreement in connection with such borrowing;
provided, however, that there may be only one interim finance agreement
outstanding at one time, unless all other existing interim finance providers
shall have so consented;
(j) To engage in any other acts or activities and to exercise
any power permitted to the Company under the Act so long as the same are
incidental to, or connected with, the foregoing or are necessary, suitable or
convenient to accomplish the foregoing;
(k) To enter into one or more interest rate hedge transactions
in respect of one or more classes of Notes;
(l) Provided, however, that the Company shall not engage in
any of the permitted activities set forth in (a) through (k) above if doing so
shall result in a downgrade of the rating by a nationally recognized rating
agency requested by the Company to rate the securities related to any previously
issued (by the Company or one of the Trusts) Notes, Pass-Through Securities or
Trust Certificates; and
(m) The Company shall pay its liabilities from its own assets,
and not have any liability to any Related Company or any creditor of any Related
Company.
ARTICLE IV
LIMITATIONS ON ACTIVITIES
4.1 Limitations on Activities. Notwithstanding any other provision of
this Agreement and any provision of law which otherwise so empowers the Company,
the Company shall not, and no Member shall have any right, power or authority to
cause the Company, for so long as the obligations under the Indenture and the
Swap Agreements remain outstanding, and thereafter
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without the unanimous affirmative vote of the Member's board of directors, to
perform any act in contravention of any of the following:
(a) The Company shall not
(i) consolidate or merge with or into any other
entity or person or dissolve or liquidate in whole or in part
or transfer its properties and assets substantially as an
entirety to any entity, or
(ii) engage in any action that bears on whether the
separate legal identity of the Company and the Member will be
respected, including, without limitation (A) holding itself
out as being liable for the debts of any other party; (B)
forming, or causing to be formed, any subsidiaries of the
Company or (C) acting other than in its name and through its
duly authorized officers or agents;
(b) The Company shall not engage in any joint activity or
transaction of any kind with or for the benefit of any Related Company,
including loans to or from any Related Company and any guarantee of the
indebtedness of any Related Company, except for
(i) entering into the agreements referenced in or
contemplated by Article III,
(ii) purchasing management services and leasing
office space or equipment, in each case only to the extent
necessary for the conduct of the Company's business, and
(iii) payment of capital distributions to the Member;
(c) The Company shall not create, incur, assume, guarantee or
in any manner become liable in respect of any indebtedness, except as stated in
Article III, other than trade payables and expense accruals incurred in the
ordinary course of business and which are incident to the business purpose of
the Company as stated in Article III above;
(d) The Company shall not commingle its funds or other assets
with those of any Person;
(e) Neither the Member nor the Company shall file or otherwise
initiate on behalf of the Company (i) a voluntary petition for relief under any
Chapter of the Bankruptcy Code, (ii) a receivership, conservatorship or
custodianship, (iii) an assignment for the benefit of creditors or (iv) any
other bankruptcy or insolvency related proceeding;
(f) The Company shall not dissolve or wind up its affairs upon
the dissociation, dissolution or Event of Bankruptcy of any of its Members;
(g) The Company shall not dissolve even if it has no remaining
Members if a personal representative of the last Member agrees in writing to
continue the Company and to act as the Member hereunder until such time as
another Member is effectively appointed hereunder
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or, in the event that no such personal representative shall agree, the Company
shall make reasonable commercial efforts to cause the Trustee to act as interim
Member until a replacement Member is effectively appointed; and
(h) In the event that the Member undergoes an Event of
Bankruptcy, the Member shall not reject the Agreement.
ARTICLE V
ACCOUNTING AND RECORDS
5.1 Records to be Maintained. The Company shall maintain the following
records at the Principal Office:
(a) a record of the full name and last known mailing address
of the Member, together with information relating to the Member's Membership
Interest;
(b) a copy of the Articles and all amendments thereto,
together with executed copies of any powers of attorney pursuant to which the
Articles or any such amendment has been executed;
(c) a copy of the Company's federal, state and local income or
information tax returns and reports;
(d) a copy of this Agreement including all amendments thereto;
and
(e) the Company's books and records, including financial
statements of the Company, which shall be open to inspections by the Member or
its agents at reasonable times.
5.2 Reports. The Managing Member shall prepare annual reports,
including a balance sheet, statement of profit and loss and changes in the
Member's account, and a statement of cash flows.
5.3 Tax Returns and Reports. The Managing Member shall prepare and
timely file income tax returns of the Company in all jurisdictions where such
filings are required.
5.4 Records to be Kept Separate. The Company (a) shall maintain its
financial and accounting books and records separate from those of any other
entity or person, (b) shall pay from its assets all obligations and indebtedness
of any kind incurred by it, and shall not pay from its assets any obligations or
indebtedness of any other entity or person, and (c) shall observe all
formalities required by its Articles, this Agreement and the laws of the State
of Delaware.
ARTICLE VI
NAME AND ADDRESS OF MEMBER
The name and address (or such other address as the Member shall
designate to the Company from time to time) of the Member is:
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DVI Receivables Corp. VIII
x/x XXX Financial Services Inc.
0000 Xxxx Xxxx
Xxxxxxx, XX 00000
ARTICLE VII
RIGHTS AND DUTIES OF MEMBER
7.1 Liability of Member. The Member shall not have any liability for
the obligations or liabilities of the Company except to the extent provided in
the Act.
7.2 Representations and Warranties. The Member hereby represents and
warrants to the Company that: (a) the Member is an entity that has power to
enter into this Agreement and to perform its obligations hereunder and that the
persons executing this Agreement on behalf of the entity have the power to do
so; and (b) the Member is acquiring its interest in the Company for the Member's
own account as an investment and without an intent to distribute the interest.
The Member acknowledges that its interest in the Company has not been registered
under the Securities Act of 1933 or any state securities laws, and may not be
resold or transferred without appropriate registration or the availability of an
exemption from such requirements.
7.3 Conflicts of Interest.
(a) The Member shall be entitled to enter into transactions
that may be considered to be competitive with the Company, it being expressly
understood that the Member may enter into transactions that are similar to the
transactions into which the Company may enter. Notwithstanding the foregoing,
the Member shall account to the Company and hold as trustee for it any Property,
profit, or benefit derived by the Member in the conduct and winding up of the
Company business or from a use or appropriation by the Member of the Company's
Property including information developed exclusively for the Company and
opportunities expressly offered to the Company.
(b) The Member does not violate a duty or obligation to the
Company merely because the Member's conduct furthers the Member's own interest.
No transaction with the Company shall be voidable solely because the Member has
a direct or indirect interest in the transaction if the transaction is fair and
reasonable to the Company.
ARTICLE VIII
MANAGEMENT
8.1 Management of the Company.
(a) The Member shall be the managing member of the Company
(the "Managing Member") and, in such capacity, shall manage the Company in
accordance with this Agreement. The Managing Member is an agent of the Company's
business, and the actions of the Managing Member taken in such capacity and in
accordance with this Agreement shall bind the Company.
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(b) The Managing Member shall have full, exclusive and
complete discretion to manage and control the business and affairs of the
Company, to make all decisions affecting the business and affairs of the Company
and to take all such actions as it deems necessary or appropriate to accomplish
the purpose of the Company as set forth herein. The Managing Member shall be the
sole person or entity with the power to bind the Company, except and to the
extent that such power is expressly delegated to any other person or entity by
the Managing Member, and such delegation shall not cause the Managing Member to
cease to be the Member or the Managing Member. There shall not be a "manager"
(within the meaning of the Act) of the Company.
(c) The Managing Member may appoint individuals ("OFFICERS")
with or without such titles as it may elect, including the titles of President,
Vice President, Treasurer, Secretary, and Assistant Secretary, to act on behalf
of the Company with such power and authority as the Managing Member may delegate
in writing to any such persons.
8.2 Authority of Managing Member to Bind the Company. Only the Managing
Member, the officers and authorized agents of the Company shall have the
authority to bind the Company. Subject to Section 4.1, the Managing Member 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 (as described in Article III),
including, without limitation:
(a) the institution, prosecution and defense of any Proceeding
in the Company's name;
(b) the entering into contracts;
(c) investment and reinvestment of the Company's funds, and
receipt and holding of Property as security for repayment;
(d) the conduct of the Company's business, the establishment
of Company offices, and the exercise of the powers of the Company;
(e) the appointment of employees and agents of the Company,
the defining of their duties and the establishment of their compensation, and
the dealing with tradespeople, accountants and attorneys, on such terms as the
Managers shall determine;
(f) the indemnification of any Person;
(g) the making of such elections under the Code and Tax
Regulations and other relevant tax laws as to the treatment of items of Company
income, gain, loss, deduction and credit, and as to all other relevant matters
as the Managing Member deems necessary or appropriate, including without
limitation, elections referred to in Section 754 of the Code, the determination
of which items of cash outlay shall be capitalized or treated as current
expenses, and the selection of the method of accounting and bookkeeping
procedures to be used by the Company;
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(h) the amendment of any provision to this Agreement;
provided, however, that no provision of Article III and Article IV hereof, or
Sections 8.01(a), 8.01(b) and 5.04 of the SCTA shall be amended without the
consent of the Independent Directors of the Member.
8.3 Actions of the Managing Member. The Managing Member has the power
to bind the Company as provided in this Article VIII. No Person dealing with the
Company shall have any obligation to inquire into the power or authority of the
Managing Member acting on behalf of the Company.
8.4 Compensation of Managing Member. The Managing Member shall be
reimbursed for all reasonable expenses incurred in managing the Company and
shall be entitled to compensation, in an amount to be determined from time to
time by consent of the Member, in its sole discretion. The Managing Member shall
not be required to devote full time to the management of the Company business,
but only so much time as shall be necessary or appropriate for the proper
management of such business.
8.5 Managing Member's Standard of Care. The Managing Member shall
discharge its duties to the Company in good faith and with that degree of care
that an ordinarily prudent person in a similar position would use under similar
circumstances. In discharging its duties, the Managing Member shall be fully
protected in relying in good faith upon the records required to be maintained
under Article VI and upon such information, opinions, reports or statements by
any Person as to matters the Managing Member reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits or losses of the Company or any other facts pertinent to the existence
and amount of assets from which Distributions to the Member might properly be
paid. The Company shall indemnify and hold harmless the Managing Member against
any loss, damage or expense (including attorneys' fees) incurred by the Managing
Member as a result of any act performed or omitted on behalf of the Company or
in furtherance of the Company's interests without, however, relieving the
Managing Member of liability for failure to perform his or her duties in
accordance with the standards set forth herein. The satisfaction of any
indemnification and any holding harmless shall be from and limited to the
Company's Property.
8.6 Resignation. Other than as set forth in Section 4.1(g) hereof, the
Member shall not resign or disassociate itself from the Company at any time
without first obtaining the effective appointment of a successor Member approved
by the Rating Agencies.
8.7 Payment of Liabilities. The Member shall at all times pay its
liabilities from its own assets, and not have any liability to any Related
Company or any creditor thereof.
ARTICLE IX
CONTRIBUTIONS
9.1 Membership Interest. The Member holds all of the Units of
Membership Interest.
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9.2 Contributions. The Member is not required to make any Capital
Contribution to the Company.
9.3 Withdrawal. The Member shall not be entitled to withdraw any part
of its Capital Contribution or to receive any distribution from the Company,
except after payment in full of all outstanding debt securities of the Company
or otherwise as specifically provided in this Agreement.
9.4 Interest. The Member shall not be entitled to interest on any
Capital Contribution or on any profits retained by the Company.
9.5 No Personal Liability. The Member shall not have any liability for
the obligations or liabilities of the Company except to the extent provided in
the Act.
ARTICLE X
ALLOCATIONS AND DISTRIBUTIONS
10.1 Taxable Income Allocations. Profits and losses, and each item of
Company income, gain, loss, deduction, credit and tax preference with respect
thereto, for each Fiscal Year (or shorter period in respect of which such items
are to be allocated) shall be allocated to the Member; provided, however, if it
is determined that there are two or more members of the Company, then such items
shall be allocated among the members in accordance with their respective
economic interests in the Company, determined generally by taking into account
the priorities of cash distributions, the actual distributions and the economic
allocation of losses and other expenses among the Members as determined in
accordance with Sections 3.04(b), 3.04(c) and 6.06 of the Indenture as
applicable.
10.2 Distributions. Distributions to the Company shall be made to the
Member or its designee in accordance with Section 3.04(b) and 6.06 of the
Indenture, as applicable.
ARTICLE XI
TRANSFER OF MEMBERSHIP INTEREST
11.1 Compliance with Securities Laws. No Unit of Membership Interest
has been registered under the Securities Act of 1933, as amended, or under any
applicable state securities laws. The Member may not transfer (a transfer, for
purposes of this Agreement, shall be deemed to include, but not be limited to,
any sale, transfer, assignment, pledge, creation of a security interest or other
Disposition) all or any part of the Member's Units of Membership Interest,
except upon compliance with the applicable federal and state securities laws.
The Managing Member shall have no obligation to register the Member's Units of
Membership Interest under the Securities Act of 1933, as amended, or under any
applicable state securities laws, or to make any exemption therefrom available
to the Member.
11.2 Transfer of Economic Interest. The right to receive allocations of
profits and losses and to receive Distributions may not be transferred in whole
or in part unless the following terms and conditions have been satisfied:
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The transferor shall have:
(a) assumed all costs incurred by the Company in connection
with the transfer;
(b) furnished the Company with a written opinion of counsel,
satisfactory in form and substance to counsel for the Company, that such
transfer complies with applicable federal and state securities laws and this
Agreement and that such transfer, for federal income tax purposes, will not
cause the termination of the Company under Section 708(b) of the Code, cause the
Company to be treated as an association taxable as a corporation for income tax
purposes or otherwise adversely affect the Company or the Member; and
(c) complied with such other conditions as the Managing Member
may reasonably require from time to time.
Transfers will be recognized by the Company as effective only upon the close of
business on the last day of the calendar month following satisfaction of the
above conditions. Any transfer in contravention of this Article XI and any
transfer which if made would cause a termination of the Company for federal
income tax purposes under Section 708(b) of the Code shall be void ab initio and
ineffectual and shall not bind the Company.
11.3 Transfer of Membership Interest.
(a) The Member may not sell, assign, encumber, transfer or
otherwise Dispose of any Units of its Membership Interest (or take or omit to
take any action, filing, election or other action that could result in a deemed
sale, assignment, encumbrance, transfer or other Disposition); provided, however
that the Member may make such a transfer to an Affiliate of the Member, which
Affiliate shall have a special purpose charter and bylaws substantially similar
in all material respects to those of the Member. Any attempted Disposition not
in accordance with this Agreement shall be void.
(b) Upon the transfer of Units and admission of an additional
Member in accordance with this Agreement, this Agreement shall be amended to
reflect the admission of the substitute Member, and the Member shall take any
action required to record to reflect such admission.
11.4 Status of Transferee. A transferee of a Unit of Membership
Interest shall be entitled to receive that share of Profits, Losses and
Distributions, and the return of any Capital Contribution to which the
transferor would otherwise be entitled with respect to the interest transferred,
and shall have the rights of the transferring Member of the Company under the
Act or this Agreement. The Company shall also, if the transferee and transferor
jointly advise the Company in writing of a transfer of the Unit of Membership
Interest, furnish the transferee with pertinent tax information at the end of
each Fiscal Year.
11.5 Dissolution or Bankruptcy of the Member. Upon the dissolution or
adjudication of bankruptcy of the Member, the Member's successors or assigns
shall have all the rights of the Member for the purpose of settling or managing
the Member's estate.
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ARTICLE XII
DISSOLUTION AND WINDING UP
12.1 Dissolution. The Company shall be dissolved and its affairs wound
up, upon the first to occur of any of the following events (each of which shall
constitute a Dissolution Event):
(a) the expiration of the Term of this Agreement, unless the
Company is continued with the consent of the Member, in its sole discretion; or
(b) the determination in writing of the Managing Member to
dissolve and terminate the Company; provided, however, that the Managing Member
shall not, and the Managing Member hereby agrees not to, take any action to
dissolve or terminate the Company prior to the expiration of the Term;
(c) the entry of a decree of judicial dissolution pursuant to
the Act; or
(d) the occurrence of an Event of Bankruptcy as to a Member or
the resignation, expulsion or dissolution of a Member or the occurrence of any
other event that terminates the membership of a Member, unless, within 90 days
of such event, there is at least one remaining Member and the remaining Members
unanimously agree to continue the business of the Company, in which event the
Company shall not be dissolved and the Company and the business of the Company
shall be continued; provided, however, that if any Member is a partnership or a
limited liability company on the date of such occurrence, the dissolution of
such Member as a result of the dissolution, termination, resignation, death,
incompetence, removal or Event of Bankruptcy of a partner or member in such
partnership or limited liability company, as the case may be, shall not be an
event of dissolution of this Company if the business of such Member is continued
by its remaining partner(s) or member(s), as the case may be, either alone or
with additional partners or members, and such Member and such partners or
members comply with any other applicable requirements of this Agreement; or
(e) the passage of 30 days after the sale or other disposition
of all or substantially all the assets of the Company (except that if the
Company receives an installment obligation as consideration for such sale, the
Company shall continue, unless sooner dissolved under the provisions of this
Agreement, until such time as such note or notes are paid in full).
(f) Upon the dissolution of the Company for any reason, the
Member shall proceed promptly to wind up the affairs of and liquidate the
Company; provided, however, that if the Notes are outstanding, the Member shall
not liquidate the assets of the Company securing the Notes, except as permitted
by the deed of trust and assignment of leases pursuant to which such assets were
encumbered, without the consent of the secured party under such document, which
may continue to exercise all of its rights under such document and shall have
complete and independent ability to retain such assets until the Notes have been
paid in full or otherwise completely discharged pursuant to the Indenture.
Subject to the foregoing, the Member shall have reasonable discretion to
determine the time, manner and terms of any sale or sales of the Company's
property pursuant to such liquidation.
15
12.2 Effect of Dissolution. Upon dissolution, the Company shall not be
terminated and shall continue until the winding up of the affairs of the Company
is completed and a certificate of dissolution has been issued by the Secretary
of State of Delaware.
12.3 Distribution of Assets on Dissolution. Upon the winding up of the
Company, the Managing Member shall take full account of the assets and
liabilities of the Company, shall liquidate the assets (unless the Managing
Member determines that a distribution of any of the Company's Property in-kind
would be more advantageous to the Member than the sale thereof) as promptly as
is consistent with obtaining the fair value thereof, and shall apply and
distribute the proceeds therefrom in the following order:
(a) first, to the payment of the debts and liabilities of the
Company to creditors, including the Member, if it is a creditor, to the extent
permitted by law, in satisfaction of such debts and liabilities, and to the
payment of necessary expenses of liquidation;
(b) second, to the setting up of any reserves which the
Managing Member may deem necessary or appropriate for any anticipated
obligations or contingencies of the Company arising out of or in connection with
the operation or business of the Company. Such reserves may be paid over by the
Managing Member to an escrow agent or trustee selected by the Managing Member to
be disbursed by such escrow agent or trustee in payment of any of the
aforementioned obligations or contingencies and, if any balance remains at the
expiration of such period as the Managing Member shall deem advisable, shall be
distributed by such escrow agent or trustee in the manner hereinafter provided;
(c) then, to the Member.
Liquidation proceeds shall be paid within 60 days of the end of the Company's
taxable year in which the liquidation occurs. Such distributions shall be in
cash or Property (which need not be distributed proportionately) or partly in
both, as determined by the Managing Member.
If at the time of liquidation the Managing Member shall determine that an
immediate sale of some or all of the Company's Property would cause undue loss
to the Member, the Managing Member may, in order to avoid such loss, defer
liquidation.
12.4 Winding Up and Filing Articles of Dissolution. Upon the
commencement of the winding up of the Company, articles of dissolution shall be
delivered by the Company to the Secretary of the State of Delaware for filing.
The articles of dissolution shall set forth the information required by the Act.
The winding up of the Company shall be completed when all debts, liabilities,
and obligations of the Company have been paid and discharged or reasonably
adequate provision therefor has been made, and all of the remaining Property of
the Company has been distributed to the Member.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. Notices to the Member shall be sent to the Principal
Office of the Company. Any notice or other communication required or permitted
hereunder shall be in
16
writing, and shall be deemed to have been given with receipt confirmed if and
when delivered personally, given by prepaid telegram or mailed first class,
postage prepaid, delivered by courier, or sent by facsimile, to the Member at
such address.
13.2 Headings. All Article and section headings in this Agreement are
for convenience of reference only and are not intended to qualify the meaning of
any Article or section.
13.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes any prior agreement or understanding between
them respecting the subject matter of this Agreement.
13.4 Binding Agreement. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their permitted successors and
assigns.
13.5 Saving Clause. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby. If the operation of any provision of this
Agreement would contravene the provisions of the Act, such provision shall be
void and ineffectual.
13.6 Counterparts. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement, binding on all
the parties hereto, even though all parties are not signatory to the original or
the same counterpart. Any counterpart of either this Agreement shall for all
purposes be deemed a fully executed instrument.
13.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
13.8 No Membership Intended for Nontax Purposes. The Member has formed
the Company under the Act, and expressly does not intend hereby to form a
partnership, either general or limited, under the Delaware partnership laws.
13.9 No Rights of Creditors and Third Parties under Agreement. This
Agreement is entered into between the Company and the Member for the exclusive
benefit of the Company, its Member, and their successors and assignees. This
Agreement is expressly not intended for the benefit of any creditor of the
Company or any other Person. Except and only to the extent provided by
applicable statute, no such creditor or any third party shall have any rights
under this Agreement or any agreement between the Company and the Member with
respect to any Capital Contribution or otherwise.
13.10 General Interpretive Principles. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Agreement include the plural as
well as the singular, and the use of any gender herein shall be deemed to
include the other gender;
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(b) accounting terms not otherwise defined herein have the
meanings given to them in the United States in accordance with generally
accepted accounting principles;
(c) references herein to "Sections", "paragraphs", and other
subdivisions without reference to a document are to designated Sections,
paragraphs and other subdivisions of this Agreement;
(d) a reference to a paragraph without further reference to a
Section is a reference to such paragraph as contained in the same Section in
which the reference appears, and this rule shall also apply to other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the Effective Date.
DVI Receivables Corp. VIII
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: EVP and CFO
DVI Receivables XIX, L.L.C.
By: DVI Receivables Corp. VIII
Its Managing Member
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: EVP and CFO
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
