AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF RESIDENTIAL CAPITAL, LLC
Exhibit 3.1
Execution Copy
This Amended and Restated Limited Liability Company Agreement (this “Agreement”) of
Residential Capital, LLC (the “Company”), dated and effective as of March 31, 2008, is
entered into by GMAC Mortgage Group LLC (the “GMAC Member”) and GMAC LLC (“GMAC” or
the “Preferred Member”, and together with the GMAC Member, the “Members”).
WHEREAS, Residential Capital Corporation (the “Corporation”) was incorporated as a
Delaware corporation on August 20, 2004;
WHEREAS, on October 24, 2006, the Corporation was converted (the “LLC Conversion”)
into a Delaware limited liability company pursuant to Section 18-214 of the Delaware Limited
Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to
time (the “Act”) and Section 266 of the General Corporation Law of the State of Delaware
(8 Del. C. § 101 et seq.), as amended from time to time (the
“GCL”), by causing the filing with the Secretary of State of the State of Delaware (the
“Delaware Secretary of State”) of a Certificate of LLC Conversion to Limited Liability
Company (the “Certificate of LLC Conversion”) and a Certificate of Formation (the
“Certificate”);
WHEREAS, on October 24, 2006, the sole stockholder of the Corporation, the GMAC Member, was
admitted as the sole member of the Company by entering into a Limited Liability Company Agreement,
dated and effective as of such date (the “Prior Agreement”);
WHEREAS, on November 27, 2006, General Motors Corporation, a Delaware corporation, GMAC and
the Company entered into an Amended and Restated Operating Agreement (the “Operating
Agreement”), pursuant to which the Company agreed to, among other things, certain restrictions
on its ability to make distributions;
WHEREAS, pursuant to terms of the Operating Agreement, the Company must at all times have at
least two “independent directors” within the meaning of the Operating Agreement (the
“Independent Directors”);
WHEREAS, GMAC desires to become a member of the Company and to purchase, and the Company
desires to issue, Preferred Units (as defined below) of the Company to GMAC;
WHEREAS, in connection with the execution of this Agreement, GMAC, the Company and IB Finance
Holding Company, LLC, a Delaware limited liability company (“IB Finance”), have entered
into an Exchange Agreement, dated as of March 31, 2008 (the “Exchange Agreement”), pursuant
to which the Preferred Member may, at any time after January 1, 2009, subject to the terms and
conditions thereof, elect to exchange all (but not less than all) of the Preferred Units into an
equivalent number of Class M preferred units of IB Finance on a one-for-one basis (the
“Preferred Exchange”); and
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WHEREAS, the Members desire to amend and restate the Prior Agreement in its entirety as set
forth in this Agreement.
NOW, THEREFORE, the Members, by execution of this Agreement, hereby agree as follows:
1. Name. The name of the limited liability company is Residential Capital, LLC.
2. Certificates. The Certificate and the Certificate of LLC Conversion have been duly
executed, delivered and filed with the Delaware Secretary of State. Each Officer (as defined in
Section 16 below), acting alone, is hereby designated as an “authorized person” of the Company to
execute, deliver and file any amendments and/or restatements of the Certificate and any other
certificates (and any amendments and/or restatements thereof) permitted or required to be filed
with the Delaware Secretary of State and shall continue as the designated “authorized person”
within the meaning of the Act. An Officer shall execute, deliver and file, or cause the execution,
delivery and filing of any certificates (and any amendments and/or restatements thereof) necessary
for the Company (i) to qualify to do business in any other jurisdiction in which the Company may
wish to conduct business and (ii) to obtain professional licensure necessary or desirable.
3. Purposes. The Company is formed for the object and purpose of, and the nature of
the business to be conducted and promoted by the Company is, engaging in any lawful act or activity
for which limited liability companies may be formed under the Act, as such acts or activities may
be determined by the Board (as herein defined) from time to time.
4. Powers. In furtherance of its purposes, but subject to all of the provisions of
this Agreement, the Company shall have the power and is hereby authorized to:
(a) Acquire by purchase, lease, contribution of property or otherwise, own, hold, sell,
convey, transfer or dispose of any real or personal property that may be necessary, convenient or
incidental to the accomplishment of the purposes of the Company;
(b) Act as a trustee, executor, nominee, bailee, director, officer, agent or in some other
fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and
responsibilities associated therewith;
(c) Take any and all actions necessary, convenient or appropriate as trustee, executor,
nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of
waivers, consents or amendments of rights or powers relating thereto and the execution of
appropriate documents to evidence such waivers, consents or amendments;
(d) Operate, purchase, maintain, finance, improve, own, sell, convey, assign, mortgage, lease
or demolish or otherwise dispose of any real or personal property that may be necessary, convenient
or incidental to the accomplishment of the purposes of the Company;
(e) Borrow money and issue evidences of indebtedness in furtherance of any or all of the
purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the
Company;
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(f) Invest any funds of the Company pending distribution or payment of the same pursuant to
the provisions of this Agreement;
(g) Prepay, in whole or in part, refinance, recast, increase, modify or extend any
indebtedness of the Company and, in connection therewith, execute any extensions, renewals or
modifications of any mortgage or security agreement securing such indebtedness;
(h) Enter into, perform and carry out contracts of any kind, including, without limitation,
contracts with any person or entity affiliated with any Member necessary to, in connection with,
convenient to, or incidental to the accomplishment of the purposes of the Company;
(i) Employ or otherwise engage employees, managers, contractors, advisors, attorneys and
consultants and pay reasonable compensation for such services;
(j) Enter into partnerships, limited liability companies, trusts, associations, corporations
or other ventures with other persons or entities in furtherance of the purposes of the Company; and
(k) Do such other things and engage in such other activities related to the foregoing as may
be necessary, convenient or incidental to the conduct of the business of the Company, and have and
exercise all of the powers and rights conferred upon limited liability companies formed pursuant to
the Act.
5. Principal Business Office. The principal business office of the Company shall be
located at 0 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, XX 00000, or at such other location as the Board may
designate from time to time in a writing to be filed with the records of the Company.
6. Registered Office. The address of the registered office of the Company in the
State of Delaware is c/o Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000, or such other office as the Board may designate from time to
time in accordance with the Act.
7. Registered Agent. The name and address of the registered agent of the Company for
service of process on the Company in the State of Delaware are Corporation Service Company, 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000, or such other agent as
the Board may designate from time to time in accordance with the Act.
8. Members. The name and the mailing address of the Members are as set forth on
Schedule A attached hereto. Each Member shall have the power to exercise any and all
rights or powers granted to such Member pursuant to the express terms of this Agreement. No Member
shall have the authority to act for or bind the Company by virtue of its status as a Member, except
as expressly provided in this Agreement. Except as otherwise provided by the Act, there shall be
no requirement to hold an annual meeting of the Members. The Preferred Member is deemed admitted
as a Member of the Company upon its execution and delivery of this Agreement.
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9. Limited Liability. Except as otherwise provided by the Act, the debts, obligations
and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by reason of being a member of the
Company.
10. Capital Contributions. Capital contributions were previously made by the GMAC
Member in connection with the issuance of capital stock by the Corporation, and the Preferred
Member has agreed to contribute certain capital to the Company as of the date hereof. As of the
date hereof, the Preferred Member has contributed to the Company (or otherwise caused to be
forgiven) certain existing indebtedness of the Company with a value of $607,192,000 (the
“Preferred Contribution”). The Preferred Member may, in its sole discretion, contribute to
the Company (or otherwise cause to be forgiven) additional existing indebtedness of the Company
from time to time on or prior to May 31, 2008, provided that the aggregate value of such additional
existing indebtedness contributed by the Preferred Member shall not exceed $265,779,000 (such
additional capital contributions, together with the Preferred Contribution, the “Aggregate
Preferred Contribution”). For purposes of determining the value of any such additional capital
contribution by the Preferred Member, the existing indebtedness of the Company shall have the value
set forth on Schedule B attached hereto.
No Member shall be required to make any additional capital contribution to the Company;
provided, however, that any Member may at any time make additional capital contributions to the
Company with the consent of the GMAC Member (except in the case of a capital contribution made by
the Preferred Member pursuant to the paragraph above, for which no such consent shall be required).
11. Capitalization.
a. Common Units. The Company shall be deemed to have issued 2,000,000 units of common
limited liability company interests (the “Common Units”) to the GMAC Member, representing
all of the limited liability company interests of the Company held by the GMAC Member as of the
date of this Agreement.
b. Preferred Units.
(i) A class of non-participating, perpetual preferred interests is hereby established,
which shall be divided into a number of units equal to the Aggregate Preferred Contribution
divided by the Preferred Unit Liquidation Price (the “Preferred Units”, and
collectively with the Common Units, the “Units”). The Company shall be deemed to
have issued all such Preferred Units to GMAC in consideration of the Preferred Contribution
and any additional capital contributions by GMAC pursuant to Section 10 (it being understood
that the number of Preferred Units so issued shall not exceed 872,971), and as soon as
practicable after May 31, 2008 the Officers shall cause Schedule A attached hereto to be
revised to reflect the number of Preferred Units outstanding.
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(ii) The Preferred Units shall, with respect to distribution rights and rights upon
liquidation, winding up or dissolution of the Company, rank senior to the Common Units.
(iii) The Company, upon approval by the Board (including a majority of the Independent
Directors), may redeem the Preferred Units then outstanding, in whole or in part, on any
Distribution Payment Date (as defined below) or on the date of the Preferred Exchange, by
delivering at least 30 but not more than 60 days’ prior notice to the holder of such
Preferred Units (or, if such redemption is to occur on the date of the Preferred Exchange,
such notice may be delivered at any time subsequent to the Company’s receipt of the Exchange
Notice (as defined in the Exchange Agreement) and prior to the date of the Preferred
Exchange). Any such redemption shall be for cash at a redemption price equal to the $1,000
per Preferred Unit (the “Preferred Unit Redemption Price”), plus any authorized but
unpaid Preferred Distributions on the Preferred Units to be redeemed.
c. Preferred Exchange. Upon the completion of the Preferred Exchange, the Preferred
Units shall be cancelled, and any authorized but unpaid Preferred Distributions shall remain an
obligation of the Company, and such obligation shall rank, with respect to distribution rights and
rights upon liquidation, winding up or dissolution of the Company, senior to the Common Units.
12. Allocation of Profits and Losses. Items of income, gain, loss and deduction of
the Company for any allocation period shall be allocated among the Members in a manner such that
the capital account of each Member, immediately after making such allocation, and after taking into
actual distributions made during such allocation period (and distributions with respect to such
allocation period to be made after the end of such allocation period if the Board is able to
determine in good faith the manner in which such distributions will be made pursuant to Section 13
and Section 22, as appropriate), is, as nearly as possible, equal (proportionately) to (i) the
distributions that would be made to such Member pursuant to Section 13 and Section 22, as
appropriate, if the Company were to dissolve, its affairs wound up and its assets sold for cash
equal to their book value, all Company liabilities were satisfied (limited, with respect to each
nonrecourse liability, to the book value of the assets securing the liability) and the net assets
of the Company were distributed in accordance with Section 13 and Section 22, as appropriate,
immediately after making such allocation, minus (ii) such Member’s share of “minimum gain” and
“partner nonrecourse debt minimum gain” determined pursuant to Regulations Section 1.704-2(g)(1)
and 1.704-2(i)(5), computed immediately prior to the hypothetical sale of assets, if any.
13. Distributions.
a. The Preferred Member shall be entitled to receive, when and as authorized by the Board and
so long as there would be no violation of the provisions of the Operating Agreement as a result of
any such distribution, out of Distributable Cash (as defined below), cash distributions (the
“Preferred Distributions”) with respect to each Preferred Unit at the rate of 13% of the
Preferred Unit Redemption Price per annum. Such distributions shall be payable quarterly on
January 1, April 1, July 1 and October 1 of each year (each, a “Distribution Payment
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Date”, and each such quarter, a “Distribution Period”), beginning July 1,
2008. The Preferred Distributions shall be non-cumulative, and any amounts of such distributions
that are not authorized by the Board to be paid during a Distribution Period shall not be carried
over to subsequent Distribution Periods.
b. Distributions shall be made to the GMAC Member at the times and in the aggregate amounts
determined by the board of directors of the Company (the “Board”); provided that no
distributions shall be made to the GMAC Member at any time Preferred Units are outstanding and any
Preferred Distributions for the then-current Distribution Period have not been authorized or any
Preferred Distributions that have been authorized (whether or not for the then-current Distribution
Period) remain unpaid (unless sufficient funds have been set aside for such payments).
c. Notwithstanding anything to the contrary, no distributions shall be authorized or paid if
and when the Company is Insolvent or would be rendered Insolvent by the distribution or would
violate the Act or other applicable law. For purposes of this Agreement, (1) “Insolvent”
means such time as when the value of the Company’s assets become less than the sum of its
liabilities or the Company becomes unable to pay its debts as they become due in the usual course
of business and (2) “Distributable Cash” means that portion of the cash and cash equivalent
assets of the Company which, in light of the Company’s then current and foreseeable sources of, and
needs for, cash, exceeds the amount of cash needed by the Company, as determined by a majority of
the Board, to (i) service its debts and obligations in a timely fashion, (ii) maintain adequate
working capital and reserves, and (iii) conduct its business and carry out its purposes.
14. Management.
a. Managers. In accordance with Section 18-402 of the Act, management of the Company
shall be vested exclusively in the Board, subject to any delegation to the Officers as provided
hereunder or any other delegation contemplated hereby. Directors (as defined in Section 14(b)
below) shall constitute “managers” within the meaning of the Act and may, but need not, be Members.
Subject to the delegation to the Officers of the Company provided herein and any delegation
otherwise herein contemplated, the business and affairs of the Company shall be managed by or under
the direction of the Board. The Preferred Member shall have no voting rights or other rights to
participate in the management or control of the Company’s business or act for or bind the Company,
except as required by law.
b. Election, Number and Term of Directors. The GMAC Member may, from time to time as
it deems advisable, elect natural persons as directors of the Company (each a “Director”).
The directors serving on behalf of the Corporation immediately prior to the LLC Conversion
continued as the Directors of the Company upon the effectiveness of the LLC Conversion. The number
of Directors may be fixed from time to time exclusively pursuant to a resolution adopted by a
majority of the Board. Each Director shall hold office until resignation, removal or death, or
until his or her successor shall have been duly elected and qualified. Any Director may be removed
with or without cause by the GMAC Member. Unless otherwise provided by law or this Agreement, any
newly created directorship or any vacancy occurring in the Board for any cause may be filled by a
majority of the remaining members of the Board,
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although such majority is less than a quorum, or by the GMAC Member in accordance with the
first sentence of this Section 14(b), and each Director so elected shall hold office until the
expiration of the term of office of the Director whom he or she has replaced or until his or her
successor is elected and qualified.
c. Committees. The Board may, by resolution or resolutions passed by a majority of
the Board, designate one or more committees, each committee to consist of one or more Directors.
Any such committee, to the extent provided in the resolution of the Board, or in this Agreement,
shall have and may exercise all the powers and authority of the Board in the management of the
business and affairs of the Company, and may authorize the seal of the Company to be affixed to all
papers which may require it. Any committee of the Corporation consisting of Directors that existed
immediately prior to the LLC Conversion shall be deemed to have continued as a committee of the
Board after the LLC Conversion, with the same composition and authority previously delegated,
including, without limitation, by the Corporation, except as may have been altered by the Board.
Any committee established by the Board pursuant to this Section 14(c) may be revoked or altered at
any time by the Board.
d. Compensation of Directors. Except as otherwise authorized by the Board, Directors
shall not receive any stated salary for their services as Directors or as members of committees,
but by resolution of the Board a fixed fee and expenses of attendance may be allowed for attendance
at each meeting. Any compensation for any Director previously authorized by or on behalf of the
Corporation prior to the LLC Conversion shall be deemed to have continued after the LLC Conversion,
except as may have been altered by the Board. Nothing herein contained shall be construed to
preclude any Director from serving the Company or its affiliates in any other capacity as an
Officer, agent or otherwise, and receiving compensation therefor.
e. Independent Directors. Notwithstanding anything to the contrary in this Agreement,
the provisions of the Operating Agreement shall govern the qualifications, duties, powers,
appointment, removal and other corporate governance matters of the Independent Directors.
f. Certain Matters Relating to IB Finance Holding Company, LLC. Notwithstanding
anything to the contrary in this Agreement or the Operating Agreement, the Company shall (and each
Officer of the Company shall cause the Company to), if so directed by a majority of the Independent
Directors, (i) cause IB Finance Holding Company, LLC, a Delaware limited liability company (“IB
Finance”), to redeem any or all Class M Preferred Units issued by IB Finance, and (ii) make one
or more capital contributions to IB Finance to fund such redemption, in each case as set forth in
Section 2.1(b) and (d) of the Limited Liability Company Agreement of IB Finance, as such agreement
may be amended from time to time. No provision of this Section 14(f) shall be deemed to limit or
otherwise modify the rights or obligations of the Independent Directors as set forth in the
Operating Agreement or elsewhere.
15. Meeting of the Board of Directors; Voting.
a. Meetings. Regular meetings of the Board may be held without notice at such places
and times as shall be determined by resolution of the Board. Special meetings of the
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Board may be called by the President or Chief Executive Officer, or by the Secretary on the
written request of any Director, on at least one day’s notice to each Director (except that notice
to any Director may be waived in writing by such Director) and shall be held at such place or
places as may be determined by the Board, or as shall be stated in the call of the meeting. Unless
otherwise restricted by this Agreement, members of the Board may participate in any meeting of the
Board by means of a conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
b. Quorum. A majority of the Directors shall constitute a quorum for the transaction
of business. If at any meeting of the Board there shall be less than a quorum present, a majority
of those present may adjourn the meeting from time to time until a quorum is obtained, and no
further notice thereof need be given other than by announcement at the meeting which shall be so
adjourned. The vote of the majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board unless this Agreement shall require the vote of a greater
number.
c. Director Voting. On each matter before the Board, each Director shall have one
vote with respect to any matter to be considered by the Board.
d. Action Without Board of Directors Meeting. Any action required or permitted to be
taken at any meeting of the Board may be taken without a meeting if written consent thereto is
signed by Directors having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all Directors entitled to vote thereon were
present and voted, and such written consent is filed with the minutes of proceedings of the Board.
e. Waiver of Notice. Attendance of a Director at a meeting shall constitute a waiver
of notice of such meeting, except when the Director attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
16. Officers. The Board may, from time to time as it deems advisable, elect natural
persons who are employees or agents of the Company and designate them as officers of the Company
(the “Officers”) and assign titles (including, without limitation, President, Vice
President, Secretary, and Treasurer) to any such person. Unless the Board decides otherwise, if
the title is one commonly used for officers of a business corporation formed under the GCL, the
assignment of such title shall constitute the delegation to such person of the authorities and
duties that are normally associated with that office. The officers serving on behalf of the
Corporation immediately prior to the LLC Conversion shall be deemed to have continued as Officers
of the Company after the LLC Conversion, holding the same positions (with the same authorities and
duties previously delegated to them, including, without limitation, by the Corporation) as they
held immediately prior to the LLC Conversion. Any delegation pursuant to this Section 16 may be
revoked at any time by the Board. An Officer may be removed with or without cause by the Board.
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17. Exculpation. Neither Member nor any Director, Officer or employee of the Company
nor any subsidiary of the Company or the foregoing (each a “Covered Person”) shall be
liable to the Company or any other person or entity who is bound by this Agreement for any loss,
damage or claim incurred by reason of any act or omission performed or omitted by such Covered
Person in good faith on behalf of the Company and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except that the Covered
Person shall be liable for any such loss, damage or claim incurred by reason of such Covered
Person’s willful misconduct or bad faith. Any repeal or modification of this Section 17 shall not
adversely affect any right or protection of a Covered Person existing hereunder with respect to any
act or omission occurring prior to such repeal or modification.
18. Indemnification.
a. General. Subject to the limitations set forth herein, to the fullest extent
permitted by applicable law:
i. Each Covered Person shall be indemnified by the Company for any loss, damage or claim
incurred by such Covered Person by reason of any act or omission performed or omitted by such
Covered Person in conformance with the Applicable Standard (as defined in Section 18(g)(vi) below),
including, without limitation, if the Covered Person is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that the Covered Person is or was or has
agreed to serve at the request of the Company as a Director, Officer or employee of the Company or
any subsidiary of the Company, or while serving as such or by reason of any action alleged to have
been taken or omitted in such capacity; provided, however, that any indemnity under this Section 18
shall be provided out of and to the extent of Company assets only, and no Member shall have
personal liability on account thereof.
ii. The indemnification provided by paragraphs (i) and (iii) of this Section 18(a) shall be
from and against expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the Covered Person or on the Covered Person’s behalf
in connection with such action, suit or proceeding and any appeal therefrom.
iii. Notwithstanding Section 18(a)(i), in the case of any threatened, pending or completed
action or suit by or in the right of the Company to procure a judgment in its favor by reason of
the fact that the Covered Person is or was a Director, Officer, or employee of the Company, no
indemnification shall be made in respect of any claim, issue or matter as to which the Covered
Person shall have been adjudged to be liable to the Company unless, and only to the extent that,
the Delaware Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, the Covered Person is fairly and reasonably entitled to indemnity for
such expenses which the Delaware Court of Chancery or such other court shall deem proper.
iv. The termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
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itself, create a presumption that the Covered Person did not act in conformance with the
Applicable Standard.
b. Successful Defense; Partial Indemnification. To the extent that the Covered Person
has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to in paragraphs (i) and (iii) of Section 18(a) above or in defense of any claim, issue or
matter therein, the Covered Person shall be indemnified against expenses (including attorneys’
fees) actually and reasonably incurred in connection therewith. For purposes of this Agreement and
without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or
otherwise (including a disposition without prejudice), without (i) the disposition being adverse to
the Covered Person, (ii) an adjudication that the Covered Person was liable to the Company, (iii) a
plea of guilty or nolo contendere by the Covered Person, and (iv) an adjudication that the Covered
Person did not act in conformance with the Applicable Standard, the Covered Person shall be
considered for the purposes hereof to have been wholly successful with respect thereto.
If the Covered Person is entitled under any provision of this Section 18 to indemnification by
the Company for some or a portion of the expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by the Covered Person or on the Covered
Person’s behalf in connection with any action, suit, proceeding or investigation, or in defense of
any claim, issue or matter therein, and any appeal therefrom but not, however, for the total amount
thereof, the Company shall nevertheless indemnify the Covered Person for the portion of such
expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which the
Covered Person is entitled.
c. Determination That Indemnification Is Proper. Any indemnification hereunder
(unless otherwise ordered by a court) shall be made by the Company unless a determination is made
that indemnification of such person is not proper in the circumstances because he or she has not
met the Applicable Standard. Any such determination shall be made (i) by a majority vote of the
Directors who are not parties to the action, suit or proceeding in question (“Non-Party
Directors”), even if less than a quorum, (ii) by a majority vote of a committee of Non-Party
Directors designated by majority vote of Non-Party Directors, even if less than a quorum, or (iii)
if there are no Non-Party Directors or if the Non-Party Directors so direct, by independent legal
counsel for the Company, or (iv) by a court of competent jurisdiction.
d. Advance Payment of Expenses; Notification and Defense of Claim.
i. Expenses (including attorneys’ fees) incurred by the Covered Person in defending a
threatened or pending civil, criminal, administrative or investigative action, suit or proceeding,
or in connection with an enforcement action pursuant to Section 18(e)(ii), shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding within thirty (30)
days after receipt by the Company of (x) a statement or statements from the Covered Person
requesting such advance or advances from time to time, with a copy of the xxxx for the related
expenses, and (y) an undertaking by or on behalf of the Covered Person to repay all such amounts
advanced, only if, and to the extent that, it should ultimately be determined that the Covered
Person is not entitled to be indemnified by the
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Company as authorized by this Agreement or otherwise. Such undertaking shall be accepted
without reference to the financial ability of the Covered Person to make such repayment. Advances
shall be unsecured and interest-free.
ii. If the Company shall be obligated to pay the expenses of the Covered Person with respect
to an action, suit or proceeding, as provided in this Section 18, the Company, if appropriate, may
assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to the
Covered Person. After approval of such counsel by the Covered Person and the retention of such
counsel by the Company, the Company will not be liable to the Covered Person under this Section 18
for any fees of counsel subsequently incurred by the Covered Person with respect to the same
action, suit or proceeding, provided that the Covered Person shall have the ability to employ the
Covered Person’s own counsel in such action, suit or proceeding (x) at the Covered Person’s expense
upon the prior written consent of the Company, or (y) if (1) counsel to the Company or the Covered
Person shall have reasonably concluded that there may be a conflict of interest or position, or
reasonably believes that a conflict is likely to arise, on any significant issue between the
Company and the Covered Person in the conduct of any such defense or (2) the Company shall not, in
fact, have employed counsel to assume the defense of such action, suit or proceeding, in which case
the fees and expenses of the Covered Person’s counsel shall be at the expense of the Company,
except as otherwise expressly provided by this Section 18. The Company shall not be entitled,
without the consent of the Covered Person, to assume the defense of any claim brought by or in the
right of the Company or as to which counsel for the Company or the Covered Person shall have
reasonably made the conclusion provided for in clause (1) above.
iii. Notwithstanding any other provision of this Agreement to the contrary, to the extent that
the Covered Person is, by reason of the Covered Person’s service as a Director, Officer or employee
of the Company, a witness or otherwise participates in any action, suit or proceeding at a time
when the Covered Person is not a party in the action, suit or proceeding, the Company shall pay or
cause to be paid on behalf of the Covered Person against, or shall otherwise cause to be paid, all
expenses (including attorneys’ fees) actually and reasonably incurred by the Covered Person or on
the Covered Person’s behalf in connection therewith.
e. Procedure for Indemnification.
i. The Company shall, promptly upon receipt of a request for indemnification from a Covered
Person, advise the Board in writing that the Covered Person has requested indemnification.
ii. The Company’s determination whether to grant the Covered Person’s indemnification request
shall be made promptly, and in any event within 90 days following receipt of a request for
indemnification pursuant to Section 18(e)(i). The right to indemnification as granted by this
Section 18 shall be enforceable by the Covered Person in any state or Federal court of competent
jurisdiction located in the State of Delaware if the Company denies such request, in whole or in
part, or fails to respond within such 90-day period. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs, charges and expenses
under Section 18(d) hereof where the required undertaking, if any,
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has been received by the Company) that the Covered Person has not met the Applicable Standard
set forth in this Section 18, but the burden of proving such defense by clear and convincing
evidence shall be on the Company. Neither the failure of the Company (including its Board or one
of its committees, and its independent legal counsel) to have made a determination prior to the
commencement of such action that indemnification of the Covered Person is proper in the
circumstances because the Covered Person has met the Applicable Standard set forth in this
Section 18, nor the fact that there has been an actual determination by the Company (including its
Board or one of its committees, and its independent legal counsel) that the Covered Person has not
met such Applicable Standard of conduct, shall be a defense to the action or create a presumption
that the Covered Person has or has not met the Applicable Standard. The Covered Person’s expenses
(including attorneys’ fees) incurred in connection with successfully establishing the Covered
Person’s right to indemnification, in whole or in part, in any such proceeding or otherwise shall
also be indemnified by the Company.
f. Insurance and Subrogation.
i. The Company may purchase and maintain (itself or through its affiliates) insurance on
behalf of the Covered Person who has agreed to serve at the request of the Company as a Director,
Officer or employee of the Company against any liability asserted against, and incurred by, the
Covered Person or on the Covered Person’s behalf, or arising out of the Covered Person’s status as
a Director, Officer or employee, whether or not the Company would have the power to indemnify the
Covered Person against such liability under the provisions of this Section 18. If the Company has
such insurance in effect at the time the Company receives from the Covered Person any notice of the
commencement of a claim, the Company shall give prompt notice of the commencement of such claim to
the insurers in accordance with the procedures set forth in the policy. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Covered Person, all amounts payable as a result of such proceeding in accordance with the terms of
such policy.
ii. In the event of any payment by the Company under this Agreement, the Company shall, to the
extent permissible, be subrogated to the extent of such payment to all of the rights of recovery of
the Covered Person with respect to any insurance policy, which Covered Person shall execute all
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such rights in accordance
with the terms of such insurance policy. The Company shall pay or reimburse all expenses actually
and reasonably incurred by the Covered Person in connection with such subrogation.
iii. The Company shall not be liable under this Section 18 to make any payment of amounts
otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) if and to the extent that the Covered Person
has otherwise actually received such payment under this Section 18 or any insurance policy,
contract, agreement or otherwise.
g. Certain Definitions. For purposes of this Section 18, the following definitions
shall apply:
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i. The term “action, suit or proceeding” shall be broadly construed and shall include, without
limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and
appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit
or proceeding, whether civil, criminal, administrative or investigative.
ii. The term “by reason of the fact that the Covered Person is or was a Director, Officer or
employee of the Company” shall be broadly construed and shall include, without limitation, any
actual or alleged act or omission to act.
iii. The term “expenses” shall be broadly and reasonably construed and shall include, without
limitation, all direct and indirect costs of any type or nature whatsoever (including, without
limitation, all reasonable attorneys’ fees and related disbursements, appeal bonds, other
out-of-pocket costs and reasonable compensation for time spent by the Covered Person for which the
Covered Person is not otherwise compensated by the Company or any third party, provided that the
rate of compensation and estimated time involved is approved by the Board, which approval shall not
be unreasonably withheld), actually and reasonably incurred by the Covered Person in connection
with either the investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement, the Act or otherwise.
iv. The term “judgments, fines and amounts paid in settlement” shall be broadly construed and
shall include, without limitation, all direct and indirect payments of any type or nature
whatsoever (including, without limitation, all penalties and amounts required to be forfeited or
reimbursed to the Company), as well as any penalties or excise taxes assessed on a person with
respect to an employee benefit plan.
v. The term “Company” shall include, without limitation and in addition to the resulting
business entity, any constituent business entity (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had continued, would have
had power and authority to indemnify its members, if any, directors, officers, and employees, so
that any person who is or was a member, director, officer or employee of such constituent business
entity, or is or was serving at the request of such constituent business entity as a director,
officer or employee of another business entity, partnership, joint venture, trust, employee benefit
plan or other enterprise, shall stand in the same position under the provisions of this Agreement
with respect to the resulting or surviving business entity as he or she would have with respect to
such constituent business entity if its separate existence had continued.
vi. The term “Applicable Standard” shall mean, with respect to the act or omission of a
Covered Person, the standard of conduct that such act or omission was performed or omitted by such
Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by this Agreement, except that the
Covered Person shall not be indemnified for any such loss, damage or claim incurred by reason of
such Covered Person’s willful misconduct or bad faith with respect to such acts or omissions.
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h. Limitation on Indemnification. Notwithstanding any other provision herein to the
contrary, the Company shall not be obligated pursuant to this Agreement:
i. Claims Initiated by the Covered Person. To indemnify or advance expenses to the
Covered Person with respect to an action, suit or proceeding (or part thereof) initiated by the
Covered Person, unless (i) the Covered Person brings such action, suit or proceeding to establish
or enforce a right to indemnification under this Agreement (which shall be governed by the
provisions of Section 18(h)(ii)), or (ii) such action, suit or proceeding (or part thereof) was
authorized or consented to by the Board;
i. Action for Indemnification. To indemnify the Covered Person for any expenses
incurred by the Covered Person with respect to any action, suit or proceeding instituted by the
Covered Person to enforce or interpret Section 18 of this Agreement, unless the Covered Person is
successful in establishing the Covered Person’s right to indemnification in such action, suit or
proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or
proceeding shall determine that, despite the Covered Person’s failure to establish its right to
indemnification, the Covered Person is entitled to indemnity for such expenses; provided, however,
that nothing in this Section 18(h) is intended to limit the Company’s obligation with respect to
the advancement of expenses to the Covered Person in connection with any such action, suit or
proceeding instituted by the Covered Person to enforce or interpret this Agreement, as provided in
Section 18(d) hereof; and
ii. Non-compete and Non-disclosure. To indemnify the Covered Person in connection
with proceedings or claims involving the enforcement of non-compete and/or non-disclosure
agreements or the non-compete and/or non-disclosure provisions of employment, consulting or similar
agreements the Covered Person may be a party to with the Company, or any subsidiary of the Company
or any other applicable foreign or domestic corporation, limited liability company, partnership,
joint venture, trust or other enterprise, if any.
iii. Certain Settlement Provisions. The Company shall have no obligation to indemnify
the Covered Person under this Agreement for amounts paid in settlement of any action, suit or
proceeding without the Company’s prior written consent, which shall not be unreasonably withheld.
The Company shall not settle any action, suit or proceeding in any manner that would impose any
fine or other obligation on the Covered Person without the Covered Person’s prior written consent,
which shall not be unreasonably withheld.
j. Savings Clause. If any provision or provisions of this Section 18 shall be
invalidated on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify the Covered Person as to costs, charges and expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, including an action by or in
the right of the Company, to the full extent permitted by any applicable portion of this Section 18
that shall not have been invalidated and to the full extent permitted by applicable law.
k. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to the Covered Person in whole or in part, it is agreed that, in
such
14
event, the Company shall, to the fullest extent permitted by law, contribute to the payment of
the Covered Person’s costs, charges and expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in an amount that is just and equitable in the circumstances,
taking into account, among other things, the relative fault of the Covered Person; provided, that,
without limiting the generality of the foregoing, such contribution by the Company shall not be
required where such holding by the court is due to (i) the failure of the Covered Person to meet
the Applicable Standard, or (ii) any limitation on indemnification set forth in Section 18(f)(iii),
18(h) or 18(i) hereof.
l. Nonexclusivity. The provisions for indemnification and advancement of expenses set
forth in this Section 18 shall not be deemed exclusive of any other rights which a Covered Person
may have under any provision of law, the Certificate, in any court in which a proceeding is
brought, the vote of the GMAC Member or disinterested Directors, other agreements or otherwise, and
a Covered Person’s rights hereunder shall continue after such Covered Person has ceased acting as
an agent of the Company and shall inure to the benefit of the heirs, executors and administrators
of such Covered Person. In addition, no amendment or alteration of the Certificate or any other
agreement shall adversely affect the rights provided to a Covered Person under this Agreement with
respect to any act or omission occurring prior to such amendment or alteration.
m. Enforcement. The Company shall be precluded from asserting in any judicial
proceeding that the procedures and presumptions of this Section 18 are not valid, binding and
enforceable. The Company agrees that its execution of this Agreement shall constitute a
stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which
a proceeding by a Covered Person for enforcement of his rights under this Section 18 shall have
been commenced, continued or appealed, that its obligations set forth in this Section 18 are unique
and special, and that failure of the Company to comply with the provisions of this Section 18 will
cause irreparable and irremediable injury to a Covered Person, for which a remedy at law will be
inadequate. As a result, in addition to any other right or remedy a Covered Person may have at law
or in equity with respect to any breach of this Section 18, it is the intent of the Members that a
Covered Person shall be entitled to injunctive or mandatory relief directing specific performance
by the Company of its obligations under this Section 18.
19. Assignments. Each Member may at any time assign in whole (or, in the case of the
GMAC Member only, in part) its limited liability company interest in the Company; provided,
however, GMAC may assign the Preferred Units only with the prior approval of the Board (including a
majority of the Independent Directors) or to a wholly-owned direct or indirect affiliate of GMAC.
If any Member transfers all of its interest in the Company as permitted by this Section 19, the
transferee shall be admitted to the Company upon its execution of an instrument signifying its
agreement to be bound by the terms and conditions of this Agreement. Such admission shall be
deemed effective immediately prior to the transfer, and, immediately following such admission, the
transferor Member shall cease to be a member of the Company.
20. Resignation. Each Member may at any time resign from the Company; provided,
however, that the GMAC Member shall not resign unless an additional member shall be admitted to the
Company, subject to Section 21 hereof, upon its execution of an instrument signifying its
15
agreement to be bound by the terms and conditions of this Agreement. Such admission shall be
deemed effective immediately prior to the resignation of the GMAC Member, and, immediately
following such admission, the resigning GMAC Member shall cease to be a member of the Company.
21. Admission of Additional Members. One or more additional members of the Company
may be admitted to the Company with the written consent of the GMAC Member.
22. Dissolution.
(a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of
the following: (i) the written consent of the Members, (ii) at any time there are no members of
the Company unless the Company is continued in accordance with the Act, or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.
(b) The bankruptcy (within the meaning of Sections 18-101(1) and 18-304 of the Act) of any
Member shall not cause such Member to cease to be a member of the Company and upon the occurrence
of such an event, the business of the Company shall continue without dissolution.
(c) In the event of dissolution, the Company shall conduct only such activities as are
necessary to wind up its affairs (including the sale of the assets of the Company in an orderly
manner), and the assets of the Company shall be applied in the following order of priority:
i. to the expenses of liquidation;
ii. to the payment of all debts and liabilities of the Company, including debts owed to the
Members and taxes;
iii. to the establishment of such reserves as the GMAC Member deems necessary or advisable to
provide for any contingent or unforeseen liabilities or obligations of the Company, except, that
after the expiration of such period of time as the GMAC Member deems appropriate, the balance of
such reserves remaining after payment of such contingencies will be distributed in the manner
hereinafter set forth;
iv. to the Preferred Member, up to an amount equal to the Preferred Unit Redemption Price
multiplied by the number of Preferred Units held by the Preferred Member, plus any authorized but
unpaid Preferred Distributions; and
v. any remaining proceeds will be distributed to the GMAC Member.
(d) Upon the cancellation of the Certificate in accordance with the Act, the Company and this
Agreement shall terminate.
23. Separability of Provisions. Each provision of this Agreement shall be considered
separable, and if for any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
16
unenforceability or illegality shall not impair the operation of or affect those portions of
this Agreement that are valid, enforceable and legal.
24. Entire Agreement. This Agreement constitutes the entire agreement of the Member
with respect to the subject matter hereof.
25. Governing Law. This Agreement shall be governed by, and construed under, the laws
of the State of Delaware (without regard to conflict of laws principles), all rights and remedies
being governed by said laws.
26. Amendments. This Agreement may not be modified, altered, supplemented or amended
except pursuant to a written agreement executed and delivered by the GMAC Member and approved by
the Board; except that the prior consent of the Preferred Member shall be required (i) to change
adversely any of the powers, preferences or other rights of the Preferred Units as provided in this
Agreement, (ii) to modify, alter or amend the provisions of Section 10 or Section 14(f), and (iii)
as may be required by applicable law.
27. Sole Benefit of Member. Except as expressly provided in Section 17 and
Section 18, the provisions of this Agreement (including Section 11) are intended solely to benefit
the Members and, to the fullest extent permitted by applicable law, shall not be construed as
conferring any benefit upon any creditor of the Company (and no such creditor shall be a
third-party beneficiary of this Agreement), and no Member shall have any duty or obligation to any
creditor of the Company to make any contributions or payments to the Company.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed
this Agreement as of the date first written above.
| GMAC MORTGAGE GROUP LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Secretary | |||
| GMAC LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Secretary | |||
18
Schedule A
MEMBERS
MEMBERS
| Class of | ||||||||
| Units | Name and Address | Number of Units Outstanding | ||||||
| Common |
GMAC Mortgage Group LLC |
2,000,000 | ||||||
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 |
||||||||
| Preferred |
GMAC LLC |
607,192 | ||||||
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000 |
||||||||
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Schedule B
VALUE
VALUE
| CUSIP | Value (per $1,000 face amount) | |||
00000XXX0 |
$ | 799.5358 | ||
00000XXX0 |
$ | 718.0347 | ||
20
