LIMITED LIABILITY COMPANY AGREEMENT OF WELLS FARGO STUDENT LOAN RECEIVABLES, LLC
LIMITED LIABILITY COMPANY AGREEMENT OF
XXXXX FARGO STUDENT LOAN RECEIVABLES, LLC
This Limited Liability Company Agreement of XXXXX FARGO STUDENT LOAN RECEIVABLES, LLC (the “Company”) is made as of August 31, 2001, by XXXXX FARGO & COMPANY as the sole member (“Member”).
Section 1.1
“Additional Member” has the meaning set forth in Section 12.1 hereof. “Additional Units” has the meaning set forth in Section 12.1 hereof.
“Affiliate” means with respect to a specified Person, any Person that directly or indirectly controls, is controlled by, or is under common control with, the specified Person. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Agreement” means this Limited Liability Company Agreement of the Company as amended, modified, supplemented or restated from time to time.
“Assignee” means any Person who is an assignee of a Member’s limited liability company interest in the Company, or part thereof, and who does not become a Member pursuant to Section 13.1 hereof.
“Bankruptcy” means, with respect to any Person, if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (vii) if 120 days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within 90 days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay, the appointment is not vacated. The foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304 of the Act.
“Basic Documents” means this Agreement and all documents and certificates contemplated by or delivered in connection with this Agreement, the formation of a Securitization Trust or the issuance of Securities.
“Board” means the Board of Directors of the Company.
“Capital Account” means, with respect to any Unit Holder, the account maintained for such Unit Holder in accordance with the provisions of Section 4.4 hereof.
“Capital Contribution” means, with respect to any Unit Holder, the aggregate amount of money and the initial fair market value of any property (other than money) contributed to the Company pursuant to Section 4.1 hereof with respect to the Units held by such Unit Holder. In the case of a Unit Holder who acquires an interest in the Company by virtue of an assignment in accordance with the terms of this Agreement, the “Capital Contribution” of such Unit Holder shall be determined in accordance with Section 4.4(b) hereof.
“Certificate” means the Certificate of Formation of the Company and any and all amendments thereto and restatements thereof filed on behalf of the Company with the office of the Secretary of State of the State of Delaware pursuant to the Delaware Act.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any corresponding federal tax statute enacted after the date of this Agreement. A reference to a specific Section (ss.) of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date of this Agreement, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Agreement containing such reference.
“Company” means XXXXX FARGO STUDENT LOAN RECEIVABLES, LLC, the limited liability company hereby established under and pursuant to the Delaware Act and this Agreement.
“Covered Person” means a Member, a Director, an Officer, a Manager, any Affiliate of a Member, a Director, an Officer or a Manager, any Officers, Directors, Member, partners, employees, representatives or agents of a Member, a Director, an Officer or a Manager or their respective Affiliates, or any employee or agent of the Company or its Affiliates.
“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. X.xx. 18-101 et seq., as amended from time to time.
“Director” means a Director of the Company.
“Eligible Lender Trustee” means a national banking association, not in its individual capacity but solely as Eligible Lender Trustee under the Trust Agreement.
“Federal Student Loans” means student loans which are guaranteed as to principal and interest by a guaranty agency pursuant to a guaranty agreement, under pertinent provisions of the Higher Education Act.
“Fiscal Year” means (i) the period commencing upon the formation of the Company and ending on December 31 of the year of formation, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31, or (iii) any portion of the period described in Clause (ii) of this sentence for which the Company is required to allocate Profits, Losses and other items of Company income, gain, loss or deduction pursuant to Article VIII hereof.
“Higher Education Act” means the Higher Education Act of 1965, as amended, together with any rules, regulations and interpretations of the United States Department of Education or the applicable guaranty agency.
“Independent Director” means a natural person who, for the five-year period prior to his or her appointment as Independent Director has not been, and during the continuation of his or her service as Independent Director is not: (i) an employee, director, stockholder, partner or officer of the Company or any of its Affiliates (other than his or her service as an Independent Director of the Company), (ii) a customer or supplier of the Company or any of its Affiliates or (iii) any member of the immediate family of a person described in (i) or (ii).
An individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the Company if such individual is at the time of initial appointment, or at any time while serving as an Independent Director of the Company, an Independent Director of a Special Purpose Entity that is an Affiliate of the Company or a Member. For purposes of this paragraph only, a “Special Purpose Entity” is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve its separateness that are substantially similar to those of the Company, and provide, inter alia, that it is (a) organized for a limited purpose; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf (and/or on behalf of certain Affiliates) without the consent of the Independent Director(s); and (d) shall conduct itself (and/or cause certain Affiliates to conduct themselves) in accordance with certain “separateness covenants,” including, but not limited to, the maintenance of books, records, bank accounts and assets separate from those of any other Person.
“Liquidating Trustee” has the meaning set forth in Section 14.3 hereof.
“Majority Vote” means the approval of, or the affirmative vote by, Members holding a majority of the Units held by Members.
“Manager” means a Person designated by a Member as a manager of the Company within the meaning of the Delaware Act and shall include Officers of the Company.
“Material Action” means to consolidate or merge the Company with or into any Person, or sell all or substantially all of the assets of the Company, or to institute proceedings to have the Company be adjudicated bankrupt or insolvent, or consent to the institution of Bankruptcy proceedings against the Company or file a petition seeking, or consent to, reorganization or relief with respect to the Company under any applicable federal or state law relating to Bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a substantial part of its property, or make any assignment for the benefit of creditors of the Company, or admit in writing the Company’s inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate the Company.
“Member” means any Person named as a member in the recitals to this Agreement or who executes this Agreement as a member and includes any Person admitted as an Additional Member or a Substitute Member pursuant to the provisions of this Agreement, and “Members” means two (2) or more of such Persons when acting in their capacities as members of the Company. “Members” shall also include the sole Member of the Company at any time there is only one Member. For purposes of the Delaware Act, the Members shall constitute one (1) class or group of members.
“Net Cash Flow” means, for each Fiscal Year or other period of the Company, the gross cash receipts of the Company from all sources, but excluding any amounts, such as gross receipts taxes, that are held by the Company as a collection agent or in trust for others or that are otherwise not unconditionally available to the Company, less all amounts paid by or for the account of the Company during the same Fiscal Year or other period (including, without limitation, payments of principal and interest on any Company indebtedness), and less any amounts determined by the Board to be necessary to provide a reasonable reserve for working-capital needs or any other contingencies of the Company. Net Cash Flow shall be determined in accordance with the cash receipts and disbursements method of accounting and otherwise in accordance with generally accepted accounting principles, consistently applied. Net Cash Flow shall not be reduced by depreciation, amortization, cost recovery deductions, depletion, similar allowances or other non-cash items, but shall be increased by any reduction of reserves previously established.
“Obligations” shall mean the Securities issued by any Securitization Trust for which the Company acts as depositor, settlor or grantor and any indebtedness, liabilities and obligations of the Company under or in connection with this Agreement, the other Basic Documents or any related document, in each case in effect as of any date of determination.
“Officer” means an Officer of the Company.
“Permitted Temporary Investments” means those investments authorized by the Board from time to time for temporary investments of Company funds.
“Person” includes any individual, association, corporation, partnership (general or limited), joint venture, trust, estate, limited liability company or partnership, or other legal entity or organization.
“President” means the President of the Company.
“Private Student Loans” means student loans which are made outside the Higher Education Act that may or may not be privately guaranteed or insured.
“Profits” and “Losses” means, for each Fiscal Year, the net profits or net losses, as the case may be, of the Company for such Fiscal Year, determined on the accrual method of accounting in accordance with generally accepted accounting principles.
“Rating Agency” means each nationally recognized rating agency that has rated any Securities that have been issued and are outstanding pursuant to any pooling and servicing agreement, indenture, trust agreement or other similar agreement entered into by the Company or any of its Affiliates.
“Rating Agency Condition” means, with respect to any action, that each Rating Agency shall have been given ten days prior notice thereof and that each of the Rating Agencies shall have notified the Company in writing that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any Securities.
“Securities” has the meaning set forth in Section 3.1(b). “Securitization Trust” has the meaning set forth in Section 3.1(b).
“Student Loans” means Federal Student Loans and/or Private Student Loans.
“Substitute Member” means a Person who is admitted to the Company as a Member pursuant to Section 13.1 hereof, and who is named as a Member on Schedule A to this Agreement.
“Treasury Regulations” means the income tax regulations, including temporary regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“Unit” means a limited liability company interest in the Company representing such fractional part of the limited liability company interest of all Unit Holders pursuant to this Agreement as is equal to the quotient of one (1) divided by the total number of Units.
“Unit Holder” means any Person who holds one (1) or more Units, regardless of whether such Person is a Member and regardless of whether such Units were initially acquired by such Person from the Company or by assignment from another Unit Holder.
Section 1.2
Section 2.1
(i)
The Member, by execution of this Agreement and the filing of the Certificate hereby enters into and forms the Company as a limited liability company under and pursuant to the Delaware Act. The Member agrees that the rights, powers, duties and liabilities of the Member, Directors and Officers shall be as provided in the Delaware Act, except as otherwise provided in this Agreement.
(ii)
The name and mailing address of each Member or Unit Holder shall be listed on Schedule A attached hereto. The Company shall be required to update Schedule A from time to time as necessary to accurately reflect the information therein. Any amendment or revision to Schedule A made in accordance with this Agreement shall not be deemed an amendment to this Agreement. Any reference in this Agreement to Schedule A shall be deemed to be a reference to Schedule A as amended and in effect from time to time.
(iii)
Xxxx X. Xxxxxxxxx, as an authorized person within the meaning of the Delaware Act, shall execute, deliver and file the Certificate and shall thereafter resign and have no further authority to act for the Company.
Section 2.2
Section 2.3
Section 2.4
Section 2.5
Section 2.6
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1
Purpose. The purpose of the Company is to engage in any of the following activities:
(a)
to acquire, own, hold, sell, transfer, convey, dispose of, pledge, assign, borrow money against, finance, refinance or otherwise deal with, publicly or privately and whether with unrelated third parties or with affiliated entities, Student Loans directly or through one or more trustees;
(b)
to act as depositor, settlor or grantor of one or more trusts or special purpose entities (each, a “Securitization Trust”) formed pursuant to a trust agreement or other agreement for the purpose of issuing one or more series or classes of certificates, bonds, notes or other evidences of interest or indebtedness (collectively, “Securities”) secured by or representing beneficial interests in Student Loans;
(c)
to acquire Securities or other property of a Securitization Trust or any interest in any of the foregoing;
(d)
to issue, authorize, sell and deliver Securities or other instruments secured or collateralized by the Securities;
(e)
to engage servicers (or other agents) to service Student Loans pursuant to related servicing arrangements and to engage trustees to hold legal title to Student Loans on behalf of the Company or other beneficiaries pursuant to related trust agreements, in each case to the extent such arrangements are deemed beneficial to the Company;
(f)
to enter into interest rate, basis swap, cap, floor or collar arrangements or other hedging arrangements and management and administrative agreements in connection with the foregoing activities;
(g)
to own equity interests in other limited liability companies or partnerships whose purposes are substantially restricted to those described in clauses (a) through (f) above;
(h)
to borrow money other than pursuant to clause (a) above, but only to the extent that such borrowing is permitted by the terms of the transactions contemplated by clauses (a) through (g) above;
(i)
to xxx and be sued, complain and defend, and participate in administrative or other proceedings, in its name;
(j)
to employ and otherwise engage employees and agents of the Company (who may be designated as Officers with titles), and define their duties and fix their compensation;
(k)
to indemnify any Person in accordance with the Delaware Act;
(l)
to negotiate, enter into, renegotiate, extend, renew, terminate, modify, amend, waive, execute, acknowledge or take any other action with respect to any lease, contract or security agreement in respect of any assets of the Company;
(m)
to pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any and all other claims or demands of or against the Company or to hold such proceeds against the payment of contingent liabilities; and
(n)
to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the laws of the State of Delaware that are necessary, convenient or incidental to the accomplishment of the purpose of the Company.
Section 3.2
ARTICLE IV
CAPITAL CONTRIBUTIONS, UNITS,
CAPITAL ACCOUNTS AND ADVANCES
Section 4.1
Capital Contributions.
(i)
The records of the Company shall reflect the cash or property that each Unit Holder has contributed or is deemed to have contributed to the capital of the Company and the agreed value of such Capital Contributions.
(ii)
No Unit Holder shall be required to make any additional capital contribution to the Company. However, a Unit Holder may make additional capital contributions to the Company upon approval by a Majority Vote of the Members.
Section 4.2
Units. A Unit Holder’s limited liability company interest in the Company shall be represented by the “Unit” or “Units” held by such Unit Holder. Each Unit Holder’s respective Units shall be set forth on Schedule A attached hereto. Each Unit Holder hereby agrees that its limited liability company interest in the Company and in its Units shall for all purposes be personal property. A Unit Holder has no interest in specific Company property.
Section 4.3
Status of Capital Contributions.
(i)
Except as otherwise provided in this Agreement, the amount of a Unit Holder’s Capital Contributions may be returned to it, in whole or in part, at any time, but only with the consent of all Members. Any such returns of Capital Contributions shall be made to all Unit Holders in proportion to the number of Units then held by each Unit Holder. Notwithstanding the foregoing, no return of a Unit Holder’s Capital Contributions shall be made hereunder if such distribution would violate applicable state law. Under circumstances requiring a return of any Capital Contribution, no Unit Holder shall have the right to demand or receive property other than cash, except as may be specifically provided in this Agreement.
(ii)
No Unit Holder shall receive any interest, salary or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company or otherwise in its capacity as a Unit Holder, except as otherwise specifically provided in this Agreement.
(iii)
Except as otherwise provided herein and by applicable state law, the Members shall be liable only to make their capital contributions pursuant to Section 4.1 hereof, and no Member or Assignee shall be required to lend any funds to the Company or, after a Member’s Capital Contributions have been fully paid pursuant to Section 4.1 hereof, to make any additional capital contributions to the Company. No Unit Holder shall have any personal liability for the repayment of any Capital Contribution of any other Member or Assignee.
Section 4.4
Capital Accounts.
(a)
An individual Capital Account shall be established and maintained for each Unit Holder in accordance with the following provisions:
(i)
to such Unit Holder’s Capital Account there shall be credited such Unit Holder’s Capital Contributions, such Unit Holder’s distributive share of Profits and the amount of any Company liabilities that are assumed by such Unit Holder or that are secured by any Company assets distributed to such Unit Holder; and
(ii)
to such Unit Holder’s Capital Account there shall be debited the amount of cash and the fair market value of any Company assets distributed to such Unit Holder pursuant to any provision of this Agreement, such Unit Holder’s distributive share of Losses and the amount of any liabilities of such Unit Holder that are assumed by the Company or that are secured by any property contributed by such Unit Holder to the Company.
(b)
Upon any transfer of a Unit Holder’s interest in the Company, the transferee shall succeed to the allocable portion of the transferor’s Capital Account.
Section 4.5
Advances. If any Unit Holder shall advance any funds to the Company in excess of its Capital Contributions, the amount of such advance shall neither increase its Capital Account nor entitle it to any increase in its share of the distributions of the Company. The amount of any such advance shall be a debt obligation of the Company to such Unit Holder and shall be repaid to it by the Company with interest at a rate equal to the lesser of (i) the applicable federal rate under Section 1274(d) of the Code and (ii) the maximum rate permitted by applicable law, and upon such other terms and conditions as shall be mutually determined by such Unit Holder and a Manager. Any such advance shall be payable and collectible only out of Company assets, and the other Unit Holders shall not be personally obligated to repay any part thereof. No Person who makes any nonrecourse loan to the Company shall have or acquire, as a result of making such loan, any direct or indirect interest in the profits, capital or property of the Company, other than as a creditor.
ARTICLE V
MEMBERS AND MEETINGS OF MEMBERS
Section 5.1
Section 5.2
Section 5.3
Section 5.4
(i)
Meetings of the Members may be called at any time by any Member. Notice of any meeting shall be given to all Members not less than two (2) days nor more than thirty (30) days prior to the date of such meeting. Each Member may authorize any Person to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or its attorney-in-fact.
(ii)
The Members shall establish all other provisions relating to meetings of Members, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Members, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote.
(iii)
The Company may take any action contemplated by this Agreement as approved by the unanimous written consent of the Members.
ARTICLE VI
MANAGEMENT OF THE COMPANY
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the Board of Directors, and subject to Sections 6.9 and 6.10, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company, but no such committee shall have the power and authority to declare a distribution, unless the resolution of the Board designating such committee expressly so provides. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Limitations on the Company’s Activities.
(a)
This Section is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity.
(b)
The Members shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definition of “Independent Director”, or Sections 3.1, 3.2, 6.1, 6.9, 6.10, 14.1, 14.2, 14.5, 16.1, 16.2 and 16.3 of this Agreement without the unanimous written consent of the Board (including all Independent Directors). Subject to this Section, the Members and the Board are reserved the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Article XVI.
(c)
Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Members, the Board, any Officer, any Manager, or any other Person, neither the Members nor the Board nor any Officer nor any other Person shall be authorized or empowered, nor shall they permit the Company, without the prior unanimous written consent of the Member and the Board (including all Independent Directors), to take any Material Action.
(d)
The Board and the Members shall cause the Company to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such existence, right or franchise if: (i) the Board shall determine that the preservation thereof is no longer desirable for the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Company and (ii) the Rating Agency Condition is satisfied. The Board also shall cause the Company to:
(1)
maintain its own separate books and records and bank accounts;
(2)
at all times hold itself out to the public and all other Persons as a legal entity separate from the Members and any other Person;
(3)
have a Board of Directors separate from that of the Members and any other Person;
(4)
file its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law;
(5)
except as contemplated by the Basic Documents, not commingle its assets with assets of any other Person;
(6)
conduct its business in its own name and strictly comply with all organizational formalities to maintain its separate existence;
(7)
maintain separate financial statements;
(8)
pay its own liabilities;
(9)
maintain an arm’s length relationship with its Affiliates and the Members;
(10)
pay the salaries of its own employees, if any;
(11)
not hold out its credit or assets as being available to satisfy the obligations of others;
(12)
allocate fairly and reasonably any overhead for shared office space;
(13)
use separate stationery, invoices and checks;
(14)
except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person;
(15)
correct any known misunderstanding regarding its separate identity;
(16)
maintain adequate capital in light of its contemplated business purpose, transactions and liabilities;
(17)
cause its Board of Directors to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe all other Delaware limited liability company formalities;
(18)
not acquire any securities of the Members except to the extent permitted by the Basic Documents; and
(19)
cause the Directors, Officers, agents and other representatives of the Company to act at all times with respect to the Company consistently and in furtherance of the foregoing and in the best interests of the Company;
failure of the Company, or the Members or Board on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Members or the Directors.
(e)
So long as any Obligation is outstanding, the Board shall not cause or permit the Company to:
(1)
except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate;
(2)
engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 3.1, the Basic Documents or this Section;
(3)
incur, create or assume any indebtedness other than as expressly permitted under the Basic Documents;
(4)
make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions;
(5)
to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than such activities as are expressly permitted pursuant to any provision of the Basic Documents; or
(6)
form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).
Section 6.10
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
The Chief Financial Officer, the Treasurer and Assistant Treasurer. The Chief Financial Officer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the Company as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer, the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all of the Chief Financial Officer’s transactions and of the financial condition of the Company. The Treasurer and Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Chief Financial Officer or in the event of the Chief Financial Officer’s inability to act, perform the duties and exercise the powers of the Chief Financial Officer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
Section 7.7
Section 7.8
(i)
the identity of a Member, Director or Officer of the Company;
(ii)
the existence or non-existence of any fact or facts that constitute a condition precedent to acts by the Board of Directors, the Members or the Officers or in any matter related to the affairs of the Company;
(iii)
the Persons who are authorized to execute and deliver any instrument or document of, or on behalf of, the Company; or
(iv)
any act or failure to act by the Company or as to any other matter whatsoever involving the Company, or any Member, Director or Officer.
Section 8.1
Section 8.2
(i)
If Members are admitted to the Company pursuant to this Agreement on different dates, the Profits or Losses allocated to the Unit Holders for each Fiscal Year during which Members are so admitted shall be allocated among the Unit Holders in proportion to the number of Units each holds from time to time during such Fiscal Year in accordance with ss. 706 of the Code, using any convention permitted by law and selected by the Treasurer, unless another allocation is authorized by the Board.
(ii)
For purposes of determining the Profits, Losses or any other items allocable to any period, Profits, Losses and any such other items shall be determined on a daily, monthly or other basis, as determined by the Treasurer using any method that is permissible under ss. 706 of the Code and the Treasury Regulations thereunder.
(iii)
Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction and any other allocations not otherwise provided for shall be divided among the Unit Holders in the same proportions as they share Profits and Losses for the Fiscal Year in question.
(iv)
The Members are aware of the income tax consequences of the allocations made by this Article VIII and hereby agree to be bound by the provisions of this Article VIII in reporting their shares of Company income and loss for income tax purposes.
Section 8.3
Section 9.1
Section 9.2
(i)
All distributions pursuant to Section 9.1 hereof shall be at such times and in such amounts as shall be determined by the Board; provided, however, that the Board shall use its best efforts to cause the Company to distribute to the Unit Holders an amount of Net Cash Flow as shall be sufficient to enable the Unit Holders to fund their federal and state income tax liabilities attributable to their respective distributive shares of the taxable income of the Company.
(ii)
All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment, distribution or allocation to the Company or the Unit Holders shall be treated as amounts distributed to the Unit Holders pursuant to this Article IX for all purposes of this Agreement. The Board is authorized to withhold from distributions, or with respect to allocations, to the Unit Holders and to pay over to any federal, state or local government any amounts required to be so withheld pursuant to the Code or any provision of any other federal, state or local law and shall allocate such amounts to those Unit Holders with respect to which such amounts were withheld.
Section 9.3
Section 10.1
Books, Records and Financial Statements.
(i)
At all times during the continuance of the Company, the Company shall maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company business in accordance with generally accepted accounting principles consistently applied, and, to the extent inconsistent therewith, in accordance with this Agreement. Such books of account, together with a certified copy of this Agreement and of the Certificate, shall at all times be maintained at the principal place of business of the Company and shall be open to inspection and examination at reasonable times by each Member and its duly authorized representative for any purpose reasonably related to such Member’s interest in the Company. The books of account and the records of the Company shall be examined by and reported upon as of the end of each Fiscal Year under the direction of the Chief Financial Officer or Treasurer, or if required by the Board, by a firm of independent certified public accountants selected by the Board. Any Member shall have the right to have a private audit of the Company books and records conducted at reasonable times and after reasonable advance notice to the Company for any purpose reasonably related to such Member’s interest in the Company, but any such private audit shall be at the expense of the Member desiring it, and it shall not be paid for out of Company funds. Notwithstanding any other provisions of this Agreement, the Board of Directors shall have the right to keep confidential from the Members, for such period of time as the Board deems reasonable, any information which the Board of Directors reasonably believes to be in the nature of trade secrets or other information the disclosure of which the Board of Directors in good faith believes is not in the best interests of the Company or could damage the Company or its business or which the Company is required by law or by Agreement with a third party to keep confidential.
(ii)
The Company shall prepare and maintain, or cause to be prepared and maintained, the books of account of the Company and the following documents shall be transmitted by a Manager to each Member at the times hereinafter set forth.
(a)
Within three (3) months after the close of each Fiscal Year, the following financial statements, examined under the direction of the Chief Financial Officer or Treasurer, or if required by the Board, examined by and certified to by the independent certified public accountants referred to in Subsection (i) of this Section 10.1:
(1)
balance sheet of the Company as of the beginning and close of such Fiscal Year;
(2)
statement of Company Profits and Losses for such Fiscal Year; and
(3)
statement of such Member’s Capital Account as of the close of such Fiscal Year, and changes therein during such Fiscal Year.
(b)
Within three (3) months after the close of each Fiscal Year, the following documents:
(1)
a statement indicating such Member’s share of each item of Company income, gain, loss, deduction or credit for such Fiscal Year for income tax purposes; and
(2)
a copy of each income tax return, federal or state, filed by the Company for such Fiscal Year.
Section 10.2
ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.1
Section 11.2
(i)
No Covered Person shall be liable to the Company or any other Covered Person 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 a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct.
(ii)
A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person 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, Losses or Net Cash Flow or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid.
Section 11.3
(i)
To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person.
(ii)
Unless otherwise expressly provided herein, (a) whenever a conflict of interest exists or arises between Covered Persons, or (b) whenever this Agreement or any other agreement contemplated herein or therein provides that a Covered Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Company or any Member, the Covered Person shall resolve such conflict of interest, taking such action or providing such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Covered Person, the resolution, action or term so made, taken or provided by the Covered Person shall not constitute a breach of this Agreement or any other agreement contemplated herein or of any duty or obligation of the Covered Person at law or in equity or otherwise.
Section 11.4
Section 11.5
Section 11.6
ARTICLE XII
ADDITIONAL MEMBERS AND UNITS
Section 12.1
ARTICLE XIII
ASSIGNABILITY AND SUBSTITUTE MEMBERS
Section 13.1
(i)
A Member may assign the whole or any part of its Units or other interests in the Company to an Affiliate in such Member’s sole discretion and without the prior consent of the Board of Directors. Any such assignment shall, nevertheless, not entitle the assignee to become a Substitute Member or to be entitled to exercise or receive any of the rights, powers or benefits of a Member, other than the right to receive distributions, to which the assigning Member would be entitled, unless the assigning Member designates, in a written instrument, its assignee to become a Substitute Member. Such written instrument or Substitute Member designation does not require the approval or prior consent of the Board.
(ii)
No Member may assign the whole or any part of its Units or other interests in the Company to any Person who is not an Affiliate without the prior consent of the Board, which consent may be given or withheld in the sole and absolute discretion of the Board. If the prior consent of the Board is obtained for any such assignment, such assignment shall, nevertheless, not entitle the assignee to become a Substitute Member or to be entitled to exercise or receive any of the rights, powers or benefits of a Member, other than the right to receive distributions to which the assigning Member would be entitled, unless the assigning Member designates, in a written instrument delivered to the Board or otherwise to the satisfaction of the Board, its assignee to become a Substitute Member and the Board, in its sole and absolute discretion, consents to the admission of such assignee as a Member; and provided further, that such assignee shall not become a Substitute Member without having first executed an instrument reasonably satisfactory to the Board accepting and agreeing to the terms and conditions of this Agreement, including a counterpart signature page to this Agreement, and without having paid to the Company a fee sufficient to cover all reasonable expenses of the Company in connection with such assignee’s admission as a Substitute Member. If a Member assigns all of its interest in the Company and the assignee of such interest is entitled to become a Substitute Member pursuant to this Section 13.1, then unless otherwise agreed, such assignee shall be admitted to the Company effective immediately prior to the effective date of the assignment, and, immediately following such admission, the assigning Member shall cease to be a Member of the Company.
Section 13.2
Recognition of Assignment by Company. No assignment, or any part thereof, that is in violation of this Article XIII shall be valid or effective, and neither the Company nor the Members shall recognize the same for the purpose of making distributions of Net Cash Flow pursuant to Section 9.1 hereof with respect to such Company interest or part thereof. Neither the Company nor the nonassigning Members shall incur any liability as a result of refusing to make any such distributions to the assignee of any such invalid assignment.
Section 13.3
Section 13.4
ARTICLE XIV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 14.1
Section 14.2
Events Causing Dissolution. The Company shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following events:
(i)
the expiration of the term of the Company, as provided in Section 2.3 hereof;
(ii)
so long as no Obligation is outstanding, a Majority Vote of the Members;
(iii)
the entry of a decree of judicial dissolution under Section 18-802 of the Delaware Act.
Section 14.3
Section 14.4
(i)
to creditors of the Company, including Unit Holders who are creditors, to the extent otherwise permitted by law, in satisfaction of the liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for distributions to Unit Holders; and
(ii)
to the Unit Holders the remaining proceeds of liquidation in accordance with their Capital Account balances, after giving effect to all contributions, distributions and allocations for all periods.
Section 14.5
Section 14.6
ARTICLE XV
APPOINTMENT OF OFFICERS AND DIRECTORS
Section 15.1
Section 16.1
(i)
a change in the name of the Company or the location of the principal place of business of the Company;
(ii)
the admission, substitution, termination or withdrawal of Members or Assignees in accordance with this Agreement;
(iii)
a change that is (a) of an inconsequential nature and does not adversely affect the Members or Assignees in any material respect; (b) necessary or desirable to cure any ambiguity, to correct or supplement any provision herein that would be inconsistent with any other provisions herein, or to make any other provision with respect to matters or questions arising under this Agreement that will not be inconsistent with the provisions of this Agreement, in each case so long as such change does not adversely affect the Members or Assignees; (c) necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state statute, so long as such change is made in a manner which minimizes any adverse effect on the Members or Assignees; or (d) required or contemplated by this Agreement; or
(iv)
any other amendments similar to the foregoing.
Section 16.2
(i)
Amendments of this Agreement may be proposed only by the Board or any Member;
(ii)
If an amendment is proposed, the Board shall seek the written approval of the holders of the requisite number of Units or call a meeting of the Members to consider and vote on such proposed amendment. A proposed amendment shall be effective upon its approval by a Majority Vote, unless a greater percentage is required by this Agreement; and
(iii)
The Board shall notify all Members upon final adoption of any proposed amendment.
Section 16.3
Section 17.1
(i)
if given to the Company, in care of the President at the Company’s mailing address set forth on Schedule A attached hereto;
(ii)
if given to a Director, at such Director’s mailing address as provided to the Company; or
(iii)
if given to any Member, at the address set forth opposite its name on Schedule A attached hereto, or at such other address as such Member may hereafter designate by written notice to the Company.
All such notices shall be deemed to have been given when received. Whenever any notice is required to be given under this Agreement, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting shall constitute waiver of notice of such meeting, except when the person attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of business because the meeting is not lawfully called or convened.
Section 17.2
Section 17.3
Section 17.4
Section 17.5
Section 17.6
Section 17.7
Section 17.8
Section 17.9
MEMBER:
XXXXX FARGO & COMPANY
By__________________________________
Its____________________________
and
By__________________________________
Its____________________________
SCHEDULE A
COMPANY |
|
|
Name | Mailing Address |
|
Xxxxx Fargo Student Loan Receivables, LLC | MAC #N9305-173 |
|
|
|
|
Name | Mailing Address | Number |
|
|
|
MEMBERS |
|
|
Xxxxx Fargo & Company | MAC #N9305-173 | 5 |
SCHEDULE B
INITIAL OFFICERS AND DIRECTORS OF
XXXXX FARGO STUDENT LOAN RECEIVABLES, LLC
OFFICERS (MANAGERS)
Xxx X. Xxxxxx
President and Chief Executive Officer
Xxxx X. Xxxxxxx
Senior Vice President and Chief Financial Officer Vice President
Xxxxx X. Xxxxxxxxxxxxx
Vice President
Xxxxxxx X. Xxxxxxx
Vice President
Xxxx X. Xxxxxxxxx
Secretary
Xxxxxxxx X. Xxxxx
Assistant Secretary
Xxxxx X. Xxx-Xxxxx
Assistant Secretary
DIRECTORS
Xxx X. Xxxxxx
Xxxx X. Xxxxxxx