EXHIBIT 2.2
This Amendment No. 1, dated as of June 20, 2003, to the Limited
Liability Company Agreement, dated as of December 19, 2002 (the "Agreement"), of
JCF CFN LLC (the "Company") is made by and among JCF Associates I LLC (the
"Managing Member"), The Enstar Group, Inc. ("Enstar" and together with the
Managing Member, the "Existing Members"), and Castlewood Holdings Limited
("Castlewood"). Capitalized terms not defined herein are used as defined in the
Agreement.
W I T N E S S E T H :
WHEREAS, the Existing Members are parties to the Agreement;
WHEREAS, the Existing Members desire to amend Schedule A to the
Agreement in order to (i) admit Castlewood as a Member of the Company and (ii)
increase Enstar's Maximum Contribution Commitment to $15.3 million;
WHEREAS, the Existing Members desire to amend certain other provisions
of the Agreement in the manner and as more fully set forth herein; and
WHEREAS, the Existing Members, by their execution of this Amendment,
are consenting to (i) the admission of Castlewood to the Company as a Member (as
required by Section 6 of the Agreement) (ii) to the increase in Enstar's Maximum
Contribution Commitment to $15.3 million and (iii) the other changes set forth
herein (in the case of clauses (ii) and (iii), as required by Section 19 of the
Agreement).
NOW, THEREFORE, in consideration of the premises the parties hereto
agree as follows:
1. Admission of Castlewood. Castlewood hereby agrees that by virtue of
the execution and delivery of this Amendment No. 1 by the parties hereto
Castlewood will become a Member of the Company and a party to the Agreement (and
will be deemed to have executed and delivered a counterpart thereof), and
Castlewood hereby accepts and agrees to be bound by all of the terms and
provisions of the Agreement.
2. Amendment to Section 4. Section 4 is hereby amended and restated in
its entirety as follows:
"The purpose of the Company shall be, directly or indirectly through
subsidiaries or affiliates, (i) to serve as a member of CFN Investment
Holdings LLC, a Delaware limited liability company ("Holdings") in
accordance with the Limited Liability Company Agreement of Holdings
dated as of December 19, 2002 (as amended from time to time, the
"Holdings Agreement"), (ii) to serve as a member of FPS DIP LLC, a
Delaware limited liability company ("DIP") in accordance with the
Limited Liability Company Agreement of DIP dated as of December 19,
2002 (as amended from time to time, the "DIP Agreement"), (iii) to
serve as a member of Green Tree Investment Holdings II LLC ("Green
Tree") in accordance with the Limited Liability Company Agreement of
Green Tree (as amended from time to time, the "Green Tree Agreement"),
(iv) to serve as a member of such other entities as are formed to
effect the acquisition of certain assets of Conseco Finance Corporation
(such other entities, together with Holdings, DIP and Green
Tree, the "Entities") in accordance with the applicable governing
documents of such entities (together with the Holdings Agreement, the
DIP Agreement and the Green Tree Agreement, the "LLC Agreements") and
(v) to do all things necessary or incidental thereto. The Members
acknowledge that a portion of the Company's investment to be made in
the Entities under the Agreement and of each Member's capital
contributions to the Company hereunder shall be made by the Members
through JFC CFN II LLC, a Delaware limited liability company ("JCF CFN
II LLC")."
3. Amendment to Section 11. Section 11(a) is hereby amended and
restated in its entirety as follows:
"(i) The Managing Member hereby acknowledges that the Company and JCF
CFN II have received from each Member aggregate capital contributions
equal to the Maximum Contribution Commitment of each such Member set
forth on Schedule A hereto in such proportions as shall be recorded in
the books of records of the Company and JCF CFN II. Each Member's
"Percentage Interest" as of any date shall be equal to the ratio
between (x) all capital contributions made to the Company and (y) the
aggregate capital contributions to the Company by all Members as of
such date. Notwithstanding anything in this Agreement to the contrary,
if requested by the Managing Member each Member shall be required,
without regard to its Maximum Contribution Commitment, to make a pro
rata (based on Percentage Interests) capital contribution to the
Company in respect of (A) the costs and expenses arising from the
organization and operations of the Company and (B) the Company's
obligations under Section 13 hereof. The Managing Member shall give the
Members at least 5 business days prior written notice of any
contribution required pursuant to the immediately preceding sentence.
(ii) In the event (A) the Company is required to make an Initial
Capital Contribution (as defined in the Holdings Agreement) or
Mandatory Capital Contribution to Holdings or other payments owed by
the Company to any Entity pursuant to the applicable Entity Agreement
and (B) the contribution by any Regular Member of all or any portion of
its pro rata share (based on Percentage Interests) of such Initial
Capital Contribution (as defined in the Holdings Agreement), Mandatory
Capital Contribution or other payment would, when taken together with
such Regular Member's prior capital contributions to the Company
pursuant to Section 7 and Section 11(a)(i) (other than pursuant to
clause (B) of Section 11(a)(i)), be in excess of such Regular Member's
Maximum Contribution Commitment (any such excess being referred to as
such Regular Member's "Excess Amount"), then the Managing Member shall,
either directly or through one or more of its affiliates, make a
capital contribution to the Company in an amount equal to such Excess
Amount and the Percentage Interest of the Managing Member (or the
relevant affiliate(s) of the Managing Member) shall be increased
proportionately. Notwithstanding the foregoing, the Managing Member and
any Regular Member may each agree in their sole and absolute discretion
that such Regular Member shall make a capital contribution of all or
any portion of such Regular Member's Excess Amount and in such event
the Percentage Interest of the Managing Member (or the relevant
affiliate(s)) and such Regular Member shall be adjusted accordingly.
(iii) In the event the Company is requested to make a Voluntary Capital
Contribution to any Entity, the Managing Member shall provide the
Regular Members with a written notice specifying (A) such Regular
Member's pro rata share (based on then existing Percentage Interests)
of such Voluntary Capital Contribution and (B) the date a capital
contribution from a participating Regular Member for such Voluntary
Capital Contribution is required to be made to the Company, which date
shall be no less than 5 business days following the date of such
written notice. Each Regular Member shall be required to notify the
Managing Member within 3 business days of the date of the written
notice provided pursuant to the preceding sentence whether the Regular
Member elects to make all or any portion of such capital contribution.
If any Regular Member elects to make less than 100% of its share of
such Voluntary Capital Contribution (the difference between a Regular
Member's share of such Voluntary Capital Contribution and the capital
contribution elected to be made by such Regular Member in respect
thereof being referred to as such Regular Member's "Shortfall Amount"),
the Managing Member shall be permitted, either directly or through one
or more of its affiliates, to make a capital contribution to the
Company in an amount up to such Regular Member's Shortfall Amount and
the Percentage Interest of the Managing Member (or the relevant
affiliate(s) of the Managing Member) shall be increased
proportionately."
4. Amendment to Section 14. Section 14 is hereby amended and restated
in its entirety as follows:
"14. Distributions and Other Tax Matters. (a) Distributions. The
Managing Member shall be required to distribute to the Members in
proportion to their respective Percentage Interests any proceeds from
an investment within 30 calendar days after the receipt thereof;
provided that the Managing Member shall be permitted to withhold from
any distribution amounts necessary to create, in its discretion,
appropriate reserves for expenses and liabilities, contingent or
otherwise, of the Company. Profits and losses shall be allocated among
the Members in proportion to their respective Percentage Interests.
Distributions upon the dissolution and winding up of the Company, after
payment of amounts to satisfy all creditors of the Company (including
Members who are creditors of the Company), either by the payment
thereof or the making of reasonable provision therefor (including the
establishment of reserves in amounts determined in good faith by the
Managing Member), shall be made among the Members in proportion to
their respective Percentage Interests.
(b) Capital Accounts. There shall be established for each Member on the
books of the Company as of the date hereof, a capital account (each
being a "Capital Account"). The Capital Account of each Member shall be
credited with such Member's initial capital contributions, increased by
any allocation of income or gain and by any additional capital
contributions by that Member, and shall be reduced by any allocation of
loss, expense or deduction and by any distribution to that Member.
Capital Accounts shall be appropriately adjusted to reflect transfers
of a Member's interests. The provisions of this Section 14 relating to
the maintenance of Capital Accounts and allocations of Company income,
gain, loss, expense or deduction are intended to comply with United
States Treasury regulations section 1.704-1(b) (including, without
limitation, the "qualified
income offset" provisions contained therein) and shall be interpreted
and applied in a manner consistent with such United States Treasury
regulations. Additionally, the foregoing allocation provisions shall be
interpreted and applied in a manner consistent with the "minimum gain
chargeback" provisions of such United States Treasury Regulations.
Interest shall not be payable on Capital Account balances.
(c) Allocations. (i) Net income and loss of the Company for each fiscal
period as determined in the reasonable discretion of the Managing
Member shall be allocated among the Capital Accounts of the Members in
a manner that as closely as possible gives economic effect to the
provisions of this Section 14 and Section 15 and other relevant
provisions hereof.
(ii) All items of income, gain, loss, deduction and credit of the
Company shall be allocated among the Members for federal, state and
local income tax purposes consistent with the manner that the
corresponding constituent items of net income and loss shall be
allocated among the Members pursuant to this Agreement, except as may
otherwise be provided herein or by the Internal Revenue Code of 1986,
as amended (the "Code"). Notwithstanding the foregoing, the Managing
Member in its sole discretion shall make such allocations for tax
purposes as may be needed to ensure that allocations are in accordance
with the interests of the Members, within the meaning of the Code and
Treasury regulations. The Managing Member shall determine all matters
concerning allocations for tax purposes not expressly provided for
herein in its sole discretion.
(iii) To the extent the Company is required by law to withhold or to
make tax payments (including interest and penalties thereon) on behalf
of or with respect to any Member ("Tax Advances"), the Managing Member
may withhold such amounts and make such tax payments as so required.
All Tax Advances made on behalf of a Member shall, at the option of the
Managing Member, (A) be promptly paid to the Company by the Member on
whose behalf such Tax Advances were made or (B) be repaid by reducing
the amount of the current or next succeeding distribution or
distributions which would otherwise have been made to such Member or,
if such distributions are not sufficient for that purpose, by so
reducing the proceeds of liquidation otherwise payable to such Member.
Whenever the Managing Member selects the option set forth in clause (B)
of the immediately preceding sentence for repayment of a Tax Advance by
a Member, for all other purposes of this Agreement such Member shall be
treated as having received all distributions unreduced by the amount of
such Tax Advance. Each Member hereby agrees to indemnify and hold
harmless the Company and the Managing Member and any member or officer
of the Managing Member from and against any liability with respect to
Tax Advances required on behalf of or with respect to such Member. In
the event the Company is liquidated and a liability is asserted against
the Managing Member and any member or officer of the Managing Member
for Tax Advances, the Managing Member shall have the right to be
reimbursed from the Member on whose behalf such Tax Advance was made.
(d) Tax Matters. Information required for Members to prepare their
federal, state and local income tax returns will be delivered to each
Member after the end of each taxable year of the Company. Every
reasonable effort will be made to furnish such information within 90
days after the end of each taxable year.
Unless the Company is advised by counsel that it is entitled to be
treated as a disregarded entity for federal income tax purposes, the
Company shall file its tax returns as a partnership for federal, state
and local income and other tax purposes. The "tax matters partner" for
purposes of Section 6231(a)(7) of the Code shall be the Managing
Member. The Managing Member shall have all of the rights, duties,
powers and obligations provided for in Sections 6221 through 6232 of
the Code with respect to the Company."
5. Amendment to Section 15. Clause (iv) of Section 15 is hereby amended
and restated in its entirety as follows:
"The disposition or liquidation to cash of all of the Company's
investments."
6. New Section 22. A new Section 22 shall be added to the Agreement as
follows:
"Confidentiality. Notwithstanding anything in this Agreement to the
contrary, to comply with Treas. Reg. Section 1.6011-4(b)(3)(i), each
Member (and any employee, representative or other agent of such Member)
may disclose to any and all persons, without limitation of any kind,
the U.S. federal income tax treatment and tax structure of the Company
or any transactions undertaken by the Company, it being understood and
agreed, for this purpose, (a) the name of, or any other identifying
information regarding (i) the Company or any existing or future Member
(or any affiliate thereof) in the Company, or (ii) any investment or
transaction entered into by the Company; and (b) any performance
information relating to the Company, does not constitute such tax
treatment or tax structure information."
7. Amendment to Schedule A. Schedule A to the Agreement is hereby
amended and restated in its entirety as follows:
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NAME PERCENTAGE INTEREST INITIAL CAPITAL MAXIMUM CONTRIBUTION
---- ------------------- --------------- --------------------
CONTRIBUTION COMMITMENT
------------ ----------
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Managing Member:
----------------
JCF Associates I LLC 0% N/A N/A
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Regular Members:
----------------
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The Enstar Group, Inc. 60% $2,996,250 $15,300,000
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Castlewood Holdings Limited 40% N/A $10,200,000
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8. Ratification and Confirmation of the Agreement. Except as so
modified pursuant to this Amendment No. 1, the Agreement is hereby ratified and
confirmed in all respects.
9. Governing Law. This Amendment No. 1 shall be governed by the laws of
the State of Delaware.
10. Effectiveness. This Amendment No. 1 shall be effective as of the
date hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
effective as of the date first written above.
MANAGING MEMBER
JCF ASSOCIATES I LLC
By: /s/ Xxxxx Rocker
--------------------------
Name: Xxxxx Rocker
Title: Principal
MEMBERS
THE ENSTAR GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman & CEO
CASTLEWOOD HOLDINGS LIMITED
By: /s/ Xxxxxxx Xxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxx Xxxxxx
Title: Chief Financial Officer
