SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NEW AFFIRMATIVE LLC
This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF
NEW AFFIRMATIVE LLC (the "Company"), dated as of August 31, 2006 (the
"Agreement"), by Affirmative Investment LLC, the sole member of the Company (the
"Managing Member").
WHEREAS, DSC AFFM, LLC ("DSC") and X.X. Xxxxxxx I LP ("Flowers") caused
the Company to be formed as a limited liability company under the Act (as
hereinafter defined);
WHEREAS, on June 13, 2005, the Company, DSC and Flowers entered into a
Subscription Agreement (the "Subscription Agreement"), pursuant to which each of
DSC and Flowers agreed to make certain investments in the Company;
WHEREAS, on June 13, 2005, DSC and Flowers entered into a Limited
Liability Company Agreement (the "Original LLC Agreement") with respect to the
management and operation of the Company;
WHEREAS, on June 14, 2005, DSC, the Managing Member, the Company, Vesta
Insurance Group, Inc. ("VIG") and Vesta Fire Insurance Corporation ("VFIC")
entered into a Stock Purchase Agreement (the "Stock Purchase Agreement"),
pursuant to which, among other things, the Company agreed to purchase 5,218,228
shares of common stock of Affirmative Insurance Holdings, Inc. ("Affirmative")
owned, collectively, by VIG and VFIC;
WHEREAS, the Company was formed for the sole purpose of acquiring,
holding and disposing of the shares of common stock of Affirmative
purchased pursuant to the Stock Purchase Agreement as well as additional shares
of common stock of Affirmative, if any, held directly by DSC and the Managing
Member as of the closing of the transactions contemplated by the Stock Purchase
Agreement;
WHEREAS, on June 30, 2005, pursuant to Section 8.2(b) of the Original
LLC Agreement, Flowers transferred and assigned its rights and obligations under
the Subscription Agreement to the Managing Member and the Managing Member became
a party to the Original LLC Agreement and was substituted for Flowers for all
purposes therein and the Managing Member and DSC amended and restated the
Original LLC Agreement (such agreement, the "Amended LLC Agreement");
WHEREAS, on August 4, 2006, DSC and the Managing Member entered into a
Purchase Agreement, pursuant to which the Managing Member purchased from DSC the
entirety of DSC's membership interest in the Company (the "Purchase") and which
requires the Managing Member to amend the Amended LLC Agreement to reflect the
Managing Member as the sole member of the Company effective as of the
consummation of the Purchase; and
WHEREAS, on August 31, 2006, DSC and the Managing Member consummated
the Purchase and the Managing Member hereby amends and restates the Amended LLC
Agreement in accordance with the Purchase Agreement.
NOW, THEREFORE, it is agreed that:
1. Name. The name of the Company shall be New Affirmative LLC, or such
other name as the Managing Member, as managing member may from time to time
hereafter designate.
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2. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings set forth therefor in Section 18-101 of the Delaware Limited
Liability Company Act, 6 Del. C. xx.xx. 18-101, et seq. (the "Act").
3. Purpose. The Company is formed for the purpose of engaging in any
lawful business permitted by the Act or the laws of any jurisdiction in which
the Company may do business. The Company shall have the power to engage in all
activities and transactions which the Managing Member deems necessary or
advisable in connection with the foregoing.
4. Offices
(a) The principal place of business and office of the Company
shall be located at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
the Company's business shall be conducted from such place or such other places
as the Managing Member may designate from time to time.
(b) The registered office of the Company in the State of Delaware
shall be located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The name and
address of the registered agent of the Company for service of process on the
Company in the State of Delaware shall be The Corporation Trust Company, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The Managing Member may from time to
time change the registered agent or office by an amendment to the certificate of
formation of the Company.
5. Members. The sole member of the Company as of the date hereof is the
Managing Member, whose business address is 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000. Additional members may be admitted to the Company with the
consent of, and on such terms and conditions as shall be determined by, the
Managing Member in its sole and absolute discretion.
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6. Term. The term of the Company shall commence on the date of filing
of the certificate of formation of the Company in accordance with the Act and
shall continue until the Company is dissolved and its affairs are wound up in
accordance with Section 11 of this Agreement and a certificate of cancellation
is filed in accordance with the Act.
7. Management of the Company. The Managing Member shall manage the
affairs of the Company. The Managing Member shall have the power to do any and
all acts necessary or convenient to or for the furtherance of the purposes
described herein. The Managing Member may appoint an authorized person, within
the meaning of the Act, to execute, deliver and file any amendment and/or
restatements to the certificate of formation of the Company and may appoint
others as authorized persons to execute, deliver and file any other certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in a jurisdiction in which the Company may wish to
conduct business. The Managing Member or any authorized person appointed by it
shall have the power to bind the Company and conduct its business and affairs.
8. Capital Contributions. The Managing Member shall make capital
contributions to the Company in such amounts and at such times as it determines
in its sole and absolute discretion are necessary in furtherance of the
Company's purposes.
9. Resignation. The Managing Member shall not resign from the Company
except upon the transfer of all of his interests in the Company or the
concurrent dissolution of the Company.
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10. Distributions. The Managing Member may receive distributions in
cash or in kind in such amounts and at such times as it shall determine in his
sole and absolute discretion, subject to the requirements of Section 18-607 of
the Act and other applicable law.
11. Dissolution. The Company shall be dissolved and its affairs wound
up upon the first to occur of the following:
(i) occurrence of an event with the respect to the Managing Member
causing a dissolution of the Company under Section 18-801 of the
Act; or
(ii) the resignation of the Managing Member pursuant to Section 9 of
this Agreement.
12. Amendments. This Agreement may be amended only upon the written
consent of the Managing Member.
13. Miscellaneous. The Managing Member shall have no liability for the
debts, obligations or liabilities of the Company except to the extent expressly
required by the Act. This Agreement shall have governed by, and construed in
accordance with, the laws of the State of Delaware.
[NEXT PAGE IS A SIGNATURE PAGE.]
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IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as
of the date first written above.
AFFIRMATIVE INVESTMENT LLC
By Affirmative Associates LLC, its
Managing Member
/s/ Xxxxxxxx Xxxxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxxxx
Title: Authorized Person
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