EXHIBIT 2.3
LIMITED LIABILITY COMPANY AGREEMENT
OF
JCF CFN II LLC
This Limited Liability Company Agreement (this "Agreement") of JCF CFN
II LLC (the "Company") is entered into effective as of June 20, 2003 by and
between JCF Associates I LLC, as the managing member (the "Managing Member"),
and each of the other members from time to time listed on Schedule A hereto (the
"Regular Members", and together with the Managing Member, the "Members"). The
Members agree as follows:
1. Name. The name of the Company shall be JCF CFN II LLC, or such other
name as the Managing Member may from time to time hereafter designate.
2. Formation. The Company has been formed under the provisions of the
Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101 et seq. (the
"Act").
3. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings set forth therefor in Section 18-101 of the Act.
4. Purpose. "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
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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.
5. Offices.
(a) The principal place of business and office of the Company
shall initially be located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 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 c/o Corporation Service Company, 0000 Xxxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, 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 Corporation Service Company, 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, 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.
6. Members. The Members of the Company as of the date hereof and their
respective addresses are set forth on Schedule A hereto. Additional Members may
be admitted to the Company, and Schedule A may be accordingly amended, with the
joint consent of all of the Members; provided, that any affiliate of the
Managing Member that makes a capital contribution to the Company pursuant to
Sections 10(b) or 10(c) shall be admitted to the Company as a Regular Member
solely upon the direction of the Managing Member.
7. Term. The term of the Company commenced on June 19, 2003, the date
of filing of the certificate of formation of the Company in accordance with the
Act, and shall
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continue until the Company is dissolved and its affairs are wound up in
accordance with Section 16 of this Agreement and a certificate of cancellation
is filed in accordance with the Act.
8. 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 amendments 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. The Managing Member shall devote such
time to the business and affairs of the Company as it deems necessary, in its
sole discretion, for the performance of its duties, but in any event, shall not
be required to devote full time to the performance of such duties and may
delegate its duties and responsibilities as provided in this Agreement. Nothing
in this Agreement shall be deemed to preclude any Member or its affiliates from
exercising investment responsibility, from engaging directly or indirectly in
any other business or from directly or indirectly purchasing, selling, holding
or otherwise dealing with any securities for the account of any such other
business, for their own accounts or for clients.
9. Limitation of Liability.
(a) Except as provided in the Act or as such Member shall
otherwise expressly agree in writing, no Member of the Company shall be
obligated personally for any debt, obligation or liability of the Company or of
any other Member solely by reason of being a Member of the Company.
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(b) In no event shall any Member or former Member (i) be
obligated to make any capital contribution or payment to or on behalf of the
Company or (ii) have any liability to return distributions received by such
Member from the Company in each case except as otherwise specifically provided
in this Agreement, as such Member shall otherwise expressly agree in writing or
as may be required by applicable law.
10. Capital Contributions.
(a) Members shall make capital contributions to the Company in
such amounts and at such times as shall be determined by the Managing Member in
its sole discretion; provided that, subject to the penultimate sentence of this
Section 10(a), no Regular Member shall be required to make a capital
contribution to the Company pursuant to this Section 10 that, when taken
together with such Regular Member's prior capital contributions to the Company
and such Regular Member's prior capital contributions to JCF CFN LLC ("JCF I"),
would be in excess of such Regular Member's Maximum Contribution Commitment (as
such term is defined in the Limited Liability Company Agreement of JCF I, dated
as of December 19, 2002 (as amended from time to time, the "JCF I Agreement"))
to JCF I. 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 (i) the costs and
expenses arising from the organization and operations of the Company and (ii)
the Company's obligations under Section 12 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.
(b) 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
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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 and JCF 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.
(c) In the event the Company is requested to make a Voluntary
Capital Contribution to Holdings or any other 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
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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.
11. No Right to Resign or Withdraw. No Member shall have the right to
resign or withdraw from the Company except upon the transfer of all of its
interest in the Company in accordance with the provisions hereof, and no Member
shall have the right to withdraw any amount from the Company or receive any
distribution except as expressly provided herein.
12. Exculpation and Indemnification.
(a) Notwithstanding any other terms of this Agreement, whether
express or implied, or any obligation or duty at law or in equity, no Member nor
any of its officers, directors, shareholders, members, managers, partners or
employees nor any officer or employee (including for this purpose any Member who
serves as a consultant to the Company) of the Company or its affiliates
(individually, a "Covered Person" and collectively, the "Covered Persons") shall
be liable to the Company or any other Member for any act or omission (in
relation to the Company, this Agreement, any related document or any transaction
or investment contemplated hereby or thereby) taken or omitted in good faith by
a Covered Person and in the reasonable belief that such act or omission is in,
or is not contrary to, the best interests of the Company and is within the scope
of authority granted to such Covered Person unless such act or omission resulted
from fraud, willful misconduct, gross negligence, a violation of applicable
securities laws or a breach of this Agreement, or any related document by such
Covered Person and except that nothing herein shall constitute a waiver or
limitation of any rights which a Member or the Company may have under applicable
securities laws or of any rights under other
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laws which as a matter of law may not be waived.
(b) To the fullest extent permitted by law, the Company shall
indemnify and hold harmless (but only to the extent of its assets) each Covered
Person from and against any and all claims, liabilities, damages, losses, costs
and expenses (including amounts paid in satisfaction of judgments, in
compromises and settlements, as fines and penalties and legal or other costs and
reasonable expenses of investigating or defending against any claim or alleged
claim) of any nature whatsoever, known or unknown, liquidated or unliquidated,
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, in which the Covered Person may be
involved, or threatened to be involved, as a party or otherwise, by reason of
its management of the affairs of the Company or which relates to or arises out
of or in connection with the Company, its property, its business or affairs;
provided that a Covered Person shall not be entitled to indemnification under
this Section with respect to any claim, issue or matter in which such Covered
Person has engaged in fraud, willful misconduct, gross negligence or a breach of
this Agreement or any related document by such Covered Person and nothing herein
shall constitute a waiver or limitation of any rights which a Member or the
Company may have under applicable securities laws or of rights under other laws
which as a matter of law may not be waived. To the fullest extent permitted by
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of a written undertaking
by or on behalf of the Covered Person to repay such amount to the extent that it
shall be determined that the Covered Person is not entitled to be indemnified as
authorized in this Section.
(c) To the extent that, at law or in equity or otherwise, a
Member has duties (including fiduciary duties) and liabilities relating thereto
to the Company or to another
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Member, such Member acting under this Agreement shall not be liable to the
Company or to any such other Member for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they expand or restrict the duties and liabilities of a Member otherwise
existing at law or in equity or otherwise, are agreed by the Members to modify
to that extent such other duties and liabilities of such Member.
13. 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. 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, and shall be set forth on Schedule A hereto.
14. 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 contribution, if any, 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
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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.
15. Allocations. (a) 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 Sections 13 and
16 and other relevant provisions hereof.
(b) 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.
(c) 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
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("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, (i) be promptly paid to the Company by the
Member on whose behalf such Tax Advances were made or (ii) 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 (ii) 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.
16. Dissolution. The Company shall be dissolved and its affairs wound
up upon the first to occur of the following:
(i) The occurrence of an event with respect to the Managing Member
causing a dissolution of the Company under Section 18-801 of
the Act, provided, however, that the Company shall not be
dissolved or required to be wound up upon the occurrence of
any such event if within ninety (90) days after the occurrence
of such event, all Regular Members agree in writing to
continue the business of the Company and to the appointment,
effective as of the date of such event, of a replacement
Managing Member, in which event the Managing Member shall
become a Regular Member;
(ii) Judicial dissolution;
(iii) The mutual agreement of the Members; or
(iv) The disposition or liquidation to cash of all of the Company's
investments.
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17. Assignments of Membership Interest. No Member may sell, assign,
pledge or otherwise transfer or encumber (collectively "transfer") all or any
part of its interest in the Company, nor shall any Member have the power to
substitute a transferee in his place as a substitute Member, without, in either
event, having obtained the prior written consent of each other Member, which
consent may be given or withheld in its sole discretion; provided that no such
consent shall be required for a transfer by any Member of all of its interest in
the Company to any affiliate of such Member so long as such Member remains
contingently liable for the performance by such affiliate of its obligations
hereunder and such transfer does not impose any legal, tax or regulatory burden
upon the Company. Upon any such transfer to an affiliate of a Member's interest
in the Company, such affiliate shall be admitted as a substitute Member of the
Company in lieu of the transferor Member.
18. 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 the
rights, duties, powers and obligations provided for in Sections 6221 through
6232 of the Code with respect to the Company.
19. Amendments. This Agreement may be amended only upon the written
consent of all of the Members.
20. Governing Law. This Agreement shall be governed by, and construed
under, the laws of the State of Delaware.
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21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
22. 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.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first written above.
MANAGING MEMBER
JCF ASSOCIATES I LLC
By: /s/ Xxxxx Rocker
------------------------------
Name: Xxxxx Rocker
Title: Principal
REGULAR MEMBERS
THE ENSTAR GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and CEO
CASTLEWOOD HOLDINGS LIMITED
By: /s/ Xxxxxxx Xxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxx Xxxxxx
Title: Chief Financial Officer
Schedule A
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NAME AND ADDRESS PERCENTAGE INTEREST
---------------- -------------------
--------------------------------------------------------------------------------
Managing Member:
----------------
JCF Associates I LLC 0%
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
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Regular Members:
----------------
The Enstar Group, Inc. 60%
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Castlewood Holdings Limited 40%
Clarendon House
2 Church Street
Xxxxxxxx, XX CX
Bermuda
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