SEVENTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ORCHID ISLAND TRS, LLC
SEVENTH
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ORCHID ISLAND TRS,
LLC
This
SEVENTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the
“Agreement”) of Orchid Island TRS, LLC (f/k/a Opteum Financial Services,
LLC) (the “Company”), dated as of July 20, 2007 (this
“Agreement”), is made and entered into by OPTEUM INC., a Maryland
corporation (the “Opteum”), and CITIGROUP GLOBAL MARKETS REALTY CORP., a
New York corporation (“Citigroup” and, together with Opteum, the
“Members”).
RECITALS
WHEREAS,
the Company was formed on February 26, 1999 as a limited liability company
pursuant to the Delaware Limited Liability Company Act, 6 Del. C.§
18-101, etseq., as amended from time to time (the “Act”),
by filing a Certificate of Formation of the Company with the office of the
Secretary of State of the State of Delaware; and
WHEREAS,
on December 21, 2006, immediately following Opteum’s conversion and
reclassification of a number of limited liability company interests in the
Company from Class A Membership Interests to Class B Membership Interests,
Citigroup acquired the percentage and class of limited liability company
interests in the Company (the “Membership Interests”) set forth opposite
Citigroup’s name on Exhibit A hereto from Opteum pursuant to and in
accordance with the terms of that certain Membership Interest Purchase, Option
and Investor Rights Agreement, dated as of December 21, 2006 (the “Purchase
Agreement”), by and among the Company, Opteum and Citigroup;
and
WHEREAS,
on July 3, 2007, the Company filed a Certificate of Amendment to its Certificate
of Formation with the Secretary of State of the State of Delaware thereby
changing its name from Opteum Financial Services, LLC to Orchid Island TRS,
LLC;
and
WHEREAS,
the Members desire to amend and restate the Company’s Sixth Amended and Restated
Limited Liability Company Agreement, dated as of December 21, 2006, to take
account of the aforementioned name change of the Company.
NOW,
THEREFORE, the Members hereby declare as follows:
Section
1. Name. The
name of the Company is “Orchid Island TRS, LLC.” The Board of
Managers is authorized to change the name of the Company and may otherwise
conduct the business and affairs of the Company under any other name, if it
deems it necessary or advisable to do so, provided that it complies with all
applicable laws in doing so and so long as such name includes the words “Limited
Liability Company” or the abbreviation “LLC”. The Company shall
notify the Members in writing of any such change or use of other
name. In the event that the name of the Company is changed pursuant
to this Section, references herein to the name of the Company shall be deemed
to
have been amended to the name as so changed.
Section
3. Term;
Continued Existence. The Company shall continue in perpetuity
unless sooner dissolved in accordance with Section 19. The
Members shall take all actions necessary to ensure the Company’s existence as a
limited liability company in good standing under the laws of the State of
Delaware and under the laws of any other state in which the Company conducts
the
business and activities authorized in this Agreement.
Section
4. Principal
Office; Books and Records. The principal office of the Company
shall be located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ or such
other place or places as the Board of Managers may determine. The
Board of Managers shall be responsible for maintaining at the Company’s
principal office those books and records required by the Act to be so
maintained.
Section
5. Registered
Office and Agent. The address of the registered office of the
Company in the State of Delaware is c/o Corporation Service Company, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
name of the registered agent of the Company is Corporation Service
Company. The address of the registered agent in the State of Delaware
is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇. The registered agent and the registered office of the Company
may be changed from time to time by the Board of Managers.
Section
6. Members. The
names, mailing addresses, class of Membership Interest and percentage interests
(the “Percentage Interest”) of the Members are set forth on Exhibit
A hereto. No other person or entity shall be admitted as a member
of the Company, and no additional interests in the Company shall be issued,
without the approval of Opteum and appropriate amendments to this Agreement,
including Exhibit A.
Section
7. Classes
of Membership Interests; Reclassification Upon Purchase.
(a) The
Membership Interests shall be issued in two classes: the “Class A Membership
Interests” and the “Class B Membership Interests”. The
Class A Membership Interests and the Class B Membership Interests shall be
identical in all respects, except that the Class A Membership Interests shall
have voting rights and the Class B Membership Interests shall not have voting
rights. All or any portion of the Class A Membership Interests may be converted
and reclassified by the holder thereof, at any time, into an equal number of
Class B Membership Interests.
(b) Pursuant
to the terms of the Purchase Agreement, Citigroup acquired Class B Membership
Interests from Opteum, such Class B Membership Interests having been
reclassified as Class B Membership Interests from Class A Membership Interests
by Opteum immediately prior to their acquisition by Citigroup. At the
Option Closing (as defined in the Purchase Agreement) and pursuant to the terms
of the Purchase Agreement, Citigroup may acquire from Opteum additional
Membership Interests constituting an additional 7.49% of the Membership
Interests then outstanding and such Membership Interests shall, immediately
prior to such sale by Opteum, be reclassified from Class A Membership Interests
to Class B Membership Interests. Following such acquisition, if any,
or any other change in ownership or class or any increase or decrease in
ownership percentage, Exhibit A hereto shall be amended to reflect the
new ownership, percentage and class of outstanding Membership Interests held
by
the Members as of such date.
Section
8. Liability
of the Member. Except as otherwise expressly provided in the Act,
the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member shall be obligated personally for
any
such debt, obligation or liability of the Company solely by reason of being
a
member.
Section
9. Management
of the Company.
(a) The
Company shall have a Board of Managers (the “Board of Managers”), which
shall be the “manager” of the Company (within the meaning of the Act) and the
size and composition of which shall be as set forth in this Section
9.
(b) Subject
to the delegation of powers provided for herein and the limitations set forth
herein, the right and power to manage and control the business and affairs
of
the Company shall be vested exclusively in the Board of Managers, and the Board
of Managers shall have the exclusive right and power, in the name of and on
behalf of the Company, to perform all acts and do all things which, in its
sole
discretion, it deems necessary or desirable to conduct the business of the
Company. Except as otherwise required by law, no Member shall have
any right or power, by reason of the Member’s status as such, to act for or bind
the Company, but shall have only the right to vote on, approve or take the
actions herein specified to be voted on, approved or taken by it.
(c) The
Board
of Managers shall consist of one or more individuals (each, a “Manager”),
with the exact number of Managers to be determined from time to time by Opteum
in its sole discretion. Initially, the Board of Managers shall
consist of the following three Managers: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇. Each Manager shall be appointed by Opteum in its sole
discretion and may be removed by Opteum at any time in its sole
discretion. Each Manager shall hold office until such Manager’s death
or resignation or removal by Opteum. Any Manager may resign at any
time by giving written notice to the Members. Such resignation shall
take effect at the time specified therein or, if the time be not specified,
upon
receipt thereof; and unless otherwise specified therein, the acceptance of
such
resignation shall not be necessary to make it effective. Vacancies on
the Board of Managers resulting from death, resignation, removal or otherwise
and newly created Managerships resulting from any increase in the number of
Managers shall be filled solely by action taken by Opteum.
(d) A
majority of the total number of Managers then in office, whether present in
person or represented by proxy, shall constitute a quorum for the transaction
of
business at a meeting of the Board of Managers, and the affirmative vote of
a
majority in voting power of the Managers present at any such meeting, whether
present in person or represented by proxy, at which a quorum is present shall
be
necessary for the passage of any resolution or act of the Board of
Managers. At each meeting of the Board of Managers at which a quorum
is present, each other Manager present at such meeting, whether present in
person or represented by proxy, shall be entitled to one vote on each matter
to
be voted on at such meeting. Any action required or permitted to be
taken at any meeting of the Board of Managers may be taken by the unanimous
written consent of the Managers then in office.
Section
10. Committees
of the Board of Managers. The Board of Managers may designate, by
resolution, one or more committees. Any such committee, to the extent
provided in the resolution of the Board of Managers, shall have and may exercise
all the powers and authority of the Board of Managers in the management of
the
business and affairs of the Company, and may authorize the seal of the Company
to be affixed to all papers which may require it. Each committee
shall consist of one or more of the Managers. Each member of a
committee shall be appointed by the Board of Managers in its sole discretion
(but subject to the foregoing sentence) and may be removed by the Board of
Managers at any time in their sole discretion. Each member of a
committee shall hold office until the member’s death or resignation or removal
by the Board of Managers. Any member of a committee may resign at any
time from such committee by giving written notice to the Board of
Managers. Such resignation shall take effect at the time specified
therein or, if the time be not specified, upon receipt thereof; and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Vacancies on a committee resulting
from death, resignation, removal or otherwise and newly created positions on
a
committee resulting from any increase in the number of members of a committee
shall be filled solely by the Board of Managers. The Board of
Managers may designate one or more Managers as alternate members of any
committee, who may replace any absent member at any meeting of the
committee. All of the members of a committee then in office (or, in
the absence of the member, the alternate member who has replaced the member),
whether present in person or represented by proxy, shall constitute a quorum
for
the transaction of business at a meeting of such committee, and the affirmative
vote of the member (or the alternate members who have replaced them) shall
be
necessary for the passage of any resolution or act of such
committee. Any action required or permitted to be taken at any
meeting of a committee may be taken by the written consent of all of the members
of such committee then in office. Each committee shall report its
actions to the Board of Managers when so required by the Board of
Managers.
Section
11. Officers. The
Board of Managers or the officer to which it delegates such responsibility
may,
from time to time, designate or appoint one or more officers of the Company,
including, without limitation, president, one or more vice presidents, a
secretary, an assistant secretary and/or a treasurer. Such officers
must be employees of the Company or an affiliate of the Company. Each
appointed officer shall hold office until: (i) his/her successor is
appointed by the Board of Managers or its applicable delegate; (ii) such officer
submits his/her resignation; or (iii) such officer is removed, with or without
cause, by the Board of Managers or its delegate. All officers shall
have such authority and perform such duties as the Board of Managers or its
delegates may determine, subject to the terms and provisions of this
Agreement.
Section
12. Duties
and Liabilities of the Members and Officers.
(a) Neither
any Member nor any Manager or officer shall be liable to the Company for any
loss or damages resulting from errors in judgment or for any acts or omissions
that do not constitute willful misconduct or gross negligence on the part of
the
Member, Manager or officer. In all transactions for or with the
Company, the Members, the Managers and the officers shall act in good faith
and
in the best interest of the Company.
(b) The
Company, its receiver or its trustee (but not any Member personally, if any
Member shall act as the receiver or trustee) shall indemnify and defend the
Members, the Managers and the officers against, and hold them harmless from,
any
and all losses, judgments, costs, damages, liabilities, fines, claims and
expenses (including, but not limited to, reasonable attorney’s fees and court
costs, which shall be paid by the Company as incurred) that may be made or
imposed upon such persons and any amounts paid in settlement of any claims
sustained by the Company by reason of any act or inaction which is determined
to
have been taken in good faith in the best interests of the Company and so long
as such conduct shall not constitute willful misconduct or gross
negligence.
(c) In
the
event of settlement of any action, suit or proceeding brought or threatened,
such indemnification shall apply to all matters covered by the settlement except
for matters as to which it is determined that the person seeking
indemnification did not act in good faith in the best interests of the Company
or such matter resulted from willful misconduct or gross
negligence. The foregoing right of indemnification shall be in
addition to any rights to which the Members, the Managers and officers may
otherwise be entitled and shall inure to the benefit of the executors,
administrators, personal representatives, successors or assigns of each such
person.
(d) The
Company shall pay the expenses incurred by the Members, the Managers or any
officer in defending a civil or criminal action, suit or proceeding, upon
receipt of an undertaking by such person to repay such payment if such person
shall be determined not to be entitled to indemnification therefor as provided
herein. Any right of indemnity granted under this Section 12 may be
satisfied only out of the assets of the Company and no Member nor any Manager
or
officer shall be personally liable with respect to any such claim for
indemnification.
(e) The
Company shall have the power to purchase and maintain insurance in reasonable
amounts on behalf of the Company and the Members, Managers, officers, employees
and agents of the Company against any liability incurred by them in their
capacities as such.
(f) The
provisions of this Section 12 shall not be construed to limit the power of
the
Company to indemnify its Members, Managers, officers, employees or agents to
the
fullest extent permitted by law or to purchase insurance or enter into specific
agreements, commitments or arrangements for indemnification. The
absence of any express provision for indemnification in this Agreement shall
not
limit any right of indemnification existing independently of this Section
12.
Section
13. Capital
Contributions. The Members shall have no obligation to contribute
any capital, or to make any loans, to the Company. With the prior
approval of the Board of Managers, the Members may, however, from time to time
make voluntary capital contributions to the Company.
Section
14. Distributions;
Allocation of Profits and Losses. Distributions shall be made by
the Company to the Members at the times and in the amounts as may from time
to
time be determined by the Board of Managers. Distributions shall be
made to each Member based on the Percentage Interest held by such Member on
the
date of such distribution.
Section
15. Tax
Matters. At all times, the Company shall be treated as a
corporation for U.S. federal income tax purposes and shall take all necessary
and appropriate actions to confirm and ensure such treatment including, but
not
limited to, filing all required U.S. federal income tax returns and elections
necessary or appropriate to secure and preserve such treatment. In
addition, at all times, the Company shall be treated as a “taxable REIT
subsidiary” (within the meaning of Section 856(l) of the Code) and shall take
all necessary and appropriate actions to confirm and ensure such treatment
including, but not limited to, filing all required U.S. federal income tax
returns and elections necessary or appropriate to secure and preserve such
treatment. The Company shall not take any action, directly or
indirectly, that would adversely affect the Company’s ability to qualify as a
taxable REIT subsidiary.
Section
16. Transfers. Except
as specifically provided in the Purchase Agreement, Citigroup shall not,
directly or indirectly, whether voluntarily, involuntarily, by operation of
law
or otherwise, transfer, dispose of, sell, lend, pledge, hypothecate, encumber,
assign, exchange, participate, subparticipate, or otherwise transfer in any
manner (each, a “Transfer”) all or any portion of its Membership
Interests, or any rights arising under, out of or in respect of this Agreement,
including, without limitation, any right to damages for breach of this Agreement
unless prior to such Transfer the transferee and such Transfer is approved
by
the Board of Managers, which approval may be withheld in its sole and absolute
discretion.
Section
17. Dissolution. Subject
to the terms of this Agreement, the Company shall be dissolved, and shall
terminate and wind up its affairs upon the first to occur of (i) the
election of Opteum or (ii) the entry of a decree of judicial dissolution
under Section 18-802 of the Act.
Section
18. Liquidation. Upon
dissolution, the Company’s business shall be liquidated in an orderly
manner. Opteum shall act as the liquidator (unless it elects to
appoint a liquidator) to wind up the affairs of the Company pursuant to this
Agreement. If there shall be no members, the successor-in-interest to
Opteum may serve as such liquidator or may approve one or more liquidators
to
act as the liquidator in carrying out such liquidation. In performing
its duties, the liquidator is authorized to sell, distribute, exchange or
otherwise dispose of the assets of the Company in accordance with the Act and
in
any reasonable manner that the liquidator shall determine to be in the best
interest of the Members or their successors-in-interest. The proceeds
of any liquidation shall be applied and distributed in the following order
of
priority:
(a) for
the
payment of the debts and liabilities of the Company (including any debts and
liabilities owed to the Members to the extent permitted under the Act (and
the
expenses of liquidation));
(b) to
the
setting up of any reserves that Opteum reasonably may deem necessary for any
contingent or unforeseen liabilities or obligations of the Company arising
in
connection with the business of the Company. These reserves may be
paid over by Opteum to any attorney-at-law, as escrowee, to be held by such
attorney for the purpose of disbursing such reserves in payment of any of the
aforementioned contingencies and, at the expiration of such period as Opteum
shall deem advisable, to distribute the balance of such reserves to the Members
based on their Percentage Interests; and
(c) thereafter,
to the Members based on their Percentage Interests.
Section
19. Right
to Partition. To the extent permitted by law, and except as
otherwise expressly provided in this Agreement, each Member, on behalf of itself
and its successors and assigns hereby specifically renounces, waives and
forfeits all rights, whether arising under contract or statute or by operation
of law, to seek, bring or maintain any action in any court of law or equity
for
partition of the Company or any asset of the Company, or any interest which
is
considered to be Company property, regardless of the manner in which title
to
any such property may be held.
Section
20. Severability. It
is the desire and intent of the Members that the provisions of this Agreement
be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this Agreement
shall be adjudicated by a court of competent jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any other jurisdiction. Notwithstanding the foregoing,
if such provision could be more narrowly drawn so as not to be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such
provision in any other jurisdiction.
Section
21. Integration. Except
as expressly provided herein, this Agreement and the Purchase Agreement
constitutes the entire agreement among the parties pertaining to the subject
matter of this Agreement and supersedes all prior and contemporaneous agreements
and understandings of the parties in connection with this
Agreement. Except as expressly provided herein, no prior,
contemporaneous, or future covenant, representation, or condition not expressed
in this Agreement or in an amendment to this Agreement in accordance with
Section 22 shall affect or be effective to interpret, change or restrict the
express provisions of this Agreement.
Section
22. Modification,
Waiver or Termination. No modification, waiver or termination of
this Agreement, or any part of this Agreement, shall be effective unless made
in
writing.
Section
23. Benefits
of Agreement. No person or entity other than the Members and the
Company is, nor is it intended that any such other person or entity be treated
as, a direct, indirect, intended or incidental third-party beneficiary of this
Agreement for any purpose whatsoever, nor shall any such other person or entity
have any legal or equitable right, remedy or claim under or in respect of this
Agreement. Without limiting the generality of the foregoing, nothing
in this Agreement, expressed or implied, is intended or shall be construed
to
give to any creditor of the Company or to any creditor of any Member or any
other person or entity whatsoever, other than the Members and the Company,
any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenant, condition or provisions contained in this Agreement, and such
provisions are and shall be held to be for the sole and exclusive benefit of
the
Members and the Company.
Section
24. Interpretation. As
used in this Agreement, the masculine, feminine or neuter gender, and the
singular or plural number, shall be deemed to be or include the other genders
or
number, as the case may be, whenever the context so indicates or
requires. Sections and other titles contained in this Agreement are
for convenience of reference only and shall not define or limit any of the
provisions of this Agreement.
Section
25. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the Members and their respective successors and permitted
assigns.
Section
26. Actions
by Opteum. Any action required or permitted to be taken under
this Agreement by Opteum shall require written evidence of such action executed
by at least two duly appointed and authorized officers of Opteum.
Section
27. Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT
TO
CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
Section
28. Application
of the Act. Any matter not specifically covered by a provision of
this Agreement shall be governed by the applicable provisions of the
Act.
Section
29. Effective
Date. This Agreement shall be effective immediately following
Citigroup’s acquisition of Membership Interests pursuant to the Purchase
Agreement.
[Signature
appears on the following page.]
NYA
812081.6
IN
WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the
day
first above written.
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
CITIGROUP
GLOBAL MARKETS REALTY CORP.
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
NYA
812081.6
EXHIBIT
A
|
Member
|
Mailing
Address
|
Class
of Membership Interest
|
Percentage
Interest
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
|
Class
A
|
92.5%
|
|
|
Citigroup
Global Markets Realty Corp.
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
Class
B
|
7.5%
|