EXHIBIT 10.9
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TRIAD HOLDINGS, LLC
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LIMITED LIABILITY COMPANY AGREEMENT
Dated as of April 29, 2005
THE INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED OR
UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE SOLD,
ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE
REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH
THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
THE INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SPECIFIED IN THIS LIMITED LIABILITY COMPANY
AGREEMENT, AS AMENDED OR MODIFIED FROM TIME TO TIME, AMONG THE ISSUER (THE
"LLC") AND CERTAIN INVESTORS, AND THE LLC RESERVES THE RIGHT TO REFUSE THE
TRANSFER OF SUCH INTERESTS UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO ANY TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE LLC
TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
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TABLE OF CONTENTS
PAGE
ARTICLE I CERTAIN DEFINITIONS............................................................. 1
ARTICLE II ORGANIZATIONAL MATTERS......................................................... 10
2.1 Formation........................................................................ 10
2.2 The Certificate, Etc............................................................. 11
2.3 Name............................................................................. 11
2.4 Purpose.......................................................................... 11
2.5 Powers of the LLC................................................................ 11
2.6 Foreign Qualification............................................................ 12
2.7 Principal Office; Registered Office.............................................. 12
2.8 Term............................................................................. 13
2.9 No State-Law Partnership......................................................... 13
2.10 No UBTI; Effectively Connected Income............................................ 13
2.11 Certification of Units........................................................... 13
ARTICLE III UNITS; CAPITAL ACCOUNTS....................................................... 13
3.1 Unitholders...................................................................... 13
3.2 Unitholder Meetings.............................................................. 15
3.3 Action of Unitholders by Written Consent or Telephone Conference................. 17
3.4 Issuance of Additional Units and Interests, Preemptive Rights.................... 18
3.5 Capital Accounts................................................................. 19
3.6 Negative Capital Accounts........................................................ 20
3.7 No Withdrawal.................................................................... 20
3.8 Loans From Unitholders........................................................... 20
ARTICLE IV DISTRIBUTIONS; REDEMPTIONS AND ALLOCATIONS..................................... 21
4.1 Distributions.................................................................... 21
4.2 Redemption....................................................................... 22
4.3 Allocations Generally............................................................ 22
4.4 Special Allocations.............................................................. 22
4.5 Tax Allocations.................................................................. 24
4.6 Indemnification and Reimbursement for Payments on Behalf of a Unitholder......... 24
4.7 Transfer of Capital Accounts..................................................... 24
ARTICLE V BOARD OF MANAGERS; OFFICERS..................................................... 25
5.1 Management by the Board of Managers.............................................. 25
5.2 Composition and Election of the Board of Managers................................ 26
5.3 Board Meetings and Actions by Written Consent.................................... 29
5.4 Committees; Delegation of Authority and Duties................................... 30
5.5 Officers......................................................................... 31
ARTICLE VI GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS.................................. 33
6.1 Limitation of Liability.......................................................... 33
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6.2 Lack of Authority................................................................ 33
6.3 No Right of Partition............................................................ 33
6.4 Unitholders Right to Act......................................................... 33
6.5 Conflicts of Interest............................................................ 33
6.6 Transactions Between the LLC and the Unitholders................................. 35
6.7 Approval Rights.................................................................. 35
6.8 Other Covenants.................................................................. 38
6.9 Nonsolicitation.................................................................. 39
ARTICLE VII EXCULPATION AND INDEMNIFICATION............................................... 40
7.1 Exculpation...................................................................... 40
7.2 Right to Indemnification......................................................... 40
7.3 Advance Payment.................................................................. 41
7.4 Indemnification of Employees and Agents.......................................... 41
7.5 Appearance as a Witness.......................................................... 41
7.6 Nonexclusivity of Rights......................................................... 41
7.7 Insurance........................................................................ 41
7.8 Savings Clause................................................................... 42
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS....................................... 42
8.1 Records and Accounting........................................................... 42
8.2 Fiscal Year...................................................................... 42
8.3 Tax Information.................................................................. 42
8.4 Transmission of Communications................................................... 42
8.5 LLC Funds........................................................................ 42
8.6 Information Rights............................................................... 43
8.7 Confidentiality.................................................................. 44
ARTICLE IX TAXES.......................................................................... 44
9.1 Tax Returns...................................................................... 44
9.2 Tax Elections.................................................................... 45
9.3 Tax Matters Partner.............................................................. 45
ARTICLE X TRANSFER OF UNITS............................................................... 45
10.1 Transfers by Unitholders......................................................... 45
10.2 Right of First Offer............................................................. 46
10.3 Tag-Along Rights................................................................. 48
10.4 Sale of the Company.............................................................. 48
10.5 Buy/Sell Arrangement............................................................. 49
10.6 Change in Business Form.......................................................... 51
10.7 Legends.......................................................................... 51
10.8 Effect of Assignment............................................................. 52
10.9 Restriction on Transfer.......................................................... 52
10.10 Transfer Fees and Expenses....................................................... 53
10.11 Void Transfers................................................................... 53
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ARTICLE XI WITHDRAWAL AND RESIGNATION OF UNITHOLDERS...................................... 53
11.1 Withdrawal and Resignation of Unitholders........................................ 53
ARTICLE XII DISSOLUTION AND LIQUIDATION................................................... 53
12.1 Dissolution...................................................................... 53
12.2 Liquidation and Termination...................................................... 54
12.3 Cancellation of Certificate...................................................... 54
12.4 Reasonable Time for Winding Up................................................... 54
12.5 Return of Capital................................................................ 55
12.6 Reserves Against Distributions................................................... 55
ARTICLE XIII VALUATION.................................................................... 55
13.1 Determination.................................................................... 55
13.2 Fair Market Value................................................................ 55
ARTICLE XIV GENERAL PROVISIONS............................................................ 56
14.1 Amendments....................................................................... 56
14.2 Investor Approval................................................................ 56
14.3 Title to LLC Assets.............................................................. 56
14.4 Remedies......................................................................... 56
14.5 Successors and Assigns........................................................... 57
14.6 Severability..................................................................... 57
14.7 Opt-in to Article 8 of the Uniform Commercial Code............................... 57
14.8 Notice to Unitholder of Provisions............................................... 57
14.9 Counterparts..................................................................... 57
14.10 Consent to Jurisdiction.......................................................... 57
14.11 Descriptive Headings; Interpretation............................................. 57
14.12 Applicable Law................................................................... 58
14.13 Mutual Waiver of Jury Trial...................................................... 58
14.14 Addresses and Notices............................................................ 58
14.15 Creditors........................................................................ 59
14.16 Waiver........................................................................... 59
14.17 Further Action................................................................... 59
14.18 Offset........................................................................... 59
14.19 Entire Agreement................................................................. 59
14.20 Delivery by Facsimile............................................................ 59
14.21 Survival......................................................................... 60
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TRIAD HOLDINGS, LLC
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT, dated as of April 29,
2005, is entered into by and among Triad Holdings, LLC (the "LLC") and the
Unitholders.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
following meanings:
"Acquisition Agreement" means the Stock Purchase Agreement, dated as of
December 23, 2004, by and among Fairlane Credit LLC, a Delaware limited
liability company, Ford Motor Credit Company, a Delaware corporation, the
Company and Purchaser, pursuant to which the Purchaser will acquire all of the
outstanding stock of Triad Financial Corporation, as amended or modified from
time to time in accordance with the terms thereof.
"Acquisition Closing" means the closing of the transactions contemplated
by the Acquisition Agreement.
"Additional Securities" shall have the meaning set forth in Section 3.4.
"Adjusted Capital Account Deficit" means with respect to any Capital
Account as of the end of any Taxable Year, the amount by which the balance in
such Capital Account is less than zero. For this purpose, such Person's Capital
Account balance shall be
(i) reduced for any items described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6), and
(ii) increased for any amount such Person is obligated to
contribute or is treated as being obligated to contribute to the LLC pursuant to
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (relating to partner
liabilities to a partnership) or 1.704-2(g)(1) and 1.704-2(i) (relating to
Minimum Gain).
"Affiliate" of any particular Person means (i) any other Person
controlling, controlled by, or under common control with such particular Person,
where "control" means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person whether through the ownership of voting securities, by contract, or
otherwise, and (ii) if such Person is a partnership, any partner thereof.
"Agreement" means this Limited Liability Company Agreement, as amended or
modified from time to time in accordance with the terms hereof.
"Approved Sale" has the meaning set forth in Section 10.4(a).
"Authorization Date" has the meaning set forth in Section 10.2(a).
"Board" means the Board of Managers established pursuant to Section 5.2.
"Book Value" means, with respect to any LLC property, the LLC's adjusted
basis for federal income tax purposes, adjusted from time to time to reflect the
adjustments required or permitted by Treasury Regulation Section
1.704-1(b)(2)(iv)(d)-(g); provided that the Book Value of any asset contributed
to the LLC shall be equal to the Fair Market Value of the contributed asset on
the date of contribution.
"Buy/Sell Offer Notice" has the meaning set forth in Section 10.5(b).
"Capital Account" means the capital account maintained for a Unitholder
pursuant to Section 3.5.
"Capital Contributions" means any cash, cash equivalents, promissory
obligations, or the Fair Market Value of other property that a Unitholder
contributes or is deemed to have contributed to the LLC with respect to any Unit
pursuant to Sections 3.1 or 3.4.
"Cause" has the meaning ascribed to such term in the Management Agreement.
"Certificate" means the LLC's Certificate of Formation as filed with the
Secretary of State of Delaware.
"Class A Preferred Unit" means a Unit representing a fractional part of
the interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class A Preferred Units in
this Agreement.
"Class A Unpaid Yield" of any Class A Preferred Unit means, as of any
date, an amount equal to the excess, if any, of (a) the aggregate Class A Yield
accrued on such Class A Preferred Unit for all periods prior to such date
(including partial periods), over (b) the aggregate amount of prior
Distributions made by the LLC that constitute payment of Class A Yield on such
Class A Preferred Unit.
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"Class A Unreturned Capital" of any Class A Preferred Unit means, as of
any date, the aggregate Capital Contributions made or deemed to be made in
exchange for such Class A Preferred Unit reduced by all Distributions made by
the LLC that constitute a return of Class A Unreturned Capital under Section
4.1(a)(ii).
"Class A Yield" means, with respect to each Class A Preferred Unit, the
amount accruing on such Class A Preferred Unit on a daily basis, at the rate of
6% per annum, compounded on the last day of each calendar year, on (a) the Class
A Unreturned Capital of such Class A Preferred Unit plus (b) as the case may be,
the Class A Unpaid Yield thereon for all prior annual periods. In calculating
the amount of any Distribution to be made during a period, the portion of the
Class A Yield with respect to such Class A Preferred Unit for the portion of the
annual period elapsing before such Distribution is made shall be taken into
account in determining the amount of such Distribution.
"Code" means the United States Internal Revenue Code of 1986 and any
successor statute, as amended from time to time.
"Common Unit" means a Unit representing a fractional part of the interest
of a Unitholder in Profits, Losses and Distributions and having the rights and
obligations specified with respect to the Common Units in this Agreement.
"Company" means Triad Holdings Inc., a Delaware corporation.
"Confidential Information" has the meaning set forth in Section 8.7.
"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del. L.
Section. 18-101, et seq., as it may be amended from time to time, and any
successor to the Delaware Act.
"Distribution" means each distribution made by the LLC to a Unitholder,
whether in cash, property or securities of the LLC and whether by liquidating
distribution, redemption, repurchase, or otherwise; provided that any
recapitalization or exchange or conversion of securities of the LLC, redemption
of securities of the LLC pursuant to the Management Agreement and any
subdivision (by Unit split or otherwise) or any combination (by reverse Unit
split or otherwise) of any outstanding Units shall not be deemed a Distribution.
"electronic transmission" means any form of communication not directly
involving the physical transmission of paper that creates a record that may be
retained, retrieved and reviewed by a recipient thereof and that may be directly
reproduced in paper form by such a recipient through an automated process.
"Equity Securities" means (i) Units or other equity interests in the LLC
or a corporate successor (including other classes or groups thereof having such
relative rights, powers, and duties as may from time to time be established by
the Board, including rights, powers, and/or
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duties senior to existing classes and groups of Units and other equity interests
in the LLC), (ii) obligations, evidences of indebtedness, or other securities or
interests convertible or exchangeable into Units or other equity interests in
the LLC or a corporate successor, and (iii) warrants, options, or other rights
to purchase or otherwise acquire Units or other equity interests in the LLC or a
corporate successor.
"Executive Agreement" means any Executive Agreement entered into from time
to time among the LLC, the Company (or any other Subsidiaries of the LLC) and
the Company's chief executive officer, as the same may be amended from time to
time pursuant to the terms thereof.
"Family Group" means a Unitholder's spouse and descendants (whether
natural or adopted), and any trust, family limited partnership, limited
liability company or other entity wholly owned, directly or indirectly, by such
Unitholder or such Unitholder's spouse and/or descendants that is and remains
solely for the benefit of such Unitholder and/or such Unitholder's spouse and/or
descendants and any retirement plan for such Unitholder.
"Fair Market Value" means, with respect to any asset or equity interest,
its fair market value determined according to Sections 13.1 and 13.2.
"Fiscal Quarter" means each calendar quarter ending March 31, June 30,
September 30, and December 31.
"Fiscal Year" means the LLC's annual accounting period established
pursuant to Section 8.2.
"Ford Transferee" means (i) the spouse or descendants of Xx. Xxxxxx X.
Xxxx, (ii) a trust, the primary beneficiaries of which are one or more Persons
named in clause (i) of this definition, (iii) any corporation in which each
class of stock is at least ninety percent (90%) owned by one or more Persons
described in clause (i) or (ii) of this definition or Xxxxxx X. Xxxx, (iv) a
partnership in which each class of partnership interests is at least ninety
percent (90%) owned by one or more Persons described in clause (i), (ii) or
(iii) of this definition or Xxxxxx X. Xxxx, (v) a limited liability company in
which each class of membership interests is at least ninety percent (90%) owned
by one or more Persons described in clause (i), (ii) or (iii) of this definition
or Xxxxxx X. Xxxx, or (vi) any of Xxxxxx X. Xxxx, J. Xxxxx Staff, Xxxx X. Xxxx
or Xxxxxx X. Xxxxxxx or any members of their respective Family Groups.
"Goldman" means GS Capital Partners 2000, L.P., a Delaware limited
partnership, GS Capital Partners 2000 Employee Fund, L.P., a Delaware limited
partnership, GS Capital Partners 2000 Offshore, L.P., a Cayman Islands exempted
limited partnership, Xxxxxxx Xxxxx Direct Investment Fund 2000, L.P., a Delaware
limited partnership, GS Capital Partners 2000 GmbH & Co. Beteilgungs KG, a
German limited partnership, and MTGLQ Investors, L.P., a Delaware limited
partnership.
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"Goldman Common Units" has the meaning set forth in Section 5.2(a)(i).
"Goldman Managers" has the meaning set forth in Section 5.2(a)(i).
"Governmental Entity" means the United States of America or any other
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government or any agency or department or subdivision of any
governmental authority, including the United States federal government or any
state or local government.
"GTCR" means (i) GTCR LLC, and (ii) any investment fund managed by GTCR
LLC or GTCR Xxxxxx Xxxxxx XX, L.L.C. that purchases Units pursuant to the Unit
Purchase Agreement.
"GTCR Common Units" has the meaning set forth in Section 5.2(a)(ii).
"GTCR LLC" means GTCR Xxxxxx Xxxxxx, L.L.C., a Delaware limited liability
company.
"GTCR Managers" has the meaning set forth in Section 5.2(a)(ii).
"HFI Term Loan" means the note issued by Triad Financial Corporation to
Ford Motor Credit Company on the Initial Closing Date in the initial aggregate
principal amount of approximately $114.1 million and the HFI Note and Security
Agreement between Triad Financial Corporation and Ford Motor Credit Company
dated as of the Initial Closing Date referenced in such note, each as amended or
modified from time to time in accordance with the terms thereof.
"HGF" means Xxxxxx'x Xxxx/Ford Ltd., a Texas limited partnership.
"HGF Buy Option" has the meaning set forth in Section 10.5(c).
"HGF Common Units" has the meaning set forth in Section 5.2(a)(iii).
"HGF Managers" has the meaning set forth in Section 5.2(a)(iii).
"HGF Sell Option" has the meaning set forth in Section 10.5(c).
"High Yield Debt" means the $150 million aggregate principal amount of
11.125% Senior Notes due 2013 originally issued under the indenture dated as of
the Initial Closing Date, among the Purchaser, as issuer, and JPMorgan Chase
Bank, N.A., as trustee, as amended or modified from time to time in accordance
with the terms thereof.
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"HSR Act" has the meaning set forth in Section 6.8(e).
"Indebtedness" means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business), and
(iv) any commitment by which a Person assures a creditor against loss (including
contingent reimbursement obligations with respect to letters of credit).
"Initial Closing Date" means April 29, 2005.
"Investments" as applied to any Person means (i) any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"Investor Members" means Goldman, GTCR, HGF and their respective
Affiliates, collectively.
"Liens" means any mortgage, pledge, security interest, encumbrance, lien,
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the LLC, any Subsidiary or any Affiliate
thereof, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any similar statute other than to reflect
ownership by a third party of property leased to the LLC, any Subsidiary or any
Affiliate under a lease which is not in the nature of a conditional sale or
title retention agreement, or any subordination arrangement in favor of another
Person (other than any subordination arising in the ordinary course of
business).
"LLC" means Triad Holdings, LLC, a Delaware limited liability company.
"Losses" means items of LLC loss and deduction determined according to
Section 3.5(b).
"Management Agreement" means the Management Agreement, dated as of the
date hereof, by and among the LLC, the Company, Triad Financial Corporation and
HGF, as the same may be amended from time to time pursuant to the terms thereof.
"Manager" means a current manager on the Board, who, for purposes of the
Delaware Act, will be deemed a "manager" (as defined in the Delaware Act) but
will be subject to the rights, obligations, limitations and duties set forth in
this Agreement.
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"Minimum Gain" means the partnership minimum gain determined pursuant to
Treasury Regulation Section 1.704-2(d).
"Non-HGF Investors" has the meaning set forth in Section 10.5(b).
"Offer Notice" has the meaning set forth in Section 10.2(a).
"Officers" means each person designated as an officer of the LLC to whom
authority and duties have been delegated pursuant to Section 5.5, subject to any
resolution of the Board appointing such person as an officer or relating to such
appointment.
"Permitted Transferee" means (i) with respect to any Unitholder who is a
natural person, a member of such Unitholder's Family Group, (ii) with respect to
any Unitholder which is an entity, any of such Unitholder's Affiliates, and
(iii) with respect to HGF only, a Ford Transferee.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity, or a
Governmental Entity.
"Proceeding" has the meaning set forth in Section 7.2.
"Profits" means items of LLC income and gain determined according to
Section 3.5(b).
"Public Offering" means any sale of the common equity securities of the
LLC (or a successor thereto) pursuant to an effective registration statement
under the Securities Act filed with the Securities and Exchange Commission;
provided that the following shall not be considered a Public Offering: (i) any
issuance of common equity securities as consideration for a merger or
acquisition, and (ii) any issuance of common equity securities or rights to
acquire common equity securities to employees of the LLC or its Subsidiaries as
part of an incentive or compensation plan.
"Public Sale" means any sale of Equity Securities (i) to the public
pursuant to an offering registered under the Securities Act or (ii) to the
public through a broker, dealer or market maker pursuant to the provisions of
Rule 144 (or any similar provision then in effect) adopted under the Securities
Act (other than Rule 144(k) prior to a Public Offering).
"Purchaser" means Triad Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of the Company.
"Qualified IPO" means an underwritten initial Public Offering of the
common stock of a corporate successor to the LLC or a Subsidiary of the LLC
(including, without limitation, the Company) with gross proceeds of at least
$50.0 million in a firm commitment underwriting.
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"Regulatory Allocations" has the meaning set forth in Section 4.4(e).
"Required Interest" means a majority of the Common Units.
"Residual Facilities" means, collectively, (i) the Master Residual Loan
Agreement between Triad Financial Residual Special Purpose LLC, Xxxxxxx Xxxxx
Mortgage Company and XX Xxxxxx Chase Bank, N.A. dated as of the Initial Closing
Date and (ii) the Master Residual Loan Agreement between Triad Financial
Residual Special Purpose LLC and Citigroup Global Markets Realty Corp. and XX
Xxxxxx Xxxxx Bank, N.A. dated as of the Initial Closing Date, each as amended or
modified from time to time in accordance with the terms thereof.
"Restricted Securities" means (i) the Securities issued pursuant to the
Unit Purchase Agreement and (ii) any securities issued with respect to the
securities referred to in clause (i) above by way of a unit dividend or unit
split or in connection with a combination of units, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) become eligible
for sale pursuant to Rule 144(k) (or any similar provision then in force) under
the Securities Act or (c) been otherwise transferred and new certificates for
them not bearing the Securities Act legend set forth in Section 10.7(b) have
been delivered by the LLC in accordance with Section 6.8(c)(ii). Whenever any
particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the LLC, without expense, new securities of
like tenor not bearing a Securities Act legend of the character set forth in
Section 10.7(b).
"Sale of the Company" means any transaction or series of transactions
pursuant to which any Person or group of related Persons (other than any of the
Investor Members) in the aggregate acquire(s) (i) equity securities of the LLC
or the Company possessing the voting power (other than voting rights accruing
only in the event of a default or breach) to elect a majority of the LLC's board
of managers or a majority of the Company's board of directors (whether by
merger, liquidation, consolidation, reorganization, combination, sale or
transfer of equity securities, securityholder or voting agreement, proxy, power
of attorney or otherwise) or (ii) all or substantially all of the LLC's or the
Company's assets determined on a consolidated basis, but excluding sales of
motor vehicle installment sales contracts and installment loans in the ordinary
course of the Company's business; provided that a Public Offering shall not
constitute a Sale of the Company.
"Securities" means notes, stocks, bonds, debentures, evidences of
indebtedness, certificates of interest or participation in any profit-sharing
agreement, partnership interests, beneficial interests in trusts,
collateral-trust certificates, pre-organization certificates or subscriptions,
transferable shares, investment contracts, voting-trust certificates,
certificates of deposit for securities, certificates of equity interests,
notional principal contracts and certificates of interest or participation in,
temporary or interim certificates for, receipts for or warrants or rights or
options to subscribe to or purchase or sell any of the foregoing, and any other
items commonly referred to as securities.
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"Securities Act" means the Securities Act of 1933, as amended, and
applicable rules and regulations thereunder, and any successor to such statute,
rules, or regulations. Any reference herein to a specific section, rule, or
regulation of the Securities Act shall be deemed to include any corresponding
provisions of future law.
"Selling Unitholder" has the meaning set forth in Section 10.2(a).
"Stockholders Agreement" means the Stockholders Agreement, dated as of
April 29, 2005, by and among the LLC and certain other Persons, as amended or
modified from time to time in accordance with the terms thereof.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association, or business entity of which (i) if
a corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association, or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association, or other
business entity gains or losses or shall be or control any managing director or
general partner of such limited liability company, partnership, association, or
other business entity. For purposes hereof, references to a "Subsidiary" of any
Person shall be given effect only at such times that such Person has one or more
Subsidiaries, and, unless otherwise indicated, the term "Subsidiary" refers to a
Subsidiary of the LLC.
"Tag-Along Notice" has the meaning set forth in Section 10.3(a).
"Tag-Along Unitholders" has the meaning set forth in Section 10.3(a).
"Tax Distribution" has the meaning set forth in Section 4.1(b).
"Tax Matters Partner" has the meaning set forth in Section 9.3.
"Taxable Year" means the LLC's Fiscal Year unless the Board determines
otherwise in compliance with applicable laws.
"Transaction Documents" means this Agreement, and all other agreements,
instruments, certificates, and other documents to be entered into or delivered
by any Unitholder in connection with the transactions contemplated to be
consummated pursuant to this Agreement, the Unit
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Purchase Agreement, the Acquisition Agreement, and any side agreements related
to the foregoing.
"Transfer" means any sale, transfer, assignment, pledge, mortgage,
exchange, hypothecation, grant of a security interest or other direct or
indirect disposition or encumbrance of an interest (including, without
limitation, by operation of law) or the acts thereof, but explicitly excluding
conversions or exchanges of one class of Unit to or for another class of Unit.
The terms "Transferee," "Transferred," and other forms of the word "Transfer"
shall have correlative meanings.
"Transferring Unitholders" has the meaning set forth in Section 10.3(a).
"Treasury Regulations" means the income tax regulations promulgated under
the Code and in effect from time to time.
"Triggering Event" has the meaning set forth in Section 10.5(a).
"Units" means Class A Preferred Units and Common Units.
"Unitholder" means any owner of one or more Units as reflected on the
LLC's books and records.
"Unit Purchase Agreement" means that certain Unit Purchase Agreement,
dated as of April 29, 2005 among the Investor Members and the LLC.
"Warehouse Facilities" means, collectively, (i) the Warehouse Lending
Agreement among Triad Financial Corporation, as originator and servicer, Triad
Financial Warehouse Special Purpose LLC, as borrower, and Xxxxxxx Xxxxx Mortgage
Company, as lender, dated as of the Initial Closing Date and (ii) the Warehouse
Lending Agreement among Triad Financial Corporation, as originator and servicer,
Triad Financial Warehouse Special Purpose LLC, as borrower, and Citigroup Global
Markets Realty Corp., as lender, dated as of the Initial Closing Date, each as
amended or modified from time to time in accordance with the terms thereof.
ARTICLE II
ORGANIZATIONAL MATTERS
2.1 Formation. The LLC has been organized as a Delaware limited
liability company by the filing with the Secretary of State of the State of
Delaware of the Certificate under and pursuant to the Delaware Act and shall be
continued in accordance with this Agreement.
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2.2 The Certificate, Etc. The Certificate was filed with the
Secretary of State of the State of Delaware on December 21, 2004. The
Unitholders hereby agree to execute, file and record all such other certificates
and documents, including amendments to the Certificate, and to do such other
acts as may be appropriate to comply with all requirements for the formation,
continuation and operation of a limited liability company, the ownership of
property, and the conduct of business under the laws of the State of Delaware
and any other jurisdiction in which the LLC may own property or conduct
business.
2.3 Name. The name of the LLC shall be "Triad Holdings, LLC." The
Board in its sole discretion may change the name of the LLC at any time and from
time to time. Notification of any such change shall be given to all Unitholders.
The LLC's business may be conducted under its name and/or any other name or
names deemed advisable by the Board.
2.4 Purpose. The purpose and business of the LLC shall be to engage
in any lawful act or activity which may be conducted by a limited liability
company formed pursuant to the Delaware Act and engaging in all activities
necessary or incidental to the foregoing. Notwithstanding anything herein to the
contrary, nothing set forth herein shall be construed as authorizing the LLC to
possess any purpose or power, or to do any act or thing, forbidden by law to a
limited liability company organized under the laws of the State of Delaware.
2.5 Powers of the LLC. Subject to the provisions of this Agreement
and the agreements contemplated hereby, the LLC shall have the power and
authority to take any and all actions necessary, appropriate, proper, advisable,
convenient or incidental to or for the furtherance of the purposes set forth in
Section 2.4, including the power:
(a) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Delaware Act
in any state, territory, district or possession of the United States, or in any
foreign country that may be necessary, convenient or incidental to the
accomplishment of the purpose of the LLC;
(b) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, refinance, improve, lease,
sell, convey, mortgage, transfer, demolish or dispose of any real or personal
property that may be necessary, convenient or incidental to the accomplishment
of the purpose of the LLC;
(c) to enter into, perform and carry out contracts of any kind,
including contracts with any Unitholder or any Affiliate thereof, or any agent
of the LLC necessary to, in connection with, convenient to or incidental to the
accomplishment of the purpose of the LLC;
(d) to purchase, take, receive, subscribe for or otherwise acquire,
own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose
of, and otherwise use and deal in and with, shares or other interests in or
obligations of domestic or foreign corporations, associations, general or
limited partnerships (including the power to be admitted as a partner thereof
and to exercise the rights and perform the duties created thereby), trusts,
limited liability companies (including the power to be admitted as a Unitholder
or appointed as a manager thereof and to exercise the rights and perform the
duties created thereby) or individuals or direct
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or indirect obligations of the United States or of any government, state,
territory, governmental district or municipality or of any instrumentality of
any of them;
(e) to lend money for any proper purpose, to invest and reinvest its
funds and to take and hold real and personal property for the payment of funds
so loaned or invested;
(f) to xxx and be sued, complain and defend, and participate in
administrative or other proceedings in its name;
(g) to appoint employees and agents of the LLC and define their
duties and fix their compensation;
(h) to indemnify any Person in accordance with the Delaware Act and
to obtain any and all types of insurance;
(i) to cease its activities and cancel its Certificate;
(j) 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
LLC;
(k) to borrow money and issue evidences of indebtedness and guaranty
indebtedness (whether of the LLC or any of its Subsidiaries), and to secure the
same by a mortgage, pledge or other lien on the assets of the LLC;
(l) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the LLC or to
hold such proceeds against the payment of contingent liabilities; and
(m) to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment of the
purpose of the LLC.
2.6 Foreign Qualification. Prior to the LLC's conducting business in
any jurisdiction other than Delaware, the Board shall cause the LLC to comply,
to the extent procedures are available and those matters are reasonably within
the control of the Board, with all requirements necessary to qualify the LLC as
a foreign limited liability company in that jurisdiction. At the request of the
Board or any Officer, each Unitholder shall execute, acknowledge, swear to and
deliver all certificates and other instruments conforming with this Agreement
that are necessary or appropriate to qualify, continue and terminate the LLC as
a foreign limited liability company in all such jurisdictions in which the LLC
may conduct business.
2.7 Principal Office; Registered Office. The principal office of the
LLC shall be located at 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, or
at such other place as the Board may from time to time designate, and all
business and activities of the LLC shall be deemed to have occurred at its
principal office. The LLC may maintain offices at such other
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place or places as the Board deems advisable. Notification of any such change
shall be given to all Unitholders. The registered office of the LLC required by
the Delaware Act to be maintained in the State of Delaware shall be the office
of the initial registered agent named in the Certificate or such other office
(which need not be a place of business of the LLC) as the Board may designate
from time to time in the manner provided by law. The registered agent of the LLC
in the State of Delaware shall be the initial registered agent named in the
Certificate or such other Person or Persons as the Board may designate from time
to time in the manner provided by law.
2.8 Term. The term of the LLC commenced upon the filing of the
Certificate in accordance with the Delaware Act and shall continue in existence
until termination and dissolution thereof in accordance with the provisions of
Article XIII.
2.9 No State-Law Partnership. The Unitholders intend that the LLC
not be a partnership (including, without limitation, a limited partnership) or
joint venture, and that no Unitholder be a partner or joint venturer of any
other Unitholder by virtue of this Agreement (except for tax purposes as set
forth in the next succeeding sentence of this Section 2.9), and neither this
Agreement nor any other document entered into by the LLC or any Unitholder
relating to the subject matter hereof shall be construed to suggest otherwise.
The Unitholders currently intend that the LLC shall be treated as a partnership
for federal and, if applicable, state or local income tax purposes, and that
each Unitholder and the LLC shall file all tax returns and shall otherwise take
all tax and financial reporting positions in a manner consistent with such
treatment.
2.10 No UBTI; Effectively Connected Income. The LLC shall not engage
in any transaction which is reasonably likely to cause the Investor Members or
any of their respective limited partners which are exempt from income taxation
under Section 501(a) of the Code to recognize unrelated business taxable income
as defined in Section 512 and Section 514 of the Code. The LLC will use
reasonable best efforts not to engage in, or invest in any Person that is
treated as a flow-through entity for U.S. federal income tax purposes that
engages in, (a) any "commercial activity" as defined in Section 892(a)(2)(i) of
the Code or (b) transactions which will cause the LLC to incur income that is
effectively connected with a "trade or business within the United States" as
defined in Section 864(b) of the Code.
2.11 Certification of Units. The LLC may in its discretion issue
certificates to the Unitholders representing the Units held by each Unitholder.
ARTICLE III
UNITS; CAPITAL ACCOUNTS
3.1 Unitholders.
(a) General. Each Person named on Schedule A attached hereto has
made Capital Contributions to the LLC as set forth on Schedule A in exchange for
the Units specified thereon, and each Unitholder's initial Capital Account
established pursuant to such Capital Contributions is set forth on Schedule A.
Any reference in this Agreement to Schedule A shall
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be deemed to be a reference to Schedule A as amended and in effect from time to
time. The LLC and each Unitholder shall file all tax returns, including any
schedules thereto, in a manner consistent with such initial Capital Accounts.
Each Person listed on Schedule A upon (i) his, her or its execution of this
Agreement or a counterpart thereto and (ii) receipt (or deemed receipt) by the
LLC of such Person's Capital Contribution as set forth on Schedule A, is hereby
admitted to the LLC as a Unitholder of the LLC. Each Unitholder's interest in
the LLC, including such Unitholder's interest in Profits, Losses and
Distributions of the LLC and the right to vote on certain matters as provided in
this Agreement, shall be represented by the Units owned by such Unitholder. The
ownership of Units shall entitle each Unitholder to allocations of Profits and
Losses and other items and distributions of cash and other property as set forth
in Article IV hereof. The Board may in its discretion issue certificates to the
Unitholders representing the Units held by each Unitholder.
(b) Representations and Warranties of Unitholders. Each Unitholder
hereby represents and warrants to the LLC and acknowledges that: (i) such
Unitholder has knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of an investment in the LLC and
making an informed investment decision with respect thereto; (ii) such
Unitholder has reviewed and evaluated all information necessary to assess the
merits and risks of his, her or its investment in the LLC and has had answered
to such Unitholder's satisfaction any and all questions regarding such
information; (iii) such Unitholder is able to bear the economic and financial
risk of an investment in the LLC for an indefinite period of time; (iv) such
Unitholder is acquiring interests in the LLC for investment only and not with a
view to, or for resale in connection with, any distribution to the public or
public offering thereof; (v) the interests in the LLC have not been registered
under the securities laws of any jurisdiction and cannot be disposed of unless
they are subsequently registered and/or qualified under applicable securities
laws and the provisions of this Agreement have been complied with; (vi) to the
extent applicable, the execution, delivery and performance of this Agreement
have been duly authorized by such Unitholder and do not require such Unitholder
to obtain any consent or approval that has not been obtained and do not
contravene or result in a default under any provision of any law or regulation
applicable to such Unitholder or other governing documents or any agreement or
instrument to which such Unitholder is a party or by which such Unitholder is
bound; (vii) the determination of such Unitholder to purchase interests in the
LLC has been made by such Unitholder independent of any other Unitholder and
independent of any statements or opinions as to the advisability of such
purchase, which may have been made or given by any other Unitholder or by any
agent or employee of any other Unitholder; (viii) the interests in the LLC were
not offered to such Unitholder by means of general solicitation or general
advertising; and (ix) this Agreement is valid, binding and enforceable against
such Unitholder in accordance with its terms.
(c) No Liability of Unitholders.
(i) No Liability. Except as otherwise required by applicable
law and as expressly set forth in this Agreement, no Unitholder shall have any
personal liability whatsoever in such Unitholder's capacity as a Unitholder,
whether to the LLC, to any of the other Unitholders, to the creditors of the LLC
or to any other third party, for the debts, liabilities, commitments or any
other obligations of the LLC or for any losses of the LLC. Each Unitholder
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shall be liable only to make such Unitholder's Capital Contribution to the LLC
and the other payments provided expressly herein.
(ii) Distribution. In accordance with the Delaware Act and the
laws of the State of Delaware, a Unitholder of a limited liability company may,
under certain circumstances, be required to return amounts previously
distributed to such Unitholder. It is the intent of the Unitholders that no
distribution to any Unitholder pursuant to Article IV hereof shall be deemed a
return of money or other property paid or distributed in violation of the
Delaware Act. The payment of any such money or distribution of any such property
to a Unitholder shall be deemed to be a compromise within the meaning of the
Delaware Act, and the Unitholder receiving any such money or property shall not
be required to return to any Person any such money or property. However, if any
court of competent jurisdiction holds that, notwithstanding the provisions of
this Agreement, any Unitholder is obligated to make any such payment, such
obligation shall be the obligation of such Unitholder and not of any other
Unitholder.
3.2 Unitholder Meetings.
(a) Voting of Unitholders. A quorum shall be present at a meeting of
Unitholders if the Unitholders holding the Required Interest are represented at
the meeting in person or by proxy. With respect to any matter, other than a
matter for which the affirmative vote of the holders of a specified portion of
all Unitholders entitled to vote is required by the Delaware Act or by this
Agreement, the affirmative vote of the Unitholders holding the Required Interest
at a meeting of Unitholders at which a quorum is present shall be the act of the
Unitholders.
(b) Place. All meetings of the Unitholders shall be held at the
principal place of business of the LLC or at such other place within or without
the State of Delaware as shall be specified or fixed in the notices or waivers
of notice thereof; provided that any or all Unitholders may participate in any
such meeting by means of conference telephone or similar communications
equipment pursuant to Section 3.3(d).
(c) Adjournment. Notwithstanding the other provisions of the
Certificate or this Agreement, the chairman of the meeting or the Unitholders
holding the Required Interest shall have the power to adjourn such meeting from
time to time, without any notice other than announcement at the meeting of the
time and place of the holding of the adjourned meeting. If such meeting is
adjourned by the Unitholders, such time and place shall be determined by a vote
of the Unitholders holding the Required Interest. Upon the resumption of such
adjourned meeting, any business may be transacted that might have been
transacted at the meeting as originally called.
(d) Annual Meeting. An annual meeting of the Unitholders, for the
transaction of such business as may properly come before the meeting, shall be
held at such place, within or without the State of Delaware, on such date and at
such time as the Board shall fix and set forth in the notice of the meeting,
which date shall be within 18 months subsequent to the date of organization of
the LLC or the last annual meeting of Unitholders, whichever most recently
occurred.
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(e) Special Meetings. Special meetings of the Unitholders for any
proper purpose or purposes may be called at any time by the Board or the
Unitholders holding the Required Interest. If not otherwise stated in or fixed
in accordance with the remaining provisions hereof, the record date for
determining Unitholders entitled to call a special meeting is the date any
Unitholder first signs the notice of that meeting. Only business within the
purpose or purposes described in the notice (or waiver thereof) required by this
Agreement may be conducted at a special meeting of the Unitholders.
(f) Notice. A written or printed notice stating the place, day and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than one
or more than 30 days before the date of the meeting, either personally or by
mail, facsimile or electronic transmission, by or at the direction of the Board
or the Unitholders calling the meeting to each Unitholder. If mailed, any such
notice shall be deemed to be delivered two business days after it is deposited
in the United States mail, addressed to the Unitholder at its address provided
for in the LLC's books and records, or to such other address or to the attention
of such other person as the recipient party has specified by prior written
notice to the sending party.
(g) Record Date. The date on which notice of a meeting of
Unitholders is mailed or the date on which the resolution of the Board declaring
a distribution is adopted, as the case may be, shall be the record date for the
determination of the Unitholders entitled to notice of or to vote at such
meeting (including any adjournment thereof) or the Unitholders entitled to
receive such distribution.
(h) Required Interest. Except as otherwise expressly provided for in
this Agreement, all matters to be voted on pursuant to this Agreement shall
require the vote of Unitholders holding the Required Interest, which vote shall
only be valid and binding if a notice of the meeting at which such vote is taken
is given to all Unitholders in accordance with Section 3.2(f).
(i) Proxies. A Unitholder may vote either in person or by proxy
executed in writing by the Unitholder. Any such proxy may be granted in writing,
by means of electronic transmission or as otherwise permitted by applicable law.
A consent transmitted by electronic transmission by a Unitholder or by a person
or persons authorized to act for a Unitholder shall be deemed to be written and
signed for purposes of this Agreement. A photographic, photostatic, facsimile or
similar reproduction of a writing executed by the Unitholder shall be treated as
an execution in writing for purposes of this Section 3.2(i). Proxies for use at
any meeting of Unitholders or in connection with the taking of any action by
written consent pursuant to Section 3.3 shall be filed with the Secretary of the
LLC, before or at the time of the meeting or execution of the written consent as
the case may be. All proxies shall be received and taken charge of and all
ballots shall be received and canvassed by the Secretary of the LLC, who shall
decide all questions concerning the qualification of voters, the validity of the
proxies and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions. No proxy
shall be valid after 11 months from the date of its execution unless otherwise
provided in the proxy. A proxy shall be revocable unless the proxy form
conspicuously states that the proxy
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is irrevocable and the proxy is coupled with an interest. Should a proxy
designate two or more Persons to act as proxies, unless that instrument shall
provide to the contrary, a majority of such Persons present at any meeting at
which their powers thereunder are to be exercised shall have and may exercise
all the powers of voting or giving consents thereby conferred, or if only one be
present, then such powers may be exercised by that one; or, if an even number
attend and a majority do not agree on any particular issue, the LLC shall not be
required to recognize such proxy with respect to such issue if such proxy does
not specify how the Units that are the subject of such proxy are to be voted
with respect to such issue.
(j) Conduct of Unitholder Meetings. All meetings of the Unitholders
shall be presided over by the chairman of the meeting, who shall be one of the
Chairman or Vice Chairman (or a representative thereof). The chairman of any
meeting of Unitholders shall determine the order of business and the procedure
at the meeting, including such regulation of the manner of voting and the
conduct of discussion as seem to him in order.
(k) Voting Rights. The holders of the Common Units shall be entitled
to notice of all Unitholder meetings in accordance with this Agreement, and
except as otherwise required by law, the holders of the Common Units shall be
entitled to vote on all matters submitted to the Unitholders for a vote with
each Common Unit entitled to one vote. Except as otherwise required by this
Agreement or by law, the holders of Class A Preferred Units shall not be
entitled to a vote on matters submitted to the Unitholders for a vote.
3.3 Action of Unitholders by Written Consent or Telephone
Conference.
(a) Written Consent in Lieu of Meeting. Any action required or
permitted to be taken at any annual or special meeting of Unitholders may be
taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by
the Unitholder or Unitholders holding not less than the minimum percentages of
Units that would be necessary to take such action at a meeting at which all
Unitholders entitled to vote on the action were present and voted. Every written
consent shall bear the date of signature of each Unitholder who signs the
consent. No written consent shall be effective to take the action that is the
subject to the consent unless, within 60 days after the date of the earliest
dated consent delivered to the LLC in the manner required by this Section
3.3(a), a consent or consents signed by the Unitholder or Unitholders holding
not less than the minimum Units that would be necessary to take the action that
is the subject of the consent are delivered to the LLC by delivery to its
registered office, its principal place of business or the chief executive
officer. Delivery shall be by hand or certified or registered mail, return
receipt requested. Delivery to the LLC's principal place of business shall be
addressed to the chief executive officer. An electronic transmission by a
Unitholder, or a photographic, photostatic, facsimile or similar reproduction of
a writing signed by a Unitholder, shall be regarded as signed by the Unitholder
for purposes of this Section 3.3(a). Prompt notice of the taking of any action
by Unitholders without a meeting by less than unanimous written consent shall be
given to those Unitholders who did not consent in writing to the action.
(b) Record Date for Written Consent in Lieu of Meeting. The record
date for determining Unitholders entitled to consent to action in writing
without a meeting shall be the
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first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the LLC by delivery to its registered
office, its principal place of business, or the chief executive officer.
Delivery shall be by hand or by certified or registered mail, return receipt
requested. Delivery to the LLC's principal place of business shall be addressed
to the chief executive officer.
(c) Filings. If any action by Unitholders is taken by written
consent, any certificate or documents filed with the Secretary of State of
Delaware as a result of the taking of the action shall state, in lieu of any
statement required by the Delaware Act concerning any vote of Unitholders, that
written consent has been given in accordance with the provisions of the Delaware
Act and that any written notice required by the Delaware Act has been given.
(d) Telephone Conference. Unitholders may participate in and hold a
meeting by means of conference telephone or similar communications equipment by
means of which all Persons participating in the meeting can hear each other, and
participation in such meeting shall constitute attendance and presence in person
at such meeting, except where a Person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
3.4 Issuance of Additional Units and Interests, Preemptive Rights.
(a) Additional Securities. Subject to compliance with the provisions
of this Agreement, the Board shall have the right to cause the LLC to issue or
sell to any Person (including Unitholders and Affiliates) any of the following
(which for purposes of this Agreement shall be "Additional Securities"): (i)
additional Units or other interests in the LLC (including other classes or
series thereof having different rights), (ii) obligations, evidences of
indebtedness, or other securities or interests convertible or exchangeable into
Units or other interests in the LLC, and (iii) warrants, options, or other
rights to purchase or otherwise acquire Units or other interests in the LLC.
Subject to the provisions of this Agreement, the Board shall determine the terms
and conditions governing the issuance of such Additional Securities, including
the number and designation of such Additional Securities, the preference (with
respect to distributions, liquidations, or otherwise) over any other Units and
any required contributions in connection therewith. Any Person who acquires
Units will be admitted to the LLC as a Unitholder pursuant to the terms of this
Agreement. If any Person acquires additional Units or other interests in the
LLC, Schedule A shall be amended to reflect such issuance or transfer, as the
case may be.
(b) Preemptive Rights.
(i) If the LLC authorizes the issuance or sale of any Units or
other Equity Securities (other than as a dividend or distribution on the
outstanding Units or an issuance upon consummation of a Sale of the Company or a
Public Offering), the LLC shall first offer to sell to each holder of Units who
is an "accredited investor" as defined in Rule 501(e) under the Securities Act,
a portion of such securities equal to the quotient determined by dividing (1)
the number of Common Units held by such holder by (2) the number of Common Units
then issued and outstanding. Each holder of Units shall be entitled to purchase
such Units or Equity
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Securities at the most favorable price and on the most favorable terms as such
units or securities are to be offered to any other Persons; provided that if all
Persons entitled to purchase or receive such Units or Equity Securities are
required to also purchase other Securities of the LLC, the holders of Units
exercising their rights pursuant to this paragraph shall also be required to
purchase the same strip of Securities (on the same terms and conditions) that
such other Persons are required to purchase. The purchase price for all
Securities offered to the holders of the Units shall be payable in cash (or such
other consideration as was proposed by the LLC initially).
(ii) In order to exercise its purchase rights hereunder, a
holder of Units must within 15 days after receipt of written notice from the LLC
describing in reasonable detail the Securities being offered, the purchase price
thereof, the payment terms and such holder's ratable share deliver a written
notice to the LLC describing its election as to (A) whether and to what extent
such holder desires to purchase its ratable share and (B) if such holder elects
to purchase its full ratable share, whether and to what extent such holder
desires to purchase an additional amount of the securities being offered if all
of the securities offered to the Unitholders are not fully subscribed.
(iii) Upon the expiration of the offering period described
above, the LLC shall be entitled to sell such Securities which the holders of
Common Units have not elected to purchase during the 90 days following such
expiration on terms and conditions no more favorable to the purchasers thereof
than those offered to such holders. Any such Securities offered or sold by the
LLC after such 90-day period must be reoffered to the holders of Common Units
pursuant to the terms of this Section 3.4(b).
(iv) The rights of the holders of Common Units under this
Section 3.4(b) shall terminate immediately prior to the consummation of a Sale
of the Company or a Qualified IPO.
3.5 Capital Accounts.
(a) The LLC shall maintain a separate Capital Account for each
Unitholder according to the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). For this purpose, the LLC may (in the discretion of the
Board), upon the occurrence of the events specified in Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), increase or decrease the Capital Accounts in
accordance with the rules of such regulation and Treasury Regulation Section
1.704-1(b)(2)(iv)(g) to reflect a revaluation of LLC property. Without limiting
the foregoing, each Unitholder's Capital Account shall be adjusted:
(i) by adding any additional Capital Contributions made by
such Unitholder in consideration for the issuance of Units;
(ii) by deducting any amounts paid to such Unitholder in
connection with the redemption or other repurchase by the LLC of Units;
(iii) by adding any Profits allocated in favor of such
Unitholder and subtracting any Losses allocated in favor of such Unitholder; and
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(iv) by deducting any distributions paid in cash or other
assets to such Unitholder by the LLC.
(b) For purposes of computing the amount of any item of LLC income,
gain, loss, or deduction to be allocated pursuant to Article IV and to be
reflected in the Capital Accounts, the determination, recognition, and
classification of any such item shall be the same as its determination,
recognition, and classification for federal income tax purposes (including any
method of depreciation, cost recovery, or amortization used for this purpose);
provided that:
(i) The computation of all items of income, gain, loss, and
deduction shall include those items described in Code Section 705(a)(l)(B) or
Code Section 705(a)(2)(B) and Treasury Regulation Section 1.704-1(b)(2)(iv)(i),
without regard to the fact that such items are not includable in gross income or
are not deductible for federal income tax purposes.
(ii) If the Book Value of any LLC property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f), the amount
of such adjustment shall be taken into account as gain or loss from the
disposition of such property.
(iii) Items of income, gain, loss, or deduction attributable
to the disposition of LLC property having a Book Value that differs from its
adjusted basis for tax purposes shall be computed by reference to the Book Value
of such property.
(iv) Items of depreciation, amortization, and other cost
recovery deductions with respect to LLC property having a Book Value that
differs from its adjusted basis for tax purposes shall be computed by reference
to the property's Book Value in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of
any LLC asset pursuant to Code Sections 732(d), 734(b) or 743(b) is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis).
3.6 Negative Capital Accounts. No Unitholder shall be required to
pay to any other Unitholder or the LLC any deficit or negative balance which may
exist from time to time in such Unitholder's Capital Account (including upon and
after dissolution of the LLC).
3.7 No Withdrawal. No Person shall be entitled to withdraw any part
of such Person's Capital Contributions or Capital Account or to receive any
Distribution from the LLC, except as expressly provided herein or in the other
agreements referred to herein.
3.8 Loans From Unitholders. Loans by Unitholders to the LLC shall
not be considered Capital Contributions. If any Unitholder shall loan funds to
the LLC, the making of such loans shall not result in any increase in the amount
of the Capital Account of such Unitholder. The amount of any such loans shall be
a debt of the LLC to such Unitholder and
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shall be payable or collectible in accordance with the terms and conditions upon
which such loans are made.
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS
AND ALLOCATIONS
4.1 Distributions.
(a) Distributions Generally. Except as otherwise set forth in this
Section 4.1, and subject to the provisions of Section 6.7 of this Agreement and
Section 18-607 of the Delaware Act, the Board may in its sole discretion make
Distributions at any time or from time to time. All Distributions shall be made
only in the following order and priority:
(i) First, to the Unitholders holding Class A Preferred Units,
an amount equal to the aggregate Class A Unpaid Yield (in the proportion that
each Unitholder's share of Class A Unpaid Yield bears to the aggregate Class A
Unpaid Yield) until each such Unitholder has received Distributions in respect
of such Unitholder's Class A Preferred Units in an amount equal to the aggregate
Class A Unpaid Yield on such Unitholder's outstanding Class A Preferred Units as
of the time of such Distribution, and no Distribution or any portion thereof may
be made pursuant to Sections 4.1(a)(ii) or (iii) below until the entire amount
of the Class A Unpaid Yield on the outstanding Class A Preferred Units as of the
time of such Distribution has been paid in full; provided that no Distribution
shall be made pursuant to this Section 4.1(a)(i) to the extent such
Distribution, when combined with all previous Distributions made pursuant to
this Section 4.1(a)(i), would exceed the aggregate amount of net Profits of the
LLC since the date of issuance of such Class A Preferred Units.
(ii) Second, to the Unitholders holding Class A Preferred
Units, an amount equal to the aggregate Class A Unreturned Capital with respect
to such Units (in the proportion that each Unitholder's share of Class A
Unreturned Capital with respect to such Class A Preferred Units bears to the
aggregate amount of Class A Unreturned Capital with respect to all Class A
Preferred Units) until each such Unitholder has received Distributions in
respect of such Unitholder's Class A Preferred Units in an amount equal to the
aggregate Class A Unreturned Capital with respect to such Unitholder's Class A
Preferred Units as of the time of such Distribution, and no Distribution or any
portion thereof may be made pursuant to Section 4.1(a)(iii) below until the
entire amount of Class A Unreturned Capital with respect to the outstanding
Class A Preferred Units as of the time of such Distribution has been paid in
full.
(iii) Third, all remaining amounts shall be distributed to the
Unitholders holding Common Units, pro-rata according to such holders' ownership
of Common Units immediately prior to such Distribution.
(b) Tax Distributions. Notwithstanding any other provision herein to
the contrary, so long as the LLC is treated as a partnership for federal and
state income tax purposes, the LLC shall use its best efforts to distribute
within 15 days after the end of each Fiscal Quarter
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of the LLC, to the extent that funds are legally available therefor and would
not impair the liquidity of the LLC with respect to working capital, capital
expenditures, debt service, reserves, or otherwise and would not be prohibited
under any credit facility to which the LLC or any Subsidiary is a party, an
amount of cash (a "Tax Distribution") which in the good faith judgment of the
Board equals the excess, if any, of (i) the product of (x) the amount of taxable
income allocable to the Unitholders in respect of the period beginning on the
date hereof and ending at the close of such Fiscal Quarter, multiplied by (y)
the combined maximum federal, state, and local income tax rate to be applied
with respect to such taxable income (calculated by using the highest maximum
combined marginal federal, state, and local income tax rates to which any
Unitholder may be subject and taking into account the deductibility of state
income tax for federal income tax purposes) for such period (making an
appropriate adjustment for any rate changes that take place during such period)
over (ii) all prior distributions made pursuant to this subsection (b) and
subsection (a) above. All Tax Distributions shall be treated as an advance of
Distributions for purposes of Section 4.1(a).
(c) Persons Receiving Distributions. Each Distribution shall be made
to the Persons shown on the LLC's books and records as Unitholders as of the
date of such Distribution; provided, however, that any transferor and transferee
of Units may mutually agree as to which of them should receive payment of any
Distribution under Section 4.1.
4.2 Redemption. At any time on or after the tenth anniversary of the
date of the Acquisition Closing, any Unitholder may request redemption of all of
their Class A Preferred Units by delivering written notice of such request to
the LLC. Within five days after receipt of such request, the LLC shall give
written notice of such request to all other holders of Class A Preferred Units,
and such other holders may request redemption of their Class A Preferred Units
by delivering written notice to the LLC within ten days after receipt of the
LLC's notice. The LLC shall be required to redeem all Class A Preferred Units
with respect to which such redemption requests have been made at a price per
Class A Preferred Unit equal to the sum of the Class A Unpaid Yield plus the
Class A Unreturned Capital with respect to such Unit within 20 days after
receipt of the initial redemption request.
4.3 Allocations Generally. Except as otherwise provided in Section
4.4, Profits and Losses for any Fiscal Year shall be allocated among the
Unitholders in such a manner that, as of the end of such Fiscal Year, the sum of
(i) the Capital Account of each Unitholder, (ii) such Unitholder's share of
Minimum Gain (as determined according to Treasury Regulation Section
1.704-2(g)), and (iii) such Unitholder's partner nonrecourse debt minimum gain
(as defined in Treasury Regulation Section 1.704-2(i)(3)) shall be equal to the
respective net amounts that would be distributed to them, determined as if the
LLC were to (i) liquidate the assets of the LLC for an amount equal to their
Book Value, and (ii) distribute the proceeds of liquidation pursuant to Section
12.2.
4.4 Special Allocations.
(a) Losses attributable to partner nonrecourse debt (as defined in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner
required by Treasury Regulation Section 1.704-2(i). If there is a net decrease
during a Fiscal Year in partner
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nonrecourse debt minimum gain (as defined in Treasury Regulation Section
1.704-2(i)(3)), Profits for such Fiscal year (and, if necessary, for subsequent
Fiscal Years) shall be allocated to the Unitholders in the amounts and of such
character as determined according to, and subject to the exceptions contained
in, Treasury Regulation Section 1.704-2(i)(4). This Section 4.4(a) is intended
to be a minimum gain chargeback provision that complies with the requirements of
Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted in a manner
consistent therewith.
(b) Nonrecourse deductions (as determined according to Treasury
Regulation Section 1.704-2(b)(1)) for any Taxable Year shall be allocated to
each Unitholder ratably among such Unitholders based upon the number of
outstanding Units held by each such Unitholder immediately prior to such
allocation. If there is a net decrease in Minimum Gain during any Fiscal Year,
each Unitholder shall be allocated Profits for such Fiscal Year (and, if
necessary, for subsequent Fiscal Years) in the amounts and of such character as
determined according to, and subject to the exceptions contained in, Treasury
Regulation Section 1.704-2(f). This Section 4.4(b) is intended to be a minimum
gain chargeback provision that complies with the requirements of Treasury
Regulation Section 1.704-2(f), and shall be interpreted in a manner consistent
therewith.
(c) If any Unitholder that unexpectedly receives an adjustment,
allocation, or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as
of the end of any Taxable Year, computed after the application of Sections
4.4(a) and 4.4(b) but before the application of any other provision of this
Article IV, then Profits for such Taxable Year shall be allocated to such
Unitholder in proportion to, and to the extent of, such Adjusted Capital Account
Deficit. This Section 4.4(c) is intended to be a qualified income offset
provision as described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted in a manner consistent therewith.
(d) Profits and Losses shall be allocated in a manner consistent
with the manner that the adjustments to the Capital Accounts are required to be
made pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(j), (k), and (m).
(e) The allocations set forth in Sections 4.4(a)-(d) (the
"Regulatory Allocations") are intended to comply with certain requirements of
Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory
Allocations may not be consistent with the manner in which the Unitholders
intend to allocate Profit and Loss of the LLC or make LLC distributions.
Accordingly, notwithstanding the other provisions of this Article IV, but
subject to the Regulatory Allocations, income, gain, deduction, and loss shall
be reallocated among the Unitholders so as to eliminate the effect of the
Regulatory Allocations and thereby cause the respective Capital Accounts of the
Unitholders to be in the amounts (or as close thereto as possible) they would
have been if Profit and Loss (and such other items of income, gain, deduction,
and loss) had been allocated without reference to the Regulatory Allocations. In
general, the Unitholders anticipate that this will be accomplished by specially
allocating other Profit and Loss (and such other items of income, gain,
deduction, and loss) among the Unitholders so that the net amount of the
Regulatory Allocations and such special allocations to each such Unitholder is
zero.
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4.5 Tax Allocations.
(a) Except as provided in Sections 4.5(b), (c) and (d), the income,
gains, losses, deductions, and credits of the LLC will be allocated, for
federal, state, and local income tax purposes, among the Unitholders in
accordance with the allocation of such income, gains, losses, deductions, and
credits among the Unitholders for computing their Capital Accounts; except that,
if any such allocation is not permitted by the Code or other applicable law,
then the LLC's subsequent income, gains, losses, deductions, and credits will be
allocated among the Unitholders so as to reflect as nearly as possible the
allocation set forth herein in computing their Capital Accounts.
(b) Items of LLC taxable income, gain, loss, and deduction with
respect to any property contributed to the capital of the LLC shall be allocated
among the Unitholders in accordance with Code Section 704(c) so as to take
account of any variation between the adjusted basis of such property to the LLC
for federal income tax purposes and its Book Value.
(c) If the Book Value of any LLC asset is adjusted pursuant to the
requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f)
subsequent allocations of items of taxable income, gain, loss, and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Book Value
in the same manner as under Code Section 704(c).
(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Unitholders according to their
interests in such items as determined by the Board taking into account the
principles of Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 4.5 are solely for purposes
of federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Unitholder's Capital Account or Unit of Profits,
Losses, Distributions, or other LLC items pursuant to any provision of this
Agreement.
4.6 Indemnification and Reimbursement for Payments on Behalf of a
Unitholder. If the LLC is required by law to make any payment that is
specifically attributable to a Unitholder or a Unitholder's status as such
(including federal withholding taxes, state personal property taxes, and state
unincorporated business taxes), then such Unitholder shall indemnify the LLC in
full for the entire amount paid (including interest, penalties and related
expenses). The LLC may pursue and enforce all rights and remedies it may have
against each Unitholder under this Section 4.6, including instituting a lawsuit
to collect such indemnification and contribution with interest calculated at a
rate equal to 10% per annum, compounded as of the last day of each year (but not
in excess of the highest rate per annum permitted by law).
4.7 Transfer of Capital Accounts. If a Unitholder transfers an
interest in the LLC to a new or existing Unitholder, the transferee Unitholder
shall succeed to that portion of the transferor's Capital Account that is
attributable to the transferred interest. Any reference in this Agreement to a
Capital Contribution of, or Distribution to, a Unitholder that has succeeded
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any other Unitholder shall include any Capital Contributions or Distributions
previously made by or to the former Unitholder on account of the interest of
such former Unitholder transferred to such Unitholder.
ARTICLE V
BOARD OF MANAGERS; OFFICERS
5.1 Management by the Board of Managers.
(a) No Management by Unitholders. The Unitholders shall not manage
and control the business and affairs of the LLC, except for situations in which
the approval of Unitholders is required by this Agreement or by non-waivable
provisions of applicable law.
(b) Authority of Board of Managers.
(i) Except for situations in which the approval of the
Unitholders is otherwise required (including pursuant to Section 6.7), (x) the
powers of the LLC shall be exercised by or under the authority of, and the
business and affairs of the LLC shall be managed under the direction of, the
Board and (y) the Board may make all decisions and take all actions for the LLC
not otherwise provided for in this Agreement, including the following:
(A) entering into, making and performing contracts,
agreements and other undertakings binding the LLC that may be necessary,
appropriate or advisable in furtherance of the purposes of the LLC and making
all decisions and waivers thereunder;
(B) maintaining the assets of the LLC in good order;
(C) collecting sums due the LLC;
(D) opening and maintaining bank and investment accounts
and arrangements, drawing checks and other orders for the payment of money and
designating individuals with authority to sign or give instructions with respect
to those accounts and arrangements;
(E) to the extent that funds of the LLC are available
therefor, paying debts and obligations of the LLC;
(F) acquiring, utilizing for LLC purposes and disposing
of any asset of the LLC;
(G) hiring and employing executives, Officers,
supervisors and other personnel;
(H) selecting, removing and changing the authority and
responsibility of lawyers, accountants and other advisers and consultants;
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(I) entering into guaranties on behalf of the LLC's
Subsidiaries;
(J) obtaining insurance for the LLC;
(K) determining distributions of cash and other property
of the LLC as provided in Article IV;
(L) establishing reserves for commitments and
obligations (contingent or otherwise) of the LLC; and
(M) establishing a seal for the LLC.
In any event, the LLC shall not, without specific Board approval pursuant to
clause (A) of Section 5.1(b)(ii), enter into, or permit any Subsidiary to enter
into, any agreement or arrangement that provide for payments to or from the
Company or any Subsidiary in excess of $35,000,000 (other than securitization
transactions in the ordinary course of business).
(ii) The Board may act (A) by resolutions adopted at a meeting
and by written consents pursuant to Section 5.3, (B) by delegating power and
authority to committees pursuant to Section 5.4, and (C) by delegating power and
authority to any Officer pursuant to Section 5.5(a).
(iii) Each Unitholder acknowledges and agrees that no Manager
shall, as a result of being a Manager (as such), be bound to devote all of his
business time to the affairs of the LLC, and that he and his Affiliates do and
will continue to engage for their own account and for the accounts of others in
other business ventures.
(c) Officers. The management of the business and affairs of the LLC
by the Officers and the exercising of their powers shall be conducted under the
supervision of and subject to the approval of the Board.
5.2 Composition and Election of the Board of Managers.
(a) Number and Designation. The number of Managers on the Board
shall be initially established at ten (10), and thereafter adjusted to conform
with the aggregate number of Managers available for designation in accordance
with this Section 5.2(a) below. The Board shall be comprised of the following
persons:
(i) three (3) representatives designated by Goldman, who
initially shall be Xxxxx X. Xxxxx, Xxxxx X. Xxxx and Xxxxxx X. Xxxx, so long as
Goldman and its Affiliates continue to hold at least 50% of the Common Units
purchased by Goldman and its Affiliates under the Unit Purchase Agreement (the
"Goldman Common Units"), and thereafter, two (2) representatives designated by
Goldman so long as Goldman and its Affiliates continue to hold at least 25% of
the Goldman Common Units, and thereafter, one (1) representative designated by
Goldman so long as Goldman and its Affiliates hold at least one (1) Goldman
Common Unit (collectively, the "Goldman Managers"); provided that so long as GS
Capital Partners 2000, L.P.
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continues to hold at least one (1) Goldman Common Unit, at least one Goldman
Manager shall be designated exclusively by GS Capital Partners 2000, L.P.;
provided further that if Goldman and its Affiliates continue to hold at least
50% of the Goldman Common Units and GTCR and its Affiliates no longer hold any
GTCR Common Units, then Goldman shall have the right to designate one (1)
additional representative (for a total of four (4) representatives) so long as
Goldman and its Affiliates continue to hold at least 50% of the Goldman Common
Units;
(ii) three (3) representatives designated by GTCR (provided
that at least one such representative shall be designated by GTCR Fund VIII, and
at least one by GTCR Fund VIII/B), which representatives initially shall be
Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxxx, so long as GTCR and
its Affiliates continue to hold at least 50% of the Common Units purchased by
GTCR and its Affiliates under the Unit Purchase Agreement (the "GTCR Common
Units"), and thereafter, two (2) representatives designated by GTCR (provided
that at least one such representative shall be designated by GTCR Fund VIII, and
at least one by GTCR Fund VIII/B) so long as GTCR and its Affiliates continue to
hold at least 25% of the GTCR Common Units, and thereafter, one (1)
representative designated by GTCR so long as GTCR and its Affiliates hold at
least one (1) GTCR Common Unit (collectively, the "GTCR Managers"); provided
that if GTCR and its Affiliates continue to hold at least 50% of the GTCR Common
Units and Goldman and its Affiliates no longer hold any Goldman Common Units,
then GTCR shall have the right to designate one (1) additional representative
(for a total of four (4) representatives) so long as GTCR and its Affiliates
continue to hold at least 50% of the GTCR Common Units;
(iii) three (3) representatives designated by HGF, who
initially shall be Xxxxxx X. Xxxxxxx, J. Xxxxx Staff and Xxxx X. Xxxx, so long
as HGF and its Affiliates continue to hold at least 50% of the Common Units
purchased by HGF and its Affiliates under the Unit Purchase Agreement (the "HGF
Common Units"), and thereafter, two (2) representatives designated by HGF so
long as HGF and its Affiliates continue to hold at least 25% of the HGF Common
Units, and thereafter, one (1) representative designated by HGF so long as HGF
and its Affiliates hold at least one (1) HGF Common Unit (collectively, the "HGF
Managers"); and
(iv) the LLC's chief executive officer, who shall initially be
Xxxxxx X. Xxxx.
If any of Investor Member becomes ineligible to designate a representative to
fill a Manager position pursuant to the terms of Sections 5.2(a)(i) through
(iii) above, such Manager position shall remain vacant and such Investor Member
shall promptly identify its designee(s) who, as a result, will be automatically
removed from the Board.
(b) Term. Members of the Board shall serve from their designation in
accordance with the terms hereof until their resignation, death or removal in
accordance with the terms hereof. Members of the Board need not be Unitholders
and need not be residents of the State of Delaware. A person shall become a
member of the Board effective upon receipt by the LLC at its principal place of
business of a written notice addressed to the Board (or at such later time or
upon the happening of some other event specified in such notice) of such
person's designation from the person or persons entitled to designate such
manager pursuant to Section
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5.2(a) above. A member of the Board may resign as such by delivering his, her or
its written resignation to the LLC at the LLC's principal office addressed to
the Board. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
(c) Removal. The removal from the Board or any of its committees
(with or without cause) of any Xxxxxxx Manager, GTCR Manager or HGF Manager
shall become effective upon (and only upon) the written request of the
respective Investor Member entitled to designate such Manager to serve on such
Board or committee.
(d) Vacancies. In the event that any designee under Section 5.2(a)
for any reason ceases to serve as a member of the Board (other than as the
result of a Investor Member becoming ineligible to designate one or more
representatives to the Board pursuant to the terms of Section 5.2(a)), (i) the
resulting vacancy on the Board shall be filled by a Person designated by the
respective Investor Member originally entitled to designate such Manager
pursuant to Section 5.2(a) above (provided that, if any party fails to designate
a person to fill a vacancy on the Board pursuant to the terms of this Section
5.2, such vacant managership shall remain vacant until such managership is
filled pursuant to this Section 5.2(d)), and (ii) such designee shall be removed
promptly after such time from each committee of the Board.
(e) Reimbursement. The LLC shall pay all reimbursable out-of-pocket
costs and expenses incurred by each member of the Board incurred in the course
of their service hereunder, including in connection with attending regular and
special meetings of the Board, any board of managers or board of directors of
each of the LLC's Subsidiaries and/or any of their respective committees.
(f) Compensation of Managers. Except as approved by the Required
Interest and subject to the Management Agreement, Managers shall receive no
compensation for serving in such capacity.
(g) Reliance by Third Parties. Any Person dealing with the LLC,
other than a Unitholder, may rely on the authority of the Board (or any Officer
authorized by the Board) in taking any action in the name of the LLC without
inquiry into the provisions of this Agreement or compliance herewith, regardless
of whether that action actually is taken in accordance with the provisions of
this Agreement. Every agreement, instrument or document executed by the Board
(or any Officer authorized by the Board) in the name of the LLC with respect to
any business or property of the LLC shall be conclusive evidence in favor of any
Person relying thereon or claiming thereunder that (i) at the time of the
execution or delivery thereof, this Agreement was in full force and effect, (ii)
such agreement, instrument or document was duly executed according to this
Agreement and is binding upon the LLC and (iii) the Board or such Officer was
duly authorized and empowered to execute and deliver such agreement, instrument
or document for and on behalf of the LLC.
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5.3 Board Meetings and Actions by Written Consent.
(a) Quorum; Voting. A majority of the total number of Managers then
serving on the Board (i.e., excluding any vacancies on the Board) must be
present (including pursuant to Section 5.3(h)) in order to constitute a quorum
for the transaction of business of the Board, and except as otherwise provided
in this Agreement, the act of a majority of the total number of Managers then
serving on the Board (i.e., excluding any vacancies on the Board) at a meeting
of the Board at which a quorum is present shall be the act of the Board. A
Manager who is present at a meeting of the Board at which action on any matter
is taken shall be presumed to have assented to the action unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof or shall deliver such dissent to the LLC
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a Manager who voted in favor of such action.
(b) Place; Attendance. Meetings of the Board may be held at such
place or places as shall be determined from time to time by resolution of the
Board. At all meetings of the Board, business shall be transacted in such order
as shall from time to time be determined by resolution of the Board. Attendance
of a Manager at a meeting shall constitute a waiver of notice of such meeting,
except where a Manager attends a meeting for the express purpose of objecting to
the transaction of any business on the ground that the meeting is not lawfully
called or convened.
(c) Meeting In Connection With Unitholder Meeting. In connection
with any meeting of Unitholders, the Managers may, if a quorum is present, hold
a meeting for the transaction of business immediately after and at the same
place as such meeting of the Unitholders. Notice of such meeting at such time
and place shall not be required.
(d) Time, Place and Notice. Regular meetings of the Board shall be
held at such times and places as shall be designated from time to time by
resolution of the Board. Notice of such meetings shall not be required.
(e) Special Meetings. Special meetings of the Board may be called by
any Manager on at least 24 hours' notice to each other Manager. Such notice need
not state the purpose or purposes of, nor the business to be transacted at, such
meeting, except as may otherwise be required by law or provided for in this
Agreement.
(f) Chairman and Vice Chairman. The Board shall designate one of the
Managers to serve as Chairman and a different Manager to serve as Vice Chairman.
The Chairman shall preside at all meetings of the Board. If the Chairman is
absent at any meeting of the Board, the Vice Chairman shall preside over such
Board meeting. If the Chairman and Vice Chairman are absent, the Managers
present shall designate a member to serve as interim chairman for that meeting.
Neither the Chairman nor Vice Chairman, except in their capacity as an Officer,
shall have the authority or power to act for or on behalf of the LLC, to do any
act that would be binding on the LLC or to make any expenditure or incur any
obligation on behalf of the LLC or authorize any of the foregoing.
-29-
(g) Board Meetings. There shall be meetings of the Board from time
to time as requested by holders of the Required Interest.
(h) Action by Unanimous Written Consent or Telephone Conference. Any
action permitted or required by the Delaware Act, the Certificate or this
Agreement to be taken at a meeting of the Board or any committee designated by
the Board may be taken without a meeting if a consent in writing, setting forth
the action to be taken, is signed by all of the Managers. Such consent shall
have the same force and effect as a vote at a meeting and may be stated as such
in any document or instrument filed with the Secretary of State of Delaware, and
the execution of such consent shall constitute attendance or presence in person
at a meeting of the Board or any such committee, as the case may be. A consent
transmitted by electronic transmission by a Member shall be deemed to be written
and signed for purposes of this Agreement. Subject to the requirements of the
Delaware Act, the Certificate or this Agreement for notice of meetings, unless
otherwise restricted by the Certificate, the Managers or members of any
committee designated by the Board may participate in and hold a meeting of the
Board or any committee, as the case may be, by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.4 Committees; Delegation of Authority and Duties.
(a) Committees; Generally. The Board may, from time to time,
designate one or more committees. Each Investor Member that is entitled to
designate at least one (1) Manager to the Board pursuant to Section 5.2(a) shall
be entitled to designate at least one (1) of its designated Managers to each of
the Board's material committees. Any such committee, to the extent provided in
the enabling resolution or in the Certificate or this Agreement, shall have and
may exercise all of the authority of the Board. At every meeting of any such
committee, the presence of a majority of all the members thereof shall
constitute a quorum, and the affirmative vote of a majority of the members
present shall be necessary for the adoption of any resolution. The Board may
dissolve any committee at any time, unless otherwise provided in the Certificate
or this Agreement.
(b) Audit Committee. The Board may establish an audit committee to
select the LLC's independent accountants and to review the annual audit of the
LLC's financial statements conducted by such accountants.
(c) Delegation; Generally. The Board may, from time to time,
delegate to one or more Persons (including any Manager or Officer) such
authority and duties as the Board may deem advisable in addition to those powers
and duties set forth in Section 5.1(b) hereof. The Board also may assign titles
(including chairman, chief executive officer, president, vice president,
secretary, assistant secretary, treasurer and assistant treasurer) to any
Manager, Unitholder or other individual and may delegate to such Manager,
Unitholder or other individual certain authority and duties. Any number of
titles may be held by the same Manager, Unitholder
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or other individual. Any delegation pursuant to this Section 5.4(c) may be
revoked at any time by the Board.
(d) Third-party Reliance. Any Person dealing with the LLC, other
than a Unitholder, may rely on the authority of any Officer in taking any action
in the name of the LLC without inquiry into the provisions of this Agreement or
compliance herewith, regardless of whether that action actually is taken in
accordance with the provisions of this Agreement.
5.5 Officers.
(a) Designation and Appointment. The Board may (but need not), from
time to time, designate and appoint one or more persons as an Officer of the
LLC. No Officer need be a resident of the State of Delaware, a Unitholder or a
Manager. Any Officers so designated shall have such authority and perform such
duties as the Board may, from time to time, delegate to them. The Board may
assign titles to particular Officers. Unless the Board otherwise decides, if the
title is one commonly used for officers of a business corporation formed, the
assignment of such title shall constitute the delegation to such Officer of the
authority and duties that are normally associated with that office, subject to
(i) any specific delegation of authority and duties made to such Officer by the
Board pursuant to the third sentence of this Section 5.5(a) or (ii) any
delegation of authority and duties made to one or more Officers pursuant to the
terms of Section 5.4(c) and 5.5(c). Each Officer shall hold office until such
Officer's successor shall be duly designated and shall qualify or until such
Officer's death or until such Officer shall resign or shall have been removed in
the manner hereinafter provided. Any number of offices may be held by the same
individual. The salaries or other compensation, if any, of the Officers and
agents of the LLC shall be fixed from time to time by the Board.
(b) Resignation. Any Officer (subject to any contract rights
available to the LLC, if applicable) may resign as such at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein, or if no time be specified, at the time of its receipt by the Board.
The acceptance of a resignation shall not be necessary to make it effective,
unless expressly so provided in the resignation. Any Officer may be removed as
such, either with or without cause, by the Board in its discretion at any time;
provided, however, that such removal shall be without prejudice to the contract
rights, if any, of the individual so removed. Designation of an Officer shall
not of itself create contract rights. Any vacancy occurring in any office of the
LLC may be filled by the Board.
(c) Duties of Officers; Generally. The following Officers, to the
extent such Officers have been appointed by the Board, shall have the following
duties:
(i) Chief Executive Officer. The initial chief executive
officer of the LLC shall be Xxxxxx X. Xxxx. Subject to the powers of the Board,
the chief executive officer of the LLC shall be in the general and active charge
of the entire business and affairs of the LLC, and shall be its chief
policy-making Officer. The president, chief financial officer and each other
senior officer of the LLC shall report directly to the chief executive officer.
The chief executive officer shall see that all orders and resolutions of the
Board are carried into effect. The LLC's chief executive officer's
responsibilities will also include setting corporate strategy, overseeing
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the performance of the Company's chief executive officer, naming senior
executives of the Company (other than the chief executive officer and chief
financial officer of the Company who shall be named and approved by the full
Board), and recommending to the Board compensation of such executives. The chief
executive officer shall have such other powers and perform such other duties as
may be prescribed by the Board.
(ii) President. The president shall, subject to the powers of
the Board and the chief executive officer, be the chief administrative officer
of the LLC and shall have general charge of the business, affairs and property
of the LLC, and control over its Officers (other than the chief executive
officer), agents and employees. The president shall see that all orders and
resolutions of the Board and the chief executive officer are carried into
effect. He or she shall be responsible for the employment of employees, agents
and Officers (other than the chief executive officer) as may be required for the
conduct of the business and the attainment of the objectives of the LLC. He or
she shall have authority to suspend or to remove any employee, agent or Officer
(other than the chief executive officer) of the LLC and, in the case of the
suspension for cause of any such Officer, to recommend to the Board what further
action should be taken. In the absence of the president, his or duties shall be
performed and his or her authority may be exercised by the chief executive
officer. In the absence of the president and the chief executive officer, the
duties of the president shall be performed and his or her authority may be
exercised by such Officer as may have been designated as the most senior officer
of the LLC. The president shall have such other powers and perform such other
duties as may be prescribed by the chief executive officer or the Board.
(iii) Chief Financial Officer. The chief financial officer
shall keep and maintain, or cause to be kept and maintained, adequate and
correct books and records of accounts of the properties and business
transactions of the LLC, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital and Units. The chief financial
officer shall have the custody of the funds and securities of the LLC, and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the LLC, and shall deposit all moneys and other valuable effects in the name
and to the credit of the LLC in such depositories as may be designated by the
Board. The chief financial officer shall have such other powers and perform such
other duties as may be prescribed by the chief executive officer or the Board.
(iv) Vice President(s). The vice president(s) shall perform
such duties and have such other powers as the chief executive officer, the
president, the chief operating officer or the Board may from time to time
prescribe, and may have such further denominations as "Executive Vice
President," "Senior Vice President," "Assistant Vice President," and the like.
(v) Secretary.
(A) The secretary shall attend all meetings of the Board
and shall record all the proceedings of the meetings in a book to be kept for
that purpose, and shall perform like duties for the standing committees of the
Board when required.
(B) The secretary shall keep all documents as may be
required under the Delaware Act or this Agreement. The secretary shall perform
such other duties and
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have such other authority as may be prescribed elsewhere in this Agreement or
from time to time by the Board. The secretary shall have the general duties,
powers and responsibilities of a secretary of a corporation.
(C) If the Board chooses to appoint an assistant
secretary or assistant secretaries, the assistant secretaries, in the order of
their seniority, in the absence, disability or inability to act of the
secretary, shall perform the duties and exercise the powers of the secretary,
and shall perform such other duties as the Board may from time to time
prescribe.
ARTICLE VI
GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS
6.1 Limitation of Liability. Except as otherwise provided by
applicable law, the debts, obligations, and liabilities of the LLC, whether
arising in contract, tort, or otherwise, shall be solely the debts, obligations,
and liabilities of the LLC, and no Unitholder shall be obligated personally for
any such debt, obligation, or liability of the LLC solely by reason of being a
Unitholder of the LLC; provided that a Unitholder shall be required to return to
the LLC any Distribution made to it in clear and manifest accounting or similar
error. The immediately preceding sentence shall constitute a compromise to which
all Unitholders have consented within the meaning of the Delaware Act.
Notwithstanding anything contained herein to the contrary, the failure of the
LLC to observe any formalities or requirements relating to the exercise of its
powers or management of its business and affairs under this Agreement or the
Delaware Act shall not be grounds for imposing personal liability on the
Unitholders for liabilities of the LLC.
6.2 Lack of Authority. No Unitholder in his, her, or its capacity as
such (other than the members of the Board acting as the Board or an authorized
Officer of the LLC) has the authority or power to act for or on behalf of the
LLC in any manner, to do any act that would be (or could be construed as)
binding on the LLC or to make any expenditures on behalf of the LLC, and the
Unitholders hereby consent to the exercise by the Board of the powers conferred
on it by law and this Agreement.
6.3 No Right of Partition. No Unitholder shall have the right to
seek or obtain partition by court decree or operation of law of any LLC
property, or the right to own or use particular or individual assets of the LLC.
6.4 Unitholders Right to Act. For situations which the approval of
any Unitholders or class thereof (rather than the approval of the Board on
behalf of the Unitholders) is required, the Unitholders shall act through
meetings and written consents as described in Sections 3.2 and 3.3.
6.5 Conflicts of Interest.
(a) A Unitholder, a Manager, their respective Affiliates and each of
their respective stockholders, directors, officers, controlling persons,
partners and employees and each Officer and employee of the LLC at any time and
from time to time, may engage in and possess
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interests in other business ventures of any and every type and description,
independently or with others, including ones in competition with the LLC and its
subsidiaries, with no obligation to offer to the LLC and its subsidiaries or any
Investor the right to participate therein, except as any such Person may have
otherwise agreed with the LLC or any of its Subsidiaries in writing. Without
limiting the generality of the foregoing, each such person may (i) engage in,
and shall have no duty to refrain from engaging in, separate businesses or
activities from the LLC or any Subsidiary of the LLC, including businesses or
activities that are the same or similar to, or compete directly or indirectly
with, those of the LLC or any Subsidiary of the LLC and (ii) do business with
any potential or actual customer or supplier of the LLC or any Subsidiary of the
LLC.
(b) To the fullest extent permitted by applicable law, none of the
Unitholders, the Managers or any of their respective Affiliates shall have any
obligation to present any business opportunity to the LLC or any Subsidiary of
the LLC, even if the opportunity is one that the LLC or any Subsidiary of the
LLC might reasonably be deemed to have pursued or had the ability or desire to
pursue if granted the opportunity to do so and no such person shall be liable to
the LLC, any Subsidiary of the LLC or any Unitholder for breach of any fiduciary
or other duty, as a Unitholder, Manager or otherwise, by reason of the fact that
such person pursues or acquires such business opportunity, directs such business
opportunity to another person or fails to present such business opportunity, or
information regarding such business opportunity, to the LLC or any Subsidiary of
the LLC unless, in the case of any such Manager, such business opportunity is
expressly offered to such Manager in writing solely as a Manager of the LLC.
Nothing in this Agreement will impede the LLC's ability to enter into
contractual arrangements with any Unitholder or any Manager, which arrangements
restrict such Unitholder or Manager from engaging in activities otherwise
allowed by this Section 6.5.
(c) Each Unitholder (for itself and on behalf of the LLC) hereby, to
the fullest extent permitted by applicable law but subject to Sections 6.5(d):
(i) confirms that each Manager has no duty to the LLC or any
Subsidiary of the LLC other than the limited obligation set forth in Section
6.5(b) and those imposed by applicable law;
(ii) confirms that each Manager has no duty to any Unitholder
individually as a result of this Agreement (it being understood that this
provision does not limit any duty such person may have to a Unitholder as a
director, officer or employee of the Unitholder);
(iii) confirms that each Unitholder has no duty to any other
Unitholder or to the LLC or any Subsidiary of the LLC as a result of this
Agreement other than the specific covenants and agreements set forth in this
Agreement;
(iv) acknowledges and agrees that (A) in the event of any
conflict of interest between the LLC, the Company and the Unitholders, any
Affiliate of the Unitholders or any Manager that may from time to time arise,
each such person may act in its best interest (provided that, in the case of a
conflict of interest between a Manager and the LLC, the existence
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of such conflict is disclosed to the Board) and (B) no such person shall be
obligated (1) to reveal to the LLC or any Subsidiary of the LLC confidential
information belonging to or relating to the business of such person or (2) to
recommend or take any action in its capacity as such Unitholder or Manager, as
the case may be, that prefers the interest of the LLC or any Subsidiary of the
LLC over the interest of such person; and
(v) waives any claim or cause of action against any other
Unitholder, any Manager and any officer, employee, agent or Affiliate of any
such Unitholder or Manager that may from time to time arise in respect of a
breach by any such person of any duty or obligation disclaimed under Sections
6.5(c)(i) through (iv).
(d) Each Unitholder agrees that the waivers, acknowledgments and
agreements set forth in subsection (c) above shall not apply to any alleged
claim or cause of action against a Manager, Unitholder or any Unitholder's
Affiliates or any of their respective stockholders, directors, officers,
controlling persons, partners or employees based upon the breach or
non-performance by such person of this Agreement or other agreement to which the
LLC or the Company and any such other Unitholder, any of its Affiliates or any
Manager designated by such other Unitholder is a party. (e) The provisions of
this Section 6.5, to the extent that they restrict the duties and liabilities of
a Unitholder or Manager otherwise existing at law or in equity, are agreed by
the Unitholders to replace such other duties and liabilities of such person.
6.6 Transactions Between the LLC and the Unitholders.
Notwithstanding that it may constitute a conflict of interest, the Unitholders
or their Affiliates may engage in any transaction (including the purchase, sale,
lease or exchange of any property or rendering of any service or the
establishment of any salary, other compensation or other terms of employment)
with the LLC so long as (i) such transaction is approved by a majority of the
Board after full disclosure of the terms of such transaction, excluding the
members of the Board designated by such Unitholder or its Affiliates (the
"Conflict Parties") and (ii) if Unitholder approval is required with respect to
such transaction, such transaction is approved by the holders of a majority of
the Units or other interests of the LLC other than those held by the Conflict
Parties.
6.7 Approval Rights. Notwithstanding the provisions of Article V,
the LLC shall not, without the prior written consent of the holders of the
Required Interest:
(a) directly or indirectly declare or pay any dividends or make any
distributions upon any of its equity securities, other than Tax Distributions
and distributions of unpaid yield or unreturned capital on the Class A Preferred
Units pursuant to Sections 4.1(a)(i) and 4.1(a)(ii) this Agreement;
(b) enter into, or permit any Subsidiary to enter into, any joint
venture or similar transaction;
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(c) enter into, or permit any Subsidiary to enter into, any
agreement or arrangement that materially limits or otherwise restricts the LLC
or any Subsidiary from engaging or competing in any material line of business or
in any material geographic area;
(d) enter into, or permit any Subsidiary to enter into, any
transaction with any of its or any Subsidiary's officers, directors, members,
employees or Affiliates or any individual related by blood, marriage or adoption
to any such Person or any entity in which any such Person or individual owns a
beneficial interest, except for normal employment arrangements and benefit
programs on reasonable terms (it being understood and agreed that loans or
advances to employees (other than travel advances and de minimus advances) shall
not constitute normal employment arrangements or benefit programs) and except as
otherwise expressly contemplated by this Agreement, the Executive Agreements and
the Management Agreement;
(e) directly or indirectly redeem, purchase or otherwise acquire, or
permit any Subsidiary to redeem, purchase or otherwise acquire, any equity
securities of the LLC or any Subsidiary (including, without limitation,
warrants, options and other rights to acquire such equity securities), other
than the redemptions of Class A Preferred Units pursuant to Section 4.2 of this
Agreement;
(f) except as expressly contemplated by this Agreement, the
Executive Agreements or the Management Agreement, authorize, issue, sell or
enter into any agreement providing for the issuance (contingent or otherwise),
or permit any Subsidiary to authorize, issue, sell or enter into any agreement
providing for the issuance (contingent or otherwise) of, (i) any notes or debt
securities containing equity features (including, without limitation, any notes
or debt securities convertible into or exchangeable for equity securities,
issued in connection with the issuance of equity securities or containing profit
participation features) or (ii) any class, series, shares or units of equity
securities (or any securities convertible into or exchangeable for any equity
securities) of the LLC or any Subsidiary or rights, warrants or options to
acquire or any security convertible into any equity securities of the LLC or any
Subsidiary, other than the issuance of equity securities by a Subsidiary to the
LLC or another Subsidiary;
(g) create, incur, assume, refinance or suffer to exist, or permit
any Subsidiary to create, incur, assume, refinance or suffer to exist, third
party Indebtedness exceeding an aggregate principal amount of $50,000,000
outstanding at any time on a consolidated basis (whether by way of authorizing,
issuing or entering into any agreement providing for the issuance (contingent or
otherwise) of, any notes or debt securities or entering into any contract or
agreement regarding third party debt financing or otherwise), except for
Indebtedness secured by receivables or financial assets (including, without
limitation, Indebtedness incurred pursuant to the Warehouse Facilities, the
Residual Facilities, the HFI Term Loan and the High Yield Debt); provided that
entry into any agreement for the refinancing of more than $200,000,000 of such
Indebtedness secured by receivables or financial assets shall require the prior
written consent of the holders of the Required Interest;
(h) merge or consolidate with any Person or permit any Subsidiary to
merge or consolidate with any Person (other than a wholly-owned Subsidiary);
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(i) sell, lease or otherwise dispose of, or permit any Subsidiary to
sell, lease or otherwise dispose of, more than 10% of the consolidated assets of
the LLC and its Subsidiaries (computed on the basis of book value, determined in
accordance with United States generally accepted accounting principles
consistently applied, or fair market value, determined by the Board in its
reasonable good faith judgment) in any transaction or series of related
transactions (other than sales of inventory in the ordinary course of business);
(j) except as contemplated by this Agreement in connection with a
Public Offering, voluntarily initiate a liquidation, dissolution or winding up
of the LLC or any Subsidiary, or a recapitalization or reorganization of the LLC
or any Subsidiary in any form of transaction (including, without limitation, any
reorganization into a corporation or a partnership), or permit the commencement
of a proceeding for bankruptcy, insolvency, receivership or similar action with
respect to the LLC or any Subsidiary;
(k) except as contemplated by this Agreement in connection with a
Public Offering, change the corporate or organizational structure of the LLC or
any Subsidiary;
(l) acquire or dispose of, or permit any Subsidiary to acquire or
dispose of, any interest in any business (whether by a purchase of assets,
purchase of securities, merger or otherwise) involving aggregate consideration
(including, without limitation, the assumption of liabilities) exceeding
$35,000,000;
(m) acquire, or permit any Subsidiary to acquire, portfolios of
securities (including auto loan portfolios) for aggregate consideration of more
than $100,000,000 in any transaction or series of related transactions;
(n) enter into the ownership, active management or operation of any
business other than the ownership of the securities of its Subsidiaries or
permit any Subsidiary to enter into the ownership, active management or
operation of any business other than a business in the automobile loan industry;
(o) become subject to, or permit any Subsidiary to become subject
to, any agreement or instrument that by its terms would (under any
circumstances) restrict (A) the right of any Subsidiary to make loans or
advances or pay dividends to, transfer property to, or repay any Indebtedness
owed to, the LLC or any Subsidiary or (B) the LLC's right to perform the
provisions of this Agreement, the Certificate, or the other Transaction
Documents;
(p) amend, alter or repeal, or permit any Subsidiary to amend, alter
or repeal, by merger, consolidation, combination, reclassification or otherwise,
the Certificate or the certificate of incorporation or bylaws any Subsidiary;
(q) except as expressly contemplated by this Agreement, make any
amendment to the Certificate or the LLC Agreement that would increase the number
of authorized Units or adversely affect or otherwise impair the rights or the
relative preferences and priorities of the holders of the Units under this
Agreement, the Certificate, or the other Transaction Documents;
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(r) terminate the employment of, appoint or hire, or enter into,
amend or modify any Executive Agreement or any employment agreement or
arrangement with, the chief executive officer of the LLC, other than a
termination of employment and/or modification to such agreement or arrangement
that does not materially change the severance or other terms of such agreement
or arrangement;
(s) make, or permit any Subsidiary to make, any election to change
the classification of the LLC or any of its Subsidiary for Federal income tax
purposes;
(t) provide any waiver by, or consent of, the LLC under or pursuant
to the Stockholders Agreement;
(u) settle or compromise, or permit any Subsidiary to settle or
compromise, any pending or threatened suit, action or claim of the LLC or any
Subsidiary in excess of $5,000,000;
(v) appoint or remove, or permit any Subsidiary to appoint or
remove, the independent auditor of the LLC or any Subsidiary;
(w) approve the annual budget (and significant variances from the
budget) of the LLC and its Subsidiaries;
(x) make, or permit any Subsidiary to make, any capital expenditures
(including, without limitation, payments with respect to capitalized leases, as
determined in accordance with generally accepted accounting principles
consistently applied) exceeding an amount that is $1,000,000 greater than the
amount set forth in the then current annual budget approved pursuant to
paragraph (w) above in the aggregate on a consolidated basis during any
twelve-month period; or
(y) make, or permit any Subsidiary to make, any material changes in
the accounting policies of the LLC or any Subsidiary.
Without limiting the generality of the foregoing, prior to the Acquisition
Closing, the LLC shall not permit the Purchaser to amend, modify or waive any
condition under the Acquisition Agreement without the unanimous consent of the
Investor Members.
6.8 Other Covenants.
(a) Public Disclosures. The LLC shall not, nor shall it permit any
Subsidiary to, disclose any Unitholder's name or identity as an investor in the
LLC in any press release or other public announcement or in any document or
material filed with any governmental entity, without the prior written consent
of such Unitholder, unless such disclosure is required by applicable law or
governmental regulations or by order of a court of competent jurisdiction, in
which case prior to making such disclosure the LLC shall give written notice to
such Unitholder describing in reasonable detail the proposed content of such
disclosure and shall permit such Unitholder to review and comment upon the form
and substance of such disclosure.
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(b) Xxxx-Xxxxx-Xxxxxx Compliance. In connection with any transaction
in which the LLC is involved that is required to be reported under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended from time to
time (the "HSR Act"), the LLC shall prepare and file all documents with the
Federal Trade Commission and the United States Department of Justice which may
be required to comply with the HSR Act, and shall promptly furnish all materials
thereafter requested by any of the regulatory agencies having jurisdiction over
such filings, in connection with such transaction. The LLC shall take all
reasonable actions and shall file and use reasonable best efforts to have
declared effective or approved all documents and notifications with any
governmental or regulatory bodies, as may be necessary or may reasonably be
requested under federal antitrust laws for the consummation of such transaction.
Notwithstanding the foregoing, if any Unitholder, rather than the LLC, is
required to make a filing under the HSR Act in connection with such a
transaction, the LLC will provide to such Unitholder all necessary information
for such filing, will facilitate such filing and will pay all fees and expenses
associated with such filing.
(c) Transfer of Restricted Securities.
(i) In addition to the transfer restrictions contained in
Article X of this Agreement, Restricted Securities are transferable only
pursuant to (A) Public Offerings, (B) Rule 144 of the Securities and Exchange
Commission (or any similar rule or rules then in force) if such rule or rules
are available and (C) subject to the conditions specified in clause (ii) below,
any other legally available means of transfer.
(ii) In connection with the transfer of any Restricted
Securities (other than a transfer described in Section 6.8(c)(i)(A)), the holder
thereof shall deliver written notice to the LLC describing in reasonable detail
the transfer or proposed transfer, together (except in the case of a transfer
described in Section 6.8(c)(i)(B)) with an opinion of counsel that (to the LLC's
reasonable satisfaction) is knowledgeable in securities law matters to the
effect that such transfer of Restricted Securities may be effected without
registration of such Restricted Securities under the Securities Act. In
addition, if the holder of the Restricted Securities delivers to the LLC an
opinion of such counsel that no subsequent transfer of such Restricted
Securities shall require registration under the Securities Act, the LLC shall
promptly upon such contemplated transfer deliver to the prospective transferor
new certificates for such Restricted Securities that do not bear the Securities
Act legend set forth in Section 10.7(b). If the LLC is not required to deliver
new certificates for such Restricted Securities not bearing such legend, the
holder thereof shall not transfer the same until the prospective transferee has
confirmed to the LLC in writing its agreement to be bound by the conditions
contained in this Section 6.8(c) and Section 10.7(b).
(iii) Upon the request of an Investor Member, the LLC shall
promptly supply to such Investor Member or its prospective transferees all
information regarding the LLC required to be delivered in connection with a
transfer pursuant to Rule 144A of the Securities and Exchange Commission.
6.9 Nonsolicitation. So long as a Unitholder holds any Units, such
Unitholder shall not solicit, or direct any other person to solicit, any
employee of the LLC or any Subsidiary of the LLC to leave the employ of the LLC
or such Subsidiary; provided, however, that the
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following shall not be deemed to cause a breach of this restriction: (i)
generalized advertisement of employment opportunities including in trade or
industry publications or generalized employee searches by a headhunter/search
firm (in either case not focused specifically on the employees of the LLC or any
Subsidiary of the LLC), (ii) soliciting or hiring any former employee of the LLC
or any Subsidiary of the LLC who has been terminated by the LLC or any
Subsidiary of the LLC prior to commencement of employment discussions between
such Unitholder and such former employee, or (iii) soliciting or hiring any such
person who contacts a Unitholder on his or her own initiative without any direct
or indirect solicitation from the Unitholder. The Unitholders acknowledge that
breach of the provisions of this Section 6.9 may cause irreparable injury to the
LLC for which monetary damages are inadequate, difficult to compute, or both.
Accordingly, the Unitholders agree that the provisions of this Section 6.9 may
be enforced by injunctive relief for specific performance.
ARTICLE VII
EXCULPATION AND INDEMNIFICATION
7.1 Exculpation. No Officer, other employee of the LLC or Manager
shall be liable to any other Officer, other employee of the LLC, Manager, the
LLC or to any Unitholder for any loss suffered by the LLC unless such loss is
caused by such Person's bad faith, gross negligence or willful misconduct. The
Officers, other employees of the LLC and Managers shall not be liable for errors
in judgment or for any acts or omissions that do not constitute bad faith, gross
negligence or willful misconduct. Any Officer, other employee of the LLC or
Manager may consult with counsel and accountants in respect of LLC affairs, and
provided such Person acts in good faith reliance upon the advice or opinion of
such counsel or accountants, such Person shall not be liable for any loss
suffered by the LLC in reliance thereon.
7.2 Right to Indemnification. Subject to the limitations and
conditions as provided in this Article VII, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative (hereinafter a "Proceeding"), or any appeal in such
a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that he or she, or a Person of whom he or she
is the legal representative, is or was a Unitholder, Manager, Officer or other
employee of the LLC, or while a Unitholder, Manager, Officer or employee of the
LLC is or was serving at the request of the LLC as a manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic limited liability company, corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise shall be indemnified by the LLC to the fullest extent permitted
by the Delaware Act, as the same exist or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
LLC to provide broader indemnification rights than said law permitted the LLC to
provide prior to such amendment) against judgments, penalties (including excise
and similar taxes and punitive damages), fines, settlements and reasonable
expenses (including attorneys' fees) actually incurred by such Person in
connection with such Proceeding, and indemnification under this Article VII
shall continue as to a Person who has ceased to serve in the capacity which
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initially entitled such Person to indemnity hereunder. The rights granted
pursuant to this Article VII shall be deemed contract rights, and no amendment,
modification or repeal of this Article VII shall have the effect of limiting or
denying any such rights with respect to actions taken or Proceedings arising
prior to any amendment, modification or repeal. It is expressly acknowledged
that the indemnification provided in this Article VII could involve
indemnification for negligence or under theories of strict liability.
7.3 Advance Payment. Reasonable expenses incurred by a Person of the
type entitled to be indemnified under Section 7.2 who was, is or is threatened
to be made a named defendant or respondent in a Proceeding shall be paid by the
LLC in advance of the final disposition of the Proceeding upon receipt of an
undertaking by or on behalf of such Person to repay such amount if it shall
ultimately be determined by a court of competent jurisdiction in a final and
non-appealable judgment that he or she is not entitled to be indemnified by the
LLC.
7.4 Indemnification of Employees and Agents. The LLC, by adoption of
a resolution of the Board, may indemnify and advance expenses to an agent of the
LLC to the same extent and subject to the same conditions under which it may
indemnify and advance expenses to Persons who are not or were not Managers,
Officers or employees of the LLC but who are or were serving at the request of
the LLC as a manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic limited
liability company, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise against any liability asserted
against him and incurred by him in such a capacity or arising out of his status
as such a Person to the same extent that it may indemnify and advance expenses
to Managers, Officers and employees of the LLC under this Article VII.
7.5 Appearance as a Witness. Notwithstanding any other provision of
this Article VII, the LLC shall pay or reimburse reasonable out-of-pocket
expenses incurred by a Manager, Officer or employee of the LLC in connection
with his appearance as a witness or other participation in a Proceeding at a
time when he is not a named defendant or respondent in the Proceeding.
7.6 Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred in this Article VII shall not be
exclusive of any other right which a Manager, Officer, employee or other Person
indemnified pursuant to Section 7.2 may have or hereafter acquire under any law
(common or statutory), provision of the Certificate or this Agreement,
agreement, vote of Unitholders or disinterested Managers or otherwise.
7.7 Insurance. The LLC shall purchase and maintain insurance, at its
expense, to protect itself and any Person who is or was serving as a Manager,
Officer, employee or agent of the LLC or is or was serving at the request of the
LLC as a manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic limited
ability company, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise against any expense, liability
or loss, whether or
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not the LLC would have the power to indemnify such Person against such expense,
liability or loss under this Article VII.
7.8 Savings Clause. If this Article VII or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
LLC shall nevertheless indemnify and hold harmless each Manager, Officer,
employee or any other Person indemnified pursuant to this Article VII as to
costs, charges and expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent
permitted by any applicable portion of this Article VII that shall not have been
invalidated and to the fullest extent permitted by applicable law.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting. The LLC shall keep, or cause to be kept,
appropriate books and records with respect to the LLC's business, including all
books and records necessary to provide any information, lists, and copies of
documents required to be provided pursuant to Section 8.3 or pursuant to
applicable laws. All matters concerning (i) the determination of the relative
amount of allocations and distributions among the Unitholders pursuant to
Articles III and IV and (ii) accounting procedures and determinations, and other
determinations not specifically and expressly provided for by the terms of this
Agreement, shall be determined by the Board, whose determination shall be final
and conclusive as to all of the Unitholders absent manifest clerical error.
8.2 Fiscal Year. The fiscal year (the "Fiscal Year") of the LLC
shall constitute the 12-month period ending on December 31 of each calendar
year, or such other annual accounting period as may be established by the Board.
8.3 Tax Information. The LLC shall use reasonable best efforts to
deliver or cause to be delivered, within 75 days after the end of each Fiscal
Year, to each Person who was a Unitholder at any time during such Fiscal Year
all information necessary for the preparation of such Person's United States
federal and state income tax returns.
8.4 Transmission of Communications. Each Person that owns or
controls Units on behalf of, or for the benefit of, another Person or Persons
shall be responsible for conveying any report, notice, or other communication
received from the Board to such other Person or Persons.
8.5 LLC Funds. The Board and Officers may not commingle the LLC's
funds with the funds of any Unitholder or Managers.
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8.6 Information Rights.
(a) Financial Statements and Other Information. The LLC shall
deliver to each Investor Member (so long as such Investor Member holds any
Units):
(i) as soon as available but in any event within 45 days after
the end of each monthly accounting period in each fiscal year, unaudited
consolidated statements of income and cash flows of the LLC and its Subsidiaries
for such monthly period and for the period from the beginning of the fiscal year
to the end of such month, and consolidated balance sheets of the LLC and its
Subsidiaries as of the end of such monthly period, all prepared in accordance
with United States generally accepted accounting principles, consistently
applied, subject to the absence of footnote disclosures and to normal year-end
adjustments;
(ii) as soon as available but in any event within 45 days
after the end of each quarterly accounting period in each fiscal year, unaudited
consolidated statements of income and cash flows of the LLC and its Subsidiaries
for such quarterly period and for the period from the beginning of the fiscal
year to the end of such quarter, and consolidated balance sheets of the LLC and
its Subsidiaries as of the end of such quarterly period, all prepared in
accordance with United States generally accepted accounting principles,
consistently applied, subject to the absence of footnote disclosures and to
normal year-end adjustments, together with a management discussion and analysis
of financial conditions and results of operations in a form reasonably
satisfactory to the Investor Members (an "MD&A") ;
(iii) within 90 days after the end of each fiscal year,
consolidating and consolidated statements of income and cash flows of the LLC
and its Subsidiaries for such fiscal year, and consolidating and consolidated
balance sheets of the LLC and its Subsidiaries as of the end of such fiscal
year, setting forth in each case comparisons to the annual budget and to the
preceding fiscal year, all prepared in accordance with United States generally
accepted accounting principles, consistently applied, together with an MD&A, and
accompanied by (a) with respect to the consolidated portions of such statements
(except with respect to budget data), an opinion containing no exceptions or
qualifications (except for qualifications regarding specified contingent
liabilities) of an independent accounting firm of recognized national standing
acceptable to the holders of the Required Interest, and (b) a copy of such
accounting firm's annual management letter to the Board;
(iv) promptly upon receipt thereof, any additional reports,
management letters or other detailed information concerning significant aspects
of the LLC's operations or financial affairs given to the LLC by its independent
accountants (and not otherwise contained in other materials provided hereunder);
(v) with reasonable promptness, such other information and
financial data concerning the LLC and its Subsidiaries as any Person entitled to
receive information under this Section 8.6 may reasonably request and which the
LLC can provide without undue burden, including, without limitation, all
securitization reporting, remittance reports and other similar reports of the
LLC.
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Each of the financial statements referred to in subsections (i) and (iii)
shall be true and correct in all material respects as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end audit adjustments (none of
which would, alone or in the aggregate, be materially adverse to the financial
condition, operating results, assets, operations or business prospects of the
LLC and its Subsidiaries taken as a whole).
(b) Inspection of Property. The LLC shall permit any representatives
designated by any Investor Member (so long as such Investor Member holds any
Units), upon reasonable notice and during normal business hours and such other
times as any such holder may reasonably request, to (a) visit and inspect any of
the properties of the LLC and its Subsidiaries, (b) examine the corporate and
financial records of the LLC and its Subsidiaries and make copies thereof or
extracts therefrom and (c) discuss the affairs, finances and accounts of any
such entities with the directors, officers, key employees and independent
accountants of the LLC and its Subsidiaries; provided that the LLC shall have
the right to have its chief financial officer present at any meetings with the
LLC's independent accountants.
8.7 Confidentiality. The Unitholders acknowledge that, from time to
time, they may receive information from or concerning the other Unitholders, the
LLC and its Subsidiaries in the nature of trade secrets or that otherwise is
confidential, the release of which is reasonably expected to damage the LLC and
its Subsidiaries or Persons with which it does business ("Confidential
Information"). In addition to any other obligations of any Unitholder pursuant
to any agreement between the LLC and such Unitholder or otherwise, each
Unitholder agrees that it shall hold in strict confidence any Confidential
Information that it receives and may not disclose it to any Person other than
another Unitholder, a member of the Board or an Officer, except for disclosures
(i) compelled by law (but the Unitholder must notify the other Unitholders
promptly of any request for that information, before disclosing it, if legal and
practicable), (ii) to advisers, agents or representatives of the Unitholder or
Persons to whom that Unitholder's Units may be Transferred as permitted by this
Agreement, but only if the recipients have been notified of, and have agreed to
be bound by, the provisions of this Section 8.7, or (iii) of information that
the Unitholder also has received from a source independent of the LLC that the
Unitholder reasonably believes obtained that information without breach of any
obligation of confidentiality. The Unitholders acknowledge that breach of the
provisions of this Section 8.7 may cause irreparable injury to the LLC for which
monetary damages are inadequate, difficult to compute, or both. Accordingly, the
Unitholders agree that the provisions of this Section 8.7 may be enforced by
injunctive relief for specific performance. Each Unitholder also agrees to cause
the Managers designated by such Unitholder to treat any Confidential Information
in the same manner as required of the Unitholder in this Section 8.7.
ARTICLE IX
TAXES
9.1 Tax Returns. The LLC shall prepare and file all necessary
federal and state income tax returns, including making the elections described
in Section 9.2. The LLC shall
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provide to each Unitholder within 75 days after the end of each Taxable Year,
any applicable Form K-1 for such Taxable Year, and such other information as may
be necessary for the preparation of each such Unitholder's federal and state
income tax returns. Each Unitholder shall furnish to the LLC all pertinent
information in its possession relating to LLC operations that is necessary to
enable the LLC's income tax returns to be prepared and filed.
9.2 Tax Elections. The LLC shall make any election the LLC may deem
appropriate and in the best interests of the Unitholders.
9.3 Tax Matters Partner. HGF (or, to the extent allowed under
applicable law, an Affiliate so designated by HGF) shall be the "tax matters
partner" of the LLC pursuant to Section 6231(a)(7) of the Code (the "Tax Matters
Partner"). The Tax Matters Partner shall be authorized and required to represent
the LLC (at the LLC's expense) in connection with all examinations of the LLC's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend LLC funds for professional services and other
expenses reasonably incurred in connection therewith. Each Unitholder agrees to
cooperate with the LLC and to do or refrain from doing any or all things
reasonably requested by the LLC with respect to the conduct of such proceedings.
The Tax Matters Partner shall inform each other Unitholder of all significant
matters that may come to its attention in its capacity as Tax Matters Partner by
giving notice thereof on or before the fifth business day after becoming aware
thereof and, within that time, shall forward to each other Unitholder copies of
all significant written communications he may receive in that capacity. The Tax
Matters Partner may not take any action contemplated by Sections 6222 through
6232 of the Code without the consent of the Board, but this sentence does not
authorize the Tax Matters Partner (or any Manager) to take any action left to
the determination of an individual Unitholder under Sections 6222 through 6232
of the Code.
ARTICLE X
TRANSFER OF UNITS
10.1 Transfers by Unitholders.
(a) No Unitholder shall Transfer any interest in any Units except in
compliance with this Article X.
(b) Notwithstanding any other provision of this Agreement, prior to
the first anniversary of the Acquisition Closing, no Unitholder shall Transfer,
or enter into any agreement to Transfer, any interest in any Units other than to
a Control Affiliate (as defined in the Acquisition Agreement) in compliance with
the other provisions of this Agreement.
(c) Each transferee of Units or other interest in the LLC shall, as
a condition precedent to such Transfer, execute a counterpart to this Agreement
pursuant to which such transferee shall agree to be bound by the provisions of
this Agreement. Each transferee of Units or other interest in the LLC (other
than a transferee in a Public Offering) shall, upon executing a counterpart to
this Agreement, have all of the economic rights and privileges of the
transferor, but shall not, notwithstanding anything herein to the contrary
except the proviso in this
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Section 10.1(c), be entitled to any voting rights or rights to designate members
of the Board, without the prior consent of the holders of at least two-thirds
(2/3) of the Common Units held by the Investor Members other than the
transferor; provided that voting rights and rights to designate members of the
Board shall transfer automatically to (i) a transferee of Units pursuant to the
exercise of first offer rights set forth in Section 10.2 if such transferee is
an existing Unitholder with existing voting rights or rights to designate
members of the Board, respectively and (ii) a Permitted Transferee.
(d) The restrictions on the Transfer of Units or other interests in
the LLC set forth in this Section 10.1 shall continue with respect to each Unit
or other interest in any Unit until the date on which such Unit or other
interest has been transferred in a Public Sale or pursuant to a Sale of the
Company that meets the conditions for Transfer set forth in this Article X.
(e) The LLC may not recognize for any purpose any purported Transfer
of all or part of a Unit until the other applicable provisions of this Article X
have been satisfied and the LLC has received (other than in the case of
transfers described in Sections 6.8(c)(i)(A) and (B) above) a favorable opinion
of legal counsel reasonably acceptable to the Board to the effect that either
(i) the Transfer of the Unit or part thereof subject to the Transfer or
admission has been registered under the Securities Act and any applicable state
securities laws or (ii) the Transfer or admission is exempt from registration
under those laws. The Board, however, may waive any or all of the requirements
of this Section 10.1(e).
(f) The LLC may not recognize for any purpose any purported Transfer
of all or part of a Unit until the other applicable provisions of this Article X
have been satisfied and the LLC has received (other than in the case of
transfers described in Sections 6.8(c)(i)(A) and (B) above) a favorable opinion
of legal counsel reasonably acceptable to the Board to the effect that the
Transfer will not cause the LLC to be treated as a "publicly traded
partnership," as defined in Code Section 7704, taxable as a corporation. The
Board, however, may waive any or all of the requirements of this Section
10.1(f).
(g) If a Unitholder Transfers its Units or other interests in the
LLC to a Permitted Transferee, then for so long as such Permitted Transferee
holds such Units or other interests in the LLC, such Permitted Transferee must
continue to be a Permitted Transferee (as defined in this Agreement) of the
initial holder of such Units or other interests in the LLC issued by the LLC.
For example, if Unitholder A transfers its Units to Unitholder B as a Permitted
Transferee of Unitholder A, then Unitholder B must continue to be a Permitted
Transferee of Unitholder A for so long as Unitholder B owns such Units. If
Unitholder B transfers its Units to Unitholder C as a Permitted Transferee of
Unitholder B, then Unitholder C must continue to be a Permitted Transferee of
Unitholder A for so long as Unitholder C owns such Units.
10.2 Right of First Offer.
(a) Prior to making any Transfer of Units or other interests in the
LLC (other than a Transfer in connection with a Public Offering, a Public Sale
of the type referred to in clause (i) of the definition thereof or a Sale of the
Company), any Unitholder desiring to make
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such Transfer (the "Selling Unitholder") will give written notice (the "Offer
Notice") to the LLC and the other Unitholders (the "Other Unitholders"). The
Offer Notice will disclose in reasonable detail the number of Units or other
interests in the LLC to be offered for sale and the terms and conditions of the
proposed sale. Such Selling Unitholder will not consummate any Transfer until 45
days after the Offer Notice has been given to the Other Unitholders, unless the
parties to the Transfer have been finally determined pursuant to this Section
10.2 prior to the expiration of such 45-day period. (The date of the first to
occur of such events is referred to herein as the "Authorization Date".) The
Offer Notice shall constitute a binding offer to sell the Units or other
interests in the LLC on such terms and conditions contained therein.
(b) The Other Unitholders may elect to purchase all (but not less
than all) of the Units or other interests to be sold upon the same terms and
conditions as those set forth in the Offer Notice by giving written notice of
such election to such Selling Unitholder within 25 days after the Offer Notice
has been given to the Other Unitholders. If more than one Unitholder elects to
purchase the Units or other interests to be transferred, the Units or other
interests in the LLC to be sold shall be allocated among the electing Other
Unitholders pro rata according to the number of Common Units that are owned by
each electing Other Unitholder on a fully diluted basis. If one or more of the
Other Unitholders have elected to purchase Units or other interests in the LLC
from the Selling Unitholder, the transfer of such Units or other interests shall
be consummated as soon as practicable after delivery of the election notices to
the Selling Unitholder, but in any event within 15 days after the Authorization
Date. If one or more of the Other Unitholders do not elect to purchase all of
the Units or other interests specified in the Offer Notice, the Selling
Unitholder may transfer the Units or other interests specified in the Offer
Notice at a price and on terms no more favorable to the transferee(s) thereof
than specified in the Offer Notice during the 90-day period immediately
following the Authorization Date. Any Units or other interests not Transferred
within such 90-day period will be subject to the provisions of this Section 10.2
upon subsequent Transfer.
(c) The restrictions of this Section 10.2 will not apply with
respect to Transfers to Permitted Transferees.
(d) Notwithstanding anything herein to the contrary, except pursuant
to clause (c) above, in no event shall any Transfer of Units pursuant to this
Section 10.2 be made for any consideration other than cash payable upon
consummation of such Transfer.
(e) The restrictions set forth in this Section 10.2 shall continue
with respect to each Unit or other interest in the LLC until the earlier of (i)
the date on which such Units or other interests have been transferred in a
Public Sale, (ii) the consummation of an Approved Sale, (iii) the consummation
of a Qualified IPO, and (iv) the date on which such Units or other interests
have been transferred pursuant to this Section 10.2 (other than pursuant to
Section 10.2(c) and other than a transfer to a Unitholder purchasing from a
Selling Unitholder pursuant to Section 10.2(b)).
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10.3 Tag-Along Rights.
(a) At least 30 days prior to any Transfer of any Units or other
interests in the LLC (other than to a Permitted Transferee) by one or more of
the Unitholders (each, a "Transferring Unitholder"), such Transferring
Unitholders shall deliver a written notice (the "Tag-Along Notice") to the LLC
and the other Unitholders (the "Tag-Along Unitholders") specifying in reasonable
detail the identity of the prospective transferee(s) and the terms and
conditions of the Transfer (which notice may be included in and given at the
same time as the Offer Notice under Section 10.2(a)). The Tag-Along Unitholders
may elect to participate in the contemplated Transfer by delivering written
notice to each of the Transferring Unitholders within 30 days after delivery of
the Tag-Along Notice. The Transferring Unitholder and such Tag-Along Unitholders
will be entitled to sell in the contemplated Transfer, at the same price and on
the same terms, a number of such class of Units proposed to be transferred equal
to the product of (A) the quotient determined by dividing the number of units of
such class of Units owned by such Person by the aggregate number of outstanding
units of such class of Units owned by the Transferring Unitholder and each such
Tag-Along Unitholder participating in such sale and (B) the number of such class
of Units to be sold in the contemplated Transfer.
(b) The Transferring Unitholder will use reasonable commercially
reasonable efforts to obtain the agreement of the prospective transferee(s) to
the participation of the Tag-Along Unitholders in any contemplated Transfer, and
the Transferring Unitholder will not transfer any of its Units to the
prospective transferee(s) unless (A) the prospective transferee(s) agrees to
allow the participation of the Tag-Along Unitholders or (B) the Transferring
Unitholder agree to purchase the number of such class of Units from the
Tag-Along Unitholders that the Tag-Along Unitholders would have been entitled to
sell pursuant to this Section 10.3(b) for the consideration per unit to be paid
to the Transferring Unitholder by the prospective transferee(s).
(c) Notwithstanding the foregoing, the participants, amounts and
types of securities sold in any transfer hereunder will be adjusted to take
account of the rights of any holders of Triad Holdings Inc. securities pursuant
to Section 4(c) of the Stockholders Agreement of even date herewith between
Triad Holdings Inc. and certain of its stockholders.
(d) The provisions of this Section 10.3 will terminate upon the
first to occur of (i) the consummation of a Sale of the Company and (ii) the
consummation of a Qualified IPO.
10.4 Sale of the Company.
(a) If the Board and the holders of the Required Interest approve a
Sale of the Company (an "Approved Sale"), each holder of Units shall vote for,
consent to and raise no objections against such Approved Sale. If the Approved
Sale is structured as a (i) merger or consolidation, each holder of Units shall
waive any dissenters' rights, appraisal rights or similar rights in connection
with such merger or consolidation or (ii) sale of Units, each holder of Units
shall agree to sell all of his, her or its Units or rights to acquire Units on
the terms and conditions approved by the Board and the holders of the Required
Interest. Each holder of Units shall take all necessary or desirable actions in
connection with the consummation of the Approved Sale as requested by the LLC.
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(b) The obligations of the holders of Units with respect to an
Approved Sale are subject to the terms of Section 10.4(e) below.
(c) If either the LLC or the holders of any class of Units enter
into a negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities and Exchange Commission may be
available with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), the holders of Units will, at the
request of the LLC, appoint a purchaser representative (as such term is defined
in Rule 501) reasonably acceptable to the LLC. If any holder of Units appoints a
purchaser representative designated by the LLC, the LLC will pay the fees of
such purchaser representative, but if any holder of Units declines to appoint
the purchaser representative designated by the LLC such holder will appoint
another purchaser representative, and such holder will be responsible for the
fees of the purchaser representative so appointed.
(d) Holders of Units will bear their pro rata share (based upon the
Common Units held) of the costs of any sale of such Units pursuant to an
Approved Sale to the extent such costs are incurred for the benefit of all
holders of Units and are not otherwise paid by the LLC or the acquiring party.
For purposes of this Section 10.4(d), costs incurred in exercising reasonable
efforts to take all actions in connection with the consummation of an Approved
Sale in accordance with Section 10.4(a) shall be deemed to be for the benefit of
all holders of Units. Costs incurred by holders of Units on their own behalf
will not be considered costs of the transaction hereunder. Each holder of Units
transferring Units pursuant to an Approved Sale shall be obligated, severally,
not jointly, to join on a pro rata basis (based on the number of Common Units to
be sold) in any indemnification or other obligations that are part of the terms
and conditions of the Approved Sale (other than any such obligations that relate
specifically to a particular holder, such as indemnification with respect to
representations and warranties given by a holder regarding such holder's title
to and ownership of Units) (the "LLC Indemnity Obligations"). Notwithstanding
the foregoing, no holder shall be obligated in connection with any Approved Sale
to agree to indemnify or hold harmless the transferees with respect to LLC
Indemnity Obligations in an amount in excess of the net proceeds paid to such
holder in connection with the Approved Sale.
(e) In the event of an Approved Sale, each Unitholder shall receive
in exchange for the Units held by such Unitholder the same portion of the
aggregate consideration from such sale or exchange that such Unitholder would
have received if such aggregate consideration had been distributed by the LLC
pursuant to the terms of Section 4.1. Each holder of Units shall take all
necessary or desirable actions in connection with the distribution of the
aggregate consideration from such sale or exchange as requested by the LLC.
10.5 Buy/Sell Arrangement.
(a) Triggering Event. If (a) without the prior written consent of
HGF, the Board or the Investor Members (i) cause the LLC or the Company to
terminate the Management Agreement, (ii) fail to pay any amount owed to HGF
under the Management Agreement in full as and when due thereunder, (iii) remove
Xx. Xxxxxx X. Xxxx as Chief Executive Officer of the LLC or as Executive
Chairman of the Company, or (iv) eliminate or materially reduce HGF's or
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Xx. Xxxx'x responsibilities with respect to the LLC or the Company, except, with
respect to each of the subparagraphs (i), (iii) and (iv) above, as a result of a
termination by the LLC for Cause, and (b) such action or actions are not cured
by the Board or the Investor Members within 30 days after receipt of notice
thereof by the Board and the Investor Managers (after expiration of the cure
period without cure, a "Triggering Event"), then HGF shall have the right to
make a fully financed offer to purchase all of the Units and other interests in
the LLC from Xxxxxxx, GTCR and their respective Affiliates at a price specified
by HGF.
(b) Exercise of Buy/Sell Right. Within 180 days after the occurrence
of a Triggering Event, HGF may deliver a notice (a "Buy/Sell Offer Notice") to
Xxxxxxx and GTCR offering to purchase all of the Units and other interests in
the LLC held by Xxxxxxx, GTCR and their respective Affiliates (collectively, the
"Non-HGF Investors") at price specified in the Buy/Sell Offer Notice payable in
cash or immediately available funds, which offer may be subject to customary
terms and conditions, but shall not be subject to any financing contingency. The
Buy/Sell Offer Notice shall constitute a binding offer to sell the Units and
other interests in the LLC on such terms and conditions contained therein.
(c) Non-HGF Investors' Response and Closing. Within 90 days after
receipt of the Buy/Sell Offer Notice (the "Response Period"), each of the
Non-HGF Investors shall notify HGF and the other Non-HGF Investor as to whether
such Non-HGF Investor either (i) accepts such offer and agrees to sell to HGF
all of its Units and other interests in the LLC on the terms and conditions set
forth in the Buy/Sell Offer Notice (the "HGF Buy Option") or (ii) elects to
purchase the Units and other interests of the LLC held by HGF and its Affiliates
at the same price per Unit and on the same other customary terms and conditions
set forth in the Buy/Sell Offer Notice, and such purchase shall not be subject
to any financing contingency (the "HGF Sell Option"); provided that if any
Non-HGF Investor fails to respond within the Response Period, such Non-HGF
Investor shall be deemed to have elected the HGF Buy Option.
(i) If both of the Non-HGF Investors elect the HGF Sell
Option, HGF shall be required to sell its Units and other interests in the LLC
to the Non-HGF Investors in the percentages, at the price and on the same other
customary terms and conditions set forth in the Buy/Sell Offer Notice, and such
sale and corresponding purchase by the Non-HGF Investors shall not be subject to
any financing contingency. The closing of the transactions under the HGF Sell
Option shall take place no later than 60 days after the expiration of the
Response Period.
(ii) If both of the Non-HGF Investors elect the HGF Buy
Option, HGF shall be required to purchase all Units and other interests in the
LLC held by the Non-HGF Investors at the price and on the same other customary
terms and conditions set forth in the Buy/Sell Offer Notice, and such purchase
and corresponding sale by the Non-HGF Investors shall not be subject to any
financing contingency. The closing of the transactions under the HGF Buy Option
shall take place no later than 60 days after the expiration of the Response
Period.
(iii) If one Non-HGF Investor elects the HGF Sell Option and
the other Non-HGF Investor elects the HGF Buy Option, then the Non-HGF Investor
electing the HGF Sell Option shall, within 14 days after the expiration of the
Response Period, make a second election to either (A) purchase all of the Units
and other interests in the LLC held by HGF and
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the other Non-HGF Investor at the price and on the same other customary terms
and conditions set forth in the Buy/Sell Offer Notice, in which case each of HGF
and the other Non-HGF Investor shall be required to sell its Units and other
interests in the LLC to such Non-HGF Investor electing to purchase such Units at
the price and on the same other customary terms and conditions set forth in the
Buy/Sell Offer Notice, and such sale and corresponding purchase by such Non-HGF
Investor shall not be subject to any financing contingency, or (B) change its
election to the HGF Buy Option, in which case Section 10.5(c)(ii) shall apply.
The closing of the transactions under this Section 10.5(c)(iii) shall take place
no later than 74 days after the expiration of the Response Period.
10.6 Change in Business Form. Each Unitholder hereby irrevocably
delegates and cedes to the Board the sole authority and power to, in its sole
discretion, (i) convert the Company into a corporation (by merger or otherwise)
or another form of business entity at any time, in which event the terms and
conditions contained herein (including the terms and conditions relating to the
Units and Capital Accounts) shall be, as closely as possible, adopted by the new
entity or (ii) notwithstanding anything else in this Agreement to the contrary,
make an election to have the Company be treated as a corporation for federal
income tax purposes and, if applicable, state income or franchise tax purposes,
rather than as a partnership (each, a "Conversion"). Without limiting the
generality of the foregoing, it is anticipated that a Conversion would occur
prior to, or in connection with, an initial Public Offering. In connection with
any Conversion, the Board may cause a recapitalization, reorganization,
incorporation and/or exchange of the Units into securities which, to the extent
possible, reflect and are consistent with the Units and Capital Accounts as in
effect immediately prior to such transaction. No Unitholder shall have the right
or power to veto, vote for or against, amend, modify or delay any such
Conversion. Further, each Unitholder shall execute and deliver any documents and
instruments and perform any additional acts that may be necessary or
appropriate, as determined by the Board, to effectuate and perform any such
Conversion.
10.7 Legends.
(a) Each certificate evidencing Units and each certificate issued in
exchange for or upon the transfer of any Units (if such securities remain Units
as defined herein after such transfer) shall be stamped or otherwise imprinted
with legends in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LIMITED
LIABILITY COMPANY AGREEMENT DATED AS OF APRIL 29, 2005 AMONG THE ISSUER OF
SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE COMPANY'S
SECURITYHOLDERS. A COPY OF SUCH LIMITED LIABILITY COMPANY AGREEMENT WILL
BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST."
(b) Each certificate evidencing Restricted Securities and each
certificate issued in exchange for or upon the transfer of any Restricted
Securities (if such securities remain
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Restricted Securities as defined herein after such transfer) shall be stamped or
otherwise imprinted with legends in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
__________, 2005 AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE LIMITED
LIABILITY COMPANY AGREEMENT, DATED AS OF APRIL 29, 2005 BY AND AMONG THE
ISSUER (THE "COMPANY") AND CERTAIN INVESTORS, AND THE COMPANY RESERVES THE
RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE
BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS
SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
The legend set forth in this Section 10.7(b) shall be removed from the
certificates evidencing any securities which cease to be Restricted Securities.
10.8 Effect of Assignment.
(a) Any Unitholder who assigns any Units or other interest in the
LLC shall cease to be a Unitholder of the LLC with respect to such Units or
other interest and shall no longer have any rights or privileges of a Unitholder
with respect to such Units or other interest.
(b) Any Person who acquires in any manner whatsoever any Units or
other interest in the LLC, irrespective of whether such Person has accepted and
adopted in writing the terms and provisions of this Agreement, shall be deemed
by the acceptance of the benefits of the acquisition thereof to have agreed to
be subject to and bound by all of the terms and conditions of this Agreement
that any predecessor in such Units or other interest in the LLC of such Person
was subject to or by which such predecessor was bound, except that the rights of
the Investor Members to designate directors pursuant to Section 5.2(a) and any
other rights expressly vested solely in the initial Investor Members shall not
be assignable without the written consent of the holders of a majority of the
Common Units held by the non-assigning Unitholders.
10.9 Restriction on Transfer. In order to permit the LLC to qualify
for the benefit of a "safe harbor" under Code Section 7704, notwithstanding
anything to the contrary in this Agreement, no Transfer of any Unit or economic
interest shall be permitted or recognized by the LLC or the Board (within the
meaning of Treasury Regulation Section 1.7704-1(d)) if and to the extent that
such Transfer would cause the LLC to have more than 100 partners (within the
meaning of Treasury Regulation Section 1.7704-1(h), including the look-through
rule in Treasury Regulation Section 1.7704-1(h)(3)).
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10.10 Transfer Fees and Expenses. The transferor and transferee of
any Units or other interest in the LLC shall be jointly and severally obligated
to reimburse the LLC for all reasonable expenses (including attorneys' fees and
expenses) of any Transfer or proposed Transfer, whether or not consummated.
10.11 Void Transfers. Any Transfer by any Unitholder of any Units or
other interest in the LLC in contravention of this Agreement (including, without
limitation, the failure of the transferee to execute a counterpart in accordance
with Section 10.1(c)) or which would cause the LLC to not be treated as a
partnership for U.S. federal income tax purposes shall be void and ineffectual
and shall not bind or be recognized by the LLC or any other party. No purported
assignee shall have any right to any profits, losses or distributions of the
LLC.
ARTICLE XI
WITHDRAWAL AND RESIGNATION OF UNITHOLDERS
11.1 Withdrawal and Resignation of Unitholders. No Unitholder shall
have the power or right to withdraw or otherwise resign or be expelled from the
LLC prior to the dissolution and winding up of the LLC pursuant to Article XII,
except simultaneous with the Transfer of all of a Unitholder's Units in a
Transfer permitted by this Agreement and, if such Transfer is to a person or
entity that is not a Unitholder, the admission of such person or entity as a
Unitholder pursuant to Section 10.1. Notwithstanding that payment on account of
a withdrawal may be made after the effective time of such withdrawal, any
completely withdrawing Unitholder will not be considered a Unitholder for any
purpose after the effective time of such complete withdrawal, and, in the case
of a partial withdrawal, such Unitholder's Capital Account (and corresponding
voting and other rights) shall be reduced for all other purposes hereunder upon
the effective time of such partial withdrawal.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
12.1 Dissolution. The LLC shall not be dissolved by the admission of
additional Unitholders or the Transfer of Units, or by the death, retirement,
resignation, expulsion, bankruptcy or dissolution of a Unitholder or the
occurrence of any other event that terminates the continued membership of a
Unitholder in the LLC. Subject to the rights of the Unitholders contained
herein, the LLC shall dissolve, and its affairs shall be wound up upon the first
to occur of the following:
(a) at any time by the Board with the prior written consent of
holders of the Required Interest;
(b) the entry of a decree of judicial dissolution of the LLC under
Section 35-5 of the Delaware Act or an administrative dissolution under Section
18-802 of the Delaware Act; or
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(c) after the consummation of a Qualified IPO, upon the election of
any Investor Member.
Except as otherwise set forth in this Article XII, the LLC is
intended to have perpetual existence.
12.2 Liquidation and Termination. On dissolution of the LLC, the
Board shall act as liquidator or may appoint one or more representatives or
Unitholders as liquidator. The liquidators shall proceed diligently to wind up
the affairs of the LLC, sell all or any portion of the LLC assets for cash or
cash equivalents as they deem appropriate, and make final distributions as
provided herein and in the Delaware Act. The costs of liquidation shall be borne
as an LLC expense. Until final distribution, the liquidators shall continue to
operate the LLC properties with all of the power and authority of the Board. The
liquidators shall pay, satisfy, or discharge from LLC funds all of the debts,
liabilities, and obligations of the LLC (including all expenses incurred in
liquidation) or otherwise make adequate provision for payment and discharge
thereof (including the establishment of a cash fund for contingent liabilities
in such amount and for such term as the liquidators may reasonably determine)
and shall promptly distribute the remaining assets to the holders of Units in
accordance with Section 4.1(a). Any non-cash assets will first be written up or
down to their Fair Market Value, thus creating Profit or Loss (if any), which
shall be allocated in accordance with Sections 4.3 and 4.4. In making such
distributions, the liquidators shall allocate each type of asset (i.e., cash,
cash equivalents, securities, etc.) among the Unitholders ratably based upon the
aggregate amounts to be distributed with respect to the Units held by each such
holder. Any such distributions in kind shall be subject to (x) such conditions
relating to the disposition and management of such assets as the liquidators
deem reasonable and equitable and (y) the terms and conditions of any agreement
governing such assets (or the operation thereof or the holders thereof) at such
time.
The distribution of cash and/or property to a Unitholder in accordance with the
provisions of this Section 12.2 constitutes a complete return to the Unitholder
of its Capital Contributions and a complete distribution to the Unitholder of
its interest in the LLC and all the LLC's property and constitutes a compromise
to which all Unitholders have consented within the meaning of the Delaware Act.
To the extent that a Unitholder returns funds to the LLC, it has no claim
against any other Unitholder for those funds.
12.3 Cancellation of Certificate. On completion of the distribution
of LLC assets as provided herein, the LLC shall be terminated (and the LLC shall
not be terminated prior to such time), and the Board (or such other Person or
Persons as the Delaware Act may require or permit) shall file a certificate of
cancellation with the Secretary of State of Delaware, cancel any other filings
made pursuant to this Agreement that are or should be canceled, and take such
other actions as may be necessary to terminate the LLC. The LLC shall be deemed
to continue in existence for all purposes of this Agreement until it is
terminated pursuant to this Section 12.3.
12.4 Reasonable Time for Winding Up. A reasonable time shall be
allowed for the orderly winding up of the business and affairs of the LLC and
the liquidation of its assets pursuant to Section 12.2 in order to minimize any
losses otherwise attendant upon such winding up.
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12.5 Return of Capital. The liquidators shall not be personally
liable for the return of Capital Contributions or any portion thereof to the
Unitholders (it being understood that any such return shall be made solely from
LLC assets).
12.6 Reserves Against Distributions. The Board shall have the right
to withhold from Distributions payable to any Unitholder under this Agreement
amounts sufficient to pay and discharge any reasonably anticipated contingent
liabilities of the LLC. Any amounts remaining after payment and discharge of any
such contingent liabilities of the LLC will be paid to the Unitholders from whom
the Distributions were withheld.
ARTICLE XIII
VALUATION
13.1 Determination. Subject to Section 13.2, the Fair Market Value
of the assets of the LLC or of a Unit will be determined by the Board (or, if
pursuant to Section 12.2, the liquidators) in its good faith judgment in such
manner as its deems reasonable and using all factors, information and data
deemed to be pertinent.
13.2 Fair Market Value. "Fair Market Value" of (i) a specific LLC
asset will mean the amount which the LLC would receive in an all-cash sale of
such asset (free and clear of all Liens and after payment of all liabilities
secured only by such asset) in an arms-length transaction with an unaffiliated
third party consummated on the day immediately preceding the date on which the
event occurred which necessitated the determination of the Fair Market Value
(and after giving effect to any transfer taxes payable in connection with such
sale); and (ii) the LLC will mean the amount which the LLC would receive in an
all-cash sale of all of its assets and businesses as a going concern (free and
clear of all Liens and after payment of indebtedness for borrowed money) in an
arms-length transaction with an unaffiliated third party consummated on the day
immediately preceding the date on which the event occurred which necessitated
the determination of the Fair Market Value (assuming that all of the proceeds
from such sale were paid directly to the LLC other than an amount of such
proceeds necessary to pay transfer taxes payable in connection with such sale,
which amount will not be received or deemed received by the LLC). After a
determination of the Fair Market Value of the LLC is made as provided above, the
Fair Market Value of a Unit will be determined by making a calculation
reflecting the cash distributions which would be made to the Unitholders in
accordance with this Agreement in respect of such Unit if the LLC were deemed to
have received such Fair Market Value in cash and then distributed the same to
the Unitholders in accordance with the terms of this Agreement incident to the
liquidation of the LLC after payment to all of the LLC's creditors from such
cash receipts other than payments to creditors who hold evidence of indebtedness
for borrowed money, the payment of which is already reflected in the calculation
of the Fair Market Value of the LLC and assuming that all of the convertible
debt and other convertible securities were repaid or converted (whichever yields
more cash to the holders of such convertible securities) and all options to
acquire Units (whether or not currently exercisable) that have an exercise price
below the Fair Market Value of such Units were exercised and the exercise price
therefor paid. Except as otherwise provided herein or in any agreement, document
or instrument contemplated
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hereby, any amount to be paid under this Agreement by reference to the Fair
Market Value shall be paid in full in cash, and any Unit being transferred in
exchange therefor will be transferred free and clear of all Liens.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Amendments. This Agreement may be amended from time to time by
a written instrument by the holders of the Required Interest; provided that no
amendment or modification pursuant to this Section 14.1 that would adversely
affect any class of Units in a manner different than other Units shall be
effective against the holders of such class of Units without the prior written
consent of holders of at least a majority of Units of such class so adversely
affected thereby; provided further that no amendment or modification pursuant to
this Section 14.1 that would affect the rights of a Unitholder or group of
Unitholders specifically granted such rights by name shall be modified without
that Unitholder's (or a majority of that group of Unitholders') consent;
provided further that no amendment shall be made to Sections 4.6, 6.1, 6.3,
Article VII or this Section 14.1 without the consent of all of the Unitholders.
14.2 Investor Approval. Whenever this Agreement calls for or refers
to the consent or approval of any matter by an Investor Member, such consent or
approval shall be deemed given by the Investor Member if each of such Investor
Member's designees on the Board has, in his capacity as a Manager of the LLC,
given his consent or approval with respect to such matter at a duly convened
meeting of the Board or pursuant to an effective written consent of the Board,
unless, with respect to any given matter, such Investor Member notifies the LLC
in writing that the consent or approval at the Board level by such Investor
Member's designees on the Board does not constitute the consent or approval by
such Investor Member itself.
14.3 Title to LLC Assets. LLC assets shall be deemed to be owned by
the LLC as an entity, and no Unitholder, individually or collectively, shall
have any ownership interest in such LLC assets or any portion thereof. Legal
title to any or all LLC assets may be held in the name of the LLC or one or more
nominees, as the Board may determine. The Board hereby declares and warrants
that any LLC assets for which legal title is held in its name or the name of any
nominee shall be held in trust by the Board or such nominee for the use and
benefit of the LLC in accordance with the provisions of this Agreement. All LLC
assets shall be recorded as the property of the LLC on its books and records,
irrespective of the name in which legal title to such LLC assets is held.
14.4 Remedies. Each Unitholder and the LLC shall have all rights and
remedies set forth in this Agreement and all rights and remedies which such
Person has been granted at any time under any other agreement or contract and
all of the rights which such Person has under any law. Any Person having any
rights under any provision of this Agreement or any other agreements
contemplated hereby shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law.
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14.5 Successors and Assigns. All covenants and agreements contained
in this Agreement shall bind and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors, legal
representatives, and permitted assigns, whether so expressed or not.
14.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal, or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed, and enforced
in such jurisdiction as if such invalid, illegal, or unenforceable provision had
never been contained herein.
14.7 Opt-in to Article 8 of the Uniform Commercial Code. The
Unitholders hereby agree that the Units shall be securities governed by Article
8 of the Uniform Commercial Code of the State of Delaware (and the Uniform
Commercial Code of any other applicable jurisdiction).
14.8 Notice to Unitholder of Provisions. By executing this
Agreement, each Unitholder acknowledges that it has actual notice of (a) all of
the provisions hereof (including the restrictions on the transfer set forth
herein), and (b) all of the provisions of the Certificate.
14.9 Counterparts. This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
14.10 Consent to Jurisdiction. Each Unitholder irrevocably submits
to the nonexclusive jurisdiction of the United States District Court for the
State of Delaware and the state courts of the State of Delaware for the purposes
of any suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each Unitholder further agrees that service of
any process, summons, notice or document by United States certified or
registered mail to such Unitholder's respective address set forth in the LLC's
books and records or such other address or to the attention of such other person
as the recipient party has specified by prior written notice to the sending
party shall be effective service of process in any action, suit or proceeding in
Delaware with respect to any matters to which it has submitted to jurisdiction
as set forth above in the immediately preceding sentence. Each Unitholder
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the State of
Delaware or the state courts of the State of Delaware and hereby irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in such court has been brought in an
inconvenient forum.
14.11 Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall
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include the corresponding masculine, feminine, or neuter forms, and the singular
form of nouns, pronouns, and verbs shall include the plural and vice versa. The
use of the word "including" in this Agreement shall be by way of example rather
than by limitation. Reference to any agreement, document, or instrument means
such agreement, document, or instrument as amended or otherwise modified from
time to time in accordance with the terms thereof, and, if applicable, hereof.
Without limiting the generality of the immediately preceding sentence, no
amendment or other modification to any agreement, document, or instrument that
requires the consent of any Person pursuant to the terms of this Agreement or
any other agreement will be given effect hereunder unless such Person has
consented in writing to such amendment or modification. Wherever required by the
context, references to a Fiscal Year shall refer to a portion thereof. The use
of the words "or," "either," and "any" shall not be exclusive. The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Wherever a conflict exists between this Agreement and any other
agreement, this Agreement shall control but solely to the extent of such
conflict.
14.12 Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
Any dispute relating hereto shall be heard in the state or federal courts of
Delaware, and the parties agree to jurisdiction and venue therein.
14.13 Mutual Waiver of Jury Trial. Because disputes arising in
connection with complex transactions are most quickly and economically resolved
by an experienced and expert person and the parties wish applicable state and
federal laws to apply (rather than arbitration rules), the parties desire that
their disputes be resolved by a judge applying such applicable laws. Therefore,
to achieve the best combination of the benefits of the judicial system and of
arbitration, each party to this agreement (including the LLC) hereby waives all
rights to trial by jury in any action, suit, or proceeding brought to resolve
any dispute between or among any of the parties hereto, whether arising in
contract, tort, or otherwise, arising out of, connected with, related or
incidental to this agreement, the transactions contemplated hereby and/or the
relationships established among the parties hereunder.
14.14 Addresses and Notices. All notices, demands, or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given or
made when (a) delivered personally to the recipient, (b) telecopied to the
recipient (with hard copy sent to the recipient by reputable overnight courier
service (charges prepaid) that same day) if telecopied before 5:00 p.m. Chicago,
Illinois time on a business day, and otherwise on the next business day, or (c)
one business day after being sent to the recipient by reputable overnight
courier service (charges prepaid). Such notices, demands, and other
communications shall be sent to the address for such recipient set forth in the
LLC's books and records, or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party. Any notice to the Board
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or the LLC shall be deemed given if received by the Board at the principal
office of the LLC designated pursuant to Section 2.5.
14.15 Creditors. None of the provisions of this Agreement shall be
for the benefit of or enforceable by any creditors of the LLC or any of its
Affiliates, and no creditor who makes a loan to the LLC or any of its Affiliates
may have or acquire (except pursuant to the terms of a separate agreement
executed by the LLC in favor of such creditor) at any time as a result of making
the loan any direct or indirect interest in LLC Profits, Losses, Distributions,
capital, or property other than as a secured creditor.
14.16 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement, or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement,
or condition. Notwithstanding the other provisions of this Agreement, Section
18-305(a) of the Delaware Act shall not apply to the LLC and no Unitholder shall
have any rights thereunder.
14.17 Further Action. The parties shall execute and deliver all
documents, provide all information, and take or refrain from taking such actions
as may be necessary or appropriate to achieve the purposes of this Agreement.
14.18 Offset. Whenever the LLC is to pay any sum to any Unitholder
or any Affiliate or related person thereof, any amounts that such Unitholder or
such Affiliate or related person owes to the LLC may be deducted from that sum
before payment.
14.19 Entire Agreement. This Agreement, those documents expressly
referred to herein, the other documents of even date herewith, and the other
Transaction Documents embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements, or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
14.20 Delivery by Facsimile. This Agreement, the agreements referred
to herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute original forms thereof and deliver them to all
other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
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14.21 Survival. Sections 4.6, 6.1, 7.1 and 7.2 shall survive and
continue in full force in accordance with its terms notwithstanding any
termination of this Agreement or the dissolution of the LLC.
* * * * *
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IN WITNESS WHEREOF, THE UNDERSIGNED HAVE EXECUTED OR CAUSED TO BE
EXECUTED ON THEIR BEHALF THIS LIMITED LIABILITY COMPANY AGREEMENT AS OF THE DATE
FIRST WRITTEN ABOVE.
TRIAD HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxx
--------------------------------------
Name:Xxxxxx X. Xxxx
Its: Chief Executive Officer and Executive
Chairman
GS CAPITAL PARTNERS 2000, L.P.
By: GS Advisors 2000, L.L.C.
Its:General Partner
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name:Xxxxxx X. Xxxx
Its: Vice President
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P.
By: GS Employee Funds 2000 GP, L.L.C.
Its:General Partner
By: /s/ Xxxxxx X. Xxxx
--------------------
Name:Xxxxxx X. Xxxx
Its: Vice President
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.
By: GS Advisors 2000, L.L.C.
Its:General Partner
By: /s/ Xxxxxx X. Xxxx
-------------------
Name:Xxxxxx X. Xxxx
Its: Vice President
XXXXXXX XXXXX DIRECT INVESTMENT FUND 2000, L.P.
By: GS Employee Funds 2000 GP, L.L.C.
Its:General Partner
By: /s/ Xxxxxx X. Xxxx
------------------
Name:Xxxxxx X. Xxxx
Its: Vice President
GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILGUNGS
KG
By: Xxxxxxx Sachs Management GP GmbH
Its:General Partner
By: /s/ Xxxxxx X. Xxxx
-------------------
Name:Xxxxxx X. Xxxx
Its: Vice President
MTGLQ INVESTORS, L.P.
By: MLQ L.L.C.
Its:General Partner
By: /s/ Xxxxx X. Xxxxx
------------------
Name:Xxxxx X. Xxxxx
Its: Vice President
GTCR FUND VIII, L.P.
By: GTCR Partners VIII, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its:General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
Signature Page to Limited Liability Company Agreement of Triad Holdings, LLC
GTCR Fund VIII/B, L.P.
By: GTCR Partners VIII, L.P.
Its:General Partner
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its:General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
GTCR CO-INVEST II, L.P.
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
XXXXXX'X XXXX/FORD LTD.
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Ford Diamond Corporation, GP
of Hunter's/Xxxx Xxxx, Ltd.
Xxxx Xxxxxx - Vice President
Signature Page to Limited Liability Company Agreement of Triad Holdings, LLC
/s/ Xxxxxx X. Xxxx
-------------------
Xxxxxx X. Xxxx
/s/ J. Xxxxx Staff
-------------------
J. Xxxxx Staff
/s/ Xxxx X. Xxxx
-------------------
Xxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Signature Page to Limited Liability Company Agreement of Triad Holdings, LLC
