Exhibit 3.2
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GREYHOUND FUNDING LLC
Dated as of October 28, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . 1
Section 1.1 Capitalized Terms . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions. . . . . . . . . 12
ARTICLE II
FORMATION OF THE LIMITED LIABILITY COMPANY . . . . . . 13
Section 2.1 Formation; Filings . . . . . . . . . . . . . 13
Section 2.2 Name and Office . . . . . . . . . . . . . . . 13
Section 2.3 Business Purpose . . . . . . . . . . . . . . 13
Section 2.4 Term . . . . . . . . . . . . . . . . . . . . 14
Section 2.5 Qualification to Do Business . . . . . . . . 14
Section 2.6 Lack of Authority of Members . . . . . . . . 14
Section 2.7 Liability to Third Parties . . . . . . . . . 15
Section 2.8 No Personal Liability of Members,
Managers, Etc. . . . . . . . . . . . . . . . 15
Section 2.9 Separateness. . . . . . . . . . . . . . . . . 15
ARTICLE III
MANAGEMENT . . . . . . . . . . . . . 16
Section 3.1 Management by Managers . . . . . . . . . . . 16
Section 3.2 Delegation of Authority and Duties to
Chairman of the Managers . . . . . . . . . . . . . . 16
Section 3.3 Number and Qualifications . . . . . . . . . . 16
Section 3.4 Independent Manager . . . . . . . . . . . . . 17
Section 3.5 Term . . . . . . . . . . . . . . . . . . . . 18
Section 3.6 Vacancy . . . . . . . . . . . . . . . . . . . 18
Section 3.7 Removal . . . . . . . . . . . . . . . . . . . 18
Section 3.8 Resignation . . . . . . . . . . . . . . . . . 18
Section 3.9 Place of Meetings of Managers . . . . . . . . 18
Section 3.10 Meetings of Managers . . . . . . . . . . . . 19
Section 3.11 Quorum; Majority Vote . . . . . . . . . . . . 19
Section 3.12 Methods of Voting; Proxies . . . . . . . . . 19
Section 3.13 Order of Business . . . . . . . . . . . . . . 20
Section 3.14 Attendance and Waiver of Notice . . . . . . . 20
Section 3.15 Compensation of Managers . . . . . . . . . . 20
Section 3.16 Committees . . . . . . . . . . . . . . . . . 20
Section 3.17 Actions Without a Meeting . . . . . . . . . . 20
Section 3.18 Telephone and Similar Meetings . . . . . . . 21
Section 3.19 Presumption of Assent . . . . . . . . . . . . 21
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ARTICLE IV
OFFICERS . . . . . . . . . . . . . . 21
Section 4.1 Designation; Term; Qualifications . . . . . . 21
Section 4.2 Removal and Resignation . . . . . . . . . . . 21
Section 4.3 Vacancies . . . . . . . . . . . . . . . . . . 22
Section 4.4 Compensation . . . . . . . . . . . . . . . . 22
ARTICLE V
MEETINGS OF PREFERRED MEMBERS . . . . . . . . 22
Section 5.1 Meetings of Preferred Members . . . . . . . . 22
Section 5.2 Place of Meetings of Preferred Members . . . 22
Section 5.3 Notice of Meetings of Preferred Members . . . 22
Section 5.4 Record Date for Notice and Voting. . . . . . 23
Section 5.5 Quorum . . . . . . . . . . . . . . . . . . . 23
Section 5.6 List of Preferred Members Entitled to
Vote . . . . . . . . . . . . . . . . . . . . 24
Section 5.7 Methods of Voting; Proxies . . . . . . . . . 24
Section 5.8 Conduct of Meetings . . . . . . . . . . . . . 25
Section 5.9 Voting on Matters . . . . . . . . . . . . . . 25
Section 5.10 Registered Members . . . . . . . . . . . . . 25
Section 5.11 Actions Without a Meeting. . . . . . . . . 25
Section 5.12 Telephone and Similar Meetings . . . . . . . 25
ARTICLE VI
CONTRIBUTIONS TO CAPITAL . . . . . . . . . . 26
Section 6.1 Capital Contributions. . . . . . . . . . . 26
Section 6.2 Additional Capital Contributions . . . . . . 26
Section 6.3 Admission of Preferred Members. . . . . . . . 26
Section 6.4 Withdrawal or Reduction of Members'
Capital Contributions. . . . . . . . . . . . 27
Section 6.5 Capital Accounts . . . . . . . . . . . . . . 27
ARTICLE VII
ALLOCATIONS . . . . . . . . . . . . . 28
Section 7.1 Allocations. . . . . . . . . . . . . . . . . 28
Section 7.2 Limitation on Loss Allocation. . . . . . . . 30
Section 7.3 Special Allocations. . . . . . . . . . . . . 30
Section 7.4 Allocations with Respect to Transferred
Interests . . . . . . . . . . . . . . . . . . 31
Section 7.5 Allocations for Income Tax Purposes . . . . . 31
Section 7.6 Member's Share of Excess Nonrecourse
Liabilities . . . . . . . . . . . . . . . . . 31
Section 7.7 Withholding . . . . . . . . . . . . . . . . . 31
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ARTICLE VIII
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . 32
Section 8.1 Dividends . . . . . . . . . . . . . . . . . . 32
Section 8.2 Limitation upon Distributions. . . . . . . . 32
ARTICLE IX
SENIOR PREFERRED MEMBERSHIP INTERESTS . . . . . . 32
Section 9.1 Issuance of Series of Senior Preferred
Membership Interests. . . . . . . . . . . . . 32
Section 9.2 Senior Preferred Membership Interests. . . . 33
Section 9.3 Tax Treatment. . . . . . . . . . . . . . . . 40
Section 9.4 Conditions to Issuance of Senior
Preferred Membership Interests. . . . . . . . 40
ARTICLE X
JUNIOR PREFERRED MEMBERSHIP INTERESTS . . . . . . 41
Section 10.1 Issuance of Series of Junior Preferred
Membership Interests. . . . . . . . . . . . . 41
Section 10.2 Junior Preferred Membership Interests. . . . 42
Section 10.3 Tax Treatment. . . . . . . . . . . . . . . . 49
Section 10.4 Conditions to Issuance of Junior
Preferred Membership Interests. . . . . . . . 49
ARTICLE XI
TAXES; BOOKS; RECORDS; AND BANK ACCOUNTS . . . . . . 50
Section 11.1 Tax Returns . . . . . . . . . . . . . . . . . 50
Section 11.2 Tax Elections . . . . . . . . . . . . . . . . 50
Section 11.3 Tax Matters Partner . . . . . . . . . . . . . 51
Section 11.4 Maintenance of Books . . . . . . . . . . . . 51
Section 11.5 Reports. . . . . . . . . . . . . . . . . . . 51
Section 11.6 Bank and Investment Accounts. . . . . . . . . 51
Section 11.7 Distributions from Series Preferred
Member Distribution Accounts. . . . . . . . 52
ARTICLE XII
TRANSFER OF MEMBERSHIP INTERESTS . . . . . . . . 55
Section 12.1 Prohibition on Disposition of Common
Interest . . . . . . . . . . . . . . . . . . 55
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Section 12.2 Form of Preferred Membership
Certificates. . . . . . . . . . . . . . . . . 55
Section 12.3 Registration of Transfer and Exchange. . . . 55
Section 12.4 Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . 56
Section 12.5 Persons Deemed Preferred Members . . . . . . 57
Section 12.6 Interests in the Issuer May Not be Traded
on an Established Securities Market. . . . . 57
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND TERMINATION . . . . . . 58
Section 13.1 Dissolution. . . . . . . . . . . . . . . . . 58
Section 13.2 Liquidation and Termination . . . . . . . . . 59
Section 13.3 Deficit Capital Accounts . . . . . . . . . . 61
Section 13.4 Certificate of Cancellation . . . . . . . . . 61
ARTICLE XIV
VOTING AGREEMENTS . . . . . . . . . . . 61
Section 14.1 Managers; Number; Selection; Vacancies . . . 61
ARTICLE XV
MISCELLANEOUS PROVISIONS . . . . . . . . . . 61
Section 15.1 Amendments . . . . . . . . . . . . . . . . . 61
Section 15.2 Amendment of Certificate . . . . . . . . . . 61
Section 15.3 Notices . . . . . . . . . . . . . . . . . . . 62
Section 15.4 Entire Agreement . . . . . . . . . . . . . . 62
Section 15.5 Effect of Waiver or Consent . . . . . . . . . 62
Section 15.6 Governing Law; Severability . . . . . . . . . 62
Section 15.7 Further Assurances . . . . . . . . . . . . . 63
Section 15.8 Waiver of Certain Rights; No Bankruptcy
Petition . . . . . . . . . . . . . . . . . . 63
Section 15.9 Headings and Sections . . . . . . . . . . . . 63
Section 15.10 Binding Effect . . . . . . . . . . . . . . . 63
Section 15.11 Counterparts . . . . . . . . . . . . . . . . 63
Section 15.12 Conflicts of Interest . . . . . . . . . . . . 64
Section 15.13 Binding Agreement. . . . . . . . . . . . . . . 64
Section 15.14 Effectiveness. . . . . . . . . . . . . . . . . 64
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THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
of GREYHOUND FUNDING LLC (the "Issuer"), dated as of October 28, 1999
(this "Agreement"), is entered into by RAVEN FUNDING LLC, a Delaware
limited liability company, as the sole common member (the "Common
Member"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in Article I hereof.
WHEREAS, the Common Member formed a limited liability company
pursuant to the Delaware Limited Liability Company Act, Title 6, Chapter
18, Section 101 et seq. of the Delaware Code;
WHEREAS, the Common Member desires to amend and restate the
Limited Liability Company Agreement of the Issuer, dated as of June 30,
1999 (the "Existing Limited Liability Company Agreement"), in order to
(i) provide for the issuance of Senior Preferred Membership Interests in
the Issuer to Senior Preferred Members from time to time and Junior
Preferred Membership Interests in the Issuer to Junior Preferred Members
from time to time, (ii) set forth the respective rights and obligations
of the Senior Preferred Members, the Junior Preferred Members and the
Common Member and (iii) provide for the management of the Issuer and its
affairs and for the conduct of the business of the Issuer;
WHEREAS, Park Avenue Receivables Corporation ("PARCO") is the
sole existing preferred member of the Issuer and PARCO has consented to
the amendment and restatement of the Existing Limited Liability Company
Agreement effected hereby; and
WHEREAS, the Independent Manager has consented to the
amendment and restatement of the Existing Limited Liability Company
Agreement effected hereby;
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Common Member hereby agrees as follows and the
Independent Manager, Tony Wong, joins in the execution of this Agreement
and agrees to be bound by its terms:
ARTICLE I
DEFINITIONS
Section 1.1 Capitalized Terms. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Act" means the Delaware Limited Liability Company Act, as
amended, as in effect on the date hereof (currently Chapter 18 of Title
6, Sections 18-101 through 18-1109 of the Delaware Code) and as it may be
amended hereafter, from time to time.
"Action" means, with respect to any Series of Preferred
Membership Interests, the action with respect to such Series permitted
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to be taken by a majority of the Managers pursuant to Section 9.1 or
Section 10.1 of this Agreement in connection with the issuance of such
Series of Preferred Membership Interests, which action shall be in
writing. Each Action is hereby incorporated by reference and made a part
of this Agreement.
"Additional Dividends" means Dividends that shall be declared
and paid by the Issuer on any Dividend arrearage in respect of any Series
of Preferred Membership Interests at the Dividend Rate set forth in the
Action with respect to such Series, compounded monthly.
"Adjusted Capital Account Deficit" shall mean, with respect to
any Member, the deficit balance, if any, in such Member's Capital Account
as of the end of the applicable fiscal Year after (i) crediting thereto
any amounts which such Member is, or is deemed to be, obligated to
restore pursuant to Treasury Regulations Section 1.704-2(g)(1) and
Section 1.704-2(i)(5) and (ii) debiting such Capital Account by the
amount of the items described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of
Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"Administration Agreement" shall have the meaning set forth in
the Definitions List attached as Schedule 1 to the Base Indenture.
"Affiliate" means, with respect to any specified Person,
another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, "control"
means the power to direct the management and policies of a Person,
directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and "controlled" and "controlling" have
meanings correlative to the foregoing."Agreement" means this Amended and
Restated Limited Liability Company Agreement of the Issuer, as the same
may be amended from time to time in accordance with the provisions
hereof.
"Agreement" means this Amended and Restated Limited Liability
Company Agreement of the Issuer, as the same may be amended from time to
time in accordance with the provisions hereof.
"ARAC" means Avis Rent A Car, Inc., a Delaware corporation.
"ARC" means Avis Rent A Car System, Inc., a Delaware
corporation.
"Base Indenture" means the Base Indenture, dated as of June
30, 1999, between the Issuer and the Indenture Trustee, as amended on the
date hereof and as further amended, modified or supplemented from time to
time, exclusive of Indenture Supplements creating a new Series of
Investor Notes.
"Business Day" means any day other than a Saturday, Sunday or
other day on which banks are authorized or required by law to be closed
in New York City, New York.
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"Capital Account" means, with respect to any Member, the
account maintained for such Member in a manner which the Managers
determine is in accordance with Treasury Regulations Section 1.704-
l(b)(2)(iv) and Section 6.5 of this Agreement.
"Capital Contribution" means the Common Member Capital
Contribution or any Preferred Capital Contribution.
"Certificate of Formation" means the Certificate of Formation
of the Issuer filed with the Secretary of State of the State of Delaware
in accordance with the Act pursuant to Section 2.1.
"Chairman of the Managers" shall mean the Manager designated
as such pursuant to Section 13.1 or pursuant to a vote of the Managers.
"Closing Date" means the Initial Closing Date or any Series
Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, and any successor
statute of similar import, in each case as in effect from time to time.
References to sections of the Code also refer to any successor sections.
"Collection Account" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Common Member" means the Person executing this Agreement as
of the date of this Agreement as the common member of the Issuer.
"Common Member Capital Contribution" is defined in Section
6.1(a).
"Common Membership Interest" means the limited liability
company interest of the Common Member in the Issuer, including without
limitation, rights to distributions (liquidating or otherwise),
allocations, information, and to vote, consent or approve, if any, as set
forth herein.
"Contingent Obligation" as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (a)
with respect to any indebtedness, lease, dividend, letter of credit or
other obligation of another if the primary purpose or intent thereof by
the Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of another
will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof or (b)
under any letter of credit issued for the account of that Person or for
which that Person is otherwise liable for reimbursement thereof. Contin-
gent Obligation shall include (a) the direct or indirect guarantee,
endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another and (b) any
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liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (i) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or
otherwise), (ii) to maintain the solvency of any balance sheet item,
level of income or financial condition of another or (iii) to make
take-or-pay or similar payments if required regardless of non-performance
by any other party or parties to an agreement, if in the case of any
agreement described under subclause (i) or (ii) of this sentence the
primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported.
"Contractual Obligation" means, with respect to any Person,
any provision of any security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Dispose," "Disposing," or "Disposition" means a sale,
assignment, transfer, exchange, mortgage, pledge, grant of a security
interest, or other disposition or encumbrance (including, without
limitation, by operation of law), or the acts thereof.
"Dividend Payment Date" means, with respect to any Series of
Preferred Membership Interests, the 7th day of each month, or if such
date is not a Business Day, the next succeeding Business Day, commencing
on the date set forth in the Action with respect to such Series of
Preferred Membership Interests.
"Dividend Period" means, with respect to any Series of
Preferred Membership Interests, the period from and including each
Dividend Payment Date (or, in the case of the initial Dividend Period,
from and including the Series Closing Date with respect to such Series of
Preferred Membership Interests) to but excluding the next succeeding
Dividend Payment Date.
"Dividend Rate" means, with respect to any Series of Preferred
Membership Interests, the rate per annum for each Dividend Period at
which dividends accumulate on the Preferred Membership Interests of such
Series (or the formula on the basis of which such rate shall be
determined) as stated in the Action with respect to such Series of
Preferred Membership Interests.
"Dividends" means, with respect to any Series of Preferred
Membership Interests, the cumulative cash distributions from the Issuer
with respect to such Preferred Membership Interests, accruing from the
Series Closing Date with respect to such Series of Preferred Membership
Interests and payable on the Dividend Payment Dates with respect to such
Series of Preferred Membership Interests.
"FDIC" means the Federal Deposit Insurance Corporation.
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"Fiscal Period" means each period from and including a
Dividend Payment Date (or, in the case of the initial Fiscal Period, the
Initial Closing Date) to but excluding the next succeeding Dividend
Payment Date.
"Fiscal Year" means, unless the Managers shall at any time
determine otherwise pursuant to the requirements of the Code, for each
year, the period commencing on January 1 and ending on December 31,
except that the initial fiscal year of the Issuer shall commence on the
filing of a Certificate of Formation in the office of the Secretary of
State of the State of Delaware and shall end as required pursuant to the
Code.
"GAAP" means the generally accepted accounting principles
promulgated or adopted by the Financial Accounting Standards Board and
its predecessors and successors from time to time.
"Governmental Authority" means the United States of America,
any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Indebtedness", as applied to any Person, means, without
duplication, (a) all indebtedness for borrowed money, (b) that portion of
obligations with respect to any lease of any property (whether real,
personal or mixed) that is properly classified as a liability on a
balance sheet in conformity with GAAP, (c) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (d) any obligation owed for all or any
part of the deferred purchase price for property or services, which
purchase price is (i) due more than six months from the date of the
incurrence of the obligation in respect thereof or (ii) evidenced by a
note or similar written instrument, (e) all indebtedness secured by any
Lien on any property or asset owned by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person, and (f) all Contingent
Obligations of such Person in respect of any of the foregoing.
"Independent Manager" means, with respect to the Issuer, an
individual who is not and never was (i) a stockholder, member, partner,
director, officer, employee, affiliate, associate, creditor or
independent contractor of ARC, ARAC, VMS or any of their affiliates or
associates or (ii) any person owning directly or beneficially any
outstanding shares of common stock of ARC, ARAC, VMS or any of their
affiliates, or a stockholder, director, officer, employee, affiliate,
associate, creditor or independent contractor of such beneficial owner or
any of such beneficial owner's affiliates or associates, or (iii) a
member of the immediate family of any person described above.
"Indenture" means the Base Indenture, together with all
Indenture Supplements, as the same may be amended, modified or
supplemented from time to time.
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"Indenture Supplement" shall mean a supplement to the Base
Indenture complying (to the extent applicable) with the terms of Section
2.2 or Article 12 of the Base Indenture.
"Indenture Trustee" means the party named as such in the
Indenture until a successor replaces it in accordance with the applicable
provisions of the Indenture and thereafter means the successor serving
thereunder.
"Initial Closing Date" means June 30, 1999.
"Insolvency Event" means, as to any Person:
(a)(i) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of such Person in an
involuntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, which decree or order is not stayed, or any other similar
relief shall be granted under any applicable federal or state law,
(ii) an involuntary case is commenced against such Person under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect which remains undismissed, undischarged or
unbonded for a period of 60 days or (iii) such Person shall have a
decree or an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect;
(b) such Person shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to all or substantially all of
its property, or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against such
Person; or such Person shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations.
(c) With respect to any Member, this definition of
"Insolvency Event" is intended to and shall supersede and replace
the definition of "Bankruptcy" set forth in Section 18-101(1) and
18-304 of the Act.
"Interest" means the entire limited liability company interest
of a Member in the Issuer at any particular time, including, without
limitation, its interest in the capital, profits, losses and
distributions of the Issuer.
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"Investor Notes" means each Series of Investor Notes issued
and outstanding under the Indenture from time to time.
"Issuer" mean Greyhound Funding LLC, a Delaware limited
liability company.
"Issuer Assets" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Issuer General Account" is defined in Section 11.6(a).
"Junior Preferred Capital Contribution" is defined in Section
6.1(c).
"Junior Preferred Member" means a Person in whose name a
Junior Preferred Membership Certificate is registered in the Register, in
its capacity as a Member of the Issuer within the meaning of the Act.
"Junior Preferred Membership Certificate" means a certificate
substantially in the form attached to the Action relating thereto,
evidencing the Junior Preferred Membership Interest of a particular
Series held by a Junior Preferred Member.
"Junior Preferred Membership Interest" means the limited
liability company interest of a Junior Preferred Member of a particular
Series in the Issuer, including without limitation, the rights to
distributions (liquidating or otherwise), allocations, information, and
to vote, consent or approve, if any, set forth in Article X and in the
Action with respect to such Series. The Senior Preferred Membership
Interests, the Junior Preferred Membership Interests and the Common
Membership Interest shall constitute separate classes of limited
liability company interests.
"Legal Final Redemption Date" means, with respect to any
Series of Preferred Membership Interests, the date stated in the Action
with respect to such Series of Preferred Membership Interests as the
latest date on which such Series of Preferred Membership Interests is
expected to be redeemed in full.
"Lien" means, when used with respect to any Person, any
interest in any real or personal property, asset or other right held,
owned or being purchased or acquired by such Person which secures payment
or performance of any obligation, and shall include any mortgage, lien,
pledge, encumbrance, charge, retained security title of a conditional
vendor or lessor, or other security interest of any kind, whether arising
under a security agreement, mortgage, lease, deed of trust, chattel
mortgage, assignment, pledge, retention or security title, financing or
similar statement, or notice or arising as a matter of law, judicial
process or otherwise.
"Liquidation Preference Amount" means, with respect to any
Series of Preferred Membership Interests, the stated liquidation
preference of such Series of Preferred Membership Interests set forth in
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the Action with respect to such Series of Preferred Membership Interests,
plus all accumulated and unpaid Dividends, including any Additional
Dividends (whether or not earned or declared) on such Series of Preferred
Membership Interests to the date of payment of such Liquidation
Preference Amount.
"Manager" means any Person hereafter elected to act as a
manager of the Issuer as provided in this Agreement, but does not include
any Person who has ceased to be a manager of the Issuer."
Management Agreement" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Managing Agent" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Member" means the Common Member, any Junior Preferred Member
or any Senior Preferred Member.
"Membership Interest" means the Common Membership Interest or
any Preferred Membership Interest.
"Monthly Settlement Statement" shall have the meaning set
forth in the Definitions List attached as Schedule 1 to the Base
Indenture.
"Moody's" means Moody's Investors Service, Inc.
"Net Income" and "Net Loss", respectively, for any Fiscal
Period means the income and loss, respectively, of the Issuer for such
Fiscal Period as determined in accordance with the method of accounting
followed by the Issuer for federal income tax purposes; provided,
however, that any item specially allocated to a Member under Section 7.3
shall be excluded from the computation of Net Income and Net Loss.
"Notice of Redemption" is defined in Section 9.2(d).
"Origination Trust" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Origination Trust Documents" shall have the meaning set forth
in the Definitions List attached as Schedule 1 to the Base Indenture.
"Permitted Lien" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Person" means any natural person, corporation, business
trust, joint venture, association, company, partnership, joint stock
company, limited liability company, trust, unincorporated organization or
Governmental Authority.
"Preferred Capital Contribution" means a Junior Preferred
Capital Contribution or a Senior Preferred Capital Contribution.
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"Preferred Member" means a Junior Preferred Member or a Senior
Preferred Member.
"Preferred Membership Certificate" means a Junior Preferred
Membership Certificate or a Senior Preferred Membership Certificate.
"Preferred Membership Interest" means a Junior Preferred
Membership Interest or a Senior Preferred Membership Interest.
"Principal Payment Amount" is defined with respect to any
Series of Preferred Membership Interests in the Indenture Supplement
creating the Related Series of Investor Notes with respect to such Series
of Preferred Membership Interests.
"Principal Terms" means, with respect to any Series of Senior
Preferred Membership Interests or any Series of Junior Preferred
Membership Interests, the terms listed in Section 9.4(a)(i) or Section
10.4(a)(i), as the case may be, set forth in the Action with respect to
such Series.
"Purchase Agreement" means, with respect to any Series of
Preferred Membership Interests, an agreement between the Issuer and the
purchaser or purchasers of Preferred Membership Interests of such Series
pursuant to which such Preferred Membership Interests are sold.
"Qualified Institution" means a depository institution
organized under the laws of the United States of America or any State
thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America or any State
thereof and subject to supervision and examination by federal or state
banking authorities which at all times has the Required Rating and, in
the case of any such institution organized under the laws of the United
States of America, whose deposits are insured by the FDIC.
"Qualified Institutional Buyer" is defined in Rule 144A
promulgated under the Securities Act.
"Qualified Trust Institution" means an institution organized
under the laws of the United States of America or any State thereof or
incorporated under the laws of a foreign jurisdiction with a branch or
agency located in the United States of America or any State thereof and
subject to supervision and examination by federal or state banking
authorities which at all times (i) is authorized under such laws to act
as a trustee or in any other fiduciary capacity, (ii) has not less than
one billion dollars in assets under fiduciary management, and (iii) has a
long term deposits rating of not less than "BBB-" by Standard & Poor's
and Baa3 by Moody's.
"Rating Agency" means, with respect to each Series of
Preferred Membership Interests, the rating agency or agencies, if any,
specified in the Action with respect to such Series of Preferred
Membership Interests.
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"Rating Agency Condition" means the notification in writing by
the Rating Agencies with respect to a particular Series of Preferred
Membership Interests that a proposed action will not result in a
reduction or withdrawal by each such Rating Agency of the rating of such
Series of Preferred Membership Interests or of the rating of the Related
Series of Investor Notes with respect to such Series.
"Record Date" means, with respect to any Series of Preferred
Membership Interests and any Dividend Payment Date, the immediately
preceding Business Day.
"Register" means the register maintained pursuant to Section
11.3, providing for the registration of the Preferred Membership
Interests and transfers and exchanges thereof.
"Related Series of Investor Notes" means, with respect to any
Series of Preferred Membership Interests, the Series of Investor Notes
set forth in the Action with respect to such Series of Preferred
Membership Interests as the "Related Series of Investor Notes."
"Related Series of Junior Preferred Membership Interests"
means, with respect to (a) any Series of Senior Preferred Membership
Interests, any Series of Junior Preferred Membership Interests having the
same Series of Investor Notes as its Related Series of Investor Notes as
such Series of Senior Preferred Membership Interests and (b) any Series
of Junior Preferred Membership Interests, any Series of Junior Preferred
Membership Interests having the same Series of Investor Notes as its
Related Series of Investor Notes as such Series of Junior Preferred
Membership Interests.
"Related Series of Senior Preferred Membership Interests"
means, with respect to (a) any Series of Junior Preferred Membership
Interests, the Series of Senior Preferred Membership Interests set forth
in the Action with respect to such Series of Junior Preferred Membership
Interests as the "Related Series of Senior Preferred Membership
Interests" and (b) any Series of Senior Preferred Membership Interests,
any Series of Senior Preferred Membership Interests having the same
Series of Investor Notes as its Related Series of Investor Notes as such
Series of Senior Preferred Membership Interests.
"Required Rating" means a short-term certificate of deposit
rating from Moody's of P-1 and from Standard & Poor's of "A-1" and a
long-term unsecured debt rating of not less than Aa3 by Moody's and "AA-"
by Standard & Poor's.
"S&P" or "Standard & Poor's" means Standard & Poor's Ratings
Service, a division of The McGraw-Hill Companies, Inc.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
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"Senior Preferred Capital Contribution" is defined in Section
6.1(b).
"Senior Preferred Member" means a Person in whose name a
Senior Preferred Membership Certificate is registered in the Register, in
its capacity as a Member of the Issuer within the meaning of the Act.
"Senior Preferred Membership Certificate" means a certificate
substantially in the form attached hereto as Exhibit A, evidencing the
Senior Preferred Membership Interest of a particular Series held by a
Senior Preferred Member.
"Senior Preferred Membership Interest" means the limited
liability company interest of a Senior Preferred Member of a particular
Series in the Issuer, including without limitation, the rights to
distributions (liquidating or otherwise), allocations, information, and
to vote, consent or approve, if any, set forth in Article IX and in the
Action with respect to such Series. The Senior Preferred Membership
Interests, the Junior Preferred Membership Interests and the Common
Membership Interest shall constitute separate classes of limited
liability company interests.
"Series" means any Series of Senior Preferred Membership
Interests issued in accordance with Section 9.1 or any Series of Junior
Preferred Membership Interests issued in accordance with Section 10.1.
"Series Closing Date" means, with respect to any Series of
Preferred Membership Interests, the date of issuance of such Series of
Preferred Membership Interests pursuant to Section 9.1 or 10.1, as the
case may be.
"Series of Investor Notes" means each Series of Investor Notes
issued and authenticated pursuant to the Base Indenture and a related
Indenture Supplement.
"Series Preferred Member Distribution Account" is defined in
Section 11.6(b).
"Series Note Termination Date" is defined with respect to each
Series of Preferred Membership Interests in the Indenture Supplement
creating the Related Series of Investor Notes with respect to such Series
of Preferred Membership Interests.
"Transaction Documents" shall have the meaning set forth in
the Definitions List attached as Schedule 1 to the Base Indenture.
"Transfer Agent" is defined in Section 12.3(a).
"Transfer Agreement" shall have the meaning set forth in the
Definitions List attached as Schedule 1 to the Base Indenture.
"Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References herein
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to specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"U.S. Person" means any Person that would be considered a
"United States person" under Section 7701(a)(30) of the Code.
"VMS" means PHH Vehicle Management Services LLC, a Delaware
limited liability company.
Section 1.2 Other Definitional Provisions.
(a) All terms in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
documents made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other
document, and accounting terms partly defined in this Agreement or in any
such certificate or other document to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in
this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in
any such certificate or other document shall control.
(c) The words "hereof", "herein", "hereunder", and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement; Section
references contained in this Agreement are references to Sections in this
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and
to the masculine as well as to the feminine and neuter genders of such
terms.
(e) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
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ARTICLE II
FORMATION OF THE LIMITED LIABILITY COMPANY
Section 2.1 Formation; Filings. The Common Member formed
the Issuer and was admitted as a Member of the Issuer pursuant to the Act
and the Existing Limited Liability Company Agreement. Pursuant to the
Act and in accordance with the further terms and provisions hereof, the
Common Member hereby agrees to continue the Issuer as a limited liability
company. Joseph Weikel, as an authorized person within the meaning of
the Act, has executed and filed a Certificate of Formation of the Issuer,
and the Common Member is designated an authorized person within the
meaning of the Act and shall execute or cause to be executed from time to
time all other instruments, certificates, notices and documents, and
shall do or cause to be done all such filing, recording, publishing and
other acts, in each case, as may be necessary or appropriate from time to
time to comply with all applicable requirements for the formation and/or
operation and, when appropriate, termination of a limited liability
company in the State of Delaware and all other jurisdictions where the
Issuer shall desire to conduct its business.
Section 2.2 Name and Office.
(a) The name of the Issuer shall be "Greyhound Funding LLC".
All business of the Issuer shall be conducted in such name and all
Contractual Obligations, property and other assets of the Issuer shall be
held in that name and no Member shall have any ownership interests in
such Contractual Obligations, property or other assets in its individual
name.
(b) The address of the registered office of the Issuer in the
State of Delaware is the Corporation Trust Center, 1209 Orange Street in
the city of Wilmington, County of New Castle, 19801. The name of its
registered agent at that address is The Corporation Trust Company.
(c) The Issuer may also have offices at such other places
both within and without the State of Delaware as the Managers may from
time to time determine.
Section 2.3 Business Purpose. The nature of the business
or purpose to be conducted or promoted by the Issuer is to engage
exclusively in the following business and financial activities:
(i) to acquire the Issuer Assets and to manage and hold the
Issuer Assets;
(ii) to issue from time to time multiple Series of Preferred
Membership Interests and to sell, transfer, exchange or redeem such
Series of Preferred Membership Interests;
(iii) to issue and sell from time to time multiple Series
of Investor Notes under the Indenture, the proceeds of which,
together with the proceeds of the Preferred Membership Interests,
shall be used to acquire the Issuer Assets, to repay the Investor
Notes or to make any other payments contemplated by the Transaction
Documents;
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(iv) to make payments or distributions in respect of the
Membership Interests and the Investor Notes, to make deposits to
and withdrawals from the bank accounts of the Issuer established
hereunder and under the Indenture and to pay the organizational,
start-up and transactional expenses of the Issuer;
(v) to assign, grant, transfer, pledge, mortgage and convey
the Issuer Assets pursuant to the Indenture and distribute to the
Members any portion of the Issuer Assets released from the Lien of,
and remitted to, the Issuer pursuant to the Indenture;
(vi) to negotiate, authorize, execute, deliver, assume the
obligations under, and perform, the Transaction Documents and any
other agreement or instrument or document relating to the
activities set forth in clauses (i) through (v) above, including
but not limited to (A) agreements with third-party credit
enhancers, (B) agreements with holders of Preferred Membership
Interests or Investor Notes, (C) agreements pursuant to which the
Issuer makes limited investments in membership interests in
financing sources and (D) interest rate swap agreements relating to
any Series of Investor Notes, provided, that, in each case, the
Issuer shall not incur any indebtedness or other liability pursuant
to any such other agreement or instrument or document except for
such indebtedness or liability that by its terms provides that the
holder thereof may not cause the filing of a petition in bankruptcy
or take any similar action against the Issuer until one year and
one day after every other indebtedness or liability of the Issuer
represented by any Series of Investor Notes and amounts owed under
the Indenture to third-party credit enhancers with respect to such
Investor Notes is paid in full; and
(vii) to engage in any activity and to exercise any powers
permitted to limited liability companies under the laws of the
State of Delaware that are related or incidental to the foregoing
and necessary, convenient or advisable to accomplish the foregoing.
Section 2.4 Term. The term of the Issuer commenced on the
date of the filing of a Certificate of Formation in the office of the
Secretary of State of the State of Delaware and shall continue until the
Issuer is dissolved and liquidated in accordance with Section 13.1. The
existence of the Issuer as a separate legal entity shall continue until
the cancellation of its Certificate of Formation as provided in the Act.
Section 2.5 Qualification to Do Business. The Managers
shall cause the Issuer to become qualified, formed or registered under
the applicable qualification, fictitious name or similar laws of any
jurisdiction in which the Issuer transacts business.
Section 2.6 Lack of Authority of Members. No Member (other
than a Manager or an officer of the Issuer in his capacity as such) shall
have the authority or power to act for or on behalf of the Issuer, to do
any act that would be binding on the Issuer, or to incur any
expenditures, debts, liabilities or obligations on behalf of the Issuer.
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Section 2.7 Liability to Third Parties. Except as
otherwise expressly provided in the Act, no Member or Manager shall be
liable for the debts, obligations or liabilities of the Issuer (whether
arising in contract, tort or otherwise), including without limitation
under a judgment, decree or order of a court, by reason of being a member
or acting as a manager of the Issuer.
Section 2.8 No Personal Liability of Members, Managers,
Etc. Except as otherwise expressly provided by the Act, no Preferred
Member of the Issuer shall be subject in such capacity to any personal
liability whatsoever to any Person in connection with the assets or the
acts, obligations or affairs of the Issuer. No Manager or officer of the
Issuer shall be subject in such capacity to any personal liability
whatsoever to the Issuer or its Members in connection with the assets or
the affairs of the Issuer, save only liability to the Issuer or its
Members arising from bad faith, willful misfeasance, gross negligence or
reckless disregard for his duty to such Person.
Section 2.9 Separateness.
(a) The funds and other assets of the Issuer shall not be
commingled with those of any other entity.
(b) The Issuer shall not hold itself out as being liable for
the debts of any other entity.
(c) The Issuer shall not form, or cause to be formed, any
subsidiaries.
(d) The Issuer shall act solely in its limited liability
company name and through its duly authorized officers or agents in the
conduct of its business, and shall conduct its business so as not to
mislead others as to the identity of the entity or assets with which they
are concerned.
(e) The Issuer shall maintain separate records and books of
account and shall not commingle its records and books of account with the
records and books of account of any other entity or any of its Members.
(f) All limited liability company actions of the Issuer shall
be duly authorized in accordance with this Agreement.
(g) The Issuer shall at all times ensure that its
capitalization is adequate in light of its business and purpose.
(h) No Member or Manager shall guaranty, become liable on or
hold itself out as being liable for the debts of the Issuer.
The failure of the Issuer or any Member or Manager on behalf of the
Issuer to comply with any of the foregoing covenants or any other
covenant in this Agreement shall not affect the status of the Issuer as a
separate legal entity or the limited liability of the Members and the
Manager.
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Section 2.10 Authorization. The Issuer, by or through any
Manager or officer of the Issuer on behalf of the Issuer, may enter into
and perform each of the Transaction Documents, any Purchase Agreement
with respect to any Series of Preferred Membership Interests and all
documents, agreements, certificates or financing statements contemplated
thereby or related thereto, all without further act, vote or approval of
any Manager, Member or any other Person notwithstanding any other
provision of this Agreement, the Act or applicable law, rule or
regulation. The foregoing authorization shall not be deemed a
restriction on the powers of the Managers or officers of the Issuer to
enter into other agreements on behalf of the Issuer.
ARTICLE III
MANAGEMENT
Section 3.1 Management by Managers. The powers of the
Issuer shall be exercised by or under the authority of, and the business
and affairs of the Issuer shall be managed under the direction of, the
Managers.
Section 3.2 Delegation of Authority and Duties to Chairman
of the Managers. Except (x) for situations in which the approval of the
Members is expressly required by this Agreement or by nonwaivable
provisions of applicable law, (y) for decisions which pursuant to the
terms of this Agreement must be approved by a majority or other specified
vote of the Managers or (z) during any period that the Preferred Members
are entitled to elect a majority of the Managers as provided in Sections
9.2(f) and 10.2(f), (i) the powers of the Issuer shall be, and hereby
are, delegated to and exercised by or under the authority of, and the
business and affairs of the Issuer shall be managed under the direction
of, the Chairman of the Managers designated in Section 14.1 of this
Agreement or by vote of the Managers as the Chairman of the Managers may
determine in its sole discretion, and (ii) the Chairman of the Managers
may make all decisions and take all actions for the Issuer not otherwise
provided in this Agreement. During any period that the Preferred Members
are entitled to elect a majority of the Managers as provided in Sections
9.2(f) and 10.2(f), a majority of the Managers shall make all decisions
and take all actions for the Issuer not otherwise provided for in this
Agreement.
Section 3.3 Number and Qualifications. Except for such
times as the Preferred Members shall be entitled to elect a majority of
the Managers as provided in Sections 9.2(f) and 10.2(f), the number of
Managers of the Issuer shall be three, and the Common Member shall be
entitled to elect two Managers and the Preferred Members shall be
entitled to elect one Manager in accordance with the procedures contained
in Article V. At any time when the Preferred Members become entitled to
elect a majority of the Managers pursuant to Sections 9.2(f) and 10.2(f),
the number of Managers shall automatically be increased to five in order
that the Preferred Members shall be able to elect a majority of the
Managers and the maximum number of Managers set forth herein shall
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automatically be increased to five. Upon termination of the right of the
Preferred Members to elect a majority of the Managers, the number of
Managers set forth herein shall automatically revert to three and all but
one of the Managers elected by the Preferred Members shall cease to be
Managers. Managers need not be Members or residents of the State of
Delaware. Each Manager is a "manager" of the Issuer within the meaning
of the Act. Each Person elected as a Manager shall execute a Manager
Agreement in the form attached hereto as Exhibit B.
Section 3.4 Independent Manager.
(a) The Issuer shall have at all times at least one
individual who is an Independent Manager. If any Independent Manager
resigns, dies or becomes incapacitated, or such position is otherwise
vacant, no action requiring the unanimous affirmative vote of the
Managers shall be taken until a successor Independent Manager is elected
and qualified and approves such action.
(b) Notwithstanding any other provision of this Agreement and
any provision of law that otherwise so empowers the Issuer, none of the
Issuer nor any Member, Manager, officer of the Issuer or other Person on
behalf of the Issuer, shall, without the prior unanimous consent of the
Managers, including the Independent Manager, and without obtaining the
consent required by Sections 9.2(f) and 10.2(f), do any of the following:
(i) engage in any business or activity other than those set
forth in Article II hereof;
(ii) incur any Indebtedness, other than the Investor Notes as
set forth in Article II hereof, or assume or guaranty any
Indebtedness of any other entity;
(iii) create, incur or suffer to exist, or agree to
create, incur or suffer to exist, or consent to cause or permit in
the future the creation, incurrence or existence of any Lien of any
kind on the Issuer Assets other than Permitted Liens;
(iv) to the fullest extent permitted by law, dissolve or
liquidate, in whole or in part;
(v) consolidate or merge with or into any other entity or
convey or transfer substantially all of its properties and assets
substantially as an entirety to any entity;
(vi) institute proceedings to be adjudicated bankrupt or
insolvent, or consent to the institution of a bankruptcy or
insolvency proceeding or case against it, or file a petition
seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Issuer or a
substantial part of its property, or make any assignment for the
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benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due; or
(vii) amend this Agreement or take action in furtherance
of any such action.
With regard to any action contemplated by the preceding sentence, the
Independent Manager will, to the fullest extent permitted by law, owe its
primary fiduciary duty to the Issuer (including the creditors of the
Issuer and the Preferred Members). The Members shall be deemed to have
consented to the foregoing by virtue of the Members' purchase of their
Membership Interests, no further act or deed of the Members being
required to evidence such consent.
Section 3.5 Term. Each Manager shall hold office until his
successor shall be elected and qualified, or until his earlier death,
resignation or removal as provided in this Agreement.
Section 3.6 Vacancy. Subject to Section 14.1 of this
Agreement, any vacancy occurring in the Managers other than by reason of
an increase in the number of Managers pursuant to Section 3.3 may be
filled (i) by the Common Member, in the case of a position vacated by a
Manager elected by the Common Member, or (ii) by election at any meeting
of the Preferred Members called for that purpose, in a case of a position
vacated by a Manager elected by the Preferred Members. A Manager elected
to fill a vacancy other than by reason of an increase in the number of
Managers shall be elected for the unexpired term of its predecessor in
office.
Section 3.7 Removal. Subject to Section 14.1 of this
Agreement, the Common Member may remove any Manager elected by the Common
Member at any time other than the Independent Manager, with or without
cause, and the Preferred Members may remove any Manager elected by the
Preferred Members at a meeting of the Preferred Members at which a quorum
of Preferred Members is present called expressly for such purpose, by the
affirmative vote of Preferred Members holding Preferred Membership
Interests of more than 50% of the aggregate stated liquidation preference
of all the Preferred Membership Interests then outstanding, voting as a
single class, represented in person, by telephone or by proxy at such
meeting.
Section 3.8 Resignation. Any Manager may resign at any
time. Such resignation shall be made in writing and shall take effect at
the time specified therein or, if no time is specified therein, at the
time of its receipt by the remaining Managers; provided, that the
resignation of the Independent Manager shall not be effective until a
replacement Independent Manager has been appointed. The acceptance of a
resignation shall not be necessary to make it effective, unless so
expressly provided in the resignation.
Section 3.9 Place of Meetings of Managers. All meetings of
the Managers may be held either within or without the State of Delaware
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at such place or places as shall be determined from time to time by
resolution of the Managers.
Section 3.10 Meetings of Managers. Meetings of the
Managers may be held when called by the Chairman of the Managers or by a
majority of the Managers. The Manager or Managers calling any meeting
shall cause notice to be given of such meeting, including therein the
time, date and place of such meeting, to each Manager at least two
Business Days before such meeting. The business to be transacted at, or
the purpose of, any meeting of the Managers shall be specified in the
notice or waiver of notice of any such meeting. If fewer than all the
Managers are present in person, by telephone or by proxy, business
transacted at any such meeting shall be confined to the business or
purposes specifically stated in the notice or waiver of notice of such
meeting.
Section 3.11 Quorum; Majority Vote. At all meetings of the
Managers, the presence in person, by telephone or by proxy of a majority
of the Managers shall be necessary and sufficient to constitute a quorum
for the transaction of business unless a greater number is required by
this Agreement or by law. The act of a majority of the Managers present
in person, by telephone or by proxy at a meeting at which a quorum is
present in person, by telephone or by proxy shall be the act of the
Managers, except as otherwise provided by law, the Certificate of
Formation or this Agreement. If a quorum shall not be present in person,
by telephone or by proxy at any meeting of the Managers, the Managers
present in person, by telephone or by proxy at the meeting may adjourn
the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present in person, by telephone or
by proxy.
Section 3.12 Methods of Voting; Proxies. A Manager may vote
either in person, by telephone or by proxy executed in writing by the
Manager; provided, however, that the Person designated to act as proxy
shall be a Manager; provided further that the Person designated to act as
proxy for an Independent Manager must be an Independent Manager. A
telegram, telex, cablegram or similar transmission by the Manager, or a
photographic, photostatic, facsimile or similar reproduction of a writing
executed by the Manager shall be treated as an execution in writing for
purposes of this Section 3.12. Proxies for use at any meeting of Managers
or in connection with the taking of any action by written consent shall
be filed with the Chairman of the Managers, 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 Chairman of the Managers, who shall decide
all questions touching upon the qualifications of voters, the validity of
the proxies, and the acceptance or rejection of votes. No proxy shall be
valid after 30 calendar days 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 is irrevocable and the
proxy is coupled with an interest. Should a proxy designate two or more
Managers to act as proxies, unless that instrument shall provide to the
contrary, a majority of such Managers present in person or by telephone
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at any meeting at which their powers thereunder may be exercised shall
have and may exercise all the powers of voting or giving consents thereby
conferred, or if only one such Manager be present, then such powers may
be exercised by that one Manager; or, if an even number of such Managers
attend in person or by telephone and a majority do not agree on any
particular issue, the Chairman of the Managers shall not be required to
recognize such proxy with respect to such issue if such proxy does not
specify how the votes that are the subject of such proxy are to be voted
with respect to such issue.
Section 3.13 Order of Business. At any meeting of the
Managers, business shall be transacted in the order as the Chairman of
the Managers may determine from time to time. The secretary of the
meeting shall prepare minutes of the meeting and such minutes shall be
placed in the minute book of the Issuer.
Section 3.14 Attendance and Waiver of Notice. Attendance of
a Manager at any 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.
Section 3.15 Compensation of Managers. Managers may receive
any stated salary for their services and expenses of attendance, if any,
may be allowed for attendance at each meeting of the Managers. Nothing
contained in this Agreement shall be construed to preclude any Manager
from serving the Issuer in any other capacity and receiving compensation
for such service.
Section 3.16 Committees. The Managers may, by resolution,
designate (i) from among the Managers one or more committees, each of
which shall be comprised of at least one Manager, and (ii) one or more of
the Managers as alternate members of any committee, who may, subject to
any limitations imposed by the Managers, replace absent or disqualified
Managers at any meeting of that committee. Such committee shall have and
may exercise all of the authority of the Managers, subject to the
limitations set forth in the Act.
Section 3.17 Actions Without a Meeting. Any action required
or permitted to be taken at a meeting of the Managers or any committee
thereof may be taken without a meeting, without prior notice, and without
a vote, if a consent in writing, setting forth the action so taken, is
signed by the Managers or members of the committee, as the case may be,
having not fewer than the minimum number of votes that would be necessary
to take the action at a meeting at which all Managers or committee
members, as the case may be, entitled to vote on the action were present
and voted. Such consent shall have the same force and effect, as of the
date stated therein, as a vote of such Managers or members of the
committee, as the case may be, and may be stated as such in any document
or instrument filed with the Secretary of State of the State of Delaware
or in any certificate or other document delivered to any person or
entity. The signed consent shall be placed in the minute book of the
Issuer.
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Section 3.18 Telephone and Similar Meetings. The Managers,
or members of any committee thereof, may participate in and hold meetings
by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each
other. Such participation in any such meeting shall constitute presence
in person at such meeting, except where a Person participates in such
meeting for the express purpose of objecting to the transaction of any
business on the ground that such meeting is not lawfully called or
convened.
Section 3.19 Presumption of Assent. A Manager, or any
member of a committee thereof, who is present in person, by telephone or
by proxy at a meeting of the Managers or a committee thereof at which
action on any matter is taken shall be presumed to have assented to the
action unless his dissent is entered in the minutes of the meeting or
unless he files his written dissent to such action with the Person acting
as secretary of the meeting before the adjournment thereof or forwards
any dissent by certified or registered mail to the Issuer immediately
after the adjournment of the meeting, provided, however, that the
affirmative vote of the Independent Manager shall be required for the
purposes set forth in Section 3.4. Such right to dissent shall not apply
to a Manager or committee member who voted in favor of such action.
ARTICLE IV
OFFICERS
Section 4.1 Designation; Term; Qualifications. The
Chairman of the Managers may, from time to time, designate one or more
Persons to be officers of the Issuer. Any officer so designated shall
have such authority and perform such duties as the Chairman of the
Managers may, from time to time, delegate to them. The Chairman of the
Managers may assign titles to particular officers, and, unless the
Chairman of the Managers decides otherwise, 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
Chairman of the Managers pursuant to this Section 4.1, or (ii) any
delegation of authority and duties made to the Chairman of the Managers
pursuant to Section 3.2. Each officer shall hold office for the term for
which such officer is designated and until its successor shall be duly
designated and shall qualify or until its death, resignation or removal
as provided in this Agreement. Any Person may hold any number of offices.
No officer need be a Manager, a Member, a Delaware resident, or a United
States citizen. Designation of a Person as an officer of the Issuer shall
not of itself create any contract rights.
Section 4.2 Removal and Resignation. Any officer of the
Issuer may be removed as such, with or without cause, by the Chairman of
the Managers whenever in his judgment the best interests of the Issuer
will be served thereby; provided, however, that such removal shall be
without prejudice to the contract rights, if any, of the Person so
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removed. Any officer of the Issuer may resign as such at any time upon
written notice to the Issuer. Such resignation shall be made in writing
and shall take effect at the time specified therein or, if no time is
specified therein, at the time of its receipt by the Chairman of the
Managers. The acceptance of a resignation shall not be necessary to make
it effective, unless expressly so provided in the resignation.
Section 4.3 Vacancies. Any vacancy occurring in any office
of the Issuer may be filled by the Chairman of the Managers.
Section 4.4 Compensation. The compensation, if any, of the
officers of the Issuer shall be fixed from time to time by the Chairman
of the Managers; provided, however, that such compensation is reasonably
comparable to that of officers having similar responsibilities in
comparable companies in similar lines of business; and provided further
that the Chairman of the Managers may delegate to one or more Managers
who are officers of the Issuer the authority to fix such compensation.
ARTICLE V
MEETINGS OF PREFERRED MEMBERS
Section 5.1 Meetings of Preferred Members. A meeting of
the Preferred Members may be called at any time by any Manager or by
Preferred Members holding Preferred Member Interests of more than 50% of
the aggregate stated liquidation preference of all of the Preferred
Membership Interests then outstanding. The date, time and place of the
meeting shall be designated by the Person(s) calling such special meeting
and shall be stated in the notice of such meeting or in a duly executed
waiver of notice of such meeting. If fewer than all holders of Preferred
Membership Interests are present in person, by telephone or by proxy,
business transacted at any such meeting shall be confined to the business
or purposes specifically stated in the notice or waiver of notice of such
meeting.
Section 5.2 Place of Meetings of Preferred Members. All
meetings of the Preferred Members shall be held at the location
designated for the meeting in the manner provided in Section 5.1.
Section 5.3 Notice of Meetings of Preferred Members.
Except as otherwise provided by law, written or printed notice stating
the place, day and hour of each meeting of the Preferred Members, and the
purpose or purposes for which the meeting is called, shall be delivered
not less than five Business Days nor more than 30 calendar days before
the date of the meeting, either personally or by mail, by or at the
direction of the Managers or Preferred Members calling the meeting, to
each Preferred Member of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, postage prepaid, addressed to the Preferred Member at
its address as it appears on the Register.
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Section 5.4 Record Date for Notice and Voting.
(a) Matters Other than Consents to Action. For the purpose
of determining the Preferred Members entitled to notice of, or to vote
at, any meeting of the Preferred Members or any adjournment thereof, or
entitled to receive a distribution, or in order to make a determination
of the Preferred Members for any other proper purpose (other than
determining the Preferred Members entitled to consent to action by the
Preferred Members proposed to be taken without a meeting of the Preferred
Members), the Managers may provide that the Register shall be closed for
a stated period but not to exceed, in any event, 30 calendar days. If the
Register is closed for the purpose of determining the Preferred Members
entitled to notice of, or to vote at, a meeting of the Preferred Members,
the records shall be closed for at least ten Business Days immediately
preceding the meeting. In lieu of closing the Register, the Managers may
fix in advance a date as the record date for any such determination of
the Preferred Members, such date in any case to be not more than 30
calendar days and not less than ten Business Days prior to the date on
which the particular action requiring such determination of the Preferred
Members is to be taken. If the Register is not closed and no record date
is fixed for the determination of the Preferred Members entitled to
notice of, or to vote at, a meeting of the Preferred Members, the date on
which the notice of the meeting is mailed shall be the record date for
such determination of the Preferred Members. When a determination of the
Preferred Members entitled to vote at any meeting of the Preferred
Members has been made as provided in this Section 5.4(a), such
determination shall apply to any adjournment thereof except where the
determination has been made through the closing of the Register and the
stated period of closing has expired.
(b) Consents to Action. Unless a record date has previously
been fixed or determined pursuant to this Section 5.4, whenever action by
the Preferred Members is proposed to be taken by consent in writing
without a meeting of the Preferred Members, the Managers may fix a record
date for the purpose of determining the Preferred Members entitled to
consent to that action, which record date may not precede, and may not be
more than ten calendar days after, the date upon which the resolution
fixing the record date has been adopted by the Managers. If no record
date has been fixed by the Managers and the prior action of the Managers
is not required by applicable law, the record date for determining the
Preferred Members entitled to consent to action in writing without a
meeting will be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the Issuer
in the manner provided in Section 5.11(a) of this Agreement. If no record
date has been fixed by the Managers and prior action of the Managers is
required by applicable law, the record date for determining the Preferred
Members entitled to consent to action in writing without a meeting shall
be at the close of business on the date on which the Managers adopt a
resolution taking such prior action.
Section 5.5 Quorum. A quorum shall be present at any
meeting of the Preferred Members if Preferred Members holding Preferred
Membership Interests of more than 50% of the aggregate stated liquidation
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preference of all of the Preferred Membership Interests then outstanding
are represented at the meeting in person or by proxy, except as otherwise
provided by law or the Certificate of Formation. Once a quorum is present
at the meeting of the Preferred Members, the Preferred Members
represented in person or by proxy and entitled to vote at the meeting may
conduct such business as may be properly brought before the meeting until
it is adjourned, and the subsequent withdrawal from the meeting of any
Preferred Member prior to adjournment or the refusal of any Preferred
Member to vote shall not affect the presence of a quorum at the meeting.
If, however, such quorum shall not be present at any meeting of the
Preferred Members, the Preferred Members represented in person or by
proxy and entitled to vote at such meeting shall have the power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the holders of the requisite amount of
Preferred Membership Interests shall be present or represented.
Section 5.6 List of Preferred Members Entitled to Vote.
The Managers shall make, at least ten Business Days before each meeting
of Preferred Members, a complete list of the Preferred Members entitled
to vote at such meeting, or any adjournment of such meeting, arranged in
alphabetical order, with the address of and the Preferred Membership
Interests held by each, which list, for a period of ten calendar days
prior to such meeting, shall be kept on file at the registered office or
principal place of business of the Issuer and shall be subject to
inspection by any Preferred Member at any time during usual business
hours. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to inspection of any Preferred
Member during the whole time of the meeting. Failure to comply with the
requirements of this Section 5.6 shall not affect the validity of any
action taken at such meeting.
Section 5.7 Methods of Voting; Proxies. A Preferred Member
may vote either in person, by telephone or by proxy executed in writing
by the Preferred Member. A telegram, telex, cablegram or similar
transmission by the Preferred Member, or a photographic, photostatic,
facsimile or similar reproduction of a writing executed by the Preferred
Member shall be treated as an execution in writing for purposes of this
Section 5.7. Proxies for use at any meeting of Preferred Members or in
connection with the taking of any action by written consent shall be
filed with the Managers, 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 Managers, who shall decide all questions touching upon
the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes. 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 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 in person or by telephone 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 such
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Person be present, then such powers may be exercised by that one Person;
or, if an even number of such Persons attend in person or by telephone
and a majority do not agree on any particular issue, the Issuer shall not
be required to recognize such proxy with respect to such issue if such
proxy does not specify how the Preferred Membership Interests that are
the subject of such proxy are to be voted with respect to such issue.
Section 5.8 Conduct of Meetings. All meetings of the
Preferred Members shall be presided over by the chairman of the meeting,
who shall be the Chairman of the Managers. The Chairman of the Managers
shall determine the order of business and the procedure at the meeting,
including without limitation such regulation of the manner of voting and
the conduct of discussion as determined by the Chairman of the Managers.
Section 5.9 Voting on Matters. Except as otherwise
provided herein, for purposes of voting on matters, at any meeting of the
Preferred Members at which a quorum is present, the act of the Preferred
Members shall be the affirmative vote of the Preferred Member or
Preferred Members holding Preferred Membership Interests of more than 50%
of the aggregate stated liquidation preference of all of the Preferred
Membership Interests then outstanding represented in person, by telephone
or by proxy at such meeting.
Section 5.10 Registered Members. The Issuer shall be
entitled to treat the holder of record of any Preferred Membership
Interest as the holder in fact of such Preferred Membership Interest for
all purposes, and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Preferred Membership
Interest on the part of any other Person, whether or not it shall have
express or other notice of such claim or interest, except as expressly
provided in this Agreement or the laws of Delaware.
Section 5.11 Actions Without a Meeting. Except as otherwise
provided by law or by the Certificate of Formation, any action required
or permitted to be taken, or which may be taken, by law or the
Certificate of Formation or this Agreement, at any meeting of Preferred
Members, may be taken without a meeting, and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of Preferred Membership Interests
constituting not less than the minimum amount of Preferred Membership
Interests that would be necessary to authorize or take such action at a
meeting at which the holders of all Preferred Membership Interests
entitled to vote on the action were present and voted. Every written
consent shall bear the date of signature of each Preferred Member who
signs the consent. The signed consent or consents of Preferred Members
shall be placed in the minute book of the Issuer. A telegram, telex,
cablegram or similar transmission by a Preferred Member, or a
photographic, photostatic, facsimile or similar reproduction of a writing
signed by a Preferred Member, shall be regarded as signed by the
Preferred Member for purposes of this Section 5.11.
Section 5.12 Telephone and Similar Meetings. The Preferred
Members may participate in and hold meetings by means of conference
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telephone or similar communications equipment by means of which all
Persons participating in the meeting can hear each other. Participation
in any such meeting shall constitute presence in person at such meeting,
except where a Person participates in such meeting for the express
purpose of objecting to the transaction of any business on the ground
that such meeting is not lawfully called or convened.
ARTICLE VI
CONTRIBUTIONS TO CAPITAL
Section 6.1 Capital Contributions.
(a) On the Initial Closing Date, the Common Member
contributed cash or assets to the Issuer having an aggregate value equal
to $381,531,550. On each subsequent Series Closing Date, the Common
Member shall make such additional capital contributions as are necessary
on or before such subsequent Series Closing Date to maintain the
aggregate balances of all of the Members' Capital Accounts at an amount
equal to at least 13% of the Issuer's total capitalization. All capital
contributions made by the Common Member pursuant to this Section 6.1(a)
are herein referred to as the "Common Capital Contribution."
(b) On each Series Closing Date with respect to a Series of
Senior Preferred Membership Interests, each Person who acquires a Senior
Preferred Membership Interest from the Issuer shall, in connection with
the acquisition of such Senior Preferred Membership Interest, contribute
to the capital of the Issuer an amount in cash equal to the purchase
price for such Senior Preferred Membership Interest (each a "Senior
Preferred Member Capital Contribution").
(c) On each Series Closing Date with respect to a Series of
Junior Preferred Membership Interests, each Person who acquires a Junior
Preferred Membership Interest from the Issuer shall, in connection with
the acquisition of such Junior Preferred Membership Interest, contribute
to the capital of the Issuer an amount in cash equal to the purchase
price for such Junior Preferred Membership Interest (each a "Junior
Preferred Member Capital Contribution").
Section 6.2 Additional Capital Contributions. Except as
provided in section 6.1(a) above, the Common Member may, but shall not be
obligated to, make additional capital contributions to the Issuer. No
Preferred Member shall at any time be required to make any additional
capital contributions to the Issuer.
Section 6.3 Admission of Preferred Members.
(a) A Person shall be admitted to the Issuer as a Preferred
Member without execution of this Agreement upon satisfaction of the
requirements of paragraph (b) of this Section 6.3 and upon the
acquisition of a Preferred Membership Certificate, whether by purchase,
gift or devise or otherwise, which acquisition shall be deemed to
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constitute a request by such Person that the Register reflect such
Person's admission as a Preferred Member; provided, however, that such
Person shall be admitted to the Issuer as a Preferred Member and shall
become bound by this Agreement only at the time a newly issued Preferred
Membership Certificate is delivered to such Person in accordance with
Article XII.
(b) The name and mailing address of each Preferred Member and
the Preferred Capital Contribution of such Preferred Member shall be
listed in the Register and no Person shall be considered to be a
Preferred Member unless such Person is listed in the Register as a
Preferred Member. The Managers shall be required to update the books and
records of the Issuer from time to time as necessary to accurately
reflect such information.
Section 6.4 Withdrawal or Reduction of Members' Capital
Contributions.
(a) No Member shall have the right to withdraw all or any
part of its Capital Contribution or to receive any return on any portion
of its Capital Contribution, except as may be otherwise specifically
provided in this Agreement. Under circumstances involving a return of any
Capital Contribution, no Member shall have the right to receive property
other than cash.
(b) No Member shall be paid interest on any of its Capital
Contribution.
(c) An unrepaid Capital Contribution shall not be a liability
of the Issuer or of any Member. A Member shall not be required to
contribute or to lend any cash or property to the Issuer to enable the
Issuer to return any Member's Capital Contribution.
Section 6.5 Capital Accounts. A separate Capital Account
shall be established and maintained for each Member. Each Member's
Capital Account shall be increased by (i) the amount of money contributed
by such Member to the Issuer, (ii) the fair market value of property
contributed by such Member to the Issuer (net of liabilities secured by
the contributed property that the Issuer is considered to assume or take
subject to under Section 752 of the Code) and (iii) allocations to such
Member of Net Income, including without limitation Net Income exempt from
tax, together with any other items of income allocated to such Member
pursuant to Article VII. Each Member's Capital Account shall be
decreased by (i) the amount of money distributed to such Member by the
Issuer, (ii) the fair market value of property distributed to such Member
by the Issuer (net of liabilities secured by the distributed property
that the Member is considered to assume or take subject to under
Section 752 of the Code), (iii) allocations to such Member of
expenditures of the Issuer described in Section 705(a)(2)(B) of the Code,
and (iv) allocations of Net Loss to such Member, together with any other
items of loss or deduction allocated to such Member pursuant to Article
VII. The Capital Accounts shall be maintained and adjusted in accordance
with the provisions set forth in Treasury Regulation Section 1.704-
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l(b)(2)(iv). Solely for the purpose of adjusting the Capital Accounts of
the Members, and not for tax purposes, if any property is distributed in
kind to any Member, the difference between its fair market value and its
book value at the time of distribution shall be treated as gain or loss
recognized by the Issuer and allocated pursuant to the provisions of
Section 7.1.
ARTICLE VII
ALLOCATIONS
Section 7.1 Allocations.
(a) Except as provided in Sections 7.2 and 7.3, Net Income
for each Fiscal Period (and if the last Fiscal Period in a Fiscal Year
does not end on the last day of such Fiscal Year, then the Net Income for
such Fiscal Period as of the last day of such Fiscal Year) of the Issuer
shall be allocated as follows:
(i) first, to each Senior Preferred Member with respect to
each outstanding Series of Senior Preferred Membership Interests,
as of the close of business on the Record Date for the Dividend
Payment Date for such Fiscal Period (or, in the case of the last
Fiscal Period in a Fiscal Year, as of the close of business on the
last day of such Fiscal Year), until such Senior Preferred Member
has been allocated an amount of Net Income equal to the excess of
(x) the amount of Dividends payable to such Senior Preferred Member
in respect of such Senior Preferred Member's Senior Preferred
Membership Interest from the Series Closing Date with respect to
such Series through and including the close of such Fiscal Period,
(or, in the case of the last Fiscal Period in each Fiscal Year, as
of the close of business on the last day of each such Fiscal Year)
over (y) the amount of Net Income allocated to such Senior
Preferred Member pursuant to this Section 7.1(a)(i) in all prior
Fiscal Periods;
(ii) second, to each Senior Preferred Member with respect to
each outstanding Series of Senior Preferred Membership Interests
until such Senior Preferred Member has been allocated an amount
equal to the excess of (x) all Net Losses allocated to such Senior
Preferred Member from the Series Closing Date with respect to such
Series of Senior Preferred Membership Interests through and
including the close of such Fiscal Period (or Fiscal Year, as the
case may be) pursuant to Section 7.1(b)(iii) over (y) the amount of
Net Income allocated to each such Preferred Member pursuant to this
Section 7.1(a)(ii) in all prior Fiscal Periods (or Fiscal Year, as
the case may be);
(iii) third, to each Junior Preferred Member with respect
to each outstanding Series of such Junior Preferred Member's Junior
Preferred Membership Interests, as of the close of business on the
Record Date for the Dividend Payment Date for such Fiscal Period
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(or, in the case of the last Fiscal Period in each Fiscal Year, as
of the close of business on the last day of each such Fiscal Year),
until such Junior Preferred Member has been allocated an amount of
Net Income equal to the excess of (x) the amount of Dividends
payable to such Junior Preferred Member in respect of such Junior
Preferred Member's Junior Preferred Membership Interest from the
Series Closing Date with respect to such Series of Junior Preferred
Membership Interests through and including the close of such Fiscal
Period (or, in the case of the last Fiscal Period in each Fiscal
Year, as of the close of business on the last day of each such
Fiscal Year), over (y) the amount of Net Income allocated to such
Junior Preferred Member pursuant to this Section 7.1(a)(iii) in all
prior Fiscal Periods (or Fiscal Years, as the case may be);
(iv) fourth, to each Junior Preferred Member with respect to
such Junior Preferred Member's outstanding Series of Junior
Preferred Membership Interests, until such Junior Preferred Member
has been allocated an amount equal to the excess of (x) all Net
Losses allocated to such Junior Preferred Member from the Series
Closing Date with respect to such Series of Junior Preferred
Membership Interests through and including the close of such Fiscal
Period (or Fiscal Year, as the case may be) pursuant to Section
7.1(b)(ii) below, over (y) the amount of Net Income allocated to
such Junior Preferred Member pursuant to this Section 7.1(a)(iv) in
all prior Fiscal Periods (or Fiscal Years, as the case may be); and
(v) any remaining Net Income shall be allocated to the Common
Member;
(b) Net Loss for any Fiscal Period shall be allocated as
follows:
(i) first, to the Common Member until the balance of the
Common Member's Capital Account is reduced to zero;
(ii) second, among the Junior Preferred Members in proportion
to their respective aggregate Capital Account balances, until the
Capital Account balances of such Junior Preferred Members are
reduced to zero;
(iii) third, among the Senior Preferred Members in
proportion to their respective aggregate Capital Account balances,
until the Capital Account balances of such Senior Preferred Members
are reduced to zero; and
(iv) any remaining Net Loss shall be allocated to the Common
Member.
(c) If the Net Income of the Issuer for any Fiscal
Period (or Fiscal Year, as the case may be) is insufficient to make the
allocations required under Section 7.1(a) above for all Senior or Junior
Preferred Members, as the case may be, with respect to a Series of Senior
or Junior Preferred Membership Interests, the Net Income for such Fiscal
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Period (or Fiscal Year, as the case may be) shall be allocated
proportionately among the relevant Senior or Junior Preferred Members, as
the case may be, in respect of the relevant Series of their Senior or
Junior Preferred Membership Interests, as the case may be.
(d) The Chairman of the Managers shall make such changes to
the allocations in Sections 7.1(a) and 7.1(b) as it deems reasonably
necessary so that, upon the liquidation of the Issuer, the balance of
the Capital Accounts of the Preferred Members of each Series shall equal
the Liquidation Preference Amount with respect to such Series.
Section 7.2 Limitation on Loss Allocation. Losses
allocated to a Member pursuant to Section 7.1 shall not exceed the
maximum amount of losses that can be allocated without causing a Member
to have an Adjusted Capital Account Deficit at the end of any Fiscal
Year. In the event that any Member would have an Adjusted Capital Account
Deficit as a consequence of an allocation of losses pursuant to Section
7.1, the amount of losses that would be allocated to such Member but for
the application of this Section 7.2 shall be allocated to the other
Members to the extent that such allocations would not cause such Members
to have an Adjusted Capital Account Deficit and allocated among such
Members in proportion to their Capital Contributions. Any allocation of
items of loss pursuant to this Section 7.2 shall be taken into account in
computing subsequent allocations pursuant to Section 7.1, and prior to
any allocation of items in such Section so that the net amount of any
items allocated to each Member pursuant to Section 7.1 and this Section
7.2 shall, to the maximum extent practicable, be equal to the net amount
that would have been allocated to each Member pursuant to the provisions
of Section 7.1 and this Section 7.2 if such allocation under this Section
7.2 had not occurred.
Section 7.3 Special Allocations.
(a) In the event any Member unexpectedly receives any
adjustments, allocations or distributions described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Issuer
income and gain shall be specially allocated to such Member in an amount
and manner sufficient to eliminate, to the extent required by the
Treasury Regulations, the Adjusted Capital Account Deficit, if any, of
such Member as quickly as possible; provided, however, that an allocation
pursuant to this Section 7.3(a) shall be made if and only to the extent
that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Article VII have been tentatively
made as if this Section 7.3(a) were not in this Agreement. This Section
7.3(a) is intended to comply with the qualified income offset provision
in Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be
interpreted and applied in a manner consistent with such Treasury
Regulations.
(b) The Members intend that the allocations under Section 7.1
conform to Treasury Regulations Sections 1.704-1(b) and 1.704-2
(including, without limitation, the minimum gain charge back, charge back
of partner nonrecourse debt minimum gain, qualified income offset and
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partner nonrecourse debt provisions of such Treasury Regulations), and
the Chairman of the Managers shall make such changes in the allocations
under Section 7.1 as it believes are reasonably necessary to meet the
requirements of such Treasury Regulations.
Section 7.4 Allocations with Respect to Transferred
Interests. For purposes of determining the profits, losses or any other
items allocable to any period, profits, losses and any such other items
shall be determined on a daily, monthly or other basis, as determined by
the Chairman of the Managers using any method that is permissible under
Section 706 of the Code and the Treasury Regulations promulgated
thereunder. Unless otherwise required, such profits, losses or other
items shall be determined for each Fiscal Period.
Section 7.5 Allocations for Income Tax Purposes. The
Members are aware of the income tax consequences of the allocations made
by this Article VII and hereby agree to be bound by the provisions of
this Article VII in reporting their shares of Net Income and Net Loss for
U.S. federal income tax purposes. The income, gains, losses, deductions
and credits of the Issuer shall be allocated in the same manner as the
items entering into the computation of Net Income and Net Loss are
allocated under Sections 7.1 and 7.2; provided, however, that solely for
federal, state and local income and franchise tax purposes, but not for
book or Capital Account purposes, income, gain, loss and deductions with
respect to any property properly carried on the Issuer's books at a value
other than the tax basis of such property shall be allocated in a manner
determined in the discretion of the Chairman of the Managers, so as to
take into account (consistently with Code Section 704(c) principles) the
difference between such property's book value and its tax basis.
Notwithstanding anything to the contrary set forth in this Agreement, the
Chairman of the Managers is authorized to modify the allocations of this
Section 7.3 and Sections 7.1 and 7.2, if necessary, so that the Capital
Account balance of each Preferred Member equals the aggregate Liquidation
Preference Amount of such Preferred Member's Preferred Membership
Interest.
Section 7.6 Member's Share of Excess Nonrecourse
Liabilities. Solely for purposes of determining a Member's proportionate
share of the "excess nonrecourse liabilities" of the Issuer within the
meaning of Treasury Regulations Section 1.752-3(a)(3) at any time, 100
percent of the interests in Issuer profits are deemed to be held by the
Common Member.
Section 7.7 Withholding. The Issuer shall comply with
withholding requirements under federal, state and local law and shall
remit amounts withheld to and file required forms with applicable
jurisdictions. To the extent that the Issuer is required to withhold and
pay over any amounts to any authority with respect to distributions or
allocations to any Member, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Member. In the event
of any claimed over withholding, Members shall be limited to an action
against the applicable jurisdiction. If the amount withheld was not
withheld from actual distributions, the Issuer may reduce subsequent
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distributions by the amount of such withholding. Each Member agrees to
furnish the Issuer with any representations and forms as shall reasonably
be requested by the Issuer to assist it in determining the extent of, and
in fulfilling, its withholding obligations.
ARTICLE VIII
DIVIDENDS AND DISTRIBUTIONS
Section 8.1 Dividends. Each Preferred Member shall receive
periodic Dividends, if any, redemption payments and liquidation
distributions in accordance with the terms of the Series of Preferred
Membership Interests held by such Preferred Member set forth in Article
IX or X. Subject to the rights of the Preferred Members and to Section
13.2, all cash on deposit in the Issuer General Account shall be
distributed to the Common Member at the times determined by the Chairman
of the Managers.
Section 8.2 Limitation upon Distributions. Notwithstanding
any other provision of the Agreement, no distribution (including a
redemption payment) shall be declared and paid to any Member if such
distribution would violate Section 18-607 of the Act or other applicable
law.
Section 8.3 Distribution to Common Member. To the extent
that any liabilities that are assumed and retired by the Issuer on the
Initial Closing Date are not treated as "qualified liabilities" for
purposes of Treasury Regulation Section 1.707-5(a)(6), amounts
distributed to the Issuer on the Initial Closing Date up to an amount
equal to 20% of the Common Member's tax basis in the property contributed
to the Issuer on the Initial Closing Date will be treated as a
reimbursement of pre-formation expenditures as provided in Treasury
Regulation Section 1.707-4(d).
ARTICLE IX
SENIOR PREFERRED MEMBERSHIP INTERESTS
Section 9.1 Issuance of Series of Senior Preferred
Membership Interests.
(a) Subject to the satisfaction of the conditions set forth
in Section 9.3, the Issuer may issue Senior Preferred Membership
Interests from time to time in one or more Series having the designation,
Dividend Rate for each Dividend Period, liquidation preference,
redemption terms and other powers, preferences and special rights and
limitations set forth in this Article IX and as set forth in the Action
with respect to such Series adopted by a majority of the Managers.
(b) The Issuer may not issue interests in the Issuer other
than the Common Membership Interest, Senior Preferred Membership
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Interests and Junior Preferred Membership Interests, without the
unanimous approval of the Senior Preferred Members. Each Senior
Preferred Membership Interest shall rank pari passu with any Related
Series of Senior Preferred Membership Interests with respect to such
Series of Senior Preferred Membership Interests and senior to any Related
Series of Junior Preferred Membership Interests with respect to such
Series of Senior Preferred Membership Interests, if any, and to the
Common Membership Interest in respect of the right to receive Dividends
or other distributions. All Senior Preferred Membership Interests shall
rank pari passu with all other Senior Preferred Membership Interests and
senior to all Junior Preferred Membership Interests and the Common
Membership Interest in respect of the right to receive payments out of
the assets of the Issuer upon voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Issuer. All Senior
Preferred Membership Interests redeemed, purchased or otherwise acquired
by the Issuer shall be canceled. The Senior Preferred Membership
Interests will be issued in registered form only. Dividends on all
Senior Preferred Membership Interests shall be cumulative.
(c) No Senior Preferred Member shall be entitled as a matter
of right to subscribe for or purchase, or have any preemptive right with
respect to, any part of any new or additional Interests in the Issuer,
whether now or hereafter authorized and whether issued for cash or other
consideration or by way of a Dividend.
(d) The Issuer may not issue any Senior Preferred Membership
Interest or other Interest in the Issuer to any Person that is not a U.S.
Person.
(e) The Issuer may not issue any Senior Preferred Membership
Interest (x) if the issuance of such Senior Preferred Membership Interest
would cause there to be more than 50 Members or otherwise cause the
Origination Trust or the Issuer to be classified as a publicly-traded
partnership taxable as a corporation in each case, in the sole
determination of the Chairman of the Managers and (y) except as provided
in the Purchase Agreement with respect to any Series of Senior Preferred
Membership Interests, unless the Chairman of the Managers has received a
duly executed Senior Preferred Member Representation Letter substantially
in the form of Exhibit C from the relevant Senior Preferred Member.
(f) Neither ARAC nor any Affiliate of ARAC shall have the
right to vote or give or withhold consent with respect to any Senior
Preferred Membership Interest owned by it, directly or indirectly, and,
for purposes of any matter upon which the Senior Preferred Members may
vote or give or withhold consent as provided in this Agreement, Senior
Preferred Membership Interests owned by ARAC or any Affiliate of ARAC
shall be treated as if they were not outstanding.
Section 9.2 Senior Preferred Membership Interests.
(a) Designation. Each Series of Senior Preferred Membership
Interests shall have the stated liquidation preference and designation
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set forth in the Action with respect to such Series of Senior Preferred
Membership Interests.
(b) Dividends.
(i) The Senior Preferred Members holding each Series
of Senior Preferred Membership Interests shall be entitled to
receive, when, as and if declared by the Issuer, cumulative
Dividends at the Dividend Rate for such Series for each Dividend
Period of the stated liquidation preference of such Series of
Senior Preferred Membership Interests, calculated on the basis
of a 360-day year and the actual number of days in such Dividend
Period. Dividends on each Series of Senior Preferred Membership
Interests shall be payable in United States dollars monthly in
arrears on each Dividend Payment Date, commencing on the first
Dividend Payment Date set forth in the Action with respect to
such Series of Senior Preferred Membership Interests. Such
Dividends will accrue and accumulate whether or not they have
been declared and whether or not there are funds of the Issuer
legally available for the payment of Dividends. Dividends on
each Series of Senior Preferred Membership Interests shall be
cumulative from the Series Closing Date with respect to such
Series of Senior Preferred Membership Interests. Additional
Dividends upon any Dividend arrearage with respect to any Series
of Senior Preferred Membership Interests shall be declared and
paid in order to provide, in effect, monthly compounding on such
Dividend arrearage at the Dividend Rate for such Series of
Senior Preferred Membership Interests compounded monthly and
such Additional Dividends also shall accrue and accumulate. All
dividends paid with respect to each Series of Senior Preferred
Membership Interests shall be paid from funds available therefor
in accordance with Section 9.2(b)(ii) pro rata to the Senior
Preferred Members of such Series.
(ii) Dividends on each Series of Senior Preferred
Membership Interests must be declared and paid on each Dividend
Payment Date to the extent that, on such date, (x) the Issuer
has funds legally available for the payment of such Dividends
and (y) the amount deposited in the Series Preferred Member
Distribution Account with respect to such Series of Senior
Preferred Membership Interests and any Related Series of Senior
Preferred Membership Interests with respect to such Series of
Senior Preferred Membership Interests is sufficient to permit
such payment, it being understood that to the extent that funds
are not available in such Series Preferred Member Distribution
Account to pay in full all accumulated and unpaid Dividends on
all such Series of Senior Preferred Membership Interests, the
Issuer shall pay partial Dividends, to the extent of funds
legally available therefor, on each such Series of Senior
Preferred Membership Interests in proportion to the respective
amounts of accumulated and unpaid dividends payable in respect
of each such Series of Senior Preferred Membership Interests.
Dividends on each Series of Senior Preferred Membership
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Interests will be payable to the Senior Preferred Members
holding such Series of Senior Preferred Membership Interests as
they appear on the Register on the relevant Record Date.
(iii) The Issuer shall not pay, declare or set aside
for payment, any distributions on the Common Membership Interest
until such time as (x) all accumulated and unpaid Dividends on
all Series of Senior Preferred Membership Interests, including
any Additional Dividends thereon, shall have been paid in full
for all Dividend Periods terminating on or prior to the date of
such payment or the date of such redemption, purchase or
acquisition, as the case may be, and (y) the Issuer has redeemed
(or given notice of a redemption for, and has on deposit in the
applicable Series Preferred Member Distribution Account a sum
sufficient to redeem) the full amount of Senior Preferred
Membership Interests required to be redeemed by any provision
for mandatory redemption contained herein.
(iv) The Issuer shall not redeem in whole or in part
any Series of Senior Preferred Membership Interests on any
Dividend Payment Date in accordance with Section 9.2(c) unless
all accumulated and unpaid Dividends (whether or not earned or
declared) on such Series of Senior Preferred Membership
Interests, including any Additional Dividends thereon, shall
have been paid in full for all Dividend Periods terminating on
or prior to such Dividend Payment Date.
(c) Redemption.
(i) Each Series of Senior Preferred Membership
Interests are redeemable, at the option of the Issuer, in whole
or in part, on any Dividend Payment Date, upon not fewer than
ten nor more than 30 days' prior notice, at a redemption price
equal to the stated liquidation preference of such Series of
Senior Preferred Membership Interests.
(ii) On or after the Series Note Termination Date with
respect to any Series of Senior Preferred Membership Interests,
such Series of Senior Preferred Membership Interests shall be
redeemed by the Issuer, in whole or in part from time to time,
on such Series Note Termination Date and each Dividend Payment
Date thereafter until such Series of Senior Preferred Membership
Interests has been redeemed in full, upon not fewer than ten nor
more than 30 days' prior notice, in an amount equal to the
amount on deposit in the Series Preferred Member Distribution
Account with respect to such Series of Senior Preferred
Membership Interests and available therefor in accordance with
Section 11.7(c), at a redemption price equal to the stated
liquidation preference of such Series of Senior Preferred
Membership Interests.
(d) Redemption Procedures.
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(i) Notice of any redemption (a "Notice of Redemption
of Senior Preferred Membership Interests") of any Series of
Senior Preferred Membership Interests to be redeemed will be
given by the Issuer by mail to each Senior Preferred Member
holding such Series of Senior Preferred Membership Interests not
fewer than ten nor more than 30 days prior to the date fixed for
redemption. For purposes of the calculation of the date of
redemption and the dates on which notices are given pursuant to
this Section 9.2.(d), a Notice of Redemption of Senior Preferred
Membership Interests shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to
each Senior Preferred Member holding Senior Preferred Membership
Interests to be redeemed. Each Notice of Redemption of Senior
Preferred Membership Interests shall be addressed to each Senior
Preferred Member holding Senior Preferred Membership Interests
to be redeemed at the address of such Senior Preferred Member
appearing in the Register and shall state: (a) the redemption
date; (b) the aggregate stated liquidation preference of the
Senior Preferred Membership Interests to be redeemed and, if
less than all of the Senior Preferred Membership Interests of
such Series held by such Senior Preferred Member are to be
redeemed from such Senior Preferred Member, the aggregate stated
liquidation preference of such Senior Preferred Membership
Interests to be redeemed from such Senior Preferred Member; (c)
the redemption price; and (d) if such Senior Preferred
Membership Interests are being redeemed in full, the place where
the Senior Preferred Membership Certificates for such Series of
Senior Preferred Membership Interests are to be surrendered for
payment of the redemption price. No defect in the Notice of
Redemption of Senior Preferred Membership Interests or in the
mailing thereof with respect to any Senior Preferred Membership
Interest shall affect the validity of the redemption proceedings
with respect to any other Senior Preferred Membership Interest.
(ii) In the event that fewer than all the outstanding
Senior Preferred Membership Interests of any Series are to be
redeemed, the Senior Preferred Membership Interests to be
redeemed will be selected pro rata based upon the aggregate
stated liquidation preference of the Senior Preferred Membership
Interests of such Series held by each Senior Preferred Member
prior to the redemption.
(e) Liquidation Rights. In the event of any voluntary
or involuntary dissolution and winding-up of the Issuer, the Senior
Preferred Members holding Senior Preferred Membership Interests of each
Series at the time outstanding will be entitled to receive out of the
assets of the Issuer legally available for distribution to Members after
satisfaction of liabilities of creditors as required by the Act before
any distribution of assets is made with respect to any other Interest in
the Issuer, an amount equal to the Liquidation Preference Amount with
respect to such Series. If upon any such liquidation, the Liquidation
Preference Amount for any Series of Senior Preferred Membership Interests
can only be paid in part because the Issuer has insufficient assets to
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pay in the full the aggregate Liquidation Preference Amounts for all
Series of Senior Preferred Membership Interests, then the amount
available to be paid to the Senior Preferred Members holding each Series
of Senior Preferred Membership Interests shall be paid on a pro rata
basis based upon the Liquidation Preference Amount with respect to each
Series of Senior Preferred Membership Interests.
(f) Voting Rights.
(i) If (x) the Issuer fails to pay Dividends in full
on the Preferred Membership Interests of any Series for 2
consecutive Dividend Periods or (y) an Event of Default under
the Indenture occurs and is continuing, then the number of
Managers shall be automatically increased to five, and the
Preferred Members holding Preferred Membership Interests of more
than 50% of the aggregate stated liquidation preference of all
Preferred Membership Interests then outstanding, voting as a
single class, shall be entitled to elect two additional
Managers. The voting rights so created upon the occurrence of
the conditions set forth in this Section 9.2(f)(i) shall
continue unless and until (a) the Event of Default, if any,
giving rise to such voting rights shall no longer be continuing
and (b) all accumulated and unpaid Dividends on each Series of
Preferred Membership Interests (whether or not earned or
declared) plus Additional Dividends, if any, shall have been
paid.
(ii) Upon the accrual of any right of the Preferred
Members to elect Managers, the Chairman of the Managers shall as
promptly as practicable call or cause to be called a special
meeting of the Preferred Members in accordance with Section 5.1.
If the Chairman of the Managers does not call or cause to be
called such a special meeting, it may be called by any Preferred
Member.
(iii) Without the consent required by Section 3.4(b)
and the affirmative vote of Senior Preferred Members holding
Senior Preferred Membership Interests of at least 66-2/3% of the
aggregate stated liquidation preference of all Senior Preferred
Membership Interests then outstanding, voting as a single class,
in person or by proxy at a special meeting called for the
purpose, or by unanimous written consent without such meeting,
none of the Issuer nor any Member, Manager, officer of the
Issuer or other Person on behalf of the Issuer shall:
A. engage in any business or activity other than
those set forth in Article II hereof;
B. incur any Indebtedness, other than the Investor
Notes as set forth in Article II hereof, or assume or guaranty
any Indebtedness of any other entity;
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C. create, incur or suffer to exist, or agree to
create, incur or suffer to exist, or consent to cause or permit
in the future the creation, incurrence or existence of any Lien
of any kind on the Issuer Assets other than Permitted Liens;
D. consolidate or merge with or into any other
entity or convey or transfer substantially all of its properties
and assets substantially as an entirety to any entity;
E. sell, lease, transfer, liquidate or otherwise
dispose of any Issuer Assets, except as contemplated by the
Transaction Documents unless directed to do so by the Indenture
Trustee;
F. institute proceedings to be adjudicated bankrupt
or insolvent, or consent to the institution of a bankruptcy or
insolvency proceeding or case against it, or file a petition
seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Issuer
or a substantial part of its property, or make any assignment
for the benefit of creditors, or admit in writing its inability
to pay its debts generally as they become due; or
G. amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of the
Origination Trust Documents, the Transfer Agreement, the Base
Indenture, the Administration Agreement or the Management
Agreement or waive timely performance or observance by SPV under
the Transfer Agreement, VMS under the Administration Agreement,
the Managing Agent under the Management Agreement or the
Origination Trust or the Servicer under the Origination Trust
Documents.
(iv) Without the consent required by Section 3.4(b)
and the unanimous written consent of all Senior Preferred
Members, none of the Issuer nor any Member, Manager, officer of
the Issuer or other Person on behalf of the Issuer shall:
A. amend or otherwise modify this Agreement or take
action in furtherance of any such action in any manner that
materially and adversely affects any Senior Preferred Member or
any creditor thereof; or
B. to the fullest extent permitted by law, dissolve
or liquidate, in whole or in part.
(v) Without the unanimous written consent of all
Senior Preferred Members, none of the Issuer nor any Member,
Manager, officer of the Issuer or other Person on behalf of the
Issuer shall amend, modify, waive, supplement, terminate or
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surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of the
Origination Trust Documents, the Transfer Agreement, the Base
Indenture, the Administration Agreement or the Management
Agreement, in each case, in any manner that materially and
adversely affects any Senior Preferred Member or any creditor
thereof.
(vi) None of the Issuer nor any Member, Manager,
officer of the Issuer or other Person on behalf of the Issuer
shall create, authorize or issue Interests in the Issuer ranking
equal with or senior to the Senior Preferred Membership
Interests with respect to the payment of dividends or the
distribution of assets, other than a Series of Senior Preferred
Membership Interests created, authorized and issued in
accordance with Article IX, without the consent required by
Section 3.4(b) and the unanimous written consent of all Senior
Preferred Members.
(vii) None of the Issuer nor any Member, Manager,
officer of the Issuer or other Person on behalf of the Issuer
shall amend, alter or repeal any of the preferences, rights or
powers of any Series of Senior Preferred Membership Interests
without the consent required by Section 3.4(b) and the unanimous
written consent of all Senior Preferred Members holding such
Series of Senior Preferred Membership Interests.
(viii) Without the unanimous written consent of the
Senior Preferred Members holding 100% of a Series of Senior
Preferred Membership Interests, none of the Issuer nor any
Member, Manager, officer of the Issuer or other Person on behalf
of the Issuer shall (A) amend or otherwise modify the Indenture
Supplement pursuant to which the Related Series of Notes with
respect to such Series of Senior Preferred Membership Interests
were issued in any manner that materially and adversely affects
any of the Senior Preferred Members holding such Series of
Senior Preferred Membership Interests or any creditor thereof,
(B) discharge the Indenture pursuant to Section 11.1 of the Base
Indenture or (C) consent to the extension of the "Series
Revolving Period" under the Indenture Supplement pursuant to
which the Related Series of Notes with respect to such Series of
Senior Preferred Membership Interests were issued, by consenting
to the extension of any revolving commitment thereunder or
otherwise.
(ix) Without the unanimous written consent of all
Senior Preferred Members, none of the Issuer nor any Member,
Manager, officer of the Issuer or other Person on behalf of the
Issuer shall issue a Series of Investor Notes having a "Series
Revolving Period" (as defined in the related Indenture
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Supplement) that is scheduled to terminate after December 31,
2009.
Section 9.3 Tax Treatment.
The Common Member and the Senior Preferred Members agree
that (x) the Senior Preferred Membership Interests shall be treated as
representing equity interests in the Issuer and not as debt for U.S.
federal income tax purposes and for all relevant state and local income,
franchise and similar tax purposes, (y) the Issuer shall be treated as a
partnership for U.S. federal income tax purposes that is not taxable as
an association or a publicly traded partnership taxable as a corporation
and (z) no Senior Preferred Member shall take any position that is
inconsistent with such treatment.
Section 9.4 Conditions to Issuance of Senior
Preferred Membership Interests.
(a) The Issuer shall not issue a Series of Senior
Preferred Membership Interests on any Series Closing Date unless it shall
have satisfied the following conditions on or prior to such Series
Closing Date:
(i) a majority of the Managers shall have duly
adopted an Action specifying the following terms of such Series
of Senior Preferred Membership Interests:
A. the aggregate stated liquidation preference and
designation of such Series;
B. the Dividend Rate (or formula for the
determination thereof);
C. the Series Closing Date;
D. each Rating Agency rating such Series;
E. the initial Dividend Payment Date for such
Series;
F. identification and the location of the Series
Preferred Member Distribution Account with respect to such
Series;
G. the Legal Final Redemption Date for such Series;
and
H. identification of the Related Series of Investor
Notes with respect to such Series and any Related Series of
Senior Preferred Membership Interests with respect to such
Series then outstanding (all such terms, the "Principal Terms"
of such Series);
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(ii) the Issuer shall have received written
confirmation from each Rating Agency with respect to each Series
of Preferred Membership Interests that the Rating Agency
Condition shall have been satisfied with respect to such
issuance;
(iii) the proceeds received by the Issuer in respect of
the issuance and sale of each Series of Senior Preferred
Membership Interests shall be applied as set forth in the Action
with respect to such Series; and
(iv) the Issuer shall have received an opinion of
counsel to the effect that neither the Origination Trust nor the
Issuer will be classified as an association or a publicly traded
partnership taxable as a corporation for U.S. federal income tax
purposes following the issuance of such Series of Senior
Preferred Membership Interests.
ARTICLE X
JUNIOR PREFERRED MEMBERSHIP INTERESTS
Section 10.1 Issuance of Series of Junior Preferred
Membership Interests.
(a) Subject to the satisfaction of the conditions set
forth in Section 10.3, the Issuer may issue Junior Preferred Membership
Interests from time to time in one or more Series having the designation,
Dividend Rate for each Dividend Period, liquidation preference,
redemption terms and other powers, preferences and special rights and
limitations set forth in this Article X and as set forth in the Action
with respect to such Series adopted by a majority of the Managers.
(b) The Issuer may not issue interests in the Issuer
other than the Common Membership Interest, the Junior Preferred
Membership Interests and the Senior Preferred Membership Interests,
without the unanimous approval of the Junior Preferred Members. Each
Series of Junior Preferred Membership Interests shall rank junior to the
Related Series of Senior Preferred Membership Interests with respect to
such Series, pari passu with any Related Series of Junior Preferred
Membership Interests with respect to such Series of Junior Preferred
Membership Interests and senior to the Common Membership Interest in
respect of the right to receive Dividends or other distributions. All
Junior Preferred Membership Interests shall rank junior to the Senior
Preferred Membership Interests, pari passu with all other Junior
Preferred Membership Interests and senior to the Common Membership
Interest in respect of the right to receive payments out of the assets of
the Issuer upon voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Issuer. All Junior Preferred Membership
Interests redeemed, purchased or otherwise acquired by the Issuer shall
be canceled. The Junior Preferred Membership Interests will be issued in
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registered form only. Dividends on all Junior Preferred Membership
Interests shall be cumulative.
(c) No Junior Preferred Member shall be entitled as a
matter of right to subscribe for or purchase, or have any preemptive
right with respect to, any part of any new or additional Interests in
the Issuer, whether now or hereafter authorized and whether issued for
cash or other consideration or by way of a Dividend.
(d) The Issuer may not issue any Junior Preferred
Membership Interest or other Interest in the Issuer to any Person that is
not a U.S. Person.
(e) The Issuer may not issue any Junior Preferred
Membership Interest if (x) the issuance of such Junior Preferred
Membership Interest would cause there to be more than 50 Members or
otherwise cause the Origination Trust or the Issuer to be classified as a
publicly-traded partnership taxable as a corporation in each case, in the
sole determination of the Chairman of the Managers and (y) except as
provided in the Purchase Agreement with respect to any Series of Junior
Preferred Membership Interests, unless the Chairman of the Managers has
received a duly executed Junior Preferred Member Representation Letter
substantially in the form of Exhibit D from the relevant Junior Preferred
Member.
(f) Neither ARAC nor any Affiliate of ARAC shall have
the right to vote or give or withhold consent with respect to any Junior
Preferred Membership Interest owned by it, directly or indirectly, and,
for purposes of any matter upon which the Junior Preferred Members may
vote or give or withhold consent as provided in this Agreement, Junior
Preferred Membership Interests owned by ARAC or any Affiliate of ARAC
shall be treated as if they were not outstanding.
Section 10.2 Junior Preferred Membership Interests.
(a) Designation. Each Series of Junior Preferred
Membership Interests shall have the stated liquidation preference and
designation set forth in the Action with respect to such Series of Junior
Preferred Membership Interests.
(b) Dividends.
(i) The Junior Preferred Members holding each Series
of Junior Preferred Membership Interests shall be entitled to
receive, when, as and if declared by the Issuer, cumulative
Dividends at the Dividend Rate for such Series for each Dividend
Period of the stated liquidation preference of such Series of
Junior Preferred Membership Interests, calculated on the basis
of a 360-day year and the actual number of days in such Dividend
Period. Dividends on each Series of Junior Preferred Membership
Interests shall be payable in United States dollars monthly in
arrears on each Dividend Payment Date, commencing on the first
Dividend Payment Date set forth in the Action with respect to
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such Series of Junior Preferred Membership Interests. Such
Dividends will accrue and accumulate whether or not they have
been declared and whether or not there are funds of the Issuer
legally available for the payment of Dividends. Dividends on
each Series of Junior Preferred Membership Interests shall be
cumulative from the Series Closing Date with respect to such
Series of Junior Preferred Membership Interests. Additional
Dividends upon any Dividend arrearage with respect to any Series
of Junior Preferred Membership Interests shall be declared and
paid in order to provide, in effect, monthly compounding on such
Dividend arrearage at the Dividend Rate for such Series of
Junior Preferred Membership Interests compounded monthly and
such Additional Dividends also shall accrue and accumulate. All
dividends paid with respect to each Series of Junior Preferred
Membership Interests shall be paid from funds available therefor
in accordance with Section 10.2(b)(ii) pro rata to the Junior
Preferred Members of such Series.
(ii) Dividends on each Series of Junior Preferred
Membership Interests must be declared and paid on each Dividend
Payment Date to the extent that, on such date, (x) the Issuer
has funds legally available for the payment of such Dividends
and (y) the amount deposited in the Series Preferred Member
Distribution Account with respect to such Series of Junior
Preferred Membership Interests and any Related Series of Junior
Preferred Membership Interests with respect to such Series of
Junior Preferred Membership Interests, after payment of all
accumulated and unpaid dividends on the Related Series of Senior
Preferred Membership Interests with respect to such Series of
Junior Preferred Membership Interests on such date, is
sufficient to permit such payment, it being understood that to
the extent that funds are not available in such Series Preferred
Member Distribution Account to pay in full all accumulated and
unpaid Dividends on all such Series of Junior Preferred
Membership Interests, the Issuer shall pay partial Dividends, to
the extent of funds legally available therefor, on each such
Series of Junior Preferred Membership Interests in proportion to
the respective amounts of accumulated and unpaid dividends
payable in respect of each such Series of Junior Preferred
Membership Interests. Dividends on each Series of Junior
Preferred Membership Interests will be payable to the Junior
Preferred Members holding such Series of Junior Preferred
Membership Interests as they appear on the Register on the
relevant Record Date.
(iii) The Issuer shall not pay, declare or set aside
for payment, any distributions on the Common Membership Interest
until such time as (x) all accumulated and unpaid Dividends on
all Series of Junior Preferred Membership Interests, including
any Additional Dividends thereon, shall have been paid in full
for all Dividend Periods terminating on or prior to the date of
such payment or the date of such redemption, purchase or
acquisition, as the case may be, and (y) the Issuer has redeemed
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(or given notice of a redemption for, and has on deposit in the
applicable Series Preferred Member Distribution Account a sum
sufficient to redeem) the full amount of Junior Preferred
Membership Interests required to be redeemed by any provision
for mandatory redemption contained herein.
(iv) The Issuer shall not redeem in whole or in part
any Series of Junior Preferred Membership Interests on any
Dividend Payment Date in accordance with Section 10.2(c) unless
all accumulated and unpaid Dividends (whether or not earned or
declared) on such Series of Junior Preferred Membership
Interests, including any Additional Dividends thereon, shall
have been paid in full for all Dividend Periods terminating on
or prior to such Dividend Payment Date.
(c) Redemption.
(i) Each Series of Junior Preferred Membership
Interests are redeemable, at the option of the Issuer, in whole
or in part, on any Dividend Payment Date, upon not fewer than
ten nor more than 30 days' prior notice, at a redemption price
equal to the stated liquidation preference of such Series of
Junior Preferred Membership Interests.
(ii) On or after the Series Note Termination Date with
respect to any Series of Junior Preferred Membership Interests,
such Series of Junior Preferred Membership Interests shall be
redeemed by the Issuer, in whole or in part from time to time,
on the first Dividend Payment Date thereafter on which the
Related Series of Senior Preferred Membership Interests with
respect to such Series of Junior Preferred Membership Interests
shall have been redeemed in full and on each Dividend Payment
Date thereafter until such Series of Junior Preferred Membership
Interests has been redeemed in full, upon not fewer than ten nor
more than 30 days' prior notice, in an amount equal to the
amount on deposit in the Series Preferred Member Distribution
Account with respect to such Series of Junior Preferred
Membership Interests and available therefor in accordance with
Section 11.7(d), at a redemption price equal to the stated
liquidation preference of such Series of Junior Preferred
Membership Interests.
(d) Redemption Procedures.
(i) Notice of any redemption (a "Notice of Redemption
of Junior Preferred Membership Interests") of any Series of
Junior Preferred Membership Interests to be redeemed will be
given by the Issuer by mail to each Junior Preferred Member
holding such Series of Junior Preferred Membership Interests not
fewer than ten nor more than 30 days prior to the date fixed for
redemption. For purposes of the calculation of the date of
redemption and the dates on which notices are given pursuant to
this Section 10.2(d), a Notice of Redemption of Junior Preferred
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Membership Interests shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage
prepaid, to each Junior Preferred Member holding Junior
Preferred Membership Interests to be redeemed. Each Notice of
Redemption of Junior Preferred Membership Interests shall be
addressed to each Junior Preferred Member holding Junior
Preferred Membership Interests to be redeemed at the address of
such Junior Preferred Member appearing in the Register and shall
state: (a) the redemption date; (b) the aggregate stated
liquidation preference of the Junior Preferred Membership
Interests to be redeemed and, if less than all of the Junior
Preferred Membership Interests of such Series held by such
Junior Preferred Member are to be redeemed from such Junior
Preferred Member, the aggregate stated liquidation preference of
such Junior Preferred Membership Interests to be redeemed from
such Junior Preferred Member; (c) the redemption price; and (d)
if such Junior Preferred Membership Interests are being redeemed
in full, the place where the Junior Preferred Membership
Certificates for such Series of Junior Preferred Membership
Interests are to be surrendered for payment of the redemption
price. No defect in the Notice of Redemption of Junior
Preferred Membership Interests or in the mailing thereof with
respect to any Junior Preferred Membership Interest shall affect
the validity of the redemption proceedings with respect to any
other Junior Preferred Membership Interest.
(ii) In the event that fewer than all the outstanding
Junior Preferred Membership Interests of any Series are to be
redeemed, the Junior Preferred Membership Interests to be
redeemed will be selected pro rata based upon the aggregate
stated liquidation preference of the Junior Preferred Membership
Interests of such Series held by each Junior Preferred Member
prior to the redemption.
(e) Liquidation Rights. In the event of any voluntary
or involuntary dissolution and winding-up of the Issuer, the Junior
Preferred Members holding Junior Preferred Membership Interests of each
Series at the time outstanding will be entitled to receive out of the
assets of the Issuer legally available for distribution to Members after
satisfaction of liabilities of creditors as required by the Act and the
distribution to the Senior Preferred Members of each Series of Senior
Preferred Membership Interests of the Liquidation Preference Amount with
respect to such Series of Senior Preferred Membership Interests but
before any distribution of assets is made with respect to any other
Interest in the Issuer, an amount equal to the Liquidation Preference
Amount with respect to such Series. If upon any such liquidation, the
Liquidation Preference Amount for any Series of Junior Preferred
Membership Interests can only be paid in part because the Issuer has
insufficient assets to pay in the full the aggregate Liquidation
Preference Amounts for all Series of Junior Preferred Membership
Interests, then the amount available to be paid to the Junior Preferred
Members holding each Series of Junior Preferred Membership Interests
shall be paid on a pro rata basis based upon the Liquidation Preference
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Amount with respect to each Series of Junior Preferred Membership
Interests.
(f) Voting Rights.
(i) If (x) the Issuer fails to pay Dividends in full
on the Preferred Membership Interests of any Series for 2
consecutive Dividend Periods or (y) an Event of Default under
the Indenture occurs and is continuing, then the number of
Managers shall be automatically increased to five, and the
Preferred Members holding Preferred Membership Interests of more
than 50% of the aggregate stated liquidation preference of all
Preferred Membership Interests then outstanding, voting as a
single class, shall be entitled to elect two additional
Managers. The voting rights so created upon the occurrence of
the conditions set forth in this Section 10.2(f)(i) shall
continue unless and until (a) the Event of Default, if any,
giving rise to such voting rights shall no longer be continuing
and (b) all accumulated and unpaid Dividends on each Series of
Preferred Membership Interests (whether or not earned or
declared) plus Additional Dividends, if any, shall have been
paid.
(ii) Upon the accrual of any right of the Preferred
Members to elect Managers, the Chairman of the Managers shall as
promptly as practicable call or cause to be called a special
meeting of the Preferred Members in accordance with Section 5.1.
If the Chairman of the Managers does not call or cause to be
called such a special meeting, it may be called by any Preferred
Member.
(iii) Without the consent required by Section 3.4(b)
and the affirmative vote of Junior Preferred Members holding
Junior Preferred Membership Interests of at least 66-2/3% of the
aggregate stated liquidation preference of all Junior Preferred
Membership Interests then outstanding, voting as a single class,
in person or by proxy at a special meeting called for the
purpose, or by unanimous written consent without such meeting,
none of the Issuer nor any Member, Manager, officer of the
Issuer or other Person on behalf of the Issuer shall:
A. engage in any business or activity other than
those set forth in Article II hereof;
B. incur any Indebtedness, other than the Investor
Notes as set forth in Article II hereof, or assume or guaranty
any Indebtedness of any other entity;
C. create, incur or suffer to exist, or agree to
create, incur or suffer to exist, or consent to cause or permit
in the future the creation, incurrence or existence of any Lien
of any kind on the Issuer Assets other than Permitted Liens;
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D. consolidate or merge with or into any other
entity or convey or transfer substantially all of its properties
and assets substantially as an entirety to any entity;
E. sell, lease, transfer, liquidate or otherwise
dispose of any Issuer Assets, except as contemplated by the
Transaction Documents unless directed to do so by the Indenture
Trustee;
F. institute proceedings to be adjudicated bankrupt
or insolvent, or consent to the institution of a bankruptcy or
insolvency proceeding or case against it, or file a petition
seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Issuer
or a substantial part of its property, or make any assignment
for the benefit of creditors, or admit in writing its inability
to pay its debts generally as they become due; or
G. amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of the
Origination Trust Documents, the Transfer Agreement, the Base
Indenture, the Administration Agreement or the Management
Agreement or waive timely performance or observance by SPV under
the Transfer Agreement, VMS under the Administration Agreement,
the Managing Agent under the Management Agreement or the
Origination Trust or the Servicer under the Origination Trust
Documents.
(iv) Without the consent required by Section 3.4(b)
and the unanimous written consent of all Junior Preferred
Members, none of the Issuer nor any Member, Manager, officer of
the Issuer or other Person on behalf of the Issuer shall:
A. amend this Agreement or otherwise modify or take
action in furtherance of any such action in any manner that
materially and adversely affects any Junior Preferred Member or
any creditor thereof; or
B. to the fullest extent permitted by law, dissolve
or liquidate, in whole or in part.
(v) Without the unanimous written consent of all
Junior Preferred Members, none of the Issuer nor any Member,
Manager, officer of the Issuer or other Person on behalf of the
Issuer shall amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of the
Origination Trust Documents, the Transfer Agreement, the Base
Indenture, the Administration Agreement or the Management
Agreement, in each case, in any manner that materially and
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adversely affects any Junior Preferred Member or any creditor
thereof.
(vi) None of the Issuer nor any Member, Manager,
officer of the Issuer or other Person on behalf of the Issuer
shall create, authorize or issue Interests in the Issuer ranking
equal with or senior to the Junior Preferred Membership
Interests with respect to the payment of dividends or the
distribution of assets, other than a Series of Senior Preferred
Membership Interests created, authorized and issued in
accordance with Article IX or a Series of Junior Preferred
Membership Interests created, authorized and issued in
accordance with Article X, without the consent required by
Section 3.4(b) and the unanimous written consent of all Junior
Preferred Members.
(vii) None of the Issuer nor any Member, Manager,
officer of the Issuer or other Person on behalf of the Issuer
shall amend, alter or repeal any of the preferences, rights or
powers of any Series of Junior Preferred Members without the
consent required by Section 3.4(b) and the unanimous written
consent of all Junior Preferred Members holding such Series of
Junior Preferred Membership Interests.
(viii) Without the unanimous written consent
of the Junior Preferred Members holding 100% of a Series of
Junior Preferred Membership Interests, none of the Issuer nor
any Member, Manager, officer of the Issuer or other Person on
behalf of the Issuer shall (A) amend or otherwise modify the
Indenture Supplement pursuant to which the Related Series of
Notes with respect to such Series of Junior Preferred Membership
Interests were issued in any manner that materially and
adversely affects any of the Junior Preferred Members holding
such Series of Junior Preferred Membership Interests, (B)
discharge the Indenture pursuant to Section 11.1 of the Base
Indenture or (C) consent to the extension of the "Series
Revolving Period" under the Indenture Supplement pursuant to
which the Related Series of Notes with respect to such Series of
Junior Preferred Membership Interests were issued, by consenting
to the extension of any revolving commitment thereunder or
otherwise.
(ix) Without the unanimous written consent of all
Junior Preferred Members, none of the Issuer nor any Member,
Manager, officer of the Issuer or other Person on behalf of the
Issuer shall issue a Series of Investor Notes having a "Series
Revolving Period" (as defined in the related Indenture
Supplement) that is scheduled to terminate after December 31,
2009.
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Section 10.3 Tax Treatment.
The Common Member and the Junior Preferred Members agree
that (x) the Junior Preferred Membership Interests shall be treated as
representing equity interests in the Issuer and not as debt for U.S.
federal income tax purposes and for relevant state and local income,
franchise and similar tax purposes, (y) the Issuer shall be treated as a
partnership for U.S. federal income tax purposes that is not taxable as
an association or a publicly traded partnership taxable as a corporation
and (z) no Senior Preferred Member shall take any position that is
inconsistent with such treatment.
Section 10.4 Conditions to Issuance of Junior
Preferred Membership Interests.
(a) The Issuer shall not issue a Series of Junior
Preferred Membership Interests on any Series Closing Date unless it shall
have satisfied the following conditions on or prior to such Series
Closing Date:
(i) a majority of the Managers shall have duly
adopted an Action specifying the following terms of such Series
of Junior Preferred Membership Interests:
A. the aggregate stated liquidation preference and
designation of such Series;
B. the Dividend Rate (or formula for the
determination thereof);
C. the Series Closing Date;
D. each Rating Agency rating such Series;
E. the initial Dividend Payment Date for such
Series;
F. identification and the location of the Series
Preferred Member Distribution Account with respect to such
Series;
G. the Legal Final Redemption Date for such Series;
and
H. identification of the Related Series of Investor
Notes with respect to such Series, the Related Series of Senior
Preferred Membership Interests with respect to such Series and
any Related Series of Junior Preferred Membership Interests with
respect to such Series (all such terms, the "Principal Terms" of
such Series);
(ii) the Issuer shall have received written
confirmation from each Rating Agency with respect to each Series
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of Preferred Membership Interests that the Rating Agency
Condition shall have been satisfied with respect to such
issuance;
(iii) the proceeds received by the Issuer in respect of
the issuance and sale of each Series of Junior Preferred
Membership Interests shall be applied as set forth in the Action
with respect to such Series of Junior Preferred Membership
Interests; and
(iv) the Issuer shall have received an opinion of
counsel to the effect that neither the Origination Trust nor the
Issuer will be classified as an association or a publicly traded
partnership taxable as a corporation for U.S. federal income tax
purposes following the issuance of such Series of Senior
Preferred Membership Interests.
ARTICLE XI
TAXES; BOOKS; RECORDS; AND BANK ACCOUNTS
Section 11.1 Tax Returns. On or before the 90th
calendar day following the end of each Fiscal Year during the term of the
Issuer, the Chairman of the Managers shall cause to be prepared and filed
all necessary federal and state income tax returns for the Issuer, if
any, including without limitation making the elections described in
Section 7.5 of this Agreement. The Managers shall cause the Issuer to
provide all applicable tax information (i) to any Member, upon reasonable
request, and (ii) to all Members for each Fiscal Year within 90 days
following the end of such Fiscal Year.
Section 11.2 Tax Elections. The Issuer shall make
the following elections on the appropriate tax returns:
(i) to adopt the Fiscal Year as the Issuer's fiscal
year;
(ii) to adopt the accrual method of tax accounting;
(iii) to elect to amortize the organizational expenses
of the Issuer and the startup expenditures of the Issuer under
section 195 of the Code ratably over a period of 60 months as
permitted by section 709(b) of the Code; and
(iv) any other election the Chairman of the Managers
may deem appropriate and in the best interests of the Members.
Neither the Issuer nor any Manager or Member shall make or authorize any
Person to make (i) an election for the Issuer to be excluded from the
application of the provisions of subchapter K of chapter 1 of subtitle A
of the Code or any similar provisions of applicable state law, and no
provision of this Agreement shall be construed to sanction or approve
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such an election or (ii) an election for the Issuer to be classified or
taxed as a corporation for federal income tax purposes or any applicable
state or local income or franchise tax purposes.
Neither the Issuer nor any Manager shall make any
election to adjust the basis of the Issuer Assets under Section 754 of
the Code.
Section 11.3 Tax Matters Partner. The Common Member
shall be the "tax matters partner" of the Issuer pursuant to section
6231(a)(7) of the Code. The "tax matters partner" shall take such action
as may be necessary to cause each other Member to become a "notice
partner" within the meaning of section 6223 of the Code. The "tax matters
partner" shall inform each other Member 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 Member
copies of all significant written communications it may receive in that
capacity.
Section 11.4 Maintenance of Books. The Managers
shall keep books and records of accounts of the Issuer and shall keep
minutes of the proceedings of the Members, the Managers and each
committee of the Managers. The books of account for the Issuer shall be
maintained in accordance with the accounting method selected by the
Managers consistently applied, except that the Capital Accounts shall be
maintained in accordance with Section 6.5. The Fiscal Year shall be the
accounting year of the Issuer.
Section 11.5 Reports.
(i) Within sixty (60) days following the end of each
Fiscal Year during the term of the Issuer, the Managers shall
cause each Member to be furnished with a balance sheet, an
income statement and a statement of changes in Member's Capital
Accounts for, or as of the end of, that Fiscal Year. Such
financial statements must be prepared in accordance with GAAP
consistently applied (except as therein noted), and shall be
accompanied by an audit report from a nationally recognized
accounting firm.
(ii) On each Dividend Payment Date, the Managers shall
provide to the Preferred Members of each Series a copy of the
Monthly Settlement Statement with respect to the Related Series
of Investor Notes with respect to such Series of Preferred
Membership Interests.
Section 11.6 Bank and Investment Accounts.
(a) The Managers shall establish and maintain in the
name of the Issuer a bank account (the "Issuer General Account") for the
deposit of amounts required to be deposited therein in accordance with
the Indenture. The Managers may also establish and maintain one or more
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other separate bank and investment accounts and arrangements for Issuer
in the Issuer name with financial institutions and firms that the
Managers determine. The Managers shall not commingle the Issuer's funds
with the funds of any Member.
(b) The Managers shall establish and maintain in the
name of the Issuer an Eligible Deposit Account with respect to the
Preferred Membership Interests relating to each Series of Investor Notes
(each a "Series Preferred Member Distribution Account") for the deposit
of all amounts released on a Payment Date from the Collection Account to
the Issuer in accordance with the Indenture Supplement for such Series of
Investor Notes. If at any time the Managers obtain knowledge that a
Series Preferred Member Distribution Account is no longer an Eligible
Deposit Account, the Managers shall, within 30 days of obtaining such
knowledge, establish a new Series Preferred Member Distribution Account
with respect to such Series of Preferred Membership Interests that is an
Eligible Deposit Account and transfer into the new Series Preferred
Member Distribution Account all cash and investments from the
non-qualifying Series Preferred Member Distribution Account.
Section 11.7 Distributions from Series Preferred
Member Distribution Accounts.
(a) Senior Preferred Membership Interests Prior to the
Series Note Termination Date. The Managers shall deposit in each Series
Preferred Member Distribution Account with respect to each Series of
Investor Notes all amounts released on a Payment Date from the Collection
Account to the Issuer in accordance with the Indenture Supplement for
such Series of Investor Notes. The Managers shall distribute from each
Series Preferred Member Distribution Account with respect to one or more
Series of Senior Preferred Membership Interests on each Dividend Payment
Date prior to the Series Note Termination Date with respect to such
Series, after payment of all accumulated and unpaid Dividends (whether or
not earned or declared) on such Series of Senior Preferred Membership
Interests and on the Related Series of Junior Preferred Membership
Interests, if any, with respect to such Series of Senior Preferred
Membership Interests, including any Additional Dividends accrued thereon,
any amounts owing by the Issuer under the Purchase Agreements with
respect to such Series of Senior Preferred Membership Interests on such
Dividend Payment Date; provided, however that if the amount so available
in any Series Preferred Member Distribution Account is less than the
aggregate amount payable under such Purchase Agreements, the Managers
shall pay such amounts in proportion to the aggregate amounts owing
thereunder. If there is no Related Series of Junior Preferred Membership
Interests with respect to any Series of Senior Preferred Membership
Interests, any remaining amounts on deposit in the Series Preferred
Member Distribution Account with respect to such Series of Senior
Preferred Membership Interests on any such Dividend Payment Date shall be
deposited into the Issuer General Account.
(b) Junior Preferred Membership Interests Prior to the
Series Note Termination Date. The Managers shall distribute from each
Series Preferred Member Distribution Account with respect to one or more
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Series of Junior Preferred Membership Interests on each Dividend Payment
Date prior to the Series Note Termination Date with respect to such
Series, after payment of all accumulated and unpaid Dividends (whether or
not earned or declared) on such Series of Junior Preferred Membership
Interests and on the Related Series of Senior Preferred Membership
Interests with respect to such Series of Junior Preferred Membership
Interests, including any Additional Dividends accrued thereon, and
payment of all amounts owing under the Purchase Agreements with respect
to the Related Series of Senior Preferred Membership Interests with
respect to such Series of Junior Preferred Membership Interests, any
amounts owing by the Issuer under the Purchase Agreements with respect to
such Series of Junior Preferred Membership Interests on such Dividend
Payment Date; provided, however that if the amount so available in any
Series Preferred Member Distribution Account is less than the aggregate
amount payable under such Purchase Agreements, the Managers shall pay
such amounts in proportion to the aggregate amounts owing thereunder.
Any remaining amounts on deposit in any such Series Preferred Member
Distribution Account on any such Dividend Payment Date shall be deposited
into the Issuer General Account.
(c) Senior Preferred Membership Interests On or After
the Series Note Termination Date. On the Series Note Termination Date
with respect to one or more Series of Senior Preferred Membership
Interests and on each Dividend Payment Date thereafter, after payment of
all accumulated and unpaid Dividends (whether or not earned or declared)
on such Series of Senior Preferred Membership Interests and on the
Related Series of Junior Preferred Membership Interests, if any, with
respect to such Series of Senior Preferred Membership Interests,
including any Additional Dividends accrued thereon, an amount equal to
the lesser of (x) any remaining amounts on deposit in the Series
Preferred Member Distribution Account with respect to such Series of
Senior Preferred Membership Interests and (y) the Principal Payment
Amount with respect to such Series of Senior Preferred Membership
Interests shall be applied to redeem in whole or in part each such Series
of Senior Preferred Membership Interests on a pro rata basis, based on
the stated liquidation preference of each such Series of Senior Preferred
Membership Interests, in accordance with Section 9.2(c)(ii). If all such
Series of Senior Preferred Membership Interests shall have not been
redeemed in full in accordance with the provisions of this Section
11.7(c) on any Dividend Payment Date, any remaining amounts on deposit in
the Series Preferred Member Distribution Account with respect to such
Series of Senior Preferred Membership Interests on any Dividend Payment
Date shall be applied (i) first, to pay any amounts owing by the Issuer
under the Purchase Agreements with respect to such Series of Senior
Preferred Membership Interests on such Dividend Payment Date, on a pro
rata basis, based on the respective amounts owing thereunder, to the
extent that there are insufficient funds to pay all amounts owing
thereunder, and (ii) second, to pay any amounts owing by the Issuer under
the Purchase Agreements with respect to the related Series of Junior
Preferred Membership Interests on such Dividend Payment Date, on a pro
rata basis, based on the respective amounts owing thereunder, to the
extent that there are insufficient funds to pay all amounts owing
thereunder. Any amounts remaining on deposit in any such Series
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Preferred Member Distribution Account, after paying any amounts owing
under such Purchase Agreements, shall be deposited into the Issuer
General Account.
(d) Junior Preferred Membership Interests On or After
the Series Note Termination Date. On the first Dividend Payment Date
after the Series Note Termination Date with respect to any Series of
Junior Preferred Membership Interests on which each Related Series of
Senior Preferred Membership Interests which respect to such Series of
Junior Preferred Membership Interests shall have been redeemed in full
and on each Dividend Payment Date thereafter, after payment of all
accumulated and unpaid Dividends (whether or not earned or declared) on
each Related Series of Senior Preferred Membership Interests, if any,
with respect to such Series of Junior Preferred Membership Interests and
such Series of Junior Preferred Membership Interests, including any
Additional Dividends accrued thereon, and redemption in full of all
Related Series of Senior Preferred Membership Interests with respect to
such Series of Junior Preferred Membership Interests in accordance with
Section 9.2(c)(ii), an amount equal to the lesser of (x) any remaining
amounts on deposit in the Series Preferred Member Distribution Account
with respect to such Series of Junior Preferred Membership Interests and
(y) the Principal Payment Amount with respect to such Series of Junior
Preferred Membership Interests (net of any amounts applied to redeem the
Related Series of Senior Preferred Membership Interests with respect to
such Series of Junior Preferred Membership Interests on such Dividend
Payment Date) shall be applied to redeem in whole or in part each such
Series of Junior Preferred Membership Interests on a pro rata basis,
based on the stated liquidation preference of each such Series of Junior
Preferred Membership Interests, in accordance with Section 10.2(c)(ii).
Any amounts remaining on deposit in any Series Preferred Member
Distribution Account with respect to any Series of Preferred Membership
Interests on any Dividend Payment Date shall be applied (i) first, to pay
any amounts owing by the Issuer under the Purchase Agreements with
respect to the related Series of Senior Preferred Membership Interests on
such Dividend Payment Date, on a pro rata basis, based on the respective
amounts owing thereunder, to the extent that there are insufficient funds
to pay all amounts owing thereunder, and (ii) second, to pay any amounts
owing by the Issuer under the Purchase Agreements with respect to the
related Series of Junior Preferred Membership Interests on such Dividend
Payment Date, on a pro rata basis, based on the respective amounts owing
thereunder, to the extent that there are insufficient funds to pay all
amounts owing thereunder. Any amounts remaining on deposit in any such
Series Preferred Member Distribution Account, after paying any amounts
owing under such Purchase Agreements, shall be deposited into the Issuer
General Account.
(e) After Redemption in Full. After all Series of
Senior Preferred Membership Interests and all Series of Junior Preferred
Membership Interests relating to a particular Series of Investor Notes
shall have been redeemed in full, the Managers shall apply any amounts on
deposit in the Series Preferred Member Distribution Account with respect
to such Series of Investor Notes (i) first, to the payment of any amounts
owing by the Issuer under the Purchase Agreements with respect to such
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Series of Senior Preferred Membership Interests, on a pro rata basis,
based on the respective amounts owing thereunder, to the extent that
there are insufficient funds to pay all amounts owing thereunder, and
(ii) second, to the payment of any amounts owing by the Issuer under the
Purchase Agreements with respect to such Series of Junior Preferred
Membership Interests, on a pro rata basis, based on the respective
amounts owing thereunder, to the extent that there are insufficient funds
to pay all amounts owing thereunder. Any amounts remaining on deposit in
any such Series Preferred Member Distribution Account, after payment of
all amounts owing under any such Purchase Agreements, shall be deposited
into the Issuer General Account.
ARTICLE XII
TRANSFER OF MEMBERSHIP INTERESTS
Section 12.1 Prohibition on Disposition of Common
Interest. The Common Member shall not Dispose of all or any part of its
Common Membership Interest. Any attempted Disposition by the Common
Member of its Common Membership Interest, or any part thereof or any
interest therein shall be, and hereby is declared, null and void and the
Issuer shall not recognize for any purpose any purported Disposition of
all or part of the Common Membership Interest.
Section 12.2 Form of Preferred Membership
Certificates.
(a) The Senior Preferred Membership Certificates of
each Series shall be issued substantially in the form set forth in
Exhibit A (appropriately completed to identify the applicable Series and
the Principal Terms of such Series). The Junior Preferred Membership
Certificate of each Series shall be issued in the form set forth in the
Action with respect to such Series of Junior Preferred Membership
Interests. The Preferred Membership Certificates shall be executed on
behalf of the Issuer by the manual or facsimile signature of any officer
or Manager of the Issuer.
(b) The Preferred Membership Certificates shall be
typewritten, printed, lithographed or engraved or produced by any
combination of these methods (with or without steel engraved borders),
all as determined by the officers or Managers executing such Preferred
Membership Certificates, as evidenced by their execution of such
Preferred Membership Certificates.
Section 12.3 Registration of Transfer and Exchange.
(a) The Managers shall provide for the registration of
the Preferred Membership Certificates and of transfers of the Preferred
Membership Certificates. The Managers shall cause to be kept a
certificate register (the "Register") in which an agent of the Issuer
(the "Transfer Agent") shall provide for the registration of the
Preferred Membership Certificates and of transfers and exchanges of the
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Preferred Membership Certificates as provided herein. Subject to the
prior satisfaction of the provisions of Section 12.3(b) below, upon
surrender for registration of transfer or exchange of any Preferred
Membership Certificate at the office or agency maintained by the Transfer
Agent for that purpose, the Issuer shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Preferred
Membership Certificates in the same Series of a like aggregate stated
liquidation preference. At the option of a Preferred Member, Preferred
Membership Certificates may be exchanged for other Preferred Membership
Certificates in the same Series of a like aggregate stated liquidation
preference upon surrender of the Preferred Membership Certificates to be
exchanged at the office or agency maintained by the Transfer Agent for
such purpose. Whenever any Preferred Membership Certificates are so
surrendered for exchange, the Issuer shall execute and cause the Transfer
Agent to deliver one or more Preferred Membership Certificates to the
Preferred Member making the exchange. Every Preferred Membership
Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Transfer Agent duly executed by the Preferred Member
or his attorney duly authorized in writing. No service charge shall be
made for any registration of transfer or exchange of Preferred Membership
Certificates, but the Transfer Agent may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Preferred Membership
Certificates.
(b) No Preferred Member shall Dispose of all or any
part of its Preferred Membership Interest (or any interest therein) other
than pursuant to a transfer of its Preferred Membership Certificates in
accordance with this Section 12.3(b). No transfer of a Preferred
Membership Certificate may be made unless (i) (x) the transferee is a
U.S. Person, such transfer complies with the requirements of Rule 144A
under the Securities Act and the transferor reasonably believes that the
transferee is a Qualified Institutional Buyer or (y) such transfer is
otherwise exempt from registration under the Securities Act and the
Chairman of Managers determines that such transfer will not cause the
Origination Trust or the Issuer to be classified as an association or a
publicly traded partnership taxable as a corporation for United States
federal income tax purposes or would cause the Issuer to have in the
aggregate more than 50 Members and (ii) except as otherwise provided in
the Purchase Agreement with respect to any Preferred Membership
Interests, the transferor and the transferee have delivered to the
Transfer Agent and the Chairman of the Managers a duly executed
Transferor Certificate of Transfer and a duly executed Transferee
Certificate of transfer, substantially in the forms of Exhibits E and F.
Section 12.4 Mutilated, Destroyed, Lost or Stolen
Certificates. If (i) any mutilated Preferred Membership Certificate is
surrendered to the Transfer Agent, or the Transfer Agent receives
evidence to its satisfaction of the destruction, loss or theft of any
Preferred Membership Certificate, and (ii) there is delivered to the
Transfer Agent and the Issuer such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of
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notice to the Transfer Agent or the Issuer that such Preferred Membership
Certificate has not been acquired for value, the Issuer shall execute and
the Transfer Agent shall deliver in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Preferred Membership Certificate a
replacement Preferred Membership Certificate of a like aggregate stated
liquidation preference. If, after the delivery of a replacement
Preferred Membership Certificate a purchaser for value of the original
Preferred Membership Certificate in lieu of which such replacement
Preferred Membership Certificate was issued presents for payment such
original Preferred Membership Certificate, the Issuer shall be entitled
to recover such replacement Preferred Membership Certificate (or such
payment) from the Person to whom it was delivered or any Person taking
such replacement Preferred Membership Certificate from such Person to
whom such replacement Preferred Membership Certificate was delivered or
any assignee of such Person, except a purchaser for value, and shall be
entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer in
connection therewith. In connection with the issuance of any replacement
Preferred Membership Certificate under this Section 12.4, the Transfer
Agent may require the payment by the Preferred Member of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses connected therewith.
Any duplicate Preferred Membership Certificate issued pursuant to this
Section 12.4 in replacement of any mutilated, destroyed, lost or stolen
Preferred Membership Certificate shall constitute an original additional
interest in the Issuer, whether or not the mutilated, destroyed, lost or
stolen Preferred Membership Certificate shall be found at any time, and
the registered holder thereof shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other
Preferred Members.
Section 12.5 Persons Deemed Preferred Members.
Prior to due presentation of a Preferred Membership Certificate for
registration of transfer or exchange, the Issuer and the Transfer Agent
may treat the Person in whose name any Preferred Membership Certificate
shall be registered in the Register as the Preferred Member holding such
Preferred Membership Certificate for the purpose of receiving Dividends
and other distributions hereunder and for all other purposes whatsoever,
and neither the Issuer nor the Transfer Agent shall be affected by any
notice to the contrary.
Section 12.6 Interests in the Issuer May Not be
Traded on an Established Securities Market. Each of the Members
covenants and agrees that it will not transfer, assign, participate,
pledge or otherwise dispose of its interest in the Issuer, or cause its
interest to be marketed, on or through an "established securities market"
within the meaning of Code Section 7704(b) and the Treasury Regulations
promulgated thereunder. No transfer of a Senior or Junior Preferred
Membership Interest in the Issuer may be made unless the relevant
transferor and the relevant transferee deliver their respective
Certificates of Transfer in accordance with Section 12.3(b) of this
Agreement.
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ARTICLE XIII
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution.
(a) The Issuer shall be dissolved and its affairs shall
be wound up upon the first of the following to occur: (i) upon the
election to dissolve the Issuer by 100% of the Managers as provided by
Section 3.4 and approved by the Preferred Members in accordance with
Sections 9.3(f) and 10.3(f), (ii) the entry of a decree of judicial
dissolution of the Issuer under Section 18-802 of the Act or (iii) at any
time that there are no Members, unless the Issuer is continued in
accordance with the Act. Notwithstanding any other provision of this
Agreement, the occurrence of an Insolvency Event with respect to any
Member shall not cause such Member to cease to be a member of the Issuer
and upon the occurrence of such an event, the business of the Issuer
shall continue without dissolution.
(b) Dissolution of the Issuer shall be effective as of
the day on which the event occurs giving rise to the dissolution, but the
Issuer shall not terminate until there has been a winding up of the
Issuer's business and affairs, and the Issuer's assets have been
distributed as provided in Section 13.2 of this Agreement and in the Act
and the Issuer's Certificate of Formation has been cancelled.
(c) Upon the occurrence of any event that causes the
Common Member to cease to be a member of the Issuer, the following
provisions shall apply:
(i) to the fullest extent permitted by law, the
personal representative of the Common Member is hereby
authorized to, and shall, within ten days after the occurrence
of the event that terminated the continued membership of the
Common Member in the Issuer, agree in writing (i) to continue
the Issuer and (ii) to the admission of the personal
representative or its nominee or designee, as the case may be,
as the substitute Common Member, effective as of the occurrence
of the event that terminated the continued membership of the
Common Member in the Issuer, and thereafter all references in
this Agreement to the Common Member shall be deemed to refer to
such substitute Common Member; and
(ii) Tony Wong, or any successor Independent Manager,
shall, without any action of any Person and simultaneously with
the Common Member ceasing to be a member of the Issuer, be
admitted to the Issuer as a member of the Issuer that has no
interest in the profits, losses and capital to the Issuer and
has no right to receive any distributions of Issuer assets (the
"Special Member") and shall continue the Issuer without
dissolution. Until such time as a substitute Common Member has
been admitted to the Issuer, the Special Member shall not have
any right to resign from the Issuer or to assign or transfer its
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rights as Special Member. Pursuant to Section 18-301 of the
Act, the Special Member shall not be required to make any
capital contribution to the Issuer and shall not receive a
limited liability company interest in the Issuer. The Special
Member may not bind the Issuer. Except as required by any
mandatory provision of the Act, the Special Member, in its
capacity as Special Member, shall have no right to vote on,
approve or otherwise consent to any action by, or matter
relating to, the Issuer, including, without limitation, the
merger, consolidation or conversion of the Issuer. In order to
implement the admission of Tony Wong as the Special Member, Tony
Wong has executed a counterpart to this Agreement as of the date
hereof and any successor Independent Manager shall be required
to execute a counterpart to this Agreement. Prior to its
admission to the issuer as Special Member, the Independent
Manager shall not be a member of the Issuer.
Section 13.2 Liquidation and Termination. Upon
dissolution of the Issuer, the Managers shall act as liquidators or may
appoint one or more Managers or Members (with its or their consent) as
liquidators. The liquidators shall proceed diligently to wind up the
affairs of the Issuer and make final distributions as provided in this
Section 13.2 and in the Act. The costs of liquidation shall be borne as
an Issuer expense. Until final distribution, the liquidators shall
continue to operate the Issuer's assets and the Issuer's affairs with all
the power and authority of the Managers. The steps to be accomplished by
the liquidators are as follows:
(a) As promptly as possible after dissolution and again
after final liquidation, the liquidator shall cause an accounting to be
made by a recognized firm of certified public accountants of the Issuer's
assets and the Issuer's liabilities and operations through the last day
of the calendar month in which the dissolution occurs or the final
liquidation is completed, as the case may be;
(b) The liquidator may cause all or any part of the
Issuer's assets to be sold to any Person (including, without limitation,
to Members) as the liquidator shall reasonably determine, and any
resulting gain or loss from each such sale shall be computed and
allocated to the Members in the manner provided in Article VII;
(c) The liquidator shall pay, satisfy or discharge from
the Issuer's assets all of the debts, liabilities and obligations of the
Issuer, including, without limitation, all expenses incurred in
liquidation and all amounts owed to the Members to the extent that they
are creditors of the Issuer, but excluding liabilities to Members on
account of their Capital Contributions, in the order of priority as
provided by law, or otherwise make adequate provision for payment and
discharge thereof (including, without limitation, the establishment of a
cash escrow fund for contingent liabilities in such amount and for such
term as the liquidator may reasonably determine);
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(d) After payment, satisfaction or discharge of the
Issuer's debts, liabilities and obligations (or adequate provision
therefor) has been made pursuant to clause (c) of this Section 13.2, all
remaining Issuer assets shall be distributed to the Members as follows:
(i) first, to the Senior Preferred Members in respect
of each outstanding Series of Senior Preferred Membership
Interests, the amount of their respective Liquidation Preference
Amounts or, to the extent that the assets of the Issuer are
insufficient to pay all of the Senior Preferred Members the
amounts of their respective Liquidation Preference Amounts, to
the Senior Preferred Members in respect each outstanding Series
of Senior Preferred Membership Interests in proportion to the
remaining positive balances in their Capital Accounts (as
determined after taking into account all allocations required to
be made under Article VII of this Agreement);
(ii) second, to the Junior Preferred Members in
respect of each outstanding Series of Junior Preferred
Membership Interests, the amount of their respective Liquidation
Preference Amounts or, to the extent that the assets of the
Issuer are insufficient to pay all of the Junior Preferred
Members the amounts of their respective Liquidation Preference
Amounts, to the Junior Preferred Members in respect each
outstanding Series of Junior Preferred Membership Interests in
proportion to the remaining positive balances in their Capital
Accounts (as determined after taking into account all
allocations required to be made under Article VII of this
Agreement); and
(iii) any remaining assets of the Issuer shall be
distributed to the Common Member.
All distributions in kind of the Issuer's assets to the Members shall be
made subject to the liability relating to such Issuer assets incurred or
for which the Issuer has committed prior to the date of termination of
the Issuer and such costs, expenses and liabilities shall be allocated to
the distributee in accordance with this Section 13.2. To the extent that
an asset is to be distributed in kind, such asset shall be deemed to have
been sold at its fair market value on the date of distribution, the gain
or loss deemed realized upon such deemed sale shall be allocated in
accordance with Article VII and the amount of the distribution shall be
considered to be such fair market value of the asset.
The distribution of the Issuer's assets to a Member in accordance with
the provisions of this Section 13.2 constitutes a complete return to the
Member of its Capital Contribution and a complete distribution to the
Member of its Membership Interest and all of the Issuer's assets, and
constitutes a compromise to which all Members have consented in writing
within the meaning of Section 18-502(b) of the Act. To the extent that a
Member returns funds to the Issuer, such Member shall have no claim
against any other Member for such funds.
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Section 13.3 Deficit Capital Accounts.
Notwithstanding anything to the contrary contained in this Agreement, to
the extent that the deficit, if any, in the Capital Account of any Member
results from or is attributable to deductions and losses of the Issuer
(including, without limitation, non-cash items such as depreciation), or
distributions of money or other assets pursuant to this Agreement upon
dissolution of the Issuer, such deficit shall not be an asset of the
Issuer and such Member shall not be obligated to contribute such amount
to the Issuer to bring the balance of such Member's Capital Account to
zero.
Section 13.4 Certificate of Cancellation. When all
liabilities and obligations of the Issuer have been satisfied and all of
the remaining Issuer assets have been distributed to the Members
according to their respective rights and interests as provided in Section
13.2 of this Agreement, a Certificate of Cancellation shall be executed
on behalf of the Issuer by the Managers (or such other Person or Persons
as the Act may require or permit) and shall be filed with the Office of
the Secretary of State of the State of Delaware, and the Managers or such
other Person or Persons shall take such other actions, and shall execute,
acknowledge and file any and all other instruments, as may be necessary
or appropriate to reflect the dissolution and termination of the Issuer.
ARTICLE XIV
VOTING AGREEMENTS
Section 14.1 Managers; Number; Selection; Vacancies.
The Common Member, the Preferred Members and the Managers shall take all
actions necessary from time to time to ensure that at all times the
number of Managers shall be three (or five under the circumstances
described in Sections 9.2(f) and 10.2(f)); provided, however, that
pursuant to Section 3.4, the Issuer shall at all times have at least one
Independent Manager. The initial Managers shall be Joseph W.Weikel (who
will serve as Chairman of the Managers), Kevin Burns and Tony Wong (who
will serve as the Independent Manager).
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Amendments. Except as provided by
Sections 3.4, 9.2(f) and 10.2(f), this Agreement may be amended by a
written instrument executed by the Common Member without the consent of
any Preferred Member; provided, however, that no amendment shall be made,
and any such purported amendment shall be void and ineffective, to the
extent the result thereof would be to cause the Issuer to be treated as
anything other than a partnership for purposes of United States federal
income taxation.
Section 15.2 Amendment of Certificate. In the event
this Agreement shall be amended pursuant to Section 15.1, the Managers
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shall amend the Certificate of Formation to reflect such change if it
deems such amendment of the Certificate of Formation to be necessary or
appropriate.
Section 15.3 Notices. Except as expressly set forth
to the contrary in this Agreement, all notices, requests, or consents
provided for or permitted to be given under this Agreement shall be in
writing and shall be given either by depositing such writing in the
United States mail, addressed to the recipient, postage paid, and
registered or certified with return receipt requested or by delivering
such writing to the recipient in person, by courier, or by facsimile
transmission; and a notice, request, or consent given under this
Agreement shall be effective on receipt by the Person to whom sent. All
notices, requests, and consents to be sent to a Member shall be sent to
or made at the address given for such Member in the Register or such
other address as such Member may specify by notice to the Transfer Agent
and the Issuer. Any notice, request, or consent to the Issuer or the
Managers must be given to the Managers at the following address: c/o
Global Securitization, LLC, 103 Foulk Road, Suite 205-11, Wilmington,
Delaware 19803. Whenever any notice is required to be given by law, the
Certificate of Formation or this Agreement, a written waiver thereof,
signed by the Person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
Section 15.4 Entire Agreement. This Agreement,
together with any Actions, constitutes the entire agreement of the
Members relating to the Issuer and supersedes all prior contracts or
agreements with respect to the Issuer, whether oral or written.
Section 15.5 Effect of Waiver or Consent. A waiver
or consent, express or implied, to or of any breach or default by any
Person in the performance by such Person of its obligations with respect
to the Issuer shall not be a consent or waiver to or of any other breach
or default in the performance by such Person of the same or any other
obligations of such Person with respect to the Issuer. Failure on the
part of a Person to complain of any act or omission of any Person or to
declare any Person in default with respect to the Issuer, irrespective of
how long that failure continues, shall not constitute a waiver by such
Person of its rights with respect to that default until the applicable
statute-of-limitations period has run.
Section 15.6 Governing Law; Severability. This
Agreement shall be governed by and shall be construed in accordance with
the law of the State of Delaware, excluding any conflict-of-laws rule or
principle that might refer the governance or the construction of this
Agreement to the law of another jurisdiction. In the event of a direct
conflict between the provisions of this Agreement and any mandatory
provision of the Act then the applicable provision of the Act shall
control. If any provision of this Agreement or the application thereof to
any Person or circumstance is held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of that
provision to other Persons or circumstances shall not be affected thereby
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and such provision shall be enforced to the fullest extent permitted by
law.
Section 15.7 Further Assurances. In connection with
this Agreement and the transactions contemplated hereby, each Member
shall execute and deliver any additional documents and instruments and
perform any additional acts that may be necessary or appropriate to
effectuate and perform the provisions of this Agreement and those
transactions.
Section 15.8 Waiver of Certain Rights; No Bankruptcy
Petition. To the fullest extent permitted by law, each Member
irrevocably waives any right it may have to maintain any action for
dissolution of the Issuer or for partition of any Issuer asset. Each
Member and each Manager (by agreeing to act in such capacity) hereby
covenants and agrees (or shall be deemed to have hereby covenanted and
agreed) that, prior to the date which is one year and one day after the
payment in full of every indebtedness or liability of the Issuer
represented by any Series of Investor Notes and amounts owed under the
Indenture to third-party credit enhancers with respect to such Investor
Notes, it will not, in its capacity as a creditor of the Issuer,
institute against, or join with any other Person in instituting against,
the Issuer, any involuntary bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
Federal or state bankruptcy or similar law. In the event that a Member or
Manager takes action in violation of this Section 15.8, the Issuer agrees
that it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition or the commencement of such
action and raise the defense that the Member or Manager, as the case may
be, has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as its counsel
advises that it may assert. The provisions of this Section 15.8 shall
survive the termination of this Agreement and the resignation or removal
of any Manager. Nothing herein contained shall preclude participation by
a Member or a Manager in assertion or defense of its claims in any such
proceeding involving the Issuer.
Section 15.9 Headings and Sections. The headings in
this Agreement are inserted for convenience only and are in no way
intended to describe, interpret, define, or limit the scope, extent or
intent of this Agreement or any provision hereof. Unless the context
requires otherwise, all references in this Agreement to Sections or
Articles shall be deemed to mean and refer to Sections or Articles of
this Agreement.
Section 15.10 Binding Effect. Except as otherwise
provided in this Agreement to the contrary, this Agreement shall be
binding upon and inure to the benefit of the Members and their legal
representatives, executors, administrators, successors and assigns.
Section 15.11 Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be deemed to be an
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original and shall be binding upon the Member who executed the same, but
all of such counterparts shall constitute the same Agreement.
Section 15.12 Conflicts of Interest. Subject to the
other express provisions of this Agreement or except as otherwise
expressly agreed in writing, each Manager, Member and officer of the
Issuer at any time and from time to time may engage in and possess
interests in other business ventures of any and every type and
description, independently or with others, including ones in competition
with the Issuer, with no obligation to offer to the Issuer or any other
Member, Manager or officer the right to participate therein.
Section 15.13 Binding Agreement. Notwithstanding any
other provision of this Agreement, the Common Member agrees that this
Agreement constitutes a legal, valid and binding agreement of the Common
Member and is enforceable against the Common Member by the Independent
Manager in accordance with its terms. In addition, the Independent
Manager shall be an intended beneficiary of this Agreement.
Section 15.14 Effectiveness. This Agreement shall be
effective upon the issuance of the Series 1999-2 Senior Preferred
Membership Interests and the simultaneous redemption in full of the
Series 1999-1 Preferred Membership Interests on October 28, 1999.
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IN WITNESS WHEREOF, this Agreement is executed and
delivered as of the date first written above by the undersigned, and the
undersigned, being all of the Members, do hereby agree to be bound by the
terms and provisions set forth in this Agreement.
RAVEN FUNDING LLC
By: /s/ Bernard J. Angelo
__________________________
Name: Bernard J. Angelo
Title: Manager
SPECIAL MEMBER:
/s/ Tony Wong
______________________________
Name: Tony Wong
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EXHIBIT A
TO LIMITED
LIABILITY
AGREEMENT
FORM OF SENIOR PREFERRED MEMBERSHIP INTEREST CERTIFICATE
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EXHIBIT B
TO LIMITED
LIABILITY AGREEMENT
FORM OF MANAGER AGREEMENT
Manager Agreement
______, ____
Greyhound Funding LLC
[Address ______________________
______________________________]
Re: Manager Agreement - Greyhound Funding LLC
Ladies and Gentlemen:
For good and valuable consideration, each of the
undersigned persons, who have been designated as Managers of Greyhound
Funding LLC, a Delaware limited liability company (the "Company"), in
accordance with the Limited Liability Company Agreement of the Company,
dated as of June 30, 1999, as it may be amended or restated from time to
time (the "LLC Agreement"), hereby agree as follows:
1. Each of the undersigned accepts such person's
rights and authority as a Manager (as defined in the LLC Agreement) under
the LLC Agreement and agrees to perform and discharge such person's
duties and obligations as a Manager under the LLC Agreement, and further
agrees that such rights, authorities, duties and obligations under the
LLC Agreement shall continue until such person's successor as a Manager
is designated or until such person's resignation or removal as a Manager
in accordance with the LLC Agreement. Each of the undersigned agrees and
acknowledges that it has been designated as a "manager" of the Company
within the meaning of the Delaware Limited Liability Company Act.
2. THIS MANAGER AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
This Manager Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this Manager
Agreement and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Manager Agreement as of the day and year first above written.
_______________________________
_______________________________
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EXHIBIT C
TO LIMITED
LIABILITY AGREEMENT
FORM OF SENIOR PREFERRED MEMBER
REPRESENTATION LETTER
Greyhound Funding LLC
900 Old Country Road
Garden City, New York 11530
Attn: Chairman of the Managers
Re: Initial Purchase of Senior Preferred Membership
Certificates
Mr. Chairman:
In connection with our proposed purchase of Series [__]
Senior Preferred Membership Certificates (the "Senior Certificates"), we
represent and warrant that:
1. We are purchasing Senior Certificates having a
stated liquidation preference of $[______].
2. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) and have
such knowledge and experience in financial and
other business matters as to be capable of
evaluating the merits and risks of investment in
the Senior Certificates and we are able to bear
the economic risks of our investment. We are
acquiring the Senior Certificates for investment
only and not with a view to any distribution
thereof. We have had access to such financial
and other information concerning the Issuer and
the Senior Certificates as we have deemed
necessary in connection with our decision to
purchase the Senior Certificates, including the
opportunity to ask questions of and request
information from the Issuer.
3. We understand and acknowledge that the Senior
Certificates have not been registered under the
Securities Act or any other applicable securities
law and may not be offered, sold or otherwise
transferred except in compliance with the
Securities Act and other applicable securities
laws. We agree that we will not offer to sell,
sell or otherwise transfer the Senior
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Certificates in violation of any of the
registration requirements of the Securities Act
or any other applicable securities law. We
acknowledge that we have no right to require the
Issuer to register the Senior Certificates under
the Securities Act or any other securities law.
We agree that in connection with any transfer by
us of an our Senior Certificates, we will not
engage in a general solicitation or general
advertising, including advertisements, articles,
notices or other communications published in any
newspaper, magazine or similar media or broadcast
over radio or television, or any seminar or
meeting whose attendees have been invited by any
general solicitation or general advertising.
4. We are acquiring the Senior Certificates for our
own account and we are, and we will remain, the
sole beneficial owner of such Senior Certificates
at all times unless and until we transfer
ownership of all, or some part, of such Senior
Certificates in accordance with and to the extent
permitted under Section 12.3(b) of the Amended
and Restated Limited Liability Company Agreement
of Greyhound Funding LLC (the "Greyhound Funding
LLC Agreement"), dated as of October 28, 1999.
5. In accordance with Section 9.3 of the Greyhound
Funding LLC Agreement, we agree to (i) treat our
Senior Certificates as representing equity
interests in the Issuer, and not as debt, for all
United States federal income tax purposes and for
all relevant state and local income, franchise
and other similar tax purposes, (ii) treat the
Issuer as a partnership for U.S. federal income
tax purposes that is not taxable as an
association or a publicly traded partnership
taxable as a corporation and (iii) take no
position on any tax return or with any taxing or
other governmental authority that is inconsistent
with such treatment.
6. We are a "United States person" within the
meaning of Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended (the "Code").
7. Either (i) we are not, and we will not become, a
trust, estate, partnership or "S corporation"
(within the meaning of Section 1361(a) of the
Code) for United States federal income tax
purposes or (ii) if we are, or if we will become,
a trust, estate, partnership or S corporation for
such purposes, then (x) less than 50% of the
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value of any direct or indirect equity or other
beneficial interest in such trust, estate,
partnership or S corporation is, and will at all
times continue to be, attributable to the Senior
Certificates or any other Interest in the Issuer
and (y) the principal purpose of our purchase of
the Senior Certificates is not to permit the
Issuer or any entity of which the Issuer is a
direct or indirect partner to satisfy the 100
partner limitation set forth in Treasury
Regulation Section 1.7704-1(h)(1)(ii).
8. In accordance with Section 12.6 of the Greyhound
Funding LLC Agreement, we agree that we will not
sell, market, transfer, assign, participate,
pledge or otherwise dispose of our Senior
Certificates (or any interest therein) on or
through an "established securities market" within
the meaning of Section 7704(b)(1) of the Code
(and the Treasury Regulations promulgated
thereunder), including, without limitation, an
over-the-counter market or an interdealer
quotation system that regularly disseminates firm
buy or sell quotations.
9. We understand that (i) we may not grant a
participation in or otherwise subdivide our
beneficial interest in the Senior Certificates
and (ii) we may not sell, assign, trade, market,
pledge, transfer or otherwise dispose of our
Senior Certificates except in accordance with and
to extent permitted under Sections 12.3 and 12.6
of the Greyhound Funding LLC Agreement.
10. No part of the assets used by us to acquire the
Senior Certificates constitute assets of any
"Benefit Plan" defined as (i) an employee benefit
plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA")), (ii) a plan or arrangement
(including an individual retirement account or a
Keogh Plan) within the meaning of or subject to
Section 4975 of the Code or (iii) any entity
whose underlying assets include "plan assets"
under a United States Department of Labor
Regulation codified at 29 C.F.R. Section 2510.3-
101 or otherwise.
All capitalized terms used but not defined herein shall
have the meaning ascribed to such terms in the Greyhound Funding LLC
Agreement.
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We understand that the Issuer could be classified as a
publicly traded partnership taxable as a corporation if any of the above
representations is untrue or inaccurate. The Issuer and its counsel may
rely upon this representation letter (and the accuracy of the
representations set forth herein) and we irrevocably authorize the Issuer
and/or its counsel to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry related to the matters covered hereby.
Very truly yours,
By:______________________
Name:
Title:
Address:
-71-
<PAGE>
EXHIBIT D
TO LIMITED
LIABILITY AGREEMENT
FORM OF JUNIOR PREFERRED MEMBER
REPRESENTATION LETTER
Greyhound Funding LLC
900 Old Country Road
Garden City, New York 11530
Attn: Chairman of the Managers
Re: Initial Purchase of Junior Preferred Membership
Certificates
Mr. Chairman:
In connection with our proposed purchase of Series [__]
Junior Preferred Membership Certificates (the "Junior Certificates"), we
represent and warrant that:
1. We are purchasing Junior Certificates having a
stated liquidation preference of $[______].
2. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) and have
such knowledge and experience in financial and
other business matters as to be capable of
evaluating the merits and risks of investment in
the Junior Certificates and we are able to bear
the economic risks of our investment. We are
acquiring the Junior Certificates for investment
only and not with a view to any distribution
thereof. We have had access to such financial
and other information concerning the Issuer and
the Junior Certificates as we have deemed
necessary in connection with our decision to
purchase the Junior Certificates, including the
opportunity to ask questions of and request
information from the Issuer.
3. We understand and acknowledge that the Junior
Certificates have not been registered under the
Securities Act or any other applicable securities
law and may not be offered, sold or otherwise
transferred except in compliance with the
Securities Act and other applicable securities
laws. We agree that we will not offer to sell,
sell or otherwise transfer the Junior
-72-
<PAGE>
Certificates in violation of any of the
registration requirements of the Securities Act
or any other applicable securities law. We
acknowledge that we have no right to require the
Issuer to register the Junior Certificates under
the Securities Act or any other securities law.
We agree that in connection with any transfer by
us of an our Junior Certificates, we will not
engage in a general solicitation or general
advertising, including advertisements, articles,
notices or other communications published in any
newspaper, magazine or similar media or broadcast
over radio or television, or any seminar or
meeting whose attendees have been invited by any
general solicitation or general advertising.
4. We are acquiring the Junior Certificates for our
own account and we are, and we will remain, the
sole beneficial owner of such Junior Certificates
at all times unless and until we transfer
ownership of all, or some part, of such Junior
Certificates in accordance with and to the extent
permitted under Section 12.3(b) of the Amended
and Restated Limited Liability Company Agreement
of Greyhound Funding LLC (the "Greyhound Funding
LLC Agreement"), dated as of October 28, 1999.
5. In accordance with Section 9.3 of the Greyhound
Funding LLC Agreement, we agree to (i) treat our
Junior Certificates as representing equity
interests in the Issuer, and not as debt, for all
United States federal income tax purposes and for
all relevant state and local income, franchise
and other similar tax purposes, (ii) treat the
Issuer as a partnership for U.S. federal income
tax purposes that is not taxable as an
association or a publicly traded partnership
taxable as a corporation and (iii) take no
position on any tax return or with any taxing or
other governmental authority that is inconsistent
with such treatment.
6. We are a "United States person" within the
meaning of Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended (the "Code").
7. Either (i) we are not, and we will not become, a
trust, estate, partnership or "S corporation"
(within the meaning of Section 1361(a) of the
Code) for United States federal income tax
purposes or (ii) if we are, or if we will become,
a trust, estate, partnership or S corporation for
such purposes, then (x) less than 50% of the
-73-
<PAGE>
value of any direct or indirect equity or other
beneficial interest in such trust, estate,
partnership or S corporation is, and will at all
times continue to be, attributable to the Junior
Certificates or any other Interest in the Issuer
and (y) the principal purpose of our purchase of
the Junior Certificates is not to permit the
Issuer or any entity of which the Issuer is a
direct or indirect partner to satisfy the 100
partner limitation set forth in Treasury
Regulation Section 1.7704-1(h)(1)(ii).
8. In accordance with Section 12.6 of the Greyhound
Funding LLC Agreement, we agree that we will not
sell, market, transfer, assign, participate,
pledge or otherwise dispose of our Junior
Certificates (or any interest therein) on or
through an "established securities market" within
the meaning of Section 7704(b)(1) of the Code
(and the Treasury Regulations promulgated
thereunder), including, without limitation, an
over-the-counter market or an interdealer
quotation system that regularly disseminates firm
buy or sell quotations.
9. We understand that (i) we may not grant a
participation in or otherwise subdivide our
beneficial interest in the Junior Certificates
and (ii) we may not sell, assign, trade, market,
pledge, transfer or otherwise dispose of our
Junior Certificates except in accordance with and
to extent permitted under Sections 12.3 and 12.6
of the Greyhound Funding LLC Agreement.
10. No part of the assets used by us to acquire the
Junior Certificates constitute assets of any
"Benefit Plan" defined as (i) an employee benefit
plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA")), (ii) a plan or arrangement
(including an individual retirement account or a
Keogh Plan) within the meaning of or subject to
Section 4975 of the Code or (iii) any entity
whose underlying assets include "plan assets"
under a United States Department of Labor
Regulation codified at 29 C.F.R. Section 2510.3-
101 or otherwise.
All capitalized terms used but not defined herein shall
have the meaning ascribed to such terms in the Greyhound Funding LLC
Agreement.
-74-
<PAGE>
We understand that the Issuer could be classified as a
publicly traded partnership taxable as a corporation if any of the above
representations is untrue or inaccurate. The Issuer and its counsel may
rely upon this representation letter (and the accuracy of the
representations set forth herein) and we irrevocably authorize the Issuer
and/or its counsel to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry related to the matters covered hereby.
Very truly yours,
By:______________________
Name:
Title:
Address:
-75-
<PAGE>
EXHIBIT E
TO LIMITED
LIABILITY AGREEMENT
TRANSFEROR'S CERTIFICATE OF TRANSFER
Greyhound Funding LLC
900 Old Country Road
Garden City, New York 11530
Attn: Chairman of the Managers
Re: Transfer of [Senior] [Junior] Preferred Membership
Certificates
Mr. Chairman:
In connection with our proposed [sale] [transfer] of
Series [__] [Senior] [Junior] Preferred Membership Certificates (the
"[Senior] [Junior] Certificates"), we represent and warrant that:
1. We are [selling] [transfering] [Senior] [ Junior]
Certificates having a stated liquidation
preference of $[______] to [Name of Transferee].
2. In connection with our [sale] [transfer] of the
[Senior] [Junior] Certificates, we have not
engaged in a general solicitation or general
advertising, including advertisements, articles,
notices or other communications published in any
newspaper, magazine or similar media or broadcast
over radio or television, or any seminar or
meeting whose attendees have been invited by any
general solicitation or general advertising.
3. We acquired such [Senior] [Junior] Certificates
for our own account and we have been the sole
beneficial owner of such [Senior] [Junior]
Certificates at all times prior to this proposed
[sale] [transfer] of such [Senior] [Junior]
Certificates.
4. At all times during the period that we owned the
[Senior] [Junior] Certificates, (i) we treated
our [Senior] [Junior] Certificates as
representing equity interests in the Issuer, and
not as debt, for all United States federal income
tax purposes and for all relevant state and local
income, franchise and other similar tax purposes
and (ii) we have not taken a position on any tax
return or with any taxing or other governmental
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<PAGE>
authority that is inconsistent with such
treatment.
5. We are a "United States person" within the
meaning of Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended (the "Code").
6. At all times during the period that we owned the
[Senior] [Junior] Certificates, [we have not been
a trust, estate, partnership or "S corporation"
(within the meaning of Section 1361(a) of the
Code) for United States federal income tax
purposes.] [less than 50% of the value of any
direct or indirect equity or other beneficial
interest in us was attributable to the [Senior]
[Junior] Certificates or any other Interest in
the Issuer.
7. We have not sold, marketed, transferred,
assigned, participated, pledged or otherwise
disposed of our [Senior] [Junior] Certificates
(or any interest therein) on or through an
"established securities market" within the
meaning of Section 7704(b)(1) of the Code (and
the Treasury Regulations promulgated thereunder),
including, without limitation, an over-the-
counter market or an interdealer quotation system
that regularly disseminates firm buy or sell
quotations.
All capitalized terms used but not defined herein shall
have the meaning ascribed to such terms in the Amended and Restated
Limited Liability Company Agreement of Greyhound Funding LLC, dated as of
October 28, 1999.
We understand that the Issuer could be classified as a
publicly traded partnership taxable as a corporation if any of the above
representations is untrue or inaccurate. The Issuer and its counsel may
rely upon this representation letter (and the accuracy of the
representations set forth herein) and we irrevocably authorize the Issuer
and/or its counsel to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry related to the matters covered hereby.
Very truly yours,
By:______________________
Name:
Title:
Address:
-77-
<PAGE>
EXHIBIT F
TO LIMITED
LIABILITY AGREEMENT
TRANSFEREE'S CERTIFICATE OF TRANSFER
Greyhound Funding LLC
900 Old Country Road
Garden City, New York 11530
Attn: Chairman of the Managers
Re: Transfer of [Senior] [Junior] Preferred
Membership Certificates
Mr. Chairman:
In connection with our proposed [purchase] [acquisition]
of Series [__] [Senior] [Junior] Preferred Membership Certificates (the
"[Senior] [Junior] Certificates"), we represent and warrant that:
1. We are [purchasing] [acquiring] [Senior] [Junior]
Certificates having a stated liquidation
preference of $[______] from [Name of
Transferor].
2. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) and have
such knowledge and experience in financial and
other business matters as to be capable of
evaluating the merits and risks of investment in
the [Senior] [Junior] Certificates and we are
able to bear the economic risks of our
investment. We are acquiring the [Senior]
[Junior] Certificates for investment only and not
with a view to any distribution thereof. We have
had access to such financial and other
information concerning the Issuer and the
[Senior] [Junior] Certificates as we have deemed
necessary in connection with our decision to
purchase the [Senior] [Junior] Certificates,
including the opportunity to ask questions of and
request information from the Issuer.
3. We understand and acknowledge that the [Senior]
[Junior] Certificates have not been registered
under the Securities Act or any other applicable
securities law and may not be offered, sold or
otherwise transferred except in compliance with
the Securities Act and other applicable
securities laws. We agree that we will not offer
-78-
<PAGE>
to sell, sell or otherwise transfer the [Senior]
[Junior] Certificates in violation of any of the
registration requirements of the Securities Act
or any other applicable securities law. We
acknowledge that we have no right to require the
Issuer to register the [Senior] [Junior]
Certificates under the Securities Act or any
other securities law. We agree that in
connection with any transfer by us of an our
[Senior] [Junior] Certificates, we will not
engage in a general solicitation or general
advertising, including advertisements, articles,
notices or other communications published in any
newspaper, magazine or similar media or broadcast
over radio or television, or any seminar or
meeting whose attendees have been invited by any
general solicitation or general advertising.
4. We are acquiring the [Senior] [Junior]
Certificates for our own account and we are, and
we will remain, the sole beneficial owner of such
[Senior] [Junior] Certificates at all times
unless and until we transfer ownership of all, or
some part, of such [Senior] [Junior] Certificates
in accordance with and to the extent permitted
under Section 12.3(b) of the Amended and Restated
Limited Liability Company Agreement of Greyhound
Funding LLC (the "Greyhound Funding LLC
Agreement"), dated as of October 28, 1999.
5. In accordance with Section 9.3 of the Greyhound
Funding LLC Agreement, we agree to (i) treat our
[Senior] [Junior] Certificates as representing
equity interests in the Issuer, and not as debt,
for all United States federal income tax purposes
and for all relevant state and local income,
franchise and other similar tax purposes, (ii)
treat the Issuer as a partnership for U.S.
federal income tax purposes that is not taxable
as an association or a publicly traded
partnership taxable as a corporation and (iii)
take no position on any tax return or with any
taxing or other governmental authority that is
inconsistent with such treatment.
6. We are a "United States person" within the
meaning of Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended (the "Code").
7. Either (i) we are not, and we will not become, a
trust, estate, partnership or "S corporation"
(within the meaning of Section 1361(a) of the
Code) for United States federal income tax
-79-
<PAGE>
purposes or (ii) if we are, or if we will become,
a trust, estate, partnership or S corporation for
such purposes, then (x) less than 50% of the
value of any direct or indirect equity or other
beneficial interest in such trust, estate,
partnership or S corporation is, and will at all
times continue to be, attributable to the
[Senior] [Junior] Certificates or any other
Interest in the Issuer and (y) the principal
purpose of our purchase of the [Senior] [Junior]
Certificates is not to permit the Issuer or any
entity of which the Issuer is a direct or
indirect partner to satisfy the 100 partner
limitation set forth in Treasury Regulation
Section 1.7704-1(h)(1)(ii).
8. In accordance with Section 12.6 of the Greyhound
Funding LLC Agreement, we agree that we will not
sell, market, transfer, assign, participate,
pledge or otherwise dispose of our [Senior]
[Junior] Certificates (or any interest therein)
on or through an "established securities market"
within the meaning of Section 7704(b)(1) of the
Code (and the Treasury Regulations promulgated
thereunder), including, without limitation, an
over-the-counter market or an interdealer
quotation system that regularly disseminates firm
buy or sell quotations.
9. We understand that (i) we may not grant a
participation in or otherwise subdivide our
beneficial interest in the [Senior] [Junior]
Certificates and (ii) we may not sell, assign,
trade, market, pledge, transfer or otherwise
dispose of our [Senior] [Junior] Certificates
except in accordance with and to extent permitted
under Sections 12.3 and 12.6 of the Greyhound
Funding LLC Agreement.
10. No part of the assets used by us to acquire the
[Senior] [Junior] Certificates constitute assets
of any "Benefit Plan" defined as (i) an employee
benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), (ii) a plan or arrangement
(including an individual retirement account or a
Keogh Plan) within the meaning of or subject to
Section 4975 of the Code or (iii) any entity
whose underlying assets include "plan assets"
under a United States Department of Labor
Regulation codified at 29 C.F.R. Section 2510.3-
101 or otherwise.
-80-
<PAGE>
All capitalized terms used but not defined herein shall
have the meaning ascribed to such terms in the Greyhound Funding LLC
Agreement.
We understand that the Issuer could be classified as a
publicly traded partnership taxable as a corporation if any of the above
representations is untrue or inaccurate. The Issuer and its counsel may
rely upon this representation letter (and the accuracy of the
representations set forth herein) and we irrevocably authorize the Issuer
and/or its counsel to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry related to the matters covered hereby.
Very truly yours,
By:______________________
Name:
Title:
Address:
-81-
