LADDER CAPITAL COMMERCIAL MORTGAGE SECURITIES LLC AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT ________________________________________________ Dated as of February 25, 2016

 

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LADDER CAPITAL COMMERCIAL MORTGAGE SECURITIES LLC

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT
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Dated as of February 25, 2016

 

 

 

 

 

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

 

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of LADDER CAPITAL COMMERCIAL MORTGAGE SECURITIES LLC, a Delaware limited liability company (the “Company”), is made as of February 25, 2016, by and among each of the Persons executing this Agreement and listed on the Members Schedule (as herein defined), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (“Springing Member 1”) and ▇▇▇▇ ▇▇▇ (“Springing Member 2”), as the Springing Members (as defined below).

 

WHEREAS, the Members wish to form a limited liability company pursuant to the Delaware Limited Liability Company Act, Delaware Code, Title 6, Sections 18-101, et seq., as amended from time to time (the “Delaware Act”), by having a Certificate of Formation of the Company (the “Certificate of Formation”) filed with the Secretary of State of the State of Delaware and entering into this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the Members, Springing Member 1 and Springing Member 2 hereby agree as follows:

 

ARTICLE 1

GENERAL

 

 

 

(1) Crediting to such Capital Account any amount which such Member is obligated to restore or is deemed to be obligated to restore pursuant to Treasury Regulation Sections 1.704-1(b)(2)(ii)(c), 1.704-2 (g)(1), and 1.704-2(i); and

 

(2) Debiting to such Capital Account the items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

“Agreement” means this Limited Liability Company Agreement, as originally executed and as may be amended, modified, supplemented or restated from time to time.

 

“Bankruptcy” means, with respect to a Member, that (i) such Member has (A) made an assignment for the benefit of creditors; (B) filed a voluntary petition in bankruptcy; (C) been adjudged bankrupt or insolvent, or had entered against such Member an order of relief in any bankruptcy or insolvency proceeding; (D) filed a petition or an answer seeking for such Member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation or filed an answer or other pleading admitting

or failing to contest the material allegations of a petition filed against such Member in any proceeding of such nature; or (E) sought, consented to, or acquiesced in the appointment of a trustee, receiver or liquidator of such Member or of all or any substantial part of such Member’s properties; (ii) 120 days have elapsed after the commencement of any proceeding against such Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation and such proceeding has not been dismissed; or (iii) 90 days have elapsed since the appointment without such Member’s consent or acquiescence of a trustee, receiver or liquidator of such Member or of all or any substantial part of such Member’s properties and such appointment has not been vacated or stayed or the appointment is not vacated within 90 days after the expiration of such stay.

 

“Book Value” means, with respect to any Company property, the Company’s adjusted basis for federal income tax purposes, adjusted from time to time to reflect the adjustments required or permitted by Treasury Regulation Section 1.704-1(b)(2)(iv)(d)—(g); provided that the Book Value of each asset of the Company shall be adjusted as of the date of this Agreement pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) in a manner determined by the Board so that the aggregate Book Value of the Company’s assets (net of the Company’s liabilities) as of such date is equal to the aggregate initial Capital Account balances of the Members (immediately after the Member’s Capital Contribution is made).

 

“Capital Account” means the capital account maintained for a Member pursuant to Section 4.2.

 

“Capital Contribution” means the cash and/or agreed fair market value of any asset or property of any nature contributed by a Member to the Company pursuant to the provisions of this Agreement.

 

“Certificate” means the Certificate of Formation, as such Certificate of Formation may be amended, supplemented or restated from time to time.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Common Unit” means a Unit having the rights and obligations specified with respect to “Common Units” in this Agreement.

 

“Company Minimum Gain” has the meaning set forth for “partnership minimum gain” in Treasury Regulation Section 1.704-2(d).

 

“GCL” means the General Corporation Law of the State of Delaware, as the same may be amended from time to time.

 

“Independent Director” means an individual who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally recognized company, in each case that is not an Affiliate of the Company and that provides professional Independent Directors and other

 

corporate services in the ordinary course of its business, and which individual is duly appointed as the Independent Director and is not, and has never been, and will not while serving as Independent Director be, any of the following:

 

(a) a member, partner, equityholder, manager, director, officer or employee of the Company, a Member, or any of their respective equityholders or Affiliates (other than as the Independent Director of the Company or an Affiliate of the Company that is not in the direct chain of ownership of the Company and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such Independent Director is employed by a company that routinely provides professional Independent Directors or managers in the ordinary course of its business);

 

(b) a creditor, supplier or service provider (including provider of professional services) to the Company, a Member or any of their respective equityholders or Affiliates (other than a nationally-recognized company that routinely provides professional Independent Directors and other corporate services to the Company, a Member or any of their respective Affiliates in the ordinary course of its business);

 

(c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or

 

(d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above.

 

A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Director of a “special purpose entity” affiliated with the Company shall be qualified to serve as the Independent Director of the Company, provided that the fees that such individual earns from serving as the Independent Director of affiliates of the Company in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

 

For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities and impose requirements intended to preserve such entity’s separateness that are substantially similar to the Special Purpose Provisions of this Agreement.

 

“Initial Member” means Ladder Capital Finance LLC, a Delaware limited liability company

 

“Liquidating Distribution” means any distribution pursuant to Section 12.2 hereof.

 

“Majority of the Board” means, at any time, a majority of the votes attributable to the Directors who are then elected and qualified and permitted under this Agreement to act, vote or otherwise participate with respect to the matter at hand.  The Independent Director may only act, vote or otherwise participate in those matters referred to in Section 8.1(b) or as otherwise specifically required by this Agreement.

 

“Majority in Voting Interest” means, at any time, a Member or Members which own a majority of the Voting Units outstanding at such time.

 

“Material Action” means to file any insolvency, or reorganization case or proceeding, to institute proceedings to have the Company be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against the Company, to file a petition seeking, or consent to, reorganization or relief with respect to the Company under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for the Company or a substantial part of its property, to make any assignment for the benefit of creditors of the Company, or except as required by applicable law, to admit in writing the Company’s inability to pay its debts generally as they become due, or, to the fullest extent permitted by law, to take action in furtherance of any of the foregoing.

 

“Member Minimum Gain” with respect to each Member Nonrecourse Debt, means the amount of Company Minimum Gain (as determined according to Treasury Regulation Section 1.704-2(d)(1)) that would result if such Member Nonrecourse Debt were treated as a nonrecourse liability, determined in accordance with Treasury Regulation Section 1.704-2(i)(3).

 

“Member Nonrecourse Debt” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4), substituting the term “Company” for the term “partnership” and the term “Member” for the term “partner” as the context requires.

 

“Member Nonrecourse Deduction” has the meaning set forth in Treasury Regulation Section 1.704-2(i), substituting the term “Member” for the term “partner” as the context requires.

 

“Members” means each Person identified on the Members Schedule as of the date hereof who has executed this Agreement or a counterpart hereof and each Person who may hereafter be admitted as a Member in accordance with the terms of this Agreement.  The Members shall constitute the “members” (as that term is defined in the Delaware Act) of the Company.  The term “Members” shall not include the Springing Members.

 

“Membership Interest” means the interest acquired by a Member in the Company, including such Member’s right (based on the type and class of Unit or Units held by such Member), if any, (a) to a distributive share of Profits, Losses, and other items of income, gain, loss, deduction and credits of the Company, (b) to a distributive share of the assets of the Company, (c) to vote on, consent to or otherwise participate in any decision of the Members, and (d) to any and all other benefits to which such Member may be entitled as provided in this Agreement or the Delaware Act.

 

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulation Section 1.704-2(b) (substituting the term “Company” for the term “partnership” as the context requires).

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity or organization.

 

“Public Offering” means an underwritten public offering and sale of Common Units pursuant to an effective registration statement under the Securities Act; provided that a Public Offering shall not include an offering made in connection with a business acquisition or combination pursuant to a registration statement on Form S-4 or any similar form, or an employee benefit plan pursuant to a registration statement on Form S-8 or any similar form.

 

“Public Sale” means any sale of securities to the public pursuant to an offering registered under the Securities Act or, after the consummation of an initial Public Offering, to the public pursuant to the provisions of Rule 144 (or any similar rule or rules then in effect) under the Securities Act.

 

“Restricted Securities” means (a) all Units issued by the Company and (b) any securities issued with respect to, or in exchange for, the Units referred to in clause (a) above in connection with a conversion, combination of units or shares, recapitalization, merger, consolidation or other reorganization, including in connection with the consummation of any reorganization plan.  As to any particular Restricted Securities, such securities shall cease to be Restricted Securities when they have been Transferred pursuant to a Public Sale.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“Special Member” means each Person who executes a counterpart to this Agreement agreeing to become a member of the Company with no economic interest in the Company upon the dissolution, withdrawal or other event that causes the last remaining Member of the Company to become disassociated from the Company in order that at all times the Company shall have at least one member.

 

“Special Purpose Provisions” has the meaning set forth in Section 8.1.

 

“Springing Member” means the Special Member who (i) has automatically become a member of the Company with no economic interest in the Company upon the dissolution, withdrawal or other event that causes the last remaining member of the Company to become disassociated from the Company and (ii) will cease to be a member of the Company upon the admission of a new member.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons shall be deemed

to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company, association or other business entity gains or losses or shall be or control the managing director, manager or a general partner of such partnership, limited liability company, association or other business entity.

 

“Taxable Year” means the Company’s taxable year ending on or about December 31 (or part thereof in the case of the Company’s first and last taxable year), or such other year as is (i) required by Section 706 of the Code or (ii) determined by the Board (if no year is so required by Section 706 of the Code).

 

“Transfer” means any direct or indirect sale, transfer, conveyance, assignment, hypothecation, gift, delivery or other disposition (other than a pledge).

 

“Treasury Regulations” shall mean that except where the context indicates otherwise, the final, temporary, proposed, or proposed and temporary regulations of the Department of the Treasury under the Code as such regulations may be lawfully changed from time to time.

 

“Unit” means a unit representing a fractional part of the Membership Interests of all of the Unitholders and shall include all types and classes of Units; provided that any type or class of Unit shall have the designations, preferences and/or special rights set forth in this Agreement and the Membership Interests represented by such type or class of Unit shall be determined in accordance with such designations, preferences and/or special rights.

 

“Unitholder” means with respect to any Unit, the record holder thereof as evidenced on the Members Schedule.

 

“Voting Units” means the Common Units.

 

 

ARTICLE 2

ORGANIZATION

 

of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Delaware Act, control.

 

 

 

 

 

 

 

(a)  Subject to Section 2.5(c) and Section 8.1, the sole purposes of the Company are to engage in only the following activities:

 

(1) To acquire, own and hold loans, including commercial and multifamily mortgage loans, securities, notes, participations or any other assets or rights relating to an interest in real property or consumer receivables (each and collectively, for so long as it is owned by the Company, an “Underlying Asset”), to deposit the same into one or more trusts for the purpose of issuing pass-through certificates representing undivided beneficial ownership interests in the Underlying Assets of such trusts (“Securities”), to acquire, hold and transfer such Securities, to exercise all powers enumerated in the Act and to engage in any and all activities relating to the foregoing or arising therefrom or

 

reasonably necessary, customary, convenient or incidental thereto, and to the conduct, promotion or attainment of the business or purposes otherwise set forth herein.

 

(2) The Company, by or through the Members, any Director or any Officer on behalf of the Company, may enter into, deliver and perform documents, agreements, certificates or financing statements contemplated by or related to its objects and purposes set forth in Section 2.5(a), all without any further act, vote or approval of the Members or any Director or Officer, 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 Members or any Director or Officer to enter into any other agreements on behalf of the Company.

 

 

 

ARTICLE 3

UNITS; MEMBERSHIP

 

 

 

 

 

 

 

 

 

the terms and conditions of this Agreement substantially in the form of Exhibit A hereto.  Upon the amendment of the Members Schedule by the Company and the satisfaction of any other applicable conditions, including the receipt by the Company of payment for the issuance of the applicable Units, such Person shall be admitted as a Member and deemed listed as such on the books and records of the Company and thereupon shall be issued his or its Units.

 

ARTICLE 4

CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

 

 

 

 

 

 

(1) Such Capital Account shall be increased by the cash amount or Book Value of any property contributed by such Member to the Company pursuant to this Agreement, such Member’s allocable share of Profits and any items in the nature of income or gains which are specially allocated to such Member pursuant to Section 5.2 or Section 5.3, and the amount of any liabilities of the Company assumed by such Member or which are secured by any property distributed to such Member.

 

(2) Such Capital Account shall be decreased by the cash amount or Book Value of any property distributed to such Member pursuant to this Agreement, such Member’s allocable share of Losses and any items of in the nature of deductions or losses which are specially allocated to such Member pursuant to Section 5.2 or Section 5.3, and the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.

 

(3) If all or any portion of a Unit is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Unit (or portion thereof).

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 1.704-1(b) of the Treasury Regulations and shall be interpreted and applied in a manner consistent with such Treasury Regulations.  If the Board determines that it is prudent to modify the manner in which the Capital Accounts, or any increases or decreases to the Capital Accounts, are computed in order to comply with such Treasury Regulations, the Board may authorize such modifications.

 

 

(1) The computation of all items of income, gain, loss and deduction shall include tax-exempt income and those items described in Treasury Regulation Section 1.704-1(b)(2)(iv)(i), without regard to the fact that such items are not includable in gross income or are not deductible for federal income tax purposes.

 

(2) If the Book Value of any Company property is adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f), the amount of such adjustment shall be taken into account as gain or loss from the disposition of such property.

 

(3) Items of income, gain, loss or deduction attributable to the disposition of Company property having a Book Value that differs from its adjusted basis for tax purposes shall be computed by reference to the Book Value of such property.

 

(4) Items of depreciation, amortization and other cost recovery deductions with respect to Company property having a Book Value that differs from its adjusted basis for tax purposes shall be computed by reference to the property’s Book Value in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g).

 

(5) To the extent an adjustment to the adjusted tax basis of any Company property pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis).

 

 

 

 

 

ARTICLE 5

ALLOCATIONS OF PROFITS AND LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

computing their Capital Accounts, except that if any such allocation for tax purposes is not permitted by the Code or other applicable law, the Company’s subsequent income, gains, losses, deductions and credits shall be allocated among the Members for tax purposes, to the extent permitted by the Code and other applicable law, so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts.

 

 

 

 

 

ARTICLE 6

DISTRIBUTIONS

 

 

 

 

 

ARTICLE 7

MANAGEMENT OF THE COMPANY

 

 

 

 

 

(1) Unless otherwise restricted by law, and subject to Section 7.1(d), holders of a Majority in Voting Interest may remove, with or without cause, any Director and fill the vacancy.  Vacancies caused by any such removal by the Members and not filled by the Members at the meeting at which such removal shall have been made or pursuant to the applicable written consent of the Members, may be filled by a majority of the votes of the Directors then in office, although less than a quorum, and any Director so elected to fill any such vacancy shall hold office until his successor is elected and qualified or until his earlier resignation or removal.

 

(2) A Director may resign at any time by giving written notice to that effect to the Board.  Any such resignation shall take effect at the time of the receipt of that notice or any later effective time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective.  Any vacancy caused by any such resignation or by the death of any Director or any vacancy for any other reason (including due to the authorization by the Members of a newly created Directorship) shall be filled by the Majority in Voting Interest as soon as practicable.

 

 

(1) Duties.  For so long as any Securities are outstanding, the Member shall cause the Company at all times to have at least one Independent Director who will be appointed by the Member.  To the fullest extent permitted by law, including Section 18-1101(c) of the Delaware Act, and notwithstanding any duty otherwise existing at law or in equity, the Independent Director shall consider only the interests of the Company, including its respective creditors, in acting or otherwise voting on the matters referred to in Section 8.1(b).  Except for duties to the Company as set forth in the immediately preceding sentence (including duties to the Member and the Company’s creditors solely to the extent of their respective economic interests in the Company but excluding (i) all other interests of the Member, (ii) the interests of other Affiliates of the Company, and (iii) the interests of any group of Affiliates of which the Company is a part), the Independent Director shall not have any fiduciary duties to the Member, any Officer or any other Person bound by this Agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.  To the fullest extent permitted by law, including Section 18-1101(e) of the Delaware Act, the Independent Director shall not be liable to the Company, the Member or any other Person bound by this Agreement for breach of contract or breach of duties (including fiduciary duties), unless the Independent Director acted in bad faith or engaged in willful misconduct.  All right, power and authority of the Independent Director shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this Agreement.  Notwithstanding any other provision of this Agreement to the contrary, the Independent Director, in its capacity as the Independent Director, may only act, vote or otherwise participate in those matters referred to in Section 8.1(b) or as otherwise specifically required by this Agreement.

 

(2) Removal.  Subject to the other provisions of this Section 7.1(d)(2), the Independent Director may be removed by the Member with or without cause.  No resignation or removal of the Independent Director permitted by the preceding sentence shall be effective until a successor Independent Director is appointed and such successor shall have accepted his or her appointment as the Independent Director by a written instrument.  In the event of a vacancy in the position of the Independent Director, the Member shall, as soon as practicable, appoint the successor Independent Director.

 

 

(1) Conduct of Meetings.  Any meeting of the Directors may be held in person or telephonically.

 

(2) Quorum.  A Majority of the Board shall constitute a quorum of the Board for purposes of conducting business.  If a quorum shall not be present at any meeting of the Board, then the Directors present 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.  A Director may vote or be present at a meeting either in person or by proxy.

 

(3) Attendance and Waiver of Notice.  Attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director 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.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting.

 

(4) Actions Without a Meeting.  Notwithstanding any provision contained in this Agreement, any action of the Board may be taken by written consent without a meeting.  Any such action taken by the Board without a meeting shall be effective only if the consent or consents set forth the actions so taken are in writing and are signed by a Majority of the Board.

 

 

 

 

 

 

 

 

 

 

other powers and perform such other duties as may from time to time be prescribed by the Board or as set forth in the President’s applicable employment agreement, if any.

 

 

 

 

 

Person’s professional or expert competence.  The preceding sentence shall in no way limit any Person’s right to rely on information to the extent provided in Section 18‑406 of the Delaware Act.  No individual who is a Director or an officer of the Company, or any combination of the foregoing, shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company or any of its Subsidiaries, whether that liability or obligation arises in contract, tort, or otherwise, solely by reason of being a Director or an officer of the Company or any combination of the foregoing.

 

 

ARTICLE 8

SEPARATENESS REQUIREMENTS

 

 

This Section 8.1 is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose entity”:

 

 

manner that is inconsistent with any of the Special Purpose Provisions, except upon receipt of confirmation from the law firm that rendered such non-consolidation opinion that such amendment would not alter such non-consolidation opinion.  In the event of any conflict between any of the Special Purpose Provisions and any other provision contained in this Agreement or in the Certificate of Formation, the Special Purpose Provisions control.  Subject to this Section 8.1, the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 13.6.

 

 

 

(1) maintain its own books, records and bank accounts separate from those of any other Person;

 

(2) at all times hold itself out to the public and all other Persons as a legal entity separate from the Member and from any other Person;

 

(3) have its own Board of Directors;

 

(4) file its own tax returns separate from those of any other Person, except to the extent that the Company is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, pay any taxes required to be paid under applicable law, and not be a member of a consolidated tax group.

 

(5) not commingle its assets with assets of any other Person;

 

(6) conduct its business only in its own name and comply with all organizational formalities necessary to maintain its separate existence;

 

(7) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Company’s assets may be included in a consolidated financial statement of its Affiliate provided that (i)  appropriate notation shall be made on such consolidated financial statements to indicate

 

the separateness of the Company from such Affiliate and to indicate that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (ii) such assets shall also be listed on the Company’s own separate balance sheet;;

 

(8) pay its own liabilities and expenses only out of its own funds; provided, however, that the foregoing shall not require the Members to make additional capital contributions to the Company;

 

(9) not enter into any transaction with an Affiliate of the Company except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction;

 

(10) maintain a sufficient number of employees in light of its contemplated business purpose and pay the salaries of its own employees, if any, only from its own funds;

 

(11) not hold out its credit or assets as being available to satisfy the obligations of any other Person;

 

(12) allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including for shared office space and for services performed by an employee of an affiliate;

 

(13) correct any known misunderstanding regarding its separate identity and not identify itself as a department or division of any other Person;

 

(14) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided, however that the foregoing shall not require the Members to make additional capital contributions to the Company; and

 

(15) cause the Directors, Officers, agents and other representatives of the Company to act at all times with respect to the Company consistently and in furtherance of the foregoing and in the best interests of the Company.

 

Failure of the Company, or the Member or Board on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the Directors.

 

 

(1) guarantee any obligation of any Person, including any Affiliate, or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;

(2) pledge any of its assets to secure the obligations of any other Person, except that it may pledge one or more of the Securities held by the Company, if any, as security for “repo” or similar financing that provides for no recourse beyond the assets of the Company;

 

(3) engage, directly or indirectly, in any business other than as required or permitted to be performed under Section 2.5 or this Section 8.1;

 

(4) (i) incur indebtedness to any Affiliate or (ii) incur, create or assume any other indebtedness, other than, with respect to clause (ii), indebtedness with the sole recourse to assets of the Company, except that it may pledge one or more of the Securities held by the Company, if any, as security for “repo” or similar financing that provides for no recourse beyond the assets of the Company;

 

(5) make or permit to remain outstanding any loan or advance to any other Person;

 

(6) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than such transfers as are conducted in connection with the deposit of mortgage loans into trust funds in accordance with Section 2.5(a);

 

(7) engage in any business activity other than as stated in Section 2.5 of this Agreement; and

 

(8) own any asset or property other than (i) the Underlying Assets and/or the Securities, and (ii) incidental personal property related to or arising from the ownership of the Underlying Assets and/or the Securities.

 

ARTICLE 9

MEMBERS; VOTING RIGHTS

 

 

 

the direction of the Member(s) calling the meeting or the Board, as the case may be.  Such notice may, but need not, specify the purpose or purposes of such meeting and may, but need not, limit the business to be conducted at such meeting to such purpose(s).

 

 

 

 

 

 

 

 

 

ARTICLE 10

TAXES

 

 

ARTICLE 11

TRANSFER OF UNITS

 

 

 

 

 

 

11.3        Procedure for Transfers.  Subject in all events to the general restrictions on Transfers contained in Sections 11.1 and 11.2, a Member may Transfer all or any part of his or its Units in accordance with this Section 11.3.  No Transfer of Unit(s) may be completed until the prospective transferee is admitted as a Member of the Company by executing and delivering to the Company a written undertaken to be bound by the terms and conditions of this Agreement substantially in the form of Exhibit A hereto.  Upon the amendment of the Members Schedule by the Company and the satisfaction of any other applicable conditions, such prospective transferee shall be admitted as a Member and deemed listed as such on the books and records of the Company and thereupon the Company shall reissue the applicable Units in the name of such prospective transferee.

 

 

 

“THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN A LIMITED LIABILITY COMPANY AGREEMENT AMONG THE ISSUER AND ITS MEMBERS.  A COPY OF SUCH LIMITED LIABILITY COMPANY AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.”

 

Upon the request of any holder of Restricted Securities, the Company shall remove the Securities Act legend set forth above from the certificates for such Restricted Securities; provided, that such Restricted Securities are eligible for sale pursuant to Rule 144(k) (or any similar rule or rules then in effect) under the Securities Act.

 

 

 

 

 

 

 

ARTICLE 12

DISSOLUTION AND LIQUIDATION

 

 

 

(1) the termination of the legal existence of the last remaining member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the Company unless the business of the Company is continued in a manner required under this Section 12.1 or permitted by this Agreement or the Delaware Act; or

 

(2) the entry of a decree of judicial dissolution under § 18-802 of the Delaware Act.

 

of a Member Cessation Event, Special Member 1 has died or is otherwise no longer able to step into the role of Springing Member, then in such event, Special Member 2 shall, concurrently with the Member Cessation Event and without any action of any Person, automatically be admitted to the Company as Springing Member and shall continue the Company without dissolution.  It is the intent of these provisions that the Company never have more than one Springing Member at any particular point in time.  No Springing Member may resign from the Company or transfer its rights as Springing Member unless a successor Special Member has been admitted to the Company as Springing Member by executing a counterpart to this Agreement; provided, however, the Springing Member shall automatically cease to be a member of the Company upon the admission to the Company of a substitute Member.  The Springing Member shall be a member of the Company that has no interest in the profits, losses and capital of the Company and has no right to receive any distributions of Company assets.  Pursuant to Section 18-301 of the Delaware Act, the Springing Member shall not be required to make any capital contributions to the Company and shall not receive a limited liability company interest in the Company.  The Springing Member, in its capacity as Springing Member, may not bind the Company.  Except as required by any mandatory provision of the Act, the Springing Member, in its capacity as Springing Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Company, including, without limitation, the merger, consolidation or conversion of the Company.  In order to implement the admission to the Company of the Springing Member, each person designated a Special Member shall execute a counterpart to this Agreement.  Prior to its admission to the Company as Springing Member, each person designated a Special Member shall not be a member of the Company.  The Company shall at all times have a Special Member 1 and a Special Member 2.  No resignation or removal of a Special Member, and no appointment of a successor Special Member, shall be effective unless and until such successor shall have executed a counterpart to this Agreement.  In the event of a vacancy in the position of Special Member 1 or Special Member 2, the Member shall, as soon as practicable, appoint a successor Special Member to fill such vacancy.  By signing this Agreement, a Special Member agrees that, should such Special Member become a Springing Member, such Special Member will be subject to and bound by the provisions of this Agreement applicable to a Springing Member.

 

 

 

orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Delaware Act.

 

 

 

 

 

(1) the payment to the creditors of the Company, including Members, in order of priority provided by law;

 

(2) to establish or add to such reserves as the Liquidator may deem necessary or appropriate; and

 

(3) to the Members (with such distribution to the Members to be divided among such Members pro rata in accordance with their Common Units).

 

The reserves established pursuant to subparagraph (ii) shall be paid over by the Liquidator to a bank or other financial institution, to be held in escrow for the purpose of paying any contingent or unforeseen liabilities or obligations and, at the expiration of such period as the Liquidator deems advisable, such reserves shall be distributed to the Members in the priorities set forth in this Section 12.2(b).

 

 

 

thereof.  Each distribution in kind of property pursuant to this Section 12.2(d) shall be distributed based upon the fair market value of such property.  If a Liquidating Distribution is made both in cash and in kind, such Liquidating Distribution shall be made so that, to the fullest extent practicable, the percentage of cash and any other assets distributed with respect to each type of Unit is identical.

 

 

 

 

ARTICLE 13

GENERAL/MISCELLANEOUS PROVISIONS

 

 

 

of the Company.  Any notice, request or consent to the Company must be given to the Secretary of the Company at the Company’s chief executive offices.  Whenever any notice is required to be given by law 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.

 

 

 

 

 

 

 

 

 

 

 

*     *     *     *     *

IN WITNESS WHEREOF, this Amended and Restated Limited Liability Company Agreement of Ladder Capital Commercial Mortgage Securities LLC has been duly executed on the day and year first above written.

 

LADDER CAPITAL FINANCE LLC

 

[HOLDER]