OPERATING AGREEMENT OF iFUNDS CASH SOLUTIONS, LLC
Exhibit 3.16
THIS OPERATING AGREEMENT (the “Agreement”) is to be effective as of the 1st day of
October, 2007, by iPayment, Inc. (the “Member”).
WHEREAS, the sole Member has formed a limited liability company under the laws of the State of
Nevada to conduct certain business as a member-managed limited liability company.
WHEREAS, this Agreement is principally designed for a single member limited liability company.
As provided herein, however, in the event of the admission of one or more additional Members,
decisions will be made based on a majority in percentage interest (as opposed to per capita). The
identity of the Member(s) and each Member’s percentage interest shall be set forth on Exhibit
A to this Agreement. Allocations of income, gain and loss as well as cash distributions will
be as agreed by the Members in writing. It is recommended that a new Agreement be prepared in the
event one or more additional Members are admitted.
NOW, THEREFORE, the Member states as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the meanings set forth
below:
“Act” means the Nevada Limited Liability Company Act.
“Agreement” shall have the meaning set forth in the first recital.
“Articles of Organization” means the Articles of Organization of the Company,
as they may be amended from time to time.
“Company” means iFunds Cash Solutions, LLC.
“Fiscal Year” means the calendar year.
“Losses” means the excess of all expenses of the Company over all income of the
Company (including the amount of any losses recognized by the Company on the sale or other
disposition of property) during a calendar year, all as determined in accordance with the
method of accounting utilized by the Company for federal income tax purposes.
“Member” means iPayment, Inc. and any other Person admitted as a member.
“Person” means any individual, corporation, partnership, limited liability
company, trust, estate or other entity.
“Profits” means the excess of all income of the Company over all expenses of
the Company (including the amount of any gains recognized by the Company on the sale or
other disposition of property) during a calendar year, all as determined in accordance with
the method of accounting utilized by the Company for federal income tax purposes.
ARTICLE II — GENERAL
2.1 Formation. The Member has formed a limited liability company under and
pursuant to the Act by filing Articles of Organization with the Nevada Secretary of State on
October 1, 2007. The Company shall file any certificates as may be required to conduct business in
any state.
2.2 Name. The Company may adopt and conduct its business under such assumed
or trade names as the Member(s) may from time to time determine. The Company shall file any
fictitious name certificates as may be required to conduct business in any state.
2.3 Principal Place of Business. The principal place of business of the
Company shall be at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The business
of the Company may also be conducted at such other or additional place or places as may be
designated by the Member(s).
2.4 Registered Office and Agent. The initial registered agent and office of
the Company in the State of Tennessee shall be Corporation Trust Company of Nevada, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
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2.5 Purpose of Company. The purpose of the Company is to engage in those
activities set forth in the Articles of Organization as filed with the Office of the Secretary of
State as it may be properly amended from time to time. If no purpose is set forth, the purpose of
the Company shall be to engage in any lawful business.
ARTICLE III — CONTRIBUTED CAPITAL AND CAPITAL ACCOUNTS
3.1 Original Member. Simultaneously with the execution of this Agreement,
the Member has made a capital contribution to the Company the description and value of which is set
forth on Exhibit A which is attached hereto and made a part of this Agreement. No Member
shall be obligated to contribute any further capital hereunder.
3.2 Limited Liability. No Member shall be liable for the debts,
liabilities, contracts or any other obligations of the Company. No Member shall not be liable to
make any additional capital contribution and shall not be required to lend any funds to the Company
at any time or for any reason.
3.3 No Negative Capital Account Make-Up. No Member shall be obligated to
contribute cash or property to restore a negative capital account balance during the existence of
the Company or at the dissolution and termination of the Company.
ARTICLE IV — ALLOCATIONS OF PROFITS AND LOSSES
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4.1 Participation in Profits and Losses. All Profits and Losses of the Company will
be allocated to the Member(s). In the event additional Members are admitted, each Member will
participate in profits and losses as they may then agree in writing.
ARTICLE V — DISTRIBUTIONS
5.1 Distributions of Cash Flow. All cash flow of the Company shall be
distributed to the Member(s) at such times and in such amounts as the Member(s) may determine. In
the event one or more additional Members are admitted, each Member shall participate in
distributions in the proportion as the Members may agree in writing.
ARTICLE VI — MANAGEMENT
6.1 Management of the Company. The Company shall be managed by its
Member(s) and the Member(s) shall have full, exclusive and complete charge of all affairs and
business of the Company and of the management and control of the Company. The Member(s) shall have
all the rights and powers as are conferred by law or as the Member(s) deems necessary, advisable or
convenient in managing the business and affairs of the Company. If there is more than one Member,
decisions shall be by a vote of a majority in interest.
6.2 Qualification and Election of Officers. The Member(s) may elect by vote
of a majority in interest, by resolution adopted by a majority in interest, any officers that the
Member(s) considers necessary or desirable for the operation and management of the Company to serve
at the pleasure of the Member(s) until his or her earlier termination, resignation or death.
Officers need not be residents of this state or a Member of the Company. Any such offices may be
held by one or more persons.
6.3 Business Relationships with Company. The Company may enter into any
contract, agreement, lease or other arrangement for the furnishing to or by the Company of goods,
services or space with a Member, or any party or entity which is related to or affiliated with a
Member, or which is directly or indirectly owned or controlled by a Member or by a party or entity
related to or affiliated with a Member, to the extent permitted under the Act.
6.4 Indemnity. Subject to the limitations of the Act, the Company shall
indemnify and hold harmless, to the full extent permitted by the Act, its Member(s) and any agent,
affiliate and professional or other advisor of each Member (collectively, the “Indemnified
Persons”), from and against any and all loss, damage, expense (including without limitation fees
and expenses of attorneys and other advisors and any court costs incurred by any Indemnified
Person) or liability by reason of anything any Indemnified Person does or refrains from doing for,
or in connection with the business or affairs of, the Company (INCLUDING ANY LOSS, DAMAGE, EXPENSE
OR LIABILITY CAUSED BY OR ATTRIBUTABLE TO THE ORDINARY OR SIMPLE NEGLIGENCE, AS OPPOSED TO GROSS
NEGLIGENCE, OF THE INDEMNIFIED PERSON), except to the extent that the loss, damage, expense or
liability results primarily from the Indemnified Person’s gross negligence or willful breach of a
material provision of this Agreement which in either event causes actual, material damage to
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the Company.
ARTICLE VII — MEMBER MEETINGS
7.1 Annual Meeting. The Member(s) is not required to have an annual meeting.
7.2 Special Meetings. A special meeting may be called by any officer or any
Member of the Company by giving written notice of demand to the Member(s) in accordance with the
provisions of the Act. The meeting may be held on the date and time and at the place fixed by the
person calling the meeting. The business transacted at any such special meeting shall be limited
to the purposes stated in the notice of the meeting.
7.3 Action Without a Meeting. Any action required or permitted to be taken
at a meeting of the Member(s) may be taken without a meeting by action on written consent as
provided in the Act. Any such action taken shall have the effect of a meeting and vote.
ARTICLE VIII — TERM, TERMINATION, WINDING UP
8.1 Term. The term of the Company commenced or will commence on the date of
the filing of the Articles of Organization with the Secretary of State and shall continue
perpetually, unless earlier terminated in accordance with the provisions of this Agreement.
8.2 Dissolution of the Company. The Company shall dissolve and commence
winding up its affairs upon (i) the decision of a majority in interest of the Members to dissolve
the Company.
8.3 Winding Up Affairs on Dissolution. Upon dissolution of the Company, one
Member selected by a majority in interest of the Members shall be responsible for overseeing the
winding up and liquidation of the Company and shall prepare and file all instruments or documents
required by law to be filed to reflect the dissolution of the Company. After paying or providing
for the payment of all liabilities and obligations of the Company, such Member shall distribute the
assets of the Company as provided by the terms of this Agreement.
8.4 Distribution Upon Dissolution. Upon dissolution of the Company and the
sale of its assets, the proceeds of such sale of the assets of the Company shall be allocated as
set forth below:
8.4.1 Liabilities and Expenses. To pay all outstanding liabilities
and expenses of the Company, including, without limitation, those liabilities and expenses
related to real or personal property or interests therein acquired by the Company which are
not assumed by the succeeding
owner of such property and any loans or amounts due for goods or services to one or more
Members;
8.4.2 Reserves. To establish such reserves for unknown or
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contingent liabilities, including without limitation reserves for environmental matters, as
the designated Member may determine, which, at the expiration of a period such Member deems
appropriate, will be distributed in the manner provided in Section 8.4.3 below; and
8.4.3 Remaining Balance. Any remaining balance shall be distributed
to the Member(s) in proportion to their percentage interest or as otherwise agreed by the
Member(s).
ARTICLE IX — FISCAL MATTERS
9.1 Books and Records. Full and accurate books and records of the Company
(including without limitation all information and records required by the Act) shall be maintained
at the Company’s principal place of business showing all receipts and expenditures, assets and
liabilities, profits and losses, and all other records necessary for recording the Company’s
business and affairs.
9.2 Reports to Member(s). Each of the following reports shall be prepared
at the Company’s expense and shall be delivered to the Member(s):
9.2.1 Taxes. Within sixty (60) days after the end of each Fiscal
Year, all information necessary for the preparation of each Member’s federal, state and local
income tax returns; and
9.2.2 Annual Report. If there is more than one Member, within one
hundred twenty (120) days after the end of each Fiscal Year, an annual report of the
activities of the Company, including a balance sheet, income statement and a statement of
cash flow, and such annual report shall contain a complete statement of all compensation and
fees paid or accrued by the Company to each Member.
9.3 Accounting Decisions. All decisions as to accounting matters, except as
expressly provided in this Agreement, shall be made by a vote of a majority in interest of the
Member(s). Such decisions must be satisfactory to the Company’s accountant(s).
9.4 Bank Accounts. All funds of the Company shall be deposited in its name
at a financial institution approved by the Member(s), in such checking and savings accounts or time
deposits or certificates of deposit as shall be designated from time to time by the Member.
ARTICLE X — MISCELLANEOUS PROVISIONS
10.1 Notices. Any notice, payment, demand or communication required or
permitted to be given by a provision of this Agreement shall be deemed to have been sufficiently
given or served for all purposes if delivered personally to the Person or to an officer, director
or Member of the Person to whom the same is directed, or if sent, by deposit with the United States
Mail, postage and charges prepaid, addressed as follows: (i) if to the Company, at its principal
place of business or to such other address as the Company
may from time to time specify by written notice to the Member(s); and (ii) if to a Member, to
the Member’s address set forth in Exhibit A to this Agreement or to such
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other address as such Member may from time to time specify by written notice to the Company. Any
such notice shall be deemed to be given as of the date delivered, if delivered personally, or as of
the date on which the same was deposited in the United States Mail, if mailed.
10.2 Section Headings. Section, paragraph and other headings contained in
this Agreement are for reference purposes only and are in no way intended to describe, interpret,
define, amplify or limit the scope, extent or intent of this Agreement or any provision hereof.
10.3 Further Action. The Member(s) shall execute and deliver such papers,
documents and instruments and perform such acts as are necessary or appropriate to implement the
terms hereof.
10.4 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during the term of this
Agreement, the legality, validity and enforceability of the remaining provisions of this Agreement
shall not be affected thereby, and in lieu of such illegal, invalid and unenforceable provisions
there shall be added automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
10.5 Governing Law. The Member(s) intends that the laws of the State of
Tennessee shall govern the determination of the validity of this Agreement and the construction of
its terms.
10.6 Parties in Interest. Subject to the provisions contained herein, each
and all of the covenants, terms, provisions and agreements contained herein shall be binding upon
and inure to the benefit of the heirs, legal representatives, successors and assigns of the
Member(s).
10.7 Amendments to Agreement. This Agreement may be amended by written
action taken by a majority in interest of the Member(s) at any time.
IN WITNESS WHEREOF, the sole Member has executed this Agreement effective as of the date set
forth above.
| SOLE MEMBER: iPAYMENT, INC. |
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| By: | /s/ ▇▇▇▇ Daily | |||
| Name: ▇▇▇▇ Daily | ||||
| Title: CEO | ||||
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Member(s)
iPayment, Inc.
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| Description and Amount of Capital Contributions: | Percentage Interest: | |||
Cash $10 |
100 | % | ||