Document:

Exhibit 10.5

 

LIMITED

LIABILITY COMPANY OPERATING AGREEMENT

OF

ACAS BUSINESS LOAN LLC, 2002-2

 

This Limited Liability Company Operating Agreement

(together with the schedules attached hereto, this “Agreement”) of ACAS

BUSINESS LOAN LLC, 2002-2 (the “Company”), is entered into by AMERICAN

CAPITAL STRATEGIES, LTD., as the sole equity member (“ACAS” or the “Member”),

and WILLIAM HOLLORAN and EVELYNE S. STEWARD, as the Special Members.  Capitalized terms used and not otherwise

defined herein have the meanings set forth on Schedule A

hereto.

 

The Member, by execution of this Agreement, hereby

forms the Company as a limited liability company pursuant to and in accordance

with this Agreement and the Delaware Limited Liability Company Act (6 Del. C.

§18-101 et  seq.), as amended from time to time (the “Act”),

and the Member and the Special Members hereby agree as follows:

 

Section 1.               Name.

 

The name of the limited liability company formed

hereby is ACAS Business Loan LLC, 2002-2.

 

Section 2.               Principal

Business Office.

 

The principal business office of the Company shall be

located at 2 Bethesda Metro Center, 14th Floor, Bethesda, Maryland 20814 or

such other location as may hereafter be determined by the Member.

 

Section 3.               Registered

Office.

 

The address of the registered office of the Company in

the State of Delaware is c/o Corporation Service Company, 2711 Centerville

Road, Suite 400, Wilmington, Delaware 19808.

 

Section 4.               Registered

Agent.

 

The name and address of the registered agent of the

Company for service of process on the Company in the State of Delaware is

Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington,

Delaware 19808.

 

Section 5.               Members.

 

(a)             The

mailing address of the Member is set forth on Schedule

B attached hereto.  The

Member was admitted to the Company as a member of the Company upon its

execution of a counterpart signature page to this Agreement.

 

(b)            Subject

to Section 9(j), the Member may act by written consent including taking

action permitted hereunder to be taken by the Board.

 

(c)             Upon

the occurrence of any event that causes the Member to cease to be a member of

the Company (other than (i) upon an assignment by the Member of all of its

limited liability company interest in the Company and the admission of the

transferee pursuant to Sections 21 and 23, or (ii) the resignation of

the Member and the admission of an additional member of the Company pursuant to

Sections 22 and 23), each person acting as an Independent Manager

pursuant to Section 10 shall, without any action of any Person and

simultaneously with the Member ceasing to be a member of the Company,

automatically be admitted to the Company as a Special Member and shall continue

the Company without

 

 

dissolution.  No Special Member

may resign from the Company or transfer its rights as Special Member unless (i)

a successor Special Member has been admitted to the Company as Special Member

by executing a counterpart to this Agreement, and (ii) such successor has also

accepted its appointment as Independent Manager pursuant to Section 10;

provided, however, the Special Members shall automatically cease to be members

of the Company upon the admission to the Company of a substitute Member.  Each Special 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 Act, a

Special 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.  A Special Member, in its

capacity as Special Member, may not bind the Company.  Except as required by any mandatory provision of the Act, each

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

Company, including, without limitation, the merger, consolidation or conversion

of the Company.  In order to implement

the admission to the Company of each Special Member, each person acting as an

Independent Manager pursuant to Section 10 shall execute a

counterpart to this Agreement.  Prior to

its admission to the Company as Special Member, each person acting as an

Independent Manager pursuant to Section 10 shall not be a member of the

Company.

 

Section 6.               Certificates.

 

Todd M. Bloomquist is hereby designated as an

“authorized person” within the meaning of the Act, and has executed, delivered

and filed the Certificate of Formation of the Company with the Secretary of

State of the State of Delaware.  Upon

the filing of the Certificate of Formation with the Secretary of State of the

State of Delaware, his powers as an “authorized person” ceased, and the Member

thereupon became the designated “authorized person” and shall continue as the

designated “authorized person” within the meaning of the Act.  Unless otherwise specified by the Board of

Managers, the Member or an Officer shall execute, deliver and file any other

certificates, affidavits and other documentation (and any amendments and/or

restatements thereof) necessary for the Company to qualify to do business in

any jurisdiction in which the Company may wish to conduct business.

 

The existence of the Company as a separate legal

entity shall continue until cancellation of the Certificate of Formation as

provided in the Act.

 

Section 7.               Purposes.

 

(a)             The

purposes and activities to be conducted or promoted by the Company shall be

limited to the following:

 

(i)              to

purchase or otherwise acquire, own or hold pursuant to certain transfer

agreements, certain loans and all collections and other monies due or to become

due in payment of such loans, any amounts payable or any payments made under

any insurance policy covering such loans, the collateral related to such Loans,

including the related security interest granted by the obligor under such loans

and all proceeds from any sale or other disposition of such collateral, all

documents and records related to such loans, all guarantees, indemnities,

warranties and other agreements or arrangements of whatever character from time

to time supporting or securing payment of such loans, the accounts relating to

such loans and all income, payments, products, proceeds and other benefits of

any and all of the foregoing, all as more particularly described in the Basic

Documents;

 

(ii)             to

enter into, and perform its obligations under, any agreements with Affiliates

relating to or effecting the transfers and conveyances of Loan Assets as

described above;

 

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(iii)            to

transfer the Loan Assets or interests therein (including for the purpose of

establishing, forming or funding one or more trusts), pursuant to one or more

indentures, transfer and servicing agreement or other agreements, entered into

by and among, among others, the Company, any trustee or trustees or collateral

agent named therein, and any entity acting as servicer for the Loan Assets, as

well as certain other financing entities (collectively hereinafter referred to

as the “Entities”), and to perform its obligations under any such

agreements;

 

(iv)           to

hold and enjoy any and all of the rights and privileges of any certificates,

notes or other ownership interests  (the

“Interests”) issued by or sold by the Entities to the Company under the

related agreements and to hold and enjoy all of the rights and privileges of

any class of any series of Interests, to sell, assign, pledge or otherwise

transfer any such Interests or any interest therein;

 

(v)            to

perform its obligations under the agreements pursuant to which any Interests

are issued, sold or serviced;

 

(vi)           to

invest the proceeds derived from the sale or ownership of the Loan Assets as

determined by the Company’s Board of Managers; and

 

(vii)          to

engage in any lawful act or activity and to exercise any powers permitted to

limited liability companies organized under the laws of the State of Delaware

that are related or incidental to and necessary, convenient or advisable for

the accomplishment of the above-mentioned purposes (including the entering into

of interest rate or basis swap, cap, floor or collar agreements, currency

exchange agreements or similar hedging transactions and referral, management,

servicing and administration agreements).

 

(b)            The

Company, by or through the Member, or any Manager or Officer on behalf of the

Company, may enter into and perform the Basic Documents and all documents,

agreements, certificates or financing statements contemplated thereby or

related thereto, all without any further act, vote or approval of 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

Member or any Manager or Officer to enter into other agreements on behalf of

the Company, in each case in connection with permitted activities and purposes

of the Company.

 

Section 8.               Powers.

 

Subject to Sections 7 and 9(j), the Company, and

the Board of Managers and the Officers of the Company on behalf of the Company,

(i) shall have and exercise all powers necessary, convenient or incidental to

accomplish its purposes as set forth in Section 7 and (ii) shall have and

exercise all of the powers and rights conferred upon limited liability

companies formed pursuant to the Act.

 

Section 9.               Management.

 

(a)             Board

of Managers.  Subject to

Section 9(j), the business and affairs of the Company shall be managed by

or under the direction of a Board of one or more Managers designated by the

Member.  Subject to Section 10, the

Member may determine at any time in its sole and absolute discretion the number

of Managers to constitute the Board. 

The authorized number of Managers may be increased or decreased by the

Member at any time in its sole and absolute discretion, upon notice to all

Managers, and subject in all cases to Section 10.  The initial number of Managers shall be

three, two of which shall be Independent Managers as and to the extent required

by Section 10.  Each Manager

elected, designated or appointed by the Member shall hold office until a

successor is elected and qualified or until such Manager’s earlier death,

resignation, expulsion or removal.  Each

Manager shall execute and deliver the

 

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Management

Agreement.  Managers need not be a

Member.  The initial Managers hereby

designated by the Member are listed on Schedule D

hereto.

 

(b)            Powers.  Subject to Section 9(j), the Board of

Managers shall have the power to do any and all acts necessary, convenient or

incidental to or for the furtherance of the purposes described herein,

including all powers, statutory or otherwise. 

Subject to Section 7, the Board of Managers has the authority to

bind the Company.

 

(c)             Meeting

of the Board of Managers.  The Board

of Managers of the Company may hold meetings, both regular and special, within

or outside the State of Delaware. 

Regular meetings of the Board may be held without notice at such time

and at such place as shall from time to time be determined by the Board.  Special meetings of the Board may be called

by the President on not less than one day’s notice to each Manager by

telephone, facsimile, mail, telegram or any other means of communication, and

special meetings shall be called by the President or Secretary in like manner

and with like notice upon the written request of any one or more of the

Managers.

 

(d)            Quorum:

Acts of the Board.  At all meetings

of the Board, a majority of the Managers shall constitute a quorum for the

transaction of business and, except as otherwise provided in any other

provision of this Agreement, the act of a majority of the Managers present at

any meeting at which there is a quorum shall be the act of the Board.  If a quorum shall not be present at any

meeting of the Board, the Managers present at such meeting may adjourn the

meeting from time to time, without notice other than announcement at the

meeting, until a quorum shall be present. 

Any action required or permitted to be taken at any meeting of the Board

or of any committee thereof may be taken without a meeting if all members of

the Board or committee, as the case may be, consent thereto in writing, and the

writing or writings are filed with the minutes of proceedings of the Board or

committee, as the case may be.

 

(e)             Electronic

Communications.  Members of the

Board, or any committee designated by the Board, may participate in meetings of

the Board, or any committee, by means of telephone conference or similar

communications equipment that allows all Persons participating in the meeting

to hear each other, and such participation in a meeting shall constitute

presence in Person at the meeting.  If

all the participants are participating by telephone conference or similar

communications equipment, the meeting shall be deemed to be held at the

principal place of business of the Company.

 

(f)             Committees

of Managers.

 

(i)              Subject

to Section 9(j), the Board may, by resolution passed by a majority of the

whole Board, designate one or more committees, each committee to consist of one

or more of the Managers of the Company. 

The Board may designate one or more Managers as alternate members of any

committee, who may replace any absent or disqualified member at any meeting of

the committee.

 

(ii)             In

the absence or disqualification of a member of a committee, the member or

members thereof present at any meeting and not disqualified from voting,

whether or not such members constitute a quorum, may unanimously appoint

another member of the Board to act at the meeting in the place of any such absent

or disqualified member.

 

(iii)            Any

such committee, to the extent provided in the resolution of the Board, shall

have and may exercise all the powers and authority of the Board in the

management of the business and affairs of the Company.  Such committee or committees shall have such

name or names as may be determined from time to time by resolution adopted by

the Board.  Each committee shall keep

regular minutes of its meetings and report the same to the Board when required.

 

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(g)            Compensation

of Managers; Expenses.  The Board

shall have the authority to fix the compensation of Managers.  The Managers may be paid their expenses, if

any, of attendance at meetings of the Board, which may be a fixed sum for

attendance at each meeting of the Board or a stated salary as Manager.  No such payment shall preclude any Manager

from serving the Company in any other capacity and receiving compensation

therefor.  Members of special or

standing committees may be allowed like compensation for attending committee

meetings.

 

(h)            Removal

of Managers.  Unless otherwise

restricted by law, any Manager or the entire Board of Managers may be removed

or expelled, with or without cause, at any time by the Member, and, subject to

Section 10, any vacancy caused by any such removal or expulsion may be

filled by action of the Member.

 

(i)              Managers

as Agents.  To the extent of their

powers set forth in this Agreement and subject to Section 9(j), the

Managers are agents of the Company for the purpose of the Company’s business,

and the actions of the Managers taken in accordance with such powers set forth

in this Agreement shall bind the Company. 

Notwithstanding the last sentence of Section 18-402 of the Act and

except as specifically provided in this Agreement or in a resolution of the

Managers, a Manager shall not have the authority to bind the Company.

 

(j)              Limitations

on the Company’s Activities.

 

(i)              This

Section 9(j) is being adopted in order to comply with certain provisions

required in order to qualify the Company as a “special purpose” entity.

 

(ii)             The

Member shall not, so long as any Obligation is outstanding, amend, alter,

change or repeal the definition of “Independent Manager” or Sections 5(c),

7, 8, 9, 10, 16, 20, 21, 22, 23, 24, 25, 26 or 31 or Schedule A of this Agreement without

the unanimous written consent of the Board (including all Independent

Managers).  Subject to this

Section 9(j), the Member reserves the right to amend, alter, change or

repeal any provisions contained in this Agreement in accordance with

Section 31.

 

(iii)            Notwithstanding

any other provision of this Agreement and any provision of law that otherwise

so empowers the Company, the Member, the Board, any Officer or any other

Person, neither the Member nor the Board nor any Officer nor any other Person

shall be authorized or empowered, nor shall they permit the Company, without

the prior unanimous written consent of the Member and the Board (including all

Independent Managers), to take any Material Action.  The Board may not vote on, or otherwise authorize, the taking of

any Material Action unless there are at least two Independent Managers then

serving in such capacity in accordance with Section 10.

 

(iv)           The

Board and the Member shall cause the Company to do or cause to be done all

things necessary to preserve and keep in full force and effect its existence,

rights (charter and statutory) and franchises; provided, however,

that the Company shall not be required to preserve any such right or franchise

if: (1) the Board shall determine that the preservation thereof is no longer

desirable for the conduct of its business and that the loss thereof is not

disadvantageous in any material respect to the Company and (2) the Rating

Agency Condition is satisfied.  The Board

also shall cause the Company to:

 

(A)          maintain its own

separate books and records and bank accounts;

 

(B)           at all times hold

itself out to the public and all other Persons as a legal entity separate from

the Member and any other Person;

 

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(C)           have a Board of

Managers separate from that of the Member and any other Person;

 

(D)          file its own tax

returns, if any, as may be required under applicable law, to the extent (1) not

part of a consolidated group filing a consolidated return or returns or (2) not

treated as a division for tax purposes of another taxpayer, and pay any taxes

so required to be paid under applicable law;

 

(E)           except as

contemplated by the Basic Documents, not commingle its assets with assets of

any other Person;

 

(F)           conduct its business

in its own name and strictly comply with all organizational formalities to

maintain its separate existence;

 

(G)           maintain separate

financial statements, showing its assets and liabilities separate and apart

from any other person or entity;

 

(H)          pay its own

liabilities only out of its own funds;

 

(I)            maintain an arm’s

length and commercially reasonable relationship with its Affiliates and the

Member;

 

(J)            not identify itself

as a division of any other Person;

 

(K)          pay the salaries of

its own employees, if any;

 

(L)           not hold out its

credit or assets as being available to satisfy the obligations of others;

 

(M)         allocate fairly and

reasonably any overhead for shared office space;

 

(N)          use separate

stationery, invoices and checks;

 

(O)          except as

contemplated by the Basic Documents, not pledge its assets for the benefit of

any other Person;

 

(P)           correct any known

misunderstanding regarding its separate identity;

 

(Q)          maintain adequate

capital in light of its contemplated business purpose, transactions and

liabilities;

 

(R)           cause its Board of

Managers to meet at least annually or act pursuant to written consent and keep

minutes of such meetings and actions and observe all other Delaware limited

liability company formalities;

 

(S)           not acquire any

securities of the Member; and

 

(T)           cause the Managers,

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.

 

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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 Managers.

 

(v)            So

long as any Obligation is outstanding, the Board shall not cause or permit the

Company to:

 

(A)          except as

contemplated by the Basic Documents, guarantee any obligation of any Person,

including any Affiliate;

 

(B)           engage, directly or

indirectly, in any business other than the actions required or permitted to be

performed under Section 7, the Basic Documents or this Section 9(j);

 

(C)           incur, create or

assume any indebtedness other than as expressly permitted under the Basic

Documents;

 

(D)          make or permit to

remain outstanding any loan or advance to, or own or acquire any stock or

securities of, any Person, except that the Company may invest in those

investments permitted under the Basic Documents and may make any advance

required or expressly permitted to be made pursuant to any provisions of the

Basic Documents and permit the same to remain outstanding in accordance with

such provisions;

 

(E)           to the fullest

extent permitted by law, engage in any dissolution, liquidation, consolidation,

merger, asset sale or transfer of ownership interests other than such

activities as are expressly permitted pursuant to any provision of the Basic

Documents; or

 

(F)           form, acquire or

hold any subsidiary (whether corporate, partnership, limited liability company

or other).

 

Section 10.             Independent

Managers.

 

As long as any Obligation is outstanding, the Member

shall cause the Company at all times to have at least two Independent Managers

who will be appointed by the Member.  To

the fullest extent permitted by law, including Section 18-1101(c) of the

Act, the Independent Managers shall consider only the interests of the Company,

including its respective creditors, in acting or otherwise voting on the

matters referred to in Section 9(j)(iii). 

No resignation or removal of an Independent Manager, and no appointment

of a successor Independent Manager, shall be effective until such successor (i)

shall have accepted his or her appointment as an Independent Manager by a

written instrument, which may be a counterpart signature page to the Management

Agreement, and (ii) shall have executed a counterpart to this Agreement as

required by Section 5(c).  In the

event of a vacancy in the position of Independent Manager, the Member shall, as

soon as practicable, appoint a successor Independent Manager.  All right, power and authority of the

Independent Managers shall be limited to the extent necessary to exercise those

rights and perform those duties specifically set forth in this Agreement.  Except as provided in the second sentence of

this Section 10, in exercising their rights and performing their duties

under this Agreement, any Independent Manager shall have a fiduciary duty of

loyalty and care similar to that of a director of a business corporation

organized under the General Corporation Law of the State of Delaware.  No Independent Manager shall at any time

serve as trustee in bankruptcy for any Affiliate of the Company.  The initial Independent Managers appointed

hereby shall be as set forth in Schedule D

hereto.

 

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Section 11.             Officers.

 

(a)             Officers.  The initial Officers of the Company shall be

designated by the Member.  The

additional or successor Officers of the Company shall be chosen by the Board

and shall consist of at least a President, a Secretary and a Treasurer.  The Board of Managers may also choose one or

more Vice Presidents, Assistant Secretaries and Assistant Treasurers.  Any number of offices may be held by the

same person. The Board shall choose a President, a Secretary and a

Treasurer.  The Board may appoint such

other Officers and agents as it shall deem necessary or advisable who shall

hold their offices for such terms and shall exercise such powers and perform

such duties as shall be determined from time to time by the Board.  The salaries of all Officers and agents of

the Company shall be fixed by or in the manner prescribed by the Board.  The Officers of the Company shall hold

office until their successors are chosen and qualified.  Any Officer may be removed at any time, with

or without cause, by the affirmative vote of a majority of the Board.  Any vacancy occurring in any office of the

Company shall be filled by the Board. 

The initial Officers of the Company designated by the Member are listed

on Schedule E hereto.

 

(b)            President.  The President shall be the chief executive

officer of the Company, shall preside at all meetings of the Board, shall be

responsible for the general and active management of the business of the

Company and shall see that all orders and resolutions of the Board are carried

into effect.  The President or any other

Officer authorized by the President or the Board shall execute all bonds,

mortgages and other contracts, except: (i) where required or permitted by law

or this Agreement to be otherwise signed and executed, including

Section 7(b); (ii) where signing and execution thereof shall be expressly

delegated by the Board to some other Officer or agent of the Company, and (iii)

as otherwise permitted in Section 11(c).

 

(c)             Vice

President.  In the absence of the

President or in the event of the President’s inability to act, the Vice

President, if any (or in the event there be more than one Vice President, the

Vice Presidents in the order designated by the Managers, or in the absence of

any designation, then in the order of their election), shall perform the duties

of the President, and when so acting, shall have all the powers of and be

subject to all the restrictions upon the President.  The Vice Presidents, if any, shall perform such other duties and

have such other powers as the Board may from time to time prescribe.

 

(d)            Secretary

and Assistant Secretary.  The

Secretary shall be responsible for filing legal documents and maintaining

records for the Company.  The Secretary

shall attend all meetings of the Board and record all the proceedings of the

meetings of the Company and of the Board in a book to be kept for that purpose and

shall perform like duties for the standing committees when required.  The Secretary shall give, or shall cause to

be given, notice of all meetings of the Member, if any, and special meetings of

the Board, and shall perform such other duties as may be prescribed by the

Board or the President, under whose supervision the Secretary shall serve.  The Assistant Secretary, or if there be more

than one, the Assistant Secretaries in the order determined by the Board (or if

there be no such determination, then in order of their election), shall, in the

absence of the Secretary or in the event of the Secretary’s inability to act,

perform the duties and exercise the powers of the Secretary and shall perform

such other duties and have such other powers as the Board may from time to time

prescribe.

 

(e)             Treasurer

and Assistant Treasurer.  The

Treasurer shall have the custody of the Company funds and securities and shall

keep full and accurate accounts of receipts and disbursements in books

belonging to the Company and shall deposit all moneys and other valuable

effects in the name and to the credit of the Company in such depositories as

may be designated by the Board.  The

Treasurer shall disburse the funds of the Company as may be ordered by the

Board, taking proper vouchers for such disbursements, and shall render to the

President and to the Board, at its regular meetings or when the Board so

requires, an account of all of the Treasurer’s transactions and of the

financial condition of the Company.  The

Assistant Treasurer, or if there shall be more than one, the Assistant

Treasurers in the

 

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order determined by the

Board (or if there be no such determination, then in the order of their

election), shall, in the absence of the Treasurer or in the event of the

Treasurer’s inability to act, perform the duties and exercise the powers of the

Treasurer and shall perform such other duties and have such other powers as the

Board may from time to time prescribe.

 

(f)             Officers

as Agents.  The Officers, to the

extent of their powers set forth in this Agreement or otherwise vested in them

by action of the Board not inconsistent with this Agreement, are agents of the

Company for the purpose of the Company’s business and, subject to Section 9(j),

the actions of the Officers taken in accordance with such powers shall bind the

Company.

 

(g)            Duties

of Board and Officers.  Except to

the extent otherwise provided herein, each Manager and Officer shall have a

fiduciary duty of loyalty and care similar to that of directors and officers of

business corporations organized under the General Corporation Law of the State

of Delaware.

 

Section 12.             Limited

Liability.

 

Except as otherwise expressly provided by the Act, the

debts, obligations and liabilities of the Company, whether arising in contract,

tort or otherwise, shall be the debts, obligations and liabilities solely of

the Company, and neither the Member nor the Special Members nor any Manager or

Officer shall be obligated personally for any such debt, obligation or

liability of the Company solely by reason of being a Member, Special Member,

Manager or Officer of the Company.

 

Section 13.             Capital

Contributions.

 

The Member has contributed to the Company property of

an agreed value as listed on Schedule B

attached hereto.  In accordance with

Section 5(c), the Special Members shall not be required to make any

capital contributions to the Company.

 

Section 14.             Additional

Contributions.

 

The Member is not required to make any additional

capital contribution to the Company. 

However, the Member may, in its discretion, make additional capital

contributions to the Company at any time. 

To the extent that the Member makes an additional capital contribution

to the Company, the Member shall revise Schedule B

of this Agreement to reflect such additional capital contribution.  The provisions of this Agreement, including

this Section 14, are intended to benefit the Member and the Special

Members and, to the fullest extent permitted by law, shall not be construed as

conferring any benefit upon any creditor of the Company (and no such creditor

of the Company shall be a third-party beneficiary of this Agreement) and the

Member and the Special Members shall not have any duty or obligation to any

creditor of the Company to make any contribution to the Company or to issue any

call for capital pursuant to this Agreement.

 

Section 15.             Allocation

of Profits and Losses.

 

The Company’s profits and losses shall be allocated to

the Member.

 

Section 16.             Distributions.

 

Distributions shall be made to the Member at the times

and in the aggregate amounts determined by the Board.  Notwithstanding any provision to the contrary contained in this

Agreement, the Company shall not be required to make a distribution to the

Member on account of its interest in the Company if

 

9

 

such distribution would violate Section 18-607 of the Act or any other

applicable law or any Basic Document.

 

Section 17.             Books

and Records.

 

The Board shall keep or cause to be kept complete and

accurate books of account and records with respect to the Company’s

business.  The books of the Company

shall at all times be maintained by the Board. 

The Member and its duly authorized representatives shall have the right

to examine the Company books, records and documents during normal business

hours.  The Company, and the Board on

behalf of the Company, shall not have the right to keep confidential from the

Member any information that the Board would otherwise be permitted to keep

confidential from the Member pursuant to Section 18-305(c) of the

Act.  The Company’s books of account

shall be kept using the method of accounting determined by the Member.  The Company’s independent auditor, if any,

shall be an independent public accounting firm selected by the Member.

 

Section 18.             Reserved.

 

Section 19.             Other

Business.

 

The Member, the Special Members and any Affiliate of

the Member or the Special Members may engage in or possess an interest in other

business ventures (unconnected with the Company) of every kind and description,

independently or with others.  The

Company shall not have any rights in or to such independent ventures or the

income or profits therefrom by virtue of this Agreement.

 

Section 20.             Exculpation

and Indemnification.

 

(a)             Neither

the Member nor the Special Members nor any Officer, Manager, employee or agent

of the Company nor any employee, representative, agent or Affiliate of the

Member or the Special Members (collectively, the “Covered Persons”)

shall be liable to the Company or any other Person who has an interest in or

claim against the Company for any loss, damage or claim incurred by reason of

any act or omission performed or omitted by such Covered Person in good faith

on behalf of the Company and in a manner reasonably believed to be within the

scope of the authority conferred on such Covered Person by this Agreement,

except that a Covered Person shall be liable for any such loss, damage or claim

incurred by reason of such Covered Person’s gross negligence or willful

misconduct.

 

(b)            To

the fullest extent permitted by applicable law, a Covered Person shall be

entitled to indemnification from the Company for any loss, damage or claim

incurred by such Covered Person by reason of any act or omission performed or

omitted by such Covered Person in good faith on behalf of the Company and in a

manner reasonably believed to be within the scope of the authority conferred on

such Covered Person by this Agreement, except that no Covered Person shall be

entitled to be indemnified in respect of any loss, damage or claim incurred by

such Covered Person by reason of such Covered Person’s gross negligence or

willful misconduct with respect to such acts or omissions; provided, however,

that any indemnity under this Section 20 by the Company shall be provided

out of and to the extent of Company assets only, and the Member and the Special

Members shall not have personal liability on account thereof; and provided

further, that so long as any Obligation is outstanding, no indemnity

payment from funds of the Company (as distinct from funds from other sources,

such as insurance) in respect of any indemnity under this Section 20 shall

be payable from amounts allocable to any other Person pursuant to the Basic

Documents.

 

(c)           To the fullest

extent permitted by applicable law, expenses (including legal fees) incurred by

a Covered Person defending any claim, demand, action, suit or proceeding shall,

from time to time, be

 

10

 

advanced by the

Company prior to the final disposition of such claim, demand, action, suit or

proceeding upon receipt by the Company of an undertaking by or on behalf of the

Covered Person to repay such amount if it shall be determined that the Covered

Person is not entitled to be indemnified as authorized in this Section 20.

 

(d)            A

Covered Person shall be fully protected in relying in good faith upon the

records, of the Company and upon such information, opinions, reports or

statements presented to the Company by any Person as to matters the Covered

Person reasonably believes are within such other Person’s professional or

expert competence and who has been selected with reasonable care by or on

behalf of the Company, including information, opinions, reports or statements

as to the value and amount of the assets, liabilities, or any other facts

pertinent to the existence and amount of assets from which distributions to the

Member might properly be paid.

 

(e)             To

the extent that, at law or in equity, a Covered Person has duties (including

fiduciary duties) and liabilities relating thereto to the Company or to any

other Covered Person, a Covered Person acting under this Agreement shall not be

liable to the Company or to any other Covered Person for its good faith

reliance on the provisions of this Agreement or any approval or authorization

granted by the Company or any other Covered Person.  The provisions of this Agreement, to the extent that they

restrict the duties and liabilities of a Covered Person otherwise existing at law

or in equity, are agreed by the Member and the Special Members to replace such

other duties and liabilities of such Covered Person.

 

(f)             The

foregoing provisions of this Section 20 shall survive any termination of

this Agreement.

 

Section 21.             Assignments.

 

Subject to Section 23, the Member may assign in

whole or in part its limited liability company interest in the Company.  If the Member transfers all of its limited

liability company interest in the Company pursuant to this Section 21, the

transferee shall be admitted to the Company as a member of the Company upon its

execution of an instrument signifying its agreement to be bound by the terms

and conditions of this Agreement, which instrument may be a counterpart

signature page to this Agreement.  Such

admission shall be deemed effective immediately prior to the transfer and,

immediately following such admission, the transferor Member shall cease to be a

member of the Company.  Notwithstanding

anything in this Agreement to the contrary, any successor to the Member by

merger or consolidation in compliance with the Basic Documents shall, without

further act, be the Member hereunder, and such merger or consolidation shall

not constitute an assignment for purposes of this Agreement and the Company

shall continue without dissolution.

 

Section 22.             Resignation.

 

So long as any Obligation is outstanding, the Member

may not resign, except as permitted under the Basic Documents and if the Rating

Agency Condition is satisfied.  If the

Member is permitted to resign pursuant to this Section 22, an additional

member of the Company shall be admitted to the Company, subject to

Section 23, upon its execution of an instrument signifying its agreement

to be bound by the terms and conditions of this Agreement, which instrument may

be a counterpart signature page to this Agreement.  Such admission shall be deemed effective immediately prior to the

resignation and, immediately following such admission, the resigning Member

shall cease to be a member of the Company.

 

11

 

Section 23.             Admission

of Additional Members.

 

One or more additional members of the Company may be

admitted to the Company with the written consent of the Member; provided,

however, that, notwithstanding the foregoing, so long as any Obligation

remains outstanding, no additional Member may be admitted to the Company unless

the Rating Agency Condition is satisfied.

 

Section 24.             Dissolution.

 

(a)             Subject

to Section 9(j), the Company shall be dissolved, and its affairs shall be

wound up upon the first to occur of the following: (i) 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 permitted by this Agreement or the Act or (ii)

the entry of a decree of judicial dissolution under Section 18-802 of the

Act.  Upon the occurrence of any event

that causes the last remaining Member of the Company to cease to be a Member of

the Company, to the fullest extent permitted by law, the personal

representative of such Member is hereby authorized to, and shall, within 90

days after the occurrence of the event that terminated the continued membership

of such Member in the Company, agree in writing (i) to continue the Company and

(ii) to the admission of the personal representative or its nominee or

designee, as the case may be, as a substitute member of the Company, effective

as of the occurrence of the event that terminated the continued membership of

the last remaining member of the Company in the Company.

 

(b)            Notwithstanding

any other provision of this Agreement, the Bankruptcy of the Member or a

Special Member shall not cause the Member or Special Member, respectively, to

cease to be a member of the Company and upon the occurrence of such an event,

the business of the Company shall continue without dissolution.

 

(c)             In

the event of dissolution, the Company shall conduct only such activities as are

necessary to wind up its affairs (including the sale of the assets of the

Company in an 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 Act.

 

(d)            The

Company shall terminate when (i) all of the assets of the Company, after

payment of or due provision for all debts, liabilities and obligations of the

Company shall have been distributed to the Member in the manner provided for in

this Agreement and (ii) the Certificate of Formation shall have been canceled

in the manner required by the Act.

 

Section 25.             Waiver

of Partition: Nature of Interest.

 

Except as otherwise expressly provided in this

Agreement, to the fullest extent permitted by law, each of the Member and the

Special Members hereby irrevocably waives any right or power that such Person

might have to cause the Company or any of its assets to be partitioned, to

cause the appointment of a receiver for all or any portion of the assets of the

Company, to compel any sale of all or any portion of the assets of the Company

pursuant to any applicable law or to file a complaint or to institute any

proceeding at law or in equity to cause the dissolution, liquidation, winding

up or termination of the Company.  The

Member shall not have any interest in any specific assets of the Company, and

the Member shall not have the status of a creditor with respect to any

distribution pursuant to Section 16 hereof.  The interest of the Member in the Company is personal property.

 

12

 

Section 26.             Benefits

of Agreement; No Third-Party Rights.

 

None of the provisions of this Agreement shall be for

the benefit of or enforceable by any creditor of the Company or by any creditor

of the Member or a Special Member. 

Nothing in this Agreement shall be deemed to create any right in any

Person (other than Covered Persons) not a party hereto, and this Agreement

shall not be construed in any respect to be a contract in whole or in part for

the benefit of any third Person (except as provided in Section 29).

 

Section 27.             Severability

of Provisions.

 

Each provision of this Agreement shall be considered

severable and if for any reason any provision or provisions herein are

determined to be invalid, unenforceable or illegal under any existing or future

law, such invalidity, unenforceability or illegality shall not impair the

operation of or affect those portions of this Agreement which are valid,

enforceable and legal.

 

Section 28.             Entire

Agreement.

 

This Agreement constitutes the entire agreement of the

parties with respect to the subject matter hereof.

 

Section 29.             Binding

Agreement.

 

Notwithstanding any other provision of this Agreement,

the Member agrees that this Agreement, including, without limitation,

Sections 7, 8, 9, 10, 20, 21, 22, 23, 24, 26, 29 and 31, constitutes

a legal, valid and binding agreement of the Member, and is enforceable against

the Member by the Independent Managers, in accordance with its terms.  In addition, the Independent Managers shall

be intended beneficiaries of this Agreement.

 

Section 30.             Governing

Law.

 

This Agreement shall be governed by and construed

under the laws of the State of Delaware (without regard to conflict of laws

principles), all rights and remedies being governed by said laws.

 

Section 31.             Amendments.

 

Subject to Section 9(j), this Agreement may not

be modified, altered, supplemented or amended except pursuant to a written

agreement executed and delivered by the Member.  Notwithstanding anything to the contrary in this Agreement, so

long as any Obligation is outstanding, this Agreement may not be modified,

altered, supplemented or amended unless the Rating Agency Condition is

satisfied except: (i) to cure any ambiguity or (ii) to convert or supplement

any provision in a manner consistent with the intent of this Agreement and the

other Basic Documents.

 

Section 32.             Counterparts.

 

This Agreement may be executed in any number of

counterparts, each of which shall be deemed an original of this Agreement and

all of which together shall constitute one and the same instrument.

 

Section 33.             Notices.

 

Any notices required to be delivered hereunder shall

be in writing and personally delivered, mailed or sent by telecopy, electronic

mail or other similar form of rapid transmission, and shall be

 

13

 

deemed to have been duly

given upon receipt (a) in the case of the Company, to the Company at its

address in Section 2, (b) in the case of the Member, to the Member at its

address as listed on Schedule B

attached hereto and (c) in the case of either of the foregoing, at such other

address as may be designated by written notice to the other party.

 

Section 34.             Effectiveness.

 

Pursuant to Section 18-201(d) of the Act, this

Agreement shall be effective as of the time of the filing of the Certificate of

Formation with the Office of the Delaware Secretary of State on July 23, 2002.

 

Section 35.             Tax

Matters.

 

The Member intends to form a limited liability company

and does not intend to form a partnership under the laws of the State of

Delaware or any other laws.  It is the

intention of the parties hereto that the Company be disregarded as a separate

entity for federal income tax purposes pursuant to Treasury Regulation Section

301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997.  The parties agree not to take any action

inconsistent with such intended federal income tax treatment.

 

14

 

IN WITNESS WHEREOF, the undersigned, intending to be

legally bound hereby, has duly executed this Limited Liability Company

Agreement as of the 23rd day of July, 2002.

 

	

   

  	

  MEMBER:

  
	

   

  	

   

  
	

   

  	

  AMERICAN CAPITAL STRATEGIES, LTD.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

  John Erickson

  
	

   

  	

  Title:

  	

  Vice President and Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SPECIAL MEMBERS:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Name:

  	

  William Holloran

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Name:

  	

  Evelyne S. Steward

  
				

 

 

SCHEDULE A

 

Definitions

 

A.            Definitions

 

When used in this Agreement, the following terms not

otherwise defined herein have the following meanings:

 

“Act” has the meaning set forth in the preamble

to this Agreement.

 

“Affiliate” means, with respect to any Person,

any other Person directly or indirectly Controlling or Controlled by or under

direct or indirect common Control with such Person.  “Affiliated” shall have a correlative meaning.

 

“Agreement” means this Limited Liability

Company Operating Agreement of the Company, together with the schedules

attached hereto, as amended, restated or supplemented or otherwise modified

from time to time.

 

“Bankruptcy” means, with respect to any Person,

if such Person (i) makes an assignment for the benefit of creditors, (ii) files

a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent,

or has entered against it an order for relief, in any bankruptcy or insolvency

proceedings, (iv) files a petition or answer seeking for itself any

reorganization, arrangement, composition, readjustment, liquidation or similar

relief under any statute, law or regulation, (v) files an answer or other

pleading admitting or failing to contest the material allegations of a petition

filed against it in any proceeding of this nature, (vi) seeks, consents to or

acquiesces in the appointment of a trustee, receiver or liquidator of the

Person or of all or any substantial part of its properties, or (vii) if 120

days after the commencement of any proceeding against the Person seeking

reorganization, arrangement, composition, readjustment, liquidation or similar

relief under any statute, law or regulation, if the proceeding has not been

dismissed, or if within 90 days after the appointment without such Person’s

consent or acquiescence of a trustee, receiver or liquidator of such Person or

of all or any substantial part of its properties, the appointment is not

vacated or stayed, or within 90 days after the expiration of any such stay, the

appointment is not vacated.  The

foregoing definition of “Bankruptcy” is intended to replace and shall supersede

and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and

18-304 of the Act.

 

“Basic Documents” means this Agreement, the

Management Agreement, the ACAS Transfer Agreement with American Capital

Strategies, Ltd., the Transfer and Servicing Agreement among the Company,

American Capital Strategies, Ltd., ACAS Business Loan Trust 2002-2, Wells Fargo

Bank Minnesota, National Association, as Indenture Trustee and Backup Servicer,

the Trust Agreement for ACAS Business Loan Trust 2002-2 and the Placement

Agency Agreement with Wachovia Securities, Inc., and all documents and

certificates contemplated thereby or delivered in connection therewith.

 

“Board” or “Board of Managers” means the

Board of Managers of the Company.

 

“Certificate of Formation” means the

Certificate of Formation of the Company filed with the Secretary of State of

the State of Delaware on July 23, 2002, as amended or amended and restated from

time to time.

 

“Company” means ACAS Business Loan LLC, 2002-2,

a Delaware limited liability company.

 

A-1

 

“Control” means the possession, directly or

indirectly, of the power to direct or cause the direction of the management or

policies of a Person, whether through the ownership of voting securities or

general partnership or managing member interests, by contract or otherwise.

 

“Controlling” and “Controlled” shall

have correlative meanings.  Without

limiting the generality of the foregoing, a Person shall be deemed to Control

any other Person in which it owns, directly or indirectly, a majority of the

ownership interests.

 

“Covered Persons” has the meaning set forth in

Section 20(a).

 

“Independent Manager” means an individual who

(i) is not and has not been employed by ACAS or any of its subsidiaries or

Affiliates as a director, officer, employee, partner, attorney or counsel

within the five years immediately prior to such individual’s appointment as an

Independent Manager; (ii) is not (and is not Affiliated with a company or a

firm that is) a significant advisor or consultant to ACAS or any of its

subsidiaries and Affiliates; (iii) does not have significant personal services

contract(s) with ACAS or any of its subsidiaries or Affiliates; (iv) is not

Affiliated with a tax-exempt entity that receives significant contributions

from ACAS or any of its subsidiaries or Affiliates; (v) is not the beneficial

owner at the time of such individual’s appointment as an Independent Manager,

or at any time thereafter while serving as an Independent Manager, of any

beneficial or economic interest in Company or its Affiliates; and (vi) is not a

spouse, parent, sibling or child of any person described in clauses (i) through

(v).

 

“Loan Assets” has the meaning set forth in the

Basic Documents.

 

“Loans” has the meaning set forth in the Basic

Documents.

 

“Management Agreement” means the agreement of

the Managers in the form attached hereto as Schedule C.  The Management Agreement shall be deemed

incorporated into, and a part of, this Agreement.

 

“Managers” means the Persons elected to the

Board of Managers from time to time by the Member, including the Independent

Managers, in their capacity as managers of the Company.  A Manager is hereby designated as a

“manager” of the Company within the meaning of Section 18-101(10) of the Act.

 

“Material Action” means to consolidate or merge

the Company with or into any Person, or sell all or substantially all of the

assets of the Company, or to institute proceedings to have the Company be

adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy

or insolvency proceedings against the Company or 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 consent to the

appointment of a receiver, liquidator, assignee, trustee, sequestrator (or

other similar official) of the Company or a substantial part of its property,

or make any assignment for the benefit of creditors of the Company, or admit in

writing the Company’s inability to pay its debts generally as they become due,

or, to the fullest extent permitted by law, take action in furtherance of any

such action, or dissolve or liquidate the Company.

 

“Member” means American Capital Strategies,

Ltd., as the initial member of the Company, and includes any Person admitted as

an additional member of the Company or a substitute member of the Company

pursuant to the provisions of this Agreement, each in its capacity as a member

of the Company; provided, however, the term “Member” shall not include the Special

Members.

 

A-2

 

“Obligations” shall mean the indebtedness,

liabilities and obligations of the Company under or in connection with this

Agreement, the other Basic Documents or any related document in effect as of

any date of determination.

 

“Officer” means an officer of the Company

described in Section 11.

 

“Officer’s Certificate” means a certificate

signed by any Officer of the Company who is authorized to act for the Company

in matters relating to the Company.

 

“Person” means any individual, corporation,

partnership, joint venture, limited liability company, limited liability

partnership, association, joint stock company, trust, unincorporated

organization, or other organization, whether or not a legal entity, and any

governmental authority.

 

“Rating Agency” has the meaning assigned to

that term in the Basic Documents.

 

“Rating Agency Condition” means, with respect

to any action, that each Rating Agency shall have been given ten days prior

notice thereof and that each of the Rating Agencies shall have notified the

Company in writing that such action will not result in a reduction or

withdrawal of the then current rating by such Rating Agency of any outstanding

Class (as defined in the Basic Documents) with respect to which such Rating

Agency has previously issued a rating.

 

“Special Member” means, upon such person’s

admission to the Company as a member of the Company pursuant

to Section 5(c), a person acting as Independent Manager, in such

person’s capacity as a member of the Company. 

A Special Member shall only have the rights and duties expressly set

forth in this Agreement.

 

B.            Rules of

Construction

 

Definitions in this Agreement apply equally to both

the singular and plural forms of the defined terms.  The words “include” and “including” shall be deemed to be

followed by the phrase “without limitation.” The terms “herein,” “hereof’ and

“hereunder” and other words of similar import refer to this Agreement as a

whole and not to any particular Section, paragraph or subdivision.  The Section titles appear as a matter of

convenience only and shall not affect the interpretation of this

Agreement.  All Section, paragraph,

clause, Exhibit or Schedule references not attributed to a particular document

shall be references to such parts of this Agreement.

 

A-3

 

SCHEDULE B

 

Member

 

	

  Name

  	

   

  	

  Mailing

  Address

  	

   

  	

  Agreed

  Value of

  Capital Contribution

  	

   

  	

  Membership

  Interest

  	

   

  
	

  American Capital

  Strategies, Ltd.

  	

   

  	

  2 Bethesda Metro Cr.,

  14th Floor

  Bethesda, Maryland  20814

  	

   

  	

  $

  	

  100.00

  	

   

  	

  100

  	

  %

  
									

 

B-1

 

SCHEDULE C

 

Management Agreement

 

July 23, 2002

 

ACAS BUSINESS LOAN LLC, 2002-2

2 Bethesda Metro Center, 14th Floor

Bethesda, Maryland 20184

 

Re:                               Management Agreement -ACAS Business Loan

LLC, 2002-2

 

Ladies and Gentlemen:

 

For good and valuable consideration, each of the

undersigned Persons, who have been designated as Managers of ACAS Business Loan

LLC, 2002-2, a Delaware limited liability company (the “Company”), in

accordance with the Limited Liability Company Agreement of the Company, dated

as of July 23, 2002, 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

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.             So

long as any Obligation is outstanding, each of the undersigned agrees, solely

in its capacity as a creditor of the Company on account of any indemnification

or other payment owing to the undersigned by the Company, not to acquiesce,

petition or otherwise invoke or cause the Company to invoke the process of any

court or governmental authority for the purpose of commencing or sustaining a

case against the Company tinder any federal or state bankruptcy, insolvency or

similar law or appointing a receiver, liquidator, assignee, trustee, custodian,

sequestrator or other similar official of the Company or any substantial part

of the property of the Company, or ordering the winding up or liquidation of

the affairs of the Company.

 

3.             THIS

MANAGEMENT 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 PRINCIPLES OF CONFLICTS OF LAWS.

 

Initially capitalized terms used and not otherwise

defined herein have the meanings set forth in the LLC Agreement.

 

This Management Agreement may be executed in any

number of counterparts, each of which shall be deemed an original of this

Management Agreement and all of which together shall constitute one and the

same instrument.

 

C-1

 

IN WITNESS WHEREOF, the undersigned have executed this

Management Agreement as of the day and year first above written.

 

 

	

   

  	

   

  
	

   

  	

  William Holloran

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Evelyne S. Steward

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Malon Wilkus

  

 

C-2

 

SCHEDULE D

 

Managers

 

1.             William Holloran

(Independent Manager)

 

2.             Evelyne S. Steward

(Independent Manager)

 

3.             Malon Wilkus

 

D-1

 

SCHEDULE E

 

	

  OFFICERS

  	

   

  	

  TITLE

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Malon Wilkus

  	

   

  	

  President

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Vice President

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  John Erickson

  	

   

  	

  Vice President, Treasurer and Secretary

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Ira Wagner

  	

   

  	

  Vice President

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Thomas McHale

  	

   

  	

  Vice President and Assistant Secretary

  	

   

  

 

E-1EXHIBIT

10.13

 

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

 

THIS AMENDMENT is made and entered into as of the 20th

day of September 2002, made effective as of 5th of April, 2002, by and between

Tennant Company, a Minnesota corporation (the “Company”) and Janet Dolan, Chief

Executive Officer of the Company (“Executive”).

 

WHEREAS, the Company and Executive are parties to that

Employment Agreement made as of April 5, 1999 (the “Agreement”);

 

WHEREAS, the Company and Executive desire to amend the

Agreement pursuant to Paragraph 6.2 of the Agreement, to recognize the current

employment status of the Executive.

 

NOW, THEREFORE, in consideration of the foregoing

recitals, and for other good and valuable consideration, the receipt and

adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.  Amendment to

Paragraph 1.1.  Paragraph 1.1

of the Agreement is replaced and hereby amended to read in its entirety as

follows:

 

1.1  EMPLOYMENT

AS EXECUTIVE.  The Company agrees to

employ Executive as its Chief Executive Officer (“CEO”), and Executive accepts

such employment.  The term of Employment

Period as CEO shall be one year, commencing on April 5, 2002, and ending on

April 5, 2003, and shall be automatically extended for one additional year on

each succeeding April 5 Anniversary Date thereof (provided Executive’s

employment has not been previously terminated pursuant to the terms of this

Agreement), except that pursuant to Paragraph 3.1(g) of this Agreement,

Executive may be terminated by Company upon not less than three month’s prior

written notice.

 

2.  Continuation.  Except as set forth in this Amendment No. 1,

the Agreement shall remain in full force and effect without further alteration

until, or unless, it expires in accordance with its terms or is further amended

by written agreement among the parties.

 

IN WITNESS WHEREOF, the Company and the Executive have

executed this Amendment as of the date first above written.

 

 

	

  TENNANT COMPANY

  	

   

  	

  EXECUTIVE

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By

  	

    /s/ William I. Miller

  	

   

  	

  /s/ Janet Dolan

  
	

           William

  Miller

  	

  Janet Dolan

  
	

   

  	

   

  
	

  Its:  Chairperson

  of the Executive

         Compensation Committee

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