EXHIBIT 4.1.1
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF PSE&G TRANSITION FUNDING LLC
TABLE OF CONTENTS
Page
ARTICLE I
Definitions...............................1
SECTION 1.01 Capitalized Terms........................................1
SECTION 1.02 Other Definitional Provisions............................7
ARTICLE II
Formation of the Limited Liability Company.............................8
SECTION 2.01 Formation; Filings.......................................8
SECTION 2.02 Name and Office..........................................8
SECTION 2.03 Business Purpose.........................................8
SECTION 2.04 Term.....................................................9
SECTION 2.05 No State Law Partnership................................10
SECTION 2.06 Authority of Member.....................................10
SECTION 2.07 Liability to Third Parties..............................10
SECTION 2.08 No Personal Liability of any Member, Special Member,
Manager, Etc............................................10
SECTION 2.09 Separateness............................................11
SECTION 2.10 Limited Liability and Bankruptcy Remoteness.............12
ARTICLE III
Management...............................12
SECTION 3.01 Management by Managers..................................12
SECTION 3.02 Acts by Managers........................................13
SECTION 3.03 Number and Qualifications...............................13
SECTION 3.04 Independent Managers....................................13
SECTION 3.05 Appointment and Vacancy.................................14
SECTION 3.06 Term....................................................14
SECTION 3.07 Removal.................................................15
SECTION 3.08 Resignation.............................................15
SECTION 3.09 Place of Meetings of Managers...........................15
SECTION 3.10 Meetings of Managers....................................15
SECTION 3.11 Quorum; Majority Vote...................................15
SECTION 3.12 Methods of Voting; Proxies..............................16
SECTION 3.13 Actions Without a Meeting...............................16
SECTION 3.14 Telephone and Similar Meetings..........................16
SECTION 3.15 Managers................................................16
ARTICLE IV
Officers.................................16
SECTION 4.01 Designation; Term; Qualifications.......................16
SECTION 4.02 Removal and Resignation.................................17
SECTION 4.03 Vacancies...............................................17
SECTION 4.04 Compensation............................................17
ARTICLE V
Member..................................17
SECTION 5.01 Powers..................................................17
SECTION 5.02 Compensation of Member..................................18
SECTION 5.03 Actions by the Member...................................18
SECTION 5.04 Control by Member.......................................18
SECTION 5.05 Special Member..........................................18
ARTICLE VI
Common Interest.............................19
SECTION 6.01 General.................................................19
SECTION 6.02 Distributions...........................................19
SECTION 6.03 Rights on Liquidation, Dissolution or Winding Up........20
SECTION 6.04 Redemption..............................................20
SECTION 6.05 Voting Rights...........................................21
ARTICLE VII
Allocations; Distributions; Expenses;
Taxes; Books; Records; and Bank Accounts.................21
SECTION 7.01 Allocations.............................................21
SECTION 7.02 Distributions...........................................21
SECTION 7.03 Limitation Upon Distributions...........................21
SECTION 7.04 Expenses................................................21
SECTION 7.05 Tax Elections...........................................22
SECTION 7.06 Annual Tax Information..................................22
SECTION 7.07 Tax Matters Member......................................23
SECTION 7.08 Maintenance of Books....................................23
SECTION 7.09 Reports.................................................23
SECTION 7.10 Bank and Investment Accounts............................23
ARTICLE VIII
Indemnification.............................23
SECTION 8.01 Mandatory Indemnification of the Member,
the Special Members, and the Managers...................23
SECTION 8.02 Mandatory Advancement of Expenses.......................24
SECTION 8.03 Indemnification of Officers, Employees and Agents.......24
SECTION 8.04 Nonexclusivity of Rights................................25
SECTION 8.05 Contract Rights.........................................25
SECTION 8.06 Insurance...............................................25
SECTION 8.07 Savings Clause..........................................25
SECTION 8.08 Other Ventures..........................................26
SECTION 8.09 Other Arrangements Not Excluded.........................26
ARTICLE IX
Miscellaneous Provisions.........................26
SECTION 9.01 Offset..................................................26
SECTION 9.02 Notices.................................................27
SECTION 9.03 Effect of Waiver or Consent.............................27
SECTION 9.04 Governing Law; Severability.............................27
SECTION 9.05 No Bankruptcy Petition; No Dissolution..................27
SECTION 9.06 Amendment...............................................28
SECTION 9.07 Headings and Sections...................................29
SECTION 9.08 Binding Agreement.......................................29
SCHEDULE A: SCHEDULE OF CAPITAL CONTRIBUTIONS OF MEMBER...................A-1
SCHEDULE B: CERTIFICATE OF COMMON INTEREST................................B-1
SCHEDULE C: MANAGERS......................................................C-1
SCHEDULE D: OFFICERS......................................................D-1
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
PSE&G TRANSITION FUNDING LLC,
a Delaware Limited Liability Company
AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT, dated January 31, 2001 (as it may be further amended,
supplemented or otherwise modified and in effect from time to time, the
"Agreement"), of PSE&G TRANSITION FUNDING LLC, a Delaware limited liability
company (the "Company"), having its principal office at 00 Xxxx Xxxxx,
X-0X, Xxxxxx, Xxx Xxxxxx 00000.
WHEREAS, Public Service Electric & Gas Company ("PSE&G"), as
sole Member, (i) on July 21, 1999 filed a Certificate of Formation of the
Company with the Delaware Secretary of State, (ii) amended and restated
such Certificate of Formation on January 25, 2001 and filed the same with
the Secretary of State of the State of Delaware on January 26, 2001, and
(iii) executed a Limited Liability Company Agreement, dated July 21, 1999
(the "Original LLC Agreement"); and
WHEREAS, this Agreement amends and restates the Original LLC
Agreement in all respects, and from and after the date hereof constitutes
the governing instrument of the Company;
NOW THEREFORE, the Member (as defined below) hereby amends and
restates the Original LLC Agreement as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CAPITALIZED TERMS. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Act" shall mean the Delaware Limited Liability Company Act, as
amended, as in effect on the date hereof (currently Chapter 18 of Title 6,
Sections 18-101 through 18-1109 of the Delaware Code) and as it may be
amended hereafter, from time to time.
"Administration Agreement" shall mean the Administration
Agreement, dated January 31, 2001, between the Company and PSE&G, as
administrator, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.
"Affiliate" shall mean, with respect to any specified Person,
any other Person controlling or controlled by or under common control with
such specified Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" shall mean this Amended and Restated Limited
Liability Company Agreement of the Company, as the same may be further
amended, supplemented or otherwise modified from time to time in accordance
with the provisions hereof.
"Bankruptcy" shall mean, 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 one hundred and twenty (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, the proceeding has not
been dismissed, or if within ninety (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 if within ninety (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" shall mean this Agreement, the Certificate of
Formation, the Indenture, the Sale Agreement, any Xxxx of Sale, the
Servicing Agreement, the Administration Agreement, the Underwriting
Agreement, the Hedge Agreement and the Interest Rate Swap Agreement.
"Xxxx of Sale" shall mean the xxxx of sale, issued by PSE&G to
the Company as of January 31, 2001, pursuant to the Sale Agreement,
together with any other xxxx of sale delivered in accordance therewith.
"Bondable Transition Property" shall mean the irrevocable right
of PSE&G to charge, collect and receive, and be paid from collections of,
the transition bond charge in the amount necessary to provide for the full
recovery of the bondable stranded costs which have been determined to be
recoverable in the Financing Order, all rights of PSE&G under the Financing
Order, including, without limitation, all rights to obtain periodic
adjustments of the transition bond charge pursuant to the Competition Act,
and all revenues, collections, payments, money and proceeds arising under,
or with respect to, all of the foregoing.
"Bonds" shall have the meaning set forth in Section 2.03(a).
"BPU" shall mean the State of New Jersey Board of Public
Utilities.
"Business Day" shall mean any day other than a Saturday, Sunday
or other day on which banks are authorized or required by law to be closed
in New York City, New York, Newark, New Jersey or, with respect to any
payments on any Bonds listed on the Luxembourg Stock Exchange, in
Luxembourg.
"Certificate of Formation" shall mean the Certificate of
Formation of the Company as filed in accordance with the Act with the
Secretary of State of the State of Delaware on July 21, 1999, as amended
and restated and filed with the Secretary of State of the State of Delaware
on January 26, 2001, as the same may be further amended, supplemented or
otherwise modified and in effect from time to time.
"Code" shall mean the Internal Revenue Code of 1986, as amended
(or any successor law).
"Common Interest" shall mean the limited liability company
interest of the Member in the Company as described in Article VI. The
Company shall have one class of Common Interest.
"Company" shall mean PSE&G Transition Funding LLC, a Delaware
limited liability company.
"Competition Act" shall mean the New Jersey Electric Discount
and Energy Competition Act, 1999 N.J. Sess. Law Serv., Ch. 23 (West).
"Financing Order" shall mean the bondable stranded cost rate
order, Docket No. EF99060390, issued by the BPU on September 17, 1999
pursuant to the Competition Act.
"Fiscal Year" shall mean, unless the Managers shall at any time
determine otherwise pursuant to the requirements of the Code, a calendar
year.
"GAAP" shall mean the generally accepted accounting principles
promulgated or adopted by the Financial Accounting Standards Board and its
successors from time to time.
"Governmental Authority" shall mean any federal, state, local
or foreign court or governmental department, commission, board, bureau,
agency, authority, instrumentality or regulatory body.
"Hedge Agreement" shall mean (i) the ISDA Master Agreement,
together with the related Schedule and Confirmation, each dated as of
January 5, 2001, between the Company and Public Service Electric and Gas
Company as counterparty thereunder, as the same may be amended,
supplemented or otherwise modified and in effect from time to time and (ii)
any other Hedge Agreement, as defined in and permitted by the Indenture and
any Supplement thereto.
"Indenture" shall mean the Indenture, dated as of January 31,
2001, between the Company and the Trustee, as the same may be amended,
modified or supplemented from time to time, including any Supplement
thereto creating a new Series of Bonds.
"Independent Manager" shall mean, with respect to the Company,
a Manager who is not, and within the previous five years was not (except
solely by virtue of such Person's serving as, or being an Affiliate of any
other Person serving as, an independent director or manager, as applicable,
of PSE&G or any bankruptcy-remote special purpose entity that is an
Affiliate of PSE&G or the Company), (i) a stockholder, member, partner,
director, officer, employee, Affiliate, customer, supplier, creditor or
independent contractor of, or any Person that has received any benefit in
any form whatever from (other than in such Manager's capacity as a
ratepayer or customer of PSE&G in the ordinary course of business), or any
Person that has provided any service in any form whatsoever to, or any
major creditor (or any Affiliate of any major creditor) of, the Company,
PSE&G, or any of their Affiliates, or (ii) any Person owning beneficially,
directly or indirectly, any outstanding shares of common stock, any limited
liability company interests or any partnership interests, as applicable, of
the Company, PSE&G or any of their Affiliates, or of any major creditor (or
any Affiliate of any major creditor) of any of the foregoing, or a
stockholder, member, partner, director, officer, employee, Affiliate,
customer, supplier, creditor or independent contractor of, or any Person
that has received any benefit in any form whatever from (other than in such
Person's capacity as a ratepayer or customer of PSE&G in the ordinary
course of business), or any Person that has provided any service in any
form whatever to, such beneficial owner or any of such beneficial owner's
Affiliates, or (iii) a member of the immediate family of any person
described above; provided that the indirect or beneficial ownership of
stock through a mutual fund or similar diversified investment vehicle with
respect to which the owner does not have discretion or control over the
investments held by such diversified investment vehicle shall not preclude
such owner from being an Independent Manager. For purposes of this
definition, "major creditor" shall mean a natural person or business entity
to which the Company, PSE&G or any of their Affiliates has outstanding
indebtedness for borrowed money or credit on open account in a sum
sufficiently large as would reasonably be expected to influence the
judgment of the proposed Independent Manager adversely to the interests of
the Company when the interests of that Person are adverse to those of the
Company.
"Interest Rate Swap Agreement" shall mean (i) the ISDA Master
Agreement, together with the related Schedule and Confirmation, each dated
January 25, 2001 between the Company and Westdeutsche Landesbank
Girozentrale, New York Branch, as swap counterparty thereunder, as the same
may be amended, supplemented or otherwise modified and in effect from time
to time (ii) and any other Interest Rate Swap Agreement, as defined in and
permitted by the Indenture and any Supplement thereto.
"Manager" shall mean any manager of the Company, including the
Independent Managers.
"Member" shall mean PSE&G, in its capacity as a member in the
Company under this Agreement, or any successor thereto as a member pursuant
to Article VI; provided, however, the term "Member" shall not include the
Special Members.
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership, limited liability
company, joint stock company, corporation, trust, unincorporated
organization or Governmental Authority.
"Proceeding" shall have the meaning set forth in Section
8.01(a).
"PSE&G" shall mean Public Service Electric and Gas Company, a
New Jersey corporation.
"Sale Agreement" shall mean the Bondable Transition Property
Sale Agreement, dated as of January 31, 2001, between PSE&G, as seller, and
the Company, as the same may be amended, supplemented or otherwise modified
and in effect from time to time.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the United States Securities and
Exchange Commission promulgated thereunder.
"Series" shall mean each series of Bonds issued and
authenticated pursuant to the Indenture and a related Supplement.
"Servicing Agreement" shall mean the Bondable Transition
Property Servicing Agreement, dated as of January 31, 2001, between the
Company and PSE&G, as servicer, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"Special Member" shall mean, upon such person's admission to
the Company as a member of the Company pursuant to Section 5.05, a person
acting as Independent Manager, in such person's capacity as a member of the
Company. A "Special Member" shall have the rights and duties expressly set
forth in this Agreement.
"State" means any one of the 50 states of the United States of
America or the District of Columbia.
"Supplement" shall mean a supplement to the Indenture complying
(to the extent applicable) with the terms of Article 9 of the Indenture.
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other
successor Treasury Regulations.
"Trustee" shall mean the party named as such in the Indenture
until a successor replaces it in accordance with the applicable provisions
of the Indenture and thereafter means the successor serving thereunder.
"Underwriting Agreement" shall mean the Underwriting Agreement,
dated January 25, 2001, between PSE&G, the Company and Xxxxxx Brothers,
Inc., on behalf of itself and as representative of the several underwriters
listed therein.
SECTION 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise defined herein, all capitalized terms
herein shall have the meanings ascribed thereto in the Indenture.
(b) All terms in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
documents made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document,
and accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under GAAP. To the extent that the
definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under GAAP, the definitions contained in this Agreement or in any
such certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder", and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; Section
references contained in this Agreement are references to Sections in this
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
FORMATION OF THE LIMITED LIABILITY COMPANY
SECTION 2.01 FORMATION; FILINGS. Pursuant to the Act and in
accordance with the further terms and provisions hereof, the Member and,
when signed by the Special Members, the Special Members, hereby continue
the Company as a limited liability company. The Certificate of Formation of
the Company, has been executed and filed with the Secretary of State of the
State of Delaware by Xxxxx X. Xxxxx, as an authorized person within the
meaning of the Act. The Member shall execute or cause to be executed from
time to time all other instruments, certificates, notices and documents,
and shall do or cause to be done all such filing, recording, publishing and
other acts, in each case, as may be necessary or appropriate from time to
time to comply with all applicable requirements for the formation and/or
operation and, when appropriate, termination of a limited liability company
in the State of Delaware and all other jurisdictions where the Company
shall desire to conduct its business.
SECTION 2.02 NAME AND OFFICE.
(a) The name of the Company shall be "PSE&G Transition Funding
LLC." All business of the Company shall be conducted in such name and all
contracts, property and other assets of the Company shall be held in that
name and the Member shall not have any ownership interests in such
contracts, property or other assets in its individual name.
(b) The address of the registered office of the Company in the
State of Delaware is the Corporation Trust Center, 0000 Xxxxxx Xxxxxx xx
xxx xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle, 19801. The name of its
registered agent at that address is CT Corporation.
(c) The Company may also have offices at such other places both
within and without the State of Delaware as the Member may from time to
time determine.
SECTION 2.03 BUSINESS PURPOSE. The nature of the business or
purpose to be conducted or promoted by the Company is to engage exclusively
in the following business and financial activities:
(a) to authorize, issue, sell and deliver one or more Series or
classes of transition bonds ("Bonds") under the Indenture and,
in connection therewith, to execute and deliver Supplements,
including Supplements providing for the issuance of additional
Series of Bonds, each as permitted by and in accordance with
the terms of the Indenture;
(b) to purchase and hold Bondable Transition Property and pledge
the same to the Trustee pursuant to the terms and conditions of
the Basic Documents;
(c) to negotiate, authorize, execute, deliver, assume the
obligations under, and perform, the Basic Documents and any
other agreement or instrument or document relating to the
activities set forth in clauses (a) and (b) above, including
but not limited to agreements with third-party credit enhancers
and additional swap or hedge agreement counterparties relating
to any Series of Bonds; provided, that each party to any
agreement with the Company shall covenant that it shall not,
prior to the date which is one year and one day after the
termination of the Indenture and the payment in full of any
Series of the Bonds and any other amounts owed under the
Indenture, including, without limitation, any amounts owed to
third-party credit enhancers, and any amounts owed under any
Hedge Agreement or Interest Rate Swap Agreement, acquiesce,
petition or otherwise invoke or cause the Company to invoke the
process of any court or government authority for the purpose of
commencing or sustaining a case against the Company under 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; and provided, further, that the Company shall be
permitted to incur additional indebtedness or other liabilities
payable to service providers and trade creditors in the
ordinary course of business in connection with the foregoing
activities; and
(d) to engage in any activity and to exercise any powers permitted
to limited liability companies under the laws of the State of
Delaware that are related or incidental to the foregoing and
necessary, convenient or advisable to accomplish the foregoing.
SECTION 2.04 TERM. The term of the Company shall continue until
the Company is dissolved and liquidated in accordance with the Act, subject
to Sections 6.03 and 9.05. The existence of the Company as a separate legal
entity shall continue until the cancellation of the Certificate of
Formation in accordance with the Act.
SECTION 2.05 NO STATE LAW PARTNERSHIP. The Member and the
Special Members intend that the Company shall not be a partnership
(including, without limitation, a general partnership or a limited
partnership) or joint venture, and that neither the Member, any Special
Member nor any Manager shall be a partner or joint venturer of the Member,
any Special Member or any Manager with respect to the business of the
Company for any purposes, and this Agreement shall not be construed to
suggest otherwise.
SECTION 2.06 AUTHORITY OF MEMBER. Subject to Section 3.04, the
Member, acting in such capacity, shall have the authority or power to act
for or on behalf of the Company, to do any act that would be binding on the
Company, or to incur any expenditures, debts, liabilities or obligations on
behalf of the Company.
SECTION 2.07 LIABILITY TO THIRD PARTIES. Except as otherwise
expressly provided by the Act, neither the Member, any Special Member nor
any Manager shall be liable for the debts, obligations or liabilities of
the Company (whether arising in contract, tort or otherwise), including,
without limitation, under a judgment, decree or order of a court, by reason
of being the Member or acting as a Special Member or Manager of the
Company.
SECTION 2.08 NO PERSONAL LIABILITY OF ANY MEMBER, SPECIAL
MEMBER, MANAGER, ETC. (a) Neither the Member nor any Special Member shall
be subject in such capacity to any personal liability whatsoever to any
Person in connection with the assets or the acts, obligations or affairs of
the Company, (b) the Member and each Special Member shall have the same
limitation of personal liability as is extended to stockholders of a
private corporation for profit incorporated under the General Corporation
Law of the State of Delaware, and (c) no Manager or officer of the Company
shall be subject in such capacity to any personal liability whatsoever to
any Person, other than the Company or its Member, in connection with the
assets or the affairs of the Company; and, subject to the provisions of
Article VIII, all such Persons shall look solely to the assets of the
Company for satisfaction of claims of any nature arising in connection with
the affairs of the Company; provided, that such protection from personal
liability shall apply to the fullest extent permitted by applicable law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide greater or broader indemnification rights than such law permitted
the Company to provide prior to such amendment).
SECTION 2.09 SEPARATENESS.
(a) Except as provided in the Basic Documents, the funds and
other assets of the Company shall not be commingled with those of any other
entity, and the Company shall maintain its accounts separate from the
Member and any other Person.
(b) The Company shall not hold itself out as being liable for
the debts of any other entity, and shall conduct its own business in its
own name.
(c) The Company shall not form, or cause to be formed, any
subsidiaries.
(d) The Company shall act solely in its limited liability
company name and through its duly authorized Member, Special Members,
Managers, officers or agents in the conduct of its business, and shall
conduct its business so as not to mislead others as to the identity of the
entity or assets with which they are concerned.
(e) The Company shall maintain separate records, books of
account and financial statements, and shall not commingle its records and
books of account with the records and books of account of any other entity
or the Member.
(f) The Managers shall hold appropriate meetings to authorize
all of its limited liability company actions, which meetings may be held by
telephone conference call. The Company shall observe all formalities
required by this Agreement.
(g) The Company shall at all times ensure that its
capitalization is adequate in light of its business and purpose.
(h) Neither the Member, any Special Member nor any Manager
shall guarantee, become liable on or hold itself out as being liable for
the debts of the Company. The Company shall not guarantee or become
obligated for the debts of the Member, any Special Member or any Manager,
any Affiliate thereof or any other Person, or otherwise hold out its credit
as being available to satisfy the obligations of the Member, any Special
Member, any Manager or any other Person, shall not pledge its assets for
the benefit of any entity other than the Trustee, shall not make loans or
advances to any Person, and shall not acquire obligations or securities of
the Member, any Special Member, any Manager or any Affiliate thereof.
(i) The Company shall pay its own liabilities out of its own
funds, including fees and expenses of the Administrator pursuant to the
Administration Agreement and the Servicer pursuant to the Servicing
Agreement.
(j) The Company shall maintain an arm's-length relationship
with its Affiliates.
(k) The Company shall allocate fairly and reasonably any
overhead for office space shared with the Member, any Special Member or any
Manager.
(l) The Company shall use its own separate stationery,
invoices, checks and other business forms.
(m) The Company shall correct any known misunderstanding
regarding its separate identity.
Failure of the Company, the Member, any Special Member or any
Manager on behalf of the Company to comply with any of the foregoing
covenants or any of the 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, any Special Member or any Manager.
SECTION 2.10 LIMITED LIABILITY AND BANKRUPTCY REMOTENESS.
Without limiting the generality of Section 2.09, the Company shall be
operated in such a manner as the Managers deem reasonable and necessary or
appropriate to preserve (a) the limited liability of PSE&G (or its
successor) as the Member in the Company and the limited liability of the
Special Members, (b) the separateness of the Company from the business of
PSE&G (or its successor), as the Member of the Company, or any other
Affiliate thereof and (c) until the expiration of the period of one year
and one day specified in Section 9.05, the bankruptcy-remote status of the
Company.
ARTICLE III
MANAGEMENT
SECTION 3.01 MANAGEMENT BY MANAGERS. The powers of the Company
shall be exercised by or under the authority of, and the business and
affairs of the Company shall be managed under the direction of, the
Managers.
SECTION 3.02 ACTS BY MANAGERS.
(a) The Managers shall be obliged to devote only as much of
their time to the Company's business as shall be reasonably required in
light of the Company's business and objectives. A Manager shall perform his
or her duties as a Manager in good faith, in a manner he or she reasonably
believes to be in the best interests of the Company, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances.
(b) Every Manager is an agent of the Company for the purpose of
its business, and the act of every Manager, including the execution in the
name of the Company of any instrument for carrying on the business of the
Company, binds the Company, unless such act is in contravention of this
Agreement or unless the Manager so acting otherwise lacks the authority to
act for the Company and the person with whom he or she is dealing has
knowledge of the fact that he or she has no such authority.
(c) The Managers shall have the right and authority to take all
actions which the Managers deem necessary, useful or appropriate for the
day-to-day management and conduct of the Company's business.
(d) The Managers may exercise all powers of the Company and do
all such lawful acts and things as are not by the Act, other applicable law
or this Agreement directed or required to be exercised or done by the
Member. All instruments, contracts, agreements and documents providing for
the acquisition or disposition of property of the Company shall be valid
and binding on the Company if executed by one or more of the Managers. All
instruments, contracts, agreements and documents of whatsoever type
executed on behalf of the Company shall be executed in the name of the
Company by one or more Managers.
SECTION 3.03 NUMBER AND QUALIFICATIONS. The number of Managers
of the Company shall not be less than three nor more than five, as may be
determined by the Member from time to time, but no decrease in the number
of Managers shall have the effect of shortening the term of any incumbent
Manager.
SECTION 3.04 INDEPENDENT MANAGERS.
(a) The Company shall have at all times at least two
individuals who are each Independent Managers. The Independent Managers may
not delegate their duties, authorities or responsibilities hereunder. If
any Independent Manager resigns, dies or becomes incapacitated, or
such position is otherwise vacant, no action requiring the unanimous
affirmative vote of the Managers shall be taken until a successor
Independent Manager is appointed by the Member and qualifies and approves
such action.
(b) Notwithstanding any other provision of this Agreement and
any provision of law that otherwise so empowers the Company, the Member,
any Special Member, any Manager or any other Person, the Company shall not,
and neither the Member nor any Special Member, Manager nor any other Person
on behalf of the Company shall, without the prior unanimous consent of the
Managers, including each of the Independent Managers, do any of the
following: (i) engage in any business or activity other than those set
forth in Article II; (ii) except as provided in the Basic Documents, incur
any indebtedness, other than the Bonds, obligations under agreements with
third party credit enhancers and swap or hedge agreement counterparties
relating to any Series of Bonds and ordinary course expenses as set forth
in Article II, or assume or guarantee any indebtedness of any other entity;
(iii) make a general assignment for the benefit of creditors; (iv) file a
petition commencing a voluntary bankruptcy case; (v) file a petition or
answer seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or
regulation; (vi) file an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
proceeding seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or
regulation, or the entry of any order appointing a trustee, liquidator or
receiver of it or of its assets or any substantial portion thereof; (vii)
seek, consent to or acquiesce in the appointment of a trustee, receiver or
liquidator of it or of all or any substantial part of its assets; (viii)
consolidate or merge with or into any other entity or convey or transfer
substantially all of its properties and assets substantially as an entirety
to any entity, or (ix) amend this Agreement or take action in furtherance
of any such action. With regard to any action contemplated by the preceding
sentence, or with regard to any action taken or determination made at any
time when the Company is insolvent, each Manager will, to the fullest
extent permitted by law, owe its primary fiduciary duty to the Company
(including the creditors of the Company).
SECTION 3.05 APPOINTMENT AND VACANCY. The Member will appoint
each Manager, including any Manager to be appointed by reason of an
increase in the number of Managers.
SECTION 3.06 TERM. Each Manager shall hold office until his or
her successor shall be selected by the Member and qualified, or until his
or her earlier death, resignation or removal as provided in this Agreement.
SECTION 3.07 REMOVAL. Subject to Section 3.04(a) and Section
3.15 of this Agreement, the Member may remove, with or without cause, any
Manager.
SECTION 3.08 RESIGNATION. Any Manager may resign at any time.
Such resignation shall be made in writing and shall take effect at the time
specified therein or, if no time is specified therein, at the time of its
receipt by the remaining Managers; provided that the resignation of an
Independent Manager shall not be effective until a replacement Independent
Manager has been appointed. The acceptance of a resignation shall not be
necessary to make it effective, unless so expressly provided in the
resignation.
SECTION 3.09 PLACE OF MEETINGS OF MANAGERS. Any meetings of the
Managers may be held either within or without the State of Delaware at such
place or places as shall be determined from time to time by resolution of
the Managers.
SECTION 3.10 MEETINGS OF MANAGERS. Meetings of the Managers may
be held when called by any Managers or Manager. The Manager or Managers
calling any meeting shall cause notice to be given of such meeting,
including therein the time, date and place of such meeting, to each Manager
at least two Business Days before such meeting. The business to be
transacted at, or the purpose of, any meeting of the Managers shall be
specified in the notice or waiver of notice of any such meeting. If fewer
than all of the Managers are present in person, by telephone or by proxy,
business transacted at any such meeting shall be confined to the business
or purposes specifically stated in the notice or waiver of notice of such
meeting.
SECTION 3.11 QUORUM; MAJORITY VOTE. At all meetings of the
Managers, the presence in person, by telephone or by proxy of a majority of
the Managers shall be necessary and sufficient to constitute a quorum for
the transaction of business unless a greater number is required by this
Agreement or by law. The act of a majority of the Managers present in
person, by telephone or by proxy at a meeting at which a quorum is present
in person, by telephone or by proxy shall be the act of the Managers,
except as otherwise provided by law or this Agreement. If a quorum shall
not be present in person, by telephone or by proxy at any meeting of the
Managers, the Managers present in person, by telephone or by proxy at the
meeting may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present in
person, by telephone or by proxy.
SECTION 3.12 METHODS OF VOTING; PROXIES. A Manager may vote
either in person, by telephone or by proxy executed in writing by the
Manager; provided that the Person designated to act as proxy for an
Independent Manager must be an Independent Manager.
SECTION 3.13 ACTIONS WITHOUT A MEETING. Any action required or
permitted to be taken at a meeting of the Managers may be taken without a
meeting, without prior notice, and without a vote, if a consent in writing,
setting forth the action so taken, is signed by the Managers having not
fewer than the minimum number of votes that would be necessary to take the
action at a meeting at which all Managers entitled to vote on the action
were present and voted. Copies of any such consents shall be filed with the
minutes and permanent records of the Company.
SECTION 3.14 TELEPHONE AND SIMILAR MEETINGS. The Managers, or
members of any committee thereof, may participate in and hold meetings by
means of conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other. Such
participation in any such meeting shall constitute presence in person at
such meeting, except where a Person participates in such meeting for the
express purpose of objecting to the transaction of any business on the
ground that such meeting is not lawfully called or convened.
SECTION 3.15 MANAGERS. The Member and each Manager shall take
all actions necessary from time to time to ensure that at all times the
number of Managers shall be not less than three nor more than five;
provided, however, that pursuant to Section 3.04, the Company shall at all
times have at least two Independent Managers. The Managers upon the
execution of this Agreement shall be Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxx, R.
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx (who will serve as an Independent Manager)
and Xxxx X. Xxxxxxxxxxxx (who will serve as an Independent Manager).
ARTICLE IV
OFFICERS
SECTION 4.01 DESIGNATION; TERM; QUALIFICATIONS. The Managers
may, from time to time, designate one or more Persons to be officers of the
Company. Any officer so designated shall have such title and authority and
perform such duties as the Managers may, from time to time, delegate to
them. Each officer shall hold office for the term for which such officer is
designated and until his or her successor shall be duly designated and
shall qualify or until his or her death, resignation or removal as provided
in this Agreement. Any Person may hold any number of offices. No officer
need be a Manager, the Member, a Delaware resident, or a United States
citizen. The persons identified on Schedule D are hereby designated the
initial officers of the Company.
SECTION 4.02 REMOVAL AND RESIGNATION. Any officer of the
Company may be removed as such, with or without cause, by the Managers at
any time. Any officer of the Company may resign as such at any time upon
written notice to the Company. Such resignation shall be made in writing
and shall take effect at the time specified therein or, if no time is
specified therein, at the time of its receipt by the Managers.
SECTION 4.03 VACANCIES. Any vacancy occurring in any office of
the Company may be filled by the Managers.
SECTION 4.04 COMPENSATION. The compensation, if any, of the
officers of the Company shall be fixed from time to time by the Managers.
ARTICLE V
MEMBER
SECTION 5.01 POWERS. Subject to the provisions of this
Agreement and the Act, all powers shall be exercised by or under the
authority of, and the business and affairs of the Company shall be
controlled by, the Member pursuant to Section 5.03. Pursuant to Section
3.01, the Member has delegated such powers to the Managers. Without
prejudice to such general powers, but subject to the same limitations, it
is hereby expressly declared that the Member shall have the following
powers, subject to Section 3.04 in all cases:
First: To select and remove the Managers and prescribe such
powers and duties for them as may be consistent with the Act and
other applicable law and this Agreement.
Second: To conduct, manage and control the affairs and business
of the Company, and to make such rules and regulations therefor
consistent with the Act and other applicable law and this Agreement.
Third: To change the registered office of the Company in
Delaware from one location to another; to fix and locate from time to
time one or more other offices of the Company; and to designate any
place within or without the State of Delaware for the conduct of the
business of the Company.
SECTION 5.02 COMPENSATION OF MEMBER. The Company shall have
authority to pay to the Member reasonable compensation for the Member's
services to the Company. It is understood that the compensation paid to the
Member under the provisions of this Section shall be determined without
regard to the income of the Company, shall not be deemed to constitute
distributions to the recipient of any profit, loss or capital of the
Company and shall be considered as an operating expense of the Company.
SECTION 5.03 ACTIONS BY THE MEMBER. All actions of the Member
may be taken by written resolution of the Member which shall be signed on
behalf of the Member by an authorized officer of the Member and filed with
the minutes and permanent records of the Company.
SECTION 5.04 CONTROL BY MEMBER. To the extent the Member takes
any action with respect to the Company (including by means of its
appointment of any individual Manager or its control or employment of any
individual Manager in any other capacity), the Member, or any such Manager,
as applicable, will act in good faith in accordance with the terms of this
Agreement, and make decisions with respect to the business and daily
operations of the Company independent of, and not dictated by, in the case
of any such Manager, the Member, or in either case any Affiliate of the
foregoing, and, to the fullest extent permitted by law, any such Manager
shall bear a fiduciary duty to the Company (including its creditors) under
the circumstances set forth in Section 3.04.
SECTION 5.05 SPECIAL MEMBER. Upon the occurrence of any event
that causes the Member to cease to be a member of the Company, each person
acting as an Independent Manager pursuant to Section 3.04 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 (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 (a) a successor Special Member has been
admitted to the Company as Special Member by executing a counterpart to
this Agreement, and (b) such successor has also accepted its appointment as
Independent Manager, 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 pursuant to this Section 5.05, each person acting as an
Independent Manager pursuant to Section 3.04 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 3.04 shall
not be a member of the Company.
ARTICLE VI
COMMON INTEREST
SECTION 6.01 GENERAL. The Common Interest constitutes personal
property and shall be freely transferable and assignable in whole but not
in part upon registration of such transfer and assignment on the books of
the Company in accordance with the procedures established for such purpose
by the Managers of the Company. Upon registration of the transfer and
assignment of the Common Interest on the books of the Company, the
transferee/assignee shall be and become the sole Member of the Company and
shall have the rights and powers, and be subject to the restrictions and
liabilities, of the Member under this Agreement and the Act, and the
transferor/assignor shall cease to be the Member, each as of the date of
such registration. Notwithstanding the foregoing, the Common Interest may
not be transferred unless each Rating Agency (as defined in the Indenture)
then rating the Bonds of any Class or Series shall have confirmed in
writing to the Trustee and the Company that such transfer will not result
in a reduction or withdrawal of the then current rating by any such Rating
Agency of any outstanding Class or Series of Bonds. The Common Interest of
the Member in the Company shall be evidenced by a certificate in the form
set forth in Schedule B hereto.
SECTION 6.02 DISTRIBUTIONS. The Member shall be entitled to
receive, out of the assets of the Company legally available therefor, when,
as and if declared by the Managers, distributions payable in cash in such
amounts, if any, as the Managers shall declare. 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 such distribution would violate Section 18-607
of the Act or any other applicable law or any Basic Document.
SECTION 6.03 RIGHTS ON LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any liquidation, dissolution or winding up
of the Company, the Member shall be entitled to all remaining assets of the
Company available for distribution to the Member after payment of all
liabilities, debts and obligations of the Company to creditors, as set
forth in Section 18-804 of the Act.
(b) Neither the sale of all or substantially all of the
property or business of the Company, nor the merger or consolidation of the
Company into or with another Company or other entity, shall be deemed to be
a dissolution, liquidation or winding up, voluntary or involuntary, for the
purpose of this Section 6.03.
(c) The commencement of a bankruptcy, insolvency, receivership
or other similar proceeding by or against the Company, any Special Member
or the Member shall not result in the dissolution of the Company or in the
cessation of the interest of the Member in the Company. The withdrawal or
resignation of the Member or any Special Member or the dissolution of the
Member or any Special Member shall not, by itself, constitute a dissolution
of the Company.
(d) Subject to Section 5.05, 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
ninety (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.
(e) Notwithstanding any other provision of this Agreement, the
bankruptcy of the Member or any 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.
SECTION 6.04 REDEMPTION. The Common Interest shall not be
redeemable.
SECTION 6.05 VOTING RIGHTS. The Member shall have the sole
right to vote on all matters as to which members of a limited liability
company shall be entitled to vote pursuant to the Act and other applicable
law.
ARTICLE VII
ALLOCATIONS; DISTRIBUTIONS; EXPENSES;
TAXES; BOOKS; RECORDS; AND BANK ACCOUNTS
SECTION 7.01 ALLOCATIONS. Except as may be required by section
704(c) of the Code and Treasury Regulation ss. 1.704-1(b)(2)(iv)(f)(4), all
items of income, gain, loss, deduction, and credit of the Company for each
Fiscal Year shall be allocated to the Member. Any credit available for
federal income tax purposes shall be allocated to the Member in the same
manner.
SECTION 7.02 DISTRIBUTIONS. All distributions shall be made to
the Member from surplus funds. Except as provided in Section 7.03, all
distributions shall be made in such amounts and at such times as determined
by the Managers.
SECTION 7.03 LIMITATION UPON DISTRIBUTIONS. No distribution
shall be declared and paid unless, after the distribution is made, the fair
value of the Company assets is in excess of all liabilities of the Company
and no default has occurred and is continuing under the Indenture or any
Series of Bonds then outstanding.
SECTION 7.04 EXPENSES. Except as otherwise provided in this
Agreement, and subject to the provisions of the Basic Documents, the
Company shall be responsible for all expenses and the allocation thereof
including without limitation:
(a) all expenses incurred by the Member or its Affiliates in
organizing the Company;
(b) all expenses related to the payment of the principal of
and interest on the Bonds issued by the Company;
(c) all expenses related to the business of the Company and
all routine administrative expenses of the Company,
including any amounts payable under the Administration
Agreement and the Servicing Agreement, the maintenance of
books and records of the Company, and the preparation and
dispatch to the Member of checks, financial reports, tax
returns and notices required pursuant to this Agreement;
(d) all expenses incurred in connection with any litigation
or arbitration involving the Company (including the cost
of any investigation and preparation) and the amount of
any judgment or settlement paid in connection therewith;
(e) all expenses for indemnity or contribution payable by the
Company to any person;
(f) all expenses incurred in connection with the collection
of amounts due to the Company from any person;
(g) all expenses incurred in connection with the preparation
of amendments to this Agreement;
(h) all expenses incurred in connection with the liquidation,
dissolution and winding up of the Company; and
(i) all expenses otherwise allocated in good faith to the
Company by the Managers.
SECTION 7.05 TAX ELECTIONS. The Managers shall make the
following elections on behalf of the Company:
(a) To elect the calendar year as the Company's Fiscal Year;
(b) To elect the accrual method of accounting;
(c) To elect to treat all organization and start-up costs of
the Company as deferred expenses amortizable over sixty (60) months under
Section 195 of the Code; and
(d) To elect with respect to such other federal, state and
local tax matters as the Managers shall agree upon from time to time.
SECTION 7.06 ANNUAL TAX INFORMATION. The Managers shall cause
the Company to deliver to the Member all information necessary for the
preparation of the Member's federal or state income tax return.
SECTION 7.07 TAX MATTERS MEMBER. The Member shall communicate
and negotiate with the Internal Revenue Service on any tax matter on behalf
of the Member and the Company.
SECTION 7.08 MAINTENANCE OF BOOKS. The Company shall keep books
and records of accounts and shall keep minutes of the proceedings of the
Member, the Managers and each committee of the Managers. The Fiscal Year
shall be the accounting year of the Company.
SECTION 7.09 REPORTS. Within sixty (60) days following the end
of each Fiscal Year during the term of the Company, the Managers shall
cause to be furnished to the Member a balance sheet, an income statement
and a statement of changes in Member's capital account for, or as of the
end of, that Fiscal Year. Such financial statements shall be prepared in
accordance with the accounting method selected by the Managers consistently
applied (except as therein noted), and shall be accompanied by an audit
report from a nationally recognized accounting firm. The Managers also may
cause to be prepared or delivered such other reports as they may deem
appropriate. The Company shall bear the costs of all such financial
statements and reports.
SECTION 7.10 BANK AND INVESTMENT ACCOUNTS. The Managers shall
establish and maintain one or more separate bank and investment accounts
and arrangements for Company funds in the Company name with such financial
institutions and firms as the Managers determine.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 MANDATORY INDEMNIFICATION OF THE MEMBER, THE
SPECIAL MEMBERS, AND THE MANAGERS. Any Person who was or is a party or is
threatened to be made a party to, or is involved in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (hereafter a "Proceeding"), or
any appeal in such a Proceeding or any inquiry or investigation that could
lead to such a Proceeding, by reason of the fact that such Person is or was
the Member, a Special Member or a Manager, or by reason of the fact that
the Member, such Special Member or such Manager is or was serving at the
request of the Company as a member, director, manager, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of
another foreign or domestic corporation, limited liability company,
partnership, joint venture, partnership, trust, sole proprietorship,
employee benefit plan or other enterprise, shall be indemnified by the
Company to the fullest extent permitted by applicable law, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Company to provide
greater or broader indemnification rights than such law permitted the
Company to provide prior to such amendment) against judgments, penalties
(including, without limitation, excise and similar taxes and punitive
damages), fines, settlements and reasonable expenses (including, without
limitation, attorneys' fees) actually incurred by such Person in connection
with such Proceeding. It is expressly acknowledged that the indemnification
provided in this Article VIII could involve indemnification for negligence
or under theories of strict liability. Notwithstanding anything herein to
the contrary, for so long as any Bonds are outstanding, no payment from
funds of the Company (as distinct from funds from other sources, such as
insurance) of any indemnity under this Article VIII shall be payable except
out of funds available for payment of Company expenses as provided in the
Indenture.
SECTION 8.02 MANDATORY ADVANCEMENT OF EXPENSES. Expenses
incurred by a Person of the type entitled to be indemnified under Section
8.01 in defending any Proceeding shall be paid or reimbursed by the Company
in advance of the final disposition of the Proceeding, without any
determination as to such Person's ultimate entitlement to indemnification
under Section 8.01, upon receipt of a written affirmation by such Person of
such Person's good faith belief that such Person has met the standard of
conduct necessary for indemnification under applicable law and a written
undertaking by or on behalf of such Person to repay all amounts so advanced
if it shall ultimately be determined that such Person is not entitled to be
indemnified by the Company as authorized in Section 8.01 or otherwise. The
written undertaking shall be an unlimited general obligation of the Person
but need not be secured and shall be accepted without reference to
financial ability to make repayment.
SECTION 8.03 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.
The Company shall indemnify and pay and advance expenses to an officer,
employee or agent of the Company to the same extent and subject to the same
conditions under which it may indemnify and pay and advance expenses to the
Member, any Special Member or any Manager under this Article VIII; and the
Company shall indemnify and pay and advance expenses to any Person who is
or was an officer, employee or agent of the Company and who is or was
serving at the request of the Company as a member, manager, director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic limited liability company,
partnership, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise against any liability
asserted against such Person and incurred by such Person in such a capacity
or arising out of such Person's status as such to the same extent and
subject to the same conditions that the Company may indemnify and pay and
advance expenses to the Member, any Special Member or any Manager under
this Article VIII.
SECTION 8.04 NONEXCLUSIVITY OF RIGHTS. The indemnification and
advancement and payment of expenses provided by this Article VIII (a) shall
not be deemed exclusive of any other rights to which the Member, a Special
Member, a Manager or other Person seeking indemnification may be entitled
under any statute, agreement, decision of the Member or disinterested
Managers, or otherwise both as to action in such Person's official capacity
and as to action in another capacity while holding such office, (b) shall
continue as to any Person who has ceased to serve in the capacity which
initially entitled such Person to indemnity and advancement and payment of
expenses, and (c) shall inure to the benefit of the heirs, executors,
administrators, successors and assigns of the Member, such Special Member,
such Manager or such other Person.
SECTION 8.05 CONTRACT RIGHTS. The rights granted pursuant to
this Article VIII shall be deemed to be contract rights, and no amendment,
modification or repeal of this Article VIII shall have the effect of
limiting or denying any such rights with respect to actions taken or
Proceedings arising prior to any such amendment, modification or repeal.
SECTION 8.06 INSURANCE. The Company may purchase and maintain
insurance or other arrangement or both, at its expense, on behalf of itself
or any Person who is or was serving as the Member, a Special Member or a
Manager, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a member, manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic limited liability company,
partnership, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise, against any liability,
expense or loss, whether or not the Company would have the power to
indemnify such Person against such liability under the provisions of this
Article VIII.
SECTION 8.07 SAVINGS CLAUSE. If this Article VIII or any
portion of this Agreement shall be invalidated on any ground by any court
of competent jurisdiction, then the Company shall nevertheless indemnify
and hold harmless the Member, each Special Member, each Manager or any
other Person indemnified pursuant to this Article VIII as to costs, charges
and expenses (including, without limitation, attorneys' fees), judgments,
fines and amounts paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to
the fullest extent permitted by any applicable portion of this Article VIII
that shall not have been invalidated and to the fullest extent permitted by
applicable law.
SECTION 8.08 OTHER VENTURES. It is expressly agreed that the
Member, any Special Member, any Manager and any Affiliates, officers,
directors, managers, stockholders, partners or employees of the Member, any
Special Member or any Manager, may engage in other business ventures of
every nature and description, whether or not in competition with the
Company, independently or with others, and the Company shall not have any
rights in and to any independent venture or activity or the income or
profits derived therefrom.
SECTION 8.09 OTHER ARRANGEMENTS NOT EXCLUDED. The
indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this Article VIII:
(a) Does not exclude any other rights to which a Person
seeking indemnification or advancement of expenses may be
entitled under any agreement, decision of the Member or
otherwise, for either an action of the Member, any
Special Member or any Manager, officer, employee or agent
in the official capacity of such Person or an action in
another capacity while holding such position, except that
indemnification, unless ordered by a court, may not be
made to or on behalf of the Member, any Special Member or
any Manager if a final adjudication established that its
acts or omissions involved intentional misconduct, fraud
or a knowing violation of the law and was material to the
cause of action; and
(b) Continues for a person who has ceased to be the Member, a
Special Member or a Manager, officer, employee or agent
and inures to the benefit of the successors, heirs,
executors and administrators of such a person.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01 OFFSET. Whenever the Company is to pay any sum to
the Member, any amounts the Member owes the Company may be deducted from
such sum before payment.
SECTION 9.02 NOTICES. Except as expressly set forth to the
contrary in this Agreement, all notices, requests, or consents provided for
or permitted to be given under this Agreement shall be in writing and shall
be given either by depositing such writing in the United States mail,
addressed to the recipient, postage paid, and registered or certified with
return receipt requested or by delivering such writing to the recipient in
person, by reputable overnight courier, or by facsimile transmission; and a
notice, request or consent given under this Agreement shall be effective on
receipt by the Person to whom sent. All notices, requests, and consents to
be sent to the Member shall be sent to or made to 00 Xxxx Xxxxx, Xxxxxx,
Xxx Xxxxxx 00000, Attention: Treasurer or such other address as the Member
may specify by notice to the Company and the Managers. Any notice, request,
or consent to the Company or the Managers must be given to the Managers at
the following address: 00 Xxxx Xxxxx, X-0X, Xxxxxx, Xxx Xxxxxx 00000,
Attention: Managers. 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.
SECTION 9.03 EFFECT OF WAIVER OR CONSENT. A waiver or consent,
express or implied, to or of any breach or default by any Person in the
performance by such Person of its obligations with respect to the Company
shall not be a consent or waiver to or of any other breach or default in
the performance by such Person of the same or any other obligations of such
Person with respect to the Company.
SECTION 9.04 GOVERNING LAW; SEVERABILITY. THIS AGREEMENT SHALL
BE GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT
MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW
OF ANOTHER JURISDICTION. In the event of a direct conflict between the
provisions of this Agreement and any mandatory provision of the Act, then
the applicable provision of the Act shall control. If any provision of this
Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any extent, the remainder of this Agreement and
the application of that provision to other Persons or circumstances shall
not be affected thereby and such provision shall be enforced to the fullest
extent permitted by law.
SECTION 9.05 NO BANKRUPTCY PETITION; NO DISSOLUTION. (a) The
Member, each Special Member and each Manager hereby covenants and agrees
(or shall be deemed to have hereby covenanted and agreed) that, prior to
the date which is one year and one day after the termination of the
Indenture and the payment in full of any Series of the Bonds, any other
amounts owed under the Indenture, including, without limitation, any
amounts owed to third-party credit enhancers, and any amounts owed under
any Hedge Agreement or Interest Rate Swap Agreement, acquiesce, petition or
otherwise invoke or cause the Company to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Company under any federal or State bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of the property of the Company, or ordering the winding up
or liquidation of the affairs of the Company; provided, however, that
nothing in this Section 9.05 shall constitute a waiver of any right to
indemnification, reimbursement or other payment from the Company pursuant
to this Agreement.
(b) To the fullest extent permitted by law, the Member, each
Special Member and each Manager hereby covenants and agrees (or shall be
deemed to have hereby covenanted and agreed) that, until the termination of
the Indenture and the payment in full of any Series of the Bonds, any other
amounts owed under the Indenture, including without limitation, any amounts
owed to third-party credit enhancers, and any amounts owed under any Hedge
Agreement or Interest Rate Swap Agreement, the Member, such Special Member
and such Manager will not consent to, or make application for, or institute
or maintain any action for, the dissolution of the Company under Section
18-801 or 18-802 of the Act or otherwise.
(c) In the event that the Member, any Special Member or any
Manager takes action in violation of this Section 9.05, the Company agrees
that it will file an answer with the court or otherwise properly contest
the taking of such action and raise the defense that the Member, the
Special Member or the Manager, as the case may be, has agreed in writing
not to take such action and should be estopped and precluded therefrom and
such other defenses, if any, as its counsel advises that it may assert.
(d) The provisions of this Section 9.05 shall survive the
termination of this Agreement and the resignation, withdrawal or removal of
the Member, any Special Member or any Manager. Nothing herein contained
shall preclude participation by the Member, any Special Member or a Manager
in assertion or defense of its claims in any such proceeding involving the
Company.
SECTION 9.06 AMENDMENT. This Agreement may not be amended,
except in writing by the Member and the Company, upon prior approval of the
Trustee and with prior notice to the Rating Agencies (as defined in the
Indenture) and notification from each of Fitch, Inc. and Standard & Poor's
Ratings Group, a division of The XxXxxx-Xxxx Companies, to the Company,
that such amendment will not result in a reduction or withdrawal of the
then current rating by such Rating Agency of any outstanding series or
class of Bonds.
SECTION 9.07 HEADINGS AND SECTIONS. The headings in this
Agreement are inserted for convenience only and are in no way intended to
describe, interpret, define, or limit the scope, extent or intent of this
Agreement or any provision hereof.
SECTION 9.08 BINDING AGREEMENT. Notwithstanding any other
provision of this Agreement, the Member agrees that this Agreement
constitutes a legal, valid and binding agreement of the Member, and is
enforceable against the Member by the Independent Mangers, in accordance
with its terms. In addition, the Independent Managers shall be intended
beneficiaries of this Agreement.
IN WITNESS WHEREOF, this Agreement is hereby executed by the
undersigned as of January 31, 2000.
MEMBER:
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY
By: /s/ Xxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: General Corporate Counsel
COMPANY:
PSE&G TRANSITION FUNDING LLC
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
Agreed and Consented to by
the Special Members and
Independent Mangers:
/s/ Xxxxxx Xxxxxxx
----------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxx X. Xxxxxxxxxxxx
----------------------------------------------
Xxxx X. Xxxxxxxxxxxx
SCHEDULE A
SCHEDULE OF CAPITAL CONTRIBUTIONS OF MEMBER
COMMON INTEREST
CAPITAL COMMON INTEREST CAPITAL
MEMBER'S NAME CONTRIBUTION PERCENTAGE ACCOUNT
------------- --------------- ------------ -------
Public Service Electric $12,625,000* 100% $12,625,000*
and Gas Company
---------------
* 0.05% of original principal amount of the Bonds.
SCHEDULE B
CERTIFICATE OF COMMON INTEREST
of
PSE&G TRANSITION FUNDING LLC
A Limited Liability Company
Organized under the Laws of the State of Delaware
This Certificate is issued and shall be held subject to the
provisions of the Certificate of Formation of PSE&G TRANSITION FUNDING LLC,
a Limited Liability Company organized under the laws of the State of
Delaware (the "Company"), filed on July 21, 1999 with the Secretary of
State of the State of Delaware, and the Limited Liability Company Agreement
dated July 21, 1999 of the Company, as each may be amended from time to
time.
This Certificate of Common Interest certifies that Public Service
Electric and Gas Company is the registered holder of the entire Common
Interest of the Company, which Common Interest shall be transferable only
on the books of the Company by the holder hereof in person or by a duly
authorized attorney upon surrender of this Certificate with a proper
endorsement.
IN WITNESS WHEREOF, this Company has caused this Certificate to be
signed by one of its duly authorized Managers this __ day of _____, 2001.
-------------------
Title: Manager
PSE&G TRANSITION FUNDING LLC
For Value Received the undersigned hereby sells, assigns and
transfers unto
------------------------------------------------------------------------
the entire Common Interest of the Company represented by the within
Certificate and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------
Attorney, to transfer said Common Interest on the books of the
Company with full power of substitution in the premises.
Dated:
-----------------------
-----------------------
SCHEDULE C
MANAGERS
Names
1) Xxxxxx X. Xxxxx
2) Xxxxxx X. Xxxxxxx
3) R. Xxxxx Xxxxxxx
4) Xxxxxx Xxxxxxx (Independent Manager)
5) Xxxx X. Xxxxxxxxxxxx (Independent Manager)
SCHEDULE D
OFFICERS
Names Office
----- ------
Xxxxxx X. Xxxxx President, Chief Financial Officer and
Principal Accounting Officer
Xxxxx X. Xxxxx Vice-President and General Counsel
Xxxxxx X. Xxxxxxx Vice-President and Treasurer
Xxxxxx X. Xxxxxxx, Xx. Assistant Secretary
Xxxxxx X. Xxxxx Assistant Treasurer
Xxxxxxxx Xxxxxxx Assistant Treasurer
Xxxx X. Xxxxxxxx Assistant Treasurer
Xxxxxxx X. Xxxxx Assistant Secretary
Xxxxx X. Xxxxx Assistant Secretary