EXHIBIT 3.5
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
SDG&E FUNDING LLC
This Amended and Restated Limited Liability Company Agreement
(together with the schedules attached hereto, this "Agreement") of SDG&E Funding
LLC (the "Company"), is entered into by San Diego Gas & Electric Company, a
California corporation, as the sole member (the "Initial Member"). Capitalized
terms used herein and not otherwise defined have the meanings set forth on
Schedule A hereto.
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The Initial Member, by execution of this Agreement, (i) hereby
continues the Company as a limited liability company pursuant to and in
accordance with the Delaware Limited Liability Company Act (6 Del.C. (S)18-101,
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et seq.), as amended from time to time (the "Act"), and this Agreement, (ii)
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hereby amends and restates in its entirety the Amended and Restated Limited
Liability Company Agreement of the Company, dated as of November 6, 1997 (the
"Initial LLC Agreement"), and (iii) hereby agrees as follows:
1. Name.
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The name of the limited liability company heretofore previously formed
and continued hereby is SDG&E Funding LLC.
2. Principal Business Office.
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The principal business office of the Company shall be located at ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as may
hereafter be determined by the Member.
3. Registered Office.
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The address of the registered office of the Company in the State of
Delaware is c/o RL&F Service Corp., One ▇▇▇▇▇▇ Square, 10th Floor, Tenth and
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
4. Registered Agent.
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The name and address of the registered agent of the Company for
service of process on the Company in the State of Delaware is RL&F Service
Corp., One ▇▇▇▇▇▇ Square, 10th Floor, Tenth and ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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5. Members.
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a. The name and the mailing address of the Initial Member are set
forth on Schedule B attached hereto.
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b. Subject to Section 9j, the Member may act by written consent.
6. Certificates.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., as an "authorized person" within the meaning of
the Act, has executed, delivered and filed the Certificate of Formation 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. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments and/or restatements thereof)
necessary for the Company to qualify to do business in California and in any
other jurisdiction in which the Company may wish to conduct business.
7. Purposes.
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Subject to Section 9j, the purposes of the Company are to engage in
the following activities:
a. (i) to acquire, own, hold, administer, service, or enter into
agreements for the servicing of, finance, manage, sell, assign, pledge, collect
amounts due on and otherwise deal with the Transition Property and other assets
to be acquired pursuant to the Basic Documents and any proceeds or rights
associated therewith;
(ii) to issue, sell, authorize and deliver the Notes and other
evidences of the Indebtedness and to enter into any agreement or document
providing for the authorization, issuance, sale and delivery of the Notes;
(iii) to sell, exchange, pledge, encumber or otherwise dispose
of all or any part of the Transition Property and its other assets and property
and, in connection therewith, to accept, collect, hold, sell, exchange or
otherwise dispose of evidences of indebtedness or other property received
pursuant thereto, including the encumbrance of all of the Transition Property
and its other assets and property as collateral security for the Indebtedness;
(iv) to execute, deliver and perform the Basic Documents;
(v) to invest proceeds from the Transition Property and its
other assets and any capital and income of the Company in accordance with the
Basic Documents
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or as otherwise determined by the Board and not inconsistent with this Section 7
or the Basic Documents; and
(vi) to do such other things and carry on any other activities
which the Board determines to be necessary, convenient or incidental to any of
the foregoing purposes, and have and exercise all of the power and rights
conferred upon limited liability companies formed pursuant to the Act.
b. The Company, by or through any Officer on behalf of the Company,
may enter into and perform the Basic Documents, including the Note Issuance
Documents, the Notes, the Sale Documents, the Servicing Agreement and all
documents, agreements, certificates, or financing statements contemplated
thereby or related thereto, all without any further act, vote or approval of the
Member or any Director or Officer notwithstanding any other provision of this
Agreement, the Act or applicable law, rule or regulation. The foregoing
authorization shall not be deemed a restriction on the powers of any Officer to
enter into other agreements on behalf of the Company.
8. Powers.
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Subject to Section 9j, 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.
9. Management.
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a. Board of Directors. Subject to Section 9j, the business and
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affairs of the Company shall be managed by or under the direction of a Board of
one or more Directors. Subject to Section 10, the Member may determine at any
time in its sole and absolute discretion the number of Directors to constitute
the Board. The authorized number of Directors may be increased or decreased by
the Member at any time in its sole and absolute discretion, upon notice to all
Directors, and subject in all cases to Section 10. The initial number of
Directors shall be three, one of which shall be an Independent Director pursuant
to Section 10. Each Director elected, designated or appointed shall hold office
until a successor is elected and qualified or until such Director's earlier
death, resignation or removal. Each Director shall execute and deliver the
Management Agreement. Directors need not be Members.
▇. ▇▇▇▇▇▇. Subject to Section 9j, the Board of Directors shall have
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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 9j, the Board of Directors has the
authority to bind the Company.
c. Meeting of the Board of Directors. The Board of Directors of the
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Company may hold meetings, both regular and special, within or outside the State
of
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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 Director 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 Directors.
d. Quorum; Acts of the Board. At all meetings of the Board, a
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majority of the Directors 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 Directors 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 Directors 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.
e. Electronic Communications. Members of the Board, or any committee
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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 Directors.
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(i) 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 Directors of the Company. The Board may designate one or more
Directors 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
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adopted by the Board. Each committee shall keep regular minutes of its meetings
and report the same to the Board when required.
g. Compensation of Directors; Expenses. The Board shall have the
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authority to fix the compensation of Directors. The Directors 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 Director.
No such payment shall preclude any Director 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 Directors. Unless otherwise restricted by law, any
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Director or the entire Board of Directors may be removed, with or without cause,
at any time by the Member, and, subject to Section 10, any vacancy caused by any
such removal may be filled by action of the Member.
i. Directors as Agents. To the extent of their powers set forth in
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this Agreement and subject to Section 9j, the Directors are agents of the
Company for the purpose of the Company's business, and the actions of the
Directors taken in accordance with such powers set forth in this Agreement shall
bind the Company.
j. Limitations on the Company's Activities.
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(i) This Section 9j is being adopted in order to comply with
certain provisions required in order to qualify the Company as a "special
purpose entity" for the purpose of the Indebtedness.
(ii) The Member shall not, so long as any Indebtedness is
outstanding, amend, alter, change or repeal the definition of "Independent
Director" or Sections 7, 8, 9, 10, 20, 21, 22, 23, 24, 26 or 31 or Schedule A of
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this Agreement without the unanimous written consent of the Board (including the
Independent Director). Subject to this Section 9j, 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 or the
Board, neither the Member nor the Board shall be authorized or empowered, nor
shall they permit the Company, without the prior unanimous written consent of
the Member and the Board (including the Independent Director), to take any
Material Action; provided, however, that the foregoing is subject in all cases
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to Section 843(e) of the Statute.
(iv) Unless otherwise provided in the Note Issuance Documents, so
long as any Indebtedness is outstanding, 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
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shall not be required to preserve any such right or franchise if: (A) 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 holders of the Indebtedness and the Company shall
deliver to the Note Trustee an Officer's Certificate to that effect and (B) the
Rating Agency Condition is satisfied. The Board also shall cause the Company
to:
(1) maintain its own separate books and records and bank
accounts;
(2) at all times hold itself out to the public as a legal
entity separate from the Member and any other Person;
(3) have a Board composed differently from that of the
Member and any other Person;
(4) file its own tax returns, if any, as may be required
under applicable law, to the extent (a) not part of a
consolidated group filing a consolidated return or
returns or (b) not treated as a division for tax
purposes of another taxpayer, and pay any taxes so
required to be paid under applicable law;
(5) not commingle its assets with assets of any other
Person (except as contemplated by the Basic Documents);
(6) conduct its business in its own name;
(7) maintain separate financial statements;
(8) pay its own liabilities only out of its own funds;
(9) maintain an arm's length relationship with its
Affiliates and its Member;
(10) pay the salaries of its own employees, if any;
(11) not hold out its credit as being available to satisfy
the obligations of others;
(12) allocate fairly and reasonably any overhead for shared
office space;
(13) use separate stationery, invoices and checks;
(14) not pledge its assets for the benefit of any other
Person;
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(15) correct any known misunderstanding regarding its
separate identity;
(16) maintain adequate capital in light of its contemplated
business purposes;
(17) cause its Board of Directors 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; and
(18) not acquire any obligations or securities of a Member.
(v) So long as any Indebtedness is outstanding, the Board shall
not cause or permit the Company to:
(1) guarantee any obligation of any Person, including any
Affiliate;
(2) engage, directly or indirectly, in any business other
than that arising out of the issuance of the
Indebtedness or the actions required or permitted to be
performed under Section 7, the Note Issuance Documents
or this Section 9j;
(3) incur, create or assume any indebtedness other than the
Indebtedness or as otherwise expressly permitted under
the Note Issuance Documents;
(4) make or permit to remain outstanding any loan or
advance to, or own or acquire any stock or securities
of, any Person other than the instruments constituting
part of the Collateral, except that the Company may
invest in those investments permitted under the Note
Issuance Documents and may make any advance required or
expressly permitted to be made pursuant to any
provisions of the Note Issuance Documents and permit
the same to remain outstanding in accordance with such
provisions;
(5) 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 Note Issuance Documents; or
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(6) form, acquire or hold any subsidiary (whether
corporate, partnership, limited liability company or
other).
10. Independent Director.
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As long as any Indebtedness is outstanding, the Member shall cause the
Company at all times to have at least one Independent Director who will be
appointed by the Member. To the fullest extent permitted by Section 18-1101(c)
of the Act, the Independent Director shall consider only the interests of the
Company, including its respective creditors, in acting or otherwise voting on
the matters referred to in Section 9j(iii). No resignation or removal of an
Independent Director, and no appointment of a successor Independent Director,
shall be effective until the successor Independent Director shall have accepted
his or her appointment by a written instrument, which may be a counterpart
signature page to the Management Agreement. All right, power and authority of
the Independent Directors 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, the Independent
Directors 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.
11. Officers.
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a. Officers. The Officers of the Company shall be chosen by the
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Board and shall consist of at least a President, a Secretary and a Treasurer.
The Board of Directors 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
elected or appointed by the Board 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.
b. President. The President shall be the chief executive officer of
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the Company, shall preside at all meetings of the Members, if any, and 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 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 7b; (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 11c.
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c. Vice President. In the absence of the President or in the event
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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 Directors, 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
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responsible for filing legal documents and maintaining records for the Company.
The Secretary shall attend all meetings of the Board and all meetings of the
Members, if any, 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
cause to be given, notice of all meetings of the Members, 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
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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 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
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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 9j, 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
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provided herein, each Director and Officer shall have a fiduciary duty of
loyalty and care similar to
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that of directors and officers of business corporations organized under the
General Corporation Law of the State of Delaware.
12. Limited Liability.
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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 any Member nor any Director shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Member or Director of the Company.
13. Capital Contributions.
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The Initial Member was deemed admitted as the Member of the Company
upon the execution and delivery of the Initial LLC Agreement. The Initial
Member has contributed the amount of cash to the Company listed on Schedule B
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attached hereto.
14. Additional Contributions.
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The Initial Member is not required to make any additional capital
contribution to the Company. However, a Member may make additional capital
contributions to the Company at any time upon the written consent of such
Member. To the extent that the Member makes an additional capital contribution
to the Company, the Member shall revise Schedule B of this Agreement. The
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provisions of this Agreement, including this Section 14, are intended solely to
benefit the Member 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 no Member shall 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.
15. Allocation of Profits and Losses.
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The Company's profits and losses shall be allocated to the Member.
16. Distributions.
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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 any 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 the Basic Documents.
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17. Books and Records.
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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. Each 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 shall be an
independent public accounting firm selected by the Member.
18. Reports.
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a. Within 60 days after the end of each fiscal quarter, the Board
shall cause to be prepared an unaudited report setting forth as of the end of
such fiscal quarter:
(i) unless such quarter is the last fiscal quarter, a balance
sheet of the Company; and
(ii) unless such quarter is the last fiscal quarter, an income
statement of the Company for such fiscal quarter.
b. The Board shall use diligent efforts to cause to be prepared and
mailed to the Members, within 90 days after the end of each fiscal year, an
audited or unaudited report setting forth as of the end of such fiscal year:
(i) a balance sheet of the Company;
(ii) an income statement of the Company for such fiscal year; and
(iii) a statement of such Member's capital account.
c. The Board shall, after the end of each fiscal year, use
reasonable efforts to cause the Company's independent accountants to prepare and
transmit to each Member as promptly as such tax information as may be reasonably
necessary to enable such Member to prepare its federal, state and local income
tax returns relating to such fiscal year.
19. Other Business.
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The Member and any Affiliate of the Member 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.
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20. Exculpation and Indemnification.
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a. No Member, Officer, Director, manager, employee or agent of the
Company and no employee, representative, agent or Affiliate of the Member
(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 shall be
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provided out of and to the extent of Company assets only, and no Member shall
have personal liability on account thereof; and provided further, that so long
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as any Indebtedness is outstanding no indemnity payment from such funds of the
Company (as distinct from funds from other sources, such as insurance) of any
indemnity under this Section 20 shall be payable except out of funds available
for payment of Company expenses as provided in the Indenture.
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 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.
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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 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.
21. Assignments.
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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 a
Member by merger or consolidation in compliance with the Basic Documents shall,
without further act, be a Member hereunder, and such merger or consolidation
shall not constitute an assignment for purposes of this Agreement.
22. Resignation.
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So long as any Indebtedness is outstanding, the Initial Member may not
resign unless the Rating Agency Condition is satisfied. A Member (other than
the Initial Member) may resign from the Company with the written consent of the
Initial Member. If a 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.
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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 that, notwithstanding
--------
the foregoing, so long as any Indebtedness remains outstanding, no additional
Members may be admitted to the Company unless the Initial Member retains a
majority interest in the Company and the Rating Agency Condition is satisfied.
24. Dissolution.
-----------
a. Subject to Section 9j, the Company shall be dissolved, and its
affairs shall be wound up upon the first to occur of the following: (i) the
retirement, resignation or dissolution of the Member or the occurrence of any
other event which terminates the continued membership of the Member in the
Company unless the business of the Company is continued in a manner permitted by
the Act or (ii) the entry of a decree of judicial dissolution under Section 18-
802 of the Act.
b. The bankruptcy (as defined in Section 18-101(1) of the Act) of
the Member shall not cause the Member 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.
25. Waiver of Partition; Nature of Interest.
---------------------------------------
Except as otherwise expressly provided in this Agreement, to the
fullest extent permitted by law, each Member hereby irrevocably waives any right
or power that such Member 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. No Member shall have any
interest in any specific assets of the Company, and no Member shall have the
status of a creditor with respect to any distribution pursuant to Section 16
hereof. The interest of the Members in the Company is personal property.
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 any Member.
Nothing in this Agreement shall be deemed to create any right in any Person
(other than Covered
14
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.
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.
28. Entire Agreement.
----------------
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof.
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 and 31, constitutes a legal, valid and binding agreement
of the Member, and is enforceable against the Member by the Independent
Director, in accordance with its terms.
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.
31. Amendments.
----------
Subject to Section 9j, 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 Indebtedness 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 correct or supplement
any provision in a manner consistent with the intent of this Agreement.
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.
15
33. Notices.
-------
Any notices required to be delivered hereunder shall be in writing and
personally delivered, mailed or sent by telecopy or other similar form of rapid
transmission, and shall be 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 a Member, to such 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.
[This space is intentionally left blank]
16
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, has duly executed this Agreement as of the 20th day of November, 1997.
MEMBER: SAN DIEGO GAS & ELECTRIC COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer of
of San Diego Gas & Electric Company
S-1
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.
---
"Administrative Services Agreement" means the Administrative Services
---------------------------------
Agreement to be entered into between the Company and the Initial Member, as
administrator.
"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.
"Agreement" means this Amended and Restated Limited Liability Company
---------
Agreement, together with the schedules attached hereto, as amended, restated or
supplemented from time to time.
"Basic Documents" means the Indenture, the Trust Agreement, the Sale
---------------
Agreement, any Subsequent Sale Agreement, the Servicing Agreement, the
Administrative Services Agreement, the Note Purchase Agreement, the DTC
Agreement, the Fee and Indemnity Agreement and all other documents and
certificates delivered in connection therewith.
"Board" or "Board of Directors" means the Board of Directors 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 1,
1997, as amended or amended and restated from time to time.
"Certificates" means the rate reduction certificates to be issued by
------------
California Infrastructure and Economic Development Bank Special Purpose Trust -
SDG&E-1.
"Certificate Trustee" means the institution serving as certificate
-------------------
trustee under the Trust Agreement.
"Class" means, with respect to any Series of Notes, any one of the
-----
classes of Notes of that Series.
A-1
"Collateral" means all of the Company's right, title and interest in
----------
and to (a) the Transition Property transferred by the Initial Member to the
Company pursuant to the Sale Agreement and all proceeds thereof, (b) any
Subsequent Transition Property transferred by the Initial Member to the Company
pursuant to each Subsequent Sale Agreement and all proceeds thereof, (c) the
Sale Agreement and each Subsequent Sale Agreement, (d) the Servicing Agreement,
(e) the Collection Account (including all subaccounts thereof) and all amounts
or investment property on deposit therein or credited thereto from time to time,
(f) all other property of whatever kind owned from time to time by the Company,
(g) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every
kind, and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in proceeds
of any of the foregoing and (h) all proceeds of the foregoing.
"Collection Account" means the segregated trust account to be established
------------------
in the name of the Note Trustee into which will be deposited the payments
received in respect of the non-bypassable, usage-based, per-kilowatt-hour FTA
charges permitted to be levied on customers pursuant to the Financing Order.
"Company" means SDG&E Funding LLC, a Delaware limited liability company.
-------
"Control" means the possession, directly or indirectly, or 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 20a.
---------------
"Delaware Trustee" means the institution serving as Delaware trustee under
----------------
the Trust Agreement.
"Directors" means the directors elected to the Board of Directors from
---------
time to time by the Member, including the Independent Director. A Director is
hereby designated as a "manager" of the Company within the meaning of Section
18-101(10) of the Act.
"DTC Agreement" means the agreement to be entered into between California
-------------
Infrastructure and Economic Development Bank Special Purpose Trust -SDG&E-1, the
A-2
Certificate Trustee and The Depository Trust Company, relating to the
Certificates, as the same may be amended and supplemented from time to time.
"Fee and Indemnity Agreement" means the Fee and Indemnity Agreement to
---------------------------
be entered into among the Company, the Note Trustee, the Certificate Trustee,
the Delaware Trustee and the California Infrastructure and Economic Development
Bank, as originator.
"Financing Order" means the order of the CPUC, Decision ▇▇-▇▇-▇▇▇,
---------------
issued as of September 3, 1997 which became effective on October 6, 1997.
"Indebtedness" means the obligations of the Company arising under
------------
all Series of Notes.
"Indenture" means the Indenture to be entered into between the Company,
---------
as issuer, and the Note Trustee, as trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Independent Director" means a natural person who, for the five-year
--------------------
period prior to his or her appointment as Independent Director has not been, and
during the continuation of his or her service as Independent Director is not:
(i) an employee, director, stockholder, partner or officer of the Company or any
of its Affiliates (other than his or her service as an Independent Director of
the Company); (ii) a customer or supplier that derives more than ten percent of
its revenues from the Company or any of its Affiliates; or (iii) any member of
the immediate family of a person described in (i) or (ii).
"Initial LLC Agreement" has the meaning set forth in the preamble to this
---------------------
Agreement.
"Initial Member" means San Diego Gas & Electric Company, a California
--------------
corporation, as the sole member of the Company.
"Management Agreement" means the agreement of the Directors in the form
--------------------
attached hereto as Schedule C.
----------
"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.
A-3
"Member" means the Initial Member 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.
"Note Issuance Documents" means the collective reference to the Indenture
-----------------------
and the other governing documents relating to the Indebtedness, as the same may
be amended, supplemented or otherwise modified from time to time.
"Note Purchase Agreement" means the Note Purchase Agreement to be
-----------------------
entered into between the Company and Bankers Trust Company, as certificate
trustee.
"Notes" means the SDG&E Funding LLC Notes at any time issued pursuant
-----
to the Indenture or any indenture supplemental thereto.
"Note Trustee" means the institution serving as note trustee under the
------------
Indenture.
"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.
"PU Code" means the California Public Utilities Code, as amended from
-------
time to time.
"Rating Agency" means ▇▇▇▇▇'▇ Investors Service Inc., Standard & Poor's
-------------
Rating Services, and Fitch Investors Service, L.P., or their respective
successors or such nationally recognized statistical rating organizations
designated by the Company with notice to the Note Trustee, the Certificate
Trustee and the Initial Member in its role as servicer under the Servicing
Agreement.
"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 Series or Class of the Notes.
"Sale Agreement" means the Transition Property Purchase and Sale Agreement
--------------
to be entered into between the Company and the Initial Member, as seller.
A-4
"Sale Documents" means the collective reference to the Sale Agreement,
--------------
any Subsequent Sale Agreements and the agreements, instruments and documents
contemplated thereby, as the same may be amended, supplemented or otherwise
modified from time to time.
"Series" means each series of Notes issued and authenticated
------
pursuant to the Indenture.
"Servicing Agreement" means the Transition Property Servicing
-------------------
Agreement to be entered into between the Company and the Initial Member, as
servicer, as the same may be amended, supplemented or otherwise modified from
time to time.
"Statute" means Assembly ▇▇▇▇ 1890, Chapter 854, California Statutes
-------
of 1996, as amended by Senate ▇▇▇▇ 477, Chapter 275, California Statutes of
1997, and as further amended from time to time.
"Subsequent Sale Agreement" means any sale agreement substantially
-------------------------
similar to the Sale Agreement, and entered into subsequently thereto, pursuant
to which the Initial Member will sell Subsequent Transition Property to the
Company.
"Subsequent Transition Property" means any transition property as
------------------------------
defined in Section 840 of the PU Code, created by the PU Code and the Financing
Order and specifically described in an issuance advice letter filed with the
CPUC pursuant to the Financing Order, and sold to the Company by the Initial
Member pursuant to a Subsequent Sale Agreement.
"Transition Property" means the "Transition Property" contemplated by
-------------------
the Financing Order and to be specifically described in the issuance advice
letter filed with the CPUC pursuant to the Financing Order.
"Trust Agreement" means the Amended and Restated Declaration and
---------------
Agreement of Trust to be entered into among the California Infrastructure and
Economic Development Bank, the Certificate Trustee and the Delaware Trustee,
including the Series supplements thereto relating to the Certificates, as the
same may be further amended and supplemented from time to time.
"Underwriting Agreement"" means the Underwriting Agreement to be
entered into among the Member, the Company, the California Infrastructure and
Economic Development Bank Special Purpose Trust-SDG&E-1 and the underwrtiters
named therein.
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
A-5
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-6
SCHEDULE B
Members
-------
Agreed Value of Percentage
Name Mailing Address Capital Contribution Interest
---- --------------- -------------------- -----------
San Diego ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ $1,050,000.00 100%
Gas & Electric Room 111
Company ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
B-1
SCHEDULE C
Management Agreement
--------------------
November __, 1997
SDG&E Funding LLC
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Management Agreement
SDG&E Funding LLC
-----------------
Ladies and Gentlemen:
For good and valuable consideration, each of the undersigned persons,
who have been designated as directors of SDG&E Funding LLC, a Delaware limited
liability company (the "Company"), in accordance with the Amended and Restated
Limited Liability Company Agreement of the Company, dated as of _____________,
1997, 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 Director (as defined in the LLC Agreement) under the LLC Agreement and agrees
to perform and discharge such person's duties and obligations as a Director
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 Director is designated or until such person's
resignation or removal as a Director 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 Indebtedness (as defined in the LLC Agreement) 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 involve or
cause the Company
C-1
to invoke the process of any court or governmental 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.
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.
C-2
IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.
__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
__________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
C-3
