Exhibit 4.3
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
PSE&G TRANSITION FUNDING II LLC,
a Delaware Limited Liability Company
This LIMITED LIABILITY COMPANY AGREEMENT, dated ________, 2005 (as it may
be amended, supplemented or otherwise modified and in effect from time to
time, this "Agreement"), of PSE&G TRANSITION FUNDING II 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,
on ________, 2005 filed a Certificate of Formation of the Company with the
Delaware Secretary of State; and
NOW THEREFORE, this Agreement constitutes the governing instrument of the
Company;
ARTICLE I
Definitions
SECTION 1.1 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
_________, 2005, between the Company and PSE&G, as administrator (the
"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 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 and the Underwriting Agreement.
"Xxxx of Sale" shall mean the xxxx of sale, issued by PSE&G to the
Company as of _________, 2005, pursuant to the Sale Agreement, together with
any other xxxx of sale delivered in accordance therewith.
"Bondable Transition Property" shall mean the property consisting of the
irrevocable right of PSE&G to charge, collect and receive, and be paid from
collections of, the transition bond charges 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 charges 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 2.3(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.
"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
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Delaware on July 18, 2005, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"Class": Collectively, all of the Bonds bearing the same designation.
"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 II 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, as amended (West).
"Financing Order" shall mean the bondable stranded cost rate order,
Docket No. EF 03070532, issued by the BPU on July 12, 2005 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.
"Indenture" shall mean the Indenture, dated as of _________, 2005,
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, (ii) any Person owning
beneficially, directly or indirectly, any outstanding shares of common stock,
any limited liability company
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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.
"Manager" shall mean any manager of the Company, including the
Independent Manager. Each Manager is hereby designated as a "manager" of the
Company within the meaning of 18-101(10) of the Act.
"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 Member.
"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 8.1(a).
"PSE&G" shall mean Public Service Electric and Gas Company, a New Jersey
corporation.
"Sale Agreement" shall mean the BGS Bondable Transition Property Sale
Agreement, dated as of _________, 2005, 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.
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"Servicing Agreement" shall mean the BGS Bondable Transition Property
Servicing Agreement, dated as of _________, 2005, between the Company and
PSE&G, as servicer (the "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 5.5, 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
_________, 2005, between PSE&G, the Company and Credit Suisse First Boston,
LLC on behalf of itself and as representative of the several underwriters
listed therein.
SECTION 1.2 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.
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(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 2.1 Formation; Filings. Pursuant to the Act and in accordance
with the further terms and provisions hereof, the Member and, when signed by
the Special Member, the Special Member, hereby form 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
____________, 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 2.2 Name and Office.
(a) The name of the Company shall be "PSE&G Transition Funding II 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 Corporation Trust Center, 0000 Xxxxxx Xxxxxx in the City of
Xxxxxxxxxx, Xxxxxx xx Xxx Xxxxxx, 00000. The name of its registered agent at
that address is The Corporation Trust Company.
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(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 2.3 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 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, 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 2.4 Term. The term of the Company shall continue until the
Company is dissolved and liquidated in accordance with the Act, subject to
Sections 6.3 and 9.5. 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.
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SECTION 2.5 No State Law Partnership. The Member and the Special Member
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, the Special Member nor any Manager shall be a
partner or joint venturer of the Member, the 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 2.6 Authority of Member. Subject to Section 3.4, 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.
The Company, and the Member, or any Manager on behalf of the Company, may
enter into and perform the Basic Documents and all documents, agreements,
certificates, or financing statements contemplated thereby or related thereto,
all without any further act, vote or approval of any Member or Manager or
other Person notwithstanding any other provision of this Agreement, the Act or
applicable law, rule or regulation. The foregoing authorization shall not be
deemed a restriction on the powers of the Member or any Manager to enter into
other agreements on behalf of the Company.
SECTION 2.7 Liability to Third Parties. Except as otherwise expressly
provided by the Act, neither the Member, the 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, solely by reason of
being the Member or acting as the Special Member or a Manager of the Company.
SECTION 2.8 No Personal Liability of any Member, Special Member, Manager,
Etc. (a) Neither the Member nor the 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 the 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.
SECTION 2.9 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.
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(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 Member, 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, the 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, the 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, the 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, the 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, the 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.
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(n) Failure of the Company, the Member, the 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,
the Special Member or any Manager.
SECTION 2.10 Limited Liability and Bankruptcy Remoteness. Without
limiting the generality of Section 2.9, 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 Member, (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 9.5, the
bankruptcy-remote status of the Company.
ARTICLE III
Management
SECTION 3.1 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 3.2 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
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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 3.3 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 3.4 Independent Manager.
(a) The Company shall have at all times at least one individual who is an
Independent Manager. The Independent Manager may not delegate his or her
duties, authorities or responsibilities hereunder. If the 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, the
Special Member, any Manager or any other Person, the Company shall not, and
neither the Member nor the Special Member, Manager nor any other Person on
behalf of the Company shall, without the prior unanimous consent of the
Managers, including the Independent Manager, 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
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 including
Section 18-1101(c) of the Act, owe its primary fiduciary duty to the Company
(including the creditors of the Company).
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SECTION 3.5 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 3.6 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 3.7 Removal. Subject to Section 3.4(a) and Section 3.15 of this
Agreement, the Member may remove, with or without cause, any Manager.
SECTION 3.8 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 the
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 3.9 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
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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 3.4, the Company shall at all times have at least one
Independent Manager. The persons identified on Schedule C are hereby
designated the initial Managers of the Company.
ARTICLE IV
Officers
SECTION 4.1 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 4.2 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.
13
SECTION 4.3 Vacancies. Any vacancy occurring in any office of the Company
may be filled by the Managers.
SECTION 4.4 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 5.1 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 5.3. Pursuant to Section 3.1, 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 3.4 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 5.2 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 5.3 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 5.4 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
14
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,
including Section 18-1101(c) of the Act, any such Manager shall bear a
fiduciary duty to the Company (including its creditors) under the
circumstances set forth in Section 3.4.
SECTION 5.5 Special Member. Upon the occurrence of any event that causes
the Member to cease to be a member of the Company, the person acting as the
Independent Manager pursuant to Section 3.4 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 the special member (the
"Special Member") and shall continue the Company without dissolution. The
Special Member may not resign from the Company nor 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 Member shall automatically cease to be a member
of the Company upon the admission to the Company of a substitute Member. The
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, the
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. The Special Member, in its capacity as Special Member, may not bind
the Company. Except as required by any mandatory provision of the Act, the
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 the Special Member pursuant to this Section 5.5, the person acting as an
Independent Manager pursuant to Section 3.4 shall execute a counterpart to
this Agreement. Prior to its admission to the Company as Special Member, the
person acting as an Independent Manager pursuant to Section 3.4 shall not be a
member of the Company.
ARTICLE VI
Common Interest
SECTION 6.1 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,
15
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 6.2 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 6.3 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 satisfaction (whether by
payment or the making of reasonable provision for the payment thereof) 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 6.3.
(c) The commencement of a bankruptcy, insolvency, receivership or other
similar proceeding by or against the Company, the 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 the Special Member or the dissolution of the Member or the Special
Member shall not, by itself, constitute a dissolution of the Company.
(d) Subject to Section 5.5, upon the occurrence of any event that causes
the last remaining member or the 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 or the Member
in the Company.
16
(e) Notwithstanding any other provision of this Agreement, the Bankruptcy
of the Member or the 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 6.4 Redemption. The Common Interest shall not be redeemable.
SECTION 6.5 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.
SECTION 6.6 Company Dissolution. The Company shall be dissolved, and its
affairs shall be wound up upon the first to occur of the following: (i) the
termination of the legal existence of the last remaining member of the Company
or the occurrence of any other event which terminates the continued membership
of the last remaining member of the Company in the Company unless the Company
is continued without dissolution in a manner permitted by this Agreement or
the Act or (ii) the entry of a decree of judicial dissolution under Section
18-802 of the Act.
ARTICLE VII
Allocations; Distributions; Expenses;
Taxes; Books; Records; and Bank Accounts
SECTION 7.1 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 7.2 Distributions. All distributions shall be made to the Member
from surplus funds. Except as provided in Section 7.3, all distributions shall
be made in such amounts and at such times as determined by the Managers.
SECTION 7.3 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 7.4 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;
17
(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 7.5 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 7.6 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.
18
SECTION 7.7 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 7.8 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 7.9 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 8.1 Mandatory Indemnification of the Member, the Special Member,
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, the 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 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.
19
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 8.2 Mandatory Advancement of Expenses. To the fullest extent
permitted by law, expenses incurred by a Person of the type entitled to be
indemnified under Section 8.1 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 8.1, 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 8.1 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 8.3 Indemnification of Officers, Employees and Agents. To the
fullest extent permitted by law, 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, the 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, the Special Member or any Manager under this
Article VIII.
SECTION 8.4 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, the 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, the Special Member, such Manager or such other
Person.
20
SECTION 8.5 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 8.6 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, the 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 8.7 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, the 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 8.8 Other Ventures. It is expressly agreed that the Member, the
Special Member, any Manager and any Affiliates, officers, directors, managers,
stockholders, partners or employees of the Member, the 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, notwithstanding any provision to the contrary at law or in equity
and the Company shall not have any rights in and to any independent venture or
activity or the income or profits derived therefrom.
SECTION 8.9 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, the 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, the Special Member or any Manager if a final
adjudication established that its
21
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, the 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 9.1 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 9.2 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 9.3 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 9.4 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
22
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 9.5 No Dissolution. (a) To the fullest extent permitted by law,
the Member, the 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, the Member, the
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.
(b) The provisions of this Section 9.5 shall survive the termination of
this Agreement and the resignation, withdrawal or removal of the Member, the
Special Member or any Manager. Nothing herein contained shall preclude
participation by the Member, the Special Member or a Manager in assertion or
defense of its claims in any such proceeding involving the Company.
SECTION 9.6 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 the Rating Agencies 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 9.7 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 9.8 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 Manager shall be an intended beneficiary of this Agreement.
23
IN WITNESS WHEREOF, this Agreement is hereby executed by the undersigned
as of _________, 2005.
MEMBER:
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
By:______________________________________
Name:
Title:
COMPANY:
PSE&G TRANSITION FUNDING II LLC
By:______________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Manager
By:______________________________________
Name: Xxxxxx X. Xxxxx
Title: Manager
By:______________________________________
Name: R. Xxxxx Xxxxxxx
Title: Manager
Agreed and Consented to by
the Special Member and
Independent Manger:
______________________________________
24
SCHEDULE A
SCHEDULE OF CAPITAL CONTRIBUTIONS OF MEMBER
COMMON INTEREST
---------------
COMMON INTEREST
MEMBER'S NAME CAPITAL CONTRIBUTION PERCENTAGE CAPITAL ACCOUNT
----------------------------- -------------------------------- ---------------------- -------------------
Public Service Electric
and Gas Company $* 100% $*
_______________
* [___]% of original principal amount of the Bonds.
A-1
SCHEDULE B
----------
CERTIFICATE OF COMMON INTEREST
of
PSE&G TRANSITION FUNDING II 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 II LLC, a Limited
Liability Company organized under the laws of the State of Delaware (the
"Company"), filed on ______, 2005 with the Secretary of State of the State of
Delaware, and the Limited Liability Company Agreement dated ______, 2005 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 _____, 2005.
By:______________________________________
Name:
Title: Manager
B-1
PSE&G TRANSITION FUNDING II 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
2
SCHEDULE C
----------
MANAGERS
Names
-----
1) Xxxxxx X. Xxxxx
2) Xxxxxx X. Xxxxxxx
3) R. Xxxxx Xxxxxxx
4) ______________ (Independent Manager)
C-1
SCHEDULE D
----------
OFFICERS
Names Office
----- ------
D-1
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.1 Capitalized Terms................................................1
SECTION 1.2 Other Definitional Provisions....................................5
ARTICLE II
Formation of the Limited Liability Company
SECTION 2.1 Formation; Filings...............................................6
SECTION 2.2 Name and Office..................................................6
SECTION 2.3 Business Purpose.................................................7
SECTION 2.4 Term.............................................................7
SECTION 2.5 No State Law Partnership.........................................8
SECTION 2.6 Authority of Member..............................................8
SECTION 2.7 Liability to Third Parties.......................................8
SECTION 2.8 No Personal Liability of any Member, Special Member,
Manager, Etc.................................................8
SECTION 2.9 Separateness.....................................................8
SECTION 2.10 Limited Liability and Bankruptcy Remoteness....................10
ARTICLE III
Management
SECTION 3.1 Management by Managers..........................................10
SECTION 3.2 Acts by Managers................................................10
SECTION 3.3 Number and Qualifications.......................................11
SECTION 3.4 Independent Manager.............................................11
SECTION 3.5 Appointment and Vacancy.........................................12
SECTION 3.6 Term............................................................12
SECTION 3.7 Removal.........................................................12
SECTION 3.8 Resignation.....................................................12
SECTION 3.9 Place of Meetings of Managers...................................12
SECTION 3.10 Meetings of Managers...........................................12
SECTION 3.11 Quorum; Majority Vote..........................................12
SECTION 3.12 Methods of Voting; Proxies.....................................12
SECTION 3.13 Actions Without a Meeting......................................13
SECTION 3.14 Telephone and Similar Meetings.................................13
SECTION 3.15 Managers.......................................................13
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ARTICLE IV
Officers
SECTION 4.1 Designation; Term; Qualifications...............................13
SECTION 4.2 Removal and Resignation.........................................13
SECTION 4.3 Vacancies.......................................................14
SECTION 4.4 Compensation....................................................14
ARTICLE V
Member
SECTION 5.1 Powers..........................................................14
SECTION 5.2 Compensation of Member..........................................14
SECTION 5.3 Actions by the Member...........................................14
SECTION 5.4 Control by Member...............................................14
SECTION 5.5 Special Member..................................................15
ARTICLE VI
Common Interest
SECTION 6.1 General.........................................................15
SECTION 6.2 Distributions...................................................16
SECTION 6.3 Rights on Liquidation, Dissolution or Winding Up................16
SECTION 6.4 Redemption......................................................17
SECTION 6.5 Voting Rights...................................................17
SECTION 6.6 Company Dissolution.............................................17
ARTICLE VII
Allocations; Distributions; Expenses; Taxes; Books; Records; and Bank Accounts
SECTION 7.1 Allocations.....................................................17
SECTION 7.2 Distributions...................................................17
SECTION 7.3 Limitation Upon Distributions...................................17
SECTION 7.4 Expenses........................................................17
SECTION 7.5 Tax Elections...................................................18
SECTION 7.6 Annual Tax Information..........................................18
SECTION 7.7 Tax Matters Member..............................................19
SECTION 7.8 Maintenance of Books............................................19
SECTION 7.9 Reports.........................................................19
SECTION 7.10 Bank and Investment Accounts...................................19
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ARTICLE VIII
Indemnification
SECTION 8.1 Mandatory Indemnification of the Member,
the Special Member, and the Managers........................19
SECTION 8.2 Mandatory Advancement of Expenses...............................20
SECTION 8.3 Indemnification of Officers, Employees and Agents...............20
SECTION 8.4 Nonexclusivity of Rights........................................20
SECTION 8.5 Contract Rights.................................................21
SECTION 8.6 Insurance.......................................................21
SECTION 8.7 Savings Clause..................................................21
SECTION 8.8 Other Ventures..................................................21
SECTION 8.9 Other Arrangements Not Excluded.................................21
ARTICLE IX
Miscellaneous Provisions
SECTION 9.1 Offset..........................................................22
SECTION 9.2 Notices.........................................................22
SECTION 9.3 Effect of Waiver or Consent.....................................22
SECTION 9.4 Governing Law; Severability.....................................22
SECTION 9.5 No Dissolution..................................................23
SECTION 9.6 Amendment.......................................................23
SECTION 9.7 Headings and Sections...........................................23
SECTION 9.8 Binding Agreement...............................................23
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
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